Document:

Exhibit 10.1

 

$150,000,000

CREDIT AGREEMENT

dated as of

June 2, 2005

among

BLYTH, INC.

PARTYLITE TRADING SA

THE LENDERS LISTED HEREIN

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

and

BANK OF AMERICA, N.A. and LASALLE BANK,

NATIONAL ASSOCIATION,

as Co-Syndication Agents

 

 

J.P. MORGAN SECURITIES INC.,

as Sole Lead Arranger and Sole Bookrunner

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  1.01. 

  	
  Definitions

  	
   

  
	
  Section
  1.02. 

  	
  Accounting
  Terms and Determinations

  	
   

  
	
  Section
  1.03. 

  	
  Types
  of Borrowings

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  THE CREDITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  2.01. 

  	
  Commitments
  to Lend

  	
   

  
	
  Section
  2.02. 

  	
  Method
  of Borrowing

  	
   

  
	
  Section
  2.03. 

  	
  Notice
  to Lenders; Funding of Loans

  	
   

  
	
  Section
  2.04. 

  	
  Registry;
  Notes

  	
   

  
	
  Section
  2.05. 

  	
  Maturity
  of Loans

  	
   

  
	
  Section
  2.06. 

  	
  Interest
  Rates

  	
   

  
	
  Section
  2.07. 

  	
  Fees

  	
   

  
	
  Section
  2.08. 

  	
  Optional
  Termination or Reduction of Commitments

  	
   

  
	
  Section
  2.09. 

  	
  Method
  of Electing Interest Rates

  	
   

  
	
  Section
  2.10. 

  	
  Scheduled
  Termination of Commitments

  	
   

  
	
  Section
  2.11. 

  	
  Optional
  Prepayments

  	
   

  
	
  Section
  2.12. 

  	
  General
  Provisions as to Payments

  	
   

  
	
  Section
  2.13. 

  	
  Funding
  Losses

  	
   

  
	
  Section 2.14. 

  	
  Computation of Interest and Fees

  	
   

  
	
  Section 2.15.

  	
  Letters of Credit

  	
   

  
	
  Section 2.16. 

  	
  Takeout of Swingline Loans

  	
   

  
	
  Section 2.17. 

  	
  Increased Commitments, Additional Lenders

  	
   

  
	
  Section 2.18. 

  	
  Currency Equivalents

  	
   

  
	
  Section 2.19. 

  	
  Judgment Currency

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  CONDITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01. 

  	
  Closing

  	
   

  
	
  Section 3.02. 

  	
  Borrowings and Issuances of Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01. 

  	
  Corporate Existence and Power

  	
   

  
	
  Section 4.02. 

  	
  Corporate and Governmental Authorization; No Contravention

  	
   

  
	
  Section 4.03. 

  	
  Binding Effect

  	
   

  

 

 

	
  Section 4.04. 

  	
  Financial Information

  	
   

  	
   

  
	
  Section 4.05. 

  	
  Litigation

  	
   

  	
   

  
	
  Section 4.06. 

  	
  Compliance with ERISA

  	
   

  	
   

  
	
  Section 4.07. 

  	
  Environmental Matters

  	
   

  	
   

  
	
  Section 4.08. 

  	
  Taxes

  	
   

  	
   

  
	
  Section 4.09. 

  	
  Not an Investment Company

  	
   

  	
   

  
	
  Section 4.10. 

  	
  Full Disclosure

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
   

  
	
  COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01. 

  	
  Information

  	
   

  	
   

  
	
  Section 5.02. 

  	
  Compliance with Law

  	
   

  	
   

  
	
  Section 5.03. 

  	
  Insurance

  	
   

  	
   

  
	
  Section 5.04. 

  	
  Maintenance of Properties

  	
   

  	
   

  
	
  Section 5.05. 

  	
  Maintenance of Records; Inspection

  	
   

  	
   

  
	
  Section 5.06. 

  	
  Payment of Taxes and Claims

  	
   

  	
   

  
	
  Section 5.07. 

  	
  Corporate Existence, etc

  	
   

  	
   

  
	
  Section 5.08. 

  	
  Transaction with Affiliates

  	
   

  	
   

  
	
  Section 5.09. 

  	
  Prohibited Liens

  	
   

  	
   

  
	
  Section 5.10. 

  	
  Subsidiary Indebtedness

  	
   

  	
   

  
	
  Section 5.11. 

  	
  Investments

  	
   

  	
   

  
	
  Section 5.12. 

  	
  Leverage Ratio

  	
   

  	
   

  
	
  Section 5.13. 

  	
  Minimum Adjusted Consolidated Net Worth

  	
   

  	
   

  
	
  Section 5.14. 

  	
  Mergers and Sales of Assets.

  	
   

  	
   

  
	
  Section 5.15. 

  	
  Use of Proceeds

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
   

  
	
  DEFAULTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01. 

  	
  Events of Default

  	
   

  	
   

  
	
  Section 6.02. 

  	
  Notice of Default

  	
   

  	
   

  
	
  Section 6.03. 

  	
  Cash Cover

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
   

  
	
  THE AGENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01. 

  	
  Appointment and Authorization

  	
   

  	
   

  
	
  Section 7.02. 

  	
  Administrative Agent and Affiliates

  	
   

  	
   

  
	
  Section 7.03. 

  	
  Action by Administrative Agent

  	
   

  	
   

  
	
  Section 7.04. 

  	
  Consultation with Experts

  	
   

  	
   

  
	
  Section 7.05. 

  	
  Liability of Agent

  	
   

  	
   

  
	
  Section 7.06.

  	
  Indemnification

  	
   

  	
   

  
	
  Section 7.07. 

  	
  Credit Decision

  	
   

  	
   

  
	
  Section 7.08. 

  	
  Successor Administrative Agent

  	
   

  	
   

  
	
  Section 7.09. 

  	
  Agents’ Fees; Arranger Fee

  	
   

  	
   

  
	
  Section 7.10. 

  	
  Co-syndication Agents

  	
   

  	
   

  

 

iii

 

	
  ARTICLE 8

  	
   

  	
   

  
	
  CHANGE IN CIRCUMSTANCES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01. 

  	
  Basis for Determining Interest Rate Inadequate or Unfair

  	
   

  	
   

  
	
  Section 8.02. 

  	
  Illegality

  	
   

  	
   

  
	
  Section 8.03. 

  	
  Increased Cost and Reduced Return

  	
   

  	
   

  
	
  Section 8.04. 

  	
  Taxes

  	
   

  	
   

  
	
  Section 8.05. 

  	
  Base Rate Loans Substituted for Affected Fixed Rate Loans

  	
   

  	
   

  
	
  Section 8.06. 

  	
  Substitution of Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01. 

  	
  Notices

  	
   

  	
   

  
	
  Section 9.02. 

  	
  No Waivers

  	
   

  	
   

  
	
  Section 9.03. 

  	
  Expenses; Indemnification

  	
   

  	
   

  
	
  Section
  9.04. 

  	
  Sharing
  of Set-offs

  	
   

  	
   

  
	
  Section
  9.05. 

  	
  Amendments
  and Waivers

  	
   

  	
   

  
	
  Section
  9.06. 

  	
  Successors
  and Assigns

  	
   

  	
   

  
	
  Section
  9.07. 

  	
  Collateral

  	
   

  	
   

  
	
  Section
  9.08. 

  	
  GOVERNING
  LAW; SUBMISSION TO JURISDICTION

  	
   

  	
   

  
	
  Section
  9.09. 

  	
  Counterparts;
  Integration; Effectiveness

  	
   

  	
   

  
	
  Section
  9.10. 

  	
  WAIVER
  OF JURY TRIAL

  	
   

  	
   

  
	
  Section
  9.11. 

  	
  Confidentiality

  	
   

  	
   

  
	
  Section
  9.12. 

  	
  USA
  Patriot Act

  	
   

  	
   

  
	
  Section
  9.13. 

  	
  Right
  of Set-off

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
   

  
	
  GUARANTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01. 

  	
  The Guarantee

  	
   

  	
   

  
	
  Section 10.02. 

  	
  Guarantee Unconditional

  	
   

  	
   

  
	
  Section 10.03. 

  	
  Discharge Only upon Payment in Full; Reinstatement in Certain
  Circumstances

  	
   

  	
   

  
	
  Section 10.04. 

  	
  Waiver

  	
   

  	
   

  
	
  Section 10.05. 

  	
  Subrogation

  	
   

  	
   

  
	
  Section 10.06. 

  	
  Stay of Acceleration

  	
   

  	
   

  

 

iv

 

	
  Pricing Schedule

  	
   

  
	
   

  	
   

  
	
  Schedule 2.16

  	
  —

  	
  Existing Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 5.08

  	
  —

  	
  Specified Affiliate Transactions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 5.09

  	
  —

  	
  Existing Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 5.10

  	
  —

  	
  Existing Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 5.11

  	
  —

  	
  Existing Investments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A 

  	
  —
  

  	
  Form of Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
  —

  	
  Form of Notice of Borrowing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
  —

  	
  Form of Opinion of Counsel for the Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
  —

  	
  Form of Opinion of Special Counsel for the
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit E

  	
  —

  	
  Form of Assignment and Assumption Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit F

  	
  —

  	
  Form of Extension Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit G

  	
  —

  	
  Form of Compliance Certificate

  	
   

  

 

v

 

CREDIT
AGREEMENT

 

AGREEMENT dated as of June 2, 2005 among
BLYTH, INC. and PARTYLITE TRADING SA, the LENDERS listed on the signature pages
hereof, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF
AMERICA, N.A. and LASALLE BANK, NATIONAL ASSOCIATION, as Co-Syndication Agents:

 

The parties hereto agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.01.  Definitions.  The following terms, as used
herein, have the following meanings:

 

“Acquisition”
means an acquisition by the Company or any of its Consolidated Subsidiaries of
a company, a division, a location or a line of business or of all or substantially
all of the assets of any of the foregoing.

 

“Additional Lender”
has the meaning set forth in Section 2.17.

 

“Adjusted Consolidated Net
Worth” means at any date the sum of (i) Consolidated Net Worth,
determined as of such date, plus (ii) an amount equal to the cumulative
reduction in Consolidated Net Worth as a result of any Specified Non-Cash
Charges occurring after January 31, 2005.

 

“Adjusted LIBO Rate”
means, with respect to any Euro-Currency Loan 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 JPMCB in its capacity as administrative agent for the Lenders under the
Loan Documents, and its successors in such capacity.

 

“Administrative
Questionnaire” means, with respect to each Lender, an administrative
questionnaire in the form prepared by the Administrative Agent and submitted to
the Administrative Agent (with a copy to the Company) duly completed by such
Lender.

 

“Affiliate”
means, at any time, (a) with respect to any Person (including the Company), any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person (provided that no Lender shall be deemed to be an Affiliate
of either Borrower by reason of the relationship created by this

 

 

Agreement), and (b) with
respect to the Company, any Person beneficially owning or holding, directly or
indirectly, 20% or more of any class of voting or equity interests of the
Company or any of its Subsidiaries or any corporation of which the Company and
its Subsidiaries beneficially own or hold, in the aggregate, directly or
indirectly, 20% or more of any class of voting or equity interests.  As used in this definition, “Control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.  Unless the context otherwise clearly
requires, any reference to an “Affiliate” is a reference to an Affiliate of the
Company.

 

“Agent” means
the Administrative Agent or each of the Co-Syndication Agents, as the context
may require, and “Agents” means all of them.

 

“Alternative Currencies”
means the Euro, Sterling, Yen or Swiss Francs; 
provided that any other currency (except Dollars) shall also be an
Alternative Currency if (i) the Company requests, by notice to the Lenders
through the Administrative Agent, that such currency be included as an
additional Alternative Currency for purposes of this Agreement, (ii) such
currency is freely transferable and is freely convertible into Dollars in the
London foreign exchange market, (iii) deposits in such currency are customarily
offered to banks in the London interbank market and (iv) no Lender shall have
objected to the inclusion of such currency as an Alternative Currency by notice
to the Company and the Administrative Agent given within five Euro-Currency
Business Days of such Lender’s receipt of the notice referred to in clause (i).

 

“Alternative Currency Loan”
means a Loan that is made in an Alternative Currency in accordance with the applicable
Notice of Borrowing.

 

“Appeal Bond Lien”
has the meaning set forth in the definition of Permitted Liens.

 

“Applicable Lending Office”
means, with respect to any Lender, (i) in the case of its Base Rate Loans, its
Domestic Lending Office, (ii) in the case of its Euro-Currency Loans, its
Euro-Currency Lending Office and (iii) in the case of its Swingline Loans, its
Swingline Lending Office.

 

“Assignee” has
the meaning set forth in Section 9.06(c).

 

“Base Rate”
means, for any day, a rate per annum equal to the greater of the Prime Rate in
effect on such day or the Federal Funds Rate in effect on such day plus 1⁄2 of
1%.  Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Rate.

 

2

 

“Base Rate Loan”
means a Syndicated Loan which bears interest at the Base Rate pursuant to the
applicable Notice of Borrowing or Notice of Interest Rate Election or the
provisions of Article 8.

 

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

 

“Borrower” means
the Company or PLT, as the context may require, and their respective successors,
and “Borrowers” means both of the
foregoing.  When used in connection with
a specific Loan, Borrowing or Letter of Credit, “the Borrower”
means the Borrower that is the borrower (or proposed borrower) of such Loan or
Borrowing or the account party (or proposed account party) for such Letter of
Credit.

 

“Borrowing” has
the meaning set forth in Section 1.03.

 

“Candle America”
means Candle Corporation of America, a New York corporation.

 

“Capital Lease”
means, at any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a
liability in accordance with GAAP.

 

“Cash Equivalents”
means (a) marketable securities issued or directly and unconditionally
guaranteed by the United States Government or issued by any agency or
instrumentality thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of issuance
thereof; (b) obligations of a municipality, a state, a territory or a
possession of the United States, or any political subdivision of any of the
foregoing or of the District of Columbia as described in Section 103(a) of the
Code if these investments are rated at least AA- by S&P or its equivalent
by another nationally recognized credit rating agency or are secured, as to
payments of principal and interest, by a letter of credit provided by a
financial institution or by insurance provided by a bond insurance company
whose debt is rated at least AA- by S&P or its equivalent by another
nationally recognized credit rating agency; (c) commercial paper maturing no
more than 270 days from the date of acquisition thereof and, at the time of
acquisition, rated at least A-1 by S&P or at least P-1 by Moody’s; (d)
investments in short term asset management accounts offered by any bank
described in clause (e) of this definition for the purpose of investing in
loans to a corporation (other than an Affiliate of the Company or any of its
Subsidiaries) organized under the laws of the United States of America or any
state thereof or the District of Columbia and rated at least A-1 by S&P or
at least P-1 by Moody’s; (e) certificates of deposit or banks’ acceptances
maturing within one year from the date of acquisition thereof issued by any bank
or trust company organized under the laws of the United States of America or
any state thereof or the District of Columbia having unimpaired capital,
surplus and undivided profits of not less than $250,000,000 and (f) tax exempt
and tax advantaged auction rate

 

3

 

products issued by financial
institutions and rated at least AA- by Standard & Poor’s Ratings Services
or its equivalent by another nationally recognized credit rating agency.

 

“CCW” means
Candle Corporation Worldwide, Inc., a Delaware corporation.

 

“Closing Date”
means the date on or after the Effective Date on which all of the conditions
specified in Section 3.01 shall have been satisfied.

 

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

 

“Commitment”
means (i) with respect to each Lender listed on the signature pages hereto, the
amount set forth opposite its name on such signature pages, (ii) with respect
to any Additional Lender, the amount of the Commitment assumed by it pursuant
to Section 2.17 and (iii) with respect to any Assignee, the amount of the
transferor Lender’s Commitment assigned to it pursuant to Section 9.06, in each
case as such amount may be changed from time to time pursuant to Section 2.08,
Section 2.17 or Section 9.06(c); provided that, if the context so requires, the
term “Commitment” means the obligation of a Lender to extend credit up to such
amount to the Borrowers hereunder.

 

“Company” means
Blyth, Inc., a Delaware corporation, and its successors.

 

“Company’s 2005 Form 10-K”
means the Company’s annual report on Form 10-K for the fiscal year ended
January 31, 2005, as filed with the Securities and Exchange Commission pursuant
to the Exchange Act.

 

“Consolidated Assets”
means at any date the consolidated assets of the Company and its Consolidated
Subsidiaries determined as of such date.

 

“Consolidated Debt”
means at any date the Indebtedness of the Company and its Consolidated
Subsidiaries, determined on a consolidated basis as of such date.

 

“Consolidated EBITDA”
means, for any period, the sum of (i) Consolidated Net Income for such period
plus (ii) to the extent deducted in the determination thereof, interest
expense, depreciation and amortization expense and provision for income
taxes.  Consolidated EBITDA for any
four-quarter period will be adjusted on a historical pro forma basis to reflect
any Acquisition closed during such period as if such Acquisition had been
closed on the first day of such period.

 

“Consolidated Net Income”
for any period means the consolidated net income of the Company and its
Consolidated Subsidiaries determined on a

 

4

 

consolidated basis for such period,
excluding the effect of any Specified Non-Cash Charges occurring after January
31, 2005.

 

“Consolidated Net Worth”
means at any date the consolidated stockholders’ equity of the Company and its
Consolidated Subsidiaries, determined as of such date.

 

“Consolidated Subsidiary”
means at any date any Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated financial statements
if such statements were prepared as of such date.

 

“Co-Syndication Agents”
means, collectively, Bank of America, N.A. and LaSalle Bank, National
Association, each in its capacity as a Co-Syndication Agent under the Loan
Documents.

 

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

 

“Dollar Amount”
means, at any time:

 

(i)            with respect to any
Dollar-Denominated Loan, the principal amount thereof then outstanding;

 

(ii)           with respect to any Letter of Credit
Liabilities denominated in Dollars, the face amount thereof at such time; and

 

(iii)          with respect to any Alternative
Currency Loan or any Letter of Credit Liabilities denominated in an Alternative
Currency, the principal or face amount thereof then outstanding in the relevant
Alternative Currency, converted to Dollars in accordance with Section 2.18.

 

“Dollar-Denominated Loan”
means a Loan that is made in Dollars in accordance with the applicable Notice
of Borrowing.

 

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

 

“Domestic Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks
in New York City are authorized by law to close.

 

“Domestic Lending Office”
means, as to each Lender, its office located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Lender may
hereafter designate as its Domestic Lending Office by notice to the Company and
the Administrative Agent.

 

5

 

“Effective Date”
means the date this Agreement becomes effective in accordance with Section
9.09.

 

“Environmental Laws”
means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges
to waste or public systems.

 

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

 

“ERISA Affiliate”
means any trade or business (whether or not incorporated) that is treated as a
single employer together with the Company under section 414 of the Code.

 

“Euro” means the
single currency of the Participating Member States.

 

“Euro-Currency Business Day”
means a Euro-Dollar Business Day, unless such term is used in connection with
an Alternative Currency Borrowing or Alternative Currency Loan for which funds
are to be paid or made available in such Alternative Currency on such day, in
which case such day shall not be a Euro-Currency Business Day unless commercial
banks are open for international business (including dealings in deposits in
such Alternative Currency) in both London and the place where such funds are to
be paid or made available.

 

“Euro-Currency Lending
Office” means, as to each Lender, its office, branch or affiliate
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Euro-Currency Lending
Office) or such other office, branch or affiliate of such Lender as it may
hereafter designate as its Euro-Currency Lending Office by notice to the
Company and the Administrative Agent; provided that any Lender may from time to
time by notice to the Company and the Administrative Agent designate separate
Euro-Currency Lending Offices for its Loans in different currencies, in which
case all references herein to the Euro-Currency Lending Office of such Lender
shall be deemed to refer to any or all of such offices, as the context may
require.

 

“Euro-Currency Loan”
means a Syndicated Loan which is either a Euro-Dollar Loan or an Alternative
Currency Loan.

 

“Euro-Currency Margin”
means the applicable rate per annum determined in accordance with the Pricing
Schedule.

 

6

 

“Euro-Currency Rate”
means a rate of interest determined pursuant to Section 2.06(b) on the basis of
an Adjusted LIBO Rate.

 

“Euro-Dollar Business Day”
means any Domestic Business Day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London.

 

“Euro-Dollar Loan”
means a Syndicated Loan denominated in Dollars which bears interest at a
Euro-Currency Rate pursuant to the applicable Notice of Borrowing or Notice of
Interest Rate Election.

 

“Event of Default”
has the meaning set forth in Section 6.01.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time.

 

“Existing Credit Facility”
means the revolving credit agreement dated as of August 5, 2002, in the
original amount of $200,000,000, among the Company, the lenders parties
thereto, and the agents parties thereto, as amended to the Effective Date.

 

“Federal Funds Rate”
means, for any day, the weighted average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Domestic Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a
Domestic Business Day, the average (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.

 

“Fiscal Quarter”
means a consolidated fiscal quarter of the Company and its Subsidiaries ending
on a Quarterly Date.

 

“Fiscal Year”
means the consolidated fiscal year of the Company and its Subsidiaries ending
on January 31 of each calendar year.

 

“Fixed Rate Loans”
means Euro-Currency Loans or Swingline Loans (excluding Swingline Loans bearing
interest at the Base Rate) or any combination of the foregoing.

 

“Foreign Subsidiary”
means any Subsidiary organized outside the United States and conducting
substantially all its business outside the United States.

 

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

 

“Governmental Authority”
means

 

7

 

(a)           the
government of

 

(i)            the United States of America or any
State or other political subdivision thereof, or

 

(ii)           any jurisdiction in which the
Borrower or any of its Subsidiaries conducts all or any part of its business,
or which asserts jurisdiction over any properties of the Borrower or any of its
Subsidiaries, or

 

(b)           any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

 

“Group of Loans”
means at any time a group of Loans consisting of (i) all Loans to the same
Borrower which are Base Rate Loans at such time or (ii) all Euro-Currency Loans
to the same Borrower denominated in the same currency and having the same
Interest Period at such time, provided that, if a Committed Loan of any
particular Lender is converted to or made as a Base Rate Loan pursuant to
Article 8, such Loan shall be included in the same Group or Groups of Loans
from time to time as it would have been if it had not been so converted or
made.

 

“Guaranty”
means, with respect to any Person, any obligation (except the endorsement in
the ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

 

(a)           to
purchase such indebtedness or obligation or any property constituting security
therefore;

 

(b)           to
advance or supply funds (i) for the purchase or payment of such indebtedness or
obligation, or (ii) to maintain any working capital or other balance sheet
condition or any income statement condition of any other Person or otherwise to
advance or make available funds for the purchase or payment of such indebtedness
or obligation;

 

(c)           to
lease properties or to purchase properties or services primarily for the
purpose of assuring the owner of such indebtedness or obligation of the ability
of any other Person to make payment of the indebtedness or obligation; or

 

(d)           otherwise
to assure the owner of such indebtedness or obligation against loss in respect
thereof.

 

8

 

In any computation of the indebtedness or
other liabilities of the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.

 

“Hazardous Material”
means any and all pollutants, toxic or hazardous wastes or any other substances
that might pose a hazard to health or safety, the removal of which may be
required or the generation, manufacture, refining, production, processing,
treatment, storage, handling, transportation, transfer, use, disposal, release,
discharge, spillage, seepage, or filtration of which is or shall be restricted,
prohibited or penalized by any applicable law (including, without limitation,
asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).

 

“Indebtedness”
with respect to any Person means, at any time, without duplication,

 

(a)           its
liabilities for borrowed money and its redemption obligations in respect of
mandatorily redeemable Preferred Stock;

 

(b)           its
liabilities for the deferred purchase price of property acquired by such Person
(excluding (i) accounts payable arising in the ordinary course of business and
(ii) contingent purchase price obligations and other earnout obligations of the
Company and/or its Subsidiaries to the extent such obligations are not required
to be included as indebtedness on the face of the Company’s consolidated
balance sheet in accordance with GAAP, but including all liabilities created or
arising under any conditional sale or other title retention agreement with
respect to any such property);

 

(c)           all
liabilities appearing on its balance sheet in accordance with GAAP in respect
of Capital Leases;

 

(d)           all
liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable
for such liabilities);

 

(e)           all
its liabilities in respect of letters of credit or instruments serving a
similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed
money); provided that for purposes of the definition of “Consolidated Debt”,
contingent liabilities in respect of undrawn amounts under letters of credit
shall be excluded;

 

(f)            Swaps
of such Person, but excluding for purposes of Section 5.10, Swaps entered into
the ordinary course of business for the purpose of managing interest expense or
foreign currency exposure; and

 

(g)           any
Guaranty of such Person with respect to liabilities of a type described in any
clauses (a) through (f) hereof.

 

9

 

Indebtedness of any Person shall include all
obligations of such Person of the character described in clauses (a) through
(g) to the extent such Person remains legally liable in respect thereof not
withstanding that any such obligation is deemed to be extinguished under GAAP.

 

“Indemnitee” has
the meaning set forth in Section 9.03(b).

 

“Insured Judgment Amounts”
shall mean that part, if any, of any and all judgments rendered against the
Company and/or any of its Subsidiaries that are covered by insurance issued by
a financially responsible insurer(s) who has not denied coverage.

 

“Interest Period”
means: (1) with respect to each Euro-Currency Loan, the period commencing on
the date of borrowing specified in the applicable Notice of Borrowing or on the
date specified in the applicable Notice of Interest Rate Election and ending
one, two, three or six months thereafter, as the Borrower may elect in the
applicable notice, provided that:

 

(a)           any Interest Period (except an
Interest Period determined pursuant to clause (c) below) which would otherwise
end on a day which is not a Euro-Currency Business Day for the relevant
currency shall be extended to the next succeeding Euro-Currency Business Day
for such currency unless such Euro-Currency Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Currency Business Day for such currency;

 

(b)           any Interest Period which begins on
the last Euro-Currency Business Day for the relevant currency in a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause (c)
below, end on the last Euro-Currency Business Day for the relevant currency in
a calendar month; and

 

(c)           any Interest Period which would
otherwise end after the Termination Date for the relevant currency shall end on
such Termination Date; and

 

(2)           with
respect to each Swingline Loan, the period commencing on the date of borrowing
specified in the applicable Notice of Borrowing and ending such number of days
thereafter (but not more than 7 days) as the Borrower may elect in such notice;
provided that:

 

(a)           any Interest Period (except an
Interest Period determined pursuant to clause (b) below) which would otherwise
end on a day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and

 

10

 

(b)           any Interest Period which would
otherwise end after the Termination Date shall end on the Termination Date.

 

“Investment”
means (a) any direct or indirect purchase or other acquisition by the Company
or any of its Subsidiaries of, or of a beneficial interest in, any securities
of any other Person (other than a Person that, prior to such purchase or
acquisition, was a Subsidiary of the Borrower), (b) any direct or indirect
redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of the Company from any Person other than the Company or any of its
Subsidiaries, of any equity securities of such Subsidiary, or (c) any direct or
indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by the Company or any
of its Subsidiaries to any other Person other than a Subsidiary of the Company,
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business.  The amount
of any Investment shall be the original cost of such Investment plus the cost
of all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such
Investments.  A guaranty by the Company
or any Subsidiary of Indebtedness of the Company or any Subsidiary shall not be
deemed an Investment hereunder.

 

“ISP” has the
meaning set forth in Section 2.15(h).

 

“Issuing Lender”
means JPMCB and any other Lender that may agree to issue letters of credit
hereunder, in each case as issuer of a Letter of Credit hereunder.

 

“JPMCB” means
JPMorgan Chase Bank, N.A., and its successors.

 

“Lender” means
each Person listed on the signature pages hereof as a Lender, each Additional
Lender or Assignee which becomes a Lender pursuant to Section 2.17 or Section
9.06(c), and their respective successors.

 

“Letter of Credit”
means a letter of credit to be issued hereunder by the Issuing Lender in
accordance with Section 2.15.

 

“Letter of Credit
Liabilities” means, for any Lender and at any time, such Lender’s
ratable participation in the sum of (x) the amounts then owing by the Borrower
in respect of amounts drawn under Letters of Credit and (y) the aggregate
amount then available for drawing under all Letters of Credit.

 

“Leverage Ratio”
means, at any date, the ratio of (i) Consolidated Debt at such date to (ii)
Consolidated EBITDA for the period of four consecutive fiscal quarters most
recently ended on or prior to such date.

 

11

 

“LIBO Rate”
means, with respect to any Euro-Currency Loan for any Interest Period, the rate
appearing on the Screen at approximately 11:00 a.m., London time, two
Euro-Currency Business Days prior to the commencement of such Interest Period,
as the rate for deposits in Dollars or the relevant Alternate Currency with a
maturity comparable to such Interest Period. 
In the event that such rate is not available for such currency at such
time for any reason, then the “LIBO Rate” with
respect to such Euro-Currency Loan for such Interest Period shall be the rate
at which deposits of the relevant currency with a maturity comparable to such
Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Euro-Currency Business
Days prior to the commencement of such Interest Period.

 

“Lien” means,
with respect to any Person, any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor, lessor,
lender or other secured party to or of such Person under any conditional sale
or other title retention agreement or Capital Lease, upon or with respect to
any property or asset of such Person.

 

“Loan” means a
Syndicated Loan or a Swingline Loan.

 

“Loan Documents”
means this Agreement and the Notes.

 

“Material” means
material in relation to the business, operations, affairs, financial condition,
assets or properties of the Borrower and its Subsidiaries taken as a whole.

 

“Material Adverse Effect”
means a material adverse effect on (a) the business, operations, affairs,
financial condition, assets or properties of the Company and its Subsidiaries
taken as a whole, or (b) the ability of the Company to perform its obligations
under the Loan Documents or (c) the validity or enforceability of any Loan
Document.

 

“Material Subsidiary”
means, at any time, (i) PLT and (ii) any other Subsidiary of the Company having
consolidated assets at such time in an amount equal to or greater than 10% of
Consolidated Net Worth at such time.

 

“Moody’s” means
Moody’s Investors Service, Inc., or any successor to such corporation’s
business of rating debt securities.

 

“Multiemployer Plan”
means any Plan that is a “multiemployer plan” (as such term is defined in
section 4001(a)(3) of ERISA).

 

“New Acquisition Subsidiary”
shall mean any Subsidiary formed by the Company (or by another Subsidiary of
the Company) after the date of this Agreement for the purpose of consummating
an acquisition of assets or

 

12

 

business(es) of another Person
(such a Person, a “Related New Acquisition
Entity”).

 

“Notes” means
promissory notes of a Borrower, substantially in the form of Exhibit A hereto,
evidencing the obligation of such Borrower to repay its Loans, and “Note” means
any one of such promissory notes issued hereunder.

 

“Notice of Borrowing”
has the meaning set forth in Section 2.02.

 

“Notice of Interest Rate
Election” has the meaning set forth in Section 2.09(a).

 

“Notice of Issuance”
has the meaning set forth in Section 2.15(b).

 

“Officer’s Certificate”
means a certificate of a Senior Financial Officer or of any other officer of
the Person delivering such certificate whose responsibilities extend to the
subject matter of such certificate.

 

“Other Liens”
has the meaning set forth in Section 5.09(g).

 

“Parent” means,
with respect to any Lender, any Person controlling such Lender.

 

“Participant”
has the meaning set forth in Section 9.06(b).

 

“Participating Member
States” means those members of the European Union from time to time
which adopt a single, shared currency.

 

“PartyLite”
means PartyLite Gifts, Inc., a Delaware corporation.

 

“PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.

 

“Permitted Liens”
means:

 

(a)           Liens
for current taxes, assessments or governmental charges which are not delinquent
or remain payable without penalty, or the validity of which is being contested
in good faith by appropriate proceedings and for which adequate reserves or
other appropriate provisions are maintained on the books of the Company or any
of its Subsidiaries in accordance with GAAP, provided that any right to
seizure, levy, attachment, sequestration, foreclosure or garnishment with
respect to such property by reason of such Lien has not matured, or has been
and continues to be effectively enjoined or stayed;

 

(b)           nonconsensual
Liens, such as landlord liens and Liens of carriers, workmen, repairmen,
warehousemen, mechanics and materialmen, imposed by operation of law, in each
case incurred in the ordinary course of business and securing obligations that
are not overdue or securing obligations that are overdue

 

13

 

that are being contested in
good faith by appropriate proceedings and (with respect to any such obligations
that are overdue) for which adequate reserves or other appropriate provisions
are maintained on the books of the Company or any of its Subsidiaries in
accordance with GAAP, provided that any right to seizure, levy, attachment,
sequestration, foreclosure or garnishment with respect to such property by
reason of such Lien has not matured, or has been and continues to be
effectively enjoined or stayed;

 

(c)           Liens
incurred or deposits made in connection with workers’ compensation,
unemployment insurance and other types of social security, or securing
liability to insurance carriers under insurance and other types of social
security, or securing liability to insurance carriers under insurance or
self-insurance arrangements, or obtaining utility service or to secure the
performance of tenders, statutory obligations, surety and appeal bonds
(provided that no Liens securing any appeal or similar bond in connection with
any litigation or other legal proceeding (an “Appeal Bond Lien”) shall
constitute Permitted Liens to the extent the sum of (i) the aggregate amount
secured thereby (exclusive of Insured Judgment Amounts) plus without
duplication (ii) the amount (exclusive of Insured Judgment Amounts) secured by
Liens permitted by paragraph (e) below exceeds $20,000,000 at any one time),
bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money) in each case (except in the case of Appeal
Bond Liens) incurred in the ordinary course of business and securing
obligations that are not overdue or securing obligations that are overdue that
are being contested in good faith by appropriate proceedings and (with respect
to any such obligations that are overdue) for which adequate reserves or other
appropriate provisions are maintained on the books of the Company or any of its
Subsidiaries in accordance with GAAP, provided that any right to seizure, levy,
attachment, sequestration, foreclosure or garnishment with respect to such
property by reason of such Lien has not matured, or has been and continues to
be effectively enjoined or stayed;

 

(d)           easements,
rights-of-way, restrictions, minor defects, encroachments or irregularities in
title and other similar charges or encumbrances not interfering in any Material
respect with the ordinary conduct of the business of the Company or any of its
Subsidiaries; and

 

(e)           Liens
arising out of or in connection with any litigation or other legal proceeding,
the time for the appeal or petition for rehearing of which shall not have
expired or which is being contested in good faith by appropriate proceedings
and for which adequate reserves or other appropriate provisions are maintained
on the books of the Company or any of its subsidiaries in accordance with GAAP,
provided that any right to seizure, levy, attachment, sequestration,
foreclosure or garnishment with respect to such property by reason of such Lien
has not matured, or has been and continues to be effectively enjoined or
stayed; and provided further that no such Liens shall be Permitted Liens to the
extent that the sum of (i) the aggregate amount secured thereby (exclusive of
Insured

 

14

 

Judgment Amounts) plus without
duplication (ii) the amount (exclusive of Insured Judgment Amounts) secured by
any Appeal Bond Liens exceeds $20,000,000 at any one time.

 

“Person” means
an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, or a government or agency or
political subdivision thereof.

 

“Plan” means an “employee
benefit plan” (as defined in section 3(3) of ERISA) that is or, within the
proceeding five years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been made or
required to be made, by the Company or any of its ERISA Affiliates or with
respect to which the Company or any of its ERISA Affiliates may have any
liability.

 

“PLT” means
PartyLite Trading SA, a Swiss company, and an indirect wholly-owned subsidiary
of the Company.

 

“PLT Sublimit”
means $100,000,000.

 

“Preferred Stock”
means any class of capital stock of a corporation that is preferred over any
other class of capital stock of such corporation as to the payment of dividends
or the payment of any amount upon liquidation or dissolution of such
corporation.

 

“Pricing Schedule”
means the Pricing Schedule attached hereto.

 

“Prime Rate”
means the rate of interest per annum publicly announced from time to time by
JPMCB as its prime rate in effect at its principal office in New York City;
each change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective.

 

“property” or “properties” means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.

 

“Quarterly Date”
means each January 31, April 30, July 31 and October 31, commencing with July
31, 2005.

 

“Regulation D”
means Regulation D of the Board, as in effect from time to time, and all
official rulings and interpretations thereunder or thereof.

 

“Regulation U”
means Regulation U of the Board, as in effect from time to time, and all
official rulings and interpretations thereunder or thereof.

 

“Regulation X”
means Regulation X of the Board, as in effect from time to time, and all
official rulings and interpretations thereunder or thereof.

 

15

 

“Related New Acquisition
Entity” has the meaning set forth in the definition of New Acquisition
Subsidiary.

 

“Required Lenders”
means at any time Lenders having more than 50% of the aggregate amount of the
Commitments or, if the Commitments shall have been terminated, holding more
than 50% of the aggregate Dollar Amount of the Loans and the Letter of Credit
Liabilities.

 

“Responsible Officer”
means any Senior Financial Officer and any other executive officer of the
Borrower with responsibility for the administration of the relevant portion of
this Agreement.

 

“Revolving Credit Period”
means the period from and including the Effective Date to but excluding the
Termination Date.

 

“Robert B. Goergen and
Family” shall mean (i) Robert B. Goergen, (ii) any other member of
the immediate family of Robert B. Goergen and their spouses, (iii) any descendants
(including by adoption) of any Person described in clauses (i) and (ii), (iii)
any trusts for the primary benefit of, or partnerships, limited liability
companies or other entities primarily controlled by, any Persons described in
clauses (i)-(iii), and/or (iv) charitable trusts and foundations whose
direction is controlled by Person(s) described in clauses (i)-(iii).

 

“S&P” means
Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor to its business of rating debt securities.

 

“SEC” means the
Securities and Exchange Commission and any successor thereto.

 

“Screen” means
(a) with respect to Dollar-Denominated Loans, Telerate Page 3750 and (b) with
respect to Alternative Currency Loans, the Telerate Page selected by the
Administrative Agent that displays rates for interbank deposits in the
appropriate Alternative Currency or, in the case of either (a) or (b), any
successor or substitute Telerate Page or any successor to or substitute source
for such rates, providing rate quotations comparable to those currently
provided on such Telerate Page, as determined by the Administrative Agent from
time to time for purposes of providing quotations of interest rates applicable
to deposits in the London interbank market.

 

“Senior Financial Officer”
means as to any Person, the chief financial officer, principal accounting
officer, treasurer or comptroller of such Person.

 

“Specified Non-Cash Charges”
means (i) any non-cash charges as a result of SFAS 141 or SFAS 142 issued by the
Financial Accounting Standards Board and (ii) any other extraordinary non-cash
charges.

 

16

 

“Spot Rate”
means, at any date, the Administrative Agent’s spot buying rate for the
relevant Alternative Currency against Dollars as of approximately 11:00 A.M.
(London time) on such date.

 

“Statutory Reserve Rate”
means a fraction (expressed as a decimal), the numerator of which is the number
one and the denominator of which is a number one minus the aggregate maximum
reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the 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).  Such reserve percentages
shall include those imposed pursuant to such Regulation D.  Euro-Currency 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.

 

“Sterling” means
the lawful currency of the United Kingdom.

 

“Subsidiary”
means, as to any Person, any corporation, association or other business entity
in which such Person or one or more of its Subsidiaries or such Person and one
or more of its Subsidiaries owns sufficient equity or voting interests to
enable it or them (as a group) ordinarily, in the absence of contingencies, to
elect a majority of the directors (or Persons performing similar functions) of
such entity, and any partnership or joint venture of more than 50% interest in
the profits or capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership
can and does ordinarily take major business actions without the prior approval
of such Person or one or more of its Subsidiaries).

 

“Swaps” means,
with respect to any Person, payment obligations with respect to interest rate
swaps, currency swaps and similar obligations obligating such Person to make
payments, whether periodically or upon the happening of a contingency.  For the purposes of this Agreement, the
amount of the obligation under any Swap shall be the amount determined in
respect thereof as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumptions that such Swap had terminated at the end
of such fiscal quarter, and in making such determination, if any agreement
relating to such Swap provides for the netting of amounts payable by and to
such Person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case, the amount of
such obligation shall be the net amount so determined.

 

“Swingline Lender”
means JPMCB, and its successors.

 

17

 

“Swingline Lending Office”
means, as to the Swingline Lender, its office located at its address set forth
in its Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Swingline Lending Office) or such other office as such
Lender may hereafter designate as its Swingline Lending Office by notice to the
Company and the Administrative Agent.

 

“Swingline Loan”
means a loan made by the Swingline Lender pursuant to Section 2.01(b).

 

“Swingline Takeout Loan”
means a Base Rate Loan made pursuant to Section 2.16.

 

“Swiss Francs”
means the lawful currency of the Union of Switzerland.

 

“Syndicated Loan”
means a Loan made by a Lender pursuant to Section 2.01(a); provided that, if
any such loan or loans (or portions thereof) are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term “Syndicated Loan”
shall refer to the combined principal amount resulting from such combination or
to each of the separate principal amounts resulting from such subdivision, as
the case may be.

 

“Termination Date”
means June 2, 2010, or such later date to which the Termination Date may be
extended pursuant to Section 2.01(c), or if any such day is not a Euro-Currency
Business Day for the relevant currency, the next preceding Euro-Currency
Business Day for such currency.  Unless
the context otherwise requires, references to the Termination Date are to the
Termination Date determined with reference to Loans denominated in Dollars.

 

“UCP” has the
meaning set forth in Section 2.15(h).

 

“United States”
means the United States of America, including the States and the District of
Columbia, but excluding its territories and possessions.

 

“Unrefunded Swingline Loans”
has the meaning set forth in Section 2.16(b).

 

“Wholly-Owned Subsidiary”
means, at any time, with respect to any Person, any Subsidiary of such Person
one hundred percent (100%) of all of the equity interests (except directors’
qualifying shares) and voting interests of which are owned by any one or more
of such Person and such Person’s other Wholly-Owned Subsidiaries at such time.

 

“Yen” means the
lawful currency of Japan.

 

Section 1.02.  Accounting Terms and
Determinations.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally

 

18

 

accepted
accounting principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Company’s independent public
accountants) with the most recent audited consolidated financial statements of
the Company and its Consolidated Subsidiaries delivered to the Lenders;
provided that, if the Company notifies the Administrative Agent that the
Company wishes to amend any covenant in Article 5 to eliminate the effect of
any change in generally accepted accounting principles on the operation of such
covenant (or if the Administrative Agent notifies the Company that the Required
Lenders wish to amend Article 5 for such purpose), then the Company’s
compliance with such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the relevant change
in generally accepted accounting principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Company and the Required Lenders.

 

Section 1.03.  Types of Borrowings.  The term “Borrowing”
denotes the aggregation of Loans of one or more Lenders to be made to the same
Borrower pursuant to Article 2 on the same date, all of which Loans are of the
same type (subject to Article 8), are denominated in the same currency and,
except in the case of Base Rate Loans, have the same initial Interest
Period.  Borrowings are classified for
purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a “Fixed Rate Borrowing”
is a Euro-Dollar Borrowing or a Swingline Borrowing (excluding any such
Borrowing consisting of Swingline Loans bearing interest at the Base Rate), and
a “Euro-Dollar Borrowing” is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article 2
under which participation therein is determined (i.e., a “Syndicated Borrowing”
is a Borrowing under Section 2.01(a) in which all Lenders participate in
proportion to their Commitments, while a “Swingline Borrowing” is a Borrowing
under Section 2.01(b)).

 

ARTICLE 2

THE CREDITS

 

Section 2.01.  Commitments to Lend.  (a) Syndicated
Loans.  During the Revolving
Credit Period each Lender severally agrees, on the terms and conditions set
forth in this Agreement, to make Loans to either Borrower from time to time in
amounts such that the aggregate Dollar Amount of Committed Loans by such
Lender, together with the Dollar Amount of its Letter of Credit Liabilities and
its participating interests or obligations to purchase participations in any
Swingline Loans, shall at no time exceed the amount of its Commitment.  The aggregate Dollar Amount of each Borrowing
under this subsection (other than a Swingline Takeout Borrowing) shall be (i)
in the case of a Base Rate Borrowing, a minimum of $1,000,000 or any larger
multiple of $500,000 (except that any such Borrowing may be in the aggregate
amount available to the Borrower in accordance with Section 3.02) or (ii) in
the case of a Euro-Currency

 

19

 

Borrowing, a
minimum of $2,000,000 or, in the case of Dollar-Denominated Loans, any larger
multiple of $500,000.  Each Borrowing
under this subsection shall be made from the several Lenders ratably in
proportion to their respective Commitments. 
Within the foregoing limits, either Borrower may borrow under this
Section, repay, or to the extent permitted by Section 2.11, prepay Loans and
reborrow at any time during the Revolving Credit Period under this Section.

 

(b)           Swingline Loans.  From time to time prior to the Termination
Date, the Swingline Lender agrees, on the terms and conditions set forth in
this Agreement, to make loans denominated in Dollars to either Borrower
pursuant to this subsection from time to time in amounts such that (i) the
aggregate Dollar Amount of its Committed Loans at any one time outstanding
together with its Letter of Credit Liabilities shall not exceed the amount of
its Commitment, (ii) the aggregate Dollar Amount of Swingline Loans at any time
outstanding shall not exceed $15,000,000 and (iii) the number of Swingline
Loans outstanding at any time shall not be greater than five.  Within the foregoing limits, either Borrower
may borrow under this subsection, repay or, to the extent permitted by Section
2.11, prepay Loans and reborrow at any time during the Revolving Credit Period
under this subsection; provided that
the proceeds of a Swingline Borrowing may not be used, in whole or in part, to
refund any prior Swingline Borrowing. 
Each Borrowing under this Section 2.01(b) shall be in an aggregate
principal amount of $100,000 or any larger multiple thereof (except that any
such Borrowing may be in the aggregate amount available in accordance with
Section 3.02).

 

(c)           Extension.  The Termination Date may be extended, in the
manner set forth in this Section 2.01(c), on June 2, 2006 and on each
anniversary of such date which falls not less than one year prior to the
Termination Date as theretofore extended (an “Extension Date”), for a period of
one year after the date on which the Termination Date would otherwise have
occurred.  If the Company wishes to
request an extension of the Termination Date to be effective on any Extension
Date, it shall give written notice to that effect to the Administrative Agent
not less than 45 nor more than 90 days prior to such Extension Date, whereupon
the Administrative Agent shall notify each of the Lenders of such notice.  Each Lender will respond to such request,
whether affirmatively or negatively, within 30 days.  If all Lenders shall have responded
affirmatively to such a request, then, subject to receipt by the Administrative
Agent of counterparts of an Extension Agreement in substantially the form of
Exhibit F duly completed and signed by all of the parties hereto, the
Termination Date shall be extended, effective on such Extension Date, for a
period of one year to the date stated in such Extension Agreement.  If Lenders holding less than all but more
than 75% of the aggregate Commitments shall have responded affirmatively to
such a request, then the Company shall have the right prior to the Extension
Date to replace all, but not less than all, of the Lenders that did not respond
affirmatively with an Assignee or Assignees (which may be one or more of the
other Lenders) that will purchase the Loans and assume the Commitment and
Letter of Credit Liabilities of the Lenders that did not respond affirmatively
and extend the Termination Date as requested,

 

20

 

and, upon consummation of the assignments
pursuant to Section 9.06 promptly followed by the receipt by the Administrative
Agent of counterparts of an Extension Agreement substantially in the form of
Exhibit F duly completed and signed by all of the parties hereto, the
Termination Date shall be extended, effective on such Extension Date, for a
period of one year to the date stated in such Extension Agreement.

 

Section 2.02.  Method of Borrowing.  The Borrower shall give the
Administrative Agent telephonic notice with the information required described
in clauses (a) - (e) below, followed promptly by a written notice substantially
in the form of Exhibit B (a “Notice of Borrowing”)
not later than 12:00 Noon (New York City time) on (x) the date of each Base
Rate Borrowing or Swingline Borrowing, (y) the third Euro-Dollar Business Day
before each Euro-Dollar Borrowing and (z) the fourth Euro-Currency Business Day
before each Euro-Currency Borrowing in an Alternative Currency, specifying:

 

(a)           the date of such Borrowing, which
shall be a Domestic Business Day in the case of a Base Rate Borrowing or a
Swingline Borrowing or a Euro-Currency Business Day for the relevant currency
in the case of a Euro-Currency Borrowing;

 

(b)           the currency and aggregate amount (in
such currency) of such Borrowing;

 

(c)           whether the Loans comprising such
Borrowing are to be Swingline Loans or Syndicated Loans;

 

(d)           in the case of a Syndicated
Borrowing, whether the Loans comprising such Borrowing are to bear interest
initially at the Base Rate or a Euro-Currency Rate; and

 

(e)           in the case of a Fixed Rate
Borrowing, the duration of the initial Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period.

 

Section 2.03.  Notice to Lenders; Funding of
Loans.  (a)  Upon receipt of a
Notice of Borrowing, the Administrative Agent shall promptly notify each Lender
of the contents thereof and of such Lender’s ratable share (if any) of such
Borrowing and such Notice of Borrowing shall not thereafter be revocable by the
Borrower.

 

(b)           On the date of each Borrowing, each
Lender participating therein shall:

 

(i)    if
such Borrowing is to be made in Dollars, make available its share of such
Borrowing in Dollars not later than 2:00 P.M. (New York

 

21

 

City time), in Federal or other funds
immediately available, to the Administrative Agent at its principal office in
New York City; or

 

(ii)   if
such Borrowing is to be made in an Alternative Currency, make available its
share of such Borrowing in such Alternative Currency (in such funds as may then
be customary for the settlement of international transactions in such
Alternative Currency) to the account of the Administrative Agent at such time
and place as shall have been notified by the Administrative Agent to the
Lenders by at least two Euro-Currency Business Days’ notice.  Unless the Administrative Agent determines
that any applicable condition specified in Article 3 has not been satisfied,
the Administrative Agent will make the funds so received from the Lenders
available to the Borrower at the Administrative Agent’s aforesaid address.

 

(c)           Unless the Administrative Agent shall
have received notice from a Lender prior to the time 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 to the Administrative Agent on the date of such
Borrowing in accordance with Section 2.03(b) and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount.  If and to the
extent that such Lender shall not have so made such share available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at the Federal Funds Rate (if such Borrowing is in Dollars) or the
applicable Adjusted LIBO Rate (if such Borrowing is in an Alternative
Currency).  If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender’s Loan included in such Borrowing for purposes of this
Agreement.

 

Section 2.04.  Registry; Notes.  (a) The Administrative Agent shall maintain a register (the “Register”) on which it will record the Commitment of each
Lender, each Loan made by such Lender and each repayment of any Loan made by
such Lender.  Any such recordation by the
Administrative Agent on the Register shall be presumptively correct, absent
manifest error.  Failure to make any such
recordation, or any error in such recordation, shall not affect any Borrower’s
obligations hereunder.

 

(b)           Each Borrower hereby agrees that, promptly
upon the request of any Lender at any time, such Borrower shall deliver to such
Lender a single Note, in substantially the form of Exhibit A hereto, duly
executed by such Borrower and payable to the order of such Lender and
representing the obligation of such Borrower to pay the unpaid principal amount
of all Loans made to such Borrower

 

22

 

by such Lender, with interest as provided herein on
the unpaid principal amount from time to time outstanding.

 

(c)           Each Lender shall record the date, amount and
maturity of each Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto, and each Lender receiving
a Note pursuant to this Section, if such Lender so elects in connection with
any transfer or enforcement of any Note, may endorse on the schedule forming a
part thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided
that neither the failure of such Lender to make any such recordation or
endorsement nor any error therein shall affect the obligations of any Borrower
hereunder or under the Notes.  Such
Lender is hereby irrevocably authorized by each Borrower so to endorse any Note
and to attach to and make a part of any Note a continuation of any such
schedule as and when required.

 

Section 2.05.  Maturity of Loans.  (a) Each Syndicated Loan shall
mature, and the principal amount thereof shall be due and payable, together
with accrued interest thereon, on the Termination Date.

 

(b)           Each Swingline Loan included in any
Swingline Borrowing shall mature, and the principal amount thereof shall be due
and payable on the last day of the Interest Period applicable to such
Borrowing.

 

Section 2.06.  Interest Rates.  (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
Base Rate for such day.  Such interest
shall be payable in arrears at maturity and on each Quarterly Date prior to
maturity.  Any overdue principal of or
overdue interest on any Base Rate Loan (and any other overdue amount for which
no other rate of interest is specified herein) shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 2% plus
the rate otherwise applicable to Base Rate Loans for such day.

 

(b)           Each Euro-Currency Loan shall bear
interest on the outstanding principal amount thereof, for each day during each
Interest Period applicable thereto, at a rate per annum equal to the sum of the
Euro-Currency Margin for such day plus the Adjusted LIBO Rate applicable to
such Interest Period.  Such interest
shall be payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months after
the first day thereof.

 

(c)           Any overdue principal of or interest
on any Euro-Currency Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the higher of (i) the sum of 2% plus
the Euro-Currency Margin for such day plus the Adjusted LIBO Rate applicable to
such Loan at the date such payment was due and (ii) the sum of 2% plus the
Euro-Currency Margin for such

 

23

 

day plus the quotient obtained (rounded upward,
if necessary, to the next higher 1/100 of 1%) by dividing (x) the rate per
annum at which one day (or, if such amount due remains unpaid more than three
Euro-Currency Business Days, then for such other period of time not longer than
three months as the Administrative Agent may select) deposits in the relevant
currency in an amount approximately equal to such overdue payment are offered
by the Administrative Agent in the London interbank market for the applicable
period determined as provided above by (y) 1.00 minus the Statutory Reserve
Rate.

 

(d)           Each Swingline Loan shall bear
interest on the outstanding principal amount thereof, for each day during the
Interest Period applicable thereto, at a rate per annum equal to the Base Rate
for such day or such other rate as may be from time to time determined by
mutual agreement between the Swingline Lender and the Borrower.  Any interest on any Swingline Loans shall be
payable on each Quarterly Date and on the Termination Date.  Any overdue principal of or interest on any
Swingline Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 2% plus the Base Rate for such day.

 

(e)           The Administrative Agent shall
determine each interest rate applicable to the Loans hereunder.  The Administrative Agent shall give prompt
notice to the Borrower and the participating Lenders of each rate of interest
so determined, and its determination thereof shall be conclusive in the absence
of manifest error.

 

Section 2.07.  Fees.  (a) The Company shall pay to the
Administrative Agent for the account of the Lenders a facility fee in Dollars
at the Facility Fee Rate (determined daily in accordance with the Pricing
Schedule).  Such facility fee shall
accrue (i) from and including the Effective Date to but excluding the date of
termination of the Commitments in their entirety, on the daily aggregate amount
of the Commitments (whether used or unused) and (ii) from and including such
date of termination to but excluding the date the Loans and Letter of Credit
Liabilities shall be repaid in their entirety, on the daily aggregate Dollar
Amount of Loans and Letter of Credit Liabilities.  Such facility fee shall be allocated among
the Lenders ratably in proportion to their Commitments; provided
that any facility fee accruing after the Commitments terminate in their
entirety shall be allocated among the Lenders ratably in proportion to the
outstanding Dollar Amounts of their respective Loans and Letter of Credit
Liabilities.

 

(b)           The Borrower shall pay to the
Administrative Agent for the account of the Lenders ratably a letter of credit
fee in Dollars accruing daily on the aggregate Dollar Amount then available for
drawing under all outstanding Letters of Credit at the LC Fee Rate (determined
daily in accordance with the Pricing Schedule) and shall pay to each Issuing
Lender fees in the amounts and at the times as may be mutually agreed from time
to time by the Company and such Issuing Lender.

 

24

 

(c)           Accrued fees under Section 2.07(a)
and Section 2.07(b) shall be payable quarterly in arrears on each Quarterly
Date and on the date of termination of the Commitments in their entirety (and,
if later, the date the Loans and Letter of Credit Liabilities shall be repaid
in their entirety).

 

Section 2.08.  Optional Termination or
Reduction of Commitments.  During
the Revolving Credit Period, the Company may, upon at least three Domestic
Business Days’ notice to the Administrative Agent, (i) terminate the Commitments
at any time, if no Loans or Letter of Credit Liabilities are outstanding at
such time or (ii) ratably reduce from time to time by an aggregate amount of
$2,000,000 or a larger multiple of $1,000,000, the aggregate amount of the
Commitments in excess of the aggregate Dollar Amount of Loans and Letter of
Credit Liabilities.

 

Section 2.09.  Method of Electing Interest
Rates.  (a) The
Dollar-Denominated Loans included in each Syndicated Borrowing shall bear
interest initially at the type of rate specified by the Borrower in the
applicable Notice of Borrowing. 
Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Dollar-Denominated
Loans (subject in each case to the provisions of Article 8 and Section
2.09(d)), as follows:

 

(i)    if
such Loans are Base Rate Loans, the Borrower may elect to convert such Loans to
Euro-Dollar Loans as of any Euro-Dollar Business Day; and

 

(ii)   if
such Loans are Euro-Dollar Loans, the Borrower may elect to convert such Loans
to Base Rate Loans or elect to continue such Loans as Euro-Dollar Loans for an
additional Interest Period, subject to Section 2.13 in the case of any such
conversion or continuation effective on any day other than the last day of the
then current Interest Period applicable to such Loans.

 

Each such election shall be made by
delivering a notice (a “Notice of Interest Rate
Election”) to the Administrative Agent not later than 12:00 Noon
(New York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected if such notice is to be effective.  A Notice of Interest Rate Election may, if it
so specifies, apply to only a portion of the aggregate principal amount of the
relevant Group of Loans, provided that
(i) such portion is allocated ratably among the Loans comprising such Group and
(ii) the portion to which such Notice applies, and the remaining portion to
which it does not apply, are each $2,000,000 or any larger multiple of
$500,000.

 

(b)           Each Notice of Interest Rate Election
shall specify:

 

(i)    the
Group of Loans (or portion thereof) to which such notice applies;

 

25

 

(ii)   the
date on which the conversion or continuation selected in such notice is to be
effective, which shall comply with the applicable clause of Section 2.09(a)
above;

 

(iii)  if
the Loans comprising such Group are to be converted, the new type of Loans and,
if the Loans being converted are to be Euro-Dollar Loans, the duration of the
next succeeding Interest Period applicable thereto; and

 

(iv)  if
such Loans are to be continued as Euro-Dollar Loans for an additional Interest
Period, the duration of such additional Interest Period.

 

Each Interest Period specified in a Notice of
Interest Rate Election shall comply with the provisions of the definition of
the term “Interest Period”.

 

(c)           Upon receipt of a Notice of Interest
Rate Election from the Borrower pursuant to Section 2.09(a) above, the
Administrative Agent shall promptly notify each Lender of the contents thereof
and such notice shall not thereafter be revocable by the Borrower.  If no Notice of Interest Rate Election is
timely received prior to the end of an Interest Period for any Group of
Euro-Dollar Loans, the Borrower shall be deemed to have elected that such Group
be converted to Base Rate Loans as of the last day of such Interest Period.

 

(d)           The Borrower shall not be entitled to
elect to convert any Syndicated Loans to, or continue any Syndicated Loans for
an additional Interest Period as,  Euro-Dollar Loans if (i) the aggregate
principal amount of any Group of Euro-Dollar Loans created or continued as a
result of such election would be less than $2,000,000 or (ii) a Default shall
have occurred and be continuing when the Borrower delivers notice of such
election to the Administrative Agent.

 

(e)           The initial Interest Period for each
Group of Alternative Currency Loans shall be specified by the Borrower in the
applicable Notice of Borrowing.  The
Borrower may specify the duration of each subsequent Interest Period applicable
to such Group of Loans by delivering to the Administrative Agent, not later
than 12:00 Noon (New York City time) on the fourth Euro-Currency Business Day
before the end of the immediately preceding Interest Period, a notice specifying
the Group of Loans to which such notice applies and the duration of such
subsequent Interest Period (which shall comply with the provisions of the
definition of Interest Period).  Such
notice may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided
that (i) such portion is allocated ratably among the Loans comprising such
Group and (ii) the Dollar Amounts of the portion to which such notice applies,
and the remaining portion to which it does not apply, are each at least
$2,000,000.  If no such Notice of
Interest Rate Election is timely received by the Administrative Agent before
the end of any applicable Interest Period, the Borrower shall be deemed to have
elected that the subsequent Interest Period for

 

26

 

such Group of Loans shall have a duration of
one month (subject to the provisions of the definition of Interest Period).

 

Section 2.10.  Scheduled Termination of
Commitments.  The Commitments
shall terminate on the Termination Date, and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on the
Termination Date.

 

Section 2.11.  Optional Prepayments.  (a) Subject in the case of any
Fixed Rate Loan to Section 2.13, the Borrower may (i) with notice by 12:00 Noon
(New York City time) on the date of such prepayment, prepay any Group of Base
Rate Loans or any Swingline Borrowing, in each case in whole at any time, or
from time to time in part in a minimum aggregate Dollar Amount of $1,000,000
($100,000 in the case of a Swingline Borrowing) or any larger multiple of
$500,000 ($100,000 in the case of a Swingline Borrowing), or (ii) upon at least
three Euro-Currency Business Days’ notice to the Administrative Agent, prepay
any Group of Euro-Currency Loans in whole at any time, or from time to time in
part in a minimum aggregate Dollar Amount of $2,000,000 or, in the case of
Dollar-Denominated Loans, any larger multiple of $500,000, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment.  Each such optional
prepayment shall be applied to prepay ratably the Loans of the several Lenders
included in such Group or Borrowing.

 

(b)           Upon receipt of a notice of
prepayment pursuant to this Section, the Administrative Agent shall promptly
notify each Lender of the contents thereof and of such Lender’s ratable share
(if any) of such prepayment and such notice shall not thereafter be revocable
by the Borrower.

 

Section 2.12.  General Provisions as to
Payments.  (a) The Borrowers
shall make each payment of principal of, and interest on, the
Dollar-Denominated Loans and of fees hereunder, not later than 2:00 P.M. (New
York City time) on the date when due, in Federal or other funds immediately
available, to the Administrative Agent at its principal office in New York
City.  Each payment of principal of, and
interest on, the Alternative Currency Loans shall be made in the relevant
Alternative Currency in such funds as may then be customary for the settlement
of international transactions in such Alternative Currency, for the account of
the Administrative Agent at such time and at such place as shall have been
notified by the Administrative Agent to the Borrower and the Lenders by at
least two Domestic Business Days’ notice. 
Each such payment shall be made irrespective of any set-off,
counterclaim or defense to payment which might in the absence of this provision
be asserted by any Borrower against the Administrative Agent or any
Lender.  The Administrative Agent will
promptly distribute to each Lender its ratable share of each such payment
received by the Administrative Agent for the account of the Lenders.  Whenever any payment of principal of, or
interest on, the Base Rate Loans, Swingline Loans or Letter of Credit
Liabilities or of fees shall be due on a day which is not a Domestic Business
Day, the date for payment thereof shall be extended to the next succeeding
Domestic Business

 

27

 

Day.  Whenever any payment of principal of, or
interest on, the Euro-Currency Loans shall be due on a day which is not a
Euro-Currency Business Day, the date for payment thereof shall be extended to
the next succeeding Euro-Currency Business Day unless such Euro-Currency
Business Day falls in another calendar month, in which case the date for
payment thereof shall be the next preceding Euro-Currency Business Day.  If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable
for such extended time.  Each Borrower
hereby authorizes and directs the Administrative Agent (upon receipt of oral or
written direction by such Borrower) to debit any account maintained by such
Borrower with the Administrative Agent to pay when due any amounts required to
be paid from time to time under this Agreement.

 

(b)           Unless the Administrative Agent shall
have received notice from the applicable Borrower prior to the date on which
any payment is due to the Lenders hereunder that such Borrower will not make
such payment in full, the Administrative Agent may assume that such Borrower
has made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender.  If and to the extent
that such Borrower shall not have so made such payment, each Lender shall repay
to the Administrative Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such amount
is distributed to such Lender until the date such Lender repays such amount to
the Administrative Agent, at (i) the Federal Funds Rate (if such amount was
distributed in Dollars) or (ii) the rate per annum at which one day deposits in
the relevant currency are offered to the Administrative Agent in the London
interbank market for such day (if such amount was distributed in an Alternative
Currency).

 

Section 2.13.  Funding Losses.  If the Borrower makes any payment
of principal with respect to any Fixed Rate Loan or any Euro-Dollar Loan is
converted or continued (pursuant to Article 2, Article 6 or Article 8 or
otherwise) on any day other than the last day of an Interest Period applicable
thereto, or the last day of an applicable period fixed pursuant to Section
2.06(c), or if the Borrower fails to borrow, prepay, convert or continue any
Fixed Rate Loans after notice has been given to any Lender in accordance with
Section 2.03, Section 2.11(b) or Section 2.09(c), the Borrower shall reimburse
each Lender within 15 days after demand for any resulting loss or expense
incurred by it (or by an existing or prospective Participant in the related Loan),
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period after any such payment or conversion or failure to borrow, prepay,
convert or continue, provided that such Lender shall have delivered to the
Borrower and the Administrative Agent a certificate as to the amount of such
loss or expense, which certificate shall be conclusive in the absence of
manifest error if prepared reasonably and in good faith.

 

28

 

Section 2.14.  Computation of Interest and Fees.  Interest based on the Prime Rate
hereunder shall be computed on the basis of a year of 365 days (or 366 days in
a leap year) and paid for the actual number of days elapsed (including the
first day but excluding the last day). 
All other interest and fees shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed (including the first
day but excluding the last day).

 

Section 2.15.  Letters of Credit.  (a) Subject to the terms and
conditions hereof, the Issuing Lender agrees to issue Letters of Credit
hereunder denominated in Dollars or in an Alternative Currency from time to
time before the tenth day before the Termination Date upon the request of
either Borrower; provided that, immediately after each Letter of Credit is
issued (i) the aggregate Dollar Amount of Loans and Letter of Credit
Liabilities shall not exceed the aggregate amount of the Commitments and (ii) the
aggregate Dollar Amount of Letter of Credit Liabilities shall not exceed
$30,000,000.  At the Company’s election
the named account party in any Letter of Credit requested by it may be the
Company and/or any of its Subsidiaries, provided, that, regardless of who is so
named as account party, the Company shall remain fully and solely liable for
all obligations hereunder with respect to all Letters of Credit requested by
it.  Upon the date of issuance by the
Issuing Lender of a Letter of Credit, the Issuing Lender shall be deemed,
without further action by any party hereto, to have sold and granted to each
Lender, and each Lender shall be deemed, without further action by any party
hereto, to have purchased and acquired from the Issuing Lender, a participation
in such Letter of Credit and the related Letter of Credit Liabilities in the
proportion their respective Commitments bear to the aggregate Commitments.

 

On the Closing
Date, if all of the conditions set forth in Article 3 (other than the
receipt by the Issuing Lender of a Notice of Issuance) shall be satisfied, each
of the letters of credit outstanding under the Existing Credit Facility and
identified on Schedule 2.16 (the “Existing Letters of Credit”)
shall be deemed to be Letters of Credit for all purposes hereof, and the
Issuing Lender shall be deemed, without further action by any party hereto, to
have sold and granted to each Lender, and each Lender shall be deemed, without
further action by any party hereto, to have purchased and acquired from the
Issuing Lender, a participation in each of the Existing Letters of Credit and
the related Letter of Credit Liabilities in the proportion their respective
Commitments bear to the aggregate Commitments.

 

(b)                                 The Borrower shall
give the Issuing Lender notice at least three Domestic Business Days prior to
the requested issuance of a Letter of Credit specifying the date such Letter of
Credit is to be issued, and describing the terms of such Letter of Credit and
the nature of the transactions to be supported thereby (such notice, including
any such notice given in connection with the extension of a Letter of Credit, a
“Notice of Issuance”).  Upon receipt of a Notice of Issuance, the
Issuing Lender shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each Lender of the contents thereof
and of the amount of such Lender’s participation in such Letter of Credit.  The issuance by the Issuing Lender of each
Letter of Credit shall, in addition to the

 

29

 

conditions precedent set forth in Article 3, be subject to the
conditions precedent that such Letter of Credit shall be in such form and
contain such terms as shall be satisfactory to the Issuing Lender and that the
Borrower shall have executed and delivered such other instruments and
agreements relating to such Letter of Credit as the Issuing Lender shall have
reasonably requested.  The Borrower shall
also pay to the Issuing Lender for its own account issuance, drawing, amendment
and extension charges in the amounts and at the times as agreed between the
Borrower and the Issuing Lender.  The
extension or renewal of any Letter of Credit shall be deemed to be an issuance
of such Letter of Credit, and if any Letter of Credit contains a provision
pursuant to which it is deemed to be extended unless notice of termination is
given by the Issuing Lender, the Issuing Lender shall timely give such notice
of termination if either (i) the conditions to issuance of such Letter of
Credit (other than receipt of a Notice of Issuance) are to the knowledge of the
Issuing Lender not met with respect to such extension or (ii) the term of
the extended Letter of Credit is not permitted under Section 2.15(c).

 

(c)                                  No Letter of Credit
shall have a term extending or be so extendible beyond the fifth Domestic
Business Day preceding the Termination Date. 
If the extension of a Letter of Credit would otherwise extend the term
of such Letter of Credit beyond the fifth Domestic Business Day preceding the
Termination Date, the Borrower and the Issuing Lender may nonetheless agree to
so extend such Letter of Credit on mutually acceptable terms; provided that the extended Letter of Credit shall thereupon
cease to be a Letter of Credit hereunder and the other Lenders shall have no
obligations hereunder with respect thereto.

 

(d)                                 Upon receipt from the
beneficiary of any Letter of Credit of any notice of a drawing under such
Letter of Credit, the Issuing Lender shall notify the Administrative Agent and
the Administrative Agent shall promptly notify the Borrower and each other
Lender as to the amount to be paid as a result of such demand or drawing and
the payment date.  The Borrower shall be
irrevocably and unconditionally obligated forthwith to reimburse the Issuing
Lender for any amounts paid by the Issuing Lender upon any drawing under any
Letter of Credit, without presentment, demand, protest or other formalities of
any kind.  All such amounts paid by the
Issuing Lender and remaining unpaid by the Borrower shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 2%
plus (i) in the case of amounts denominated in Dollars, the Base Rate for
such day and (ii) in the case of amounts denominated in an Alternative
Currency, the sum of the Euro-Currency Margin for such day plus the rate per
annum at which one day deposits in the relevant currency in an amount
approximately equal to such unpaid amount are offered by the Issuing Lender in
the London interbank market.  In
addition, each Lender will pay to the Administrative Agent, for the account of
the Issuing Lender, immediately upon the Issuing Lender’s demand at any time
during the period commencing after such drawing until reimbursement therefor in
full by the Borrower, an amount equal to such Lender’s ratable share of such
drawing (in proportion to its participation therein), together with interest on
such amount for each day from the date of the

 

30

 

Issuing Lender’s demand for such payment (or, if such demand is made
after 12:00 Noon (New York City time) on such date, from the next succeeding
Domestic Business Day) to the date of payment by such Lender of such amount at
a rate of interest per annum equal to (i) in the case of amounts
denominated in Dollars, the Federal Funds Rate and (ii) in the case of
amounts denominated in an Alternative Currency, the rate at which one day
deposits in the relevant currency in an amount approximately equal to such
payment are offered by the Issuing Lender in the London interbank market.  The Issuing Lender will pay to each Lender
ratably all amounts received from the Borrower for application in payment of
its reimbursement obligations in respect of any Letter of Credit, but only to
the extent such Lender has made payment to the Issuing Lender in respect of
such Letter of Credit pursuant hereto. 
All payments in respect of the principal amount of the reimbursement
obligation of the Borrower in respect of any Letter of Credit and interest
thereon shall be made in the same currency as the related Letter of Credit was
denominated, and shall be made in the funds specified in Section 2.12 for
payments in such currency.  Unless the
Borrower gives notice to the contrary not less than one Business Day prior to
the date of such drawing, each notice by the Issuing Lender to the
Administrative Agent of the Issuing Lender’s receipt of a notice of a drawing
under a Letter of Credit denominated in Dollars shall be deemed to be a Notice
of Borrowing from the Borrower for a Base Rate Loan on the date of such drawing
in the exact amount due to the Issuing Lender hereunder (the requirement with
respect to the aggregate Dollar Amount of Base Rate Borrowings shall not apply
to such deemed Notice of Borrowing) on such date with respect thereto, and the
Administrative Agent shall apply the proceeds of any Base Rate Loan made
pursuant to such deemed Notice of Borrowing to the payment of such amount.

 

(e)                                  The obligations of
the Borrowers and each Lender under Section 2.15(d) above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under all circumstances
whatsoever, including without limitation the following circumstances:

 

(i)             the
use which may be made of the Letter of Credit by, or any acts or omission of, a
beneficiary of a Letter of Credit (or any Person for whom the beneficiary may
be acting);

 

(ii)          the
existence of any claim, set-off, defense or other rights that any Borrower may
have at any time against a beneficiary of a Letter of Credit (or any Person for
whom the beneficiary may be acting), the Lenders (including the Issuing Lender)
or any other Person, whether in connection with this Agreement or the Letter of
Credit or any document related hereto or thereto or any unrelated transaction;

 

(iii)       any
statement or any other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect

 

31

 

or any
statement therein being untrue or inaccurate in any respect whatsoever;

 

(iv)      payment
under a Letter of Credit to the beneficiary of such Letter of Credit against
presentation to the Issuing Lender of a draft or certificate that does not
comply with the terms of the Letter of Credit; or

 

(v)         any
other act or omission to act or delay of any kind by any Lender (including the
Issuing Lender), the Administrative Agent or any other Person or any other
event or circumstance whatsoever that might, but for the provisions of this Section 2.15(e)(v),
constitute a legal or equitable discharge of any Borrower’s or Lender’s
obligations hereunder.

 

(f)                                    The Company hereby
indemnifies and holds harmless each Lender (including the Issuing Lender) and
the Administrative Agent and their respective officers, directors, employees
and agents from and against any and all claims, damages, losses, liabilities,
costs or expenses which such Lender or the Administrative Agent may incur
(including, without limitation, any claims, damages, losses, liabilities, costs
or expenses which the Issuing Lender may incur by reason of or in connection
with the failure of any other Lender to fulfill or comply with its obligations
to such Issuing Lender hereunder (but nothing herein contained shall affect any
rights the Borrower may have against such defaulting Lender)), and none of the
Lenders (including the Issuing Lender) nor the Administrative Agent nor any of
their respective officers or directors or employees or agents shall be liable
or responsible, by reason of or in connection with the execution and delivery
or transfer of or payment or failure to pay under any Letter of Credit,
including without limitation any of the circumstances enumerated in Section 2.15(d) above,
as well as (i) any error, omission, interruption or delay in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise, (ii) any
loss or delay in the transmission of any document required in order to make a
drawing under a Letter of Credit, and (iii) any consequences arising from
causes beyond the control of the Issuing Lender, including without limitation
any government acts, or any other circumstances whatsoever in making or failing
to make payment under such Letter of Credit; provided
that the Company shall not be required to indemnify the Issuing Lender for any claims,
damages, losses, liabilities, costs or expenses, and the Borrower shall have a
claim for direct (but not consequential or exemplary) damage suffered by it, to
the extent found by a court of competent jurisdiction to have been caused by
(x) the failure of the Issuing Lender to comply in any material respect with
the UCP or the ISP, as applicable, (or, with respect to any Letter of Credit
not governed by the UCP or the ISP, applicable law) in determining whether a
request presented under any Letter of Credit complied with the terms of such
Letter of Credit or (y) the Issuing Lender’s failure to pay under any Letter of
Credit after the presentation to it of a request strictly complying with the
terms and conditions of the Letter of Credit. 
Each Lender and Borrower agree that, in paying any drawing under a
Letter of Credit, the Issuing Lender shall not have any responsibility to
obtain any document (other than any sight draft, certificates

 

32

 

and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.  Each Borrower hereby assumes all risks of the
acts or omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude any Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. 
In furtherance and not in limitation of the foregoing, the Issuing
Lender may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the Issuing Lender shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason. 
Nothing in this Section 2.15(f) is intended to limit the
obligations of any Borrower under any other provision of this Agreement.  To the extent the Company does not indemnify
the Issuing Lender as required by this subsection, the Lenders agree to do so
ratably in accordance with their Commitments.

 

(g)                                 None of the Issuing
Lender, its affiliates and their respective directors, officers, employees and
agents nor any of the respective correspondents, participants or assignees of
the Issuing Lender shall be liable to any Lender for (i) any action taken
or omitted in connection herewith at the request or with the approval of the
Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit.

 

(h)                                 Unless otherwise
expressly agreed by the Issuing Lender and the Company when a Letter of Credit
is issued, (i) the rules of the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice (or
such later version thereof as may be in effect at the time of issuance) (the “ISP”) shall apply to each standby Letter of Credit, and (ii) the
rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce (the “ICC”) at the time of issuance (including the ICC decision
published by the Commission on Banking Technique and Practice on April 6,
1998 regarding the European single currency (euro)) (the “UCP”)
shall apply to each commercial Letter of Credit.

 

Section 2.16.  Takeout of Swingline Loans.  (a) In the event that any
Swingline Borrowing shall not be repaid in full at or prior to the maturity
thereof, the Administrative Agent shall, on behalf of the Borrower (the
Borrower hereby irrevocably directing and authorizing the Administrative Agent
so to act on its behalf), give a Notice of Borrowing requesting the Lenders,
including the Swingline Lender, to make a Base Rate Borrowing on the maturity
date of such Swingline Borrowing in an amount equal to the unpaid principal
amount of such Swingline Borrowing.  Each
Lender will make the proceeds of its Base Rate Loan

 

33

 

included in such Borrowing available to the
Administrative Agent for the account of the Swingline Lender on such date in
accordance with Section 2.03.  The
proceeds of such Base Rate Borrowing shall be immediately applied to repay such
Swingline Borrowing.

 

(b)                                 If, for any reason, a
Base Rate Borrowing may not be (as determined by the Administrative Agent in
its sole discretion), or is not, made pursuant to Section 2.16(a) above
to refund Swingline Loans as required by said clause, then, effective on the
date such Borrowing would otherwise have been made, each Lender severally,
unconditionally and irrevocably agrees that it shall purchase an undivided
participating interest in such Swingline Loans (“Unrefunded
Swingline Loans”) in an amount equal to the amount of the Loan which
otherwise would have been made by such Lender pursuant to Section 2.16(a),
which purchase shall be funded by the time such Loan would have been required
to be funded pursuant to Section 2.03 by transfer to the Administrative
Agent, for the account of the Swingline Lender, in immediately available funds,
of the amount of its participation.

 

(c)                                  Whenever, at any time
after the Swingline Lender has received from any Lender payment in full for
such Lender’s participating interest in a Swingline Loan, the Swingline Lender
(or the Administrative Agent on its behalf) receives any payment on account
thereof, the Swingline Lender (or the Administrative Agent, as the case may be)
will promptly distribute to such Lender its participating interest in such
payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s participating interest was
outstanding and funded); provided, however,
that in the event that such payment is subsequently required to be returned,
such Lender will return to the Swingline Lender (or the Administrative Agent,
as the case may be) any portion thereof previously distributed by the Swingline
Lender (or the Administrative Agent, as the case may be) to it.

 

(d)                                 Each Lender’s
obligation to purchase and fund participating interests pursuant to this Section shall
be absolute and unconditional and shall not be affected by any circumstance,
including, without limitation:  (i) any
setoff, counterclaim, recoupment, defense or other right which such Lender or
any Borrower may have against the Swingline Lender, or any other Person for any
reason whatsoever; (ii) the occurrence or continuance of a Default or the
failure to satisfy any of the conditions specified in Article 3; (iii) any
adverse change in the condition (financial or otherwise) of any Borrower; (iv) any
breach of this Agreement by any Borrower or Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

 

Section 2.17.  Increased Commitments, Additional
Lenders.  (a)  From time to time the Company may, upon at
least five Domestic Business Days’ notice to the Administrative Agent (which
shall promptly provide a copy of such notice to the Lenders), increase the
aggregate amount of the Commitments by an amount

 

34

 

not less than $10,000,000 (the amount of any such increase, the “Increased Commitments”).

 

(b)                                 To effect such an increase, the Company may
designate one or more of the existing Lenders or other financial institutions
reasonably acceptable to the Administrative Agent, each Issuing Lender and the
Company which at the time agree to (i) in the case of any such lender that
is an existing Lender, increase its Commitment and (ii) in the case of any
other such lender (an “Additional Lender”),
become a party to this Agreement with a Commitment of not less than $5,000,000.

 

(c)                                  Any increase in the Commitments pursuant to
this Section 2.17 shall be subject to satisfaction of the following
conditions::

 

(i)             before and after giving effect to such
increase, all representations and warranties contained in Article 4 shall
be true;

 

(ii)          at the time of such increase, no Default
shall have occurred and be continuing or would result from such increase; and

 

(iii)       after giving effect to such increase, the
aggregate amount of all increases in Commitments made pursuant to this Section 2.17
shall not exceed $50,000,000.

 

(d)                                 An increase in the aggregate amount of the
Commitments pursuant to this Section 2.17 shall become effective upon the
receipt by the Administrative Agent of (i) an agreement in form and
substance reasonably satisfactory to the Administrative Agent signed by the
Company, by each Additional Lender and by each other Lender whose Commitment is
to be increased, setting forth the new Commitments of such Lenders and setting
forth the agreement of each Additional Lender to become a party to this
Agreement and to be bound by all the terms and provisions hereof, (ii) such
evidence of appropriate corporate authorization on the part of the Company with
respect to the Increased Commitments and such opinions of counsel for the
Company with respect to the Increased Commitments as the Administrative Agent
may reasonably request and (iii) a certificate of the Company stating that
the conditions set forth in subsection (c) above have been satisfied.

 

(e)                                  Upon any increase in the aggregate amount of
the Commitments pursuant to this Section 2.17, (i) the respective
Letter of Credit Liabilities of the Lenders shall be redetermined as of the
effective date of such increase and (ii) within five Domestic Business
Days, in the case of Base Rate Loans then outstanding, and at the end of the
then current Interest Period with respect thereto, in the case of Euro-Currency
Loans then outstanding, the Borrower shall prepay or repay such Loans in their
entirety and, to the extent the Borrower elects to do so and subject to the
conditions specified in Section 3.02, the Borrower shall reborrow
Syndicated Loans from the Lenders in proportion to their respective

 

35

 

Commitments
after giving effect to such increase, until such time as all outstanding
Syndicated Loans are held by the Lenders in such proportion.

 

Section 2.18.  Currency Equivalents.  (a) The Administrative Agent
shall determine the Dollar Amount of each Alternative Currency Loan as of the
first day of each Interest Period applicable thereto and, in the case of any
such Interest Period of more than three months, at three-month intervals after
the first day thereof, and shall promptly notify the Borrower and the Lenders
of each Dollar Amount so determined by it. 
Each such determination shall be based on the Spot Rate (i) on the
date of the related Notice of Borrowing for purposes of the initial such
determination for any Alternative Currency Loan and (ii) the fourth
Euro-Currency Business Day prior to the date as of which such Dollar Amount is
to be determined, for purposes of any subsequent determination.

 

(b)                                 The Administrative
Agent shall determine the Dollar Amount of the Letter of Credit Liabilities
related to each Letter of Credit denominated in an Alternative Currency as of
the date of issuance thereof, at three-month intervals after the date of
issuance thereof and as of the funding date in respect of each drawing
thereunder.  Each such determination
shall be based on the Spot Rate on the date of determination.

 

(c)                                  If after giving
effect to any such determination of a Dollar Amount, the aggregate Dollar
Amount of all Loans and Letter of Credit Liabilities exceeds the aggregate
amount of the Commitments, the Company shall within five Euro-Currency Business
Days cause outstanding Loans to be prepaid (as selected by the Company and
notified to the Lenders through the Administrative Agent not less than three
Euro-Currency Business Days prior to the date of prepayment) to the extent
necessary to eliminate any such excess.

 

Section 2.19.  Judgment Currency.  If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due from any Borrower
hereunder or under any of the Notes in the currency expressed to be payable
herein (the “specified currency”) into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase the specified currency with
such other currency at the Administrative Agent’s principal office in New York
City on the Euro-Currency Business Day preceding that on which final judgment
is given.  The obligations of the
Borrowers in respect of any sum due to any Lender or the Administrative Agent
hereunder or under any Note shall, notwithstanding any judgment in a currency
other than the specified currency, be discharged only to the extent that on the
Euro-Currency Business Day following receipt by such Lender or the
Administrative Agent (as the case may be) of any sum adjudged to be so due in
such other currency such Lender or the Administrative Agent (as the case may
be) may in accordance with normal banking procedures purchase the specified
currency with such other currency.  If
the amount of the specified currency so purchased is less than the sum
originally due to such Lender or the

 

36

 

Administrative Agent, as the case may be, in
the specified currency, each Borrower agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Lender or the Administrative Agent, as the case may
be, against such loss, and if the amount of the specified currency so purchased
exceeds (a) the sum originally due to any Lender or the Administrative
Agent, as the case may be, in the specified currency and (b) any amounts
shared with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Lender under Section 9.04, such Lender or
the Administrative Agent, as the case may be, agrees to remit such excess to
such Borrower.

 

ARTICLE 3

CONDITIONS

 

Section 3.01.  Closing. 
The closing hereunder shall occur upon receipt by the
Administrative Agent of the following documents, each dated the Closing Date
unless otherwise indicated:

 

(a)                                  an opinion of Bruce
D. Kreiger, the General Counsel of the Borrower, substantially in the form of Exhibit C
hereto and covering such additional matters relating to the transactions
contemplated hereby as the Required Lenders may reasonably request;

 

(b)                                 an opinion of Davis
Polk & Wardwell, special counsel for the Administrative Agent,
substantially in the form of Exhibit D hereto and covering such additional
matters relating to the transactions contemplated hereby as the Required
Lenders may reasonably request;

 

(c)                                  all documents the
Administrative Agent may reasonably request relating to the existence of the
Borrowers, the corporate authority for and the validity of the Loan Documents,
and any other matters relevant hereto, all in form and substance satisfactory
to the Administrative Agent; and

 

(d)                                 evidence satisfactory
to the Administrative Agent of the payment of all principal of and interest on
any loans outstanding under, and all accrued commitment fees under, the
Existing Credit Facility, and the termination of the commitments thereunder.

 

The
Administrative Agent shall promptly notify the Company and the Lenders of the
Closing Date, and such notice shall be conclusive and binding on all parties
hereto.

 

Section 3.02.  Borrowings and Issuances of Letters of
Credit.  The obligation of any
Lender to make a Loan on the occasion of any Borrowing and the obligation of
the Issuing Lender to issue (or renew or extend the term of) any Letter of
Credit is subject to the satisfaction of the following conditions; provided

 

37

 

that if such Borrowing is a Swingline Takeout
Borrowing, only the conditions set forth in Section 3.02(b) and Section 3.02(c) must
be satisfied:

 

(a)                                  the fact that the
Closing Date shall have occurred on or prior to June 10, 2005;

 

(b)                                 receipt (or deemed
receipt) by the Administrative Agent of a Notice of Borrowing as required by Section 2.02
or receipt by the Issuing Lender of a Notice of Issuance as required by Section 2.15(b),
as the case may be;

 

(c)                                  the fact that,
immediately after such Borrowing or issuance of such Letter of Credit (i) the
sum of the aggregate Dollar Amount of Loans and Letter of Credit Liabilities
will not exceed the aggregate amount of the Commitments, (ii) the
aggregate outstanding principal amount of Swingline Loans will not exceed
$15,000,000, (iii) the aggregate Dollar Amount of Letter of Credit
Liabilities will not exceed $30,000,000, and (iv) the aggregate Dollar
Amount of Loans and Letter of Credit Liabilities in respect of which PLT is the
Borrower will not exceed the PLT Sublimit;

 

(d)                                 the fact that,
immediately before and after such Borrowing or issuance of such Letter of
Credit, no Default shall have occurred and be continuing;

 

(e)                                  the fact that the
representations and warranties of the Company (and if the Borrower is PLT, of
PLT) contained in this Agreement shall be true in all material respects on and
as of the date of such Borrowing or issuance of such Letter of Credit; and

 

(f)                                    the fact that, in
the case of any Euro-Currency Borrowing in a currency other than Dollars,
Euros, Sterling, Yen or Swiss Francs, no Lender shall have notified the
Administrative Agent (which shall promptly notify the Borrower and the other
Lenders) within two Euro-Currency Business Days of such Lender’s receipt of the
Notice of Borrowing for such Euro-Currency Borrowing that deposits in the
relevant currency are not available to such Lender in the London interbank
market for the relevant Interest Period.

 

Each Borrowing
and issuance of a Letter of Credit hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of such Borrowing or
issuance of such Letter of Credit as to the facts specified in Section 3.02(c),
Section 3.02(d) and Section 3.02(e) (unless such Borrowing
is a Swingline Takeout Borrowing, in which case the Borrower shall be deemed to
represent and warrant as to the facts specified in Section 3.02(c)).

 

38

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

 

Each Borrower
jointly and severally represents and warrants that:

 

Section 4.01.  Corporate Existence and Power.  The Company and each of its
Subsidiaries (i) is a corporation, partnership, limited liability company
or other entity duly organized, validly existing and, where applicable, in good
standing under the laws of their respective jurisdictions of organization,
except where the failure to be in good standing would not have a Material
Adverse Effect, and (ii) has all powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.

 

Section 4.02.  Corporate and Governmental Authorization; No
Contravention.  The execution,
delivery and performance by each Borrower of this Agreement and its Notes are
within such Borrower’s corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of such Borrower or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Company or any of its Subsidiaries or result in the creation or imposition
of any Lien on any asset of the Company or any of its Subsidiaries.

 

Section 4.03.  Binding Effect.  This Agreement constitutes a valid
and binding agreement of each Borrower and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Borrower executing the same, in each case enforceable
in accordance with its terms.

 

Section 4.04.  Financial Information.  (a) The consolidated balance
sheet of the Company and its Consolidated Subsidiaries as of January 31,
2005, the related consolidated statements of income, common stockholders’
equity and cash flows for the fiscal year then ended, reported on by Deloitte &
Touche LLP and set forth in the Company’s 2005 Form 10-K, a copy of which
has been delivered to each of the Lenders, present fairly, in all material
respects, in conformity with generally accepted accounting principles, the
consolidated financial position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.

 

(b)                                 Since January 31,
2005 there has been no material adverse change in the business, financial
position or results of operations of the Company and its Consolidated
Subsidiaries, considered as a whole.

 

Section 4.05.  Litigation. 
There is no action, suit or proceeding pending against, or to
the knowledge of the Company threatened against, the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body,

 

39

 

agency or official which could reasonably be
expected to have a Material Adverse Effect or which in any manner draws into
question the validity of the Loan Documents.

 

Section 4.06.  Compliance with ERISA.  Each of the Company and the ERISA Affiliates
has fulfilled its obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Code with
respect to each Plan.  Neither the
Company nor any ERISA Affiliate has (i) sought a waiver of the minimum
funding standard under Section 412 of the Code in respect of any Plan, (ii) failed
to make any contribution or payment to any Plan or Multiemployer Plan, or made
any amendment to any Plan, which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security under ERISA or the Code or
(iii) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA.

 

Section 4.07.  Environmental Matters.  In the ordinary course of its
business, the Company reviews when and as it determines to be appropriate the
effect of Environmental Laws on the business, operations and properties of the Company
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (which may include capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or
as a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site
disposal of wastes or Hazardous Materials, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses).  On the basis of this review,
the Company has reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental Laws, are unlikely
to have a Material Adverse Effect.

 

Section 4.08.  Taxes. 
The Company and its Subsidiaries have filed all United States
Federal income tax returns and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Company or any
Subsidiary, to the extent required to be paid pursuant to Section 5.06.  The charges, accruals and reserves on the
books of the Company and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Company, adequate.

 

Section 4.09.  Not an Investment Company.  Neither Borrower is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

 

40

 

Section 4.10.  Full Disclosure.  All information heretofore
furnished by the Company to any Agent or Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Company to any Agent or Lender
will be, true and accurate (taken as a whole) in all material respects on the
date as of which such information is stated or certified.  On the date hereof, the Company has disclosed
to the Lenders in writing any and all facts which materially and adversely
affect or could reasonably be expected to materially and adversely affect (to
the extent the Company can now reasonably foresee), the business, operations or
financial condition of the Company and its Consolidated Subsidiaries, taken as
a whole, or the ability of the Company to perform its obligations under this
Agreement.

 

ARTICLE 5

COVENANTS

 

The Company
agrees that, so long as any Lender has any Commitment hereunder or any amount
payable under any Note remains unpaid or any Letter of Credit Liabilities
remain outstanding:

 

Section 5.01.  Information. 
The Company will deliver to each of the Lenders:

 

(a)                                  as soon as available
and in any event within 90 days after the end of each Fiscal Year of the
Company or such shorter period as the Company is required by applicable
securities law to file an Annual Report on Form 10-K with the SEC, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
of the end of such Fiscal Year and the related consolidated statements of
income and cash flows for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, all reported on in a
manner acceptable to the Securities and Exchange Commission by Deloitte &
Touche LLP or other independent public accountants of nationally recognized
standing;

 

(b)                                 as soon as available
and in any event within 45 days after the end of each of the first three
quarters of each fiscal year of the Company or such shorter period as the
Company is required by applicable securities law to file a Quarterly Report on Form 10-Q
with the SEC, a consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of income and cash flows for such quarter and for the portion of the
Company’s fiscal year ended at the end of such quarter, setting forth in each
case in comparative form the figures for the corresponding quarter and the
corresponding portion of the Company’s previous fiscal year, all certified
(subject to normal year-end adjustments and absence of footnotes) as to
fairness of presentation in all material respects, generally accepted
accounting principles and consistency by a Senior Financial Officer;

 

41

 

(c)                                  simultaneously with
the delivery of each set of financial statements referred to in Section 5.01(a) and
Section 5.01(b) above, a certificate of a Senior Financial Officer,
on behalf of the Company, substantially in the form of Exhibit G setting
forth (i) in reasonable detail the calculations required to establish
whether the Company was in compliance with the requirements of Section 5.09
to Section 5.13, inclusive, on the date of such financial statements, (ii) the
Leverage Ratio and Consolidated Net Worth as at the date of such financial
statements and (iii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Company is taking or proposes to take with
respect thereto;

 

(d)                                 simultaneously with
the delivery of each set of financial statements referred to in Section 5.01(a) above,
a statement of the firm of independent public accountants (subject to customary
qualifications) which reported on such statements whether anything has come to
their attention to cause them to believe that any Default existed on the date
of such statements;

 

(e)                                  within five days
after any Senior Financial Officer of the Company obtains knowledge of any
Default, if such Default is then continuing, an Officer’s Certificate setting
forth the details thereof and the action which the Company is taking or
proposes to take with respect thereto;

 

(f)                                    promptly upon the
mailing thereof to the shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so mailed;

 

(g)                                 promptly upon the
filing thereof, copies of all registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or its equivalent) and
reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which the Company
shall have filed with the Securities and Exchange Commission;

 

(h)                                 if and when any member
of the ERISA Group (i) gives or is required to give notice to the PBGC of
any “reportable event” (as defined in Section 4043 of ERISA) with respect
to any Plan which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has given
or is required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to

 

42

 

Section 4063 of ERISA, a copy of such notice; or (vii) fails
to make any payment or contribution to any Plan or Multiemployer Plan or makes
any amendment to any Plan which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security, a certificate of the
chief financial officer or the chief accounting officer of the Company setting
forth details as to such occurrence and action, if any, which the Company or
applicable member of the ERISA Group is required or proposes to take; and

 

(i)                                     from time to time such
additional information regarding the financial position or business of the
Company and its Subsidiaries as the Administrative Agent, at the request of any
Lender, may reasonably request.

 

Information
required to be delivered pursuant to Section 5.01(a), Section 5.01(b),
Section 5.01(f) or Section 5.01(g) above shall be deemed to
have been delivered on the date on which the Company provides notice to the
Lenders that such information has been posted on the Company’s website on the
Internet at the website address listed on the signature pages hereof, at
sec.gov/edaux/searches.htm or at another website identified in such notice and
accessible by the Lenders without charge; provided that (i) such notice
may be included in a certificate delivered pursuant to Section 5.01(c) and
(ii) the Company shall deliver paper copies of the information referred to
in Section 5.01(a), Section 5.01(b), Section 5.01(f) or Section 5.01(g) to
any Lender which requests such delivery.

 

Section 5.02.  Compliance with Law.  The Company will and will cause
each of its Subsidiaries to comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will and will cause each of its Subsidiaries to obtain
and maintain in effect all licenses, certificates, permits, franchises and
other governmental authorizations necessary to the ownership of its property or
to the conduct of its business, in each case to the extent necessary to ensure
that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

Section 5.03.  Insurance. 
The Company will and will cause each of its  Subsidiaries to maintain, with financially
sound and reputable insurers, insurance with respect to its property and
business against such casualties and contingencies, of such types, on such
terms and in such amounts (including deductibles, co-insurance and
self-insurance, if adequate reserves are maintained with respect thereto) as is
customary in the case of entities of established reputations engaged in the
same or a similar business and similarly situated.

 

Section 5.04.  Maintenance of Properties.  The Company will and will cause
each of its Subsidiaries to maintain and keep, or cause to be maintained and
kept, its property in good repair, working order and condition (other than
ordinary

 

43

 

wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided
that this Section shall not prevent the Company or any of its Subsidiaries
from discontinuing the operation and the maintenance of any of its property if
such discontinuance is desirable in the conduct of its business and the Company
has concluded that such discontinuance would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 5.05.  Maintenance of Records; Inspection.  The Company will and will cause
each of its Subsidiaries to maintain proper books of records and accounts in
accordance with normal business practice in which full and appropriate entries
shall be made of all dealings or transactions in relation to their respective
businesses and activities; and will permit, and will cause each Subsidiary to
permit, representatives of any Lender at such Lender’s expense, upon reasonable
prior written notice (except such notice shall not be required if an Event of
Default then exists), to visit and inspect any of their respective properties,
to examine and make abstracts from any of their respective books and records
and to discuss their respective affairs, finances and accounts with their
respective officers, employees and independent public accountants, all at such
reasonable times and as often as may reasonably be desired.

 

Section 5.06.  Payment of Taxes and Claims.  The Company will and will cause
each of its Subsidiaries to file all income and franchise tax returns required
to be filed in any jurisdiction and to pay and discharge all taxes shown to be
due and payable on such returns and all other taxes, assessments, governmental
charges, or levies imposed on them or any of their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on properties or
assets of the Company or any of its Subsidiaries, provided
that neither the Company nor any of its Subsidiaries need pay any such tax or
assessment or claims if (i) the amount, applicability or validity thereof
is contested by the Company or such Subsidiary on a timely basis in good faith
and in appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes and
assessments in the aggregate would not reasonably be expected to have a
Material Adverse Effect.

 

Section 5.07.  Corporate Existence, etc.  The Company will at all times
preserve and keep in full force and effect its corporate existence.  The Company will at all times preserve and
keep in full force and effect the corporate existence of each of its
Subsidiaries (unless merged into the Company or any Subsidiary) and all rights
and franchises of the Company and its Subsidiaries unless, in the good faith
judgment of the Company, the termination of or failure to preserve and keep in
full force and effect such corporate existence, right or franchise could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

44

 

Section 5.08.  Transaction with Affiliates.  Except as set forth in Schedule 5.08,
the Company will not and will not permit any of its Subsidiaries to enter into
directly or indirectly any Material transaction or Material group of related
transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Subsidiary), except in the
ordinary course and pursuant to the reasonable requirements of the Company’s or
such Subsidiary’s business and upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length
transaction with a Person not an Affiliate.

 

Section 5.09.  Prohibited Liens.  The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of the Company or any of its Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit
the filing of, or permit to remain in effect, any charge, mortgage, finance
statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the recording or notice statutes of
any jurisdiction, except:

 

(a)                                  Permitted Liens;

 

(b)                                 (i) Liens (“Existing Liens”) existing as of the date hereof and
described in Schedule 5.09 annexed hereto and (ii) Liens (“Replacement Existing Liens”) on the same assets in
replacement of Existing Liens or of other Replacement Existing Liens; provided that to the extent any Existing Lien or Replacement
Existing Lien secures any greater amount of Indebtedness than the related
respective amount thereof set forth on Schedule 5.09, the amount of
Indebtedness secured by such Lien in excess of such related respective amount
set forth on Schedule 5.09 shall not be permitted by this Section 5.09(d) but
only by Section 5.09(g);

 

(c)                                  Liens created or
incurred after the date hereof by the Company or any of its Subsidiaries on
assets useful and intended to be used in carrying on the business of the
Company and its Subsidiaries, securing the purchase price, or cost of
construction or improvement, thereof; provided, however,
that (i) the Liens shall attach solely to assets purchased or constructed
(and proceeds thereof), (ii) the Liens shall be created within twelve
months of the date of the acquisition, purchase, construction or improvement of
the assets to which the Liens attached, and (iii) at the time of
acquisition, purchase, construction or improvement of such assets, the unpaid
principal amount of all Indebtedness secured by such Liens on such assets
(whether or not assumed by the Company or a Subsidiary) shall not exceed an
amount equal to the lesser of (A) the purchase price, or the cost of
construction or improvement, of such assets incurred by the Company or any of
its Subsidiaries and (B) the fair market value of such assets at the time
of acquisition, purchase, construction or improvement of such assets (as
determined

 

45

 

in good faith by the Board of Directors of the Company); and any Lien
arising out of the refinancing, extension, renewal or refunding of any Indebtedness
secured by any Lien permitted by this Section 5.09(c), provided that such
Indebtedness is not secured by any additional assets and provided further that
to the extent that such Indebtedness is increased, the amount of the increase
shall not be permitted under this Section 5.09(c) and shall only be
permitted under Section 5.09(g);

 

(d)                                 Liens (“Acquisition Liens”) existing on property of a Related New
Acquisition Entity immediately prior to its being consolidated with or merged
into any New Acquisition Subsidiary, immediately prior to such Related New
Acquisition Entity becoming a Subsidiary of the Company or immediately prior to
a New Acquisition Subsidiary acquiring such property from the Related New
Acquisition Entity and Liens on the same assets (“Replacement
Acquisition Liens”) in replacement of any such Acquisition Liens or
of other Replacement Acquisition Liens; provided that
to the extent the Indebtedness or, in the case of a line of credit, the amount
of the credit facility secured by any Acquisition Lien is in an amount greater
than the respective amount of such Indebtedness or such line of credit, as the
case may be, in existence at the time of such merger or consolidation, such
Person becoming such a Subsidiary or such acquisition of such property, as the
case may be, the excess amount shall not be permitted under this Section 5.09(d) and
shall only be permitted under Section 5.09(g); and provided,
further, that in the case of any Replacement Acquisition Lien, to
the extent that the Indebtedness or, in the case of a line of credit, the
amount of the line of credit secured by such Replacement Lien is in an amount
greater than the respective amount of Indebtedness or line of credit, as the
case may be, secured by the replaced Lien, the excess shall not be permitted
under this Section 5.09(d) and shall only be permitted under Section 5.09(g);

 

(e)                                  Liens on assets
leased by the Company or one of its Subsidiaries pursuant to a Capital Lease
securing the obligations of the Company or such Subsidiary under such Capital
Lease;

 

(f)                                    Liens on assets of
a Foreign Subsidiary securing Indebtedness of such Foreign Subsidiary; and

 

(g)                                 Other Liens, provided that after giving effect to the creation,
incurrence or assumption, or after accounting for the existence, of all Other
Liens, the sum (without duplication) of (i) the aggregate principal amount
of all Indebtedness or other obligations secured by all Other Liens plus (ii) the
aggregate principal amount of all Indebtedness of Subsidiaries permitted solely
under Section 5.10(g) does not exceed 10% of Consolidated
Assets.  “Other Liens”
means Liens securing Indebtedness or other obligations of the Company or any of
its Subsidiaries that are incurred in reliance on this clause (g) of Section 5.09
and not on any other clause of this Section.

 

Section 5.10.  Subsidiary Indebtedness.  The Company will not permit any of
its Subsidiaries (including Candle America, CCW and PartyLite) to directly or

 

46

 

indirectly create, assume, incur or guaranty,
or otherwise become or remain directly or indirectly liable with respect to,
any Indebtedness for borrowed money except:

 

(a)                                  Any Borrowings by PLT
that are otherwise permitted under this Agreement;

 

(b)                                 a Subsidiary may
become and remain liable with respect to Indebtedness to the Company or a
Wholly-Owned Subsidiary of the Company;

 

(c)                                  the Subsidiaries may (i) remain
liable with respect to Indebtedness existing, and Indebtedness under lines of
credit where such lines of credit are existing, as of the Effective Date and
described in Schedule 5.10 and (ii) become liable with respect to
Indebtedness in respect of a refinancing of such Indebtedness (or of any
Indebtedness under this clause (ii)) and Indebtedness under lines of credit in
replacement of the lines of credit referred to in clause (i) or this
clause (ii); provided, that (A) if the
principal amount of such refinancing Indebtedness or the amount of any such
replacement line of credit exceeds the principal amount of Indebtedness
refinanced or the amount of the replaced line of credit, then that excess
(i.e., that portion of the refinancing or replacement representing such
increase) shall not be permitted under this Section 5.10(c) but only
by Section 5.10(g) and (B) the maximum principal amount of
Indebtedness permitted under this Section 5.10(c) shall not exceed
$30,000,000 at any one time outstanding (any amount in excess of such
$30,000,000 shall only be permitted by Section 5.10(g));

 

(d)                                 a Subsidiary (a “Target Subsidiary”) may remain liable with respect to
Indebtedness outstanding at the time such Target Subsidiary becomes a
Subsidiary and a New Acquisition Subsidiary may become liable with respect to
Indebtedness of the Related New Acquisition Entity assumed by the New Acquisition
Subsidiary in connection with the acquisition (whether by merger or otherwise)
of assets or business(es) of such Related New Acquisition Entity; provided that
(i) such Indebtedness shall not have been incurred in contemplation of
such Target Subsidiary becoming a Subsidiary and (ii) immediately after
such Target Subsidiary becomes a Subsidiary or the New Acquisition Subsidiary
so assumes such Indebtedness, as the case may be, no Default shall exist;

 

(e)                                  a Subsidiary may
become and remain liable with respect to Indebtedness (i) incurred to
refinance, in whole or in part, any outstanding Indebtedness permitted under Section 5.10(d) or
under this clause (i), or (ii) under any line of credit in replacement of
any line of credit evidencing Indebtedness permitted under Section 5.10(d) or
this clause (ii); provided, however, that if the principal amount of such
refinancing Indebtedness or the amount of any such replacement line of credit
exceeds the principal amount of Indebtedness refinanced or amount of the line
of credit replaced, then such excess shall not be permitted under this Section 5.10(e) but
only by Section 5.10(g);

 

47

 

(f)                                    a Subsidiary may
become and remain liable with respect to Indebtedness secured by Liens
permitted by Section 5.09; provided that the recourse of the holders of
such Indebtedness in respect thereof shall be limited to the assets subject to
such Lien, and such holder shall have no recourse to any other assets of such
Subsidiary or to the Company or any other Subsidiary with respect thereto; and

 

(g)                                 a Subsidiary may
become and remain liable after the date hereof with respect to Indebtedness for
borrowed money not described in Section 5.10(a) through Section 5.10(f) above,
provided that after giving effect to such Subsidiary’s creation, assumption,
incurrence or guaranty of (or such Subsidiary’s becoming liable with respect
to), or after accounting for the existence of, such other Indebtedness, the sum
(without duplication) of (i) the aggregate principal amount of all such
Indebtedness of Subsidiaries plus (ii) the aggregate principal amount of
all Indebtedness and other obligations secured by Other Liens does not exceed
10% of Consolidated Assets.

 

Section 5.11.  Investments. 
The Company will not, and will not permit any of its
Subsidiaries to, make directly or indirectly any Investment in any Person,
including any joint venture, except:

 

(a)                                  the Company and its
Subsidiaries may continue to own the Investments owned by them as of the date
hereof and described in Schedule 5.11;

 

(b)                                 the Company and its
Subsidiaries may make and own Investments in any Person which is, or
immediately after giving effect to such Investment will become, a Subsidiary of
the Company;

 

(c)                                  the Company and its Subsidiaries
may make and own Investments in Cash Equivalents or in money market funds that
comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7
under the Investment Company Act of 1940; and

 

(d)                                 the Company and its
Subsidiaries may make and own Investments not described in Section 5.11(a) through
Section 5.11(c) above, provided that
the aggregate amount of all such Investments does not exceed 10% of
Consolidated Assets; provided, that,
in the event that an Investment is not initially permitted under Section 5.11(b) and
is permitted under this Section 5.11(d), and subsequently (whether due to
subsequent Investment by the Company or its Subsidiaries or otherwise) the
Person in whom the Investment is made becomes a Subsidiary of the Company, then
the full amount of the Investment in such Person shall qualify under Section 5.11(b).

 

Section 5.12.  Leverage Ratio.  The Leverage Ratio will not, at
any time  exceed 2.75 to 1.00.

 

48

 

Section 5.13.  Minimum Adjusted Consolidated Net Worth.  Adjusted Consolidated Net Worth
will at no time be less than $471,176,000 plus 50% of Cumulative Positive Net
Income plus 50% of Cumulative Equity Proceeds. 
For purposes of this Section, “Cumulative Positive Net
Income” means, as of any date, the sum of Consolidated Net Income
for each Fiscal Year ending after January 31, 2005 and on or prior to such
date for which such Consolidated Net Income is a positive amount, disregarding
any Fiscal Year for which Consolidated Net Income is a negative amount and “Cumulative Equity Proceeds” means, as of any date, the
aggregate amount by which Consolidated Net Worth shall have been increased by
reason of the issuance of capital stock of the Company subsequent to January 31,
2005 and on or prior to such date.

 

Section 5.14.  Mergers and Sales of Assets. Neither
Borrower will consolidate or merge with or into any other Person; provided that either Borrower may merge with another Person
if (x) such Borrower is the corporation surviving such merger and (y) after
giving effect to such merger, no Default shall have occurred and be
continuing.  The Company shall not permit
the sale, lease or other transfer, directly or indirectly, to any Person or
Persons (other than the Company or a Subsidiary) of assets having an aggregate
book value in excess of 20% of Consolidated Assets as reflected in the most
recent consolidated balance sheet of the Company available at the time of the
most recent such transaction; provided that the foregoing shall not apply to (i) transfers
of assets with an aggregate book value of less than $70,000,000 in one or more
related or unrelated transactions to one or more Persons in connection with the
leasing of such assets from such Person or Persons, (ii) sales of
inventory in the ordinary course of business, (iii) dispositions of
obsolete assets or assets no longer used in their respective businesses or
assets replaced, in the ordinary course of business, with assets or comparable
or better value or (iv) dispositions of any assets within twelve months
after the acquisition thereof.

 

Section 5.15.  Use of Proceeds.  The proceeds of the Loans made
under this Agreement will be used by the Borrowers for their general corporate
purposes (including, without limitation, acquisitions, but only with the
approval of the boards of directors of the Persons to be acquired).  None of such proceeds will be used, directly
or indirectly, for any purpose that entails a violation of, or is inconsistent
with, Regulation U or Regulation X.

 

ARTICLE 6

DEFAULTS

 

Section 6.01.  Events of Default.  If one or more of the following
events (“Events of Default”) shall have occurred
and be continuing:

 

(a)                                  any principal of any
Loan or of any Letter of Credit Liabilities shall not be paid when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment
or by declaration or otherwise; or

 

49

 

(b)                                 any interest, any fees
or any other amount payable hereunder shall not be paid for more than five
Domestic Business Days after the same becomes due and payable; or

 

(c)                                  the Company defaults
in the performance of or compliance with any term contained in Section 5.01(e) or
Section 5.08 through Section 5.15, inclusive; or

 

(d)                                 any Borrower defaults
in the performance of or compliance with any term contained herein (other than
those referred to in Section 6.01(a), Section 6.01(b) and Section 6.01(c))
and such default is not remedied within 30 days after the earlier of (i) a
Responsible Officer obtaining actual knowledge of such default and (ii) the
Company receiving notice of such default from the Administrative Agent at the
request of any Lender (any such notice to be identified as a “notice of default”
and to refer specifically to this Section 6.01(d)); or

 

(e)                                  any representation or
warranty made in writing by or on behalf of any Borrower or by any officer of
any Borrower in the Loan Documents or in any writing furnished in connection
with the transactions contemplated thereby proves to have been false or
incorrect in any material respect on the date as of which made; or

 

(f)                                    (i) the
Company or any of its Material Subsidiaries is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness owed to any other Person(s)
that is outstanding in an aggregate principal amount of at least $25,000,000
beyond any period of grace provided with respect thereto, or (ii) the
Company or any of its Material Subsidiaries is in default in the performance of
or compliance with any term of any Indebtedness owed to any other Person(s) in
an aggregate outstanding principal amount of at least $25,000,000 or of any
mortgage, indenture or other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such Indebtedness has
become, or has been declared (or one or more Persons are entitled to declare
such Indebtedness to be), due and payable before its stated maturity or before
its regularly scheduled dates of payment or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than (A) the
passage of time, (B) the right of the holder of Indebtedness to convert
such Indebtedness into equity interests or (C) in the case of secured
Indebtedness, the occurrence of a casualty or condemnation event with respect
to the principal collateral therefor without default on the part of the Company
or any Material Subsidiary), (x) the Company or any of its Material
Subsidiaries has become obligated to purchase or repay Indebtedness owed to any
other Person(s) before its regular maturity or before its regularly scheduled
dates of payment in an aggregate outstanding principal amount of at least
$25,000,000, or (y) one or more Persons have the right to require the Company
or any of its Material Subsidiaries so to purchase or repay such Indebtedness,
except to the extent that such obligation to purchase or repay or right to
require repayment arises solely through the passage of time (or, in the

 

50

 

case of any such right, may be exercised at any time) and not by the
occurrence of any other event or the existence of any other condition; or

 

(g)                                 the Company or any of
its Material Subsidiaries (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy,
for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or

 

(h)                                 a court or
governmental authority of competent jurisdiction enters an order appointing,
without consent by the Company or any of its Material Subsidiaries, a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its Material Subsidiaries,
or any such petition shall be filed against the Company or any of its Material
Subsidiaries and such petition shall not be dismissed within 60 days; or

 

(i)                                     a final judgment
or judgments for the payment of money aggregating in excess of $20,000,000
(excluding Insured Judgment Amounts) are rendered against one or more of the
Company and its Material Subsidiaries and which judgments are not, within 60
days after entry thereof, bonded, discharged or stayed pending appeal, or are
not discharged within 30 days after the expiration of such stay; or

 

(j)                                     if (i) any
Plan shall fail to satisfy the minimum funding standards of ERISA or the Code
for any plan year or part thereof or a waiver of such standards or extension of
any amortization period is sought or granted under section 412 of the
Code, (ii) a notice of intent to terminate any Plan shall have been or is
reasonably expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified the Company or any ERISA
Affiliate that a Plan may become a subject of any such proceedings, (iii) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $20,000,000, (iv) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any liability pursuant to
Title I or IV or ERISA or the penalty or exercise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), (v) the
Company or

 

51

 

any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the
Company or any Subsidiary establishes or amends any employee welfare benefit
plan (as defined in Section 3 of ERISA) that provides post-employment
welfare benefits in a manner that would increase the liability of the Company
or any Subsidiary thereunder; and any such event or events described in Section 6.01(j)(i) through
Section 6.01(j)(vi) above, either individually or together with any
other such event or events, could reasonably be expected to have a Material
Adverse Effect; or

 

(k)                                  any person or group
of persons (within the meaning of Section 13 or 14 of the Exchange Act)
(other than Robert B. Goergen and Family or a group including Robert B. Goergen
and Family) shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Exchange Act)
of 30% or more of the outstanding shares of voting common stock of the Company;
or, during any period of 12 consecutive calendar months, individuals who were
either (i) directors of the Company on the first day of such period or (ii) elected
to fill vacancies caused by the ordinary course resignation or retirement of
any other director and whose nomination or election was approved by a vote of
at least a majority of directors then still in office who were directors of the
Company on the first day of such period, shall cease to constitute a majority of
the board of directors of the Company;

 

then, and in
every such event, the Administrative Agent shall (i) if requested by the
Required Lenders, by notice to the Company terminate the Commitments and they
shall thereupon terminate, (ii) if requested by Lenders holding more than
50% of the aggregate Dollar Amount of the Loans, by notice to the Company
declare the Loans (together with accrued interest thereon) to be, and the Loans
shall thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrowers; provided that in the case of any of the
Events of Default specified in Section 6.01(g) or Section 6.01(h) above
with respect to any Borrower, without any notice to the Borrowers or any other
act by the Administrative Agent or the Lenders, the Commitments shall thereupon
terminate and the Loans (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrowers.

 

Section 6.02.  Notice of Default.  The Administrative Agent shall
give notice to the Company under Section 6.01(d) promptly upon being
requested to do so by any Lender and shall thereupon notify all the Lenders
thereof.

 

Section 6.03.  Cash Cover. 
The Company agrees, in addition to the remedies in the last
paragraph of Section 6.01 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the
Administrative Agent upon the instruction of the Lenders having more than 50%
in aggregate amount of the Commitments (or, if the Commitments shall have been

 

52

 

terminated, holding more than 50% of the
Letter of Credit Liabilities), pay to the Administrative Agent an amount in
immediately available funds (which funds shall be held as collateral pursuant
to arrangements satisfactory to the Administrative Agent) equal to the
aggregate amount available for drawing under all Letters of Credit then
outstanding at such time, provided that,
upon the occurrence of any Event of Default specified in Section 6.01(g) or
Section 6.01(h) with respect to the Company, the Company shall pay
such amount forthwith without any notice or demand or any other act by any
Agent or Lender.

 

ARTICLE 7

THE AGENTS

 

Section 7.01.  Appointment and Authorization.  Each Lender irrevocably appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Administrative Agent by the terms thereof, together with all such powers as
are reasonably incidental thereto.

 

Section 7.02.  Administrative Agent and Affiliates.  The Administrative Agent shall
have the same rights and powers under the Loan Documents as any other Lender
and may exercise or refrain from exercising the same as though it were not the
Administrative Agent, and the Administrative Agent and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Company or any Subsidiary or affiliate of the Company as if
it were not the Administrative Agent hereunder.

 

Section 7.03.  Action by Administrative Agent.  The obligations of the Administrative
Agent under the Loan Documents are only those expressly set forth therein.  Without limiting the generality of the
foregoing, the Administrative Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article 6.

 

Section 7.04.  Consultation with Experts.  The Administrative Agent may
consult with legal counsel (who may be counsel for the Company), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.

 

Section 7.05.  Liability of Agent.  Neither the Administrative Agent
nor any of its affiliates nor any of the respective directors, officers, agents
or employees of the foregoing shall be liable for any action taken or not taken
by it in connection with the Loan Documents (i) with the consent or at the
request of the Required Lenders  (or such
other number or percentage of the Lenders as may be specified herein for the
particular purpose) or (ii) in the absence of its own gross negligence or
willful misconduct.  Neither the
Administrative Agent nor any of its affiliates nor any of the respective
directors, officers, agents or employees of

 

53

 

the foregoing shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with the Loan Documents or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Company or any of its Subsidiaries; (iii) the
satisfaction of any condition specified in Article 3, except receipt of
items required to be delivered to the Administrative Agent; or (iv) the
validity, effectiveness or genuineness of the Loan Documents or any other
instrument or writing furnished in connection therewith.  The Administrative Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex, facsimile
transmission or similar writing) believed by it to be genuine or to be signed
by the proper party or parties.  Without
limiting the generality of the foregoing, the use of the term “agent” in this
Agreement with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law.  Instead,
such term is used merely as a matter of market custom and is intended to create
or reflect only a contractual relationship between independent contracting
parties.

 

Section 7.06.  Indemnification.  Each Lender shall, ratably in
accordance with its Commitment, indemnify the Administrative Agent, its
affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by the Borrowers) against any cost, expense
(including reasonable counsel fees and disbursements), claim, demand, action,
loss or liability (except such as result from such indemnitees’ gross
negligence or willful misconduct) that such indemnitees may suffer or incur in
connection with the Loan Documents or any action taken or omitted by such
indemnitees thereunder.

 

Section 7.07.  Credit Decision.  Each Lender acknowledges that it
has, independently and without reliance upon any Agent or any other Lender, and
on the basis of such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon any Agent or any other Lender, and on
the basis of such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under the Loan Documents.

 

Section 7.08.  Successor Administrative Agent.  The Administrative Agent may
resign at any time by giving notice thereof to the Lenders and the
Company.  Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent with (so long as no Event of Default shall have occurred and be
continuing) the consent of the Company, which consent shall not be unreasonably
withheld or delayed.  If no successor
Administrative Agent shall have been so appointed by the Required Lenders with
the Company’s consent (if applicable), and shall have accepted such
appointment, within 60 days after the retiring Administrative Agent gives
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be either a
Lender or a commercial bank

 

54

 

organized or licensed under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $250,000,000. 
Upon the acceptance of its appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.  After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Article shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent.

 

Section 7.09.  Agents’ Fees; Arranger Fee.  The Company shall pay to each Agent
for its own account and to J.P. Morgan Securities Inc. (“JPMSI”),
in its capacity as arranger, for its own account, fees in the amounts and at
the times previously agreed upon between the Company and such Agent and JPMSI,
respectively.

 

Section 7.10.  Co-syndication Agents.  Nothing in this Agreement shall
impose upon either of the Co-Syndication Agents, in such capacity, any duty,
responsibility or liability whatsoever.

 

ARTICLE 8

CHANGE IN CIRCUMSTANCES

 

Section 8.01.  Basis for Determining Interest Rate Inadequate
or Unfair.  If on or prior to
the first day of any Interest Period for any Euro-Currency Loan:

 

(a)                                  the Administrative
Agent determines that adequate and fair means do not exist for determining the
Adjusted LIBO Rate for such Interest Period, or

 

(b)                                 Lenders having 50% or
more of the aggregate amount of the Commitments advise the Administrative Agent
that the Adjusted LIBO Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Lenders of funding their
Euro-Currency Loans for such Interest Period,

 

the
Administrative Agent shall forthwith give notice thereof to the Company and the
Lenders, whereupon until the Administrative Agent notifies the Company that the
circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Lenders to make Euro-Currency Loans, or to continue or
convert outstanding Loans as or into Euro-Currency Loans, in the affected
currency shall be suspended and (ii) each outstanding Euro-Currency Loan
in the affected currency shall be converted (in the case of an Alternative
Currency Loan, at the Spot Rate) into a Base Rate Loan on the last day of the
then current Interest Period applicable thereto.  Unless the Borrower notifies the
Administrative Agent at least two Domestic Business Days before the date of any
Fixed Rate Borrowing

 

55

 

for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall instead be made in Dollars as a Base Rate
Borrowing in the same aggregate Dollar Amount as the requested Borrowing.

 

Section 8.02.  Illegality. 
If, on or after the date of this Agreement, the adoption of
any applicable law, rule or regulation, or any change in any applicable
law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Euro-Currency Lending Office) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Lender (or its Euro-Currency Lending Office) to make, maintain or fund any of
its Euro-Dollar Loans in any currency and such Lender shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Lenders and the Company, whereupon until such Lender
notifies the Borrower and the Administrative Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Lender
to make Euro-Currency Loans, or to convert outstanding Loans into Euro-Currency
Loans, in such currency shall be suspended. 
Before giving any notice to the Administrative Agent pursuant to this
Section, such Lender shall designate a different Euro-Currency Lending Office
if such designation will avoid the need for giving such notice and will not, in
the judgment of such Lender, be otherwise disadvantageous to such Lender.  If such notice is given, each Euro-Currency
Loan of such Lender in such currency then outstanding shall be converted (at
the Spot Rate on the date of conversion in the case of each Alternative
Currency Loan) to a Base Rate Loan either (a) on the last day of the then
current Interest Period applicable to such Euro-Currency Loan if such Lender
may lawfully continue to maintain and fund such Loan to such day or (b) immediately
if such Lender shall determine that it may not lawfully continue to maintain
and fund such Loan to such day.

 

Section 8.03.  Increased Cost and Reduced Return.  (a) If on or after the date
hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
with respect to any Euro-Currency Loan any such requirement reflected in an
applicable Adjusted LIBO Rate), special deposit, insurance assessment or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (or its Applicable Lending Office) or shall
impose on any Lender (or its

 

56

 

Applicable Lending Office) or on the London
interbank market any other condition affecting its Fixed Rate Loans, its Note
or its obligation to make Fixed Rate Loans or its obligations hereunder in
respect of Letters of Credit and the result of any of the foregoing is to
increase the cost to such Lender (or its Applicable Lending Office) of making
or maintaining any Fixed Rate Loan or of issuing or participating in any Letter
of Credit, or to reduce the amount of any sum received or receivable by such
Lender (or its Applicable Lending Office) under this Agreement or under its
Note with respect thereto, by an amount deemed by such Lender to be material,
then, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Company shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction.

 

(b)                                 If any Lender shall
have determined that, after the date hereof, the adoption of any applicable
law, rule or regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on capital of such Lender
(or its Parent) as a consequence of such Lender’s obligations hereunder to a
level below that which such Lender (or its Parent) could have achieved but for
such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, within 15 days after demand by such
Lender (with a copy to the Administrative Agent), the Company shall pay to such
Lender such additional amount or amounts as will compensate such Lender (or its
Parent) for such reduction.

 

(c)                                  Each Lender will
promptly notify the Company and the Administrative Agent of any event of which
it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Lender, be otherwise disadvantageous to such Lender.  A certificate of any Lender claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error if made reasonably and in good faith.  In determining such amount, such Lender may
use any reasonable averaging and attribution methods.  Notwithstanding subsections (a) and (b) of
this Section 8.03, the Company shall only be obligated to compensate any
Lender for any amount arising or accruing during (i) any time or period
commencing not more than three months prior to the date on which such Lender
notifies the Administrative Agent and the Company that it proposes to demand
such compensation and identifies to the Administrative Agent and the Company

 

57

 

the statute, regulation or other basis upon which the claimed
compensation is or will be based and (ii) any time or period during which,
because of the retroactive application of such statute, regulation or other
basis, such Lender did not know that such amount would arise or accrue.

 

Section 8.04.  Taxes. 
(a) For purposes of this Section 8.04, the
following terms have the following meanings:

 

“Taxes” means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any
payment by any Borrower pursuant to any Loan Document, and all liabilities with
respect thereto, excluding (i) in the case of each Lender and the
Administrative Agent, taxes imposed on its income, net worth or gross receipts
and franchise or similar taxes imposed on it, by a jurisdiction under the laws
of which such Lender or the Administrative Agent (as the case may be) is
organized or in which its principal executive office is located or, in the case
of each Lender, in which its Applicable Lending Office is located or by a
jurisdiction as a result of a present, former or future connection with such
Lender or the Administrative Agent (other than a connection resulting from or
attributable to such Person having executed, delivered or performed its
obligations or received a payment under, or enforced, the Loan Documents) and (ii) in
the case of each Lender, any United States withholding tax imposed on such
payments but only to the extent that such payments to such Lender are subject
to United States withholding tax at the time such Lender first becomes a party
to this Agreement.

 

“Other Taxes” means any present or future stamp or
documentary taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to any Loan Document or from
the execution or delivery of, or otherwise with respect to, any Loan Document.

 

(b)                                 Any and all payments
by any Borrower to or for the account of any Lender or the Administrative Agent
under any Loan Document shall be made without deduction for any Taxes or Other
Taxes; provided that, if any Borrower shall be required by law to deduct any
Taxes or Other Taxes from any such payments, (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 8.04)
such Lender or the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions, (iii) such Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) such Borrower shall furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof.

 

(c)                                  Each Borrower agrees
to indemnify each Lender and the Administrative Agent for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed or asserted by any

 

58

 

jurisdiction on amounts payable under this Section 8.04) paid by
such Lender or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses, except such as result from the
gross negligence of willful misconduct of such Lender or the Administrative
Agent, as the case may be) arising therefrom or with respect thereto.  This indemnification shall be paid within 15
days after such Lender or the Administrative Agent (as the case may be) makes
demand therefor.

 

(d)                                 Each Lender organized
under the laws of a jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the case of each Lender
listed on the signature pages hereof, on or prior to the date on which it
becomes a Lender in the case of each other Lender, on or prior to the date on
which it designates a new Applicable Lending Office (if such Applicable Lending
Office is a different legal entity or is located in a different taxing
jurisdiction), in the case of each Lender, and from time to time thereafter if
requested in writing by the Company (but only so long as such Lender remains
lawfully able to do so), shall provide the Company and the Administrative Agent
with Internal Revenue Service W-8BEN or W-8ECI, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Lender from United States withholding tax
or reduces the rate of withholding tax on payments of interest for the account
of such Lender or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States.

 

(e)                                  For any period with
respect to which a Lender has failed to provide the Company with the
appropriate form pursuant to Section 8.04(d) (unless such failure is
due to a change in treaty, law or regulation occurring subsequent to the date
on which such form originally was required to be provided), such Lender shall
not be entitled to indemnification under Section 8.04(b) or Section 8.04(c) with
respect to Taxes imposed by the United States; provided that if a Lender, which
is otherwise exempt from or subject to a reduced rate of withholding tax,
becomes subject to Taxes because of its failure to deliver a form required
hereunder, the Borrowers shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.

 

(f)                                    If any Borrower is
required to pay additional amounts to or for the account of any Lender pursuant
to this Section 8.04, then such Lender will change the jurisdiction of its
Applicable Lending Office if, in the judgment of such Lender, such change (i) will
eliminate or reduce any such additional payment which may thereafter accrue and
(ii) is not otherwise disadvantageous to such Lender.

 

(g)                                 If a Lender or the
Administrative Agent (as the case may be) shall become aware that it is
entitled to claim a refund (or refund in the form of a credit) (each a “Refund”)
from a taxing authority (as a result of any error in the

 

59

 

amount of Taxes or Other Taxes paid to such taxing authority) of such
Taxes or Other Taxes for which it has been indemnified by any Borrower, or with
respect to which any Borrower has paid additional amounts, pursuant to this Section 8.04,
it shall promptly notify such Borrower of the availability of such Refund and
shall, within 30 days after receipt of a written request by such Borrower, make
a claim to such taxing authority for such Refund at the Borrower’s expense if,
in the judgment of such Lender or the Administrative Agent (as the case may
be), the making of such claim will not be otherwise disadvantageous to it; provided that nothing in this subsection (g) shall
be construed to require any Lender or the Administrative Agent to institute any
administrative proceeding (other than the filing of a claim for any such
Refund) or judicial proceeding to obtain any such Refund.  If a Lender or the Administrative Agent (as
the case may be) receives a Refund from a taxing authority (as a result of any
error in the amount of Taxes or Other Taxes paid to such taxing authority) of
any such Taxes or Other Taxes for which it has been indemnified by any
Borrower, or with respect to which any Borrower has paid additional amounts,
pursuant to this Section 8.04, it shall promptly pay to such Borrower the
amount so received (but only to the extent of indemnity payments made, or
additional amounts paid, by such Borrower under this Section 8.04 with
respect to the Taxes or Other Taxes giving rise to such Refund), net of all
reasonable out-of-pocket expenses (including the net amount of taxes, if any,
imposed on such Lender or the Administrative Agent with respect to such Refund)
of such Lender or Administrative Agent, and without interest (other than
interest paid by the relevant taxing authority with respect to such Refund); provided, however, that such Borrower upon the request of
such Lender or the Administrative Agent, agrees to repay the amount paid over
to the Borrower (plus penalties, interest or other charges) to such Lender or
the Administrative Agent in the event such Lender or the Administrative Agent
is required to repay such Refund to such taxing authority.  Nothing contained in this Section 8.04
shall require any Lender or the Administrative Agent to make available any of
its tax returns (or any other information that it deems to be confidential or
proprietary).

 

Section 8.05.  Base Rate Loans Substituted for Affected
Fixed Rate Loans.  If (i) the
obligation of any Lender to make, or to continue or convert outstanding Loans
as or to, Euro-Currency Loans has been suspended pursuant to Section 8.02
or (ii) any Lender has demanded compensation under Section 8.03 or Section 8.04
with respect to its Euro-Currency Loans, and in any such case the Borrower
shall, by at least five Euro-Dollar Business Days’ prior notice to such Lender
through the Administrative Agent, have elected that the provisions of this Section shall
apply to such Lender, then, unless and until such Lender notifies the Borrower
that the circumstances giving rise to such suspension or demand for
compensation no longer exist, all Loans which would otherwise be made by such
Lender as (or continued as or converted to) Euro-Currency Loans (in the
affected currency), shall instead be Base Rate Loans (in the case of
Alternative Currency Loans, in the same Dollar Amount as the Euro-Currency Loan
that such Lender would otherwise have made in the Alternative Currency) (on
which interest and principal

 

60

 

shall be payable contemporaneously with the
related Euro-Currency Loans of the other Lenders).  If such Lender notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no longer
exist, the principal amount of each such Base Rate Loan shall be converted into
a Euro-Currency Loan on the first day of the next succeeding Interest Period
applicable to the related Euro-Currency Loans of the other Lenders.  If such Loan is converted into an Alternative
Currency Loan, such Lender, the Administrative Agent and the Borrower shall
make such arrangements as shall be required (including increasing or decreasing
the amount of such Alternative Currency Loan) so that such Alternative Currency
Loan shall be in the same amount as it would have been if the provisions of
this Section had never been applied thereto.

 

Section 8.06.  Substitution of Lender.  If (i) the obligation of any
Lender to make Euro-Currency Loans has been suspended pursuant to Section 8.02
or (ii) any Lender has demanded compensation under Section 8.03 or Section 8.04,
and, in the case of either clause (i) or clause (ii), such suspension is
not generally applicable to or such compensation has not generally been
demanded by the other Lenders, then the Company shall have the right, with the
assistance of the Agents, to replace such Lender in accordance with the
procedures specified in Section 9.05(b).

 

ARTICLE 9

MISCELLANEOUS

 

Section 9.01.  Notices. 
(a) All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party (1) in
the case of the Company, at its address, facsimile number or telex number set
forth on the signature pages hereof, (2) in the case of the
Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and Agency Services
Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention of
Denise M. Ramon (Telecopy No. (713) 750-2938), with a copy to JPMorgan
Chase Bank, N.A., 2 Corporate Drive, 7th Floor, Shelton, CT 06484-6238,
Attention of Valerie Schanzer (Telecopy No. (203) 944-8495), (3) in
the case of PLT, to it in care of the Company, (4) in the case of any
Lender, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (5) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Agents and the Borrower.  Each such notice, request or other communication
shall be effective (i) if given by telex, when such telex is transmitted
to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, 72 hours
after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iv) if given by any other means, when
delivered at the address specified in this Section;

 

61

 

provided that notices to any Agent or Issuing
Lender under Article 2 or Article 8 shall not be effective until
received.

 

(b)                                 Notices and other
communications to the Lenders 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 2
unless otherwise agreed by the Administrative Agent and the applicable
Lender.  The Administrative Agent or the
Company 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.

 

Section 9.02.  No Waivers. 
No failure or delay by any Agent or any Lender in exercising
any right, power or privilege under the Loan Documents shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies
provided in the Loan Documents shall be cumulative and not exclusive of any
rights or remedies provided by law.

 

Section 9.03.  Expenses; Indemnification.  (a) The Borrowers jointly and
severally agree to pay (i) all out-of-pocket expenses of the
Administrative Agent, including reasonable fees and disbursements of special counsel
for the Administrative Agent, in connection with the preparation of the Loan
Documents, any waiver or consent thereunder or any amendment thereof or any
Default or alleged Default hereunder and (ii) if an Event of Default
occurs, all out-of-pocket expenses incurred by each Agent and Lender,
including, without limitation and without duplication, the reasonable fees and
disbursements of outside counsel and allocated cost of inside counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom.

 

(b)                                 The Borrowers jointly
and severally agree to indemnify each Agent and Lender, their respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an “Indemnitee”)
and hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind, including, without limitation
and without duplication, the reasonable fees and disbursements of outside
counsel and allocated cost of inside counsel, 
which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of this Agreement or any actual or proposed use of proceeds
of Loans or Letter of Credit hereunder; provided that no Indemnitee shall have
the right to be indemnified hereunder for such Indemnitee’s own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.

 

62

 

Section 9.04.  Sharing of Set-offs.  Subject to Section 2.16, each
Lender agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount then due with respect to the Loans and Letter of Credit Liabilities held
by it which is greater than the proportion received by any other Lender in
respect of the aggregate amount then due and interest due with respect to the
Loans and Letter of Credit Liabilities held by such other Lender, the Lender
receiving such proportionately greater payment shall purchase such
participations in the Loans and Letter of Credit Liabilities held by the other
Lenders, and such other adjustments shall be made, as may be required so that
all such payments then due with respect to the Loans and Letter of Credit
Liabilities held by the Lenders shall be shared by the Lenders pro rata;
provided that nothing in this Section shall impair the right of any Lender
to exercise any right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness other than
indebtedness under the Loan Documents. 
Each Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in the Loans and
Letter of Credit Liabilities, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a participation
were a direct creditor of such Borrower in the amount of such participation.

 

Section 9.05.  Amendments and Waivers.  (a) Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Company and the Required Lenders
or the Agent acting with the written consent of the Required Lenders (and, if
the rights or duties of PLT, any Agent, the Swingline Lender or any Issuing
Lender are directly affected thereby, by such Person); provided that no such
amendment or waiver shall (x) unless signed by each affected Lender, (i) increase
or decrease the Commitment of any Lender (except for a ratable decrease in the
Commitments of all Lenders) or subject any Lender to any additional obligation,
(ii) reduce the principal of or rate of interest on any Loan or the amount
to be reimbursed in respect of any Letter of Credit or any interest thereon or
any fees hereunder or (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or for reimbursement in respect of any
Letter of Credit or interest thereon or any fees hereunder or for termination
of any Commitment or (y) unless signed by all Lenders, (i) change the
percentage of the Commitments or of the aggregate Dollar Amount of the Notes
and Letter of Credit Liabilities, or the number of Lenders, which shall be
required for the Lenders or any of them to take any action under this Section or
any other provision of this Agreement or (ii) release the Company from its
obligations under Article 10.

 

(b)           In the event any
Lender refuses to consent to any amendment, waiver or other modification of any
Loan Document requested by the Company that requires the consent of all the
Lenders affected and such amendment, waiver or other modification is consented
to by the Required Lenders, the Company may,

 

63

 

at its sole expense and effort (including
with respect to the administration fee referred to in Section 9.06(c)),
upon notice to such Lender and the Administrative Agent, require such Lender to
transfer and assign, without recourse (in accordance with and subject to the
restrictions contained in Section 9.06) , all its interests, rights and
obligations under this Agreement to an assignee that shall assume such assigned
obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that (v) such
assignee shall consent to such amendment, waiver or other modification, (w)
such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction, (x) the
Company shall have received the prior written consent of the Administrative
Agent, the Issuing Lender and the Swingline Lender, which consents shall not
unreasonably be withheld, (y) the Borrower or such assignee shall have paid to
the affected Lender in immediately available funds an amount equal to the sum
of the principal of and interest accrued to the date of such payment on the
outstanding Loans (and funded participations in Letter of Credit and Swingline
Loans) of such Lender, plus the amount, in immediately available funds, that
would be payable to such Lender that refuses to consent to any such amendment,
waiver or other modification pursuant to Section 2.13 if such Loans had
been repaid on the date of sale, plus all fees, as described in Section 2.07,
and other amounts accrued for the account of such Lender hereunder (including
any amounts under Section 8.03 and Section 8.04), and (z) upon the
effectiveness of such assignment, the proposed amendment, waiver or other
modification shall become effective; provided further
that, if prior to any such transfer and assignment such Lender shall consent to
the proposed amendment, waiver or other modification, as the case may be, then
such Lender shall not thereafter be required to make any such transfer and
assignment hereunder.  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 and Assumption Agreement, as referred to in Section 9.06(c),
necessary to effectuate any assignment of such Lender’s interests under this Section 9.05(b).

 

Section 9.06.  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, except that neither Borrower may
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Lenders.

 

(b)           Any Lender may at
any time grant to one or more Lenders or other institutions (each a “Participant”) participating interests in its Commitment or
any or all of its Loans and Letter of Credit Liabilities.  In the event of any such grant by a Lender of
a participating interest to a Participant, whether or not upon notice to the
Company and the Agents, such Lender shall remain responsible for the
performance of its obligations hereunder, and the Borrowers, the Issuing
Lenders, the Swingline Lender and the Agents shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations

 

64

 

under the Loan Documents.  Any agreement pursuant to which any Lender
may grant such a participating interest shall provide that such Lender shall
retain the sole right and responsibility to enforce the obligations of the
Borrowers under the Loan Documents including, without limitation, the right to
approve any amendment, modification or waiver of any provision thereof; provided that such participation agreement may provide that
such Lender will not agree to any modification, amendment or waiver of this
Agreement described in clause (i), (ii) or (iii) of Section 9.05
without the consent of the Participant. 
The Borrowers agree that each Participant shall, to the extent provided
in its participation agreement, be entitled to the benefits of Article 8 with
respect to its participating interest. 
An assignment or other transfer which is not permitted by Section 9.06(c) or
Section 9.06(d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this Section 9.06(b).

 

(c)           Any Lender may at
any time assign to one or more lenders or other institutions (each an “Assignee”) all, or a proportionate part (equivalent to an
initial Commitment of not less than $5,000,000) of all, of its rights and
obligations under the Loan Documents, and such Assignee shall assume such
rights and obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit E hereto executed by such Assignee and
such transferor Lender, with (and subject to) the written consent of the
Administrative Agent and, so long as no Event of Default then exists under Section 6.01(a),
Section 6.01(b), Section 6.01(c) (with respect to Section 5.12
and Section 5.13 only), Section 6.01(g), Section 6.01(h) or
Section 6.01(k), the Company, which consents shall not be unreasonably
withheld or delayed; provided that
if an Assignee is an affiliate of such transferor Lender or was a Lender
immediately prior to such assignment, no such consent shall be required.  Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Lender of an amount
equal to the purchase price agreed between such transferor Lender and such
Assignee, such Assignee shall be a Lender party to this Agreement and shall
have all the rights and obligations of a Lender with a Commitment as set forth
in such instrument of assumption, and the transferor Lender shall be released
from its obligations hereunder to a corresponding extent, and no further
consent or action by any party shall be required.  Upon the consummation of any assignment
pursuant to this Section 9.06(c), the transferor Lender, the
Administrative Agent and the Borrowers shall make appropriate arrangements so
that, if required, a new Note is issued to the Assignee.  In connection with any such assignment, the
transferor Lender shall pay to the Administrative Agent an administrative fee
for processing such assignment in the amount of $2,500.  If the Assignee is not incorporated under the
laws of the United States of America or a state thereof, it shall, prior to the
first date on which interest or fees are payable hereunder for its account,
deliver to the Company and the Administrative Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.04.

 

65

 

(d)           Any Lender may at
any time assign all or any portion of its rights under the Loan Documents to a
Federal Reserve Bank.  No such assignment
shall release the transferor Lender from its obligations hereunder.

 

(e)           No Assignee,
Participant or other transferee of any Lender’s rights (including for this
purpose a successor Applicable Lending Office) shall be entitled to receive any
greater payment under Section 8.03 or Section 8.04 than such Lender
would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Company’s prior written consent or by
reason of the provisions of Section 8.02, Section 8.03 or Section 8.04
requiring such Lender to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.

 

Section 9.07.  Collateral.  Each of the Lenders represents to
the Agents and each of the other Lenders that it in good faith is not relying
upon any “margin stock” (as defined in Regulation U) as collateral in the
extension or maintenance of the credit provided for in this Agreement.

 

Section 9.08.  GOVERNING LAW; SUBMISSION TO
JURISDICTION.  THIS AGREEMENT
AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.  EACH BORROWER
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT
SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.  EACH
BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

Section 9.09.  Counterparts; Integration;
Effectiveness.  This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument.  This Agreement
constitutes the entire agreement and understanding among the parties hereto and
supersedes any and all prior agreements and understandings, oral or written,
relating to the subject matter hereof. 
This Agreement shall become effective upon receipt by the Administrative
Agent of counterparts hereof signed by each of the parties hereto (or, in the
case of any party as to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of telegraphic,
telex, facsimile or other written confirmation from such party of execution of
a counterpart hereof by such party).

 

66

 

Section 9.10.  WAIVER OF JURY TRIAL.  EACH OF THE BORROWERS, THE AGENTS,
THE LENDERS, THE SWINGLINE BANK AND THE ISSUING BANK HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

Section 9.11.  Confidentiality.  Each Agent and each Lender agrees
to keep any information delivered or made available by the Company pursuant to
this Agreement confidential from anyone other than persons employed or retained
by such Agent or such Lender who are engaged in evaluating, approving,
structuring or administering the credit facility contemplated hereby; provided
that nothing herein shall prevent any Agent or Lender from disclosing such information
(a) to any other Lender or Agent, (b) to any other Person if
reasonably incidental to the administration of the credit facility contemplated
hereby, (c) upon the order of any court or administrative agency, (d) upon
the request or demand of any regulatory agency or authority, (e) which had
been publicly disclosed other than as a result of a disclosure by an Agent or
any Lender prohibited by this Agreement, (f) in connection with any
litigation to which an Agent, any Lender or its subsidiaries or Parent may be a
party, (g) to the extent necessary in connection with the exercise of any
remedy hereunder, (h) to such Lender’s or Agent’s legal counsel and
independent auditors and (i) subject to provisions substantially similar
to those contained in this Section, to any actual or proposed Participant or
Assignee.

 

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

 

Section 9.13.  Right of Set-off.  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
any Borrower against any of and all the obligations of such 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. 
Each Lender agrees promptly to notify such Borrower and the
Administrative Agent after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. 
The rights of each Lender under this Section are in

 

67

 

addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.

 

ARTICLE 10

GUARANTEE

 

Section 10.01.  The Guarantee.  The Company hereby unconditionally
and irrevocably guarantees to the Lenders, and to each of them, the due and
punctual payment of all present and future indebtedness of PLT evidenced by or
arising out of this Agreement, and the Notes, including, but not limited to,
the due and punctual payment of principal of and interest on the Loans of PLT
and the due and punctual payment of all other sums now or hereafter owed by PLT
under this Agreement and the Notes as and when the same shall become due and
payable, whether at maturity, by declaration or otherwise, according to the
terms hereof.  In case of failure by PLT
punctually to pay the indebtedness guaranteed hereby, the Company hereby
unconditionally agrees to cause such payment to be made punctually as and when
the same shall become due and payable, whether at maturity or by declaration or
otherwise, and as if such payment were made by PLT.

 

Section 10.02.  Guarantee Unconditional.  The obligations of the Company
under this Article 10 shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:

 

(a)           any extension, renewal, settlement,
compromise, waiver or release in respect of any obligation of PLT under any
Loan Document by operation of law or otherwise;

 

(b)           any modification or amendment of or
supplement to any Loan Document;

 

(c)           any modification, amendment, waiver,
release, non-perfection or invalidity of any direct or indirect security, or of
any guarantee or other liability of any third party, for any obligation of PLT
under any Loan Document;

 

(d)           any change in the corporate
existence, structure or ownership of PLT, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting PLT or its assets or any
resulting release or discharge of any obligation of PLT contained in any Loan
Document;

 

(e)           the existence of any claim, set-off
or other rights which the Company may have at any time against PLT, any Agent,
any Lender or any other Person, whether or not arising in connection with any
Loan

 

68

 

Document, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim;

 

(f)            any invalidity or unenforceability
relating to or against PLT for any reason of any Loan Document, or any
provision of applicable law or regulation purporting to prohibit the payment by
PLT of the principal of or interest on any Loan or any other amount payable by
it under any Loan Document; or

 

(g)           any other act or omission to act or
delay of any kind by PLT, any Agent, any Lender or any other Person or any
other circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of or defense to the obligations
of the Company under this Article 10.

 

Section 10.03.  Discharge Only upon Payment in
Full; Reinstatement in Certain Circumstances. 
The obligations of the Company under this Article 10
shall remain in full force and effect until the Commitments are terminated and
the principal of and interest on the Loans and all other amounts payable by PLT
under this Agreement shall have been paid in full.  If at any time any payment of the principal
of or interest on any Loan or any other amount payable by PLT under this
Agreement is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of PLT or otherwise, the Company’s
obligations under this Article 10 with respect to such payment shall be
reinstated at such time as though such payment had become due but had not been
made at such time.

 

Section 10.04.  Waiver.  The Company irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against PLT or any other Person.

 

Section 10.05.  Subrogation.  The Company irrevocably waives any
and all rights to which it may be entitled, by operation of law or otherwise,
upon making any payment hereunder to be subrogated to the rights of the payee
against PLT with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by PLT in respect thereof.

 

Section 10.06.  Stay of Acceleration.  If acceleration of the time for
payment of any amount payable by PLT under this Agreement or the Notes is
stayed upon the insolvency, bankruptcy or reorganization of PLT, all such
amounts otherwise subject to acceleration under the terms of this Agreement
shall nonetheless be payable by the Company hereunder forthwith on demand by
the Administrative Agent made at the request of the requisite number of Lenders
specified in Section 6.01.

 

69

 

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.

 

	
   

  	
  BLYTH, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jane F. Casey

  	
   

  
	
   

  	
   

  	
  Name: Jane F. Casey

  
	
   

  	
   

  	
  Title: Vice President & Treasurer

  
	
   

  	
   

  	
  Blyth, Inc.

  
	
   

  	
   

  	
  1 E. Weaver Street

  
	
   

  	
   

  	
  Greenwich, CT 06831

  
	
   

  	
   

  	
  Facsimile number: 203-861-7850

  
	
   

  	
   

  	
  For notices pursuant to Article 6, a 

  
	
   

  	
   

  	
  copy shall also be sent to:

  
	
   

  	
   

  	
  Bruce D. Kreiger, General Counsel,

  
	
   

  	
   

  	
  at the above address or facsimile

  
	
   

  	
   

  	
  number.

  
	
   

  	
   

  	
  Website: www.blythinc.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARTYLITE TRADING SA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank P. Mineo

  	
   

  
	
   

  	
   

  	
  Name: Frank P. Mineo

  
	
   

  	
   

  	
  Title:   Director

  

 

 

Commitments

 

	
  $32,500,000.00

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter M. Killea

  	
   

  
	
   

  	
   

  	
  Name: Peter M. Killea

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $28,750,000.00

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Casey Cosgrove

  	
   

  
	
   

  	
   

  	
  Name: J. Casey Cosgrove

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $28,750,000.00

  	
  LASALLE BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Adam Lutostanski

  	
   

  
	
   

  	
   

  	
  Name: Adam Lutostanski

  
	
   

  	
   

  	
  Title: Commercial Banking Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $20,000,000.00

  	
  BARCLAYS BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Barton

  	
   

  
	
   

  	
   

  	
  Name: David Barton

  
	
   

  	
   

  	
  Title: Associate Director

  

 

 

	
  $20,000,000.00

  	
  NORDEA BANK FINLAND PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Henrik M. Steffenson

  	
   

  
	
   

  	
   

  	
  Name: Henrik M. Steffenson

  
	
   

  	
   

  	
  Title: First Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $20,000,000.00

  	
  THE NORTHERN TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. Clark

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey B. Clark

  
	
   

  	
   

  	
  Title:   Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Commitments

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $150,000,000

  	
   

  	
   

  	
   

  
					

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A. as

  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter M. Killea

  	
   

  
	
   

  	
   

  	
  Name: Peter
  M. Killea

  
	
   

  	
   

  	
  Title:  Vice President

  

 

	
   

  	
  BANK OF AMERICA, N.A., as 

  Co-Syndication Agent

  
	
   

  	
  By:

  	
  /s/ J. Casey Cosgrove

  	
   

  
	
   

  	
   

  	
  Name: J.
  Casey Cosgrove

  
	
   

  	
   

  	
  Title:  Vice 
  President

  

 

 

	
   

  	
  LASALLE BANK, NATIONAL

  ASSOCIATION, as Co-Syndication

  Agent

  
	
   

  	
  By:

  	
  /s/ Adam Lutostanski

  	
   

  
	
   

  	
   

  	
  Name: Adam
  Lutostanski

  
	
   

  	
   

  	
  Title:   Commercial Banking Officer

  

 

 

PRICING SCHEDULE

 

The “Euro-Currency
Margin”, “Facility Fee Rate” and “LC Fee Rate” for any day are the respective
percentages set forth below in the applicable row and column corresponding to
the Status and Utilization that exist on such day:

 

	
  Status

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  	
  Level IV

  	
   

  	
  Level V

  	
   

  
	
  Euro-Currency
  Margin:

  	
   

  	
  0.360

  	
  %

  	
  0.400

  	
  %

  	
  0.500

  	
  %

  	
  0.600

  	
  %

  	
  0.800

  	
  %

  
	
  Facility Fee Rate

  	
   

  	
  0.090

  	
  %

  	
  0.100

  	
  %

  	
  0.125

  	
  %

  	
  0.150

  	
  %

  	
  0.200

  	
  %

  
	
  LC Fee Rate:

  	
   

  	
  0.360

  	
  %

  	
  0.400

  	
  %

  	
  0.500

  	
  %

  	
  0.600

  	
  %

  	
  0.800

  	
  %

  

 

For purposes
of this Schedule, the following terms have the following meanings, subject to
the concluding paragraph of this Schedule:

 

“Level I Status” exists at any date if, at such date, the
Company’s senior unsecured long-term debt is rated A- or higher by S&P or
A3 or higher by Moody’s.

 

“Level II Status” exists at any date if, at such date, (i) the
Company’s senior unsecured long-term debt is rated BBB+ or higher by S&P or
Baa1 or higher by Moody’s and (ii) Level I Status does not exist.

 

“Level III Status” exists at any date if, at such date, (i) the
Company’s senior unsecured long-term debt is rated BBB or higher by S&P or
Baa2 or higher by Moody’s and (ii) neither Level I Status nor Level II
Status exists.

 

“Level IV Status” exists at any date if, at such date, (i) the
Company’s senior unsecured long-term debt is rated BBB- or higher by S&P or
Baa3 or higher by Moody’s and (ii) none of Level I Status, Level II Status
or Level III Status exists.

 

“Level V Status”
exists at any date if, at such date, no other Status exists.

 

“Status” refers
to the determination of which of Level I Status, Level II Status, Level III
Status, Level IV Status or Level V Status exists at any date.

 

The credit ratings to be utilized for
purposes of this Schedule are those assigned to the senior unsecured
long-term debt securities of the Company without third-party credit
enhancement, and any rating assigned to any other debt security of the Company
shall be disregarded.  The rating in
effect at any date is that in effect at the close of business on such
date.  If the Company is split-rated and
the ratings differential is one notch, the higher of the two ratings will apply
(e.g., BBB+/Baa2 results in Level II Status). 
If the Company is split-rated and the ratings differential is more than
one notch, the rating one notch lower than the higher of the two shall be used
(e.g., BBB+/Baa3 results in Level III Status, as does BBB+/Ba1).

 

 

Schedule 2.16

 

1.             Letter
of Credit No. 7409987 issued by Bank of America, N.A. in the amount of
$2,513,658.00 for the benefit of Royal Bank of Canada initially expiring on March 1,
2003 and automatically renewed for successive one-year periods.

 

2.             Letter of Credit No. 7409986 issued by Bank of
America, N.A. in the amount of $770,000.00 for the benefit of the Economic
Development Authority for the City of Cannon Falls initially expiring on October 30,
2003 and automatically renewed for successive one-year periods until final
expiry of March 1, 2009.

 

 

Schedule 5.08

 

The Borrower has entered into an employment
agreement with Robert B. Goergen dated as of August 1, 2000, as amended by
Amendment No. 1 dated as of June 15, 2002 and Amendment No. 2
dated as of March 31, 2004 (sometimes herein referred to as “agreement” or
“employment agreement”).  The agreement
provides for Mr. Goergen’s employment for a term of ten years (subject to
earlier termination at the election of either the Borrower or Mr. Goergen,
as described below) from August 1, 2000. 
During the period commencing on March 31, 2004 and ending on August 1,
2007, Mr. Goergen will serve as Chairman of the Board and Chief Executive
Officer of the Borrower and will be responsible for the general management of
the affairs of the Borrower.  During the
remainder of the term of Mr. Goergen’s employment pursuant to the
agreement, he will serve as the non-executive Chairman of the Board of the
Borrower and will have such duties and responsibilities for the management of
the Borrower as the Board of Directors may from time to time assign to him,
consistent with the duties and responsibilities that might reasonably be
expected of a part-time senior executive of a major corporation.  Mr. Goergen has agreed that during the
first seven years of his employment pursuant to the employment agreement (the “Initial
Term”) he will devote his full business time and attention to the business and
affairs of the Borrower while during the remainder of the term of the
employment agreement he will devote one half of his business time and attention
to the business and affairs of the Borrower.

 

Mr. Goergen will receive a base salary
of at least $600,000 per year during the Initial Term.  During the remainder of the term of the
employment agreement, Mr. Goergen will receive a base salary of at least
one-half of the annualized base salary he was receiving on the last day of the
seventh year of his employment pursuant to the agreement.  Mr. Goergen’s base salary will be
reviewed annually by the Board of Directors for increase, in the Board’s
discretion.  In addition to his base
salary, during the term of his employment pursuant to the employment agreement,
Mr. Goergen will participate in the Borrower’s Annual Incentive Compensation
Plan or any successor plan.  Mr. Goergen
will have a target bonus opportunity each year equal to one hundred percent of
his base salary, payable based upon meeting certain performance goals and
subject to adjustment upward or downward if those performance goals are
exceeded or are not met, as the case may be.

 

Mr. Goergen’s employment agreement
provides that, subject to vesting as described below, he will be entitled to
receive, during his lifetime, a supplemental pension benefit, commencing on August 1,
2010, equal to fifty percent of his “Final Average Compensation” but not to
exceed $500,000 per annum.  “Final
Average Compensation” is defined in the employment agreement to mean the sum of
the base salary and annual incentive award payments paid in respect of the
three calendar years of Mr. Goergen’s employment by the Borrower, out of
the five calendar years of such employment ending on the last day of the
Initial Term (or, if earlier, the last day of his employment by the Borrower),
during which he

 

 

received the highest level of
such payments, divided by three.  Mr. Goergen’s
supplemental pension will vest daily, on a pro
rata basis over the six year period commencing on August 1,
2000 and will cease vesting if Mr. Goergen’s employment is terminated for “Cause”
(as defined in the employment agreement) or if Mr. Goergen voluntarily
terminates his employment prior to July 31, 2006.  To provide for the payment of such
supplemental pension benefit, the Borrower has purchased a single life annuity contract
that insures the payment of such benefit.

 

Each of the
Borrower and Mr. Goergen has the right to terminate Mr. Goergen’s
employment at any time.  In the event of
a termination of Mr. Goergen’s employment by reason of Mr. Goergen’s
death, Mr. Goergen’s estate will be entitled to continue to receive Mr. Goergen’s
then current base salary for a period of twenty-four months and to receive the
annual incentive award for the year in which Mr. Goergen’s death occurs; Mr. Goergen’s
spouse will be entitled to continue to participate in certain Borrower benefit
plans; and upon the death of both Mr. Goergen and his spouse, the Borrower
will, upon the demand of the estate of either Mr. Goergen or his spouse,
buy back from such estate up to 7,500,000 shares of the Borrower’s common stock
within 90 days of such demand at the fair market value thereof (as defined in
the employment agreement) or register the public offer and sale by such estate
of up to 7,500,000 shares of the Borrower’s common stock.  In the event of a termination of Mr. Goergen’s
employment by reason of Mr. Goergen’s disability, Mr. Goergen will be
entitled to: receive disability benefits in accordance with the Borrower’s then
current disability program; continued payment of Mr. Goergen’s then current
base salary (less disability benefit payments) through the end of the term of
the agreement and for a period of twenty-four months thereafter; payment of the
annual incentive award for the year in which Mr. Goergen’s disability
occurs; continued participation by Mr. Goergen and his spouse in certain
benefit plans maintained by the Borrower; continuation of certain perquisites
provided for in the employment agreement; full vesting of the supplemental
pension benefit described above; and the buyback or registration of up to
7,500,000 shares of the Borrower’s common stock upon the death of both Mr. Goergen
and his spouse, as described above.  In
the event of the termination of Mr. Goergen’s employment for “Cause” (as
defined in the employment agreement), Mr. Goergen will be entitled to
payment of his base salary through the date of such termination and any
unvested supplemental pension benefit will be forfeited.  In the event of a termination of Mr. Goergen’s
employment without “Cause”, or of a “Constructive Termination Without Cause”
(as defined in the employment agreement), Mr. Goergen will be entitled to:
continued payment of Mr. Goergen’s then current base salary through the
end of the term of the agreement; payment of the annual incentive award for the
year in which Mr. Goergen is terminated; continued participation by Mr. Goergen
and his spouse in certain benefit plans maintained by the Borrower;
continuation of certain perquisites provided for in the employment agreement;
continued provision by the Borrower of office space and secretarial support;
the repurchase by the Borrower from Mr. Goergen of 100,000

 

 

shares of the Borrower’s common
stock at the end of each of the next four calendar quarters at fair market
value (as defined in the employment agreement); full vesting of the
supplemental pension benefit described above; and the buyback or registration
of up to 7,500,000 shares of the Borrower’s common stock upon the death of both
Mr. Goergen and his spouse, as described above.  In the event that Mr. Goergen
voluntarily terminates his employment prior to the expiration of the employment
agreement (other than pursuant to a “Constructive Termination Without Cause”)
he will be entitled to payment of his base salary through the date of such
voluntary termination and any unvested supplemental pension benefit will be
forfeited.  In the event that Mr. Goergen
retires after the expiration of the term of the employment agreement, Mr. Goergen
will be entitled to: continued participation by Mr. Goergen and his spouse
in certain benefit plans maintained by the Borrower; continuation of certain
perquisites provided for in the employment agreement; continued provision by
the Borrower of office space and secretarial support; and the buyback or
registration of up to 7,500,000 shares of the Borrower’s common stock upon the
death of both Mr. Goergen and his spouse, as described above.

 

In connection
with the employment agreement, the Borrower and Mr. Goergen entered into a
registration rights agreement relating to the registration of up to 7,500,000
shares of the Borrower’s common stock as described above in the event that the
Borrower chooses not to purchase such shares upon the death of both Mr. Goergen
and his spouse.  The Borrower will not be
obligated to purchase or register such shares, notwithstanding the death of
both Mr. Goergen and his spouse, if the survivor’s estate, or his or her
beneficiaries, as the case may be, can then sell all of the shares of the
Borrower’s common stock owned by them without registration.

 

The inclusion
of the above described employment agreement in this Schedule 5.08 is not
an admission or suggestion that, and shall not be deemed or interpreted to
imply that, such employment agreement was not entered into in the ordinary
course and pursuant to the reasonable requirements of the Borrower’s business
and upon fair and reasonable terms no less favorable to the Borrower than would
be obtainable in a comparable arm’s-length transaction with a Person not an
Affiliate.

 

 

SCHEDULE 5.09(1)

 

	
  DEBTOR NAME

  	
   

  	
  JURISDICTION

  	
   

  	
  SECURED

  PARTY

  	
   

  	
  OBLIGATION

  SECURED

  	
   

  	
  FILING

  NUMBER

  	
   

  	
  DATE OF

  FILING

  	
   

  	
  COLLATERAL

  DESCRIPTION(2)

  	
   

  
	
  Kaemingk
  BV

  	
   

  	
  The
  Netherlands

  	
   

  	
  ING
  Bank N.V. and Postbank N.V.

  	
   

  	
  Obligations
  of Kaemingk in connection with all Indebtedness of Kaemingk BV described in
  Schedule 5.10 and obligations arising in connection with current account
  plus credit facility extended from time, the current total amount of such
  current account plus credit facility being EUR 27,500,000.00.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  See
  Footnote 2.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk
  BV

  	
   

  	
  The
  Netherlands

  	
   

  	
  ING
  Bank N.V. and Postbank N.V.

  	
   

  	
  Obligations
  of Kaemingk in connection with all Indebtedness of Kaemingk BV described in
  Schedule 5.10 and obligations arising in connection with current account
  plus credit facility extended from time, the current total amount of such
  current account plus credit facility being EUR 341,469.64.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  See
  Footnote 2.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk
  BV

  	
   

  	
  The
  Netherlands

  	
   

  	
  ING
  Bank N.V. and Postbank N.V.

  	
   

  	
  Obligations
  of Kaemingk in connection with all Indebtedness of Kaemingk BV described in
  Schedule 5.10 and obligations arising in connection with current account
  plus credit facility extended from time, the current total amount of such 

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  See
  footnote 2.

  	
   

  

 

 

	
  DEBTOR NAME

  	
   

  	
  JURISDICTION

  	
   

  	
  SECURED

  PARTY

  	
   

  	
  OBLIGATION

  SECURED

  	
   

  	
  FILING

  NUMBER

  	
   

  	
  DATE OF

  FILING

  	
   

  	
  COLLATERAL

  DESCRIPTION(2)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  current account plus
  credit facility being EUR 433,927.32.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk
  BV

  	
   

  	
  The
  Netherlands

  	
   

  	
  ING
  Bank N.V. and Postbank N.V.

  	
   

  	
  Obligations
  of Kaemingk in connection with all Indebtedness of Kaemingk BV described in
  Schedule 5.10 and obligations arising in connection with current account
  plus credit facility extended from time, the current total amount of such
  current account plus credit facility being EUR 510,502.76.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  See
  Footnote 2.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk
  BV

  	
   

  	
  The
  Netherlands

  	
   

  	
  ING
  Bank N.V. and Postbank N.V.

  	
   

  	
  Obligations
  of Kaemingk in connection with all Indebtedness of Kaemingk BV described in
  Schedule 5.10 and obligations arising in connection with current account
  plus credit facility extended from time, the current total amount of such
  current account plus credit facility being EUR 1,966,632.95.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  See
  Footnote 2.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk
  BV

  	
   

  	
  The
  Netherlands

  	
   

  	
  ING
  Bank N.V. and Postbank N.V.

  	
   

  	
  Obligations
  of Kaemingk in connection with all Indebtedness of Kaemingk BV described in
  Schedule 5.10 and obligations arising in connection with current account
  plus credit facility extended from time, the current total 

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  See
  Footnote 2.

  	
   

  

 

 

	
  DEBTOR NAME

  	
   

  	
  JURISDICTION

  	
   

  	
  SECURED

  PARTY

  	
   

  	
  OBLIGATION

  SECURED

  	
   

  	
  FILING

  NUMBER

  	
   

  	
  DATE OF

  FILING

  	
   

  	
  COLLATERAL

  DESCRIPTION(2)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  amount of such current
  account plus credit facility being EUR 1,542,852.74.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk
  BV

  	
   

  	
  The
  Netherlands

  	
   

  	
  ING
  Bank N.V. and Postbank N.V.

  	
   

  	
  Obligations
  of Kaemingk in connection with all Indebtedness of Kaemingk BV described in
  Schedule 5.10 and obligations arising in connection with current account
  plus credit facility extended from time, the current total amount of such
  current account plus credit facility being EUR 2,268,901.08.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  See
  Footnote 2.

  	
   

  

 

(1)               Liens securing (i) Indebtedness of
Foreign Subsidiaries described in Schedule 5.10 and (ii) capitalized
leases are not listed herein as such Liens are subject to the exceptions set
forth in Sections 5.09(e) and 5.09(f) of the Credit Agreement to
which this Schedule 5.09 is attached.

 

(2)               The following will serve as security for the
credit facility and everything that the Debtor may owe the Secured Party on
whatever grounds:

 

•                       a first mortgage of EUR 1,815,000.00 on the
business premises situated at the corner of Broekstraat 13-17 and 2e
Broekdijk in (7122 MN) Aalten, the Netherlands (existing);

 

•                       a mortgage of EUR 907,000.00 on:

 

a.                   the plot of land (the first in rank) situated
at 3e or 2e Broekdijk in Aalten;

b.                  the business premises (the second in rank)
situated at the corner of Broekstraat 13-17 and 2e Broekdijk in (7122 MN)
Aalten; pre-encumbered with an amount of EUR 1,815,120.00 in favour of ING Bank
N.V. (existing);

 

•                       a first mortgage of EUR 907,000.00 on the
business premises situated at 3e Broekstraat 1d in (7122 MN) Aalten (existing);

 

•                       a first mortgage of EUR 635,000.00 on the
business premises situated at 3e Broekstraat 10b in Aalten (existing);

 

•                       a first mortgage of EUR 1,815,000.00 on the
business premises situated at Ambachtstraat 7-9 in Aalten (existing);

 

•                       a second or third mortgage of EUR
2,995,000.00 on:

 

a.                   the plot of land (the second in rank)
situated at 3e or 2e Broekdijk in Aalten, pre-encumbered with an amount of EUR
907,000.00 on favour of ING Bank N.V.;

b.                  the business premises (the second in rank)
situated at 3e Broekstraat 1d in Aalten, pre-encumbered with an amount of EUR
907,000.00 in favour of ING Bank N.V.;

 

 

c.                   the business premises (the second in rank)
situated at 3e Broekstraat 10b in Aalten, pre-encumbered with an amount of EUR
635,000.00 in favour of ING Bank N.V.;

d.                  the business premises (the second in rank)
situated at Ambachstraat 7-9 in Aalten, pre-encumbered with an amount of
EUR 1,815,,000.00 in favour of ING Bank N.V.;

e.                   the business premises (the third in rank)
situated at the corner of Broekstraat 13-17 and 2e Broekdijk in Aalten,
pre-encumbered with an amount of EUR 1,815,000.00 and EUR 907,000.00, both
amounts in favour of ING Bank N.V. (existing);

 

•                       a first pledge of trade receivables, plant
and stocks by the Debtor (existing);

 

 

Schedule 5.10

 

 

	
  Borrower

  	
   

  	
  Financial
  Institution

  	
   

  	
  Facility
  Type

  	
   

  	
  Amount

  	
   

  	
  Maturity

  	
   

  	
  Comments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk BV

  	
   

  	
  ING Bank N.V. and
  Postbank N.V.

  	
   

  	
  Revolving line of credit

  	
   

  	
  €

  	
   27,500,000

  	
   

  	
  n/a

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk BV

  	
   

  	
  ING Bank N.V. and
  Postbank N.V.

  	
   

  	
  Fixed interest loan

  	
   

  	
  €

  	
   270,000

  	
   

  	
  6/1/2009

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk BV

  	
   

  	
  ING Bank N.V. and
  Postbank N.V.

  	
   

  	
  Fixed interest loan

  	
   

  	
  €

  	
   346,000

  	
   

  	
  2/1/2006

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk BV

  	
   

  	
  ING Bank N.V. and
  Postbank N.V.

  	
   

  	
  Fixed interest loan

  	
   

  	
  €

  	
   385,000

  	
   

  	
  5/1/2007

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk BV

  	
   

  	
  ING Bank N.V. and
  Postbank N.V.

  	
   

  	
  Fixed interest loan

  	
   

  	
  €

  	
  1,827,000

  	
   

  	
  6/1/2008

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk BV

  	
   

  	
  ING Bank N.V. and
  Postbank N.V.

  	
   

  	
  Fixed interest loan

  	
   

  	
  €

  	
   1,338,000

  	
   

  	
  6/1/2009

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kaemingk BV

  	
   

  	
  ING Bank N.V. and
  Postbank N.V.

  	
   

  	
  Fixed interest loan

  	
   

  	
  €

  	
   2,269,000

  	
   

  	
  7/1/2010

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Edelman B.V.

  	
   

  	
  ABN AMRO Bank N.V.

  	
   

  	
  Revolving line of credit

  	
   

  	
  €

  	
   25,000,000

  	
   

  	
  2007

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Promol SA

  	
   

  	
  Caixa Geral De Depositos

  	
   

  	
  Revolving line of credit

  	
   

  	
  €

  	
   1,500,000

  	
   

  	
  June-05

  	
   

  	
  Renewed semi-annually,
  Jan & July

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Promol SA

  	
   

  	
  Banco Commecial
  Portugues

  	
   

  	
  Revolving line of credit

  	
   

  	
  €

  	
   3,491,000

  	
   

  	
  June-05

  	
   

  	
  Renewed semi-annually,
  Jan & July

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Promol SA

  	
   

  	
  Banco Santander

  	
   

  	
  Revolving line of credit

  	
   

  	
  €

  	
   2,500,000

  	
   

  	
  June-05

  	
   

  	
  Renewed semi-annually,
  Jan & July

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Promol SA

  	
   

  	
  Banco Portugues De
  Inestimento

  	
   

  	
  Revolving line of credit

  	
   

  	
  €

  	
   2,500,000

  	
   

  	
  June-05

  	
   

  	
  Renewed semi-annually,
  Jan & July

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Promol SA

  	
   

  	
  BBVA S.A.

  	
   

  	
  Revolving line of credit

  	
   

  	
  €

  	
   1,500,000

  	
   

  	
  June-05

  	
   

  	
  Renewed semi-annually,
  Jan & July

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gies Kerzen GmbH

  	
   

  	
  Vereins Und Westbank

  	
   

  	
  Revolving line of credit

  	
   

  	
  €

  	
   4,000,000

  	
   

  	
  January-06

  	
   

  	
  Renewed annually,
  31/1/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gies Kerzen GmbH

  	
   

  	
  HSH Nordbank S.A.

  	
   

  	
  Revolving line of credit

  	
   

  	
  €

  	
   4,000,000

  	
   

  	
  January-06

  	
   

  	
  Renewed annually,
  31/1/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ASP-Homblad A/S

  	
   

  	
  Den Danske Bank

  	
   

  	
  Revolving line of credit

  	
   

  	
  DKK

  	
   7,000,000

  	
   

  	
  December-05

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Liljeholmens
  Stearinfabriks AB

  	
   

  	
  Skandinaviska Enskilda
  Banken

  	
   

  	
  Revolving line of credit

  	
   

  	
  SEK

  	
   40,000,000

  	
   

  	
  December-05

  	
   

  	
   

  	
   

  
																

 

 

	
  Borrower

  	
   

  	
  Financial
  Institution

  	
   

  	
  Facility
  Type

  	
   

  	
  Amount

  	
   

  	
  Maturity

  	
   

  	
  Comments

  	
   

  
	
  Liljeholmens
  Stearinfabriks AB

  	
   

  	
  Skandinaviska Enskilda
  Banken

  	
   

  	
  Revolving line of credit

  	
   

  	
  SEK

  	
   20,000,000

  	
   

  	
  Dec-05

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Colony

  	
   

  	
  Barclays Bank

  	
   

  	
  Revolving line of credit

  	
   

  	
  £

  	
   9,000,000

  	
   

  	
  August-05

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CBK Ltd., LLC

  	
   

  	
  Industrial Development
  Board of the City of Union City, Tennessee; J.P. Morgan Trust Company
  (Trustee)

  	
   

  	
  Industrial Revenue Bonds
  (Note that there is a related letter of credit in the amount of $4,578,126.71
  issued by LaSalle Bank N.A. for which CBK Styles, Inc. is the obligor)

  	
   

  	
  $

  	
  4,495,000

  	
   

  	
  January-25

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Miles Kimball

  	
   

  	
  DNJ Capital

  	
   

  	
  Capital Lease

  	
   

  	
  $

  	
  132,722

  	
   

  	
  1/15/2006

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Miles Kimball

  	
   

  	
  John Hancock Life Ins.

  	
   

  	
  Mortgage

  	
   

  	
  $

  	
  9,281,887

  	
   

  	
  6/1/2020

  	
   

  	
   

  	
   

  
															

 

 

Schedule 5.11

 

Investments

 

Blyth, Inc.
holds a 50% interest in Auschar Polyco Ltd., an Australian Corporation.

 

 

EXHIBIT A

 

NOTE

 

	
   

  	
  New York, New York

  
	
   

  	
                     ,
  2005

  	
   

  

 

For value
received, [NAME OF RELEVANT BORROWER] (the “Borrower”),
promises to pay to the order of [                                 ]
(the “Lender”), for the account of its
Applicable Lending Office, the unpaid principal amount of each Loan made by the
Lender to the Borrower pursuant to the Credit Agreement referred to below on
the maturity date provided for in the Credit Agreement.  The Borrower promises to pay interest on the
unpaid principal amount of each such Loan on the dates and at the rate or rates
provided for in the Credit Agreement. 
All such payments of principal and interest shall be made (i) if in
Dollars, in lawful money of the United States in Federal or other immediately
available funds at the office of JPMorgan Chase Bank, N.A., 270 Park Avenue,
New York, New York 10017 or (ii) if in an Alternative Currency, in such
funds as may then be customary for the settlement of international transactions
in such Alternative Currency at the place specified for payment thereof
pursuant to the Credit Agreement.

 

All Loans made
by the Lender, the respective types thereof and, in the case of Alternative
Currency Loans, the currency thereof, and all repayments of the principal
thereof shall be recorded by the Lender and, if the Lender so elects in connection
with any transfer or enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding may be
endorsed by the Lender on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided
that the failure of the Lender to make any such recordation or endorsement
shall not affect the obligations of the Borrower hereunder or under the Credit
Agreement.

 

This note is
one of the Notes referred to in the Credit Agreement dated as of June 2,
2005 among Blyth, Inc., PartyLite Trading SA, the Lenders listed on the
signature pages thereof,  JPMorgan
Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A. and
LaSalle Bank, National Association, as Co-Syndication Agents (as the same may
be amended from time to time, the “Credit Agreement”).  Terms defined in the Credit Agreement are
used herein with the same meanings.

 

 

Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.

 

	
   

  	
  [NAME OF RELEVANT BORROWER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-2

 

LOANS AND PAYMENTS OF PRINCIPAL

 

	
  Date

  	
   

  	
  Currency of

  Loan

  	
   

  	
  Amount of

  Loan

  	
   

  	
  Type of

  Loan

  	
   

  	
  Principal

  Repaid

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-3

 

EXHIBIT B

 

FORM OF NOTICE OF BORROWING

 

	
   

  	
  [Date]

  

 

To:                              JPMorgan
Chase Bank, N.A., as Administrative Agent

 

From:                  [NAME OF RELEVANT
BORROWER] (the “Borrower”)]

 

Re:                               Credit
Agreement (as the same may be amended from time to time, the “Credit Agreement”) dated as of June 2, 2005 among the
Borrowers, the Lenders party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and Bank of America, N.A. and LaSalle Bank, National
Association, as Co-Syndication Agents

 

We hereby
irrevocably give notice pursuant to Section 2.02 of the Credit Agreement
of the Borrowing specified below:

 

1.                                       The
[Domestic Business Day][Euro-Currency Business Day] of the proposed Borrowing
is [Date].

 

2.                                       The
aggregate amount of the proposed Borrowing is [specify currency and amount in
such currency].

 

3.                                       The
Loans comprising such Borrowing are to be [Swingline Loans][Syndicated Loans].

 

4.                                       [The
Loans comprising such Borrowing are to bear interest initially at [the Base
Rate][a Euro-Currency Rate][other mutually agreed rate for Swingline Loan].]

 

5.                                       [The
duration of the initial Interest Period applicable thereto is [specify
duration].]

 

Terms used herein have the meanings assigned
to them in the Credit Agreement.

 

 

	
   

  	
  [NAME OF RELEVANT BORROWER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

B-1

 

EXHIBIT C

 

	
                     ,
  2005

  

 

To the Banks and the Agents

Referred to Below

c/o JPMorgan Chase Bank, N.A., as Administrative Agent

270 Park Avenue

New York, New York 10017

 

Re:          Credit
Agreement dated as of June 2, 2005, among Blyth, Inc., PartyLite
Trading SA, the lenders named therein (the “Lenders”),
JPMorgan Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A.
and LaSalle Bank, National Association, as Co-Syndication Agents, (such
Administrative Agent and Co-Syndication Agents are sometimes collectively
referred to below as the “Agents”)

 

Ladies and
Gentlemen:

 

I am the Vice President and General Counsel
of Blyth, Inc. (the “Company”) and am rendering the opinions contained
herein in connection with the Credit Agreement (the “Credit Agreement”), dated
as of the date hereof among the Company, PartyLite Trading SA, the Lenders and
the Agents.  Terms defined in the Credit
Agreement are used herein as defined therein.

 

In rendering the opinions expressed below, I
have examined executed copies or photocopies of (i) the Credit Agreement
and (ii) any Notes executed and delivered by the Company pursuant to
Section 2.04(b) of the Credit Agreement (such Notes are referred to
herein as the “Notes” and the Notes and the Credit Agreement are collectively
referred to herein as the “Loan Documents”). 
In addition, I have examined and am familiar with originals or copies of
(i) the Certificate of Incorporation and By-laws of the Company, as in
effect on the date hereof and (ii) such other corporate and stockholder
records, agreements and instruments of the Company, certificates of public
officials and of officers of the Company and such other documents and papers I
have deemed necessary as a basis for the opinions hereinafter expressed.  In such examination, as I have assumed the
genuineness of all signatures, the authenticity of documents submitted to me as
originals and the conformity to the original documents of all documents
submitted to me as copies.

 

Based upon the
foregoing and subject to the qualifications set forth below, and having due
regard for such legal consideration as I have deemed relevant, I am of the
opinion that:

 

C-1

 

1.  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation.

 

2.  The
Company has all corporate power required to own its properties and conduct its
business as now conducted.

 

3.  The execution, delivery and performance by
the Company of the Loan Documents are within the Company’s corporate powers and
have been duly authorized by all necessary corporate action.

 

4.  Each of the Loan Documents has been duly
executed and delivered by the Company.

 

5.  The Credit Agreement constitutes a valid and
binding agreement of the Company and each Note issued thereunder today by it
constitutes a valid and binding obligation of the Company, in each case
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors’ rights
generally and general principles of equity.

 

6.  No license, approval or authorization of,
exemption by, or registration or declaration with, any governmental body,
agency or official is required to be made or obtained by the Company in
connection with the execution, delivery or performance by the Company, or the
validity or enforceability against the Company, of the Loan Documents.

 

7.  The execution, delivery and performance by
the Company of the Loan Documents (a) will not violate (i) any
provision of any applicable law or regulation, (ii) the Certificate of
Incorporation or By-laws of the Company or (iii) any judgment, order,
decree or award of any court, arbitrator or governmental body binding on the
Company or, to my knowledge, any mortgage, indenture, security agreement, contract
or other agreement or instrument to which the Company is a party or that is
binding upon it or any of its properties or assets, and (b) will not
result in the imposition or creation of any Lien on any properties or assets of
the Company pursuant to the provisions of any such mortgage, indenture,
security agreement, contract or other agreement or instrument.

 

8.  The Company is not an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder.

 

9.  To the best of my knowledge after due
inquiry, except as set forth in the Company’s Form 10-K for the
fisca1 year ended January 31, 2005 and/or the Company’s Form 10-Q
for the fiscal quarter ended April 30, 2005, there are no actions, suits
or proceedings pending or threatened against or affecting the Company or any
Subsidiary or any of their respective properties in any court or before any
arbitrator of any kind or before or by any governmental body, except actions,
suits or proceedings of the character normally incident to the kind of

 

C-2

 

business conducted by the
Company and its Subsidiaries that (a) would not materially impair the
right or ability of the Company or any Subsidiary to carry on its business
substantially as now conducted and (b) would not have a material adverse
effect on the consolidated financial condition of the Company and its
Subsidiaries, and there are no actions, suits or proceedings pending or
threatened that relate to or which in any manner draw into question the
validity of any of the transactions contemplated by the Credit Agreement.

 

I do not express, or purport to express, any
opinion with respect to the laws of any jurisdiction other than the laws of the
State of New York, the Federal laws of the United States of America and the
Delaware General Corporation Law.  This
opinion is limited in all respects to the facts and law existing on the date
hereof and, by rendering my opinion, I do not undertake to advise you of any
changes in such facts or law which may occur after the date hereof.  This opinion has been rendered solely to you
for your use in connection with the Credit Agreement.  No other person or entity shall be entitled
to rely hereon without my prior written consent.

 

	
   

  	
  Very truly yours,

  

 

C-3

 

EXHIBIT D

 

OPINION OF DAVIS POLK & WARDWELL,

SPECIAL COUNSEL FOR THE ADMINISTRATIVE AGENT

 

	
   

  	
  June 2, 2005

  

 

To the Banks and Agents

Referred to Below

c/o                               JPMorgan
Chase Bank, N.A.,

as Administrative Agent

270 Park Avenue

New York, New York 10017

 

Dear Sirs:

 

We have
participated in the preparation of the Credit Agreement dated as of
June 2, 2005 (the “Credit Agreement”) among Blyth, Inc., a Delaware
corporation (the “Company”), PartyLite Trading SA, the Lenders party thereto,
Bank of America, N.A. and LaSalle Bank, National Association, as Co-Syndication
Agents and JPMorgan Chase Bank, N.A., as Administrative Agent (the
“Administrative Agent”), and have acted as special counsel for the
Administrative Agent for the purpose of rendering this opinion pursuant to
Section 3.01(b) of the Credit Agreement.  Terms defined in the Credit Agreement are
used herein as therein defined.

 

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
execution, delivery and performance by the Company of the Credit Agreement and
the Notes are within the Company’s corporate powers and have been duly
authorized by all necessary corporate action.

 

2.                                       The
Credit Agreement constitutes a valid and binding agreement of the Company and
each Note issued thereunder today constitutes a valid and binding obligation of
the Company, in each case enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors’ rights generally and general principles of equity.

 

We are members
of the Bar of the State of New York and the foregoing opinion is limited to the
laws of the State of New York, the federal laws of the

 

D-1

 

United States of America and
the General Corporation Law of the State of Delaware.  In giving the foregoing opinion, we express
no opinion as to the effect (if any) of any law of any jurisdiction (except the
State of New York) in which any Lender is located which limits the rate of
interest that such Lender may charge or collect.

 

This opinion
is rendered solely to you in connection with the above matter.  This opinion may not be relied upon by you
for any other purpose or relied upon by any other Person without our prior
written consent.

 

	
   

  	
  Very truly yours,

  

 

D-2

 

EXHIBIT E

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

AGREEMENT
dated as of                    ,
20     among [ASSIGNOR] (the “Assignor”), [ASSIGNEE] (the
“Assignee”), [BLYTH, INC. (the “Company”) and JPMORGAN CHASE BANK, N.A., as
Administrative Agent under the Credit Agreement (as defined below).]

 

W I T N E S S E T H

 

WHEREAS, this
Assignment and Assumption Agreement (the “Agreement”) relates to the Credit
Agreement dated as of June 2, 2005 among the Company, PartyLite Trading
SA, the Assignor and the other Lenders party thereto, as Lenders, and the Agents
party thereto (as amended through the date hereof, the “Credit Agreement”);

 

WHEREAS, as
provided under the Credit Agreement, the Assignor has a Commitment to make
Loans and participate in Letters of Credit in an aggregate Dollar Amount at any
time outstanding not to exceed $    ,000,000;

 

WHEREAS,
Syndicated Loans made to the Borrowers by the Assignor under the Credit
Agreement in the aggregate Dollar Amount of $                
are outstanding at the date hereof;

 

WHEREAS,
Letters of Credit with a total amount available for drawing thereunder of $                     
are outstanding at the date hereof; and

 

WHEREAS, the
Assignor proposes to assign to the Assignee all of the rights of the Assignor
under the Credit Agreement and the other Loan Documents in respect of [all] [a
portion] of its Commitment thereunder in an amount equal to $            
(the “Assigned Amount”), together with a corresponding portion of its
outstanding Syndicated Loans and Letter of Credit Liabilities, and the Assignee
proposes to accept assignment of such rights and assume the corresponding
obligations from the Assignor on such terms;

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

 

Section 1.
 Definitions.  All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.

 

Section 2.  Assignment.  The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement and the
other Loan Documents to the extent of the Assigned Amount, and the Assignee
hereby accepts such assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to the extent of the Assigned
Amount, including the purchase from the Assignor of the corresponding

 

E-1

 

portion of the principal amount
of the Syndicated Loans made by, and Letter of Credit Liabilities of, the
Assignor outstanding at the date hereof. 
Upon the execution and delivery hereof by the Assignor, the Assignee,
[the Company and the Administrative Agent] and the payment of the amounts
specified in Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights and be obligated
to perform the obligations of a Lender under the Credit Agreement with a
Commitment in an amount equal to the Assigned Amount, and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by a like
amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the
Assignee.  The assignment provided for
herein shall be without recourse to the Assignor.

 

Section 3.  Payments.  As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between them.*
 It is understood that facility and Letter
of Credit fees accrued to the date hereof in respect of the Assigned Amount are
for the account of the Assignor and such fees accruing from and including the
date hereof are for the account of the Assignee.  Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit Agreement which is for
the account of the other party hereto, it shall receive the same for the
account of such other party to the extent of such other party’s interest
therein and shall promptly pay the same to such other party.

 

[Section 4.  Consents.  This Agreement is conditioned upon the
consent of the Company and the Administrative Agent pursuant to
Section 9.06(c)) of the Credit Agreement. 
The execution of this Agreement by the Company and the Administrative
Agent is evidence of this consent.]

 

Section 5.  Non-reliance on Assignor.  The Assignor makes no representation or
warranty in connection with, and shall have no responsibility with respect to,
the solvency, financial condition or statements of the Company or any of its
Subsidiaries, or the validity and enforceability of the obligations of the
Company or any of its Subsidiaries in respect of any Loan Document.  The Assignee acknowledges that it has, independently
and without reliance on the Assignor, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Company and its Subsidiaries.

 

* Amount
should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee.  It may be preferable in an appropriate case
to specify these amounts generically or by formula rather than as a fixed sum.

 

E-2

 

Section 6.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

 

Section 7.  Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

E-3

 

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

 

 

	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [BLYTH, INC.]*

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [JPMORGAN CHASE BANK, N.A., as

  Administrative Agent]*

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

* Only if consent
is required under Section 9.06(c) of the Credit Agreement.

 

E-4

 

EXHIBIT F

 

EXTENSION AGREEMENT

 

JPMorgan Chase Bank, N.A.,

as Administrative Agent

under the Credit Agreement

referred to below

[Address]

 

Gentlemen:

 

The
undersigned hereby agree to extend, effective [Extension Date], the Termination
Date under the Credit Agreement dated as of June 2, 2005 among
Blyth, Inc., PartyLite Trading SA, the Lenders parties thereto, JPMorgan
Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A. and
LaSalle Bank, National Association, as Co-Syndication Agents (as amended
through the date hereof, the “Credit Agreement”)
for one year to [date to which the Termination Date is extended].  Terms defined in the Credit Agreement are
used herein as therein defined.

 

This Extension
Agreement shall be construed in accordance with and governed by the law of the
State of New York.

 

	
   

  	
  [LENDERS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Agreed and accepted:

 

	
  BLYTH, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

	
  PARTYLITE TRADING SA

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

F-1

 

 

	
  JPMORGAN CHASE BANK, N.A., as

  Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

F-2

 

EXHIBIT G

 

FORM OF COMPLIANCE CERTIFICATE

 

	
   

  	
  [Date]

  

 

To:          The Lenders

 

From:      Blyth, Inc. (the
“Company”)

 

Re:          Credit
Agreement (as the same may be amended from time to time, the “Credit Agreement”) dated as of June 2, 2005 among the
Company, PartyLite Trading SA, the Lenders party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and Bank of America, N.A. and LaSalle Bank,
National Association, as Co-Syndication Agents

 

I, [Name], am
a Senior Financial Officer of the Company and hereby certify, on behalf of the
Company, pursuant to Section 5.01(c) of the Credit Agreement in
connection with the delivery of the [describe financial statements, including
date of financial statements] as follows:

 

1.  Set forth on Schedule I
hereto is information and calculations establishing that the Company was in
compliance with the requirements of Section 5.09 to Section 5.13,
inclusive, on [Date of financial statements], together with the Leverage Ratio
and the Adjusted Consolidated Net Worth as of [Date of financial statements].

 

2.  [No Default exists on the
date hereof.][The following are the only Default(s) existing on the date
hereof: [set forth details of Default(s)]. 
The Company proposes to [describe actions proposed to be taken with
respect to Default(s)].]

 

Terms used
herein have the meanings assigned to them in the Credit Agreement.

 

	
   

  	
  BLYTH, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

G-1Exhibit 10.1

 

MASTER
AGREEMENT

 

This MASTER AGREEMENT (this “Agreement”)
is made and entered into as of this 2nd day of June, 2005, by
and between Edwards Lifesciences PVT, Inc., a Delaware corporation (“Edwards”),
and 3F Therapeutics, Inc., a Delaware corporation (“3F Therapeutics”
and, together with Edwards, are each referred to herein as a “Party” and
collectively as the “Parties”).

 

RECITALS

 

WHEREAS, reference is made
to (i) the Development and Supply Agreement, dated as of June 13,
2002, as amended by the First Amendment to Development and Supply Agreement,
dated as of October 31, 2002, and the Second Amendment to Development and
Supply Agreement, dated as of May 27, 2003 (as so amended, the “3F
Development and Supply Agreement”), by and between 3F Therapeutics and
Edwards (as successor to Percutaneous Valve Technologies, Inc. (“PVT”))
and (ii) the Development Agreement, dated as of November 14, 2001, as
amended by the First Amendment to Development Agreement, dated as of October 31,
2002 and the Second Amendment to Development Agreement, dated as of May 27,
2003 (as so amended, the “VenPro Development Agreement” and, together
with the 3F Development and Supply Agreement, the “Subject Agreements”),
by and between 3F Therapeutics (as successor to VenPro Corporation (“VenPro”))
and Edwards (as successor to PVT);

 

WHEREAS, Edwards, as
successor in interest to PVT under the Subject Agreements, and 3F Therapeutics,
under the 3F Development and Supply Agreement and as successor in interest to
VenPro under the VenPro Development Agreement, mutually desire to terminate the
Subject Agreements and to release one another of certain liabilities and
obligations between the Parties under the Subject Agreements, all upon the
terms and subject to the conditions set forth in this Agreement;

 

WHEREAS, in connection with
the termination of the Subject Agreements pursuant to this Agreement, the
Parties have agreed that (i) Edwards shall grant to 3F licenses with
respect to certain of Edwards’ patent and patent applications, upon the terms
and subject to the conditions set forth in a license agreement in the form
attached as Exhibit A hereto (the “Edwards License Agreement”),
(ii) 3F Therapeutics shall grant to Edwards licenses to produce and sell
products incorporating certain of 3F Therapeutics’ manufacturing know-how and
intellectual property, upon the terms and subject to the conditions set forth
in a license agreement in the form attached as Exhibit B hereto
(the “3F License Agreement”) and (iii) 3F Therapeutics shall supply
Edwards with certain products and provide Edwards with training with respect to
certain of 3F Therapeutics’ know-how and intellectual property needed by
Edwards in connection with certain of Edwards’ manufacturing processes, upon
the terms and subject to the conditions set forth in a supply and training
agreement in the form attached as Exhibit C hereto (the “Supply
and Training Agreement” and, together with the Edwards License Agreement
and 3F License Agreement, the “Related Transaction Agreements”); and

 

WHEREAS, in connection with
the transactions contemplated by this Agreement and upon the terms and subject
to the conditions contained herein, Edwards shall pay to 3F

 

 

Therapeutics, or cause to be
paid to 3F Therapeutics on its behalf, the consideration set forth herein.

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements
hereinafter set forth, the Parties agree as follows:

 

1.             TERMINATION OF THE SUBJECT AGREEMENTS AND RELEASE. 
Effective on the Closing Date (as defined below):

 

1.1          Termination.  Upon the terms and subject to the conditions
contained in this Agreement, the Subject Agreements shall be irrevocably
terminated and extinguished in their entirety as of the Closing Date, and upon
such termination and extinguishment, no provision of either of the Subject
Agreements shall have any force or effect.

 

1.2          No Surviving Provisions.  Notwithstanding any provision
in any Subject Agreement providing for the survival of such provision or any
other provision following termination of such Subject Agreement (each such
provision and other provision, a “Non-Surviving Provision”), the parties
hereby agree that no provision contained in either Subject Agreement shall
survive the termination and extinguishment of the Subject Agreements pursuant
to this Agreement.

 

1.3          Release.  Each of Edwards, on the one hand, and 3F
Therapeutics, on the other hand, on behalf of itself and each of its respective
affiliates, employees, agents, successors and assigns (each, a “Releasing
Party”), hereby fully releases and discharges the other and each of its
respective affiliates, employees, agents, successors and assigns (each, a “Released
Party”), from, and to the extent applicable, relinquishes, all rights,
obligations, liabilities, claims and actions, whether known or unknown, now
existing or hereafter arising, at law or in equity or otherwise, that each such
Releasing Party now has or may have against any Released Party, arising out of
or in connection with the Subject Agreements (the “Released Obligations”);
provided, however, that the outstanding obligations of Edwards to 3F
Therapeutics and the outstanding obligations of 3F Therapeutics to Edwards,
each as set forth in Exhibit D, shall not be released.

 

2.             CLOSING AND PAYMENT OF THE CONSIDERATION.

 

2.1          Closing.  The closing (the “Closing”) of the
transactions contemplated under this Agreement shall take place on the date
both Parties have executed and delivered this Agreement.

 

2.2          Consideration for Termination of Subject Agreements.  In
full consideration of the termination of the Subject Agreements in accordance
with Section 1 above, Edwards agrees to pay to 3F Therapeutics, or cause
to be paid to 3F Therapeutics on its behalf, the aggregate sum of up to twenty
four million seven hundred fifty thousand dollars and no cents
($24,750,000.00), as follows:

 

(a)           On the Closing Date, Edwards shall pay to 3F
Therapeutics, or cause to be paid to 3F Therapeutics on its behalf, the sum of
twenty two million seven hundred fifty thousand dollars and no cents
($22,750,000.00) (the “Initial Termination Fee”), by wire transfer of
immediately available funds to an account designated by 3F Therapeutics; and

 

2

 

(b)           On the date that is the first business day
following the expiration of the Term (as such term is defined in the Supply and
Training Agreement) of the Supply and Training Agreement in accordance with its
terms, or such other date as the Parties may mutually determine (the “Transitional
Agreement Termination Date”), Edwards shall pay to 3F Therapeutics, or
cause to be paid to 3F Therapeutics on its behalf, the sum of two million
dollars and no cents ($2,000,000.00) (the “Holdback Amount”), by wire
transfer of immediately available funds to an account designated by 3F
Therapeutics, provided, however,
that Edwards’ obligations under this Section 2.2(b) shall be subject
to the condition that there shall not have been any breach by 3F Therapeutics
of any of its obligations under the Supply and Training Agreement as provided
in Section 5.6 thereof at any time during the Term.  In the event that the aforementioned
condition is not satisfied, Edwards shall have no obligation to pay to 3F
Therapeutics, or cause to be paid to 3F Therapeutics on its behalf, any portion
of the Holdback Amount under this Section 2.2(b).

 

2.3          Consideration for 3F License Agreement.  In
full consideration of the execution and delivery of the 3F License Agreement by
3F Therapeutics, Edwards shall pay to 3F Therapeutics on the Closing Date, or
cause to be paid to 3F Therapeutics on its behalf, the sum of two hundred fifty
thousand dollars and no cents ($250,000.00) (the “License Agreement Fee”),
by wire transfer of immediately available funds to an account designated by 3F
Therapeutics.

 

2.4          Full Consideration.  3F Therapeutics hereby agrees
that the Initial Termination Fee, the Holdback Amount (to the extent that
Edwards is obligated to pay, or cause to be paid on its behalf, the Holdback
Amount under the provisions of Section 2.2(b)) and the License Agreement
Fee shall constitute consideration in full for 3F Therapeutics’ agreement to be
bound by the provisions in this Agreement.

 

2.5          Documents to be Delivered.  Concurrently with the
consummation of the transactions set forth in Sections 2.2 and 2.3 on the
Closing Date, each Party shall duly execute and deliver to the other Party each
of the Related Transaction Agreements.

 

3.             REPRESENTATIONS AND WARRANTIES OF EDWARDS. 
Edwards represents and warrants to 3F Therapeutics, as of the Closing Date:

 

3.1          Organization and Corporate Power. 
Edwards is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and has all required
corporate power and corporate authority to perform its obligations under this
Agreement.

 

3.2          Authorization and Approval.  The execution, delivery and
performance by Edwards of each of this Agreement and the Related Transaction
Agreements have been duly authorized by all necessary corporate action of
Edwards, including approval of such execution, delivery and performance by the
board of directors of Edwards.  Edwards
has duly executed and delivered each of this Agreement and the Related
Transaction Agreements, which constitutes the valid and legally binding
obligation of Edwards, enforceable in accordance with its terms, except that
enforcement thereof may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally and (b) general
principles of equity, whether such enforceability is considered in a proceeding
in equity or at law.

 

3

 

3.3          Agreements.  Edwards acknowledges that the Subject
Agreements constitute all of the agreements, whether written or oral, entered
into by and between the Parties with respect to the subject matter covered
under the Subject Agreements, and that the termination of the Subject
Agreements and the release of the Released Obligations pursuant to this
Agreement effectively terminates all and any agreements or arrangements between
the Parties with respect to such subject matter (including each Non-Surviving
Provision) and releases 3F Therapeutics of all and any liabilities and
obligations under all such agreements and arrangements, except those set forth
in Exhibit D as referenced in Section 1.3 hereof.

 

4.             REPRESENTATIONS AND WARRANTIES OF 3F THERAPEUTICS.  3F
Therapeutics represents and warrants to Edwards, as of the Closing Date:

 

4.1          Organization and Corporate Power.  3F
Therapeutics is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and has all required
corporate power and corporate authority to perform its obligations under this
Agreement.

 

4.2          Authorization and Approval.  The execution, delivery and
performance by 3F Therapeutics of each of this Agreement and the Related
Transaction Agreements have been duly authorized by all necessary corporate
action of 3F Therapeutics, including approval of such execution, delivery and
performance by the board of directors of 3F Therapeutics.  3F Therapeutics has duly executed and
delivered each of this Agreement and the Related Transaction Agreements, which
constitutes the valid and legally binding obligation of 3F Therapeutics,
enforceable in accordance with its terms, except that enforcement thereof may
be limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’
rights generally and (b) general principles of equity, whether such
enforceability is considered in a proceeding in equity or at law.

 

4.3          Agreements.  3F
Therapeutics acknowledges that the Subject Agreements constitute all of the
agreements, whether written or oral, entered into by and between the Parties
with respect to the subject matter covered under the Subject Agreements, and
that the termination of the Subject Agreements and the release of the Released
Obligations pursuant to this Agreement effectively terminates all and any
agreements or arrangements between the Parties with respect to such subject
matter (including each Non-Surviving Provision) and releases Edwards of all and
any liabilities and obligations under all such agreements and arrangements,
except those set forth in Exhibit D as referenced in Section 1.3
hereof.

 

5.             MATTERS REGARDING TERMINATION AND RELEASE.

 

5.1          Certain Agreements and Acknowledgements.

 

(a)           3F Therapeutics hereby agrees and
acknowledges that it shall not use or otherwise access any data, results and
information generated by the testing, analysis, evaluation, or other means of
the Investigational PVT Product (as defined in the 3F Development and Supply
Agreement) (such data, results and information, the “Test Data”); provided, however,
that

 

4

 

3F
Therapeutics shall have the right to use in the Surgical Field of Use (as such
term is defined in the 3F License Agreement) (i) any Test Data that is in
3F Therapeutics’ possession as of the Closing Date and as set forth on Exhibit E
and (ii) any additional Test Data in Edwards’ possession that was
generated by Edwards prior to the Closing Date, to the extent required for
regulatory purposes.

 

(b)           Edwards hereby acknowledges that (i) no
license with respect to 3F Technology (as such term is defined in the 3F
Development and Supply Agreement) was granted to Edwards or PVT by 3F
Therapeutics by operation of Section 6.18 of the 3F Development and Supply
Agreement and (ii) neither it nor PVT has obtained any right to exercise,
or has exercised, the license with respect to 3F Patents (as such term is
defined in the 3F Development and Supply Agreement) pursuant to Section 7.3
of the 3F Development and Supply Agreement.

 

(c)           3F Therapeutics hereby acknowledges that (i) no
license with respect to PVT Technology (as such term is defined in the 3F
Development and Supply Agreement) was granted to 3F Therapeutics by Edwards or
PVT by operation of Section 6.16 of the 3F Development and Supply Agreement
and (ii) it has not obtained the right to, and has not, exercised the
license with respect to PVT Patents (as such term is defined in the 3F
Development and Supply Agreement) pursuant to Section 7.2 of the 3F
Development and Supply Agreement.

 

(d)           3F Therapeutics hereby acknowledges that (i) no
license with respect to PVT Patents (as such term is defined in the VenPro
Development Agreement) was granted to 3F Therapeutics or VenPro by Edwards or
PVT by operation of Section 6.10 of the VenPro Development Agreement and (ii) neither
it nor VenPro has obtained any right to exercise, or has exercised, the license
with respect to PVT Patents (as such term is defined in the VenPro Development
Agreement) pursuant to Section 7.2 of the VenPro Development Agreement.

 

(e)           Each of Edwards and 3F Therapeutics hereby
acknowledges that (i) termination of the 3F Development and Supply
Agreement hereunder, including termination of each Non-Surviving Provision
thereunder, is pursuant to mutual agreement between the Parties, and not in
accordance with Section 9.1, 9.2 or 9.3 of the 3F Development and Supply
Agreement and (ii) termination of the VenPro Development Agreement
hereunder, including termination of each Non-Surviving Provision thereunder, is
pursuant to mutual agreement between the Parties, and not in accordance with Section 9.2,
9.3 or 9.4 of the VenPro Development Agreement.

 

(f)            Each of Edwards and 3F Therapeutics hereby
acknowledges and agrees that its supply obligations (i.e., Edwards’ obligations to supply PVT Components (as such
term is defined under the 3F Development and Supply Agreement) and 3F
Therapeutics’ obligations to supply 3F-PVT SAs (as such term is defined under
the 3F Development and Supply Agreement)) under the 3F Development and Supply
Agreement shall terminate and be extinguished as of the Closing Date, and there
shall be no obligation by either Party to supply any product to the other
following termination of the 3F Development and Supply Agreement in accordance
herewith on the Closing Date, except pursuant to the Supply and Training
Agreement.

 

5

 

(g)           Each of Edwards and 3F Therapeutics hereby
acknowledges and agrees that (i) neither Party has developed or produced
any “Joint IP” (as such term is defined under both the 3F Development
and Supply Agreement and the VenPro Development Agreement) under either
the 3F Development and Supply Agreement or the VenPro Development Agreement, (ii) neither
Party has developed, conceived or devised any “Invention” (as such term is
defined under both the 3F Development and Supply Agreement and
the VenPro Development Agreement) under either the 3F Development and Supply
Agreement or the VenPro Development Agreement by use of or reference to any
Joint IP and (iii) neither Party has obtained any right in or to any
intellectual property of the other Party other than pursuant to the Edwards
License Agreement and the 3F License Agreement.

 

(h)           Each Party hereby agrees that whenever
consent or approval is required from such Party under this Agreement, such
consent or approval shall not be unreasonably withheld, delayed or conditioned.

 

5.2          Acknowledgment of Effect.  Each Releasing Party
acknowledges and understands that (i) by executing and delivering this
Agreement, such Releasing Party is forever giving up the right to sue or
attempt to recover money, damages or any other relief from any Released Person
for all claims it has or may have against such Released Person with respect to
the Released Obligations (even if any such claim is unforeseen as of the date
hereof); (ii) this Agreement is in full accord and satisfaction of the
Released Obligations released hereby by such Releasing Party; and (iii) the
releases made herein constitute final and complete releases of the Released
Obligations.  Without limiting the
foregoing, no Releasing Party may, directly or indirectly, (x) bring or cause
to be brought, or participate in the prosecution of, any action, proceeding or
suit seeking recovery by or on behalf of such party of any amount in respect
of, or damages with respect to, the Released Obligations, or (y) defend any
action, proceeding or suit in whole or in part on the grounds that any or all
of the terms or provisions of this Agreement are illegal, invalid, not binding,
unenforceable or against public policy.

 

5.3          Review of Subject Agreements.  Each
Releasing Party hereto, for itself and the other Releasing Parties,
acknowledges and represents to the Released Parties that (i) this
Agreement is executed voluntarily by such Releasing Party, without any duress
or undue influence; (ii) such Releasing Party has had the opportunity to
obtain, from legal counsel of its own choosing, full and adequate legal advice
as to its legal rights with respect to this Agreement; and (iii) such
Releasing Party has read this Agreement in its entirety and fully understands
its content and legal effect.

 

5.4          Section 1542 Waiver.  Each of Edwards and 3F
Therapeutics expressly waives the provisions of Section 1542 of the Civil
Code of the State of California as to matters relating to the Subject
Agreements and the Subject Agreements themselves, which provides as follows:

 

A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

6

 

6.             CONFIDENTIALITY AND PUBLICITY; NON-SOLICITATION.

 

6.1          Confidentiality.

 

(a)           Subject to the provisions of Section 6.2,
each of the Parties agrees that it will not use to the detriment of the
disclosing Party (except as permitted under this Agreement or the Related
Transaction Agreements) or disclose to any third party any confidential or
proprietary information of the other Party, except to the extent that such
information (i) is or becomes generally available to the public other than
as a result of a disclosure by the receiving Party or its representatives in
violation of this Agreement, (ii) was within the receiving Party’s
possession prior to its first being furnished to it, (iii) is, at any
time, disclosed to the receiving Party by any third party having the right to
disclose the same or (iv) is independently developed by an employee or
agent/consultant of the receiving Party without reference to the confidential
or proprietary information of the other Party. 
Each Party may disclose the confidential information of the other Party
to such Party’s representatives, who shall not use such information except for
the purposes contemplated hereby, and who shall maintain the confidentiality of
such information, provided however, that each Party shall be responsible for
any breach of this Section 6.1 by its representatives.

 

(b)           In the event that either Party or any of its
representatives are requested or required to disclose any of the confidential
information of the other Party, it shall provide the other Party with prompt
written notice of any such request or requirement so that the disclosing Party
may seek a protective order or other appropriate remedy.  If, in the absence of a protective order or
other remedy, the receiving Party or any of its representatives are
nonetheless, in the opinion of its outside counsel, legally compelled to
disclose such confidential information to any governmental authority or else
stand liable for contempt or suffer other censure or penalty, the receiving
Party or its representative may, without liability hereunder, disclose to such
governmental authority only that portion of such confidential information which
such counsel advises is legally required to be disclosed.

 

(c)           Notwithstanding anything to the contrary in
this Agreement and any other agreement entered into by the parties, either
Party to this Agreement (and their representatives) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated by this Agreement and the Related Transaction
Agreements and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure; provided, however, that this sentence shall not permit any
disclosure that otherwise is prohibited by this Agreement (i) if such
disclosure would result in a violation of federal or state securities laws or (ii) to
the extent not related to the tax aspects of the transaction.  Moreover, nothing in this Agreement shall be
construed to limit in any way any Party’s ability to consult any tax advisor
regarding the tax treatment or tax structure of the Transactions.

 

6.2          Public Statements.  Except for the information set
forth on any of the exhibits to the Related Transaction Agreements (the “Proprietary
Information”), each of Edwards and 3F Therapeutics shall be entitled to
disclose the terms of this Agreement and the Related Transaction Agreements as
they deem appropriate, provided that any press release disclosing any of such
terms shall be provided to the other Party at least one day in advance of the
issuance of

 

7

 

such press release to permit
the other Party to review the accuracy of such release [and provided that an
initial press release disclosing this Agreement and the related Transaction
Agreements shall be a joint press release by Edwards and 3F Therapeutics in the
form attached hereto as Exhibit F]. 
Except as required by law or the applicable regulations of a nationally
recognized stock exchange (or as necessary in conjunction with a registration
statement), neither Edwards nor 3F Therapeutics nor their affiliates shall
release any Proprietary Information to any third party, other than as
specifically may be permitted in this Agreement or the Related Transaction
Agreements.  In the event that either
Party or their affiliates are requested or required to disclose any of the
Proprietary Information, the procedures and provisions of Section 6.1(b) above
shall apply.  Notwithstanding any other
provisions of this Agreement, Edwards may disclose Proprietary Information as
necessary to any prior, current or future licensor under the Heartport License
(as such term is defined in the Edwards License Agreement), and any of its
affiliates, employees, agents, representatives, successors or assigns, in order
for Edwards to comply with its obligations under the terms of the Heartport
License, in each case without the prior consent of 3F Therapeutics.

 

6.3          Non-Solicitation.

 

(a)           During the period from the Closing Date to
the first anniversary of the expiration of the Term (as such term is defined in
the Supply and Training Agreement) (the “Non-Solicitation Period”), each
Party agrees that it will not directly or indirectly through another person or
entity: (i) induce or attempt to induce any employee or independent
contractor of the other Party who is involved in the execution of the
Technology Transfer Plan (as such term is defined in the Supply and Training
Agreement) to terminate his or her employment or engagement with such other
Party or (ii) recruit, solicit or hire any employee or independent
contractor of such other Party who is involved in the execution of the
Technology Transfer Plan.

 

(b)           It is the desire and intent of the Parties
that the provisions of this Section 6.3 be enforced to the fullest extent
permissible under the laws and public policies of each jurisdiction in which
enforcement is sought.  Accordingly, if,
at the time of enforcement of any provision of this Section 6.3, a court
holds that the restrictions stated herein are unreasonable under circumstances
then existing, the Parties agree that, to the extent permitted by applicable
law, the maximum period or scope reasonable under such circumstances will be
substituted for the Nonsolicitation Period or scope.  Furthermore, such substitution will apply
only with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made.

 

(c)           Among other matters, because each Party will
have access to certain confidential and proprietary information of the other,
each Party agrees that money damages would be an inadequate remedy for any
breach of this Section 6.3. 
Therefore, in the event of a breach or threatened breach of any
provision of this Section 6.3 by either Party, the other Party or any of
its successors or assigns may, in addition to other rights and remedies
existing in its favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce, or
prevent any violations of, the provisions of this Section 6.3 (without
posting a bond or other security).  Each
Party expressly agrees and acknowledges that its covenants contained in this Section 6.3
are (i) reasonably necessary for the protection of the other Party’s
interests, (ii) made in consideration of, among other matters, such Party’s
agreement to be bound by this Agreement and the Related Transaction Agreements
and (iii) not unduly restrictive upon such Party.

 

8

 

7.             [This Section has been intentionally omitted.]

 

8.             [This Section has been intentionally omitted.]

 

9.             INDEMNIFICATION.

 

9.1          Indemnity.  Each Party (the “Indemnifying Party”)
hereby indemnifies and agrees to defend and hold the other Party (the “Indemnified
Party”), its permitted successors, affiliates, and permitted assigns
harmless from and against all claims, demands, liabilities, damages, losses and
expenses suffered or incurred by the Indemnified Party (“Losses”) only
to the extent arising out of or in connection with (i) any breach of any
representation, warranty or acknowledgement of the Indemnifying Party set forth
in this Agreement and (ii) any breach of any agreement, covenant or
obligation of the Indemnifying Party set forth in this Agreement.

 

9.2          Indemnification Procedures.  If an Indemnified Party
intends to seek indemnification pursuant to this Section 9, such
Indemnified Party shall promptly notify the Indemnifying Party in writing of
such claim.  The Indemnified Party will
provide the Indemnifying Party with prompt written notice of any third party
claim in respect of which indemnification is sought.  The failure to provide either such notice
will not affect any rights hereunder except to the extent the Indemnifying
Party is materially prejudiced thereby. 
Any such notice shall set forth in reasonable detail the available
facts, circumstances and basis of the claim. If such claim involves a claim by
a third party against the Indemnified Party, the Indemnifying Party may, after
acknowledging in writing liability hereunder, assume, through counsel of its
own choosing (so long as reasonably acceptable to the Indemnified Party) and at
its own expense, the defense thereby and the Indemnified Party shall cooperate
with it in connection therewith (including by furnishing such information as
the Indemnifying Party may reasonably request), provided, that the Indemnified
Party may participate in such defense through counsel chosen by it, at its own
expense.  So long as the Indemnifying
Party is contesting any such claim in good faith, the Indemnified Party shall
not pay or settle, or admit any liability with respect to, any such claim which
it continues to seek indemnification for without the Indemnifying Party’s
consent.  The Indemnifying Party will not
without the Indemnified Party’s prior written consent settle or compromise any
claim or consent to entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim. The
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld), take any
measure or step in connection with any settlement or compromise that imposes a
material burden or encumbrance upon the operation or conduct of the Indemnified
Party’s business. If the Indemnifying Party is not contesting such claim in
good faith, then the Indemnified Party may, upon at least ten (10) days’
notice to the Indemnifying Party (unless the Indemnifying Party shall assume
such settlement or defense within such ten (10) day period), conduct and
control, through counsel of its own choosing and at the expense of the
Indemnifying Party, the settlement or defense thereof, and the Indemnifying
Party shall cooperate with it in connection therewith.  The failure of the Indemnified Party to
participate in, conduct or control such defense shall not relieve the
Indemnifying Party of any obligation it may have hereunder.

 

9

 

10.          GENERAL.

 

10.1        Survival.  The provisions of Section 1, each of the
representations and warranties made by the Parties in Sections 3 and 4, the
agreements and acknowledgements contained in Section 5, the
confidentiality and publicity and non-solicitation provisions contained in Section 6,
the indemnification provisions contained in Section 9 and the general
provisions in Sections 10.1 through 10.10 shall survive each of the Closing
Date and the Transitional Agreement Termination Date.

 

10.2        Entire Agreement.  This Agreement (including the
documents referred to herein) constitutes the entire agreement between the
Parties concerning its subject matter and supersedes any prior understandings,
agreements, or representations by or between the Parties, written or oral, to
the extent they relate in any way to the subject matter hereof.

 

10.3        Succession and Assignment.  Neither Party may assign
either this Agreement or any of its rights, interests, or obligations hereunder
without the prior written approval, not to be unreasonably withheld, of the
other.  This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns.

 

10.4        Counterparts.  This Agreement may be executed in one or more
counterparts, (including by means of facsimile), each of which shall be deemed
an original but all of which together will constitute one and the same
instrument.

 

10.5        Notices and Demands.  Any notice or demand which is
required or provided to be given under this Agreement shall be deemed to have
been sufficiently given and received for all purposes when delivered by hand,
telecopy, telex or other method of facsimile, or five days after being sent by
certified or registered mail, postage and charges prepaid, return receipt
requested, or two days after being sent by overnight delivery providing receipt
of delivery, to the following addresses:

 

	
  If to Edwards:

  

  Edwards Lifesciences PVT, Inc.

  One Edwards Way

  Irvine, CA 92614

  Facsimile No.: (949) 250-6868

  Attn: General Counsel

  	
  Copy to (which copy shall
  not constitute notice):

  

  Gibson, Dunn & Crutcher LLP

  Jamboree Center

  4 Park Plaza

  Irvine, CA 92614

  Facsimile No.: (949) 475-4673

  Attn:  John M. Williams

  

 

10

 

	
  If to 3F Therapeutics:

  

  3F Therapeutics, Inc.

  20412 James Bay Circle

  Lake Forest, CA  92630

  Facsimile No.: (949) 380-9399

  Attn: Walter A. Cuevas

  	
  Copy to (which copy shall
  not constitute notice):

  

  Reed Smith, LLP

  1901 Avenue of the Stars, Suite 700

  Los Angeles, CA 90067

  Facsimile No.: (310) 734-5299

  Attn: Michael Sanders

  

 

10.6        Governing Law.  This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of California
without giving effect to any choice or conflict of law provision or rule (whether
of the State of California or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of California.

 

10.7        Arbitration.

 

(a)           All disputes between Edwards and 3F
Therapeutics arising out of or in connection with the execution, interpretation
and performance of this Agreement (including the validity, scope and
enforceability of this arbitration provision) shall be solely and finally
settled by arbitration in accordance with the United States Arbitration Act, 9
U.S.C.  §§1, et seq., as amended from
time to time, the rules of practice and procedure for the arbitration of
commercial disputes of the American Arbitration Association (the “AAA”)
and the “special rules” set forth in this Section 10.7(a).  In the event of any inconsistency, the “special
rules” set forth herein shall control. 
The following shall constitute the “special rules” applicable to any
arbitration commenced under this Section 10.7(a): (i) the arbitration
shall be conducted in the County of Orange, California, and administered by the
AAA, who will appoint an arbitrator that is either a lawyer from a national
firm or a judge with at least 15 years of experience, in each case experienced
in the industry of the Parties’ business and (ii) all arbitration hearings
will be commenced within sixty (60) days of the demand for arbitration,
provided that, the arbitrator shall, upon a showing of cause, be permitted to
extend the commencement of such hearing for up to an additional sixty (60)
days.

 

(b)           To the extent permissible under applicable
law, Edwards and 3F Therapeutics agree that the award of the arbitrator shall
be final and shall not be subject to judicial review.  Judgment on the arbitration award may be
entered and enforced in any court having jurisdiction over the parties or their
assets.  It is the intent of the parties
that the arbitration provisions hereof be enforced to the fullest extent
permitted by applicable law.

 

10.8        Amendments and Waivers.  No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing and signed
by all Parties.  No waiver by any Party
of any provision of this Agreement or any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be valid
unless the same shall be in writing and signed by the Party making such waiver
nor shall such waiver be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any such prior or subsequent default,
misrepresentation, or breach of warranty or covenant.

 

11

 

10.9        Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

 

10.10      Expenses.  Unless otherwise set forth in this Agreement,
each of the Parties will bear its own costs and expenses (including legal fees
and expenses) incurred in connection with this Agreement and the transactions contemplated
hereby.

 

12

 

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

 

 

	
   

  	
  EDWARDS
  LIFESCIENCES PVT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jay P. Wertheim

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jay P. Wertheim

  
	
   

  	
   

  	
  Title:

  	
  Vice President, Associate

  General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  3F
  THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter Cuevas

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Walter Cuevas

  
	
   

  	
   

  	
  Title:

  	
  President and Chief
  Executive Officer

  
					

 

13

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