Document:

Exhibit 10.1

 

[EXECUTION COPY]

 

 

SECOND AMENDED AND
RESTATED

CREDIT AGREEMENT

 

Dated as of April 16,
2008

 

among

 

PROTECTIVE LIFE
CORPORATION, PROTECTIVE

LIFE INSURANCE COMPANY

 

THE SEVERAL LENDERS
FROM TIME

TO TIME PARTY HERETO

 

and

 

REGIONS BANK,

 

as Administrative
Agent and Swingline Lender,

REGIONS CAPITAL
MARKETS,

 

a Division of Regions
Bank, as Co-Lead Arranger and Sole Bookrunner,

 

and

 

WACHOVIA CAPITAL
MARKETS, LLC, 

as Co-Lead Arranger
and Syndication Agent,

and

BANK OF AMERICA, N.A. AND BARCLAYS BANK PLC,

as Co-Documentation Agents

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE LOANS

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
   

  	
  Amount of Revolving Credit
  Loan

  	
   

  	
  16

  
	
  2.2.

  	
   

  	
  Use of Proceeds

  	
   

  	
  16

  
	
  2.3.

  	
   

  	
  Revolving Credit Notes

  	
   

  	
  16

  
	
  2.4.

  	
   

  	
  Separate Commitments of
  Lenders

  	
   

  	
  16

  
	
  2.5.

  	
   

  	
  Advances of Loans

  	
   

  	
  17

  
	
  2.5.1

  	
   

  	
  Loans Advanced Pursuant to Borrowing
  Notices

  	
   

  	
  17

  
	
  2.5.1 (a) Applicability

  	
   

  	
  17

  
	
  2.5.1 (b) Borrowing Notices

  	
   

  	
  17

  
	
  2.5.1 (c) Funding of Loans

  	
   

  	
  17

  
	
  2.5.1 (d) Prime Rate Loan
  Limitations

  	
   

  	
  17

  
	
  2.5.1 (e) LIBOR Loan
  Limitations

  	
   

  	
  17

  
	
  2.5.1 (f) Additional
  Limitation on LIBOR Interest Periods

  	
   

  	
  18

  
	
  2.5.2

  	
   

  	
  Conversion of Loans

  	
   

  	
  18

  
	
  2.5.2 (a) Application of
  Loans

  	
   

  	
  18

  
	
  2.5.2 (b) Notices of
  Conversions

  	
   

  	
  18

  
	
  2.5.3

  	
   

  	
  Absence of Election

  	
   

  	
  18

  
	
  2.5.4

  	
   

  	
  Implied Representations Upon Request for
  Loan

  	
   

  	
  18

  
	
  2.5.5

  	
   

  	
  Advance Not Waiver

  	
   

  	
  18

  
	
  2.6.

  	
   

  	
  Interest

  	
   

  	
  19

  
	
  2.6.1

  	
   

  	
  Prime Rate Loans

  	
   

  	
  19

  
	
  2.6.2

  	
   

  	
  LIBOR Loans

  	
   

  	
  19

  
	
  2.6.3

  	
   

  	
  Additional Interest on LIBOR Loans

  	
   

  	
  19

  
	
  2.6.4

  	
   

  	
  Calculation of Interest

  	
   

  	
  19

  
	
  2.6.5

  	
   

  	
  Default Rate

  	
   

  	
  19

  
	
  2.6.6

  	
   

  	
  Payment of Interest

  	
   

  	
  19

  
	
  2.6.7

  	
   

  	
  Usury Savings Provision

  	
   

  	
  19

  
	
  2.7.

  	
   

  	
  Alternate Rate of Interest
  if LIBOR Unavailable

  	
   

  	
  20

  
	
  2.8.

  	
   

  	
  Change in Circumstances

  	
   

  	
  20

  
	
  2.8.1

  	
   

  	
  Imposition of Requirements

  	
   

  	
  20

  
	
  2.8.2

  	
   

  	
  Other Changes

  	
   

  	
  21

  

 

i

 

	
  2.8.3

  	
   

  	
  Computation of Amounts

  	
   

  	
  21

  
	
  2.8.4

  	
   

  	
  No Duty to Contest

  	
   

  	
  21

  
	
  2.8.5

  	
   

  	
  Replacement Lender

  	
   

  	
  22

  
	
  2.9.

  	
   

  	
  Change in Legality of
  LIBOR Loans

  	
   

  	
  22

  
	
  2.10.

  	
   

  	
  Principal Repayment

  	
   

  	
  22

  
	
  2.11.

  	
   

  	
  Prepayment of LIBOR Loans

  	
   

  	
  23

  
	
  2.11.1

  	
   

  	
  Notice of LIBOR Loan Prepayment

  	
   

  	
  23

  
	
  2.11.2

  	
   

  	
  Amount of LIBOR Loan Prepayment

  	
   

  	
  23

  
	
  2.11.3

  	
   

  	
  LIBOR Loan Prepayment Premium

  	
   

  	
  23

  
	
  2.12.

  	
   

  	
  Prepayment of Prime Rate
  Loans

  	
   

  	
  24

  
	
  2.13.

  	
   

  	
  Fixed Commitment Fees

  	
   

  	
  24

  
	
  2.14.

  	
   

  	
  Periodic Facility Fee

  	
   

  	
  24

  
	
  2.15.

  	
   

  	
  Administrative Agent’s Fee

  	
   

  	
  24

  
	
  2.16.

  	
   

  	
  Letters of Credit

  	
   

  	
  24

  
	
  2.16.1

  	
   

  	
  Procedure for Issuance

  	
   

  	
  24

  
	
  2.16.2

  	
   

  	
  Participation Among Lenders

  	
   

  	
  25

  
	
  2.16.3

  	
   

  	
  Reimbursement Obligation

  	
   

  	
  25

  
	
  2.16.4

  	
   

  	
  Means of Reimbursement

  	
   

  	
  25

  
	
  2.16.5

  	
   

  	
  Payments by Lenders

  	
   

  	
  26

  
	
  2.16.6

  	
   

  	
  Settlement Among Lenders

  	
   

  	
  26

  
	
  2.16.7

  	
   

  	
  Letter of Credit Fee

  	
   

  	
  27

  
	
  2.16.8

  	
   

  	
  Letter of Credit Information

  	
   

  	
  27

  
	
  2.16.9

  	
   

  	
  Conditions Relating to Letters of Credit

  	
   

  	
  27

  
	
  2.16.10

  	
   

  	
  Payments Among Lenders

  	
   

  	
  27

  
	
  2.16.11

  	
   

  	
  Modifications

  	
   

  	
  28

  
	
  2.16.12

  	
   

  	
  Absolute Obligations of Borrowers

  	
   

  	
  28

  
	
  2.16.13

  	
   

  	
  Indemnification

  	
   

  	
  29

  
	
  2.16.14

  	
   

  	
  Assumption of Risk

  	
   

  	
  30

  
	
  2.16.15

  	
   

  	
  Reserves

  	
   

  	
  30

  
	
  2.17.

  	
   

  	
  Swingline Loans

  	
   

  	
  30

  
	
  2.17.1

  	
   

  	
  Use of Proceeds of Swingline Loans

  	
   

  	
  30

  
	
  2.17.2

  	
   

  	
  Swingline Note

  	
   

  	
  30

  
	
  2.17.3

  	
   

  	
  Funding of Swingline Loans Advanced
  Pursuant to Borrowing Notices

  	
   

  	
  31

  
	
  2.17.3 (a) Applicability

  	
   

  	
  31

  
	
  2.17.3 (b) Borrowing Notices

  	
   

  	
  31

  

 

ii

 

	
  2.17.3 (c) Funding of
  Swingline Loans

  	
   

  	
  31

  
	
  2.17.4

  	
   

  	
  Funding of Swingline Loans Advanced Pursuant to Cash Management
  Accounts

  	
   

  	
  31

  
	
  2.17.4 (a) Funding and
  Payment Procedures Controlled by Account Agreements

  	
   

  	
  31

  
	
  2.17.4 (b) Certain
  Provisions Controlled by this Agreement

  	
   

  	
  31

  
	
  2.17.4 (c) Continuing
  Warranty Under Account Agreements

  	
   

  	
  32

  
	
  2.17.5

  	
   

  	
  Implied Representations Uon Request for
  Swingline Loan

  	
   

  	
  32

  
	
  2.17.6

  	
   

  	
  Advance Not Waiver

  	
   

  	
  32

  
	
  2.17.7

  	
   

  	
  Interest

  	
   

  	
  32

  
	
  2.17.7 (a) Rate of Interest

  	
   

  	
  32

  
	
  2.17.7 (b) Calculation of
  Interest

  	
   

  	
  32

  
	
  2.17.7 (c) Payment of
  Interest

  	
   

  	
  32

  
	
  2.17.7 (d) Default Rate

  	
   

  	
  32

  
	
  2.17.7 (e) Usury Savings
  Provision

  	
   

  	
  32

  
	
  2.17.8

  	
   

  	
  Repayment of Principal

  	
   

  	
  33

  
	
  2.17.9

  	
   

  	
  Procedures Among Lenders Upon Default

  	
   

  	
  33

  
	
  2.18.

  	
   

  	
  Withholding Tax Exemption

  	
   

  	
  33

  
	
  2.19.

  	
   

  	
  Maximum PLICO Liability
  Amount

  	
   

  	
  34

  
	
  2.20.

  	
   

  	
  Optional Increase to the
  Revolving Credit Commitment

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III CONDITIONS
  PRECEDENT

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
   

  	
  Initial Advance

  	
   

  	
  37

  
	
  3.2.

  	
   

  	
  Each Loan

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
   

  	
  Corporate Existence and
  Standing

  	
   

  	
  38

  
	
  4.2.

  	
   

  	
  Authorization and Validity

  	
   

  	
  38

  
	
  4.3.

  	
   

  	
  No Conflict; Government
  Consent

  	
   

  	
  38

  
	
  4.4.

  	
   

  	
  Financial Statements

  	
   

  	
  39

  
	
  4.5.

  	
   

  	
  Material Adverse Change

  	
   

  	
  39

  
	
  4.6.

  	
   

  	
  Taxes

  	
   

  	
  39

  
	
  4.7.

  	
   

  	
  Litigation and Guaranteed
  Obligations

  	
   

  	
  39

  
	
  4.8.

  	
   

  	
  List of Significant
  Subsidiaries

  	
   

  	
  40

  
	
  4.9.

  	
   

  	
  ERISA

  	
   

  	
  40

  
	
  4.10.

  	
   

  	
  Accuracy of Information

  	
   

  	
  40

  
	
  4.11.

  	
   

  	
  Regulation U

  	
   

  	
  40

  
	
  4.12.

  	
   

  	
  Material Agreements

  	
   

  	
  40

  

 

iii

 

	
  4.13.

  	
   

  	
  Compliance With Laws

  	
   

  	
  40

  
	
  4.14.

  	
   

  	
  Investment Company Act

  	
   

  	
  41

  
	
  4.15.

  	
   

  	
  [Intentionally omitted].

  	
   

  	
  41

  
	
  4.16.

  	
   

  	
  Insurance Licenses

  	
   

  	
  41

  
	
  4.17.

  	
   

  	
  Ownership of Properties

  	
   

  	
  41

  
	
  4.18.

  	
   

  	
  Sanctioned Persons

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V COVENANTS

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
   

  	
  Financial Reporting

  	
   

  	
  41

  
	
  5.2.

  	
   

  	
  Use of Proceeds

  	
   

  	
  43

  
	
  5.3.

  	
   

  	
  Notice of Default

  	
   

  	
  43

  
	
  5.4.

  	
   

  	
  Conduct of Business

  	
   

  	
  44

  
	
  5.5.

  	
   

  	
  Taxes

  	
   

  	
  44

  
	
  5.6.

  	
   

  	
  Insurance

  	
   

  	
  44

  
	
  5.7.

  	
   

  	
  Compliance with Laws

  	
   

  	
  45

  
	
  5.8.

  	
   

  	
  Maintenance of Properties

  	
   

  	
  45

  
	
  5.9.

  	
   

  	
  Inspection

  	
   

  	
  45

  
	
  5.10.

  	
   

  	
  Merger, Consolidation and
  Sale of Assets

  	
   

  	
  45

  
	
  5.11.

  	
   

  	
  Liens

  	
   

  	
  46

  
	
  5.12.

  	
   

  	
  Adjusted Consolidated Net
  Worth

  	
   

  	
  46

  
	
  5.13.

  	
   

  	
  Ratio of Adjusted
  Consolidated Indebtedness to Consolidated Capitalization

  	
   

  	
  46

  
	
  5.14.

  	
   

  	
  Total Adjusted Capital of
  PLICO

  	
   

  	
  46

  
	
  5.15.

  	
   

  	
  Ratio of Unconsolidated
  Cash Inflow Available for Interest Expense to Adjusted Consolidated Interest
  Expense

  	
   

  	
  46

  
	
  5.16.

  	
   

  	
  Affiliates

  	
   

  	
  46

  
	
  5.17.

  	
   

  	
  Compliance with ERISA

  	
   

  	
  46

  
	
  5.18.

  	
   

  	
  PATRIOT Act Compliance

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI DEFAULTS

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII REMEDIES

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
   

  	
  Default Rate

  	
   

  	
  49

  
	
  7.2.

  	
   

  	
  Termination of Commitments

  	
   

  	
  49

  
	
  7.3.

  	
   

  	
  Letters of Credit

  	
   

  	
  49

  
	
  7.4.

  	
   

  	
  Acceleration

  	
   

  	
  50

  
	
  7.5.

  	
   

  	
  Setoff

  	
   

  	
  50

  
	
  7.6.

  	
   

  	
  Other Remedies

  	
   

  	
  50

  

 

iv

 

	
  ARTICLE VIII THE
  ADMINISTRATIVE AGENT

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
   

  	
  Appointment of
  Administrative Agent

  	
   

  	
  50

  
	
  8.2.

  	
   

  	
  Powers of Administrative
  Agent

  	
   

  	
  50

  
	
  8.2.1

  	
   

  	
  Administration of Loans

  	
   

  	
  50

  
	
  8.2.2

  	
   

  	
  Matters Reserved to Required Lenders

  	
   

  	
  51

  
	
  8.2.3

  	
   

  	
  Matters Reserved to all Lenders

  	
   

  	
  51

  
	
  8.3.

  	
   

  	
  Duties of Administrative
  Agent

  	
   

  	
  51

  
	
  8.3.1

  	
   

  	
  Specific Duties of Administrative Agent:
  Standard of Care

  	
   

  	
  51

  
	
  8.3.2

  	
   

  	
  Limitations on Administrative Agent’s
  Duties

  	
   

  	
  51

  
	
  8.3.3

  	
   

  	
  Administrative Agent’s Right to Require
  Instructions in Performance of Duties

  	
   

  	
  52

  
	
  8.3.4

  	
   

  	
  Administrative Agent’s Reliance on Others
  in Performance of Duties

  	
   

  	
  52

  
	
  8.3.5

  	
   

  	
  Sharing of Information

  	
   

  	
  52

  
	
  8.4.

  	
   

  	
  Indemnification of
  Administrative Agent

  	
   

  	
  52

  
	
  8.5.

  	
   

  	
  No Representations by
  Administrative Agent

  	
   

  	
  53

  
	
  8.6.

  	
   

  	
  Independent Investigations
  by Lenders

  	
   

  	
  53

  
	
  8.7.

  	
   

  	
  Notice of Default

  	
   

  	
  53

  
	
  8.8.

  	
   

  	
  Funding of Loans Pursuant
  to Borrowing Notices

  	
   

  	
  54

  
	
  8.9.

  	
   

  	
  Administrative Agent in
  its Individual Capacity

  	
   

  	
  54

  
	
  8.10.

  	
   

  	
  Holders

  	
   

  	
  54

  
	
  8.11.

  	
   

  	
  Successor Administrative
  Agent

  	
   

  	
  54

  
	
  8.12.

  	
   

  	
  Sharing of Payments, etc.

  	
   

  	
  55

  
	
  8.13.

  	
   

  	
  Payments Between
  Administrative Agent and Lenders

  	
   

  	
  55

  
	
  8.14.

  	
   

  	
  Bankruptcy Provisions

  	
   

  	
  55

  
	
  8.15.

  	
   

  	
  Procedures for Notices and
  Approvals

  	
   

  	
  56

  
	
  8.16.

  	
   

  	
  Amendments to
  Article VIII

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX BENEFIT OF
  AGREEMENT; ASSIGNMENTS; PARTICIPATION

  	
  56

  
	
   

  	
   

  
	
  9.1.

  	
   

  	
  Successors and Assigns

  	
   

  	
  56

  
	
  9.2.

  	
   

  	
  Participations and
  Assignments

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X GENERAL
  PROVISIONS

  	
   

  	
  58

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
   

  	
  Notices

  	
   

  	
  58

  
	
  10.2.

  	
   

  	
  Renewal, Extension, or
  Rearrangement

  	
   

  	
  59

  
	
  10.3.

  	
   

  	
  Application of Payments

  	
   

  	
  59

  
	
  10.4.

  	
   

  	
  Counterparts

  	
   

  	
  59

  
	
  10.5.

  	
   

  	
  Negotiated Document

  	
   

  	
  60

  
	
  10.6.

  	
   

  	
  Consent to Jurisdiction:
  Exclusive Venue

  	
   

  	
  60

  

 

v

 

	
  10.7.

  	
   

  	
  Not Partners: No Third
  Party Beneficiaries

  	
   

  	
  60

  
	
  10.8.

  	
   

  	
  No Reliance on Lenders’
  Analysis

  	
   

  	
  60

  
	
  10.9.

  	
   

  	
  No Marshaling of Assets

  	
   

  	
  60

  
	
  10.10.

  	
   

  	
  Business Days

  	
   

  	
  60

  
	
  10.11.

  	
   

  	
  Standard of Care:
  Limitation of Damages

  	
   

  	
  60

  
	
  10.12.

  	
   

  	
  Incorporation of Schedules

  	
   

  	
  61

  
	
  10.13.

  	
   

  	
  Indulgence Not Waiver

  	
   

  	
  61

  
	
  10.14.

  	
   

  	
  Cumulative Remedies

  	
   

  	
  61

  
	
  10.15.

  	
   

  	
  Amendment and Waiver in
  Writing

  	
   

  	
  61

  
	
  10.16.

  	
   

  	
  Entire Agreement

  	
   

  	
  61

  
	
  10.17.

  	
   

  	
  Severability

  	
   

  	
  61

  
	
  10.18.

  	
   

  	
  Time of Essence

  	
   

  	
  61

  
	
  10.19.

  	
   

  	
  Applicable Law

  	
   

  	
  61

  
	
  10.20.

  	
   

  	
  Captions Not Controlling

  	
   

  	
  61

  
	
  10.21.

  	
   

  	
  Facsimile Signatures

  	
   

  	
  61

  
	
  10.22.

  	
   

  	
  Termination

  	
   

  	
  62

  
	
  10.23.

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  63

  
	
  10.24.

  	
   

  	
  Expenses; Indemnity

  	
   

  	
  63

  
	
  10.25.

  	
   

  	
  PATRIOT Act Notice

  	
   

  	
  63

  
	
  10.26.

  	
   

  	
  Agreement Amends and
  Restates Existing Credit Agreement

  	
   

  	
  64

  

 

vi

 

SECOND
AMENDED AND RESTATED

CREDIT AGREEMENT

 

THIS SECOND
AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 16,
2008 (“this Agreement”) is entered into by and among PROTECTIVE LIFE CORPORATION, a Delaware corporation (“PLC”), PROTECTIVE LIFE INSURANCE COMPANY, a
Tennessee corporation (“PLICO”; PLC and PLICO are together referred to as the “Borrowers”),
REGIONS BANK, an Alabama banking
corporation (“Regions”), and the various lenders identified on the signature pages hereto
(collectively, with all other persons that may from time to time hereafter
become Lenders hereunder by execution of an Assignment and Acceptance, the “Lenders”),
and REGIONS BANK, in its capacity,
as Administrative Agent for the Lenders (the “Administrative Agent”).

 

RECITALS

 

A.            PLC, the Lenders and AmSouth
Bank (now known as Regions Bank), as Administrative Agent for the Lenders, have
heretofore entered into an Amended and Restated Credit Agreement dated as of July 30,
2004 (the “Existing Credit Agreement”) pursuant to which the Lenders agreed to
make available to the Borrowers a credit facility in the maximum principal
amount of $200,000,000.

 

B.            The Borrowers, the Lenders
and the Administrative Agent wish to amend and restate the Existing Credit
Agreement in its entirety, as hereinafter set forth.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing recitals, and of
the mutual agreement of the parties hereto, the Borrowers, the Lenders and the
Administrative Agent agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

As used in this Agreement:

 

“Adjusted
Consolidated Indebtedness” means (i) Consolidated Indebtedness,
less (ii) Short-Term Indebtedness for advance fundings of guaranteed
investment contracts, annuities and other similar insurance and investment
products.

 

“Adjusted
Consolidated Interest Expense” means, for any period of calculation,
(i) Consolidated Interest Expense, less (ii) interest on Short-Term
Indebtedness for advance fundings of guaranteed investment contracts, annuities
and other similar insurance and investment products.

 

1

 

“Adjusted
Consolidated Net Worth” means at any date of determination,
Consolidated Net Worth excluding all unrealized net losses and gains on assets
held for sale pursuant to SFAS 115 and other accumulated comprehensive income
pursuant to SFAS 133 or subsequent accounting pronouncements having
substantially similar impact as these provisions, to the extent such unrealized
net losses and gains have been taken into account in determining Consolidated
Net Worth.

 

“Administrative
Agent” means Regions Bank in its capacity as agent for the Lenders
pursuant to Article IX of this Agreement, and not in its individual
capacity as a Lender, and any successor Administrative Agent appointed pursuant
to Article IX hereof.

 

“Affiliate”
of any Person means any other Person directly or indirectly controlling,
controlled by or under common control with such Person. A Person shall be
deemed to control another Person if the controlling Person owns 10% or more of
any class of voting securities (or other ownership interests) of the controlled
Person or possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person, whether
through ownership of stock, by contract or otherwise.

 

“Agreement”
means this Second Amended and Restated Credit Agreement (including all
schedules and exhibits hereto), as it may be further amended or modified and in
effect from time to time.

 

“Annual
Statement” means the annual statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance Subsidiary’s jurisdiction of
incorporation or, if no specific form is so required, in the form of financial
statements recommended by the NAIC to be used for filing annual statutory
financial statements and shall contain the type of information recommended by
the NAIC to be disclosed therein, together with all exhibits or schedules filed
therewith.

 

“Applicable
Facility Fee,” “Applicable LIBOR Rate Margin,” and “Applicable Prime
Rate Margin” mean, with respect to any Revolving Credit Loan, Letter of Credit
and the facility fee, the rates per annum set forth opposite the appropriate
test in the pricing grid below:

 

	
  S&P Rating of PLC

  	
   

  	
  Prime Rate

  Margin in

  Basis Points

  	
   

  	
  LIBOR

  Margin in

  Basis Points

  	
   

  	
  Facility Fee in

  Basis Points

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tier 1 - Greater than or
  equal to A+

  	
   

  	
  0bps

  	
   

  	
  25bps

  	
   

  	
  8.5bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tier 2 – Greater than or
  equal to A

  	
   

  	
  0bps

  	
   

  	
  30bps

  	
   

  	
  9bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tier 3 - Greater than or
  equal to A- 

  	
   

  	
  0bps 

  	
    

  	
  40bps 

  	
    

  	
  10bps 

  	
    

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tier 4 - Greater than or
  equal to BBB+

  	
   

  	
  0bps

  	
   

  	
  50bps

  	
   

  	
  12.5bps

  	
   

  

 

2

 

	
  S&P Rating of PLC

  	
   

  	
  Prime Rate

  Margin in

  Basis Points

  	
   

  	
  LIBOR

  Margin in

  Basis Points

  	
   

  	
  Facility Fee in

  Basis Points

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tier 5 – Greater than or
  equal to BBB

  	
   

  	
  0bps

  	
   

  	
  60bps

  	
   

  	
  15bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tier 6 – Greater than or
  equal to BBB-

  	
   

  	
  0bps

  	
   

  	
  95bps

  	
   

  	
  20bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tier 7 – Less than BBB-

  	
   

  	
  20bps

  	
   

  	
  120bps

  	
   

  	
  30bps

  	
   

  

 

The Applicable Facility Fee, Applicable LIBOR Rate Margin and
Applicable Prime Rate Margin shall be based on PLC’s current senior long-term
unsecured debt rating as published by S&P and as determined by the
above-referenced pricing grid.  Changes
in the Applicable Facility Fee and Applicable Prime Rate Margin shall become
effective on the date on which the rating change was announced by S&P.  Changes in the Applicable LIBOR Margin shall
become effective at the end of the applicable Interest Period subsequent to the
date on which the rating change was announced by S&P.  As of the date of this Agreement, PLC is
currently rated A by S&P and the Applicable LIBOR Rate Margin is therefore
30 basis points and the Applicable Facility Fee is therefore 9 basis points.

 

“Article”
means an article of this Agreement.

 

“Assignment
and Acceptance” means an Assignment and Acceptance in the form of Exhibit 9.2
(with blanks appropriately completed) delivered in connection with an
assignment of a portion of a Lender’s interest under this Agreement pursuant to
Section 9.2.

 

“Authorized
Officer” means any of the President, Chief Financial Officer, Chief
Accounting Officer or any Vice President of the Borrowers, acting singly.

 

“Borrowers”
means collectively, PLC and PLICO, and their successors and assigns.

 

“Borrowing
Notice” is defined in Section 2.5.

 

“Business Day”
means any day on which Administrative Agent is open for the conduct of ordinary
business; provided however, that when used in connection with determining the
LIBOR Rate, the term “Business Day” shall exclude any day on which banks are
not open for dealings in U.S. Dollar deposits in the London Interbank Market.

 

“Capitalized
Lease” of a Person means any lease of Property by such Person as
lessee that would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.

 

3

 

“Capitalized Lease
Obligations” of a Person means the amount of the obligations of such
Person under Capitalized Leases that would be shown as a liability on a balance
sheet of such Person prepared in accordance with GAAP.

 

“Change in Control”
means the acquisition by any Person, or two or more Persons acting in concert,
of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934)
of 35% or more of the outstanding shares of voting stock of PLC.

 

“Closing Date”
means April 16, 2008.

 

“Code” means the
Internal Revenue Code of 1986, as amended, reformed or otherwise modified from
time to time.

 

“Consolidated
Capitalization” means, at any date of determination, the sum of (i) Adjusted
Consolidated Net Worth as at such date plus (ii) Adjusted Consolidated
Indebtedness as at such time.

 

“Consolidated Indebtedness”
means the Indebtedness of PLC and its Subsidiaries determined on a consolidated
basis in accordance with GAAP.

 

“Consolidated Interest
Expense” means, for any period of calculation, interest expense on
Indebtedness, whether paid or accrued, of PLC and its Subsidiaries calculated
on a consolidated basis in accordance with GAAP.

 

“Consolidated Net Income”
means, for any period, the consolidated net income of PLC and the Subsidiaries
for such period, as shown on the consolidated financial statements of PLC and
the Subsidiaries delivered in accordance with Section 5.1.

 

“Consolidated Net Worth”
means, at any date of determination, the amount of consolidated common
shareholders’ equity of PLC and its Subsidiaries, determined as at such date in
accordance with GAAP (or SAP, with respect to the Insurance Subsidiaries).

 

“Consolidated Subsidiary”
means, a Subsidiary, the accounts of which are customarily consolidated with
those of PLC for the purpose of reporting to stockholders of PLC or, in the
case of a recently acquired Subsidiary, the accounts of which would, in
accordance with PLC’s regular practice, be so consolidated for that purpose.

 

“Consolidated Total Assets”
means, at any time, the total assets of PLC and its Consolidated Subsidiaries,
determined on a consolidated basis, as set forth or reflected on the most
recent consolidated balance sheet of PLC and its Consolidated Subsidiaries,
prepared in accordance with GAAP.

 

4

 

“Credit Documents”
means, collectively, each writing delivered at any time by the Borrowers to
Lenders or Administrative Agent relating to the Loans, the Swingline Loans or
the Letters of Credit to evidence or secure any of the Obligations.

 

“Default” means
an event described in Article VI.

 

“Default Rate”
means a rate of interest equal to two percentage points (200 basis points) in
excess of the highest interest rate that would otherwise be payable on the
principal amount of the Obligations under the Credit Documents from time to
time in the absence of the existence of a default, or the maximum rate
permitted by law, whichever is less.

 

“ERISA” means
the Employee Retirement Income Security Act of 1974, as amended from time to
time.

 

“ERISA Affiliate”
means any Person that is a member of PLC’s controlled group, or under common
control with PLC, within the meaning of Section 414 of the Code.

 

“ERISA Event”
means (i) the occurrence with respect to a Plan of a reportable event,
within the meaning of Section 4034 of ERISA, unless the 30-day notice
requirement with respect thereto has been waived by the PBGC, (ii) the
provision by the administrator of any Plan of a notice of intent to terminate
such Plan, pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (iii) the cessation of operations at a facility of PLC or any
ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA; (iv) the withdrawal by PLC or an ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (v) the conditions set
forth in Section 302(f)(1)(A) and (B) of ERISA to the creation
of a lien upon property or rights to property of PLC or any ERISA Affiliate for
failure to make a required payment to a Plan are satisfied; (vi) the
adoption of an amendment to a Plan requiring the provision of security to such
Plan, pursuant to Section 307 of ERISA; or (vii) the institution by
the PBGC of proceedings to terminate a Plan, pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section 4042
of ERISA that constitutes grounds for the termination of, or the appointment of
a trustee to administer, a Plan.

 

“GAAP” means
generally accepted accounting principles as in effect from time to time,
applied in a manner consistent with that used in preparing the financial
statements referred to in Section 5.1.

 

“Governmental Authority”
means the federal government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government including, without
limitation, any board of insurance, insurance department or insurance
commissioner.

 

5

 

“Guaranteed Obligations”
of a Person means all guaranties, endorsements, assumptions and other
contingent obligations with respect to, or to purchase or to otherwise pay or
acquire, Indebtedness of others.

 

“Indebtedness”
of a Person means, without duplication, such Person’s (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price
of Property or services (other than accounts payable arising in the ordinary
course of such Person’s business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, payable out of the proceeds or production from Property
now or hereafter owned or acquired by such Persons, (iv) obligations
evidenced by notes, acceptances or other similar debt instruments, (v) Capitalized
Lease Obligations, (vi) obligations for reimbursement of drafts drawn or
available to be drawn under letters of credit, (vii) Synthetic Lease
Obligations and (viii) Guaranteed Obligations.  It is understood and agreed, for the
avoidance of doubt, that (a) annuities, guaranteed investment contracts,
funding agreements, Federal Home Loan Bank advances and similar instruments and
agreements, (b) obligations (including without limitation trust
obligations) under reinsurance, coinsurance, modified coinsurance agreements or
similar agreements and related trust agreements, and (c) insurance
products created or entered into in the normal course of business shall not
constitute “Indebtedness”. 
Notwithstanding the foregoing, Indebtedness shall not include:  (1) the following obligations issued in
connection with the funding of statutory reserves and with respect to which the
Borrowers have no obligation to repay:  (A) surplus
notes or other obligations of Subsidiaries of the Borrowers (“Capital Market
Notes”), (B) any securities backed by such Capital Market Notes, (C) letters
of credit issued for the account of Subsidiaries of the Borrowers that are not
issued under this Agreement, and (D) any guarantees by the issuers of the
obligations described in (A), (B) and (C) above, (2) obligations
or portions thereof issued in connection with the funding of statutory reserves
that each of the Rating Agencies which make such determination recognize as
operating rather than financial leverage in their calculation of Borrowers’
financial ratios, (3) any short-term indebtedness incurred for the
pre-funding of anticipated policy obligations or anticipated investment cash
flow, or (4) obligations that are not otherwise included in items (i) through
(viii) of the definition of Indebtedness, but which would be classified as
a liability on the Borrowers’ financial statements only by reason of FASB
Interpretation No. 46 or a subsequent accounting pronouncement having a
substantially similar impact.

 

“Insufficiency”
means, with respect to any Plan, the amount, if any, of its unfunded benefit
liabilities as defined in Section 4001(a)(18) of ERISA.

 

“Insurance Subsidiary”
means any Subsidiary that is engaged in the insurance business.

 

“Interest Payment Date”
means, (i) as to Prime Rate Loans and Swingline Loans, the first day of
each month, and (ii) as to any LIBOR Loan, the last day of the Interest
Period applicable to such Loan.

 

“Interest Period”
means, as to any LIBOR Loan, the period commencing on (and including) the date
of such LIBOR Loan and ending on (but excluding) the numerically 

 

6

 

corresponding day (or, if there
is no numerically corresponding day, on the last day) in the calendar month
that is 1, 2 or 3 months thereafter, as Borrowers may elect; provided, however,
that (x) if any Interest Period would end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless, with respect to LIBOR Loans, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end
on the next preceding Business Day and (y) no Interest Period with respect
to any Loan shall end later than the Termination Date. Interest shall accrue
from and including the first Business Day of an Interest Period to but
excluding the last Business Day of such Interest Period.

 

“Law” or “Laws” means all applicable constitutional provisions,
statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, and requirements of all Governmental Authorities.

 

“Letters of Credit”
has the meaning assigned in Section 2.16 of this Agreement.

 

“Letter of Credit Documents”
has the meaning assigned in Section 2.16.3 of this Agreement.

 

“Letter of Credit
Liabilities” has the meaning assigned in Section 2.16 of this
Agreement.

 

“Lender” means (a) Regions
in its capacity as a Lender and each Person listed on the signature pages hereto
and identified as a Lender and (b) each Person that becomes an Assignee
pursuant to the provisions of Section 9.2.

 

“LIBOR Liabilities”
means deposit liabilities incurred through the London Interbank Market.

 

“LIBOR Loan”
means a Loan for which the Borrowers have elected application of an interest
rate based on the LIBOR Rate.

 

“LIBOR Rate”
means, for any given Interest Period with respect to a given LIBOR Loan, the
rate per annum determined by the Administrative Agent at such time by reference
to the Bloomberg reporting service or, if unavailable, other comparable
financial information reporting service at the time employed by the
Administrative Agent as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term LIBOR Rate
means, for any given Interest Period with respect to a given LIBOR Loan, the
rate per annum appearing on Reuters Screen LIBOR Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however,
if more than one rate is specified on Reuters Screen LIBOR Page, the applicable
rate shall be the arithmetic mean of all such rates.

 

7

 

“LIBOR Rate Reserve
Percentage” means the reserve percentage applicable during any
Interest Period (or if more than one such percentage shall be so applicable,
the daily average of such percentages for those days in such Interest Period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for Lenders with respect to liabilities or assets
consisting of or including LIBOR Liabilities having a term equal to such
Interest Period.

 

“License” means
any license, certificate of authority, permit or other authorization required
to be obtained from a Governmental Authority in connection with the operation,
ownership or transaction of the insurance business.

 

“Lien” means any
lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any conditional sale,
Capitalized Lease or other title retention agreement).  Notwithstanding the foregoing, a Lien shall
not include any such agreement or arrangement with respect to:  (1) the following obligations issued in
connection with the funding of statutory reserves and with respect to which the
Borrowers have no obligation to repay: (A) surplus notes or other
obligations of Subsidiaries of the Borrowers (“Capital Market Notes”), (B) any
securities backed by such Capital Market Notes, (C) letters of credit
issued for the account of Subsidiaries of the Borrowers that are not issued
under this Agreement, and (D) any guarantees by the issuers of the
obligations described in (A), (B) and (C) above, (2) obligations
or portions thereof issued in connection with the funding of statutory reserves
that each of the Rating Agencies which make such determination recognize as
operating rather than financial leverage in their calculation of Borrowers’
financial ratios, (3) any short-term indebtedness incurred for the
pre-funding of anticipated policy obligations or anticipated investment cash
flow, or (4) obligations that are not otherwise included in items (i) through
(viii) of the definition of Indebtedness, but which would be classified as
a liability on the Borrowers’ financial statements only by reason of FASB
Interpretation No. 46 or a subsequent accounting pronouncement having a
substantially similar impact.

 

“Loan” means and
collectively refers to, loans advanced under the Revolving Credit Loan or, when
the context so requires, advanced as a Swingline Loan.

 

“Material Adverse Effect”
means a material adverse effect on (i) the business, Property, condition
(financial or otherwise), results of operations or prospects of the Borrowers
and their Subsidiaries taken as a whole, (ii) the ability of the Borrowers
to perform their obligations under the Credit Documents or (iii) the
validity or enforceability of any of the Credit Documents or the rights or
remedies of the Administrative Agent or the Lenders thereunder.

 

8

 

“Maximum Lawful Amount”
means the maximum lawful amount of interest, loan charges, commitment fees or
other charges that may be assessed under Alabama law or, if higher, under
applicable federal law.

 

“Multiemployer Plan”
means a “multiemployer plan” as defined in Section 3(37) of ERISA.

 

“Multiple Employer Plan”
means a single employer plan, as defined in Section 4001(a)(15) of ERISA,
that (i) is maintained for employees of PLC or an ERISA Affiliate and at
least one Person other than PLC and its ERISA Affiliates or (ii) was so
maintained and with respect to which PLC or an ERISA Affiliate could have
liability under Section 4064 or 4049 of ERISA in the event such plan has
been or were to be terminated.

 

“NAIC” means the
National Association of Insurance Commissioners or any successor thereto, or in
lieu thereof, any other association, agency or other organization performing
advisory, coordination or other like functions among insurance departments,
insurance commissions and similar Governmental Authorities of the various
states of the United States of America toward the promotion of uniformity in
the practices of such Governmental Authorities.

 

“Notes” means
any of the Revolving Credit Notes and the Swingline Note.

 

“Obligations”
means the obligation of the Borrowers to Lenders to repay the Loans, the
obligation of the Borrowers to the Swingline Lender to repay the Swingline
Loans, the Reimbursement Obligations, and all other obligations of the
Borrowers to Lenders and to Administrative Agent under this Agreement and the
other Credit Documents, subject to the limitations regarding PLICO set forth in
Section 2.19 of this Agreement.

 

“PATRIOT Act”
means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001), as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.

 

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

 

“Permitted Liens”
means: (i) with respect to the Synthetic Lease Facility, any of the
following:

 

(a)                                  rights reserved to or
vested in any Governmental Authority by the terms of any right, power,
franchise, grant, license, permit or provision of law affecting the Synthetic
Lease Facility to (1) terminate, or take any other action which has the
effect of modifying, such right, power, franchise, grant, license, permit or
provision of law; provided that such termination or other action, when
taken, shall not have resulted in a loss event and shall not have had a
Material Adverse Effect,

 

9

 

or (2) purchase, condemn,
appropriate or recapture, or designate a purchaser of, the Synthetic Lease
Facility;

 

(b)                                 any Liens thereon for
impositions or taxes and any Liens of mechanics, materialmen and laborers for
work or services performed or materials furnished which (i) are not
overdue, or (ii) are being contested in good faith;

 

(c)                                  rights reserved to or
vested in any Governmental Authority to control or regulate the use of such
Property or to use the Synthetic Lease Facility in any manner;

 

(d)                                 in the case of the
Site, encumbrances, easements, and other similar rights existing which
existence or exercise of which do not have a Material Adverse Effect; and

 

(e)                                  any Liens created
under the operative documents relating to the Synthetic Lease Facility and any
financing statements filed in connection therewith; and

 

(ii)                                  with
respect to any other Property, any of the following:

 

(a)                                  Liens existing on the
Closing Date of this Agreement securing Indebtedness outstanding on the Closing
Date;

 

(b)                                 any Lien existing on
any asset of (i) corporation or partnership at the time such corporation
or such partnership becomes a consolidated Subsidiary of PLC, or (ii) Subsidiary
at the time it becomes a Subsidiary, and in either case not created in
contemplation of such event;

 

(c)                                  any Lien on any asset
securing Indebtedness incurred for the purposes of financing all or any part of
the cost of constructing such asset, provided that such Lien attaches to such
asset concurrently with or within 18 months after the completion of
construction thereof;

 

(d)                                 any Lien on any asset
of any corporation existing at the time such corporation is merged or
consolidated with or into the Borrowers or their Subsidiaries and not created
in contemplation of such event;

 

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

 

(f)                                    Liens securing
Indebtedness owing by any Subsidiary to the Borrowers;

 

(g)                                 Any Lien arising out
of the refinancing, extension, renewal or refunding of any Indebtedness secured
by any Lien permitted by any of the foregoing clauses of this subsection (ii) provided
that (i) such Indebtedness is not secured by any 

 

10

 

additional assets, and (ii) the
amount of such Indebtedness secured by any such Lien is not increased;

 

(h)                                 Liens incidental to
the conduct of the business of the Borrowers or any of their Subsidiaries or
the ownership of their respective assets which (i) do not secure
Indebtedness and (ii) do not in the aggregate materially detract from the
value of their respective assets or materially impair the use thereof in the
operation of their respective businesses;

 

(i)                                     Any Lien on margin
stock (as defined in Regulation U);

 

(j)                                     Liens for impositions
or taxes either not yet delinquent or which are being contested in good faith
by appropriate proceedings;

 

(k)                                  Liens not securing
Indebtedness which are created by or relate to any legal proceedings which at
the time are being contested in good faith by appropriate proceedings;

 

(l)                                     Any other
statutory or inchoate Lien securing amounts other than Indebtedness which are
not delinquent;

 

(m)                               Liens securing purchase
money debt, or Indebtedness arising under capitalized leases; provided,
however, that in each case any such Lien attaches only to the specific item(s) or
property or asset(s) financed with such purchase money debt or capitalized
lease; and

 

(n)                                 Liens not otherwise
permitted by the foregoing paragraphs of this subsection (ii) securing
Indebtedness and other obligations in an aggregate principal amount at any time
outstanding not to exceed 15% of Adjusted Consolidated Net Worth.

 

“Person”
(whether or not capitalized) means any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, government, limited liability company, governmental agency or
political subdivision thereof or other governmental authority, or any other
form of entity.

 

“Plan” means a
Single Employer Pension Plan or a Multiple Employer Pension Plan.

 

“PLC” means
Protective Life Corporation, a Delaware corporation.

 

“PLICO” means
Protective Life Insurance Company, a Tennessee corporation.

 

“Prime Rate”
means that rate of interest designated by Regions from time to time as its “prime
rate”, it being expressly understood and agreed that such prime rate is merely
an index rate used by Regions to establish lending rates and is not necessarily
Regions’ most favorable lending rate, and that changes in the prime rate are
discretionary with Regions.

 

11

 

“Prime Rate Loan”
means a Loan for which the Borrowers have elected application of an interest
rate based on the Prime Rate.

 

“Pro Rata” or “Pro Rata Share” of any amount means, with respect to any
Lender at any time, the product of (i) such amount, multiplied by (ii) such
Lender’s Revolving Credit Percentage at such time of the Revolving Credit
Facility; provided however, if at a time of determination there are principal
amounts outstanding under the Revolving Credit Loan, and if any Lender has
failed to fund any unrepaid Revolving Credit Loan that was funded by any other
Lender or Lenders, this apportionment shall be determined according to the
respective total principal amounts of the Revolving Credit Loan held by the
respective Lenders rather than by their Revolving Credit Commitments.

 

“Property” of a
Person means any and all property, whether real, personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated
by such Person.

 

“Rating Agencies”
means Standard & Poor’s Rating Services, a division of The McGraw Hill
Companies, Inc. and Moody’s Investors Services, Inc., as applicable.

 

“Regions” means
Regions Bank, an Alabama banking corporation, in its individual capacity, and
its successors and assigns.

 

“Regulation U”
means Regulation U of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor or other regulation or official
interpretation of said Board of Governors relating to the extension of credit
by banks for the purpose of purchasing or carrying margin stocks applicable to
member banks of the Federal Reserve System.

 

“Regulatory Change”
means on or after the Closing Date, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof.

 

“Reimbursement Obligations”
has the meaning assigned in Section 2.16.2 of this Agreement.

 

“Required Lenders”
means, at any time, the Lenders owning or holding 51% or more of the sum of (i) the
then aggregate principal amount of the Revolving Credit Loans then outstanding
plus (ii) the then aggregate Letter of Credit Liabilities plus (iii) the
exposure (including the risk participation exposure) in respect of then
outstanding Swingline Loans; or, if no Loans or Letters of Credits are then
outstanding, the Lenders with 51% or more of the aggregate of all Revolving
Credit Commitments at such time (or, if the Revolving Credit Commitments are
not then in effect, the Revolving Credit Commitments as they existed
immediately prior to their termination). 
For purposes of this definition, if at a time of determination there are
principal amounts outstanding under the Revolving Credit Loan, and if 

 

12

 

any Lender has failed to fund
any unrepaid Revolving Credit Loan that was funded by any other Lender or
Lenders, this determination shall be made according to Lenders holding the
required percentage of principal amounts of the Revolving Credit Loan rather
than by the outstanding Revolving Credit Commitments.

 

“Revolving Credit
Commitment” means, with respect to any Lender at any time, the
amount set forth under such Lender’s name on its signature page hereto
under the caption “Revolving Credit Commitment” or if such Lender has entered
into one or more Assignment and Acceptances, the amount set forth for such
Lender at such time in the register maintained by the Administrative Agent
pursuant to Section 9.2 as such Lender’s “Revolving Credit Commitment” as
such amount may be reduced at or prior to such time pursuant to the terms
hereof or increased pursuant to Section 2.20.

 

“Revolving Credit Facility”
means the revolving line of credit established by the Lenders under Article II.

 

“Revolving Credit Loans”
means the revolving credit loans described in Article II hereof.

 

“Revolving Credit Note”
means the promissory notes of the Borrowers in substantially the form of Exhibit 2.3,
executed and delivered to the Lenders with the Revolving Credit Commitments
pursuant to Section 2.3 or, in connection with an Assignment and
Acceptance, pursuant to Section 9.2, together with any amendments,
modifications and supplements thereto and restatements thereof, in whole or in
part.

 

“Revolving Credit
Percentage” means, with respect to any Lender at any time, a
fraction (expressed as a percentage) the numerator of which is the Revolving
Credit Commitment of such Lender at such time and denominator of which is the
total Revolving Credit Commitment at such time; provided that if the Revolving
Credit Percentage of any Lender is to be determined after the Revolving Credit
Commitments have been terminated, then such Revolving Credit Percentage shall
be determined immediately prior (and without giving effect) to such
termination.

 

“S&P” means
Standard & Poor’s Ratings Group.

 

“SAP” means,
with respect to any Insurance Subsidiary, the statutory accounting practices
prescribed or permitted by the insurance commissioner (or other similar
authority) as of the Closing Date in the jurisdiction of incorporation of such
Insurance Subsidiary for the preparation of annual statements and other
financial reports by insurance companies of the same type as such Insurance
Subsidiary.

 

“Section” means
a numbered section of this Agreement, unless another document is specifically
referenced.

 

13

 

 

“Short-Term Indebtedness”
means all indebtedness that by its terms matures within one year from and that
is not renewable at the option of the obligor to a date later than one year
after, the date such indebtedness was incurred. 
Any indebtedness which is extended or renewed (other than pursuant to
the option of the obligor) shall be deemed to have been incurred at the date of
such extension or renewal.

 

“Significant Insurance
Subsidiary” means any Significant Subsidiary that is an Insurance
Subsidiary.

 

“Significant Subsidiary”
means any Subsidiary which meets or exceeds any of the following conditions:

 

(1)           PLC’s
and its other Subsidiaries’ investments in and advances to the Subsidiary
exceed 10 percent of the total assets of PLC and its Subsidiaries consolidated
as of the end of the most recently completed fiscal year; or

 

(2)           PLC’s
and its other Subsidiaries’ proportionate share of the total assets (after
intercompany eliminations) of the Subsidiary exceeds 10 percent of the total
assets of PLC and its Subsidiaries consolidated as of the end of the most
recently completed fiscal year; or

 

(3)           PLC’s
and its other Subsidiaries’ equity in the income from continuing operations
before income taxes, extraordinary items and cumulative effect of a change in
accounting principle of the Subsidiary exceeds 10 percent of such income of PLC
and its Subsidiaries consolidated for the most recently completed fiscal year.

 

“Single Employer Plan”
means a single employer plan, as defined in Section 4001(a)(15) of ERISA,
that (i) is maintained for employees of PLC or an ERISA Affiliate and no
Person other than PLC and its ERISA Affiliates or (ii) was so maintained
and with respect to which PLC or an ERISA Affiliate could have liability under Section 4069
of ERISA in the event such plan has been or were to be terminated.

 

“Site” means
certain real property located in Birmingham, Alabama which generally comprises
a building, related parking deck, and related furniture, equipment, fixtures
and other improvements, located at 2801 Highway 280 South, Birmingham, Alabama
35223.

 

“Subsidiary”
means any corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by PLC.  A
separate account established pursuant to SAP or any applicable insurance
regulatory requirement shall be deemed not to be a Subsidiary.

 

“Substantial Portion”
means, with respect to the Property of PLC and its Subsidiaries, Property that (i) represents
more than 10% of the consolidated assets of PLC and its Subsidiaries as would
be shown in the consolidated financial statements of PLC and its Subsidiaries
as at the 

 

14

 

beginning of the twelve-month
period ending with the month in which such determination is made or (ii) is
responsible for more than 10% of the consolidated net sales or of the
consolidated net income of PLC and its Subsidiaries as reflected in the
financial statements referred to in clause (i) above.

 

“Surplus Note”
means a promissory note executed by an Insurance Subsidiary of the type
generally described in the insurance industry as a “surplus note”, the
principal amount of which is properly recorded by the issuer as an addition to
capital and surplus rather than as a liability in accordance with SAP.

 

“Swingline Borrowing Notice”
has the meaning assigned in Section 2.17.3(b) hereof.

 

“Swingline Lender”
means Regions Bank.

 

“Swingline Loan”
means a loan advanced under Section 2.17 hereof, and funded under the
Revolving Credit Loan.

 

“Swingline Note”
means the promissory note of the Borrowers in substantially the form of Exhibit 2.17.2
hereto executed and delivered to the Swingline Lender, together with any
amendments, modifications and supplements thereto and restatements thereof.

 

“Synthetic Lease Facility”
means those documents pertaining to the synthetic lease facility for a
building, related parking deck and related furniture, equipment, fixtures and
other improvements in Birmingham, Jefferson County, Alabama among Wachovia
Development Corporation (as assignee of Wachovia Capital Investments, Inc.)
as Lessor, PLICO as Lessee, and PLC as Guarantor, dated as of January 11,
2007.

 

“Synthetic Lease
Obligations” of a Person means the amount of the obligations of such
Person under any lease that would not be shown as a liability, but would be
treated as an operating lease, in accordance with GAAP, but which arise under a
transaction in which the property subject to such lease is owned by the lessee
for the purposes of the Code. 
Obligations under the Synthetic Lease Facility are Synthetic Lease
Obligations.

 

“Termination Date”
means April 16, 2013, or such earlier date on which the obligations of the
Lenders to make Loans hereunder are terminated pursuant to the terms of this
Agreement.

 

“Unconsolidated Cash Inflow
Available for Interest Expense” means, for any period of
calculation, the sum (without duplication) of (a) all amounts received by
PLC from its Subsidiaries during such period as (i) interest and principal
on Indebtedness (including but not limited to Surplus Notes) and (ii) management
fees (net of expenses incurred in providing the services for which such
management fees were paid), (b) all amounts that PLC’s Subsidiaries were
permitted, under applicable laws and regulations, to distribute to PLC during
each period as dividends, whether or not so distributed, and (c) other
income of PLC.

 

15

 

“Unmatured Default”
means an event that, but for the lapse of time or the giving of notice, or
both, would constitute a Default.

 

“Wholly-Owned Subsidiary”
means (i) any Subsidiary all of the outstanding voting securities of which
shall at the time be owned or controlled, directly or indirectly, by PLC or one
or more Wholly-Owned Subsidiaries of PLC, or by PLC and one or more
Wholly-Owned Subsidiaries of PLC, or (ii) any partnership, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.

 

The foregoing definitions shall be equally
applicable to both the singular and plural forms of the defined terms.

 

ARTICLE II

 

THE LOANS

 

Concurrently with the execution of this
Agreement, Lenders agree on a several basis, and not on a joint basis, in
accordance with their respective Revolving Credit Commitments, to make the
Loans to the Borrowers, under the following terms and conditions:

 

2.1.          Amount of Revolving Credit Loan.  The principal indebtedness of the Borrowers
to Lenders having a Revolving Credit Commitment under the Revolving Credit Loan
shall not exceed Five Hundred Million and No/100 Dollars ($500,000,000.00) less
the sum of the outstanding Letter of Credit Liabilities and the principal
balance of Swingline Loans outstanding from time to time.

 

2.2.          Use of Proceeds.  The Revolving Credit Loan and Letters of
Credit shall be used by the Borrowers for general corporate purposes, including
but not limited to, (i) working capital needs, (ii) stock
repurchases, (iii) payment of costs and expenses related to this
Agreement, (iv) capital contributions to PLC’s Subsidiaries, (v) financing
reserve requirements, capital or collateral requirements, (vi) acquisitions,
and (vii) refinance existing indebtedness.

 

2.3.          Revolving Credit Notes.  The Borrowers’ obligations under the
Revolving Credit Loan shall be evidenced by Revolving Credit Notes in favor of
the respective Lenders in the form included as Exhibit 2.3 hereto payable
to each Lender for its Revolving Credit Commitment.

 

2.4.          Separate Commitments of Lenders.  The Borrowers acknowledge that each Lender’s
commitment to fund its portion of the Loans is made by each Lender severally, and
neither Administrative Agent nor any Lender shall be liable for the failure of
another Lender to timely perform under this Agreement.

 

16

 

2.5.          Advances of Loans.  Subject to the terms and conditions of this
Agreement, the Borrowers may borrow, repay and reborrow Loans under the
Revolving Credit Loan, provided that the outstanding principal balance of the
Revolving Credit Loan shall not at any time exceed the amounts permitted under Section 2.1
above.  Loans shall be disbursed as
follows:

 

2.5.1        Loans Advanced Pursuant to Borrowing
Notices.

 

2.5.1(a) Applicability.  Loans (other than the Swingline Loan) may be
LIBOR Loans, Prime Rate Loans, or a combination thereof, and the funding
thereof shall be subject to this Section 2.5.1.

 

2.5.1(b) Borrowing
Notices.  As long as the Borrowers
meet the conditions for funding stated in this Agreement, the Borrowers may
submit requests for Loans (“Borrowing Notices”) to Administrative Agent.  All requests shall be made in writing (or by
telephone, subject to such security procedures as Administrative Agent may
require from time to time, provided that all telephonic notices shall be
confirmed by written Borrowing Notices within one (1) Business Day) and
shall specify the portion of the Loan to be borrowed by PLICO (if any); the
proposed disbursement date for the requested Loan; the amount of the Loan; the
purpose of the Loan (characterized in accordance with Section 2.2 above);
the type of Loan, i.e., LIBOR Loan or Prime Rate Loan; and if a LIBOR Loan, the
designated Interest Period.  Each
Borrowing Notice shall irrevocably obligate the Borrowers to accept the Loan
requested thereby.  Borrowing Notices
shall be in the form of Exhibit 2.5.1(b) hereto or such other form as
Administrative Agent may from time to time require.

 

2.5.1(c) Funding
of Loans.  Lenders shall fund their
respective portions of requested Loans on the next following Business Day after
the Business Day of Administrative Agent’s receipt of the Borrowing Notice (or
telephonic notice if such notice is followed by a written Borrowing Notice as
provided in Section 2.5.1(b)), in the case of Prime Rate Loans, and on the
third (3rd) Business Day following the Business Day of Administrative Agent’s
receipt of the Borrowing Notice, in the case of LIBOR Loans.  All funds shall be disbursed directly into an
account maintained by the Borrowers with Administrative Agent.  The Borrowers agree that if any Lender elects
to fund any requested Loan(s) sooner after requested than is required
hereunder, the Lender may nevertheless use the entire response period allowed
hereunder upon receipt of any subsequent request, at the Lender’s sole option.

 

2.5.1(d) Prime
Rate Loan Limitations.  Individual
Prime Rate Loans shall be in the minimum amount of Five Hundred Thousand and
No/100 Dollars ($500,000.00) each (and in multiples of $100,000 if in excess
thereof).  Any number of Prime Rate Loans
may be outstanding at any one time.

 

2.5.1(e) LIBOR
Loan Limitations.  Individual LIBOR
Loans shall be in the minimum amount of Three Million and No/100 Dollars
($3,000,000.00) each (and in multiples of $1,000,000 if in excess
thereof).  No more than four (4) LIBOR
Loans may be outstanding under the Revolving Credit Loan.

 

17

 

2.5.1(f) Additional
Limitation on LIBOR Interest Periods. 
Notwithstanding anything to the contrary in this Agreement, if an
Unmatured Default or a Default shall have occurred and be continuing, no
additional LIBOR Loans may be created or continued and no Prime Rate Loan may
be converted into a LIBOR Loan.

 

2.5.2        Conversion of Loans.  The Borrowers shall have the right, on prior
irrevocable written notice to Administrative Agent given three (3) Business
Days prior to the date of any requested conversion, to convert any Prime Rate
Loan or LIBOR Loan into a Loan of another type, or to continue any LIBOR Loan
for another Interest Period, subject in each case to the following:

 

2.5.2(a) Application
of Loans.  Each conversion shall be
effected by applying the proceeds of the new LIBOR Loan and/or Prime Rate Loan,
as the case may be, to the Loan (or portion thereof) being converted.

 

2.5.2(b) Notices
of Conversions.  Each notice pursuant
to this 2.5.2(b) shall be irrevocable and shall refer to this Agreement
and specify the identity and principal amount of the particular Loan that a
Borrower requests be converted or continued; if such notice requests
conversion, the date of such conversion (which shall be a Business Day); and if
a Loan is to be converted to a LIBOR Loan or a LIBOR Loan is to be continued,
the Interest Period with respect thereto. 
No LIBOR Loan shall be converted at any time other than at the end of
the Interest Period applicable thereto, except in accordance with Section 2.12
hereof.  Conversion notices shall be in
the form attached as Exhibit 2.5.1(b) hereto.

 

2.5.3        Absence of Election.  If a Borrower fails to give Administrative
Agent notice to continue any LIBOR Loan for a subsequent period, such LIBOR
Loan (unless repaid) shall automatically be converted into a Prime Rate
Loan.  If a Borrower fails to specify in
any Borrowing Notice the type of borrowing or, in the case of a LIBOR Loan, the
applicable Interest Period, the Borrower will be deemed to have requested a
Prime Rate Loan.

 

2.5.4        Implied Representations Upon Request
for Loan.  Upon making any request
for any Loan, a Borrower shall be deemed to have warranted to Administrative
Agent and Lenders that all conditions to funding set forth in Article III
hereof are satisfied.

 

2.5.5        Advance Not Waiver.  Any Lender’s making of any Loan that it is
not obligated to be made under any provision of Article III hereof or any
other provision hereof shall not be construed as a waiver of the Lenders’ right
to withhold future Loans, declare a Default, or otherwise demand strict
compliance with this Agreement, acting through Administrative Agent as
permitted by the terms hereof.

 

18

 

2.6.          Interest.  Interest shall accrue on each Loan as
follows:

 

2.6.1        Prime Rate Loans.  Interest shall accrue on each Prime Rate Loan
at an annual rate equal to the Prime Rate plus the Applicable Prime Rate
Margin, said rate to change contemporaneously with any change in the Prime
Rate.

 

2.6.2        LIBOR Loans.  Interest shall accrue on each LIBOR Loan at a
rate equal to the LIBOR Rate for the selected Interest Period plus the
Applicable LIBOR Rate Margin.

 

2.6.3        Additional Interest on LIBOR Loans.  In addition to the interest described above,
the Borrowers shall pay to Lenders, if and so long as Lenders shall be required
under regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including LIBOR Liabilities, additional interest on the unpaid principal amount
of each LIBOR Loan, from the date of such advance until said principal amount
is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the LIBOR Rate for the Interest Period
from (ii) the rate obtained by dividing the LIBOR Rate by a percentage
equal to 100% minus the LIBOR Rate Reserve Percentage for such Interest
Period.  This additional interest shall
be payable on each date on which interest is payable.  The amount of additional interest shall be
determined by each Lender, who shall notify the Borrowers and Administrative
Agent thereof and whose determination shall be conclusive, absent manifest
error.

 

2.6.4        Calculation of Interest.  Interest for both Prime Rate Loans and LIBOR
Loans shall be computed on the basis of a 360-day year counting the actual
number of days elapsed. Interest shall accrue on the Business Day a Loan is
extended and shall accrue through the Business Day prior to the Business Day on
which it is repaid.

 

2.6.5        Default Rate.  Notwithstanding the foregoing, upon the
occurrence of a Default and during the continuation of such Default, interest
shall be charged at the Default Rate, regardless of whether Lenders have
elected to exercise any other remedies available to Lenders, including, without
limitation, acceleration of the maturity of the outstanding principal of the
Revolving Credit Loan.  All such interest
shall be paid without demand on the Interest Payment Dates applicable to Prime
Rate Loans.

 

2.6.6        Payment of Interest.  Interest for Prime Rate Loans and LIBOR Loans
shall be due and payable in arrears, without notice, on each Interest Payment
Date.

 

2.6.7        Usury Savings Provision.  It is the intention of the parties that all
charges under or in connection with this Agreement and the Obligations, however
denominated, and including (without limitation) all interest, commitment fees,
late charges and loan charges, shall be limited to the Maximum Lawful Amount.
Such charges hereunder shall be characterized and all provisions of the Credit
Documents shall be construed as to uphold the validity of charges provided for
therein to the fullest possible extent. Additionally, all charges hereunder
shall be spread over the full permitted term of the Obligations for the purpose
of determining the effective rate thereof to the fullest possible extent,
without regard to prepayment of or the right to prepay the Obligations. If for
any reason whatsoever, however, any charges paid or contracted to 

 

19

 

be paid in respect of the
Obligations shall exceed the Maximum Lawful Amount, then, without any specific
action by Lenders, Administrative Agent or the Borrowers, the obligation to pay
such interest and/or other charges shall be reduced to the Maximum Lawful
Amount in effect from time to time and any amounts collected by Lenders that
exceed the Maximum Lawful Amount shall be applied to the reduction of the
principal balance of the Obligations and/or refunded to the Borrowers so that
at no time shall the interest or loan charges paid or payable in respect of the
Obligations exceed the Maximum Lawful Amount. This provision shall control
every other provision herein and in any and all other agreements and
instruments now existing or hereafter arising between the Borrowers and Lenders
with respect to the Obligations.

 

2.7.          Alternate Rate of Interest if LIBOR
Unavailable.  In the event, and on
each occasion, that on the date of commencement of any Interest Period for a
LIBOR Loan, a Lender shall have determined (i) that dollar deposits in the
amount of the requested principal amount of such LIBOR Loan are not generally
available in the London Interbank Market; (ii) that the rate at which such
dollar deposits are being offered will not adequately and fairly reflect the
cost to such Lender of making or maintaining such LIBOR Loan during such
Interest Period; or (iii) that reasonable means do not exist for
ascertaining the LIBOR Rate, such Lender shall, as soon as practicable thereafter,
give written or telephonic notice of such determination to the Borrowers.  In the event of any such determination, any
request by the Borrowers for a LIBOR Loan under this Agreement shall, until the
circumstances giving rise to such notice no longer exist, be deemed to be a
request for a Prime Rate Loan.  Each
determination by such Lender hereunder shall be conclusive absent manifest
error.

 

2.8.          Change in
Circumstances.

 

2.8.1        Imposition of Requirements.  Notwithstanding any other provision herein,
if after the date of this Agreement any change in applicable Laws or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to a Lender under
any LIBOR Loan made by the Lender or any other fees or amounts payable
hereunder (other than taxes imposed on the overall net income, gross receipts
or added value of a Lender by the country in which the Lender is located, or by
the jurisdiction in which a Lender has its principal office, or by any
political subdivision or taxing authority therein), or shall impose, modify or
deem applicable any reserve requirement, special deposit, insurance charge (including
FDIC insurance on LIBOR Liabilities) or similar requirement against assets of,
deposits with or for the account of, or credit extended by, a Lender or shall
impose on a Lender or the London Interbank Market any other condition affecting
this Agreement or LIBOR Loans made by a Lender, and the result of any of the
foregoing shall be to increase the cost to the Lender of making or maintaining
its LIBOR Loan or to reduce the amount of any sum received or receivable by a
Lender hereunder (whether of principal, interest or otherwise) in respect
thereof by an amount deemed by the affected Lender to be material, then the
Borrowers will pay to such Lender such additional amount or amounts as will
compensate the Lender for such additional costs of reduction.

 

20

 

2.8.2        Other Changes.  If either (i) the introduction of, or
any change in, or in the interpretation of, any United States or foreign Law;
or (ii) compliance with any directive, guidelines or request from any
central bank or other United States or foreign Governmental Authority (whether
or not having the force of law) promulgated or made after the date hereof,
affects or would affect the amount of capital required or expected to be
maintained by a Lender (or any lending office of a Lender) or any corporation
directly or indirectly owning or controlling a Lender (or any lending office of
a Lender) based upon the existence of this Agreement, and the Lender shall have
determined that such introduction, change or compliance has or would have the
effect of reducing the rate of return on the Lender’s capital or on the capital
of such owning or controlling corporation as a consequence of its obligations
hereunder (including its commitment) to a level below that which the Lender or
such owning or controlling corporation could have achieved but for such
introduction, change or compliance (after taking into account that Lender’s
policies or the policies of such owning or controlling corporation, as the case
may be, regarding capital adequacy) by an amount deemed by the Lender (in its
sole discretion) to be material, then, from time to time, the Borrowers shall
pay to the Lender such additional amount or amounts as will compensate the
Lender for such reduction attributable to making, funding and maintaining its
commitment and Loans hereunder.

 

2.8.3        Computation of Amounts.  A certificate of a Lender setting forth the
basis and method of computation of such amount or amounts specified in Section 2.11
hereof as shall be necessary to compensate the Lender (or its participating
banks) as specified above, as the case may be, shall be delivered to the
Borrowers and shall be conclusive absent manifest error; provided however, that
the Borrowers shall be responsible for compliance herewith and the payment of
increased costs only to the extent that (i) any change in Laws giving rise
to increased costs occurs after the date of this Agreement; and (ii) the
Lender gives notice of the change giving rise to increased costs within one
hundred eighty (180) Business Days after the Lender has, or with reasonable
diligence should have had, knowledge of the change, or else Lender can only
collect costs from and after the date of the notice. Subject to the foregoing,
the Borrowers shall pay the affected Lender the amount shown as due on any such
certificate within ten (10) Business Days after their receipt of such
certificate.

 

2.8.4        No Duty to Contest.  The protection of this Section 2.8 shall
be available to a Lender regardless of any possible contention of invalidity or
inapplicability of the Law or condition that shall have been imposed.  Should a Lender assess any charge to the
Borrowers under this Section 2.8, and provided that the Borrowers pay the
assessment to the Lender, the Borrowers may thereafter undertake, at the
Borrowers’ expense any contest of the matters giving rise to the charge that
may, in the opinion of the Borrowers’ independent counsel issued to the
affected Lender, and concurred in by counsel to the Lender, have a reasonable
chance of success, provided further that the contest would not require the
assertion of any position contrary to a position taken by the Lender generally
with taxing authorities or any other involved parties and that there does not
exist any other circumstance that would disadvantage the Lender in the event of
such contest, as the affected Lender may determine in its discretion. The
affected Lender shall offer reasonable participation to the Borrowers’ for the
purpose of enabling the Borrowers to 

 

21

 

pursue the contest of such
issue, with all expenses, including fees and expenses of the affected Lender’s
counsel, to be paid by the Borrowers.

 

2.8.5        Replacement Lender.  Notwithstanding anything to the contrary contained
herein or in any other Credit Document, upon the occurrence of any event that
obligates the Borrowers to pay any amount under Section 2.8 with respect
to any Lender, the Borrowers shall have the right, if no Default or Unmatured
Default then exists or will exist immediately after giving effect to the
respective replacement, to replace such Lender (the “Replaced Lender”) by
designating another Lender or an eligible assignee under Section 9.2 (such
Lender or eligible assignee being herein called a “Replacement Lender”) to
which such Replaced Lender shall assign, in accordance with Section 9.2
and without recourse to or warranty by, or expense to, such Replaced Lender,
all of the rights and obligations of such Replaced Lender hereunder and, upon
such assignment, such Replaced Lender shall no longer be a party hereto or have
any rights hereunder (except for such rights as survive repayment of the
Loans), and such Replacement Lender shall succeed to the rights and obligations
of such Replaced Lender hereunder.  The
Borrowers shall pay to such Replaced Lender in same day funds on the date of
replacement all interest, fees and other amounts then due and owing such
Replaced Lender by the Borrowers hereunder to and including the date of
replacement, including, without limitation, costs incurred under Section 2.8.  Notwithstanding anything to the contrary set
forth herein or implied above, no Lender shall be obligated hereunder to become
a Replacement Lender.

 

2.9.          Change in Legality of LIBOR Loans.  Notwithstanding anything to the contrary
herein contained, if any change in any Law or in interpretation thereof by any
Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for a Lender to make or maintain any LIBOR Loan
or to give effect to its obligations as contemplated hereby, then, by written
notice to the Borrowers, the Lender may (i) declare that LIBOR Loans will
not thereafter be made by the Lender hereunder, whereupon the Borrowers shall
be prohibited from requesting LIBOR Loans from the Lender hereunder unless such
declaration is subsequently withdrawn; and (ii) require that all
outstanding LIBOR Loans made by it be converted to Prime Rate Loans, in which
event (a) all such LIBOR Loans shall be automatically converted to Prime
Rate Loans (but without imposition of any additional charge that would normally
become due under Section 2.8 hereof) as of the effective date of such
notice, and (b) all payments and prepayments of principal that would
otherwise have been applied to repay the converted LIBOR Loans shall instead be
applied to repay the Prime Rate Loans resulting from the conversion of such
LIBOR Loans. For purposes of this Section 2.9, a notice to the Borrowers
by the Lender pursuant to (a) above shall be effective, if lawful, on the
last day of the then current Interest Period; in all other cases, such notice
shall be effective on the date of receipt by the Borrowers.

 

2.10.        Principal Repayment.  All remaining principal outstanding under the
Revolving Credit Loan shall become due on the Termination Date or the earlier
acceleration of the Revolving Credit Loan in accordance with the terms of this
Agreement.  During the continuance of any
Default, all prepayments shall be applied, first, to the Swingline Loans, and
second, after 

 

22

 

payment in full of the
Swingline Loans, to the Revolving Credit Loans. 
In the absence of a Default, voluntary prepayments pursuant to this
Agreement shall be applied as the Borrowers determine.  Revolving Credit Loans and Swingline Loans
prepaid pursuant to this Agreement may be reborrowed, subject to the terms and
conditions of this Agreement.  Each prepayment
of the Revolving Credit Loans made pursuant to this Agreement shall be applied
to reduce the aggregate outstanding principal amount of the Revolving Credit
Loans, ratably among the Lenders holding Revolving Credit Loans in proportion
to the principal amount held by each. 
All payments by the Borrowers of principal, interest, fees and other
obligations shall be made without defense, setoff or counterclaim, free of any
restriction or condition.

 

2.11.        Prepayment of
LIBOR Loans.

 

2.11.1      Notice of LIBOR Loan Prepayment.  A Borrower may, upon three (3) Business
Days’ prior written notice to Administrative Agent, and upon payment of all
applicable premiums set forth in Section 2.11.3 hereof, prepay any
outstanding LIBOR Loans prior to any Interest Payment Date for such LIBOR
Loans, in whole or in part. Each notice of prepayment of any LIBOR Loan shall
specify the date and amount of such prepayment and shall be irrevocable.

 

2.11.2      Amount of LIBOR Loan Prepayment.  Each partial prepayment of any LIBOR Loan
shall be in an aggregate principal amount which is the lesser of (i) the
then outstanding principal balance of the one or more LIBOR Loans to be
prepaid, or (ii) Three Million and No/100 Dollars ($3,000,000.00) or an
integral multiple thereof. Interest on the amount prepaid accrued to the
prepayment date shall be paid on such date.

 

2.11.3      LIBOR Loan Prepayment Premium.  Upon (i) prepayment of any LIBOR Loan on
a date other than the relevant Interest Payment Date for such borrowing or (ii) the
conversion of any LIBOR Loan other than on the relevant Interest Payment Date,
or (iii) the failure to borrow, convert, continue or prepay any LIBOR Loan
on the date specified in any notice delivered pursuant hereto, or (iv) the
assignment of any LIBOR Loan other than on the relevant Interest Payment Date
as a result of a request by the Borrowers pursuant to Section 2.8.5, a
Borrower shall pay to applicable Lenders, in addition to all other payments
then due and owing Lenders, premiums which shall be equal to an amount, if any,
reasonably determined by Administrative Agent to be the difference between the
rate of interest then applicable to the relevant LIBOR Loan and the yield
Lenders would receive upon reinvestment of so much of the relevant LIBOR Loans
as is prepaid for the remainder of the term of the relevant LIBOR Loan or
Loans. Anything in this Section 2.11.3 to the contrary notwithstanding,
the premiums payable upon any such prepayment shall not exceed the amount, if
any, determined by Administrative Agent to be the difference between the rate
of interest then applicable to the relevant LIBOR Loan and the yield that
Lenders could receive upon reinvestment in the “Floor Reinvestment” of so much
of the relevant LIBOR Loan as is prepaid for the remainder of the term of the
relevant LIBOR Loan. For purposes hereof, “Floor Reinvestment” means an investment
for the time period from the date of such prepayment to the end of the relevant
Interest Period applicable to such LIBOR Loan at an interest rate per annum
equal to the federal funds “offered” rate as published in the Wall Street
Journal on the date of such prepayment. All determinations, estimates,
assumptions,

 

23

 

 

allocations
and the like required for the determination of such premiums shall be made by
Administrative Agent in good faith and shall be presumed correct absent
manifest error.

 

2.12.        Prepayment of
Prime Rate Loans.  A Borrower may at
any time prepay any outstanding Prime Rate Loans prior to the Termination Date
in whole or in part without premium or penalty on one (1) Business Day’s
notice in a minimum amount of $500,000 or any incremental multiple of $100,000.

 

2.13.        Fixed Commitment
Fees.  Upon the execution of this
Agreement, the Borrowers shall pay commitment fees to Regions and the other
Lenders, in the amounts previously agreed to by the Borrowers and the
Lenders.  These commitment fees are not
refundable or proratable.

 

2.14.        Periodic Facility
Fee.  The Borrowers shall pay to
Administrative Agent for distribution to Lenders Pro Rata a facility fee
determined by applying the Applicable Facility Fee to the total Revolving
Credit Commitment. The facility fee shall be paid in arrears on the first day
of each January, April, July and October, commencing on July 1, 2008
and on the Termination Date and shall be computed on the basis of a 360-day
year counting the actual number of days elapsed. This facility fee is not
refundable or proratable.

 

2.15.        Administrative
Agent’s Fee.  On the Closing Date,
and on each subsequent anniversary thereof excepting only an anniversary
corresponding to the Termination Date, the Borrowers shall pay to
Administrative Agent, for its own account, a fee in such amount as shall be
agreed to from time to time.

 

2.16.        Letters of Credit.  Subject to the terms and conditions of this
Agreement, Lenders’ respective Revolving Credit Commitments may be utilized,
upon the request of PLC, on behalf of the Borrowers, for the issuance by the
Administrative Agent of letters of credit (the “Letters of Credit”) for the
account of Borrowers for uses that would be permitted for the Revolving Credit
Loans; provided that in no event shall (i) the aggregate amount of all
stated and undrawn amounts under Letters of Credit (the “Letter of Credit
Liabilities”), together with the sum of the aggregate principal amount of the
Loans advanced under the Revolving Credit Loan and the Swingline Loan, exceed
the amount stated in Section 2.1 hereof, (ii) the initial face amount
of any Letter of Credit be less than $5,000,000 and (iii) there be more
than eight (8) Letters of Credit outstanding at any one time.  No Letter of Credit shall have an expiry date
later than the fifth Business Day prior to the Termination Date or, in any
event, more than thirteen months after its date of issuance; provided, however,
that a Letter of Credit may, if requested by the Borrowers, provide by its
terms, for renewal for successive periods of thirteen months or less (but not
beyond the Termination Date), unless and until the Administrative Agent shall
have delivered a notice of nonrenewal to the beneficiary of such Letter of
Credit during the existence of a Default or Unmatured Default.  The following additional provisions shall
apply to Letters of Credit:

 

2.16.1      Procedure for
Issuance.  Borrowers shall give
Administrative Agent at least three (3) Business Days’ irrevocable prior
notice (effective upon receipt) (i) specifying the Business 

 

24

 

Day
each Letter of Credit is to be issued, (ii) describing in reasonable
detail the proposed terms of such Letter of Credit (including its beneficiary)
and the nature of the transactions or obligations proposed to be supported and (iii) specifying
the portion of the Letter of Credit to be issued for the account of PLICO.  The Administrative Agent shall issue the
Letter of Credit as reasonably requested by the Borrowers and in compliance
with applicable law and will make available to the beneficiary thereof the
original of such Letter of Credit, as directed by PLC.  Except for the Letters of Credit issued for
the account of PLICO, PLC shall be the account party for each Letter of Credit,
including Letters of Credit issuable to a beneficiary having a claim or
potential claim against a Wholly-Owned Subsidiary of PLC.

 

2.16.2      Participation Among
Lenders.  On each day during the
period commencing with the issuance by the Administrative Agent of any Letter
of Credit and until such Letter of Credit shall have expired or been terminated
or, if drawn upon, until the resulting obligations of reimbursement (the “Reimbursement
Obligations”) have been satisfied in full by Borrowers (whether by a borrowing
under this Agreement or otherwise), the Revolving Credit Commitment of each
Lender shall be deemed to be utilized for all purposes of this Agreement
(including, but not limited to, the calculation of availability) in an amount
equal to such Lender’s Pro Rata Share of the Letter of Credit Liabilities
associated with such Letter of Credit. 
Each Lender (other than the Administrative Agent) agrees that, upon the
issuance of any Letter of Credit, it shall automatically be deemed to have
acquired a participation in the Administrative Agent’s liability under such
Letter of Credit in an amount equal to such Lender’s Pro Rata Share of such
liability, and each Lender (other than the Administrative Agent) thereby shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and shall be unconditionally obligated to the Administrative Agent
to pay and discharge when due, its Pro Rata Share of the Administrative Agent’s
liability under such Letter of Credit.

 

2.16.3      Reimbursement
Obligation.  Upon receipt from the
beneficiary of any Letter of Credit of any demand for payment under such Letter
of Credit, the Administrative Agent shall promptly notify PLC of the amount to
be paid by the Administrative Agent as a result of such demand and the date on
which payment is to be made by the Administrative Agent to such beneficiary in
respect of such demand.  Subject to Section 2.19,
Borrowers hereby unconditionally agree to pay and reimburse the Administrative
Agent and the other Lenders Pro Rata with respect to the amount of each demand
for payment under such Letter of Credit at or prior to the date on which
payment is to be made by the Administrative Agent to the beneficiary under such
Letter of Credit, without presentment, demand, protest or other formalities of
any kind. Any amounts not so paid or borrowed as set forth in Section 2.16.4
below shall bear interest at the rate(s) specified in the documents
relating to the issuance of the Letter of Credit (the “Letter of Credit
Documents”) or, if higher, at the rate(s) specified on the Notes
(including the Default Rate, if applicable).

 

2.16.4      Means of
Reimbursement.  Forthwith upon its
receipt of a notice referred to in Section 2.16.3 hereof, PLC shall advise
the Administrative

 

25

 

Agent
whether or not PLC, on behalf of Borrowers, intends to obtain a Loan to finance
its obligation to reimburse the Administrative Agent for the amount of the
related demand for payment and, if it does, submit a notice of such borrowing
as provided in this Agreement.  In the
event that PLC fails to so advise the Administrative Agent, and if PLC fails to
reimburse the Administrative Agent for a demand for payment under a Letter of
Credit by the date of such payment, the Administrative Agent shall give each
Lender prompt notice of the amount of the demand for payment, specifying such
Lender’s Pro Rata Share of the amount of the related demand for payment, and
Borrowers shall be deemed in default hereunder for breaching Section 2.16.3
above.

 

2.16.5      Payments by Lenders.  Each Lender (other than the Administrative
Agent) shall pay to the Administrative Agent in Dollars and in immediately
available funds, such Lender’s Pro Rata Share of any payment under a Letter of
Credit not reimbursed by Borrowers upon notice by the Administrative Agent to
such Lender requesting such payment and specifying such amount as provided in Section 2.16.4.
Each such Lender’s obligation to make such payments to the Administrative Agent
under this Section 2.16.5, and the Administrative Agent’s right to receive
the same, shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the failure of any other Lender to make its
payment under this Section 2.16.5, the financial condition of Borrowers,
the existence of any Unmatured Default or Event of Default or the termination
of the Revolving Credit Commitments. 
Each such payment to the Administrative Agent shall be made without any
offset, abatement, withholding or reduction whatsoever; provided, nothing
contained in the foregoing shall limit the Administrative Agent’s liability for
its gross negligence or willful misconduct in improperly honoring a draft drawn
under a Letter of Credit.

 

2.16.6      Settlement Among
Lenders.  Upon the making of each
payment by a Lender to the Administrative Agent pursuant to Section 2.16.5
above in respect of any Letter of Credit, such Lender shall, automatically and
without any further action on the part of the Administrative Agent or such
Lender, acquire (i) a participation in any amount equal to such payment in
the Reimbursement Obligation owing to the Administrative Agent by Borrowers
under this Agreement and under the Letter of Credit Documents relating to such
Letter of Credit and (ii) a participation in a percentage equal to such
Lender’s Pro Rata Share in any interest or other amounts payable by Borrowers
under such Letter of Credit Documents and the other Credit Documents in respect
of such Reimbursement Obligation.  Upon
receipt by the Administrative Agent from or for the account of Borrowers of any
payment in respect of any Reimbursement Obligation or any such interest or
other amount (including by way of set-off or application of proceeds of any
collateral security) the Administrative Agent shall promptly pay to each Lender
who shall have previously assumed a participation in such payment under clause (ii) above,
such Lender’s Pro Rata Share of such payment, each such payment by the
Administrative Agent to be made in the same money and funds in which received
by the Administrative Agent.  In the
event any payment received by the Administrative Agent and so paid to Lenders
is rescinded or must otherwise be returned by the Administrative Agent, each
Lender shall, upon the request of the Administrative Agent, repay to the
Administrative Agent the amount of such payment paid to such Lender, with
interest at the rate specified in Section 2.16.10.

 

26

 

2.16.7      Letter of Credit
Fee.  Subject to Section 2.19,
Borrowers shall pay to the Administrative Agent for the account of each Lender
a letter of credit fee in respect of each Letter of Credit on the daily average
undrawn face amount of such Letter of Credit for the period from and including
the date of issuance of such Letter of Credit to and including the date such
Letter of Credit is drawn in full, expires or is terminated (such fee to be
non-refundable, to be paid in arrears on the first day of each calendar quarter
and on the Termination Date and to be calculated, for any day, after giving
effect any payments made under such Letter of Credit on such day) in an amount
equal to the Applicable LIBOR Rate Margin(s) in effect during the relevant
period.  In addition, for each Letter of
Credit that is issued (and all renewals thereof), the Borrowers agree to pay to
the Administrative Agent in advance, for its sole account (x) documentary
and processing charges in connection with the issuance or renewal of and draws
under Letters of Credit in accordance with the Administrative Agent’s standard
schedule for such charges as in effect from time to time and (y) an
issuance or renewal fee, as the case may be, on the stated amount of the Letter
of Credit being issued or renewed in an amount agreed upon by the Borrowers and
the Administrative Agent.  Such fee shall
be payable in advance on the date of issuance or renewal, as the case may
be.  All calculations of Letter of Credit
fees shall be based on a 360-day year counting the actual number of elapsed
days.

 

2.16.8      Letter of Credit
Information.  Upon the request of any
Lender from time to time, the Administrative Agent shall deliver any
information reasonably requested by such Lender with respect to each Letter of
Credit then outstanding.

 

2.16.9      Conditions Relating
to Letters of Credit.  The issuance
by the Administrative Agent of each Letter of Credit shall be subject, in
addition to the conditions precedent set forth in Article III hereof (as
though the issuance of the Letter of Credit were the making of a Loan), to the
conditions precedent that (i) such Letter of Credit shall be in such form,
contain such terms and support such transactions as shall be satisfactory to
the Administrative Agent consistent with its then current practices and
procedures with respect to letters of credit of the same type, (ii) Borrowers
shall have executed and delivered such applications, agreements and other
instruments relating to such Letter of Credit as the Administrative Agent shall
have reasonably requested consistent with its then current practices and
procedures with respect to letters of credit of the same type and (iii) Borrowers
shall have specified the portion of the Letter of Credit to be issued for the
account of PLICO (if any); provided that in the event of any conflict between
any such application, agreement or other instrument and the provisions of this
Agreement, the provisions of this Agreement shall control.

 

2.16.10    Payments Among
Lenders.  In the event that any
Lender fails to pay any amount required to be paid pursuant to this Section 2.16
when due, such Lender shall pay interest to the Administrative Agent on such
amount from and including such due date to but excluding the date such payment
is made (i) during the period from and including such due date to but
excluding the date three Business Days thereafter, at a rate per annum equal to
the federal funds rate (as in effect from time to time as determined by the
Administrative Agent) and (ii) thereafter, at a rate per annum equal to
the Prime Rate plus 2.0%.

 

27

 

2.16.11    Modifications.  The issuance by the Administrative Agent of
any modification or supplement to any Letter of Credit shall be subject to the
same conditions applicable under this Section 2.16 to the issuance of new
Letters of Credit, and no such modification or supplement shall be issued
unless either (x) the respective Letter of Credit as affected by such
action would have complied with such conditions had it originally been issued
in such modified or supplemented form or (y) each Lender shall have consented
to such modification or supplement.

 

2.16.12    Absolute Obligations
of Borrowers.  The obligations of
Borrowers under this Agreement in respect of any Letter of Credit and under any
other agreement or instrument relating to any Letter of Credit shall be unconditional
and absolute and shall not be affected, modified or impaired, upon the
happening at any time or from time to time of any of the following, whether or
not with notice to or the consent of Borrowers:

 

2.16.12(a) the compromise, settlement, release,
modification, amendment (whether material or otherwise) or termination of any
or all of the obligations, conditions, covenants or agreements of any Person in
respect of any of the Credit Documents;

 

2.16.12(b) the occurrence, or the failure by
Administrative Agent, any Lender or any other Person to give notice to
Borrowers of the occurrence, of any Event of Default or any default under any
of the Credit Documents;

 

2.16.12(c) the waiver of the payment,
performance or observance of any of the obligations, conditions, covenants or
agreements of any Person contained in any of the Credit Documents;

 

2.16.12(d) the extension of the time for
performance of any other obligations, covenants or agreements of any Person
under or arising out of any of the Credit Documents;

 

2.16.12(e) the taking or the omission of any of
the actions referred to in any of the Credit Documents;

 

2.16.12(f) any failure, omission or delay on
the part of Administrative Agent, any Lender, Borrowers or the beneficiary of
any Letter of Credit to enforce, assert or exercise any right, remedy, power or
privilege conferred by this Agreement or any of the Credit Documents;

 

2.16.12(g) the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or substantially all
the assets of, the marshaling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors or readjustment of, or
other similar proceedings which affect, Borrowers or any other party to any of
the Credit Documents;

 

2.16.12(h) any lack of validity or
enforceability of this Agreement, any Letter of Credit or any other Credit
Document, or any allegation of invalidity or unenforceability or any contest of
such validity or enforceability;

 

28

 

2.16.12(i) the existence of any claim, set-off,
defense or other right which Borrowers may have at any time against
Administrative Agent, any Lender or any beneficiary or any transferee of any
Letter of Credit (or any persons or entities for whom the Lender or any such
beneficiary or transferee may be acting), or any other Person, whether in
connection with this Agreement or any of the other Credit Documents or any of
the transactions contemplated by any Credit Document;

 

2.16.12(j) any statement in any certificate or
any other document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any such statement being
untrue or inaccurate in any respect whatsoever;

 

2.16.12(k) the release or discharge by
operation of law (to the extent permitted thereby) of Borrowers from the
performance or observance of any obligation, covenant or agreement contained in
any of the Credit Documents pertaining to the Letters of Credit except for any
such release or discharge which results from the Administrative Agent’s gross
negligence or willful misconduct;

 

2.16.12(l) payment by the Administrative Agent
under any Letter of Credit against presentation of a demand or certificate
which does not comply with the terms of such Letter of Credit except for any
such payment resulting from the Administrative Agent’s gross negligence or
willful misconduct; or

 

2.16.12(m) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, provided the same
shall not have constituted gross negligence or willful misconduct of the
Administrative Agent.

 

2.16.13    Indemnification.  Without affecting Borrowers’ liability under
any other provision of this Agreement, Borrowers agree to indemnify each of the
Administrative Agent and Lenders and their respective affiliates, directors,
officers, employees, attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, damages or expenses incurred by any
of them in connection with or by reason of any actual or threatened
investigation, litigation or other proceeding (including, in respect of the
Administrative Agent, any such investigations, litigation or other proceeding
between the Administrative Agent and any Lender) relating to (a) the
execution and delivery of any Letter of Credit; (b) the use of the
proceeds of any drawing under any Letter of Credit; or (c) the transfer or
substitution of, or payment or failure to pay under, any Letter of Credit,
including the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding, but
excluding damages, losses, liabilities or expenses to the extent incurred by
reason of the willful misconduct or gross negligence of the Administrative
Agent.  It shall not be a condition to
any such indemnification that the Administrative Agent or any Lender shall be a
party to any such investigations, litigation or other proceeding.  Nothing in this Section 2.16.13 is
intended to limit Borrowers’ payment obligations under this Agreement.

 

29

 

2.16.14    Assumption of Risk.  Borrowers assume all risks of the acts or
omissions of any beneficiary of any Letter of Credit with respect to the use of
the Letter of Credit. None of the Administrative Agent, any Lender nor any of
their respective affiliates, officers, directors, employees, attorneys or
agents shall be liable or responsible for: (a) the use which may be made
of the Letter of Credit or for any acts or omissions of any beneficiary of any
Letter of Credit in connection with such Letter of Credit; (b) the
validity, sufficiency or genuineness of documents presented to the Administrative
Agent, or of any endorsement on such documents, even if such documents should
in fact prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by the Administrative Agent against presentation of
documents which do not comply with the terms of any Letter of Credit, including
failure of any documents to bear any reference or adequate reference to such
Letter of Credit; or (d) any other circumstances whatsoever in making or
failure to make payment under any Letter of Credit; provided that Borrowers
shall have a claim against the Administrative Agent to the extent of damages
(other than any special or consequential damages) suffered by Borrowers which
Borrowers prove were caused by the Administrative Agent’s willful misconduct or
gross negligence.  In furtherance and not
in limitation of the foregoing, the Administrative Agent may accept documents
that appear on their face to be in order, without responsibility for further
investigation.

 

2.16.15    Reserves.  The Borrowers acknowledge that the
Administrative Agent will be required by applicable rules and regulations
of the Federal Reserve Board to maintain reserves for its liability to honor
draws made pursuant to a Letter of Credit notwithstanding the obligation of the
Lenders for a participation in such Letter of Credit Liabilities.  The Borrowers agree to reimburse the
Administrative Agent promptly for all additional costs incurred by reason of
any Regulatory Change that the Administrative Agent may hereafter incur solely
by reason of its acting as issuer of the Letters of Credit and its being
required to reserve for such liability, it being understood by the Borrowers
that other interest and fees payable under this Agreement do not include
compensation of the Administrative Agent for such reserves.  The Administrative Agent shall furnish to the
Borrowers, at the time of the Administrative Agent’s demand for payment of such
additional costs, the computation of such additional cost, which shall be
conclusive absent demonstrable error, provided that such computations are made
on a reasonable basis.  The Borrowers
shall pay to the Administrative Agent administrative and other fees, if any, in
connection with the Letters of Credit in such amounts and at such times as the
Administrative Agent and the Borrowers shall agree from time to time.

 

2.17.        Swingline Loans.  The Swingline Lender hereby agrees to extend
to the Borrowers’ Swingline Loans in the aggregate amount not to exceed Twenty
Million and No/100 Dollars ($20,000,000.00), on the following terms and
conditions.

 

2.17.1      Use of Proceeds of
Swingline Loans.  The Borrowers may
use the proceeds of Swingline Loans for any purpose permitted for the proceeds
of the Revolving Credit Loan under Section 2.2 of this Agreement.  Swingline Loans shall be applied to reduce
the amount available for Revolving Credit Loans.

 

2.17.2      Swingline Note.  The Swingline Loans shall be evidenced by the
Swingline Note.

 

30

 

2.17.3      Funding
of Swingline Loans Advanced Pursuant to Borrowing Notices.

 

2.17.3(a) Applicability.  Except for Swingline Loans made pursuant to
Account Agreements as provided in Section 2.17.4 hereof, the funding of
Swingline Loans shall be subject to this Section 2.17.3.

 

2.17.3(b) Borrowing Notices.  As long as the Borrowers meet the conditions
for funding stated in this Agreement, the Borrowers may submit requests for
Swingline Loans (“Swingline Borrowing Notices”) to the Swingline Lender.  All requests shall be made in writing (or by
telephone, subject to such security procedures as the Swingline Lender may
require from time to time, provided that all telephonic notices shall be
confirmed by written Swingline Borrowing Notices within one (1) Business
Day) and shall specify the portion of the Swingline Loan to be borrowed by
PLICO (if any); the proposed date of the requested disbursement and the
aggregate amount of such disbursement. Each Swingline Borrowing Notice shall
irrevocably obligate the Borrowers to accept the Swingline Loan requested
thereby. Swingline Borrowing Notices shall be in such form as the Swingline
Lender may from time to time require.

 

2.17.3(c) Funding of Swingline Loans.  The Swingline Lender shall fund Swingline
Loans on the Business Day following the Business Day of the Swingline Lender’s
receipt of the Swingline Borrowing Notice. All funds shall be disbursed
directly into an account maintained by the Borrowers with the Swingline
Lender.  The Borrowers agree that if the
Swingline Lender elects to fund any requested Swingline Loan(s) sooner
after requested than is required hereunder, the Swingline Lender may
nevertheless use the entire response period allowed hereunder upon receipt of
any subsequent request, at its sole option.

 

2.17.4      Funding of
Swingline Loans Advanced Pursuant to Cash Management Accounts.  The Borrowers may have in effect from time to
time separate agreements with the Swingline Lender or its affiliates (“Account
Agreements”) establishing cash management procedures that may involve the
automatic disbursement of Swingline Loans. The Account Agreements may be
established using standardized forms that do not address the specific
circumstances of the Swingline Loan.  All
Swingline Loans made pursuant to Account Agreements shall be deemed advanced on
behalf of PLC only.  To resolve potential
inconsistencies between this Agreement and Account Agreements, the terms of
this Agreement and of Account Agreements shall relate to one another as
follows:

 

2.17.4(a) Funding and Payment Procedures
Controlled by Account Agreements. 
The Account Agreements shall control this Agreement as to (i) Section 2.17.3
hereof regarding funding procedures, and (ii) Interest Payment Dates, to
the extent that an Account Agreement may provide for such payment more
frequently than otherwise required under this Agreement.

 

2.17.4(b) Certain Provisions Controlled by
this Agreement.  Notwithstanding any
provision of an Account Agreement to the contrary, except as provided above in Section 2.17.4(a) hereof,
the provisions of this Agreement shall control any Account Agreement to the
extent that an Account Agreement may be inconsistent with this Agreement.

 

31

 

2.17.4(c) Continuing Warranty Under Account
Agreements.  Because Account Agreements
may provide for the making of Swingline Loans without formal draw requests from
the Borrowers, the Borrowers agree that the Borrowers’ warranty under Section 2.17.5
hereof as to the satisfaction of all conditions to the right to receive
Swingline Loans shall be a continuing one during any period that such an
Account Agreement may be in effect. 
Therefore, any Swingline Loans funded by the Swingline Lender pursuant
to an Account Agreement after the failure of a condition stated in Article III
hereof shall be deemed made upon the affirmative misrepresentation of the
Borrowers unless the Swingline Lender has received written notice of and waived
the failed condition in writing.

 

2.17.5      Implied
Representations Upon Request for Swingline Loan.  Upon making any request for a Swingline Loan,
the Borrowers shall be deemed to have warranted to the Swingline Lender that
all conditions to funding are satisfied as of the submission of the request to
the Swingline Lender.

 

2.17.6      Advance Not Waiver.  The Swingline Lender’s making of any
Swingline Loan that it is not obligated to make under any provision of Article III
hereof or any other provision hereof shall not be construed as a waiver of the
Swingline Lender’s right to withhold future Swingline Loans, notify Administrative
Agent of a Default, or otherwise demand strict compliance with this Agreement.

 

2.17.7      Interest.  Interest shall be charged and paid on each
Swingline Loan as follows:

 

2.17.7(a) Rate of Interest.  Interest shall accrue on Swingline Loans at
an annual rate equal to the Prime Rate, said rate to change contemporaneously
with any change in the Prime Rate.

 

2.17.7(b) Calculation of Interest.  Interest shall be computed on the basis of a
360-day year counting the actual number of days elapsed.

 

2.17.7(c) Payment of Interest.  Interest shall be due and payable in arrears
without notice on each Interest Payment Date.

 

2.17.7(d) Default Rate.  Notwithstanding the foregoing, upon the
occurrence of a Default and during the continuation of such Default until it is
cured or waived, interest shall be charged at the Default Rate, regardless of
whether the Swingline Lender has elected to exercise any other remedies
available to it, including, without limitation, acceleration of the maturity of
the outstanding principal of the Swingline Loans. All such interest shall be
paid at the time of and as a condition precedent to the curing of any such
Default to the extent any right to cure is given in this Agreement.

 

2.17.7(e) Usury Savings Provision.  It is the intention of the parties that all
charges under or in connection with this Agreement and the Obligations, however
denominated, and including (without limitation) all interest, commitment fees,
late charges and loan charges, shall

 

32

 

be
limited to the Maximum Lawful Amount. Such charges hereunder shall be
characterized and all provisions of the Credit Documents shall be construed as
to uphold the validity of charges provided for therein. If for any reason
whatsoever, however, any charges paid or contracted to be paid in respect of
the Swingline Loans shall exceed the Maximum Lawful Amount, then, ipso
facto the obligation to pay such interest and/or other charges shall be reduced
to the Maximum Lawful Amount in effect from time to time, and any amounts
collected by Lender that exceed the Maximum Lawful Amount shall be applied to
the reduction of the principal balance of the Swingline Loans and/or refunded
to the Borrowers so that at no time shall the interest or loan charges paid or
payable in respect of the Swingline Loans exceed the Maximum Lawful Amount.
This provision shall control every other provision herein and in any and all
other agreements and instruments now existing or hereafter arising between the
Borrowers and the Swingline Lender with respect to the Swingline Loans.

 

2.17.8      Repayment of
Principal.  All remaining principal,
interest and expenses outstanding under the Swingline Loans shall become due in
full on the Termination Date or the earlier acceleration of the Revolving
Credit Loan in accordance with the terms of this Agreement.  A Borrower may at any time prepay the
interest or principal on any outstanding Swingline Loans in whole or in part
without premium or penalty.

 

2.17.9      Procedures Among
Lenders Upon Default.  Upon the
occurrence of a Default, Lenders shall acquire participation interests in the
outstanding Swingline Loans as necessary to cause each Lender to own a Pro Rata
interest in the outstanding Swingline Loans, pursuant to such documentation as
Administrative Agent may deem necessary. The obligation of each Lender to
acquire such a participation interest shall be unconditional and, without
limiting the foregoing, shall remain in effect irrespective of (i) the
occurrence of any Default or Unmatured Default, (ii) the financial
condition of the Borrowers, the Administrative Agent, the Swingline Lender or
any other Lender or (iii) the termination or cancellation of the Revolving
Credit Commitments (provided that such Swingline Loan was made prior to the
date of such termination or cancellation). The Swingline Loans shall thereafter
be administered by Lenders and Administrative Agent as though the Swingline
Loans were amounts outstanding under the Revolving Credit Loan. Additionally,
to this end, upon the occurrence and continuation of a Default, Administrative
Agent may, in its discretion, and without the Borrowers’ consent, cause an
advance to be made under the Revolving Credit Loan sufficient to repay the
outstanding Swingline Loans, even if a Default is then outstanding.

 

2.18.        Withholding Tax
Exemption.  Each Lender that is not
incorporated or organized under the laws of the United States of America, or a
state thereof, shall, on or before the date such Lender becomes a party to this
Agreement, deliver to each of the Borrowers and the Administrative Agent two
duly completed copies of United States Internal Revenue Service Form W
8BEN, W 8ECI or W 8IMY, certifying that such Lender is entitled to receive
payments under this Agreement and such Lender’s Revolving Credit Note without
deduction or withholding of any United States federal income taxes.  Each Lender that so delivers a Form W
8BEN, W 8ECI or W 8IMY further undertakes to deliver to each of the Borrowers
and the

 

33

 

Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires, becomes obsolete or otherwise is required to be resubmitted
as a condition to obtaining an exemption from a required withholding or
deduction of United States federal income tax or after the occurrence of any
event requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrowers or the Administrative Agent, in each case certifying
that such Lender is entitled to receive payments under this Agreement and such
Lender’s Revolving Credit Note without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred after the Closing Date and
prior to the date on which any such delivery would otherwise be required that
renders all such forms inapplicable or that would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender
promptly advises the Borrowers and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.  Each Lender
that is incorporated or organized under the laws of the United States of
America or a state thereof shall, within ten (10) days following the date
such Lender becomes a party to this Agreement, deliver to the Borrowers and the
Administrative Agent two duly completed copies of United States Internal
Revenue Service Form W-9, certifying that such Lender is a United States
person for United States federal income tax purposes.  Each Lender further undertakes to deliver to
the Borrowers and the Administrative Agent two additional copies of such form
(or a successor form) on or before the date that such form expires, becomes
obsolete or otherwise becomes ineffective.

 

2.19.        Maximum PLICO Liability
Amount.  Notwithstanding anything to
the contrary set forth elsewhere in this Agreement or any Credit Document, the
liability of PLICO to the Lenders under this Agreement and the other Credit
Documents shall be several and not joint with the liability of PLC under this
Agreement and the other Credit Documents and shall not exceed the aggregate
amount of the Loans (including principal, interest, fees and expenses)
received, used by, or the portion of Letters of Credit issued for the account
of PLICO in accordance with the provisions of Section 2.5.1 (in the case
of Revolving Credit Loans), Section 2.16 (in the case of Letters of
Credit) or Section 2.17.3 (in the case of Swingline Loans); provided,
however PLC shall be liable for the full amount of the Obligations (including
those portions of Loans received or used by PLICO and the portion of Letters of
Credit issued for the account of PLICO) without limitation.  If there is any doubt or uncertainty as to
the Borrower for whose benefit a Loan has been received or used, such Loan
shall be deemed to have been received by and used by or for the benefit of
PLC.  If there is any doubt or
uncertainty as to the Borrower for whose benefit a Letter of Credit has been
issued, such Letter of Credit shall be deemed to have been issued for the
account of PLC and such Letter of Credit Liabilities attributable to such
Letter of Credit shall be attributed to PLC.

 

2.20.        Optional Increase to the
Revolving Credit Commitment.

 

(i)            Provided that
no Default or Unmatured Default then exists and, upon delivery by the Borrowers
of an updated proforma compliance certificate which takes into

 

34

 

account the requested increase and which does not forecast any covenant
non-compliance, the Borrowers may, in accordance with the provisions of this Section prior
to the fourth anniversary of the Closing Date, request in writing that the then
total Revolving Credit Commitments be increased by an amount not in excess of
$100,000,000, provided, however, that (a) no such request
shall be for an increase amount less than $10,000,000 or a greater integral
multiple of $5,000,000 and (b) the aggregate amount of all such increases
under this Section shall not exceed $100,000,000.  Any request under this Section shall be
submitted by the Borrowers to the Lenders through the Administrative Agent not
less than forty-five (45) days prior to the proposed increase, specify the
proposed effective date and amount of such increase and be accompanied by (a) an
updated proforma compliance certificate from the Borrowers stating that no
Default or Unmatured Default exists as of the date of the request or will
result from the requested increase and (b) the satisfaction of all
conditions precedent specified in Article III.  The consent of the Lenders, as such, shall
not be required for an increase in the amount of the total Revolving Credit
Commitments pursuant to this Section.

 

(ii)           Each Lender may
approve or reject a request for an increase in its Revolving Credit Commitment
in its sole and absolute discretion and, absent an affirmative written response
within fifteen (15) days after receipt of such request, shall be deemed to have
rejected the request.  The rejection of
such a request by any number of Lenders shall not affect the Borrowers’ right
to increase the total Revolving Credit Commitments pursuant to this Section as
a result of, and with respect to the pro rata shares of, those Lenders that
approve such increase and such additional Lenders that join this Agreement in
accordance with subsection (v) of this Section.  Notwithstanding any other provision hereof,
no Lender which rejects a request for an increase in the total Revolving Credit
Commitments shall be (a) subject to removal as a Lender, (b) obligated
to lend any amount greater than its then Revolving Credit Commitment, or (c) deemed
to be in default in any respect hereunder as a result of such rejection.

 

(iii)          In responding
to a request under this Section, each Lender that is willing to increase the
amount of its Revolving Credit Commitment shall specify the amount of the
proposed increase which it is willing to assume.  Each consenting Lender shall be entitled to
participate ratably (based on its Revolving Credit Percentage before such
increase) in any resulting increase in the total Revolving Credit Commitment,
subject to the right of Administrative Agent to adjust allocations of the
increased amount of the total Revolving Credit Commitment so as to result in
the commitment amounts of the Lenders being in integral multiples of
$1,000,000.

 

(iv)          If the
aggregate principal amount offered to be assumed by the consenting Lenders is
less than the amount requested, the Borrowers in their sole discretion

 

35

 

may (a) reject the proposed increase in its entirety, (b) accept
the offered amounts or (c) designate new lenders who qualify as assignees
under Section 9.2 and which are reasonably acceptable to Administrative
Agent as additional Lenders hereunder in accordance with clause (v) of
this Section (each, a “New Lender”), which New Lenders may assume the
amount of the increase in the total Revolving Credit Commitment that has not
been assumed by the consenting Lenders.

 

(v)           Each New Lender
designated by the Borrowers and reasonably acceptable to Administrative Agent
shall become an additional party hereto as a New Lender concurrently with the
effectiveness of the proposed increase in the total Revolving Credit Commitment
upon its execution of an instrument of joinder to this Agreement which is in
form and substance acceptable to Administrative Agent and Borrowers and which,
in any event, contains the representations, warranties, indemnities and other
protections afforded to Administrative Agent and the other Lenders which would
be granted or made by an assignee under Section 9.2 by means of the
execution of an Assignment and Acceptance Agreement.

 

(vi)          Subject to the
foregoing, any increase to the total Revolving Credit Commitment requested
under this Section shall be effective as of the date proposed by the
Borrowers (or such later date as all conditions in this Section are
satisfied) and shall be in the principal amount equal to (a) the amount
which consenting Lenders are willing to assume as increases to their Revolving
Credit Commitment plus (b) the amount offered by any New Lenders.  Upon the effectiveness of any such increase,
the Borrowers shall execute replacement Notes to each affected Lender and new
Notes to each New Lender, and the Revolving Credit Percentage of each Lender
will be adjusted, higher or lower as needed, to give effect to the increase in
the total Revolving Credit Commitment.

 

(vii)         If Revolving
Credit Loans would be outstanding immediately after giving effect to any such
increase, then simultaneously with such increase (1) each Lender whose Revolving
Credit Commitment is increasing, each New Lender and each other Lender shall be
deemed to have entered into a master assignment and acceptance agreement, in
form and substance substantially similar to Exhibit 9.2, pursuant to which
each such other Lender shall have assigned to each such each Lender whose
Revolving Credit Commitment is increasing and each New Lender a portion of its
Revolving Credit Loans necessary to reflect proportionately the Revolving
Credit Commitments as adjusted in accordance with this subsection (vii), and (2) in
connection with such assignment, each such each Lender whose Revolving Credit
Commitment is increasing and each New Lender shall pay to the Administrative
Agent, for the account of each such other Lender, such amount as shall be
necessary to reflect the assignment to it of Revolving Credit Loans, and in
connection with such master assignment each such other Lender may treat

 

36

 

the assignment of LIBOR Loans as a prepayment of such LIBOR Loans for
purposes of Section 2.11.3.

 

ARTICLE III

 

CONDITIONS PRECEDENT

 

3.1.          Initial Advance.  The Lenders shall not be required to make the
initial Advance hereunder and the Administrative Agent shall not issue any
Letters of Credit unless the Borrowers have furnished to the Administrative
Agent, with sufficient copies for the Lenders:

 

(i)            A certificate
of good standing from the Secretary of State of Delaware with respect to PLC
and a certificate of good standing from the Secretary of State of Tennessee
with respect to PLICO.

 

(ii)           Copies,
certified by the Secretary or an Assistant Secretary of the Borrowers, of their
certificates of incorporation, together with all amendments thereto, and
by-laws and Board of Directors’ resolutions (and resolutions of other bodies,
if any are deemed necessary by counsel for any Lender) authorizing the
execution of the Credit Documents.

 

(iii)          An incumbency
certificate, executed by the Secretary or any Assistant Secretary of the
Borrowers, which shall identify by name and title and bear the signature of the
officers of the Borrowers authorized to sign the Credit Documents and to make
borrowings hereunder, upon which certificate the Administrative Agent and the
Lenders shall be entitled to rely until informed in writing by the Borrowers of
any change.

 

(iv)          A certificate,
signed by the Chief Financial Officer or the Chief Accounting Officer of the
Borrowers, stating that on the initial Borrowing Date no Default or Unmatured
Default has occurred and is continuing.

 

(v)           A written
opinion of the Borrowers’ counsel, addressed to the Lenders in form and
substance satisfactory to the Administrative Agent.

 

(vi)          Revolving
Credit Notes payable to the order of each of the Lenders and the Swingline
Note.

 

(vii)         Written money
transfer instructions, in a form required by the Administrative Agent,
addressed to the Administrative Agent and signed by an Authorized Officer,
together with such other related money transfer authorizations as the
Administrative Agent may have reasonably requested.

 

37

 

(viii)        A duly
completed compliance certificate as of April 16, 2008, in substantially
the form of Exhibit 3.1(viii) hereto.

 

(ix)           A duly
completed certificate certifying as to the solvency of the Borrowers.

 

(x)            Such other
documents as any Lender or its counsel may have reasonably requested.

 

3.2.          Each Loan.  The Lenders shall not be required to make or
continue any Loan, unless on the applicable borrowing date or date of
continuation:

 

(i)            There exists no
Default or Unmatured Default and no Default or Unmatured Default would result
therefrom.

 

(ii)           The
representations and warranties contained in Article IV (other than Section 4.5)
are true and correct as of such borrowing date or date of continuation.

 

Each Borrowing Notice with
respect to each such Loan shall constitute a representation and warranty by the
Borrowers that the conditions contained in Section 3.2(i) and (ii) have
been satisfied.  Any Lender may require a
duly completed compliance certificate in substantially the form of Exhibit 3.1(viii) hereto
as a condition to making or continuing a Loan.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

The Borrowers represent and
warrant to the Lenders and the Administrative Agent that:

 

4.1.          Corporate
Existence and Standing.  Each of the
Borrowers and its Significant Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.

 

4.2.          Authorization and
Validity.  The Borrowers have the
corporate power and authority and legal right to execute and deliver the Credit
Documents and to perform their obligations thereunder.  The execution and delivery by the Borrowers
of the Credit Documents and the performance of their obligations thereunder
have been duly authorized by proper corporate proceedings, and the Credit
Documents constitute legal, valid and binding obligations of the Borrowers
enforceable against the Borrowers in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally.

 

4.3.          No Conflict;
Government Consent.  Neither the
execution and delivery by the Borrowers of the Credit Documents, nor the
consummation of the transactions provided for

 

38

 

therein,
nor compliance with the provisions thereof, will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrowers or any of their Significant Subsidiaries or the Borrowers’ or any of
their Significant Subsidiaries’ certificate or articles of incorporation or
by-laws or the provisions of any indenture, instrument or agreement to which
the Borrowers or any of their Significant Subsidiaries are parties or are
subject, or by which they, or their Property, are bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
Lien in, of or on the Property of the Borrowers or any of their Significant
Subsidiaries pursuant to the terms of any such indenture, instrument or
agreement, other than such violations, conflicts or defaults which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.  No order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any Governmental Authority is
required to authorize, or is required in connection with the execution,
delivery and performance of, or the legality, validity, binding effect or
enforceability of, any of the Credit Documents, except such as would not have a
Material Adverse Effect.

 

4.4.          Financial
Statements.  The December 31,
2007 consolidated financial statements of PLC and its Subsidiaries heretofore
delivered to the Lenders were prepared in accordance with GAAP in effect on the
date such statements were prepared and fairly present the consolidated
financial condition and operations of PLC and its Subsidiaries at such date and
the consolidated results of their operations for the period then ended.  The December 31, 2007 consolidated
financial statements of PLICO and its Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with GAAP in effect on the date such
statements were prepared and fairly present the consolidated financial
condition and operations of PLICO and its Subsidiaries at such date and the
consolidated results of the operations of PLICO and its Subsidiaries for the
period then ended.

 

4.5.          Material Adverse
Change.  Since December 31,
2007, there has been no change in the business, Property, prospects, condition
(financial or otherwise) or results of operations of the Borrowers and their
Significant Subsidiaries which would have a Material Adverse Effect.

 

4.6.          Taxes.  The Borrowers and their Significant
Subsidiaries have filed all United States federal tax returns and all other tax
returns required to be filed and have paid all taxes due pursuant to said
returns or pursuant to any assessment received by the Borrowers or any of their
Significant Subsidiaries, except with respect to such tax returns or such
taxes, if any, as are not material or are being contested in good faith and as
to which, in the good faith judgment of the Borrowers, adequate reserves have
been provided.  The United States income
tax returns of the Borrowers and their Significant Subsidiaries have been
audited by the Internal Revenue Service through the fiscal year ended December 31,
2002.  To the best knowledge of the
Borrowers, no tax liens have been filed with respect to any such taxes.  The charges, accruals and reserves on the
books of the Borrowers and their Significant Subsidiaries with respect to any
taxes or other governmental charges are adequate in the good faith judgment of
the Borrowers.

 

4.7.          Litigation and
Guaranteed Obligations.  Except as
disclosed on Exhibit 4.7 hereto, there is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or,

 

39

 

to
the knowledge of any of their officers, threatened in writing against or
affecting the Borrowers or any of their Significant Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.  The Borrowers have no material Guaranteed
Obligations not provided for or disclosed in the financial statements referred
to in Section 4.4.

 

4.8.          List of
Significant Subsidiaries.  Exhibit 4.8
hereto contains an accurate list of all of the now existing Significant
Subsidiaries of the Borrowers, setting forth their respective jurisdictions of
incorporation and the percentage of their respective capital stock owned by the
Borrowers or other Subsidiaries.  All the
issued and outstanding shares of capital stock of such Significant Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.

 

4.9.          ERISA.  Each Plan complies in all material respects
with all applicable requirements of law and regulations, and no ERISA Event has
occurred or is reasonably expected to occur with respect to any Plan.  No Insufficiency exists with respect to any
Plan.  Neither PLC nor any ERISA
Affiliate is required to contribute to or has ever had a liability to a
Multiemployer Plan.

 

4.10.        Accuracy of
Information.  No information, exhibit
or report furnished by the Borrowers or any of their Significant Subsidiaries
to the Administrative Agent or any Lender in connection with the negotiation
of, or compliance with, the Credit Documents contained any material
misstatement of fact or purposely omitted to state a material fact.

 

4.11.        Regulation U.  Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrowers and their
Significant Subsidiaries that are subject to any limitation on sale, pledge or
other restriction hereunder.

 

4.12.        Material
Agreements.  Neither the Borrowers
nor any Significant Subsidiary is a party to any agreement or instrument or
subject to any charter or other corporate restriction that could reasonably be
expected to have a Material Adverse Effect. 
Neither the Borrowers nor any Significant Subsidiary is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect.  Neither the Borrowers nor any Significant
Subsidiary is in default in the performance, observance or fulfillment of any
of the material obligations, covenants or conditions contained in any agreement
or instrument evidencing or governing Indebtedness.

 

4.13.        Compliance With
Laws.  The Borrowers and their
Significant Subsidiaries have complied with all applicable statutes, rules,
regulations, orders and restrictions of any Governmental Authority, having
jurisdiction over the conduct of their respective businesses or the ownership
of their respective Property, except where the failure so to comply could not
reasonably be expected to have a Material Adverse Effect.  Neither the Borrowers nor any Significant
Subsidiary has received any notice to the effect that its operations are not in
material compliance with any of the requirements of applicable federal, state
and local environmental,

 

40

 

health
and safety statutes and regulations or the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.

 

4.14.        Investment Company
Act.  Neither the Borrowers nor any
Significant Subsidiary thereof is an “investment company” or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of
1940, as amended.

 

4.15.        [Intentionally
omitted].

 

4.16.        Insurance Licenses.  Each Significant Insurance Subsidiary holds
active Licenses, and is authorized to transact insurance business, in each
jurisdiction wherein it transacts any insurance business except where failure
to do so could not reasonably be expected to have a Material Adverse Effect.  No such License is the subject of a
proceeding for suspension or revocation, there is no sustainable basis for such
suspension or revocation, and to the Borrowers’ knowledge no such suspension or
revocation has been threatened by any Governmental Authority.

 

4.17.        Ownership of
Properties.  On the Closing Date, the
Borrowers and their Significant Subsidiaries have beneficial ownership of the
property and assets reflected in the financial statements referred to in Section 4.4
as owned by them, free of all Liens other than Permitted Liens.

 

4.18.        Sanctioned Persons.  None of the Borrowers or any Significant
Subsidiary nor, to the knowledge of the Borrowers, any director, officer,
agent, employee or Affiliate of the Borrowers or any Significant Subsidiary is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”) and each of the
Borrowers and Significant Subsidiaries is currently in compliance in all
material respects with the rules and regulations promulgated by OFAC; and
the Borrowers will not directly or indirectly use the proceeds of the Loans or
otherwise make available such proceeds to any person, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.

 

ARTICLE V

 

COVENANTS

 

During the term of this
Agreement, unless the Lenders shall otherwise consent in writing:

 

5.1.          Financial
Reporting.  PLC will maintain, for
itself and each Consolidated Subsidiary, a system of accounting established and
administered in accordance with GAAP and (where applicable) SAP, and furnish to
the Lenders:

 

41

 

(i)            Within 95 days
after the close of each of its fiscal years, an unqualified audit report
certified by independent certified public accountants, acceptable to the
Lenders, prepared in accordance with GAAP on a consolidated and consolidating
basis (consolidating statements need not be certified by such accountants) for
itself and the Consolidated Subsidiaries, including balance sheets as of the
end of such period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows (solely with respect to the
consolidated statements), accompanied by a certificate of said accountants
that, in the course of their examination necessary for their certification of
the foregoing, they have obtained no knowledge of any Default or Unmatured
Default, or if, in the opinion of such accountants, any Default or Unmatured
Default shall exist, stating the nature and status thereof.

 

(ii)           Within 50 days
after the close of each quarterly period of each of its fiscal years, for
itself and the Consolidated Subsidiaries, consolidated and consolidating
unaudited balance sheets as at the close of each such period and consolidated
and consolidating profit and loss statements and a consolidated statement of
cash flows for the period from the beginning of such fiscal year to the end of
such quarter, all certified by its Chief Financial Officer or Chief Accounting
Officer.

 

(iii)          Together with
the financial statements required hereunder, a compliance certificate in
substantially the form of Exhibit 3.1(viii) hereto signed by the
Chief Financial Officer or Chief Accounting Officer of PLC showing the
calculations necessary to determine compliance with this Agreement and stating
that no Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof.

 

(iv)          In the event an
Insufficiency exists, within 270 days after the close of each fiscal year, a
statement of the Insufficiency with respect to each Plan, certified as correct
by an actuary enrolled under ERISA.

 

(v)           Promptly upon
the request of any of the Lenders, copies of all the most recent material reports
and notices in connection with Plans that PLC or any Significant Subsidiary is
required to file under ERISA with the Internal Revenue Service or the PBGC or
the U.S. Department of Labor, or which PLC or any Significant Subsidiary
receives from such Governmental Authorities.

 

(vi)          As soon as
possible and in any event within 10 days after receipt by the Borrowers, a copy
of (a) any notice or claim to the effect that the Borrowers or any of
their Significant Subsidiaries are or may be liable to any Person as a result
of the release by the Borrowers, any of their Significant Subsidiaries or any
other Person of any toxic or hazardous waste or substance into the environment,
and (b) any notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the Borrowers or any of
their Significant

 

42

 

Subsidiaries, which, in either case, could reasonably be expected to
have a Material Adverse Effect.

 

(vii)         Upon the earlier
of (a) 15 days after the regulatory filing date or (b) 90 days after
the close of each fiscal year of each Significant Insurance Subsidiary copies
of the Annual Statement of each of the Significant Insurance Subsidiaries
prepared on the NAIC annual statement blanks (or such other form as shall be
required by the jurisdiction of incorporation of each such Significant
Insurance Subsidiary), all such statements to be prepared in accordance with
SAP consistently applied throughout the periods reflected therein with such
prescribed or permitted practices as authorized by state regulatory
authorities; and within 15 days after the regulatory filing date, copies of
such Annual Statements certified by independent certified public accountants
reasonably acceptable to the Lenders if such certification is so required by
any Governmental Authority.

 

(viii)        Promptly upon
the filing thereof, copies of all Forms 10Q and 10K (other than earnings press
releases or filings made with respect to guaranteed investment contracts,
funding agreements and similar instruments and agreements) that PLC or any
Significant Subsidiary files with the Securities and Exchange Commission and,
upon request, any Forms A and B that any Significant Insurance Subsidiary files
with any insurance commission or department or analogous Governmental
Authority.

 

(ix)           Promptly upon
the Borrowers’ receipt thereof, copies of reports, notices, or claims prepared
by or on behalf of any Governmental Authority with respect to any adverse
action or event that has resulted in the reduction by 10% or more in the
capital and surplus of any Significant Insurance Subsidiary.

 

(x)            Promptly and in
any event within 10 days after learning thereof, notification of any change
after the Closing Date of any rating given (a) by S&P with respect to
PLC or any Consolidated Subsidiary or (b) by A.M. Best & Co.
with respect to any Significant Insurance Subsidiary.

 

(xi)           Such other
information (including, without limitation, non-financial information) as the
Administrative Agent or any Lender may from time to time reasonably request.

 

5.2.          Use of Proceeds.  The Borrowers will, and will cause each
Subsidiary to, use the proceeds of the Loans as set forth in Section 2.2.  The Borrowers will not, nor will they permit
any Subsidiary to, use any of the proceeds of the Loans to purchase or carry
any “margin stock” (as defined in Regulation U).

 

5.3.          Notice of Default.  The Borrowers will give prompt notice in
writing to the Administrative Agent and the Lenders of (i) the occurrence
of any Default or Unmatured Default

 

43

 

and of any other development, financial or
otherwise, that could reasonably be expected to have a Material Adverse Effect,
(ii) the receipt of any notice from any Governmental Authority of the
expiration without renewal, revocation or suspension of, or the institution of
any proceedings to revoke or suspend, any License now or hereafter held by any
Significant Insurance Subsidiary which is required to conduct insurance
business in compliance with all applicable laws and regulations, other than
such expiration, revocation or suspension or institution of such proceedings
that, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect, (iii) the receipt of any notice from any
Governmental Authority of the institution of any disciplinary proceedings
against or with respect to any Significant Insurance Subsidiary, or the
issuance of any order, the taking of any action or any request for an
extraordinary audit for cause by any Governmental Authority which is reasonably
expected to have a Material Adverse Effect or (iv) any judicial or
administrative order limiting or controlling the insurance business of any
Significant Insurance Subsidiary (and not the insurance industry generally)
which has been issued or adopted and which could reasonably be expected to have
a Material Adverse Effect.

 

5.4.          Conduct of Business.  The Borrowers will, and will cause each
Significant Subsidiary to, do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted except
where such failure to do so would not have a Material Adverse Effect.  The Borrowers will cause each Significant
Insurance Subsidiary to (i) carry on or otherwise be associated with the
business of a licensed insurance carrier and (ii) do all things necessary
to renew, extend and continue in effect all Licenses that may at any time and
from time to time be necessary for such Significant Insurance Subsidiary to
operate its insurance business in compliance with all applicable laws and
regulations; provided, however, that any such Significant
Insurance Subsidiary may withdraw from one or more states as an admitted
insurer or change the state of its domicile, if such withdrawal or change is in
the best interests of the Borrowers and such Significant Insurance Subsidiary.

 

5.5.          Taxes.  The Borrowers will, and will cause each
Significant Subsidiary to, pay when due all taxes, assessments and governmental
charges and levies upon it or its income, profits or Property, except where the
failure to file has not had and would not reasonably be expected to have, a
Material Adverse Effect, and except those that are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside.

 

5.6.          Insurance.  The Borrowers will, and will cause each
Significant Subsidiary to, maintain with financially sound and reputable
insurance companies insurance on all or substantially all of its Property in
such amounts and covering such risks, and with such risk retention or
self-insurance, as is consistent with sound business practice for Persons in
substantially the same industry as the Borrowers or such Significant
Subsidiary, and the

 

44

 

Borrowers will furnish to any
Lender upon request full information as to the insurance carried and any
applicable risk retention or self-insurance.

 

5.7.          Compliance with Laws.  The Borrowers will, and will cause each
Significant Subsidiary to, comply with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject,
except where the failure to so comply could not reasonably be expected to have
a Material Adverse Effect.

 

5.8.          Maintenance of
Properties.  The Borrowers will, and
will cause each Significant Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property in good repair, working order and
condition and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly
conducted at all times, except where the failure to so maintain, preserve,
protect and repair could not reasonably be expected to have a Material Adverse
Effect.

 

5.9.          Inspection.  The Borrowers will, and will cause each
Significant Subsidiary to, permit the Lenders, by their respective
representatives and agents, upon reasonable notice to the Borrowers to make a
reasonable inspection of any of the Property, corporate books and financial
records of the Borrowers and each Significant Subsidiary, to examine and make
copies of the books or accounts and other financial records of the Borrowers
and each Significant Subsidiary, and to discuss the affairs, finances and
accounts of the Borrowers and each Significant Subsidiary with, and to be
advised as to the same by, their respective officers at such reasonable times
and intervals as the Lenders may designate, provided that the Lenders agree to
keep this and all such information provided under this Agreement confidential.

 

5.10.        Merger, Consolidation
and Sale of Assets.  The Borrowers
will not, nor will they permit any Significant Subsidiary to, merge or
consolidate with or into, or sell, lease or otherwise transfer all or any
Substantial Portion of its assets to any other Person, except that (a) either
Borrower or a Significant Subsidiary may merge with another Person if (i) such
Person was organized under the laws of the United States of America or one of
its states, (ii) either Borrower or a Significant Subsidiary is the
corporation surviving such merger (provided that in a merger of either Borrower
and a Significant Subsidiary, such Borrower shall be the corporation surviving
such merger) and (iii) immediately after giving effect to such merger, no
Default shall have occurred and be continuing and (b) Subsidiaries (other
than PLICO) may merge with one another or into either Borrower.  The foregoing limitation on merger and
consolidation and the sale, lease or other transfer of assets shall not
prohibit (i) sales of investment assets in the ordinary course of business
and (ii) during any fiscal quarter, a merger, consolidation or any
transfer of assets (in a single transaction or a series of related
transactions) unless the aggregate assets that are the subject of such merger
or consolidation or to be so transferred, when combined with all other assets
transferred (including as the result of a merger or consolidation) during such
fiscal quarter and the immediately preceding 3 fiscal quarters, constituted
more than 15% of Consolidated Total Assets at the end of the most recent fiscal
year.

 

45

 

5.11.        Liens.  PLC will not, nor will it permit any
Significant Subsidiary to, create, incur or suffer to exist any Lien in, of or
on any Property of PLC or a Significant Subsidiary, except for Permitted Liens.

 

5.12.        Adjusted Consolidated
Net Worth.  PLC will maintain at all
times Adjusted Consolidated Net Worth equal to not less than the sum of (i) $2,200,000,000
plus (ii) 25% of the Consolidated Net Income of PLC and its Subsidiaries
as reflected in the financial statements, if positive, earned after December 31,
2007, through the last day of the most recent fiscal quarter for which
statements were delivered or required to have been delivered to the Lenders
pursuant to Section 5.1, taken as one accounting period, minus (iii) PLC’s
consolidated allowance for potential future losses on investments at the end of
such fiscal quarter.

 

5.13.        Ratio of Adjusted
Consolidated Indebtedness to Consolidated Capitalization.  PLC will maintain at all times a ratio of
Adjusted Consolidated Indebtedness to Consolidated Capitalization of not more
than 0.4 to 1.0.

 

5.14.        Total Adjusted Capital
of PLICO.  PLICO will maintain at all
times Total Adjusted Capital in an amount not less than 4.0 times PLICO’s
Authorized Control Level Risk-Based Capital. 
As used herein the terms “Total Adjusted Capital” and “Authorized
Control Level Risk-Based Capital” have the meanings attributed thereto in the
Risk-Based Capital (RBC) for Life and/or Health Insurers Model Act adopted by
the NAIC in December 2000, as the same may be modified, supplemented or
amended from time to time.

 

5.15.        Ratio of Unconsolidated
Cash Inflow Available for Interest Expense to Adjusted Consolidated Interest
Expense.  PLC will maintain, on a
rolling four quarter basis, a ratio of (i) Unconsolidated Cash Inflow
Available for Interest Expense to (ii) Adjusted Consolidated Interest
Expense of not less than 2.0 to 1.0.

 

5.16.        Affiliates.  PLC will not, and will not permit any
Significant Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make
payments or transfer to, any Affiliate (other than a Wholly-Owned Subsidiary)
except (i) any such transactions, payments or transfers with or to such
Affiliates as are made in the ordinary course of business and pursuant to the
reasonable requirements of  PLC’s or such
Significant Subsidiary’s business and upon fair and reasonable terms no less
favorable to PLC’s or such Significant Subsidiary than PLC or such Significant
Subsidiary would obtain in a comparable arms-length transaction and (ii) any
such other transactions, payments or transfers with or to such Affiliates as
could not reasonably be expected to have a Material Adverse Effect.

 

5.17.        Compliance with ERISA.  The Borrowers will not (i) terminate, or
permit any ERISA Affiliate to terminate, any Plan so as to result in any
material (in the opinion of the Lenders) liability of the Borrowers or an ERISA
Affiliate to the PBGC; (ii) permit to exist any occurrence of any Reportable
Event (as defined in Title IV of ERISA), or any other event or condition, that
presents a material (in the opinion of the Lenders) risk of such a termination
by

 

46

 

the PBGC of any Plan so as to
result in any material (in the opinion of the Lenders) liability of the
Borrowers or any ERISA Affiliate to the PBGC; (iii) be an “employer” (as
defined in Section 3(5) of ERISA), or permit any ERISA Affiliate to
be an “employer”, required to contribute to any Multiemployer Plan; or (iv) fail
to comply in all material respects with any laws or regulations applicable to
any Plan.

 

5.18.        PATRIOT Act Compliance.  The Borrowers will provide, to the extent
commercially reasonable, such information as is reasonably requested by the
Administrative Agent or any Lender in order to assist the Administrative Agent
and the Lenders in maintaining compliance with the PATRIOT Act.

 

ARTICLE
VI

 

DEFAULTS

 

The occurrence of any one or more of the
following events shall constitute a Default:

 

6.1.          Any representation or
warranty made or deemed made by or on behalf of the Borrowers or any of their
Subsidiaries to the Lenders or the Administrative Agent under or in connection
with this Agreement, any Loan or any certificate or written information
delivered in connection with this Agreement or any other Credit Document shall
be incorrect in any material respect on the date as of which made.

 

6.2.          Nonpayment of principal
of any Loan when due, or nonpayment of interest upon any Loan or of any facility
fee or other Obligation under any of the Credit Documents.

 

6.3.          The breach by the
Borrowers of any of the terms or provisions of Section 5.2, 5.10, 5.11,
5.12, 5.13 and 5.15.

 

6.4.          The breach by the
Borrowers (other than a breach that constitutes a Default under Section 6.1,
6.2 or 6.3) of any of the terms or provisions of this Agreement, and the
continuance of such breach for a period of 30 days after there has been given,
by registered or certified mail, to the Borrowers by the Administrative Agent a
written notice specifying such breach and requiring it to be remedied and
stating that such notice is a “notice of default” hereunder.

 

6.5.          Failure of the Borrowers
or any of their Subsidiaries to pay when due or within any applicable cure
periods any Indebtedness, if the aggregate amount of all such Indebtedness
involved exceeds $30,000,000; or if any event or condition shall occur that
results in any Indebtedness of the Borrowers or any Subsidiary being declared
to be due and payable or required to be prepaid (other than by a regularly
scheduled payment or a payment made in the ordinary course of business and
pursuant to a contractual obligation) prior to the stated maturity thereof, if
the aggregate amount of all such Indebtedness involved exceeds $30,000,000; or
the Borrowers or any of PLC’s Subsidiaries shall not pay, or admit in writing
their inability to pay, their debts generally as they become due.

 

47

 

6.6.          The Borrowers or any of
their Significant Subsidiaries shall (i) have an order for relief entered
with respect to them under the Federal bankruptcy laws as now or hereafter in
effect, (ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for them or any
Substantial Portion of their Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate them bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of them or their debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding, filed against them, (v) take any corporate action to authorize
or effect any of the foregoing actions set forth in this Section 6.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section 6.7.

 

6.7.          Without the application,
approval or consent of the Borrowers or any of their Subsidiaries, a receiver,
trustee, examiner, liquidator or similar official shall be appointed for the
Borrowers or any of PLC’s Significant Subsidiaries or any Substantial Portion
of its Property, or a proceeding described in Section 6.6(iv) shall
be instituted against the Borrowers or any of PLC’s Significant Subsidiaries,
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 30 consecutive days.

 

6.8.          Any Governmental
Authority shall condemn, seize or otherwise appropriate, or take custody or
control of (each a “Condemnation”), all or any portion of the Property of the
Borrowers or any of PLC’s Significant Subsidiaries which, when taken together
with all other Property of the Borrowers and PLC’s Significant Subsidiaries so
condemned, seized, appropriated or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation
occurs, constitutes a Substantial Portion.

 

6.9.          The Borrowers or any of
PLC’s Subsidiaries shall fail within 45 days to pay, bond or otherwise
discharge any judgment or order for the payment of money in excess of
$30,000,000, which is not stayed on appeal or otherwise being appropriately
contested in good faith.

 

6.10.        (i) Any ERISA Event
shall have occurred or (ii) the sum of the aggregate Insufficiencies of
all Plans shall exceed $30,000,000.

 

6.11.        Any Governmental Authority
having jurisdiction shall prohibit or further limit the payment or distribution
by PLICO or any other Significant Insurance Subsidiary to PLC of dividends,
principal or interest payments or management fees, if such prohibition or
further limitation could reasonably be expected to have a Material Adverse
Effect.

 

6.12.        The Borrowers or any of
PLC’s Subsidiaries shall be the subject of any proceedings or investigation of
any toxic or hazardous waste or substance into the environment,

 

48

 

or any violation of any
federal, state or local environmental, health or safety law or regulation,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.

 

6.13.        Any Change in Control
shall occur.

 

6.14.        Any License of any
Insurance Subsidiary held by such Insurance Subsidiary on the Closing Date or
acquired by such Insurance Subsidiary thereafter, the loss of which would have,
in the reasonable judgment of the 
Lenders, a Material Adverse Effect (i) shall be revoked by a final
non-appealable order by the state that issued such License, or any action
(whether administrative or judicial) to revoke such License shall have been
commenced against such Insurance Subsidiary which shall not have been dismissed
or contested in good faith within 30 days of the commencement thereof, (ii) shall
be suspended by such state for a period in excess of 30 days or (iii) shall
not be reissued or renewed by such state upon the expiration thereof following
application for such reissuance or renewal by such Insurance Subsidiary.

 

6.15.        A federal tax lien shall
attach against the Borrowers or any Subsidiary under Section 6323 of the
Code or a lien of the PBGC shall be filed against the Borrowers or any
Subsidiary under Section 4068 of ERISA in an amount that would have, in
the reasonable judgment of the Lenders, a Material Adverse Effect and in either
case such lien shall remain undischarged for a period of 60 days after the
attachment or filing, as the case may be.

 

ARTICLE
VII

 

REMEDIES

 

Upon the happening of any Default:

 

7.1.          Default Rate.  Administrative Agent shall at the direction,
or may with the consent, of the Required Lenders declare the Obligations to
thereafter bear interest at the Default Rate until such Default is cured or no
longer exists.

 

7.2.          Termination of
Commitments.  As provided in Article III
hereof, Lenders shall not be obligated to advance any additional Loans.  Administrative Agent shall at the direction,
or may with the consent, of the Required Lenders terminate the obligation of
Lenders to advance any additional Loans; provided that, upon the
occurrence of a Default specified in Sections 6.6 or 6.7 hereof, the obligation
of Lenders to advance any additional Loans shall automatically be terminated.

 

7.3.          Letters of Credit.  At the option of the Required Lenders, the
Administrative Agent may treat all then outstanding Letters of Credit as if
drafts in the full amount available to be drawn thereunder had been properly
drawn thereunder and paid by the Administrative Agent and the Borrowers had
failed or refused to reimburse the Administrative Agent for the amount so paid
within the time permitted under this Agreement. 
The Borrowers shall, promptly upon demand of the Administrative Agent,
deposit in cash with the Administrative Agent an amount

 

49

 

equal to the amount of all
Letter of Credit Liabilities then outstanding, as collateral security for the
repayment thereof, which deposit shall be held by the Administrative Agent
under the provisions of Section 10.22.

 

7.4.          Acceleration.  Administrative Agent shall at the direction,
or may with the consent of the Required Lenders, by written notice to the
Borrowers, declare the entire principal amount of all Obligations then
outstanding, including interest accrued thereon, to be immediately due and
payable without presentment, demand, protest, notice of protest, or dishonor or
other notice of default of any kind, all of which are hereby expressly waived; provided
that, upon the occurrence of a Default specified in Sections 6.6 or 6.7 hereof,
all Obligations then outstanding shall automatically become immediately due and
payable without presentment, demand, protest, notice of intent to accelerate or
other notice or legal process of any kind, all of which are hereby expressly
waived.

 

7.5.          Setoff.  Any Lender may, to the extent of the amount
of the Obligations, exercise its lien upon and right of setoff against any
monies, items, credits, deposits or instruments that such Lender may have in
its possession and which belong to the Borrowers or to any other person or
entity liable for the payment of any or all of the Obligations.

 

7.6.          Other Remedies.  Lenders and Administrative Agent may exercise
any right that they may have under any other document evidencing or securing
the Obligations or otherwise available to Lenders or Administrative Agent at
law or equity.

 

ARTICLE
VIII

 

THE
ADMINISTRATIVE AGENT

 

8.1.          Appointment of
Administrative Agent.  Lenders hereby
appoint Administrative Agent to act as specified in this Article VIII.
Administrative Agent’s duties hereunder are administrative and ministerial in
nature, and Administrative Agent’s capacity is that of an independent
contractor for Lenders. Administrative Agent is not a trustee or other
fiduciary for Lenders, and Administrative Agent has no duties whatsoever to
Lenders except as expressly set forth in this Agreement.

 

8.2.          Powers
of Administrative Agent.

 

8.2.1        Administration of Loans.  Except as otherwise provided in this Section 8.2,
Administrative Agent shall have the power and authority to (i) give all
consents and approvals, issue waivers and amendments, enforce the Credit
Documents (including, but not limited to, the power to enforce the Credit
Documents in any relevant case under the Bankruptcy Code) and otherwise take
all actions permitted of Administrative Agent under this Agreement or any other
Credit Document, (ii) give all consents and approvals, issue waivers and
amendments, enforce the Credit Documents (including, but not limited to, the
power to enforce the Credit Documents in any relevant case under the Bankruptcy
Code) and otherwise take all actions permitted of

 

50

 

Lenders under this Agreement or
any other Credit Document, excepting only those matters that the Credit
Documents specifically reserve for the respective Lenders severally (such as
the computation of LIBOR charges unique to the circumstances of a given
Lender), (iii) receive all payments, notices and other deliveries and
communications to be given Lenders or Administrative Agent under this Agreement
or any other Credit Document, and (iv) to perform such actions as are
incidental to any of the foregoing.

 

8.2.2        Matters Reserved to
Required Lenders.  Absent the prior
approval of the Required Lenders, Administrative Agent shall not waive, consent
to any departure from, or amend any provision of this Agreement or any other
Credit Document or accelerate the maturity of the Obligations.

 

8.2.3        Matters Reserved to all
Lenders.  Absent the prior approval
of all Lenders, Administrative Agent shall not forgive any principal included
in the Obligations; waive or amend any fee or interest rate applicable to the
Obligations; waive or amend the Termination Date; amend the expiry date of a
Letter of Credit to any date beyond the Termination Date; waive or amend the
amount of any Lender’s Revolving Credit Commitment (other than pursuant to Section 2.20
hereof); waive a Default arising from non-payment of any principal or interest
due on the Obligations; amend the definitions of Pro Rata Share or Required
Lenders or amend this Section 8.2.3.

 

8.3.          Duties
of Administrative Agent.

 

8.3.1        Specific Duties of
Administrative Agent: Standard of Care. 
Administrative Agent shall (i) remit to each Lender, with
reasonable promptness, the appropriate Pro Rata Share of payments received or
other amounts collected on account of the Obligations, (ii) forward to
Lenders, with reasonable promptness, counterparts or copies of Borrowing
Notices, financial reports and other information that may be delivered to
Administrative Agent by the Borrowers pursuant to the requirements of the
Credit Documents, (iii) notify Lenders of any Unmatured Default or Default
known to Administrative Agent, in accordance with Section 8.7 below, and (iv) otherwise
administer the Loans through the exercise of such of the powers granted herein
as Administrative Agent deems appropriate from time to time. Administrative
Agent shall have no liability to Lenders for any action or inaction relating to
this Agreement or the other Credit Documents, except for actual losses caused
by its gross negligence or reckless or willful misconduct.

 

8.3.2        Limitations on
Administrative Agent’s Duties. 
Administrative Agent shall not be obligated to take any action hereunder
or under any other Credit Document (i) if such action would, in the
opinion of Administrative Agent, be contrary to applicable law, this Agreement or
the other Credit Documents, (ii) if it shall not first be specifically
indemnified to its satisfaction against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such
action, (iii) if it would likely subject Administrative Agent to a tax in
any jurisdiction where it is not then subject to a tax unless the
Administrative Agent receives security or indemnity satisfactory to it against
any tax, (iv) if it would likely require

 

51

 

Administrative Agent to qualify
to do business in any jurisdiction where it is not then so qualified, unless
Administrative Agent receives security or indemnity satisfactory to it against
any tax or other liability in connection with such qualification or resulting
from the taking of such action in connection therewith, or (v) if it would
likely subject Administrative Agent to in  personam jurisdiction
in any location where it is not then so subject.

 

8.3.3        Administrative Agent’s
Right to Require Instructions in Performance of Duties.  If Administrative Agent, in its sole and
absolute discretion, requests instructions from the Required Lenders with
respect to any act or action (including the failure to act) in connection with
this Agreement or any other Credit Document for which the approval of the
Required Lenders or all Lenders is not otherwise required, Administrative Agent
shall be entitled, at its option, to refrain from such action, or to continue
such inaction, unless and until Administrative Agent shall have received such
instructions, and Administrative Agent shall incur no liability by reason of so
acting or refraining from action. No Lender shall have any right of action
whatsoever against Administrative Agent as a result of Administrative Agent’s
acting or refraining from acting hereunder or under any other Credit Document
in accordance with the instructions of the Required Lenders in such a case.

 

8.3.4        Administrative Agent’s
Reliance on Others in Performance of Duties.  Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, consent, certificate, telex, teletype or
facsimile message, order or other documentary, teletransmission or telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person. Administrative Agent may consult
with legal counsel (including counsel for the Borrowers), accountants and other
experts selected by it with respect to all matters pertaining to this Agreement
and the other Credit Documents and its duties hereunder and thereunder and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel (including counsel for the
Borrowers), accountants or experts.

 

8.3.5        Sharing of Information.  Except as otherwise expressly provided in
this Article VIII, Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information concerning the business, prospects,
operations, properties, financial or other condition or creditworthiness of the
Borrowers or any other Person that may come into its possession, whether before
the making of the initial Loans or at any time or times thereafter.  All notices to be given to the Borrowers by a
Lender hereunder shall be concurrently given to Administrative Agent and all
other Lenders.

 

8.4.          Indemnification of
Administrative Agent.  To the extent
Administrative Agent is not reimbursed by or on behalf of the Borrowers, and
without limiting the obligation of the Borrowers to do so, each Lender will
reimburse and indemnify Administrative Agent, from and against its Pro Rata
Share of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including attorneys’ fees and
expenses) or disbursements of any kind or nature whatsoever that may at any
time (including at any time following the indefeasible repayment in full of the
Loans) be imposed on, incurred by or asserted

 

52

 

against Administrative Agent in
any way relating to or arising out of this Agreement or any other Credit Document
or the transactions contemplated thereby or any action taken or omitted by
Administrative Agent under or in connection with any of the foregoing, and in
particular will reimburse Administrative Agent for out-of-pocket expenses
promptly upon demand by Administrative Agent therefor; provided, however, that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements finally determined by a court of competent jurisdiction and not
subject to any appeal or pursuant to arbitration to have resulted from
Administrative Agent’s gross negligence or reckless or willful misconduct.
Administrative Agent may offset any amounts due Administrative Agent by any
Lender against obligations of Administrative Agent to that Lender.

 

8.5.          No Representations by
Administrative Agent.  Each Lender
acknowledges that neither Administrative Agent nor any of its officers,
directors, employees, attorneys, accountants or agents has made any
representation or warranty to it regarding the Borrowers, the Loans, or
otherwise relating to this Agreement. Administrative Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any other Credit Document or in any
document, instrument, certificate or other writing delivered in connection
herewith or therewith or for the execution, effectiveness, genuineness,
validity, enforceability, perfection, priority or sufficiency of this Agreement
or any other Credit Document or the financial condition of the Borrowers or any
other Person, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of the
Borrowers or any other Person or the existence or possible existence of any
Unmatured Default or Default.

 

8.6.          Independent
Investigations by Lenders.  Each
Lender acknowledges that, independently and without reliance upon
Administrative Agent or any other Lender and based on such documents and
information as it has deemed and may deem appropriate, (i) it has made its
own appraisal of and investigation into the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrowers
in connection with its decision to enter into this Agreement and extend credit
to Borrowers hereunder, and (ii) it will continue to make its own credit
analysis, appraisals and decisions in taking or not taking action hereunder.

 

8.7.          Notice of Default.  Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Unmatured Default or Default,
other than any Unmatured Default or Default arising out of the failure to pay
any principal, interest, fees or other amounts payable to Administrative Agent
for the account of Lenders, unless Administrative Agent has received written
notice from the Borrowers or a Lender describing such Unmatured Default or
Default and stating that such notice is a “notice of default.” In the event
that Administrative Agent receives such a notice, Administrative Agent shall
give notice thereof to Lenders as soon as reasonably practicable; provided,
however, that if any such notice has also been furnished to Lenders,
Administrative Agent shall have no obligation to notify Lenders with respect
thereto.

 

53

 

Each Lender shall promptly give Administrative Agent such a notice upon
its actual knowledge of an Unmatured Default or a Default; provided, however,
that the failure of any Lender to deliver such notice in the absence of gross
negligence or reckless or willful misconduct shall not affect its rights
hereunder or under the other Credit Documents.

 

8.8.          Funding of Loans
Pursuant to Borrowing Notices. 
Promptly following receipt of notice from Administrative Agent that a
Borrowing Notice has been submitted, and provided that all conditions to
funding are believed to have been satisfied, each Lender shall transfer to a
designated account with Administrative Agent that Lender’s Pro Rata Share of
the requested funding. The transfer of funds shall occur within the time
required for funding under this Agreement; provided, however, no Lender shall
be obligated to fund a LIBOR Loan earlier than three (3) Business Days
after its receipt of notice of the borrowing from Administrative Agent. Should
any Lender fail to timely fund its Pro Rata Share of a requested Loan,
Administrative Agent may, but shall be under no obligation whatsoever to,
advance to the Borrowers the defaulted Lender’s Pro Rata Share of the requested
Loan.  If such an advance is made, it
shall be deemed an advance by Administrative Agent for the account of the
defaulting Lender and shall bear interest at the rate applicable to the Loan
funded by the advance, payable on demand.

 

8.9.          Administrative Agent
in its Individual Capacity.  With
respect to its Commitments, and the Loans made by it, Administrative Agent
shall have the same rights and powers under the Credit Documents as any other
Lender or holder of a Note and may exercise the same as though it were not
performing the duties specified herein; and the terms “Lenders,” “Required
Lenders,” and any similar terms shall, unless the context clearly otherwise
indicates, include Administrative Agent in its individual capacity as a Lender.
Administrative Agent may accept deposits from, lend money to and generally
engage in any kind of banking, trust, financial advisory or other business with
the Borrowers or any of their respective Affiliates as if it were not
performing the servicing duties specified herein, and may accept fees and other
consideration from the Borrowers for services in connection with this Agreement
and otherwise without having to disclose or account for the same to Lenders.

 

8.10.        Holders.  Administrative Agent may deem and treat the
payee of any Note as the holder thereof and Lender hereunder for all purposes
hereof unless and until a written notice of the assignment, transfer or
endorsement thereof purportedly executed by the payee, as the case may be,
shall have been filed with Administrative Agent. Any request, authority or
consent of any Person that, at the time of making such request or giving such
authority or consent, is the holder of any Note according to Administrative
Agent’s information, shall be conclusive and binding on any subsequent holder,
transferee, assignee or endorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.

 

8.11.        Successor
Administrative Agent.  Administrative
Agent may resign at any time upon sixty (60) days’ prior written notice to the
Borrowers and Lenders. Administrative Agent may be removed upon Administrative
Agent’s insolvency, liquidation or the appointment of a receiver for
Administrative Agent, and by action of the Required Lenders, at any time upon
sixty (60) days’ prior written notice to the Borrowers and Administrative
Agent. Such resignation or

 

54

 

removal, as the case may be,
shall take effect upon the appointment of a successor Administrative Agent as
provided herein. The Required Lenders will appoint from among Lenders a
successor Administrative Agent. If no successor Administrative Agent shall have
been appointed within such sixty (60) day period, Administrative Agent may
appoint, after consulting with Lenders and the Borrowers, a successor agent
from among Lenders, who shall serve as Administrative Agent until such time, if
any, as the Required Lenders shall have appointed a successor Administrative
Agent as provided hereinabove. Upon the written acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Credit Documents.
After any retiring Administrative Agent’s resignation as Administrative Agent,
the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent.

 

8.12.        Sharing of Payments,
etc.  Each Lender agrees that if it
shall, through the exercise of a right of banker’s lien, set-off, counterclaim
or otherwise, obtain payment with respect to the Obligations which results in
its receiving more than its Pro Rata Share of the aggregate payments with
respect to all of the Obligations, then (a) such Lender shall be deemed to
have simultaneously purchased from the other Lenders a share in the Obligations
so that the amount of the Obligations held by each of Lenders shall continue to
equal their respective Pro Rata Shares, and (b) such other adjustments
shall be made from time to time as shall be equitable to insure that Lenders
share such payments ratably.

 

8.13.        Payments Between
Administrative Agent and Lenders. 
All payments by Administrative Agent to any Lender, and all payments by
any Lender to Administrative Agent, under the terms of this Agreement shall be
made by wire transfer in immediately available funds to the receiving party’s
address specified for notices in this Agreement. If any of Lenders fail to pay
when due any sum payable to Administrative Agent, then, except as otherwise
provided in Section 8.8 hereof, such sum shall bear interest until paid at
the interest rate per annum for overnight borrowing by the payee from the
Federal Reserve Bank for the period commencing on the date such payment was due
and ending on, but excluding, the date such payment is made.

 

8.14.        Bankruptcy Provisions.  Should the Borrowers become parties to a case
under the Bankruptcy Code, each Lender shall be entitled to file its own claim,
to the extent such a filing may be necessary. 
Should the Borrowers become parties to a reorganization proceeding under
the Bankruptcy Code, each Lender shall be recognized as the holder of a
separate claim for the purpose of the approval or rejection of a Plan under 11
U.S.C. § 1126, may freely vote such claim, and the provisions of that Section shall
control the other provisions of this Agreement that otherwise require the
consent of the Required Lenders or all Lenders in certain circumstances.
Administrative Agent shall continue to administer the Revolving Credit Loan on
behalf of Lenders, as they may be amended by any adopted Plan of Reorganization.

 

55

 

8.15.        Procedures for Notices
and Approvals.  All notices given
among Lenders and Administrative Agent with respect to this Agreement or the
other Credit Documents shall be given in the manner provided in this Agreement.
Additionally, should Administrative Agent request Lenders’ approval of any
matter, each Lender shall respond in writing within five (5) Business Days
after the Business Day on which the request was received.

 

8.16.        Amendments to Article VIII.  No provision of this Article VIII may be
amended or waived absent the prior written consent of all Lenders and
Administrative Agent.  The Borrowers’
approval shall not be required for the amendment or waiver of any provision of
this Article VIII; provided, however, the Borrowers’ written consent shall
be required for any amendment of this Article VIII that would eliminate
the position of Administrative Agent.

 

ARTICLE
IX

 

BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATION

 

9.1.          Successors and
Assigns.  The terms and provision of
the Credit Documents shall be binding upon and inure to the benefit of the
Borrowers and the Lenders and their respective successors and assigns, except
that (i) the Borrowers shall not have the right to assign their rights or
obligations under the Credit Documents, and (ii) any assignment by any
Lender must be made in compliance with Section 9.2.  Notwithstanding clause (ii) of the
immediately preceding sentence, any Lender may at any time, without the consent
of the Borrowers or the Administrative Agent, but with concurrent notice to the
Borrowers and the Administrative Agent, assign all or any portion of its rights
under this Agreement and its Note to (a) a Federal Reserve Bank; provided,
however, that no such assignment shall release the transferor Lender from its
obligations hereunder, or (b) such Person that, immediately prior to such
assignment, was a Lender; provided however that such person has an office
located in the United States of America and is acting through such office with
respect to this Agreement.  The
Administrative Agent may treat the payee of any Note as the owner thereof for
all purposes hereof unless and until such payee complies with Section 9.2,
in the case of an assignment thereof, or, in the case of any other transfer, a
written notice of the transfer is filed with the Administrative Agent.  Any assignee or transferee of a Note agrees
by acceptance thereof to be bound by all the terms and provisions of the Credit
Documents.  Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.

 

9.2.          Participations and
Assignments.

 

(a)           Lenders may, from time to time, in their
sole discretion, and with concurrent notice to the Borrowers, sell
participations in any credit subject hereto to such other investors or
financial institutions as it may elect. 
Lenders and Administrative Agent may from time to time, with the prior
consent of the Borrowers, which consent shall not be unreasonably withheld or
delayed, disclose to any participant or prospective participant such information
as they may have

 

56

 

regarding the
financial condition, operations, and prospects of the Borrowers, which
participant agrees to keep such information confidential, provided, however,
such consent of the Borrowers shall not be required if any such participant is
an Affiliate of any such Lender selling a participation.

 

(b)           At any time after the Closing Date each
Lender may, with the prior consent of the Administrative Agent and the
Borrowers (so long as no Default or Unmatured Default exists), which consent
shall not be unreasonably withheld, assign to one or more banks or financial
institutions all or a portion of its rights and obligations under this
Agreement (including all or a portion of the Note payable to its order); provided,
that (i) each such assignment shall be of a constant, and not a varying,
percentage of all of the assigning Lender’s rights and obligations under this
Agreement, (ii) for each assignment involving the issuance and transfer of
Notes, the assigning Lender shall execute an Assignment and Acceptance and the
Borrowers hereby consent to execute a replacement Note or Notes to give effect
to the assignment, (iii) the minimum commitment which shall be assigned is
$5,000,000 (or such lesser amount as may be agreed to by Borrowers and
Administrative Agent or as shall constitute the aggregate amount of the
commitment of the assigning Lender), (iv) such assignee has an office
located in the United States of America and is acting through such office with
respect to this Agreement and (v) no consent of the Borrowers or the
Administrative Agent shall be required in connection with an assignment by a
Lender to an Affiliate of such Lender. 
Upon such execution, delivery, approval and acceptance, from and after
the effective date specified in each Assignment and Acceptance (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder or under such Note or Notes have been assigned or
negotiated to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder, as fully as if such assignee had been
named as a Lender in this Agreement, and of a holder of such Note or Notes, and
(y) the assignor shall, to the extent that rights and obligations
hereunder or under such Note or Notes have been assigned or negotiated by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its future obligations under this Agreement.  Any Lender that makes an assignment (other
than an assignment to an existing Lender or an Affiliate of a Lender) shall pay
to the Administrative Agent a one-time administrative fee of $3,500, which fee
shall not be reimbursed by the Borrowers.

 

(c)           By executing and delivering an Assignment
and Acceptance, the Lender-assignor and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows:  (i) the assignment made under such
Assignment and Acceptance is made under such Assignment and Acceptance without
recourse; (ii) such assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers or any other person or the performance or observance by the Borrowers
or any other person of any of its obligations under any Credit Document or any
other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of all financial statements delivered pursuant to this Agreement, and
such other Credit Documents and other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance;

 

57

 

(iv) such
assignee will, independently and without reliance upon the Administrative
Agent, the assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement, the
Note and the other Credit Documents as are delegated to the Administrative
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender and a
holder of such Note.

 

(d)           The Administrative Agent shall maintain at
its address referred to herein a copy of each Assignment and Acceptance
delivered to and accepted by it.

 

(e)           Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender, the Administrative Agent shall give
prompt notice thereof to the Borrowers.

 

(f)            If at any time the ratings in effect from
the Rating Agencies for the non-credit enhanced senior unsecured long-term debt
of any Lender is less than BBB+/Baa1 respectively (the “Designated Ratings
Levels”), the Administrative Agent may, upon written notice to such Lender,
require such Lender to assign and delegate, without recourse (in accordance
with and subject to the terms contained in, this Section 9.2) all of its
interests, rights and obligations under this Agreement to a bank or financial
institution that shall assume such obligations (which assignee may be another
Lender, if such Lender accepts such assignment), provided  that (i) such
assigning Lender shall have received payments equal to all principal payments,
accrued interest thereon, accrued fees and all other amounts then payable to it
hereunder, (ii) such assignee has ratings in effect from Moody’s and
S&P for its non-credit enhanced senior unsecured long-term debt not lower
than the Designated Ratings Levels, and (iii) such assignment does not
conflict with applicable laws.

 

ARTICLE
X

 

GENERAL PROVISIONS

 

10.1.        Notices.  All communications relating to this Agreement
or any of the other Credit Documents shall be in writing and shall effective
when be delivered by mail, overnight courier, special courier, facsimile or
otherwise to the following addresses:

 

	
  If to the Borrowers:

  	
   

  
	
   

  	
   

  
	
  2801 Highway 280 South

  	
   

  
	
  Birmingham, Alabama 35223

  	
   

  
	
  Facsimile:

  	
  (205) 268-3642

  
	
  Attention:

  	
  Treasurer

  
			

 

58

 

	
  With a Copy To:

  	
   

  
	
   

  	
   

  
	
  2801 Highway 280 South

  	
   

  
	
  Birmingham, Alabama 35223

  	
   

  
	
  Facsimile:

  	
  (205) 268-3597

  
	
  Attention:

  	
  General Counsel

  
			

 

	
  If to Regions or Administrative Agent:

  	
   

  
	
   

  	
   

  
	
  1900 5th Avenue North

  	
   

  
	
  Upper Lobby, Regions Center

  	
   

  
	
  Birmingham, Alabama 35203

  	
   

  
	
  Facsimile:

  	
  (205) 801-0157

  
	
  Attention:

  	
  David A. Simmons

  
			

 

	
  With a Copy To:

  	
   

  
	
   

  	
   

  
	
  Maynard, Cooper & Gale, P.C.

  	
   

  
	
  1901 6th Avenue North

  	
   

  
	
  2400 Regions/Harbert Plaza

  	
   

  
	
  Birmingham, Alabama 35203-2618

  	
   

  
	
  Facsimile:

  	
  (205) 254-1999

  
	
  Attention:

  	
  J. Kris Lowry, Esq.

  
			

 

If to the other Lenders, at the address set
forth on the signature pages attached hereto.  Any party may change its address for receipt
of notice by written direction to the other parties hereto.

 

10.2.        Renewal, Extension, or
Rearrangement.  All provisions of
this Agreement relating to Obligations shall apply with equal force and effect
to each and all promissory notes executed hereafter which in whole or in part
represent a renewal, extension for any period, increase, or rearrangement of
any part of the Obligations originally represented by any part of such other
Obligations.

 

10.3.        Application of Payments.  Amounts received with respect to the
Obligations shall be applied (i) first, to any expenses due Lenders or
Administrative Agent, (ii) second, to accrued and unpaid interest under
any of the Obligations, and (iii) third, to reduce the unpaid principal
portion of the Obligations (other than those arising from Hedge Agreements) in
such manner as determined by Administrative Agent.

 

10.4.        Counterparts.  This Agreement may be executed in
counterparts with all signatures or by counterpart signature pages, and it shall
not be necessary that the signatures of

 

59

 

all parties be contained on any
one counterpart. Each counterpart shall be deemed an original, but all of them
together shall constitute one and the same instrument.

 

10.5.        Negotiated Document.  This Agreement and the other Credit Documents
have been negotiated by the parties with full benefit of counsel and should not
be construed against any party as author.

 

10.6.        Consent to
Jurisdiction: Exclusive Venue.  The
Borrowers hereby irrevocably consent to the jurisdiction of the United States
District Court for the Northern District of Alabama and of all Alabama state
courts sitting in Jefferson County, Alabama, for the purpose of any litigation
to which Lenders or Administrative Agent may be a party and which concerns this
Agreement or the Obligations. It is further agreed that venue for any such
action shall lie exclusively with courts sitting in Jefferson County, Alabama,
unless Lenders and Administrative Agent agree to the contrary in writing.

 

10.7.        Not Partners: No Third
Party Beneficiaries.  The
relationship of Lenders and the Borrowers is that of lenders and borrowers
only, and neither is a fiduciary, partner or joint venturer of the other for
any purpose. This Agreement has been executed for the sole benefit of Lenders,
and no third party is authorized to rely upon Lenders’ rights or duties
hereunder.

 

10.8.        No Reliance on Lenders’
Analysis.  The Borrowers acknowledge
and represent that, in connection with the Obligations, the Borrowers have not
relied upon any financial projection, budget, assessment or other analysis by
Lenders or Administrative Agent upon any representation by Lenders as to the
risks, benefits or prospects of Borrowers’ business activities or present or
future capital needs incidental thereto, all such considerations having been
examined fully and independently by the Borrowers.

 

10.9.        No Marshaling of Assets.  Lenders and Administrative Agent may proceed
against collateral securing the Obligations and against parties liable therefor
in such order as they may elect, and neither the Borrowers nor any surety or
guarantor for the Borrowers nor any creditor of the Borrowers shall be entitled
to require Lenders or Administrative Agent to marshal assets. The benefit of
any rule of law or equity to the contrary is hereby expressly waived.

 

10.10.      Business Days.  If any payment date under the Obligations
falls on a day that is not a Business Day, or if the last day of any notice
period falls on such a day, the payment shall be due and the notice period
shall end on the next following Business Day.

 

10.11.      Standard of Care:
Limitation of Damages.  Lenders and
Administrative Agent shall be liable to the Borrowers only for matters arising
from this Agreement or otherwise related to the Obligations resulting from such
Lender’s or Administrative Agent’s gross negligence or reckless or willful
misconduct as finally determined by a court of competent jurisdiction and not
subject to any appeal or by settlement tantamount to such judgment, and
liability for all other matters is hereby waived.  Lenders and Administrative Agent shall not in
any event be liable to

 

60

 

the Borrowers for special or
consequential damages arising from this Agreement or otherwise related to the
Obligations.

 

10.12.      Incorporation of
Schedules.  All Schedules and
Exhibits referred to in this Agreement are incorporated herein by this
reference.

 

10.13.      Indulgence Not Waiver.  Lenders’ or Administrative Agent’s indulgence
in the existence of a default hereunder or any other departure from the terms
of this Agreement shall not prejudice Lenders’ or Administrative Agent’s rights
to declare a default or otherwise demand strict compliance with this Agreement.

 

10.14.      Cumulative Remedies.  The remedies provided Lenders and
Administrative Agent in this Agreement are not exclusive of any other remedies
that may be available to Lenders and Administrative Agent under any other
document or at law or equity.

 

10.15.      Amendment and Waiver in
Writing.  No provision of this
Agreement can be amended or waived, except by a statement in writing signed by
the party or parties against whom enforcement of the amendment or waiver is
sought. Waivers and amendments may be executed by Administrative Agent on
behalf of Lenders, subject to the requirements of Article VIII hereof
requiring the consent of some or all of Lenders under certain circumstances.

 

10.16.      Entire Agreement.  This Agreement and the other written agreements
among the Borrowers, Lenders and Administrative Agent represent the entire
agreement between the parties concerning the subject matter hereof, and all
oral discussions and prior agreements are merged herein. Provided, if there is
a conflict between this Agreement and any other document executed
contemporaneously herewith with respect to the Obligations, the provisions in
this Agreement shall control.

 

10.17.      Severability.  Should any provision of this Agreement be
declared invalid or unenforceable for any reason, the remaining provisions
hereof shall remain in full effect.

 

10.18.      Time of Essence.  Time is of the essence of this Agreement, and
all dates and time periods specified herein shall be strictly observed.

 

10.19.      Applicable Law.  The validity, construction and enforcement of
this Agreement and all other documents executed with respect to the Obligations
shall be determined according to the laws of Alabama applicable to contracts
executed and performed entirely within that state.

 

10.20.      Captions Not Controlling.  Captions and headings have been included in
this Agreement for the convenience of the parties, and shall not be construed
as affecting the content of the respective Sections.

 

10.21.      Facsimile Signatures.  This Agreement may be executed by facsimile
signatures, and shall be effective when Administrative Agent has received
telecopy transmissions of the

 

61

 

signature pages executed
by all parties hereto; provided, however, that all parties shall deliver
original executed documents to Administrative Agent promptly following the
execution hereof.

 

10.22.      Termination.  The termination of this Agreement shall not
affect any rights of the Borrowers, the Lenders or the Administrative Agent or
any obligation of the Borrowers, the Lenders or the Administrative Agent,
arising prior to the effective date of such termination, and the provisions
hereof shall continue to be fully operative until all transactions entered into
or rights created or obligations incurred prior to such termination have been
fully disposed of, concluded or liquidated and the Obligations arising prior to
or after such termination have been irrevocably paid in full.  The rights granted to the Administrative
Agent for the benefit of the Lenders hereunder and under the other Credit
Documents shall continue in full force and effect, notwithstanding the
termination of this Agreement, until all of the Obligations have been paid in
full after the termination hereof or the Borrowers have furnished the Lenders
with an indemnification satisfactory to the Lenders with respect thereto.  All representations, warranties, covenants,
waivers and agreements contained herein shall survive termination hereof until
payment in full of the Obligations unless otherwise provided herein.  Notwithstanding the foregoing, if after
receipt of any payment of all or any part of the Obligations, the
Administrative Agent or the Lenders are for any reason compelled to surrender
such payment to any Person because such payment is determined to be void or
voidable as a preference, impermissible setoff, a diversion of trust funds or
for any other reason, this Agreement shall continue in full force and the
Borrowers shall be liable to, and shall indemnify and hold the Administrative
Agent and the Lenders harmless for, the amount of such payment surrendered
until the Administrative Agent and the Lenders shall have been finally and
irrevocably paid in full. The provisions of the foregoing sentence shall be and
remain effective notwithstanding any contrary action which may have been taken
by the Administrative Agent or the Lenders in reliance upon such payment, and
any such contrary action so taken shall be without prejudice to the
Administrative Agent’s or the Lenders’ rights under this Agreement and shall be
deemed to have been conditioned upon such payment having become final and
irrevocable.  If on any date on which the
Borrowers wish to pay the Obligations in full and terminate this Agreement,
there are any outstanding Letters of Credit, the Borrowers shall, unless
otherwise agreed by the Required Lenders in their sole discretion, make a cash
prepayment to the Administrative Agent on such date in an amount equal to the
then-outstanding Letter of Credit Liabilities, and the Administrative Agent
shall hold such prepayment in an interest-bearing cash collateral account in
the name and under the sole control of the Administrative Agent (which account
shall bear interest at the Administrative Agent’s then-current rate for such
accounts) as security for the Reimbursement Obligations and other Letter of
Credit obligations.  To the extent
allowed by law, such account shall not constitute an asset of the Borrowers, or
any of them, subject to their rights therein under this Section 10.22.  The Administrative Agent shall from time to
time debit such account for the payment of the Letter of Credit Liabilities as
the same become due and payable and shall promptly refund any excess funds
(including interest) held in said account to the Borrowers if and when no
Letter of Credit Liabilities remain outstanding hereunder and all of the
Obligations have been paid in full.  The
Borrowers shall remain liable for any Obligations in excess of the amounts paid
from such account.

 

62

 

10.23.      Waiver of Jury Trial.  THE BORROWERS, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDERS, THE ADMINISTRATIVE AGENT
OR THE BORROWERS OR ANY OF THEM.  THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS’ AND THE ADMINISTRATIVE
AGENT’S ENTERING INTO THIS AGREEMENT.

 

10.24.      Expenses; Indemnity.

 

(a)           The Borrowers shall pay or reimburse all
reasonable and documented out-of-pocket expenses incurred during the existence
of a Default or Unmatured Default by the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its
rights under this Section, or in connection with the Loans made hereunder,
including all such reasonable out-of-pocket expenses incurred during  any workout, restructuring or negotiations in
respect of such Loans.

 

(b)           The Borrowers shall indemnify the
Administrative Agent and each Lender and the officers, partners, members,
directors, trustees, advisors, employees, agents, sub-agents and Affiliates
of  the Administrative Agent and each
Lender (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 reasonable and documented fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the transactions contemplated
hereby, (ii) any Loan or the use of the proceeds therefrom, including any
of the foregoing relating to any actual or alleged presence or release of
hazardous waste, substance or materials on or from any property owned or
operated by the Borrowers or its Subsidiaries, or any environmental liability
or violation of any federal, state or local environmental, health or safety law
or regulation related in any way to the Borrowers or its Subsidiaries, or (iii) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory; provided
that Borrowers shall have no obligation hereunder to any Indemnitee with
respect to such losses, claims, damages, liabilities or related expenses
resulting from the gross negligence or willful misconduct of such Indemnitee or
its Affiliates or disputes that are solely between Indemnitees.

 

10.25.      PATRIOT Act Notice.  Each Lender that is subject to the PATRIOT
Act and the Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT
Act, it is required to obtain, verify and record

 

63

 

information that identifies the
Borrowers, which information includes the name and address of the Borrowers and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrowers in accordance with the PATRIOT Act.

 

10.26.      Agreement Amends and
Restates Existing Credit Agreement. 
The Existing Credit Agreement is amended and restated in its entirety by
this Agreement.  The proceeds of the
Loans made on the Closing Date under this Agreement shall repay any Loans
outstanding under the Existing Credit Agreement.  The promissory notes held by the Lenders to
evidence the indebtedness owing by the Borrowers to the Lenders under the
Existing Credit Agreement shall be retained by the Lenders in their files until
this Agreement is terminated.

 

[signatures on
following pages]

 

64

 

IN WITNESS WHEREOF, the Borrowers, the
Lenders and the Administrative Agent have executed this Agreement.

 

 

	
   

  	
  PROTECTIVE
  LIFE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTIVE
  LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  2801 Highway
  280 South

  
	
   

  	
  Birmingham,
  Alabama 35223

  
					

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  REGIONS BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Post Office
  Box 11007

  
	
   

  	
  Birmingham,
  Alabama 35288

  
	
   

  	
   

  
	
   

  	
  Attention:
  Mr. David A. Simmons

  
	
   

  	
  Senior Vice
  President

  
	
   

  	
  Telephone
  Number: (205) 326-5924

  
	
   

  	
  Facsimile:
  (205) 801-0157

  
					

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  WACHOVIA
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  301 South
  College Street

  
	
   

  	
  Charlotte,
  North Carolina 28288

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
							

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  BANK OF
  AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  BARCLAYS
  BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  BANK OF NEW
  YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  GOLDMAN
  SACHS CREDIT PARTNERS L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  WELLS FARGO
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  U.S. BANK
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  One Firstar
  Plaza

  
	
   

  	
  Corporate
  Banking - 12th Floor

  
	
   

  	
  St. Louis, Missouri 63101

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
							

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  FIRST
  COMMERCIAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  800 Shades
  Creek Parkway

  
	
   

  	
  Birmingham,
  Alabama 35209

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
							

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  COMPASS BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  15 South
  20th Street, 2nd Floor

  
	
   

  	
  Birmingham,
  Alabama 35233

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
							

 

 

Revolving

Credit Commitment

 

 

	
  $

  	
  MERRILL LYNCH BANK USA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  15 West
  South Temple, Suite 300

  
	
   

  	
  Salt Lake
  City, UT 84101

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
							

 

 

	
   

  	
  REGIONS
  BANK, as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Post Office
  Box 11007

  
	
   

  	
  Birmingham,
  Alabama 35288

  
	
   

  	
   

  
	
   

  	
  Attention:
  Mr. David A. Simmons

  
	
   

  	
  Senior Vice
  President

  
	
   

  	
  Telephone
  Number: (205) 326-5924

  
	
   

  	
  Facsimile:
  (205) 801-0157

  
					

 

 

EXHIBIT 2.3

 

REVOLVING CREDIT
NOTE

 

	
  $                  

  	
   

  	
  Birmingham, Alabama

  
	
   

  	
   

  	
                            ,
  2008

  

 

FOR VALUE RECEIVED, PROTECTIVE LIFE
CORPORATION, a Delaware corporation (“PLC”) and PROTECTIVE LIFE INSURANCE COMPANY, a
Tennessee corporation (“PLICO”; PLC and PLICO are sometimes together referred
to as “Borrower”), hereby promise to pay, subject to the limitations set forth
in Section 2.19 of the Credit Agreement (as hereinafter defined) with
respect to PLICO, to the order of
                                              
(“Payee”), the sum of
                                          
Dollars
($                        ),or
as much thereof as may be outstanding from time to time, together with interest
thereon as provided in that certain Second Amended and Restated Credit
Agreement of even date herewith executed by and among Borrower, Payee and the
several lenders from time to time party thereto and Regions Bank, as agent, as
it may be amended or restated from time to time (the “Credit Agreement”).  Capitalized terms not otherwise defined
herein shall have the meanings ascribed to those terms in the Credit Agreement.

 

This Note evidences the “Revolving Credit Loans,” as defined in the
Credit Agreement. Reference is made to the Credit Agreement for the terms of
payment of principal and interest hereunder, for a description of the rights of
the “Administrative Agent” as defined in the Credit Agreement, to enforce this
Note, and for additional provisions regarding additional payments, prepayment, draws
and other terms and conditions applicable to the indebtedness evidenced by this
Note.  As provided in the Credit
Agreement, all remaining principal, interest and expenses outstanding hereunder
or under the Credit Agreement shall become finally due on the Termination Date.

 

As provided in the Credit Agreement, interest hereunder shall be
calculated based upon a 360-day year and actual days elapsed.  As also provided further in the Credit
Agreement, the interest rate required hereby shall not exceed the maximum rate
permissible under applicable law, and any amounts paid in excess of such rate
shall be applied to reduce the principal amount hereof or shall be refunded to
the Borrower, at the option of the holder of this Note.

 

Subject to the provisions of the Credit Agreement, Borrower may borrow,
repay and reborrow amounts hereunder from time to time, provided that Borrower
is not in default hereunder or under the Credit Agreement (unless such default
is waived) and provided that all conditions to Payee’s obligation to fund
advances as set forth in the Credit Agreement are satisfied.  Payee shall have no liability for its refusal
to advance funds hereunder following a determination that any condition
precedent to the making of an advance has not been satisfied.

 

 

Payee’s records of the amounts advanced hereunder shall be conclusive
proof thereof, absent manifest error.

 

All amounts due under this Note are payable in lawful money of the
United States of America, at the principal place of business of the Administrative
Agent in Atlanta, Georgia, or at such other address as the Administrative Agent
may direct.

 

To the extent permitted by applicable law, Borrower shall pay to the
holder hereof (“Holder”) a late charge equal to five percent (5%) of any
payment which is past due for a period of twelve (12) or more days, in order to
cover the additional expenses incident to the handling and processing of
delinquent payments.

 

The occurrence of a Default under the Credit Agreement shall constitute
a Default under this Note.

 

Upon the occurrence of a Default, the Holder may, at its option and
without notice (except as provided in the Credit Agreement), acting through the
Administrative Agent as provided in the Credit Agreement, declare all
Obligations to be presently due and payable, and Holder may enforce any
remedies available to Holder under any Credit Document.  Holder may waive any default before or after
it occurs and may restore this Note in full effect without impairing the right
to declare it due for a subsequent default, this right being a continuing
one.  Upon Default, the remaining unpaid
principal balance of the indebtedness evidenced hereby and all expenses due
Holder shall bear interest at the Default Rate, as defined in the Credit
Agreement.

 

All amounts received for payment of this Note shall be applied in
accordance with the Credit Agreement.

 

Borrower and all sureties, guarantors, endorsers and other parties to
this Note hereby consent to any and all renewals, waivers, modifications, or
extensions of time (of any duration) that may be granted by Holder with respect
to this Note and severally waive demand, presentment, protest, notice of
dishonor, and all other notices that might otherwise be required by law, except
as set forth in the Credit Agreement. 
All parties hereto waive the defense of impairment of collateral and all
other defenses of suretyship, if applicable.

 

Borrower and all sureties, guarantors, endorsers and other parties
hereto agree to pay reasonable attorneys’ fees and all court and other costs
that Holder may incur in the course of efforts to collect the debt evidenced
hereby, to the extent permitted by the Credit Agreement.

 

The validity and construction of this Note shall be determined
according to the laws of Alabama applicable to contracts executed and performed
within that state and applicable federal law. 
If any provision of this Note should for any reason be invalid or
unenforceable, the remaining provisions hereof shall remain in full effect.

 

 

Words used herein indicating gender or number shall be read as context
may require.

 

	
   

  	
  PROTECTIVE LIFE CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Taxpayer Identification Number: 95-2492236

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTIVE LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Taxpayer Identification Number: 63-0169720

  

 

 

EXHIBIT 2.17.2

 

SWINGLINE NOTE

 

	
  $20,000,000

  	
  Birmingham, Alabama

  
	
   

  	
                             ,
  2008

  

 

FOR VALUE RECEIVED, PROTECTIVE LIFE
CORPORATION, a Delaware corporation (“PLC”) and PROTECTIVE LIFE INSURANCE COMPANY, a
Tennessee corporation (“PLICO”; PLC and PLICO are sometimes together referred
to as “Borrower”), hereby promise to pay, subject to the limitations set forth
in Section 2.19 of the Credit Agreement (as hereinafter defined) with
respect to PLICO, to the order of REGIONS
BANK, an Alabama banking corporation (“Payee”), the sum of Twenty
Million and No/100 Dollars ($20,000,000.00), or as much thereof as may be
outstanding from time to time, together with interest thereon as provided in
that certain Second Amended and Restated Credit Agreement of even date herewith
executed by and among Borrower, Payee and the other several lenders from time
to time party thereto and Regions Bank, as agent, as it may be amended or
restated from time to time (the “Credit Agreement”).  Capitalized terms not otherwise defined
herein shall have the meanings ascribed to those terms in the Credit Agreement.

 

This Note evidences the “Swingline Loan,” as defined in the Credit
Agreement.  Reference is made to the
Credit Agreement for the terms of payment of principal and interest hereunder,
for a description of the rights of the “Administrative Agent” as defined in the
Credit Agreement, to enforce this Note, and for additional provisions regarding
additional payments, prepayment, draws and other terms and conditions applicable
to the indebtedness evidenced by this Note. 
As provided in the Credit Agreement, (i) all remaining principal,
interest and expenses outstanding hereunder or under the Credit Agreement shall
become finally due on the Termination Date, (ii) the sum of the
outstanding principal balance hereunder and under the Revolving Credit Loan may
not exceed the total Revolving Credit Commitments in the aggregate at any time,
and (iii) the obligations hereunder are to be allocated to Lenders Pro
Rata upon an Event of Default.

 

As provided in the Credit Agreement, interest hereunder shall be
calculated based upon a 360-day year and actual days elapsed. As also provided
further in the Credit Agreement, the interest rate required hereby shall not
exceed the maximum rate permissible under applicable law, and any amounts paid
in excess of such rate shall be applied to reduce the principal amount hereof
or shall be refunded to the Borrower, at the option of the holder of this Note.

 

Subject to the provisions of the Credit Agreement, Borrower may borrow,
repay and reborrow amounts hereunder from time to time, provided that Borrower
is not in default hereunder or under the Credit Agreement (unless such default
is waived) and provided that all

 

 

conditions to Payee’s obligation to fund advances as set forth in the
Credit Agreement are satisfied.  Payee
shall have no liability for its refusal to advance funds hereunder following a
determination that any condition precedent to the making of an advance has not
been satisfied.

 

Payee’s records of the amounts advanced hereunder shall be conclusive
proof thereof, absent manifest error.

 

All amounts due under this Note are payable in lawful money of the
United States of America, at the principal place of business of the
Administrative Agent in Atlanta, Georgia, or at such other address as the
Administrative Agent may direct.

 

To the extent permitted by applicable law, Borrower shall pay to the
holder hereof (“Holder”) a late charge equal to five percent (5%) of any
payment which is past due for a period of twelve (12) or more days, in order to
cover the additional expenses incident to the handling and processing of
delinquent payments.

 

The occurrence of a Default under the Credit Agreement shall constitute
a Default under this Note.

 

Upon the occurrence of a Default, the Holder may, at its option and
without notice (except as provided in the Credit Agreement), acting through the
Administrative Agent as provided in the Credit Agreement, declare all
Obligations to be presently due and payable, and Holder may enforce any
remedies available to Holder under any Credit Document.  Holder may waive any default before or after
it occurs and may restore this Note in full effect without impairing the right
to declare it due for a subsequent default, this right being a continuing
one.  Upon Default, the remaining unpaid
principal balance of the indebtedness evidenced hereby and all expenses due
Holder shall bear interest at the Default Rate, as defined in the Credit
Agreement.

 

All amounts received for payment of this Note shall be applied in
accordance with the Credit Agreement.

 

Borrower and all sureties, guarantors, endorsers and other parties to
this Note hereby consent to any and all renewals, waivers, modifications, or
extensions of time (of any duration) that may be granted by Holder with respect
to this Note and severally waive demand, presentment, protest, notice of
dishonor, and all other notices that might otherwise be required by law, except
as set forth in the Credit Agreement. 
All parties hereto waive the defense of impairment of collateral and all
other defenses of suretyship, if applicable.

 

Borrower and all sureties, guarantors, endorsers and other parties
hereto agree to pay reasonable attorneys’ fees and all court and other costs
that Holder may incur in the course of efforts to collect the debt evidenced
hereby, to the extent permitted by the Credit Agreement.

 

 

The validity and construction of this Note shall be determined
according to the laws of Alabama applicable to contracts executed and performed
within that state and applicable federal law. If any provision of this Note
should for any reason be invalid or unenforceable, the remaining provisions
hereof shall remain in full effect.

 

Words used herein indicating gender or number shall be read as context
may require.

 

	
   

  	
  PROTECTIVE LIFE CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Taxpayer Identification Number: 95-2492236

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTIVE LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Taxpayer Identification Number: 63-0169720

  

 

 

SCHEDULE 2.5.1(b)

 

BORROWING/CONVERSION
NOTICE

 

	
  TO:

  	
   

  	
  Regions Bank, Administrative Agent

  
	
   

  	
   

  	
   

  
	
  LENDERS:

  	
   

  	
  Lenders who are parties to the Credit Agreement described below

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
                                                        ,           

  
	
   

  	
   

  	
   

  
	
  BORROWER:

  	
   

  	
  Protective Life Corporation (“PLC”) and Protective Life Insurance
  Company (“PLICO”; together with PLC referred to herein as the “Borrower”)

  

 

This notice is delivered under the Second Amended and Restated Credit
Agreement (the “Credit Agreement”) dated April         ,
2008, between Borrower, the Lenders named therein and Regions Bank, as
Administrative Agent for the Lenders. Terms defined in the Credit Agreement
have the same meanings when used — unless otherwise defined — in this request.

 

Borrower requests a Loan under the Credit Agreement as follows:

 

	
  Borrowing Date(1)

  	
                              ,        

  	
   

  
	
  Amount of Borrowing

  	
   

  	
   

  
	
  Portion of Borrowing to be borrowed by PLICO

  	
   

  	
   

  
	
  Type of Borrowing(2)

  	
   

  	
   

  
	
  For LIBOR Loans, the Interest Period(3)

  	
   

  	
  months

  

 

Select one:

 

The proceeds of the requested Revolving Credit Loan shall be disbursed
to Borrower as provided in the Credit Agreement.

 

The proceeds of the requested LIBOR Loan shall be applied to the
payment of Borrower’s existing Prime Rate Loan, this new Loan being a
conversion of a Prime Rate Loan to a LIBOR Loan

 

(1) Same Business Day for Prime Rate Loans, second following
Business Day for LIBOR Loans.

(2) LIBOR or Prime Rate Loan.

(3) 1, 2, or 3 months.

 

 

The proceeds of the requested LIBOR Loan shall be applied to the
payment of the following LIBOR Loan, subject to all requirements of the Credit
Agreement, this new Loan being a conversion of a LIBOR Loan to a different
LIBOR Loan:

 

	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Amount:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Interest Period:

  	
   

  

 

The proceeds of the requested Prime Rate Loan shall be applied to the
payment of the following LIBOR Loan, subject to all requirements of the Credit
Agreement, this new Loan being a conversion of a LIBOR Loan to a Prime Rate
Loan:

 

	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Amount:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Interest Period:

  	
   

  

 

If this draw request relates to an acquisition, attached hereto as Exhibit A
are calculations of financial covenants as they will exist both before and
after the closing of the acquisition. These calculations demonstrate continued
compliance with all financial covenants before and after the acquisition.

 

Borrower certifies that on the date hereof and on the date of the above
Borrowing Date, after giving effect to the requested Loan, (a) all of the
representations and warranties in the Credit Documents will be true and correct
in all material respects — unless they speak to a specific date or the facts on
which they are based have been changed by transactions contemplated or
permitted by the Credit Agreement, (b) no Event of Default or Unmatured
Default will exist, and (c) all conditions to Borrower’s right to receive
the requested Loan under the Credit Agreement have been satisfied.

 

	
   

  	
  PROTECTIVE LIFE CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROTECTIVE LIFE INSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT 3.1(viii)

 

COMPLIANCE
CERTIFICATE

 

	
  To:

  	
   

  	
  The Lenders named in the

  
	
   

  	
   

  	
  Credit Agreement described below

  

 

This Compliance Certificate is furnished pursuant to that certain
Second Amended and Restated Credit Agreement dated April         ,
2008 (as amended, modified, renewed or extended from time to time, the “Agreement”)
between the Protective Life Corporation, a Delaware corporation (“PLC”) and
Protective Life Insurance Company, a Tennessee corporation (“PLICO”; PLC and
PLICO are sometimes together referred to as “Borrower”), the Lenders named
therein and Regions Bank, as Administrative Agent for the Lenders.  Unless otherwise defined herein, capitalized
terms used in this Compliance Certificate have the meanings ascribed thereto in
the Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.             I am the duly
elected                                                         of
the PLC.

 

2.             I have reviewed the
terms of the Agreement and have made, or have caused to be made under my
supervision, a detailed review of the transactions and conditions of the
Borrower and its Subsidiaries during the accounting period covered by the
attached financial statements.

 

3.             The examinations
described in paragraph 2 did not disclose, and I have no knowledge of, the existence
of any condition or event that constitutes a Default or Unmatured Default
during or at the end of the accounting period covered by the attached financial
statements or as of the date of this Certificate, except as set forth below.

 

4.             Schedule I attached
hereto sets forth financial data and computations evidencing the Borrower’s
compliance with certain covenants of the Agreement, all of which data and
computations are true, complete and correct.

 

Described below are the exceptions, if any, to paragraph 3 listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action the Borrower has taken, is taking or proposes to take
with respect to each such condition or event:

 

 

 

 

 

The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this
                  
day of
                      ,
20        .

 

 

	
   

  	
   

  
	
   

  	
                                     of
  Protective Life Corporation

  

 

 

SCHEDULE I TO
COMPLIANCE CERTIFICATE

 

Schedule of Compliance as of [Insert date of
end of fiscal quarter]

with provisions of 5.12, 5.13, 5.14 and 5.15
of the Agreement

 

1.             Section 5.12 -
Adjusted Consolidated Net Worth

 

	
  A.

  	
   

  	
  Consolidated Net Worth

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B. 

  	
   

  	
  Adjustments, if any, for unrealized net gains and losses on assets
  held for sale pursuant to SFAS 115 and accumulated other comprehensive income
  pursuant to SFAS 133

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Adjusted Consolidated Net Worth (A excluding B)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  $2,200,000,000

  	
   

  	
  $

  	
   

  	
  2,200,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E. 

  	
   

  	
  Cumulative Consolidated Net Income earned after December 31,
  2007 (if positive) 

  	
   

  	
  $ 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  25% of E

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G. 

  	
   

  	
  PLC’s consolidated allowance for potential future losses on
  investments 

  	
   

  	
  $ 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  D plus F minus G

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I. 

  	
   

  	
  C minus H  (Must be greater than or equal to 0) 

  	
   

  	
  $ 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Complies

  	
   

  	
   

  	
  Does not comply

  	
   

  	
   

  
														

 

2.             Section 5.13 -
Ratio of Adjusted Consolidated Indebtedness to Consolidated Capitalization

 

	
  A.

  	
   

  	
  Consolidated Indebtedness

  	
   

  	
   

  	
   

  	
  $

  

 

 

	
   

  	
   

  	
  1. 

  	
   

  	
  Borrowed money, obligations secured by
  Liens and obligations evidenced by notes, etc. 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2. 

  	
   

  	
  Deferred purchase of property or services 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3. 

  	
   

  	
  Capitalized Lease Obligations 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Letters of Credit

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Guaranteed Obligations

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B. 

  	
   

  	
  Short-Term Indebtedness for advance
  fundings of guaranteed investment contracts, annuities and other similar
  insurance and investment products 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Adjusted Consolidated Indebtedness (A minus B)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Consolidated Capitalization

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
   

  	
  Adjusted Consolidated Net Worth

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
   

  	
  Adjusted Consolidated Indebtedness

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
   

  	
  Sum of (i) and (ii)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Ratio of C to D

  	
   

  	
   

  	
   

  	
          :1.0

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Permitted Ratio

  	
   

  	
   

  	
  Less than 0.4:1.0

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Complies

  	
   

  	
   

  	
  Does not comply

  	
   

  	
   

  
																	

 

3.             Section 5.14 -
PLICO’s Total Adjusted Capital

 

	
  A.

  	
   

  	
  PLICO’s Total Adjusted Capital

  	
   

  	
  $

  
	
   

  	
   

  	
  (See attached Exhibit A)

  	
   

  	
   

  

 

 

	
  B. 

  	
   

  	
  PLICO’s Authorized Control Level Risk-Based Capital 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  4.0 times B

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  A minus C (must be greater than or equal to 0)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Complies

  	
   

  	
   

  	
  Does not comply

  	
   

  	
   

  
											

 

4.                                      Section 5.15
- Ratio of Unconsolidated Cash Inflow Available for Interest Expense to Adjusted
Consolidated Interest Expense

 

	
  A. 

  	
   

  	
  Unconsolidated Cash Inflow Available for Interest Expense

  (for fiscal quarter ended                              ,
  20     )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) 

  	
   

  	
  Interest and principal received by Borrower from Subsidiaries during
  quarter 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
   

  	
  Interest

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  Principal

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) 

  	
   

  	
  Gross management fees received by Borrower from Subsidiaries during
  quarter 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii) 

  	
   

  	
  Borrower’s operating and administrative expenses during quarter (excluding
  interest expense) 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv) 

  	
   

  	
  Net management fees received by Borrower from Subsidiaries during
  quarter ((ii) minus (iii)) 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (v) 

  	
   

  	
  Dividends available to be distributed by Subsidiaries to Borrower
  during this year (see attached Exhibit B)(4) 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (vi)

  	
   

  	
  (v) ÷ 4

  	
   

  	
  $

  
																

 

(4) $
                        is
the amount of dividends actually distributed by Subsidiaries to Borrower during
this fiscal year.

 

 

	
   

  	
   

  	
  (vii)

  	
   

  	
  Other income (Describe: 

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (viii)

  	
   

  	
  Sum of (i), (iv), (vi) and (vii)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Consolidated Interest Expense

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C. 

  	
   

  	
  Interest on Short-Term Indebtedness for advance fundings of
  guaranteed investment contracts, annuities and other similar insurance and
  investment products 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D. 

  	
   

  	
  Adjusted Consolidated Interest Expense (B minus C) 

  	
   

  	
  $ 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Ratio of A to D

  	
   

  	
   

  	
   

  	
             :1.0

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Permitted Ratio

  	
   

  	
   

  	
  Greater than  2.0:1.0

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Complies

  	
   

  	
   

  	
  Does not comply

  	
   

  	
   

  
															

 

 

EXHIBIT 4.7

 

A number of civil jury verdicts have been returned against insurers,
broker-dealers, and other providers of financial services involving sales,
refund or claims practices, alleged agent misconduct, failure to properly
supervise representatives, relationships with agents or other persons with whom
the insurer does business, and other matters. 
Often these lawsuits have resulted in the award of substantial judgments
that are disproportionate to the actual damages, including material amounts of
punitive non-economic compensatory damages. 
In some states, juries, judges, and arbitrators have substantial
discretion in awarding punitive and non-economic compensatory damages, which
creates the potential for unpredictable material adverse judgments or awards in
any given lawsuit or arbitration. 
Arbitration awards are subject to very limited appellate review.  In addition, in some class action and other
lawsuits, companies have made material settlement payments.

 

Group health coverage issued through associations and credit insurance
coverages have received some negative coverage in the media as well as
increased regulatory consideration and review and litigation.  Borrowers have a small closed block of group
health insurance coverage that was issued to members of an association; a purported
class action lawsuit is currently pending against Borrowers in connection with
this business.  Borrowers are also
defending purported class action litigation challenging its practices relating
to issuing refunds of unearned premiums upon termination of credit insurance.

 

In connection with Borrowers’ discontinued Lender’s Indemnity product,
Borrowers have discovered facts and circumstances that support allegations
against third parties (including policyholders and the administrator of the
associated loan program), and Borrowers have instituted litigation to establish
the rights and liabilities of various parties; Borrowers have also received
claims seeking to assert liability against us for various matters, including
claims alleging payments owing for bad faith refusal to pay and payments with
respect to policies for which premiums were not received by us and this matter
is addressed by the pending litigation matters. 
In addition, Borrowers are defending an arbitration claim by the
reinsurer of this Lender’s Indemnity product. 
The reinsurer asserts that it is entitled to a return of most the Lender’s
Indemnity claims that were paid on behalf of Borrowers by the administrator,
claiming that the claims were not properly payable under the terms of the
policies.  The reinsurer was under common
ownership with the program administrator, and Borrowers are vigorously
defending this arbitration.  Although
Borrowers cannot predict the outcome of any litigation or arbitration,
Borrowers do not believe that the outcome of these matters will have a material
impact on Borrowers’ financial condition or results of operations.

 

Borrowers, like other financial services companies, in the ordinary
course of business are involved in litigation and arbitration.  Although Borrowers cannot predict the outcome
of any litigation or arbitration, Borrowers do not believe that any such
outcome will have a material impact on the financial condition or results of
operations of Borrowers.

 

 

 

EXHIBIT 4.8

 

SIGNIFICANT
SUBSIDIARIES

 

	
  Name of Significant 

  Subsidiary

  	
   

  	
  State of 

  Incorporation

  	
   

  	
  Percentage Stock 

  Owned by Borrower 

  or Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Protective Life Insurance Company

  	
   

  	
  Tennessee

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  West Coast Life Insurance Company

  	
   

  	
  California

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Protective Life and Annuity Insurance
  Company

  	
   

  	
  Alabama

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lyndon Property Insurance Company

  	
   

  	
  Missouri

  	
   

  	
  100

  	
  %

  

 

 

EXHIBIT 9.2

 

FORM OF
ASSIGNMENT AND ACCEPTANCE

 

DATED
                            ,
20          

 

Reference is made to the Second Amended and Restated Credit Agreement
dated April         , 2008 (the “Agreement”)
among PROTECTIVE LIFE CORPORATION,
a Delaware corporation (“PLC”) and PROTECTIVE
LIFE INSURANCE COMPANY, a Tennessee corporation (“PLICO”; PLC and
PLICO are sometimes together referred to as “Borrower”), the Lenders (as
defined in the Agreement) and REGIONS BANK,
as Administrative Agent for the Lenders (“Administrative Agent”).  Unless otherwise defined herein, terms
defined in the Agreement are used herein with the same meanings.

 

                                (the
“Assignor”)
and                           (the
“Assignee”) agree as follows:

 

1.             The
Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchased and assumes from the Assignor, WITHOUT
RECOURSE, a                     %(5) interest
in and to all of the Assignor’s rights and obligations under the Agreement as
of the Effective Date (as defined below), including, without limitation, such
percentage interest in the Loans owing to the Assignor on the Effective Date,
and the Note held by the Assignor.

 

2.             The
Assignor (i) represents and warrants that, as of the date hereof, the
aggregate outstanding principal amount of the Loans owing to it (without giving
effect to assignments thereof which have not yet become effective) is
$                        ;
(ii) represents and warrants that it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement or any of the
Credit Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or any of the Credit
Documents or any other instrument or document furnished pursuant thereto; (iv) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower or the performance or observance by Borrower of
any of its obligations under the Agreement or any of the Credit Documents or
any other instrument or document furnished pursuant thereto and (v) attaches
the Note referred to in paragraph 1 above and requests that the Administrative
Agent exchange such Note for new Note(s) as follows:  A Note, dated
                              ,
20         in the principal amount of
$                          
payable to the order of the Assignor, and a Note, dated
                                  ,
20          , in the
principal amount of
$                                
payable to the order of the Assignee.

 

(5) Specify percentage in no more than 4 decimal points.

 

 

3.             The
Assignee (i) confirms that it has received a copy of the Agreement,
together with copies of the financial statements referred to in Section 5.1
thereof and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance
upon the Administrative Agent, the Assignor, or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Agreement; (iii) appoints and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers under the Credit
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (iv) agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of the Agreement are required to be performed by the Lender;
and (v) specifies as its address for notices the office set forth beneath
its name on the signature pages hereof.

 

4.             The
effective date for this Assignment and Acceptance shall be
                                                                
(the “Effective Date”).  Following the
execution of this Assignment and Acceptance, it will be delivered to the
Administrative Agent for acceptance and recording by the Administrative Agent.

 

5.             Upon
such acceptance and recording, as of the Effective Date, (i) the Assignee
shall be a party to the Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Credit Documents and (ii) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Agreement.

 

6.             Upon
such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments under the Agreement and Note in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest, commitment fees and letter of credit fees with
respect thereto) to the Assignee.  The
Assignor and Assignee shall make all appropriate adjustments in payments under
this Agreement and the Note for periods prior to the Effective Date directly
between themselves.

 

 

7.             This
Assignment and Acceptance shall be governed by and construed in accordance
with, the laws of the State of Alabama.

 

 

	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice of Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  After the Effective Date

  
	
   

  	
  Outstanding Loans:$

  	
   

  
				

 

 

	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice of Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  After the Effective Date

  
	
   

  	
  Outstanding Loans:$

  	
   

  
				

 

	
   

  	
   

  
	
   

  	
  Accepted this
             day of
                      ,
  20   

  

 

	
   

  	
  REGIONS BANK, as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:Exhibit
10.1

 

EXECUTION COPY

 

FIVE
YEAR CREDIT AGREEMENT

 

Dated as of April 15,
2008

 

Among

 

PACKAGING
CORPORATION OF AMERICA

as  Borrower

 

and

 

THE
INITIAL LENDERS NAMED HEREIN

 

as  Initial  Lenders

 

and

 

DEUTSCHE BANK AG NEW YORK BRANCH

 

as  Syndication  Agent

 

and

 

JPMORGAN CHASE BANK, N.A.

 

as  Administrative  Agent

 

and

 

DEUTSCHE BANK SECURITIES INC..

 

as  Sole  Lead  Arranger  and
Book  Manager

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.01.
  Certain Defined Terms

  	
  4

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.02.
  Computation of Time Periods

  	
  14

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.03.
  Accounting Terms

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.01.
  The Advances and Letters of Credit

  	
  14

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.02.
  Making the Advances

  	
  15

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.03.
  Issuance of and Drawings and Reimbursement Under Letters of Credit

  	
  16

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.04.
  Fees

  	
  17

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.05.
  Optional Termination or Reduction of the Commitments

  	
  17

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.06.
  Repayment of Advances

  	
  17

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.07.
  Interest on Advances

  	
  18

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.08.
  Interest Rate Determination

  	
  19

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.09.
  Optional Conversion of Advances

  	
  19

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.10.
  Prepayments of Advances

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.11.
  Increased Costs

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.12.
  Illegality

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.13.
  Payments and Computations

  	
  21

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.14.
  Taxes

  	
  22

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.15.
  Sharing of Payments, Etc.

  	
  23

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.16.
  Evidence of Debt

  	
  23

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.17.
  Use of Proceeds

  	
  24

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.18.
  Increase in the Aggregate Revolving Credit Commitments

  	
  24

  
						

 

 

	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.19.
  Extension of Termination Date

  	
  25

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.20.
  Regulation D Compensation

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.01.
  Conditions Precedent to Effectiveness of Section 2.01

  	
  27

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.02.
  Conditions Precedent to Each Borrowing and Issuance.

  	
  28

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.03.
  Determinations Under Section 3.01

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 4.01.
  Representations and Warranties of the Borrower

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.01.
  Affirmative Covenants

  	
  30

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.02.
  Negative Covenants

  	
  32

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.03.
  Financial Covenants

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 6.01.
  Events of Default

  	
  35

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 6.02.
  Actions in Respect of the Letters of Credit upon Default

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.01.
  Authorization and Action

  	
  37

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.02.
  Agent’s Reliance, Etc.

  	
  37

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.03.
  JPMorgan and Affiliates

  	
  38

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.04.
  Lender Credit Decision

  	
  38

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.05.
  Indemnification

  	
  38

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.06.
  Successor Agent

  	
  39

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.07.
  Other Agents.

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.01.
  Amendments, Etc.

  	
  39

  
							

 

 

2

 

	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.02.
  Notices, Etc.

  	
  40

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.03.
  No Waiver; Remedies

  	
  40

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.04.
  Costs and Expenses

  	
  40

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.05.
  Right of Set-off

  	
  41

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.06.
  Binding Effect

  	
  41

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.07.
  Assignments and Participations

  	
  41

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.08.
  Confidentiality

  	
  43

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.09.
  Governing Law

  	
  44

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.10.
  Execution in Counterparts

  	
  44

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.11.
  Jurisdiction, Etc.

  	
  44

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.12.
  No Liability of the Issuing Banks

  	
  44

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.13.
  Patriot Act Notice

  	
  44

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.14.
  Waiver of Jury Trial

  	
  45

  

 

 

3

 

FIVE YEAR CREDIT
AGREEMENT

 

Dated as of April 15,
2008

 

PACKAGING CORPORATION OF AMERICA, a Delaware
corporation (the “Borrower”), the banks, financial institutions and
other institutional lenders (the “Initial Lenders”) and initial issuing
banks (the “Initial Issuing Banks”) listed on the signature pages hereof,
DEUTSCHE BANK SECURITIES INC., as sole lead arranger and book manager, DEUTSCHE
BANK AG NEW YORK BRANCH, as syndication agent, and JPMORGAN CHASE BANK, N.A. (“JPMorgan”),
as agent (the “Agent”) for the Lenders (as hereinafter defined), agree
as follows:

 

ARTICLE I

 

DEFINITIONS AND
ACCOUNTING TERMS

 

SECTION 1.01. 
Certain Defined Terms.  As
used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms
of the terms defined):

 

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

 

“Affiliate”
means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a
director or officer of such Person.  For
purposes of this definition, the term “control” (including the terms “controlling”,
“controlled by” and “under common control with”) of a Person means the
possession, direct or indirect, of the power to vote 20% or more of the Voting
Stock of such Person or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.

 

“Agent’s
Account” means the account of the Agent maintained by the Agent at JPMorgan
at its office at 1111 Fannin, 10th Floor, Houston, Texas 77002, Account No. 9008113381H0441,
Attention:  Leslie Opeyemi;
E-Mail Address: leslie.d.opeyemi@chase.com).

 

“Applicable
Lending Office” means, with respect to each Lender, such Lender’s Domestic
Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar
Lending Office in the case of a Eurodollar Rate Advance.

 

“Applicable
Margin” means, as of any date, a percentage per annum determined by
reference to the Public Debt Rating in effect on such date as set forth below:

 

	
  Public Debt Rating

  S&P/Moody’s

  	
   

  	
  Applicable Margin for

  Base Rate Advances

  	
   

  	
  Applicable Margin for

  Eurodollar Rate Advances

  	
   

  
	
  Level 1

  BBB+ or Baa1 or above

  	
   

  	
  (0.125

  	
  %)

  	
  0.500

  	
  %

  
	
  Level 2

  BBB or Baa2

  	
   

  	
  (0.150

  	
  %)

  	
  0.600

  	
  %

  
	
  Level 3

  BBB- or Baa3

  	
   

  	
  (0.175

  	
  %)

  	
  0.700

  	
  %

  

 

4

 

	
  Level 4

  BB+ and Ba1

  	
   

  	
  0.000

  	
  %

  	
  0.800

  	
  %

  
	
  Level 5

  Lower than Level 4

  	
   

  	
  0.000

  	
  %

  	
  1.000

  	
  %

  

 

“Applicable
Percentage” means, as of any date, a percentage per annum determined by
reference to the Public Debt Rating in effect on such date as set forth below:

 

	
  Public Debt Rating

  S&P/Moody’s

  	
   

  	
  Applicable

  Percentage

  	
   

  
	
  Level 1

  BBB+ or Baa1 or above

  	
   

  	
  0.125

  	
  %

  
	
  Level 2

  BBB or Baa2

  	
   

  	
  0.150

  	
  %

  
	
  Level 3

  BBB- or Baa3

  	
   

  	
  0.175

  	
  %

  
	
  Level 4

  BB+ and Ba1

  	
   

  	
  0.200

  	
  %

  
	
  Level 5

  Lower than Level 4

  	
   

  	
  0.250

  	
  %

  

 

“Assignment and
Acceptance” means an assignment and acceptance entered into by a Lender and
an Eligible Assignee, and accepted by the Agent, in substantially the form of Exhibit C
hereto.

 

“Assuming Lender” has the meaning specified in Section 2.18(c).

 

“Assumption
Agreement” has the meaning specified in Section 2.18(c)(ii).

 

“Available
Amount” of any Letter of Credit means, at any time, the maximum amount
available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).

 

“Base Rate”
means a fluctuating interest rate per annum in effect from time to time, which
rate per annum shall at all times be equal to the higher of:

 

(a)           the rate of interest
announced publicly by JPMorgan in New York, New York, from time to
time, as JPMorgan’s prime rate; and

 

(b)           1⁄2 of one percent per
annum above the Federal Funds Rate.

 

“Base Rate
Advance” means an Advance that bears interest as provided in Section 2.07(a)(i).

 

“Borrower
Information” has the meaning specified in Section 8.08.

 

“Borrowing”
means a borrowing consisting of simultaneous Advances of the same Type made by
each of the Lenders pursuant to Section 2.01(a).

 

“Business Day”
means a day of the year on which the Federal Reserve Banks or the banks in
New York City are not required or authorized by law to close and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which dealings
are carried on in the London interbank market.

 

 

5

 

“Change
in Control” means any of (i) any Person or two or more Persons acting
in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing 35% or more of the
combined voting power of all Voting Stock of the Borrower; or (ii) during
any period of up to 12 consecutive months, commencing after the date of this
Agreement, individuals who at the beginning of such 12-month period were
directors of the Borrower shall cease for any reason (other than due to death
or disability) to constitute a majority of the board of directors of the
Borrower (except to the extent that individuals who at the beginning of such
12-month period were replaced by individuals (x) elected by a majority of
the remaining members of the board of directors of the Borrower or (y) nominated
for election by a majority of the remaining members of the board of directors
of the Borrower and thereafter elected as directors by the shareholders of the
Borrower); or (iii) 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, 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 (iv) a “change
in control” or similar event shall occur as provided in any instrument or
agreement governing Debt of the Borrower, to the extent the outstanding principal
amount of the Debt outstanding thereunder exceeds $25,000,000.

 

“Commitment”
means a Revolving Credit Commitment or a Letter of Credit Commitment.

 

“Commitment
Date” has the meaning specified in Section 2.18(b).

 

“Commitment
Increase” has the meaning specified in Section 2.18(a).

 

“Consenting
Lender” has the meaning specified in Section 2.19(b).

 

“Consolidated”
refers to the consolidation of accounts in accordance with GAAP.

 

“Convert”, “Conversion”
and “Converted” each refers to a conversion of Advances of one Type into
Advances of the other Type pursuant to Section 2.08 or 2.09.

 

“Debt” of
any Person means, without duplication, (a) all indebtedness of such Person
for borrowed money, (b) all obligations of such Person for the deferred
purchase price of property or services, (c) all obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (d) all
obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations of such Person as lessee under leases that
have been or should be, in accordance with GAAP, recorded as capital leases, (f) all
obligations, contingent or otherwise, of such Person in respect of acceptances,
letters of credit or similar extensions of credit (excluding commercial letters
of credit and letters of credit issued to support worker’s compensation or
insurance obligations), (g) all net obligations of such Person in respect
of Hedge Agreements, (h) all Invested Amounts, (i) all Debt of others
referred to in clauses (a) through (h) above or clause (j) below
(collectively, “Guaranteed Debt”) guaranteed directly or indirectly in
any manner by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (1) to pay or purchase such Guaranteed
Debt or to advance or supply funds for the payment or purchase of such
Guaranteed Debt, (2) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Guaranteed Debt or to assure the
holder of such Guaranteed Debt against loss, (3) to supply funds to or in
any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or such
services are rendered) or (4) otherwise to assure a creditor against loss,
and (j) all Debt referred to in clauses (a) through (i) above
(including Guaranteed Debt) secured by (or for which the holder of such Debt
has an existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Debt; 

 

 

6

 

provided, that “Debt”
shall not include obligations under trade payables, accrued expenses and other
current liabilities (other than as described in clauses (a) or (c) above)
incurred by any Person in accordance with its customary practices and in the
ordinary course of business.

 

“Default”
means any Event of Default or any event that would constitute an Event of
Default but for the requirement that notice be given or time elapse or both.

 

“Domestic
Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” opposite its name on
Schedule I hereto or in the in the Assumption Agreement or the Assignment
and Acceptance pursuant to which it became a Lender, or such other office of
such Lender as such Lender may from time to time specify to the Borrower and
the Agent.

 

“EBITDA”
means, for any period, net income (or net loss) plus the sum of (a) interest
expense, (b) income tax expense, (c) depletion and depreciation
expense and (d) amortization expense, in each case without
giving effect to any extraordinary gains or losses or gains or losses from
sales of assets other than inventory sold in the ordinary course of business,
and determined in
accordance with GAAP for such period.

 

“Effective Date”
has the meaning specified in Section 3.01.

 

“Eligible
Assignee” means (a) with respect to the Revolving Credit Facility (i) a
Lender; (ii) an Affiliate of a Lender; (iii) a commercial bank
organized under the laws of the United States, or any State thereof; (iv) a
commercial bank organized under the laws of any other country that is a member
of the Organization for Economic Cooperation and Development or has concluded
special lending arrangements with the International Monetary Fund associated
with its General Arrangements to Borrow, or a political subdivision of any such
country, so long as such bank is acting through a branch or agency located in
the country in which it is organized or another country that is described in
this clause (iv); and (v) any other Person approved by the Agent and,
unless an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 8.07, the Borrower, such
approvals not to be unreasonably withheld or delayed and (b) with respect
to the Letter of Credit Facility, a Person that is an Eligible Assignee under
subclause (i), (ii), (iii) or (iv) of clause (a) of this
definition and is approved by the Agent and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected pursuant to Section 8.07,
the Borrower; provided, however, that neither the Borrower nor an
Affiliate of the Borrower shall qualify as an Eligible Assignee.

 

“Environmental
Action” means any action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability,
investigation, proceeding, consent order or consent agreement relating in any
way to any Environmental Law, Environmental Permit or Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or any third party for damages, contribution, indemnification, cost
recovery, compensation or injunctive relief.

 

“Environmental
Law” means any federal, state, local or foreign statute, law, ordinance,
rule, regulation, code, order, judgment, decree or judicial or agency
interpretation, policy or guidance relating to pollution or protection of the
environment, health, safety or natural resources, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.

 

“Environmental
Permit” means any permit, approval, identification number, license or other
authorization required under any Environmental Law.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.

 

 

7

 

“ERISA
Affiliate” means any Person that for purposes of Title IV of ERISA is
a member of the Borrower’s controlled group, or under common control with the
Borrower, within the meaning of Section 414 of the Internal Revenue Code.

 

“ERISA Event”
means (a) (i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of
ERISA (without regard to subsection (2) of such Section) are met with
respect to a contributing sponsor, as defined in Section 4001(a)(13) of
ERISA, of a Plan, and an event described in paragraph (9), (10), (11),
(12) or (13) of Section 4043(c) of ERISA is reasonably expected to
occur with respect to such Plan within the following 30 days; (b) the
application for a minimum funding waiver with respect to a Plan; (c) the
provision by the administrator of any Plan of a notice of intent to terminate
such Plan pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (d) the cessation of operations at a facility of the Borrower or
any ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA; (e) the withdrawal by the Borrower or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f)  the
conditions for the imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan pursuant
to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, a Plan.

 

“Eurocurrency
Liabilities” has the meaning assigned to that term in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.

 

“Eurodollar
Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Eurodollar Lending Office” opposite its name on Schedule I
hereto or in the Assumption Agreement or the Assignment and Acceptance pursuant
to which it became a Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Agent.

 

“Eurodollar
Rate” means, for any Interest Period for each Eurodollar Rate Advance
comprising part of the same Borrowing, the rate per annum appearing on Reuters
Screen LIBOR01 Page (or any successor page) as the London interbank
offered rate for deposits in U.S. dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period or, if for any reason such rate
is not available, the average (rounded upward to the nearest whole
multiple of 1/10,000 of 1% per annum, if such average is not such a multiple)
of the rate per annum at which deposits in U.S. dollars are offered by the
principal office of each of the Reference Banks in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to such Reference Bank’s Eurodollar Rate Advance comprising
part of such Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period.  If
the Reuters Screen LIBOR01 Page (or any successor page) is unavailable,
the Eurodollar Rate for any Interest Period for each Eurodollar Rate Advance comprising
part of the same Borrowing shall be determined by the Agent on the basis of
applicable rates furnished to and received by the Agent from the Reference
Banks two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.08.

 

“Eurodollar
Rate Advance” means an Advance that bears interest as provided in Section 2.07(a)(ii).

 

“Eurodollar
Rate Reserve Percentage” for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing means the reserve percentage
applicable two Business Days before the first day of such Interest Period under
regulations issued from time to time by the Board of Governors 

 

 

8

 

of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities
that includes deposits by reference to which the interest rate on Eurodollar
Rate Advances is determined) having a term equal to such Interest Period.

 

“Events of
Default” has the meaning specified in Section 6.01.

 

“Extension Date”
has the meaning specified in Section 2.19(b).

 

“Federal Funds
Rate” means, for any period, a fluctuating interest rate per annum equal
for each day during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of recognized
standing selected by it.

 

“GAAP” has
the meaning specified in Section 1.03.

 

“Hazardous
Materials” means (a) petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.

 

“Hedge
Agreements” means interest rate swap, cap or collar agreements, interest
rate future or option contracts, currency swap agreements, currency future or
option contracts and other similar agreements.

 

“Increase Date”
has the meaning specified in Section 2.18(a).

 

“Increasing
Lender” has the meaning specified in Section 2.18(b).

 

“Information
Memorandum” means the information memorandum dated March 4, 2008 used
by the Agent in connection with the syndication of the Commitments.

 

“Interest
Period” means, for each Eurodollar Rate Advance comprising part of the same
Borrowing, the period commencing on the date of such Eurodollar Rate Advance or
the date of the Conversion of any Base Rate Advance into such Eurodollar Rate
Advance and ending on the last day of the period selected by the Borrower
pursuant to the provisions below and, thereafter each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below.  The duration of each
such Interest Period shall be one, two, three or six months, as the Borrower
may, upon notice received by the Agent not later than 11:00 A.M.
(New York City time) on the third Business Day prior to the first day of
such Interest Period, select; provided, however, that:

 

(a)           the Borrower may not
select any Interest Period with respect to any Eurodollar Rate Advance that
ends after the final Termination Date;

 

(b)           Interest Periods
commencing on the same date for Eurodollar Rate Advances comprising part of the
same Borrowing shall be of the same duration;

 

 

9

 

(c)           whenever the last
day of any Interest Period would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided, however, that, if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and

 

(d)           whenever the first
day of any Interest Period occurs on a day of an initial calendar month for
which there is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period shall end on the
last Business Day of such succeeding calendar month.

 

“Internal
Revenue Code” means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.

 

“Invested Amounts” means the amounts invested by investors that
are not Affiliates of the Borrower in connection with a Permitted Receivables
Financing and paid to the Borrower or any of its Subsidiaries, as reduced by
the aggregate amounts received by such investors from the payment of
receivables and applied to reduce such invested amounts.

 

“Issuing Bank”
means an Initial Issuing Bank, any Eligible Assignee to which a portion of a
Letter of Credit Commitment hereunder has been assigned pursuant to Section 8.07
or any Lender so long as such Eligible Assignee or such Lender expressly agrees
to perform in accordance with their terms all of the obligations that by the
terms of this Agreement are required to be performed by it as an Issuing Bank
and notifies the Agent of its Applicable Lending Office (which information
shall be recorded by the Agent in the Register), for so long as the Initial
Issuing Bank, Eligible Assignee or Lender, as the case may be, shall have a Letter
of Credit Commitment.

 

“L/C
Cash Collateral Account” means an interest bearing cash collateral account
to be established and maintained by the Agent, over which the Agent shall have
sole dominion and control, upon terms as may be satisfactory to the Agent.

 

“L/C
Related Documents” has the meaning specified in Section 2.06(b)(i).

 

“Lenders”
means the Initial Lenders, each Issuing Bank, each Assuming Lender that shall
become a party hereto pursuant to Section 2.18 or 2.19 and each Person
that shall become a party hereto pursuant to Section 8.07.

 

“Letter of
Credit” has the meaning specified in Section 2.01(b).

 

“Letter of Credit Agreement” has the meaning
specified in Section 2.03(a).

 

“Letter of
Credit Commitment” means as to any Issuing Bank (a) the amount set
forth opposite such Lender’s name on Schedule I hereto under the caption “Letter
of Credit Commitment” or (b) in the case of each Initial Issuing Bank that
has entered into an Assignment and Acceptance and in the case of each other
Issuing Bank, the amount set forth for such Issuing Bank in the Register
maintained by the Agent pursuant to Section 8.07(d) as such Issuing
Bank’s “Letter of Credit Commitment”, as such amount may be reduced pursuant to
Section 2.05.

 

“Letter of Credit Facility” means, at any time,
an amount equal to the lesser of (a) the aggregate amount of the Issuing
Banks’ Letter of Credit Commitments at such time and (b) $35,000,000, as
such amount may be reduced at or prior to such time pursuant to Section 2.05.

 

 

10

“Lien”
means any lien, security interest or other charge or encumbrance of any kind,
or any other type of preferential arrangement, including, without limitation,
the lien or retained security title of a conditional vendor and any easement,
right of way or other encumbrance on title to real property.

 

“Loan Document”
means this Agreement, the Notes, the other L/C Related Documents and each
Guaranty delivered pursuant to Section 5.01(j).

 

“Loan Parties”
means the Borrower and each Subsidiary of the Borrower party to the Subsidiary
Guaranties delivered pursuant to Section 5.01(j).

 

“Material
Adverse Change” means any material adverse change in the business,
condition (financial or otherwise), operations, performance or properties of
the Borrower and its Subsidiaries taken as a whole.

 

“Material
Adverse Effect” means a material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance or properties of
the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies
of the Agent or the Lenders under any Loan Document or (c) the ability of
the Loan Parties to perform their obligations under the Loan Documents.

 

“Material
Subsidiary” of the Borrower means, at any time, any Subsidiary of the
Borrower (other than Packaging Credit Company LLC and Packaging Receivables
Company LLC) that, together with its Subsidiaries, has (a) Consolidated
assets with a value of not less than 10% of the total value of the assets of
the Borrower and its Consolidated Subsidiaries, taken as a whole, or (b) Consolidated
EBITDA not less than 10% of the Consolidated EBITDA of the Borrower and its
Subsidiaries, taken as a whole, in each case as of the end of or for the most
recently completed fiscal quarter of the Borrower.

 

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

 

“Multiemployer
Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, to which the Borrower or any ERISA Affiliate is making or accruing an
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.

 

“Multiple
Employer Plan” means a single employer plan, as defined in Section 4001(a)(15)
of ERISA, that (a) is maintained for employees of the Borrower or any
ERISA Affiliate and at least one Person other than the Borrower and the ERISA
Affiliates or (b) was so maintained and in respect of which the Borrower
or any ERISA Affiliate could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.

 

“Non-Consenting
Lender” has the meaning specified in Section 2.19(b).

 

“Note”
means a promissory note of the Borrower payable to the order of any Lender,
delivered pursuant to a request made under Section 2.16 in substantially
the form of Exhibit A hereto, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Advances made by such Lender.

 

“Notice of
Borrowing” has the meaning specified in Section 2.02(a).

 

“Notice of
Issuance” has the meaning specified in Section 2.03(a).

 

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

 

“Permitted
Liens” means such of the following as to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced:  (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid under Section 5.01(b) hereof;
(b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’,
workmen’s, repairmen’s and customs Liens 

 

 

11

 

and other similar Liens
arising in the ordinary course of business securing obligations that are not
overdue for a period of more than 30 days unless being contested in good faith
by proper proceedings and as to which appropriate reserves are being
maintained; (c) pledges or deposits to secure obligations under workers’
compensation laws or similar legislation or to secure public or statutory
obligations; and (d) easements, rights of way and other encumbrances,
restrictions or deficiencies on title to real property that do not render title
to the property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes.

 

“Permitted
Receivables Financing” means any financing pursuant to which the Borrower
or any Subsidiary of the Borrower may sell, convey, or otherwise transfer to a
Receivables Subsidiary or any other Person, or grant a security interest in,
any accounts receivable (and related assets) of the Borrower or such
Subsidiary, provided that such financing shall be on customary market terms and
shall be with limited or no recourse to the Borrower and its Subsidiaries
(other than the Receivables Subsidiary) except to the extent customary for such
transactions.

 

“Person”
means an individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, joint venture, limited
liability company or other entity, or a government or any political subdivision
or agency thereof.

 

“Plan”
means a Single Employer Plan or a Multiple Employer Plan.

 

“Public Debt
Rating” means, as of any date, the rating that has been most recently
announced by either S&P or Moody’s, as the case may be, for any class of
non-credit enhanced long-term senior unsecured debt issued by the Borrower or,
if any such rating agency shall have issued more than one such rating, the
lowest such rating issued by such rating agency.  For purposes of the foregoing, (a) if
only one of S&P and Moody’s shall have in effect a Public Debt Rating, the
Applicable Margin and the Applicable Percentage shall be determined by
reference to the available rating; (b) if neither S&P nor Moody’s
shall have in effect a Public Debt Rating, the Applicable Margin and the
Applicable Percentage will be set in accordance with Level 5 under the
definition of “Applicable Margin” or “Applicable Percentage”, as
the case may be; (c) if the ratings established by S&P and Moody’s
shall fall within different levels, the Applicable Margin and the Applicable
Percentage shall be based upon the higher rating unless the such ratings differ
by two or more levels, in which case the applicable level will be deemed to be
one level above the lower of such levels; (d) if any rating established by
S&P or Moody’s shall be changed, such change shall be effective as of the
date on which such change is first announced publicly by the rating agency
making such change; and (e) if S&P or Moody’s shall change the basis
on which ratings are established, each reference to the Public Debt Rating
announced by S&P or Moody’s, as the case may be, shall refer to the then
equivalent rating by S&P or Moody’s, as the case may be.

 

“Ratable Share”
of any amount means, with respect to any Lender at any time, the product of (a) a
fraction the numerator of which is the amount of such Lender’s Revolving Credit
Commitment at such time and the denominator of which is the aggregate Revolving
Credit Commitments at such time and (b) such amount.

 

“Receivables
Subsidiary” means a bankruptcy-remote, special-purpose wholly owned
Subsidiary formed in connection with a Permitted Receivables Financing.

 

“Reference
Banks” means JPMorgan, Deutsche Bank AG New York Branch and Bank of
America, N.A.

 

“Register”
has the meaning specified in Section 8.07(d).

 

“Required
Lenders” means, at any time, Lenders owed or holding at least a majority in
interest of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time and (c) the aggregate Unused
Revolving 

 

12

 

Credit Commitments at such time.  For purposes of this definition, the
Available Amount of each Letter of Credit shall be considered to be owed to the
Lenders ratably in accordance with their respective Revolving Credit
Commitments.

 

“Revolving
Credit Commitment” means as to any Lender (a) the amount set forth
opposite such Lender’s name on Schedule I hereto under the caption “Revolving
Credit Commitment”, (b) if such Lender has become a Lender hereunder
pursuant to an Assumption Agreement, the amount set forth in such Assumption
Agreement or (c) if such Lender has entered into an Assignment and
Acceptance, the amount set forth for such Lender in the Register maintained by
the Agent pursuant to Section 8.07(d) as such Lender’s “Revolving
Credit Commitment”, as such amount may be reduced pursuant to Section 2.05
or increased pursuant to Section 2.18.

 

“Revolving
Credit Facility” means, at any time, the aggregate of the Revolving Credit
Commitments at such time.

 

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

 

“Single
Employer Plan” means a single employer plan, as defined in Section 4001(a)(15)
of ERISA, that (a) is maintained for employees of the Borrower or any  ERISA Affiliate and no Person other than the
Borrower and the ERISA Affiliates or (b) was so maintained and in respect
of which the Borrower or any ERISA Affiliate could have liability under Section 4069
of ERISA in the event such plan has been or were to be terminated.

 

“Solvent”
and “Solvency” mean, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair salable value
of the assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability
to pay such debts and liabilities as they mature and (d) such Person is
not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person’s property would constitute an
unreasonably small capital.  The amount
of contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.

 

“Subsidiary”
of any Person means any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) more than 50% of (a) the
issued and outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation (irrespective of whether
at the time capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any contingency), (b) the
interest in the capital or profits of such limited liability company,
partnership or joint venture or (c) the beneficial interest in such trust
or estate is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person’s other Subsidiaries.

 

“Subsidiary
Guarantor” means each Subsidiary of the Borrower that shall be required to
execute and deliver a guaranty pursuant to Section 5.01(j).

 

“Subsidiary
Guaranty” means the guaranty of the Subsidiary Guarantors delivered
pursuant to Section 5.01(j).

 

“Termination
Date” means the earlier of (a) April 15, 2013, subject to the
extension thereof pursuant to Section 2.19 and (b) the date of
termination in whole of the Revolving Credit Commitments and the Letter of
Credit Commitments pursuant to Section 2.05 or 6.01; provided, however,
that the Termination Date of any Lender that is a Non-Consenting Lender to any
requested extension pursuant to 

 

 

13

 

Section 2.19
shall be the Termination Date in effect immediately prior to the applicable
Extension Date for all purposes of this Agreement.

 

“Type”
refers to the distinction between Advances bearing interest at the Base Rate
and Advances bearing interest at the Eurodollar Rate.

 

“Unissued
Letter of Credit Commitment” means, with respect to any Issuing Bank, such
Issuing Bank’s Letter of Credit Commitment minus the aggregate Available
Amount of all Letters of Credit issued by such Issuing Bank.

 

“Unused
Revolving Credit Commitment” means, with respect to each Lender at any
time, (a) such Lender’s Revolving Credit Commitment at such time minus
(b) the sum of (i) the aggregate principal amount of all Advances
made by such Lender (in its capacity as a Lender) and outstanding at such time,
plus (ii) such Lender’s Ratable Share of the aggregate Available
Amount of all the Letters of Credit outstanding at such time.

 

“Voting Stock”
means capital stock issued by a corporation, or equivalent interests in any
other Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.

 

SECTION 1.02. 
Computation of Time Periods. 
In this Agreement in the computation of periods of time from a specified
date to a later specified date, the word “from” 
means “from and including” and the words “to” and “until” each mean “to
but excluding”.

 

SECTION 1.03. 
Accounting Terms.  All
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles as in effect in the United States from time to time (“GAAP”), provided
that (a) if there is any change in GAAP from such principles applied in
the preparation of the audited financial statements referred to in Section 4.01(e) (“Initial
GAAP”), that is material in respect of the calculation of compliance with
the covenants set forth in Section 5.03, the Borrower shall give prompt
notice of such change to the Agent and the Lenders, (b) if the Borrower
notifies the Agent that the Borrower requests an amendment of any provision
hereof to eliminate the effect of any change in GAAP (or the application
thereof) from Initial GAAP (or if the Agent or the Required Lenders request an
amendment of any provision hereof for such purpose), regardless of whether such
notice is given before or after such change in GAAP (or the application
thereof), then such provision shall be applied on the basis of generally
accepted accounting principles as in effect and applied immediately before such
change shall have become effective until such notice shall have been withdrawn
or such provision is amended in accordance herewith.

 

ARTICLE II

 

AMOUNTS AND TERMS
OF THE ADVANCES AND LETTERS OF CREDIT

 

SECTION 2.01. 
The Advances and Letters of Credit.  (a)  Advances.  Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make advances (each, an “Advance”)
to the Borrower from time to time on any Business Day during the period from
the Effective Date until the Termination Date applicable to such Lender in an
amount not to exceed such Lender’s Unused Revolving Credit Commitment at such
time.  Each Borrowing shall be in an
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and shall consist of Advances of the same Type made on the same day by
the Lenders ratably according to their respective Revolving Credit
Commitments.  Within the limits of each
Lender’s Revolving Credit Commitment, the Borrower may borrow under this Section 2.01(a),
prepay pursuant to Section 2.10 and reborrow under this Section 2.01(a).

 

(b)           Letters
of Credit.  Each Issuing Bank agrees,
on the terms and conditions hereinafter set forth, to issue letters of credit
(each, a “Letter of Credit”)
for the account of the Borrower from time to time on any Business Day during
the period from the Effective Date until 30 days before the Termination Date
applicable to 

 

 

14

 

such Issuing Bank in an
aggregate Available Amount (i) for all Letters of Credit issued by each
Issuing Bank not to exceed at any time the lesser of (x) the Letter of
Credit Facility at such time and (y) such Issuing Bank’s Letter of Credit
Commitment at such time and (ii) for each such Letter of Credit not to
exceed an amount equal to the Unused Revolving Credit Commitments of the
Lenders at such time.  Other than as
specified on Schedule 2.01(b), no Letter of Credit shall have an expiration
date (including all rights of the Borrower or the beneficiary to require
renewal) later than (x) the date that is one year after the date of
issuance thereof and (y) 10 Business Days prior to the final Termination
Date, provided that no Letter of Credit may expire after the Termination
Date of any Non-Consenting Lender if, after giving effect to such issuance, the
aggregate Revolving Credit Commitments of the Consenting Lenders (including any
replacement Lenders) for the period following such Termination Date would be
less than the Available Amount of the Letters of Credit expiring after such
Termination Date.  Within the limits of
the Letter of Credit Facility and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this Section 2.01(b),
repay any Advances resulting from drawings thereunder pursuant to Section 2.03(c) and
request the issuance of additional Letters of Credit under this Section 2.01(b).  Each letter of credit listed on Schedule 2.01(b) shall
be deemed to constitute a Letter of Credit issued hereunder, and each Lender
that is an issuer of such a Letter of Credit shall, for purposes of Section 2.03,
be deemed to be an Issuing Bank for each such letter of credit, provided
than any renewal or replacement of any such letter of credit shall be issued by
an Issuing Bank pursuant to the terms of this Agreement.

 

SECTION 2.02. 
Making the Advances.  (a) 
Except as otherwise provided in Section 2.03, each Borrowing shall be made
on notice, given not later than (x) 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed Borrowing in
the case of a Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M.
(New York City time) on the date of the proposed Borrowing in the case of a
Borrowing consisting of Base Rate Advances, by the Borrower to the Agent, which
shall give to each Lender prompt notice thereof by telecopier.  Each such notice of a Borrowing (a “Notice
of Borrowing”) shall be by telephone, confirmed immediately in writing, or
telecopier in substantially the form of Exhibit B hereto, specifying
therein the requested (i) date of such Borrowing, (ii) Type of
Advances comprising such Borrowing, (iii) aggregate amount of such
Borrowing, and (iv) in the case of a Borrowing consisting of Eurodollar
Rate Advances, initial Interest Period for such Advances.  Each Lender shall, before 1:00 P.M.
(New York City time) on the date of such Borrowing make available for the
account of its Applicable Lending Office to the Agent at the Agent’s Account,
in same day funds, such Lender’s ratable portion of such Borrowing in
accordance with the respective Revolving Credit Commitments of such Lender and
the other Lenders.  After the Agent’s
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Agent will make such funds available to the
Borrower at the Agent’s address referred to in Section 8.02.

 

(b)           Anything
in subsection (a) above to the contrary notwithstanding, (i) the
Borrower may not select Eurodollar Rate Advances for any Borrowing if the
aggregate amount of such Borrowing is less than $5,000,000 or if the obligation
of the Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.08 or 2.12 and (ii) Borrowings comprised of
Eurodollar Rate Advances may not be outstanding as part of more than six
separate Interest Periods.

 

(c)           Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.  In the case of any Borrowing that the related
Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances,
the Borrower shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or before the
date specified in such Notice of Borrowing the applicable conditions set forth
in Article III, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.

 

(d)           Unless
the Agent shall have received notice from a Lender prior to the date of any
Borrowing that such Lender will not make available to the Agent such Lender’s
ratable portion of such Borrowing, the Agent may assume that such Lender has
made such portion available to the Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount.  If and
to the extent that such Lender shall not have so made such ratable portion
available to the Agent, such Lender and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date 

 

 

15

 

such amount is made
available to the Borrower until the date such amount is repaid to the Agent, at
(i) in the case of the Borrower, the interest rate applicable at the time
to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Lender’s
Advance as part of such Borrowing for purposes of this Agreement.

 

(e)           The
failure of any Lender to make the Advance to be made by it as part of any
Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.

 

SECTION 2.03. 
Issuance of and Drawings and Reimbursement Under Letters of Credit.  (a)  Request for Issuance.  (i) Each Letter of Credit shall be
issued upon notice, given not later than 1:00 P.M. (New York City
time) on the third Business Day prior to the date of the proposed issuance of
such Letter of Credit (or on such shorter notice as the applicable Issuing Bank
may agree), by the Borrower to any Issuing Bank, and such Issuing Bank shall
give the Agent prompt notice thereof by telecopier.  Each such notice of issuance of a Letter of
Credit (a “Notice
of Issuance”) shall be by telephone, confirmed immediately in
writing, or telecopier, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount of such
Letter of Credit, (C) expiration date of such Letter of Credit, (D) name
and address of the beneficiary of such Letter of Credit and (E) form of
such Letter of Credit, and shall be accompanied by such customary application
and agreement for letter of credit as such Issuing Bank may specify to the
Borrower requesting such issuance for use in connection with such requested
Letter of Credit (a “Letter of Credit Agreement”).  If the requested form of such Letter of
Credit is acceptable to such Issuing Bank in its sole discretion, such Issuing
Bank will, upon fulfillment of the applicable conditions set forth in Article III,
make such Letter of Credit available to the Borrower requesting such issuance
at its office referred to in Section 8.02 or as otherwise agreed with the
Borrower in connection with such issuance. 
In the event and to the extent that the provisions of any Letter of
Credit Agreement shall conflict with this Agreement, the provisions of this
Agreement shall govern.

 

(b)           Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the applicable Issuing Bank or the Lenders, such
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
such Issuing Bank, a participation in such Letter of Credit equal to such
Lender’s Ratable Share of the aggregate amount available to be drawn under such
Letter of Credit.  The Borrower hereby
agrees to each such participation.  In
consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Agent, for the account of
such Issuing Bank, such Lender’s Ratable Share of each drawing made under a
Letter of Credit funded by such Issuing Bank and not reimbursed by the Borrower
on the date made, or of any reimbursement payment required to be refunded to
the Borrower for any reason.  Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Revolving Credit
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. 
Each Lender further acknowledges and agrees that its participation in
each Letter of Credit will be automatically adjusted to reflect such Lender’s
Ratable Share of the Available Amount of such Letter of Credit at each time
such Lender’s Revolving Credit Commitment is amended pursuant to an assignment
in accordance with Section 8.07 or otherwise pursuant to this Agreement.

 

(c)           Drawing and Reimbursement.  The payment by an Issuing Bank of a draft
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by such Issuing Bank of an Advance, which shall be a Base
Rate Advance, in the amount of such draft. 
Each Issuing Bank shall give prompt notice of each drawing under any
Letter of Credit issued by it to the Borrower and the Agent.  Upon written demand by such Issuing Bank to
the Agent, which the Agent shall promptly forward to the Lenders, each Lender
shall pay to the Agent such Lender’s Ratable Share of such outstanding Advance,
by making available for the account of its Applicable Lending Office to the
Agent for the account of such Issuing Bank, by deposit to the Agent’s Account,
in same day funds, an amount equal to the portion of the outstanding principal
amount of such Advance to be funded by such Lender.  Promptly after receipt thereof, the Agent
shall transfer such funds to such Issuing Bank. 
Each Lender agrees to fund its Ratable Share of an outstanding Advance
on (i) the Business Day on which demand therefor is made by such Issuing
Bank, provided that notice of such demand is given not later than 11:00 A.M.

 

 

16

 

(New York City time) on such Business Day, or (ii) the
first Business Day next succeeding such demand if notice of such demand is
given after such time.  If and to the
extent that any Lender shall not have so made the amount of such Advance
available to the Agent, such Lender agrees to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date
of demand by any such Issuing Bank until the date such amount is paid to the
Agent, at the Federal Funds Rate for its account or the account of such Issuing
Bank, as applicable.  If such Lender
shall pay to the Agent such amount for the account of any such Issuing Bank on
any Business Day, such amount so paid in respect of principal shall constitute
an Advance made by such Lender on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Advance made by such
Issuing Bank shall be reduced by such amount on such Business Day.

 

(d)           Letter of Credit Reports.  Each Issuing Bank shall furnish (i) to
the Agent on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued by it during the
preceding month and drawings during such month under all Letters of Credit and (ii) to
the Agent on the first Business Day of each calendar quarter a written report
setting forth the average daily aggregate Available Amount during the preceding
calendar quarter of all Letters of Credit issued by it.  The Agent shall promptly forward to each
Lender each report received by it in accordance with this Section 2.03(d).

 

(e)           Failure
to Make Advances.  The failure of any
Lender to make the Advance to be made by it on the date specified in Section 2.03(c) shall
not relieve any other Lender of its obligation hereunder to make its Advance on
such date, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on such date.

 

SECTION 2.04. 
Fees.  (a)  Facility
Fee.  The Borrower agrees to pay to
the Agent for the account of each Lender a facility fee on the aggregate amount
of such Lender’s Revolving Credit Commitment from the Effective Date in the
case of each Initial Lender and from the effective date specified in the
Assumption Agreement or in the Assignment and Acceptance pursuant to which it
became a Lender in the case of each other Lender until the Termination Date
applicable to such Lender at a rate per annum equal to the Applicable
Percentage in effect from time to time, payable in arrears quarterly on the last
day of each March, June, September and December, commencing June 30,
2008, and on such Termination Date.

 

(b)           Letter
of Credit Fees.  (i)  The
Borrower shall pay to the Agent for the account of each Lender a commission on
such Lender’s Ratable Share of the average daily aggregate Available Amount of
all Letters of Credit outstanding from time to time at a rate per annum equal
to the Applicable Margin for Eurodollar Rate Advances in effect from time to
time, payable in arrears quarterly on the last day of each March, June, September and
December, commencing June 30, 2008, and on the Termination Date applicable
to such Lender and after the final Termination Date payable upon demand.

 

(ii)           The Borrower shall pay to each
Issuing Bank for its own account such fronting, issuance and other reasonable
fees as may from time to time be agreed in writing between the Borrower and
such Issuing Bank.

 

(c)           Agent’s
Fees.  The Borrower shall pay to the
Agent for its own account such fees as may from time to time be agreed between
the Borrower and the Agent.

 

SECTION 2.05. 
Optional Termination or Reduction of the Commitments.  The Borrower shall have the right, upon at
least three Business Days’ notice (or, if the Facilities are to be refinanced
in full, upon notice given on the date of such termination) to the Agent, to
terminate in whole or permanently reduce in part the Unused Revolving Credit
Commitments of the Lenders, provided that each partial reduction shall
be in the aggregate amount of $5,000,000 or an integral multiple of $1,000,000
in excess thereof and shall be made ratably among the Lenders in accordance
with their Commitments.

 

SECTION 2.06. 
Repayment of Advances.  (a) 
Advances.  The Borrower shall
repay to the Agent for the account of each Lender on the Termination Date
applicable to such Lender the aggregate principal amount of the Advances made
by such Lender and then outstanding.

 

 

17

 

(b)           Letter of Credit Reimbursements.  The obligations of the Borrower under this
Agreement, any Letter of Credit Agreement and any other agreement or
instrument, in each case, relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without limitation,
the following circumstances (it being understood that any such payment by the
Borrower is without prejudice to, and does not constitute a waiver of, any
rights the Borrower might have or might acquire as a result of the payment by
any Issuing Bank of any draft or the reimbursement by the Borrower thereof):

 

(i)            any lack of validity or
enforceability of this Agreement, any Letter of Credit, any Letter of Credit
Agreement or any other agreement or instrument, in each case, relating thereto
(all of the foregoing being, collectively, the “L/C Related Documents”);

 

(ii)           any change in the time, manner or
place of payment of, or in any other term of, all or any of the obligations of
the Borrower in respect of any L/C Related Document or any other amendment or
waiver of or any consent to departure from all or any of the L/C Related
Documents;

 

(iii)          the existence of any claim, set-off,
defense or other right that the Borrower may have at any time against any
beneficiary or transferee of a Letter of Credit (or any Person for which any
such beneficiary or transferee may be acting), any Issuing Bank or any other
Person, whether in connection with the transactions contemplated by the L/C
Related Documents or any unrelated transaction;

 

(iv)          any statement or any other document
presented under a 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;

 

(v)           payment by any Issuing Bank under a
Letter of Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit;

 

(vi)          any exchange, release or non-perfection
of any collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the obligations of the Borrower
in respect of the L/C Related Documents; or

 

(vii)         any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including, without limitation,
any other circumstance that might otherwise constitute a defense available to,
or a discharge of, the Borrower or a guarantor.

 

SECTION 2.07. 
Interest on Advances.  (a) 
Scheduled Interest.  The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:

 

(i)            Base Rate Advances.  During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of (x) the
Base Rate in effect from time to time plus (y) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the last
day of each March, June, September and December during such periods
and on the date such Base Rate Advance shall be Converted or paid in full.

 

(ii)           Eurodollar Rate Advances.  During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (x) the Eurodollar Rate for
such Interest Period for such Advance plus (y) the Applicable
Margin in effect from time to time, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every three months
from the first day of such Interest Period and on the date such Eurodollar Rate
Advance shall be Converted or paid in full.

 

 

18

 

(b)           Default
Interest.  Upon the occurrence and
during the continuance of an Event of Default under Section 6.01(a), the
Agent may, and upon the request of the Required Lenders shall, require the
Borrower to pay interest (“Default Interest”) on (i) the overdue
principal amount of each Advance owing to each Lender, payable in arrears on
the dates referred to in clause (a)(i) or (a)(ii) above, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above
and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on Base Rate Advances pursuant to clause (a)(i) above,
provided, however, that following acceleration of the Advances
pursuant to Section 6.01, Default Interest shall accrue and be payable
hereunder whether or not previously required by the Agent.

 

SECTION 2.08. 
Interest Rate Determination. 
(a)  Promptly after receipt of a Notice of Borrowing pursuant to Section 2.02(a),
a notice of Conversion pursuant to Section 2.09 or a notice of selection
of an Interest Period pursuant to the terms of the definition of “Interest
Period”, the Agent shall give prompt notice to the Borrower and each Lender of
the applicable interest rate determined by the Agent for purposes of Section 2.07(a)(i) or
(ii), and the rate, if any, furnished by each Reference Bank for the purpose of
determining the interest rate under Section 2.07(a)(ii).  Each Reference Bank agrees to furnish to the
Agent timely information for the purpose of determining each Eurodollar
Rate.  If any one or more of the
Reference Banks shall not furnish such timely information to the Agent for the
purpose of determining any such interest rate, the Agent shall determine such
interest rate on the basis of timely information furnished by the remaining
Reference Banks.

 

(b)           If
the Borrower shall fail to select the duration of any Interest Period for any
Eurodollar Rate Advances in accordance with the provisions contained in the
definition of “Interest Period” in Section 1.01, the Agent will forthwith
so notify the Borrower and the Lenders and such Advances will automatically, on
the last day of the then existing Interest Period therefor, Convert into Base
Rate Advances.

 

(c)           On
the date on which the aggregate unpaid principal amount of Eurodollar Rate
Advances comprising any Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than $3,000,000, such Advances shall automatically Convert
into Base Rate Advances.

 

(d)           Upon
the occurrence and during the continuance of any Event of Default, (i) each
Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.

 

(f)            If
Reuters Screen LIBOR01 Page is unavailable and none of the Reference Banks
furnish timely information to the Agent for determining the Eurodollar Rate for
any Eurodollar Rate Advances,

 

(i)            the Agent shall forthwith notify the
Borrower and the Lenders that the interest rate cannot be determined for such
Eurodollar Rate Advances, and

 

(ii)           so long as such circumstance
continue, each such Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance (or if such
Advance is then a Base Rate Advance, will continue as a Base Rate Advance) and
the obligation of the Lenders to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended.

 

SECTION 2.09. 
Optional Conversion of Advances. 
The Borrower may on any Business Day, upon notice given to the Agent not
later than 11:00 A.M. (New York City time) on the third Business Day
prior to the date of the proposed Conversion and subject to the provisions of
Sections 2.08 and 2.12, Convert all or any portion of the Advances of one
Type comprising the same Borrowing into Advances of the other Type; provided,
however, that any Conversion of Eurodollar Rate Advances into Base Rate
Advances shall be made only on the last day of an Interest Period for such
Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar
Rate Advances shall be in an amount not less than the minimum amount specified
in Section 2.02(b), no

 

 

19

 

Conversion of any
Advances shall result in more separate Borrowings under such Facility than
permitted under Section 2.02(b) and each Conversion of Advances
comprising part of the same Borrowing shall be made ratably among the Lenders
in accordance with their Revolving Credit Commitments.  Each such notice of a Conversion shall,
within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for each such Advance. 
Each notice of Conversion shall be irrevocable and binding on the
Borrower.

 

SECTION 2.10. 
Prepayments of Advances. 
The Borrower may on any Business Day, upon notice to the Agent not later
than 11:00 A.M. (New York City time) stating the date and aggregate
principal amount of a proposed prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof  and (y) in
the event of any such prepayment of a Eurodollar Rate Advance, the Borrower
shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(c).

 

SECTION 2.11. 
Increased Costs.  (a) 
If, due to either (i) the introduction after the date hereof of or any
change after the date hereof in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request issued
after the date hereof from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances or agreeing to issue or of issuing or maintaining or participating
in Letters of Credit (excluding for purposes of this Section 2.11 any  such increased costs resulting from (i) Taxes
or Other Taxes (as to which Section 2.14 shall govern) and (ii) changes
after the date hereof in the basis of taxation of overall net income or overall
gross income by the United States or by the foreign jurisdiction or state under
the laws of which such Lender is organized or has its Applicable Lending Office
or any political subdivision thereof), then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost; provided, however,
that before making any such demand, each Lender agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. 
A certificate as to the amount of such increased cost, submitted to the
Borrower and the Agent by such Lender, shall be prima  facie
evidence of the correctness thereof for all purposes, absent manifest error.

 

(b)           If
any Lender reasonably determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) adopted or issued after the date
hereof affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender and that
the amount of such capital is increased by or based upon the existence of such
Lender’s commitment to lend hereunder and other commitments of this type, then,
upon demand by such Lender (with a copy of such demand to the Agent), the
Borrower shall pay to the Agent for the account of such Lender, from time to
time as specified by such Lender, additional amounts sufficient to compensate
such Lender or such corporation in the light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender’s commitment to lend hereunder.  A certificate as to such amounts submitted to
the Borrower and the Agent by such Lender shall be prima  facie
evidence of the correctness thereof for all purposes, absent manifest error.

 

(c)           Failure
or delay on the part of any Lender to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender pursuant to this
Section for any increased costs or reductions incurred more than six
months prior to the date that such Lender notifies the Borrower of the change
or circumstance giving rise to such increased costs or reductions and of such
Lender’s intention to claim compensation therefor; provided  further
that, if the change or circumstance giving rise to such increased costs or
reductions is retroactive, then the six-month period referred to above shall be
extended to include the period of retroactive effect thereof.

 

SECTION 2.12. 
Illegality. 
Notwithstanding any other provision of this Agreement, if any Lender
shall notify the Agent that the introduction of or any change in or in the
interpretation of any law or regulation 

 

20

 

makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
any Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar
Rate Advances hereunder, (a) each Eurodollar Rate Advance made by such
Lender will automatically, on the last day of the current Interest Period or,
if required by law, upon such demand, Convert into a Base Rate Advance and (b) the
obligation of such Lender to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and such Lender that the circumstances causing such
suspension no longer exist; provided, however, that before making
any such demand, such Lender agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation would
allow such Lender or its Eurodollar Lending Office to continue to perform its
obligations to make Eurodollar Rate Advances or to continue to fund or maintain
Eurodollar Rate Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. 
Each request for a Eurodollar Rate Borrowing or a Conversion into
Eurodollar Rate Advances shall, as to such affected Lender only, be deemed to
be a request for a Base Rate Advance, and all payments and prepayments of principal
which would otherwise have been applied to repay the Eurodollar Rate Advances
of such Lender shall instead be applied to repay or prepay the Base Rate
Advances made by such Lender in lieu thereof, or resulting from the Conversion
of, such Eurodollar Rate Advances.

 

SECTION 2.13. 
Payments and Computations. 
(a)  The Borrower shall make each payment hereunder, irrespective
of any right of counterclaim or set-off, not later than 11:00 A.M. (New
York City time) on the day when due in U.S. dollars to the Agent at the Agent’s
Account in same day funds.  The Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest or fees or commissions ratably (other than
amounts payable pursuant to Section 2.03, 2.06, 2.11, 2.14, 2.20 or
8.04(c)) to the Lenders for the account of their respective Applicable Lending
Offices, and like funds relating to the payment of any other amount payable to
any Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement.  Upon any Assuming Lender becoming a Lender
hereunder as a result of a Commitment Increase pursuant to Section 2.18 or
an extension of the Termination Date pursuant to Section 2.19, and upon
the Agent’s receipt of such Lender’s Assumption Agreement and recording of the
information contained therein in the Register, from and after the applicable
Increase Date or Extension Date, as the case may be, the Agent shall make all
payments hereunder and under any Notes issued in connection therewith in
respect of the interest assumed thereby to the Assuming Lender.  Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 8.07(c), from and after the effective date specified
in such Assignment and Acceptance, the Agent shall make all payments hereunder
and under the Notes in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.

 

(b)           All
computations of interest based on the Base Rate shall be made by the Agent on
the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate or the Federal Funds Rate
and of fees and Letter of Credit commissions shall be made by the Agent on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest, fees or commissions are payable.  Each determination by the Agent of an interest
rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.

 

(c)           Whenever
any payment hereunder or under the Notes shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest, facility fee or commission, as the case may
be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.

 

(d)           Unless
the Agent shall have received notice from the Borrower prior to the date on
which any payment is due to the Lenders hereunder that the Borrower will not
make such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender.  If and to the extent the Borrower shall not
have so made such payment in full to the Agent, each Lender shall repay to the
Agent forthwith on demand such amount distributed to such Lender together with
interest

 

21

 

thereon, for each day
from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Agent, at the Federal Funds Rate.

 

SECTION 2.14. 
Taxes.  (a)  Any and
all payments by the Borrower to or for the account of any Lender or the Agent
hereunder or under the Notes or any other documents to be delivered hereunder
shall be made, in accordance with Section 2.13 or the applicable
provisions of such other documents, free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and the Agent, taxes imposed on its overall net income,
and franchise taxes imposed on it in lieu of net income taxes, by the
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its overall net income, and franchise taxes imposed on
it in lieu of net income taxes, by the jurisdiction of such Lender’s Applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Notes being hereinafter referred to
as “Taxes”).  If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note or any other documents to be delivered
hereunder to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section 2.14)
such Lender or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.

 

(b)           In
addition, the Borrower shall pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or under the Notes or any other documents
to be delivered hereunder or from the execution, delivery or registration of,
performing under, or otherwise with respect to, this Agreement or the Notes or
any other documents to be delivered hereunder (hereinafter referred to as “Other
Taxes”).

 

(c)           The
Borrower shall indemnify each Lender and the Agent for and hold it harmless
against the full amount of Taxes or Other Taxes (including, without limitation,
taxes of any kind imposed or asserted by any jurisdiction on amounts payable
under this Section 2.14) imposed on or paid by such Lender or the Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto.  This indemnification shall be made within 30
days from the date such Lender or the Agent (as the case may be) makes written
demand therefor.

 

(d)           Within
30 days after the date of any payment of Taxes, the Borrower shall furnish to
the Agent, at its address referred to in Section 8.02, the original or a
certified copy of a receipt evidencing such payment to the extent such a
receipt is issued therefor, or other written proof of payment thereof that is
reasonably satisfactory to the Agent.  In
the case of any payment hereunder or under the Notes or any other documents to
be delivered hereunder by or on behalf of the Borrower through an account or
branch outside the United States or by or on behalf of the Borrower by a payor
that is not a United States person, if the Borrower determines that no Taxes
are payable in respect thereof, the Borrower shall furnish, or shall cause such
payor to furnish, to the Agent, at such address, an opinion of counsel
acceptable to the Agent stating that such payment is exempt from Taxes.  For purposes of this subsection (d) and
subsection (e), the terms “United States” and “United States person”
shall have the meanings specified in Section 7701 of the Internal Revenue
Code.

 

(e)           Each
Lender organized under the laws of a jurisdiction outside the United States, on
or prior to the date of its execution and delivery of this Agreement in the
case of each Initial Lender and on the date of the Assumption Agreement or the
Assignment and Acceptance pursuant to which it becomes a Lender in the case of each
other Lender, and from time to time thereafter as reasonably requested in
writing by the Borrower (but only so long as such Lender remains lawfully able
to do so), shall provide each of the Agent and the Borrower with two original
Internal Revenue Service Forms W-8BEN or W-8ECI, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or the Notes.  If the form provided by a Lender at the time
such Lender first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from Taxes unless and until such Lender provides
the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax 

 

22

 

at such lesser rate only
shall be considered excluded from Taxes for periods governed by such form; provided,
however, that, if at the date of the Assignment and Acceptance pursuant
to which a Lender assignee becomes a party to this Agreement, the Lender
assignor was entitled to payments under subsection (a) in respect of United
States withholding tax with respect to interest paid at such date, then, to
such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Lender assignee on such date.  If any
form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the date hereof by Internal Revenue Service
Form W-8BEN or W-8ECI, that the Lender reasonably considers to be
confidential, the Lender shall give notice thereof to the Borrower and shall
not be obligated to include in such form or document such confidential
information.

 

(f)            For
any period with respect to which a Lender has failed to provide the Borrower
with the appropriate form, certificate or other document described in Section 2.14(e) (other
than if such failure is due to a change in law, or in the interpretation
or application thereof, occurring subsequent to the date on which a form,
certificate or other document originally was required to be provided, or if
such form, certificate or other document otherwise is not required under subsection (e) above),
such Lender shall not be entitled to indemnification under Section 2.14(a) or
(c) with respect to Taxes imposed by the United States by reason of such
failure; provided, however, that should a Lender become subject
to Taxes because of its failure to deliver a form, certificate or other
document required hereunder, the Borrower shall take such steps as the Lender
shall reasonably request to assist the Lender to recover such Taxes.

 

(g)           Any
Lender claiming any additional amounts payable pursuant to this Section 2.14
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to change the jurisdiction of its Eurodollar
Lending Office if the making of such a change would avoid the need for, or reduce
the amount of, any such additional amounts that may thereafter accrue and would
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender.

 

SECTION 2.15. 
Sharing of Payments, Etc. 
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
Advances owing to it (other than pursuant to Section 2.11, 2.12, 2.14,
2.20 or 8.04(c)) in excess of its ratable share of payments on account of the
Advances obtained by all the Lenders, such Lender shall forthwith purchase from
the other Lenders such participations in the Advances owing to them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender,
such purchase from each Lender shall be rescinded and such Lender shall repay
to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender’s ratable share (according to the
proportion of (i) the amount of such Lender’s required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered.  The Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant to this Section 2.15
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.

 

SECTION 2.16. 
Evidence of Debt.  (a) 
Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Advance owing to such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder in respect of Advances.  The
Borrower agrees that upon notice by any Lender to the Borrower (with a copy of
such notice to the Agent) to the effect that a Note is required or appropriate
in order for such Lender to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made by, such Lender,
the Borrower shall promptly execute and deliver to such Lender a Note payable
to the order of such Lender in a principal amount up to the Revolving Credit
Commitment of such Lender.

 

(b)           The
Register maintained by the Agent pursuant to Section 8.07(d) shall
include a control account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the
terms of each Assumption Agreement and each Assignment and Acceptance delivered
to and accepted by it, (iii) the amount of any principal or interest due
and

 

23

 

payable or to become due
and payable from the Borrower to each Lender hereunder and (iv) the amount
of any sum received by the Agent from the Borrower hereunder and each Lender’s
share thereof.

 

(c)           Entries
made in good faith by the Agent in the Register pursuant to subsection (b) above,
and by each Lender in its account or accounts pursuant to subsection (a) above,
shall be prima  facie evidence of the amount of principal and
interest due and payable or to become due and payable from the Borrower to, in
the case of the Register, each Lender and, in the case of such account or
accounts, such Lender, under this Agreement, absent manifest error; provided,
however, that the failure of the Agent or such Lender to make an entry,
or any finding that an entry is incorrect, in the Register or such account or
accounts shall not limit or otherwise affect the obligations of the Borrower
under this Agreement.

 

SECTION 2.17. 
Use of Proceeds.  The
proceeds of the Advances shall be available (and the Borrower agrees that it
shall use such proceeds) solely for general corporate purposes of the Borrower
and its Subsidiaries.

 

SECTION 2.18. 
Increase in the Aggregate Revolving Credit Commitments.  (a) The Borrower may, at any time but in
any event not more than twice in any calendar year prior to the final
Termination Date, by notice to the Agent, request that the aggregate amount of
the Revolving Credit Commitments be increased by an amount of $20,000,000 or an
integral multiple thereof (each a “Commitment Increase”) to be effective
as of a date that is at least 90 days prior to the scheduled final Termination
Date then in effect (the “Increase Date”) as specified in the related
notice to the Agent; provided, however that (i) in no event
shall the aggregate amount of the Revolving Credit Commitments at any time
exceed $250,000,000 and (ii) on the date of any request by the Borrower
for a Commitment Increase and on the related Increase Date (A) the
representations and warranties contained in Section 4.01 shall correct on
and as of such date, before and after giving effect to such Commitment
Increase, as though made on and as of such date and (B) no event has
occurred and is continuing, or would result from such Commitment Increase, that
constitutes a Default.

 

(b)           The
Agent shall promptly notify such Lenders or Eligible Assignees as the Borrower
may direct of a request by the Borrower for a Commitment Increase, which notice
shall include (i) the proposed amount of such requested Commitment
Increase, (ii) the proposed Increase Date and (iii) the date by which
Lenders wishing to participate in the Commitment Increase must commit to an
increase in the amount of their respective Revolving Credit Commitments (the “Commitment
Date”).  Each such Lender that is
willing to participate in such requested Commitment Increase (each an “Increasing
Lender”) shall, in its sole discretion, give written notice to the Agent on
or prior to the Commitment Date of the amount by which it is willing to
increase its Revolving Credit Commitment. 
The requested Commitment Increase shall be allocated among the Lenders
willing to participate therein and the applicable Assuming Lenders in such
amounts as are agreed between the Borrower and the Agent.

 

(c)           On
each Increase Date, each Eligible Assignee that accepts an offer to participate
in a requested Commitment Increase in accordance with Section 2.18(b) (each
such Eligible Assignee and each Eligible Assignee that agrees to an extension
of the Termination Date in accordance with Section 2.19(c), an “Assuming
Lender”) shall become a Lender party to this Agreement as of such Increase
Date and the Revolving Credit Commitment of each Increasing Lender for such
requested Commitment Increase shall be so increased by such amount (or by the
amount allocated to such Lender pursuant to the last sentence of Section 2.18(b))
as of such Increase Date; provided, however, that the Revolving
Credit Commitment of each such Eligible Assignee shall be in an amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and the
Agent shall have received on or before such Increase Date the following, each
dated such date:

 

(i)            (A) certified copies of
resolutions of the Board of Directors of the Borrower or the Executive
Committee of such Board authorizing the Commitment Increase and (B) an
opinion of counsel for the Borrower (which may be in-house counsel), in
substantially the form of Exhibit D hereto;

 

(ii)           an assumption agreement from each
Assuming Lender, if any, in form and substance satisfactory to the Borrower and
the Agent (each an “Assumption Agreement”), duly executed by such
Eligible Assignee, the Agent and the Borrower; and

 

24

 

(iii)          confirmation from each Increasing
Lender of the increase in the amount of its Revolving Credit Commitment in a
writing satisfactory to the Borrower and the Agent.

 

On each Increase Date, upon fulfillment of the
conditions set forth in the immediately preceding sentence of this Section 2.18(c),
the Agent shall notify the Lenders (including, without limitation, each
Assuming Lender) and the Borrower, on or before 1:00 P.M. (New York City
time), by telecopier, of the occurrence of the Commitment Increase to be
effected on such Increase Date and shall record in the Register the relevant
information with respect to each Increasing Lender and each Assuming Lender on
such date.  Each Increasing Lender and each
Assuming Lender shall, before 2:00 P.M. (New York City time) on the
Increase Date, make available for the account of its Applicable Lending Office
to the Agent at the Agent’s Account, in same day funds, in the case of such
Assuming Lender, an amount equal to such Assuming Lender’s ratable portion of
the Revolving Credit Borrowings then outstanding (calculated based on its
Revolving Credit Commitment as a percentage of the aggregate Revolving Credit
Commitments outstanding after giving effect to the relevant Commitment
Increase) and, in the case of such Increasing Lender, an amount equal to the
excess of (i) such Increasing Lender’s ratable portion of the Revolving
Credit Borrowings then outstanding (calculated based on its Revolving Credit
Commitment as a percentage of the aggregate Revolving Credit Commitments
outstanding after giving effect to the relevant Commitment Increase) over (ii) such
Increasing Lender’s ratable portion of the Revolving Credit Borrowings then
outstanding (calculated based on its Revolving Credit Commitment (without
giving effect to the relevant Commitment Increase) as a percentage of the
aggregate Revolving Credit Commitments (without giving effect to the relevant
Commitment Increase).  After the Agent’s
receipt of such funds from each such Increasing Lender and each such Assuming
Lender, the Agent will promptly thereafter cause to be distributed like funds
to the other Lenders for the account of their respective Applicable Lending
Offices in an amount to each other Lender such that the aggregate amount of the
outstanding Revolving Credit Advances owing to each Lender after giving effect
to such distribution equals such Lender’s ratable portion of the Revolving
Credit Borrowings then outstanding (calculated based on its Revolving Credit
Commitment as a percentage of the aggregate Revolving Credit Commitments
outstanding after giving effect to the relevant Commitment Increase).

 

SECTION 2.19. 
Extension of Termination Date. 
(a) At least 45 days but not more than 60 days prior to the first
and/or second anniversary of the Effective Date, the Borrower, by written
notice to the Agent, may request an extension of the Termination Date in effect
at such time by one year from its then scheduled expiration.  The Agent shall promptly notify each Lender
of such request, and each Lender shall in turn, in its sole discretion, not
later than 20 days prior to the applicable anniversary date, notify the
Borrower and the Agent in writing as to whether such Lender will consent to
such extension.  If any Lender shall fail
to notify the Agent and the Borrower in writing of its consent to any such
request for extension of the Termination Date at least 20 days prior to the
applicable anniversary date, such Lender shall be deemed to be a Non-Consenting
Lender with respect to such request.  The
Agent shall notify the Borrower not later than 15 days prior to the applicable
anniversary date of the decision of the Lenders regarding the Borrower’s
request for an extension of the Termination Date.

 

(b)           If
all the Lenders consent in writing to any such request in accordance with
subsection (a) of this Section 2.19, the Termination Date in effect
at such time shall, effective as at the Termination Date (the “Extension
Date”), be extended for one year; provided that on each Extension
Date (i) the representations and warranties contained in Section 4.01
shall be correct on and as of such date, before and after giving effect to such
Extension Date, as though made on and as of such date and (ii) no event
shall have occurred and be continuing, or would result from such Extension
Date, that constitutes a Default.  If
less than all of the Lenders consent in writing to any such request in
accordance with subsection (a) of this Section 2.19, the Termination
Date in effect at such time shall, effective as at the applicable Extension
Date and subject to subsection (d) of this Section 2.19, be extended
as to those Lenders that so consented (each a “Consenting Lender”) but
shall not be extended as to any other Lender (each a “Non-Consenting Lender”).  To the extent that the Termination Date is
not extended as to any Lender pursuant to this Section 2.19 and the
Commitment(s) of such Lender is not assumed in accordance with subsection (c) of
this Section 2.19 on or prior to the applicable Extension Date, the
Commitment(s) of such Non-Consenting Lender shall automatically terminate
in whole on such unextended Termination Date without any further notice or
other action by the Borrower, such Lender or any other Person; provided
that such Non-Consenting Lender’s rights under Sections 2.11, 2.14 and 8.04,
and its obligations under Section 7.05, shall survive the Termination Date
for such Lender as to matters occurring prior to such date.  It is understood and agreed that no Lender
shall have any obligation whatsoever to agree to any request made by the
Borrower for any requested extension of the Termination Date.

 

25

 

(c)           If
less than all of the Lenders consent to any such request pursuant to subsection
(a) of this Section 2.19, the Agent shall promptly so notify the
Borrower, and the Borrower may arrange for one or more Consenting Lenders or
other Eligible Assignees as Assuming Lenders to assume, effective as of the
Extension Date, any Non-Consenting Lender’s Commitment(s) and all of the
obligations of such Non-Consenting Lender under this Agreement thereafter
arising, without recourse to or warranty by, or expense to, such Non-Consenting
Lender; provided, however, that the amount of the Revolving
Credit Commitment of any such Assuming Lender as a result of such substitution
shall in no event be less than $5,000,000 unless the amount of the Revolving
Credit Commitment of such Non-Consenting Lender is less than $5,000,000, in
which case such Assuming Lender shall assume all of such lesser amount; and provided
further that:

 

(i)            any such Consenting Lender or
Assuming Lender shall have paid to such Non-Consenting Lender (A) the
aggregate principal amount of, and any interest accrued and unpaid to the effective
date of the assignment on, the outstanding Advances, if any, of such
Non-Consenting Lender plus (B) any accrued but unpaid facility fees
and commissions owing to such Non-Consenting Lender as of the effective date of
such assignment;

 

(ii)           all additional costs reimbursements,
expense reimbursements and indemnities payable to such Non-Consenting Lender,
and all other accrued and unpaid amounts owing to such Non-Consenting Lender
hereunder, as of the effective date of such assignment shall have been paid to
such Non-Consenting Lender; and

 

(iii)          with respect to any such Assuming
Lender, the applicable processing and recordation fee required under Section 8.07(a) for
such assignment shall have been paid;

 

provided  further that such Non-Consenting Lender’s
rights under Sections 2.11, 2.14 and 8.04, and its obligations under Section 7.05,
shall survive such substitution as to matters occurring prior to the date of
substitution.  At least three Business
Days prior to any Extension Date, (A) each such Assuming Lender, if any,
shall have delivered to the Borrower and the Agent an Assumption Agreement,
duly executed by such Assuming Lender, such Non-Consenting Lender, the Borrower
and the Agent, (B) any such Consenting Lender shall have delivered
confirmation in writing satisfactory to the Borrower and the Agent as to the
increase in the amount of its Commitment(s) and (C) each
Non-Consenting Lender being replaced pursuant to this Section 2.19 shall
have delivered to the Agent any Note or Notes held by such Non-Consenting
Lender.  Upon the payment or prepayment
of all amounts referred to in clauses (i), (ii) and (iii) of the
immediately preceding sentence, each such Consenting Lender or Assuming Lender,
as of the Extension Date, will be substituted for such Non-Consenting Lender
under this Agreement and shall be a Lender for all purposes of this Agreement,
without any further acknowledgment by or the consent of the other Lenders, and
the obligations of each such Non-Consenting Lender hereunder shall, by the provisions
hereof, be released and discharged.

 

(d)           If
(after giving effect to any assignments or assumptions pursuant to subsection (c) of
this Section 2.19) Lenders having Revolving Credit Commitments equal to at
least 50% of the Revolving Credit Commitments in effect immediately prior to
the Extension Date consent in writing to a requested extension (whether by
execution or delivery of an Assumption Agreement or otherwise) not later than
one Business Day prior to such Extension Date, the Agent shall so notify the
Borrower, and, subject to the condition that (i) the representations and
warranties contained in Section 4.01 shall be correct on and as of such
date, before and after giving effect to such Extension Date, as though made on
and as of such date and (ii) no event shall have occurred and be
continuing, or would result from such Extension Date, that constitutes a
Default, the Termination Date then in effect shall be extended for the
additional one-year period as described in subsection (a) of this Section 2.19,
and all references in this Agreement, and in the other Loan Documents, to the “Termination
Date” shall, with respect to each Consenting Lender and each Assuming
Lender for such Extension Date, refer to the Termination Date as so
extended.  Promptly following each
Extension Date, the Agent shall notify the Lenders (including, without
limitation, each Assuming Lender) of the extension of the scheduled Termination
Date in effect immediately prior thereto and shall thereupon record in the
Register the relevant information with respect to each such Consenting Lender
and each such Assuming Lender.

 

26

 

SECTION 2.20. 
Regulation D Compensation.  Each Lender that is subject to reserve requirements of the Board of
Governors of the Federal Reserve System (or any successor) may require the
Borrower to pay, contemporaneously with each payment of interest on the
Eurodollar Rate Advances, additional interest on the related Eurodollar Rate
Advances of such Lender at the rate per annum equal to the excess of (i) (A) the
applicable Eurodollar Rate divided by (B) one minus the Eurodollar Rate
Reserve Percentage over (ii) the rate specified in
clause (i)(A).  Any Lender wishing
to require payment of such additional interest (x) shall so notify the
Agent and the Borrower, in which case such additional interest on the
Eurodollar Rate Advances of such Lender shall be payable to such Lender at the
place indicated in such notice with respect to each Interest Period commencing
at least five Business Days after the giving of such notice and (y) shall
notify the Agent and the Borrower at least five Business Days prior to each
date on which interest is payable of the amount then due it under this Section.

 

ARTICLE III

 

CONDITIONS TO EFFECTIVENESS
AND LENDING

 

SECTION 3.01. 
Conditions Precedent to Effectiveness of Section 2.01.  Section 2.01 of this Agreement shall
become effective on and as of the first date (the “Effective Date”) on
which the following conditions precedent have been satisfied:

 

(a)           There shall have occurred no event or
circumstance that could reasonably be expected to result in a Material Adverse
Change since December 31, 2007.

 

(b)           There shall exist no action, suit,
investigation, litigation or proceeding affecting the Borrower or any of its
Subsidiaries pending or, to the knowledge of the Borrower, threatened before
any court, governmental agency or arbitrator that (i) could be reasonably
likely to have a Material Adverse Effect or (ii) could be reasonably
likely to adversely affect the legality, validity or enforceability of this
Agreement or any other Loan Document or the consummation of the transactions
contemplated hereby.

 

(c)           Nothing shall have come to the
attention of the Lenders during the course of their due diligence investigation
to lead them to believe that the Information Memorandum was or has become
misleading, incorrect or incomplete in any material respect; without limiting
the generality of the foregoing, the Lenders shall have been given such access
to the management, records, books of account, contracts and properties of the
Borrower and its Subsidiaries as they shall have requested.

 

(d)           All governmental and third party
consents and approvals necessary in connection with the transactions
contemplated hereby shall have been obtained (without the imposition of any
conditions that are not acceptable to the Lenders) and shall remain in effect,
and no law or regulation shall be applicable in the reasonable judgment of the
Lenders that restrains, prevents or imposes materially adverse conditions upon
the transactions contemplated hereby.

 

(e)           The Borrower shall have notified each
Lender and the Agent in writing as to the proposed Effective Date.

 

(f)            The Borrower shall have paid all
reasonable and invoiced accrued fees and expenses of the Agent and the Lenders
(including the accrued fees and expenses of counsel to the Agent).

 

(g)           On the Effective Date, the following
statements shall be true and the Agent shall have received for the account of
each Lender a certificate signed by a duly authorized officer of the Borrower,
dated the Effective Date, stating that:

 

(i)            The representations
and warranties contained in Section 4.01 are correct on and as of the
Effective Date, and

 

(ii)           No event has
occurred and is continuing that constitutes a Default.

 

27

 

(h)           The Agent shall have received on or
before the Effective Date the following, each dated such day, in form and
substance satisfactory to the Agent and (except for the Notes) in sufficient
copies for each Lender:

 

(i)            The Notes to the
order of the Lenders to the extent requested by any Lender pursuant to Section 2.16.

 

(ii)           Certified copies of
the resolutions of the Board of Directors of the Borrower approving this Agreement
and the Notes, and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Agreement and the
Notes.

 

(iii)          A certificate of
the Secretary or an Assistant Secretary of the Borrower certifying the names
and true signatures of the officers of the Borrower authorized to sign this
Agreement and the Notes and the other documents to be delivered hereunder.

 

(iv)          Favorable opinions
of (A) Mayer Brown LLP, New York counsel for the Borrower, substantially
in the form of Exhibit D-1 hereto and (B) Kent Pflederer, General
Counsel of the Borrower, substantially in the form of Exhibit D-2 hereto.

 

(i)            The Borrower shall have terminated
the commitments of the lenders and repaid or prepaid in full all amounts
outstanding under the Five Year Credit Agreement dated as of July 21, 2003
among the Borrower, the lenders parties thereto and JPMorgan Chase Bank, as
administrative agent.  By execution of
this Agreement, each of the Lenders that is a lender under the credit agreement
referred to above hereby waives the requirements set forth in Section 2.05
and 2.10 of such credit agreement of prior notice to the termination of its
commitments and prepayment of advances thereunder.

 

SECTION 3.02. 
Conditions Precedent to Each Borrowing and Issuance.  The obligation of each Lender to make an
Advance (other than an Advance made by an Issuing Bank or any Lender pursuant
to Section 2.03(c)) on the occasion of each Borrowing and the obligation
of each Issuing Bank to issue a Letter of Credit, shall be subject to the
conditions precedent that the Effective Date shall have occurred and on the
date of such Borrowing or issuance (a) the following statements shall be
true (and each of the giving of the applicable Notice of Borrowing or Notice of
Issuance and the acceptance by the Borrower of the proceeds of such Borrowing
or issuance shall constitute a representation and warranty by the Borrower that
on the date of such Borrowing or such issuance such statements are true):

 

(i)            the representations and warranties
contained in Section 4.01 are correct on and as of such date, before and
after giving effect to such Borrowing or such issuance and to the application
of the proceeds therefrom, as though made on and as of such date, and

 

(ii)           no event has occurred and is
continuing, or would result from such Borrowing or such issuance or from the
application of the proceeds therefrom, that constitutes a Default;

 

and (b) the Agent shall have received such other
approvals, opinions or documents as any Lender through the Agent may reasonably
request.

 

SECTION 3.03. 
Determinations Under Section 3.01.  For purposes of determining compliance with
the conditions specified in Section 3.01, each Lender shall be deemed to
have consented to, approved or accepted or to be satisfied with each document
or other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lenders unless an officer of the Agent
responsible for the transactions contemplated by this Agreement shall have
received notice from such Lender prior to the date that the Borrower, by notice
to the Lenders, designates as the proposed Effective Date, specifying its
objection thereto.  The Agent shall
promptly notify the Lenders of the occurrence of the Effective Date.

 

 

28

 

ARTICLE IV

 

REPRESENTATIONS
AND WARRANTIES

 

SECTION 4.01. 
Representations and Warranties of the Borrower.  The Borrower represents and warrants as
follows:

 

(a)           Each Loan Party is duly organized,
validly existing and in good standing under the laws of the laws of its
justification of organization.

 

(b)           The execution, delivery and
performance by the each Loan Party of the Loan Documents to which it is a
party, and the consummation of the transactions contemplated hereby and
thereby, are within such Loan Party’s corporate or other organizational powers,
have been duly authorized by all necessary corporate or other action, and do
not contravene (i) such Loan Party’s charter or by-laws or other
organizational documents, (ii) law, (iii) any indenture, deed of trust,
credit agreement or loan agreement binding on or affecting the Borrower or (iv) any
other material agreement, contract or instrument binding on or affecting such
Loan Party.

 

(c)           No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
any Loan Party of the Loan Documents to which it is or is to be a party.  No authorization or approval or other action
by, and no notice to or filing with, any third party is required for the due
execution, delivery and performance by any Loan Party of the Loan Documents to
which it is or is to be a party, except to the extent that failure to so obtain
or so file could not reasonably be expected to have a Material Adverse Effect.

 

(d)           This Agreement has been, and each
other Loan Document when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. 
This Agreement is, and each other Loan Document when delivered hereunder
will be, legal, valid and binding obligations of each Loan Party party thereto
enforceable against such Loan Party in accordance with their respective terms, subject
to the effect of any applicable bankruptcy, insolvency, reorganization or
moratorium or similar laws affecting the rights of creditors generally and
subject to general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).

 

(e)           The Consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 2007, and the related
Consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, accompanied by an opinion of Ernst &
Young LLP, independent public accountants, copies of which have been furnished
to each Lender, fairly present in accordance with GAAP the Consolidated
financial condition of the Borrower and its Subsidiaries as at such date and
the   Consolidated results of the
operations of the Borrower and its Subsidiaries for the period ended on such
date, all in accordance with generally accepted accounting principles
consistently applied.  Since December 31,
2007, no event or circumstance has occurred and is continuing that could
reasonably be expected to result in a Material Adverse Change.

 

(f)            There is no pending or, to the
knowledge of the Borrower, threatened action, suit, investigation, litigation
or proceeding, including, without limitation, any Environmental Action,
affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator that (i) could be reasonably likely to
have a Material Adverse Effect or (ii) could be reasonably likely to
adversely affect the legality, validity or enforceability of this Agreement or
any other Loan Documents or the consummation of the transactions contemplated
hereby or thereby.

 

(g)           The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of Governors
of the Federal Reserve System), and no proceeds of any Advance will be used to
purchase or 

 

29

 

carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.

 

(h)           The Borrower is not an “investment
company”, or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended.

 

(i)            Each Loan Party is, individually and
together with its Subsidiaries, Solvent.

 

(j)            Neither the Information Memorandum
nor any of the other reports, financial statements, certificates or other
information furnished in writing by or on behalf of the Borrower to the Agent
or any Lender in connection with the negotiation of this Agreement or the other
Loan Documents or delivered hereunder (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 and taken as a whole, not
materially misleading; provided that, with respect to projected
financial information and forward-looking statements, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time made and provided, further,
that the Borrower makes no representation or warranty with respect to general
industry information contained in the Information Memorandum derived from
consultants or public or third party sources except that the Borrower believed,
to the best of its knowledge and on the date of the Information Memorandum,
such information to be reliable.

 

ARTICLE V

 

COVENANTS OF THE
BORROWER

 

SECTION 5.01. 
Affirmative Covenants.  So
long as any Advance shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower will:

 

(a)           Compliance with Laws, Etc.  Comply, and cause each of its Subsidiaries to
comply with all applicable laws, rules, regulations and orders, such compliance
to include, without limitation, compliance with ERISA and Environmental Laws,
except to the extent that failure to so comply could not reasonably be expected
to have a Material Adverse Effect.

 

(b)           Payment of Taxes, Etc.  Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its property and (ii) all material lawful claims that, if unpaid,
might by law become a Lien upon its property; provided, however,
that neither the Borrower nor any of its Subsidiaries shall be required to pay
or discharge any such tax, assessment, charge or claim that is being contested
in good faith and by proper proceedings and as to which appropriate reserves
are being  maintained, unless and until
any Lien resulting therefrom attaches to its property and enforcement actions
are begun.

 

(c)           Maintenance of Insurance.  Maintain, and cause each of its Subsidiaries
to maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates.

 

(d)           Preservation of Corporate
Existence, Etc.  Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its
corporate existence, rights (charter and statutory) and franchises; provided,
however, that the Borrower and its Subsidiaries may consummate any
transaction permitted under Section 5.02(b) and provided  further
that neither the Borrower nor any of its Subsidiaries shall be required to preserve
any right or franchise or, in the case of any Subsidiary, its corporate
existence, if the Borrower shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Borrower or the Borrower
and its Subsidiaries taken as a whole, and that the loss thereof is not 

 

30

 

disadvantageous in
any material respect to the Borrower, the Borrower and its Subsidiaries taken
as a whole or the Lenders.

 

(e)           Visitation Rights.  At any reasonable time and from time to time
upon reasonable prior notice, permit the Agent or any of the Lenders or any
agents or representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Borrower and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Borrower and any of its Subsidiaries with any of their officers
or directors and with their independent certified public accountants, provided
that, so long as no Default shall have occurred and be continuing, the Borrower
shall have the right to participate in any discussions of the Agent or any
Lender with any independent accountants of the Borrower.

 

(f)            Keeping of Books.  Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Borrower and each such Subsidiary in accordance with generally accepted accounting
principles in effect from time to time.

 

(g)           Maintenance of Properties, Etc.  Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear and loss or damage by casualty or condemnation excepted.

 

(h)           Transactions with Affiliates.  Conduct, and cause each of its Subsidiaries
to conduct, all transactions otherwise permitted under this Agreement with any
of their Affiliates on terms that are fair and reasonable and no less favorable
to the Borrower or such Subsidiary than it would obtain in a comparable arm’s-length
transaction with a Person not an Affiliate, other than (i) transactions by
and among the Borrower and its wholly-owned Subsidiaries and (ii) compensation
of, or fees payable to, officers and directors of the Borrower and its
Subsidiaries.

 

(i)            Reporting Requirements.  Furnish to the Agent:

 

(i)            as soon as
available and in any event within 50 days after the end of each of the first
three quarters of each fiscal year of the Borrower, the Consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such quarter and
Consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, duly certified (subject to year-end
adjustments and the absence of footnotes) by the chief financial officer, chief
executive officer or treasurer of the Borrower as having been prepared in
accordance with generally accepted accounting principles and certificates of
the chief financial officer, chief executive officer or treasurer of the
Borrower as to compliance with the terms of this Agreement and setting forth in
reasonable detail the calculations necessary to demonstrate compliance with Section 5.03,
provided that in the event of any change in generally accepted
accounting principles used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the determination of compliance
with Section 5.03, a statement of reconciliation conforming such financial
statements to GAAP;

 

(ii)           as soon as
available and in any event within 90 days after the end of each fiscal year of
the Borrower, a copy of the annual audit report for such year for the Borrower
and its Subsidiaries, containing the Consolidated balance sheet of the Borrower
and its Subsidiaries as of the end of such fiscal year and Consolidated
statements of income and cash flows of the Borrower and its Subsidiaries for
such fiscal year, in each case accompanied by an opinion reasonably acceptable
to the Required Lenders by Ernst & Young LLP or other independent
public accountants reasonably acceptable to the Required Lenders and
certificates of the chief financial officer, chief executive officer or
treasurer of the Borrower as to compliance with the terms of this 

 

31

 

Agreement and setting
forth in reasonable detail the calculations necessary to demonstrate compliance
with Section 5.03, provided that in the event of any change in
generally accepted accounting principles used in the preparation of such
financial statements, the Borrower shall also provide, if necessary for the
determination of compliance with Section 5.03, a statement of
reconciliation conforming such financial statements to GAAP;

 

(iii)          as soon as possible
and in any event within five Business Days after the chief financial officer,
the chief executive officer, the treasurer, the controller or the general
counsel of the Borrower obtains actual knowledge of the occurrence of any
Default continuing on the date of such statement, a statement of the chief
financial officer, chief executive officer or treasurer of the Borrower setting
forth details of such Default and the action that the Borrower has taken and
proposes to take with respect thereto;

 

(iv)          promptly after the
sending or filing thereof, copies of all reports that the Borrower sends to its
securityholders generally, and copies of all reports and registration
statements that the Borrower or any Subsidiary files with the Securities and
Exchange Commission or any national securities exchange;

 

(v)           promptly after the
commencement thereof, notice of all actions and proceedings before any court,
governmental agency or arbitrator affecting the Borrower or any of its
Subsidiaries of the type described in Section 4.01(f); and

 

(vi)          such other
information respecting the Borrower or any of its Subsidiaries as any Lender
through the Agent may from time to time reasonably request.

 

(j)            New Material Subsidiaries.  Promptly and in any event within 30 days
following the request of the Required Lenders made after either (i) the
organization or acquisition of any new Material Subsidiary or (ii) the
delivery of audited annual financial statements pursuant to Section 5.01(i) that
indicate that a Subsidiary of the Borrower that is not at such time a
Subsidiary Guarantor is a Material Subsidiary, cause such Material Subsidiary
to execute and deliver a Subsidiary Guaranty in substantially the form of Exhibit E
hereto, together with such documents as the Required Lenders may reasonably
request evidencing corporate action taken to authorize such execution and
delivery and the incumbency and signatures of officers of such Material
Subsidiary, provided
that a Material Subsidiary shall not be required to become a Subsidiary
Guarantor if (A) a guaranty by such Material Subsidiary would result in
materially adverse tax consequences to the Borrower and its Subsidiaries or
shareholders of the Borrower or (B) a guaranty by such Material Subsidiary
is prohibited or limited by regulatory requirements or applicable law.

 

SECTION 5.02. 
Negative Covenants.  So
long as any Advance shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower will not:

 

(a)           Liens, Etc.  Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist, any Lien on or with respect to any
of its properties, whether now owned or hereafter acquired, or assign, or
permit any of its Subsidiaries to assign, any right to receive income, other
than:

 

(i)            Permitted Liens,

 

(ii)           capital leases and
purchase money Liens upon or in any real or personal property acquired or held
by the Borrower or any Subsidiary in the ordinary course of business to secure
the purchase price of such property or to secure Debt incurred solely for the
purpose of financing the acquisition of such property, or Liens existing on
such property at the time of its acquisition (other than any such Liens created
in contemplation of such acquisition that were not incurred to finance the
acquisition of such property) or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount, provided, however,
that no such Lien shall extend to or cover any properties of any character
other than the property being acquired, and no 

 

32

 

such extension,
renewal or replacement shall extend to or cover any properties not theretofore
subject to the Lien being extended, renewed or replaced, provided  further
that the aggregate principal amount of the indebtedness secured by the Liens
referred to in this clause (ii) shall not exceed $100,000,000 at any
time outstanding,

 

(iii)          the Liens existing
on the Effective Date and described on Schedule 5.02(a) hereto,

 

(iv)          Liens on property of
a Person existing at the time such Person is merged into or consolidated with
the Borrower or any Subsidiary of the Borrower or becomes a Subsidiary of the
Borrower; provided that such Liens were not created in contemplation of
such merger, consolidation or acquisition and do not extend to any assets other
than those of the Person so merged into or consolidated with the Borrower or
such Subsidiary or acquired by the Borrower or such Subsidiary,

 

(v)           assignments of the
right to receive income or Liens in connection with any Permitted Receivables
Financing, to the extent permitted under Section 5.02(d)(iv),

 

(vi)          licenses, leases or subleases granted to other Persons in
the ordinary course of business not materially interfering with the conduct of
the business of the Borrower and its Subsidiaries taken as a whole,

 

(vii)         Liens arising from precautionary UCC financing statement
filings regarding operating leases entered into by the Borrower or any of its
Subsidiaries (other than a Receivables Subsidiary) in the ordinary course of
business,

 

(viii)        Liens arising out of judgments or awards in circumstances not
constituting an Event of Default under Section 6.01 in respect of which
the Borrower or any of its Subsidiaries shall in good faith be prosecuting an
appeal or proceedings for review in respect of which there shall have been
secured a subsisting stay of execution pending such appeal or proceedings, provided
that the aggregate amount of all such judgments or awards does not exceed
$25,000,000 at any time outstanding,

 

(ix)           statutory, contractual and common law landlords’ liens under leases or subleases
permitted by this Agreement,

 

(x)            Liens
(other than any Lien imposed by ERISA) (x) to secure the performance of
tenders, statutory obligations (other than excise taxes), surety, stay, customs
and appeal bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or (y) arising
by virtue of deposits made in the ordinary course of business to secure
liability for premiums to insurance carriers, provided that the
aggregate amount of deposits at any time pursuant to sub-clauses (x) and (y) shall
not exceed $15,000,000 in the aggregate,

 

(xi)           any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this Agreement,

 

(xii)          Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business
(excluding any general inventory financing),

 

(xiii)         other Liens
securing Debt (whether incurred by the Borrower or any of its Subsidiaries) in
an aggregate principal amount not to exceed $50,000,000 at any time
outstanding, and

 

33

 

(xiv)        the replacement,
extension or renewal of any Lien permitted by clause (iii) or (iv) above
upon or in the same property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby.

 

(b)           Mergers, Etc.  Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, any Person, or permit any of its Subsidiaries
to do so, except that (i) any Subsidiary of the Borrower may merge or
consolidate with or into, or dispose of assets to, any other Subsidiary of the
Borrower, (ii) any Subsidiary of the Borrower may merge into or dispose of
assets to the Borrower, (iii) the Borrower may merge with any other Person
so long as the Borrower is the surviving corporation and (iv) any
Subsidiary or Subsidiaries of the Borrower may merge or consolidate with or
into, or dispose of assets to, any other Person so long as the assets of such
Subsidiaries, in aggregate, do not constitute all or substantially all of the
assets of the Borrower or of the Borrower and its Subsidiaries taken as a
whole, provided, in each case, that no Default shall have occurred and
be continuing at the time of such proposed transaction or would result
therefrom.

 

(c)           Accounting Changes.  Make or permit, or permit any of its Subsidiaries
to make or permit, any change in accounting policies or reporting practices,
except as required or permitted by generally accepted accounting principles.

 

(d)           Subsidiary Debt.  Permit any of its Subsidiaries to create or
suffer to exist any Debt other than:

 

(i)            Debt owed to the
Borrower or to a wholly owned Subsidiary of the Borrower,

 

(ii)           Debt existing on
the Effective Date and described on Schedule 5.02(d) hereto (the “Existing
Debt”), and any Debt extending the maturity of, or refunding or refinancing,
in whole or in part, the Existing Debt, provided that the principal
amount of such Existing Debt shall not be increased above the principal amount
thereof outstanding immediately prior to such extension, refunding or
refinancing, and the direct and contingent obligors therefor shall not be
changed, as a result of or in connection with such extension, refunding or
refinancing,

 

(iii)          Debt secured by
Liens permitted by Section 5.02(a)(ii) or (xiii),

 

(iv)          Debt arising under
Permitted Receivables Financings in an aggregate Invested Amount not to exceed
$250,000,000 at any time outstanding,

 

(v)           unsecured Debt
incurred in the ordinary course of business aggregating for all of the Borrower’s
Subsidiaries not more than $35,000,000 at any one time outstanding,

 

(v)           endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, and

 

(vi)          Debt under the
Subsidiary Guaranty.

 

(e)           Change in Nature of Business.  Make, or permit any of its Subsidiaries to make,
any material change in the nature of the business of the Borrower and its
Subsidiaries, taken as a whole, as carried on at the date hereof.

 

(f)            Payment Restrictions Affecting
Subsidiaries.  Directly or indirectly
enter into or suffer to exist, or permit any of its Subsidiaries to enter into
or suffer to exist, any agreement or arrangement limiting the ability of any of
its Subsidiaries to declare or pay dividends or other distributions in respect
of its equity interests or repay or prepay any Debt owed to, make loans or
advances to, or otherwise transfer 

 

34

 

assets to or
invest in, the Borrower or any Subsidiary of the Borrower (whether through a
covenant restricting dividends, loans, asset transfers or investments, a
financial covenant or otherwise), except (i) any agreement in effect at
the time such Subsidiary becomes a Subsidiary of the Borrower, so long as such
agreement was not entered into solely in contemplation of such Person becoming
a Subsidiary of the Borrower, (ii) any customary agreement restricting
subletting or assignment of any lease governing a leasehold interest, (iii) customary
provisions restricting assignment of any licensing agreement entered into in
the ordinary course of business, (iv) customary provisions restricting the
transfer of assets subject to Liens permitted pursuant to Section 5.02(a),
(v) under an document evidencing a Permitted Receivables Financing and (vi) any
encumbrance or restriction existing under or by reason of applicable law.

 

SECTION 5.03. 
Financial Covenants.  So
long as any Advance shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower will:

 

(a)           Net Worth.  Maintain an excess of Consolidated total
assets over Consolidated total liabilities of not less than $500,000,000.

 

(b)           Capitalization Ratio.  Maintain a ratio of Consolidated Debt to the
sum of Consolidated Debt plus Consolidated shareholders’ equity of not greater
than 0.60 to 1, provided that Consolidated Debt for purposes of this
covenant shall not include obligations under letters of credit in an amount not
to exceed $35,000,000 and shall not include accrued interest.

 

(c)           Interest Coverage Ratio.  Maintain a ratio of Consolidated EBITDA as at
the end of any quarter for the four quarter period then ended of the Borrower
and its Subsidiaries to the sum of interest payable on, and amortization of
debt discount in respect of, all Debt during such period, in each case, by the
Borrower and its Subsidiaries of not less than 3.5 to 1.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

SECTION 6.01. 
Events of Default.  If any
of the following events (“Events of Default”) shall occur and be
continuing:

 

(a)           The Borrower shall fail to pay any
principal of any Advance when the same becomes due and payable; or the Borrower
shall fail to pay any interest on any Advance or make any other payment of fees
or other amounts payable under this Agreement or any Note within three Business
Days after the same becomes due and payable; or

 

(b)           Any representation or warranty made
by the Borrower herein or by the Borrower (or any of its officers) in
connection with this Agreement shall prove to have been incorrect in any
material respect when made; or

 

(c)           (i) The Borrower shall fail to
perform or observe any term, covenant or agreement contained in Section 5.01(d) (as
it relates to the corporate existence of the Borrower), (e), (h) or
(i)(iii), 5.02(a), (c), (d), (e) or (f) or 5.03, or (ii) the
Borrower shall fail to perform or observe any other term, covenant or agreement
contained in Section 5.01(i) if such failure shall remain unremedied
for 10 days after written notice thereof shall have been given to the Borrower
by the Agent or any Lender; or (iii) the Borrower shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement on
its part to be performed or observed if such failure shall remain unremedied
for 20 days after written notice thereof shall have been given to the Borrower
by the Agent or any Lender; or

 

(d)           The Borrower or any of its
Subsidiaries shall fail to pay any principal of or premium or interest on any
Debt that is outstanding in a principal (or, in the case of a Hedge Agreement,
with a termination value) of at least $25,000,000 in the aggregate (but
excluding Debt outstanding hereunder) of

 

35

 

the Borrower or
such Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Debt shall be required to be
made, in each case prior to the stated maturity thereof; or

 

(e)           Any of (x) the Borrower, (y) any
of the Material Subsidiaries or (z) any combination of Subsidiaries of the
Borrower that, in aggregate own assets with a value of 15% or more of the total
value of the assets of the Borrower and its Subsidiaries taken as a whole,
shall generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against the Borrower or any of its Subsidiaries seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any substantial
part of its property and, in the case of any such proceeding instituted against
it (but not instituted by it), either such proceeding shall remain undismissed
or unstayed for a period of 60 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur; or
the Borrower or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (e); or

 

(f)            Judgments or orders for the payment
of money in excess of $25,000,000 in the aggregate shall be rendered against
the Borrower or any of its Subsidiaries and either (i) unstayed
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; provided, however,
that any such judgment or order shall not be an Event of Default under this Section 6.01(f) if
and for so long as (i) the amount of such judgment or order is covered by
a valid and binding policy of insurance between the defendant and the insurer
covering payment thereof and (ii) such insurer, which shall be rated at
least “A” by A.M. Best Company, has been notified of, and has not disputed
the claim made for payment of, the amount of such judgment or order; or

 

(g)           Any non-monetary judgment or order
shall be rendered against the Borrower or any of its Subsidiaries that could be
reasonably expected to have a Material Adverse Effect, and there shall be any
period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or

 

(h)           The Borrower or any of its ERISA
Affiliates shall incur, or shall be reasonably likely to incur liability in
excess of $25,000,000 in the aggregate as a result of one or more of the
following:  (i) the occurrence of
any ERISA Event; (ii) the partial or complete withdrawal of the Borrower
or any of its ERISA Affiliates from a Multiemployer Plan; or (iii) the
reorganization or termination of a Multiemployer Plan; or

 

(i)            any Loan Document after delivery
thereof pursuant to Section 3.01 or 5.01(j) shall for any reason
cease to be valid and binding on or enforceable against any Loan Party party to
it, or any such Loan Party shall so state in writing; or

 

(j)            a Change in Control;

 

36

 

then, and in any such event, the Agent (i) shall
at the request, or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the obligation of each Lender to make Advances (other
than Advances by an Issuing Bank or a Lender pursuant to Section 2.03(c))
and of the Issuing Banks to issue Letters of Credit to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may
with the consent, of the Required Lenders, by notice to the Borrower, declare
the Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Borrower; provided, however,
that in the event of an actual or deemed entry of an order for relief with
respect to the Borrower under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances (other than Advances by an Issuing
Bank or a Lender pursuant to Section 2.03(c)) and of the Issuing Banks to
issue Letters of Credit shall automatically be terminated and (B) the
Advances, all such interest and all such amounts shall automatically become and
be due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.

 

SECTION 6.02. 
Actions in Respect of the Letters of Credit upon Default.  If any Event of Default shall have occurred
and be continuing, the Agent may with the consent, or shall at the request, of
the Required Lenders, irrespective of whether it is taking any of the actions
described in Section 6.01 or otherwise, make demand upon the Borrower to,
and forthwith upon such demand the Borrower will, (a) pay to the Agent on
behalf of the Lenders in same day funds at the Agent’s office designated in
such demand, for deposit in the L/C Cash Collateral Account, an amount equal to
the aggregate Available Amount of all Letters of Credit then outstanding or (b) make
such other arrangements in respect of the outstanding Letters of Credit as
shall be acceptable to the Required Lenders; provided, however,
that in the event of an actual or deemed entry of an order for relief with
respect to the Borrower under the Federal Bankruptcy Code, the Borrower will
pay to the Agent on behalf of the Lenders in same day funds for deposit in the
L/C Cash Collateral Account an amount equal to the aggregate Available Amount
of all Letters of Credit then outstanding, without presentment, demand, protest
or any notice of any kind, all of which are hereby expressly waived by the
Borrower.  If at any time the Agent
determines that any funds held in the L/C Cash Collateral Account are subject
to any right or claim of any Person other than the Agent and the Lenders or
that the total amount of such funds is less than the aggregate Available Amount
of all Letters of Credit, the Borrower will, forthwith upon demand by the
Agent, pay to the Agent, as additional funds to be deposited and held in the
L/C Cash Collateral Account, an amount equal to the excess of (a) such
aggregate Available Amount over (b) the total amount of funds, if any,
then held in the L/C Cash Collateral Account that the Agent determines to be
free and clear of any such right and claim. 
Upon the drawing of any Letter of Credit, to the extent funds are on
deposit in the L/C Cash Collateral Account, such funds shall be applied to
reimburse the Issuing Banks to the extent permitted by applicable law.  After all such Letters of Credit shall have
expired or been fully drawn upon and all other obligations of the Borrower
hereunder and under the Notes shall have been paid in full, the balance, if
any, in such L/C Cash Collateral Account shall be returned to the Borrower.

 

ARTICLE VII

 

THE AGENT

 

SECTION 7.01. 
Authorization and Action. 
Each Lender hereby appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers and discretion under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof, together with such powers and discretion as are reasonably
incidental thereto.  As to any matters
not expressly provided for by this Agreement (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes; provided,
however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to this Agreement
or applicable law.  The Agent agrees to
give to each Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.

 

SECTION 7.02. 
Agent’s Reliance, Etc. 
Neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or any other Loan Document,
except for its or their own gross negligence or willful misconduct.  

 

37

 

Without limitation of the
generality of the foregoing, the Agent:  (i) may
treat the Lender that made any Advance as the holder of the Debt resulting
therefrom until the Agent receives and accepts an Assumption Agreement entered
into by an Assuming Lender as provided in Section 2.18 or 2.19, as the
case may be, or an Assignment and Acceptance entered into by such Lender, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with  the advice of such
counsel, accountants or experts; (iii) makes no warranty or representation
to any Lender and shall not be responsible to any Lender for any statements,
warranties or representations (whether written or oral) made in or in
connection with this Agreement; (iv) shall not have any duty to ascertain
or to inquire as to the performance, observance or satisfaction of any of the
terms, covenants or conditions of this Agreement or any other Loan Document on
the part of any Loan Party or the existence at any time of any Default or to
inspect the property (including the books and records) of any Loan Party; (v) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement, any other Loan Document or any
other instrument or document furnished pursuant hereto; and (vi) shall
incur no liability under or in respect of this Agreement or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telecopier or telex) believed by it to be genuine and
signed or sent by the proper party or parties.

 

SECTION 7.03. 
JPMorgan and Affiliates. 
With respect to its Commitment, the Advances made by it and the Note
issued to it, JPMorgan shall have the same rights and powers under this
Agreement any each other Loan Document as any other Lender and may exercise the
same as though it were not the Agent; and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated, include JPMorgan in its individual
capacity.  JPMorgan and its Affiliates
may accept deposits from, lend money to, act as trustee under indentures of,
accept investment banking engagements from and generally engage in any kind of
business with, the Borrower, any of its Subsidiaries and any Person who may do
business with or own securities of the Borrower or any such Subsidiary, all as
if JPMorgan were not the Agent and without any duty to account therefor to the
Lenders.  The Agent shall have no duty to
disclose any information obtained or received by it or any of its Affiliates
relating to the Borrower or any of its Subsidiaries to the extent such
information was obtained or received in any capacity other than as Agent.

 

SECTION 7.04. 
Lender Credit Decision. 
Each Lender acknowledges that it has, independently and without reliance
upon the Agent or any other Lender and based on the financial statements
referred to in Section 4.01 and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement or any other Loan Document.

 

SECTION 7.05. 
Indemnification.  (a) 
Each Lender severally agrees to indemnify the Agent (to the extent not reimbursed
by the Borrower) from and against such Lender’s Ratable Share of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted by the Agent under or any other Loan Document
(collectively, the “Indemnified Costs”), provided that no Lender
shall be liable for any portion of the Indemnified Costs resulting from the
Agent’s gross negligence or willful misconduct. 
Without limitation of the foregoing, each Lender agrees to reimburse the
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Agent in connection with
the preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement and the other Loan Documents, to the extent that the Agent is not
reimbursed for such expenses by the Borrower. 
In the case of any investigation, litigation or proceeding giving rise
to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by the Agent, any Lender or
a third party.

 

(b)           Each Lender severally agrees to
indemnify the Issuing Banks (to the extent not promptly reimbursed by the
Borrower) from and against such Lender’s Ratable Share of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature

 

 

38

whatsoever that may be imposed on, incurred by, or
asserted against any such Issuing Bank in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted by
such Issuing Bank hereunder or in connection herewith; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Issuing Bank’s gross negligence or willful
misconduct.  Without limitation of the
foregoing, each Lender agrees to reimburse any such Issuing Bank promptly upon
demand for its Ratable Share of any costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) payable by the Borrower
under Section 8.04, to the extent that such Issuing Bank is not promptly
reimbursed for such costs and expenses by the Borrower.

 

(c)           The failure of any Lender to
reimburse the Agent or any Issuing Bank promptly upon demand for its Ratable Share
of any amount required to be paid by the Lenders to the Agent or such Issuing
Bank as provided herein shall not relieve any other Lender of its obligation
hereunder to reimburse the Agent or such Issuing Bank for its Ratable Share of
such amount, but no Lender shall be responsible for the failure of any other
Lender to reimburse the Agent or an Issuing Bank for such other Lender’s
Ratable Share of such amount.  Without
prejudice to the survival of any other agreement of any Lender hereunder, the
agreement and obligations of each Lender contained in this Section 8.05
shall survive the payment in full of principal, interest and all other amounts
payable hereunder and under the Notes.

 

SECTION 7.06. 
Successor Agent.  The Agent
may resign at any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by the Required
Lenders.  Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent
with, so long as no Event of Default has occurred and is continuing, the
consent of the Borrower, which consent shall not be unreasonably withheld or
delayed.  If no successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent’s giving of notice of
resignation or the Required Lenders’ removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000.  Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement and
the other Loan Documents.  After any
retiring Agent’s resignation or removal hereunder as Agent, the provisions of
this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.

 

SECTION 7.07. 
Other Agents.  Each Lender
hereby acknowledges that neither the documentation agent nor any other Lender
designated as any “Agent” on the signature pages hereof has any liability
hereunder other than in its capacity as a Lender.

 

ARTICLE VIII

 

MISCELLANEOUS

 

SECTION 8.01. 
Amendments, Etc.  No
amendment or waiver of any provision of this Agreement or any other Loan
Document, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Required
Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that (a) no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, do any of the following:  (i) waive any of the conditions
specified in Section 3.01, (ii) change the number of Lenders or the
percentage of (x) the Commitments, (y) the aggregate unpaid principal
amount of the Advances or (z) the aggregate Available Amount of
outstanding Letters of Credit that, in each case, shall be required for the
Lenders or any of them to take any action hereunder or (iii) amend this Section 8.01
and (b) no amendment, waiver or consent shall, unless in writing and
signed by the Required Lenders and each Lender that is directly affected by
such amendment, waiver or consent, (i) increase the Commitments of such
Lender (other than as provided in Section 2.18), (ii) reduce the
principal of, or interest on, the Notes held by such Lender or any fees or
other amounts payable hereunder to such Lender, or (iii) postpone any date
fixed for any payment of principal of, or interest on, the Notes held by such
Lender or any fees or other amounts payable hereunder to such Lender (other
than as provided in Section 2.19), and 

 

39

 

provided  further that no amendment, waiver
or consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Agent under this Agreement or any other Loan Document and no amendment, waiver
or consent shall, unless in writing and signed by the Issuing Banks in addition
to the Lenders required above to take such action, adversely affect the rights
or obligations of the Issuing Banks in their capacities as such under this
Agreement.

 

SECTION 8.02. 
Notices, Etc.  (a) 
All notices and other communications provided for hereunder shall be in writing
(including telecopier communication) and mailed, telecopied or delivered, if to
the Borrower, at its address at 1900 West Field Court, Lake Forest,
Illinois  60045, Attention:  Chief Financial Officer; if to any Initial
Lender, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assumption Agreement or the Assignment and Acceptance pursuant
to which it became a Lender; and if to the Agent, at its address at 1111
Fannin, 10th Floor, Houston, Texas 77002, Attention:  Jeremy Jones (Telecopy No. (713)
750-2223; E-Mail Address: 
jeremy.m.jones@jpmorgan.com), with a copy to 270 Park Avenue, 4th Floor,
New York, New York 10017, Attention: 
Peter S. Predun (Telecopy No. (212) 270-5100; E-Mail Address:
peter.predun@jpmorgan.com); or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Agent.  All such notices and
communications shall, when mailed, telecopied or delivered, be effective when
deposited in the mails, telecopied or delivered, respectively, except that
notices and communications to the Agent pursuant to Article II, III
or VII shall not be effective until received by the Agent.  Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or
any other Loan Document or of any Exhibit hereto to be executed and
delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.

 

SECTION 8.03. 
No Waiver; Remedies.  No
failure on the part of any Lender or the Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

 

SECTION 8.04. 
Costs and Expenses.  (a) 
The Borrower agrees to pay on demand all reasonable costs and expenses of the
Agent in connection with the preparation, execution, delivery, administration,
modification and amendment of this Agreement, the other Loan Documents and the
other documents to be delivered hereunder, including, without limitation, (A) all
due diligence, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, appraisal, consultant, and
audit expenses and (B) the reasonable fees and expenses of counsel for the
Agent with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under this Agreement and the other Loan Documents.  The Borrower further agrees to pay on demand
all costs and expenses of the Agent and the Lenders, if any (including, without
limitation, reasonable counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement, the other Loan Documents and the other documents to be
delivered hereunder, including, without limitation, reasonable fees and
expenses of counsel for the Agent and each Lender in connection with the
enforcement of rights under this Section 8.04(a).

 

(b)           The
Borrower agrees to indemnify and hold harmless the Agent and each Lender and
each of their Affiliates and their officers, directors, employees, agents and
advisors (each, an “Indemnified Party”) from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation or proceeding or preparation of a defense in
connection therewith) (i) this Agreement, the other Loan Documents, any of
the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances or (ii) the actual or alleged presence of
Hazardous Materials on any property of the Borrower or any of its Subsidiaries
or any Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense resulted from such Indemnified Party’s gross negligence or willful
misconduct.  In the case of an
investigation, litigation or other proceeding to which the indemnity in this Section 8.04(b) applies,
such indemnity shall be effective whether or not such investigation, litigation
or proceeding is brought by the Borrower, its directors, equityholders or
creditors or an Indemnified Party or any other Person, whether or not any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated.  The
Borrower also agrees not to assert any claim for special, indirect,
consequential or 

 

40

 

punitive damages against
the Agent, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of
liability, arising out of or otherwise relating to this Agreement, the other
Loan Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Advances.

 

(c)           If
any payment of principal of, or Conversion of, any Eurodollar Rate Advance is
made by the Borrower to or for the account of a Lender other than on the last
day of the Interest Period for such Advance, as a result of a payment or
Conversion pursuant to Section 2.08(d) or (e), 2.10 or 2.12,
acceleration of the maturity of the Notes pursuant to Section 6.01 or for
any other reason, or by an Eligible Assignee to a Lender other than on the last
day of the Interest Period for such Advance upon an assignment of rights and
obligations under this Agreement pursuant to Section 8.07 as a result of a
demand by the Borrower pursuant to Section 8.07(a), the Borrower shall,
upon demand by such Lender (with a copy of such demand to the Agent), pay to
the Agent for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses that it may reasonably
incur as a result of such payment or Conversion, including, without limitation,
any loss (excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired
by any Lender to fund or maintain such Advance.

 

(d)           Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in Sections 2.11,
2.14 and 8.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the Notes.

 

SECTION 8.05. 
Right of Set-off.  Upon (i) the
occurrence and during the continuance of any Event of Default and (ii) the
making of the request or the granting of the consent specified by Section 6.01
to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender or 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, any Note
held by such Lender and the other Loan Documents, whether or not such Lender
shall have made any demand under this Agreement or such Note and although such
obligations may be unmatured.  Each
Lender agrees promptly to notify the applicable Loan Party after any such
set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application.  The rights of each Lender and its Affiliates
under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender and
its Affiliates may have.

 

SECTION 8.06. 
Binding Effect.  This
Agreement shall become effective (other than Section 2.01, which shall
only become effective upon satisfaction of the conditions precedent set forth
in Section 3.01) when it shall have been executed by the Borrower and the
Agent and when the Agent shall have been notified by each Initial Lender that
such Initial Lender has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.

 

SECTION 8.07. 
Assignments and Participations. 
(a)  Each Lender may with the consent of the Agent, each Issuing
Bank and, so long as no Event of Default has occurred and is continuing, the
Borrower (which consents shall not be unreasonably withheld or delayed), and,
if demanded by the Borrower (following a demand by such Lender pursuant to Section 2.11,
2.14 or 2.20) upon at least five Business Days’ notice to such Lender and the
Agent, will assign to one or more Persons all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Revolving Credit Commitment, its Unissued Letter of Credit
Commitment, the Advances owing to it, its participations in Letters of Credit
and the Note or Notes held by it); provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage of all of
its rights and obligations under this Agreement, (ii) except in the case
of an assignment to a Person that, immediately prior to such assignment, was a
Lender or an assignment of all of a Lender’s rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than (x) in
the case of an assignment of Revolving Credit Commitment, $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and (y) in the case of
an assignment of Unissued Letter of Credit 

 

41

 

Commitment, $5,000,000 or
an integral multiple of $1,000,000 in excess thereof, in each case unless the
Agent and, if no Default has occurred and is continuing, the Borrower otherwise
agree, (iii) each such assignment shall be to an Eligible Assignee, (iv) each
such assignment made as a result of a demand by the Borrower pursuant to this Section 8.07(a) shall
be arranged by the Borrower after consultation with the Agent and shall be
either an assignment of all of the rights and obligations of the assigning
Lender under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to
make any such assignment as a result of a demand by the Borrower pursuant to
this Section 8.07(a) unless and until such Lender shall have received
one or more payments from either the Borrower or one or more Eligible Assignees
in an aggregate amount at least equal to the aggregate outstanding principal
amount of the Advances owing to such Lender, together with accrued interest
thereon to the date of payment of such principal amount and all other amounts
payable to such Lender under this Agreement, (vi) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
subject to such assignment and a processing and recordation fee of $3,500
payable by the parties to each such assignment, provided, however,
that in the case of each assignment made as a result of a demand by the
Borrower, such recordation fee shall be payable by the Borrower except that no
such recordation fee shall be payable in the case of an assignment made at the
request of the Borrower to an Eligible Assignee that is an existing Lender and (vii) no
consent of the Borrower, the Agent or any Issuing Bank shall be required in the
case of an assignment to any Affiliate of the assigning Lender or in the case
of an assignment to a Person that, immediately prior to such assignment, was a
Lender.  Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights (other
than its rights under Sections 2.11, 2.14 and 8.04 to the extent any claim
thereunder relates to an event arising prior to such assignment) and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease
to be a party hereto).

 

(b)           By
executing and delivering an Assignment and Acceptance, the Lender assignor
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows:  (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any
Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Loan Document or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Loan
Party or the performance or observance by any Loan Party of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon the Agent, such assigning Lender
or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under any Loan Document as are delegated to the
Agent by the terms hereof or thereof, together with such powers and discretion
as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all of the obligations that by
the terms of this Agreement are required to be performed by it as a Lender.

 

(c)           Upon
its receipt of an Assignment and Acceptance executed by an assigning Lender and
an assignee representing that it is an Eligible Assignee, together with any
Note or Notes subject to such assignment, the Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower.

 

42

 

(d)                 The
Agent shall maintain at its address referred to in Section 8.02 a copy of
each Assumption Agreement and each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the “Register”).  The entries in the Register shall be prima
facie evidence of the correctness thereof  and binding for all purposes, absent manifest
error, and the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement.  The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.

 

(e)           Each
Lender may sell participations to one or more banks or other entities (other
than any Loan Party or any of its Affiliates) in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment, its participation in Letters of Credit, the
Advances owing to it and any Note or Notes held by it); provided, however,
that (i) such Lender’s obligations under this Agreement (including,
without limitation, its Commitment to the Borrower hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender
shall remain the holder of any such Note for all purposes of this Agreement, (iv) each
Loan Party, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or any other Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder,
in each case to the extent subject to such participation.

 

(f)            Any
Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 8.07, disclose to the
assignee or participant or proposed assignee or participant, any information
relating to the Loan Parties furnished to such Lender by or on behalf of the
Loan Parties; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Borrower Information relating to the Loan Parties
received by it from such Lender.

 

(g)           Notwithstanding
any other provision set forth in this Agreement, any Lender may at any time
create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to it and any Note
or Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.

 

SECTION 8.08. 
Confidentiality.  Neither
the Agent nor any Lender may disclose to any Person any confidential,
proprietary or non-public information of the Loan Parties furnished to the
Agent or the Lenders by any Loan Party (such information being referred to
collectively herein as the “Borrower
Information”), except that each of the Agent and each of the Lenders
may disclose Borrower Information (i) to its and its affiliates’ employees,
officers, directors, agents and advisors on a need to know basis (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Borrower Information and instructed to keep
such Borrower Information confidential on substantially the same terms as
provided herein), (ii) to the extent requested by any regulatory
authority, (iii) to the extent required by applicable laws or regulations
or by any subpoena or similar legal process, (iv) to any other party to
this Agreement, (v) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement, the
other Loan Documents or the enforcement of rights hereunder or thereunder, (vi) subject
to an agreement containing provisions substantially the same as those of this Section 8.08,
to any assignee or participant or prospective assignee or participant, (vii) to
the extent such Borrower Information (A) is or becomes generally available
to the public on a non-confidential basis other than as a result of a breach of
this Section 8.08 by the Agent or a Lender, or (B) is or becomes
available to the Agent or such Lender on a nonconfidential basis from a source
other than the Loan Parties and (viii) with the consent of any Loan Party,
provided, that, prior to any disclosure pursuant to (ii) or (iii) above,
the disclosing party agrees that it will notify the Borrower as soon as
practical in the event of any such request for a disclosure, unless such
notification shall be prohibited by applicable law or legal process.

 

43

 

SECTION 8.09. 
Governing Law.  This
Agreement and the Notes shall be governed by, and construed in accordance with,
the laws of the State of New York.

 

SECTION 8.10. 
Execution in Counterparts. 
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. 
Delivery of an executed counterpart of a signature page to this
Agreement by telecopier or in .pdf or similar file shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

SECTION 8.11. 
Jurisdiction, Etc.  (a) 
Each of the parties hereto hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York
State court or federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York
State court or, to the extent permitted by law, in such federal court. The
Borrower hereby agrees and consents to the service of process in any action or
proceeding in such courts by the mailing thereof by any parties hereto by
registered or certified mail, postage prepaid, to the Borrower at its address
specified pursuant to Section 8.02. 
Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents in the courts
of any jurisdiction.

 

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

 

SECTION 8.12. 
No Liability of the Issuing Banks.  Neither the Agent, the Lenders nor any
Issuing Bank, nor any of their respective Affiliates or their respective
officers, directors, employees, agents and advisors, shall have any liability
or responsibility by reason of or in connection with the issuance or transfer
of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in Section 2.06(b)),
or any error, omission, interruption, loss or delay in transmission or delivery
of any draft, notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder), any
error in interpretation of technical terms or any consequence arising from
causes beyond the control of the applicable Issuing Bank; provided that
the foregoing shall not be construed to excuse any Issuing Bank from liability
to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by such Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. 
The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the applicable Issuing Bank,
such Issuing Bank shall be deemed to have exercised care in each such
determination.  In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the applicable
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the terms
of such Letter of Credit.

 

SECTION 8.13. 
Patriot Act Notice.  Each
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 each borrower, guarantor or grantor (the “Loan
Parties”), which information includes the name and address of each Loan
Party and other information that will allow such Lender to identify such Loan
Party in accordance with the Act.

 

44

 

SECTION 8.14. 
Waiver of Jury Trial.  Each
of the Borrower, the Agent and the Lenders hereby irrevocably waives all right
to trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement or
the other Loan Documents or the actions of the Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.

 

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

 

	
   

  	
  PACKAGING CORPORATION
  OF AMERICA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Richard B. West

  
	
   

  	
  Title:          Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,
  N.A.,

  
	
   

  	
       as
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Peter S. Predun

  
	
   

  	
  Title:  Executive
  Director

  
	
   

  	
   

  
	
   

  	
  Initial Lenders

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK AG NEW
  YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ signature illegible

  
	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ signature illegible

  
	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Peter S. Predun

  
	
   

  	
  Title:  Executive
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION BANK OF
  CALIFORNIA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Christine Davis

  
	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Michael L. Letson, Jr.

  
	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  
									

 

45

 

	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ signature illegible

  
	
   

  	
  Title:  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BMO CAPITAL MARKETS
  FINANCING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Thad D. Rasche

  
	
   

  	
  Title:  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE NORTHERN TRUST
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ signature illegible

  
	
   

  	
  Title:  Second
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL CITY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  Rachel M. Williamson

  
	
   

  	
  Title:  Vice
  President

  
					

 

46

 

SCHEDULE I

PACKAGING CORPORATION OF AMERICA

FIVE YEAR CREDIT AGREEMENT

APPLICABLE LENDING OFFICES

 

	
  Name of Initial Lender

  	
   

  	
  Revolving Credit Commitment

  	
   

  	
  Letter of Credit Commitment

  	
   

  	
  Domestic Lending Office

  	
   

  	
  Eurodollar Lending Office

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  18,750,000

  	
   

  	
   

  	
   

  	
  315 Montgomery St. 

  San Francisco, CA 94104 

  Attn: Anna Marie Finn

  T: 925 675-8312

  F: 888 969-9238

  	
   

  	
  315 Montgomery St. 

  San Francisco, CA 94104 Attn: Anna Marie Finn 

  T: 925 675-8312

  F: 888 969-9238

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BMO Capital Markets Financing, Inc.

  	
   

  	
  $

  	
  12,500,000

  	
   

  	
    

  	
   

  	
  111 W. Monroe 

  Chicago, IL 60603

  Attn: Blanca Velez

  T: (312) 461-3775

  F: (312) 293-5283 

  	
   

  	
  111 W. Monroe 

  Chicago, IL 60603 

  Attn: Blanca Velez 

  T: (312) 461-3775

  F: (312) 293-5283

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank AG New York Branch

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
   

  	
   

  	
  60 Wall Street

  New York, NY 10005 

  Attn: Joe Cusmai

  T: (201) 593-2202

  F: (201) 593-2313

  	
   

  	
  60 Wall Street

  New York, NY 10005 

  Attn: Joe Cusmai

  T: (201) 593-2202

  F: (201) 593-2313

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  1111 Fannin, 10th Floor 

  Houston, TX 77002 

  Attn: Jeremy Jones 

  (Telecopy T: 

  F: (713) 750-2223 

   

  with a copy to:

  270 Park Avenue, 4th Floor 

  New York, NY 10017 

  Attn: Peter S. Predun 

  T: (212) 270-7005 

  F: (212) 270-5100 

  	
   

  	
  1111 Fannin, 10th Floor 

  Houston, TX 77002 

  Attn: Jeremy Jones 

  (Telecopy T: 

  F: (713) 750-2223 

   

  with a copy to:

  270 Park Avenue, 4th Floor 

  New York, NY 10017 

  Attn: Peter S. Predun 

  T: (212) 270-7005 

  F: (212) 270-5100 

   

  	
   

  
												

 

 

	
  National City Bank

  	
   

  	
  $

  	
  12,500,000

  	
   

  	
   

  	
   

  	
  One North Franklin 

  20th Floor 

  Chicago, IL 60606 

  Attn: Donna Benson 

  T: (312) 338-2207 

  F: (312) 782-7084

  	
   

  	
  One North Franklin 

  20th Floor 

  Chicago, IL 60606 

  Attn: Donna Benson 

  T: (312) 338-2207 

  F: (312) 782-7084

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Northern Trust Company

  	
   

  	
  $

  	
  12,500,000

  	
   

  	
   

  	
   

  	
  50 S. LaSalle Street 

  Chicago, IL 60675 

  Attn: Linda Honda

  T: 312 444-3532 

  F: 312 444-3502

  	
   

  	
  50 S. LaSalle Street 

  Chicago, IL 60675

  Attn: Linda Honda 

  T: 312 444-3532 

  F: 312 444-3502

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Union Bank of California, N.A.

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
   

  	
   

  	
  1980 Saturn Street 

  Monterey Park, CA 91755 

  Attn: Shirley Davis 

  T: 323 720-2870 

  F: 323 724-6198

  	
   

  	
  1980 Saturn Street

  Monterey Park, CA 91755 

  Attn: Shirley Davis 

  T: 323 720-2870 

  F: 323 724-6198

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  $

  	
  18,750,000

  	
   

  	
   

  	
   

  	
  301 South College Street 

  Charlotte, NC 28288 

  Attn: Sherry Richards 

  T: 704 715-1459 

  F: 704 374-2802

  	
   

  	
  301 South College Street 

  Charlotte, NC 28288 

  Attn: Sherry Richards 

  T: 704 715-1459 

  F: 704 374-2802

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  150,000,000

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
												

 

2

EXHIBIT A - FORM OF

PROMISSORY NOTE

 

	
  U.S.$ 

  	
   

  	
   

  	
  Dated: 

  	
   

  	
  ,200

  	
   

  	
   

  

 

 

FOR VALUE RECEIVED, the
undersigned, Packaging Corporation of America, a Delaware corporation (the 

	
  “Borrower”),
  HEREBY PROMISES TO PAY to the order of 

  	
   

  	
  (the “Lender”)
  for the account of its

  

 Applicable Lending Office on the Termination
Date applicable to the Lender (each as defined in the Credit Agreement referred
to below) the principal sum of U.S.$[amount of the Lender’s Commitment in
figures] or, if less, the aggregate principal amount of the Advances made by
the Lender to the Borrower pursuant to the Five Year Credit Agreement dated as
of April 15, 2008 among the Borrower, the Lender and certain other lenders
parties thereto, Deutsche Bank AG New York Branch, as syndication agent, Deutsche
Bank Securities Inc., as sole lead arranger and book manager, and JPMorgan
Chase Bank, N.A., as Agent for the Lender and such other lenders (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; the terms defined therein being used herein as
therein defined) outstanding on such Termination Date.

 

The Borrower promises to
pay interest on the unpaid principal amount of each Advance from the date of
such Advance until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Credit Agreement.

 

Both principal and
interest are payable in lawful money of the United States of America to
JPMorgan, as Agent, at 1111 Fannin, 10th Floor, Houston, Texas 77002, in same
day funds.  Each Advance owing to the
Lender by the Borrower pursuant to the Credit Agreement, and all payments made
on account of principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note.

 

This Promissory Note is
one of the Notes referred to in, and is entitled to the benefits of, the Credit
Agreement.  The Credit Agreement, among
other things, (i) provides for the making of Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Advance being evidenced by this
Promissory Note and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified.

 

	
   

  	
  PACKAGING CORPORATION
  OF AMERICA

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  

 

 

ADVANCES AND
PAYMENTS OF PRINCIPAL

 

	
  

  Date

  	
   

  	
   

  	
  

  Amount of

  Advance

  	
   

  	
   

  	
  Amount of

  Principal Paid

  or Prepaid

  	
   

  	
   

  	
  

  Unpaid Principal

  Balance

  	
   

  	
   

  	
  

  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

2

 

 

EXHIBIT B - FORM OF NOTICE OF

BORROWING

 

JPMorgan Chase Bank,
N.A., as Agent

  for the Lenders parties

  to the Credit Agreement

  referred to below

  1111 Fannin, 10th Floor,

  Houston, Texas 77002

 

[Date]

 

Attention:  Loan and Agency Services

 

Ladies and Gentlemen:

 

The undersigned,
Packaging Corporation of America, refers to the Five Year Credit Agreement,
dated as of April 15, 2008 (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”, the
terms defined therein being used herein as therein defined), among the
undersigned, certain Lenders parties thereto, Deutsche Bank AG New York Branch,
as syndication agent, Deutsche Bank Securities Inc., as sole lead arranger and
book manager, and JPMorgan Chase Bank, N.A., as Agent for said Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 2.02 of the
Credit Agreement that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the “Proposed Borrowing”) as required by Section 2.02(a) of
the Credit Agreement:

 

	
  (i)            The
  Business Day of the Proposed Borrowing is 

  	
                           

  	
  ,200

  	
  .

  

 

(ii)           The Type of Advances comprising the
Proposed Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].

 

	
  (iii)          The
  aggregate amount of the Proposed Borrowing is $

  	
                                

  	
  .

  

 

	
  [(iv)         The initial Interest Period for each
  Eurodollar Rate Advance made as part of the Proposed 

  
	
  Borrowing is

  	
   

  	
   month[s].]

  

 

The undersigned hereby
certifies that the following statements are true on the date hereof, and will
be true on the date of the Proposed Borrowing:

 

(A)          the representations and warranties
contained in Section 4.01 of the Credit Agreement are correct, before and
after giving effect to the Proposed Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date; and

 

 

 

(B)           no event has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds therefrom, that constitutes a Default.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  PACKAGING CORPORATION
  OF AMERICA

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:.

  

 

2

 

EXHIBIT C - FORM OF

ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the
Five Year Credit Agreement dated as of April 15, 2008 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among Packaging Corporation of America, a Delaware corporation
(the “Borrower”), the Lenders (as defined in the Credit Agreement),
Deutsche Bank AG New York Branch, as syndication agent, Deutsche Bank
Securities Inc., as sole lead arranger and book manager, and JPMorgan Chase
Bank, N.A., as Agent for the Lenders (the “Agent”).  Terms defined in the Credit Agreement are
used herein with the same meaning.

 

The “Assignor” and the “Assignee”
referred to on Schedule I hereto agree as follows:

 

1.             The Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, an interest in
and to the Assignor’s rights and obligations under the Credit Agreement as of
the date hereof equal to the percentage interest specified on Schedule 1 hereto
of all outstanding rights and obligations under the Credit Agreement.  After giving effect to such sale and assignment,
the Assignee’s Commitments and the amount of the Advances owing to the Assignee
will be as set forth on Schedule 1 hereto.

 

2.             The Assignor (i) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (ii) makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto; (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or the performance or observance by any Loan Party of any of
its obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Note, if any, held by
the Assignor [and requests that the Agent exchange such Note for a new Note
payable to the order of [the Assignee in an amount equal to the Commitment[s]
assumed by the Assignee pursuant hereto or new Notes payable to the order of
the Assignee in an amount equal to the Commitment[s] assumed by the Assignee
pursuant hereto and] the Assignor in an amount equal to the Commitment[s]
retained by the Assignor under the Credit Agreement, [respectively,] as
specified on Schedule 1 hereto.

 

3.             The Assignee (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements
referred to in Section 4.01 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it
will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement and the other Loan Documents; (iii) confirms
that it is an Eligible Assignee; (iv) appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement and the other Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a Lender; and (vi) attaches
any U.S. Internal Revenue Service forms required under Section 2.14 of the
Credit Agreement.

 

4.             Following the execution of this Assignment and
Acceptance, it will be delivered to the Agent for acceptance and recording by
the Agent.  The effective date for this
Assignment and Acceptance (the “Effective Date”) shall be the date of
acceptance hereof by the Agent, unless otherwise specified on Schedule 1
hereto.

 

 

1

 

5.             Upon such acceptance and recording by the Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement.

 

6.             Upon such acceptance and recording by the Agent, from
and after the Effective Date, the Agent shall make all payments under the
Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest, facility
fees and commission with respect thereto) to the Assignee.  The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes
for periods prior to the Effective Date directly between themselves.

 

7.             This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

8.             This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
agreement.  Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.

 

IN WITNESS WHEREOF, the
Assignor and the Assignee have caused Schedule 1 to this Assignment and
Acceptance to be executed by their officers thereunto duly authorized as of the
date specified thereon.

 

 

2

 

Schedule 1

to

Assignment and
Acceptance

 

	
  Revolving Credit Facility:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Percentage interest assigned: 

  	
   

  	
   

  	
   

  	
   

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Assignee’s Revolving Credit Commitment:

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aggregate outstanding principal amount of Advances
  assigned:

  	
  $

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal amount of Note payable to Assignee:

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal amount of Note payable to Assignor:

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Letter of Credit Facility:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Percentage interest assigned: 

  	
   

  	
   

  	
   

  	
   

  	
  %

  	
   

  
	
   

  
	
  Assignee’s Letter of Credit Commitment:

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  
	
  Effective Date*:

  	
   

  	
  ,200

  	
   

  	
   

  	
   

  
	
   

  
												

 

	
   

  	
  [NAME OF ASSIGNOR], as
  Assignor

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: 

  	
                                

  	
  , 200

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [NAME OF ASSIGNEE], as
  Assignee

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: 

  	
                                

  	
  , 200

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Domestic Lending
  Office:

  
	
   

  	
  [Address]

  
	
   

  	
   

  
	
   

  	
  Eurodollar Lending
  Office:

  
	
   

  	
  [Address]

  
	
   

  	
   

  
							

Accepted [and Approved]*
this

*              This date should be no earlier than five Business Days
after the delivery of this Assignment and Acceptance to the Agent.

 

 

3

 

	
          

  	
  day of

  	
                               

  	
  , 200

  	
   

  	
   

  
	
   

  
	
  JPMORGAN CHASE BANK,
  N.A., as Agent

  
	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  
	
  [Approved this 

  	
        

  	
   day

  
	
  of

  	
                                

  	
  , 200

  	
   

  	
   

  
	
   

  
	
   

  
	
  PACKAGING CORPORATION
  OF AMERICA

  
	
   

  
	
  By

  	
   

  	
  ]*

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  [Approved this 

  	
        

  	
   day

  
	
  of

  	
                                

  	
  , 200

  	
   

  	
   

  
	
   

  
	
   

  
	
  [NAME OF ISSUING BANK]

  
	
   

  
	
  By

  	
   

  	
  ]**

  
	
   

  	
  Title:

  
												

*              Required if the Assignee is an Eligible Assignee solely
by reason of clauses (a)(iii), (iv) or (v) or clause (b) of
the definition of “Eligible Assignee”.

**           Required if the Assignee becomes a Lender under the
Revolving Credit Facility and is an Eligible Assignee solely by reason of
clauses (a)(iii), (iv) or (v) of the definition of “Eligible
Assignee”.

 

 

4

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