Document:

Exhibit 10.1

 

EXECUTION COPY

 

 

$150,000,000

 

CREDIT AGREEMENT

 

among

 

LOUISIANA-PACIFIC
CORPORATION,

as Borrower,

 

and

 

THE DOMESTIC SUBSIDIARIES OF THE BORROWER

FROM TIME TO TIME PARTIES HERETO,

as Guarantors,

 

THE LENDERS PARTIES HERETO,

 

WACHOVIA
BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

 

BANK
OF AMERICA, N.A.,

as Collateral Agent and Syndication Agent,

 

and

 

ROYAL
BANK OF CANADA
and

THE BANK
OF NOVA SCOTIA,

as Documentation Agents

 

Dated as of September 1, 2004

 

 

 

WACHOVIA
CAPITAL MARKETS, LLC,

as Joint-Lead Arranger and Sole Book Runner

and

BANC OF AMERICA SECURITIES LLC,

as Joint-Lead Arranger

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I  DEFINITIONS

  	
   

  
	
   

  	
  Section 1.1

  	
  Defined Terms.

  	
   

  
	
   

  	
  Section 1.2

  	
  Other Definitional Provisions.

  	
   

  
	
   

  	
  Section 1.3

  	
  Accounting Terms.

  	
   

  
	
   

  	
  Section 1.4

  	
  Time References.

  	
   

  
	
  ARTICLE II  THE LOANS; AMOUNT AND TERMS

  	
   

  
	
   

  	
  Section 2.1

  	
  Revolving Loans.

  	
   

  
	
   

  	
  Section 2.2

  	
  Letter of Credit Subfacility.

  	
   

  
	
   

  	
  Section 2.3

  	
  Swingline Loan Subfacility.

  	
   

  
	
   

  	
  Section 2.4

  	
  Incremental Facility.

  	
   

  
	
   

  	
  Section 2.5

  	
  Fees.

  	
   

  
	
   

  	
  Section 2.6

  	
  Commitment Reductions.

  	
   

  
	
   

  	
  Section 2.7

  	
  Prepayments.

  	
   

  
	
   

  	
  Section 2.8

  	
  Minimum Principal Amount of Tranches.

  	
   

  
	
   

  	
  Section 2.9

  	
  Default Rate and Payment Dates.

  	
   

  
	
   

  	
  Section 2.10

  	
  Conversion Options.

  	
   

  
	
   

  	
  Section 2.11

  	
  Computation of Interest and Fees.

  	
   

  
	
   

  	
  Section 2.12

  	
  Pro Rata Treatment and Payments.

  	
   

  
	
   

  	
  Section 2.13

  	
  Non-Receipt of Funds by the Administrative
  Agent.

  	
   

  
	
   

  	
  Section 2.14

  	
  Inability to Determine Interest Rate.

  	
   

  
	
   

  	
  Section 2.15

  	
  Illegality.

  	
   

  
	
   

  	
  Section 2.16

  	
  Requirements of Law.

  	
   

  
	
   

  	
  Section 2.17

  	
  Indemnity.

  	
   

  
	
   

  	
  Section 2.18

  	
  Taxes.

  	
   

  
	
   

  	
  Section 2.19

  	
  Indemnification; Nature of Issuing Lender’s
  Duties.

  	
   

  
	
  ARTICLE III  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
  Section 3.1

  	
  Financial Condition.

  	
   

  
	
   

  	
  Section 3.2

  	
  No Change.

  	
   

  
	
   

  	
  Section 3.3

  	
  Corporate Existence; Corporate Power;
  Enforceability.

  	
   

  
	
   

  	
  Section 3.4

  	
  Governmental Approvals.

  	
   

  
	
   

  	
  Section 3.5

  	
  No Legal Bar; No Default.

  	
   

  
	
   

  	
  Section 3.6

  	
  No Material Litigation.

  	
   

  
	
   

  	
  Section 3.7

  	
  Government Acts.

  	
   

  
	
   

  	
  Section 3.8

  	
  Margin Regulations.

  	
   

  
	
   

  	
  Section 3.9

  	
  Compliance with Laws.

  	
   

  
	
   

  	
  Section 3.10

  	
  ERISA.

  	
   

  
	
   

  	
  Section 3.11

  	
  Environmental Matters.

  	
   

  
	
   

  	
  Section 3.12

  	
  Purpose of Extensions of Credit.

  	
   

  
	
   

  	
  Section 3.13

  	
  Subsidiaries.

  	
   

  
	
   

  	
  Section 3.14

  	
  Ownership.

  	
   

  
	
   

  	
  Section 3.15

  	
  Indebtedness.

  	
   

  
	
   

  	
  Section 3.16

  	
  Taxes.

  	
   

  
	
   

  	
  Section 3.17

  	
  Solvency.

  	
   

  

 

i

 

	
   

  	
  Section 3.18

  	
  Investments.

  	
   

  
	
   

  	
  Section 3.19

  	
  No Burdensome Restrictions.

  	
   

  
	
   

  	
  Section 3.20

  	
  Accuracy and Completeness of Information.

  	
   

  
	
   

  	
  Section 3.21

  	
  Material Contracts.

  	
   

  
	
   

  	
  Section 3.22

  	
  Insurance.

  	
   

  
	
   

  	
  Section 3.23

  	
  Anti-Terrorism Laws.

  	
   

  
	
  ARTICLE IV  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
  Section 4.1

  	
  Conditions to Closing Date and Initial
  Revolving Loans.

  	
   

  
	
   

  	
  Section 4.2

  	
  Conditions to All Extensions of Credit.

  	
   

  
	
  ARTICLE V  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
  Section 5.1

  	
  Financial Statements.

  	
   

  
	
   

  	
  Section 5.2

  	
  Certificates; Other Information.

  	
   

  
	
   

  	
  Section 5.3

  	
  Payment of Obligations.

  	
   

  
	
   

  	
  Section 5.4

  	
  Conduct of Business and Maintenance of
  Existence.

  	
   

  
	
   

  	
  Section 5.5

  	
  Maintenance of Property; Insurance.

  	
   

  
	
   

  	
  Section 5.6

  	
  Inspection of Property; Books and Records;
  Discussions.

  	
   

  
	
   

  	
  Section 5.7

  	
  Notices.

  	
   

  
	
   

  	
  Section 5.8

  	
  Environmental Laws.

  	
   

  
	
   

  	
  Section 5.9

  	
  Financial Covenants.

  	
   

  
	
   

  	
  Section 5.10

  	
  Additional Subsidiary Guarantors.

  	
   

  
	
   

  	
  Section 5.11

  	
  Compliance with Law.

  	
   

  
	
   

  	
  Section 5.12

  	
  Cash Collateral.

  	
   

  
	
  ARTICLE VI  NEGATIVE COVENANTS

  	
   

  
	
   

  	
  Section 6.1

  	
  Indebtedness.

  	
   

  
	
   

  	
  Section 6.2

  	
  Liens.

  	
   

  
	
   

  	
  Section 6.3

  	
  Nature of Business.

  	
   

  
	
   

  	
  Section 6.4

  	
  Consolidation, Merger, Sale or Purchase of Assets, etc.

  	
   

  
	
   

  	
  Section 6.5

  	
  Advances, Investments and Loans.

  	
   

  
	
   

  	
  Section 6.6

  	
  Transactions with Affiliates.

  	
   

  
	
   

  	
  Section 6.7

  	
  Ownership of Subsidiaries; Restrictions.

  	
   

  
	
   

  	
  Section 6.8

  	
  Fiscal Year; Organizational Documents;
  Material Contracts.

  	
   

  
	
   

  	
  Section 6.9

  	
  Limitation on Restricted Actions.

  	
   

  
	
   

  	
  Section 6.10

  	
  Restricted Payments.

  	
   

  
	
   

  	
  Section 6.11

  	
  No Further Negative Pledges.

  	
   

  
	
  ARTICLE VII  EVENTS OF DEFAULT

  	
   

  
	
   

  	
  Section 7.1

  	
  Events of Default.

  	
   

  
	
   

  	
  Section 7.2

  	
  Acceleration; Remedies.

  	
   

  
	
  ARTICLE VIII  THE AGENTS

  	
   

  
	
   

  	
  Section 8.1

  	
  Appointment.

  	
   

  
	
   

  	
  Section 8.2

  	
  Delegation of Duties.

  	
   

  
	
   

  	
  Section 8.3

  	
  Exculpatory Provisions.

  	
   

  
	
   

  	
  Section 8.4

  	
  Reliance by Agents.

  	
   

  
	
   

  	
  Section 8.5

  	
  Notice of Default.

  	
   

  
	
   

  	
  Section 8.6

  	
  Non-Reliance on Agents and Other Lenders.

  	
   

  
	
   

  	
  Section 8.7

  	
  Indemnification.

  	
   

  
	
   

  	
  Section 8.8

  	
  Agents in Their Individual Capacity.

  	
   

  

 

ii

 

	
   

  	
  Section 8.9

  	
  Successor Agents.

  	
   

  
	
   

  	
  Section 8.10

  	
  Nature of Duties.

  	
   

  
	
  ARTICLE IX  MISCELLANEOUS

  	
   

  
	
   

  	
  Section 9.1

  	
  Amendments and Waivers.

  	
   

  
	
   

  	
  Section 9.2

  	
  Notices.

  	
   

  
	
   

  	
  Section 9.3

  	
  No Waiver; Cumulative Remedies.

  	
   

  
	
   

  	
  Section 9.4

  	
  Survival of Representations and Warranties.

  	
   

  
	
   

  	
  Section 9.5

  	
  Payment of Expenses and Taxes.

  	
   

  
	
   

  	
  Section 9.6

  	
  Successors and Assigns; Participations;
  Purchasing Lenders.

  	
   

  
	
   

  	
  Section 9.7

  	
  Adjustments; Set-off.

  	
   

  
	
   

  	
  Section 9.8

  	
  Table of Contents and
  Section Headings.

  	
   

  
	
   

  	
  Section 9.9

  	
  Counterparts.

  	
   

  
	
   

  	
  Section 9.10

  	
  Effectiveness.

  	
   

  
	
   

  	
  Section 9.11

  	
  Severability.

  	
   

  
	
   

  	
  Section 9.12

  	
  Integration.

  	
   

  
	
   

  	
  Section 9.13

  	
  Governing Law.

  	
   

  
	
   

  	
  Section 9.14

  	
  Consent to Jurisdiction and Service of
  Process.

  	
   

  
	
   

  	
  Section 9.15

  	
  Confidentiality.

  	
   

  
	
   

  	
  Section 9.16

  	
  Acknowledgments.

  	
   

  
	
   

  	
  Section 9.17

  	
  Waivers of Jury Trial.

  	
   

  
	
   

  	
  Section 9.18

  	
  Patriot Act Notice.

  	
   

  
	
  ARTICLE X  GUARANTY

  	
   

  
	
   

  	
  Section 10.1

  	
  The Guaranty.

  	
   

  
	
   

  	
  Section 10.2

  	
  Bankruptcy.

  	
   

  
	
   

  	
  Section 10.3

  	
  Nature of Liability.

  	
   

  
	
   

  	
  Section 10.4

  	
  Independent Obligation.

  	
   

  
	
   

  	
  Section 10.5

  	
  Authorization.

  	
   

  
	
   

  	
  Section 10.6

  	
  Reliance.

  	
   

  
	
   

  	
  Section 10.7

  	
  Waiver.

  	
   

  
	
   

  	
  Section 10.8

  	
  Limitation on Enforcement.

  	
   

  
	
   

  	
  Section 10.9

  	
  Confirmation of Payment.

  	
   

  

 

iii

 

	
  Schedules

  	
   

  
	
   

  	
   

  
	
  Schedule 1.1-A

  	
  Form of Account Designation Letter

  	
   

  
	
  Schedule 1.1-B

  	
  Closing Date Permitted Liens

  	
   

  
	
  Schedule 1.1-C

  	
  Existing Letters of Credit

  	
   

  
	
  Schedule 1.1-D

  	
  Closing Date Investments

  	
   

  
	
  Schedule 2.1(a)

  	
  Schedule of Lenders and Commitments

  	
   

  
	
  Schedule 2.1(b)(i)

  	
  Form of Notice of Borrowing

  	
   

  
	
  Schedule 2.1(e)

  	
  Form of Revolving Note

  	
   

  
	
  Schedule 2.3(d)

  	
  Form of Swingline Note

  	
   

  
	
  Schedule 2.10

  	
  Form of Notice of Conversion/Extension

  	
   

  
	
  Schedule 2.18

  	
  Form of Section 2.18 Certificate

  	
   

  
	
  Schedule 3.13

  	
  Subsidiaries

  	
   

  
	
  Schedule 4.1(b)

  	
  Form of Secretary’s Certificate

  	
   

  
	
  Schedule 4.1(e)

  	
  Form of Solvency Certificate

  	
   

  
	
  Schedule 5.10

  	
  Form of Joinder Agreement

  	
   

  
	
  Schedule 5.12(b)

  	
  Cash Collateral Notice

  	
   

  
	
  Schedule 5.12(c)

  	
  Cash Collateral Release Notice

  	
   

  
	
  Schedule 6.1(b)

  	
  Indebtedness

  	
   

  
	
  Schedule 9.2

  	
  Lenders’ Lending Offices

  	
   

  
	
  Schedule 9.6(c)

  	
  Form of Commitment Transfer Supplement

  	
   

  

 

iv

 

This CREDIT AGREEMENT is entered into as of September 1, 2004
by and among LOUISIANA-PACIFIC CORPORATION, a Delaware corporation (the “Borrower”)
those Domestic Subsidiaries of the Borrower identified as a “Guarantor” on the
signature pages hereto and such other Domestic Subsidiaries of the Borrower as
may from time to time become a party hereto (collectively, the “Guarantors”),
the several banks and other financial institutions as may from time to time
become parties to this Credit Agreement (collectively, the “Lenders”;
and individually, a “Lender”), BANK OF AMERICA, N.A., as Syndication Agent
and as collateral agent for the Lenders hereunder (in such capacity, the “Collateral
Agent”), ROYAL BANK OF CANADA and THE BANK OF NOVA SCOTIA, as Documentation
Agents, and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent
for the Lenders hereunder (in such capacity, the “Administrative Agent”).

 

WITNESSETH:

 

WHEREAS, the Borrower has requested that the Lenders make loans and
other financial accommodations to the Borrower in the amount of up to
$150,000,000, as more particularly described herein; and

 

WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                      Defined
Terms.

 

As used in this Credit Agreement, terms defined in the preamble to this
Credit Agreement have the meanings therein indicated, and the following terms
have the following meanings:

 

“Account Collateral” shall have the meaning set forth in
Section 5.12.

 

“Account Designation Letter” shall mean the Notice of Account
Designation Letter dated as of the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as Schedule 1.1-A.

 

“Additional Credit Party” shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with
Section 5.10.

 

“Additional Loan” shall have the meaning set forth in
Section 2.4.

 

 

“Administrative Agent” shall have the meaning set forth in the
first paragraph of this Credit Agreement and any successors in such capacity.

 

“Affiliate” shall mean as to any Person, any other Person
(excluding any Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person.  For purposes of this definition, a Person
shall be deemed to be “controlled by” a Person if such Person possesses,
directly or indirectly, power either (a) to vote ten percent (10%) or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

 

“Agents” shall mean, collectively, the Administrative Agent and
the Collateral Agent, and “Agent” shall mean either one of them.

 

“Aggregate Revolving Committed Amount” shall have the meaning
set forth in Section 2.1.

 

“Alternate Base Rate” shall mean, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Effective Rate in effect on such day plus 1/2 of
1%.  For purposes hereof: “Prime Rate”
shall mean, at any time, the rate of interest per annum publicly announced from
time to time by Wachovia at its principal office in Charlotte, North Carolina
as its prime rate.  Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs.  The
parties hereto acknowledge that the rate announced publicly by Wachovia as its
Prime Rate is an index or base rate and shall not necessarily be its lowest or
best rate charged to its customers or other banks; and “Federal Funds
Effective Rate” shall mean, for any day, 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 on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published on the next succeeding Business Day, the average of the quotations
for the day of such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by it.  If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive in the absence
of manifest error) that it is unable to ascertain the Federal Funds Effective
Rate, for any reason, including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the terms thereof, the
Alternate Base Rate shall be determined without regard to clause (b) of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. 
Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on the opening of
business on the date of such change.

 

“Alternate Base Rate Loan” shall mean a Loan that bears interest
at an interest rate based on the Alternate Base Rate.

 

“Applicable Percentage” shall mean the rate per annum set forth
below opposite the applicable level then in effect based on the Borrower’s then
current Debt Rating, it being

 

2

 

understood that the Applicable Percentage for (a) Loans that are
LIBOR Rate Loans shall be  (i) during
the Cash Collateral Period, 0.10% and (ii) during any No Collateral Period, the
percentage set forth under the column “Applicable Percentage for LIBOR Rate
Loans and Letter of Credit Fee”, (b) the Letter of Credit Fee shall be (i)
during the Cash Collateral Period, 0.10% and (ii) during any No Collateral
Period, the percentage set forth under the column “Applicable Percentage for LIBOR
Rate Loans and Letter of Credit Fee”, (c) Loans that are Alternate Base
Rate Loans shall be (i) during the Cash Collateral Period, 0.00% and (ii)
during any No Collateral Period, the percentage set forth under the column
“Applicable Percentage for Alternate Base Rate Loans”, and (d) the
Facility Fee shall be the percentage set forth under the column “Facility Fee”:

 

	
  Level

  	
   

  	
  Rating

  	
   

  	
  Applicable

  Percentage for

  LIBOR Rate

  Loans and Letter of

  Credit Fee

  	
   

  	
  Applicable

  Percentage for

  Alternate Base

  Rate Loans

  	
   

  	
  Facility
  Fee

  	
   

  
	
  I

  	
   

  	
  3
  Baa1/BBB+

  	
   

  	
  0.525%

  	
   

  	
  0.000%

  	
   

  	
  0.100%

  	
   

  
	
  II

  	
   

  	
  Baa2/BBB

  	
   

  	
  0.625%

  	
   

  	
  0.000%

  	
   

  	
  0.125%

  	
   

  
	
  III

  	
   

  	
  Baa3/BBB-

  	
   

  	
  0.850%

  	
   

  	
  0.000%

  	
   

  	
  0.150%

  	
   

  
	
  IV

  	
   

  	
  Ba1/BB+

  	
   

  	
  1.050%

  	
   

  	
  0.000%

  	
   

  	
  0.200%

  	
   

  
	
  V

  	
   

  	
  Ba2/BB

  	
   

  	
  1.250%

  	
   

  	
  0.250%

  	
   

  	
  0.250%

  	
   

  
	
  VI

  	
   

  	
  < Ba3/BB-

  	
   

  	
  1.450%

  	
   

  	
  0.450%

  	
   

  	
  0.300%

  	
   

  

 

Any change in the Applicable Percentage due to a change in the Debt
Rating shall be effective on the effective date of such change in the Debt
Rating.  Notwithstanding the foregoing,
the Borrower shall be obligated to provide notice to the Administrative Agent
and the Lenders of any change in the Debt Rating in accordance with
Section 5.2(f).

 

If (a) only one of S&P and Moody’s at any time of
determination shall have in effect a Debt Rating, the Applicable Percentage
shall be determined by reference to the available rating, (b) neither
S&P nor Moody’s at any time of determination shall have in effect a Debt
Rating, the Applicable Percentage will be set in accordance with Level VI,
(c) the ratings established by S&P and Moody’s shall fall within
different levels, the Applicable Percentage shall be based upon the higher
rating; provided, that if there exists a multiple level split in the
ratings, the rating that is one level higher than the lower level shall apply,
(d) 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) S&P or Moody’s shall change the basis on which ratings are
established, each reference to the 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.

 

“Bankruptcy Code” shall mean the Bankruptcy Code in
Title 11 of the United States Code, as amended, modified, succeeded or
replaced from time to time.

 

“BANA Investment Collateral Account” shall mean the account of
the Borrower numbered 236234 at Bank of America, N.A.

 

3

 

“BAS Investment Collateral Account” shall mean the account of
the Borrower numbered 249-01169 with Banc of America Securities LLC.

 

“Borrower” shall have the meaning set forth in the first
paragraph of this Credit Agreement.

 

“Borrowing Date” shall mean, in respect of any Loan, the date
such Loan is made.

 

“Business” shall have the meaning set forth in
Section 3.11(b).

 

“Business Day” shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or New York,
New York are authorized or required by law to close; provided, however,
that when used in connection with a rate determination, borrowing or payment in
respect of a LIBOR Rate Loan, the term “Business Day” shall also exclude any
day on which banks in London, England are not open for dealings in Dollar deposits
in the London interbank market.

 

“Canadian Subsidiary” shall mean Louisiana-Pacific Canada Ltd.,
a company organized under the laws of British Columbia, Canada.

 

“Capital Lease” shall mean any lease of property, real or
personal, the obligations with respect to which are required to be capitalized
on a balance sheet of the lessee in accordance with GAAP.

 

“Capital Stock” shall mean (a) in the case of a
corporation, capital stock, (b) in the case of an association or business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (c) in the case of a
partnership, partnership interests (whether general or limited), (d) in
the case of a limited liability company, membership interests and (e) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

 

“Cash Collateral Account” shall mean the account of the
Collateral Agent numbered 12331-05166 with Bank of America, N.A.

 

“Cash Collateral Security Agreement” shall mean that certain
Cash Collateral and Security Agreement dated as of the date hereof by and among
the Borrower, the Administrative Agent, the Collateral Agent and Bank of America,
N.A. as the depository institution.

 

“Cash Collateral Notice” shall mean the notice substantially in
the form of Schedule 5.12(b).

 

“Cash Collateral Period” shall have the meaning set forth in
Section 5.12.

 

“Cash Collateral Release Notice” shall mean the notice
substantially in the form of Schedule 5.12(c).

 

4

 

“Cash Equivalents” shall mean those securities and other
investments of the Borrower which are permitted to be made pursuant to the
Louisiana-Pacific Corporation Investment Policy issued on May 1, 2004 by Curtis
M. Stevens, Chief Financial Officer of the Borrower, as in effect on the date
hereof, and those securities and other investments of the Canadian Subsidiary
which are permitted to be made pursuant to the Louisiana-Pacific Canada Ltd.
Investment Policy issued on May 1, 2004 by Curtis M. Stevens, Chief Financial
Officer of the Canadian Subsidiary, as in effect on the date hereof.

 

“Change of Control” shall mean the occurrence of one or more of
the following events: (a) any Person or two or more Persons acting in concert
shall have acquired “beneficial ownership,” directly or indirectly, of, or
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, or control over, 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 (b) Continuing
Directors shall cease for any reason to constitute a majority of the members of
the board of directors of the Borrower then in office.  As used herein, “beneficial ownership” shall
have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934.

 

“Closing Date” shall mean the date of this Credit Agreement.

 

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

 

“Collateral Account Notification and Acknowledgements” shall
mean, collectively, (a) the Collateral Account Notification and Acknowledgement
among the Collateral Agent, Banc of America Securities LLC and the Borrower
relating to the BAS Investment Collateral Account, in form and substance satisfactory
to the Administrative Agent and (b) the Collateral Account Notification and
Acknowledgement among the Collateral Agent, Bank of America, N.A., as the
depository, and the Borrower relating to the BANA Investment Collateral
Account, in form and substance satisfactory to the Administrative Agent and,
individually, either one of them.

 

“Collateral Agent” shall have the meaning set forth in the first
paragraph of this Credit Agreement and any successors in such capacity.

 

“Collateral Engagement Date” shall have the meaning set forth in
Section 5.12.

 

“Collateral Release Date” shall have the meaning set forth in
Section 5.12.

 

“Commitment” shall mean the Revolving Commitment, the LOC
Commitment and the Swingline Commitment, individually or collectively, as
appropriate.

 

“Commitment Period” shall mean the period from and including the
Closing Date to but not including the Maturity Date.

 

5

 

“Commitment Transfer Supplement” shall mean a Commitment
Transfer Supplement, substantially in the form of Schedule 9.6(c).

 

“Commonly Controlled Entity” shall mean an entity, whether or
not incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of
the Code.

 

“Consolidated EBITDA” shall mean, for any period, determined for
the Borrower and its Subsidiaries on a consolidated basis, the sum of (a)
Consolidated Net Income, plus (b) an amount which, in the determination
of Consolidated Net Income, has been deducted for (i) Consolidated Interest
Expense, (ii) total federal, state, local and foreign income and similar taxes,
(iii) depreciation and amortization expense, and (iv) other non-cash items
(excluding any such non-cash item to the extent that it represents an accrual
or reserve for potential cash items in any future period or amortization of a
prepaid cash item that was paid in a prior period), minus (c) non-cash items
increasing Consolidated Net Income for such period (excluding any such non-cash
item to the extent it represents the reversal of an accrual or reserve for
potential cash item in any prior period or will result in the receipt of cash
payments in a future period), all as determined in accordance with GAAP.  Unless expressly indicated otherwise, the
applicable period shall be for the four consecutive quarters ending on the date
of computation.

 

“Consolidated Interest Coverage Ratio” shall
mean, as of the end of any fiscal quarter of the Borrower for the four fiscal
quarter period ending on such date with respect to the Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a) Consolidated EBITDA for
such period to (b) the difference (to the extent the difference between the
following is negative, for purposes of calculating the Consolidated Interest
Coverage Ratio, this clause (b) shall be set at $1) of (i) Consolidated
Interest Expense for such period minus (ii) Consolidated Interest Income
for such period.

 

“Consolidated Interest Expense” shall mean, for any period, all
interest expense (including, without limitation, the interest component under
Capital Leases) of the Borrower and its Subsidiaries on a consolidated basis,
including all commissions, discounts and other fees and charges owed with
respect to letters of credit and net costs under Hedging Agreements, as
determined in accordance with GAAP. 
Unless expressly indicated otherwise, the applicable period shall be for
the four consecutive quarters ending on the date of computation.

 

“Consolidated Interest Income” shall mean, for any period, all
interest income of the Borrower and its Subsidiaries on a consolidated basis,
as determined in accordance with GAAP. 
Unless expressly indicated otherwise, the applicable period shall be for
the four consecutive quarters ending on the date of computation.

 

“Consolidated Leverage Ratio” shall mean, as of the end of any
fiscal quarter of the Borrower for the four fiscal quarter period ending on
such date with respect to the Borrower and its Subsidiaries on a consolidated
basis, the ratio of (a) Funded Debt of the Borrower and its Subsidiaries on a
consolidated basis on the last day of such period to (b) Consolidated EBITDA
for such period.

 

6

 

“Consolidated Net Income” shall mean for any period, net income
of the Borrower and its Subsidiaries on a consolidated basis, as determined in
accordance with GAAP.  Unless expressly
indicated otherwise, the applicable period shall be for the four consecutive
quarters ending on the date of computation.

 

“Consolidated Net Worth” shall mean, as of any date of
computation, (a) Consolidated Total Assets minus (b) the total
liabilities of the Borrower and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.

 

“Consolidated Total Assets” shall mean, on the date of
computation, the amount of total assets of the Borrower and its Subsidiaries on
a consolidated basis, as determined in accordance with GAAP.

 

“Continuing Directors” shall mean either during any period of up
to 24 consecutive months commencing after the Closing Date, individuals who at
the beginning of such 24 month period were directors of the Borrower
(together with any new director whose election by the Borrower’s board of
directors or whose nomination for election by the Borrower’s shareholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved).

 

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

 

“Credit Agreement” shall mean this Credit Agreement, as amended,
modified or supplemented from time to time in accordance with its terms.

 

“Credit Documents” shall mean this Credit Agreement, the Cash
Collateral Security Agreement, each of the Notes, any Joinder Agreement, any
Commitment Transfer Supplement, the Letters of Credit, LOC Documents and all
other agreements, documents, certificates and instruments delivered to the
Administrative Agent, the Collateral Agent or any Lender by any Credit Party in
connection therewith (other than any agreement, document, certificate or
instrument related to a Hedging Agreement).

 

“Credit Party” shall mean any of the Borrower and the
Guarantors.

 

“Credit Party Obligations” shall mean, without duplication, all
of the obligations of the Credit Parties to the Lenders (including the Issuing
Lenders), the Collateral Agent, and the Administrative Agent, whenever arising,
under this Credit Agreement, the Notes or any of the other Credit Documents
(including, but not limited to, any interest accruing after the occurrence of a
filing of a petition of bankruptcy under the Bankruptcy Code with respect to
any Credit Party, regardless of whether such interest is an allowed claim under
the Bankruptcy Code).

 

7

 

“Debt Rating” shall mean the debt rating for the Borrower’s
senior, unsecured, non-credit enhanced long term indebtedness for money
borrowed as determined by Moody’s and S&P.

 

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

 

“Default” shall mean any event that would constitute an Event of
Default, whether or not any requirement for the giving of notice or the lapse
of time, or both, or any other condition, has been satisfied.

 

“Defaulting Lender” shall mean, at any time, any Lender that, at
such time (a) has failed to make a Loan required pursuant to the terms of
this Credit Agreement, including the funding of a Participation Interest in
accordance with the terms hereof, (b) has failed to pay to the
Administrative Agent , the Collateral Agent or any Lender an amount owed by
such Lender pursuant to the terms of this Credit Agreement, or (c) has
been deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or to a receiver, trustee or similar official.

 

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

 

“Domestic Lending Office” shall mean, initially, the office of
each Lender designated as such Lender’s Domestic Lending Office shown on Schedule 9.2;
and thereafter, such other office of such Lender as such Lender may from time
to time specify to the Administrative Agent and the Borrower as the office of
such Lender at which Alternate Base Rate Loans of such Lender are to be made.

 

“Domestic Subsidiary” shall mean any Subsidiary that is
organized and existing under the laws of the United States or any state or
commonwealth thereof or under the laws of the District of Columbia.

 

“Eligible
Assignee” shall mean (i) any Lender, any Affiliate of any Lender and
any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
“accredited investor” (as defined in Regulation D under the Securities Act
of 1933, as amended) and that extends credit or buys loans as one of its
businesses; provided, no Affiliate of the Borrower (except as agreed by
the Administrative Agent) shall be an Eligible Assignee.

 

“Environmental Laws” shall mean any and all applicable foreign,
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Credit Agreement.

 

8

 

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

 

“Eurodollar Reserve Percentage” shall mean for any day, the
percentage (expressed as a decimal and rounded upwards, if necessary, to the
next higher 1/100th of 1%) which is in effect for such day as prescribed by the
Federal Reserve Board (or any successor) for determining the maximum reserve
requirement (including without limitation any basic, supplemental or emergency
reserves) in respect of Eurocurrency liabilities, as defined in
Regulation D of such Board as in effect from time to time, or any similar
category of liabilities for a member bank of the Federal Reserve System in New
York City.

 

“Event of Default” shall mean any of the events specified in
Section 7.1; provided, however, that any requirement for the
giving of notice or the lapse of time, or both, or any other condition, has
been satisfied.

 

“Existing Letters of Credit” shall mean each of the letters of
credit described by date of issuance, amount, purpose and the date of expiry on
Schedule 1.1-B hereto.

 

“Extension of Credit” shall mean, as to any Lender, the making
of a Loan by such Lender or the issuance of, or participation in, a Letter of
Credit by such Lender.

 

“Facility Fee” shall have the meaning set forth in
Section 2.5(a).

 

“Federal Funds Effective Rate” shall have the meaning set forth
in the definition of “Alternate Base Rate”.

 

“Fee Letter” shall mean the letter agreement dated July 23,
2004 addressed to the Borrower from the Administrative Agent and WCM, as
amended, modified or otherwise supplemented.

 

“Funded Debt” shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered
into in the ordinary course of business), (d) all obligations (including,
without limitation, earnout obligations) of such Person incurred, issued or
assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within nine months of the incurrence thereof) that would appear as
liabilities on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) all obligations of such
Person under Hedging Agreements, excluding any portion thereof that would be
accounted for as interest expense under GAAP, (g) the maximum amount of all
letters of credit issued or bankers’ acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn and
unreimbursed thereunder, (h) all preferred Capital Stock or other equity
interests issued by such

 

9

 

Person and which by the terms thereof could be (at the request of the
holders thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration on or prior to the Maturity Date, (i) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product, (j) all Indebtedness of others of the type described in clauses
(a) through (i) hereof secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on,
or payable out of the proceeds of production from, property owned or acquired
by such Person, whether or not the obligations secured thereby have been
assumed, (k) all Guaranty Obligations of such Person with respect to Indebtedness
of another Person of the type described in clauses (a) through (i) hereof, and
(l) all Indebtedness of the type described in clauses (a) through (i) hereof of
any partnership or unincorporated joint venture in which such Person is a
general partner or a joint venturer; provided, that Funded Debt shall
not include any Indebtedness of the Borrower or its Subsidiaries that is
non-recourse to the Borrower or its Subsidiaries or their respective assets.

 

“GAAP” shall mean generally accepted accounting principles in
effect in the United States of America applied on a consistent basis, subject,
however, in the case of determination of compliance with the financial
covenants set out in Section 5.9 to the provisions of Section 1.3.

 

“Government Acts” shall have the meaning set forth in
Section 2.19.

 

“Governmental Authority” shall mean any nation or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

 

“Guaranty Obligations” shall mean, with respect to any Person,
without duplication, any obligations of such Person (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any other
Person in any manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (a) to purchase any
such Indebtedness or any property constituting security therefor, (b) to
advance or provide funds or other support for the payment or purchase of any
such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (c) to lease or purchase property, securities or services
primarily for the purpose of assuring the holder of such Indebtedness, or (d) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof.  The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount
(or maximum principal amount, if larger) of the Indebtedness in respect of
which such Guaranty Obligation is made.

 

“Guarantor” shall mean any of the Domestic Subsidiaries
identified as a “Guarantor” on the signature pages hereto and the Additional
Credit Parties which execute a Joinder Agreement, together with their
successors and permitted assigns.

 

“Guaranty” shall mean the guaranty of the Guarantors set forth
in Article X.

 

10

 

“Hedging Agreements” shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or
other interest or exchange rate or commodity price hedging agreements.

 

“Hedging Agreement Provider” shall mean any Person that enters
into a Hedging Agreement with a Credit Party or any of its Subsidiaries that is
permitted by Section 6.1 to the extent such Person is a (a) Lender, (b) an
Affiliate of a Lender or (c) any other Person that was a Lender (or an
Affiliate of a Lender) at the time it entered into the Hedging Agreement but
has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) under
the Credit Agreement.

 

“Incremental Facility” shall have the meaning set forth in
Section 2.4.

 

“Indebtedness” shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered
into in the ordinary course of business), (d) all obligations (including,
without limitation, earnout obligations) of such Person incurred, issued or
assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within nine months of the incurrence thereof) that would appear as
liabilities on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) all obligations of such
Person under Hedging Agreements, excluding any portion thereof that would be
accounted for as interest expense under GAAP, (g) the maximum amount of all
letters of credit issued or bankers’ acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn and
unreimbursed thereunder (excluding performance based letters of credit issued
to the Borrower’s customers in connection with certain long-term contracts),
(h) all preferred Capital Stock or other equity interests issued by such Person
and which by the terms thereof could be (at the request of the holders thereof
or otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (i) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product, (j) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements, (k) all
Indebtedness of others of the type described in clauses (a) through (j) hereof
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (l) all Guaranty
Obligations of such Person with respect to Indebtedness of another Person of
the type described in clauses (a) through (j) hereof, and (m) all Indebtedness
of the type described in clauses (a) through (j) hereof of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer in proportion to such Person’s ownership percentage in such
partnership or joint venture.

 

11

 

“Insolvency” shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is insolvent within the meaning of such term as
used in Section 4245 of ERISA.

 

“Insolvent” shall mean being in a condition of Insolvency.

 

“Interest Payment Date” shall mean (a) as to any Alternate
Base Rate Loan or Swingline Loan, the last Business Day of each March, June,
September and December and on the applicable Maturity Date,
(b) as to any LIBOR Rate Loan having an Interest Period of three months or
less, the last day of such Interest Period, (c) as to any LIBOR Rate Loan
having an Interest Period longer than three months, each day which is three
months after the first day of such Interest Period and the last day of such
Interest Period and (d) as to any Loan which is the subject of a mandatory
prepayment required pursuant to Section 2.7(a), the date on which such
mandatory prepayment is due.

 

“Interest Period” shall mean, with respect to any LIBOR Rate
Loan,

 

(a)                                        initially, the
period commencing on the Borrowing Date or conversion date, as the case may be,
with respect to such LIBOR Rate Loan and ending one, two, three or six months
thereafter, subject to availability, as selected by the Borrower in the Notice
of Borrowing or Notice of Conversion given with respect thereto; and

 

(b)                                       thereafter, each
period commencing on the last day of the immediately preceding Interest Period
applicable to such LIBOR Rate Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto;

 

provided that the
foregoing provisions are subject to the following:

 

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

 

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

 

(iii)                               if the Borrower shall
fail to give notice as provided above, the Borrower shall be deemed to have
selected an Alternate Base Rate Loan to replace the affected LIBOR Rate Loan;

 

12

 

(iv)                              if the Borrower shall
fail to give notice as provided above, the Borrower shall be deemed to have
selected an Alternate Base Rate Loan to replace the affected LIBOR Rate Loan;

 

(v)                                 no Interest Period in
respect of any Loan shall extend beyond the Maturity Date; and

 

(vi)                              no more than six (6)
LIBOR Rate Loans may be in effect at any time. 
For purposes hereof, LIBOR Rate Loans with different Interest Periods
shall be considered as separate LIBOR Rate Loans, even if they shall begin on
the same date and have the same duration, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new LIBOR Rate Loan with a single
Interest Period.

 

“Investment” shall mean, as to any Person, any direct or
indirect acquisition or investment by such Person, whether by means of
(a) the purchase or other acquisition of capital stock or other securities
of another Person, (b) a loan, advance or capital contribution to,
guaranty or assumption of debt of, or purchase or other acquisition of any
other debt or equity participation or interest in, another Person, including
any partnership or joint venture interest in such other Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit.

 

“Investment Grade Debt Rating” shall mean a Debt Rating of BBB-
or higher by S&P and Baa3 or higher by Moody’s; provided, however,
if (a) only one of S&P and Moody’s at any time of determination shall
have in effect a Debt Rating, the available rating shall apply,
(b) neither S&P nor Moody’s at any time of determination shall have in
effect a Debt Rating, the Borrower shall not have an Investment Grade Rating,
(c) the ratings established by S&P and Moody’s shall fall within
different levels, the higher rating shall apply; provided, that if there
exists a multiple level split in the ratings, the rating that is one level
higher than the lower level shall apply, (d) 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) S&P or Moody’s shall change the basis on
which ratings are established, each reference to the 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.

 

“Issuing Lender” shall mean Wachovia or Bank of America, N.A.,
as applicable.

 

“Issuing Lender Fees” shall have the meaning set forth in
Section 2.5(c).

 

“Joinder Agreement” shall mean a Joinder Agreement substantially
in the form of Schedule 5.10, executed and delivered by an Additional
Credit Party in accordance with the provisions of Section 5.10.

 

“Lender” shall have the meaning set forth in the first paragraph
of this Credit Agreement.

 

13

 

“Letter of Credit” shall mean (a) any letter of credit issued by
the Issuing Lender pursuant to the terms hereof and (b) any Existing Letter of
Credit, in each case as such letter of credit may be amended, modified,
extended, renewed or replaced from time to time.

 

“Letter of Credit Facing Fee” shall have the meaning set forth
in Section 2.5(c).

 

“Letter of Credit Fee” shall have the meaning set forth in
Section 2.5(b).

 

“LIBOR” shall mean, for any LIBOR Rate Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately
11:00 A.M. (London time) two (2) 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” shall mean, for any LIBOR Rate Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two (2) 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 LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/100 of 1%). 
If, for any reason, neither of such rates is available, then “LIBOR”
shall mean the rate per annum at which, as determined by the Administrative
Agent, Dollars in an amount comparable to the Loans then requested are being
offered to leading banks at approximately 11:00 A.M. London time, two (2)
Business Days prior to the commencement of the applicable Interest Period for
settlement in immediately available funds by leading banks in the London
interbank market for a period equal to the Interest Period selected.

 

“LIBOR Lending Office” shall mean, initially, the office of each
Lender designated as such Lender’s LIBOR Lending Office shown on Schedule 9.2;
and thereafter, such other office of such Lender as such Lender may from time
to time specify to the Administrative Agent and the Borrower as the office of
such Lender at which the LIBOR Rate Loans of such Lender are to be made.

 

“LIBOR Rate” shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:

 

	
  LIBOR Rate =

  	
  LIBOR

  
	
   

  	
  1.00 - Eurodollar Reserve Percentage

  

 

“LIBOR Rate Loan” shall mean Loans the rate of interest
applicable to which is based on the LIBOR Rate.

 

“Lien” shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature

 

14

 

whatsoever (including, without limitation, any conditional sale or
other title retention agreement and any Capital Lease having substantially the
same economic effect as any of the foregoing).

 

“Loan” shall mean a Revolving Loan and/or a Swingline Loan, as
appropriate.

 

“LOC Commitment” shall mean the commitment of the Issuing Lender
to issue Letters of Credit and with respect to each Lender, the commitment of
such Lender to purchase participation interests in the Letters of Credit up to
such Lender’s LOC Commitment as specified in Schedule 2.1(a), as
such amount may be reduced from time to time in accordance with the provisions
hereof.

 

“LOC Committed Amount” shall have the meaning set forth in
Section 2.2(a).

 

“LOC Documents” shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or (b) any collateral
security for such obligations.

 

“LOC Mandatory Borrowing” shall have the meaning set forth in
Section 2.2(e).

 

“LOC Obligations” shall mean, at any time, the sum of (a) the
maximum amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (b) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.

 

“Margin Stock” shall have the meaning given such term in
Regulation U.

 

“Material Adverse Effect” shall mean a material adverse effect
on (a) the business, operations, property,  condition (financial or otherwise) or prospects of any of  the Borrower and its Subsidiaries taken as a
whole, (b) the ability of the Borrower or any Guarantor to perform its
obligations, when such obligations are required to be performed, under this
Credit Agreement, any of the Notes or any other Credit Document or (c) the
validity or enforceability of this Credit Agreement, any of the Notes or any of
the other Credit Documents or the rights or remedies of the Administrative
Agent, the Collateral Agent or the Lenders hereunder or thereunder.

 

“Material Contract” shall mean any contract or other agreement,
whether written or oral, to which any Credit Party or any of its Subsidiaries
is a party as to which the breach, nonperformance, cancellation or failure to
renew by any party thereto could reasonably be expected to have a Material
Adverse Effect.

 

“Material Proceeding” shall mean any litigation, investigation
or other proceeding by or before any Governmental Authority (a) which
involves any of the Credit Documents or any of the transactions contemplated
hereby or thereby, (b) which involves the Borrower or any of its Subsidiaries
as a party or the property of Borrower or any of its Subsidiaries, and could

 

15

 

reasonably be expected to have a Material Adverse Effect if adversely
determined, (c) in which there has been issued an injunction, writ,
temporary restraining order or any other order of any nature which purports to
restrain or enjoin the making of any requested Extension of Credit, the
consummation of any other transaction contemplated by the Credit Documents, or
the enforceability of any provision of any of the Credit Documents, (d) which
involves the breach or violation by the Borrower or any of its Subsidiaries of,
or default by the Borrower or any of its Subsidiaries under, any Material
Contract which, in each case, could reasonably be expected to have a Material
Adverse Effect or (e) which involves the violation by the Borrower or any
of its Subsidiaries of any applicable law which could reasonably be expected to
have a Material Adverse Effect.

 

“Maturity Date” shall mean the fifth anniversary of the Closing
Date.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

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

 

“No Collateral Period” shall mean any period during the
Commitment Period that is not the Cash Collateral Period.

 

“Note” or “Notes” shall mean the Revolving Notes and/or
the Swingline Note, collectively, separately or individually, as appropriate.

 

“Notice of Borrowing” shall mean a written request for a
Revolving Loan or a Swingline Loan, in each case substantially in the form of Schedule 2.1(b)(i).

 

“Notice of Conversion/Extension” shall mean the written notice
of conversion or extension as referenced and defined in Section 2.10.

 

“Obligations” shall mean, collectively, Loans and LOC
Obligations and all other obligations of the Credit Parties to the
Administrative Agent, the Collateral Agent, and the Lenders under the Credit
Documents.

 

“Off-Balance Sheet Liabilities” shall mean, with respect to any
Person as of any date of determination thereof, without duplication and to the
extent not included as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP:  (a) with respect to any asset securitization transaction
(including any accounts receivable purchase facility) (i) the unrecovered
investment of purchasers or transferees of assets so transferred, and (ii) any
other payment, recourse, repurchase, hold harmless, indemnity or similar
obligation of such Person or any of its Subsidiaries in respect of assets
transferred or payments made in respect thereof, other than limited recourse
provisions that are customary for transactions of such type and that neither
(x) have the effect of limiting the loss or credit risk of such purchasers
or transferees with respect to payment or performance by the obligors of the
assets so transferred nor (y) impair the characterization of the
transaction as a true sale under applicable laws (including Debtor Relief
Laws); (b) the monetary obligations under any

 

16

 

financing lease or so-called “synthetic”, tax retention or off-balance
sheet lease transaction which, upon the application of any Debtor Relief Law to
such Person or any of its Subsidiaries, would be characterized as indebtedness;
(b) the monetary obligations under any sale and leaseback transaction
which does not create a liability on the consolidated balance sheet of such
Person and its Subsidiaries; or (c) any other monetary obligation arising
with respect to any other transaction which (i) upon the application of
any Debtor Relief Law to such Person or any of its Subsidiaries, would be
characterized as indebtedness or (ii) is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
consolidated balance sheet of such Person and its Subsidiaries (for purposes of
this clause (d), any transaction structured to provide tax deductibility
as interest expense of any dividend, coupon or other periodic payment will be
deemed to be the functional equivalent of a borrowing).

 

“Participant” shall have the meaning set forth in
Section 9.6(b).

 

“Participation Interest” shall mean the purchase by a Lender of
a participation interest in Letters of Credit as provided in Section 2.2
and in Swingline Loans as provided in Section 2.3.

 

“Patriot Act” shall have the meaning set forth in
Section 9.18.

 

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

 

“Permitted Acquisition” shall mean an acquisition or any series
of related acquisitions by a Credit Party of the assets or all of the Capital
Stock of a Person that is incorporated, formed or organized in the United
States or any division, line of business or other business unit of a Person
that is incorporated, formed or organized in the United States (such Person or
such division, line of business or other business unit of such Person referred
to herein as the “Target”), in each case that is in the same line of
business (or assets used in the same line of business) as the Credit Parties
and their Subsidiaries, so long as (a) no Default or Event of Default shall
then exist or would exist after giving effect thereto, (b) if applicable, the
Credit Parties shall have complied with the documentation requirements for a
Permitted Acquisition as set forth in Section 5.2(e), (c) the Credit
Parties shall demonstrate to the reasonable satisfaction of the Administrative
Agent and the Required Lenders that the Credit Parties will be in compliance on
a pro forma basis with all of the terms and provisions of the financial
covenants set forth in Section 5.9, (d) the Target, if a Person, shall
have executed a Joinder Agreement in accordance with the terms of
Section 5.10, and (e) such acquisition has been approved by the Board of
Directors and/or shareholders of the applicable Credit Party.

 

“Permitted Cash Collateral” shall mean (i) cash and (ii)
investments in the Nations Money Market Reserves Fund and Nations Treasury
Reserves Fund held in the BAS Investment Collateral Account or any successor
funds approved by the Administrative Agent.

 

“Permitted Investments” shall mean:

 

(a)                                  cash and Cash
Equivalents;

 

17

 

(b)                                 receivables owing to
the Borrower or any of its Subsidiaries or any receivables and advances to
suppliers, in each case if created, acquired or made in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;

 

(c)                                  Investments in and
loans to any Credit Parties;

 

(d)                                 (i) loans and advances
to employees (other than any officer or director) of the Borrower or its
Subsidiaries in an aggregate amount not to exceed $5,000,000 at any time
outstanding and (ii) in addition to the loans and advances made pursuant to the
immediately preceding clause (i), advances to employees of the Borrower or its
Subsidiaries made in accordance with the Borrower’s relocation policy in
connection with the relocation of the Borrower’s headquarters from Portland,
Oregon to Nashville, Tennessee;

 

(e)                                  Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;

 

(f)                                    Investments,
acquisitions or transactions permitted under Section 6.4(b);

 

(g)                                 Hedging Agreements
entered into by the Borrower to the extent permitted pursuant to
Section 6.1;

 

(h)                                 Permitted
Acquisitions;

 

(i)                                     Permitted Cash
Collateral;

 

(j)                                     Investments in and
loans to the Canadian Subsidiary not to exceed (i) the amount of such
Investments and loans outstanding on the Closing Date (the “Closing Date
Investment Amount”) plus (ii) on a cumulative basis as of the end of
each fiscal year of the Borrower, commencing with the fiscal year ending
December 31, 2004 (A) for such fiscal year, 15% of the Closing Date
Investment Amount, and (B) for each subsequent fiscal year, 15% of the
aggregate Investments in and loans to the Canadian Subsidiary as of the end of
the immediately preceding fiscal year;

 

(k)                                  Investments existing
(or committed to made, but not yet funded) on the Closing Date and listed on Schedule 1.1-D;

 

(l)                                     Investments in
Securitization Vehicles; provided, however, that both immediately
before and after giving effect to such Investment no Default or Event of
Default shall have occurred and be continuing, and Investments of any
Securitization Vehicle in the Borrower or in another Securitization Vehicle;
and

 

18

 

(m)                               other Investments in
addition to those permitted by the foregoing clauses in an aggregate amount not
to exceed20% of Consolidated Net Worth  at any time outstanding.

 

“Permitted Liens” shall mean:

 

(a)                                  Liens created by or otherwise
existing, under or in connection with this Credit Agreement or the other Credit
Documents in favor of the Administrative Agent or Collateral Agent for the
benefit of the Lenders and the Agents;

 

(b)                                 purchase money Liens
securing purchase money indebtedness (and refinancings thereof) to the extent
permitted under Section 6.1(c);

 

(c)                                  Liens for taxes,
assessments, charges or other governmental levies not yet due or as to which
the period of grace (not to exceed sixty (60) days), if any, related thereto
has not expired or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP (or, in the case of Subsidiaries with significant
operations outside of the United States of America, generally accepted
accounting principles in effect from time to time in their respective
jurisdictions of incorporation);

 

(d)                                 carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period
of more than sixty (60) days or which are being contested in good faith by
appropriate proceedings;

 

(e)                                  pledges or deposits
in connection with workers’ compensation, unemployment insurance and other
social security legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements;

 

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

 

(g)                                 any extension, renewal
or replacement (or successive extensions, renewals or replacements) , in whole
or in part, of any Lien referred to in the foregoing clauses; provided
that such extension, renewal or replacement Lien shall be limited to all or a
part of the property which secured the Lien so extended, renewed or replaced
(plus improvements on such property);

 

(h)                                 Liens existing on the
Closing Date and set forth on Schedule 1.1-B; provided that
(i) no such Lien shall at any time be extended to cover property or assets
other than the property or assets subject thereto on the Closing Date and
(ii) the principal amount of the Indebtedness secured by such Liens shall
not be extended, renewed, refunded or refinanced unless the principal amount of
such Indebtedness is not increased

 

19

 

at the time of such refinancing, refunding, renewal or extension except
by an amount equal to a reasonable premium or other reasonable amount paid, and
fees and expenses reasonably incurred, in connection with such refinancing, and
so long as such Indebtedness is permitted to be incurred under
Section 6.1;

 

(i)                                     Liens arising in
connection with Capital Leases to the extent permitted under
Section 6.1(c);

 

(j)                                     Liens on the
property of a Person existing at the time such Person becomes a Subsidiary of
the Borrower in a transaction permitted hereunder securing Indebtedness
permitted to be incurred under Section 6.1; provided, however,
that any such Lien may not extend to any other property of the Borrower or any
other Subsidiary that is not a Subsidiary of such Person; provided, further,
that any such Lien was not created in anticipation of or in connection with the
transaction or series of transactions pursuant to which such Person became a
Subsidiary of the Borrower;

 

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

 

(l)                                     other Liens in
addition to those permitted by the foregoing clauses securing Indebtedness in
an aggregate amount not to exceed the following (measured at the time of
incurrence):  (i) if the Borrower has an
Investment Grade Debt Rating, 15% of Consolidated Net Worth  at any time outstanding or
(ii) if the Borrower does not have an Investment Grade Debt Rating, 8% of
Consolidated Net Worth at any time outstanding.

 

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

 

“Plan” shall mean, at any particular time, any employee benefit
plan which is covered by Title IV of ERISA and in respect of which any
Credit Party or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be)
an “employer” as defined in Section 3(5) of ERISA.

 

“Prime Rate” shall have the meaning set forth in the definition
of Alternate Base Rate.

 

“Properties” shall have the meaning set forth in
Section 3.11(a).

 

“Purchasing Lenders” shall have the meaning set forth in
Section 9.6(c).

 

“Recovery Event” shall mean theft, loss, physical destruction or
damage, taking or similar event with respect to any property or assets owned by
the Borrower or any of its

 

20

 

Subsidiaries which results in the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason thereof.

 

“Register” shall have the meaning set forth in
Section 9.6(d).

 

“Related Fund” shall mean, with respect to any Lender or other
Person who invests in commercial bank loans in the ordinary course of business,
any other fund or trust or entity that invests in commercial bank loans in the
ordinary course of business and is advised or managed by such Lender, by an
Affiliate of such Lender or other Persons or the same investment advisor as
such Lender or by an Affiliate of such Lender or investment advisor.

 

“Reorganization” shall mean, with respect to any Multiemployer
Plan, the condition that such Plan is in reorganization within the meaning of
such term as used in Section 4241 of ERISA.

 

“Reportable Event” shall mean any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
thirty-day notice period is waived under PBGC Reg. §4043.

 

“Required Lenders” shall mean Lenders holding in the aggregate
greater than 50% of (a) the Commitments (and Participation Interests
therein) or (b) if the Commitments have been terminated, the outstanding
Loans and Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit and of the Swingline Lender in
Swingline Loans) provided, however, that if any Lender shall be a
Defaulting Lender at such time, then there shall be excluded from the
determination of Required Lenders, Obligations (including Participation
Interests) owing to such Defaulting Lender and such Defaulting Lender’s
Commitments, or after termination of the Commitments, the principal balance of
the Obligations owing to such Defaulting Lender.

 

“Requirement of Law” shall mean, as to any Person, the
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and each law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

 

“Responsible Officer” shall mean, as to (a) the Borrower,
any of the President, the Chief Executive Officer or the Chief Financial
Officer or (b) any other Credit Party, any duly authorized officer
thereof.

 

“Restricted Payment” shall mean (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of the Borrower or any of its Subsidiaries, now or hereafter
outstanding, (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of Capital Stock of the Borrower or any of its
Subsidiaries, now or hereafter outstanding, (c) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of Capital Stock of the Borrower or
any of its Subsidiaries, now or

 

21

 

hereafter outstanding, (d) any payment with respect to any earnout
obligation, (e) any payment or prepayment of principal of, premium, if
any, or interest on, redemption, purchase, retirement, defeasance, sinking fund
or similar payment with respect to, any Subordinated Debt or (f) the payment by
the Borrower or any of its Subsidiaries of any management or consulting fee to
any Person or of any salary, bonus or other form of compensation to any Person
who is directly or indirectly a significant partner, shareholder, owner or
executive officer of any such Person, to the extent such salary, bonus or other
form of compensation is not included in the corporate overhead of the Borrower
or such Subsidiary.

 

“Revolving Commitment” shall mean, with respect to each Lender,
the commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender’s Revolving Committed Amount.

 

“Revolving Commitment Percentage” shall mean, for each Lender,
the percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).

 

“Revolving Committed Amount” shall mean the amount of each
Lender’s Revolving Commitment as specified on Schedule 2.1(a), as
such amount may be reduced from time to time in accordance with the provisions
hereof.

 

“Revolving Loans” shall have the meaning set forth in
Section 2.1.

 

“Revolving Note” or “Revolving Notes” shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time.

 

“S&P” shall mean Standard & Poor’s Ratings Group, a
division of The McGraw Hill Companies, Inc.

 

“Securitization
Vehicle” shall mean a special purpose vehicle that is a wholly-owned
Subsidiary of the Borrower and is a corporation, limited liability company,
trust or other person organized for the limited purpose of entering into
securitization transactions by purchasing, or receiving by way of capital
contributions, assets from the Borrower and obtaining financing for such assets
from third parties, and whose structure is designed to insulate such vehicle
from the credit risk of the Borrower.

 

“Single Employer Plan” shall mean any Plan which is not a
Multiemployer Plan.

 

“Specified Sales” shall mean (a) the sale, transfer, lease or
other disposition of inventory and raw materials in the ordinary course of
business, or (b) the sale, transfer or other disposition of Cash Equivalents
for fair market value.

 

22

 

“Subordinated Debt” shall mean any Indebtedness incurred by any
Credit Party which by its terms is specifically subordinated in right of
payment to the prior payment of the Credit Party Obligations and contains
subordination and other terms acceptable to the Required Lenders.

 

“Subsidiary” shall mean, as to any Person, a corporation,
partnership, limited liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise qualified, all references
to a “Subsidiary” or to “Subsidiaries” in this Credit Agreement shall refer to
a Subsidiary or Subsidiaries of the Borrower.

 

“Swingline Commitment” shall mean the commitment of the
Swingline Lender to make Swingline Loans in an aggregate principal amount at
any time outstanding up to the Swingline Committed Amount, and the commitment
of the Lenders to purchase participation interests in the Swingline Loans as
provided in Section 2.3(b)(ii), as such amounts may be reduced from time
to time in accordance with the provisions hereof.

 

“Swingline Committed Amount” shall have the meaning set forth in
Section 2.3(a).

 

“Swingline Lender” shall mean Wachovia.

 

“Swingline Loan” or “Swingline Loans” shall have the
meaning set forth in Section 2.3(a).

 

“Swingline Mandatory Borrowing” shall have the meaning set forth
in Section 2.3(b)(ii).

 

“Swingline Note” shall mean the promissory note of the Borrower
in favor of the Swingline Lender evidencing the Swingline Loans provided
pursuant to Section 2.3(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.

 

“Target” shall have the meaning set forth in the definition of
“Permitted Acquisition.”

 

“Taxes” shall have the meaning set forth in Section 2.18.

 

“Tranche” shall mean the collective reference to LIBOR Rate
Loans whose Interest Periods begin and end on the same day.  A Tranche may sometimes be referred to as a
“LIBOR Tranche”.

 

“Transfer Effective Date” shall have the meaning set forth in
each Commitment Transfer Supplement.

 

“2.18 Certificate” shall have the meaning set forth in
Section 2.18(b).

 

23

 

“Voting Stock” shall mean, with respect to any Person, Capital
Stock issued by such 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 though the right so to vote
has been suspended by the happening of such a contingency.

 

“Wachovia” shall mean Wachovia Bank, National Association,
together with its successors and/or assigns.

 

“WCM” shall mean Wachovia Capital Markets, LLC, together with
its successors and assigns.

 

Section 1.2                                      Other Definitional Provisions.

 

(a)                                  Unless otherwise
specified therein, all terms defined in this Credit Agreement shall have the
defined meanings when used in the Notes or other Credit Documents or any
certificate or other document made or delivered pursuant hereto.

 

(b)                                 The words “hereof”,
“herein” and “hereunder” and words of similar import when used in this Credit
Agreement shall refer to this Credit Agreement as a whole and not to any
particular provision of this Credit Agreement, and Section, subsection,
Schedule and Exhibit references are to this Credit Agreement unless
otherwise specified.

 

(c)                                  The meanings given to
terms defined herein shall be equally applicable to both the singular and
plural forms of such terms.

 

Section 1.3                                      Accounting Terms.

 

Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be
prepared in accordance with GAAP applied on a basis consistent with the most
recent audited consolidated financial statements of the Borrower delivered to
the Lenders; provided that, if the Borrower shall notify the
Administrative Agent that it wishes to amend any covenant in Section 5.9
to eliminate the effect of any change in GAAP on the operation of such covenant
(or if the Administrative Agent notifies the Borrower that the Required Lenders
wish to amend Section 5.9 for such purpose), then the Borrower’s
compliance with such covenant shall be determined on the basis of GAAP in
effect immediately before the relevant change in GAAP became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.

 

The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial
statements given in accordance with the provisions of Section 5.1,
(i) a description in reasonable detail of any material change in the
application of accounting principles employed in the preparation of such
financial statements from those applied in the most recently preceding
quarterly or annual financial statements as to

 

24

 

which no objection shall have been made in accordance with the
provisions above and (ii) a reasonable estimate of the effect on the
financial statements on account of such changes in application.

 

Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in Section 5.9,
after consummation of any Permitted Acquisition, (i) income statement items and
other balance sheet items (whether positive or negative) attributable to the
Target acquired in such transaction shall be included in such calculations to
the extent relating to such applicable period, and (ii) Indebtedness of a
Target which is retired in connection with a Permitted Acquisition shall be
excluded from such calculations and deemed to have been retired as of the first
day of such applicable period.

 

Section 1.4                                      Time References.

 

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

 

ARTICLE II

 

THE LOANS; AMOUNT AND TERMS

 

Section 2.1                                      Revolving Loans.

 

(a)                                  Revolving
Commitment.  During the Commitment
Period, subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans (“Revolving Loans”) to the
Borrower from time to time in an aggregate principal amount of up to ONE HUNDRED
FIFTY MILLION DOLLARS ($150,000,000) (as such aggregate maximum
amount may be reduced from time to time as provided in Section 2.6 or
increased from time to time as provided in Section 2.4, the “Aggregate
Revolving Committed Amount”) for the purposes hereinafter set forth; provided,
however, that (i) with regard to each Lender individually, the
aggregate principal amount of such Lender’s Revolving Commitment Percentage of
outstanding Revolving Loans plus such Lender’s Revolving Commitment
Percentage of outstanding Swingline Loans plus such Lender’s Revolving
Commitment Percentage of LOC Obligations shall not exceed such Lender’s
Revolving Committed Amount, and (ii) with regard to the Lenders
collectively, the aggregate principal amount of the outstanding Revolving Loans
plus outstanding Swingline Loans plus outstanding LOC Obligations
shall not exceed the Aggregate Revolving Committed Amount.  Revolving Loans may consist of Alternate
Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower
may request, and may be repaid and reborrowed in accordance with the provisions
hereof; provided, however, Revolving Loans made on the Closing
Date or on any of the three Business Days following the Closing Date may only
consist of Alternate Base Rate Loans unless the Borrower executes a funding
indemnity letter in form and substance satisfactory to the Administrative
Agent.  LIBOR Rate Loans shall be made
by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its
Domestic Lending Office.

 

25

 

(b)                                 Revolving
Loan Borrowings.

 

(i)                                     Notice of
Borrowing.  The Borrower may request
a Revolving Loan borrowing by delivering a Notice of Borrowing (or telephone
notice promptly confirmed by delivery of a Notice of Borrowing, which delivery
may be by fax) to the Administrative Agent not later than 12:00 Noon on
the Business Day prior to the date of requested borrowing in the case of
Alternate Base Rate Loans denominated in Dollars and on the third Business Day
prior to the date of the requested borrowing in the case of LIBOR Rate
Loans.  Each such request for borrowing
shall be irrevocable and shall specify (A) the Borrower, (B) that a
Revolving Loan is requested, (C) the date of the requested borrowing
(which shall be a Business Day), (D) the aggregate principal amount to be
borrowed, (E) whether the borrowing shall be comprised of Alternate Base
Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans
are requested, the Interest Period(s). 
If the Borrower shall fail to specify in any such Notice of Borrowing
(I) an applicable Interest Period in the case of a LIBOR Rate Loan, then such
notice shall be deemed to be a request for an Interest Period of one month,
(II) the type of Revolving Loan requested, then such notice shall be
deemed to be a request for an Alternate Base Rate Loan hereunder.  The Administrative Agent shall give notice
to each Lender promptly upon receipt of each Notice of Borrowing, the contents
thereof and each such Lender’s share thereof.

 

(ii)                                  Minimum Amounts.  Each Revolving Loan which is an Alternate
Base Rate Loan shall be in a minimum aggregate amount of $1,000,000 and in
integral multiples of $500,000 in excess thereof (or the remaining amount of
the Aggregate Revolving Committed Amount, if less).  Each Revolving Loan which is a LIBOR Rate Loan shall be in a
minimum aggregate amount of $2,000,000 and in integral multiples of $1,000,000
in excess thereof (or the remaining amount of the Aggregate Revolving Committed
Amount, if less).

 

(iii)                               Advances.  Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to the
Administrative Agent for the account of the Borrower at the office of the
Administrative Agent specified in Schedule 9.2, or at such other
office as the Administrative Agent may designate in writing, by 12:00 noon
on the date specified in the applicable Notice of Borrowing in Dollars and in
funds immediately available to the Administrative Agent.  Such borrowing will then be made available
to the Borrower by the Administrative Agent by crediting the account of the
Borrower on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.

 

(c)                                  Repayment.  The principal amount of all Revolving Loans
shall be due and payable in full on the Maturity Date.

 

26

 

(d)                                 Interest.  Subject to the provisions of
Section 2.9, Revolving Loans shall bear interest as follows:

 

(i)                                     Alternate Base
Rate Loans.  During such periods as
Revolving Loans shall be comprised of Alternate Base Rate Loans, each such
Alternate Base Rate Loan shall bear interest at a per annum rate equal to the
sum of the Alternate Base Rate plus the Applicable Percentage; and

 

(ii)                                  LIBOR Rate Loans.  During such periods as Revolving Loans shall
be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest
at a per annum rate equal to the sum of the LIBOR Rate plus the
Applicable Percentage.

 

Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.

 

(e)                                  Revolving
Notes.  Each Lender’s Revolving
Committed Amount shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in substantially the form of Schedule 2.1(e),
if requested by such Lender.

 

Section 2.2                                      Letter of Credit Subfacility.

 

(a)                                  Issuance.  Subject to the terms and conditions hereof
and of the LOC Documents, if any, and any other terms and conditions which the
Issuing Lenders may reasonably require, during the Commitment Period the
Issuing Lenders shall issue, and the Lenders shall participate in, Letters of
Credit for the account of the Borrower from time to time upon request in a form
acceptable to the applicable Issuing Lender; provided, however,
that (i) the aggregate amount of LOC Obligations shall not at any time
exceed 90% of the Aggregate Revolving Committed Amount (the “LOC Committed
Amount”), (ii) the sum of outstanding Revolving Loans plus
outstanding Swingline Loans plus LOC Obligations shall not at any time
exceed the Aggregate Revolving Committed Amount, (iii) all Letters of
Credit shall be denominated in U.S. Dollars and (iv) Letters of Credit
shall be issued for lawful corporate purposes and may be issued as standby or
trade letters of credit, including in connection with workers’ compensation and
other insurance programs, and trade letters of credit.  Except as otherwise expressly agreed upon by
all the Lenders, no Letter of Credit shall have an original expiry date more
than twelve (12) months from the date of issuance; provided, however,
so long as no Default or Event of Default has occurred and is continuing and
subject to the other terms and conditions to the issuance of Letters of Credit
hereunder, the expiry dates of Letters of Credit may be extended annually or
periodically from time to time on the request of the Borrower or by operation
of the terms of the applicable Letter of Credit to a date not more than twelve
(12) months from the date of extension; provided, further, that
no Letter of Credit, as originally issued or as extended, shall have an expiry
date extending beyond the date that is thirty (30) days prior to the Maturity
Date unless (A) the Borrower shall have cash collateralized such Letter of
Credit, in a manner satisfactory to the Administrative Agent, in an amount
equal to 105% of the maximum amount which is available to be drawn under such
Letter of Credit, and (B) the expiry date of such Letter of Credit shall not be
more than twelve (12) months after the Maturity Date.  Each Letter of Credit shall comply with the related LOC
Documents.  The issuance and expiry date
of each Letter of Credit shall be a Business Day.  Any Letters of Credit issued hereunder shall be in a

 

27

 

minimum original face amount of $50,000 or such lesser amount as agreed
to by the Administrative Agent.  The
Borrower’s reimbursement obligations in respect of the Existing Letters of
Credit, and each Lender’s participation obligations in connection therewith,
shall be governed by the terms of this Credit Agreement.  Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed to mean
the maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the related LOC
Documents, whether or not such maximum face amount is in effect at such time
and after reducing such maximum face amount by any amount by which the maximum
face amount of such Letter of Credit has been permanently reduced.

 

(b)                                 Notice
and Reports.  The request for the
issuance of a Letter of Credit shall be submitted to the applicable Issuing
Lender and the Administrative Agent at least five (5) Business Days prior
to the requested date of issuance.  The
applicable Issuing Lender will promptly upon request provide to the
Administrative Agent for dissemination to the Lenders a detailed report
specifying the Letters of Credit which are then issued and outstanding and any
activity with respect thereto which may have occurred since the date of any
prior report, and including therein, among other things, the account party, the
beneficiary, the face amount, expiry date as well as any payments, expirations,
terminations, cancellations or replacements which may have occurred.  The applicable Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the Letters
of Credit.  The applicable Issuing
Lender will provide to the Administrative Agent promptly upon request a summary
report of the nature and extent of LOC Obligations then outstanding.

 

(c)                                  Participations.  Each Lender (i) on the Closing Date with
respect to the Existing Letters of Credit and (ii) upon issuance of any other
Letter of Credit, shall be deemed to have purchased without recourse a risk
participation from the applicable Issuing Lender in such Letter of Credit and
the obligations arising thereunder and any collateral relating thereto, in each
case in an amount equal to its Revolving Commitment Percentage of the
obligations under such Letter of Credit and shall absolutely, unconditionally
and irrevocably assume, as primary obligor and not as surety, and be obligated
to pay to the applicable Issuing Lender therefor and discharge when due, its
Revolving Commitment Percentage of the obligations arising under such Letter of
Credit.  Without limiting the scope and
nature of each Lender’s participation in any Letter of Credit, to the extent
that the applicable Issuing Lender has not been reimbursed as required
hereunder or under any LOC Document, each such Lender shall pay to the
applicable Issuing Lender its Revolving Commitment Percentage of such
unreimbursed drawing in same day funds on the day of notification by the
applicable Issuing Lender of an unreimbursed drawing pursuant to the provisions
of subsection (d) hereof.  The
obligation of each Lender to so reimburse the applicable Issuing Lender shall
be absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event.  Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the applicable
Issuing Lender under any Letter of Credit, together with interest as
hereinafter provided.

 

(d)                                 Reimbursement.  In the event of any drawing under any Letter
of Credit, the applicable Issuing Lender will promptly notify the Borrower and
the Administrative Agent.  The Borrower
shall reimburse the applicable Issuing Lender on the day of drawing under any
Letter

 

28

 

of Credit (with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds as provided herein or in the LOC Documents.  If the Borrower shall fail to reimburse the
applicable Issuing Lender as provided herein, the unreimbursed amount of such
drawing shall bear interest at a per annum rate equal to the Alternate Base
Rate plus the Applicable Percentage for Revolving Loans that are Alternate Base
Rate Loans plus two percent (2%) for so long as such amount shall be
unreimbursed.  Unless the Borrower shall
immediately notify the applicable Issuing Lender and the Administrative Agent
of its intent to otherwise reimburse the applicable Issuing Lender, the
Borrower shall be deemed to have requested a LOC Mandatory Borrowing in the
amount of the drawing as provided in subsection (e) hereof, the proceeds
of which will be used to satisfy the reimbursement obligations.  The Borrower’s reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of set-off, counterclaim or defense to payment the
Borrower may claim or have against the applicable Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation any defense based
on any failure of the Borrower to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit.  The applicable Issuing Lender will promptly
notify the other Lenders of the amount of any unreimbursed drawing and each
Lender shall promptly pay to the Administrative Agent for the account of the
applicable Issuing Lender in Dollars and in immediately available funds, the
amount of such Lender’s Revolving Commitment Percentage of such unreimbursed
drawing.  Such payment shall be made on
the day such notice is received by such Lender from the applicable Issuing
Lender if such notice is received at or before 1:00 p.m., otherwise such
payment shall be made at or before 12:00 Noon on the Business Day next
succeeding the day such notice is received. 
If such Lender does not pay such amount to the applicable Issuing Lender
in full upon such request, such Lender shall, on demand, pay to the
Administrative Agent for the account of the applicable Issuing Lender interest
on the unpaid amount during the period from the date of such drawing until such
Lender pays such amount to the applicable Issuing Lender in full at a rate per
annum equal to, if paid within two (2) Business Days of the date of
drawing, the Federal Funds Effective Rate and thereafter at a rate equal to the
Alternate Base Rate.  Each Lender’s
obligation to make such payment to the applicable Issuing Lender, and the right
of the applicable Issuing Lender to receive the same, shall be absolute and unconditional,
shall not be affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the
existence of a Default or Event of Default or the acceleration of the Credit
Party Obligations hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever.

 

(e)                                  Repayment
with Revolving Loans.  On any day on
which the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan to reimburse a drawing under a Letter of Credit, the Administrative
Agent shall give notice to the Lenders that a Revolving Loan has been requested
or deemed requested in connection with a drawing under a Letter of Credit, in
which case a Revolving Loan borrowing comprised entirely of Alternate Base Rate
Loans (each such borrowing, a “LOC Mandatory Borrowing”) shall be
immediately made (without giving effect to any termination of the Commitments
pursuant to Section 7.2) pro  rata based on each Lender’s
respective Revolving Commitment Percentage (determined before giving effect to
any termination of the Commitments pursuant to Section 7.2) and in the
case of both clauses (i) and (ii) the proceeds thereof shall be paid
directly to the applicable Issuing Lender for application to the respective LOC
Obligations.  Each Lender hereby
irrevocably agrees to make such

 

29

 

Revolving Loans immediately upon any such request or deemed request on
account of each LOC Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date notwithstanding
(i) the amount of LOC Mandatory Borrowing may not comply with the minimum
amount for borrowings of Revolving Loans otherwise required hereunder,
(ii) whether any conditions specified in Section 4.2 are then
satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) failure for any such request or deemed request for Revolving Loan to
be made by the time otherwise required in Section 2.1(b),  (v) the
date of such LOC Mandatory Borrowing, or (vi) any reduction in the
Aggregate Revolving Committed Amount after any such Letter of Credit may have
been drawn upon; provided, however, that in the event any such
LOC Mandatory Borrowing should be less than the minimum amount for borrowings
of Revolving Loans otherwise provided in Section 2.1(b)(ii), the Borrower
shall pay to the Administrative Agent for its own account an administrative fee
of $500.  In the event that any LOC
Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code), then each such Lender hereby agrees
that it shall forthwith fund (as of the date the LOC Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) its Participation
Interests in the outstanding LOC Obligations; provided, further,
that in the event any Lender shall fail to fund its Participation Interest on
the day the LOC Mandatory Borrowing would otherwise have occurred, then the
amount of such Lender’s unfunded Participation Interest therein shall bear
interest payable by such Lender to the applicable Issuing Lender upon demand,
at the rate equal to, if paid within two (2) Business Days of such date,
the Federal Funds Effective Rate, and thereafter at a rate equal to the
Alternate Base Rate.

 

(f)                                    Modification,
Extension.  The issuance of any
supplement, modification, amendment, renewal, or extension to any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.

 

(g)                                 Uniform
Customs and Practices.  Each trade
Letter of Credit shall be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the International
Chamber of Commerce (the “UCP”), and the UCP shall be incorporated
therein and deemed in all respects to be a part thereof.  In addition, unless otherwise expressly
agreed by the Issuing Lender and the Borrower when a standby Letter of Credit
is issued (including any such agreement applicable to an Existing Letter of
Credit), the rules of the “International Standby Practices 1998” published by
the Institute of International Banking Law & Practice (or such later
version thereof as may be in effect at the time of issuance) shall apply to
each standby Letter of Credit.

 

Section 2.3                                      Swingline Loan Subfacility.

 

(a)                                  Swingline
Commitment.  At any time during the
No Collateral Period, subject to the terms and conditions hereof, the Swingline
Lender, in its individual capacity, agrees to make certain revolving credit
loans to the Borrower (each a “Swingline Loan” and, collectively, the “Swingline
Loans”) for the purposes hereinafter set forth; provided,  however,
(i) the aggregate amount of Swingline Loans outstanding at any time shall
not exceed TEN MILLION DOLLARS ($10,000,000) (the “Swingline Committed
Amount”), and (ii) the sum of the

 

30

 

outstanding Revolving Loans plus outstanding Swingline Loans plus
LOC Obligations shall not exceed the Aggregate Revolving Committed Amount.  Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.

 

(b)                                 Swingline
Loan Borrowings.

 

(i)                                     Notice of
Borrowing and Disbursement.  The
Swingline Lender will make Swingline Loans available to the Borrower on any
Business Day upon request made by the Borrower not later than 12:00 noon
on such Business Day.  A notice of
request for Swingline Loan borrowing shall be made in the form of Schedule 2.1(b)(i)
with appropriate modifications. 
Swingline Loan borrowings hereunder shall be made in minimum amounts of
$100,000 and in integral amounts of $100,000 in excess thereof.

 

(ii)                                  Repayment of
Swingline Loans.  Each Swingline
Loan borrowing shall be due and payable on the Maturity Date.  The Swingline Lender may, at any time, in
its sole discretion, by written notice to the Borrower and the Administrative
Agent, demand repayment of its Swingline Loans by way of a Revolving Loan
borrowing, in which case the Borrower shall be deemed to have requested a
Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans in the
amount of such Swingline Loans; provided, however, that, in the
following circumstances, any such demand shall also be deemed to have been
given one Business Day prior to the occurrence thereof (A) the Maturity
Date, (B) the occurrence of any Event of Default described in
Section 7.1(e), (C) upon acceleration of the Credit Party Obligations
hereunder, whether on account of an Event of Default described in
Section 7.1(e) or any other Event of Default, and (D) the exercise of
remedies in accordance with the provisions of Section 7.2 hereof (each
such Revolving Loan borrowing made on account of any such deemed request
therefor as provided herein being hereinafter referred to as “Swingline
Mandatory Borrowing”).  Each Lender
hereby irrevocably agrees to make such Revolving Loans promptly upon any such
request or deemed request on account of each Swingline Mandatory Borrowing in
the amount and in the manner specified in the preceding sentence and on the
same such date notwithstanding (I) the amount of Swingline Mandatory
Borrowing may not comply with the minimum amount for borrowings of Revolving
Loans otherwise required hereunder, (II) whether any conditions specified in
Section 4.2 are then satisfied, (III) whether a Default or an Event of
Default then exists, (IV) failure of any such request or deemed request for
Revolving Loans to be made by the time otherwise required in
Section 2.1(b)(i), (V) the date of such Swingline Mandatory Borrowing, or
(VI) any reduction in the Revolving Committed Amount or termination of the
Revolving Commitments immediately prior to such Swingline Mandatory Borrowing
or contemporaneously therewith.  In the
event that any Swingline Mandatory Borrowing cannot for any reason be made on
the date otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code), then each
Lender hereby agrees that it shall forthwith purchase (as of the date the
Swingline Mandatory Borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such date and prior to such
purchase) from the Swingline Lender such participations in the outstanding
Swingline Loans as shall be necessary to cause each such Lender to share in
such Swingline Loans ratably

 

31

 

based upon its respective Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments pursuant to
Section 7.2); provided that (A) all interest payable on the
Swingline Loans shall be for the account of the Swingline Lender until the date
as of which the respective participation is purchased, and (B) at the time any
purchase of participations pursuant to this sentence is actually made, the
purchasing Lender shall be required to pay to the Swingline Lender interest on
the principal amount of such participation purchased for each day from and
including the day upon which the Swingline Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such participation, at
the rate equal to, if paid within two (2) Business Days of the date of the
Swingline Mandatory Borrowing, the Federal Funds Effective Rate, and thereafter
at a rate equal to the Alternate Base Rate.

 

(c)                                  Interest
on Swingline Loans.  Subject to the
provisions of Section 2.9, Swingline Loans shall bear interest at a per
annum rate equal to the Alternate Base Rate plus the Applicable
Percentage for Revolving Loans that are Alternate Base Rate Loans.  Interest on Swingline Loans shall be payable
in arrears on each Interest Payment Date.

 

(d)                                 Swingline
Note.  The Swingline Loans shall be
evidenced by a duly executed promissory note of the Borrower to the Swingline
Lender in the original amount of the  Swingline Committed Amount and
substantially in the form of Schedule 2.3(d).

 

Section 2.4                                      Incremental Facility.

 

Subject to the terms and conditions set forth herein, the Borrower
shall have the right, at any time and from time to time (but not to exceed four
(4) increases in the aggregate) prior to the date that is ninety (90) days
prior to the Maturity Date, to incur additional Indebtedness under this Credit
Agreement in the form of an increase to the Aggregate Revolving Committed
Amount (each an “Incremental Facility”) by an aggregate amount of up to
$100,000,000.  The following terms and
conditions shall apply to each Incremental Facility:  (a) the loans made under any such Incremental Facility (each an “Additional
Loan”) shall constitute Credit Party Obligations and will be guaranteed
with the other Credit Party Obligations on a pari passu basis, (b) any such
Incremental Facility shall have the same terms (including interest rate and
maturity date) as the existing Revolving Loans, (c) any such Incremental
Facility shall be entitled to the same voting rights as the existing Revolving
Loans and shall be entitled to receive proceeds of prepayments on the same
basis as the existing Revolving Loans, (d) any such Incremental Facility shall
be obtained from existing Lenders or from other banks, financial institutions
or investment funds, in each case in accordance with the terms set forth below,
(e) any such Incremental Facility shall be in a minimum principal amount of
$10,000,000  and integral multiples of $10,000,000 in excess thereof, (f)
the proceeds of any Additional Loan will be used for the purposes set forth in
Section 3.12, (g) the Borrower shall execute a Revolving Note in favor of
any new Lender, if requested by such Lender, (h) the conditions to Extensions
of Credit in Section 4.2 shall have been satisfied and (i) the
Administrative Agent shall have received from the Borrower updated financial
projections and an officer’s certificate, in each case in form and substance
reasonably satisfactory to the Administrative Agent, demonstrating that, after
giving effect to any such Incremental Facility on a pro forma basis, the
Borrower will be in compliance with the financial covenants set forth in
Section 5.9.  Participation in the
Incremental Facility shall be offered first

 

32

 

to each of the existing Lenders, but no Lender shall have any
obligation to provide all or any portion of the Incremental Facility.  If the amount of the Incremental Facility
requested by the Borrower shall exceed the commitments which the existing Lenders
are willing to provide with respect to such Incremental Facility, then the
Borrower may invite other banks, financial institutions and investment funds
reasonably acceptable to the Administrative Agent to join this Credit Agreement
as Lenders hereunder for the portion of such Incremental Facility not taken by
existing Lenders, provided that such other banks, financial institutions and
investment funds shall enter into such joinder agreements to give effect
thereto as the Administrative Agent and the Borrower may reasonably
request.  The Administrative Agent is
authorized to enter into, on behalf of the Lenders, any amendment to this
Credit Agreement or any other Credit Document as may be necessary to incorporate
the terms of any new Incremental Facility therein.

 

Section 2.5                                      Fees.

 

(a)                                  Facility
Fee.  In consideration of the
Commitments, the Borrower agrees to pay to the Administrative Agent for the
ratable benefit of the Lenders holding Commitments a facility fee (the “Facility
Fee”) in an amount equal to the Applicable Percentage per annum on the
Aggregate Revolving Committed Amount, regardless of usage.  The Facility Fee shall be payable quarterly
in arrears on the 15th day following the last day of each calendar quarter for
the prior calendar quarter.

 

(b)                                 Letter
of Credit Fees.  In consideration of
the LOC Commitments, the Borrower agrees to pay to the Administrative Agent for
the ratable benefit of the Lenders (including the applicable Issuing Lender) a
fee (the “Letter of Credit Fee”) equal to the Applicable Percentage per
annum on the average daily maximum amount available to be drawn under each
Letter of Credit from the date of issuance to the date of expiration.  The Letter of Credit Fee shall be payable quarterly
in arrears on the 15th day following the last day of each calendar quarter for
the prior calendar quarter.

 

(c)                                  Issuing
Lender Fees.  In addition to the
Letter of Credit Fees payable pursuant to subsection (b) hereof, the
Borrower shall pay to the applicable Issuing Lender for its own account without
sharing by the other Lenders the reasonable and customary charges from time to
time of the applicable Issuing Lender with respect to the amendment, transfer,
administration, cancellation and conversion of, and drawings under, such
Letters of Credit (collectively, the “Issuing Lender Fees”).  The applicable Issuing Lender may charge,
and retain for its own account without sharing by the other Lenders, an
additional facing fee (the “Letter of Credit Facing Fee”) of one-tenth
of one percent (0.10%) per annum on the average daily maximum amount
available to be drawn under each such Letter of Credit issued by it.

 

(d)                                 Administrative
Fee.  The Borrower agrees to pay to
the Administrative Agent the annual administrative fee as described in the Fee
Letter.

 

Section 2.6                                      Commitment Reductions.

 

(a)                                  Voluntary
Reductions.  The Borrower shall have
the right to terminate or permanently reduce the unused portion of the
Aggregate Revolving Committed Amount at any

 

33

 

time or from time to time upon not less than five Business Days’ prior
notice to the Administrative Agent (which shall notify the Lenders thereof as
soon as practicable) of each such termination or reduction, which notice shall
specify the effective date thereof and the amount of any such reduction which
shall be in a minimum amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof and shall be irrevocable and effective upon receipt by the
Administrative Agent, provided that no such reduction or termination
shall be permitted if after giving effect thereto, and to any prepayments of
the Loans made on the effective date thereof, the sum of the outstanding
Revolving Loans plus outstanding Swingline Loans plus LOC
Obligations would exceed the Aggregate Revolving Committed Amount.

 

(b)                                 Maturity
Date.  The Revolving Commitment, the
Swingline Commitment and the LOC Commitment shall automatically terminate on
the Maturity Date.

 

Section 2.7                                      Prepayments.

 

(a)                                  Voluntary
Prepayments.  The Borrower shall
have the right to prepay Loans in whole or in part from time to time, without
premium or penalty; provided, however, that (i) LIBOR Rate Loans may only be
prepaid on three (3) Business Days’ prior written notice to the Administrative
Agent and specifying the applicable Loans to be prepaid; (ii) any prepayment of
LIBOR Rate Loans will be subject to Section 2.17; and (iii) each such
partial prepayment of Loans shall be (A) in the case of Revolving Loans, in a
minimum principal amount of $2,000,000 and integral multiples of $1,000,000 (or
the then remaining principal balance of the Loan, if less) and (B) in the case
of Swingline Loans, in a minimum principal amount of $100,000 and integral
multiples of $100,000 (or the then remaining principal balance of the Swingline
Loan, if less).  Subject to the
foregoing terms, amounts prepaid under this Section 2.7(a) shall be
applied as the Borrower may elect.

 

(b)                                 Mandatory
Prepayments.  If at any time after
the Closing Date, the sum of the outstanding Revolving Loans plus outstanding
Swingline Loans plus LOC Obligations shall exceed the Aggregate
Revolving Committed Amount, the Borrower immediately shall prepay the Loans in
an amount sufficient to eliminate such excess (any such prepayment to be
applied as set forth below).  All
amounts required to be paid pursuant to this Section 2.7(b) shall be
applied as follows:  (1) first to the
outstanding Swingline Loans (without any reduction in the Revolving
Commitments), (2) second to the outstanding Revolving Loans (without any
reduction in the Revolving Commitments) and (3) third to a cash collateral
account in respect of outstanding LOC Obligations.  Within the parameters of the applications set forth above,
prepayments shall be applied first to Alternate Base Rate Loans and then to
LIBOR Rate Loans in direct order of Interest Period maturities.  All prepayments under this
Section 2.7(b) shall be subject to Section 2.17 and be accompanied by
interest on the principal amount prepaid through the date of prepayment.

 

Section 2.8                                      Minimum Principal Amount of Tranches.

 

All borrowings, payments and prepayments in respect of Revolving Loans
shall be in such amounts and be made pursuant to such elections so that after
giving effect thereto the aggregate principal amount of the Revolving Loans
comprising any Tranche shall be (a) with

 

34

 

respect to Alternate Base Rate Loans, $1,000,000 or a whole multiple of
$500,000 in excess thereof and (b) with respect to LIBOR Rate Loans,  $2,000,000  or
a whole multiple of $1,000,000 in excess thereof.

 

Section 2.9                                      Default Rate and Payment Dates.

 

Upon the occurrence, and during the continuance, of an Event of
Default, (i) the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Credit
Documents shall, at the discretion of the Required Lenders, bear interest,
payable on demand, at a per annum rate 2% greater than the rate which would
otherwise be applicable (or if no rate is applicable, whether in respect of
interest, fees or other amounts, then the Alternate Base Rate plus 2%)
and (ii) the Letter of Credit Fee shall be 2% greater than the rate which would
otherwise be applicable.

 

Section 2.10                                Conversion Options.

 

(a)                                  The
Borrower may, in the case of Revolving Loans, elect from time to time to
convert Alternate Base Rate Loans to LIBOR Rate Loans, by giving the
Administrative Agent at least three (3) Business Days’ prior irrevocable
written notice of such election.  A form
of Notice of Conversion/Extension is attached as Schedule 2.10.  If the date upon which an Alternate Base
Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then
such conversion shall be made on the next succeeding Business Day and during
the period from such last day of an Interest Period to such succeeding Business
Day such Loan shall bear interest as if it were an Alternate Base Rate
Loan.  All or any part of outstanding
Alternate Base Rate Loans may be converted as provided herein, provided
that (i) no Loan may be converted into a LIBOR Rate Loan when any Default
or Event of Default has occurred and is continuing and (ii) partial
conversions shall be in an aggregate principal amount of $2,000,000 or a whole
multiple of $1,000,000 in excess thereof.

 

(b)                                 Any
LIBOR Rate Loans may be continued as such upon the expiration of an Interest
Period with respect thereto by compliance by the Borrower with the notice
provisions contained in Section 2.10(a); provided, that no LIBOR
Rate Loan may be continued as such when any Default or Event of Default has
occurred and is continuing, in which case such Loan shall be automatically
converted to an Alternate Base Rate Loan at the end of the applicable Interest
Period with respect thereto.  If the Borrower
shall fail to give timely notice of an election to continue a LIBOR Rate Loan,
or the continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR
Rate Loans shall be automatically converted to Alternate Base Rate Loans at the
end of the applicable Interest Period with respect thereto.

 

Section 2.11                                Computation of Interest and Fees.

 

(a)                                  Interest
payable hereunder with respect to Alternate Base Rate Loans which bear interest
at the Prime Rate shall be calculated on the basis of a year of 365 days (or
366 days, as applicable) for the actual days elapsed.  All other fees, interest and all other amounts payable hereunder
shall be calculated on the basis of a 360 day year for the actual days
elapsed.  The Administrative Agent shall
as soon as practicable notify the Borrower and the Lenders of each

 

35

 

determination of a LIBOR Rate on the Business Day of the determination
thereof.  Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate shall become
effective as of the opening of business on the day on which such change in the
Alternate Base Rate shall become effective. 
The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change.

 

(b)                                 Each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Credit Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error.  The Administrative Agent shall, at the
request of the Borrower, deliver to the Borrower a statement showing the
computations used by the Administrative Agent in determining any interest rate.

 

(c)                                  It
is the intent of the Lenders and the Credit Parties to conform to and contract
in strict compliance with applicable usury law from time to time in
effect.  All agreements between the
Lenders and the Credit Parties are hereby limited by the provisions of this
paragraph which shall override and control all such agreements, whether now
existing or hereafter arising and whether written or oral.  In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the maturity of any
Obligation), shall the interest taken, reserved, contracted for, charged, or
received under this Credit Agreement, under the Notes or otherwise, exceed the
maximum nonusurious amount permissible under applicable law.  If, from any possible construction of any of
the Credit Documents or any other document, interest would otherwise be payable
in excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document.  If any Lender shall ever
receive anything of value which is characterized as interest on the Loans under
applicable law and which would, apart from this provision, be in excess of the
maximum nonusurious amount, an amount equal to the amount which would have been
excessive interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest, or
refunded to the Borrower or the other payor thereof if and to the extent such
amount which would have been excessive exceeds such unpaid principal amount of
the Loans.  The right to demand payment
of the Loans or any other Indebtedness evidenced by any of the Credit Documents
does not include the right to receive any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to charge or
receive any unearned interest in the event of such demand.  All interest paid or agreed to be paid to
the Lenders with respect to the Loans shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term (including any renewal or extension) of the Loans so that the
amount of interest on account of such indebtedness does not exceed the maximum
nonusurious amount permitted by applicable law.

 

Section 2.12                                Pro Rata Treatment and Payments.

 

(a)                                  Each
borrowing of Revolving Loans and any reduction of the Revolving Commitments
shall be made pro  rata according to the respective Revolving
Commitment Percentages of the Lenders. 
Each payment under this Credit Agreement or any Note shall be applied,
first, to any fees then due and owing by the Borrower pursuant to
Section 2.5, second, to

 

36

 

interest then due and owing in respect of the Notes of the Borrower
and, third, to principal then due and owing hereunder and under the Notes of
the Borrower.  Each payment on account
of any fees pursuant to Section 2.5 shall be made pro  rata
in accordance with the respective amounts due and owing (except as to the
Letter of Credit Facing Fee and the Issuing Lender Fees).  Each payment (other than prepayments) by the
Borrower on account of principal of and interest on the Revolving Loans shall
be made pro  rata according to the respective amounts due and
owing.  Prepayments made pursuant to
Section 2.15 shall be applied in accordance with such section.  Each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with
Section 2.7(b).  All payments
(including prepayments) to be made by the Borrower on account of principal,
interest and fees shall be made without defense, set-off or counterclaim
(except as provided in Section 2.18(b)) and shall be made to the
Administrative Agent for the account of the Lenders at the Administrative
Agent’s office specified on Schedule 9.2 in Dollars and in
immediately available funds not later than 12:00 noon on the date when due.  The Administrative Agent shall distribute
such payments to the Lenders entitled thereto promptly upon receipt in like
funds as received.  If any payment
hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such
extension.  If any payment on a LIBOR
Rate Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless
the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day.

 

(b)                                 Allocation
of Payments After Event of Default. 
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the exercise of remedies by the Administrative Agent, the Collateral
Agent or the Lenders pursuant to Section 7.2 (or after the Commitments
shall automatically terminate and the Loans (with accrued interest thereon) and
all other amounts under the Credit Documents (including without limitation the
maximum amount of all contingent liabilities under Letters of Credit) shall
automatically become due and payable in accordance with the terms of such
Section), all amounts collected or received by the Administrative Agent, the
Collateral Agent or any Lender on account of the Credit Party Obligations or
any other amounts outstanding under any of the Credit Documents shall be paid
over or delivered as follows:

 

FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys’ fees) of the
Administrative Agent and the Collateral Agent in connection with enforcing the
rights of the Lenders under the Credit Documents;

 

SECOND, to the payment of any fees owed to the Administrative Agent;

 

THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys’ fees) of each of
the Lenders in connection with enforcing its rights under the Credit Documents
or otherwise with respect to the Credit Party Obligations owing to such Lender;

 

37

 

FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;

 

FIFTH, to the payment of the
outstanding principal amount of the Credit Party Obligations and the payment or
cash collateralization of the outstanding LOC Obligations;

 

SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or otherwise
and not repaid pursuant to clauses ”FIRST” through “FIFTH” above; and

 

SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be
applied in the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the then
outstanding Loans and LOC Obligations held by such Lender bears to the aggregate
then outstanding Loans and LOC Obligations) of amounts available to be applied
pursuant to clauses ”THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and
(iii) to the extent that any amounts available for distribution pursuant
to clause ”FIFTH” above are attributable to the issued but undrawn amount
of outstanding Letters of Credit, such amounts shall be held by the
Administrative Agent in a cash collateral account and applied (A) first, to
reimburse the applicable Issuing Lender from time to time for any drawings
under such Letters of Credit and (B) then, following the expiration of all
Letters of Credit, to all other obligations of the types described in
clauses ”FIFTH” and “SIXTH” above in the manner provided in this
Section 2.12(b).

 

Section 2.13                                Non-Receipt of Funds by the Administrative Agent.

 

(a)                                  Unless
the Administrative Agent shall have been notified in writing by a Lender prior
to the date a Loan is to be made by such Lender (which notice shall be
effective upon receipt) that such Lender does not intend to make the proceeds
of such Loan available to the Administrative Agent, the Administrative Agent
may assume that such Lender has made such proceeds available to the
Administrative Agent on such date, and the Administrative Agent may in reliance
upon such assumption (but shall not be required to) make available to the
Borrower a corresponding amount.  If
such corresponding amount is not in fact made available to the Administrative
Agent, the Administrative Agent shall be able to recover such corresponding
amount from such Lender.  If such Lender
does not pay such corresponding amount forthwith upon the Administrative
Agent’s demand therefor, the Administrative Agent will promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent.  The
Administrative Agent shall also be entitled to recover from the Lender or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent at a per annum rate equal to
(i) from the Borrower at the applicable rate for the applicable

 

38

 

borrowing pursuant to the Notice of Borrowing and (ii) from a
Lender at the Federal Funds Effective Rate.

 

(b)                                 Unless
the Administrative Agent shall have been notified in writing by the Borrower,
prior to the date on which any payment is due from the Borrower hereunder
(which notice shall be effective upon receipt) that the Borrower does not
intend to make such payment, the Administrative Agent may assume that the
Borrower has made such payment when due, and the Administrative Agent may in
reliance upon such assumption (but shall not be required to) make available to
each Lender on such payment date an amount equal to the portion of such assumed
payment to which such Lender is entitled hereunder, and if the Borrower has not
in fact made such payment to the Administrative Agent, such Lender shall, on
demand, repay to the Administrative Agent the amount made available to such
Lender.  If such amount is repaid to the
Administrative Agent on a date after the date such amount was made available to
such Lender, such Lender shall pay to the Administrative Agent on demand
interest on such amount in respect of each day from the date such amount was
made available by the Administrative Agent to such Lender to the date such
amount is recovered by the Administrative Agent at a per annum rate equal to
the Federal Funds Effective Rate.

 

(c)                                  A
certificate of the Administrative Agent submitted to the Borrower or any Lender
with respect to any amount owing under this Section 2.13 shall be conclusive
in the absence of manifest error.

 

Section 2.14                                Inability to Determine Interest Rate.

 

Notwithstanding any other provision of this Credit Agreement, if
(i) the Administrative Agent shall reasonably determine (which
determination shall be conclusive and binding absent manifest error) that, by
reason of circumstances affecting the relevant market, reasonable and adequate
means do not exist for ascertaining LIBOR for such Interest Period, or
(ii) the Required Lenders shall reasonably determine (which determination
shall be conclusive and binding absent manifest error) that the LIBOR Rate does
not adequately and fairly reflect the cost to such Lenders of funding LIBOR
Rate Loans that the Borrower has requested be outstanding as a LIBOR Tranche
during such Interest Period, the Administrative Agent shall forthwith give
telephone notice of such determination, confirmed in writing, to the Borrower,
and the Lenders at least two Business Days prior to the first day of such
Interest Period.  Unless the Borrower shall
have notified the Administrative Agent upon receipt of such telephone notice
that it wishes to rescind or modify its request regarding such LIBOR Rate
Loans, any Loans that were requested to be made as LIBOR Rate Loans shall be
made as Alternate Base Rate Loans and any Loans that were requested to be
converted into or continued as LIBOR Rate Loans shall remain as or be converted
into Alternate Base Rate Loans.  Until
any such notice has been withdrawn by the Administrative Agent, no further
Loans shall be made as, continued as, or converted into, LIBOR Rate Loans for
the Interest Periods so affected.

 

Section 2.15                                Illegality.

 

Notwithstanding any other provision of this Credit Agreement, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant

 

39

 

Governmental Authority to any Lender shall make it unlawful for such
Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans as contemplated
by this Credit Agreement or to obtain in the interbank eurodollar market
through its LIBOR Lending Office the funds with which to make such Loans,
(a) such Lender shall promptly notify the Administrative Agent and the
Borrower thereof, (b) the commitment of such Lender hereunder to make
LIBOR Rate Loans or continue LIBOR Rate Loans as such shall forthwith be
suspended until the Administrative Agent shall give notice that the condition
or situation which gave rise to the suspension shall no longer exist, and
(c) such Lender’s Loans then outstanding as LIBOR Rate Loans, if any,
shall be converted on the last day of the Interest Period for such Loans or
within such earlier period as required by law as Alternate Base Rate Loans.  The Borrower hereby agrees to promptly pay
any Lender, upon its demand, any additional amounts necessary to compensate
such Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by such Lender in making any repayment in accordance with
this Section including, but not limited to, any interest or fees payable
by such Lender to lenders of funds obtained by it in order to make or maintain
its LIBOR Rate Loans hereunder.  A
certificate as to any additional amounts payable pursuant to this Section,
setting forth the calculation thereof in reasonable detail, submitted by such
Lender, through the Administrative Agent, to the Borrower shall be conclusive
in the absence of manifest error.  Each
Lender agrees to use reasonable efforts (including reasonable efforts to change
its LIBOR Lending Office) to avoid or to minimize any amounts which may
otherwise be payable pursuant to this Section; provided, however,
that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in its
sole discretion to be material.

 

Section 2.16                                Requirements of Law.

 

(a)                                  If
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:

 

(i)                                     shall subject such
Lender to any tax of any kind whatsoever with respect to any Letter of Credit
or any application relating thereto, any LIBOR Rate Loan made by it, or change
the basis of taxation of payments to such Lender in respect thereof (except for
changes in the rate of tax on the overall net income of such Lender);

 

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

 

(iii)                               shall impose on such
Lender any other condition;

 

and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of Credit or to
reduce any amount receivable hereunder or under any Note, then, in any such
case, the Borrower shall promptly pay such

 

40

 

Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such additional cost or reduced amount receivable which such
Lender reasonably deems to be material as determined by such Lender with
respect to its LIBOR Rate Loans or Letters of Credit.  A certificate as to any additional amounts payable pursuant to
this Section, setting forth the calculation thereof in reasonable detail,
submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error.  Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR Lending
Office, as the case may be) to avoid or to minimize any amounts which might
otherwise be payable pursuant to this paragraph of this Section; provided,
however, that such efforts shall not cause the imposition on such Lender
of any additional costs or legal or regulatory burdens deemed by such Lender in
its sole discretion to be material.

 

(b)                                 If
any Lender shall have reasonably determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation
or application thereof or compliance by such Lender or any corporation
controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any central bank or
Governmental Authority made subsequent to the date hereof does or shall have
the effect of reducing the rate of return on such Lender’s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender’s or
such corporation’s policies with respect to capital adequacy) by an amount
reasonably deemed by such Lender to be material, then from time to time, within
fifteen (15) days after demand by such Lender, the Borrower shall pay to such
Lender such additional amount as shall be certified by such Lender as being
required to compensate it for such reduction. 
Such a certificate as to any additional amounts payable under this
Section submitted by a Lender (which certificate shall include a
description of the basis for the computation), through the Administrative
Agent, to the Borrower shall be conclusive absent manifest error.

 

(c)                                  The
agreements in this Section 2.16 shall survive the termination of this
Credit Agreement and payment of the Credit Party Obligations.

 

Section 2.17                                Indemnity.

 

The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing
after the Borrower has given a notice in accordance with the terms hereof,
(c) default by the Borrower in making any prepayment after the Borrower
has given a notice in accordance with the terms hereof, and/or (d) the
making by the Borrower of a prepayment of a Loan, or the conversion thereof, on
a day which is not the last day of the Interest Period with respect thereto, in
each case including, but not limited to, any such loss or expense arising from
interest or fees payable by such Lender to lenders of funds obtained by it in
order to maintain its Loans hereunder. 
A certificate as to any reasonably incurred additional amounts payable
pursuant to this Section, setting forth the calculation thereof in reasonable
detail, submitted by any Lender,

 

41

 

through the Administrative Agent, to the Borrower shall be conclusive
in the absence of manifest error.  The
agreements in this Section shall survive termination of this Credit
Agreement and payment of the Credit Party Obligations.

 

Section 2.18                                Taxes.

 

(a)                                  All
payments made by the Borrower hereunder or under any Note will be, except as
provided in Section 2.18(b), made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
Governmental Authority or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding any tax imposed
on or measured by the net income or profits of a Lender pursuant to the laws of
the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as “Taxes”).  If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Credit Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or
in such Note.  The Borrower will furnish
to the Administrative Agent as soon as practicable after the date the payment
of any Taxes is due pursuant to applicable law certified copies (to the extent
reasonably available and required by law) of tax receipts evidencing such
payment by the Borrower.  The Borrower
agrees to indemnify and hold harmless each Lender, and reimburse such Lender
upon its written request, for the amount of any Taxes so levied or imposed and
paid by such Lender.

 

(b)                                 Each
Lender that is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) agrees to deliver to the Borrower and the
Administrative Agent on or prior to the Closing Date, or in the case of a
Lender that is an assignee or transferee of an interest under this Credit
Agreement pursuant to Section 9.6(d) (unless the respective Lender was
already a Lender hereunder immediately prior to such assignment or transfer),
on the date of such assignment or transfer to such Lender, (i) if the
Lender is a “bank” within the meaning of Section 881(c)(3)(A) of the Code,
two accurate and complete original signed copies of Internal Revenue Service
Form W-8BEN or W-8ECI (or successor forms) certifying such Lender’s entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Credit Agreement and under any Note, or
(ii) if the Lender is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, either Internal Revenue Service Form
W-8BEN or W-8ECI as set forth in clause (i) above, or (x) a certificate substantially
in the form of Schedule 2.18 (any such certificate, a “2.18
Certificate”) and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying such Lender’s
entitlement to an exemption from United States withholding tax with respect to
payments of interest to be made under this Credit Agreement and under any
Note.  In addition, each Lender agrees
that it will deliver upon the Borrower’s request updated versions of the
foregoing, as applicable, whenever the previous certification has become
obsolete or inaccurate in any material respect, together with such other forms
as may be required in order to confirm or establish the entitlement of such
Lender to a continued exemption from or

 

42

 

reduction in United States withholding tax with respect to payments
under this Credit Agreement and any Note. 
Notwithstanding anything to the contrary contained in
Section 2.18(a), but subject to the immediately succeeding sentence, (A)
the Borrower shall be entitled, to the extent it is required to do so by law,
to deduct or withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or
other amounts payable hereunder for the account of any Lender which is not a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (B) the
Borrower shall not be obligated pursuant to Section 2.18(a) hereof to
gross-up payments to be made to a Lender in respect of Taxes imposed by the
United States if (I) such Lender has not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 2.18(b) or (II) in the case of a payment, other than interest, to
a Lender described in clause (ii) above, to the extent that such Forms do
not establish a complete exemption from withholding of such Taxes.  Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 2.18, the
Borrower agrees to pay additional amounts and to indemnify each Lender in the
manner set forth in Section 2.18(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence
as a result of any changes after the Closing Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of Taxes.

 

(c)                                  Each
Lender agrees to use reasonable efforts (including reasonable efforts to change
its Domestic Lending Office or LIBOR Lending Office, as the case may be) to
avoid or to minimize any amounts which might otherwise be payable pursuant to
this Section; provided, however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.

 

(d)                                 If
the Borrower pays any additional amount pursuant to this Section 2.18 with
respect to a Lender, such Lender shall use reasonable efforts to obtain a
refund of tax or credit against its tax liabilities on account of such payment;
provided that such Lender shall have no obligation to use such
reasonable efforts if either (i) it is in an excess foreign tax credit
position or (ii) it believes in good faith, in its sole discretion, that
claiming a refund or credit would cause adverse tax consequences to it.  In the event that such Lender receives such
a refund or credit, such Lender shall pay to the Borrower an amount that such
Lender reasonably determines is equal to the net tax benefit obtained by such
Lender as a result of such payment by the Borrower.  In the event that no refund or credit is obtained with respect to
the Borrower’s payments to such Lender pursuant to this Section 2.18, then
such Lender shall upon request provide a certification that such Lender has not
received a refund or credit for such payments. 
Nothing contained in this Section 2.18 shall require a Lender to
disclose or detail the basis of its calculation of the amount of any tax
benefit or any other amount or the basis of its determination referred to in
the proviso to the first sentence of this Section 2.18 to the Borrower or
any other party.

 

(e)                                  The
agreements in this Section 2.18 shall survive the termination of this
Credit Agreement and the payment of the Credit Party Obligations.

 

43

 

Section 2.19                                Indemnification; Nature of Issuing Lender’s Duties.

 

(a)                                  In
addition to its other obligations under Section 2.2, the Borrower hereby
agrees to protect, indemnify, pay and save the applicable Issuing Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys’ fees) that
the applicable Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit or
(ii) the failure of the applicable Issuing Lender to honor a drawing under
a Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called “Government
Acts”).

 

(b)                                 As
between the Borrower and the applicable Issuing Lender, the Borrower shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by
the beneficiary thereof.  The applicable
Issuing Lender shall not be responsible: 
(i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged or for obtaining any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit);
(ii) for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, that
may prove to be invalid or ineffective for any reason; (iii) for failure
of the beneficiary of a Letter of Credit to comply with conditions required in
order to draw upon a Letter of Credit (other than any sight draft,
certificates, express instructions and documents expressly required by the
Letter of Credit); (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (vii) for any
consequences arising from causes beyond the control of the applicable Issuing
Lender, including, without limitation, any Government Acts.  None of the above shall affect, impair, or
prevent the vesting of the applicable Issuing Lender’s rights or powers
hereunder.  In furtherance and not in
limitation of the foregoing, each Issuing Lender may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and the
Issuing Lender shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason.  None of the Issuing Lenders, the Agents, any
of their respective Affiliates nor any correspondent, participant or assignee
of any Issuing Lender shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of the
Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted
in the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or LOC Document.

 

44

 

(c)                                  In
furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the applicable Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put the applicable
Issuing Lender under any resulting liability to the Borrower.  It is the intention of the parties that this
Credit Agreement shall be construed and applied to protect and indemnify the
applicable Issuing Lender against any and all risks involved in the issuance of
the Letters of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts or omissions,
whether rightful or wrongful, of any Government Authority.  The applicable Issuing Lender shall not, in
any way, be liable for any failure by the applicable Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the applicable Issuing
Lender.

 

(d)                                 Nothing
in this Section 2.19 is intended to limit the reimbursement obligation of
the Borrower contained in Section 2.2(d) hereof.  The obligations of the Borrower under this Section 2.19
shall survive the termination of this Credit Agreement.  No act or omissions of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the rights
of the applicable Issuing Lender to enforce any right, power or benefit under
this Credit Agreement.

 

(e)                                  Notwithstanding
anything to the contrary contained in this Section 2.19, the Borrower
shall have no obligation to indemnify any applicable Issuing Lender in respect
of any liability incurred by the applicable Issuing Lender arising out of the
gross negligence or willful misconduct of the applicable Issuing Lender
(including action not taken by the applicable Issuing Lender), as determined by
a court of competent jurisdiction pursuant to a final, non-appealable judgment.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders to enter into this Credit Agreement and to make
the Extensions of Credit herein provided for, each of the Credit Parties hereby
represents and warrants to the Administrative Agent and to each Lender that:

 

Section 3.1                                      Financial Condition.

 

The Borrower has heretofore delivered to the Lenders, at the Lenders’
request, the following financial statements and information: (a) audited
consolidated financial statements of the Borrower and its Subsidiaries for the Fiscal
Years ended December 31, 2001, 2002 and 2003, consisting of consolidated
balance sheets and the related consolidated statements of income, stockholders’
equity and cash flows for such period, (b) company-prepared unaudited
consolidated financial statements of the Borrower and its Subsidiaries for the
fiscal quarter ended June 30, 2004, consisting of consolidated balance
sheets and the related consolidated statements of income, stockholders’ equity
and cash flows for such period,  and (c) five-year projections for the
Borrower and its Subsidiaries, all in form and substance reasonably
satisfactory to the

 

45

 

Administrative Agent and certified by the chief financial officer of
the Borrower that such consolidated financial statements fairly present the
financial condition of the Borrower and its Subsidiaries as of the dates
indicated and (i) with respect to the audited and unaudited financial
statements, the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments, and (ii) with respect to the projections, were prepared in
good faith based upon reasonable assumptions.

 

Section 3.2                                      No
Change.

 

Since December 31, 2003, there has been no change in the business,
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole which could have a Material
Adverse Effect (other than as disclosed in the Borrower’s Form 10-K for the
fiscal year ending December 31, 2003, as supplemented by the Borrower’s
Form 10-Q for the fiscal quarter ending March 31, 2004 and Form 10-Q for
the fiscal quarter ending June 30, 2004).

 

Section 3.3                                      Corporate Existence; Corporate Power; Enforceability.

 

(a)                                  Each of the Credit
Parties is duly organized and validly existing and in good standing under the
laws of the state of its incorporation or formation, as the case may be, and
each of the Credit Parties has the power and authority to enter into and
perform its obligations under the Credit Documents to which it is a party and
has the requisite power and authority to enter into and perform the obligations
under each other agreement, instrument and document to be executed and
delivered by it in connection with or as contemplated by each such Credit
Document to which it is a party or will be a party.

 

(b)                                 The execution and
delivery by each of the Credit Parties of this Credit Agreement and the other
applicable Credit Documents as of such date and the performance by each of the
Credit Parties of its respective obligations under this Credit Agreement and
the other applicable Credit Documents are within the limited liability company
or corporate powers of each of the Credit Parties, have been duly authorized by
all necessary limited liability company or corporate action on the part of each
of the Credit Parties (including without limitation any necessary shareholder
action), have been duly executed and delivered, have received all necessary
governmental approval, and do not and will not (i) violate any Requirement of
Law which is binding on any Credit Party or any of its Subsidiaries, (ii) contravene
or conflict with, or result in a breach of, any provision of the articles of
incorporation, bylaws or other organizational documents of any of the Credit
Parties or any of their Subsidiaries or of any agreement, indenture, instrument
or other document which is binding on any of the Credit Parties or any of their
Subsidiaries or (iii) result in, or require, the creation or imposition of any
Lien (other than pursuant to the terms of the Credit Documents) on any asset of
any of the Credit Parties or any of their Subsidiaries.

 

(c)                                  This Credit Agreement
and the other applicable Credit Documents to which the Credit Parties are
parties constitute the legal, valid and binding obligation of

 

46

 

such Credit Parties, as applicable, enforceable against each such
Credit Party, as applicable, in accordance with their terms except as
enforceability may be limited by Debtor Relief Laws or by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).

 

Section 3.4                                      Governmental Approvals.

 

No consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or other authorization,
registration, filing, consent, approval, waiver, notice or other action by, to
or of any other Person pursuant to any Requirement of Law, contract, indenture,
instrument or agreement or for any other reason is required to authorize or is
required in connection with (i) the execution, delivery or performance of any
Credit Document, (ii) the legality, validity, binding effect or enforceability
of any Credit Document or (iii) any Extension of Credit, in each case, except
those which have been obtained and are in full force and effect.

 

Section 3.5                                      No Legal Bar; No Default.

 

The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
other Credit Party (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of
any Lien on any of its or their respective properties or revenues pursuant to
any Requirement of Law or Contractual Obligation other than the Liens arising
under or contemplated in connection with the Credit Documents.  Neither the Borrower nor any other Credit
Party is in default under or with respect to any of its Contractual Obligations
in any respect which could reasonably be expected to have a Material Adverse
Effect.  No Default or Event of Default
has occurred and is continuing.

 

Section 3.6                                      No Material Litigation.

 

Other than as disclosed in the Borrower’s Form 10-K for the fiscal year
ending December 31, 2003, as supplemented by the Borrower’s Form 10-Q for
the fiscal quarter ending March 31, 2004 and Form 10-Q for the fiscal
quarter ending June 30, 2004, no litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
best knowledge of the Borrower, threatened by or against the Borrower or any of
its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.

 

Section 3.7                                      Government Acts.

 

(a)                                  Neither the Borrower
nor any Credit Party is an “investment company”, or a company “controlled” by
an “investment company”, within the meaning of the Investment Company Act of
1940, as amended.

 

47

 

(b)                                 Neither the Borrower
nor any of its Subsidiaries is a “holding company”, or an “affiliate” of a
“holding company” or a “subsidiary company” of a “holding company”, within the
meaning of the Public Utility Holding Company Act of 1935, as amended.

 

Section 3.8                                      Margin Regulations.

 

No part of the proceeds of any Extension of Credit hereunder will be
used directly or indirectly for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect.  The Borrower and its
Subsidiaries taken as a group do not own Margin Stock except as identified in
the financial statements referred to in Section 3.1 and the aggregate
value of all Margin Stock owned by the Borrower and its Subsidiaries taken as a
group does not exceed 25% of the value of their assets.

 

Section 3.9                                      Compliance with Laws.

 

Each of the Credit Parties is in compliance with all Requirements of
Law, including all applicable Environmental Laws, except to the extent that (a)
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, or (b) such Requirements of Law are
being contested in good faith or a bona fide dispute exists with respect
thereto and the affected Credit Party has established adequate reserves in
conformity with GAAP on the books of such Credit Party to account therefor.

 

Section 3.10                                ERISA.

 

Neither a Reportable Event nor an “accumulated funding deficiency”
(within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code.  No termination of a
Single Employer Plan has occurred resulting in any liability that has remained
underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period.  The present value of
all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued
benefits.  Neither any Credit Party nor
any Commonly Controlled Entity is currently subject to any liability for a
complete or partial withdrawal from a Multiemployer Plan.

 

Section 3.11                                Environmental Matters.

 

The Borrower conducts, in the ordinary course of business, a review of
the effect of existing Environmental Laws and claims alleging potential
liability or responsibility for violation of any Environmental Law on the
facilities and properties owned, leased or operated by the Credit Parties or
any of their Subsidiaries (the “Properties”).  Such review is of such a scope and nature that the review is
reasonably likely to lead to discovery by the Borrower of any material

 

48

 

violation of any Environmental Law or the existence of any circumstance
or condition that could give rise to any material obligation by the Borrower or
any of its Subsidiaries to make any report to any Governmental Authority, or
conduct any investigative, remedial, response or cleanup action, pursuant to
any Environmental Law.  As a result of
such review, the Borrower has reasonably concluded that there exists no
violation of any Environmental Law, or circumstance or condition giving rise to
any obligation by the Borrower or any of its Subsidiaries to make any report to
any Governmental Authority, or conduct any investigative, remedial, response or
cleanup action, pursuant to, or claim arising under, any Environmental Law,
that could reasonably be expected to have a Material Adverse Effect.

 

Section 3.12                                Purpose of Extensions of Credit.

 

The proceeds of the Extensions of Credit shall be used by the Borrower
solely to (i) refinance certain existing Indebtedness of the Borrower, (ii) pay
fees and expenses owing to the Lenders and the Administrative Agent in
connection with this Credit Agreement, (iii) support issuances of Letters of
Credit and (iv) provide for the working capital and other general corporate
requirements of the Borrower and its Subsidiaries including, but not limited
to, Permitted Acquisitions and capital expenditures.

 

Section 3.13                                Subsidiaries.

 

Set forth on Schedule 3.13 is a complete and accurate list
of all Subsidiaries of the Credit Parties. 
Information on the attached Schedule includes (i) the state of
incorporation or formation, (ii) the number of shares of each class of Capital
Stock or other equity interests outstanding, (iii) the number and percentage of
outstanding shares of each class of Capital Stock or other equity interests and
(iv) the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and similar rights.  The outstanding Capital Stock and other equity interests of all
such Subsidiaries is validly issued, fully paid and non-assessable and is
owned, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents).  The Borrower may update Schedule 3.13
from time to time by providing a replacement Schedule 3.13 to the
Administrative Agent.

 

Section 3.14                                Ownership.

 

Each of the Credit Parties (a) is the owner of, and has good and valid
title to, or a valid leasehold interest in, all of its respective material
assets, except as may be permitted pursuant to Section 6.2 hereof, and
none of such assets is subject to any Lien other than Permitted Liens and (b)
enjoys peaceful and undisturbed possession of all real properties that are
necessary for the operation and conduct of its business.

 

Section 3.15                                Indebtedness.

 

Except as otherwise permitted under Section 6.1, the Borrower and
its Subsidiaries have no Indebtedness (including Off-Balance Sheet
Liabilities).

 

49

 

Section 3.16                                Taxes.

 

Each of the Credit Parties and each Subsidiary thereof has filed or
caused to be filed all tax reports and returns required to be filed by each of
them with any Governmental Authority, except where (i) extensions have been
properly obtained and have paid or made adequate provision for the payment of
all taxes, assessments, fees and other charges by any Governmental Authority
which are due and payable, except such taxes, assessments, fees and other
charges, if any, as are being diligently contested in good faith by appropriate
proceedings and as to which the applicable Credit Party or Subsidiary thereof
has established adequate reserves in conformity with GAAP on the books of such
Credit Party or Subsidiary or (ii) the failure to file such tax reports or
returns could not reasonably be expected to have a Material Adverse
Effect.  No Lien for any such taxes,
assessments, fees or other charges has been filed, and no claims are being
asserted with respect to any such taxes, assessments, fees or other charges
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect.

 

Section 3.17                                Solvency.

 

None of the Credit Parties (a) has unreasonably small capital in
relation to the business in which it is or proposes to be engaged or
(b) has incurred, or believes that it will incur after giving effect to
the transactions contemplated by this Credit Agreement, debts beyond its
ability to pay such debts as they become due.

 

Section 3.18                                Investments.

 

All Investments of each of the Borrower and its Subsidiaries are
Permitted Investments.

 

Section 3.19                                No Burdensome Restrictions.

 

None of the Borrower or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or
regulation which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

Section 3.20                                Accuracy and Completeness of Information.

 

(a)                                  All information
heretofore or contemporaneously herewith furnished by either the Borrower or
any other Credit Party or any of their Subsidiaries to the Administrative
Agent, WCM, the Collateral Agent or any Lender for purposes of or in connection
with this Credit Agreement and the transactions contemplated hereby is, and all
information hereafter furnished by or on behalf of the Credit Parties or any of
their Subsidiaries to the Administrative Agent, WCM, the Collateral Agent or
any Lender pursuant hereto or in connection herewith will be, true and accurate
in every material respect on the date as of which such information is dated or
certified, and such information, taken as a whole, does not and will not omit
to state any material fact necessary to make such information, taken as a
whole, not misleading.

 

50

 

(b)                                 All registration
statements, reports, proxy statements and other documents, if any, required to
be filed by Credit Parties and their Subsidiaries with the Securities and
Exchange Commission pursuant to the Securities Act if 1933 and the Securities
Exchange Act of 1934, as amended, have been filed, and such filings are
complete and accurate and contain no untrue statements of material fact or omit
to state any material facts required to be stated therein or necessary in order
to make the statements therein not misleading.

 

Section 3.21                                Material Contracts.

 

Each Material Contract is, and after giving effect to the transactions
contemplated by the Credit Documents will be, in full force and effect in
accordance with the terms thereof and no Credit Party and no Subsidiary of any
Credit Party has violated in any material respect any such Material Contract.

 

Section 3.22                                Insurance.

 

The Properties and other assets of the Credit Parties and their Subsidiaries
are insured with financially sound and reputable insurance companies which are
not Affiliates of any of the Credit Parties, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties and other assets in
localities where the Credit Parties or their Subsidiaries operate.

 

Section 3.23                                Anti-Terrorism Laws.

 

(a)                                  Neither the borrowing
of the Loans hereunder nor the Borrower’s use of the proceeds thereof will
violate the Patriot Act, the Trading with the Enemy Act, as amended, or any of
the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto, or is in violation of any
federal statute or Presidential Executive Order, including without limitation
Executive Order 13224 66 Fed. Reg. 49079 (September 25, 2001) (Blocking
Property and Prohibiting Transactions with Persons who Commit, Threaten to
Commit or Support Terrorism).

 

(b)                                 None of the Borrower,
Subsidiaries of the Borrower or Affiliates of the Borrower are (i) named on the
United States Department of the Treasury’s Specially Designated Nationals or
Blocked Persons list available through
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html or as otherwise
published from time to time, or (ii) (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a person resident
in a country that is subject to sanctions under a program specified on
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html or as otherwise
published from time to time, as such program may be applicable to such agency,
organization, or person.

 

51

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

Section 4.1                                      Conditions to Closing Date and Initial Revolving
Loans.

 

This Credit Agreement shall become effective upon, and the obligation
of each Lender to make the initial Revolving Loans and the Swingline Loans on
the Closing Date is subject to, the satisfaction of the following conditions
precedent:

 

(a)                                  Execution of
Credit Documents.  The
Administrative Agent shall have received (i) counterparts of this Credit
Agreement, (ii) for the account of each Lender, Revolving Notes, if
requested by such Lender and (iii) for the account of the Swingline
Lender, the Swingline Note, in each case conforming to the requirements of this
Credit Agreement and executed by a duly authorized officer of each party
thereto

 

(b)                                 Authority Documents.  The Administrative Agent shall have received
the following:

 

(i)                                     Articles of
Incorporation.  Copies of the
articles of incorporation or other charter or formation documents, as
applicable, of each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the state of its
incorporation.

 

(ii)                                  Resolutions.  Copies of resolutions of the board of
directors (or other equivalent managing body) of each Credit Party approving
and adopting the Credit Documents, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by an officer of such
Credit Party as of the Closing Date to be true and correct and in force and
effect as of such date.

 

(iii)                               Bylaws.  A copy of the bylaws or operating agreement
of each Credit Party certified by an officer of such Credit Party as of the
Closing Date to be true and correct and in force and effect as of such date.

 

(iv)                              Good Standing.  Copies of certificates of good standing,
existence or its equivalent with respect to each Credit Party certified as of a
recent date by the appropriate Governmental Authorities of its state of
incorporation or formation, as applicable, and each other state in which the
failure to so qualify and be in good standing could reasonably be expected to
have a Material Adverse Effect on the business or operations of the Borrower
and its Subsidiaries.

 

(v)                                 Incumbency.  An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true and correct as
of the Closing Date.

 

52

 

(c)                                  Legal Opinions of
Counsel.  The Administrative Agent
shall have received an opinion or opinions of legal counsel for the Credit
Parties, dated the Closing Date and addressed to the Administrative Agent and
the Lenders, which opinion or opinions shall provide, among other things, that
the Borrower and its Subsidiaries are in compliance in all material respects
with all organizational documents and Material Contracts on the Closing Date
and shall otherwise be in form and substance acceptable to the Administrative
Agent.

 

(d)                                 Account Designation
Letter.  The Administrative Agent
shall have received the executed Account Designation Letter in the form of Schedule 1.1-A
hereto.

 

(e)                                  Solvency
Certificate. The Administrative Agent shall have received an officer’s
certificate for the Credit Parties prepared by the chief financial officer of
the Borrower as to the financial condition, solvency and related matters of
each of the Credit Parties, in each case after giving effect to the initial
borrowings under the Credit Documents, in substantially the form of Schedule 4.1(f)
hereto.

 

(f)                                    Officer’s
Certificate.  The Administrative
Agent shall have received a certificate executed by a responsible officer of
the Borrower as of the Closing Date stating that immediately after giving
effect to this Credit Agreement, the other Credit Documents and all the
transactions contemplated herein and therein to occur on such date, (i) no
Default or Event of Default exists, (ii) all representations and warranties
contained herein and in the other Credit Documents are true and correct in all
material respects and (iii) the Credit Parties are in compliance with each of
the financial covenants set forth in Section 5.9 on a pro forma basis, as
evidenced by detailed calculations attached thereto.

 

(g)                                 Litigation.  There shall not exist any pending or, to the
best knowledge of the Borrower, threatened litigation or investigation
affecting or relating this Credit Agreement, the other Credit Documents or
(other than as disclosed in the Borrower’s Form 10-K for the fiscal year ending
December 31, 2003, as supplemented by the Borrower’s Form 10-Q for the
fiscal quarter ending March 31, 2004 and Form 10-Q for the fiscal quarter
ending June 30, 2004) to the Borrower or any of its Subsidiaries that in
the reasonable judgment of the Administrative Agent and Lenders could
materially adversely affect the Borrower or any of its Subsidiaries, taken as a
whole, or this Credit Agreement or the other Credit Documents, that has not
been settled, dismissed, vacated, discharged or terminated prior to the Closing
Date.

 

(h)                                 Termination of
Existing Indebtedness.  All existing
Indebtedness for borrowed money of the Borrower and its Subsidiaries (other
than Permitted Indebtedness) shall have been repaid in full and terminated and
all Liens relating thereto shall have been terminated.

 

(i)                                     Consents.  The Administrative Agent shall have received
evidence that all governmental, shareholder and material third party consents
and approvals necessary in connection with the Extensions of Credit and the
other transactions contemplated hereby

 

53

 

have been obtained without any action being taken by any authority that
could restrain, prevent or impose any material adverse conditions on such
transactions or that could seek or threaten any of such transactions.

 

(j)                                     Compliance with
Laws.  The financings and other
transactions contemplated hereby shall be in compliance with all applicable
laws and regulations (including all applicable securities and banking laws,
rules and regulations).

 

(k)                                  Bankruptcy.  There shall be no bankruptcy or insolvency
proceedings with respect to the Borrower or any of its Subsidiaries.

 

(l)                                     Material
Adverse Effect. Since December 31, 2003, there shall have been no
change in the business, assets, liabilities, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole which could
have a Material Adverse Effect (other than as disclosed in the Borrower’s Form
10-K for the fiscal year ending December 31, 2003, as supplemented by the
Borrower’s Form 10-Q for the fiscal quarter ending March 31, 2004 and Form
10-Q for the fiscal quarter ending June 30, 2004).

 

(m)                               Financial Statements.  The Administrative Agent shall have received
copies of the financial statements referred to in Section 3.1 hereof, each
in form and substance satisfactory to it.

 

(n)                                 Fees.  The Administrative Agent and the Lenders
shall have received all fees, if any, owing pursuant to the Fee Letter and
Section 2.5.

 

(o)                                 Capital
Structure/Other Documentation. Receipt by the Administrative Agent of any
information reasonably requested by it relating to the corporate and capital
structure of the Borrower and its Subsidiaries.

 

(p)                                 Patriot Act
Certificate.  The Administrative
Agent shall have received a certificate satisfactory thereto, for benefit of
itself and the Lenders, provided by the Borrower that sets forth information
required by the Patriot Act (as defined in Section 9.18) including,
without limitation, the identity of the Borrower, the name and address of the
Borrower and other information that will allow the Administrative Agent or any
Lender, as applicable, to identify the Borrower in accordance with the Patriot
Act.

 

(q)                                 Blue Ridge
Agreement.  The Administrative Agent
shall have received a true and complete copy of the Credit and Security
Agreement, dated November 15, 2001, among the Borrower, the applicable
subsidiaries of the Borrower, Blue Ridge Asset Funding Corporation and the
other parties thereto as originally executed and delivered, together with all
amendments, modifications, supplements, exhibits and schedules thereto, and
such document shall be reasonably satisfactory to the Administrative Agent.

 

(r)                                    Senior Note
Documents.  The Administrative Agent
shall have received a true and complete copy of the credit documentation
evidencing the 8 1/2% Senior Notes due

 

54

 

2005 and the 8 7/8% Senior Notes due 2010 as originally executed and
delivered, together with all amendments, modifications, supplements, exhibits
and schedules thereto, and such documentation shall be reasonably satisfactory
to the Administrative Agent.

 

(s)                                  Cash Collateral
Security Agreement.  If the Borrower
shall have elected to cash collateralize the Credit Party Obligations, the
Administrative Agent shall have received the following:

 

(i)                                     a fully executed
original of the Cash Collateral Security Agreement, in form and substance
satisfactory to the Administrative Agent;

 

(ii)                                  a fully executed
amendment to (A) the Collateral Account Notification and Acknowledgement among
the Collateral Agent, Banc of America Securities LLC and the Borrower and (B)
the Account Agreement among Banc of America Securities LLC and the Borrower,
each relating to the BAS Investment Collateral Account, in form and substance
satisfactory to the Administrative Agent; and

 

(iii)                               a fully executed
amendment to (A) the Collateral Account Notification and Acknowledgement among
the Collateral Agent, Bank of America, N.A., as the depository, and the
Borrower and (B) the Account Agreement among Bank of America, N.A., as the
depository, and the Borrower, each relating to the BANA Investment Collateral
Account, in form and substance satisfactory to the Administrative Agent.

 

(t)                                    Additional
Matters.  All other documents and
legal matters in connection with the transactions contemplated by this Credit
Agreement shall be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel.

 

Section 4.2                                      Conditions to All Extensions of Credit.

 

The obligation of each Lender to make any Extension of Credit hereunder
is subject to the satisfaction of the following conditions precedent on the
date of making such Extension of Credit:

 

(a)                                  Representations
and Warranties.  The representations
and warranties made by the Credit Parties herein or which are contained in any
certificate furnished at any time under or in connection herewith shall be true
and correct in all material respects on and as of the date of such Extension of
Credit as if made on and as of such date.

 

(b)                                 No Default or Event
of Default.  No Default or Event of
Default shall have occurred and be continuing on such date or after giving
effect to the Extension of Credit to be made on such date unless such Default
or Event of Default shall have been waived in accordance with this Credit
Agreement.

 

55

 

(c)                                  Compliance with
Commitments.  Immediately after
giving effect to the making of any such Extension of Credit (and the
application of the proceeds thereof), (i) the sum of outstanding Revolving
Loans plus outstanding Swingline Loans plus LOC Obligations shall
not exceed the Aggregate Revolving Committed Amount, (ii) the LOC
Obligations shall not exceed the LOC Committed Amount and (iii) the
Swingline Loans shall not exceed the Swingline Committed Amount.

 

(d)                                 Cash Collateral.  For each Extension of Credit requested
during the Cash Collateral Period, the Borrower (i) shall have deposited funds
into the Cash Collateral Account such that, immediately after giving effect to
such Extension of Credit, the Borrower shall be in compliance with
Section 5.12 and (ii) shall deliver a certified calculation to the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent, setting forth the value of the Account Collateral (together with such
supporting documentation as the Administrative Agent may request), and such
value shall demonstrate compliance with clause (i) immediately above.

 

(e)                                  Additional
Conditions to Revolving Loans.  If a
Revolving Loan is requested, all conditions set forth in Section 2.1 shall
have been satisfied.

 

(f)                                    Additional
Conditions to Letters of Credit.  If
the issuance of a Letter of Credit is requested, all conditions set fort in
Section 2.2 shall have been satisfied.

 

(g)                                 Additional
Conditions to Swingline Loans.  If a
Swingline Loan is requested, all conditions set forth in Section 2.3 shall
have been satisfied.

 

(h)                                 Additional
Conditions to Additional Loans.  If
an Additional Loan is requested, all conditions set forth in Section 2.4
shall have been satisfied.

 

Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute
representations and warranties by the Borrower as of the date of such Extension
of Credit that the conditions in paragraphs (a) through (c) of this Section and
the applicable conditions in paragraphs (d) through (h) of this
Section have been satisfied.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Each Credit Party hereby covenants and agrees that on the Closing Date,
and thereafter for so long as this Credit Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations and all other amounts owing to the Administrative
Agent or any Lender hereunder, are paid in full, such Credit Party shall, and
shall cause each of its Subsidiaries (other than in the case of Sections 5.1,
5.2 or 5.7 hereof), to:

 

56

 

Section 5.1                                      Financial Statements.

 

Furnish to the Administrative Agent and each of the Lenders:

 

(a)                                  Annual Financial
Statements.  As soon as available,
but in any event within ninety (90) days after the end of each fiscal year of
the Borrower, a copy of the consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated  statements of income, cash flows and stockholders’ equity of
the Borrower and its consolidated Subsidiaries for such year which shall be
audited by a firm of independent certified public accountants of nationally
recognized standing reasonably acceptable to the Administrative Agent, setting
forth in each case in comparative form the figures for the previous year,
reported on without a “going concern” or like qualification, assumption or
exception, or qualification indicating that the scope of the audit was
inadequate to permit such independent certified public accountants to certify
such financial statements without such qualification;

 

(b)                                 Quarterly Financial
Statements.  As soon as available
and in any event within forty-five (45)  days after the end of each
of the first three fiscal quarters of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end
of such period and related consolidated statements of income and cash flows for
the Borrower and its consolidated Subsidiaries for such quarterly period and
for the portion of the fiscal year ending with such period, in each case
setting forth in comparative form consolidated figures for the corresponding
period or periods of the preceding fiscal year (subject to normal recurring
year-end audit adjustments);

 

(c)                                  Annual Operating
Budget and Cash Flow.  As soon as
available, but in any event prior to the end of each fiscal year, a copy of the
detailed annual operating budget or plan including cash flow projections of the
Borrower and its Subsidiaries for the next four fiscal quarter period prepared
on a quarterly basis, in form and detail reasonably acceptable to the
Administrative Agent and the Lenders, together with a summary of the material
assumptions made in the preparation of such annual budget or plan; provided,
that such budget or plan shall not be required for a fiscal year if (i) as of
the end of such fiscal year the Borrower has an Investment Grade Debt Rating or
(ii) the end of such fiscal year falls within the Cash Collateral Period;

 

all such financial statements to be complete and correct in all
material respects (subject, in the case of interim statements, to normal
recurring year-end adjustments) and to be prepared in reasonable detail and, in
the case of the annual and quarterly financial statements provided in
accordance with subsections (a) and (b) above, in accordance with GAAP
applied consistently throughout the periods reflected therein and further
accompanied by a description of, and an estimation of the effect on the
financial statements on account of, a material change, if any, in the
application of accounting principles as provided in Section 1.3.

 

57

Section 5.2             Certificates;
Other Information.

 

Furnish to the Administrative Agent and each of the Lenders:

 

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

 

(b)           concurrently
with the delivery of the financial statements referred to in Sections 5.1(a)
and 5.1(b) above, a certificate of a Responsible Officer stating that, to the
best of such Responsible Officer’s knowledge, each of the Credit Parties during
such period observed or performed in all material respects all of its covenants
and other agreements, and satisfied in all material respects every condition,
contained in this Credit Agreement to be observed, performed or satisfied by
it, and that such Responsible Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate and such
certificate shall include the calculations in reasonable detail required to
indicate compliance with Section 5.9 as of the last day of such period;

 

(c)           (i)
within thirty (30) days after the same are sent, notice of and copies of all
reports (other than those otherwise provided pursuant to Section 5.1 and
those which are of a promotional nature) and other financial information which
the Borrower sends to its stockholders, and within thirty (30) days after the
same are filed, notice of and copies of all financial statements and
non-confidential reports which the Borrower may file with the Securities and
Exchange Commission or any successor or analogous Governmental Authority; provided,
however, that to the extent that (A) notification of such reports,
information or statements is provided on the Borrower’s authorized website and
(B) copies of such reports, information or statements are publicly available,
the requirements of this subsection (c) shall be satisfied;

 

(d)           promptly
upon receipt thereof, a copy of any other report or “management letter”
submitted by independent accountants to the Borrower or any of its Subsidiaries
in connection with any annual, interim or special audit of the books of such
Person;

 

(e)           not
less than ten (10) days prior to the consummation of any Permitted Acquisition
for which consideration given by the Borrower is $100,000,000 or greater:

 

(i)            a
reasonably detailed description of the material terms of such Permitted
Acquisition (including, without limitation, the purchase price and method and
structure of payment) and of each Target;

 

(ii)           to
the extent available, audited financial statements of the Target for its two
(2) most recent fiscal years prepared by independent certified public
accountants acceptable to the Administrative Agent and unaudited fiscal
year-to-date statements for the two (2) most recent interim periods; and

 

58

 

(iii)          to
the extent available, consolidated projected balance sheets, income statements,
and cash flow statements of the Borrower and its consolidated Subsidiaries
(giving effect to such Permitted Acquisition and the consolidation with the
Borrower of each relevant Target) for the three (3)-year period following the
consummation of such Permitted Acquisition, in reasonable detail, together with
any appropriate statement of assumptions and pro forma adjustments reasonably
acceptable to the Required Lenders;

 

(f)            promptly,
but in no event later than three Business Days after a Responsible Officer of
the Borrower knows of any change in the Debt Rating, notice of the new Debt
Rating; and

 

(g)           promptly,
such other documents and information about the business, operations, revenues,
financial condition, property or business prospects of the Borrower or any of
its Subsidiaries as the Administrative Agent, on behalf of any Lender, may from
time to time reasonably request.

 

Section 5.3             Payment
of Obligations.

 

(a)           Perform
all of its obligations under each contract to which it is a party, if a failure
to so perform may have a Material Adverse Effect, except to the extent such
obligation is being contested in good faith or a bona fide dispute exists with
respect thereto so long as such Credit Party has established adequate reserves
on the books of such Credit Party to account therefor in accordance with GAAP.

 

(b)           Pay
and perform all of its obligations under the Credit Documents and pay and
perform (i) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or its property, which if not paid or performed
would have a Material Adverse Effect and (ii) all other indebtedness,
obligations and liabilities in accordance with customary trade practices, which
if not paid would have a Material Adverse Effect; provided that it may
contest any tax, assessment or other governmental charge in good faith so long
as adequate reserves are maintained with respect thereto in accordance with
GAAP.

 

Section 5.4             Conduct
of Business and Maintenance of Existence.

 

Continue to engage in business of the same general type as conducted by
it on the Closing Date and preserve and maintain its corporate existence and
all rights, franchises, licenses and privileges necessary to the conduct of its
business, and qualify and remain qualified as a foreign corporation (or
partnership, limited liability company or other such similar entity, as the
case may be) and authorized to do business in each jurisdiction in which the
failure to so qualify would have a Material Adverse Effect and shall maintain
all licenses, permits and registrations necessary for the conduct of its
operations, except to the extent that the failure to do so could not reasonably
expected to result in a Material Adverse Effect.

 

59

 

Section 5.5             Maintenance
of Property; Insurance.

 

(a)           Keep
all material property useful and necessary in its business in good working
order and condition (ordinary wear and tear and obsolescence excepted).

 

(b)           Maintain with
financially sound and reputable insurance companies insurance on all its
material property in at least such amounts and against at least such risks as
are usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to the Administrative Agent, upon
reasonable written request, full information as to the insurance carried; provided,
however, that the Borrower and its Subsidiaries may maintain self
insurance plans to the extent companies of similar size and in similar
businesses do so.

 

Section 5.6             Inspection
of Property; Books and Records; Discussions.

 

Keep proper books and records of accounts in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and, provided that the Administrative Agent and the Lenders use
reasonable efforts to minimize disruption to the business of the Borrower and
its Subsidiaries, permit representatives of the Administrative Agent or any
Lender, from time to time, to visit and inspect its Properties and to inspect,
audit and make extracts from its books, records and files, including without
limitation management letters prepared by independent accountants and to
discuss with its principal officers, and its independent accountants, its
business, assets, liabilities, financial condition, results of operations and
business prospects.

 

Section 5.7             Notices.

 

Give notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:

 

(a)           promptly,
but in any event within five (5) Business Days after a Responsible Officer of
the Borrower knows thereof, the occurrence of any Default or Event of Default;

 

(b)           promptly
and in any event within five (5) Business Days after a Responsible Officer
of the Borrower knows thereof, the commencement of any (i) Material Proceeding,
(ii) loss of or damage to any assets of the Borrower or any Subsidiary that
likely will result in a Material Adverse Effect and (iii) litigation,
investigation or proceeding involving an environmental claim or potential
liability under Environmental Laws that if adversely determined could
reasonably be expected to have a Material Adverse Effect;

 

(c)           promptly
and in any event within five (5) Business Days after a Responsible Officer
of the Borrower knows thereof, default by Borrower or any Subsidiary under any
note, indenture, loan agreement, mortgage or other similar 

 

60

 

agreement to
which the Borrower or any Subsidiary is a party or by which the Borrower or any
Subsidiary is bound, which relates to borrowed money, or of any other default
under any other note, indenture, loan agreement, mortgage or other similar
agreement to which the Borrower or any Subsidiary is a party or by which the
Borrower or any Subsidiary is bound if, in each case in this subsection, such
default could reasonably be expected to have a Material Adverse Effect;

 

(d)           promptly
and in any event within thirty (30) days after a Responsible Officer of
the Borrower knows thereof: (i) the occurrence or expected occurrence of
any Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC (other
than a Permitted Lien) or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan; and

 

(e)           promptly
and in any event within five (5) Business Days after a Responsible Officer
of the Borrower knows thereof, any other development or event which could
reasonably be expected to have a Material Adverse Effect.

 

Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto.  In the case of any
notice of a Default or Event of Default, the Borrower shall specify that such
notice is a Default or Event of Default notice on the face thereof.

 

Section 5.8             Environmental
Laws.

 

Defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective employees, agents, officers and directors, from
and against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the 
Borrower, any of its Subsidiaries or the Properties, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney’s and consultant’s fees, investigation
and laboratory fees, response costs, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification therefor.  The agreements in this paragraph shall
survive repayment of the Credit Party Obligations and termination of the
Commitments and the Credit Documents.

 

Section 5.9             Financial
Covenants.

 

(a)           Commencing
on the day immediately following the Closing Date, the Credit Parties shall
comply with the following financial covenant:

 

61

 

(i)            Consolidated
Net Worth.  Consolidated Net Worth
shall not at any time be less than the sum of (A) $1,150,000,000 plus
(B) on a cumulative basis as of the end of each fiscal quarter of the Borrower,
commencing with the fiscal quarter ending December 31, 2005, an amount equal to
25% of Consolidated Net Income for the fiscal quarter then ended, after giving
effect to the payment of dividends for such period; provided, that
Consolidated Net Worth shall not at any time be less than $1,150,000,000.

 

(b)           During
any No Collateral Period, the Credit Parties shall comply with the following
additional financial covenants:

 

(i)            Consolidated
Leverage Ratio.  The Consolidated
Leverage Ratio, as of the last day of each fiscal quarter of the Borrower,
shall be less than or equal to 3.00 to 1.00.

 

(ii)           Consolidated
Interest Coverage Ratio.  The
Consolidated Interest Coverage Ratio, as of the last day of each fiscal quarter
of the Borrower, shall be greater than or equal to 4.00 to 1.00.

 

Section 5.10           Additional
Subsidiary Guarantors.

 

Where Domestic
Subsidiaries of the Borrower (excluding Securitization Vehicles) that are not
Credit Parties hereunder (the “Non-Guarantor
Subsidiaries”) shall at any time constitute more than either

 

(i)            fifteen percent (15%), in the
aggregate, of Consolidated Total Assets, or

 

(ii)           fifteen percent (15%), in the
aggregate, of Consolidated Net Income,

 

(collectively, the “Threshold
Requirement”), the Borrower shall so notify the Administrative Agent and
shall cause one or more Domestic Subsidiaries to become a “Guarantor” hereunder
by (a) executing a Joinder Agreement and (b) delivering such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, certified resolutions and
other organizational and authorizing documents of such Person and favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above), all in form, content and scope reasonably satisfactory to
the Administrative Agent such that immediately after the joinder of such Domestic
Subsidiaries as Guarantors hereunder, the remaining Non-Guarantor Subsidiaries
shall not, either individually or as a group, exceed the Threshold Requirement.

 

Section 5.11           Compliance
with Law.

 

To the extent failure to do so would have a Material Adverse Effect,
each Credit Party will, and will cause each of its Subsidiaries to (a) observe
and remain in compliance with all

 

62

 

applicable Requirements of Law,
including all applicable Environmental Laws, except to the extent such
Requirement of Law is being contested in good faith or a bona fide dispute
exists with respect thereto so long as such Credit Party has established
adequate reserves on the books of such Credit Party to account therefor in
accordance with GAAP, and (b) maintain in full force and effect all permits,
authorizations, registrations and consents from any Governmental Authority, in
each case applicable to the conduct of its business.

 

Section 5.12           Cash
Collateral.

 

(a)           The Borrower shall maintain the Cash
Collateral Account, the BANA Investment Collateral Account, and the BAS
Investment Collateral Account at all times during the Cash Collateral Period.

 

(b)           Once during the term of this Credit
Agreement, the Borrower shall have the option to cash collateralize the Credit
Party Obligations.  On and from the date
(the “Collateral Engagement Date”) that the Borrower shall deliver to
the Administrative Agent a Cash Collateral Notice in the form of Schedule
5.12 hereto until the Collateral Release Date (the “Cash Collateral
Period”), the Borrower shall maintain
Permitted Cash Collateral in the Cash Collateral Account and the BAS Investment
Collateral Account (the “Account Collateral”) with an aggregate value
equal to at least 105% of all Credit Party Obligations.  If for any reason during the Cash Collateral
Period the value of the Account Collateral at any time falls below an amount
equal to 105% of the Credit Party Obligations, then the Borrower shall immediately
deposit additional funds into the Cash Collateral Account in an amount
sufficient to eliminate such shortfall.

 

(c)           The Borrower may, at any time
following the Collateral Engagement Date but only once during the term of this
Credit Agreement, elect to release
the Account Collateral and terminate the requirements of Section 5.12(b)
hereof; provided, that (i) as of the effective date of such election
(the “Collateral Release Date”), the Borrower shall be able to
demonstrate to the  reasonable
satisfaction of the Administrative Agent that for the four quarter period
immediately preceding the Collateral Release Date (A) the Consolidated Leverage
Ratio for such period was less than or equal to 2.50 to 1.00, (B) the
Consolidated Interest Coverage Ratio for such period was greater than or equal
to 4.25 to 1.00, (ii) no Default or Event of Default shall have occurred and be
continuing prior to, as of or immediately after the Collateral Release Date
(for the avoidance of doubt, the determination of the existence of a Default or
Event of Default immediately after the Collateral Release Date shall take into
account the effectiveness of the covenants set forth in Article VI which are
effective only during the No Collateral Period as well as those covenants set
forth in Article VI which are effective at all times during the term of this
Credit Agreement) and (iii) the Borrower shall have delivered a Cash Collateral
Release Notice to the Administrative Agent and the Lenders demonstrating
compliance with the foregoing conditions and setting forth the date of the
proposed Collateral Release Date at least 60 days prior to such proposed
Collateral Release Date.

 

(d)           If at the end of any fiscal month of
the Borrower during the Cash Collateral Period the value of the Account Collateral exceeds 105% of the Credit Party
Obligations, then, provided no Default or Event of Default has occurred and is
continuing, at the request of the Borrower, the Administrative Agent shall
direct the Collateral Agent in writing, specifying the amount of such excess
and the account of the Borrower into which such excess is to be deposited, to

 

63

 

pay and
transfer to the Borrower cash on deposit (to the extent available) in the Cash
Collateral Account in an amount equal to such excess.

 

ARTICLE VI

 

NEGATIVE
COVENANTS

 

The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Credit Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Facility Fee and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full that:

 

Section 6.1             Indebtedness.

 

During any No Collateral Period, the Borrower will not, nor will it
permit any Subsidiary to, contract, create, incur, assume or permit to exist
any Indebtedness, except:

 

(a)           Indebtedness
arising or existing under this Credit Agreement and the other Credit Documents;

 

(b)           Indebtedness
of the Borrower and its Subsidiaries existing as of the Closing Date as
referenced in the financial statements referenced in Section 3.1 (and set
out more specifically in Schedule 6.1(b)) hereto and renewals,
extensions and refinancings thereof incurred at any time during the term of this
Credit Agreement, in a principal amount not in excess of that outstanding as of
the date of such renewal, refinancing or extension;

 

(c)           (i)
Indebtedness of the Borrower and its Subsidiaries incurred after the Closing
Date consisting of Capital Leases or Indebtedness incurred to provide all or a
portion of the purchase price or cost of construction of an asset and (ii)
Off-Balance Sheet Liabilities and/or indebtedness, liabilities and obligations
incurred in connection with a trade receivables securitization transaction
involving the Borrower or any of its Subsidiaries and a Securitization Vehicle
(regardless of whether such indebtedness, liabilities and obligations
constitute Off-Balance Sheet Liabilities); provided, that in each case
(A) such Indebtedness when incurred shall not exceed the purchase price or
cost of construction of such asset and (B) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;

 

(d)           Unsecured
intercompany Indebtedness among the Credit Parties, provided that any such
Indebtedness shall be fully subordinated to the Credit Party Obligations
hereunder on terms reasonably satisfactory to the Administrative Agent;

 

64

 

(e)           Indebtedness
and obligations owing under Hedging Agreements entered into in order to manage
existing or anticipated interest rate, exchange rate or commodity risks and not
for speculative purposes;

 

(f)            Indebtedness
and obligations of Credit Parties owing under trade letters of credit for the
purchase of goods or other merchandise (but not under standby, direct pay or
other letters of credit except for the Letters of Credit hereunder) generally;

 

(g)           Guaranty
Obligations in respect of Indebtedness of a Credit Party to the extent such
Indebtedness is permitted to exist or be incurred pursuant to this Section 6.1;

 

(h)           Indebtedness
that is non-recourse to any of the Borrower or its Subsidiaries or any of their
respective assets;

 

(i)            Indebtedness
incurred under take-or-pay arrangements entered into in the ordinary course of
business; and

 

(j)            other
Indebtedness of the Borrower and its Subsidiaries in an aggregate amount not to
exceed the following (measured at the time of incurrence):  (i) if the Borrower has an Investment Grade
Debt Rating, 30% of Consolidated Net Worth  at any time outstanding and (ii) if the
Borrower does not have an Investment Grade Debt Rating, 15% of Consolidated Net
Worth at any time outstanding.

 

Section 6.2             Liens.

 

The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of the
Account Collateral except for the Liens in favor of the Collateral Agent, for
the benefit of the Lenders and the Agents, to secure the Credit Party
Obligations.  During any No Collateral
Period, the Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.

 

Section 6.3             Nature
of Business.

 

The Borrower will not, nor will it permit any Subsidiary to, alter the
character of its business in any material respect from that conducted as of the
Closing Date.

 

Section 6.4             Consolidation, Merger, Sale or Purchase of Assets, etc.

 

The Borrower will not, nor will it permit any Subsidiary to,

 

(a)           dissolve,
liquidate or wind up its affairs, sell, transfer, lease or otherwise dispose of
its property or assets or agree to do so at a future time except the following,
without duplication, shall be expressly permitted:

 

65

 

(i)            Specified
Sales;

 

(ii)           the
sale, transfer, lease or other disposition of property or assets (A) to an
unrelated party not in the ordinary course of business (other than Specified
Sales), where and to the extent that they are the result of a Recovery Event or
(B) the sale, lease, transfer or other disposition of real property, machinery,
parts and equipment no longer used or useful in the conduct of the business of
the Borrower or any of its Subsidiaries, as appropriate, in its reasonable
discretion;

 

(iii)          the
sale, lease or transfer of property or assets from a Credit Party to another
Credit Party;

 

(iv)          the
sale of trade receivables sold or otherwise conveyed to or by a Securitization
Vehicle; and

 

(v)           the
sale, lease or transfer of property or assets not to exceed 10%  of
Consolidated Total Assets in the aggregate in any fiscal year; or

 

(b)           (i)  purchase, lease or otherwise acquire (in a
single transaction or a series of related transactions) the property or assets
of any Person (other than purchases or other acquisitions of inventory, leases,
materials, property and equipment in the ordinary course of business, except as
otherwise limited or prohibited herein) or (ii) enter into any transaction of
merger or consolidation, except for (A) Investments or acquisitions (including
Permitted Acquisitions) permitted pursuant to Section 6.5, (B) the merger
or consolidation of a Credit Party with and into another Credit Party, provided
that if the Borrower is a party thereto, the Borrower will be the surviving
corporation and (C) the merger or consolidation of a Subsidiary with and into
another Subsidiary or the Borrower; provided that if a Credit Party is a party
thereto, the Credit Party will be the surviving corporation.

 

Section 6.5             Advances, Investments and Loans.

 

The Borrower will not, nor will it permit any Subsidiary to, make any
Investment except for Permitted Investments.

 

Section 6.6             Transactions
with Affiliates.

 

The Borrower will not, nor will it permit any Subsidiary to, enter into
any transaction or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder or Affiliate of
such Person other than on terms and conditions substantially as favorable as
would be obtainable in a comparable arm’s-length transaction with a Person
other than an officer, director, shareholder or Affiliate; provided,
that this Section 6.6 shall not apply to compensation and employee stock plans
of the Credit Parties.

 

66

 

Section 6.7             Ownership
of Subsidiaries; Restrictions.

 

The Borrower will not, nor will it permit any Subsidiary to, create,
form or acquire any Subsidiaries, except for Securitization Vehicles and other
Domestic Subsidiaries which are joined as Additional Credit Parties to the
extent required by Section 5.10 hereof. 
The Borrower will not sell, transfer, pledge or otherwise dispose of any
Capital Stock or other equity interests in any of its Subsidiaries (other than
Securitization Vehicles), nor will it permit any of its Subsidiaries (other
than Securitization Vehicles) to issue, sell, transfer, pledge or otherwise
dispose of any of their Capital Stock or other equity interests, except in a
transaction permitted by Section 6.4.

 

Section 6.8             Fiscal
Year; Organizational Documents; Material Contracts.

 

The Borrower will not, nor will it permit any of its Subsidiaries to (a)
change its fiscal year, (b) amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational or
formation document) or bylaws (or other similar document) in any material
respect or in any respect adverse to the interests of the Lenders without the
prior written consent of the Required Lenders or (c) during any No Collateral
Period, amend, modify, cancel, terminate or fail to renew or extend or permit
the amendment, modification, cancellation or termination of any Material
Contract without the prior written consent of the Required Lenders, except in
the event that such amendments, modifications, cancellations or terminations
could not reasonably be expected to have a Material Adverse Effect.

 

Section 6.9             Limitation
on Restricted Actions.

 

The Borrower will not, nor will it permit any Subsidiary to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to
(a) pay dividends or make any other distributions to any Credit Party on
its Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, (b) pay any Indebtedness or other obligation
owed to any Credit Party, (c) make loans or advances to any Credit Party,
(d) sell, lease or transfer any of its Properties or assets to any Credit
Party, or (e) act as a Guarantor and pledge its assets pursuant to the
Credit Documents or any renewals, refinancings, exchanges, refundings or
extension thereof, except (in respect of any of the matters referred to in
clauses (a)-(d) above) for such encumbrances or restrictions existing
under or by reason of (i) this Credit Agreement and the other Credit
Documents, (ii) applicable law,  (iii) any document or instrument governing
Indebtedness incurred pursuant to Section 6.1(c), provided that any
such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith or (iv) any Permitted Lien
or any document or instrument governing any Permitted Lien, provided
that any such restriction contained therein relates only to the asset or assets
subject to such Permitted Lien.

 

Section 6.10           Restricted
Payments.

 

During any No Collateral Period, the Borrower will not, nor will it
permit any Subsidiary to, directly or indirectly, declare, order, make or set
apart any sum for or pay any Restricted Payment; provided, that to the extent
that (a) no Default or Event of Default shall have occurred

 

67

 

and be continuing or would
result therefrom and (b) the Borrower shall be in compliance with the financial
covenants set forth in Section 5.9 on a pro forma basis after giving effect
thereto, the Borrower shall be permitted: (i) to make dividends payable
solely in the common stock or equivalent equity interests of such Person,
(ii to make dividends or other distributions payable to the Borrower or
any wholly owned Subsidiary of the Borrower that is a Guarantor (directly or
indirectly through Subsidiaries), and (iii) to make other Restricted Payments
as may be approved by the Borrower’s board of directors.

 

Section 6.11           No
Further Negative Pledges.

 

The Borrower will not, nor will it permit any Subsidiary to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its Properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Credit Agreement and the other Credit
Documents, (b) pursuant to any document or instrument governing Indebtedness
incurred pursuant to Section 6.1(c), provided that any such
restriction contained therein relates only to the asset or assets constructed
or acquired in connection therewith and (c) in connection with any
Permitted Lien or any document or instrument governing any Permitted Lien, provided
that any such restriction contained therein relates only to the asset or assets
subject to such Permitted Lien.

 

ARTICLE VII

 

EVENTS OF
DEFAULT

 

Section 7.1             Events
of Default.

 

An Event of Default shall exist upon the occurrence of any of the
following specified events (each an “Event of Default”):

 

(a)           (i)
The Borrower shall fail to pay any principal on any Loan when due in accordance
with the terms hereof; or (ii) the Borrower shall fail to reimburse the
applicable Issuing Lender for any LOC Obligations when due in accordance with
the terms hereof; or (iii) the Borrower shall fail to pay any interest on any
Loan or any fee or other amount payable hereunder when due in accordance with
the terms hereof and such failure shall continue unremedied for five (5)  days;
or (iv) or any Guarantor shall fail to pay on the Guaranty in respect of any of
the foregoing or in respect of any other Guaranty Obligations hereunder (after
giving effect to the grace period in clause (iii)); or

 

(b)           Any
representation or warranty made or deemed made herein or in any of the other
Credit Documents or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Credit Agreement shall prove to have been incorrect, false or misleading
in any material respect on or as of the date made or deemed made; or

 

68

 

(c)           (i) Any
Credit Party shall fail to perform, comply with or observe any term, covenant
or agreement applicable to it contained in Section 5.1, Section 5.2,
Section 5.7(a), Section 5.9 or Article VI hereof; or
(ii) any Credit Party shall fail to comply with any other covenant,
contained in this Credit Agreement or the other Credit Documents or any other
agreement, document or instrument among any Credit Party, the Administrative
Agent and the Lenders or executed by any Credit Party in favor of the
Administrative Agent, the Collateral Agent or the Lenders (other than as described
in Sections 7.1(a) or 7.1(c)(i) above), and in the event such breach or failure
to comply in (i) and (ii) is capable of cure, is not cured within thirty (30)
days of its occurrence; or

 

(d)           The
Borrower or any of its Subsidiaries shall (i) default in any payment of
principal of or interest on any Indebtedness (other than the Credit Party
Obligations) in a principal amount outstanding of at least $20,000,000 in the
aggregate for the Borrower and any of its Subsidiaries beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; (ii) default in the observance or performance of
any other agreement or condition relating to any Indebtedness in a principal
amount outstanding of at least $20,000,000 in the aggregate for the Borrower
and its Subsidiaries or contained in any instrument or agreement evidencing,
securing or relating thereto after giving effect to any cure or grace period
provided therein, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity; or (iii) breach
or default any Hedging Agreement between any Credit Party and any Hedging
Agreement Provider after giving effect to any cure or grace period provided
therein; or

 

(e)           (i) The
Borrower or any of its Subsidiaries shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Borrower or any of its
Subsidiaries shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed, undischarged
or unbonded for a period of sixty (60) days; or  (iii) there shall be
commenced against the Borrower or any of its Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within sixty
(60) days from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating its consent

 

69

 

to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or  (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing their inability to, pay its debts as they become due; or

 

(f)            One
or more judgments or decrees (other than judgments adequately reserved for or
which are covered by insurance for which the insurer has acknowledged coverage)
shall be entered against the Borrower or any of its Subsidiaries involving in
the aggregate a liability (to the extent not paid when due or covered by
insurance) of $20,000,000  or more and all such judgments or decrees
shall not have been paid and satisfied, vacated, discharged, stayed or bonded
pending appeal within thirty (30) days from the entry thereof or any
injunction, temporary restraining order or similar decree shall be issued
against a Credit Party or any of its Subsidiaries that could reasonably be
expected to result in a Material Adverse Effect; or

 

(g)           (i) Any
Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any “accumulated funding deficiency” (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or any
Lien in favor of the PBGC or a Plan (other than a Permitted Lien) shall arise
on the assets of the Borrower or any Commonly Controlled Entity,  (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA,  (v) the Borrower, any of its
Subsidiaries or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, any
Multiemployer Plan or  (vi) any other similar event or condition
shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could have a Material Adverse Effect;
or

 

(h)           There
shall occur a Change of Control; or

 

(i)            At
any time after the execution and delivery thereof, the Guaranty for any reason,
other than the satisfaction in full of all Credit Party Obligations, shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void, or  any Credit Party
shall contest the validity or enforceability of the Guaranty or any Credit
Document in writing or deny in writing that it has any further liability,
including with respect to future advances by the Lenders, under any Credit
Document to which it is a party; or

 

(j)            Any
other Credit Document shall fail to be in full force and effect or to give the
Administrative Agent, the Collateral Agent and/or the Lenders the rights,
powers and privileges purported to be created thereby (except as such documents
may be

 

70

 

terminated or no longer in force and effect in accordance with the
terms thereof, other than those indemnities and provisions which by their terms
shall survive).

 

Section 7.2             Acceleration;
Remedies.

 

Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in
Section 7.1(e) above, automatically the Commitments shall immediately
terminate and the Loans (with accrued interest thereon), and all other amounts
under the Credit Documents (including without limitation the maximum amount of
all contingent liabilities under Letters of Credit) shall immediately become
due and payable, and (b) if such event is any other Event of Default, any
or all of the following actions may be taken: 
(i) with the written consent of the Required Lenders, the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; (ii) the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Credit Agreement and the Notes
to be due and payable forthwith and direct the Borrower to pay to the
Administrative Agent cash collateral as security for the LOC Obligations for
subsequent drawings under then outstanding Letters of Credit in an amount equal
to the maximum amount of which may be drawn under Letters of Credit then
outstanding, whereupon the same shall immediately become due and payable;
and/or (iii) with the written consent of the Required Lenders, the Agents may,
or upon the written request of the Required Lenders, the Agents shall, exercise
such other rights and remedies as provided under the Credit Documents and under
applicable law.

 

ARTICLE VIII

 

THE AGENTS

 

Section 8.1             Appointment.

 

Each Lender hereby irrevocably designates and appoints Wachovia as the
Administrative Agent of such Lender under this Credit Agreement, and each such
Lender irrevocably authorizes Wachovia, as the Administrative Agent for such
Lender, to take such action on its behalf under the provisions of this Credit
Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Credit Agreement and the other Credit Documents, together with
such other powers as are reasonably incidental thereto.  Each Lender acknowledges that the Credit
Parties may rely on each action taken by the Administrative Agent on behalf of
the Lenders hereunder.  Notwithstanding
any provision to the contrary elsewhere in this Credit Agreement or the other
Credit Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or the other Credit Documents or otherwise exist against the
Administrative Agent.

 

71

 

Each Lender hereby irrevocably designates and appoints Bank of America,
N.A. as the Collateral Agent of such Lender under this Credit Agreement and the
other Credit Documents, and each such Lender irrevocably authorizes Bank of
America, N.A., as the Collateral Agent for such Lender, to take such action on
its behalf under the provisions of this Credit Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Collateral Agent by the terms of this Credit Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto.  Each Lender
acknowledges that the Credit Parties may rely on each action taken by the
Collateral Agent on behalf of the Lenders hereunder.  Notwithstanding any provision to the contrary elsewhere in this
Credit Agreement or the other Credit Documents, the Collateral Agent shall not
have any duties or responsibilities, except those expressly set forth herein
and in the Cash Collateral Security Agreement, or any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Credit Agreement or the
other Credit Documents or otherwise exist against the Collateral Agent.

 

Section 8.2             Delegation
of Duties.

 

The Agents may execute any of their respective duties under this Credit
Agreement and the other Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The
Agents shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by them with reasonable care.  Without limiting the foregoing, the
Administrative Agent may appoint one of its affiliates as its agent to perform
the functions of the Administrative Agent hereunder relating to the advancing
of funds to the Borrower and distribution of funds to the Lenders and to
perform such other related functions of the Administrative Agent hereunder as
are reasonably incidental to such functions.

 

Section 8.3             Exculpatory
Provisions.

 

Neither the Agents nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for
any action lawfully taken or omitted to be taken by it or such Person under or
in connection with this Credit Agreement and the other Credit Documents (except
for its or such Person’s own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Credit Agreement, the other Credit Documents or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Agents under or in connection with, this Credit
Agreement, the other Credit Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the Credit
Documents or for any failure of the Borrower to perform its obligations
hereunder or thereunder.  The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance by the Borrower of any of the agreements
contained in, or conditions of, this Credit Agreement and the other Credit
Documents, or to inspect the Properties, assets, books or records of the
Borrower.

 

72

 

Section 8.4             Reliance
by Agents.

 

The Agents shall be entitled to rely, and shall be fully protected in
relying, upon any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it in good faith
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Agents.  The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent and (b) the Administrative Agent shall have received the written
agreement of such assignee to be bound hereby as fully and to the same extent
as if such assignee were an original Lender party hereto, in each case in form
satisfactory to the Administrative Agent. 
Each Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or the other Credit Documents unless it
shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action.  Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under any of the Credit
Documents in accordance with a request of the Required Lenders or all of the
Lenders, as may be required under this Credit Agreement, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Notes.

 

Section 8.5             Notice
of Default.

 

Neither Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless such Agent has
received notice from a Lender or the Borrower referring to this Credit
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”.  In the
event that the Administrative Agent receives such a notice, it shall give
prompt notice thereof to the Lenders. 
The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders except to the extent
that this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be. 
Upon the written instruction from the Administrative Agent specifying
the action or actions to be taken with respect to the Account Collateral as it
relates to such Default or Event of Default, the Collateral Agent shall (i)
send a notice of exclusive control to Bank of America, N.A. and Banc of America
Securities LLC under the Control Account Notification and Acknowledgements
executed with respect to the BANA Investment Collateral Account and the BAS
Investment Collateral Account and (ii) exercise such rights and remedies with
respect to the Account Collateral as the Administrative Agent may reasonably
direct.  The Collateral Agent shall have
no liability for determining whether any written instructions received

 

73

 

from the Administrative Agent
have been authorized by the Lenders as required hereunder and may rely without
inquiry on any such written instructions.

 

Section 8.6             Non-Reliance
on Agents and Other Lenders.

 

Each Lender expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by
either Agent hereinafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by such
Agent to any Lender.  Each Lender
represents to the Agents that it has, independently and without reliance upon
either Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Credit Agreement.  Each Lender also represents that it will, independently and
without reliance upon either 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 analysis, appraisals and decisions in taking or not taking
action under this Credit Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Borrower.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agents
hereunder, the Agents shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower which may come into the possession of either
Agent or any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates.

 

Section 8.7             Indemnification.

 

The Lenders agree to indemnify the Agents and the Issuing Lenders in
their respective capacities hereunder (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so), ratably
according to their respective Revolving Commitment Percentages in effect on the
date on which indemnification is sought under this Section, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against either
Agent or Issuing Lender in any way relating to or arising out of any Credit
Document or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by either Agent or Issuing Lender under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting from such Agent’s or Issuing Lender’s gross negligence or
willful misconduct, as determined by a court of competent jurisdiction.  The agreements in this Section 8.7
shall survive the termination of this Credit Agreement and payment of the Notes
and all other amounts payable hereunder.

 

74

 

Section 8.8             Agents
in Their Individual Capacity.

 

The Agents and their respective affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Agents were not the Administrative Agent or the Collateral Agent,
respectively, hereunder.  With respect
to its Loans made or renewed by it and any Note issued to it, each Agent shall
have the same rights and powers under this Credit Agreement as any Lender and
may exercise the same as though it were not the Administrative Agent or the
Collateral Agent, respectively, and the terms “Lender” and “Lenders” shall
include the Administrative Agent and the Collateral Agent in their individual
capacities.

 

Section 8.9             Successor
Agents.

 

(a)           The Administrative
Agent may resign as Administrative Agent upon thirty (30) days’ prior
notice to the Borrower and the Lenders. 
If the Administrative Agent shall resign as Administrative Agent under
this Credit Agreement and the Notes, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor
agent, so long as no Event of Default has occurred and is continuing, shall
require the approval of the Borrower (such approval not to be unreasonably
withheld), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term “Administrative Agent”
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Credit Agreement or any holders of the Notes.  After any retiring Administrative Agent’s resignation as
Administrative Agent, the provisions of this Section 8.9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Credit Agreement.

 

(b)           The Collateral Agent
may resign as Collateral Agent upon thirty (30) days’ prior notice to the
Administrative Agent, the Borrower and the Lenders.  If the Collateral Agent shall resign as Collateral Agent under
this Credit Agreement and the Cash Collateral Security Agreement, then the
Required Lenders shall appoint Wachovia as successor agent for the Lenders,
whereupon such successor agent shall succeed to the rights, powers and duties
of the Collateral Agent, and the term “Collateral Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Collateral Agent’s rights, powers and duties as Collateral Agent shall be
terminated, without any other or further act or deed on the part of such former
Collateral Agent or any of the parties to this Credit Agreement or any holders
of the Notes, except that the former Collateral Agent, the new Collateral Agent
and the Borrower shall make the appropriate transfers and other arrangements to
ensure that the Account Collateral has been adequately delivered into the
control of the new Collateral Agent, as determined by the Administrative
Agent.  After any retiring Collateral
Agent’s resignation as Collateral Agent, the provisions of this Section 8.9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent under this Credit Agreement.  Notwithstanding the foregoing to the
contrary, upon the Collateral Release Date, the Collateral Agent shall have no
further obligations, responsibilities or duties under this Credit Agreement or
under any other Credit Document.

 

75

 

Section 8.10           Nature
of Duties.

 

Except as otherwise expressly stated herein, any agent (other than the
Administrative Agent and the Collateral Agent) or joint-lead arranger listed
from time to time on the cover page of this Credit Agreement shall have no
obligations, responsibilities or duties under this Credit Agreement or under any
other Credit Document other than obligations, responsibilities and duties
applicable to all Lenders in their capacity as Lenders; provided, however, that
such agents and joint-lead arrangers shall be entitled to the same rights,
protections, exculpations and indemnifications granted to the Administrative
Agent under this Article VIII in their capacity as an agent or joint-lead
arranger.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.1             Amendments
and Waivers.

 

Neither this Credit Agreement nor any of the other Credit Documents,
nor any terms hereof or thereof may be amended, supplemented, waived or
modified (by amendment, waiver, consent or otherwise) except in accordance with
the provisions of this Section nor may Account Collateral be released except as
specifically provided herein or in accordance with the provisions of this
Section 9.1.  The Required Lenders
may or, with the written consent of the Required Lenders, the Administrative
Agent may, from time to time, (a) enter into with the Borrower written
amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Credit Agreement or
the other Credit Documents or changing in any manner the rights of the Lenders
or of the Borrower hereunder or thereunder or (b) waive or consent to the
departure from, on such terms and conditions as the Required Lenders may
specify in such instrument, any of the requirements of this Credit Agreement or
the other Credit Documents or any Default or Event of Default and its
consequences; provided, however, that no such amendment,
supplement, modification, release, waiver or consent shall:

 

(i)            reduce
the amount or extend the scheduled date of maturity of any Loan or Note, or
reduce the stated rate of any interest or fee payable hereunder (other than
interest at the increased post-default rate) or extend the scheduled date of
any payment thereof or increase the amount or extend the expiration date of any
Lender’s Commitment, in each case without the written consent of each Lender
directly affected thereby; or

 

(ii)           amend,
modify or waive any provision of this Section 9.1 or reduce the percentage
specified in the definition of Required Lenders, without the written consent of
all the Lenders; or

 

(iii)          amend,
modify or waive any provision of Article VIII without the written consent
of the Administrative Agent; or

 

76

 

(iv)          release
all or substantially all of the Guarantors from their obligations under the
Guaranty, without the written consent of all of the Lenders; or

 

(v)           except
pursuant to Section 5.12, release all or substantially all of the Account
Collateral (if any), without the written consent of all of the Lenders; or

 

(vi)          permit
the Borrower to assign or transfer any of its rights or obligations under this
Credit Agreement or other Credit Documents; or

 

(vii)         amend,
modify or waive any provision of the Credit Documents requiring consent,
approval or request of the Required Lenders or all Lenders, without the written
consent of all of the Required Lenders or Lenders as appropriate; or

 

(viii)        amend,
modify or waive any provision of the Credit Documents affecting the rights or
duties of the Administrative Agent, the Collateral Agent, the applicable
Issuing Lender or the Swingline Lender under any Credit Document without the
written consent of the Administrative Agent, the Collateral Agent, the
applicable Issuing Lender and/or the Swingline Lender, as applicable, in
addition to the Lenders required hereinabove to take such action; or

 

(ix)           amend
or modify the definition of Credit Party Obligations to delete or exclude any
obligation or liability described therein without the written consent of each
Lender directly affected thereby.

 

Any such waiver, amendment, supplement or modification and any such
release shall apply equally to each of the Lenders and shall be binding upon
the Borrower, the other Credit Parties, the Lenders, the Administrative Agent,
the Collateral Agent and all future holders of the Notes.  In the case of any waiver, the Borrower, the
other Credit Parties, the Lenders, the Collateral Agent and the Administrative
Agent shall be restored to their former position and rights hereunder and under
the outstanding Loans and Notes and other Credit Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.

 

The Borrower and the Lenders hereby authorize the Administrative Agent
to modify this Credit Agreement by unilaterally amending or supplementing Schedule 2.1(a)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; provided, however, that the
Administrative Agent shall promptly deliver a copy of any such modification to
the Borrower and each Lender.

 

77

 

Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.

 

Section 9.2             Notices.

 

Except as otherwise provided in Article II, all notices, requests
and demands to or upon the respective parties hereto to be effective shall be
in writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered
by hand, (b) when transmitted via telecopy (or other facsimile device) to
the number set out herein, (c) the day following the day on which the same
has been delivered prepaid (or pursuant to an invoice arrangement) to a
reputable national overnight air courier service, or (d) the third
Business Day following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case, addressed as follows in the
case of the Borrower, the other Credit Parties and the Administrative Agent,
and as set forth on Schedule 9.2 in the case of the Lenders, or to
such other address as may be hereafter notified by the respective parties
hereto and any future holders of the Notes:

 

	
  The Borrower

  	
   

  	
   

  
	
  and the other

  	
   

  	
   

  
	
  Credit Parties:

  	
   

  	
  Louisiana-Pacific Corporation

  
	
   

  	
   

  	
  414 Union Street, Ste. 2000

  
	
   

  	
   

  	
  Nashville, Tennessee 37219

  
	
   

  	
   

  	
  Attention:

  	
  Mark Tobin

  
	
   

  	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  	
  Telecopier:
  (503) 821-5319

  
	
   

  	
   

  	
  Telephone:
  (503) 821-5138

  
	
   

  	
   

  	
   

  
	
  The Administrative

  	
   

  	
  Wachovia Bank, National Association

  
	
  Agent:

  	
   

  	
  Charlotte Plaza

  
	
   

  	
   

  	
  201 South College Street, CP-8

  
	
   

  	
   

  	
  Charlotte,
  North Carolina  28288-0680

  
	
   

  	
   

  	
  Attention:  Syndication Agency Services

  
	
   

  	
   

  	
  Telecopier:  (704) 383-0288

  
	
   

  	
   

  	
  Telephone:  (704) 374-2698

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  

 

78

 

	
   

  	
   

  	
  Wachovia Bank, National Association

  
	
   

  	
   

  	
  301 South College Street, DC-5

  
	
   

  	
   

  	
  Charlotte, North Carolina 
  28288-0760

  
	
   

  	
   

  	
  Attention:

  	
  Leanne Phillips,

  
	
   

  	
   

  	
   

  	
  Agency Management Group

  
	
   

  	
   

  	
  Telecopier:  (704) 383-7611

  
	
   

  	
   

  	
  Telephone:  (704) 374-6278

  
	
   

  	
   

  	
   

  
	
   

  	
  The Collateral

  	
   

  	
  Bank of America, N.A.

  
	
   

  	
  Agent:

  	
   

  	
  315 Montgomery Street, 6th Floor

  
	
   

  	
   

  	
  Mail code CA5-704-06-37

  
	
   

  	
   

  	
  San Francisco, California 
  94104

  
	
   

  	
   

  	
  Attention:  Michael Letson

  
	
   

  	
   

  	
  Telecopier:  (415) 622-4585

  
	
   

  	
   

  	
  Telephone:  (415) 953-0604

  

 

Section 9.3             No
Waiver; Cumulative Remedies.

 

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

 

Section 9.4             Survival
of Representations and Warranties.

 

All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Credit Agreement and the Notes
and the making of the Loans; provided that all such representations and
warranties shall terminate on the date upon which the Commitments have been
terminated and all amounts owing hereunder and under any Notes have been paid
in full.

 

Section 9.5             Payment
of Expenses and Taxes.

 

The Borrower
agrees (a) to pay or reimburse the Administrative Agent and WCM for all their
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation, negotiation, printing and execution of, and any
amendment, supplement or modification to, this Credit Agreement and the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and
disbursements of counsel to the Administrative Agent and WCM, (b) to pay or
reimburse each Lender and each Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this Credit
Agreement and the other Credit Documents, including, without limitation, the
reasonable fees and disbursements of counsel to the

 

79

 

Administrative Agent and to the
Lenders, (c) to pay or reimburse each Lender and each Agent for any costs, fees
or expenses incurred in connection with any investigation (including, without
limitation, background checks) performed to determine whether the Borrower or
any of its Subsidiaries or any officer, director, shareholder or affiliate of
the Borrower or any of its Subsidiaries has violated any Anti-Terrorism Laws or
other similar law, and (d) on demand, to pay, indemnify, and hold each Lender
and each Agent harmless from, any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, which may be payable or determined to
be payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
the Credit Documents and any such other documents, and (d) to pay, indemnify,
and hold each Lender and each Agent and their Affiliates harmless from and
against, any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of the Credit Documents and any such other
documents and the use, or proposed use, of proceeds of the Loans (all of the
foregoing, collectively, the “indemnified liabilities”); provided,
however, that the Borrower shall not have any obligation hereunder to
any Agent or any Lender or any Affiliate thereof with respect to indemnified
liabilities to the extent arising from the gross negligence or willful
misconduct of any such Agent or any such Lender or any such Affiliate, as
determined by a court of competent jurisdiction.  The agreements in this Section 9.5 shall survive repayment of the
Loans and the Credit Party Obligations.

 

Section 9.6             Successors
and Assigns; Participations; Purchasing Lenders.

 

(a)           This
Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Credit Agreement or the
other Credit Documents without the prior written consent of each Lender.

 

(b)           Any
Lender may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more Eligible Assignees (“Participants”)
participating interests in any Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender, or any other interest of such Lender
hereunder.  In the event of any such
sale by a Lender of participating interests to a Participant, such Lender’s
obligations under this Credit Agreement to the other parties to this Credit
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Credit Agreement, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Credit Agreement.  No Lender shall transfer
or grant any participation under which the Participant shall have rights to
approve any amendment to or waiver of this Credit Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
scheduled maturity of any Loan or Note in which such Participant is
participating, or reduce the stated rate or extend

 

80

 

the time of payment of interest or fees thereon (except in connection
with a waiver of interest at the increased post-default rate) or reduce the
principal amount thereof, or increase the amount of the Participant’s
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default shall not constitute a change in
the terms of such participation, and that an increase in any Commitment or Loan
shall be permitted without consent of a Participant if such Participant’s
participation is not increased as a result thereof), (ii) release all or
substantially all of the Guarantors, from their obligations under the Guaranty,
(iii) release all or substantially all of the Account Collateral (if any), or
(iv) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Credit Agreement. 
In the case of any such participation, the Participant shall not have
any rights under this Credit Agreement or any of the other Credit Documents
(the Participant’s rights against such Lender in respect of such participation
to be those set forth in the agreement executed by such Lender in favor of the
Participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Lender had not sold such participation; provided
that each Participant shall be entitled to the benefits of Sections 2.15, 2.16,
2.17, and 2.18 and 9.5 with respect to its participation in the Commitments and
the Loans outstanding from time to time; provided, further, that
no Participant shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.

 

(c)           Any
Lender may, in the ordinary course of its business and in accordance with
applicable law, at any time, sell or assign to any Eligible Assignee described
in clause (i) of the definition thereof, and with the consent of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower (in each case, which consent shall not be unreasonably
withheld), to one or more Eligible Assignees described in clause (ii) of the
definition thereof (“Purchasing Lenders”), all or any part of its rights
and obligations under this Credit Agreement and the Notes in minimum amounts of
$5,000,000 (or, if less, the entire amount of such Lender’s Obligations),
pursuant to a Commitment Transfer Supplement, executed by such Purchasing
Lender and such transferor Lender (and, in the case of a Purchasing Lender that
is not an Eligible Assignee described in clause (i) of the definition thereof,
the Administrative Agent and, so long as no Event of Default has occurred and
is continuing, the Borrower), and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided, however, that
any sale or assignment to an Eligible Assignee described in clause (i) of the
definition thereof shall not require the consent of the Administrative Agent or
the Borrower nor shall any such sale or assignment be subject to the minimum
assignment amounts specified herein. 
Upon such execution, delivery, acceptance and recording, from and after
the Transfer Effective Date specified in such Commitment Transfer Supplement, (x)
the Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under this
Credit

 

81

 

Agreement (and, in the case of a Commitment Transfer Supplement
covering all or the remaining portion of a transferor Lender’s rights and
obligations under this Credit Agreement, such transferor Lender shall cease to
be a party hereto).  Such Commitment
Transfer Supplement shall be deemed to amend this Credit Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Purchasing
Lender and the resulting adjustment of Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Credit Agreement and the
Notes.  On or prior to the Transfer
Effective Date specified in such Commitment Transfer Supplement, the Borrower,
at its own expense, shall execute and deliver to the Administrative Agent in
exchange for the Notes delivered to the Administrative Agent pursuant to such
Commitment Transfer Supplement new Notes to the order of such Purchasing
Lender, if requested by such Purchasing Lender, in an amount equal to the
Commitment assumed by it pursuant to such Commitment Transfer Supplement and,
unless the transferor Lender has not retained a Commitment hereunder, new Notes
to the order of the transferor Lender, if requested by such transferor Lender,
in an amount equal to the Commitment retained by it hereunder.  Such new Notes shall be dated the Closing
Date and shall otherwise be in the form of the Notes replaced thereby.  The Notes surrendered by the transferor
Lender shall be returned by the Administrative Agent to the Borrower marked
“canceled”.

 

(d)           The
Administrative Agent shall maintain at its address referred to in Section 9.2 a
copy of each Commitment Transfer Supplement delivered to it and a register (the
“Register”) for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time.  The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Credit 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)           Upon
its receipt of a duly executed Commitment Transfer Supplement, together with
payment to the Administrative Agent by the transferor Lender or the Purchasing
Lender (except for any assignment by a Lender to an Affiliate of such Lender),
as agreed between them, of a registration and processing fee of $3,500 for each
Purchasing Lender listed in such Commitment Transfer Supplement and the Notes
subject to such Commitment Transfer Supplement, the Administrative Agent shall
(i) accept such Commitment Transfer Supplement and (ii) record the information
contained therein in the Register.

 

(f)            Each
Credit Party authorizes each Lender to disclose to any Participant or
Purchasing Lender (each, a “Transferee”) and any prospective Transferee
any and all financial information in such Lender’s possession concerning the
Credit Parties and their Affiliates which has been delivered to such Lender by
or on behalf of a Credit Party pursuant to this Credit Agreement or which has
been delivered to such Lender by or on behalf of a Credit Party in connection with
such Lender’s credit evaluation of the Credit

 

82

 

Parties and their Affiliates prior to becoming a party to this Credit
Agreement, in each case subject to Section 9.15.

 

(g)           At
the time of each assignment pursuant to this Section 9.6 to a Person which is
not already a Lender hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for federal income tax
purposes, the respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable, a 2.18 Certificate) described in Section 2.18.

 

(h)           In
addition to the assignments permitted under clause (c) of this Section 9.6, any
Lender may pledge or assign any of its rights under this Credit Agreement
(including, without limitation, any right to payment of principal and interest
under any Note) to any Federal Reserve Bank in accordance with applicable laws
and (ii) upon notice to the Administrative Agent, any Lender that is an
investment fund may pledge all or any portion of its Notes, if any, or Loans to
its trustee in support of its obligations to such trustee; provided, no
Lender, as between the Borrower and such Lender, shall be relieved of any of
its obligations hereunder as a result of any such assignment and pledge, and provided
further, in no event shall the applicable Federal Reserve Bank or trustee
be considered to be a “Lender” or be entitled to require the assigning Lender
to take or omit to take any action hereunder.

 

Section 9.7             Adjustments;
Set-off.

 

(a)           Each
Lender agrees that if any Lender (a “benefited Lender”) shall at any
time receive any payment of all or part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7.1(e), or otherwise) in a greater proportion than
any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender’s Loans, or interest thereon, such benefited
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender’s Loan, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefited Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.  The
Borrower agrees that each Lender so purchasing a portion of another Lender’s
Loans may exercise all rights of payment (including, without limitation, rights
of set-off) with respect to such portion as fully as if such Lender were the
direct holder of such portion.

 

(b)           In
addition to any rights and remedies of the Lenders provided by law (including,
without limitation, other rights of set-off), each Lender shall have the right,
without prior notice to the applicable Credit Party to the extent permitted by
law, any such notice being expressly waived by the applicable Credit Party to
the extent permitted

 

83

 

by applicable law, upon the occurrence of any Event of Default, to
setoff and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or owing
by such Lender or any branch or agency thereof to or for the credit or the
account of any Credit Party, or any part thereof in such amounts as such Lender
may elect, against and on account of the obligations and liabilities of such
Credit Party to such Lender hereunder and claims of every nature and
description of such Lender against such Credit Party, in any currency, whether
arising hereunder or under any other Credit Document, as such Lender may elect,
whether or not such Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured.  The aforesaid right of set-off may be
exercised by such Lender against the applicable Credit Party or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of such
Credit Party, or against anyone else claiming through or against such Credit
Party or any such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the occurrence of any Event of Default.  Each Lender agrees promptly to notify the
applicable Credit Party and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.

 

Section 9.8             Table
of Contents and Section Headings.

 

The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Credit Agreement.

 

Section 9.9             Counterparts.

 

This Credit Agreement may be executed by one or more of the parties to
this Credit Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.  A set of the copies of this
Credit Agreement signed by all the parties shall be lodged with the Borrower
and the Administrative Agent.

 

Section 9.10           Effectiveness.

 

This Credit Agreement shall become effective on the date on which all
of the parties have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent pursuant to
Section 9.2 or, in the case of the Lenders, shall have given to the
Administrative Agent written, telecopied or telex notice (actually received) at
such office that the same has been signed and mailed to it.

 

84

 

Section 9.11           Severability.

 

Any provision of this Credit Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

 

Section 9.12           Integration.

 

This Credit Agreement and the other Credit Documents represent the
agreement of the Borrower, the other Credit Parties, the Agents and the Lenders
with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agents, the Borrower, the
other Credit Parties or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or therein.

 

Section 9.13           Governing
Law.

 

This Credit Agreement and, unless otherwise specified therein, each
other Credit Document and the rights and obligations of the parties under this
Credit Agreement and such other Credit Document shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

 

Section 9.14           Consent
to Jurisdiction and Service of Process.

 

All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Credit Agreement, any Note or any of the
other Credit Documents shall be brought in the courts of the State of New York
in New York County or of the United States for the Southern District of New
York, and, by execution and delivery of this Credit Agreement, the Borrower and
each of the other Credit Parties accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Credit Agreement from which no appeal
has been taken or is available.  The
Borrower and each of the other Credit Parties irrevocably agree that all
service of process in any such proceedings in any such court may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to it at its address set forth in
Section 9.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto, such service being hereby acknowledged
by the Borrower and the other Credit Parties to be effective and binding
service in every respect.  The Borrower,
the other Credit Parties, the Agents and the Lenders, to the fullest extent
permitted by law, irrevocably waive any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have to the bringing of any
such action or proceeding in any such jurisdiction.  Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of any Lender to bring
proceedings against the Borrower or the other Credit Parties in the court of
any other jurisdiction.

 

85

 

Section 9.15           Confidentiality.

 

The Agents and
each of the Lenders agrees that it will not disclose without the prior consent
of the Borrower (other than to its employees, affiliates, auditors or counsel
or to another Lender) any information (the “Information”) with respect
to the Borrower and its Subsidiaries which is furnished pursuant to this Credit
Agreement, any other Credit Document or any documents contemplated by or
referred to herein or therein and which is designated by the Borrower to the
Lenders in writing as confidential or as to which it is otherwise reasonably
clear such information is not public, except that any Lender may disclose any
such Information (a) as has become generally available to the public other
than by a breach of this Section 9.15, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or the Office of the Comptroller of the Currency or the National
Association of Insurance Commissioners or similar organizations (whether in the
United States or elsewhere) or their successors, (c) as may be required or
appropriate in response to any summons or subpoena or any law, order,
regulation or ruling applicable to such Lender, (d) to any prospective
Participant or assignee in connection with any contemplated transfer pursuant
to Section 9.6, provided that such prospective transferee shall
have been made aware of this Section 9.15 and shall have agreed to be
bound by its provisions as if it were a party to this Credit Agreement, (e) to
any actual or prospective counterparty (or its advisors) to any Hedging
Agreement relating to a Credit Party and its obligations; provided that
such prospective transferee shall have agreed to be bound by the
confidentiality provisions set forth in this Section, (f) to Gold Sheets
and other similar bank trade publications; such information to consist of deal
terms and other information regarding the credit facilities evidenced by this
Credit Agreement customarily found in such publications, and (g) in connection
with any suit, action or proceeding for the purpose of defending itself,
reducing its liability, or protecting or exercising any of its claims, rights,
remedies or interests under or in connection with the Credit Documents or any
Hedging Agreement.  The Borrower hereby
authorizes the Administrative Agent to use the name, logos and other insignia
of the Borrower and the amount of the credit facility provided hereunder in any
“tombstone” or comparable advertising, on its website or in other marketing
materials of the Administrative Agent.

 

Section 9.16           Acknowledgments.

 

The Borrower and the other Credit Parties each hereby acknowledges
that:

 

(a)           it
has been advised by counsel in the negotiation, execution and delivery of each
Credit Document;

 

(b)           neither
of the Agents nor any Lender has any fiduciary relationship with or duty to the
Borrower or any other Credit Party arising out of or in connection with this
Credit Agreement and the relationship between the Agents and the Lenders, on
one hand, and the Borrower and the other Credit Parties, on the other hand, in
connection herewith is solely that of debtor and creditor; and

 

86

 

(c)           no
joint venture exists among the Lenders or among the Borrower or the other
Credit Parties and the Lenders.

 

Section 9.17           Waivers
of Jury Trial.

 

THE BORROWER, THE OTHER CREDIT PARTIES, THE AGENTS AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

 

Section 9.18           Patriot
Act Notice.

 

Each Lender
and each Agent (for itself and not on behalf of any other party) 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 “Patriot
Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or such Agent, as
applicable, to identify the Borrower in accordance with the Patriot Act.

 

ARTICLE X

 

GUARANTY

 

Section 10.1           The
Guaranty.

 

In order to
induce the Lenders to enter into this Credit Agreement and to extend credit
hereunder and in recognition of the direct benefits to be received by the
Guarantors from the Extensions of Credit hereunder, each of the Guarantors
hereby agrees with the Administrative Agent, the Collateral Agent and the
Lenders as follows:  the Guarantor
hereby unconditionally and irrevocably jointly and severally guarantees as
primary obligor and not merely as surety the full and prompt payment when due,
whether upon maturity, by acceleration or otherwise, of any and all
indebtedness of the Borrower owed to the Administrative Agent, the Collateral
Agent and/or the Lenders.  If any or all
of the indebtedness becomes due and payable hereunder, each Guarantor
unconditionally promises to pay such indebtedness to the Administrative Agent,
the Collateral Agent the Lenders, or their respective order, or demand,
together with any and all reasonable expenses which may be incurred by the
Administrative Agent, the Collateral Agent or the Lenders in collecting any of
the Credit Party Obligations.  The word
“indebtedness” is used in this Article X in its most comprehensive sense and
includes any and all advances, debts, obligations and liabilities of the
Borrower and the Guarantors, including specifically all Credit Party
Obligations, arising in connection with this Credit Agreement or the other
Credit Documents, in each case, heretofore, now, or hereafter made, incurred or
created, whether voluntarily or involuntarily, absolute or contingent,
liquidated or unliquidated, determined or undetermined, whether or not such
indebtedness is from time to time reduced, or extinguished and thereafter
increased or incurred, whether the Borrower and the Guarantors may be liable

 

87

 

individually or jointly with
others, whether or not recovery upon such indebtedness may be or hereafter
become barred by any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise unenforceable.

 

Notwithstanding
any provision to the contrary contained herein or in any other of the Credit
Documents, to the extent the obligations of a Guarantor shall be adjudicated to
be invalid or unenforceable for any reason (including, without limitation,
because of any applicable law relating to fraudulent conveyances or transfers)
then the obligations of each such Guarantor hereunder shall be limited to the
maximum amount that is permissible under applicable law (including, without
limitation, the Bankruptcy Code or its non-U.S. equivalent).

 

Section 10.2           Bankruptcy.

 

Additionally,
each of the Guarantors unconditionally and irrevocably guarantees jointly and
severally the payment of any and all Credit Party Obligations of the Borrower
to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1(e) as applicable
to the Borrower or any Subsidiaries of the Borrower, and unconditionally
promises to pay such Credit Party Obligations to the Administrative Agent for
the account of the Lenders and the Agents, or order, on demand, in lawful money
of the United States.  Each of the
Guarantors further agrees that to the extent that the Borrower or a Guarantor
shall make a payment or a transfer of an interest in any property to the
Administrative Agent, the Collateral Agent or any Lender, which payment or
transfer or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, or otherwise is avoided, and/or required to be
repaid to the Borrower or a Guarantor, the estate of the Borrower or a
Guarantor, a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or other applicable law or equitable cause,
then to the extent of such avoidance or repayment, the obligation or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if said payment had not been made.

 

Section 10.3           Nature
of Liability.

 

The liability
of each Guarantor hereunder is exclusive and independent of any security for or
other guaranty of the Credit Party Obligations of the Borrower whether executed
by any such Guarantor, any other guarantor or by any other party, and no
Guarantor’s liability hereunder shall be affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party,
or (b) any other continuing or other guaranty, undertaking or maximum liability
of a guarantor or of any other party as to the Credit Party Obligations of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or
change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent, the Collateral Agent or the Lenders on the Credit Party
Obligations that the Administrative Agent, the Collateral Agent or such Lenders
repay the Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each of the
Guarantors waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.

 

88

 

Section 10.4           Independent
Obligation.

 

The
obligations of each Guarantor hereunder are independent of the obligations of
any other guarantor or the Borrower, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is brought
against any other guarantor or the Borrower and whether or not any other
Guarantor or the Borrower is joined in any such action or actions.

 

Section 10.5           Authorization.

 

Each of the
Guarantors authorizes the Administrative Agent, the Collateral Agent and each
Lender without notice or demand (except as shall be required by applicable law
and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the Credit Party Obligations or any part thereof in accordance with
this Credit Agreement, including any increase or decrease of the rate of
interest thereon, (b) take and hold security from any Guarantor or any other
party for the payment of this Guaranty or the Credit Party Obligations and
exchange, enforce waive and release any such security, (c) apply such security
and direct the order or manner of sale thereof as the Administrative Agent and
the Lenders in their discretion may determine and (d) release or substitute any
one or more endorsers, Guarantors, the Borrower or other obligors.

 

Section 10.6           Reliance.

 

It is not
necessary for the Administrative Agent, the Collateral Agent or the Lenders to
inquire into the capacity or powers of the Borrower or the officers, directors,
members, partners or agents acting or purporting to act on its behalf, and any indebtedness
made or created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.

 

Section 10.7           Waiver.

 

(a)           Each
of the Guarantors waives any right (except as shall be required by applicable
law and cannot be waived) to require the Administrative Agent, the Collateral
Agent or any Lender to (i) proceed against the Borrower, any other guarantor or
any other party, (ii) proceed against or exhaust any security held from the
Borrower, any other guarantor or any other party, or (iii) pursue any other
remedy in the Administrative Agent’s, Collateral Agent’s or any Lender’s power
whatsoever.  Each of the Guarantors
waives any defense based on or arising out of any defense of the Borrower, any
other guarantor or any other party other than payment in full of the Credit
Party Obligations, including without limitation any defense based on or arising
out of the disability of the Borrower, any other guarantor or any other party,
or the unenforceability of the Credit Party Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the Credit Party Obligations.  The Agents or any of the Lenders may, at
their election, foreclose on any security held by either Agents or a Lender by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is

 

89

 

permitted by applicable law), or exercise any other right or remedy
either Agent and any Lender may have against the Borrower or any other party,
or any security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Credit Party Obligations have been
paid in full.  Each of the Guarantors,
to the extent permitted by law, waives any defense arising out of any such
election by each Agent and each of the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of the Guarantors against the Borrower or any other party
or any security.

 

(b)           Each
of the Guarantors waives all presentments, demands for performance, protests
and notices, including without limitation notices of nonperformance, notice of
protest, notices of dishonor, notices of acceptance of this Guaranty, and
notices of the existence, creation or incurring of new or additional Credit
Party Obligations.  Each Guarantor assumes
all responsibility for being and keeping itself informed of the Borrower’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Credit Party Obligations and the nature, scope and
extent of the risks which such Guarantor assumes and incurs hereunder, and
agrees that neither the Administrative Agent, the Collateral Agent nor any
Lender shall have any duty to advise such Guarantor of information known to it
regarding such circumstances or risks.

 

(c)           Each
of the Guarantors hereby agrees it will not exercise any rights of subrogation
which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the U.S. Bankruptcy Code, or otherwise) to
the claims of the Lenders against the Borrower or any other guarantor of the
Credit Party Obligations of the Borrower owing to the Lenders (collectively,
the “Other Parties”) and all contractual, statutory or common law rights
of reimbursement, contribution or indemnity from any Other Party which it may
at any time otherwise have as a result of this Guaranty until such time as the
Credit Party Obligations shall have been paid in full, no Credit Document
remains in effect and the Commitments have been terminated.  Each of the Guarantors hereby further agrees
not to exercise any right to enforce any other remedy which the Administrative
Agent, the Collateral Agent or the Lenders now have or may hereafter have
against any Other Party, any endorser or any other guarantor of all or any part
of the Credit Party Obligations of the Borrower and any benefit of, and any
right to participate in, any security or collateral given to or for the benefit
of the Lenders to secure payment of the Credit Party Obligations of the
Borrower until such time as the Credit Party Obligations shall have been paid
in full, no Credit Document remains in effect and the Commitments have been
terminated.

 

Section 10.8           Limitation
on Enforcement.

 

The Lenders
agree that this Guaranty may be enforced only by the action of the
Administrative Agent acting upon the instructions of the Required Lenders and
that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Credit Agreement.  The Lenders

 

90

 

further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.

 

Section 10.9           Confirmation
of Payment.

 

The
Administrative Agent and the Lenders will, upon request after payment of the
Credit Party Obligations under the Credit Documents which are the subject of
this Guaranty and termination of the Commitments relating thereto, confirm to
the Borrower, the Guarantors or any other Person that the Credit Party
Obligations under the Credit Documents have been paid in full and the
Commitments relating thereto terminated, subject to the provisions of Section
10.2.

 

91

 

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

 

 

	
  BORROWER:

  	
  LOUISIANA-PACIFIC CORPORATION,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

LOUISIANA-PACIFIC CORPORATION

CREDIT AGREEMENT

 

 

	
  ADMINISTRATIVE

  	
   

  
	
  AGENT AND LENDERS:

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as Administrative Agent, Issuing Lender, Swingline Lender and as a
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:Exhibit
10.2

 

SINGLE TENANT

N E T  L E A S E

 

THIS SINGLE TENANT NET LEASE (“Lease”)
is made as of the 14th day of July 2004, by and between Turnpike Crossing I,
L.L.C., a Delaware limited liability company (“Landlord”) and The
Children’s Place Retail Stores, Inc., a Delaware corporation (“Tenant”),
who hereby mutually covenant and agree as follows:

 

ARTICLE I.  GRANT, TERM, DEFINITIONS AND BASIC PROVISIONS

 

1.0                               Basic
Lease Provisions. The following terms are defined as follows:

 

(a)                        Commencement
Date: December 1, 2004

 

(b)                       Lease Term:  Eleven (11) Years and Two (2) months.

 

(c)                        Expiration
Date:  January 31, 2016.

 

(d)  Purpose:
Warehousing of Tenant’s non-hazardous goods and related office uses.

 

(e)  Base Rent:

 

12/1/2004 – 3/31/2005  —     Base Rent Abates

 

4/1/2005 – 3/31/2010  -  $186,433.33 per month  $2,237,200 
per annum ($4.25/rsf/year)

 

4/1/2010 – 1/31/2016 -  $206,173.33 per month  
$2,474,080 per annum 
($4.70/rsf/year)

 

 (f)  Tenant’s Address:  915 Secaucus Road, Secaucus, NJ 07094, Attn: VP Real Estate with
a copy to the General Counsel.

 

(g)  Landlord’s
Address:  Turnpike Crossing
I, L.L.C., c/o Allianz of America, 55 Greens Farms Road, Westport, CT
06881-8500 Attn. Real Estate Department.

 

(h)  Rentable
Area of Premises:  526,400
rentable square feet (“rsf”).

 

 (i)  Security Deposit:  None.

 

 (j)  Guarantor: 
None.

 

1.1                               Grant.  Landlord, for and in consideration of the
rents and other sums herein reserved and of the covenants and agreements herein
contained on the part of the Tenant to be performed, hereby leases to Tenant,
and Tenant hereby leases from Landlord, the Premises hereafter described.  The “Premises” are comprised of and defined as
(i) that parcel of land (“Land”) located at 115 Interstate
Boulevard, South Brunswick Township, Middlesex County,

 

 

New Jersey and legally described on Exhibit “A” attached
hereto, (ii) a one-story industrial warehouse building located on the Land,
together with all alterations, additions and replacements thereof  and all equipment, fixtures, walks, drives,
parking areas, loading areas, landscaping and other improvements now or
hereafter erected or placed into service on the Land (collectively the “Building”),
and (iii) all easements appurtenant to the Land.

 

1.2                               Lease
Term.  The Lease Term shall
commence on the Commencement Date and shall expire on the Expiration Date,
unless extended or sooner terminated in accordance with the terms of this
Lease.

 

1.3                               Option
to Extend.  Tenant shall have the right to renew the term
of this Lease for two (2) consecutive periods of five (5) years each (the first
such 5-year period is sometimes hereinafter referred to as the “First
Renewal Term”; the second such 5-year period is sometimes
hereinafter referred to as the “Second Renewal Term”;  and the First Renewal Term and the Second
Renewal Term are sometimes hereinafter collectively referred to as the “Renewal
Terms” and individually as a “Renewal Term”) on and subject to the
following terms and conditions:

 

A.                                   Upon
Tenant’s exercise of any Renewal Term and upon the expiration of the Term of
this Lease or the First Renewal Term, as applicable, no default by Tenant, of
which Landlord has provided written notice to Tenant, has occurred and is
continuing beyond any applicable notice and cure period;

 

B.                                     The
Renewal Terms shall be upon the same terms, covenants and conditions as
provided in this Lease; provided that Landlord shall not be required to provide
any free rent, rent abatement, tenant improvements,  allowances, or other concessions, and provided further, that Base
Rent for the First Renewal Term shall be $2,763,600 per annum ($5.25/ft) and
the Base Rent for the Second Renewal Term shall be the greater of (i)
$2,763,600 per annum ($5.25/ft), or (ii) 95% of  Market Rent (as hereafter defined) for the Premises as determined
in the manner set forth below.  Upon
determination of the Base Rent for a Renewal Term, the parties shall execute an
amendment to this Lease to establish and evidence such rental rate;

 

C.                                     Tenant
shall exercise its right to a Renewal Term by notifying Landlord in writing of
its election to exercise its right to renew no later than nine (9) months prior
to the expiration of the initial term of this Lease (or the First Renewal Term,
as applicable), which notice, in the case of the Second Renewal Term, shall be
accompanied by Tenant’s written estimate of the Market Rent applicable to the
Second Renewal Term. Tenant’s exercise of an election to renew shall be
irrevocable.  Within thirty (30) days
after receipt of Tenant’s notice and estimate for the Second Renewal Term,
Landlord shall provide Tenant written notice of Landlord’s estimate of Market
Rent.  If such estimates differ, then
Landlord and Tenant shall, for a period of thirty (30) days, attempt to agree
as to the Market Rent for such Renewal Term. Any estimate of Market Rent given
in a written notice by one party to the other with respect to a Renewal Term
shall represent an  irrevocable offer
which shall be susceptible of acceptance by the other party at any time prior
to receipt of the arbiter’s determination as provided below.   If Landlord and Tenant

 

2

 

do not agree on Market Rent
by the conclusion of such 30-day period, then either party may demand that
Market Rent be determined by binding arbitration, in accordance with the
following provisions.

 

D.                                    Within 10
days following a demand for arbitration, each party shall give written notice
to the other party specifying the name, address and professional qualifications
of the person designated to act as appraiser on its behalf. The two appraisers
designated by the parties shall, within ten (10) days after designation of the
second appraiser, select a third appraiser to act as arbitrator. Each appraiser
designated and the arbitrator jointly appointed hereunder shall be MAI members
of the Appraisal Institute with not less than five (5) years of experience in
the appraisal of improved industrial property in the Exit 8A market area of
Middlesex County, and be devoting substantially full time to professional appraisal
work at the time of appointment, and, with respect to the arbitrator only, be
in all respects impartial and disinterested. Neither party shall engage in any
“ex-party” communications with the arbitrator. If either party fails to
designate its appraiser within the time above specified, or if the two (2)
appraisers so designated cannot agree on the selection of the arbitrator within
the time above specified, then either party, on behalf of both parties, may
request that the President of the metro New York/New Jersey chapter of the
Appraisal Institute appoint such arbitrator, and if such President is
unavailable or unwilling to make such appointment, then the arbitrator shall be
selected by the New Jersey chapter of the American Arbitration Association. Each
party shall pay the fees and expenses of the appraiser designated by such
party. The fees and expenses of the arbitrator shall be borne equally by both
parties. The arbitrator shall render its determination of Market Rent no later
than thirty (30) days after the date of his appointment and such determination
shall be final, binding and conclusive upon the parties.

 

E.                                      “Market Rent” shall
mean the fair market base rental (net of real estate taxes, maintenance, and
insurance premiums) at which the Premises would be expected to be leased for
the applicable Renewal Term based on the then existing market conditions for
similar modern industrial warehouse facilities within the Exit 8A market area
of Middlesex County.

 

1.4                               Management Fee. 
Tenant shall pay to Landlord on the first day of each month of the Term,
in advance, a management fee as follows:

 

From Commencement Date through November 30,
2009, an amount equal to One Thousand Five Hundred Dollars ($1,500.00) per
month.

 

From December 1, 2009 through November 30,
2014, Two Thousand Dollars ($2,000,00) per month.

 

From December 1, 2014 until expiration of the
Term (as the same may be extended) an amount equal to one percent (1%) of Base
Rent per month.

 

3

 

ARTICLE II.  POSSESSION

 

2.0                               Delivery
of Possession.  Tenant
acknowledges that it has been given the opportunity to make inspections of the
Premises to verify that condition of the Premises is acceptable to Tenant and
suitable for Tenant’s intended use. Landlord shall deliver Premises with the
roof and all mechanical systems, loading doors, door hardware and plumbing in
good working order as of the Commencement Date.   Except as expressly provided herein, no representations,
warranties or agreements as to the condition or repair of, or improvements to,
the Premises have been made by or on behalf of Landlord.  Tenant’s acknowledges that the Premises
shall be delivered in “AS IS” condition except as otherwise
expressly provided herein. Tenant’s taking possession of the Premises shall be
conclusive evidence that the Premises were suitable for Tenant’s intended
purposes, that the Premises were in broom swept condition with all roofing,
mechanical, loading doors, door hardware, electrical, and plumbing and other systems
in good working order, that Tenant accepts the condition of the Premises, and
that Tenant waives all claims relating to the condition of the Premises.  Notwithstanding anything to the contrary
contained in this Section, Landlord agrees to provide the Premises in
compliance with all federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations and ordinances, as well as in
compliance with all environmental laws, rules, codes and regulations. Tenant
shall provide Landlord with detailed written notice of any such code violation
or deficiencies within ninety (90) days after delivery of possession of the
Premises, and Tenant shall have waived all claims under this Section other than
those specified in such written notice.

 

2.1  Racking System.  On the Commencement Date
and provided Tenant is not in default hereunder, Landlord shall deliver a quit
claim bill of sale to Tenant as to Landlord’s right, title and interest in the
racking system in the Building as of the hereof for a price of One Dollar. Such
racking system shall be conveyed in “AS IS” condition and Landlord disclaims
all representation or warranties with respect thereto. Upon termination of this
Lease, Tenant shall, at its expense, remove the racking system and repair any
damage to the Building caused thereby.

 

2.2                               Tenant
Improvement Allowance.    Tenant
shall, at its sole expense (but subject to reimbursement from the Tenant
Improvement Allowance described below), construct any and all improvements that
Tenant deems necessary or desirable for Tenant’s use and occupancy of the
Premises (“Tenant Improvements”). The plans, specifications and contractors for
the Tenant Improvements shall be subject to Landlord’s reasonable
approval.  Such construction shall
comply with all terms and conditions of Article IX hereof which are applicable
to Alterations.  All such Tenant
Improvements shall be the property of Landlord upon installation. Landlord
shall provide Tenant with a “Tenant Improvement Allowance” of  Two Hundred Twenty-Five Thousand Dollars
($225,000.00) to be paid to Tenant on the first business day following
Commencement Date.

 

4

 

ARTICLE III.  USE

 

3.0                               Permitted
Use.  The Premises shall be used
and occupied only for the purposes set forth in Section 1.0.

 

ARTICLE IV.  RENT

 

4.0                               Base
Rent.  Commencing on the
Commencement Date, Tenant shall pay Base Rent as set forth in the Basic Lease
Provisions, in equal monthly installments in advance, on the first day of each
month during the term hereof.    Base
Rent shall be prorated for any partial months or years within the Lease Term.

 

4.1                               Payment
of Rent.  All charges, costs and
sums required to be paid by Tenant under this Lease in addition to Base Rent,
including without limitation payments on account of Taxes (as defined below),
shall be deemed additional rent (“Additional Rent”).  Base Rent and Additional Rent are  hereinafter collectively referred to as “Rent”.  Tenant’s covenant to pay Rent shall be
independent of every other covenant in this Lease.  Rent shall be paid to or upon the order of Landlord at the
Landlord’s Address set forth in the Basic Lease Provisions, or as Landlord
shall otherwise direct by written notice to Tenant.  All payments of Rent shall be made without any prior demand
therefor and without deduction, set off, discount or abatement in lawful money
of the United States. If paid by check, such check shall be drawn upon a
Federal Reserve Member Bank located in the State in which the Premises are
located.

 

4.2                               Late
Charges.  If any payment of Rent
is not received by Landlord within five (5) days after the date due, on more
than two (2) occasions during the first twelve months of the Lease Term, or on
more than one (1) occasion during any subsequent twelve month period, then
Tenant shall pay Landlord a late charge equal to five percent (5%) of the
amount of said delinquent payment.

 

4.3                               Accord and Satisfaction.  No
payment by Tenant or receipt by Landlord of Rent hereunder shall be deemed to
be other than on account of the amount due, and no endorsement or statement on
any check or any letter accompanying any check or payment of Rent shall be
deemed an accord and satisfaction, and Landlord may accept such check as
payment without prejudice to Landlord’s right to recover the balance of such
installment or payment of Rent or pursue any other remedies available to
Landlord.  No receipt of money by
Landlord from Tenant after the termination of this Lease or Tenant’s right of
possession of the Premises shall reinstate, continue or extend the Lease Term
or Tenant’s right of possession.

 

ARTICLE V.  TAXES

 

5.0                               Net
Lease.  Except as otherwise
expressly provided herein and notwithstanding any present or future law to the
contrary, the parties intend that the Base Rent reserved herein shall be
received and enjoyed by Landlord as a net sum, without setoff, abatement,
counterclaim, defense or deduction by Tenant, and without diminution by Taxes
or any other imposition of any public authority (except for income, franchise,
estate, succession, inheritance or transfer taxes assessed against Landlord),
or any expenses or charges for maintenance or repair of the Premises.

 

5

 

5.1                               Payment
of Taxes.   Unless otherwise
provided below,  throughout the Lease
Term, Tenant shall pay all Taxes (as hereafter defined) assessed against the
Premises directly to the proper governmental authority,  municipality, or other entity owed therefor
prior to the Taxes (or any installment thereof) becoming delinquent. Tenant
shall pay all interest and penalties imposed upon the late payment of any
Taxes. Tenant shall deliver to Landlord official receipts or other appropriate
proof of payment satisfactory to Landlord of all Taxes required to be paid by
Tenant within 10 days after the due date of each installment of Taxes.

 

5.2                               Taxes.  “Taxes” shall mean all federal, state and
local governmental taxes, assessments and charges of every kind or nature,
whether general, special, ordinary or extraordinary, which shall be levied
against the Premises or which Landlord or Tenant shall become obligated to pay
because of, or in connection with, the ownership, leasing, or operations of the
Premises, as now or hereafter improved, or the personal property, fixtures, machinery,
equipment, systems and apparatus located therein, or used in connection
therewith, including without limitation any rental or lease tax, capital levy
or similar levies, charges, assessments or taxes based in whole or part, on the
value, use or rents of the Premises, whether levied in substitution for, in
lieu of, or in addition to, general real and/or personal property taxes.  Taxes shall not include any federal, state
or local income, corporate, franchise, capital stock, inheritance, gift or
estate taxes of Landlord, except that if a change occurs in the method of
taxation resulting in whole or in part the substitution of any such taxes, or
any other assessment, for any Taxes as above defined, such substituted taxes or
assessments shall be included in the Taxes. Taxes shall also include any and
all storm sewer, sanitary sewer and water taxes. For purposes hereof, Taxes for
any Lease Year (as hereafter defined) shall be Taxes which are assessed or
become a lien during such year regardless of the date such Taxes are due for
payment.   If a special assessment
payable in installments is levied against the Premises, Taxes for any Lease
Year shall include only the installment of such assessment and any interest
payable or paid during such year.  Taxes
that accrue during the first and last Lease Year in the term shall be prorated
between Landlord and Tenant, and such obligation shall survive termination of
this Lease.  Taxes for the purposes
hereof, however, shall not include (i) any special assessment for highway,
street, or traffic control improvements, for sanitary or storm sewers, for
utilities or for other off-site improvements of any nature whatsoever made in
connection with the development of the Building in any instance where the work
of constructing or installing such improvements or facilities shall have been
started on or before a date two (2) years after the Commencement Date of the
Term of this Lease, or (ii) any inheritance tax, estate tax, transfer tax, gift
tax, franchise tax, corporate income tax, net profit tax or capital levy that
may be imposed on Landlord unless and until the same is levied as a real estate
tax or, nor shall any interest or penalties on any late payment be included in
Taxes except to the extent that Tenant was late in paying its share of such
Taxes.  In no event shall Taxes
allocable to the Premises include taxes on parcels of land not included in
property described in Exhibit “A”.

 

5.3                               Protest
of Taxes.  Tenant may from time
to time, at Tenant’s sole cost,  protest
or challenge Taxes for any Lease Year, provided that Tenant shall have paid the
Taxes in question (with reservation of rights if necessary). Tenant shall
deliver Landlord written notice of any protest or challenge (which shall
include copies of any filings) thirty (30) days prior to date on which such
challenge must be filed for such Lease Year. 
If Tenant shall fail to file or institute a

 

6

 

protest or challenge of Taxes by March 1 of any given
Lease Year, then with written notice to Tenant,  Landlord shall have the right to file or institute such a protest
or challenge, with such counsel and in such manner as shall be reasonably
acceptable to Landlord, and in such event, Tenant shall pay the cost of such
challenge in an amount not to exceed any savings realized.

 

5.4                               Lease
Year.  For purposes of this
Lease, the term “Lease Year” shall mean each calendar year (or portion
thereof, if the Lease shall commence after January 1 or terminate prior to
December 31) within the Lease Term.

 

ARTICLE VI.  INSURANCE

 

6.0                               Kinds
and Amounts.  Tenant, at its
sole cost and expense, shall obtain and continuously maintain in full force and
effect during the Lease Term:

 

(a)                                            Policies
of insurance for the benefit of Landlord, as the named insured, insuring the
Building against (i) loss or damage by fire or other casualty, on an “all risk”
form, subject only to such exclusions as are approved by Landlord; (ii) loss or
damage by flood, if the Premises are in a designated flood hazard area; (iii)
loss from so-called explosion, collapse and underground hazards; (iv) if a
sprinkler is in the Premises, loss from sprinkler leakage, (v) rent loss
insurance sufficient to pay all rent for a period of no less than twelve months
after a casualty, and (vi) loss or damage from such other risks or hazards of a
similar or dissimilar nature which are now or may hereafter be customarily
insured against with respect to improvements similar in construction, design,
general location, use and occupancy to the Building.  At all times, such insurance coverage shall be in an amount equal
to one hundred percent (100%) of the full replacement cost of the Building and
shall include a so-called “agreed value endorsement”.  “Full Replacement Cost” shall mean Landlord’s reasonable
judgment, from time to time, of the cost of replacing the Building without
deduction for depreciation or wear and tear, and including a reasonable sum for
architectural, engineering, legal, administrative and supervisory fees
connected with the restoration or replacement of the Building in the event of
damage thereto or destruction thereof. 
If Tenant disputes Landlord’s judgment as to full replacement cost,
Tenant may at its expense, commission an appraisal of the property performed by
an appraiser acceptable to Landlord, which appraisal shall then serve as the
basis for replacement cost.

 

(b)                                           Commercial
general liability insurance covering claims arising from occurrences on, about
or with respect to the Premises, with a minimum of Ten Million Dollars
($10,000,000.00) combined single limit coverage, on an occurrence basis.    Such insurance shall specifically insure
(by contractual liability endorsement) Tenant’s obligations under Section 13.0
of this Lease.

 

(c)                                            Boiler
and pressure vessel (including, but not limited to, pressure pipes, steam pipes
and condensation return pipes) insurance, but only if the Building contains

 

7

 

a boiler or other pressure vessel or pressure pipes, in an amount
reasonably satisfactory to Landlord.

 

(d)                                           Whenever
and so long as any construction work or alteration work is in progress at or on
the Premises, Tenant shall procure builder’s risk insurance on a completed
value form and all-risk basis with a replacement cost provision.  During all periods of such construction,
Tenant, its contractors and subcontractors shall also maintain in effect
general liability insurance in such amounts as Landlord may reasonably require
and  Worker’s Compensation Insurance in
minimum amounts required by State law.

 

(e)                                            Such
other insurance, and in such amounts as may from time to time be reasonably
required by Landlord, against other insurable hazards which at the time are, in
Landlord’s judgment, commonly or prudently insured against in the case of
premises and/or buildings or improvements similar in construction, design,
general location, use and occupancy to those on or appurtenant to the Premises.

 

Notwithstanding anything
to the contrary contained in this Lease, Tenant’s obligation to carry the
insurance required in this Section may be satisfied by a blanket policy of
insurance maintained by Tenant provided that (i) the amount of such blanket
policy is reasonable in relation to the number of locations covered; (ii) the
coverage afforded will not be reduced or diminished by reason thereof; (iii)
the Premises under this Lease are specifically referenced in the Tenant’s
policy, (iv) the insurance limits required to be carried above are specifically
designated as being exclusively available to the Premises and this Lease
regardless of any  claims brought under
such blanket policy with respect to other locations; and (iv) all other
requirements of this Section are met.

 

6.1                               Named
Insureds; Co-Insurance.  All
liability policies required to be maintained by Tenant shall name Landlord,
Landlord’s mortgagee and such others as may from time to time be named by
Landlord, as additional insureds.  All
property policies insuring the Building or improvements therein shall be
payable solely to Landlord and Tenant shall have no interest therein. Landlord
shall have the sole right to settle with the insurance carriers on the policies
carried under Sections 6(a), (c) and (d) above. Landlord shall have no interest
in, and Tenant shall have the sole right to settle, any policies that Tenant
carries on its contents and personal property. 
If Landlord so requests, the holder of any mortgages or ground leases on
the Premises shall be named on such property policies pursuant to a standard
mortgagee clause.   Tenant shall comply
with, observe and perform all provisions and requirements of all policies of
insurance at any time in force with respect to the Premises. Tenant shall not
take out separate property insurance concurrent in form or contributing in the
event of loss with that required hereunder, unless Landlord is included therein
as a named insured with loss payable as provided above.  Tenant shall immediately notify Landlord
whenever any such separate insurance is taken out and shall deliver to Landlord
duplicate originals thereof or original certificates evidencing the same with
true copies of such insurance policies attached.   Tenant shall increase the limits of the

 

8

 

policies required hereunder as Landlord may request
from time to time.  All policies carried
by Tenant shall contain a waiver of subrogation endorsement.

 

6.2                               Deductibles;
Evidence of Insurance.  Each
policy required under this Article shall have a deductible of no more than Two
Hundred Fifty Thousand Dollars ($250,000.00) and in the event of a loss, Tenant
shall pay the amount of such deductible to Landlord.  Each policy shall have attached thereto (i) an endorsement that
such policy shall not be cancelled or materially changed without at least
thirty (30) days prior written notice to Landlord and any named mortgagee, and
(ii) an endorsement to the effect that the insurance as to the interest of
Landlord shall not be invalidated by any act or neglect of any person.  All policies of insurance shall be written
by companies with “Best Guide” ratings in excess of A/XII, and licensed in the
state in which the Premises are located, and shall be written in such form as
shall be reasonably satisfactory to Landlord. 
Certificates of insurance acceptable to Landlord (on Accord Form 28) and
evidence of payment shall be delivered to Landlord prior to the Commencement
Date and prior to expiration of any policy.  
Upon request by Landlord, Tenant shall deliver copies of all insurance
policies to Landlord.

 

6.3                               Mutual
Waiver of Subrogation Rights. 
Whenever (a) any loss, cost, damage or expense resulting from fire,
explosion or any other casualty or occurrence is incurred by either of the
parties to this Lease, or anyone claiming by, through, or under it in connection
with the Premises, and (b) such party is then covered in whole or in part by
insurance with respect to such loss, cost, damage or expense or is required
under this Lease to be so insured, then the party so insured (or so required to
be insured hereunder) hereby releases the other party from any liability said
other party may have on account of such loss, cost, damage or expense to the
extent of any amount recovered by reason of such insurance (or which could have
been recovered had such insurance been carried as so required hereunder) and
waives any right of subrogation which might otherwise exist in, or accrue to,
any person on account thereof, provided that such release of liability and
waiver of the right of subrogation shall not be operative in any case where the
effect thereof is to invalidate such insurance coverage.

 

ARTICLE VII.  COMPLIANCE WITH LAWS; CODES; DECLARATIONS

 

7.0                               Compliance.  Tenant shall, throughout the
Lease Term, at Tenant’s sole cost and expense, promptly comply with, and remove
or cure violations of, any and all present and future laws, ordinances, orders,
rules, regulations, guidelines and requirements of all Federal, State,
Municipal and other governmental bodies having jurisdiction over Tenant, the
Premises and the operations or activities conducted therein, regardless of
whether the compliance, curing or removal of any such violation and the costs
and expenses necessitated thereby shall have been foreseen or unforeseen,
ordinary or extraordinary, and whether or not the same shall be presently
within the contemplation of Landlord or Tenant or shall involve any change of
governmental policy, and irrespective of the costs thereof.  Landlord shall, without expense to
Tenant, make any and all alterations whether structural or non-structural,
ordinary or extraordinary, foreseen or unforeseen, required to be made to the
Premises at any time during the Term of the Lease by law, ordinance or
regulation of any governmental authority, Landlord’s insurers, or similar
authority, whether or not said law, ordinance or regulation is in

 

9

 

effect, or is contemplated, as of the date of
execution hereof, but only if such change in law is of general applicability to
industrial warehouses and is not 
related to Tenant’s particular use or operations.

 

7.1 Observance of Matters of Record.  Tenant shall comply with the terms and
requirements of all permits issued by governmental authorities issued in
connection with use or operation of the Premises. Tenant, at its sole cost and
expense, shall comply with any and all 
easements and covenants, conditions and 
restrictions of record affecting the Premises. Tenant shall observe and
perform all obligations binding upon the owner of the Premises pursuant to the
Declaration (as defined below).

 

7.2                               Fire Protection. 
Tenant shall comply with all applicable building and fire codes, laws
and ordinances, including without limitation the all applicable rules and
regulations of the Board of Fire Underwriters, the fire department or marshall
wherein the Premises are situated, and the property insurance carrier.  In the event that the Premises are served by
a sprinkler system, Tenant will cause the same to be served by a sprinkler
monitoring system connected to the local fire department or to a qualified
monitoring service approved by Landlord.

 

ARTICLE VIII.  REPAIRS AND MAINTENANCE

 

8.0                               Tenant’s
Repair Obligations. Except for those repairs which are to be performed
by Landlord as described below, Tenant shall, at its sole cost,  take good care of the Premises, and shall
keep the same in good order and condition, and shall,  without limitation promptly make and perform all necessary
repairs, maintenance and replacements to mechanical, electrical, plumbing,
loading, and HVAC systems, interior walls, ceilings and floors, loading areas,
landscaping, parking and driveways, walls, doors, windows and all other
building components, refuse and loading areas, 
entrances and passageways, except for damage caused by the act or
neglect of Landlord, its subtenants, employees, agents, invitees, or
contractors. Tenant shall, at its sole cost, perform all landscaping, salting,
de-icing and snowplowing at its cost. 
Tenant shall further, at its sole cost, perform all obligations and pay
all assessments imposed on the owner of the Premises pursuant to the
Declaration of Covenants, Conditions and Restrictions for Turnpike Crossing,
dated April 30, 2001 and recorded  in
Deed book 4937 page 71, as amended by First Amendment of Declaration of
Covenants, Conditions and Restrictions for Turnpike Crossing, dated September
17, 2001, and recorded in Deed Book 4962 page 333, and Second Amendment of
Declaration of Covenants, Conditions and Restrictions for Turnpike Crossing,
dated December 22, 2003, as the same may be subsequently amended (collectively,
the “Declaration”).  A copy of the Declaration is attached hereto
as Exhibit “B” and incorporated herein. 
If the Declaration is hereafter amended, Tenant shall not be obligated
to comply with any terms of such amendment which conflict with the terms of
this Lease or materially increase Tenant’s obligations.  Notwithstanding anything herein or in the
Declaration to the contrary, Tenant shall not be responsible (i) to repair or maintain
common utilities or lines which serve more than one parcel in the Turnpike
Crossing Industrial Park, except to the extent of its pro-rata share of such
costs or related association assessments, or (ii) to make any repairs or
replacements required by the Declaration that would be the obligation of
Landlord under Section 8.1 or Article 14 below.

 

10

 

8.1                               Landlord
Repair Responsibilities.  
Landlord shall maintain, repair and replace, as necessary, the roof and
structure of the Building, except for damage caused by the act or neglect of
Tenant, its subtenants, employees, agents, invitees, or contractors.   Landlord shall not be deemed in default of
this Section or Section 8.2 unless Tenant has first given Landlord written
notice of any repairs required of Landlord and Landlord has not effected such
repairs within thirty (30) days after 
receipt of such notice or such longer period as may be reasonably
required to effect such repairs.  Except
as set forth in this Section 8.1 and Section 8.2, Landlord shall not be
required to furnish any services or facilities or to make any repairs or
alterations in, about or to the Premises and Tenant assumes the full and sole
responsibility for the condition, operation, repair, replacement, and
maintenance of the Premises and waives any rights created by any law now or
hereafter in force that require Landlord to make repairs to the Premises.

 

In the event
Landlord makes any repairs required pursuant to this Section, Landlord shall use its reasonable efforts to avoid
damage to Tenant’s property. Landlord agrees to be responsible for damage to
Tenant’s property, if such damage is caused by the negligence of Landlord or
its agents, contractors or employees.

 

In the event
Landlord fails in the performance of any of its obligations under this Section and after thirty (30) days of
receipt of written notice from Tenant specifying such default (or, in the event
of an emergency, within a period of time commensurate with such emergency
provided Tenant has made reasonable effort to provide both fax and telephonic
notice to Landlord and its management agent) fails to commence curing such
default, Tenant may thereupon cure such default and Landlord will pay the
actual and reasonable costs paid by Tenant in curing such default (plus an
administrative fee of fifteen percent (15%) of the amount thereof) within
thirty (30) days after receipt of a bill therefore, as Tenant’s sole remedy.

 

8.2   Landlord
Representations and Warranties.  Landlord warrants  the
roof and all mechanical systems against defects in material and workmanship for
twelve (12) months after the Commencement Date, except for damage caused by the
act or neglect of Tenant, its subtenants, employees, agents, invitees, or
contractors.  As of the date hereof,
Landlord has not received any written notice that the Building is in violation
of any applicable building, environmental or other  code or law that has not been cured.

 

8.3                               Covenant
Against Waste.  Tenant shall not
commit or suffer any waste or damage, disfigurement or injury to the Premises
or permit or suffer any overloading of the floors, electrical or other systems
or otherwise use the Building in a manner that would place an undue stress on
the same beyond safe or design limits.

 

ARTICLE IX.  ALTERATIONS

 

9.0                               Alterations.
Tenant shall not perform any alterations, additions, demolition, installations,
or improvements in, on, of or to the Premises (“Alterations”) without
Landlord’s prior written consent, which Landlord shall not unreasonably
withhold except as provided below.  No
Alterations shall be permitted that, in Landlord’s sole discretion, adversely
affect the Building’s systems, structure or exterior appearance, or value or
marketability of the Premises.

 

11

 

All Alterations
shall be performed in accordance with all applicable laws, codes, regulations,
ordinances and rules.  All Alterations
shall be performed in a good and workmanlike manner by tradesmen skilled in
their respective trades, using only new materials.   All Alterations and Tenant’s Work shall, upon installation,
become part of the Premises, shall be owned by Landlord, and shall, unless
Landlord requires removal, remain in the Premises at the expiration or termination
of this Lease or termination of Tenant’s right to possession of the Premises,
without compensation or credit to Tenant. 
Landlord shall, without limitation, have the right to receive and
approve all contractors, subcontractors, construction contracts, plans and
specifications, contractor insurance and sworn owners affidavits. In addition
Owner shall have the right to require satisfactory evidence of Tenant’s ability
to pay and the posting of payment and performance bonds from contractors.  Notwithstanding anything to the contrary,
Tenant may, without Landlord’s consent, but with prior notice to Landlord, make
alterations to the interior of the Premises, the cost of which does not exceed
$250,000 in the aggregate, and which do not alter, modify or in any other
manner whatsoever affect (i) the structural portions of the Premises, (ii) the
roof of the building of which the Premises shall form a part and the exterior
of the Premises (including but not limited to the storefront), (iii) the
structural integrity of the building of which the Premises shall form a part,
or (iv) the plumbing, electrical, heating, ventilating, air-conditioning, or
mechanical systems or installations in the Premises.

 

9.1                               Liens
and Claims.  To the extent
permitted by law, all of Tenant’s contracts and subcontracts for such
Alterations for which Landlord’s consent is required shall provide that no lien
shall attach to or be claimed against the Premises or any interest therein
other than Tenant’s leasehold interest in the Premises, and that all
subcontracts let thereunder shall contain the same provision.  Any liens or claims that are filed shall be
subject to the provisions of Section 11.1 below.

 

9.2                               Completion of Alterations. 
Tenant shall pay the cost of all Alterations.  Upon completion of each Alteration, Tenant shall furnish Landlord
with customary contractor’s affidavits and full and final waivers of lien and
receipted bills covering all labor and materials expended and used in
connection therewith, and “as built” plans thereof or a certificate from
Tenant’s architect that the Alterations were performed in accordance with the
plans and specifications approved by Landlord.

 

9.3                               Signage.    Subject to
compliance with applicable laws and any approvals required under the
Declaration, and subject to the prior written approval of Landlord, which shall
not be unreasonably withheld, upon execution of this Lease, Tenant shall have
the right, at its sole expense, to install a monument sign on the Land and a
sign on the exterior of the Building. 
Upon expiration or termination of the Lease, all such signs shall be
removed and any damage caused thereby shall be repaired by Tenant, at its
expense.

 

ARTICLE X.  ASSIGNMENT AND SUBLETTING

 

10.0                        Landlord’s
Consent Required.  Tenant shall
not sell, assign, mortgage, hypothecate, pledge or in any other manner transfer
or encumber any of its interest in this Lease or sublet or permit others to use
or occupy any portion of the Premises, or grant any license,

 

12

 

concession, franchise or other rights or interest in
this Lease or the Premises, voluntarily, by operation of law or otherwise (the
foregoing are sometimes referred to collectively or individually as a “Transfer”)
without in each case obtaining Landlord’s prior written consent, which Landlord
shall not unreasonably withhold. Landlord shall not be deemed to have
unreasonably withheld its consent if: (i) such proposed transferee  has a net worth of less than $50,000,000.00
(exclusive of goodwill); or (ii) if such proposed transferee has publicly rated
debt, its senior unsecured credit rating shall be less than Standard &
Poors “BBB” (or Moody’s or Fitch equivalent), (iii) the reputation or character
of the proposed transferee would in Landlord’s judgment materially damage the
image or value of the Building, or (iv) the transferee proposes a use which is
not permitted by the Declaration or applicable law or  involves manufacturing or the use, generation or storage of
significant amounts of Hazardous Materials (as hereafter defined).

 

A registered
offering of the stock of Tenant shall not be deemed a Transfer under this Lease
provided (i) the registered public offering applies to all stores of Tenant,
its parent, subsidiaries and affiliates, (ii) there is no material change in
Tenant’s management on account thereof, and (iii) Tenant is not in material
default under this Lease beyond applicable cure periods at the time of the
public offering.  The sale of any
outstanding capital stock of Tenant which is effected through the “over the
counter” market or through any recognized stock exchange shall not be deemed a
Transfer under this Lease.

 

Tenant may assign
this Lease or sublet all or any part of the Premises without Landlord’s consent
to any parent, or wholly-owned subsidiary of Tenant or of Tenant’s parent
company or Tenant’s guarantor or any entity which is a successor to Tenant by
way of merger, consolidation or corporate reorganization or by the purchase of
substantially all of the assets or shares of stock of Tenant (“Affiliate”),
provided (a) any assignee shall assume in writing the performance and
observance of all of the terms, covenants and conditions of this Lease; (b) a
copy of the sublease or assignment and assumption agreement is delivered to
Landlord; (c) Tenant continues to remain liable for the performance of all of
the terms, covenants and conditions of this Lease, and (d) Tenant is not in
default under the Lease.

 

10.1                        Other
Requirements for Transfer.  (a) 
As of the effective date of the Transfer, and at the time when
Tenant  requests  Landlord’s written consent thereto, this
Lease must be in full force and effect, without default on the part of
Tenant.  Any Transfer shall be subject
to all the provisions, terms, covenants and conditions of this Lease. Any
assignment of this Lease shall transfer to the assignee all of Tenant’s right,
title and interest in this Lease and all of Tenant’s estate or interest in the
Premises.

 

(b)
No Transfer, whether or not Landlord’s consent is given, shall relieve Tenant
of its liability and obligations under this Lease, and such liability of Tenant
shall not be affected by any subsequent amendment, modification, waiver or
concession under the Lease.

 

(c)
Any attempt by Tenant to Transfer an interest in this Lease or the Premises, by
document or other agreement or by operation of law in violation of the terms of
this Lease, shall be void and confer no rights on any third party and shall, at
Landlord’s option, constitute a

 

13

 

default under this
Lease.  The consent by Landlord to any
Transfer shall neither constitute a waiver of the necessity of such consent to
any subsequent Transfer. If the Premises or any part thereof or any interest in
the Lease are transferred, whether or not in violation of this Article,
Landlord may collect rent from the Transferee. 
In such event, Landlord shall apply the net amount collected to the Rent
due under this Lease, but no such collection or application shall be deemed a
waiver of any term, covenant or condition of this Lease or the consent to such
Transfer or acceptance by Landlord of such Transferee.

 

(d)                                 Should Tenant desire to Transfer this Lease,
Tenant shall give Landlord written notice of its intention to do so to Landlord
at least thirty (30) days or more before the effective date of such proposed
Transfer, provided if Landlord’s consent is not required, such notice shall be
given no later than the date of Transfer.

 

(e)                                  Each
Transfer shall be accomplished by an instrument in writing wherein the
Transferee shall agree in writing for the benefit of Landlord to assume and be
bound by, and to perform the terms, covenants and conditions of this Lease to
be done, kept and performed by Tenant. If Landlord’s consent is required to
such Transfer, said instrument shall be in form and substance reasonably
acceptable to Landlord.

 

(f)                                    If Landlord’s consent is required to a
Transfer, Tenant shall on demand reimburse Landlord for all expenses, including
reasonable attorneys’ fees and disbursements, incurred by Landlord in conjunction
with a requested Transfer by Tenant.

 

10.2                        Special
Provisions Relating to Subleases.    The
following terms and conditions shall apply to any subletting by Tenant of all
or any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:

 

(a)                                  Tenant hereby assigns and transfers to
Landlord all of Tenant’s interest in all rentals and income arising from any
sublease of all or a portion of the Premises heretofore or hereafter made by
Tenant, and Landlord may collect such rent and income and apply same toward
Tenant’s obligations under this Lease; provided, however, that until a default
(after any required notice and the expiration of any cure period) shall occur
in the performance of Tenant’s obligations under this Lease, Tenant may, except
as otherwise provided in this Lease, receive, collect and enjoy the rents
accruing under such sublease.  Landlord
shall not, by  reason of this or any
other assignment of such sublease to Landlord, nor by reason of the collection
of the rents from a subtenant, be deemed liable to the subtenant for any
failure of Tenant to perform and comply with any of Tenant’s obligations to
such subtenant under such sublease.  Tenant
hereby irrevocably authorizes and directs any such subtenant, upon receipt of a
written notice from Landlord stating that a default  (after any required notice and the expiration of any cure period)
exists in the performance of Tenant’s obligations under this Lease, to pay to
Landlord the rents and other charges due and to become due under the
sublease.  Subtenant shall rely upon any
such statement and request from Landlord and shall pay such rents and other
charges to Landlord without any obligation or right to inquire as to whether
such default exists and notwithstanding any notice from or claim from Tenant to
the contrary.  Tenant shall have no
right or claim against said subtenant, or, until the breach has

 

14

 

been cured, against
Landlord, for any such rents and other charges so paid by said sublessee to
Landlord.

 

(b)                                 In the event of a breach by Tenant in the
performance of its obligations under this Lease, Landlord, at its option and
without any obligation to do so, may require any sublessee to attorn to
Landlord, in which event Landlord shall undertake the obligations of the
sublandlord under such sublease from the time of the exercise of said option to
the expiration of such sublease; provided, however, Landlord shall not be
liable for any prepaid rents or security deposit paid by such subtenant to such
sublandlord or for any other prior defaults or breaches of such sublandlord
under such sublease.

 

(c)                                  Any matter or thing requiring the consent of
the sublandlord under a sublease shall also require the consent of Landlord
herein.

 

(d)                                 No subtenant shall further assign or sublet
all or any part of the Premises without Landlord’s prior written consent.

 

ARTICLE XI.  LIENS AND ENCUMBRANCES

 

11.0                        Encumbering
Title.    Tenant shall not do
any act which shall in any way encumber Landlord’s interest in and to the
Premises, nor shall the interest or estate of Landlord in the Premises in any
way become subject to any claim by way of lien or encumbrance, whether by
operation of law or by virtue of any express or implied contract by
Tenant.  Any claim to, or lien upon, the
Premises arising from any act or omission of Tenant other than a claim by
Landlord, shall accrue only against the leasehold estate of Tenant and shall be
subject and subordinate to the paramount title and rights of Landlord in and to
the Premises.  Tenant shall have no
authority to contract for or on behalf of Landlord for any improvements or
work. Notwithstanding anything in this Lease to the contrary, Tenant and its
lenders shall have the right to file UCC financing statements to perfect any
lien which Tenant may desire to give on its inventory, personal property or
trade fixtures.

 

11.1                        Liens
and Right to Contest.    Tenant
agrees to hold Landlord harmless against all liens, claims and liabilities of
every kind, nature and description which may arise out of or in any way be
connected with any work performed by or on behalf of Tenant. Tenant shall not
permit the Premises to become subject to any mechanics’, laborers’ or
materialmen’s lien on account of labor, material or services furnished to
Tenant or claimed to have been furnished to Tenant in connection with work of
any character performed or claimed to have been performed for the Premises by,
or at the direction or sufferance of Tenant. 
If any such lien is filed against the Premises, Tenant shall within
thirty (30) days thereafter either pay and discharge such lien of record, or
provide Landlord with a bond, title indemnity or other security acceptable to
Landlord to assure full payment and discharge of such lien and to prevent any
sale, foreclosure or other forfeiture by reason of non-payment of such
lien.  If Tenant fails to so discharge
the lien or post such bond or security within said thirty (30) days, then
Landlord may, without investigation as to

 

15

 

the validity of the lien claim, pay and discharge such
lien and Tenant shall pay the cost thereof, and related attorneys fees, to
Landlord upon demand.

 

ARTICLE XII.  UTILITIES

 

12.0                        Use and
Purchase of Utilities.  From and
after the date Tenant takes possession of the Premises, Tenant will pay, when
due, all charges of every nature, kind or description for utilities furnished
to the Premises or chargeable against the Premises, including all charges for
water, sewage, heat, gas, light, garbage, electricity, telephone, steam, power,
or other public or private utility services.  
Tenant shall provide evidence of payment of all utilities to Landlord
upon request from time to time.

 

ARTICLE XIII.  INDEMNITY; WAIVER; ENVIRONMENTAL

 

13.0                        Indemnity.
Tenant shall protect, indemnify and save harmless Landlord, Landlord’s
beneficiaries, mortgagees, and their agents, employees, officers and directors,
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and expenses, including, without limitation, attorneys’
fees and expenses, incurred or asserted by reason of (a) any accident, injury
to, or death of, persons or loss of, or damage to, property occurring on or
about the Premises or any part thereof, (b) any negligent or wrongful act or
omission of Tenant, its successors, assigns or subtenants, or their respective
agents or employees; (c) any default  (after any required notice and the expiration
of any cure period) by Tenant under the terms of this Lease; and (d) the
performance of any labor or services or the furnishing of any materials or
other property in respect of the Premises or any part thereof performed by or
on behalf of Tenant during the Lease Term. 
Tenant’s indemnification obligations set forth in this Lease shall
survive the expiration or termination of this Lease.  Landlord shall protect, indemnify and save harmless Tenant,
Tenant’s beneficiaries, invitees and their agents, employees, officers and
directors, from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses, including, without limitation,
attorneys’ fees and expenses, incurred or asserted by reason of (a) any
negligent or wrongful act or omission of Landlord, its successors, assigns, or
their respective agents or employees; or (b) any failure on the part of
Landlord to perform or comply with any of the terms of this Lease, which
failure continues for thirty (30) days after written notice thereof or such
longer period as is reasonably required to cure.  Landlord’s indemnification obligations set forth in this Lease
shall survive the expiration or termination of this Lease.

 

13.1                        Waiver
of Certain Claims.  Except with
respect to damage or injury caused by Landlord’s willful acts or gross
negligence, Tenant waives all claims it may have against Landlord for damage or
injury to property sustained by Tenant or any persons claiming through Tenant
or by any occupant of the Premises, or by any other person, resulting from any
part of the Premises or any of its improvements, equipment or appurtenances
becoming out of repair, or resulting from any accident on or about the Premises
or any other cause or resulting directly or indirectly from any act of neglect
of any person, including Landlord, to the extent permitted by law.  Such waiver shall include, but not by way of
limitation, damage caused by water, snow, frost, steam, excessive heat or cold,
interruptions in utilities, sewage, gas, odors or noise, theft, or

 

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caused by bursting or leaking of pipes or plumbing
fixtures, and shall apply equally whether any such damage results from the act
or neglect of Tenant or any other person, including Landlord, to the extent
permitted by law, and whether such damage be caused by, or result from, any
thing or circumstance above mentioned or referred to, or to any other thing or
circumstance whether of a like nature or of wholly different nature.  In no event shall Rent abate as the result
of any such occurrence.  All personal
property belonging to Tenant or any occupant of the Premises that is in or on
any part of the Premises shall be at the risk of Tenant or of such other person
only, and Landlord shall not be liable for any damage thereto or theft or
misappropriation thereof.

 

13.2                        Receipt
of Reports.    Tenant
acknowledges that it has received a copies of the following environmental
reports from Landlord:  Phase 1 Environmental Site Assessment
Prepared by Eckland Consultants, Inc. for Allianz Life dated August 14, 2001 (“Existing
Environmental Report”).

 

13.3                      Tenant’s
Compliance With Environmental Laws. 
Tenant shall not store any reportable quantities of Hazardous Materials
at the Premises without Landlord’s prior written consent, which consent shall
not be unreasonably withheld.  The
foregoing shall not be construed to prohibit Tenant from storing and using
non-reportable quantities of customary office and cleaning supplies or other
products in the Premises, or from storing and using non-reportable quantities
of other products required in connection with Tenant’s permitted use.  Notwithstanding the foregoing, all flammable
or combustible materials and any Hazardous Materials in the Premises shall be
stored in specially designed containment rooms or containers to the extent
required by applicable Hazardous Materials Laws (as defined below).  In addition to the foregoing, Tenant shall
at all times and in all respects comply with, and not violate, by operation of
law or otherwise, any federal, state and local laws, ordinances and regulations
(“Hazardous Materials Laws”) relating to the industrial hygiene, environmental
protection or the use, analysis, generation, manufacture, storage, presence,
disposal or transportation of any oil, petroleum products, flammable
explosives, mold, asbestos, urea formaldehyde, polychlorinated biphenyls,
radioactive materials or waste, or other hazardous, toxic, contaminated or
polluting materials, substances or wastes, including without limitation, any
“hazardous substances,” “hazardous wastes,” “hazardous materials” or “toxic
substances” under any such laws, ordinances or regulations (collectively,
“Hazardous Materials”).  Tenant shall not
be deemed to have violated a Hazardous Material Law by operation of law if
Landlord’s actions shall have served as the cause of such violation.

 

Tenant shall at
its own expense procure, maintain in effect and comply with all conditions of
any and all permits, licenses and other governmental and regulatory approvals
required for Tenant’s use of the Premises including, without limitation,
discharge of (appropriately treated) materials or waste into or through any
sanitary sewer system serving the Premises. 
Tenant shall cause any and all Hazardous Materials to be removed from
the Premises and transported solely by duly licensed haulers to duly licensed
facilities for final disposal of such Hazardous Materials and wastes.  Tenant shall in all respects, handle, treat,
deal with and manage any and all Hazardous Materials in, on, under or about the
Premises in complete conformity with all applicable Hazardous Materials Laws
and prudent industry practices regarding the management of such Hazardous
Materials.  All reporting obligations to
the extent

 

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imposed upon
Tenant by Hazardous Materials Laws are solely the responsibility of
Tenant.  Upon expiration or earlier
termination of this Lease, Tenant shall cause all Hazardous Materials (except
to the extent such Hazardous Materials are generated, stored, released or
disposed of during the term of this Lease by Landlord) to be removed from the
Premises and transported for use, storage or disposal in accordance and in
compliance with all applicable Hazardous Materials Laws.  Tenant shall not take any remedial action in
response to the presence of any Hazardous Materials in, on, about or under the
Premises, nor enter into any settlement agreement, consent, decree or other
compromise in respect to any claims relating to any way connected with the
foregoing without first notifying Landlord of Tenant’s intention to do so and
affording Landlord ample opportunity to appear, intervene or otherwise
appropriately assert and protect Landlord’s interest with respect thereto.  In addition, at Landlord’s written request,
at the expiration of the term of this Lease or within sixty (60) days following
the date of such request, whichever is later, Tenant shall remove all tanks or
fixtures which were placed on the Premises during the term of this Lease by
Tenant, its agents, contractors or employees and which contain, or are
contaminated with, Hazardous Materials.

 

Tenant shall
within ten (10) days after receipt notify Landlord in writing of (a) any
enforcement, clean-up, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Materials Laws;
(b) any claim made or threatened by any person against Landlord, or the
Premises, relating to damage, contribution, cost recovery, compensation, loss
or injury resulting from or claimed to result from any Hazardous Materials; and
(c) any reports made to any environmental agency arising out of or in
connection with any Hazardous Materials in, on or about the Premises, or with
respect to any Hazardous Materials removed form the Premises, including, any
complaints, notices, warnings, reports or asserted violations in connection
therewith.  Tenant shall also provide to
Landlord, as promptly as possible, and in any event within ten (10) business
days after Tenant first receives or sends the same, copies of all claims,
reports, complaints, notices, warnings or asserted violations relating in any
way to the Hazardous Materials in or on the Premises.  Upon written request of Landlord (to enable Landlord to defend
itself from any claim or charge related to any Hazardous Materials Law), Tenant
shall promptly deliver to Landlord notices of hazardous waste manifests
reflecting the legal and proper disposal of all such Hazardous Materials
removed or to be removed from the Premises. 
All such manifests shall list the Tenant or its agent as a responsible
party and in no way shall attribute responsibility for any such Hazardous
Materials to Landlord.

 

Tenant will
indemnify, defend (with counsel reasonably acceptable to Landlord), protect and
hold harmless the Landlord from and against any and all loss, claim, cause of
action, demand, expense and the like (“Claims”) whatsoever arising or
resulting, in whole or in part, directly or indirectly, from the presence,
treatment, storage, transportation, disposal, release or management of
Hazardous Materials in, on, under, upon or from the Premises (including water
tables and atmosphere) resulting from or in any way related to Tenant’s use of
the Premises.  Tenant’s obligations
under this section include, without limitation and whether foreseeable or
unforeseeable, (a) the costs of any required or necessary repair, clean-up,
detoxification or decontamination of the Premises, (b) the costs of
implementing any closure, remediation or other required action in connection
therewith as stated above; (c) the value of any loss of use and any diminution
in value of the Premises, and (d) consultants’ fees, experts’ fees and response
costs.

 

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The obligations of
Tenant under this section survive the expiration or earlier termination of this
Lease.

 

Notwithstanding
anything in this Lease to the contrary, Tenant shall not be responsible for any
claim, charge, loss, damage or liability relating to Hazardous Materials to the
extent that such Hazardous Materials (a) exist at, on or under the Premises on
the date of Tenant’s entry thereon, (b) result from the migration of Hazardous
Materials from adjacent properties, or (c) are otherwise introduced to the
Premises by Landlord, its employees or agents.

 

Landlord shall
defend and indemnify Tenant and save Tenant harmless from and against all
claims, actions, damages, liability and expense (including, but not limited to,
attorneys’ fees and disbursements) in connection with the loss of life,
personal injury or damage to property caused by the use, installation, release
or removal of Hazardous Materials on the Premises by Landlord, its employees or
agents.  Landlord shall not be liable
for damages or injury occasioned by the negligence or willful acts of Tenant,
its agents, employees or servants. 
Except as disclosed in the Existing Environmental Report, Landlord
represents and warrants to Tenant, that to the knowledge of Landlord, without
investigation, the Premises is not in violation of applicable Hazardous
Material Laws as of the date hereof. 
For the purposes hereof,  the
“knowledge of Landlord’ shall be mean the actual knowledge of Brian Brennan or
Patrick O’Reilly, without investigation.

 

13.4                        Tenant’s
Compliance with New Jersey Industrial Site Recovery Act.  Tenant represents and warrants that its U.S.
Standard Industrial Classification (“SIC”) system code is 5137 and that its
operations on or about the Premises shall not constitute an “Industrial
Establishment,” as defined at N.J.A.C. § 7:26B-1.4, and successor
provisions thereto.  Tenant, its
assignees or sublessees agree that they will be primarily responsible for
compliance with all aspects of the Industrial Site Recovery Act, N.J.S.A. 13:1K-6
et. seq. (“ISRA”), for its Industrial Establishment and any Closing Operations
related thereto.

 

Tenant concurs
that the termination of this Lease, whether by its scheduled course, operation
of Landlord or Tenant’s acts, or those of a third party, shall constitute
“Closing Operations,” as defined at N.J.A.C. § 7:26B-1.4, and any successor
provisions thereto, notwithstanding the fact that there is no disruption in the
operations of the industrial establishment.

 

Tenant shall, at
Tenant’s own expense, make all submissions to, provide all information to, and
comply with all requirements of, the Industrial Site Evaluation Element or its
successor at the New Jersey Department of Environmental Protection
(“NJDEP”).  Tenant shall promptly
furnish to Landlord true and complete copies of all documents, submission,
correspondence and oral or written communications provided by Tenant to the
NJDEP, and all documents, reports, directives, correspondence and oral or
written communications by the NJDEP to Tenant. 
Tenant shall also promptly furnish to Landlord true and complete copies
of all sampling and test results and reports obtained and prepared from samples
and tests taken at and around the Premises. 
Tenant shall notify Landlord in advance of all meetings scheduled
between Tenant and NJDEP, and Landlord may attend all such meetings.

 

19

 

Should the NJDEP
or any other division of NJDEP determine that a cleanup plan must be prepared
and/or that a cleanup must be undertaken because of a spill or discharge of
Hazardous Materials at the Premises which occurred during the term of this
Lease, Tenant shall, at Tenant’s own expense, promptly carry out the approved
plans (hereinafter a “Remediation Plan”). 
Notwithstanding anything in this Lease to the contrary, Tenant shall not
be responsible for any cleanup plan to remediate a spill or discharge of
Hazardous Materials to the extent that such Hazardous Materials (a) exist at,
on or under the Premises on the date of Tenant’s entry thereon, (b) result from
the migration of Hazardous Materials from adjacent properties, or (c) are
otherwise introduced to the Premises by any party other than Tenant, its
agents, contractors or employees.

 

Tenant shall
commence all actions required to obtain ISRA Clearance (as such term is defined
below) (i) at least five (5) months prior to the scheduled termination of this
Lease, (ii) immediately following Tenant’s intention to assign or sublease all
or any portion of the Premises, or (iii) within ten (10) days following
Landlord’s written request therefor, which request may be delivered at any
time, and Tenant shall diligently prosecute such clearance to completion.  At no expense to Landlord, Tenant shall promptly
provide all information requested by Landlord or NJDEP for preparation of a
non-applicability affidavit, de minimis quantity exemption application, limited
conveyance application or other submission and shall promptly sign such
affidavits and submissions when requested by Landlord.  Landlord agrees that it shall reasonably
cooperate with Tenant, at Tenant’s expense, as necessary to assist Tenant in
obtaining ISRA Clearance.  In the event
Tenant fails to take all such required action for a period of thirty (30) days
after notice, Landlord shall be entitle to take such action as it deems
appropriate in Tenant’s name.  Should
Tenant determine its operations do not constitute an “Industrial Establishment”
pursuant to ISRA, Tenant shall, at Tenant’s own expense, obtain a letter of
non-applicability or de minimis quantity exemption from the NJDEP and shall
promptly provide Tenant’s submission and the NJDEP’s exemption letter to
Landlord.  In the event Tenant is unable
to obtain a letter of non-applicability or de minimis quality exemption from the
NJDEP, Tenant shall promptly obtain a negative declaration, a signed
Remediation Agreement or a final approval of clean up from NJDEP and thereafter
promptly take all necessary action in order to finally and completely comply
with the same.

 

If Tenant fails to
obtain either: (i) a non-applicability letter, (ii) a de minimis quantity
exemption; (iii) a negative declaration; (iv) a signed remediation agreement;
or (v) final approval of cleanup; (collectively referred to as “ISRA
Clearance”) from the NJDEP prior to the expiration or earlier termination of
the term of this Lease, then upon the expiration or earlier termination of the
term of this Lease Landlord shall have the option either to consider this Lease
as having ended or to treat Tenant as a holdover tenant in possession of the
Premises.  If Landlord considers this
Lease as having ended, then Tenant shall nevertheless be obligated to promptly
obtain ISRA Clearance and to fulfill the obligations set forth above.  If Landlord treats Tenant as a holdover
Tenant in possession of the Premises, then Tenant shall pay monthly to Landlord
double the regular and additional monthly rent which Tenant would otherwise
have paid, until such time as Tenant obtains ISRA Clearance, and during the
holdover period all of the terms of this Lease shall remain in full force and
effect.

 

20

 

Tenant shall
permit Landlord and Landlord’s agents, servants and employees including but not
limited to legal counsel and environmental consultants and engineers, access to
the Premises for the purposes of environmental inspections and sampling during
regular business hours, or during other hours either by agreement of the
parties or in the event of any environmental emergency.  Tenant shall not restrict access to any part
of the Premises and Tenant shall not impose any conditions to access.

 

Tenant shall
indemnify, defend and hold harmless Landlord from and against all claims,
liabilities, losses, damages and costs, forseen or unforseen, including,
without limitation, counsel, engineering and other professional or expert fees,
which Landlord may incur by reason of Tenant’s action or non-action with regard
to Tenant’s obligations under this Section 13.5.

 

This Section 13.4
shall not be construed to limit Tenant’s obligations under any other Federal,
State or local environmental laws, rules and regulations, and shall not
restrict Tenant’s additional environmental obligations, representations or
warranties under this Lease. This Section 13.4 shall survive the expiration or
earlier termination of this Lease. 
Tenant’s failure to abide by the terms of Section 13.4 shall be
restrainable by injunction.

 

ARTICLE XIV.  DESTRUCTION AND RESTORATION

 

14.0                        Substantial Destruction

 

If fifty percent (50%) or more of the Rentable Area of Premises is made
untenantable by fire or other casualty, Landlord may, at its option, elect:

 

A.                                   To terminate this Lease as of the date of the
fire or casualty by notice to Tenant within ninety (90) days after that date;
or

 

B.                                     To proceed with reasonable diligence to
repair, restore or rehabilitate the Building (excluding leasehold improvements
paid for by Tenant), in which event this Lease shall not terminate.

 

Landlord shall, as soon as reasonably
possible but no later than 90 days after said casualty, notify Tenant of its
estimate of the time necessary to repair, restore or rehabilitate the
Building.  If the repair of the Building
is estimated by Landlord to take more than one hundred eighty (180) days from
the date of said casualty, then Tenant may, at its option, by written notice to
Landlord delivered no later than thirty (30) days after receipt of said notice,
terminate this Lease.  If Landlord fails
to repair, restore or rehabilitate the Building within said one hundred eighty
(180) days, Tenant may terminate this Lease (which termination shall occur
delivery of Tenant’s termination notice or surrender of the Premises, whichever
is later) by serving notice on Landlord no later than thirty (30) days after
the expiration of said one hundred eighty (180) day period.  If Tenant timely serves such notice on
Landlord, Tenant shall surrender the Premises (if not previously surrendered)
within said thirty (30) days.

 

21

 

Each of Landlord and Tenant shall have the
right to cancel this Lease if a casualty damaging or destroying more than
twenty-five percent (25%) of the rentable area of the Premises occurs during
the last two (2) years of the Lease.  A
party shall exercise such right if at all by written notice to the other party
given not later than thirty (30) days after such damage or destruction.

 

14.1                        Less Than Substantial Destruction.  If less than fifty percent (50%) of the
Rentable Area of Premises is made untenantable by fire or other casualty, then
Landlord shall with reasonable diligence repair, restore or rehabilitate the
Building (excluding leasehold improvements paid for by Tenant), at Landlord’s
expense.

 

14.2                        Abatement.   If
a fire or other casualty renders all or part of the Premises untenantable, Rent
shall abate in proportion to the area rendered untenantable and vacated by
Tenant.

 

14.3                        Limitation on Repair Obligations. Landlord’s obligation to repair, restore and
rehabilitate the Building shall be limited to the amount of available insurance
proceeds and subject to the terms of any first mortgage on the Premises.  In no event shall Landlord be obligated to
repair or rebuild leasehold improvements, alterations, or other improvements,
trade fixtures or personal property installed or owned by Tenant.

 

ARTICLE XV.  CONDEMNATION

 

15.0                        Complete
Taking.  In the event
substantially all of the Building or the Premises is taken or condemned by any
competent authority for any public use or purpose (including a deed given in
lieu of condemnation), this Lease shall terminate as of the date title vests in
such authority, and Base Rent shall be apportioned as of said date.  For the purposes hereof, “substantially all”
shall mean a taking such that the Building or Premises, in Landlord’s judgment,
cannot physically or economically be restored to a complete architectural unit.

 

15.1                        Taking
of Part. If less than substantially all of the Building or the Premises
is taken or condemned by any competent authority for any public use or purpose
(including a deed given in lieu of condemnation), Base Rent shall be reduced by
an amount which bears the same ratio to Base Rent then in effect as the number
of square feet of rentable area in the Premises so taken or condemned bears to
the number of square feet of rentable Area of the Premises.  Landlord, upon receipt of and to the extent
of the award in condemnation or proceeds of sale, shall make necessary repairs
and restorations (exclusive of Tenant’s leasehold improvements and personal
property paid for or installed by Tenant) to restore the Premises remaining to
as near its former condition as circumstances will permit, and to the Building
to the extent necessary to constitute the portion of the Building not so taken
or condemned as a complete architectural unit. 
In such event, the Base Rent payable hereunder from and after the date
of vesting of title in such proceedings shall be reduced to a sum equal to the
product of the Base Rent set forth in the Basic Lease Provisions multiplied by
a fraction, the numerator of which square footage the Premises

 

22

 

after the same has been restored to a complete
architectural unit, and the denominator of which is square footage of the
Premises prior to such taking.

 

15.2                        Compensation.  Landlord shall be entitled to receive the
entire price or award from any such sale, taking or condemnation, whether
applicable to land, building, or other real estate interests.  Tenant hereby assigns all its interest in
such award to Landlord and Tenant waives any right Tenant has now or may have
under present or future law to receive any award of damages for its interest in
the Premises or this Lease, provided, Tenant shall have the right to separately
claim and receive any award which may be allowed to Tenant for Tenant’s trade
fixtures and moving expenses, provided the same does not reduce Landlord’s
award.

 

ARTICLE XVI.  SUBORDINATION OR SUPERIORITY

 

16.0                        Subordination.  This Lease and Tenant’s rights are and shall
be subject and subordinate to any and all mortgages, trust deeds and ground
leases now of record or hereafter executed by Landlord against the Premises and
to all amendments, modifications, replacements or renewals thereof, provided,
the holder of such mortgage, trust deed or ground lease shall deliver to Tenant
(and Tenant shall execute) a non-disturbance agreement in such mortgagee’s
standard and reasonable form.  Tenant
shall execute and deliver within ten (10) days after request of Landlord such
acknowledgments or documents as may be requested from time to time in
connection with the sale, financing, refinancing or ground leasing of the
Premises, Land or Building including, without limitation, subordination and
attornment instruments.  If, in
connection with the financing of the Premises, Land or Building, any mortgagee
(or ground lessor) shall request reasonable modifications of this Lease that do
not materially increase the obligations or materially and adversely affect the
rights of Tenant under this Lease, Tenant shall make such modifications.  In particular, but without limitation,
Tenant shall, upon request, provide all mortgagees with written notice of any
Landlord default hereunder and the right and opportunity to cure for no less
than thirty (30) days after written notice from Tenant or such longer period as
is reasonably required to cure. 
Landlord represents that as of the date hereof there is no mortgage
encumbering the Premises. If Landlord hereafter mortgages or refinances the
Building, then Landlord shall cause the mortgagee, or other party holding an
interest or estate affecting the Premises and the Building, or both, to which
this Lease is being subordinated, to deliver to Tenant a subordination and
non-disturbance agreement in such mortgagee’s reasonable form. Tenant shall
execute such subordination non-disturbance and agreement within ten (10) days
after receipt.

 

16.1                        Superiority.  Notwithstanding the foregoing, a holder of a
trust deed, mortgage or ground lease interest may, at its option require that
this Lease be made superior and paramount to any such trust deed, mortgage or
ground lease and in such event Tenant shall execute whatever instruments are
requested to effect such result.

 

ARTICLE XVII.  SURRENDER

 

17.0                        Surrender.  Upon termination of this Lease or Tenant’s
right to possession, Tenant will at once surrender and deliver up the Premises,
together with all improvements thereon, to Landlord, in good condition and
repair, subject to ordinary wear and tear. 
Tenant

 

23

 

shall remove from the Premises all of Tenant’s
personal property, and its equipment and trade fixtures (collectively “Tenant’s
Property”) and Tenant shall repair any injury or damage to the
Premises which may result from such removal. 
If Tenant does not remove Tenant’s Property from the Premises, as
aforesaid, Landlord may, at its option, remove the same (and repair any damage
occasioned thereby) and dispose thereof or deliver the same to any other place
of business of Tenant or warehouse the same, and Tenant shall pay the cost of
such removal, repair, delivery and warehousing to Landlord on demand, or
Landlord may treat Tenant’s Property as having been conveyed to Landlord with
this Lease acting as a bill of sale, without further payment or credit by
Landlord to Tenant.  If Landlord
requests the removal of any Alterations, Tenant shall remove all such items and
restore the Premises to their original condition, ordinary wear and tear
excepted upon expiration or termination of this Lease.  If, after Landlord’s request, Tenant does
not  remove said Alterations, Landlord
may remove the same and Tenant shall pay the cost of such removal to Landlord
upon demand.

 

17.1                        Holding
Over.  Tenant shall have no
right to occupy the Premises or any portion thereof after the expiration or
termination of this Lease or of Tenant’s right to possession.  For each month or portion thereof Tenant
retains possession of the Premises, or any portion thereof, after the expiration
or termination of this Lease or Tenant’s right to possession, Tenant shall pay
Landlord an amount equal to one hundred fifty percent (150%) of the last
applicable monthly Base Rent for the first six (6) months of any holdover, and
thereafter two hundred percent (200%) of the last applicable monthly Base Rent.
Holdover rent shall be payable in advance on the first day of each month of
such holdover and shall not be prorated for any partial month.  Acceptance of said Base Rent shall not
constitute a waiver by Landlord of any re-entry or other rights of Landlord
provided for under this Lease or by law nor shall it be deemed an extension or
renewal of the Lease Term without a written election thereof by Landlord.  In addition, Tenant shall be liable for all
damages, direct and consequential, incurred by Landlord as a result of such
holdover.  Notwithstanding the
foregoing, if prior to the date of Lease expiration, Landlord has delivered a
written renewal proposal to Tenant and Tenant and Landlord are negotiating in
good faith to renew the Lease Term, then for a period of thirty (30) days after
expiration of the Lease, Base Rent shall be 100% of the last applicable monthly
Base Rent, provided, however, the foregoing shall not obligate Landlord or
Tenant to negotiate in good faith or otherwise for a new lease for the Premises
or renewal of the Term.

 

ARTICLE XVIII.  DEFAULT AND REMEDIES

 

18.0                        Defaults.  The occurrence of any one or more of the
following events shall be considered events of default by Tenant under this
Lease:

 

(a)                                  Tenant shall fail to make any payment of Rent
or any other payment required to be made by Tenant hereunder for a period of
ten (10) days after notice; or

 

(b)                                 Tenant shall fail in keeping, observing or
performing any of the other covenants or agreements herein contained to be kept,
observed and performed by Tenant, and such failure shall continue for thirty
(30) days after notice thereof in writing to Tenant or such

 

24

 

longer
period as is reasonably required to cure, but not to exceed one hundred and
twenty (120) days in total; or

 

(c)                                  Tenant or Guarantor, if any, shall make any
assignment for the benefit of creditors or shall apply for or consent to the
appointment of a receiver for themselves or any of their property; or

 

(d)                                 Tenant or Guarantor, if any, shall be
adjudged an involuntary bankrupt, or a decree or order for reorganization under
the Federal bankruptcy laws as now or hereafter amended, or under the laws of
any state, shall be entered against Tenant or Guarantor, and any such decree or
judgment or order shall not have been vacated or set aside within sixty (60)
days from the date of the entry or granting thereof; or

 

(e)                                  Tenant or Guarantor, if any, shall file or
admit the jurisdiction of the court and the material allegations contained in
any petition in bankruptcy or any petition pursuant to, or purporting to be
pursuant to, the Federal bankruptcy laws as now or hereafter amended, or Tenant
or Guarantor shall institute any proceedings for any relief under any bankruptcy
or insolvency laws or any laws relating to the relief of debtors, readjustment
or indebtedness, reorganization, arrangements, composition or extension; or

 

(f)                                    The Premises are levied upon by any revenue
officer or similar officer as the result of any act or omission of Tenant and
such levy is not removed with sixty (60) days after such levy is feled; or

 

(g)                                 A decree or order appointing a receiver of
all or substantially all of the property of Tenant or Guarantor, if any, shall
be made and such decree or order shall not have been vacated or set aside
within sixty (60) days from the date of entry or granting thereof; or

 

(h)                                 Except as permitted herein, Tenant shall
abandon the Premises or vacate the same during the term hereof for more than
ninety (90) consecutive days.

 

Upon the occurrence of
any one or more of such events, Tenant shall be in default hereunder.  Upon a default by Tenant, Landlord may apply
and retain all sums deposited with Landlord hereunder, and Landlord may, at its
election, terminate this Lease or terminate Tenant’s right to possession only,
without terminating the Lease.  Upon
termination of the Lease, or upon any termination of the Tenant’s right to
possession without termination of the Lease, the Tenant shall surrender
possession and vacate the Premises immediately, and deliver possession thereof
to the Landlord, and Tenant hereby grants to the Landlord the full and free
right, without demand or notice of any kind to Tenant, to enter into and upon
the Premises, with or without process of law, and to repossess the Premises as
the Landlord’s former estate and to expel or remove the Tenant and any others
who may be occupying the Premises, without being deemed in any manner guilty of
trespass, eviction, or forcible entry or detainer, without incurring any
liability for any damage resulting therefrom and without relinquishing the
Landlord’s rights to Rent or any other right given the Landlord hereunder or by
operation of law.  Tenant shall pay on

 

25

 

demand all costs and expenses, including attorneys’
fees and costs, incurred by Landlord in recovering sums due hereunder,
recovering possession of the Premises, or otherwise enforcing this Lease or
pursuing Landlord’s rights and remedies against Tenant or any assignee,
sublessee or other transferee.  Where
either party brings a claim, in a court of competent jurisdiction, to enforce
performance of the other party under this Lease, the non-prevailing party shall
pay to the prevailing party, on demand, such expenses as prevailing party may
incur, including, without limitation, court costs and reasonable attorneys’
fees and disbursements.

 

18.1                        Termination
of Lease.  If Landlord elects to
terminate this Lease, Landlord shall be entitled to recover as damages all Rent
and other sums due and payable by Tenant on the date of termination, plus (1)
an amount equal to the value of the Rent and other sums provided herein to be
paid by Tenant for the residue of the stated term hereof, less the fair rental
value of the Premises for the residue of the stated term (taking into account
the time and expenses necessary to obtain a replacement tenant or tenants,
including expenses hereinafter described relating to recovery of the Premises,
preparation for reletting and for reletting itself), discounted to a present
value using a discount factor of five percent (5%), (2) the cost of performing
any other covenants to be performed by the Tenant, and (3) all other costs and
expenses of Landlord resulting from such default, including attorneys fees,
allowable under this Lease or at law.

 

18.2                        Termination
of Right of Possession.  If the
Landlord elects to terminate the Tenant’s right to possession only without
terminating the Lease, the Landlord may, at the Landlord’s option, enter into
the Premises, remove the Tenant’s property, signs, and other evidences of
tenancy, and take and hold possession thereof as hereinabove provided, without
such entry and possession terminating the Lease or releasing the Tenant, in
whole or in part, from the Tenant’s obligations to pay the Rent hereunder for
the full term or from any of its other obligations under this Lease.  Landlord shall have the right to relet all
or any part of the Premises for such rent and upon such terms as shall be
satisfactory to Landlord in its sole discretion (including the right to relet
the Premises as part of a larger area and the right to change the character or
use made of the Premises).  Landlord shall use reasonable efforts to
relet the Premises, but in no event shall Landlord have an obligation to expend
or advance any funds for marketing, commissions, tenant improvements, cleaning,
remodeling or other purposes related to reletting unless Tenant first deposits
with Landlord the total amount of such anticipated costs, as Landlord shall
estimate.  Landlord shall have no
obligation to accept any replacement tenant who in Landlord’s sole discretion
is not creditworthy or whose or reputation intended use would be detrimental to
the Premises or the property of which the Premises is a part.  Landlord shall not be deemed to have failed
to use such reasonable efforts to mitigate its damages by reasons of the fact
that Landlord has leased or sought to lease other vacant premises owned or
controlled by Landlord or its affiliates in preference to reletting the Leased
Premises, or by reason of the fact that Landlord has sought to relet the Leased
Premises at a rental rate higher than that payable by Tenant under the Lease.  For the purpose of such reletting, Landlord
may decorate or make any repairs, changes, alterations or additions in or to
the Premises that may be necessary or convenient, the cost of which shall be
borne solely by Tenant.  If Landlord
does not relet the Premises, Tenant shall pay to Landlord on demand all costs
of attempting to relet the Premises, and Rent and other sums provided herein to
be paid by Tenant for the remainder of the Lease Term as the same shall become
due and payable.  If the Premises are
relet and a sufficient sum shall not be realized from

 

26

 

such reletting after paying all of the expenses of
such reletting and the collection of the rent accruing therefrom (including,
but not by way of limitation, attorneys’ fees and brokers’ commissions), to satisfy
the Rent and other charges herein provided to be paid for the remainder of the
Lease Term, Tenant shall pay to Landlord on demand any deficiency as the same
shall become due and payable.  Tenant
shall not be entitled to any surplus if the Premises are leased for an amount
greater than the Rent reserved hereunder. 
Tenant agrees that Landlord may file suit to recover any sums falling
due under the terms of this Section from time to time.  Notwithstanding an election by Landlord to
terminate Tenant’s right to possession, Landlord may at any time thereafter
elect to terminate this Lease.

 

18.3                        Remedies
Cumulative.  No remedy herein or
otherwise conferred upon or reserved to Landlord shall be considered to exclude
or suspend any other remedy, but the same shall be cumulative and shall be in
addition to every other remedy given hereunder, or now or hereafter existing at
law or in equity or by statute, and every power and remedy given by this Lease
to Landlord may be exercised from time to time and so often as occasion may
arise or as may be deemed expedient.

 

18.4                        No
Waiver.  No delay or omission of
Landlord to exercise any right or power arising from any default shall impair
any such right or power or be construed to be a waiver of any such default or
any acquiescence therein.  No waiver by
Landlord of any default of any of the covenants of this Lease shall be
construed, taken or held to be a waiver of any other default, or as a waiver,
acquiescence in or consent to any further or succeeding default of the same
covenant.  The acceptance by Landlord of
any payment of Rent or other sums due hereunder after the termination by
Landlord of this Lease, or of Tenant’s right to possession hereunder, shall
not, in the absence of agreement in writing to the contrary by Landlord, be
deemed to restore this Lease or Tenant’s rights hereunder, as the case may be,
but shall be construed as a payment on account, and not in satisfaction of
damages due from Tenant to Landlord.

 

18.5                        Interest.  Each payment of Rent and other amounts owed
by Tenant hereunder, which shall not be paid when due, shall bear interest at
the rate of three percent (3%) over the the prime, corporate or base rate of
interest announced by the Bank of America (or in the absence thereof, such
other U.S. bank designated by Landlord) from time to time, but, in either case,
not to exceed any maximum rate of interest permitted by law, (“Interest
Rate”), from the date when the same is due under the terms of this
Lease until the same shall be paid.

 

18.6                        Landlord’s
Right to Perform Tenant Obligations. 
If Tenant shall at any time fail to pay any Taxes, insurance premiums or
other payments as required under this Lease, fail to take out, pay for,
maintain and deliver any of the insurance policies or certificates of insurance
provided for in Article VI, or fail to make any other payment or perform any
other act or obligation on its part to be made or performed under this Lease,
then after thirty (30) days prior written notice to Tenant (or immediately and
without notice in case of emergency, provided Landlord shall make a reasonable
effort to provide both fax and telephonic notice to Tenant or its
representative), Landlord may, but shall not be obligated to make any such
payment or perform any such act or obligation on Tenant’s part to be paid or
performed under this Lease.  Landlord
may enter upon the Premises for any such purpose and take all such action
therein or thereon as

 

27

 

may be necessary therefor.  Nothing herein contained and no such action by Landlord shall be
deemed as a waiver or release of Tenant from any obligation of Tenant under
this Lease.  All sums so paid by
Landlord and all costs and expenses, including attorney’s fees incurred by
Landlord in connection with the performance of any such act, plus an
administrative fee of fifteen percent (15%) of the amount thereof, together
with interest thereon at the Interest Rate from the respective dates of
Landlord’s making of each payment, shall be paid by Tenant to Landlord on
demand.

 

ARTICLE XIX.  MISCELLANEOUS

 

19.0                        Rights
Reserved to Landlord.  Without
limiting any other rights reserved or available to Landlord under this Lease,
at law or in equity, Landlord reserves the following rights to be exercised at
Landlord’s election upon reasonable prior notice to Tenant: (i) to enter and/or
inspect the Premises and to make repairs, replacements, additions or
alterations to the Premises, and (ii) to show the Premises to persons having a
legitimate interest in viewing the same. 
Landlord reserves the right to grant easements, licenses and other
rights and interests in, to or over any part of the Land, except that no such
grant shall materially interfere with Tenant’s use and enjoyment of the
Premises.

 

19.1                        Right
of First Offer.  (a)  Subject
to the terms of this Section 19.1, prior to executing a binding agreement of
sale for (or actually selling) Premises, Landlord shall first offer to sell the
Premises to Tenant.  Such offer shall be
made by notice given to Tenant (the “First Offer Notice”), which shall include
the asking price for the Premises and any other material terms and conditions
on which Landlord desires to offer such sale. Tenant shall have the right to
purchase the Premises upon the same terms and conditions as set forth in the
First Offer Notice or upon such other terms and conditions as the parties may
mutually agree in writing (but the parties have no obligation to negotiate or
agree to terms others than those in the First Offer Notice).  Tenant shall have the right to exercise its
purchase rights only by delivering unconditional written notice of acceptance
to Landlord within fifteen (15) business days after delivery of the First Offer
Notice (the “Election Period”).  If
for any reason Tenant fails to deliver this unconditional notice of acceptance
within the Election Period, then Tenant’s rights under this Section 19.1shall
be deemed to have been waived and Landlord shall be free to sell the Premises
to any person or entity upon any terms and without any further obligation to
Tenant, except as set forth below.

 

(b) If after Tenant fails
to deliver its unconditional notice of acceptance, Landlord elects to market
the Premises at a price which is less than 95% of the price offered Tenant or
accept an offer which is less than 95% of the price last offered Tenant, then
Landlord shall first provide a revised First Offer Notice which  notifies Tenant of such reduced price (which
notice shall, in the case of an offer Landlord desires to accept, include a
copy of the term sheet, letter of intent or other written evidence of the terms
of such offer, as the case may be). 
Tenant shall have the right to exercise its purchase rights only by
delivering unconditional written notice of acceptance to Landlord within five
(5) calendar days after delivery of such revised First Offer Notice (the “Revised
Election Period”).  If for
any reason Tenant fails to deliver this unconditional notice of acceptance
within the Revised Election Period, then Tenant’s rights under this Section 19.1

 

28

 

shall be deemed to have been waived and Landlord shall
be free to sell the Premises to any person or entity upon any terms and without
any further obligation to Tenant.  
Landlord’s obligations and Tenant’s rights under this subsection 19.1(b)
shall not apply to any reduction in price offered to a party with whom Landlord
has previously entered a contract for the sale of the Premises after Tenant has
waived its rights under subsection (a) above.

 

(c) Notwithstanding
anything to the contrary, Landlord’s obligations and Tenant’s rights under this
Section 19.1are subject to the following.

 

1. 
Landlord’s obligations and Tenant’s rights under this Section 19.1 will
terminate and become null and void if: the Tenant is not The Children’s Place
Retail Stores, Inc. or its Affiliate (as defined in Section 10.0 above), such
rights being personal to such entity, or if Tenant defaults hereunder beyond
applicable notice and cure periods.

 

2.                                       Nothing in this
Agreement is binding on or applicable in any way to: any mortgagee or ground
lessors of all or any part of the Premises or their purchasers, successors or
assigns, whether or not any of them acquire title to the Premises; or any sale
or conveyance of all or any part of the Premises to any entity affiliated
with  Landlord, or to any entity in
which Landlord or any of its affiliates have an ownership or partnership
interest.

 

3.                                       The rights of
Tenant in this Section 19.1 are strictly personal to The Children’s Place Retail
Stores, Inc. and any Affiliate to whom this Lease has been properly assigned,
and may not be exercised by or assigned or conveyed to any other person or
entity.

 

4.                                     This Section 19.1 shall be
applicable only to the first sale or transfer of the Premises by Landlord.  If Tenant waives its rights above and
Landlord thereafter sells the Premises to a third party, this Section 19.1
shall become null and void upon such conveyance.

 

19.2                        Brokerage.  Landlord and Tenant warrant to the other
that neither of them has had any dealings with any broker or agent in
connection with the transactions contemplated hereby, other than Cushman &
Wakefield of New Jersey Inc. and Resource Realty of Northern New Jersey, each
of whom shall be compensated by Landlord pursuant to separate written
agreement.  Landlord and Tenant covenant
to pay, hold harmless and indemnify the other from and against any and all
costs, expenses or liability for any compensation, commissions and charges claimed
by any other broker or agent, with respect to the transactions contemplated
hereby or the negotiation thereof and arising by virtue of the acts of the
indemnifying party.

 

19.3                        Quiet
Enjoyment.  So long as Tenant is
not in default under this Lease, Tenant’s quiet and peaceable enjoyment of the
Premises shall not be disturbed or interfered with by Landlord.

 

19.4                        Notices.  All notices to, or demands upon, Landlord or
Tenant desired or required to be given under any of the provisions hereof shall
be in writing.  Any notices or demands
from Landlord to Tenant shall be deemed to have been duly and sufficiently
given if delivered personally or if a copy thereof has been mailed by United
States registered or certified mail in an envelope properly stamped and
addressed to Tenant at Tenant’s Address or at such other address as Tenant may
heretofore have designated by written notice to Landlord, and any notices or
demands from Tenant to Landlord shall be deemed to have been duly and
sufficiently given if

 

29

 

delivered personally or mailed by United States
registered or certified mail in an envelope properly stamped and addressed to
Landlord at Landlord’s address or at such other address or to such other agent
as Landlord may heretofore have designated by written notice to Tenant, with a
copy to any first mortgagee of the Premises, the identity and address of which
Tenant shall have received written notice. 
The effective date of any notice shall be the date of receipt.

 

19.5                        Time
of Essence.  Time is of the
essence of this Lease and all provisions herein relating to time of performance
shall be strictly construed.  If either
party hereto shall be delayed or prevented from the performance of any
non-monetary obligation required hereunder by reason of acts of God, strikes,
lockouts, labor troubles, inability to procure materials or permits,
restrictive governmental laws or regulations or other cause without fault and
beyond the control of the party obligated (financial inability excepted),
performance of such act shall be excused for the period of delay and the period
for the performance of any such act shall be extended for a period equivalent
to the period of such delay, provided such party gives written notice of such
condition within ten (10) days after its occurrence.

 

19.6                        Severability.  If any term or provision of this Lease shall
to any extent be held invalid or unenforceable, the remaining terms and
provisions of this Lease shall not be affected thereby, but each term and
provision of this Lease shall be valid and shall be enforced to the fullest
extent permitted by law so long as the parties receive the essence of their
bargain.

 

19.7                        Covenants
Binding on Successors.  All of
the covenants, agreements, conditions and undertakings contained in this Lease shall
extend and inure to and be binding upon the parties hereto and their permitted
successors and assigns.

 

19.8                        Sale of
Building.  If owner of the
Premises sells or transfers the Premises, said owner shall be freed and
relieved of all liability under this Lease, provided the purchaser assumes the
obligations of Landlord arising from and after the date of such sale or
transfer.

 

19.9                        Estoppel
Certificate.  Tenant shall from
time to time, within ten (10) days after written request by Landlord or any
mortgagee holding a mortgage on the Premises, deliver to Landlord or such
mortgagee a statement in writing certifying: (i) that this Lease is unmodified
and in full force and effect or, if there have been modifications, that this
Lease, as modified, is in full force and effect; (ii) the amount of Rent then
payable hereunder and the date to which Rent has been paid; (iii) that Landlord
is not in default under this Lease or, if in default, a detailed description of
such default(s); (iv) that Tenant is or is not in possession of the Premises,
as the case may be; (v) that Tenant has no claims, offsets or defenses against
Landlord, and (vi) such other information as Landlord may reasonably
request.  In no event shall Tenant be required
to deliver more than one (1) such statement or certificate in any twelve (12)
month period. In the event that
Landlord shall require Tenant to deliver more than one (1) such statement or
certificate in any twelve (12) month period, Landlord shall pay to Tenant the
sum of $300 for each such additional statement.

 

19.10                 Limitation of
Liability.  All obligations and
liabilities of Landlord hereunder shall be limited to Landlord’s interest in
the Premises as the same may be improved, subject to

 

30

 

all prior interests, and neither Landlord nor its
beneficiaries, partners, shareholders, directors, employees or agents shall be
individually or personally liable for any claim arising out of this Lease.   Any manager retained by Landlord shall be
acting only as an agent and in such capacity shall not in any event be held
liable to Tenant for the fulfillment or non-fulfillment of any of the terms,
covenants or conditions of this Lease or for any action or proceedings that may
be taken by Landlord against Tenant, or by Tenant against Landlord.

 

19.11                 Entire
Agreement.  This Lease contains
the entire agreement of the parties hereto and no representations, inducements,
promises or agreement, oral or otherwise, between the parties not embodied
herein shall be of any force and effect. 
The masculine (or neuter) pronoun, singular number shall include the
masculine, feminine and neuter gender and the singular and plural number.

 

19.12                 Law Applicable.  This Lease shall be construed and enforced
in accordance with the laws of the State of 
New Jersey.

 

19.13                 Venue.  To the maximum extent permitted by law, the
parties agree that all actions or proceedings arising in connection with this
Lease shall be tried and determined only in the State courts located in the County
of Middlesex, State of New Jersey or Federal courts located in the State of New
Jersey.  To the maximum extent permitted
by law, each party hereby expressly waives any right it may have to assert the
doctrine of forum non conveniens or to object to venue to the extent any
proceeding is brought in accordance with this Section.

 

19.14                 Jury Waiver.  To the maximum extent permitted by law, each
of Tenant and Landlord hereby expressly waives any right to trial by jury of
any action, cause of action, claim, demand, or proceeding arising under or with
respect to this Lease, or in any way connected with, related to, or incidental
to the dealings of Landlord and Tenant with respect to this Lease, in each case
whether now existing or hereafter arising, and whether sounding in contract,
tort, or otherwise.  To the maximum
extent permitted by law, each of Tenant and Landlord hereby agrees that any
such action, cause of action, claim, demand or proceeding shall be decided by a
court trial without a jury and that Tenant or Landlord may file a copy of this
Lease with any court or other tribunal as written evidence of the consent of
each of Tenant and Landlord to the waiver of its right to trial by jury.

 

19.15                 Corporate Consent.  Upon
the execution of this Lease, Tenant shall deliver to Landlord such corporate
consents, certificates and other instruments as Landlord shall reasonably
require, to verify the Tenant’s corporate authority to enter into this Lease.

 

19.16                 Execution.  The execution of this Lease by Tenant and delivery
of same to Landlord or its agents does not constitute a reservation of or
option for leasing the Premises or an agreement to enter into a Lease, and this
Lease shall become effective only if and when Landlord executes and delivers
same to Tenant.

 

19.17                 Amendments Must Be in Writing.  None of the covenants, terms or conditions
of this Lease to be kept and performed by either party shall in any manner be
altered, waived,

 

31

 

modified, changed or abandoned, except by a written instrument, duly
signed and delivered by both parties.

 

19.18                 Financial Statements.  If
Tenant is not or ceases to be a publicly traded company, Tenant shall deliver
to Landlord from time to time, upon written request, current financial
statements of Tenant, which shall be prepared in accordance with generally
accepted accounting principles by a certified public accountant.

 

19.19                 Counterparts.  This Lease may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same agreement.

 

19.20                 Anti-Terrorism.  Each party hereto represents and warrants to
the other that such party is not, and is not acting, directly or indirectly,
for or on behalf of any person or entity, named as a Specially Designated
National and Blocked Person (as defined in Presidential Executive Order 13224),
and that such party is not engaged in this transaction, directly or indirectly,
on behalf of, and is not facilitating this transaction, directly or indirectly,
on behalf of, any such person or entity. 
Each party hereby agrees to defend, indemnify and hold harmless the
other party from and against any and all claims, damages, losses, risks,
liabilities, and expenses (including reasonable attorneys’ fees and costs)
arising from or related to any breach of the foregoing representations and
warranties.

 

19.21                 Exhibits.  The following Exhibits are attached hereto
and made a

 

part hereof:

 

	
  Exhibit A

  	
   

  	
  Legal
  Description

  
	
  Exhibit B

  	
   

  	
  Declaration

  

 

IN WITNESS WHEREOF,
Landlord and Tenant have executed this Lease as of the date first above
written.

 

	
  TENANT:

  	
  LANDLORD:

  
	
   

  	
   

  
	
  The Children’s
  Place Retail Stores, Inc.,

  	
  Turnpike
  Crossing I, L.L.C.

  
	
  a Delaware
  corporation.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/  Mario Ciampi

  	
   

  	
  By:

  	
  /s/  Brian S. Brennan

  	
   

  
	
  Its:

  	
  Senior Vice
  President

  	
   

  	
  Its:

  	
  Director, Real
  Estate Acquisitions

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
  Steven Balasiano

  	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
  Vice President
  & General Counsel

  	
   

  	
   

  
												

 

32

 

EXHIBIT A

LEGAL DESCRIPTION

 

ALL THAT CERTAIN TRACT, PARCEL AND
LOT OF LAND LYING AND BEING SITUATE IN THE TOWNSHIP OF SOUTH BRUNSWICK, COUNTY
OF MIDDLESEX, STATE OF NEW JERSEY, BEING MORE PARTICULARLY DESCRIBED AS
FOLLOWS:

 

BEING
KNOWN AND DESIGNATED AS PROPOSED LOT 9.03131 IN BLOCK 22.010, AS SHOWN ON A
CERTAIN FILED MAP ENTITLED “FINAL MAJOR SUBDIVISION PLAT, OPUS EAST, L.L.C.,
BLOCK 22.01, LOT 9.0313” DULY FILED IN THE OFFICE OF THE CLERK/REGISTER OF
MIDDLESEX COUNTY, ON APRIL 10, 2000 AS MAP 6056 FILE 984, AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS: THIS PLAT WILL BE REFERRED TO AS THE “MAJOR SUBDIVISION
PLAT”

 

BEGINNING AT A POINT SAID POINT
BEING THE FOLLOWING BEARINGS AND DISTANCES FROM THE SOUTHEASTERLY TERMINUS OF A
CONNECTING ARC HAVING THE RADIUS OF 25.00 FEET AND CURVING TO THE LEFT AN ARC
LENGTH OF 39.37 FEET (CENTRAL ANGLE 90 DEGREES 00 MINUTES 00 SECONDS) AND
CONNECTING THE NORTHEASTERLY LINE OF DAVIDSONS MILL ROAD (VARIABLE WIDTH
R.O.W.) WITH THE AFORESAID NORTHEASTERLY LINE OF INTERSTATE BOULEVARD,

 

A.                                   NORTH FIFTY
DEGREES THIRTY-THREE MINUTES EIGHT SECONDS EAST (N 50 DEGREES 33 MINUTES 08
SECONDS E) SEVEN HUNDRED FORTY-TWO AND SEVENTY-EIGHT HUNDREDTHS FEET (742.78’)
ALONG THE AFORESAID NORTHWESTERLY LINE OF INTERSTATE BOULEVARD, TO A POINT IN
THE SAME,

 

B.                                     NORTH
THIRTY-NINE DEGREES TWENTY-SIX MINUTES FIFTY-TWO SECONDS WEST (N 39 DEGREES 26
MINUTES 52 SECONDS W) EIGHT HUNDRED SEVENTY-FOUR AND NINE HUNDREDTHS FEET
(874.09’) ALONG THE NEWLY CREATED NORTHEASTERLY LINE OF PROPOSED LOT 9.03133
BLOCK 22.01, SAID LOT AS SHOWN ON THE AFORESAID MAJOR SUBDIVISION PLAT, TO A
POINT IN THE SAME,

 

AND FROM SAID POINT RUNNING,
THENCE:

 

1.                                       NORTH
THIRTY-NINE DEGREES TWENTY-SIX MINUTES FIFTY-TWO SECONDS WEST (N 39 DEGREES 26
MINUTES 52 SECONDS W) FOUR HUNDRED THIRTY-SIX AND SEVENTY-EIGHT HUNDREDTHS FEET
(436.78’) ALONG THE AFORESAID NORTHEASTERLY LINE OF PROPOSED LOT 9.03133 BLOCK
22.01 TO A POINT IN A NORTHWESTERLY LINE OF SAME; THENCE

 

2.                                       SOUTH
FIFTY DEGREES THIRTY-THREE MINUTES EIGHT SECONDS WEST (S 50 DEGREES 33 MINUTES
08 SECONDS W) FOUR HUNDRED FIFTY-FIVE AND FOURTEEN HUNDREDTHS FEET (455.14’)
ALONG THE AFORESAID NORTHWESTERLY LINE OF PROPOSED LOT 9.03133 BLOCK 22.01 TO A
POINT IN A NORTHEASTERLY LINE OF SAME; THENCE

 

33

 

3.                                       NORTH THIRTY-NINE DEGREES TWENTY-SIX MINUTES
FIFTY-TWO SECONDS WEST (N 39 DEGREES 26 MINUTES 52 SECONDS W) ONE HUNDRED
FORTY-NINE AND NINETY-SIX HUNDREDTHS FEET (149.96’) ALONG THE AFORESAID
NORTHEASTERLY LINE OF PROPOSED LOT 9.03133 BLOCK 22.01 TO A POINT IN THE
EXISTING SOUTHEASTERLY LINE OF LANDS NOW OR FORMERLY OF THE NEW JERSEY TURNPIKE
AUTHORITY (VARIABLE WIDTH R.O.W.); THENCE

 

4.                                       NORTH SEVENTEEN DEGREES TEN MINUTES TWELVE
SECONDS EAST (N 17 DEGREES 10 MINUTES 12 SECONDS E) ONE THOUSAND FIVE HUNDRED
TWENTY-TWO AND NINETEEN HUNDREDTHS FEET (1,522.19’) ALONG THE AFORESAID
SOUTHEASTERLY LINE OF LANDS NOW OR FORMERLY OF THE NEW JERSEY TURNPIKE
AUTHORITY, TO A POINT IN THE SAME; THENCE

 

5.                                       SOUTH THIRTY-SIX DEGREES SIXTEEN MINUTES
FIFTY-SEVEN SECONDS EAST (S 36 DEGREES 16 MINUTES 57 SECONDS E) THREE HUNDRED
SEVENTY-EIGHT AND THIRTY THREE HUNDREDTHS FEET (378.33’) ALONG THE
SOUTHWESTERLY LINE OF LOT 2.03 BLOCK 22.01 LANDS NOW OR FORMERLY OF MARY LOUISE
JARASCHAK TO A POINT IN THE SOUTHWESTERLY LINE OF SAME, SAID ADJOINING LOT AS
SHOWN ON THE AFORESAID MAJOR SUBDIVISION PLAT; THENCE

 

6.                                       NORTH SEVENTY-ONE DEGREES FIFTEEN MINUTES
THREE SECONDS EAST (N 71 DEGREES 15 MINUTES 03 SECONDS E) NINE HUNDRED SEVEN
AND NINE HUNDREDTHS FEET (907.09’) ALONG THE AFORESAID SOUTHWESTERLY LINE OF
LOT 2.03 BLOCK 22.01 TO A POINT IN THE SAME; THENCE

 

7.                                       SOUTH TWENTY-FIVE DEGREES FIFTY-NINE MINUTES
TWENTY-FOUR SECONDS EAST (S 25 DEGREES 59 MINUTES 24 SECONDS E) SEVEN HUNDRED
FORTY-SIX AND FORTY HUNDREDTHS FEET (746.40’) ALONG THE SOUTHWESTERLY LINE OF
LOT 3.01 BLOCK 22.01 LANDS NOW OR FORMERLY OF ALEXANDER & EILEEN BASTEK, ET
AL AND BEYOND ALONG THE SOUTHWESTERLY LINE OF LOT 3.03 BLOCK 22.01 LANDS NOW OR
FORMERLY OF LOCUST TO A POINT IN THE SAME; THENCE

 

8.                                       SOUTH FIFTY DEGREES THIRTY-THREE MINUTES
EIGHT SECONDS WEST (S 50 DEGREES 33 MINUTES 08 SECONDS W) ONE THOUSAND FOUR
HUNDRED SIXTY-NINE AND EIGHTY-SIX HUNDREDTHS FEET (1,469.86’) ALONG THE NEWLY
CREATED NORTHWESTERLY LINE OF PROPOSED LOT 9.03132, BLOCK 22.01, SAID ADJOINING
LOT AS SHOWN ON THE AFORESAID MAJOR SUBDIVISION PLAT, THE POINT AND PLACE OF
BEGINNING.

 

34

 

EXHIBIT B

DECLARATION

 

35

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