Document:

Exhibit
4.03

 

CUSIP NO. 52517P6Y2

ISIN NO. US52517P6Y29

 

	
  REGISTERED

  	
  PRINCIPAL
  AMOUNT: $5,500,000

  

No.
R-1

 

LEHMAN BROTHERS HOLDINGS INC.

 

MEDIUM-TERM NOTE, SERIES I

 

FX BASKET-LINKED NOTE
 DUE OCTOBER 13, 2009

 

THIS
NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A NOMINEE OF THE
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE
& CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED FORM (A “CERTIFICATED NOTE”), THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY
OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

 

 

LEHMAN BROTHERS HOLDINGS INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the “Company,” which term includes any successor corporation under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to CEDE & Co., or registered assigns, on the Maturity Date,
an amount equal to the
Redemption Amount.

 

The “Maturity Date” is
October 13, 2009, or if such day is not a Business Day, on the next following
Business Day.

 

The “Redemption Amount” is the amount equal
to the sum of the principal amount of the Notes plus the Additional Amount, if
any.

 

The “Additional Amount” is a single U.S.
dollar amount equal to the principal amount of the Notes multiplied by the
product of the Leverage times greatest of the Basket Returns of (a) Basket 1,
(b) Basket 2 and (c) Basket 3; provided that
the minimum Additional Amount payable on the notes shall be zero.

 

The “Leverage” is 150%.

 

Basket 1 consists of the Brazilian Real
(BRL), Argentine Peso (ARS) and Mexican Peso (MXN), each with a weighting of
33.34%, 33.33% and 33.33%, respectively. Basket 2 consists of Turkish Lira
(TRY), Hungarian Forint (HUF), Israeli Shekel (ILS) and Russian Ruble (RUB),
each with a weighting of 25%. Basket 3 consists of Indonesian Rupiah (IDR),
Singapore Dollar (SGD), Malaysian Ringgit (MYR) and Indian Rupee (INR), each
with a weighting of 25%. Each such currency is a “Reference Currency.”

 

The
“Basket Return” for each Basketn equals the sum of the Weighted
Currency Returns for the Reference Currencies in that Basketn.

 

The “Weighted Currency Return” for each Reference
Currency in each Basketn is the product of the Weighting for such
Reference Currency times a quotient, the numerator of which is the difference
of the Initial Reference Currency Rate for such Reference Currency minus the
Settlement Rate for such Reference Currency and the denominator of which is the
Settlement Rate for such Reference Currency.

 

The “Initial Reference Currency Rate” and “Weighting”
for each Reference Currency in each Basketn are as follows:

	
  Basketn

  	
   

  	
  Reference

  Currency

  	
   

  	
  Initial

  Reference

  Currency

  Rate

  	
   

  	
  Weighting

  	
   

  
	
  Basket 1 

  	
   

  	
  BRL

  	
   

  	
  1.8092

  	
   

  	
  33.34

  	
  %

  
	
   

  	
  ARS

  	
   

  	
  3.15400

  	
   

  	
  33.33

  	
  %

  
	
   

  	
  MXN

  	
   

  	
  10.8685

  	
   

  	
  33.33

  	
  %

  
	
  Basket 2 

  	
   

  	
  TRY

  	
   

  	
  1.1869

  	
   

  	
  25

  	
  %

  
	
   

  	
  HUF

  	
   

  	
  177.419

  	
   

  	
  25

  	
  %

  
	
   

  	
  ILS

  	
   

  	
  4.0095

  	
   

  	
  25

  	
  %

  
	
   

  	
  RUB

  	
   

  	
  24.9882

  	
   

  	
  25

  	
  %

  

 

2

 

	
  Basket 3

  	
   

  	
  IDR

  	
   

  	
  9107

  	
   

  	
  25

  	
  %

  
	
   

  	
  SGD

  	
   

  	
  1.4786

  	
   

  	
  25

  	
  %

  
	
   

  	
  MYR

  	
   

  	
  3.4059

  	
   

  	
  25

  	
  %

  
	
   

  	
  INR

  	
   

  	
  39.49

  	
   

  	
  25

  	
  %

  

 

The “Settlement Rate” for each
Reference Currency is the Reference Exchange Rate on the Valuation Date,
determined in accordance with the applicable Settlement Rate Option (subject to
the occurrence of a Disruption Event).

 

The “Reference Exchange Rates”
are the spot exchange rates for each of the Reference Currencies quoted against
the U.S. dollar expressed as number of currency units per USD 1.

 

The “Valuation Date” is October 5, 2009; provided that, upon the occurrence of a Disruption Event
with respect to a Reference Currency, the Valuation Date for the affected
Reference Currency may be postponed (as described in “Disruption Events”
below).

 

The “Issue Date” is October 12, 2007.

 

If the Calculation Agent
determines that a Disruption Event relating to one or more of the Reference
Currencies is in effect on the scheduled Valuation Date, the Calculation Agent
will determine the Basket Return using:

 

•                                          for each Reference
Currency that did not suffer a Disruption Event on the scheduled Valuation
Date, the Settlement Rate on the scheduled Valuation Date, and

 

•                                          for each Reference
Currency that did suffer a Disruption Event on the scheduled Valuation Date,
the Settlement Rate on the immediately succeeding scheduled Valuation Business
Day for such Reference Currency on which no Disruption Event occurs or is
continuing with respect to such Reference Currency;

 

provided, however, that if a
Disruption Event has occurred or is continuing with respect to a Reference
Currency on each of the three scheduled Valuation Business Days following the
scheduled Valuation Date, then (a) such third scheduled Valuation Business Day
shall be deemed the Valuation Date for the affected Reference Currency; and (b)
the Calculation Agent will determine the Settlement Rate for the affected
Reference Currency on such day in accordance with Fallback Rate Observation
Methodology.

 

For purposes of the above, “scheduled
Valuation Business Day” means a day that is or, in the judgment of the
Calculation Agent, should have been, a Valuation Business Day for the affected
Reference Currency.

 

A “Disruption Event” means any of the following events as determined in
good faith by the Calculation Agent:

 

3

 

(A)                              the occurrence and/or existence of an event on any
day that has the effect of preventing or making impossible the delivery of USD
from accounts inside the country for which a Reference Currency is the lawful
currency (such jurisdiction with respect to such Reference Currency, the “Reference
Currency Jurisdiction”) for that Reference Currency to accounts outside that
Reference Currency Jurisdiction;

 

(B)                                the occurrence of any
event causing the Reference Exchange Rate for the Reference Currency to be
split into dual or multiple currency exchange rates; or

 

(C)                                the Settlement Rate being unavailable for the
Reference Currency, or the occurrence of an event (i) in the Reference Currency
Jurisdiction for that Reference Currency that materially disrupts the market
for the Reference Currency or (ii) that generally makes it impossible to obtain
the Settlement Rate for the Reference Currency, on the Valuation Date.

 

A “Valuation Business Day” means, with respect to each
Reference Currency, any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which commercial banks are authorized or required by
law, regulation or executive order to close (including for dealings in foreign
exchange in accordance with the practice of the foreign exchange market) in the
city or jurisdiction indicated in the table below:

 

	
  Reference

  Currency

  	
   

  	
  Screen

  Reference

  	
   

  	
  Valuation

  Business Day

  
	
  BRL

  	
   

  	
  BRFR

  	
   

  	
  Brazilia, Rio de Janiero or
  São Paulo; and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARS

  	
   

  	
  ARS=

  	
   

  	
  Buenos Aires and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MXN

  	
   

  	
  MEX01

  	
   

  	
  Mexico City and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TRY

  	
   

  	
  The EUR/TRY rate on ECB37 divided by the EUR/USD rate on
  ECB37

  	
   

  	
  TARGET and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HUF

  	
   

  	
  The EUR/HUF rate on ECB37 divided by the EUR/USD rate on
  ECB37

  	
   

  	
  TARGET and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ILS

  	
   

  	
  FXIL

  	
   

  	
  Tel Aviv and New York

  

 

4

 

	
  RUB

  	
   

  	
  EMTA

  	
   

  	
  Moscow and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IDR

  	
   

  	
  ABSIRFIX01

  	
   

  	
  Singapore and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SGD

  	
   

  	
  ABSIRFIX01

  	
   

  	
  Singapore and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MYR

  	
   

  	
  ABSIRFIX01

  	
   

  	
  Singapore and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INR

  	
   

  	
  RBIB

  	
   

  	
  Mumbai and New York

  

 

The “Settlement Rate
Option” for the BRL is the Brazilian Real/U.S. dollar offered rate for U.S.
dollars, expressed as the amount of Brazilian Reals per one U.S. dollar, for
settlement in two Business Days reported by the Banco Central do Brasil on
SISBACEN Data System under transaction code PTAX-800 (“Consulta de Cambio” or
Exchange Rate Inquiry), Option 5 ( “Cotacoes para Contabilidade” or Rates for
Accounting Purposes), which appears on Reuters Screen BRFR Page under the
caption “Dolar PTAX” at approximately 6:30 pm Sao Paolo time on the Valuation
Date or such other relevant date. The Settlement Rate Option for ARS is the
Argentine Peso/U.S. dollar official fixing rate, expressed as the amount of
Argentine Pesos per one U.S. dollar for settlement on the same day (or, if that
day is not a business day in Buenos Aires and New York, for settlement on the
first succeeding day that is a business day in both Buenos Aires and New York)
which appears on the Reuters Screen ARS= page at the close of business in
Buenos Aires on the Valuation Date or such other relevant date. The Settlement Rate Option for the MXN
Reference Exchange Rate is the Mexican Peso/U.S. dollar official fixing rate,
expressed as the amount of Mexican Pesos per one U.S. dollar, for settlement in
two business days reported by Banco de Mexico which appears on Reuters Screen
MEX01 Page under the heading “USDMXNFIX=“ at the close of business in Mexico
City on the Valuation Date or such other relevant date.

 

The
Settlement Rate Option for the TRY is the TRY/EUR Fixing Rate divided by the
USD/EUR Fixing Rate. The Settlement Rate Option for the TRY is the EUR/TRY
Fixing Rate divided by the EUR/USD Fixing Rate. The “EUR/TRY Fixing Rate” is
the Euro/Turkish Lira fixing rate, expressed as the amount of Euro per one
Turkish Lira which appears on Reuters Screen ECB37 to the right of the caption “TRY”
at approximately 2:15 p.m., Central European time, on the Valuation Date or
such other relevant date. The “EUR/USD Fixing Rate” is the Euro/U.S. dollar
fixing rate, expressed as the amount of Euro per one U.S. dollar which appears
on Reuters Screen ECB37 to the right of the caption “USD” at approximately 2:15
p.m., Central European time, on the Valuation Date or such other relevant date.
The Settlement Rate Option for the HUF is the EUR/HUF Fixing Rate divided by
the EUR/USD Fixing Rate. The “EUR/HUF Fixing Rate” is the Euro/Hungarian Forint
fixing rate, expressed as the amount of Euro per one Hungarian Forint which
appears on Reuters Screen ECB37 to the right of the caption “HUF” at
approximately 2:15 p.m., Central European time, on the Valuation Date or such
other relevant date. The Settlement Rate Option for the ILS is the Israeli
Shekel/U.S. dollar Specified Rate, expressed as the amount of Israeli Shekels
per one U.S. dollar, for settlement in two Business Days which appears on the
Reuters Screen FXIL under the heading “USD/ILS” to the right of the caption “1700”
at approximately 5.00 p.m., Tel Aviv time, on Valuation Date or such other
relevant date. The Settlement Rate Option for the RUB is the Russian Ruble/U.S.
dollar Specified Rate, expressed as the amount of Russian Rubles per one U.S.
dollar, for 

 

5

 

settlement in one Business
Day, calculated by the Chicago Mercantile Exchange (“CME”) and as published on
CME’s website, which appears on the Reuters Screen EMTA Page, at approximately
1:30 p.m., Moscow time, on the Valuation Date or such other relevant date.

 

The
Settlement Rate Option for the IDR is the Indonesian Rupiah/U.S. dollar spot
rate at 11:00 a.m., Singapore time, expressed as the amount of Indonesian
Rupiah per one U.S. dollar, for settlement in two Business Days reported by the
Association of Banks in Singapore which appears on the Reuters Page ABSIRFIX01
to the right of the caption “Spot” under the column “IDR” at approximately
11:30 a.m., Singapore time, on the on the Valuation Date or such other relevant
date. The Settlement Rate Option for the SGD is the Singapore Dollar/U.S.
dollar spot rate at 11:00 a.m., Singapore time, expressed as the amount of
Singapore Dollar per one U.S. dollar, for settlement in two Business Days,
reported by the Association of Banks in Singapore which appears on the Reuters
Page ABSIRFIX01 to the right of the caption “Spot” under the column “SGD” at
approximately 11:30 a.m., Singapore time, on the Valuation Date or such other
relevant date. The Settlement Rate Option for the MYR is the Malaysian
Ringgit/U.S. dollar spot rate, expressed as the amount of Malaysian Ringgit per
one U.S. dollar, for settlement in two Business Days reported by the
Association of Banks in Singapore, which appears on the Reuters Page ABSIRFIX01
to the right of the caption “Spot” under the column “MYR” at approximately
11:30 a.m. Singapore time on the Valuation Date or such other relevant date. The
Settlement Rate Option for the INR is the Indian Rupee/U.S. dollar reference
rate, expressed as the amount of Indian Rupee per one U.S. dollar, for
settlement in two Business Days reported by the Reserve Bank of India which
appears on the Reuters Screen RBIB Page at approximately 2:30 p.m., Mumbai
time, or as soon thereafter as practicable on the on the Valuation Date
or such other relevant date.

 

The
term “Business Day” solely as used in any Settlement Rate Option described
above shall mean any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which commercial banks are authorized or required by
law, regulation or executive order to close (including for dealings in foreign
exchange in accordance with the practice of the foreign exchange market) in the
Principal Financial Center for both (a) the Reference Currency and (b) the
currency against which the Reference Currency is quoted (the “base currency”)
in accordance with the Reference Exchange Rate specified in the applicable
pricing supplement, in each case as specified for the applicable Reference
Currency or base currency in the table above; provided that where the Turkish
Lira or Hungarian Forint is the Reference Currency or the base currency “business
day” for the Turkish Lira or Hungarian Forint as the Reference Currency or the
base currency shall mean any day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System is open.

 

The screen or time of observation indicated in relation to
any Settlement Rate Option above shall be deemed to refer to such screen or
time of observation as modified or amended from time to time, or to any
substitute screen thereto.

 

The “Fallback Rate Observation
Methodology” means that the
reference exchange rate, Settlement Rate or other rate, as specified in the
applicable pricing supplement, in respect of a reference currency will equal
the noon buying rate in New York for cable transfers in foreign currencies as
announced by the Federal Reserve Bank of New York for customs purposes (the “Noon
Buying Rate”) on the relevant Valuation Date or such other date specified in
the applicable pricing supplement. If the Noon Buying Rate is not announced on
that date, the Reference Exchange Rate, Settlement Rate or other rate for such
Reference Currency will be 

 

6

 

calculated
on the basis of the arithmetic mean of the applicable spot quotations received
by the Calculation Agent at approximately 10:00 a.m., New York City time,
on the Valuation Business Day next succeeding the Valuation Date or such other
date specified in the applicable pricing supplement, for the purchase or sale
for deposits in the reference currency by the New York offices of three leading
banks engaged in the interbank market (selected in the sole discretion of the
Calculation Agent) (the “Reference Banks”). If fewer than three Reference Banks
provide spot quotations, then the Reference Exchange Rate, Settlement Rate or
other rate, as applicable, will be calculated on the basis of the arithmetic
mean of the applicable spot quotations received by the Calculation Agent at
approximately 10:00 a.m., New York City time, on the relevant date from
two Reference Banks (selected in the sole discretion of the Calculation Agent),
for the purchase or sale for deposits in the Reference Currency. If these spot
quotations are available from only one Reference Bank, then the Calculation
Agent, in its sole discretion, will determine whether that quotation is
reasonable to be used. If no spot quotation is available, then the Reference
Exchange Rate, Settlement Rate or other rate, as applicable, for such Reference
Currency will be determined by the Calculation Agent in good faith and in a
commercially reasonable manner.

 

A “Business
Day”, notwithstanding any provision in the Indenture, is any day that is not is
not a Saturday or Sunday and that is not a day on which banking institutions in
New York City generally are authorized or obligated by law or executive order
to be closed.

 

The “Calculation
Agent” means Lehman Brothers Inc.

 

Except as
provided below, the Redemption Amount may, at the option of the Company, be
made by check mailed to the person entitled thereto at such person’s address as
it appears on the registry books of the Company.

 

Payment of the
Redemption Amount will be made in immediately available funds in accordance
with the normal procedures of the Trustee (or any duly appointed Paying Agent).

 

The Company
will pay any administrative costs imposed by banks in making payments in
immediately available funds, but any tax, assessment or governmental charge
imposed upon payments hereunder, including, without limitation, any withholding
tax, will be borne by the Holder hereof.

 

References
herein to “U.S. dollars” or “U.S.$” or “$” or “USD” are to the coin or currency
of the United States as at the time of payment is legal tender for the payment
of public and private debts.

 

REFERENCE IS
HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
IF SET FORTH AT THIS PLACE.

 

This Note
shall not be valid or become obligatory for any purpose until the certificate
of authentication hereon shall have been signed by the Trustee under the
Indenture.

 

7

 

IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has
caused this instrument to be signed by its Chairman of the Board, its
President, its Vice Chairman, its Chief Financial Officer, one of its Vice
Presidents or its Treasurer, by manual or facsimile signature under its
corporate seal, attested by its Secretary or one of its Assistant Secretaries
by manual or facsimile signature.

 

Dated:  October 12, 2007

 

	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Andrew
  Yeung

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Cindy
  Buckholz

  
	
   

  	
   

  	
  Title:   Assistant Secretary

  

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This
is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.

 

CITIBANK,
N.A.

  as
Trustee

 

 

	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

  

 

8

 

[REVERSE OF NOTE]

 

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I

FX BASKET-LINKED NOTE
 DUE OCTOBER 13, 2009

 

Section
1. General. This Note is one of a
duly authorized series of Notes of the Company designated as the Medium-Term
Notes, Series I, FX Basket-Linked Note
(herein called the “Notes”). The
Notes are one of an indefinite number of series of debt securities of the
Company (collectively, the “Securities”) issued or issuable under and pursuant
to an indenture dated as of September 1, 1987, as amended and supplemented (the
“Indenture”), duly executed and delivered by the Company and Citibank, N.A., as
Trustee (herein called the “Trustee”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Securities. The separate series of
Securities may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions or repurchase rights (if any), may be
subject to different sinking, purchase or analogous funds (if any), may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided.

 

Section
2. Principal Amount for Indenture Purposes. For the purpose of
determining whether Holders of the requisite amount of Notes of this series
outstanding under the Indenture have made a demand, given a notice or waiver or
taken any other action, the principal amount of this Note will be deemed to be
the principal amount of this Note then outstanding.

 

Section
3. Modification and Waivers. The Indenture contains provisions
permitting the Company and the Trustee, with the consent of the Holders of not
less than 66-2/3% in aggregate principal amount of each series of the
Securities at the time Outstanding to be affected, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities of all such series; provided, however, that no such supplemental
indenture shall, among other things, (i) change the fixed maturity of any
Security, or reduce the Additional Amount or the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium or other amount payable on redemption, or make the Additional Amount or
the principal amount thereof, premium or other amount payable, if any, or
interest thereon payable in any coin or currency other than that herein above
provided, without the consent of the Holder of each Security so affected, or
(ii) change the place of payment on any Security, or impair the right to
institute suit for payment on any Security, or reduce the aforesaid percentage
of Securities, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each Security so
affected. It is also provided in the Indenture that, prior to any declaration
accelerating the maturity of any series of Securities, the holders of a
majority in aggregate principal amount of the Securities of such series
Outstanding may on behalf of the holders of all the Securities of such series
waive any past 

 

 

default or Event of
Default under the Indenture with respect to such series and its consequences,
except a default in the payment of interest, if any, on the Additional Amount
or the principal amount, or premium, if any, on any of the Securities of such
series, or in the payment of any sinking fund installment or analogous
obligation with respect to Securities of such series. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future holders and owners of this Note and any Notes of
this series which may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this Note or
such other Notes of this series.

 

Section
4. Obligations Unconditional. No reference herein to the Indenture and
no provisions of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
Additional Amount or the principal amount on this Note at the place, at the
respective times, at the rate, and in the coin or currency herein prescribed.

 

Section
5. Defeasance. The Indenture contains provisions for the discharge of
the Indenture and defeasance at any time of the indebtedness on this Note upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Note.

 

Section
6. Authorized Form and Denominations. The Notes of this series are
issuable in registered form, without coupons. Each Note will be issued
initially as either a Global Security or a Certificated Note, at the option of
the Company, in denominations of $1,000 or whole multiples of $1,000, either at
the office or agency to be designated and maintained by the Company for such
purpose in the Borough of Manhattan, New York City, pursuant to the provisions
of the Indenture or at any of such other offices or agencies as may be
designated and maintained by the Company for such purpose pursuant to the
provisions of the Indenture, and in the manner and subject to the limitations
provided in the Indenture, but without the payment of any service charge,
except for any tax or other governmental charges imposed in connection
therewith. Notes of this series are exchangeable for a like aggregate principal
amount of Notes of this series of a different authorized denomination, except
that Global Securities will not be exchangeable for Certificated Notes of this
series.

 

Section
7. Registration of Transfer. As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer, at the Corporate Trust Office or agency in a Place of
Payment for this Note, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
requiring such written instrument of transfer duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

 

If at
any time the Depository notifies the Company that it is unwilling or unable to
continue as Depository or if at any time the Depository shall no longer be
eligible under the Indenture, the Company shall appoint a successor Depository.
If a successor Depository for the Notes of this series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such ineligibility, the Company will issue, and the Trustee will 

 

 

authenticate and deliver,
Notes of this series in definitive form in an aggregate principal amount equal
to the principal amount of this Note.

 

No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith.

 

Prior
to due presentment of this Note for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Note is registered as the owner hereof for all purposes, and
neither the Company nor the Trustee nor any agent of the Company or of the
Trustee shall be affected by any notice to the contrary.

 

Section
8. Events of Default. If an Event of Default with respect to Notes of
this series shall occur and be continuing, the amount that may be declared due
and payable upon any acceleration of the notes will be determined by the
Calculation Agent for the period from and including the Issue Date to but
excluding the date of early repayment and will equal, for each note, the
Redemption Amount, calculated as the date of early repayment were the Maturity
Date. If a bankruptcy proceeding is commenced in respect of Lehman Brothers
Holdings, the claim of the beneficial owner of a note for the period from and
including the Issue Date to but excluding the date of early repayment will be
capped at the Redemption Amount, calculated as though the date of the
commencement of the proceeding were the Maturity Date.

 

Section
9. No Recourse Against Certain Persons. No recourse for the payment of
the Additional Amount or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any Indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

 

Section
10. Defined Terms. All terms used
but not defined in this Note are used herein as defined in the Indenture.

 

Section
11. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.Exhibit 10.1

 

EXECUTION VERSION

 

CREDIT AGREEMENT

 

dated as of

 

October 10, 2007

 

among

 

SIMPSON MANUFACTURING CO., INC.

 

as Borrower

 

SIMPSON DURA-VENT COMPANY, INC., SIMPSON STRONG-TIE
COMPANY INC., AND

SIMPSON STRONG-TIE INTERNATIONAL, INC.

 

as Guarantors

 

The Lenders Party Hereto

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

as Administrative Agent, Sole Arranger

and Sole Bookrunner

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Defined Terms

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Classification of Loans and Borrowings

  	
  21

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Terms Generally

  	
  21

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  Accounting Terms; GAAP

  	
  21

  
	
   

  	
   

  	
   

  
	
  1.5

  	
  Calculation of Financial and Capital Maintenance
  Covenants

  	
  21

  
	
   

  	
   

  	
   

  
	
  1.6

  	
  Additional Alternative Currencies

  	
  22

  
	
   

  	
   

  	
   

  
	
  1.7

  	
  Exchange Rates

  	
  22

  
	
   

  	
   

  	
   

  
	
  1.8

  	
  Redenomination of Certain Foreign Currencies; New
  Currency

  	
  22

  
	
   

  	
   

  	
   

  
	
  1.9

  	
  Currency of Account

  	
  23

  
	
   

  	
   

  	
   

  
	
  1.10

  	
  Currency Fluctuations

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
  THE CREDITS

  	
  23

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Commitments

  	
  23

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Revolving Loans and Borrowings

  	
  24

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Requests for Borrowings

  	
  24

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Swingline Loans

  	
  25

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Letters of Credit

  	
  26

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Funding of Borrowings

  	
  30

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  Interest Elections

  	
  30

  
	
   

  	
   

  	
   

  
	
  2.8

  	
  Maturity Date; Reduction of Commitment by the
  Borrower; Increase in Commitment

  	
  31

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  Repayment of Loans; Evidence of Debt

  	
  33

  
	
   

  	
   

  	
   

  
	
  2.10

  	
  Prepayment of Loans

  	
  34

  
	
   

  	
   

  	
   

  
	
  2.11

  	
  Fees

  	
  34

  
	
   

  	
   

  	
   

  
	
  2.12

  	
  Interest

  	
  35

  
	
   

  	
   

  	
   

  
	
  2.13

  	
  Alternate Rate of Interest

  	
  36

  
	
   

  	
   

  	
   

  
	
  2.14

  	
  Increased Costs

  	
  36

  
	
   

  	
   

  	
   

  
	
  2.15

  	
  Break Funding Payments

  	
  37

  
	
   

  	
   

  	
   

  
	
  2.16

  	
  Taxes

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.17

  	
  Payments Generally; Pro Rata Treatment; Sharing of
  Set-offs

  	
  40

  
	
   

  	
   

  	
   

  
	
  2.18

  	
  Mitigation Obligations

  	
  42

  
	
   

  	
   

  	
   

  
	
  2.19

  	
  Replacement of Lenders

  	
  42

  
				

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  43

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Organization; Powers

  	
  43

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Authorization; Enforceability

  	
  43

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Governmental Approvals; No Conflicts

  	
  43

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Financial Condition

  	
  44

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Properties

  	
  44

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  Litigation

  	
  44

  
	
   

  	
   

  	
   

  
	
  3.7

  	
  Compliance with Laws and Agreements

  	
  44

  
	
   

  	
   

  	
   

  
	
  3.8

  	
  Investment and Holding Company Status

  	
  44

  
	
   

  	
   

  	
   

  
	
  3.9

  	
  Taxes

  	
  44

  
	
   

  	
   

  	
   

  
	
  3.10

  	
  ERISA

  	
  45

  
	
   

  	
   

  	
   

  
	
  3.11

  	
  Subsidiaries

  	
  45

  
	
   

  	
   

  	
   

  
	
  3.12

  	
  Use of Proceeds and Letters of Credit

  	
  45

  
	
   

  	
   

  	
   

  
	
  3.13

  	
  OFAC

  	
  45

  
	
   

  	
   

  	
   

  
	
  3.14

  	
  USA PATRIOT Act

  	
  46

  
	
   

  	
   

  	
   

  
	
  3.15

  	
  Solvency

  	
  46

  
	
   

  	
   

  	
   

  
	
  3.16

  	
  Absence of Defaults

  	
  46

  
	
   

  	
   

  	
   

  
	
  3.17

  	
  Labor Disputes, Collective Bargaining Agreements,
  Employee Grievances

  	
  46

  
	
   

  	
   

  	
   

  
	
  3.18

  	
  Environmental Compliance

  	
  46

  
	
   

  	
   

  	
   

  
	
  3.19

  	
  Absence of Financing Statements, etc

  	
  47

  
	
   

  	
   

  	
   

  
	
  3.20

  	
  Senior Debt Status

  	
  48

  
	
   

  	
   

  	
   

  
	
  3.21

  	
  Disclosure

  	
  48

  
	
   

  	
   

  	
   

  
	
  3.22

  	
  Date and Nature of Representations and Warranties

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
  CONDITIONS

  	
  48

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Effective Date

  	
  48

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Each Credit Event

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
  AFFIRMATIVE COVENANTS

  	
  50

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Financial Statements and Other Information

  	
  50

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Notices of Material Events

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Existence; Conduct of Business

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Payment of Obligations

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Maintenance of Properties; Insurance

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Books and Records; Inspection Rights

  	
  53

  
				

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Compliance with Laws

  	
  53

  
	
   

  	
   

  	
   

  
	
  5.8

  	
  Use of Proceeds and Letters of Credit

  	
  53

  
	
   

  	
   

  	
   

  
	
  5.9

  	
  Payment of Obligations

  	
  53

  
	
   

  	
   

  	
   

  
	
  5.10

  	
  Maintenance of Existence

  	
  54

  
	
   

  	
   

  	
   

  
	
  5.11

  	
  Additional Guarantors

  	
  54

  
	
   

  	
   

  	
   

  
	
  5.12

  	
  Updates to Schedules

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  	
  NEGATIVE COVENANTS

  	
  54

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Indebtedness

  	
  54

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Liens

  	
  55

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Fundamental Changes

  	
  56

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  Investments

  	
  57

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  Hedging Agreements

  	
  58

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  Restricted Payments

  	
  58

  
	
   

  	
   

  	
   

  
	
  6.7

  	
  Transactions with Affiliates

  	
  58

  
	
   

  	
   

  	
   

  
	
  6.8

  	
  Restrictive Agreements

  	
  58

  
	
   

  	
   

  	
   

  
	
  6.9

  	
  Amendments to Subordinated Debt Documents

  	
  59

  
	
   

  	
   

  	
   

  
	
  6.10

  	
  Sales and Leasebacks

  	
  59

  
	
   

  	
   

  	
   

  
	
  6.11

  	
  Amendments to Governing Documents

  	
  59

  
	
   

  	
   

  	
   

  
	
  6.12

  	
  Financial Covenants

  	
  59

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
  EVENTS OF DEFAULT

  	
  59

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  	
  THE ADMINISTRATIVE AGENT

  	
  62

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Appointment and Authorization

  	
  62

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Delegation of Duties

  	
  62

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Exculpatory Provisions

  	
  62

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  Reliance by the Administrative Agent

  	
  63

  
	
   

  	
   

  	
   

  
	
  8.5

  	
  Notice of Default

  	
  63

  
	
   

  	
   

  	
   

  
	
  8.6

  	
  Credit Decision

  	
  64

  
	
   

  	
   

  	
   

  
	
  8.7

  	
  Indemnification

  	
  64

  
	
   

  	
   

  	
   

  
	
  8.8

  	
  The Administrative Agent in Individual Capacity

  	
  65

  
	
   

  	
   

  	
   

  
	
  8.9

  	
  Resignation; Successor Administrative Agent

  	
  65

  
	
   

  	
   

  	
   

  
	
  8.10

  	
  Payments to the Administrative Agent

  	
  66

  
	
   

  	
   

  	
   

  
	
  8.11

  	
  Administrative Agent May File Proofs of Claim

  	
  66

  
				

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX.

  	
  MISCELLANEOUS

  	
  67

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Notices

  	
  67

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Waivers; Amendments

  	
  69

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  Expenses; Indemnity; Damage Waiver

  	
  70

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  Successors and Assigns

  	
  71

  
	
   

  	
   

  	
   

  
	
  9.5

  	
  Survival

  	
  74

  
	
   

  	
   

  	
   

  
	
  9.6

  	
  Counterparts; Integration; Effectiveness

  	
  75

  
	
   

  	
   

  	
   

  
	
  9.7

  	
  Severability

  	
  75

  
	
   

  	
   

  	
   

  
	
  9.8

  	
  Right of Setoff

  	
  75

  
	
   

  	
   

  	
   

  
	
  9.9

  	
  Governing Law

  	
  75

  
	
   

  	
   

  	
   

  
	
  9.10

  	
  Judicial Reference

  	
  76

  
	
   

  	
   

  	
   

  
	
  9.11

  	
  Judgment Currency

  	
  77

  
	
   

  	
   

  	
   

  
	
  9.12

  	
  USA Patriot Act Notice

  	
  77

  
	
   

  	
   

  	
   

  
	
  9.13

  	
  Headings

  	
  78

  
	
   

  	
   

  	
   

  
	
  9.14

  	
  Confidentiality

  	
  78

  
	
   

  	
   

  	
   

  
	
  9.15

  	
  Interest Rate Limitation

  	
  78

  
	
   

  	
   

  	
   

  
	
  9.16

  	
  Termination

  	
  79

  
	
   

  	
   

  	
   

  
	
  9.17

  	
  Reinstatement

  	
  79

  
	
   

  	
   

  	
   

  
	
  ARTICLE X.

  	
  GUARANTY

  	
  79

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Guaranty of Payment and Performance

  	
  79

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Guaranty Absolute

  	
  80

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Effectiveness, Enforcement

  	
  81

  
	
   

  	
   

  	
   

  
	
  10.4

  	
  Waiver

  	
  81

  
	
   

  	
   

  	
   

  
	
  10.5

  	
  Subordination; Subrogation

  	
  82

  
	
   

  	
   

  	
   

  
	
  10.6

  	
  Payments

  	
  82

  
	
   

  	
   

  	
   

  
	
  10.7

  	
  Setoff

  	
  82

  
	
   

  	
   

  	
   

  
	
  10.8

  	
  Further Assurances

  	
  83

  
	
   

  	
   

  	
   

  
	
  10.9

  	
  Successors and Assigns

  	
  83

  
	
   

  	
   

  	
   

  
	
  10.10

  	
  Contribution

  	
  83

  
	
   

  	
   

  	
   

  
	
  10.11

  	
  Release of Guarantee

  	
  83

  
	
   

  	
   

  	
   

  
	
  10.12

  	
  Limitation on Guarantee; No Impairment

  	
  84

  
				

 

iv

 

	
  SCHEDULES:

  	
   

  
	
   

  	
   

  
	
  Schedule
  2.1

  	
  Commitments

  
	
   

  	
   

  
	
  Schedule
  3.11

  	
  Subsidiaries

  
	
   

  	
   

  
	
  Schedule
  3.18

  	
  Environmental
  Compliance

  
	
   

  	
   

  
	
  Schedule
  4.1(h)

  	
  Material
  Adverse Change

  
	
   

  	
   

  
	
  Schedule
  6.1

  	
  Existing
  Indebtedness

  
	
   

  	
   

  
	
  Schedule
  6.2

  	
  Existing
  Liens

  
	
   

  	
   

  
	
  Schedule
  6.4

  	
  Existing
  Investments

  
	
   

  	
   

  
	
  Schedule
  6.7

  	
  Affiliate
  Transactions

  
	
   

  	
   

  
	
  Schedule
  6.8

  	
  Existing
  Restrictions

  
	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  
	
  Exhibit
  A

  	
  Form
  of Assignment and Assumption

  
	
   

  	
   

  
	
  Exhibit
  B

  	
  Form
  of Note

  
	
   

  	
   

  
	
  Exhibit
  C

  	
  Form
  of Opinion of Counsel

  
	
   

  	
   

  
	
  Exhibit
  D

  	
  Form
  of Compliance Certificate

  
	
   

  	
   

  
	
  Exhibit
  E

  	
  Form
  of Borrowing Request

  
	
   

  	
   

  
	
  Exhibit
  F

  	
  Form
  of Interest Election Request

  
	
   

  	
   

  
	
  Exhibit
  G-1

  	
  Form
  of Closing Certificate (Borrower)

  
	
   

  	
   

  
	
  Exhibit
  G-2

  	
  Form
  of Closing Certificate (Guarantors)

  
	
   

  	
   

  
	
  Exhibit
  H

  	
  Form
  of Exemption Certificate

  
	
   

  	
   

  
	
  Exhibit
  I

  	
  Form
  of Repayment Notice

  
	
   

  	
   

  
	
  Exhibit
  J

  	
  Form
  of Joinder Agreement

  
	
   

  	
   

  
	
  Exhibit
  K

  	
  Investment
  Policy of the Borrower

  
	
   

  	
   

  
	
  Exhibit
  L

  	
  Form
  of Confidentiality Agreement

  
	
   

  	
   

  
	
  Exhibit
  M

  	
  Form
  of Opinion - Additional Guarantor

  
			

 

v

 

CREDIT
AGREEMENT dated as of October 10, 2007, among SIMPSON MANUFACTURING CO., INC.,
a Delaware corporation (the “Borrower”), the LENDERS party hereto and
WELLS FARGO BANK, NATIONAL ASSOCIATION, in its separate capacities as the
Issuing Bank and the Swingline Lender and in its separate capacity as the
Administrative Agent on behalf and for the benefit of itself and the Lenders,
and, for purposes of Article X only, Simpson Dura-Vent Company, Inc., a
California corporation (“Simpson Dura-Vent”), Simpson Strong-Tie Company
Inc., a California corporation (“Simpson Strong-Tie”) and Simpson
Strong-Tie International, Inc., a California corporation (“Simpson
Strong-Tie International”), as Guarantors.

 

The
parties hereto agree as follows:

 

ARTICLE I.

 

Definitions

 

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

 

“Additional
Alternative Currency” has the meaning specified in Section 1.6.

 

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

 

“Administrative
Agent” means Wells Fargo in its capacity as administrative agent for the
Lenders hereunder, and shall include any successor Administrative Agent
appointed pursuant to Section 8.9.

 

“Administrative
Agent-Related Persons” means the Administrative Agent and each successor
Administrative Agent, together with their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons.

 

“Administrative
Agent’s Payment Office” means the office specified from time to time by the
Administrative Agent as its payment office by written notice to the Borrower
and the Lenders.

 

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

 

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

 

“Agreement”
means this Credit Agreement dated as of October 10, 2007, including all
schedules and exhibits hereto, as the same may from time to time hereafter be
extended, renewed, amended or restated.

 

“Alternative
Currency” means Sterling, Euros, Canadian Dollars, Yen, Danish Kroner and
each Additional Alternative Currency (other than Dollars) that is approved from
time to time in accordance with Section 1.6.

 

1

 

“Alternative
Currency Equivalent” means, at any time, with respect to any amount
denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Administrative Agent at such time on
the basis of the Spot Rate (determined in respect of the most recent
Revaluation Date) for the purchase of such Alternative Currency with Dollars.

 

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

 

“Applicable
Rate” means, for any day, with respect to any Base Rate Loan or LIBO Rate
Loan, or with respect to the Facility Fee payable pursuant to Section 2.11,
as the case may be, the applicable rate per
annum set forth below under the caption “Base Rate Spread,” “LIBO
Rate Spread” or “Facility Fee,” as the case may be, based upon the Leverage
Ratio applicable on such date:

 

	
  Leverage Ratio:

  	
   

  	
  Base Rate

  Spread

  	
   

  	
  LIBO Rate

  Spread

  	
   

  	
  Facility

  Fee

  	
   

  
	
  Category 1

  Less than or equal to

  1.00:1.00

  	
   

  	
  (0.50

  	
  )%

  	
  0.27

  	
  %

  	
  0.08

  	
  %

  
	
  Category 2

  Greater than 1.00:1.00 but

  less than or equal to

  1.75: 1.00

  	
   

  	
  (0.50

  	
  )%

  	
  0.31

  	
  %

  	
  0.09

  	
  %

  
	
  Category 3

  Greater than 1.75:1.00

  	
   

  	
  (0.50

  	
  )%

  	
  0.40

  	
  %

  	
  0.10

  	
  %

  

 

Changes
in the Applicable Rate with respect to Base Rate Loans, LIBO Rate Loans or in
the Facility Fee resulting from changes in the Leverage Ratio shall become
effective on the first day of the month following the date on which a
Compliance Certificate and accompanying financial statements are delivered to
the Lenders pursuant to Section 5.1, but in any event not later
than the first day of the month following the 50th day after the end of each of
the first three quarterly periods of each fiscal year or the 90th day after the
end of each fiscal year, as the case may be, and shall remain in effect until
the next change to be effected pursuant to this paragraph. If any Compliance
Certificate and accompanying financial statements referred to above are not
delivered within the applicable time period specified above, then, until such
complying Compliance Certificate and accompanying financial statements are
delivered, the Applicable Rate corresponding to the “Base Rate Spread” or the “LIBO
Rate Spread” applicable to any outstanding Loan, or to the “Facility Fee”
applicable to the Commitments, as the case may be, shall be deemed to be
Category 3.

 

Notwithstanding
anything in the foregoing to the contrary, in the event the Borrower or the
Administrative Agent determines, in good faith, that the calculation of the
Leverage Ratio on which the Applicable Rate for any particular period was
determined is inaccurate and as a consequence thereof the Applicable Rate as
determined based thereon was lower than it would have been had the Leverage
Ratio been calculated accurately, (a) the Borrower shall promptly (but in any
event within 5 Business Days after 

 

2

 

the Borrower discovers such inaccuracy or is otherwise notified by the
Administrative Agent) of such inaccuracy by written notice delivered to the
Borrower to such effect, accompanied by calculations supporting the
Administrative Agent’s determination), deliver to the Lender a corrected
Compliance Certificate and accompanying financial statements for such period
(and if such Compliance Certificate and accompanying financial statements are
not accurately restated and delivered within 10 Business Days after the first
discovery of such inaccuracy by the Borrower or such notice, as the case may
be, then Category 3 shall apply retroactively for such period until such time
as the corrected Compliance Certificate and accompanying financial statements
are delivered and, from and after the delivery of such corrected Compliance
Certificate and accompanying financial statements to the Administrative Agent
the corrected Applicable Rate shall apply for such period), (b) the
Administrative Agent shall determine and notify the Borrower of the amount of
interest, Facility Fees and letter of credit fees that would have been due in
respect of any outstanding Obligations during such period had the Applicable
Rate been determined based on an accurate Leverage Ratio (or, to the extent
applicable, Category 3 if such corrected Compliance Certificate and
accompanying financial statements were not timely delivered as provided herein)
and (c) the Borrower shall promptly pay to the Administrative Agent, for
the benefit of the Lenders, the difference, if any, between that amount and the
amount actually paid in respect of such period. The foregoing shall in no way
limit the rights of the Administrative Agent to impose the default rate of
interest pursuant to Section 2.12(c) or to exercise any other
remedy available at law or as provided hereunder or under any of the other Loan
Documents.

 

Each
determination of the Leverage Ratio pursuant to the Applicable Rate
determination shall be made for the periods and in the manner contemplated by Section 6.12(a).
Commencing as of the Effective Date, the Applicable Rate corresponding to the “Base
Rate Spread” or the “LIBO Rate Spread” applicable to any outstanding Loan, or
to the “Facility Fee” applicable to the Commitments, as the case may be, shall
be deemed to be Category 1 until changed in accordance with this paragraph.

 

“Applicable
Time” means, with respect to any borrowings and payments in any Alternative
Currency, the local time in the place of settlement for such Alternative
Currency as may be reasonably determined by the Lender to be necessary for
timely settlement on the relevant date in accordance with normal banking
procedures in the place of payment.

 

“Approved
Fund” has the meaning assigned to such term in Section 9.4(b)(ii).

 

“Assignment
and Assumption” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by Section 9.4),
and accepted by the Administrative Agent, in the form of Exhibit A
or any other form approved by the Administrative Agent.

 

“Authorized
Officer” of any Person shall mean any of the chief executive officer,
president or vice president of such Person, or any Financial Officer of such
Person.

 

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

 

“Bankruptcy
Code” means Title 11 of the United States Code entitled “Bankruptcy,” as
now and hereafter in effect, or any successor statute.

 

“Base
Rate” means, for any day, the higher of (a) the per annum floating rate established by
Wells Fargo in San Francisco, California as its “prime rate” for domestic
(United States) commercial

 

3

 

loans in effect on such day (the “Prime Rate”) and (b) the per annum floating rate equal to one-half
of one percent (0.50%) in excess of the Federal Funds Effective Rate in effect
on such day. The Prime Rate is a rate set by Wells Fargo based upon various
factors, including Wells Fargo’s costs and desired return, general economic
conditions and other factors, and is neither directly tied to an external rate
of interest or index nor necessarily the lowest or best rate of interest
actually charged by Wells Fargo at any given time to any customer or particular
class of customers for any particular credit extension. Wells Fargo may make
commercial or other loans at rates of interest at, above or below the Prime
Rate. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective as of the opening of business
on the effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively. When used in reference to any Loan or Borrowing,
the term “Base Rate” refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the Base Rate.

 

“Borrower”
has the meaning set forth in the introductory paragraph of this Agreement.

 

“Borrowing”
means (a) Loans of the same Type made, converted or continued on the same date
and, in the case of LIBO Rate Loans, as to which a single Interest Period is in
effect, or (b) a Swingline Loan.

 

“Borrowing
Request” means a request by the Borrower for a Borrowing in accordance with
Section 2.3.

 

“Business
Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in San Francisco or New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
LIBO Rate Loan, the term “Business Day” shall also exclude any day on
which banks are not open for dealings in Dollar deposits in the London
interbank market.

 

“Canadian
Dollars” means the lawful currency of Canada.

 

“Capital
Lease Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases
on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

 

“Change
in Control” means the occurrence of any of the following events:  (a) any “person” or “group” (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act) shall acquire, or
obtain rights (whether by means of warrants, options or otherwise) to acquire,
beneficial ownership (as defined in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act), directly or indirectly, of Equity Interests representing greater
than 35% of the combined voting power of all Equity Interests of the Borrower
ordinarily entitled to vote in the election of directors; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors (or
the nominating committee thereof) of the Borrower by Persons who were neither
(i) nominated by the board of directors (or the nominating committee thereof)
of the Borrower nor (ii) appointed by directors so nominated; or (c) the
acquisition of direct or indirect possession, by any Person or group, of
greater than 35% of the combined voting power of a Person, by voting trust or
agreement or other Contractual Obligation.

 

“Change
in Law” means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by 

 

4

 

any Governmental Authority after the date of this Agreement or
(c) compliance by any Lender or the Issuing Bank (or, for purposes of Section
2.14(b), by any lending office of such Lender or by such Lender’s or the
Issuing Bank’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

 

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

 

“Commitment”
means, with respect to each Lender, the commitment of such Lender to make
Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced or increased from time to time pursuant to Section
2.8 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.4. The initial
amount of each Lender’s Commitment is set forth on Schedule 2.1, or in
the Assignment and Assumption pursuant to which such Lender shall have assumed
its Commitment, as applicable. The initial aggregate amount of the Lenders’
Commitments is $200,000,000.

 

“Compliance
Certificate” means a certificate duly executed by a Financial Officer or
the chief executive officer of the Borrower substantially in the form of Exhibit D.

 

“Contractual
Obligation”, as applied to any Person, means any provision of any Equity
Interest issued by that Person or any indenture, mortgage, deed of trust,
contract, undertaking, instrument or agreement to which that Person is a party
or by which it or any of its properties is bound or to which it or any of its
properties is subject (including any restrictive covenant affecting any of the
properties of such Person).

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “Controlling”
and “Controlled” have meanings correlative thereto.

 

“Danish
Kroner” means the lawful currency of the Kingdom of Denmark.

 

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

 

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

 

“Dollars”
or “$” means the lawful money of the United States of America.

 

“Dollar
Equivalent” means, at any time, (a) with respect to any amount denominated
in Dollars, such amount, and (b) with respect to any amount denominated in any
Alternative Currency, the equivalent amount thereof (rounded to the nearest
unit of such Alternative Currency, with 0.5 of a unit being rounded upward) in
Dollars as determined by the Administrative Agent at such time on the basis of
the Spot Rate (determined in respect of the most recent Revaluation Date) for
the purchase of Dollars with such Alternative Currency.

 

5

 

“Domestic
Account” has the meaning set forth in clause (h) of the definition of “Permitted
Investments.”

 

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

 

“EBIT”
means for any period, the sum, for the Borrower and its Subsidiaries
(determined on a consolidated basis without duplication in accordance with
GAAP), of the following:  (a) net income
for such period plus (b) without duplication and to the extent deducted in
computing such net income for such period, the sum of (i) income tax expense,
(ii) Interest Expense (net of interest income), amortization or writeoff of
debt discount and debt issuance costs and commissions, discounts and other fees
and charges associated with Indebtedness, (iii) any extraordinary, unusual or
non-recurring expenses or losses, (iv) any other non-cash charges and (v)
goodwill impairment charges, minus (c) to the extent included in computing such
net income for such period, the sum of (i) any extraordinary, unusual or
non-recurring income or gains and (ii) any other non-cash income, all as
determined on a consolidated basis.

 

Pro forma credit shall be given for an acquired
Person’s EBIT as if owned on the first day of the applicable period, and
companies (or identifiable business units or divisions) sold, transferred or
otherwise disposed of during any period will be treated as if not owned during
the entire applicable period (with any add backs to be agreed to in writing by
the Borrower and the Administrative Agent (with the consent of the Required
Lenders in their sole discretion)).

 

“EBITDA”
means, for any period, the sum, for the Borrower and its Subsidiaries
(determined on a consolidated basis without duplication in accordance with
GAAP), of the following:  (a) net income
for such period plus (b) without duplication and to the extent deducted
in computing such net income for such period, the sum of (i) income tax
expense, (ii) Interest Expense (net of interest income), amortization or
writeoff of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with Indebtedness, (iii) depreciation and
amortization expense, (iv) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (v) any extraordinary,
unusual or non-recurring expenses or losses, (vi) goodwill impairment charges
and (vii) any other non-cash charges minus (c) to the extent
included in computing such net income for such period, the sum of (i) any
extraordinary, unusual or non-recurring income or gains and (ii) any other
non-cash income, all as determined on a consolidated basis.

 

Pro forma credit shall be given for an acquired
Person’s EBITDA as if owned on the first day of the applicable period, and
companies (or identifiable business units or divisions) sold, transferred or
otherwise disposed of during any period will be treated as if not owned during
the entire applicable period (with any add backs to be agreed to in writing by
the Borrower and the Administrative Agent (with the consent of the Required
Lenders in their sole discretion)).

 

“Effective
Date” means the date on which the conditions specified in Section 4.1
are satisfied (or waived in accordance with Section 9.2).

 

“EMU
Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.

 

“Environmental
Laws” has the meaning set forth in Section 3.18.

 

“Environmental
Liability” means any liability, contingent or otherwise (including any
liability for

 

6

 

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

 

“Equity
Interests “ means shares of capital stock, partnership interests, membership
interests or units in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants,
options or other rights entitling the holder thereof to purchase or acquire any
such equity interest.

 

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

 

“ERISA
Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section
302 of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

 

“ERISA
Event” means (a) any “reportable event,” as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to
a Plan (other than an event for which the 30-day notice period is waived by
regulation); (b) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant
to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of
any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the
PBGC or a plan administrator of any notice relating to an intention to terminate
any Plan or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

 

“Euro”
and “EUR” mean the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation.

 

“Event
of Default” has the meaning assigned to such term in Article VII.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder from time to time.

 

“Excluded
Taxes” means, with respect to the Administrative Agent, any Lender or any
other recipient of any payment to be made by or on account of any obligation of
the Borrower hereunder, (a) income or franchise taxes imposed on (or
measured by) its net income  by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, 

 

7

 

(b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
Administrative Agent , such Lender or such other recipient is located and
(c) in the case of a Foreign Lender (other than an assignee pursuant to an
assignment required by the Borrower under Section 2.19(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to
comply with Section 2.16(d), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the Borrower
with respect to such withholding tax pursuant to Section 2.16(a).

 

“Facility
Fee” has the meaning set forth in Section 2.11(a).

 

“Federal
Funds Effective Rate” means, for any day, the rate (in each case rounded
upwards, if necessary, to the next 1/100 of 1%) set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor, “H.15(519)”) for such day opposite the caption “Federal Funds
(Effective)” (or, if such day is not a Business Day, for the Business Day next
preceding such day). If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the “Composite 3:30
p.m. Quotation”) for such day under the caption “Federal Funds Effective
Rate” (or, if such day is not a Business Day, for the Business Day next
preceding such day). If on any relevant day the appropriate rate for such day
is not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations,
the rate for such day will be the arithmetic mean of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m., New York
City time, on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.

 

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

 

“Financial
Officer” of a Person means the chief financial officer, principal
accounting officer, treasurer or controller of such Person.

 

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

 

“Foreign
Subsidiary” means any Subsidiary other than a Domestic Subsidiary.

 

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

 

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

 

“Guarantee”
of or by any Person (the “guarantor”) means any obligation, contingent
or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other 

 

8

 

obligation of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the purchase of) any
security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business.

 

“Guarantor”
means each of Simpson Dura-Vent, Simpson Strong-Tie and Simpson Strong-Tie
International, and each other Material Subsidiary of the Borrower which
executes a Joinder Agreement as a Guarantor of all of the Obligations pursuant
to the provisions of this Agreement after the Effective Date.

 

“Guaranty”
means the Guaranty set forth in Article X of this Agreement made by each
Guarantor in favor of the Lenders, the Issuing Bank and the Administrative
Agent pursuant to which each Guarantor guaranties to the Lenders, the Issuing
Bank and the Administrative Agent the full and complete payment in cash of the
Obligations under this Agreement and the other Loan Documents.

 

“Hazardous
Substances” has the meaning set forth in Section 3.18.

 

“Hedging
Agreement” means an interest rate or credit swap, cap, floor, collar,
forward foreign exchange transaction, currency swap, cross currency rate swap,
currency option, or any combination of, or option with respect to, these or
similar transactions designed to provide protection against fluctuations in
interest rates or currency exchange rates.

 

“Indebtedness”
of any Person means, without duplication, (a) all obligations of such Person
for borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services, (f) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been assumed, (g) all
Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit, bank
undertakings (within the meaning of 12 C.F.R. §7.1061) and letters of guaranty
(including the stated or available amount under any letter of credit, bank
undertaking or letter of guaranty that is undrawn or that has been drawn but is
unreimbursed), (j) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances, (k) the principal balance
outstanding under any Synthetic Lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product to which
such Person is a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP and (l) all obligations of such Person in respect of
Hedging Agreements (provided that the principal amount of the
Indebtedness of any Person in respect of any Hedging Agreement at any time
shall be the amount, if any, that would, under the agreements and instruments
governing such Hedging Agreement, be payable by such Person at such time if
such Hedging Agreement 

 

9

 

were terminated at such time by the other party thereto, in each case
taking into account any netting or set-off arrangements applicable thereto). The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership interest
in or other relationship with such entity, except to the extent the terms of
such Indebtedness provide that such Person is not liable therefor. Notwithstanding
the foregoing, none of the following shall constitute Indebtedness for purposes
of this Agreement:  (i) trade or other
accounts payable incurred in the ordinary course of such Person’s business,
(ii) deferred compensation arrangements with respect to officers, directors,
employees or agents of such Person, (iii) customer accounts and deposits,
accrued employee compensation and other liabilities in the nature of employee
compensation accrued, and (iv) rebates, credits for returned products,
discounts, refunds, allowances for customers and credits against receivables,
in each case in this clause (iv) in the ordinary course of business.

 

“Interest
Coverage Ratio” means as calculated as of any measurement date, the ratio
of (i) EBIT to (ii) Interest Expense, as calculated on a trailing
four fiscal quarter basis.

 

“Interest
Election Request” means with respect to any request for conversion or
continuation of a Borrowing hereunder, a notice from the Borrower,
substantially in the form of, and containing the information prescribed by, Exhibit F,
delivered to the Administrative Agent.

 

“Interest
Expense” means, for any period, the sum, for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: 
(a) all interest in respect of Indebtedness (including the interest
component of any payments in respect of Capital Lease Obligations) accrued or
capitalized during such period (whether or not actually paid during such
period) plus (b) the net amount payable (or minus the net amount
receivable) under interest rate Hedging Agreements during such period (whether
or not actually paid or received during such period).

 

“Interest
Payment Date” means (a) with respect to any Base Rate Loan (other than
a Swingline Loan), the last Business Day of each calendar month and the
Maturity Date, as the case may be, (b) with respect to any LIBO Rate Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a LIBO Rate Borrowing with an Interest
Period of more than 3 months’ duration, each day prior to the last day of such
Interest Period that occurs at intervals of 3 months’ duration after the first
day of such Interest Period, and (c) with respect to any Swingline Loan, the
day that such Loan is required to be repaid.

 

“Interest
Period” means, with respect to any LIBO Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is 1, 2, 3 or 6 months thereafter,
as the Borrower may elect; provided, that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the immediately preceding Business Day, and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

 

10

 

“Investment”
means, when used in connection with any Person, any (a) investment by or of
that Person, whether by means of purchase or other acquisition of equity
securities or other Equity Interests of any other Person or by means of any
loan, advance, capital contribution, guaranty or other debt or equity
participation or interest, or otherwise, in any other Person, including any
partnership, joint venture or limited liability company interests of such
Person in any other Person, (b) acquisition by that Person of all or
substantially all of the assets of any other Person or an identifiable business
unit or division of any other Person, or (c) the acquisition by that Person of
any other Person or an identifiable business unit or division of any Person in any
transaction of merger or consolidation.

 

“Investment
Company Act” means the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et
seq.), as amended from time to time.

 

“Issuing
Bank” means Wells Fargo in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.5(i).
The Issuing Bank may, in its discretion, arrange for one or more Letters of
Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing
Bank” shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate.

 

“Joinder
Agreement” means a joinder agreement in substantially the form of Exhibit J
pursuant to which Material Subsidiaries of the Borrower become parties to and
agree to be bound by the provisions of this Agreement as a Guarantor.

 

“Keymark”
means Keymark Enterprises, LLC, a Delaware limited liability company.

 

“LC
Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

 

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

 

“Lenders”
means the Persons listed on Schedule 2.1 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption. Unless the context otherwise requires, the term “Lenders”
includes the Swingline Lender.

 

“Letter
of Credit” means any commercial or standby letter of credit issued pursuant
to this Agreement.

 

“Leverage
Ratio” means, as calculated as of any measurement date, the ratio of
(i) Total Funded Debt to (ii) EBITDA, as calculated on a trailing
four fiscal quarter basis.

 

“LIBO
Rate” means, with respect to any LIBO Rate Borrowing for any Interest
Period, the per  annum rate
appearing on Reuters Screen LIBOR01-02 Page under the heading “British Bankers
Association LIBOR Rates” (or on any successor or substitute Reuters screen of
such service, or any successor to or substitute for such service, providing
rate quotations comparable to those currently provided on such Reuters screen
in the event such Reuters screen is no longer published or readily available as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates in the London interbank market) at
approximately 11:00 a.m., London time, 2

 

11

 

Business Days prior to the commencement of such Interest Period, as the
rate for Dollar deposits (or, for determination of the LIBO Rate for a
Borrowing that is denominated in an Alternative Currency, for deposits in the
applicable Alternative Currency) with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for any
reason, then the “LIBO Rate” with respect to such LIBO Rate Borrowing
for such Interest Period shall be the rate (rounded upwards, if necessary, to
the next 1/100 of 1%) at which Dollar deposits (or, for determination of the
LIBO Rate for a Borrowing that is denominated in an Alternative Currency, for
deposits in the applicable Alternative Currency) in a comparable amount to such
LIBO Rate Borrowing and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in Same Day
Funds in the London interbank market at approximately 11:00 a.m., London
time, 2 Business Days prior to the commencement of such Interest Period. When “LIBO
Rate” is used in reference to any Loan or Borrowing, such term refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.

 

“Lien”
means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.

 

“Loan
Documents” means, collectively, this Agreement, the Notes (if any), the WFB
Fee Letter and any other agreement or document executed or delivered by the
Borrower pursuant to or in connection with this Agreement, as the same may from
time to time hereafter be amended or restated.

 

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

 

“Loans”
means the loans made by the Lenders to the Borrower pursuant to this Agreement,
including, where applicable, Swingline Loans.

 

“Market
Disruption Event” means any event or circumstance causing or resulting in a
material adverse change or disruption in the bank loan syndication market or
the debt capital market.

 

“Material
Adverse Change” means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower or of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Borrower or any other Loan Party to perform any of its payment
or other obligations under this Agreement or any other Loan Document or (c) the
rights of or benefits or remedies available to the Administrative Agent or the
Lenders or the Issuing Bank under this Agreement or any other Loan Document.

 

“Material
Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, or condition, financial or otherwise, of the Borrower or of
the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower or any other Loan Party to perform any of its payment or other
obligations under this Agreement or any other Loan Document or (c) the
rights of or benefits or remedies available to the Administrative Agent or the
Lenders or the Issuing Bank under this Agreement or any other Loan Document.

 

“Material
Indebtedness” means Indebtedness (other than the Loans), or obligations in
respect of one or more Hedging Agreements, of any one or more of the Borrower
and its Subsidiaries in an

 

12

 

aggregate principal amount exceeding $5,000,000, including, for
purposes of this definition, commitments to advance funds, whether or not drawn.
For purposes of determining Material Indebtedness, the “principal amount” of
the obligations of the Borrower or any Subsidiary in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Borrower or such Subsidiary would be required
to pay if such Hedging Agreement were terminated at such time.

 

“Material
Subsidiary” means any Domestic Subsidiary that, on an unconsolidated basis,
accounts for 5% or more of either (a) EBITDA or (b) net revenue, in each
case of the Borrower and its consolidated Subsidiaries, measured on a pro  forma basis for
the most recent four fiscal quarters of the Borrower for which financial
statements have been delivered pursuant to Section 5.1. For
purposes of this definition of “Material Subsidiary,” measurement on a pro  forma basis
shall mean that credit shall be given for a Domestic Subsidiary’s EBITDA or
gross revenue, as the case may be, as if owned on the first day of the
applicable period.

 

“Maturity
Date” means October 9, 2012.

 

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

 

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

 

“National
Currency Unit” means a fraction or multiple of one Euro expressed in units
of the former national currency of a Participating Member State.

 

“Note”,
as further defined in Section 2.9(e), means any promissory note
evidencing any Loan.

 

“Obligations”
means the unpaid principal of and interest on (including interest accruing
after the maturity of the Loans and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans
and all other obligations and liabilities of the Borrower to the Administrative
Agent or to any Lender or the Issuing Bank, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement,
any other Loan Document or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including all
fees, charges and disbursements of counsel to the Administrative Agent or to
any Lender or to the Issuing Bank that are required to be paid by the Borrower
pursuant hereto) or otherwise.

 

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

 

“Participant”
has the meaning set forth in Section 9.4(c).

 

“Participating
Member State” means each country so described in any EMU Legislation.

 

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

 

13

 

“Permitted
Acquisition” means any acquisition by the Borrower or any Subsidiary of all
or substantially all of the Equity Interests or assets of any Person or an
identifiable business unit or division of any Person, or the acquisition of
such Person or an identifiable business unit or division of any Person by the
Borrower or any Subsidiary in any transaction of merger or consolidation (in
each case, the “Proposed Target”), excluding (i) any acquisition
(including those effected through a merger, consolidation, amalgamation,
reorganization or other similar transaction) by the Borrower of all or
substantially all of the Equity Interests or assets or an identifiable business
unit or division of any Subsidiary or (ii) any acquisition (including those
effected through a merger, consolidation, amalgamation, reorganization or other
similar transaction) by any Subsidiary of all or substantially all of the
Equity Interests or assets or an identifiable business unit or division of any
other Subsidiary; provided that:

 

(a) no
Default or Event of Default has occurred and is continuing on the date of, or
will result after giving effect to, any such acquisition (actually and on a pro forma basis);

 

(b) the
Proposed Target is in the same or a similar or a related line of business (as
reasonably determined in good faith by the Borrower’s board of directors) as
conducted by the Borrower or any of its Subsidiaries;

 

(c) the
acquisition of the Proposed Target shall be completed as a result of an arm’s
length negotiation (i.e., on a
non-hostile basis);

 

(d) the
acquisition of the Proposed Target shall be consummated, in all material
respects, in accordance with all applicable laws and all applicable
authorizations, permits and approvals of Governmental Authorities;

 

(e) if
the financial statements of the Proposed Target (or, in the case of the
acquisition of assets constituting less than all of the assets of a Proposed
Target, the equivalent of financial statements with respect to such assets) to
the extent available, but in no event for less than the immediately preceding
most recent 12 month period for which financial statements are available (“Historical
Target Financial Statements”) demonstrate, as determined in good faith by
the Borrower, that such Proposed Target’s earnings before interest, taxes,
depreciation and amortization (calculated in the same manner as EBITDA) (“Target
EBITDA”) is:

 

(i) less than zero, and the consideration paid
or payable in cash or other property, including the issuance of Equity
Interests of the Borrower or any of its Subsidiaries (with the value of such
other property determined as of the closing date of such proposed Permitted
Acquisition) in connection with such proposed Permitted Acquisition or series
of related Permitted Acquisitions (such consideration, including seller notes, “earn-out”
or similar payments, “Acquisition Consideration”) is in excess of
$25,000,000; or

 

(ii) zero or greater, and the Acquisition
Consideration is in excess of $50,000,000,

 

then in the case of clauses (i) and (ii) above, the
Borrower has delivered to the Administrative Agent:

 

(A) the Historical Target Financial Statements;
and

 

(B) pro  forma financial statements, reflecting the combined
performance of the

 

14

 

Loan Parties and the Proposed Target for the 12 month period
immediately preceding the consummation of such transaction, certified to the
Administrative Agent and the Lenders as being the good faith pro forma financial statements prepared by the Borrower, in
form and detail reasonably acceptable to the Administrative Agent, which pro forma financial statements shall show that such
acquisition would not result in any Default or Event of Default hereunder;

 

provided
that if (x) Target EBITDA is less than zero, and the Acquisition
Consideration is $25,000,000 or less or (y) Target EBITDA is equal to or
greater than zero, and the Acquisition Consideration is $50,000,000 or
less, then in each such case no financial statements shall be required to be
delivered pursuant to this clause (e);

 

(f) the
Borrower shall be in compliance with the financial covenants set forth in Section 6.12
on a pro forma basis after giving effect to
the acquisition of the Proposed Target as of the last day of the most recent
fiscal quarter of the Borrower for which financial statements of the Borrower
have been filed with the SEC, and, if the Permitted Acquisition meets the
threshold in clause (e) above which requires the Borrower to deliver financial
statements as required in clause (e) above, the Administrative Agent shall,
prior to the proposed acquisition date, have received a completed Schedule 2
to the Compliance Certificate, (i) demonstrating such pro forma
compliance, calculated in compliance with GAAP, subject to such qualifications
as described in accompanying notes thereto, in a manner reasonably acceptable
to the Administrative Agent and (ii) certified by a Financial Officer or the
chief executive officer of the Borrower as to the matters in paragraphs 1
through 5 of the Compliance Certificate;

 

(g) if
such Proposed Target (or any of its Subsidiaries) is to remain a separate
Subsidiary and as such would become a Material Subsidiary, all action required
under Section 5.11 shall be completed substantially concurrently
with the consummation of such acquisition and such Proposed Target (and such
additional Subsidiaries, if applicable) shall be made a party to this Agreement
as a Guarantor substantially concurrently with the consummation of such
acquisition by executing and delivering to the Administrative Agent a Joinder
Agreement in the form of Exhibit J and otherwise complying with the
terms of Section 5.11; and

 

(h) if
the Leverage Ratio as of the date of the consummation of a Permitted
Acquisition is equal to or greater than 2.00:1.00, as calculated either
(x) on a pro forma basis giving effect to
such proposed Permitted Acquisition and all Indebtedness to be incurred
therewith or (y) on a historical basis without giving effect to such
proposed Permitted Acquisition and all Indebtedness to be incurred therewith,
then the Acquisition Consideration, together with all Acquisition Consideration
with respect to all subsequent acquisitions which otherwise would be Permitted
Acquisitions, shall not exceed an aggregate of $100,000,000.

 

“Permitted
Encumbrances” means:

 

(a) Liens
imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.4;

 

(b) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 60 days or are being contested in
compliance with Section 5.4;

 

(c) pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;

 

15

 

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

 

(e) judgment
liens in respect of judgments that do not constitute an Event of Default under clause (k)
of Article VII;

 

(f) easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;

 

(g) any
interest or title of a lessor under any operating lease entered into by the
Borrower or any of its Subsidiaries in the ordinary course of its business and
covering only the assets so leased;

 

(h)
Liens arising solely by virtue of any contractual or statutory or common law
provision relating to banker’s liens, rights of set-off or similar rights and
remedies as to deposit accounts, other funds maintained with a creditor
depository institution; provided,
that such deposit account is not a dedicated cash collateral account in favor
of such depository institution and not otherwise intended to provide collateral
security (other than for customary account commissions, fees and reimbursable
expenses relating solely to such deposit account, for returned items or solely
to secure any interest or title described in clause (g) above);

 

(i)
Liens arising out of conditional sale, title retention, consignment or similar
arrangements for sale of goods entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business not materially interfering with
the conduct of the business of the Borrower and its Subsidiaries taken as a
whole;

 

(j)
Liens in favor of customs and revenues authorities which secure payment of
customs duties in connection with the importation of goods in the ordinary
course of business;

 

(k)
Liens deemed to exist in connection with repurchase agreements permitted under
the definition of “Permitted Investments”;

 

(l)
leases and subleases granted to others in the ordinary course of business not
interfering, alone or in the aggregate, with the conduct of the business of the
Borrower and it Subsidiaries;

 

(m)
real estate security deposits with respect to leaseholds in the ordinary course
of business;

 

(n)
reservations by vendors of security interests in the ordinary course of
business pursuant to Section 2-401(1) of the Uniform Commercial Code as in
effect in the applicable jurisdiction; and

 

(o) any
interest of any licensor of rights in intellectual property;

 

provided
that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness, except that nothing in this proviso shall eliminate from the term
“Permitted Encumbrances” any item described in clauses (g) or (i) of this
definition of “Permitted Encumbrances.”

 

“Permitted
Investments” means:

 

16

 

(a)
direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

 

(b)
investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;

 

(c)
investments in certificates of deposit, banker’s acceptances and time deposits
maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;

 

(d)
fully collateralized repurchase agreements with a term of not more than 30 days
for securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above;

 

(e)
money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940,
(ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $4,000,000,000;

 

(f)
other short-term investments utilized by the Borrower and its Subsidiaries
organized under the laws of a jurisdiction outside the United States in
accordance with normal investment practices for cash management in investments
of a type analogous to the foregoing;

 

(g)
other investments made at the discretion of the Borrower’s board of directors
in compliance with its investment policy in effect as of the Effective Date and
attached hereto as Exhibit K; and

 

(h)
cash balances in bank accounts deposited in the United States (“Domestic
Accounts”) maintained with any Lender, which cash balances are (i) invested
overnight in an account maintained by a branch or affiliate of such financial
institution located outside of the United States, and (ii) returned to the
Domestic Account at the start of business each Business Day.

 

“Permitted
Liens” has the meaning set forth in Section 6.2.

 

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

 

“Plan”
means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 302 of ERISA, and in respect of which the Borrower or any
ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

 

“Platform”
has the meaning set forth in Section 9.1(c).

 

“Real
Estate” means all real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.

 

17

 

“Register”
has the meaning set forth in Section 9.4(b)(iv).

 

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

 

“Required
Lenders” means, at any time, Lenders having Revolving Credit Exposures and
unused Commitments representing at least 51% of the sum of the total Revolving
Credit Exposures and unused Commitments at such time; provided that if
at any applicable time there shall be two or more Lenders, then Required
Lenders must also consist of at least two Lenders.

 

“Requirement
of Law” means, as to any Person, any 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.

 

“Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in the Borrower or any option, warrant or other
right to acquire any such Equity Interests in the Borrower.

 

“Revaluation
Date” means with respect to any Loan, each of the following: (a) each date
of issuance of a Loan denominated in an Alternative Currency, (b) each date of
an amendment of any such Loan having the effect of increasing the amount
thereof (solely with respect to the increased amount), (c) each date of
any payment by the Lender under any Loan denominated in an Alternative Currency
and (d) such additional dates as the Lender shall reasonably determine in
accordance with the provisions of this Agreement.

 

“Revolving
Credit Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Revolving Loans and its LC
Exposure and Swingline Exposure at such time.

 

“Revolving
Loan” means a Loan made pursuant to Section 2.3.

 

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

 

“Same
Day Funds” means (a) with respect to disbursements and payments in Dollars,
immediately available funds, and (b) with respect to disbursements and
payments in an Alternative Currency, same day or other funds as may be
determined by the Lender to be customary in the place of disbursement or
payment for the settlement of international banking transactions in the
relevant Alternative Currency.

 

“SEC”
means the Securities and Exchange Commission (or successors thereto or an
analogous Governmental Authority).

 

“Simpson
Dura-Vent” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Simpson
Strong-Tie” has the meaning set forth in the introductory paragraph of this
Agreement.

 

18

 

“Simpson
Strong-Tie International” has the meaning set forth in the introductory
paragraph of this Agreement.

 

“Solvent”
means, with respect to any Person, as of any date of determination, that
(a) the amount of the “present fair saleable value” of the assets of such
Person, as of such date, exceeds the amount of all “liabilities of such Person,
contingent or otherwise,” as of such date, as such quoted terms are determined
in accordance with applicable federal and state laws governing determinations
of the insolvency of debtors, (b) such Person does not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (c) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) ”debt” means liability on a “claim,”
and (ii) ”claim” means any (A) right to payment, whether or not such
a right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (B) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.

 

“Spot
Rate” for a currency means the rate determined by the Administrative Agent
to be to the spot rate for the purchase by the Administrative Agent of such
currency with another currency through its principal foreign exchange trading
office on the date as of which the foreign exchange computation is made;
provided that the Administrative Agent may obtain such spot rate from another
financial institution designated by the Administrative Agent if the
Administrative Agent does not have as of the date of determination a spot
buying rate for any such currency.

 

“Sterling”
and “£” mean the lawful currency of the United Kingdom.

 

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

 

“Subordinated
Debt” means any unsecured Indebtedness of the Borrower or any Subsidiary
that (a) is subordinated by its terms in right of payment to the Loans pursuant
to provisions reasonably acceptable to the Required Lenders, (b) is subject to
such financial and other covenants and events of defaults as may be reasonably
acceptable to the Required Lenders and (c) is subject to such customary
interest blockage and delayed acceleration provisions as may be reasonably
acceptable to the Required Lenders.

 

“subsidiary”
means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements
were

 

19

 

prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power or,
in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) of which
the combined voting power representing more than 50% of the voting power is
held, as of such date, by voting trust or agreement or other Contractual
Obligation, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

 

“Subsidiary”
means any subsidiary of the Borrower.

 

“Swingline
Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.

 

“Swingline
Lender” means Wells Fargo in its capacity as the lender of Swingline Loans
hereunder.

 

“Swingline
Loan” means a Loan made pursuant to Section 2.4.

 

“Synthetic
Lease” means any lease, funding agreement or other arrangement with respect
to any real or personal property pursuant to which the lessor is treated as the
owner of such property for accounting purposes and the lessee is treated as the
owner of such property for federal income tax purposes.

 

“Taxes”
means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.

 

“Total
Funded Debt” means the sum of all Indebtedness of the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in accordance
with GAAP) of a type described in clauses (a) through (k) inclusive (or any
Guarantee of such Indebtedness) of the definition of “Indebtedness.”

 

“Transactions”
means the execution, delivery and performance by the Borrower of this Agreement
and the other Loan Documents, the borrowing of Loans and the use of the
proceeds thereof.

 

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

 

“Unasserted
Obligations” means, at any time, indemnity obligations under the Loan
Documents that are not then due and payable or for which no events or claims
that would give rise thereto are pending.

 

“USA
PATRIOT Act” means the United and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III
of Pub. L. 107-56 signed into law October 26, 2001), as amended.

 

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

 

20

 

“WFB
Fee Letter” has the meaning set forth in Section 2.11(c).

 

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

 

“Yen”
and “¥” mean the lawful currency of Japan.

 

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

 

1.3                                 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have
the same meaning and effect as the word “shall.”  Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument
or other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person’s successors and assigns, (c) the
words “herein,” “hereof” and “hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.

 

1.4                                 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that if
at any time any change in GAAP would affect the computation of any financial
ratio or requirement set forth in any Loan Document, and either the Borrower or
Required Lenders shall so request, the Administrative Agent and the Borrower
shall negotiate in good faith to amend such ratio or requirement so as to
preserve the original intent thereof in light of such change in GAAP (subject
to the approval of the Required Lenders), provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

 

1.5                                 Calculation of Financial and Capital
Maintenance Covenants. All calculations of financial ratios and capital maintenance levels
set forth in Section 6.12, shall be calculated to the same number
of decimal places as the relevant ratios are expressed in and shall be rounded
upward if the number in the decimal place immediately following the last
calculated decimal place is 5 or greater. For example, if the relevant ratio is
to be calculated to the hundredth decimal place and the calculation of the
ratio is 5.125, the ratio will be rounded up to 5.13.

 

21

 

1.6                                 Additional Alternative Currencies. The Borrower may from time to time
request that Loans be made in a currency other than those specifically listed
in the definition of “Alternative Currency”; provided that such
requested currency is a lawful currency (other than Dollars) that is readily
available and freely transferable and convertible into Dollars. Each such
request shall be subject to the prior approval of all Lenders. Any such request
shall be made to the Administrative Agent not later than 11:00 a.m., San
Francisco time, 10 Business Days prior to the date of the desired Loan. 
The Administrative Agent shall notify the Borrower, not later than 9:00 a.m.,
San Francisco time, 5 Business Days after receipt of such request whether the
Lenders have consented, in their sole discretion, to the making of such
requested Loan in such requested currency. Any failure by the Administrative
Agent to respond to such request within the time period specified in the
preceding sentence shall be deemed to be a refusal by the Lenders to permit
such Loan to be made in such requested currency. If the Lenders consent to the
making of such Loan in such in such requested currency (an “Additional
Alternative Currency”), such Additional Alternative Currency shall
thereupon be deemed for all purposes to be an Alternative Currency hereunder
for purposes of such Loan.

 

1.7                                 Exchange Rates. The Administrative Agent shall
determine the Spot Rates as of each Revaluation Date to be used for calculating
the Dollar Amounts of Loans and amounts outstanding hereunder denominated in
Alternative Currencies. Such Spot Rates shall become effective as of such
Revaluation Date and shall be the Spot Rates employed in converting any amounts
between the applicable currencies until the next Revaluation Date to occur. Except
for purposes of financial statements delivered by the Borrower hereunder or
calculating financial covenants hereunder or except as otherwise provided
herein, the applicable amount of any currency for purposes of the Loan
Documents shall be such Dollar Amount as so determined by the Administrative
Agent.

 

1.8                                 Redenomination of Certain Foreign
Currencies; New Currency.

 

(a)                                  Each obligation of the Borrower to make a
payment denominated in the National Currency Unit of any member state of the
European Union that adopts the Euro as its lawful currency after the date
hereof shall be redenominated into Euro at the time of such adoption (in
accordance with the EMU Legislation). If, in relation to the currency of any
such member state, the basis of accrual of interest expressed in this Agreement
in respect of that currency shall be inconsistent with any convention or
practice in the London interbank market for the basis of accrual of interest in
respect of the Euro, such expressed basis shall be replaced by such convention
or practice with effect from the date on which such member state adopts the
Euro as its lawful currency; provided that if any Loan in the currency
of such member state is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such Loan, at the end of the
then current Interest Period.

 

(b)                                 If, after the making of any Loan in any
Alternative Currency, currency control or exchange regulations are imposed in
the country which issues such Alternative Currency with the result that
different types of such Alternative Currency (the “New Currency”) are
introduced and the type of currency in which the Loan was made (the “Original
Currency”) no longer exists or the Borrower is not able to make payment to
the Administrative Agent for the account of the Lenders or the Administrative
Agent in such Original Currency, then all payments to be made by the Borrower
hereunder in such currency shall be made to the Administrative Agent in such
amount and such type of the New Currency as shall be equivalent to the amount
of such payment otherwise due hereunder in the Original Currency, it being the
intention of the parties hereto that the Borrower takes all risks of the
imposition of any such currency control or exchange regulations. In addition,
notwithstanding the foregoing provisions of this Section 1.8(b), if,
after the making of any Loan in any Alternative Currency, the Borrower is not able
to

 

22

 

make payment to the Administrative Agent for the
account of the Lenders or the Administrative Agent in the type of currency in
which such Loan was made because of the imposition of any such currency control
or exchange regulation, then such Loan shall instead be repaid when due in
Dollars in a principal amount equal to the Dollar Equivalent (as of the date of
repayment) of such Loan.

 

1.9                                 Currency of Account. Dollars are the currency of account and
payment for each and every sum at any time due from the Borrower hereunder in
each case except as expressly provided in this Agreement; provided that,
subject to Section 1.8:

 

(a)                                  each repayment of a Loan or a part
thereof shall be made in the currency in which such Loan is denominated at the
time of that repayment;

 

(b)                                 each payment of interest shall be made in
the currency in which such principal or other sum in respect of which such
interest is payable, is denominated;

 

(c)                                  each payment of fees shall be in Dollars;

 

(d)                                 each payment in respect of costs,
expenses and indemnities shall be made in the currency in which the same were
incurred or the Dollar Equivalent thereof; and

 

(e)                                  any amount expressed to be payable in a
currency other than Dollars shall be paid in that other currency.

 

No
payment to the Administrative Agent or any Lender (whether under any judgment
or court order or otherwise) shall discharge the obligation or liability in
respect of which it was made unless and until the Administrative Agent or such
Lender shall have received payment in full in the currency in which such
obligation or liability was incurred, and to the extent that the amount of any
such payment shall, on actual conversion into such currency, fall short of such
obligation or liability actual or contingent expressed in that currency, the
Borrower agrees to indemnify and hold harmless the Administrative Agent or such
Lender, as the case may be, with respect to the amount of the shortfall, with
such indemnity surviving the termination of this Agreement and any legal
proceeding, judgment or court order pursuant to which the original payment was
made which resulted in the shortfall.

 

1.10                           Currency Fluctuations. If, on any Revaluation Date and on the
Maturity Date, the Dollar Equivalent of the outstanding Obligations exceeds the
total Commitment at such time for 3 or more consecutive Business Days (but not
in the case of the Maturity Date), then the Borrower shall repay or prepay the
relevant Loans in accordance with this Agreement within 5 Business Days from
such third consecutive Business Day (or on the Maturity Date, as applicable) in
an aggregate principal amount such that, after giving effect thereto, the
outstanding Obligations (expressed in Dollars) no longer exceeds the total
Commitment (expressed in Dollars).

 

ARTICLE II.

 

The Credits

 

2.1                                 Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (a) such Lender’s Revolving Credit Exposure exceeding such
Lender’s Commitment or (b) the sum of the total Revolving Credit Exposures
exceeding the total Commitments.

 

23

 

Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and re-borrow
Loans.

 

2.2                                 Revolving Loans and Borrowings.

 

(a)                                  Each Revolving Loan shall be denominated
in Dollars or in an Alternative Currency as permitted by this Agreement and no
Lender shall be obligated to make any Revolving Loan if the requested Revolving
Loan is to be denominated in a currency other than Dollars or an Alternative
Currency as permitted under this Agreement. All Revolving Loans to be
denominated in an Alternative Currency shall be LIBO Rate Loans.

 

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

 

(c)                                  Subject to Section 2.13, each
Borrowing of Revolving Loans shall be comprised entirely of Base Rate Loans or
LIBO Rate Loans as the Borrower may request in accordance herewith. Each Lender
at its option may make any LIBO Rate Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to
repay such Revolving Loan in accordance with the terms of this Agreement.

 

(d)                                 At the commencement of each Interest
Period for any LIBO Rate Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $3,000,000. At
the time that each Base Rate Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $100,000 and not less than
$500,000; provided that a Base Rate Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the total Commitments or
that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.5(e). Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time
be more than a total of 10 LIBO Rate Borrowings outstanding.

 

(e)                                  Notwithstanding any other provision of
this Agreement, the Borrower shall not be entitled to request any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity
Date, or to elect to convert or continue any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.

 

2.3                                 Requests for Borrowings. To request a Borrowing of Revolving
Loans, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a LIBO Rate Borrowing, not later than 11:00
a.m., San Francisco time, 3 Business Days before the date of the proposed
Borrowing (provided that in the case of any requested Revolving Loan to
be denominated in an Alternative Currency, the Borrower shall, subject to Section
1.6, notify the Administrative Agent of such request not later than 11:00
a.m., San Francisco time, 5 Business Days before the date of the proposed
Borrowing), or (b) in the case of a Base Rate Borrowing, not later than
11:00 a.m., San Francisco time, one Business Day before the date of the
proposed Borrowing; provided that any such notice of a Base Rate
Borrowing to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.5(e) may be given not later than 11:00 a.m., San
Francisco time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand

 

24

 

delivery or facsimile to the Administrative Agent of a
written Borrowing Request in the form of Exhibit E, with
appropriate insertions, and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.2:

 

(i)                                     the aggregate amount of the requested
Borrowing;

 

(ii)                                  the date of such Borrowing, which shall
be a Business Day;

 

(iii)                               whether such Borrowing is to be
denominated in Dollars or in an Alternative Currency, and if the latter, which Alternative
Currency;

 

(iv)                              if such Borrowing is to be denominated in
Dollars, whether such Borrowing is to be a Base Rate Borrowing or a LIBO Rate
Borrowing;

 

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

 

(vi)                              the location and number of the Borrower’s
account to which funds are to be disbursed, which shall comply with the
requirements of Section 2.5.

 

If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be a Base Rate Borrowing. If no Interest Period is specified with respect
to any requested LIBO Rate Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of three months’ duration. Promptly following
receipt of a Borrowing Request in accordance with this Section 2.3, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

2.4                                 Swingline Loans.

 

(a)                                  Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans, denominated
in Dollars, to the Borrower from time to time during the Availability Period in
an aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans exceeding
$25,000,000 or (ii) the aggregate Revolving Credit Exposures exceeding the
total Commitments; provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within
the foregoing limits and subject to the terms and conditions set forth herein,
the Borrower may borrow, prepay and re-borrow Swingline Loans.

 

(b)                                 To request a Swingline Loan, the Borrower
shall notify the Administrative Agent of such request by telephone (confirmed
by facsimile), not later than 11:00 a.m., San Francisco time, on the day of a
proposed Swingline Loan. Each such notice shall be irrevocable and shall
specify the requested date (which shall be a Business Day) and amount of the
requested Swingline Loan. The Administrative Agent will promptly advise the
Swingline Lender of any such notice received from the Borrower. The Swingline
Lender shall make each Swingline Loan available to the Borrower by means of a
credit to the general deposit account of the Borrower with the Swingline Lender
(or, in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.5(e), by remittance to the
Issuing Bank) by 12:00 noon, San Francisco time, on the requested date of such
Swingline Loan.

 

25

 

(c)                                  The Swingline Lender may by written
notice given to the Administrative Agent not later than 11:00 a.m., San
Francisco time, on any Business Day require the Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
outstanding. Such notice shall specify the aggregate amount of Swingline Loans
in which Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Lender, specifying in
such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans.
Each Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Administrative Agent, for the account
of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline
Loan or Loans. Each Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this Section 2.4(c)
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an Event
of Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender shall comply with its obligation under this Section 2.4(c)
by wire transfer of Same Day Funds, in the same manner as provided in Section
2.6 with respect to Loans made by such Lender (and Section 2.6
shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this Section
2.4(c), and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this Section 2.4(c)
and to the Swingline Lender, as their interests may appear; provided
that any such payment so remitted shall be repaid to the Swingline Lender or to
the Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this Section 2.4(c)
shall not relieve the Borrower of any default in the payment thereof.

 

2.5                                 Letters of Credit.

 

(a)                                  General. Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of Letters of Credit, denominated
in Dollars, for its own account or for the benefit of any Subsidiary of the
Borrower (provided the account party shall be the Borrower), in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.

 

(b)                                 Notice of Issuance, Amendment, Renewal,
Extension; Certain Conditions. To request the issuance of a Letter of Credit (or
the amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall hand deliver or transmit by facsimile (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or

extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or

 

26

 

extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with Section 2.5(c)),
the amount of such Letter of Credit, the name and address of the beneficiary
thereof and such other information as shall be necessary to prepare, amend,
renew or extend, as the case may be, such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on
the Issuing Bank’s standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only
if (and upon issuance, amendment, renewal or extension of each Letter of Credit
the Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the LC
Exposure shall not exceed $50,000,000 and (ii) the sum of the total Revolving
Credit Exposures shall not exceed the total Commitments.

 

(c)                                  Expiration Date. Each Letter of Credit shall expire at
or prior to the close of business on the earlier of (i) the date one year
after the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and
(ii) the date that is 5 Business Days prior to the Maturity Date.

 

(d)                                 Participations. By the issuance of a Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Lender’s
Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Borrower on the date due as provided in Section 2.5(e),
or of any reimbursement payment required to be refunded to the Borrower for any
reason. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this Section 2.5(d) in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or an Event of
Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.

 

(e)                                  Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal to
such LC Disbursement not later than 12:00 noon, San Francisco time, (i) on the
date that such LC Disbursement is made, if the Borrower shall have received
notice of such LC Disbursement prior to 10:00 a.m., San Francisco time, on such
disbursement date, or (ii) on the Business Day immediately following the day
that the Borrower receives such notice of the LC Disbursement , if such notice
is not received by the Borrower prior to 10:00 a.m., San Francisco time, on
such date; provided that the Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.3 or Section
2.4 that such payment be financed with a Base Rate Borrowing or Swingline
Loan in an equivalent amount and, to the extent so financed, the Borrower’s
obligation to make such payment shall be discharged and replaced by the
resulting Base Rate Borrowing or Swingline Loan. If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.6 with respect to Loans made by such
Lender (and

 

27

Section 2.6 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this Section 2.5(e),
the Administrative Agent shall distribute such payment to the Issuing Bank or,
to the extent that Lenders have made payments pursuant to this Section 2.5(e)
to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as
their interests may appear. Any payment made by a Lender pursuant to this Section 2.5(e)
to reimburse the Issuing Bank for any LC Disbursement (other than the funding
of Base Rate Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.

 

(f)                                    Obligations Absolute. The Borrower’s obligation to reimburse
LC Disbursements as provided in Section 2.5(e) shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not strictly
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.5(f), constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders
nor the Issuing Bank, nor any of their Related Parties, shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit strictly
comply with the terms thereof. The parties hereto expressly agree that, in the
absence of gross negligence or willful misconduct on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction), the Issuing
Bank shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.

 

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

 

28

 

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

 

(h)                                 Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC Disbursement,
at the rate per annum then
applicable to Base Rate Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to Section 2.5(e), then
Section 2.12(d) shall apply. Interest accrued pursuant to this Section 2.5(h)
shall be for the account of the Issuing Bank, except that interest accrued on
and after the date of payment by any Lender pursuant to Section 2.5(e)
to reimburse the Issuing Bank shall be for the account of such Lender to the
extent of such payment.

 

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

 

(j)                                     Cash Collateralization. Upon the earlier to occur of (i) the
Maturity Date; (ii) the date of the termination of the Commitments; (iii)
the date that the Loans then outstanding are declared to be due and payable in
whole or in part; or (iv) the termination of this Agreement, then on the
Business Day that the Borrower receives notice from the Administrative Agent or
the Required Lenders (or, if the maturity of the Loans has been accelerated,
Lenders with LC Exposure representing greater than 51% of the total LC
Exposure) demanding the deposit of cash collateral pursuant to this Section 2.5(j),
the Borrower shall deposit in an account with the Administrative Agent, in the
name of the Administrative Agent and for the benefit of the Lenders, an amount
in cash equal to 105% of the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such
cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default clause (h) or (i)
of Article VII. Such deposit shall be held by the Administrative Agent
as collateral for the payment and performance of the payment in full in cash of
the Obligations of the Borrower. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the Administrative
Agent to reimburse the Issuing Bank for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been

 

29

 

accelerated (but subject to the consent of Lenders
with LC Exposure representing greater than 51% of the total LC Exposure), be
applied to satisfy other obligations of the Borrower under this Agreement. If
the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within 3 Business Days
after all Events of Default have been cured or waived.

 

2.6                                 Funding of Borrowings.

 

(a)                                  Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of Same Day
Funds by 11:00 a.m., San Francisco time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders;
provided that Swingline Loans shall be made as provided in Section
2.4. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in San
Francisco and designated by the Borrower in the applicable Borrowing Request; provided
that Base Rate Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.5(e) shall be remitted by the Administrative Agent
to the Issuing Bank.

 

(b)                                 Unless the Administrative Agent shall
have received notice from a Lender prior to the proposed date of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with Section 2.6(a)
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower
to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of
the Borrower, the interest rate applicable to Base Rate Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.

 

2.7                                 Interest Elections.

 

(a)                                  Each Borrowing of a Revolving Loan
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a LIBO Rate Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the Borrower may, as
to Revolving Loans denominated in Dollars, elect to convert such Borrowing to a
different Type or, as to any Revolving Loan, to continue such Borrowing and, in
the case of a LIBO Rate Borrowing, may elect Interest Periods therefor, all as
provided in this Section 2.7. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing. This Section 2.7 shall not
apply to Swingline Borrowings, which may not be converted or continued.

 

(b)                                 To make an election pursuant to this Section
2.7, the Borrower shall notify the Administrative Agent of such election by
telephone or in writing by the time that a Borrowing Request

 

30

 

would be required under Section 2.3 if the
Borrower were requesting a Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such Interest Election
Request shall be irrevocable and, if made by telephone, shall be confirmed
promptly by hand delivery or facsimile to the Administrative Agent of a written
Interest Election Request signed by the Borrower.

 

(c)                                  Each telephonic and written Interest
Election Request shall specify the following information in compliance with Section 2.2:

 

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

 

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

 

(iii)                               whether the resulting Borrowing is to be
a Base Rate Borrowing or a LIBO Rate Borrowing; and

 

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

 

If any
such Interest Election Request requests a LIBO Rate Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of three months’ duration.

 

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

 

(e)                                  If the Borrower fails to deliver a timely
Interest Election Request with respect to a LIBO Rate Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to a LIBO Rate Borrowing with an Interest Period of 3 months.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then (i) no outstanding
Borrowing may be converted to or continued as a LIBO Rate Borrowing and (ii) unless
repaid, each LIBO Rate Borrowing shall be converted to a Base Rate Borrowing at
the end of the Interest Period applicable thereto.

 

2.8                                 Maturity Date; Reduction of Commitment by
the Borrower; Increase in Commitment.

 

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

 

(b)                                 The Borrower may at any time terminate,
or from time to time permanently reduce, the Commitments; provided that
(i) each reduction of the Commitments shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
Borrower shall not terminate or reduce the Commitments if, after giving effect
to any concurrent prepayment of the Loans in

 

31

 

accordance with Section 2.10, the sum of the
Revolving Credit Exposures would exceed the total Commitments.

 

(c)                                  The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Commitments
under Section 2.8(b) at least 3 Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof, pursuant to a written Repayment Notice in the form
of Exhibit I, with appropriate insertions, and signed by the Borrower. Promptly
following receipt of any such notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section 2.8 shall be irrevocable; provided that a
notice of termination of the Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.

 

(d)                                 Subject to the terms and conditions set
forth herein, so long as no Default or Event of Default shall have occurred and
be continuing, and provided that the Borrower shall not have previously
terminated or reduced the Commitments pursuant to Section 2.8(b), the
Borrower shall have the right during the period from the Effective Date until
the date one Business Day prior to the Maturity Date, to incur additional
Indebtedness under this Agreement in the form of one or more increases to the
Commitments by an aggregate amount of up to an additional $200,000,000 (the “Additional
Commitments”). The following terms and conditions shall apply to all
Additional Commitments:  (a) the loans
made under any such Additional Commitment shall constitute Obligations, (b)
such Additional Commitment and the Loans and other credit accommodations
available thereunder shall have the same terms (including interest rate) as the
existing Commitments and the Loans and other credit accommodations available
hereunder and under the other Loan Documents, (c) any Lender providing such
Additional Commitment shall be entitled to the same voting rights as the
existing Lenders and shall be entitled to receive proceeds of prepayments on
the same basis as comparable Loans, (d) any such Additional Commitment 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) such Additional Commitment shall be in a minimum principal amount of
$25,000,000 and integral multiples of $1,000,000 in excess thereof,
(f) the proceeds of any Loans under any Additional Commitment will be used
only for the purposes set forth in this Agreement, (g) the Borrower shall
execute such promissory notes as are necessary and requested by the Lenders to
reflect the Additional Commitments, (h) the conditions in Section 4.2
shall have been satisfied, (i) the Borrower shall have paid all fees payable in
regard to such Additional Commitments as specified in the WFB Fee Letter, and
(j) the Administrative Agent shall have received from the Borrower (i) updated
financial statements and a Compliance Certificate demonstrating that, after
giving effect to any such Additional Commitment, the Borrower will be in
compliance with the financial covenants set forth in Section 6.12, (ii)
copies of resolutions of the board of directors of the Borrower approving the
Additional Commitments and the transactions contemplated thereby, as may be
reasonably requested by the Administrative Agent and (iii) a favorable legal
opinion of counsel to the Borrower relating to such Additional Commitments, in
each case in form and substance satisfactory to the Administrative Agent. Participation
in any Additional Commitment shall be offered first to each of the existing
Lenders, but each such Lender shall have no obligation to provide all or any
portion of any such Additional Commitment. If the amount of any Additional
Commitment requested by the Borrower shall exceed the commitments which the
existing Lenders are willing to provide with respect to such Additional
Commitment, then the Borrower may invite other

 

32

 

banks, financial institutions and investment funds
reasonably acceptable to the Administrative Agent to join this Agreement as
Lenders hereunder for the portion of such Additional Commitment 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
existing Lenders shall make such assignments (which assignments shall not be
subject to the requirements set forth in Section 9.4) of the
outstanding Loans to the Lenders providing any Additional Commitment so that,
after giving effect to such assignments, each Lender (including the Lenders
providing the Additional Commitments) will hold Loans equal to its Applicable
Percentage. The Administrative Agent is authorized to enter into, on behalf of
the Lenders, any amendment to this Agreement or any other Loan Document as may
be necessary to incorporate the terms of any Additional Commitment.

 

2.9                                 Repayment of Loans; Evidence of Debt.

 

(a)                                  The Borrower hereby unconditionally
promises to pay (i) to the Administrative Agent for the account of each Lender
the then unpaid principal amount of each Revolving Loan on the Maturity Date,
and (ii) to the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earlier of the Maturity Date and the tenth Business Day
after such Swingline Loan is made; provided that on each date that a
Borrowing of a Revolving Loan is made, the Borrower shall repay all Swingline
Loans then outstanding.

 

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

 

(c)                                  The Administrative Agent shall maintain a
Register in accordance with Section 9.4 in which it shall record
(i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender’s
share thereof.

 

(d)                                 The entries made in the accounts maintained
pursuant to Section 2.9(b) or the Register maintained pursuant to Section 9.4
and Section 2.9(c) shall be prima  facie evidence of
the existence and amounts of the obligations recorded therein; provided
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.

 

(e)                                  Any Lender may request that Loans made by
it be evidenced by a promissory note. In such event, the Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) substantially in the form of Exhibit B (each, a
“Note”), with appropriate insertions as to the Lender, the date and the
principal amount. Thereafter, the Loans evidenced by such Note and interest
thereon shall at all times (including after assignment pursuant to Section 9.4)
be represented by one or more Notes in such form payable to the order of the
payee named therein (or, if such promissory note is a registered note, to such
payee and its registered assigns).

 

33

 

2.10                           Prepayment of Loans.

 

(a)                                  The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, provided that each
such prepayment shall be in an amount that is an integral multiple of $100,000
and not less than $500,000, and provided  further that if the
outstanding principal amount of any Borrowing is less than $500,000, then the
Borrower may prepay the entire outstanding principal amount of such Borrowing,
but not less than the entire principal amount thereof, and in any event subject
to prior notice in accordance with Section 2.10(b).

 

(b)                                 The Borrower shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by telephone (confirmed by facsimile) of any prepayment
hereunder (i) in the case of prepayment of a LIBO Rate Borrowing
denominated in Dollars, not later than 11:00 a.m., San Francisco time, 3
Business Days before the date of prepayment, (ii) in the case of prepayment of
a LIBO Rate Borrowing denominated in an Alternative Currency, not later than
11:00 a.m. 4 Business Days before the date of prepayment, (iii) in the
case of prepayment of a Base Rate Borrowing, not later than 11:00 a.m., San
Francisco time, one Business Day before the date of prepayment or (iv) in
the case of prepayment of a Swingline Loan, not later than 11:00 a.m., San
Francisco time, on the date of prepayment, pursuant to a written Repayment
Notice in the form of Exhibit I, with appropriate insertions, and
signed by the Borrower. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that if a notice of prepayment is given
in connection with a conditional notice of termination of the Commitments as
provided by Section 2.8, then such notice of prepayment may be
revoked if such notice of termination is revoked in accordance with Section 2.8.
Promptly following receipt of any such notice relating to a Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.2.  Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Each prepayment
under this Section 2.10 shall be accompanied by payment of all
accrued and unpaid interest to the extent required by Section 2.12,
together with any additional amounts required pursuant to Section 2.15.

 

(c)                                  If for any reason the outstanding
Obligations at any time exceed the total Commitments then in effect, the
Borrower shall immediately prepay Loans and/or deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash in an aggregate amount equal to such
excess; provided, however, that the Borrower shall not be
required to deposit such cash pursuant to this Section 2.10(c)
unless after the prepayment in full of the Loans, the outstanding Obligations
exceed the Commitment then in effect.

 

2.11                           Fees.

 

(a)                                  The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage, a facility fee in Dollars (the “Facility Fee”)
equal to the Applicable Rate appearing under the column “Facility Fee” as set
forth in the definition of “Applicable Rate,” multiplied by the actual daily
amount of the Commitments (or, if the Commitments have terminated, on the
outstanding amount of all outstanding Loans, Swingline Loans, and LC Exposure),
regardless of usage. The Facility Fee shall accrue at all times during the
period from and including the Effective Date to but excluding the date on which
such Commitment terminates (and thereafter so long as any Loans, Swingline
Loans or LC Exposure remain outstanding). Facility Fees

 

34

 

shall be calculated and payable in arrears on the last
day of March, June, September and December of each year, and on the date on
which the Commitments terminate, commencing on the first such date to occur
after the date hereof. All Facility Fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

 

(b)                                 The Borrower shall pay (i) to the
Administrative Agent for the account of each Lender, a participation fee with
respect to its participations in standby Letters of Credit, which shall accrue
at the same Applicable Rate used to determine the interest rate applicable to
LIBO Rate Loans on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date on which such Lender’s Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, (ii) with respect to
commercial Letters of Credit, participation fees to be determined by the Administrative
Agent and the Issuing Bank consistent with then-prevailing market terms for
issuances of commercial Letters of Credit; and (iii) the Issuing Bank’s
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the tenth Business Day following such
last day, commencing on the first such date to occur after the Effective Date; provided
that all such fees shall be payable on the date on which the Commitments
terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing
Bank pursuant to this Section 2.11(b) shall be payable within ten
calendar days after demand. All participation fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

 

(c)                                  The Borrower shall pay the fees payable
to the Persons, in the amounts and at the times specified as set forth in the
fee letter dated May 4, 2007 between the Borrower and Wells Fargo (the “WFB
Fee Letter”).

 

(d)                                 All fees payable hereunder shall be paid
on the dates due, in Same Day Funds, to the Administrative Agent (or to the
Issuing Bank, in the case of fees payable to it) for distribution, and itself,
as applicable. All fees described in this Section 2.11 shall be
fully earned when due and payable and shall be non-refundable once paid.

 

2.12                           Interest.

 

(a)                                  The Loans comprising each Base Rate
Borrowing and each Swingline Loan shall bear interest at the Base Rate plus the
Applicable Rate.

 

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

 

(c)                                  Notwithstanding the foregoing, upon the
occurrence and during the continuance of an Event of Default under clauses
(a), (b), (h), (i) or (n)  of Article
VII or upon written notice to the Borrower from the Administrative Agent or
Required Lenders following the occurrence and during the continuance of any
other Event of Default, (i) the outstanding principal amount of the Loans shall
bear interest at a rate equal to the interest rate specified in Section 2.12(a)
or Section 2.12(b), as applicable, plus the incremental rate of
2.00% per annum, and (ii) the
other outstanding Obligations, if any, shall bear interest at a rate equal to
the interest rate specified in Section 2.12(a) plus the incremental
rate of 2.00%

 

35

 

per annum. Upon the occurrence and during the
continuance of an Event of Default, no new LIBO Rate Loans may be requested
pursuant to Section 2.3.

 

(d)                                 Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitments; provided that (i) interest accrued
pursuant to Section 2.12(c) shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of a Base Rate Loan prior to the end of the Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any LIBO Rate Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.

 

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

 

2.13                           Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a LIBO Rate Borrowing:

 

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

 

(b)                                 the Administrative Agent is advised by
any Lender that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for
such Interest Period will not adequately and fairly reflect the cost to such
Lender of making or maintaining its Loan included in such Borrowing for such
Interest Period;

 

then
the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by facsimile as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders by facsimile that
the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBO Rate Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a LIBO Rate Borrowing, such
Borrowing shall be made as a Base Rate Borrowing; if the circumstances giving
rise to such notice affect only one Type of Borrowings, then the other Type of
Borrowings shall be permitted.

 

2.14                           Increased Costs.

 

(a)                                  If any Change in Law shall:

 

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

 

36

 

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

 

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

 

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

 

(c)                                  A certificate of a Lender or the Issuing
Bank setting forth in reasonable detail the amount or amounts necessary to
compensate such Lender or the Issuing Bank or its holding company, as the case
may be, as specified in Section 2.14(a) or Section 2.14(b)
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender or the Issuing Bank, as the case may
be, the amount shown as due on any such certificate within 10 Business Days
after receipt thereof.

 

(d)                                 Failure or delay on the part of any
Lender or the Issuing Bank to demand compensation pursuant to this Section 2.14
shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to
demand such compensation; provided that the Borrower shall not be
required to compensate a Lender or the Issuing Bank pursuant to this Section 2.14
for any increased costs or reductions incurred more than 180 days prior to the
date that such Lender or the Issuing Bank, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or the Issuing Bank’s intention to claim compensation
therefor; provided  further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

 

2.15                           Break Funding Payments. In the event of (a) the payment of
any principal of any LIBO Rate Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any LIBO Rate Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any LIBO Rate Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.8(c) and is revoked in accordance therewith) or
(d) the assignment of any LIBO Rate Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the

 

37

 

Borrower pursuant to Section 2.16, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. Such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of such Loan had such event not occurred, at the Adjusted
LIBO Rate that would have been applicable to such Loan, for the period from the
date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts in reasonable detail that such Lender is
entitled to receive pursuant to this Section 2.15 shall be delivered to
the Borrower and shall be conclusive absent manifest error. The Borrower shall
pay such Lender the amount shown as due on any such certificate within 10
Business Days after receipt thereof. For purposes of calculating amounts
payable to the Lenders under this Section 2.15, each Lender shall
be deemed to have funded each LIBO Rate Loan denominated in an Alternative
Currency made by it at the LIBO Rate for such Loan by a matching deposit or
other borrowing in the offshore interbank market for such currency for a
comparable amount and for a comparable period, whether or not such LIBO Rate
Loan was in fact so funded.

 

2.16                           Taxes.

 

(a)                                  All payments made by, or on account of
any obligation of, the Borrower under this Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, Taxes,
other than Excluded Taxes. If any such non-excluded Taxes (“Non-Excluded
Taxes”) or any Other Taxes are required by law to be withheld from any
amounts payable to the Administrative Agent or any Lender or the Issuing Bank
(as the case may be) hereunder, the amounts so payable to the Administrative
Agent or such Lender or the Issuing Bank (as the case may be) shall be
increased to the extent necessary so that after making all required deductions
and withholdings (including deductions and withholdings applicable to
additional sums payable under this Section 2.16(a)) the
Administrative Agent or such Lender or the Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions or withholdings been made; provided, however, that the
Borrower shall not be required to increase any such amounts payable to the
Administrative Agent or any Lender or the Issuing Bank (as the case may be) with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender’s
or the Issuing Bank’s failure to comply with the requirements of Section 2.16(d),
(ii) that are United States withholding taxes imposed on amounts payable
to such Lender or the Issuing Bank at the time such Lender or the Issuing Bank
becomes a party to this Agreement, except to the extent that such Lender’s or
the Issuing Bank’s assignor (if any) was entitled, at the time of assignment,
to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this Section 2.16(a) or
(iii) that relate to any period or portion thereof prior to the date that
is 180 days prior to the date upon which such Lender or the Issuing Bank or the
Administrative Agent shall have notified the Borrower in writing of its
entitlement under this Section 2.16(a) to receive additional amounts; provided
further, however, that if any such amounts giving rise to such Lender’s
or the Issuing Bank’s notification are retroactive, then the 180-day period
referred to in this Section 2.16(a) shall be extended to include
the period of retroactive effect thereof.

 

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

 

38

 

(c)                                  Whenever any Non-Excluded Taxes or Other
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for the account of the
Administrative Agent or a Lender or the Issuing Bank, as the case may be, a
certified copy of an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or Other
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
and the Issuing Bank for any incremental taxes, interest or penalties that may
become payable by the Administrative Agent or any Lender or the Issuing Bank
directly as a result of any such failure. The agreements in this Section 2.16
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.

 

(d)                                 Each Foreign Lender shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, as
appropriate, or, in the case of a Foreign Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest” a statement substantially in the form of Exhibit H
and a Form W-8BEN, or any subsequent versions thereof or successors thereto
properly completed and duly executed by such Foreign Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all
payments by the Borrower under this Agreement and the other Loan Documents. Such
forms shall be delivered by each Foreign Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Foreign Lender shall deliver such forms promptly upon the
expiration, obsolescence or invalidity of any form previously delivered by such
Foreign Lender. Each Foreign Lender shall promptly notify the Borrower at any
time it determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this Section 2.16(d), a Foreign Lender shall not
be required to deliver any form pursuant to this Section 2.16(d)
that such Foreign Lender is not legally able to deliver.

 

(e)                                  The Borrower shall indemnify the Administrative
Agent and each Lender and the Issuing Bank within 10 Business Days after
written demand therefor for the full amount of any Non-Excluded Taxes or Other
Taxes paid by the Administrative Agent or such Lender or the Issuing Bank on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Non-Excluded Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 2.16) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Non-Excluded Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by the Issuing Bank, by a
Lender, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest error. Notwithstanding
the foregoing, the Borrower shall not be obligated to make payment to the
Administrative Agent or such Lender or the Issuing Bank pursuant to this Section 2.16
in respect of such Non-Excluded Taxes, Other Taxes, interest, penalties or
other liabilities (i) if such Non-Excluded Taxes, Other Taxes, interest,
penalties or other liabilities are attributable to such Lender’s or the Issuing
Bank’s failure to comply with the requirements of Section 2.16(d),
(ii) if such interest or penalties are attributable to the gross
negligence or willful misconduct of the Administrative Agent or such Lender or
the Issuing Bank, (iii) if such taxes are United States withholding taxes
imposed on amounts payable to such Lender or the Issuing Bank at the time such
Lender or the Issuing Bank becomes a party to this Agreement, except to the
extent that such Lender’s or

 

39

 

the Issuing Bank’s assignor (if any) was entitled, at
the time of assignment, to receive additional amounts from the Borrower with
respect to such United States withholding taxes pursuant to Section 2.16(a),
(iv) with respect to a period or portion thereof prior to the date that is
180 days prior to the date upon which such Lender or the Issuing Bank or the
Administrative Agent shall have notified the Borrower in writing of its
entitlement to such payment under this Section 2.16(e) or
(v) if, with respect to interest or penalties, such interest or penalties
have accrued after the Borrower has indemnified or paid the additional amount
in respect of the Non-Excluded Taxes or Other Taxes from which the interest or
penalties arose; provided, however, that if any such amounts
giving rise to such Lender’s notification are retroactive, then the 180-day
period referred to in this Section 2.16(e)(iv) shall be extended to
include the period of retroactive effect thereof. After the Administrative
Agent or a Lender or the Issuing Bank learns of the imposition of Non-Excluded
Taxes or Other Taxes, the Administrative Agent or such Lender or the Issuing
Bank will act in good faith to promptly notify the Borrower of its obligations
hereunder.

 

(f)                                    If any Lender or the Issuing Bank or the
Administrative Agent receives a refund (including any interest paid or credited
by the relevant Governmental Authority with respect to such refund, the “Refund”)
in respect of any amounts paid by the Borrower pursuant to this Section 2.16,
which Refund in the good faith judgment of such Lender or the Issuing Bank or
the Administrative Agent is allocable to such payment, it shall promptly notify
the Borrower of such Refund and shall, within 15 days after receipt, pay such
Refund to the Borrower net of all out-of-pocket expenses of such Lender or the
Issuing Bank or the Administrative Agent; provided, however, that
the Borrower, upon the request of such Lender or the Issuing Bank or the
Administrative Agent, agrees to repay the amount paid over to the Borrower to
such Lender or the Administrative Agent in the event such Lender or the Issuing
Bank or the Administrative Agent is required to repay such Refund. This Section 2.16
shall not be construed to require the Administrative Agent or any Lender or the
Issuing Bank to make available its tax returns (or any other information
related to its taxes which it deems confidential) to the Borrower to any other
Person.

 

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

 

(a)                                  The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest or fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.14,
2.15 or 2.16, or otherwise) prior to 12:00 noon,
San Francisco time, on the date when due, in Same Day Funds, without
set-off or counterclaim. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at the
Administrative Agent’s Payment Office (except payments to be made directly to
the Issuing Bank or Swingline Lender as expressly provided herein), except that
payments pursuant to Sections 2.14, 2.15, 2.16 and 9.3
shall be made directly to the Persons entitled thereto. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient (any such payment being distributed
to a Lender for its own account at the office set forth in its Administrative
Questionnaire unless otherwise instructed by such Lender in writing) promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All
payments under this Section 2.17(a) shall be made in Dollars.

 

(b)                                 If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, unreimbursed LC Disbursements, interest and

 

40

 

fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second,
towards payment of principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amount of principal and unreimbursed LC Disbursements then due to such parties.

 

(c)                                  If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans or participations in LC
Disbursements and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans and participations in LC
Disbursements of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and participations in LC Disbursements; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this Section 2.17(c) shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this Section 2.17(c) shall apply). The
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Borrower in the amount of such
participation, subject to Section 9.4(c)(i)(E).

 

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

 

(e)                                  If any Lender shall fail to make any
payment required to be made by it pursuant to Section 2.6(b) or Section 2.17(d),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are
fully paid.

 

(f)                                    If, for any reason, the Borrower is
prohibited by any Requirement of Law from making any required payment hereunder
in an Alternative Currency, the Borrower shall make such

 

41

 

payment in Dollars in the Dollar Equivalent of the
Alternative Currency payment amount. All payments received by the
Administrative Agent (i) after 12:00 noon, San Francisco time, in the case of
payments in Dollars, or (ii) after the Applicable Time specified by the
Administrative Agent in the case of payments in an Alternative Currency, shall
in each case be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue.

 

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

 

2.19                           Replacement of Lenders.

 

(a)                                  If (i) any Lender requests compensation
under Section 2.14, (ii) the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.16, (iii) any Lender defaults
in its obligation to fund Loans hereunder, or (iv) any Lender gives notice to
the Administrative Agent under Section 2.13(b) that the Adjusted
LIBO Rate or LIBO Rate does not adequately and fairly reflect the cost to such
Lender of making or maintaining a Loan, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in Section 9.4), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (A) the Borrower
shall have received the prior written consent of the Administrative Agent,
which consent shall not unreasonably be withheld, (B) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and participations in LC Disbursements, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (C) in the case of any
such assignment resulting from a claim for compensation under Section 2.14
or payments required to be made pursuant to Section 2.16, such
assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

(b)                                 If any Lender other than the Lender
acting as Administrative Agent (such Lender, a “Non-Consenting Lender”)
has failed to consent to a proposed amendment, waiver, discharge or termination
which pursuant to the terms of Section 9.2 requires the consent of all
affected Lenders and with respect to which the Required Lenders shall have
granted their consent, then the Borrower shall have the right (unless such
Non-Consenting Lender grants such consent) to replace such Non-Consenting
Lender by requiring such Non-Consenting Lender to (and any such Non-Consenting
Lender agrees that it shall, upon the Borrower’s request) assign all of its
rights and obligations under this Agreement and under the other Loan Documents
to an assignee selected by the Borrower and approved by the Administrative

 

42

 

Agent and the Issuing Bank and the Swingline Lender in
consideration for (i) the payment by such assignee to the Non-Consenting Lender
of the principal of, and interest accrued and unpaid to the date of such
assignment on, the outstanding Loans made by such Lender, (ii) the payment by
the Borrower to the Non-Consenting Lender of any and all other amounts owing to
such Non-Consenting Lender under any provision of this Agreement accrued and
unpaid to the date of such assignment and (iii) the Borrower’s release of the
Non-Consenting Lender from any further obligation or liability under this
Agreement. The assignment fee required under Section 9.4(b)(ii) for
such assignment shall be paid by the Borrower. In connection with any such
assignment, the Borrower, the Administrative Agent, such Non-Consenting Lender
and the replacement Lender shall otherwise comply with Section 9.4. Notwithstanding
anything to the contrary in this Section 2.19(b), in no event shall the
replacement of any Non-Consenting Lender result in a decrease or reallocation
of the aggregate Commitments. Each Lender hereby grants to the Administrative
Agent an irrevocable power of attorney (which power is coupled with an
interest) to execute and deliver, on behalf of such Lender as assignor, any
assignment agreement necessary to effectuate any assignment of such Lender’s
interests hereunder in the circumstances contemplated by this Section 2.19(b),
in the event a Non-Consenting Lender fails to execute an Assignment and
Acceptance if so required by this Section 2.19(b).

 

ARTICLE III.

 

Representations and Warranties

 

The
Borrower represents and warrants to the Lenders that:

 

3.1                                 Organization; Powers. The Borrower and each of its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is
required.

 

3.2                                 Authorization; Enforceability. The Transactions are within the
Borrower’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly
executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, enforceable in accordance with its terms,
subject to applicable Debtor Relief Laws or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

 

3.3                                 Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or
made and are in full force and effect, other than a filing with the SEC on Form
8-K upon the execution of this Agreement, (b) will not violate any
applicable Requirement of Law or the charter, by-laws or other organizational
documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any
of its Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries, and
(d) will not result in the creation or imposition of any Lien on any asset
of the Borrower or any of its Subsidiaries.

 

43

 

3.4                                 Financial Condition. The Borrower has heretofore furnished
to the Lenders its consolidated balance sheet and statements of income, owners’
equity and cash flows (i) as of and for the fiscal year of the Borrower
ended December 31, 2006, reported on by PricewaterhouseCoopers LLP,
independent public accountants, and (ii) as of and for the fiscal quarter
of the Borrower ended March 31, 2007, certified by its chief financial officer.
Such financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes
in the case of the statements referred to in clause (ii) above.

 

3.5                                 Properties.

 

(a)                                  Each of the Borrower and its Subsidiaries
has good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.

 

(b)                                 Each of the Borrower and its Subsidiaries
owns, or is licensed to use, all trademarks, trade names, copyrights, patents
and other intellectual property material to its business, and the use thereof
by the Borrower and its Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

3.6                                 Litigation. There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened in writing against or affecting the
Borrower or any of its Subsidiaries that (i), if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (ii) involve this Agreement, any of the other
Loan Documents, the funding of any Loan or the issuance of any Letter of
Credit.

 

3.7                                 Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with all Requirements of Law applicable to it or
its property, and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.

 

3.8                                 Investment and Holding Company Status. Neither the Borrower nor any of its
Subsidiaries is a “holding company”, or a “subsidiary company” of a “holding
company”, or an “affiliate” of a “holding company”, as such terms are defined in
the Public Utility Holding Company Act of 2005; nor is it is subject to
regulation as a “public utility” under the Federal Power Act, as amended; nor
is it an “investment company”, or an “affiliated company” or a “principal
underwriter” of an “investment company”, as such terms are defined in the
Investment Company Act of 1940.

 

3.9                                 Taxes. Each of the Borrower and its Subsidiaries has filed
or caused to be filed all United States federal income tax returns and other
material state and other material tax returns that are required to be filed by
it and has paid all material taxes shown to be due and payable on such returns
or on any assessments made against it (other than any the amount or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with

 

44

 

GAAP have been provided on the books of the Borrower
or its Subsidiaries, as the case may be); and no state or other material tax
Lien has been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any tax, fee or other charge, except any such claim
which the Borrower, in consultation with its legal counsel and independent
accountants, has determined in good faith could not reasonably be expected to
have a Material Adverse Effect. The charges, accruals and reserves in
accordance with GAAP on the books of the Borrower and its Subsidiaries in
respect of taxes or other governmental charges are, in the reasonable opinion
of the Borrower, adequate.

 

3.10                           ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $5,000,000 the fair market value of the assets of
such Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$5,000,000 the fair market value of the assets of all such underfunded Plans.

 

3.11                           Subsidiaries.

 

(a)                                  Schedule 3.11 sets forth as of the Effective Date the
name and jurisdiction of organization of each Subsidiary of the Borrower, the
percentage ownership of each class of equity securities of such Subsidiary, and
the owners thereof if it is a corporation, such Subsidiary’s outstanding
partnership interests if it is a partnership and such Subsidiary’s outstanding
membership interests if it is a limited liability company. All Equity Interests
of each Subsidiary have been duly authorized and validly issued and are fully
paid and nonassessable. All capital contributions and other consideration
required to be made or paid in connection with the issuance of partnership
interests of any Subsidiary that is a partnership have been made or paid, as
the case may be. There are no options, warrants or other rights outstanding as
of the Effective Date to purchase any Equity Interests of any Subsidiary except
as indicated on Schedule 3.11.

 

(b)                                 As of the Effective Date, there are no
outstanding Liens, subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock options granted to employees or
directors and directors’ qualifying shares) of any nature relating to any
Equity Interests of any Subsidiary of the Borrower, except as disclosed on Schedule
3.11.

 

3.12                           Use of Proceeds and Letters of Credit. The proceeds of the Loans advanced
hereunder and Letters of Credit issued hereunder shall be used only to (a)
finance the working capital and other general corporate needs of the Borrower,
(b) pay dividends to the stockholders of the Borrower or to repurchase
outstanding securities of the Borrower as permitted by this Agreement and (c) finance
acquisitions permitted by this Agreement. No part of the proceeds of any Loan
or Letter of Credit shall be used, whether directly or indirectly, for any
purpose that violates, or which is inconsistent with, any of the regulations of
the Federal Reserve Board, including Regulations T, U and X.

 

3.13                           OFAC. Neither the Borrower nor any of its Subsidiaries
(a) is a Person whose property or interest in property is blocked or
subject to blocking pursuant to Section 1 of Executive Order 13224 of September
23, 2001 Blocking Property and Prohibiting Transactions with Persons Who
Commit,

 

45

 

Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)), (b) engages in any dealings or transactions prohibited by
Section 2 of such executive order, or is otherwise associated with any such
Person in any manner violative of Section 2, or (c) is a Person on the
list of Specially Designated Nationals and Blocked Persons or subject to the
limitations or prohibitions under any other U.S. Department of Treasury’s
Office of Foreign Assets Control regulations or executive order.

 

3.14                           USA PATRIOT Act. To the extent applicable, each of the
Borrower and each Subsidiary is in compliance, in all material aspects, with
the (a) Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the U.S. Department of Treasury (31 C.F.R.,
Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (b) USA PATRIOT Act.

 

3.15                           Solvency. On the Closing Date, the Borrower separately is, and
the Borrower and its Subsidiaries on a consolidated basis are, Solvent.

 

3.16                           Absence of Defaults. No event has occurred and is continuing
which constitutes a Default or an Event of Default. No event has occurred and
is continuing which constitutes, or which with the passage of time or giving of
notice or both would constitute, a default or event of default by the Borrower
or any Subsidiary under any Contractual Obligation or judgment, decree or order
to which the Borrower or one or more of its Subsidiaries is a party or by which
the Borrower or one or more of its Subsidiaries or any of their respective
properties may be bound or which would require the Borrower or one or more of
its Subsidiaries to make any payment thereunder prior to the scheduled maturity
date therefor, except in cases in which any such default or event of default
would not, in any instance or in the aggregate, be reasonably expected to have
a Material Adverse Effect.

 

3.17                           Labor Disputes, Collective Bargaining
Agreements, Employee Grievances. (a) There is no pending strike, work stoppage,
material unfair labor practice claim or charge, arbitration or other material
labor dispute against or affecting the Borrower or any of its Subsidiaries or
their representative employees, in each case the consequences of which could
reasonably be expected to have a Material Adverse Effect; and (b) there are no
actions, suits, charges, demands, claims, counterclaims or proceedings pending
or, to the best of the Borrower’s knowledge, threatened in writing against the
Borrower or any of its Subsidiaries, by or on behalf of, or with, its
employees, other than any such actions, suits, charges, demands, claims,
counterclaims or proceedings arising in the ordinary course of business that,
if adversely determined, could not, in the aggregate, be reasonably expected to
have a Material Adverse Effect.

 

3.18                           Environmental Compliance. To the best of the Borrower’s
knowledge:

 

(a)                                  none of the Borrower, its Subsidiaries or
any operator of the Real Estate or any operations thereon is in violation, or
alleged violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including those arising under
the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended (“CERCLA”),
the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), the
Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act, or any state, local or foreign law, statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter “Environmental Laws”), which violation could reasonably be
expected to have a Material Adverse Effect;

 

46

 

(b)                                 except as set forth on Schedule 3.18,
none of the Borrower nor any of its Subsidiaries has received notice from any
third party, including any Governmental Authority, (i) that any one of them has
been identified by the United States Environmental Protection Agency (“EPA”)
as a potentially responsible party under CERCLA with respect to a site listed
on the National Priorities List, 40 C.F.R. Part 300 Appendix B, except to the
extent that the obligation or liability of the Borrower or such Subsidiary with
respect to such site could not reasonably be expected to result in a Material
Adverse Effect; (ii) that any hazardous waste, as defined by 42 U.S.C.
§6903(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any pollutant
or contaminant as defined by 42 U.S.C. §9601(33) and any toxic substances, oil
or hazardous materials or other chemicals or substances regulated by any
Environmental Laws (“Hazardous Substances”) which any one of them has
generated, transported or disposed of has been found at any site at which a
Governmental Authority has conducted or has ordered that the Borrower or any of
its Subsidiaries conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law, except to the extent that the
obligation or liability of the Borrower or such Subsidiary with respect to such
Hazardous Substances could not reasonably be expected to result in a Material
Adverse Effect; or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or administrative proceeding (in
each case, contingent or otherwise) arising out of any third party’s incurrence
of costs, expenses, losses or damages of any kind whatsoever in connection with
the release of Hazardous Substances, which, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect; and

 

(c)                                  except as set forth on Schedule 3.18
or as could not reasonably be expected to have a Material Adverse Effect, (i)
no portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with
applicable Environmental Laws; and no underground tank or other underground
storage receptacle for Hazardous Substances is located on any portion of the
Real Estate except in accordance with applicable Environmental Laws; (ii) in
the course of any activities conducted by the Borrower, its Subsidiaries or
operators of its properties, no Hazardous Substances have been generated or are
being used on the Real Estate except in accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e., any past or
present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the properties of the Borrower
or its Subsidiaries, which releases could reasonably be expected to have a
Material Adverse Effect; (iv) to the best of the Borrower’s knowledge, there
have been no releases on, upon, from or into any real property in the vicinity
of any of the Real Estate which, through soil or groundwater contamination,
could reasonably be expected to have a Material Adverse Effect; and
(v) any Hazardous Substances that have been generated on any of the Real
Estate have been transported offsite only by carriers having an identification
number issued by the EPA (or the equivalent thereof in any foreign
jurisdiction), treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws,
which transporters and facilities have been and are, to the best of the
Borrower’s knowledge, operating in compliance with such permits and applicable
Environmental Laws.

 

3.19                           Absence of Financing Statements, etc. Except with respect to Permitted Liens,
there is no financing statement, security agreement, chattel mortgage, real
estate mortgage or other document filed or recorded with any filing records,
registry or other public office, that purports to cover, affect or give notice
of any present or possible future Lien on any assets or property of the
Borrower or any of its Subsidiaries or any rights relating thereto.

 

47

 

3.20                           Senior Debt Status. The Obligations of the Borrower under
this Agreement and each of the other Loan Documents to which it is a party do
rank and will rank at least pari passu in
priority of payment with all other Indebtedness of the Borrower except
Indebtedness of the Borrower to the extent secured by Permitted Liens. There is
no Lien upon or with respect to any of the properties or income of the Borrower
or any Subsidiary of the Borrower which secures Indebtedness or other
obligations of any Person except for Permitted Liens.

 

3.21                           Disclosure. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

 

3.22                           Date and Nature of Representations and
Warranties. The
representations and warranties set forth in this Article III shall
be deemed made as of the Effective Date and as of the date of each Borrowing
hereunder (except for any such representations and warranties that are stated
to relate to a particular date or dates, in which case such representations and
warranties shall be deemed made as of such particular date or dates). Each
representation and warranty made in this Agreement, in any other Loan Document,
or in any other document delivered to the Administrative Agent or any Lender by
or on behalf of the Borrower shall be deemed to have been relied upon by the
Administrative Agent and the Lenders notwithstanding any investigation,
inspection or inquiry theretofore or thereafter made by or on behalf of the
Administrative Agent or any Lender, or any funding of any Loans by the Lenders
or the Swingline Lender, or any issuance of any Letter of Credit by the Issuing
Bank.

 

ARTICLE IV.

 

Conditions

 

4.1                                 Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.2):

 

(a)                                  The Administrative Agent (or its counsel)
shall have received from each party hereto either (i) a counterpart of
this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include facsimile
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.

 

(b)                                 The Administrative Agent shall have
received a favorable written opinion (addressed to the Administrative Agent and
the Lenders and dated the Effective Date) of Shartsis Friese LLP, counsel for
the Loan Parties, substantially in the form of Exhibit C. The Loan
Parties hereby request such counsel to deliver such opinion.

 

(c)                                  The Administrative Agent shall have
received such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of the Borrower, the authorization of the Transactions and any other
legal matters relating

 

48

 

to the Borrower, this Agreement or the Transactions,
all in form and substance satisfactory to the Administrative Agent and its
counsel.

 

(d)                                 The Administrative Agent shall have
received a certificate from the Borrower, substantially in the form of Exhibit G-1,
dated the Effective Date and signed by an Authorized Officer of the Borrower.

 

(e)                                  The Administrative Agent shall have
received a certificate from each Guarantor, substantially in the form of Exhibit G-2,
dated the Effective Date and signed by an Authorized Officer of such Guarantor.

 

(f)                                    The Administrative Agent shall have
received all fees and other amounts due and payable on or prior to the
Effective Date, including reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder.

 

(g)                                 All existing Indebtedness of the Borrower
and its Domestic Subsidiaries for borrowed money, excluding Simpson Strong-Tie
International’s overdraft facility with Barclays Bank PLC, existing trade
indebtedness incurred in the ordinary course of business, and existing
equipment leases permitted by Section 6.1, and including the
undrawn commitments to lend under the existing facilities with Wells Fargo and
Union Bank of California, shall be repaid (to the extent of any outstanding
obligations thereunder), and all commitments to lend thereunder and all Liens
associated therewith shall be terminated.

 

(h)                                 Since December 31, 2006, there shall have
been no development or event that has had or could reasonably be expected to
have a Material Adverse Change, except as set forth on Schedule 4.1(h).

 

(i)                                     There shall have occurred no Market
Disruption Event which would be expected to materially adversely affect the
syndication of the Loans, as determined by the Administrative Agent in its
reasonable discretion.

 

(j)                                     The Administrative Agent shall have
received such other documents and information from the Borrower concerning or
relating to the Borrower or its Subsidiaries as the Administrative Agent may
reasonably request, including the completion of all legal, regulatory and
financial diligence of the Borrower and its Subsidiaries, with the results
thereof satisfactory to the Administrative Agent and each Lender.

 

The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding.

 

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

 

(a)                                  The representations and warranties of the
Borrower set forth in this Agreement shall be true and correct in all material
respects on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable (provided,
that to the extent any representation or warranty is already limited by any
materiality term, such as a Material Adverse Effect limitation or qualification
or the words “material” or “in any material respect”, then the

 

49

 

materiality limitation set forth above in this clause
(a) shall be ignored in order to avoid the unintended effect of a “double
materiality” limitation).

 

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

 

(c)                                  Since December 31, 2006, there shall have
been no development or event that has had or could reasonably be expected to
have a Material Adverse Change, except as set forth on Schedule 4.1(h).

 

Each
Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section 4.2.

 

ARTICLE V.

 

Affirmative Covenants

 

Until
the Commitments have expired or been terminated and the Obligations have been
paid in full in cash, and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, other than
Unasserted Obligations, the Borrower covenants and agrees with the Lenders
that:

 

5.1                                 Financial Statements and Other
Information. The
Borrower will furnish to the Administrative Agent and each Lender:

 

(a)                                  within 90 days after the end of each
fiscal year of the Borrower (commencing with the fiscal year of the Borrower
ending December 31, 2007), (i) audited consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such year for the Borrower and its Subsidiaries, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by PricewaterhouseCoopers LLP or other independent certified public
accountants of recognized national standing without a “going concern” or like
qualification or exception, or qualification arising out of the scope of the
audit, accompanied by (1) a report of management on the Borrower’s internal
control over financial reporting pursuant to Item 308(a) of Regulation S-K
promulgated under the Exchange Act, and any report of the auditor with respect
to the Borrower’s internal controls so long as such reports continue to be
required to be publicly filed with the Securities and Exchange Commission or
any successor or analogous governmental authority pursuant to applicable
federal securities laws and (2) an opinion of such independent certified public
accountants to the effect that such financial statements present fairly in all
material respects the financial position, results of operations and cash flows
of the Borrower and its consolidated Subsidiaries on a consolidated basis, in
accordance with GAAP consistently applied, and (ii) unaudited
consolidating balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year for the Borrower and
its Material Subsidiaries, setting forth in each case in comparative form the
figures for the previous fiscal year, all certified by a Financial Officer or
the chief executive officer of the Borrower as presenting fairly in all
material respects the financial position, results of operations and cash flows
of the Borrower and such Material Subsidiaries, in accordance with GAAP
consistently applied, subject to adjustments and footnotes for such unaudited
financial information;

 

50

 

(b)                                 within 50 days after the end of each of
the first three fiscal quarters of each fiscal year of the Borrower (commencing
with the fiscal quarter of the Borrower ended September 30, 2007), consolidated
and consolidating balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year for the Borrower and
its Subsidiaries, setting forth in each case in comparative form the figures
for the corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by a Financial
Officer or the chief executive officer of the Borrower as presenting fairly in
all material respects the financial position, results of operations and cash
flows of the Borrower and its consolidated Subsidiaries on a consolidated and
consolidating basis, as the case may be, in accordance with GAAP consistently
applied, subject to year-end audit adjustments and the absence of footnotes, provided
that such consolidating financial statements shall be limited to the Borrower
and its Material Subsidiaries;

 

(c)                                  concurrently with any delivery of
financial statements under clause (a) or (b) above, a Compliance
Certificate, signed by a Financial Officer or the chief executive officer of
the Borrower;

 

(d)                                 concurrently with any delivery of
financial statements under clause (a) above, a certificate of the accounting
firm that reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial statements
of any Event of Default to the extent such Event of Default relates to
accounting matters (which certificate may be limited to the extent required by
accounting rules or guidelines);

 

(e)                                  no later than 20 Business Days after
approval thereof by the Borrower’s board of directors, a final annual operating
budget for the forthcoming fiscal year of the Borrower prepared on a quarterly
basis (or monthly basis, if available) and otherwise in form and substance
reasonably satisfactory to Administrative Agent, provided that in the
event any budget is materially revised in any fiscal year, such revised budget
shall be promptly delivered to Administrative Agent, and provided  further
that each such budget shall be prepared on a reasonable basis and in good
faith, based on assumptions believed by the Borrower to be reasonable at the
time made;

 

(f)                                    promptly, but in any event within 5
Business Days after the same become publicly available, copies of all periodic
and other reports (including all reports on Form 10-K, 10-Q and 8-K (or their
equivalent), proxy statements and other materials filed by the Borrower or any
Subsidiary with the SEC or with any national securities exchange (or,
alternatively, notice that any such filing with the SEC or such national
securities exchange has been made), or distributed by the Borrower to its
stockholders generally, as the case may be, which materials or notice may be
provided to Administrative Agent and each Lender via electronic mail or,
alternatively, the Borrower may, within 5 Business Days after any of such
reports, proxy statements or other materials shall have become publicly
available, deliver written notice or email notification to the Administrative
Agent and each Lender that such report, proxy statement or other material is
publicly available and where the same may be found for electronic downloading.

 

(g)                                 promptly, but in any event within 10
Business Days after the Borrower’s receipt thereof, copies of any detailed
audit reports or final management letters submitted to the board of directors
(or the audit committee of the board of directors) of the Borrower by
independent accountants in connection with the accounts or books of the
Borrower or any Subsidiary, or any audit of any of them; and

 

51

 

(h)                                 promptly following any request therefor,
such other information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the terms of
this Agreement, as the Administrative Agent or any Lender may reasonably
request.

 

5.2                                 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt, and in any event within 5 Business
Days after any Authorized Officer of the Borrower obtains knowledge thereof,
written notice of the following:

 

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

 

(b)                                 the filing or commencement of any action,
arbitration, suit or proceeding by or before any arbitrator or Governmental
Authority against or affecting the Borrower or any of its Subsidiaries or any
Affiliate, that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect; and

 

(c)                                  the occurrence of any ERISA Event that,
alone or together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and its Subsidiaries
in an aggregate amount exceeding $10,000,000.

 

Each
notice delivered under this Section 5.2 shall be accompanied by a
statement of an Authorized Officer of the Borrower setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto.

 

5.3                                 Existence; Conduct of Business. The Borrower will, and will cause each
of its Material Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any
formation, merger, consolidation, liquidation or dissolution permitted under Section 6.3.

 

5.4                                 Payment of Obligations. The Borrower will, and will cause each
of its Material Subsidiaries to, pay its obligations, including tax
liabilities, that, if not paid, could result in a Material Adverse Effect
before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or such Subsidiary has set aside
on its books adequate reserves with respect thereto in accordance with GAAP and
(c) the failure to make payment pending such contest could not reasonably
be expected to result in a Material Adverse Effect.

 

5.5                                 Maintenance of Properties; Insurance.

 

(a)                                  The Borrower will keep, and will cause
each Subsidiary to keep, all property useful and necessary in its business in
good working order and condition, ordinary wear and tear excepted where the
failure to so maintain such property has had, or could reasonably be expected
to have, a Material Adverse Effect.

 

(b)                                 The Borrower will, and will cause each of
its Subsidiaries to, (i) maintain (either in the name of the Borrower or in
such Subsidiary’s own name) with financially sound and responsible insurance
companies, insurance on all their respective properties in at least such amounts,
against at least such risks and with such risk retention as are usually
maintained, insured against or retained, as the case may be, in the same
general area by companies of established repute engaged in the same or a
similar

 

52

 

business, subject to commercially reasonable and
prudent adjustments in such insurance coverage (including with respect to
deductible amounts and exclusions) made by the Borrower and its Subsidiaries; provided
that the Borrower and its Subsidiaries may self-insure against such risks, in
accordance with sound business, accounting and actuarial practice, in such
amounts as is usually self-insured by companies engaged in similar businesses
and owning similar properties in the same general areas in which the Borrower
or such Subsidiary operates, and (ii) furnish to the Lenders, upon request from
the Administrative Agent, information presented in reasonable detail as to the
insurance so carried (it being understood that, as of the Effective Date,
neither the Borrower nor its Subsidiaries maintain in force employer liability,
errors and omissions, earthquake or flood insurance.

 

5.6                                 Books and Records; Inspection Rights. The Borrower will, and will cause each
of its Subsidiaries to, keep proper books of record and account in which full,
true and correct entries are made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon at least 7 Business Days’ prior notice (provided
that if a Default or an Event of Default has occurred and is continuing, no
such prior notice shall be required), to visit and inspect its properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.

 

5.7                                 Compliance with Laws. The Borrower will comply, and cause
each Subsidiary to comply, with applicable Requirements of Law of Governmental
Authorities (including Environmental Laws) except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings and
where the failure to so comply has not had, and could not reasonably be
expected to have, a Material Adverse Effect. The Borrower will substantially
comply, and cause each other ERISA Affiliate to substantially comply, with
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including ERISA and the rules and regulations
thereunder) except where the necessity of substantial compliance therewith is
contested in good faith by appropriate proceedings and where the failure to so
comply has no had, and could not reasonably be expected to have, a Material
Adverse Effect.

 

5.8                                 Use of Proceeds and Letters of Credit. The proceeds of the Loans advanced
hereunder and Letters of Credit issued hereunder shall be used only to (a)
finance the working capital and other general corporate needs of the Borrower,
(b) pay dividends to the stockholders of the Borrower or to repurchase
outstanding securities of the Borrower as permitted by this Agreement and (c) finance
acquisitions permitted by this Agreement. No part of the proceeds of any Loan
or Letter of Credit shall be used, whether directly or indirectly, for any
purpose that violates, or which is inconsistent with, any of the regulations of
the Federal Reserve Board, including Regulations T, U and X.

 

5.9                                 Payment of Obligations. The Borrower will pay and discharge,
and will cause each Subsidiary to pay and discharge, at or before maturity, all
their respective obligations and liabilities (including tax liabilities and
claims of materialmen, warehousemen and the like which if unpaid might by law
give rise to a Lien), except where the same may be contested in good faith by
appropriate proceedings, if the failure to pay and discharge such obligations
and liabilities could reasonably be expected to result in a Material Adverse
Effect, and will maintain, and will cause each Subsidiary to maintain, in
accordance with GAAP, appropriate reserves for the accrual of any of the same.

 

53

 

5.10                           Maintenance of Existence. The Borrower will continue, and will
cause each of its Material Subsidiaries to continue to preserve, renew and keep
in full force and effect, and will cause each Material Subsidiary to preserve,
renew and keep in full force and effect their respective existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section 5.10
shall prohibit (a) any transaction permitted by Section 6.3(a), Section
6.4 or Section 6.6 or (b) the termination of the corporate
existence or the abandonment of rights, privileges and franchises of any
Subsidiary that is not a Material Subsidiary if the Borrower in good faith
determines that such termination or abandonment is in the best interest of the
Borrower.

 

5.11                           Additional Guarantors. The Borrower will notify the
Administrative Agent at the time that (a) any Person becomes a Material
Subsidiary or (b) any Domestic Subsidiary that is not at such time a Material
Subsidiary qualifies as a Material Subsidiary, and in each case promptly
thereafter (and in any event within 45 days), (i) cause such Person to become a
Guarantor by executing and delivering to and in favor of the Lender a Joinder
Agreement in the form of Exhibit J, and all other agreements, documents,
instruments and certificates required by applicable Requirements of Law or
reasonably deemed necessary or advisable by the Administrative Agent; and (ii)
deliver to the Administrative Agent documents of the types referred to in Section
4.1(c) and (e) and, if reasonably requested by the Administrative Agent,
favorable opinions of counsel to such Person in the form of Exhibit M.

 

5.12                           Updates to Schedules. Should any of the information or
disclosures provided on any of the Schedules attached hereto become outdated or
incorrect in any material respect, the Borrower shall promptly provide the
Administrative Agent in writing with such revisions or updates to such Schedule
as may be necessary or appropriate to update or correct same; provided
that no Schedule shall be deemed to have been amended, modified or superseded
by any such correction or update, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the
Administrative Agent (which may request the consent of the Required Lenders)
shall have accepted in writing such revisions or updates to such Schedule,
which acceptance shall not be unreasonably withheld or delayed.

 

ARTICLE VI.

 

Negative Covenants

 

Until
the Commitments have expired or terminated and Obligations have been paid in
full in cash and all Letters of Credit shall have expired or terminated and all
LC Disbursements shall have been reimbursed, other than Unasserted Obligations,
the Borrower covenants and agrees with the Lenders that:

 

6.1                                 Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:

 

(a)                                  Indebtedness created hereunder;

 

(b)                                 Indebtedness existing on the Effective
Date and set forth in Schedule 6.1 and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof;

 

(c)                                  Indebtedness of the Borrower to any
Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary;

 

54

 

(d)                                 Guarantees by the Guarantors pursuant to
this Agreement;

 

(e)                                  Guarantees by the Borrower of
Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the
Borrower or any other Subsidiary, provided in each case that such
Indebtedness is otherwise permitted by this Section 6.1;

 

(f)                                    Indebtedness (including Capital Lease
Obligations, mortgage financing and construction-in-process secured by real
property and other similar purchase money financing) of the Borrower or any
Subsidiary (i) incurred to finance the acquisition, construction or improvement
of any goods or other fixed or capital assets, (ii) assumed in connection with
the acquisition of any such goods or other fixed or capital assets or (iii)
secured by a Lien on any such goods or other fixed or capital assets prior to
the acquisition thereof, and in the case of each of the preceding subclauses
(i), (ii) and (iii), extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof; provided
that the aggregate principal amount of Indebtedness permitted by this clause
(f) shall not exceed $30,000,000 at any time outstanding;

 

(g)                                 Subordinated Debt;

 

(h)                                 Indebtedness of any Person that becomes a
Subsidiary after the date hereof; provided that (i) such Indebtedness
exists at the time such Person becomes a Subsidiary and is not created in contemplation
of or in connection with such Person becoming a Subsidiary and (ii) the
aggregate principal amount of Indebtedness permitted by this clause (h) shall
not exceed $25,000,000 at any time outstanding;

 

(i)                                     Subject to Section 3.20, other
unsecured Indebtedness in an aggregate principal amount not exceeding,
collectively with all Indebtedness permitted by clause (j) below, $25,000,000
at any time outstanding; and

 

(j)                                     Indebtedness of a Foreign Subsidiary
secured only by the assets of any one or more Foreign Subsidiaries, and
non-recourse to any Loan Party, in an aggregate principal amount not exceeding,
collectively with all Indebtedness permitted by clause (i) above, $25,000,000
at any time outstanding.

 

6.2                                 Liens. Except as set forth below (“Permitted Liens”),
the Borrower will not, and will not permit any Subsidiary to, create, incur,
assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, provided that
the foregoing shall not apply to (x) restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness and (y) customary provisions in leases and other contracts
restricting the assignment thereof:

 

(a)                                  Permitted Encumbrances;

 

(b)                                 any Lien on any property or asset of the
Borrower or any Subsidiary existing on the Effective Date and set forth in Schedule 6.2;
provided that (i) such Lien shall not apply to any other property
or asset of the Borrower or any Subsidiary except as set forth in Schedule 6.2
and (ii) such Lien shall secure only those obligations which it secures on
the date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

 

55

 

(c)                                  any Lien existing on any property or
asset prior to the acquisition thereof by the Borrower or any Subsidiary or
existing on any property or asset of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a Subsidiary; provided
that (i) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case may be, (ii)
such Lien shall not apply to any other property or assets of the Borrower or
any Subsidiary and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;

 

(d)                                 Liens on fixed or capital assets
acquired, constructed or improved by the Borrower or any Subsidiary; provided
that (i) such security interests secure Indebtedness permitted by Section 6.1(f),
(ii) such security interests and the Indebtedness secured thereby are in
connection with such acquisition, construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such Liens
shall not apply to any other property or assets of the Borrower or any
Subsidiary;

 

(e)                                  any interest of any collection agency in
accounts receivable assigned to it by the Borrower or any Subsidiary in the
ordinary course of business for the purpose of facilitating the collection of
such accounts receivable;

 

(f)                                    Liens on any property or asset of Foreign
Subsidiaries to secure Indebtedness permitted pursuant to Section 6.1(j),
provided that such Lien shall not apply to any other property or asset
of any Loan Party; and

 

(g)                                 Liens on any property or asset of the
Borrower or any Subsidiary securing liabilities or other obligations not to
exceed $1,000,000 in the aggregate amount outstanding at any time; provided
that such Liens do not materially interfere with the ordinary conduct of the
business of the Borrower and its Material Subsidiaries.

 

6.3                                 Fundamental Changes.

 

(a)                                  The Borrower will not, and will not
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of its assets, or all or
substantially all of the Equity Interests of any of its Subsidiaries (in each
case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default or Event of Default shall have occurred and be continuing,
(i) the Borrower may merge or consolidate with another Person in
connection with a Permitted Acquisition so long as the Borrower shall be the
surviving Person in such Permitted Acquisition, (ii) any Subsidiary may
merge or consolidate into the Borrower in a transaction in which the Borrower
is the surviving corporation, (iii) any Subsidiary may merge or
consolidate into any Subsidiary in a transaction in which the surviving entity
is a Subsidiary, (iv) any Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to the Borrower or to another Subsidiary,
(v) any Subsidiary that is not a Material Subsidiary may sell all or a
substantial part of its assets, and the Borrower or any Subsidiary may sell all
or substantially all of the Equity Interests of any of such Person’s
Subsidiaries that is not a Material Subsidiary, in each case in an aggregate
amount for all such transactions not to exceed $10,000,000 from the Effective
Date, (vi) any Subsidiary that is not a Material Subsidiary may liquidate
or dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best

 

56

 

interests of the Borrower and (vii) the Borrower may
contribute Equity Securities of a Subsidiary that is directly owned by the
Borrower to a wholly-owned Subsidiary of the Borrower; provided that any
such merger or consolidation involving a Person that is not a wholly owned
Subsidiary immediately prior to such merger or consolidation shall not be
permitted unless also permitted by Section 6.4.

 

(b)                                 The Borrower will not, and will not
permit any of its Subsidiaries to, engage to any material extent in any
business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date of execution of this Agreement and businesses
reasonably related thereto; provided that the Borrower and its
Subsidiaries may discontinue or dispose of existing product lines or product
groups, subject to the other restrictions of this Agreement.

 

(c)                                  Neither the Borrower nor any Subsidiary
will sell, transfer or assign its accounts receivable, or an interest therein,
to any other Person (other than to a collection agency in the ordinary course
of business for the purpose of facilitating the collection thereof), or enter
into any other securitization transaction with respect to its accounts
receivable.

 

6.4                                 Investments. The Borrower will not, and will not
permit any of its Subsidiaries to, make, or enter into any agreement or
commitment to make, any Investment, except:

 

(a)                                  Investments by the Borrower and its Subsidiaries
in the Equity Interests of the Borrower’s Subsidiaries;

 

(b)                                 Permitted Investments;

 

(c)                                  Guaranties constituting Indebtedness
permitted by Section 6.1;

 

(d)                                 Investments made by the Borrower in any
Subsidiary and made by any Subsidiary in the Borrower or in any other
Subsidiary;

 

(e)                                  loans and advances to employees of the
Borrower and its Subsidiaries in the ordinary course of business not to exceed
an aggregate principal amount of $3,000,000 at any time outstanding;

 

(f)                                    Investments received in connection with
the bankruptcy or reorganization of customers or clients and in settlement of
delinquent obligations of, and other disputes with, customers or clients;

 

(g)                                 loans to employees or directors of the
Borrower or any of its Subsidiaries for the purpose of purchasing the Equity
Interests of the Borrower, provided,
that each such loan and purchase transaction shall have a cash neutral effect
on the Borrower and its Subsidiaries;

 

(h)                                 Investments consisting of endorsements
for collection or deposit in the ordinary course of business;

 

(i)                                     Investments in the form of Hedging
Agreements permitted under Section 6.5;

 

(j)                                     Investments in existence as of the
Effective Date and set forth on Schedule 6.4;

 

57

 

(k)                                  Investments made by the Borrower and its
Subsidiaries in Keymark after the Effective Date in an aggregate amount not to
exceed $15,000,000;

 

(l)                                     Permitted Acquisitions;

 

(m)                               transactions set forth in Schedule 6.7;

 

(n)                                 transactions contemplated in clauses (i)
and (ii) of the preamble of the definition of “Permitted Acquisitions”;

 

(o)                                 transactions contemplated by Section
6.3(a)(i), (ii), (iii) and (vii); and

 

(p)                                 other Investments in an aggregate amount
not to exceed $25,000,000 from and after the Effective Date.

 

6.5                                 Hedging Agreements. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Agreement, except
Hedging Agreements (a) the liabilities under which are unsecured and (b) which
are entered into to (i) hedge or mitigate risks to which the Borrower or any
Subsidiary has actual exposure (other than those in respect of Equity Interests
of the Borrower or any of its Subsidiaries) or (ii) cap, collar or exchange
interest rates (from floating to fixed rates, from one floating rate to another
floating rate or otherwise) with respect to any interest-bearing liability or
investment of the Borrower or any Subsidiary.

 

6.6                                 Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, provided that
(a) the Borrower may purchase or redeem shares of its own capital stock or
any other Equity Interests of the Borrower or its Subsidiaries and declare and
pay distributions to the holders of its Equity Interests so long as no Default
or Event of Default shall have occurred and be continuing at the time such
purchase, redemption or distribution is made and so long as no Default or Event
of Default shall occur as a result of such purchase, redemption or
distribution, (b) the Borrower may make Restricted Payments pursuant to and in
accordance with stock option plans or other benefit plans for management or
employees of the Borrower and its Subsidiaries and (c) any Subsidiary may
declare and pay distributions or dividends to the Borrower or to any other
Subsidiary which holds Equity Interests in the Subsidiary declaring and paying
such distribution or dividend.

 

6.7                                 Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on
terms and conditions not less favorable to the Borrower or such Subsidiary than
could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions
set forth on Schedule 6.7, (c) transactions between or among the
Borrower and its wholly owned Subsidiaries or among the Borrower’s wholly owned
Subsidiaries not involving any other Affiliate that is not a wholly owned
Subsidiary and (d) any Restricted Payment permitted by Section 6.6.

 

6.8                                 Restrictive Agreements. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon the ability of any Subsidiary to (a) pay
dividends or other distributions with respect to any shares of its capital
stock or (b) make or repay loans

 

58

 

or advances to the Borrower or any other Subsidiary or
to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided
that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by this Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule 6.8
(but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition) and
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary
that is to be sold and such sale is permitted hereunder.

 

6.9                                 Amendments to Subordinated Debt Documents. The Borrower will not, and will not
permit any of its Subsidiaries to, amend in any respect any document,
instrument or agreement in respect of or evidencing any Subordinated Debt, if
such amendment would affect any of the terms described in clauses (a) through
(c) of the definition of “Subordinated Debt” or would otherwise materially
impair the ability of any Loan Party to pay or perform its obligations under
this Agreement or the Loan Documents as a whole.

 

6.10                           Sales and Leasebacks. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any arrangement with any Person
providing for the leasing by the Borrower or any of its Subsidiaries of real or
personal property which has been or is to be sold or transferred by the Borrower
or such Subsidiary to such Person or to any other Person to whom funds have
been or are to be advanced by such Person on the security of such property or
rental obligations of the Borrower or such Subsidiary if and to the extent the
aggregate consideration received by the Borrower and its Subsidiaries in
connection with all such transactions since the Effective Date exceeds
$15,000,000.

 

6.11                           Amendments to Governing Documents. Borrower will not, nor will permit any
of its Subsidiaries to, amend in any respect its certificate or articles of
incorporation or organization, its by-laws, or, as the case may be, its
certificate of formation, limited partnership certificate, operating agreement,
limited partnership agreement or other constitutive documents, including any
shareholder agreements, voting trusts or similar arrangements applicable to any
of its Equity Interests, as the case may be, if such amendment would materially
impair the ability of any Loan Party to pay or perform its obligations under this
Agreement or the Loan Documents as a whole.

 

6.12                           Financial Covenants. The Borrower shall maintain the
following financial covenants.

 

(a)                                  Leverage Ratio. At all times, the Borrower shall not
permit the Leverage Ratio to exceed 3.00 to 1.00.

 

(b)                                 Interest Coverage Ratio. As of the last day of each fiscal
quarter of the Borrower, the Borrower shall not permit the Interest Coverage
Ratio to be less than 3.00 to 1.00.

 

ARTICLE VII.

 

Events of Default

 

If any
of the following events (each an “Event of Default”) shall occur:

 

(a)                                  the Borrower shall fail to pay any
principal of any Loan or any reimbursement or obligation in respect of any LC
Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise; or

 

59

 

(b)                                 the Borrower shall fail to pay any
interest on any Loan or any fee or any other amount (other than an amount
referred to in clause (a) of this Article VII) payable under this
Agreement, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of 3 Business Days; or

 

(c)                                  any representation or warranty made or
deemed made by or on behalf of any Loan Party in or in connection with any Loan
Document or any amendment or modification hereof or waiver hereunder, or in any
report, certificate, financial statement or other document furnished pursuant
to or in connection with this Agreement or any amendment or modification hereof
or waiver hereunder, shall prove to have been incorrect in any material respect
when made or deemed made (provided, that to the extent any
representation or warranty is already limited by any materiality term, such as
a Material Adverse Effect limitation or qualification or the words “material”
or “in any material respect”, then the materiality limitation set forth above
in this clause (c) shall be ignored in order to avoid the unintended
effect of a “double materiality” limitation); or

 

(d)                                 (i) the Borrower shall fail to observe or
perform any covenant, condition or agreement contained in Section 5.2,
Section 5.3 (with respect to the Borrower’s existence), Section 5.8
or in Article VI; or (ii) the Borrower shall fail to observe or
perform any covenant, condition or agreement contained in Section 5.1(d),
and such failure shall continue unremedied for a period of 45 days after the
earlier of (A) notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of any Lender) or
(B) an Authorized Officer of the Borrower shall have become aware of such
failure; or

 

(e)                                  any Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement (other
than those specified in clause (a), (b) or (d) of this Article VII),
and such failure shall continue unremedied for a period of 30 days after the
earlier of (i) notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of any Lender) or
(ii) an Authorized Officer of the Borrower shall have become aware of such
failure; or

 

(f)                                    the Borrower or any Subsidiary shall fail
to make any payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall become due
and payable (after the expiration of any applicable cure period); or

 

(g)                                 any event or condition that results in
any Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (after the expiration of any applicable cure period) the
holder or holders of any Material Indebtedness or any trustee or agent on its
or their behalf to cause any Material Indebtedness to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity; or

 

(h)                                 an involuntary proceeding shall be
commenced or an involuntary petition shall be filed seeking
(i) liquidation, reorganization or other relief in respect of any Loan
Party or their respective debts, or of a substantial part of their respective
assets, under any Federal, state or foreign Debtor Relief Law now or hereafter
in effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Material
Subsidiary or for a substantial part of their respective assets, and, in any
such case under (i) or (ii), such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or

 

60

 

(i)            any Loan Party shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign Debtor Relief Law now or hereafter
in effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in clause
(h) of this Article VII, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material Subsidiary or for a
substantial part of their respective assets, (iv) file an answer admitting
the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing; or

 

(j)            any Loan Party shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due; or

 

(k)           one or more judgments or arbitral decisions for the
payment of money in an aggregate amount in excess of $10,000,000, in excess of
insurance coverage which has been tendered and accepted by the applicable
insurer, shall be rendered against the Borrower, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Borrower or any Subsidiary to enforce any such judgment and shall
remain in place for a period of 30 consecutive days; or

 

(l)            an ERISA Event that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding (i) $10,000,000 in any year
or (ii) $10,000,000 for all periods, and such ERISA Event shall continue
unremedied for a period of 30 days after notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of any
Lender); or

 

(m)          any material term of any Loan Document, or any Loan
Document as a whole, shall for any reason other than the payment in full of the
Obligations cease to be, or be asserted by any Loan Party not to be, a legal,
valid and binding obligation of such Loan Party; or

 

(n)           a Change in Control;

 

then,
and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article VII),
and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, take any or all of the following actions, at the same or
different times:  (i) terminate the Commitments, and thereupon
the Commitments shall terminate immediately, and (ii) require that the Borrower
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash
equal to the then outstanding amount of the Obligations, and (iii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (h) or (i)
of this Article VII, the Commitments shall automatically terminate and
the principal of the Loans then

 

61

 

outstanding,
together with accrued interest thereon and all fees and other obligations of
the Borrower accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower, and the obligation of the Borrower to cash
collateralize the outstanding Obligations pursuant to clause (ii) in this
paragraph shall automatically become effective, in each case without further
action of the Administrative Agent or any Lender. After the exercise of
remedies provided for in this Article VII (or after the Loans have
automatically become immediately due and payable and the outstanding
Obligations have automatically been required to be cash collateralized as set
forth in clause (ii) in this paragraph), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in such order as it
elects in its sole discretion.

 

ARTICLE VIII.

 

The Administrative Agent

 

8.1           Appointment and Authorization. Each Lender and the Issuing Bank hereby
appoints, designates and authorizes Wells Fargo as and to be the Administrative
Agent of such Lender and the Issuing Bank under this Agreement and under each
of the other Loan Documents and each Lender and the Issuing Bank irrevocably
authorizes the Administrative Agent to take such action on its behalf under and
subject to the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein or therein, nor shall
the Administrative Agent have or be deemed to have any fiduciary relationship
with any Lender or the Issuing Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent in such capacity. Wells Fargo in its capacity as “Sole
Arranger” or “Sole Bookrunner” shall not have any right, power, obligation,
responsibility, duty or liability under this Agreement other than those
applicable to all Lenders (and in its separate capacities as the Swingline
Lender, as the Issuing Bank and as the Administrative Agent) as such and,
without limiting the foregoing, shall not have or be deemed to have any
fiduciary relationship with any Lender. Each Lender acknowledges that it has
not relied, and will not rely, on Wells Fargo in its capacity as “Sole Arranger”
or “Sole Bookrunner” in deciding to enter into this Agreement or in taking or
not taking any action hereunder.

 

8.2           Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.

 

8.3           Exculpatory Provisions. None of the Administrative Agent-Related Persons
shall (a) be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Loan Document
(except for such Person’s own gross negligence, bad faith or willful
misconduct), or (b) be responsible in any manner to any of the Lenders or
the Issuing Bank for any recital, statement, representation or warranty made by
the Borrower or any other Affiliate of the Borrower or any officer thereof
contained in this Agreement or in any other Loan Document, or in any
certificate,

 

62

 

report, statement or other document referred to or
provided for in or received by the Administrative Agent under or in connection
with this Agreement or any other Loan Document or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, the Notes or any
other Loan Document, or for any failure of the Borrower or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Administrative Agent-Related Person shall be under any obligation to any Lender
or the Issuing Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any other Affiliate of the Borrower.

 

8.4           Reliance by the Administrative Agent.

 

(a)           The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, electronic mail,
telex or telephone message, statement or other document or conversation
believed by it 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 counsel to the Borrower), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless a
completed and fully executed Assignment and Assumption shall have been
delivered to the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders or all Lenders or the Issuing Bank, as the case may be, as
it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders and the Issuing Bank against any and all
liability and expense (except those incurred as a result of the Administrative
Agent’s gross negligence, bad faith or willful misconduct) which may be
incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement, the Notes or any of the other
Loan Documents in accordance with a request or consent of the Required Lenders
or all Lenders, or the Issuing Bank, as the case may be, as may be required,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all of the Lenders and the Issuing Bank and all future holders
of the Notes.

 

(b)           For purposes of determining compliance with the
conditions precedent specified in Article IV for the initial Loans, each
Lender and the Issuing Bank that has executed this Agreement or shall hereafter
execute and deliver an Assignment and Assumption in accordance with Section 9.4
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter either sent by the Administrative Agent to
such Lender and the Issuing Bank, as the case may be, for consent, approval,
acceptance or satisfaction, or required hereunder to be consented to or
approved by or acceptable or satisfactory to the Lender or the Issuing Bank.

 

8.5           Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders
and the Issuing Bank or itself, unless the Administrative Agent shall have
received written notice from a Lender or the Issuing Bank or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default.”  In the event of any such default in the
payment of principal, interest or fees or in the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give notice
thereof promptly to the Lenders and the Issuing Bank. The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall

 

63

 

be requested by the Required Lenders or all Lenders or the Issuing
Bank, as appropriate; provided, however, that unless and until the
Administrative Agent shall have received any such request, 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 in the best interest of the Lenders and the Issuing Bank or as the
Administrative Agent shall believe necessary to protect the Lenders’ and the
Issuing Bank’s interests under the Loan Documents.

 

8.6           Credit Decision. Each Lender and the Issuing Bank expressly acknowledges
that none of the Administrative Agent-Related Persons has made any
representation or warranty to it and that no act by the Administrative Agent
hereafter taken, including any review of the affairs of the Borrower or any
other Affiliate of the Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender or the
Issuing Bank. Each Lender and the Issuing Bank represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender or the Issuing Bank and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and each of the Borrower’s
Affiliates, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and extend credit to the Borrower under and pursuant to this
Agreement. Each Lender and the Issuing Bank also represents that it will,
independently and without reliance upon the Administrative 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 Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrower and its Affiliates. Except for
notices, reports and other documents expressly herein required to be furnished
to any Lender or the Issuing Bank by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender or the Issuing Bank with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrower or any of the Borrower’s Affiliates, which may
come into the possession of any Administrative Agent-Related Person.

 

8.7           Indemnification. Whether or not the transactions contemplated hereby
shall be consummated, the Lenders and the Issuing Bank agree to and shall
indemnify upon demand the Administrative Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Borrower or any other guarantor of the
Obligations and without limiting the obligation of such Persons to do so),
severally and ratably (based on each Lender’s Commitment) from and against any
and all liabilities, obligations, losses, damages, penalties, costs (including
reasonable attorneys’ fees, costs and expenses), and reasonable expenses and
disbursements of any kind whatsoever which may at any time (including at any
time following the repayment of the Loans and the termination or resignation of
the related Administrative Agent) be imposed on, incurred by or asserted
against any such Person in such capacity, but not as Lenders or the Issuing
Bank, in any way relating to or arising out of this Agreement, any of the other
Loan Documents or any document contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by any such Person under or in connection with any of the foregoing; provided,
however, that no Lender nor the Issuing Bank shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, costs, expenses or disbursements resulting from such Person’s gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender and the Issuing Bank shall reimburse the Administrative Agent upon
demand for its ratable share of any costs or other out-of-pocket expenses
(including reasonable

 

64

 

attorneys’ fees, costs and expenses) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower or any other guarantor of the Obligations. Without limiting the
generality of the foregoing, if the Internal Revenue Service or any other
Governmental Authority of the United States or other jurisdiction asserts a
claim that the Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Lender or the Issuing Bank (because the appropriate
form was not delivered, was not properly executed, or because such Lender or
the Issuing Bank failed to notify the Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason other than the Administrative Agent’s
own gross negligence or willful misconduct), such Lender or the Issuing Bank
shall indemnify the Administrative Agent fully for all amounts paid, directly
or indirectly, by the Administrative Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Administrative Agent under this Section 8.7,
together with all costs and expenses (including reasonable attorneys’ fees,
costs and expenses). The obligation of the Lenders and the Issuing Bank in this
Section 8.7 shall survive the payment of all Obligations.

 

8.8           The Administrative Agent in Individual Capacity. Wells Fargo and its Affiliates and its
successors as the Administrative Agent, may make loans to, issue letters of
credit for the account of, accept deposits from, acquire Equity Interests in
and generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower or any of the Borrower’s other Affiliates as though
Wells Fargo (or such successors) were not the Administrative Agent hereunder
and under the other Loan Documents and without notice to or consent of the
Lenders or the Issuing Bank. With respect to its Loans or Letters of Credit,
Wells Fargo shall have the same rights and powers under this Agreement as any
other Lender or the Issuing Bank and may exercise the same as though it were
not the Administrative Agent and the terms “Lender” and “Lenders” shall include
Wells Fargo in its individual capacity.

 

8.9           Resignation; Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 60 days’ notice to the Lenders, the Issuing Bank and
the Borrower. In the event that the Administrative Agent shall resign as the
Administrative Agent under this Agreement and the other Loan Documents, the
Required Lenders may appoint from among the Lenders, the Issuing Bank or any
assignee eligible under Section 9.4, a successor Administrative
Agent, and if the Required Lenders shall not make such appointment within 30
days after such notice of resignation is given, the resigning Administrative
Agent may make such appointment from among the Lenders, the Issuing Bank or
such an assignee eligible under Section 9.4, which successor agent
shall be approved by the Borrower (which approval shall not be unreasonably
withheld or delayed), upon which appointment, in either case, such successor
agent shall succeed to all of the rights, powers and duties of the
Administrative Agent, as the case may be, and the term “Administrative Agent”
shall mean such successor agent, effective upon its appointment, 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 Agreement or any
holders of the Notes. After any retiring Administrative Agent’s resignation as
Administrative Agent, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was a Administrative Agent, under this Agreement and the other Loan
Documents. Further, if any Administrative Agent no longer has any Loans or
Commitments hereunder, such Administrative Agent shall immediately resign and
shall be replaced, and have the benefits, as set forth in this Section 8.9.

 

65

 

8.10         Payments to the Administrative Agent. A payment by the Borrower to the Administrative
Agent hereunder or any of the other Loan Documents for the account of any
Lender or the Issuing Bank shall constitute a payment to such Lender or the
Issuing Bank, as the case may be. The Administrative Agent agrees promptly to
distribute to each Lender and the Issuing Bank such Lender’s and the Issuing
Bank’s pro rata share of payments received by
the Administrative Agent for the account of the Lenders or the Issuing Bank, as
the case may be, except as otherwise expressly provided herein or in any of the
other Loan Documents.

 

8.11         Administrative Agent May File Proofs of Claim.

 

(a)           In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial, administrative or like proceeding or any
assignment for the benefit of creditors relative to the Borrower or any of its
Subsidiaries, the Administrative Agent (irrespective of whether the principal
of any Loan or Letter of Credit reimbursement obligation) shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding, under any
such assignment or otherwise:

 

(i)            to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, Letter of
Credit reimbursement obligation and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under the terms of this Agreement) allowed in such proceeding or under any such
assignment; and

 

(ii)           to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same.

 

(b)           Any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such proceeding or
under any such assignment is hereby authorized by each Lender to make such
payments to the Administrative Agent and, in the event that the Administrative
Agent shall consent to the making of such payments directly to the Lenders,
nevertheless to pay to the Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent
and its agents and counsel, and any other amounts due the Administrative Agent
under the terms of this Agreement.

 

(c)           Nothing contained herein shall authorize the
Administrative Agent to consent to or accept or adopt on behalf of any Lender
any plan of reorganization, arrangement, adjustment or composition affecting
the Obligations owed to such Lender or the rights of any Lender or to authorize
the Administrative Agent to vote in respect of the claim of any Lender in any
such proceeding or under any such assignment.

 

66

 

ARTICLE IX.

 

Miscellaneous

 

9.1           Notices.

 

(a)           Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to Section 9.1(b)),
all notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by facsimile, as follows:

 

(i)            if to the Borrower, to it at 5956 W. Las Positas
Boulevard, Pleasanton, California, 94588, Attention of Michael J. Herbert,
Chief Financial Officer (Facsimile No. (925) 847-1608);

 

(ii)           if to any Guarantor, to it in care of the Borrower at
the address above;

 

(iii)          if to the Administrative Agent, to Wells Fargo Bank,
National Association, 201 3rd Street, 8th Floor, San Francisco, California
94103, Attention:  Agency Management
(Facsimile No. (415) 512-9408);

 

(iv)          if to the Issuing Bank, to Wells Fargo Bank, National
Association, 1 Front Street, 21st Floor, San Francisco, California 94111,
Attention:  Trade Bank (Facsimile No.
(415) 975-6284);

 

(v)           if to the Swingline Lender, to Wells Fargo Bank,
National Association, 201 3rd Street, 8th Floor, San Francisco, California
94103, Attention:  Agency Management
(Facsimile No. (415) 512-9408); and

 

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

 

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

 

(c)           The Borrower agrees that the Administrative Agent may
make any material delivered by the Borrower to the Administrative Agent, as
well as any amendments, waivers, consents, and other written information,
documents, instruments and other materials relating to the Borrower, or any of
its Subsidiaries, or any other materials or matters relating to this Agreement,
the Notes or any of the other Loan Documents, or any of the transactions
contemplated hereby or thereby (collectively, the “Communications”)
available to the Lenders and the Issuing Bank by posting such notices on an
electronic delivery system (which may be provided by the Administrative Agent,
an Affiliate of the Administrative Agent, or any Person that is not an
Affiliate of the Agent), such as IntraLinks, or a substantially similar
electronic system (the “Platform”). The Borrower acknowledges that
(i) the distribution of material through an electronic medium is not
necessarily secure and that there are confidentiality and other risks
associated with such distribution, provided that the Administrative
Agent shall take commercially reasonable measures to assure that Information
(as defined in Section 9.14) supplied by the Borrower is maintained in
accordance with the confidentiality provisions of Section 9.14,
(ii) the Platform is provided “as is” and “as available” and
(iii) neither the Administrative Agent nor any of its Affiliates warrants
the accuracy, completeness, timeliness, sufficiency, or sequencing of the
Communications posted on the Platform. The Administrative Agent and its
Affiliates expressly disclaim

 

67

 

with respect to the Platform any liability for errors
in transmission, incorrect or incomplete downloading, delays in posting or
delivery, or problems accessing the Communications posted on the Platform and
any liability for any losses, costs, expenses or liabilities that may be
suffered or incurred in connection with the Platform; provided that the
Administrative Agent shall take commercially reasonable measures to assure that
Information (as defined in Section 9.14) supplied by the Borrower is
maintained in accordance with the confidentiality provisions of Section 9.14.
No warranty of any kind, express, implied or statutory, including any warranty
of merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the
Administrative Agent or any of its Affiliates in connection with the Platform.

 

(d)           Each Lender and the Issuing Bank agrees that notice to
it (as provided in the next sentence) (a “Notice”) specifying that any
Communication has been posted to the Platform shall for purposes of this
Agreement constitute effective delivery to such Lender of such information,
documents or other materials comprising such Communication. Each Lender and the
Issuing Bank agrees (i) to notify, on or before the date such Lender or
the Issuing Bank, as the case may be, becomes a party to this Agreement, the
Administrative Agent in writing of such Lender’s or the Issuing Bank’s e-mail
address(es) to which a Notice may be sent (and from time to time thereafter to
ensure that the Administrative Agent has on record an effective e-mail address
for such Lender) and (ii) that any Notice may be sent to such e-mail
address(es).

 

(e)           Without limiting clauses (c) and (d) of
this Section 9.1, notices and other communications to the Lenders
and the Issuing Bank hereunder may be delivered or furnished by electronic
communications pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices pursuant to Article II
or Section 8.5 unless otherwise agreed by the Administrative Agent and
the applicable Lender or the Issuing Bank. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.

 

(f)            Without limiting clauses (c) and (d) of
this Section 9.1, electronic mail and Internet and intranet
websites may be used only to deliver routine communications, such as financial
statements and other information as provided in Section 5.1, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose. If so delivered by the Borrower, such information
shall be deemed to have been delivered on the date (i) on which the Borrower
posts such documents, or provides a link thereto on the Borrower’s website on
the Internet at the Borrower’s official website address; or (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender, the Issuing Bank and the Administrative
Agent has access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent); provided that other than as
otherwise set forth in Section 5.1: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent, the Issuing Bank or any
Lender that requests the Borrower to deliver such paper copies until a written
request to cease delivering paper copies is given by the Administrative Agent,
the Issuing Bank or such Lender and (ii) the Borrower shall notify the
Administrative Agent, the Issuing Bank and each Lender (by facsimile or
electronic mail) of the posting of any such documents and provide to the Administrative
Agent by electronic mail electronic versions (i.e.,
soft copies) of such documents. Notwithstanding anything contained herein, in
every instance the Borrower shall be required to provide paper copies of the
Compliance Certificates to the Administrative Agent. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have

 

68

 

no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender and the Issuing
Bank shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

 

(g)           The Administrative Agent and the Lenders shall be
entitled to rely and act upon any notices (including telephonic Borrowing
Requests) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrower shall indemnify the Administrative Agent and each Lender,
their respective Affiliates, and their respective officers, directors,
employees, agents and attorneys-in-fact from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower; provided that such
indemnity shall not be available to the extent that such losses, costs,
expenses and liabilities resulted from the gross negligence or willful
misconduct of the party seeking indemnification. All telephonic notices to and
other communications with the Administrative Agent or any Lender may be
recorded by the Administrative Agent or such Lender, and the Borrower hereby
consents to such recording.

 

9.2           Waivers; Amendments.

 

(a)           No failure or delay by the Administrative Agent, the
Issuing Bank or any Lender in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by Section 9.2(b), and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default or Event of Default, regardless of whether the Administrative Agent,
the Issuing Bank or any Lender may have had notice or knowledge of such Default
or Event of Default at the time.

 

(b)           Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the
Borrower and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment
of any Lender without the written consent of such Lender, (ii) reduce the
principal amount of any Loan or LC Disbursement or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the scheduled date of payment
of the principal amount of any Loan, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment,
or postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) change Section
2.17(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby without the written consent of each Lender, or
(v) change any of the provisions of this Section 9.2 or the
definition of “Required Lenders” or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender; provided  further that no such
agreement shall amend, modify or otherwise affect the

 

69

 

rights or duties of the Administrative Agent, the
Issuing Bank or the Swingline Lender hereunder without the prior written
consent of the Administrative Agent, the Issuing Bank or the Swingline Lender,
respectively.

 

9.3           Expenses; Indemnity; Damage Waiver.

 

(a)           The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
in connection with or relating to the Transactions, including the reasonable
fees, charges and disbursements of counsel for the Administrative Agent
(including any allocated costs of in-house counsel), in connection with the
diligence performed by or on behalf of the Administrative Agent and its
Affiliates, the preparation of the commitment letter of Wells Fargo describing
the revolving credit facility provided for herein, the syndication of the
revolving credit facility provided for herein, fees and expenses related to the
Platform, the preparation and administration of this Agreement and the other
Loan Documents and each amendment, modification or waiver of the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Administrative Agent, the Issuing Bank or any Lender (including
any allocated costs of in-house counsel), including the reasonable fees,
charges and disbursements of any counsel for the Administrative Agent, the
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights in connection with this Agreement, including its rights under this Section
9.3, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit; and (iii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder.

 

(b)           The Borrower shall indemnify the Administrative Agent,
the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses resulted from the
gross negligence or willful misconduct of such Indemnitee. Upon receiving
knowledge of any suit, claim or demand asserted by a third party that the
Administrative Agent or any Lender believes is covered by this indemnity, the
Administrative Agent or such Lender shall give the Borrower notice of the
matter and the Administrative Agent or such Lender may select its own counsel
or request that the Borrower defend such suit, claim or demand, with legal
counsel satisfactory to the Administrative Agent or such Lender as the case may
be, at the Borrower’s sole cost and expense; provided, that the Administrative
Agent or such Lender shall not be

 

70

 

required to so notify the Borrower and the
Administrative Agent or such Lender shall have the right to defend, at the
Borrower’s sole cost and expense, any such matter that is in connection with a
formal proceeding instituted by any Governmental Authority having authority to
regulate or oversee any aspect of the Administrative Agent’s or such Lender’s
business or that of its Affiliates. The Administrative Agent or such Lender may
also require the Borrower to defend the matter. Notwithstanding the foregoing
provisions, an Indemnitee will be entitled to employ counsel separate from
counsel for the Borrower and from any other party in such action if such
Indemnitee reasonably determines that a conflict of interest or other
reasonable basis exists which makes representation by counsel chosen by the
Borrower or the other Indemnitees not advisable, but not more than one counsel
separate from the Borrower’s counsel shall be at the Borrower’s expense. The
Borrower shall not consent to the entry of any judgment or enter into any
settlement in any such litigation or proceeding unless such judgment or
settlement (A) does not impose any other obligations on the relevant
Indemnitees, (B) does not include any admission of wrongdoing on the part of such
Indemnitees and (C) includes as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnitees of an unconditional release
from all liability in respect to such claim or litigation. Any Indemnitee shall
have the right to propose settlement to the relevant claimant or plaintiff from
time to time, and the Borrower shall not unreasonably deny giving its consent
to such settlement. In the event an Indemnitee (or any of its officers,
directors or employees) appears as a witness in any action or proceeding
brought against the Borrower in which an Indemnitee is not named as a
defendant, the Borrower agrees to reimburse such Indemnitee for all reasonable
out-of-pocket expenses incurred by it (including fees and expenses of counsel)
in connection with its appearing as a witness. Any failure or delay of the
Administrative Agent or any Lender to notify the Borrower of any such suit,
claim or demand shall not relieve the Borrower of its obligations under this Section
9.3(b). Expenses of counsel to the Indemnitees shall be reimbursed on a
current basis by the Borrowers. The obligations of the Borrower under this Section
9.3(b) shall survive the payment and performance of the Obligations and the
termination of this Agreement, to the extent any such obligations remain.

 

(c)           To the extent that the Borrower fails to pay any
amount required to be paid by it to the Administrative Agent, the Issuing Bank
or the Swingline Lender under Section 9.3(a) or Section 9.3(b),
each Lender severally agrees to pay to the Administrative Agent, the Issuing
Bank or the Swingline Lender, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity
as such.

 

(d)           To the extent permitted by applicable law, the
Borrower shall not assert, and hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.

 

(e)           All amounts due under this Section 9.3 shall be
payable not later than 10 Business Days after written demand therefor.

 

9.4           Successors and Assigns.

 

(a)           The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby (including any Affiliate

 

71

 

of the Issuing Bank that issues any Letter of Credit),
except that (i) the Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this Section
9.4. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit), Participants (to the extent provided in
Section 9.4(c)) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason
of this Agreement.

 

(b)           (i)            Subject to the conditions set forth in Section 9.4(b)(ii),
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment, the Loans at the time owing to it and its participations in any
outstanding Swingline Loans and Letters of Credit) with the prior written
consent (such consent not to be unreasonably withheld, conditioned or delayed)
of:

 

(A)          the
Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee; and

 

(B)           the
Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of any Commitment to an assignee that
is a Lender with a Commitment immediately prior to giving effect to such
assignment.

 

(ii)           Assignments shall be subject to the following
additional conditions:

 

(A)          except
in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans, the amount of the Commitment or Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 unless each of the Borrower and the
Administrative Agent otherwise consents, provided that no such consent
of the Borrower shall be required if an Event of Default has occurred and is
continuing;

 

(B)           each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement;

 

(C)           the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500;

 

(D)          the
assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire; and

 

(E)           each
prospective assignee shall have executed a confidentiality agreement in the
form attached hereto as Exhibit L.

 

For
the purposes of this Section 9.4(b), the term “Approved Fund”
means any Person (other than

 

72

 

a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

 

(iii)          Subject to acceptance and recording thereof pursuant
to Section 9.4(b)(iv), from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have (in addition to any rights and obligations theretofore held by
it) the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 9.3).
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 9.4 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 9.4(c).

 

(iv)          The Administrative Agent, acting for this purpose as
an agent of the Borrower, shall maintain a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
prima facie evidence of the existence
and amounts of the obligations recorded therein, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

(v)           Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee, the assignee’s
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in Section 9.4(b)
and any written consent to such assignment required by this Section 9.4(b),
the Administrative Agent shall accept such Assignment and Assumption and record
the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this Section 9.4(b)(v).

 

(c)           (i) Any Lender may, without the consent of the
Borrower, or the Administrative Agent, the Issuing Bank or the Swingline
Lender, sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (C) the Borrower, the Administrative Agent, the Issuing Bank
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement, (D) each prospective Participant shall have executed a
confidentiality agreement in the form attached hereto as Exhibit L and
(E) in the event such Lender desires to sell a participation to a Participant
pursuant to this Section 9.4(c)(i) accompanied by rights of set-off and
counterclaim with respect to such participation

 

73

 

against the Borrower, such participating Lender shall
provide written notice of such participation, identifying the Participant, to
the Administrative Agent and the Borrower no later than the effective date of
such participation, and in the absence of such written notice, such
participation shall not be accompanied by rights of set-off and counterclaim
against the Borrower. Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.2(b) that affects such Participant. Subject
to Section 9.4(c)(ii), the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.14, 2.15 and
2.16 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 9.4(b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 9.8
as though it were a Lender, provided such Participant agrees to be
subject to Section 2.17(c) as though it were a Lender.

 

(ii)           A Participant shall not be entitled to receive any
greater payment under Section 2.14 or 2.16 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.16 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.16(d) as though
it were a Lender.

 

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

 

(e)           Notwithstanding anything to the contrary contained
herein, if at any time the Issuing Bank or the Swingline Lender assigns all of
its Commitments and Loans pursuant to this Section 9.4, the Issuing
Bank or the Swingline Lender may, upon 45 days’ notice to the Borrower and the
Lenders, resign in its capacity as the Issuing Bank or the Swingline Lender, as
applicable. In the event of any such resignation as the Issuing Bank, the
Borrower, with the consent of the Administrative Agent, shall be entitled to
appoint from among the Lenders a successor Issuing Bank hereunder; provided,
however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of the Issuing Bank. If the Issuing Bank resigns
in such capacity, it shall retain all the rights and obligations of the Issuing
Bank hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as Issuing Bank and all reimbursement
obligations with respect thereto (including the right to require the Lenders to
advance amounts for unpaid reimbursement obligations in accordance with Section 2.5(e)).
If any Person resigns as Swingline Lender, it shall retain all the rights of
the Swingline Lender provided for hereunder with respect to Swingline Loans
made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Loans or acquire
participations in outstanding Swingline Loans pursuant to Section 2.4(c).

 

9.5           Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to

 

74

 

this Agreement shall be considered to have been relied
upon by the other parties hereto and shall survive the execution and delivery
of this Agreement and the making of any Loans and issuance of any Letters of
Credit, regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or Event of Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.14, 2.15, 2.16 and 9.3
and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.

 

9.6           Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement, the other Loan Documents
and any separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in Section 4.1,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. Delivery
of an executed counterpart of a signature page of this Agreement by facsimile
shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

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

 

9.8           Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender under this Section are in addition
to other rights and remedies (including other rights of setoff) which such
Lender may have.

 

9.9           Governing Law.

 

(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE;

 

75

 

PROVIDED THAT THE LENDER SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF CALIFORNIA SITTING IN THE COUNTY OF SAN FRANCISCO OR OF THE UNITED STATES
FOR THE NORTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER, EACH GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH
LENDER EACH CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, EACH GUARANTOR, THE
ADMINISTRATIVE AGENT AND EACH LENDER EACH IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING 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
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR
OTHER DOCUMENT RELATED THERETO. THE BORROWER, EACH GUARANTOR, THE
ADMINISTRATIVE AGENT AND EACH LENDER EACH WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.

 

(c)           THE BORROWER AND EACH OTHER LOAN PARTY, THE
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT,
INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE
DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION,
PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
THE BORROWER AND EACH OTHER LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND THE LENDERS ENTERING
INTO THIS AGREEMENT.

 

9.10         Judicial Reference. TO THE EXTENT THAT THE WAIVER OF JURY TRIAL IN SECTION
9.9(c) IS UNENFORCEABLE, THE PARTIES HERETO DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE OR RETIRED JUDGE APPLYING THE APPLICABLE LAW. THEREFORE,
THE PARTIES HERETO AGREE TO REFER, FOR A COMPLETE AND FINAL ADJUDICATION, ANY
AND ALL ISSUES OF FACT OR LAW INVOLVED IN ANY LITIGATION OR PROCEEDING
(INCLUDING ALL DISCOVERY AND LAW AND MOTION MATTERS, PRETRIAL MOTIONS, TRIAL
MATTERS, AND POST-TRIAL MOTIONS (E.G., MOTIONS FOR RECONSIDERATION, NEW TRIAL
AND TO TAX COSTS, ATTORNEY FEES AND PREJUDGMENT INTEREST)) UP TO AND INCLUDING
FINAL JUDGMENT, BROUGHT TO RESOLVE ANY DISPUTE (WHETHER SOUNDING IN CONTRACT,
TORT, UNDER ANY STATUTE, OR OTHERWISE) BETWEEN THE LENDER AND THE BORROWER ARISING
OUT OF, CONNECTED WITH, OR RELATED OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THE PARTIES IN CONNECTION WITH THIS AGREEMENT, THE LOAN
DOCUMENTS OR THE TRANSACTIONS RELATED HERETO AND THERETO, TO A JUDICIAL REFEREE
WHO SHALL BE APPOINTED UNDER A GENERAL REFERENCE

 

76

 

PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION
638. THE REFEREE’S DECISION WOULD STAND AS THE DECISION OF THE COURT, WITH
JUDGMENT TO BE ENTERED ON HIS STATEMENT OF DECISION IN THE SAME MANNER AS IF
THE ACTION HAD BEEN TRIED BY THE COURT. THE ADMINISTRATIVE AGENT AND THE
BORROWER SHALL SELECT A SINGLE NEUTRAL REFEREE, WHO SHALL BE A RETIRED STATE OR
FEDERAL JUDGE WITH AT LEAST FIVE YEARS OF JUDICIAL EXPERIENCE IN CIVIL MATTERS.
IN THE EVENT THAT THE ADMINISTRATIVE AGENT AND THE BORROWER CANNOT AGREE UPON A
REFEREE, THE REFEREE SHALL BE APPOINTED BY THE COURT. THE LOAN PARTIES SHALL
JOINTLY AND SEVERALLY BEAR THE FEES AND EXPENSES OF THE REFEREE UNLESS THE
REFEREE OTHERWISE PROVIDES IN THE STATEMENT OF DECISION. EACH PARTY AGREES THAT
ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION
9.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE REFERENCE TO A JUDICIAL REFEREE AS PROVIDED ABOVE.

 

9.11         Judgment Currency. If, for the purpose of obtaining judgment in any
court or obtaining an order enforcing a judgment, it becomes necessary to
convert any amount due under this Agreement in Dollars or in any other currency
(hereinafter in this Section 9.11 called the “first currency”)
into any other currency (hereinafter in this Section 9.11 called the “second
currency”), then the conversion shall be made at the rate of exchange at
which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such second currency at the
Administrative Agent’s close of business on the Business Day next preceding the
day on which the judgment is given or (as the case may be) the order is made. Any
payment made to the Administrative Agent, the Issuing Bank or any Lender
pursuant to this Agreement in the second currency shall constitute a discharge
of the obligations of the Borrower to pay to the Administrative Agent, the
Issuing Bank and the Lenders any amount originally due to the Administrative
Agent, the Issuing Bank and the Lenders in the first currency under this
Agreement only to the extent of the amount of the first currency which the
Administrative Agent, the Issuing Bank and each of the Lenders is able, on the
date of the receipt by it of such payment in any second currency, to purchase,
in accordance with the Administrative Agent’s, the Issuing Bank’s and such
Lender’s normal banking procedures, with the amount of such second currency so
received. If the amount of the first currency falls short of the amount
originally due to the Administrative Agent, the Issuing Bank and the Lenders in
the first currency under this Agreement, the Borrower hereby agrees that it
will indemnify each of the Administrative Agent, the Issuing Bank and each of
the Lenders against and save each of the Administrative Agent, the Issuing Bank
and each of the Lenders harmless from any shortfall so arising. This indemnity
shall constitute an obligation of the Borrower separate and independent from
the other obligations contained in this Agreement, shall give rise to a
separate and independent cause of action and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum or sums in
respect of amounts due to the Administrative Agent, the Issuing Bank or any
Lender under this Agreement or under any such judgment or order. Any such
shortfall shall be deemed to constitute a loss suffered by each of the
Administrative Agent, the Issuing Bank and each such Lenders, as the case may
be, and the Borrower shall not be entitled to require any proof or evidence of
any actual loss. The covenant contained in this Section 9.11 shall
survive the payment in full of all of the other obligations of the Borrower
under this Agreement.

 

9.12         USA Patriot Act Notice. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such

 

77

 

Lender to identify the Borrower in accordance with the
Act. The Borrower shall promptly provide such information upon request by any
Lender.

 

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

 

9.14         Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority, (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, provided that, if not prohibited by law, the disclosing party
shall use commercially reasonable efforts (i) to notify the Borrower in advance
of such disclosure so that the Borrower may seek an appropriate protective
order and (ii) to cooperate with the Borrower to obtain such protective order,
(d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating
to this Agreement or the enforcement of rights hereunder, (f) subject to
an agreement containing provisions substantially the same as those of this Section 9.14,
to (i) any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement or
(ii)  any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to the Borrower and its obligations,
(g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of its
breach of this Section 9.14 or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower. For the purposes of this Section 9.14, “Information”
means this Agreement and all information received from the Borrower relating to
the Borrower and its Subsidiaries or their respective business, assets,
operations or condition (financial or otherwise), other than any such
information that is available to either the Administrative Agent or any Lender
on a nonconfidential basis prior to disclosure by the Borrower; provided
that, in the case of information received from the Borrower after the date
hereof, such information is either clearly identified at the time of delivery
as confidential, or should, because of its nature, reasonably be understood to
be confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section 9.14 shall be considered to
have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

9.15         Interest Rate Limitation. Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any Loan, together with all
fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section 9.15 shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.

 

78

 

9.16         Termination. At any time,
whether or not any Loan has been made, upon (a) receipt by the Administrative
Agent, on behalf of the Lenders, of the entire indebtedness and all other
amounts then due or owing to the Lenders under the Loan Documents (without any
condition, deduction, offset, netting, counterclaim or reservation of rights)
(other than Unasserted Obligations), and (b) receipt by the Administrative
Agent of an instruction from the Borrower to terminate and cancel the Loan
Documents, all Commitments and Loans under the Loan Documents (together with an
acknowledgment that the Administrative Agent and the Lenders will not have any
further obligations or liabilities under or in connection with any Loan
Document), then all Loan Documents shall automatically terminate without
further action (other than the waivers, reinstatement rights, and reimbursement
and indemnification protections in favor of the Lender under the Loan
Documents, which provisions shall survive any such termination of the Loan Documents).
Upon termination of the Loan Documents in accordance with, and subject to the
terms of, this Section 9.16, the Administrative Agent (at the expense of
the Borrower) (i) will release the Loan Parties under the Loan Documents
(without representation, warranty, recourse, liability or indemnification of
any kind by or to the Lenders), and (ii) will terminate and cancel all
Commitments and Loans under the Loan Documents.

 

9.17         Reinstatement. To the maximum
extent not prohibited by applicable law, this Agreement and the other Loan
Documents (and the indebtedness hereunder, to the extent restored, refunded or
returned) will be reinstated (as though such payment(s) had not been made) if
at any time any amount received by any Lender in respect of any Loan Document
is rescinded or must otherwise be restored, refunded or returned by such Lender
to the Borrower, any Loan Party or any other Person (a) upon or as a result of
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any other Person, or (b) upon or as a result of the appointment of
any receiver, intervenor, conservator, trustee or similar official for the
Borrower or any other Person or for any substantial part of the Property of the
Borrower or any other Person, or (c) for any other reason.

 

ARTICLE X.

 

GUARANTY

 

10.1         Guaranty of Payment and Performance.
For value received and hereby acknowledged and as an inducement to the Lenders
to make Loans to the Borrower and the Issuing Bank to issue Letters of Credit
for the account of the Borrower, each Guarantor hereby absolutely,
unconditionally and irrevocably guarantees to the Administrative Agent, the
Issuing Bank and the Lenders, the full and punctual payment when due (whether
at stated maturity, by required pre-payment, by acceleration or otherwise), as
well as the performance, of all of the Obligations including all such which
would become due but for the operation of the automatic stay pursuant to
§362(a) of the Bankruptcy Code and the operation of §§502(b) and 506(b) of the
Bankruptcy Code (such obligations collectively being the “Guaranteed
Obligations”). This Article X is in no way conditioned upon any
requirement that the Administrative Agent, the Issuing Bank or any Lender first
attempt to collect any of the Obligations from the Borrower or resort to any
collateral security or other means of obtaining payment. Should the Borrower
default in the payment or performance of any of its Obligations, the
obligations of each Guarantor hereunder with respect to the Guaranteed
Obligations shall become immediately due and payable to the Administrative
Agent, for the benefit of the Lenders, the Issuing Bank and the Administrative
Agent, without demand or notice of any nature, all of which are expressly
waived by each Guarantor.

 

79

 

10.2         Guaranty Absolute. Each of the
Guarantors guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms hereof, regardless of any defense available under any
law, regulation, order, decree or directive (whether or not having the force of
law) or any interpretation thereof, now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Administrative
Agent, the Issuing Bank or any Lender with respect thereto, including any law,
regulation, order, decree or directive or interpretation thereof that purports
to require or permit the satisfaction of any Guaranteed Obligation, other than
strictly in accordance with the terms of this Agreement (such as by the tender
of a currency other than as provided in Section 1.9 or that
restricts the procurement of such currency by the Borrower or the Guarantors),
or (b) any agreement, whether or not signed by or on behalf of the
Administrative Agent, the Issuing Bank or the Lenders, in connection with the
restructuring or rescheduling of public or private obligations in the Borrower’s
country, whether or not such agreement is stated to cause or permit the
discharge of the Obligations prior to the final payment in full of the
Obligations in the currency required by Section 1.9 in strict
accordance with this Agreement. The liability of each Guarantor under this
Guaranty with regard to the Guaranteed Obligations shall be absolute and
unconditional irrespective of:

 

(a)           any lack of authorization, execution,
validity or enforceability or any illegality of the Borrower to become the
Borrower hereunder, this Agreement and any amendment hereof (with regard to
such Guaranteed Obligations), or any other obligation, agreement or instrument
relating thereto (it being agreed by each Guarantor that the Guaranteed
Obligations shall not be discharged prior to the final and complete
satisfaction of all of the Obligations of the Borrower) or any failure to
obtain any necessary governmental consent or approvals or necessary third party
consents or approvals;

 

(b)           the Administrative Agent’s, the
Issuing Bank’s or any Lender’s exercise or enforcement of, or failure or delay
in exercising or enforcing, legal proceedings to collect the Obligations or the
Guaranteed Obligations, as the case may be, or any power, right or remedy with
respect to any of the Obligations or the Guaranteed Obligations, as the case
may be, including (i) any suspension of the Administrative Agent’s, the Issuing
Bank’s or any Lender’s right to enforce against any other Borrower of the
Guaranteed Obligations, as the case may be, or (ii) any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Guaranteed Obligations of the Borrower or any other amendment or waiver of or
any consent to departure from this Agreement or the other Loan Documents (with
regard to such Guaranteed Obligations) or any other agreement or instrument
governing or evidencing any of the Guaranteed Obligations;

 

(c)           any exchange, release or
non-perfection of any collateral, or any release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the Guaranteed
Obligations of the Borrower;

 

(d)           any change in ownership of the
Borrower;

 

(e)           any acceptance of any partial
payment(s) from the Borrower;

 

(f)            any insolvency, bankruptcy,
reorganization, arrangement, adjustment, composition, assignment for the
benefit of creditors, appointment of a receiver, examiner or trustee for all or
any part of the Borrower’s assets;

 

(g)           any assignment, participation or
other transfer, in whole or in part, of the Administrative Agent’s, the Issuing
Bank’s or any Lender’s interest in and rights under this Agreement or

 

80

 

any other Loan Document, or of the Administrative
Agent’s, the Issuing Bank’s or any Lender’s interest in the Obligations or the
Guaranteed Obligations;

 

(h)           any cancellation, renunciation or
surrender of any pledge, guaranty or any debt instrument evidencing the
Obligations or the Guaranteed Obligations, as the case may be;

 

(i)            the Administrative Agent’s, the
Issuing Bank’s or any Lender’s vote, claim, distribution, election, acceptance,
action or inaction in any bankruptcy or reorganization case related to the
Obligations or the Guaranteed Obligations, as the case may be; or

 

(j)            any other action or circumstance,
other than payment, which might otherwise constitute a defense available to, or
a discharge of, the Borrower in respect of its or the Guaranteed Obligations.

 

This
Guaranty shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by the Administrative Agent, the Issuing Bank or any
Lender upon the insolvency, bankruptcy or reorganization, examination of the
Borrower or otherwise, all as though such payment had not been made.

 

10.3         Effectiveness, Enforcement. The
Guaranty herein of each Guarantor shall be effective and shall be deemed to be
made with respect to each Loan made or Letter of Credit issued to the Borrower
as of the time it is made. No invalidity, irregularity or unenforceability by
reason of any Debtor Relief Law, or any law or order of any government or
agency thereof purporting to reduce, amend or otherwise affect any liability of
the Borrower, and no defect in or insufficiency or want of powers of the
Borrower or irregular or improperly recorded exercise thereof, shall impair,
affect, be a defense to or claim against such Guaranty. This Guaranty is a
continuing guaranty and shall (a) survive any termination of this Agreement and
(b) remain in full force and effect until payment in full in cash and
performance of all Guaranteed Obligations, and all other amounts payable under
this Guaranty. This Guaranty is made for the benefit of the Administrative
Agent, the Issuing Bank and each of the Lenders and their respective successors
and assigns, and may be enforced from time to time as often as occasion
therefor may arise and without requirement on the part of the Administrative
Agent, the Issuing Bank or any Lender first to exercise any rights against the
Borrower or to exhaust any remedies available to it against the Borrower or to
resort to any other source or means of obtaining payment of any of the
Guaranteed Obligations, or to elect any other remedy. In the event that
acceleration of the time for payment (or the giving of notice of such
acceleration) of the Guaranteed Obligations of the Borrower is stayed upon the
insolvency, bankruptcy, examination or reorganization of the Borrower or for
any other reason, all such amounts otherwise subject to acceleration under the
terms of this Agreement shall be immediately due and payable by each Guarantor
under and pursuant to the terms of this Guaranty.

 

10.4         Waiver.

 

(a)           Each of the Guarantors hereby waives
promptness, diligence, protest, notice of protest, all suretyship defenses,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Administrative
Agent, the Issuing Bank or any Lender secure, perfect or protect any security
interest or lien or any property subject thereto or exhaust any right or take
any action against the Borrower or any other Person or any collateral. Each of
the Guarantors also irrevocably waives, to the fullest extent permitted by law,
all defenses which at any 

 

81

 

time may be available to it in respect of the
Guaranteed Obligations by virtue of any statute of limitations, valuation,
stay, moratorium law or other similar law now or hereafter in effect.

 

(b)           Without limiting the generality of
the foregoing, each Guarantor expressly waives, to the extent permitted by law,
the benefit of California Civil Code Sections 2787 through and including
Section 2855, including Sections 2809, 2810, 2819, 2839, 2845, 2847, 2848,
2849, 2850, and California Civil Code Sections 1432 and 2899.

 

10.5         Subordination; Subrogation. Until
the termination of the Commitment and final payment in full in cash of all of
the Obligations (other than Unasserted Obligations), none of the Guarantors
shall exercise and hereby waives any rights against the Borrower as a result of
payment by any Guarantor hereunder, by way of subrogation, reimbursement,
restitution, contribution or otherwise, and any Guarantor will not prove any
claim in competition with the Administrative Agent, the Issuing Bank or any
Lender in respect of any payment hereunder in bankruptcy, insolvency or
reorganization proceedings of any nature; any Guarantor will not claim any
set-off, recoupment or counterclaim against the Borrower in respect of any
liability of such Guarantor to the Borrower; and each Guarantor waives any
benefit of and any right to participate in any collateral which may be held by
the Administrative Agent, the Issuing Bank and any Lender. The payment of any
amounts due with respect to any Indebtedness of the Borrower now or hereafter
held by any Guarantor is hereby subordinated to the prior payment in full of
the Guaranteed Obligations. Each Guarantor agrees that after the occurrence of
any default in the payment or performance of the Guaranteed Obligations, such
Guarantor will not demand, sue for, or otherwise attempt to collect any such
Indebtedness of any of the Borrower to such Guarantor until the Guaranteed
Obligations then due shall have been paid in full in cash. If, notwithstanding
the foregoing sentence, any Guarantor shall collect or receive any amounts in
respect of such indebtedness, such amounts shall be collected and received by
such Guarantor as trustee for the Administrative Agent, the Issuing Bank and
the Lenders and be paid over to the Administrative Agent for the respective
accounts of the Administrative Agent, the Issuing Bank and the Lenders on
account of the Guaranteed Obligations without affecting in any manner the
liability of any Guarantor under the other provisions of this Article X. 
The provisions of this section shall survive the expiration or termination of
the Agreement and the other Loan Documents and the provisions of this section
shall be supplemental to and not in derogation of any rights and remedies of
the Administrative Agent, the Issuing Bank or any Lender under any separate
subordination agreement which the Administrative Agent, the Issuing Bank or any
Lender may at any time and from time to time entered into with any Guarantor
for the benefit of the Administrative Agent, the Issuing Bank or any Lender.

 

10.6         Payments. Payments by each
Guarantor hereunder may be required by the Administrative Agent on any number
of occasions. All payments made by each Guarantor under this Article X
shall be made to the Administrative Agent, in the manner and at the place of
payment specified therefor in this Agreement, for the account of the Lenders,
the Issuing Bank and the Administrative Agent and in the same currency in which
such Obligation was made, unless otherwise agreed to in writing by the
Administrative Agent, the Issuing Bank or the Lenders.

 

10.7         Setoff. Each Guarantor grants to
the Administrative Agent, the Issuing Bank and the Lenders, as security for the
full and punctual payment and performance of all of such Guarantor’s
obligations under this Article X, a continuing lien on, security
interest and right of setoff in all securities or other property belonging to
such Guarantor now or hereafter held by the Administrative Agent, the Issuing
Bank or such Lender and in all deposits (general or special, time or demand,
provisional or final) and other sums credited by or due from the Administrative
Agent, the Issuing Bank or such Lender to

 

82

 

such Guarantor or subject to withdrawal by such
Guarantor. Regardless of the adequacy of any collateral security or other means
of obtaining payment of any of the Guaranteed Obligations, each of the
Administrative Agent, each Issuing Bank and the Lenders is hereby authorized at
any time and from time to time during the continuance of any Event of Default,
without notice to any Guarantor (any such notice being expressly waived by the
Guarantors) and to the fullest extent permitted by law, to set off and apply
such deposits and other sums against the obligations of such Guarantor under
this Article X, whether or not the Administrative Agent, such Issuing
Bank or such Lender shall have made any demand under this Article X and
although such obligations may be contingent or unmatured.

 

10.8         Further Assurances. Each
Guarantor agrees that it will from time to time, at the request of the
Administrative Agent, do all such things and execute all such documents as the
Administrative Agent may reasonably consider necessary or desirable to give
full effect to this Article X and to perfect and preserve the rights and
powers of the Lenders, the Issuing Bank and the Administrative Agent hereunder.
Each Guarantor acknowledges and confirms that it has established its own
adequate means of obtaining from the Borrower on a continuing basis all
information desired by it concerning the financial condition of the Borrower
and that it will look to the Borrower and not to the Administrative Agent, the
Issuing Bank or any Lender in order for it to keep adequately informed of
changes of the financial condition of the Borrower.

 

10.9         Successors and Assigns. This Article
X shall be binding upon each Guarantor, its successors and assigns, and
shall inure to the benefit of the Administrative Agent, the Issuing Bank and
the Lenders and their respective successors, and permitted transferees and
assigns. Without limiting the generality of the foregoing sentence, each Lender
may, in accordance with and subject to the provisions of this Agreement, assign
or otherwise transfer this Agreement, the other Loan Documents or any other
agreement or note held by it evidencing, securing or otherwise executed in
connection with the Obligations, or sell participations in any interest
therein, to another Person, and such other Person shall thereupon become
vested, to the extent set forth in the agreement evidencing such assignment,
transfer or participation, with all the rights in respect thereof granted to
such Lender herein. None of the Guarantors may assign any of its obligations
hereunder.

 

10.10       Contribution. To the extent any of
the Guarantors makes a payment hereunder in excess of the aggregate amount of
the benefit received by such Person in respect of the extensions of credit
under this Agreement (the “Benefit Amount”), then such Person, after the
payment in full in cash of all of the Guaranteed Obligations shall be entitled
to recover from each such Person such excess payment, pro
rata in accordance with the ratio of the
Benefit Amount received by such other Person to the total Benefit Amounts
received by each of the Guarantors, and the right to such recovery shall be
deemed to be in asset and property of such Person so funding; provided
that all such rights to recovery shall be subordinate and junior in right of
payment to the final and indefeasible repayment in full in cash of all of the Obligations.

 

10.11       Release of Guarantee. Notwithstanding
anything to the contrary in Section 9.17 and this Article X:

 

(a)  if the
Borrower’s delivery of a Compliance Certificate demonstrates to the reasonable
satisfaction of the Administrative Agent that any Guarantor that has been a
Material Subsidiary is no longer a Material Subsidiary for a period of twelve
(12) consecutive months, and if no Event of Default has occurred and is
continuing, the Administrative Agent shall, within 20 Business Days after delivery
of such Compliance Certificate, terminate and release the Guarantee set forth
in this Article X by such Guarantor of the Obligations; and

 

83

 

(b) in the event that Required Lenders shall consent
under Section 6.3 to a sale of all or substantially all of the assets or
Equity Interests of a Guarantor (such that upon the consummation of such sale
such Guarantor would cease to be a Material Subsidiary), the Administrative
Agent shall upon the consummation of such sale, and conditioned upon the
effectiveness thereof, terminate and release the Guarantee set forth in this
Article X by such Guarantor of the Obligations.

 

10.12       Limitation on Guarantee; No Impairment.
Each Guarantor agrees that the Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without
impairing the guarantee of such Guarantor contained in this Article X or
affecting the rights and remedies of the Administrative Agent or any Lender
hereunder. Notwithstanding any provision to the contrary contained herein or in
any other of the Loan Documents, the obligations of each Guarantor under this
Agreement and the other Loan Documents shall be limited to an aggregate amount
equal to the largest amount that would not render such obligations subject to
avoidance under the Debtor Relief Laws or any comparable provisions of any
applicable state laws
(after giving effect to the right of contribution established in Section
10.10).

 

84

 

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

 

	
   

  	
  SIMPSON
  MANUFACTURING CO., INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Thomas J Fitzmyers

  	
   

  
	
   

  	
   

  	
  Name:Thomas
  J Fitzmyers

  
	
   

  	
   

  	
  Title:   CEO

  
	
   

  	
  FOR
  PURPOSES OF ARTICLE X ONLY:

  
	
   

  	
  SIMPSON
  DURA-VENT COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Stephen P. Eberhard

  	
   

  
	
   

  	
   

  	
  Name:Stephen
  P. Eberhard

  
	
   

  	
   

  	
  Title:   President

  
	
   

  	
  SIMPSON
  STRONG-TIE COMPANY INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael J.  Herbert

  	
   

  
	
   

  	
   

  	
  Name:Michael
  J.  Herbert

  
	
   

  	
   

  	
  Title:   CFO

  
	
   

  	
  SIMPSON
  STRONG-TIE INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael J.  Herbert

  	
   

  
	
   

  	
   

  	
  Name:Michael
  J.  Herbert

  
	
   

  	
   

  	
  Title:   CFO

  
						

 

 

	
   

  	
  CITIBANK,
  N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Doug Bontemps

  	
   

  
	
   

  	
   

  	
  Name:  Doug Bontemps

  
	
   

  	
   

  	
  Title:    Vice President

  

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as a
  Lender and in its separate capacities as the Administrative Agent, the
  Issuing Bank, the Swingline Lender, Sole Arranger and Sole Bookrunner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Martha Woods

  	
   

  
	
   

  	
   

  	
  Name:  Martha Woods

  
	
   

  	
   

  	
  Title:    Vice President

  

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	
   

  	
  UNION
  BANK OF CALIFORNIA, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ J. 
  William Bloore

  	
   

  
	
   

  	
   

  	
  Name:  J. 
  William Bloore

  
	
   

  	
   

  	
  Title:    Vice President

  

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	
   

  	
  COMERICA
  BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/
  John Esposito

  	
   

  
	
   

  	
   

  	
  Name:  John Esposito

  
	
   

  	
   

  	
  Title:    Vice President - Western Market

  

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

EXHIBIT A

 

ASSIGNMENT AND ASSUMPTION

 

Reference
is made to the Credit Agreement dated as of October 10, 2007 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Simpson Manufacturing Co., Inc., a Delaware corporation (the “Borrower”),
the Lenders party thereto, and Wells Fargo Bank, National Association, in its
separate capacity as the Administrative Agent, and, for purposes of Article
X thereof only, Simpson Dura-Vent Company, Inc., a California corporation (“Simpson
Dura-Vent”), Simpson Strong-Tie Company Inc., a California corporation (“Simpson
Strong-Tie”) and Simpson Strong-Tie International, Inc., a California
corporation (“Simpson Strong-Tie International”), as Guarantors. Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.

 

The
Assignor identified on Schedule 1 hereto (the “Assignor”) and the
Assignee identified on Schedule 1 hereto (the “Assignee”) agree as
follows:

 

1.             The Assignor hereby irrevocably
sells and assigns to the Assignee without recourse to the Assignor, and the
Assignee hereby irrevocably purchases and assumes from the Assignor without
recourse to the Assignor, as of the Effective Date (as defined below), the
interest described in Schedule 1 hereto (the “Assigned Interest”) in and
to the Assignor’s rights and obligations under the Credit Agreement with
respect to the revolving credit facility contained in the Credit Agreement as
are set forth on Schedule 1 hereto (the “Assigned Facility”), in
a principal amount as set forth on Schedule 1 hereto.

 

2.             The Assignor (a) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or with respect to the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Loan Document or any other instrument or document furnished pursuant
thereto, other than that the Assignor has not created any adverse claim upon
the interest being assigned by it hereunder and that such interest is free and
clear of any such adverse claim; (b) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or any other obligor or the performance or
observance by the Borrower, any of its Subsidiaries or any other obligor of any
of their respective obligations under the Credit Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; and (c) attaches any Note[s] held by it evidencing the Assigned
Facility and (i) requests that the Administrative Agent, upon request by the
Assignee, exchange the attached Note[s] for a new Note or Notes payable to the
Assignee and (ii) if the Assignor has retained any interest in the Assigned
Facility, requests that the Administrative Agent exchange the attached Note[s]
for a new Note or Notes payable to the Assignor, in each case in amounts which
reflect the assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Effective Date).

 

3.             The Assignee (a) represents and
warrants that it is legally authorized to enter into this Assignment and
Assumption; (b) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements delivered pursuant to Section 5.1
thereof and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Assumption; (c) agrees that it will, independently and without reliance upon
the Assignor, the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant thereto; (d) appoints and authorizes the Administrative
Agent to take such action as 

 

 

agent on its behalf and to exercise such powers and discretion under
the Credit Agreement, the other Loan Documents and any other instrument or document
furnished pursuant thereto as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are incidental thereto; and (e)
agrees that it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender, including,
if it is organized under the laws of a jurisdiction outside the United States,
its obligation pursuant to Section 2.16(d) of the Credit Agreement.

 

4.             The effective date of this
Assignment and Acceptance shall be the Effective Date of Assignment described
in Schedule 1 hereto (the “Effective Date”). Following the execution of
this Assignment and Assumption, it will be delivered to the Administrative
Agent (with a copy to the Borrower) for acceptance by it and recording by the
Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).

 

5.             Upon such acceptance and recording,
from and after the Effective Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts have
accrued prior to the Effective Date or accrue subsequent to the Effective Date.
The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.

 

6.             From and after the Effective Date,
(a) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Assumption, have (in addition to such rights
and obligations theretofore held by it) the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights (except under Sections
2.14, 2.15, 2.16, 2.17 and 9.3 of the Credit Agreement in respect of
the period prior to the Effective Date) and be released from its obligations
under the Credit Agreement.

 

7.             THIS ASSIGNMENT AND ASSUMPTION
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption
to be executed as of the date first above written by their respective duly
authorized officers on Schedule 1 hereto.

 

 

Schedule 1

to Assignment and Acceptance

 

Name
of Assignor:

 

Name
of Assignee:

 

Effective
Date of Assignment:

 

	
  Principal or

  Commitment Amount Assigned

  	
   

  	
  Commitment

  Percentage Assigned*

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
  %

  
					

 

 

	
  [NAME
  OF ASSIGNOR]

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted
  [and Consented to]:

  	
  [Consented
  To:

  
	
   

  	
   

  
	
  WELLS
  FARGO BANK, NATIONAL

  ASSOCIATION, as Administrative Agent

  	
  SIMPSON
  MANUFACTURING CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Title:

  

 

 

 

*  Calculate the Commitment percentage that is
assigned to at least 15 decimal places and show as a percentage of the
aggregate Commitments of all Lenders.

 

 

EXHIBIT B

 

FORM OF REVOLVING CREDIT NOTE

 

THIS
REVOLVING CREDIT NOTE (“NOTE”) AND THE OBLIGATIONS REPRESENTED HEREBY
MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF
THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE AND THE
OBLIGATIONS REPRESENTED HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY
THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.

 

	
  $                          

  	
  Pleasanton, California

  
	
   

  	
  [                        ],
  20[    ]

  

 

 

FOR VALUE RECEIVED, the undersigned, SIMPSON
MANUFACTURING CO., INC., a Delaware corporation (the “Borrower”), hereby
unconditionally promises to pay to the order of
                                   
(the “Lender”) or its registered assigns at the Administrative Agent’s
Payment Office specified in the Credit Agreement (as hereinafter defined) for
the account of Lender in lawful money of the United States and in Same Day
Funds (or, with respect to Loans made in Alternative Currencies, as otherwise
expressly provided in the Credit Agreement), on the Maturity Date the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower
pursuant to Article II of the Credit Agreement. The Borrower further agrees to
pay interest in like money at such Administrative Agent’s Payment Office for
the account of Lender on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in Section 2.12 of
the Credit Agreement.

 

The holder of this Note is authorized to indorse on
the schedules annexed hereto and made a part hereof or on a continuation
thereof which shall be attached hereto and made a part hereof the date, Type
and amount of each Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in
the case of LIBO Rate Loans, the length of each Interest Period with respect
thereto.  Each such indorsement shall constitute prima  facie
evidence of the accuracy of the information indorsed. The failure to make any
such indorsement or any error in any such indorsement shall not affect the
obligations of the Borrower in respect of any Loan.

 

This Note (a) is one of the Notes referred to in the
Credit Agreement dated as of October 10, 2007 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Borrower, the Lender, the other Lenders (as defined therein) party thereto,
Wells Fargo Bank, National Association in its separate capacity as the
Administrative Agent, and, for purposes of Article X thereof only,
Simpson Dura-Vent Company, Inc., a California corporation (“Simpson
Dura-Vent”), Simpson Strong-Tie Company Inc., a California corporation (“Simpson
Strong-Tie”) and Simpson Strong-Tie International, Inc., a California
corporation (“Simpson Strong-Tie International”), as Guarantors, (b) is
subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement.

 

Upon the occurrence of any one or more of the Events
of Default, all principal and all accrued interest then remaining unpaid on
this Note shall become, or may be declared to be, immediately due and

 

 

payable,
all as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect to
this Note, whether maker, principal, surety, guarantor, indorser or otherwise,
hereby waive presentment, demand, protest and all other notices of any kind.

 

Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

 

NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE REGISTRATION AND
OTHER PROVISIONS OF SECTION 9.4 OF THE CREDIT AGREEMENT.

 

THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA.

 

	
   

  	
  SIMPSON
  MANUFACTURING CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  

 

 

Schedule A

 

to Revolving Credit Note

 

LOANS,
CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS

 

	
  Date

  	
   

  	
  Amount of Base Rate Loans

  	
   

  	
  Amount

  Converted to

  Base Rate Loans

  	
   

  	
  Amount of Principal of Base

  Rate Loans Repaid

  	
   

  	
  Amount of Base Rate Loans

  Converted to

  LIBO Rate Loans

  	
   

  	
  Unpaid Principal Balance of

  Base Rate Loans

  	
   

  	
  Notation Made
  By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

LOANS,
CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF LIBO RATE LOANS

 

	
  Date

  	
   

  	
  Amount of LIBO Rate

  Loans

  	
   

  	
  Amount Converted to

  LIBO Rate Loans

  	
   

  	
  Interest Period and

  LIBO Rate with

  Respect Thereto

  	
   

  	
  Amount of Principal of

  LIBO Rate Loans

  Repaid

  	
   

  	
  Amount of LIBO Rate

  Loans Converted to

  Base Rate Loans

  	
   

  	
  Unpaid Principal

  Balance of LIBO Rate

  Loan

  	
   

  	
  Notation

  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT C

 

OPINION OF SHARTSIS FRIESE LLP

 

 

EXHIBIT D

 

FORM OF COMPLIANCE CERTIFICATE

 

                                    ,
200  

 

	
  To:

  	
   

  	
  Wells Fargo Bank, National Association, as Administrative Agent for
  the Lenders

  
	
   

  	
   

  	
                                   
  , MAC                              
  

  
	
   

  	
   

  	
                                                                             
  

  
	
   

  	
   

  	
  Attention:                                                  
           

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:  (      )                         

  
	
   

  	
   

  	
  Facsimile:   (      )                         

  

 

Re:                              Credit Agreement dated as of October 10,
2007 (as the same may from time to time be amended, modified or supplemented or
restated, the “Credit Agreement”),
by and among Simpson Manufacturing Co. Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto, Wells Fargo Bank, National
Association in its separate capacity as the Administrative Agent, and, for
purposes of Article X thereof only, Simpson Dura-Vent Company, Inc., a
California corporation (“Simpson Dura-Vent”), Simpson Strong-Tie Company
Inc., a California corporation (“Simpson Strong-Tie”) and Simpson
Strong-Tie International, Inc., a California corporation (“Simpson Strong-Tie
International”), as Guarantors

 

Ladies and
Gentlemen:

 

Reference
is made to the Credit Agreement. Capitalized terms used in this Compliance
Certificate have the same meaning when used herein as given to them in the
Credit Agreement.

 

Pursuant
to Section 5.1(c) of the Credit Agreement, the
undersigned hereby certifies, solely in his or her capacity as [list title of Financial Officer] of the
Borrower and not in his or her individual capacity, to the Administrative Agent
and the Lenders as follows:

 

1.             I am the duly elected, qualified
and acting [list title of Financial Officer]
of the Borrower.

 

2.             I have reviewed the
terms of the Credit Agreement and the other Loan Documents and have made, or
caused to be made under my supervision, a review in reasonable detail of the
transactions and financial condition of the Borrower and its Subsidiaries
during the accounting period covered by financial statements delivered pursuant
to [Section 5.1(a)] [Section 5.1(b)] of the
Credit Agreement [and attached hereto as Schedule 1]. Such financial
statements present fairly, in all material respects, the financial position,
results of operations and cash flows of the Borrower and its consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP
consistently applied, subject, in the case of quarterly financial statements,
to year-end adjustments and the absence of footnotes.

 

3.             The representations and warranties
set forth in Article III of the Credit Agreement are true and correct on
and as of the date hereof with the same effect as if made on the date hereof,
except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct as of such earlier date (provided, that to the extent
any representation or warranty is already limited by any materiality term, such
as a Material Adverse Effect limitation or qualification or the words “material”
or “in any material respect”, then the materiality limitation set forth above
in this paragraph 3 shall be ignored in order to avoid the unintended effect of
a 

 

 

“double
materiality” limitation).

 

4.             The information furnished in Schedule 2  attached hereto was
true and correct as of the last date of the fiscal quarter immediately
preceding the date of this Compliance Certificate.

 

5.             Such reviews have
not disclosed the existence during or at the end of such accounting period, and
the undersigned does not have knowledge of the existence as of the date hereof,
of any condition or event which constitutes a Default or Event of Default,
except for such conditions or events listed on Schedule 3 attached hereto,
specifying the nature and period of existence thereof and what action the
Borrower has taken, or is taking and proposes to take, if any, with respect
thereto.

 

6.             Since the date of the most recent
Compliance Certificate submitted by the Borrower, there has been no change in
GAAP or in the application thereof [, other than [describe
any such change, and if any such change has occurred, specify the effect of
such change on the financial statements accompanying this Compliance
Certificate]].

 

7.             Since the date of
the most recent Compliance Certificate submitted by the Borrower:

 

(a)           the Borrower has not
changed its name, organizational identification number or corporate structure;

 

(b)           the Borrower not changed its
jurisdiction of organization; and

 

(c)           the Borrower has not consummated any
Permitted Acquisition or formed or acquired any new direct or indirect
Subsidiaries[, other than [describe]].

 

8.             During the four most recently
completed fiscal quarters of the Borrower, no Guarantor under the Credit
Agreement has ceased to be a Material Subsidiary[, other than [describe]].

 

9.             During the four most recently
completed fiscal quarters of the Borrower, no Domestic Subsidiary has qualified
to be a Material Subsidiary and no Person has otherwise become a Material
Subsidiary[, other than [describe]].

 

IN WITNESS WHEREOF, this Compliance
Certificate is executed by the undersigned this         
day of                                     ,
200  .

 

	
   

  	
  SIMPSON MANUFACTURING CO., INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
					

 

 

SCHEDULE
1 TO COMPLIANCE CERTIFICATE

 

Dated                                       ,
200  

 

[attach Financial
Statements]

 

 

SCHEDULE 2 TO COMPLIANCE CERTIFICATE

 

Dated                                       ,
200  

 

FINANCIAL COVENANTS OF THE BORROWER

 

(a)                                     EBITDA.
For the Borrower and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), calculated on a trailing four
fiscal quarter basis.

 

	
  (i)

  	
   

  	
  Net
  income

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Income
  tax expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)
  

  	
   

  	
  Interest
  Expense (net of interest income), amortization or writeoff of debt discount
  and debt issuance costs and commissions, discounts and other fees and charges
  associated with Indebtedness

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  Depreciation
  and amortization expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v) 

  	
   

  	
  Amortization
  of intangibles (including, but not limited to, goodwill) and organization
  costs

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  Extraordinary,
  unusual or non-recurring expenses or losses

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  Any
  other non-cash charges

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  Goodwill
  impairment charges

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  Extraordinary,
  unusual or non-recurring income or gains

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (x)

  	
   

  	
  Other
  non-cash income

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EBITDA: 
  (i) plus the sum of (ii) through (viii) minus the sum of
  (ix) and (x):

  	
   

  	
  $

  	
   

  

 

(b)                                    Total
Funded Debt. For the Borrower and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP), calculated as
of the end of the fiscal quarter ended on (or if such day is not the last day
of a fiscal quarter, as of the last day of the fiscal quarter most recently
ended before) the applicable measurement date.

 

	
  TOTAL FUNDED DEBT:

  	
   

  	
  $

  

 

(c)                                     Leverage
Ratio. as calculated as of any measurement date.

 

	
  (i)

  	
   

  	
  Total
  Funded Debt (from (b) above)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  EBITDA
  (from (a) above)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    Leverage
  Ratio:  ratio of (i) to (ii):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    Maximum Leverage Ratio:  3.00 to 1.00

  	
   

  	
   

  

 

 

(d)                                    EBIT.
For the Borrower and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), calculated on a trailing four
fiscal quarter basis.

 

	
  (i)

  	
   

  	
  Net
  income

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Income
  tax expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  Interest
  Expense (net of interest income), amortization or writeoff of debt discount
  and debt issuance costs and commissions, discounts and other fees and charges
  associated with Indebtedness

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  Extraordinary,
  unusual or non-recurring expenses or losses

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  Any
  other non-cash charges

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  Extraordinary,
  unusual or non-recurring income or gains

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  Goodwill
  impairment charges

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  Other
  non-cash income

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EBIT: 
  (i) plus the sum of (ii) through (vi) minus the sum of
  (vii) and (viii):

  	
   

  	
  $

  	
   

  

 

(e)                                     Interest
Expense. For the Borrower and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP), calculated as
of the end of the fiscal quarter ended on (or if such day is not the last day
of a fiscal quarter, as of the last day of the fiscal quarter most recently
ended before) the applicable measurement date.

 

	
  (i)

  	
   

  	
  all
  interest in respect of Indebtedness (including the interest component of any
  payments in respect of Capital Lease Obligations) accrued or capitalized
  during such period (whether or not actually paid during such period)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  net
  amount payable under interest rate Hedging Arrangements during such period (whether
  or not actually paid during such period)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  net
  amount receivable under interest rate Hedging Arrangements during such period
  (whether or not actually received during such period)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INTEREST EXPENSE:  (i) plus (ii) minus (iii):

  	
   

  	
  $

  	
   

  

 

 

(f)                                       Interest
Coverage Ratio. as calculated as of any measurement date.

 

	
  (i)

  	
   

  	
  EBIT
  (from (d) above)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Interest
  expense (from (e) above)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    Interest
  Coverage Ratio:  ratio of (i) to (ii):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    Minimum Interest Coverage Ratio:  3.00 to 1.00

  	
   

  	
   

  	
   

  

 

 

SCHEDULE
3 TO COMPLIANCE CERTIFICATE

 

Dated                               ,
200  

 

LIST OF EXCEPTIONS

 

Condition(s)
or event(s) constituting a Default or Event of Default:

 

 

Period of
Existence:

 

 

Remedial
action with respect to such condition or event:

 

 

EXHIBIT E

 

FORM OF BORROWING REQUEST

 

	
  To:

  	
   

  	
  Wells Fargo Bank, National Association, as Administrative Agent for
  the Lenders

  
	
   

  	
   

  	
                                     
  , MAC                           

  
	
   

  	
   

  	
                                                                            

  
	
   

  	
   

  	
  Attention:                                                 
          

  
	
   

  	
   

  	
  Telephone:  (      )                                             

  
	
   

  	
   

  	
  Facsimile:   (      )                                             

  

 

 

Reference
is hereby made to the Credit Agreement dated as of October 10, 2007 (as the
same may from time to time be amended, modified or supplemented or restated,
the “Credit Agreement”),
by and among Simpson Manufacturing Co. Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto, Wells Fargo Bank, National
Association in its separate capacity as the Administrative Agent, and, for
purposes of Article X thereof only, Simpson Dura-Vent Company, Inc., a
California corporation (“Simpson Dura-Vent”), Simpson Strong-Tie Company
Inc., a California corporation (“Simpson Strong-Tie”) and Simpson
Strong-Tie International, Inc., a California corporation (“Simpson
Strong-Tie International”), as Guarantors. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein with the meanings so
defined.

 

The
Borrower hereby gives notice to the Administrative Agent that Loans of the Type
and amount set forth below are requested to be made on the date indicated below:

 

LOANS

 

	
  Type of Loans

  	
   

  	
  Interest

  Period

  	
   

  	
  Aggregate

  Amount

  	
   

  	
  Date of Loans

  
	
  Base
  Rate Loans

  	
   

  	
  N/A

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LIBO
  Rate Loans (denominated in Dollars)*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LIBO
  Rate Loans (denominated in [list Alternative Currency #1])†

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*               If more than one Interest Period
is requested, the Borrower shall list duration of each requested Interest
Period and amount of requested Loans allocated to each Interest Period.

 

†               List
each LIBO Rate Loan Request to be denominated in a different Alternative
Currency on separate lines.

 

 

The
Borrower hereby requests that the proceeds of the Loans described in this
Borrowing Request be made available to it as follows:

 

[insert transmittal
instructions]

 

The
Borrower hereby certifies that each of the applicable conditions contained in Section 4.2
of the Credit Agreement to the making of any Loan requested hereby is satisfied
in full.

 

	
   

  	
  SIMPSON
  MANUFACTURING CO., INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

DATE:                      ,
200    

 

 

EXHIBIT F

 

FORM OF INTEREST ELECTION REQUEST

 

 

	
  To:

  	
   

  	
  Wells Fargo Bank, National Association, as Administrative Agent for
  the Lenders

  
	
   

  	
   

  	
                                      ,
  MAC                           

  
	
   

  	
   

  	
                                                                         
    

  
	
   

  	
   

  	
  Attention:                                                         
  

  
	
   

  	
   

  	
  Telephone:  (      )                                             

  
	
   

  	
   

  	
  Facsimile:   (      )                                             

  

 

Reference
is hereby made to the Credit Agreement dated as of October 10, 2007 (as the
same may from time to time be amended, modified or supplemented or restated,
the “Credit Agreement”),
by and among Simpson Manufacturing Co. Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto, Wells Fargo Bank, National
Association in its separate capacity as the Administrative Agent, and, for
purposes of Article X thereof only, Simpson Dura-Vent Company, Inc., a
California corporation (“Simpson Dura-Vent”), Simpson Strong-Tie Company
Inc., a California corporation (“Simpson Strong-Tie”) and Simpson
Strong-Tie International, Inc., a California corporation (“Simpson
Strong-Tie International”), as Guarantors. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein with the meanings so
defined.

 

Ladies
and Gentlemen:

 

The
undersigned Borrower refers to the Credit Agreement, the terms defined therein
being used herein as therein defined, and hereby gives you notice irrevocably,
pursuant to Section 2.6 of the Credit Agreement, of the [conversion]
[continuation] of the Loans specified herein, that:

 

1.             The date of the [conversion]
[continuation] is                                   ,
200  .

 

2.             The aggregate amount of the
proposed Loans [converted] [continued] is $                  .

 

3.             The Loans are to be [converted
into] [continued as] [LIBO Rate] [Base Rate] Loans.

 

[4.            The duration of the Interest Period
for the LIBO Rate Loans included in the [conversion] [continuation] shall be             
month[s], with a requested tenor of                    .

 

 

The
undersigned hereby certifies that on the date hereof, and as of the date of the
proposed [conversion] [continuation], no Default or Event of Default has
occurred and is continuing, or would result from such proposed [conversion]
[continuation].

 

	
   

  	
  SIMPSON
  MANUFACTURING CO., INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

DATE:                      ,
200    

 

 

EXHIBIT G-1

 

FORM OF CLOSING CERTIFICATE FOR THE
BORROWER

 

This Closing Certificate is delivered pursuant to Section
4.1(d) of the Credit Agreement dated as of October 10, 2007 (as the same
may from time to time be amended, modified or supplemented or restated, the “Credit Agreement”), by and among
Simpson Manufacturing Co. Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto, Wells Fargo Bank, National
Association in its separate capacity as the Administrative Agent, and, for
purposes of Article X thereof only, Simpson Dura-Vent Company, Inc., a
California corporation (“Simpson Dura-Vent”), Simpson Strong-Tie Company
Inc., a California corporation (“Simpson Strong-Tie”) and Simpson
Strong-Tie International, Inc., a California corporation (“Simpson
Strong-Tie International”), as Guarantors. Terms defined in the Credit
Agreement are used herein as therein defined.

 

The
undersigned, solely in his or her capacity as [insert
title of officer] of the Borrower and not in his or her individual
capacity, hereby certifies to the Administrative Agent and the Lenders as
follows:

 

1.             The
representations and warranties of the Borrower set forth in each of the Loan
Documents to which it is a party or which are contained in any certificate
furnished by or on behalf of the Borrower pursuant to any of the Loan Documents
to which it is a party are true and correct on and as of the date hereof with
the same effect as if made on the date hereof, except for representations and
warranties expressly stated to relate to a specific earlier date, in which case
such representations and warranties were true and correct as of such earlier
date (provided, that to the extent any representation or warranty is
already limited by any materiality term, such as a Material Adverse Effect
limitation or qualification or the words “material” or “in any material respect”,
then the materiality limitation set forth above in this clause (a) shall be
ignored in order to avoid the unintended effect of a “double materiality”
limitation).

 

2.             No
Default or Event of Default has occurred and is continuing as of the date
hereof.

 

3.             Since
December 31, 2006, there has been no development or event that has had or could
reasonably be expected to have a Material Adverse Change.

 

4.             [                        ]
is the duly elected and qualified corporate Secretary of the Borrower.

 

The
undersigned corporate Secretary of the Borrower certifies as follows:

 

A.            There
are no liquidation or dissolution proceedings pending or to my knowledge
threatened against the Borrower or any of its Material Subsidiaries, nor has
any other event occurred adversely affecting or threatening the continued
corporate existence of the Borrower or any of its Material Subsidiaries.

 

B.            The
Borrower is a corporation validly existing and in good standing under the laws
of the State of Delaware and is qualified to do business as a foreign corporation
and in good standing in the State of California and has not failed to qualify
or is not in good standing in any State as to which such failure to so qualify
or be in good standing could reasonably be expected to result in a Material
Adverse Effect. Attached hereto as Annex 1 are certificates of the
applicable public officials evidencing such existence and good standing.

 

C.            Attached
hereto as Annex 2 is a true and complete copy of resolutions duly
adopted by the board of directors of the Borrower on [                              ,
2007]; such resolutions have not in any 

 

 

way
been amended, modified, revoked or rescinded, have been in full force and
effect since their adoption to and including the date hereof and are now in
full force and effect and are the only board proceedings of the Borrower now in
force relating to or affecting the matters referred to therein.

 

D.            Attached
hereto as Annex 3 is a true and complete copy of the bylaws of the
Borrower as in effect on the date hereof.

 

E.             Attached
hereto as Annex 4 is a true and complete copy of the certificate of
incorporation of the Borrower as in effect on the date hereof, and such
certificate has not been amended, repealed, modified or restated.

 

F.             The
persons named below are the duly appointed and acting officers of the Borrower,
hold the respective offices of the Borrower set forth opposite their names
below, and are authorized to sign any documents to which the Borrower is a
party. I am familiar with the signature of each of said officers and the
signature set forth opposite each such officer’s name is the genuine signature
of such officer.

 

 

	
  Name

  	
   

  	
  Title or Office

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

IN
WITNESS WHEREOF, the undersigned have executed the Closing Certificate as of
the date set forth below.

 

	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
  Secretary

  

 

The
undersigned hereby confirms that                             
is the duly elected Secretary of the Borrower and that the signature above is
his  genuine signature.

 

	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  October
  10, 2007

  

 

EXHIBIT G-2

 

FORM OF CLOSING CERTIFICATE FOR EACH
GUARANTOR

 

This Closing Certificate is delivered pursuant to Section
4.1(e) of the Credit Agreement dated as of October 10, 2007 (as the same
may from time to time be amended, modified or supplemented or restated, the “Credit Agreement”), by and among
Simpson Manufacturing Co. Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto, Wells Fargo Bank, National
Association in its separate capacity as the Administrative Agent, and, for
purposes of Article X thereof only, Simpson Dura-Vent Company, Inc., a
California corporation (“Simpson Dura-Vent”), Simpson Strong-Tie Company
Inc., a California corporation (“Simpson Strong-Tie”) and Simpson
Strong-Tie International, Inc., a California corporation (“Simpson
Strong-Tie International”), as Guarantors. Terms defined in the Credit
Agreement are used herein as therein defined.

 

The
undersigned, solely in his or her capacity as [insert
title of officer] of [                ],
a California corporation (the “Guarantor”) and not in his or her
individual capacity, hereby certifies to the Administrative Agent and the
Lenders as follows:

 

1.             [                        ]
is the duly elected and qualified corporate Secretary of the Guarantor.

 

The
undersigned corporate Secretary of the Guarantor certifies as follows:

 

A.            There
are no liquidation or dissolution proceedings pending or to my knowledge
threatened against the Guarantor, nor has any other event occurred adversely
affecting or threatening the continued corporate existence of the Guarantor.

 

B.            The
Guarantor is a corporation validly existing and in good standing under the laws
of the State of California and is qualified to do business as a foreign
corporation and in good standing in the State of [                ]
and [list state in which Guarantor maintains
its chief executive office and principal place of business] and has
not failed to qualify or is not in good standing in any State as to which such
failure to so qualify or be in good standing could reasonably be expected to
result in a Material Adverse Effect. Attached hereto as Annex 1 are
certificates of the applicable public officials evidencing such existence and
good standing.

 

C.            Attached
hereto as Annex 2 is a true and complete copy of resolutions duly
adopted by the board of directors of the Guarantor on [                        ,
2007]; such resolutions have not in any way been amended, modified, revoked or
rescinded, have been in full force and effect since their adoption to and
including the date hereof and are now in full force and effect and are the only
board proceedings of the Guarantor now in force relating to or affecting the
matters referred to therein.

 

D.            Attached
hereto as Annex 3 is a true and complete copy of the bylaws of the
Guarantor as in effect on the date hereof.

 

E.             Attached
hereto as Annex 4 is a true and complete copy of the articles of
incorporation of the Guarantor as in effect on the date hereof, and such
certificate has not been amended, repealed, modified or restated.

 

F.             The
persons named below are the duly appointed and acting officers of the
Guarantor, hold the respective offices of the Guarantor set forth opposite
their names below, and are authorized to sign any documents to which the
Guarantor is a party. I am familiar with the signature of each of said officers
and the signature set forth opposite each such officer’s name is the genuine
signature of such

 

 

officer.

 

	
  Name

  	
   

  	
  Title or
  Office

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

IN
WITNESS WHEREOF, the undersigned have executed the Closing Certificate as of
the date set forth below.

 

	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
  Secretary

  	
   

  
				

 

The
undersigned hereby confirms that                           
is the duly elected Secretary of the Guarantor and that the signature above is
his  genuine signature.

 

	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

Date:       October 10, 2007

 

 

EXHIBIT H

 

FORM OF EXEMPTION CERTIFICATE

 

Reference
is made to the Credit Agreement dated as of October 10, 2007 (as the same may
from time to time be amended, modified or supplemented or restated, the “Credit Agreement”), by and among
Simpson Manufacturing Co. Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto, Wells Fargo Bank, National
Association in its separate capacity as the Administrative Agent, and, for
purposes of Article X thereof only, Simpson Dura-Vent Company, Inc., a
California corporation (“Simpson Dura-Vent”), Simpson Strong-Tie Company
Inc., a California corporation (“Simpson Strong-Tie”) and Simpson
Strong-Tie International, Inc., a California corporation (“Simpson
Strong-Tie International”), as Guarantors. Capitalized terms used herein
that are not defined herein shall have the meanings ascribed to them in the
Credit Agreement.

 

                                                
(the “Non-U.S. Lender”) is providing this certificate pursuant to Section
2.16(d) of the Credit Agreement. The Non-U.S. Lender  hereby represents and warrants that:

 

1.             The Non-U.S. Lender is the sole
record and beneficial owner of the Loans or the obligations evidenced by
Note(s) in respect of which it is providing this certificate;

 

2.             The Non-U.S. Lender is not a “bank”
for purposes of Section 881(c)(3)(A) of the Internal Revenue Code of 1986,
as amended (the “Code”). In this regard, the Non-U.S. Lender further
represents and warrants that:

 

(a)                                  the Non-U.S. Lender is not subject to
regulatory or other legal requirements as a bank in any jurisdiction; and

 

(b)                                 the Non-U.S. Lender has not been treated
as a bank for purposes of any tax, securities law or other filing or submission
made to any Governmental Authority, any application made to a rating agency or
qualification for any exemption from tax, securities law or other legal
requirements;

 

3.             The Non-U.S. Lender is not a
10-percent shareholder of the Borrower within the meaning of Section
881(c)(3)(B) of the Code; and

 

4.             The Non-U.S. Lender is not a
controlled foreign corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code.

 

 

IN
WITNESS WHEREOF, the undersigned has executed this certificate as of the date
set forth below.

 

	
   

  	
   

  	
  [NAME
  OF NON-U.S. LENDER]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
								

 

 

EXHIBIT I

 

FORM OF REPAYMENT NOTICE

 

	
  To:

  	
  Wells Fargo Bank, National Association, as
  Administrative Agent for the Lenders

  
	
   

  	
                                 ,
  MAC                                 

  
	
   

  	
   

  
	
   

  	
  Attention: 

  	
   

  	
   

  
	
   

  	
  Telephone: (         )
  

  	
   

  	
   

  
	
   

  	
  Facsimile:(         )
  

  	
   

  	
   

  
					

 

Reference
is hereby made to the Credit Agreement dated as of October 10, 2007 (as the
same may from time to time be amended, modified or supplemented or restated,
the “Credit Agreement”),
by and among Simpson Manufacturing Co. Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto, Wells Fargo Bank, National
Association in its separate capacity as the Administrative Agent, and, for
purposes of Article X thereof only, Simpson Dura-Vent Company, Inc., a
California corporation (“Simpson Dura-Vent”), Simpson Strong-Tie Company
Inc., a California corporation (“Simpson Strong-Tie”) and Simpson
Strong-Tie International, Inc., a California corporation (“Simpson
Strong-Tie International”), as Guarantors. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein with the meanings so
defined.

 

Ladies
and Gentlemen:

 

The
undersigned Borrower refers to the Credit Agreement, the terms defined therein
being used herein as therein defined, and hereby gives you notice irrevocably,
pursuant to Section 2.10 of the Credit Agreement, of the repayment of
one or more Loans specified herein, as follows:

 

1.             The date of the repayment is                        ,
200   [three (3) Business Days notice for LIBO Rate Loans and for
Commitment Reductions; one (1) Business Days notice for Base Rate Loans; same
day notice for Swingline Loans].

 

2.             The aggregate amount of the
proposed Loan(s) to be repaid is $               [specify
amount not less than $500,000 and in integral multiples of $100,000].

 

3.             The type of Loan(s) to be repaid is
[are] [LIBO Rate] [Base Rate] Loan(s) [specify the type of each Loan to be
repaid].

 

4.             Pursuant to Section 2.8,
the undersigned hereby notifies you that the Commitments shall be [permanently
reduced] [terminated] in the amount of $                    
[not less than $5,000,000 and in integral multiples of $1,000,000].

 

	
   

  	
  SIMPSON
  MANUFACTURING CO., INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATE:
                  ,
  200     

  
						

 

 

EXHIBIT J

 

FORM OF JOINDER AGREEMENT

 

This Joinder Agreement is dated as of [           ,         ].
Reference is made to the Credit Agreement dated as of October 10, 2007 (as the
same may from time to time be amended, modified or supplemented or restated,
the “Credit Agreement”),
by and among Simpson Manufacturing Co. Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto, Wells Fargo Bank, National
Association in its separate capacity as the Administrative Agent, and, for
purposes of Article X thereof only, Simpson Dura-Vent Company, Inc., a
California corporation (“Simpson Dura-Vent”), Simpson Strong-Tie Company
Inc., a California corporation (“Simpson Strong-Tie”) and Simpson
Strong-Tie International, Inc., a California corporation (“Simpson
Strong-Tie International”), as Guarantors. Capitalized terms used herein
that are not defined herein shall have the meanings ascribed to them in the
Credit Agreement.

 

1.             Joinder
to Credit Agreement [and other Loan Documents].

 

The
undersigned, [INSERT NEW GUARANTOR], a [insert jurisdiction of organization]
[insert type of entity] (the “New Guarantor”), hereby joins the Credit
Agreement as a Guarantor thereunder and becomes a party thereto for the
purposes of Article X thereof. The undersigned further covenants and
agrees that by its execution hereof it shall be bound by and shall comply with
all terms and conditions of Article X of the Credit Agreement as if it
were an original Guarantor thereunder and that it is jointly and severally
liable with all of the Guarantors for the payment and performance of all
Guaranteed Obligations under the Credit Agreement.]

 

2.             New
Guarantor’s Representations and Warranties.

 

The
undersigned hereby acknowledges, and represents and warrants, the following:

 

(a)           it
is a [insert type of entity] [incorporated/formed] on or prior to the date
hereof;

 

(b)           it
is a [direct][indirect] wholly-owned Subsidiary of the Borrower;

 

(c)           its
principal place of business is located at                          

                                                                                                                                                                                ;

 

(d)           its
books and records are kept at its principal place of business;

 

(e)           no
provision of its certificate or articles of incorporation or organization, its
by-laws, or, as the case may be, its certificate of formation, limited
partnership certificate, operating agreement, limited partnership agreement or
other constitutive documents and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its Equity Interests prohibits the
undersigned from making distributions to the Borrower;

 

(f)            it
is capable of complying with and is in compliance with all of the provisions of
the Credit Agreement and the Loan Documents applicable to it;

 

(g)           upon
execution of this agreement, the undersigned New Guarantor shall be jointly and
severally liable, together with the Guarantors, for the payment and performance
of all of the Guaranteed Obligations under the Credit Agreement as supplemented
hereby and shall guarantee the full and prompt

 

 

payment
and performance of the Guaranteed Obligations;

 

(h)           the
financial success of the undersigned is expected to depend in whole or in part
upon the financial success of the Borrower;

 

(i)            it
will receive substantial direct and indirect benefits from the Lenders’
extensions of credit to the Borrower pursuant to the Credit Agreement; and

 

(j)            it
wishes to become a party to the Credit Agreement for the purposes of becoming a
Guarantor under Article X thereto and to guarantee the full and prompt
payment and performance of the Guaranteed Obligations.

 

3.             Delivery
of Documents.

 

The
undersigned hereby agrees that the following documents shall be delivered to
the Administrative Agent concurrently with this Joinder Agreement, each in form
and substance satisfactory to the Administrative Agent:

 

(a)           a
legal opinion of counsel to the Borrower and its Subsidiaries with respect to
the New Guarantor, in the form attached as Exhibit M to the Credit
Agreement;

 

(b)           copies,
certified by a duly authorized officer of the undersigned to be true and
complete as of the date hereof, of each of (i) the charter or other formation
documents of the undersigned as in effect on the date hereof, (ii) the by-laws
or other constitutive documents of the undersigned as in effect on the date
hereof, (iii) the resolutions of the Board of Directors or a committee or
similar governing entity of the undersigned authorizing the execution and
delivery of this Joinder Agreement, the other documents executed in connection
herewith and the undersigned’s performance of all of the transactions
contemplated hereby, and (iv) an incumbency certificate giving the name and
bearing a specimen signature of each individual who shall be authorized to
sign, in the undersigned’s name and on its behalf, each of this Joinder
Agreement, and to give notices and to take other action on its behalf under
Credit Agreement;

 

(c)           certificates
of the Secretary of State of [Insert jurisdiction of organization] of a recent
date as to the undersigned’s good standing and valid existence;

 

(d)           certificate(s)
of an appropriate official of [Insert jurisdiction(s)] of a recent date as to
the undersigned’s foreign qualification to do business in such jurisdiction(s);
and

 

(e)           such
other documents as the Administrative Agent may reasonably request.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

 

This Joinder Agreement shall be governed by and
construed in accordance with the laws of the State of California.

 

Very
truly yours,

 

[INSERT
NAME OF NEW GUARANTOR]

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[New
Guarantor’s Address and Facsimile for purposes of Section 9.1 of
the Credit Agreement]:

 

 

 

 

 

Accepted
and Agreed:

 

WELLS
FARGO BANK, NATIONAL ASSOCIATION,

 

as
Administrative Agent

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT K

 

INVESTMENT POLICY OF THE BORROWER

 

 

SIMPSON MANUFACTURING CO., INC.

 

INVESTMENT POLICY

 

 

PURPOSE

 

This document
establishes the policy for the investment management of operating funds of
Simpson Manufacturing Co., Inc.

 

OBJECTIVE

 

To invest in
instruments with the following criteria, prioritized as listed:

 

	
  •

  	
  Preservation of Capital

  
	
  •

  	
  Liquidity to meet Cash Flow Requirements

  
	
  •

  	
  Maximization of yield

  

 

POLICY

 

The Chief
Financial Officer is charged with the overall responsibility of monitoring and
managing all operating funds and to direct those funds either to ongoing
business uses or to direct their investment as appropriate.

 

The Chief
Financial Officer, or any person specifically designated in writing by the
Chief Financial Officer, is authorized to invest operating funds in investment
instruments that comply with the standards set forth herein.

 

Investment
Management Firms may be approved by the Chief Financial Officer to manage the
investment of Simpson Manufacturing Co., Inc. operating funds. Approved
Investment Management Firms must sign an Investment Management Agreement and
manage funds only in accordance with these guidelines.

 

APPROVED SECURITIES/

 

CREDIT QUALITY

 

 

•                  United
States Government obligations, obligations guaranteed by the United States
government and United States Government agency obligations.

 

•                  Obligations
issued by any state or political subdivision (including the District of
Columbia and any possession of the United States)

 

•                  Negotiable
Certificates of Deposit, Eligible Bankers Acceptances and Time deposits of
approved banks or guaranteed by approved banks. Approved banks are defined as:

 

•                                              U.S.
Banks — Any bank or banking holding company which maintains at the time of
purchase a TBW (Thomson Bank Watch)  “
Domestic Bank Watch” rating of B/C or higher or a commercial paper rating of at
least P-1 by Moody’s Investors Services, Inc. (Moody’s) or A-1 by Standard and
Poor’s Corporation (S&P).

 

 

•                                      Non
U.S. Banks— At the time of purchase any bank or banking holding company which
maintains a TBW “International Bank Watch” rating of B/C or higher or a
commercial paper rating of at least P-1 by Moody’s or A-1 by S&P.

 

•                  Obligations
of domestic or foreign corporations including: Commercial Paper, Loan
Participation, Short-Term Notes, Asset Backed Securities and Corporate
Notes/Bonds at the time of purchase having the following ratings:

 

•                                                                   Commercial
Paper ratings of at least P-2 by Moody’s or A-2 by S&P; or

 

•                                                                   Asset
Backed Securities ratings of AAA by Moody’s or Aaa by S&P.

 

•                                                                   Corporate
Notes/Bonds and other corporate securities listed above must have ratings of at
least A2 by Moody’s or A by S&P or an equivalent rating from a nationally
recognized statistical ratings organization (NRSRO) designated by The
Securities and Exchange Commission.

 

•                  Obligations
of governments other than the United States having the highest ratings as
defined in the second or third item above.

 

•                  Repurchase
Agreements collateralized by securities permitted in the first through fourth
items above.

 

•                  Money
Market Funds registered with The Securities and Exchange Commission according
to Rule 2a-7 under the Investment Company Act of 1940.

 

•                  Any
Approved Security previously listed in this section with split credit ratings
shall be considered to carry the lowest publicly available rating for eligibility
purposes under this investment policy.

 

EXCLUDED

 

SECURITIES

 

 

•                All
complex derivative securities including: inverse floaters, range notes, swaps,
options, and structured notes with embedded swaps or options. However, for the
purpose of this guideline, ordinary structured derivatives, such as floating
rate notes, callable notes and puttable notes will not be defined as complex
derivatives.

 

DIVERSIFICATION

 

•                  United
States Government or Agency obligations – no limit.

 

•                  All Other
Instruments – No more than 10% of the
portfolio value shall be invested in the obligations of any one issuer. No more
than 15% of the portfolio shall be invested in Commercial Paper obligations
rated P-2 by Moody’s or A-2 by S&P. No more than 10% of portfolio value
shall be exposed to issuers from any one foreign country. No more than 10% of
portfolio value shall be exposed to any given repurchase agreement
counterparty.

 

MATURITY

 

•                       Limited
to a maximum of 24 months for any single security purchased by Simpson
Manufacturing Co., Inc directly.

 

 

•                       Investment
management firms may maintain a weighted average portfolio maturity of up to 1
year and an average credit quality of at least AA. However any investment
maturing in excess of 6 months must be able to be sold in a secondary market. No
investment in the investment manager’s portfolio may have maturity in excess of
2 years. Asset Backed Securities will be deemed to have a maturity equal to
such security’s weighted average life. At least 15% of the externally managed
portfolios must also mature, or have a put or auction feature within 90 days at
all times.

 

•                       Investments
that have regular puts at par or regular interest rate resets via auction in
which the investor can redeem the investment at par are considered to mature in
concurrence with the frequency of the put or auction.

 

REALIZED
LOSS RESTRICTION                                        Realized
losses as determined on an accounting basis are not permitted without the prior
authorization of the Chief Financial Officer.

 

SAFEKEEPING

 

All Investments (except time deposits and loan participation) with
maturities of more than one week shall require safekeeping of the actual
investment for the full term of the investment, at a safekeeping facility
approved by the Chief Financial Officer. For externally managed portfolios, all
securities will be held in a separate custody account in the name of Simpson
Manufacturing Co., Inc.

 

POLICY

 

EXCEPTIONS

 

Any individual exceptions to the above policy require prior approval by
the Chief Financial Officer. Any changes to the above policy require prior
approval by the Board of Directors of Simpson Manufacturing Co., Inc.

 

 

EXHIBIT L

 

FORM OF CONFIDENTIALITY AGREEMENT

 

 

CONFIDENTIALITY AGREEMENT

 

In order for [                                ]
(“Assignee Lender”) to determine whether or not it will participate in the
syndicated credit facility (the “Financing”) provided to Simpson Manufacturing
Co., Inc. (the “Company”), pursuant to that Credit Agreement dated as of
October 10, 2007 (as the same may form time to time be amended, modified or
restated, the “Credit Agreement”), among the Company, as borrower, Simpson
Dura-Vent Company, Inc., Simpson Strong-Tie Company Inc., Simpson Strong-Tie
International, Inc. and such other Material Subsidaries (as such term is
defined in the Credit Agreement) of the Company as may from time to time be
joined thereto as guarantors, [                                               ]
(“Assignor Lender”) and the other banks and other institutional lenders from
time to time party thereto and named therein as “Lenders”, and Wells Fargo
Bank, National Association in its separate capacity as administrative agent on
behalf and for the benefit of itself and the Lenders (in such capacity, the “Agent”),
Assignee Lender has requested, and the Company is prepared to make available to
Assignee Lender, certain financial and other information relating to the
Company and its affiliates which is non-public, confidential or proprietary in
nature. By execution of this confidentiality agreement (this “Agreement”) and
as a condition to such information being furnished to Assignee Lender, Assignee
Lender agrees that all information concerning the Company, in whatever form
maintained (whether documentary, computerized, electronic or otherwise), that
is furnished or has been previously furnished to Assignee Lender by or on
behalf of the Company (herein collectively referred to as the “Confidential
Information”) in connection with the Financing, will be held and treated by
Assignee Lender, its affiliates, and its and their respective directors,
officers, employees, advisors, agents, or representatives (collectively, “Related
Persons”) in confidence and will not, except as hereinafter provided, without
the prior written consent of the Company and Assignor Lender, be disclosed by
Assignee Lender or any Related Person in any manner whatsoever, in whole or in
part, or be used by Assignee Lender or any Related Person other than in
connection with Assignee Lender’s consideration or provision of the Financing. Assignee
Lender further agrees to disclose Confidential Information only to Related
Persons who need to know the Confidential Information for purposes of
evaluating the Financing and who agree to keep such information confidential
and to be bound by the terms of this Agreement to the same extent as if they
were parties hereto, and for  such
purposes Assignee Lender shall be responsible for any breach of this Agreement
by such Related Persons.

 

In addition, subject to the last sentence of the
preceding paragraph, Assignee Lender agrees that it will not make any
disclosure (i) that it, Assignor Lender or the Company are having or have
had discussions, or that it has received Confidential Information from the
Company or Assignor Lender concerning the Financing or (ii) concerning any
investigations, discussions or negotiations relating to the Financing,
including the status thereof or any of the terms, conditions or other facts or
events with respect thereto; provided, however,
and subject to the paragraphs below, Assignee Lender may make such disclosure
if in the opinion of Assignee Lender’s counsel such disclosure must be made by
Assignee Lender in order that Assignee Lender not violate any applicable law,
rule or regulation and, prior to such disclosure, Assignee Lender promptly
advises and consults with the Company and its legal counsel concerning the
information Assignee Lender proposes to disclose.

 

 

Notwithstanding the foregoing, for purposes of this
Agreement, “Confidential Information” does not include information which:

 

(A)                              was or becomes generally available to the
public other than as a result of a disclosure by Assignee Lender or Related
Persons; or

 

(B)                                was or becomes available on a
non-confidential basis from a source other than the Company who, insofar as is
known to Assignee Lender, is not prohibited from transmitting the information
by a contractual, legal or fiduciary obligation to the Company.

 

Further, Assignee Lender may disclose Confidential
Information:

 

(i)            to any governmental or regulatory authority
to which Assignee Lender is or becomes subject or in connection with an
examination of Assignee Lender by such authority;

 

(ii)           pursuant to subpoena or other legal process; provided
that, if not prohibited by law, Assignee Lender will use its best efforts to
provide prompt notice to the Company of receipt of such subpoena prior to
delivering the Confidential Information in response to the subpoena so that the
Company may seek an appropriate protective order and/or waive Assignee Lender’s
compliance with the provisions of this Agreement, and Assignee Lender will
cooperate with the Company to obtain such protective order or other remedy;

 

(iii)          to any person and in any proceeding necessary in Assignee Lender’s
judgment to protect the interest of Assignee Lender or any Related Persons in
connection with any claim or dispute involving Assignee Lender or any Related
Persons; provided that, if not prohibited by law,
Assignee Lender will use its best efforts to provide prompt prior notice to the
Company prior to delivering the Confidential Information to such person or in
such proceeding so that the Company may seek an appropriate protective order
and/or waive Assignor Lender’s compliance with the provisions of this
Agreement; or

 

(iv)         to any
prospective assignee or participant of Assignee Lender under the Financing, if
such assignee or participant has executed in favor of Company a confidentiality
agreement substantially in the form of this Agreement.

 

Assignee Lender agrees
that monetary damages would not be a sufficient remedy for any breach of this
Agreement by Assignee Lender or Related Persons and that in addition to all
other remedies, the Company shall be entitled to specific performance and
injunctive relief as a remedy for any such breach.

 

If Assignee Lender decides not to proceed with the
proposed participation in the Financing or with any further discussions
concerning the same, then Assignee Lender shall immediately deliver all
Confidential Information to Assignor Lender or, with the permission of Assignor Lender, destroy all written material
constituting the Confidential Information and will not retain 

 

 

any copies, extracts or
other reproductions in whole or in part of such written material, except as may
be required by applicable law, regulation or legal process. Notwithstanding the cessation of negotiations
or discussions or the termination of the proposed participation described
above, this Agreement shall remain in full force and effect so long as any of
the Confidential Information has not been generally disclosed to the public or
published in or otherwise made ascertainable from any source available to the
public generally.

 

All
of the Confidential Information furnished to Assignee Lender has been prepared
or compiled by the Assignor Lender solely for informational purposes from
information supplied by or on behalf of the Company. The Assignor Lender
assumes no responsibility for, or makes any representation or warranty (express
or implied) with respect to, the accuracy or completeness of the Confidential
Information. The Assignor Lender expressly disclaims any liability for any
statements, express or implied, contained in, or omissions from, the Confidential
Information. The Confidential Information has been prepared to assist
interested parties in making their own evaluation of the Company and does not
purport to be all-inclusive or to contain all the information that a
prospective lender may desire. In all cases, interested parties should conduct
their own independent investigation and analysis of the Company and the data
set forth in the Confidential Information.

 

Assignee
Lender hereby acknowledges that it is aware that the securities laws of the
United States prohibit any person who has material, non-public information
concerning the Company or the Financing involving the Company from purchasing
or selling securities in reliance upon such information or from communicating
such information to any other person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such
securities in reliance upon such information.

 

This Agreement shall be governed by the laws of the
State of California (without regard to the conflicts of laws principles
thereto).

 

This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.

 

 

Please fax a copy of this Agreement to the attention of [                               ]:  Tel: (      )        -        
and overnight the original to [                                                                                    ]

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [ASSIGNOR LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
						

 

 

AGREED TO AND ACCEPTED as
of this date                                 
         , 200  :

 

 

	
  [ASSIGNEE LENDER]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
   

  
						

 

EXHIBIT M

 

FORM OF OPINION - ADDITIONAL
GUARANTOR

 

[Date]

 

	
  Wells Fargo Bank, National Association,

  	
   

  
	
  as Administrative Agent and as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

The Lenders Listed on Schedule 1

 

Ladies and Gentlemen:

 

We have acted as counsel for Simpson Manufacturing
Co., Inc., a Delaware corporation (the “Borrower”), and Simpson
Dura-Vent Company, Inc., a California corporation (“Simpson Dura-Vent”),
Simpson Strong-Tie Company Inc., a California corporation (“Simpson Strong-Tie”)
and Simpson Strong-Tie International, Inc., a California corporation (“Simpson
Strong-Tie International,” and, collectively with Simpson Dura-Vent, Simpson
Strong-Tie and Simpson Strong-Tie International, the “Guarantors,” and the
Guarantors, collectively with the Borrower,
the “Loan Parties”) and [describe
the new Guarantor] (the “Additional Guarantor”) in connection
with the Credit Agreement dated as of October 10, 2007 (the “Credit Agreement”),
among the Borrower, the Guarantors, the banks and other financial institutions
identified therein as Lenders, and Wells Fargo Bank, National Association in
its separate capacity as the Administrative Agent. Terms defined in the Credit
Agreement are used herein with the same meanings.

 

We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.

 

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

 

1.             The
Additional Guarantor is a corporation validly existing and in good standing as
a domestic corporation under the laws of the State of [                 ].
The Additional Guarantor is qualified and in good standing as a foreign
corporation in the State[s] of [                  ]
[ and                   ].
[note: good standing opinion may be based solely on certificates of status/good
standing certificates issued by the applicable state Secretaries of State
without further investigation]

 

2.             The
Additional Guarantor has the corporate power to own, lease and operate its
properties, borrow money, to carry on its business as now conducted, and to
execute, deliver and perform its obligations under each of (a) the Joinder
Agreement, dated as of [                  ,
20    ], between the Administrative Agent and the
Additional Guarantor and (b) for purposes of the Guarantee in Article X thereof
only, the Credit Agreement (collectively, the “Transaction Documents”).

 

3.             The
execution, delivery and performance by the Additional Guarantor of each of the
Transaction Documents to which it is a party, including the Credit Agreement as
the Additional Guarantor has been joined thereto by the Joinder Agreement, has
been duly authorized by all requisite corporate action on the part of the
Additional Guarantor and does not require any further approval of, or action
by, its equity holders or officers.

 

 

4.             The
Joinder Agreement has been duly executed and delivered by the Additional
Guarantor.

 

5.             Each
of the Transactions Documents to which the Additional Guarantor is a party,
including the Credit Agreement as the Additional Guarantor has been joined
thereto by the Joinder Agreement, is a valid and binding obligation of the
Additional Guarantor, enforceable against the Additional Guarantor in
accordance with its terms. [subject
to customary limitations and qualifications reasonably acceptable to recipients
of this letter.]

 

6.             The
execution, delivery and performance by the Additional Guarantor of each of the
Transaction Documents to which it is a party, will not (a) conflict with
or result in a violation by the Additional Guarantor of any of the provisions
or terms of the Additional Guarantor’s certificate of incorporation, bylaws or
other organizational documents, (b) to the best of our knowledge, violate,
contravene or result in a violation of, or a default under, any judgment,
order, writ, decree, determination or award of any governmental authority or
arbitrator which has been rendered in a matter in which the Additional
Guarantor is a named party or by which any of its properties is bound, (c)
violate or contravene any provision of any federal or California law, statute,
rule or regulation, in each case as applicable to Persons such as the
Additional Guarantor in commercial transactions of the nature contemplated by
the Transaction Documents, or (d) to the best of our knowledge, result in a
breach of any of the material terms or conditions of, or result in the
imposition of any contractual Lien, upon any properties of the Additional
Guarantor pursuant to, or constitute a default under, any of the material
agreements to which the Additional Guarantor is a party or by which any of the
Additional Guarantor property is bound.

 

7.             Other
than the recordations, filings, registrations, authorizations, exemptions,
consents, approvals, and orders already obtained by the Additional Guarantor
(each of which we have examined and each of which to the best of our knowledge
is in full force and effect), no recordation, filing, registration,
authorization, exemption, consent, approval, or order of or with any
governmental authority pursuant to any now existing federal or state law or
regulation to enable the Additional Guarantor to execute and deliver, and
perform its obligations to be performed under each of the Transaction Documents
to which it is a party, including the Credit Agreement as the Additional
Guarantor has been joined thereto by the Joinder Agreement.

 

8.             To
the best of our knowledge, no action, suit, other legal proceeding, arbitral
proceeding or investigation is pending by or before any court or governmental
authority or in any formal arbitration or is overtly threatened against the
Additional Guarantor or any of its properties that seeks to invalidate or
otherwise limit the enforceability of, or enjoin, any of the Transaction
Documents to which it is a party, including the Credit Agreement as the
Additional Guarantor has been joined thereto by the Joinder Agreement.

 

 

This opinion is intended solely for the benefit of
Wells Fargo Bank, National Association in its separate capacity as the
Administrative Agent and of each of the Lenders and of each other bank,
financial institution, institutional lender or other Person as shall hereafter
become a Lender under the Credit Agreement (each of which may make this opinion
available, for informational and not reliance purposes, to its respective
counsel, auditors, regulators, underwriters, rating agencies, pledgees (in
respect of securitizations and other funding vehicles) and other comparable
Persons), and is not to be made available to or relied upon by any other
Person, without our prior written consent.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Counsel to the Loan Parties]

  
	
   

  	
   

  

 

Schedule 1 to Opinion Letter

 

List of Lenders

 

 

SCHEDULE 2.1

 

COMMITMENTS

 

	
  Lender

  	
   

  	
  Commitment

  	
   

  
	
  Wells Fargo Bank, National Association

  	
   

  	
   

  	
  $

  	
  100,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Citibank, N.A.

  	
   

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Comerica Bank

  	
   

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Union Bank of California, N.A.

  	
   

  	
   

  	
  $

  	
  50,000,000

  	
   

  

 

 

Schedule 3.11

 

EQUITY INTERESTS IN SUBSIDIARIES

 

Corporations

 

	
  Name

  	
   

  	
  Jurisdiction of 

  Organization

  	
   

  	
  Owner of 

  Outstanding Shares 

  of Capital Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Company Inc. (“SST”)

  	
   

  	
  California

  	
   

  	
  Borrower

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Dura-Vent Company, Inc.

  	
   

  	
  California

  	
   

  	
  Borrower

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie International, Inc. (“STI”)

  	
   

  	
  California

  	
   

  	
  SST

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Japan, Inc.

  	
   

  	
  California

  	
   

  	
  SST

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Australia, Inc. (“STAU”)

  	
   

  	
  California

  	
   

  	
  SST

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Canada, Limited

  	
   

  	
  Canada

  	
   

  	
  SST

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Asia Limited

  	
   

  	
  Hong
  Kong

  	
   

  	
  SST

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie A/S (“STDEN”)

  	
   

  	
  Denmark

  	
   

  	
  STI

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Europe EURL (“STEUR”)

  	
   

  	
  France

  	
   

  	
  STI

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie, S.A.S. (“STSA”)

  	
   

  	
  France

  	
   

  	
  STEUR

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  France SCI

  	
   

  	
  France

  	
   

  	
  STEUR-.02%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  STSA-99.98%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie GmbH (“STGER”)

  	
   

  	
  Germany

  	
   

  	
  STI

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Sp.z,o.o.

  	
   

  	
  Poland

  	
   

  	
  STDEN

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATF
  GmbH

  	
   

  	
  Switzerland

  	
   

  	
  STGER

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Australia Pty Limited

  	
   

  	
  Australia

  	
   

  	
  STAU

  

 

 

	
  Simpson
  Strong-Tie Company Inc. Chile Y

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compañia
  Limitada

  	
   

  	
  Chile

  	
   

  	
  SST-99%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Borrower-1%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Company Inc.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Argentina
  SRL

  	
   

  	
  Argentina

  	
   

  	
  SST-99%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Borrower-1%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Strong-Tie Mexico, S. de R.L. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  SST-99%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Borrower-1%

  

 

Limited Liability Companies

 

	
   

  	
   

  	
   

  	
   

  	
  Owner of

  
	
   

  	
   

  	
   

  	
   

  	
  Outstanding

  
	
   

  	
   

  	
  Jurisdiction

  	
   

  	
  Membership

  
	
  Name

  	
   

  	
  of Organization

  	
   

  	
  Interests

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simpson
  Manufacturing Cyprus Limited

  	
   

  	
  Cyprus

  	
   

  	
  Borrower

  

 

 

OTHER RIGHTS PERTAINING TO EQUITY INTERESTS IN
SUBSIDIARIES

 

As of
the Effective Date, there are no options, warrants or other rights to purchase,
Liens, subscriptions, options, warrants, calls, rights or other agreements or
commitments of any nature relating to any Equity Interests of any Subsidiary of
the Borrower.

 

 

Schedule 3.18

 

HAZARDOUS SUBSTANCE DISCLOSURES

 

None

 

 

Schedule 4.1(h)

 

DEVELOPMENTS OR EVENTS NOT CONSITUTING A MATERIAL
ADVERSE CHANGE

 

Losses
incurred by Simpson Dura-Vent Company, Inc. during the first and second fiscal
quarters of 2007, as reflected in Simpson Dura-Vent Company, Inc.’s
unconsolidated financial statements for such fiscal quarters.

 

 

Schedule 6.1

 

EXISTING INDEBTEDNESS

 

None

 

 

Schedule 6.2

 

EXISTING LIENS

 

 

1.  UCC #06-7058472625 filed with the CA Secretary
of State

 

Debtor: Simpson
Strong-Tie Company Inc.

 

Secured Party: J.R.
Automation Technologies, Inc.

 

Collateral: JR Job
#121010/QTY 1/Machine Description: Wedge-All Anchor Wrapping

 

2.  Security
interest in furniture, equipment, fixtures and property of every kind, nature
and description (“Tenant Property”) related to or arising out of the leasehold
estate of Simpson Strong-Tie Company Inc., successor in interest to Swan Secure
Products, Inc., which Tenant Property may be located in or upon the leased
building and premises at 960 Turnpike St., Canton, MA

 

Original Debtor: Swan
Secure Products, Inc.

 

Successor Debtor: Simpson
Strong-Tie Company Inc.

 

Secured Party/Landlord: Foxford
Business Center, LLC

 

Instrument Creating
Security Interest: Lease dated 10/6/06 between Foxford Business Center, LLC,
Landlord, and Swan Secure Products, Inc., Tenant

 

3.  Release of
Professional Debt Claims (Dailly Law Jan. 21, 1981, Monetary and Financial Code
of France, Article L313-23 et. seq.), creating a potential assignment or pledge
of receivables, securing the Credit Agricole Overdraft Line of Credit
#83049797948 in favor of Simpson Strong-Tie S.A.S. (France)

 

 

Schedule 6.4

 

EXISTING INVESTMENTS

 

None

 

 

Schedule 6.7

 

AFFILIATE TRANSACTIONS

 

 

1.               Any and all
transactions, not to exceed $500,000 in the aggregate subsequent to the
Effective Date, (a) between the Borrower or any Subsidiary and any non-profit
or charitable organization whose board of directors includes an individual who
also serves as a member of the board of directors of the Borrower or any
Subsidiary, and/or (b) between the Borrower or any Subsidiary and any
non-profit or charitable organization to which Barclay Simpson or Sharon
Simpson makes charitable contributions or on whose behalf Barclay Simpson or
Sharon Simpson serves as a member of the board of directors or trustees,
including without limitation the California College of Arts, the California
Shakespeare Festival, and the University of California, Berkeley.

 

2.               Any and all
activities in furtherance of or related to the transactions in #1 above,
including without limitation the sponsoring by Borrower or any Subsidiary of
educational courses and activities and the donation of goods and services in
kind, with a value not to exceed $500,000 in the aggregate subsequent to the
Effective Date.

 

3.               Any and all
transactions, not to exceed $500,000 in the aggregate subsequent to the
Effective Date, between the Borrower or any Subsidiary and Simpson Fine Arts
for the purchase of fine art and other goods and services.

 

4.               Any and all
transactions, not to exceed $2,000,000 in the aggregate subsequent to the
Effective Date, (a) between the Borrower or any Subsidiary and PSB, a non-profit
organization, pursuant to which the Borrower or any Subsidiary provides
assistance to PSB, as the holder of Equity Interests in the Borrower, by (i)
filing a registration statement with the SEC under the Securities Act of 1933
covering the resale of such party’s Equity Interests in the Borrower, (ii)
paying all costs, expenses and attorneys’ fees related to the registration
statement, and (iii) making all necessary efforts and filings to keep such
registration statement continuously effective ((i) – (iii), collectively, “Registration
Activities”) and (b) between the Borrower or any Subsidiary and the Simpson
Family, as the holders of Equity Interests in the Borrower, with respect to any
and all Registration Activities for the benefit of the Simpson Family’s Equity
Interests in the Borrower.

 

For purposes of #4 above,
“Simpson Family” means each of Barclay Simpson and Sharon Simpson and each of
their descendants, including the spouses of such descendants. A “spouse” shall
mean the individual to whom a person is married, and “descendants” of an
individual shall mean all the individual’s lineal descendants of all
generations, with the relationship of parent and child at each generation being
determined by the definitions of parent and child under the California Probate
Code; the terms “child” and “descendant” shall include “adopted child”; the
term “adopted child” means an individual who was adopted before reaching age 18
and who lived 

 

 

a substantial part of his
or her minority with the adopting parent; an adopted child and the adopted
child’s descendants shall be considered descendants of the adopting parent or
parents and of anyone who is by blood or adoption an ancestor of the adopting
parent or of either of the adopting parents; and the terms “child” and “descendant”
shall not include a foster child or a stepchild, even if a parent-child
relationship existed between the foster parent and the foster child or between
the stepparent and the stepchild.

 

 

Schedule 6.8

 

EXISTING RESTRICTIONS AND CONDITIONS

 

None

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