FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

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Exhibit 10(aa)

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of July 12, 2007

among

REGIS CORPORATION,

VARIOUS FINANCIAL INSTITUTIONS,

JPMORGAN CHASE BANK, N.A.
as Administrative Agent, Swing Line Lender and Issuer,

BANK OF AMERICA, N.A.,
as Syndication Agent,

and

LASALLE BANK NATIONAL ASSOCIATION,
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., CHICAGO BRANCH,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Documentation Agents

Arranged by
J.P. MORGAN SECURITIES INC.
and
BANC OF AMERICA SECURITIES LLC
Joint Lead Arrangers and Joint Bookrunners

TABLE OF CONTENTS

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Regis Corporation

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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

        This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this " Agreement ") is entered into as of July 12, 2007 among Regis Corporation, a Minnesota corporation (the " Company "), the several financial institutions from time to time party to this Agreement (collectively, the " Lenders ", and individually each a " Lender ") and JPMorgan Chase Bank, N.A. (" JPMorgan "), as administrative agent for the Lenders (together with any successor thereto in such capacity, the " Administrative Agent ").

        WHEREAS, the Lenders are willing to extend commitments to make loans to, and issue or participate in letters of credit for the account of, the Company on the terms and conditions set forth herein.

        NOW, THEREFORE, in consideration of the mutual agreements contained herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

        1.01     Certain Defined Terms.     The following terms have the following meanings:

        " Acquired Person "—see the definition of "EBITDA".

        " Acquisition " means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) provided that the Company or the Subsidiary is the surviving entity.

        " Additional Default " means any provision contained in any document or instrument creating or evidencing Indebtedness of the Company or any Subsidiary that permits the holder or holders of Indebtedness to accelerate (with the passage of time or giving of notice or both) the maturity thereof or otherwise requires the Company or any Subsidiary to purchase such Indebtedness prior to the stated maturity thereof and that either (i) is similar to Defaults and Events of Default hereunder (or the related definitions in this Article I ), but contains one or more percentages, amounts or formulas that is more restrictive or has a shorter grace period than those set forth herein or is more beneficial to the holders of such other Indebtedness (and such provision shall be deemed an Additional Default only to the extent that it is more restrictive, has a shorter period or is more beneficial) or (ii) is different from the subject matter of the Defaults and Events of Default hereunder (or the related definitions in this Article I ).

        " Additional Financial Covenant " means any financial covenant applicable to the Company or any Subsidiary (regardless of whether such provision is labeled or otherwise characterized as a financial covenant), the subject matter of which either (i) is similar to that of the covenants in Sections 8.14 through 8.16 (or the related definitions in this Article I ), but contains one or more percentages, amounts or formulas that is more restrictive, or more favorable to the Persons entitled to the benefits thereof, than those set forth herein or more beneficial to the holder or holders of the Indebtedness created or evidenced by the document in which such covenant or similar restriction is contained (and such covenant or similar restriction shall be deemed an Additional Financial Covenant only to the extent that it is more restrictive or more beneficial) or (ii) is a financial covenant that is different from the subject matter of the covenants in Sections 8.14 through 8.16 .

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        " Administrative Agent "—see the preamble.

        " Administrative Agent's Payment Office " means (a) in respect of payments in Dollars, the address for payments set forth on Schedule 11.02 or such other address as the Administrative Agent may from time to time specify, and (b) in the case of payments in any Offshore Currency, such address as the Administrative Agent may from time to time specify in accordance with Section 11.02 .

        " Administrative Questionnaire " means an administrative questionnaire in a form supplied by the Administrative Agent.

        " Additional Lender " has the meaning specified in Section 2.17 .

        " Additional Offshore Currency " has the meaning specified in subsection 2.06(b) .

        " Affiliate " means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, membership interests, by contract, or otherwise.

        " Agent Fee Letter " has the meaning specified in subsection 2.11(a) .

        " Aggregate Commitment " means the aggregate Commitments of the Lenders.

        " Agreement "—see the preamble.

        " Applicable Currency " means, as to any particular payment or Loan, Dollars or the Offshore Currency in which it is denominated or payable.

        " Applicable Facility Fee Percentage "—see Schedule 1.01(a) .

        " Applicable Margin "—see Schedule 1.01(a) .

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

        " Arranger " means each of JPMSI and Banc of America Securities LLC in its capacity as a joint lead arranger and joint bookrunner hereunder, and " Arrangers " means both of them.

        " Asset Disposition " has the meaning specified in Section 8.02 .

        " Assignee " has the meaning specified in subsection 11.08(a) .

        " Associated Costs Rate " means, for any Offshore Currency Loan for any Interest Period, a percentage rate per annum as determined on the first day of such Interest Period by the Administrative Agent or the Swing Line Lender as reflecting the cost, loss or difference in return which would be suffered or incurred by a Lender as a result of (a) funding (at the Offshore Rate and on a match funded basis) any special deposit or cash ratio deposit required to be placed with the Bank of England and/or the Financial Services Authority (or any other authority which replaces any of their respective functions) and/or (b) any charge imposed by the Bank of England and/or the Financial Services Authority (or any other authority which replaces any of their respective functions).

        " Attorney Costs " means and includes all reasonable fees and disbursements of any law firm or other external counsel, the allocated cost of internal legal services and all disbursements of internal counsel.

        " Bankruptcy Code " means the United States Bankruptcy Code (11 U.S.C. §101, et seq .).

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        " Base Rate " means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus ¹ / 2 of 1%. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

        " Base Rate Loan " means a Loan or an L/C Advance that bears interest based on the Base Rate.

        " Borrowing " means a borrowing hereunder consisting of Revolving Loans of the same Type made to the Company on the same day by the Lenders under Article II and, in the case of Offshore Rate Loans, having the same Interest Period. The making of a Swing Line Loan shall not constitute a Borrowing.

        " Borrowing Date " means any date on which a Borrowing occurs under Section 2.03 .

        " Business Day " means any day other than a Saturday, Sunday or other day on which commercial banks in Chicago, Illinois or New York, New York are authorized or required by law to close, and (a) with respect to disbursements and payments in Dollars, a day on which dealings are carried on in the applicable offshore Dollar interbank market and (b) with respect to disbursements and payments in and calculations pertaining to any Offshore Currency Loan, a day on which commercial banks in London are open and dealings in the relevant Offshore Currency are carried on in the applicable offshore foreign exchange interbank market in which disbursement of or payment in such Offshore Currency will be made or received hereunder.

        " Capital Adequacy Regulation " means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.

        " Capital Lease " has the meaning specified in the definition of "Capital Lease Obligations".

        " Capital Lease Obligations " means all monetary obligations of the Company or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease (a " Capital Lease ").

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

        " Cash Collateralize " means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent, the applicable Issuer and the Lenders, as additional collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and such Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term shall have corresponding meanings. The Company hereby grants the Administrative Agent, for the benefit of the Administrative Agent, the Issuers and the Lenders, a security interest in all such cash and deposit account balances. Cash collateral shall be maintained in blocked deposit accounts at JPMorgan. The Administrative Agent shall invest any and all available funds deposited in such deposit accounts, within 10 Business Days after the date the relevant funds become available, in securities issued or fully guaranteed or insured by the United States Government or any agency thereof backed by the full faith and credit of the United States having maturities of three months from the date of acquisition thereof (collectively, " Governmental Obligations "). The Company hereby acknowledges and agrees that the Administrative Agent shall not have any liability with respect to, and the Company hereby indemnifies the

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Administrative Agent against, any loss resulting from the acquisition of Governmental Obligations, and the Administrative Agent shall not have any obligation to monitor the trading activity of any Governmental Obligation on and after the acquisition thereof for the purpose of obtaining the highest possible return with respect thereto, the Administrative Agent's responsibility being limited to acquiring Governmental Obligations.

        " Cash Equivalents " means:

        (a)   securities issued or fully guaranteed or insured by the United States Government or any agency thereof and (i) backed by the full faith and credit of the United States or such other countries where the Company or its Subsidiaries have operations, (ii) purchased in the ordinary course of business consistent with past practices and (iii) having maturities of not more than twelve months from the date of acquisition;

        (b)   certificates of deposit, time deposits, Eurodollar time deposits, repurchase agreements, reverse repurchase agreements and bankers' acceptances, having in each case a term of not more than twelve months, issued by any Lender, or by any U.S. commercial bank or non-U.S. commercial bank in the ordinary course of business consistent with past practices having combined capital and surplus of not less than $100,000,000 whose short term securities are rated at least A-1 by Standard & Poor's Ratings Group, a division of The McGraw Hill Companies, Inc. (" S&P ") and P-1 by Moody's Investors Service, Inc. (" Moody's "); and

        (c)   commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody's and in either case having a tenor of not more than three months.

        " CERCLA " has the meaning specified in the definition of "Environmental Laws."

        " Change of Control " means (a) any Person or any two or more Persons acting in concert acquiring beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act), directly or indirectly, of capital stock of the Company (or other securities convertible into such capital stock) representing 20% or more of the combined voting power of all capital stock of the Company entitled to vote in the election of directors, other than capital stock having such power only by reason of the happening of a contingency; or (b) during any period of twelve consecutive calendar months, individuals who at the beginning of such period constituted the Company's board of directors (together with any new directors whose election by the Company's board of directors or whose nomination for election by the Company's stockholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reasons other than death or disability to constitute a majority of the directors then in office.

        " Code " means the Internal Revenue Code of 1986.

        " Commitment " has the meaning specified in Section 2.01 .

        " Commitment Increase " has the meaning specified in Section 2.17 .

        " Company "—see the preamble.

        " Compliance Certificate " means a certificate substantially in the form of Exhibit B .

        " Computation Date " has the meaning specified in subsection 2.06(a) .

        " Contingent Obligation " means, as to any Person, any direct or indirect liability of that Person, whether or not contingent, with or without recourse, (a) with respect to any Indebtedness, lease, dividend, letter of credit or other obligation (the " primary obligations ") of another Person (the " primary obligor "), including any obligation of that Person (i) to purchase, repurchase or otherwise acquire such primary obligations or any security therefor, (ii) to advance or provide funds for the payment or

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discharge of any such primary obligation, or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof (each, a " Guaranty Obligation "); (b) with respect to any Surety Instrument issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings or payments; (c) to purchase any materials, supplies or other property from, or to obtain the services of, another Person if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered; or (d) in respect of any Swap Contract. The amount of any Contingent Obligation, (x) in the case of Guaranty Obligations, shall be deemed equal to the stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof, (y) in the case of Contingent Obligations in respect of Swap Contracts, shall be deemed equal to the aggregate Swap Termination Value of such Swap Contracts, and (z) in the case of other Contingent Obligations shall be deemed equal to the maximum reasonably anticipated liability in respect thereof.

        " Contractual Obligation " means, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement to which such Person is a party or by which it or any of its property is bound.

        " Conversion/Continuation Date " means any date on which, under Section 2.04 , the Company (a) converts Loans of one Type to another Type, or (b) continues as Loans of the same Type, but with a new Interest Period, Loans having Interest Periods expiring on such date.

        " Credit Extension " means (a) the making of any Loan and (b) the Issuance of any Letter of Credit.

        " Default " means any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default.

        " Default Rate "—see Section 2.10 .

        " Designated Offshore Currency " means Euros, pounds sterling and Canadian Dollars.

        " Dollar Equivalent " means, at any time, (a) as to any amount denominated in Dollars, the amount thereof at such time, and (b) as to any amount denominated in an Offshore Currency, the equivalent amount in Dollars as determined by the Administrative Agent at such time on the basis of the Spot Rate for the purchase of Dollars with such Offshore Currency on the most recent Computation Date provided for in subsection 2.06(a) .

        " Dollars ", " dollars " and " $ " each mean lawful money of the United States.

        " Domestic Subsidiary " means any Subsidiary of the Company that is organized under the laws of the United States or any state thereof.

        " EBITDA " means, for any period, for the Company and its Subsidiaries on a consolidated basis, determined in accordance with GAAP, the sum of (a) net income (or net loss) for such period, excluding any extraordinary non-cash gains or losses during such period ( provided that the net income of any Person that is not a Subsidiary of the Company shall be included in the consolidated net income of the Company only to the extent of the amount of cash dividends or distributions paid by such Person to the Company or to a consolidated Subsidiary of the Company), plus (b) to the extent included in the determination of such net income (or net loss), (i) all amounts treated as expenses for depreciation

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(including, without duplication, non-cash gains and losses upon the closing and abandonment of any non-franchised store locations) and interest and the amortization of intangibles of any kind, plus (ii) all taxes paid or accrued and unpaid on or measured by income, plus (iii) non-cash impairment charges arising in connection with any Joint Venture plus (c) without duplication, the amount of any other charge in respect of non-recurring expenses arising in connection with Acquisitions, to the extent approved by the Administrative Agent and the Required Lenders; provided that if the Company or any Subsidiary acquires a Person (an " Acquired Person ") in an Acquisition in such period, then all of the Acquired Person's EBITDA (calculated for such Person as set forth above without giving effect to clause (c) ) for the four fiscal quarters then ended shall be added to EBITDA, and if the Company or any Subsidiary sells all or substantially all of the stock or assets of any Subsidiary in any such period, then the EBITDA of such Subsidiary (calculated for such Person as set forth above without giving effect to clause (c) ) shall be deducted from EBITDA.

        " EBITDAR " means, for any period, for the Company and its Subsidiaries on a consolidated basis, determined in accordance with GAAP, the sum of (a) EBITDA for such period, minus (b) any Acquired Person's EBITDA added to the determination of EBITDA for the four fiscal quarters then ended pursuant to the proviso set forth in the definition of EBITDA, plus (c) the EBITDA of any Subsidiary deducted from the determination of EBITDA for the four fiscal quarters then ended pursuant to the proviso set forth in the definition of EBITDA, plus (d) all Rental Expense for such period.

        " Effective Amount " means (a) with respect to any Loan on any date, the aggregate outstanding principal Dollar Equivalent amount thereof after giving effect to any Borrowing, prepayment or repayment of Loans occurring on such date and any Swing Line Loan made on such date; and (b) with respect to any outstanding L/C Obligations on any date, the Dollar Equivalent amount of such L/C Obligations on such date after giving effect to any Issuance occurring on such date and any other change in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letter of Credit or any reduction in the maximum amount available for drawing under any Letter of Credit taking effect on such date.

        " Effective Date " means the date on which all conditions precedent set forth in Section 5.01 are satisfied or waived by all Lenders (or, in the case of subsection 5.01(e) , waived by the Person entitled to receive such payment).

        " Eligible Assignee " means (a) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $100,000,000; (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the " OECD "), or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000, provided that such bank is acting through a branch or agency located in the United States; (c) a Person that is primarily engaged in the business of commercial banking and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary, (d) an Approved Fund and (e) any other Person that has been approved in writing as an Eligible Assignee by the Company (prior to the occurrence and continuance of an Event of Default) and the Administrative Agent.

        " Empire Joint Venture " means the Joint Venture between the Company and Empire Beauty School Inc. known as "Empire Education Group, Inc."

        " Environmental Claims " means all claims, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), investigation, cleanup, removal, remedial or response

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costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief, resulting from or based upon the presence, placement, discharge, emission or release (including intentional and unintentional, negligent and non-negligent, sudden or non-sudden, accidental or non-accidental, placements, spills, leaks, discharges, emissions or releases) of any Hazardous Material at, in, or from any property, whether or not owned by the Company or any Subsidiary or taken as collateral, or in connection with any operations of the Company.

        " Environmental Laws " means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case relating to environmental, health, safety and land use matters, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (" CERCLA "), the Clean Air Act, the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act, and the Emergency Planning and Community Right-to-Know Act.

        " Environmental Permits " has the meaning specified in subsection 6.12(b) .

        " ERISA " means the Employee Retirement Income Security Act of 1974.

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

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

        " Euro " means the single currency of participating member states of the European Monetary Union.

        " Eurodollar Reserve Percentage " has the meaning specified in the definition of "Offshore Rate".

        " Event of Default " means any event or circumstance specified in Section 9.01 .

        " Exchange Act " means the Securities Exchange Act of 1934.

        " Existing Credit Agreement " means the Third Amended and Restated Credit Agreement dated as of April 7, 2005 among the Company, various financial institutions and Bank of America, N.A., as administrative agent.

        " Existing Letters of Credit " means the outstanding letters of credit previously issued under the Existing Credit Agreement and set forth on Schedule 1.01(b) .

        " 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 Business Day

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by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (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.

        " Fixed Charges " means, with respect to the Company and its Subsidiaries on a consolidated basis, as of any date of determination, (a) interest expense paid or accrued on outstanding Indebtedness for the period of four fiscal quarters ending on the date of determination, and (b) Rental Expense paid or accrued in such period.

        " Foreign Subsidiary " means any Subsidiary of the Company other than a Domestic Subsidiary

        " FRB " means the Board of Governors of the Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions.

        " Funded Debt " of any Person means, without duplication, all Indebtedness of such Person.

        " Further Taxes " means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges (including net income taxes and franchise taxes), and all liabilities with respect thereto, imposed by any jurisdiction on account of amounts payable or paid pursuant to Section 4.01 .

        " FX Trading Office " means the Chicago office of JPMorgan, or such other office of JPMorgan as the Administrative Agent may designate from time to time.

        " GAAP " means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.

        " Governmental Authority " means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

        " Guarantor " means any Subsidiary of the Company from time to time party to the Subsidiary Guaranty in accordance with Section 7.14 .

        " Guaranty Obligation " has the meaning specified in the definition of "Contingent Obligation."

        " Hazardous Materials " means all those substances that are regulated by, or which may form the basis of liability or a standard of conduct under, any Environmental Law, including any substance identified under any Environmental Law as a pollutant, contaminant, hazardous waste, hazardous constituent, special waste, hazardous substance, hazardous material, or toxic substance, or petroleum or petroleum-derived substance or waste.

        " Honor Date " has the meaning specified in subsection 3.03(b) .

        " Indebtedness " of any Person means, without duplication, (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business on ordinary terms); (c) all reimbursement or payment obligations with respect to Surety Instruments and all L/C Obligations; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or

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incurred as financing, in either case with respect to property acquired by such Person (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property); (f) all Capital Lease Obligations; (g) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with GAAP; (h) all indebtedness referred to in clauses (a) through (g) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; and (i) all Guaranty Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (a) through (h) above. For all purposes of this Agreement, the Indebtedness of any Person shall include all recourse Indebtedness of any partnership or joint venture or limited liability company in which such Person is a general partner or a joint venturer or a member and as to which such Person is or may become directly liable.

        " Indemnified Liabilities " has the meaning specified in Section 11.05 .

        " Indemnified Person " has the meaning specified in Section 11.05 .

        " Independent Auditor " has the meaning specified in subsection 7.01(a) .

        " Insolvency Proceeding " means, with respect to any Person, (a) any case, action or proceeding with respect to such Person before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or similar arrangement in respect of its creditors generally or any substantial portion of its creditors, in each case undertaken under U.S. Federal, state or foreign law, including the Bankruptcy Code.

        " Interest Payment Date " means (a) as to any Offshore Rate Loan, the last day of each Interest Period applicable to such Loan and the date of any payment (including any prepayment) in full of such Loan under Section 2.08 , (b) as to any Base Rate Loan, the last day of each calendar quarter and the date of any payment (including any prepayment) in full of all Loans hereunder, and (c) as to any Swing Line Loan denominated in an Offshore Currency, on the date of any payment (including any prepayment) of such Loan; provided that if any Interest Period for an Offshore Rate Loan exceeds three months, the date that falls three months after the beginning of such Interest Period and after each Interest Payment Date thereafter is also an Interest Payment Date.

        " Interest Period " means, as to any Offshore Rate Loan, the period commencing on the Borrowing Date of such Loan or on the Conversion/Continuation Date on which the Loan is converted into or continued as an Offshore Rate Loan, and ending on the date seven days or one, two, three or six months thereafter as selected by the Company in its Notice of Borrowing;

provided that:

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

        (b)   any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

        (c)   no Interest Period for any Loan shall extend beyond the Termination Date.

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        " Investments " has the meaning specified in Section 8.04 .

        " IRS " means the Internal Revenue Service, and any Governmental Authority succeeding to any of its principal functions under the Code.

        " Issuance Date " has the meaning specified in subsection 3.01(a) .

        " Issue " means, with respect to any Letter of Credit, to issue or to extend the expiry of, or to renew or increase the amount of, such Letter of Credit; and the terms " Issued ," " Issuing " and " Issuance " have corresponding meanings.

        " Issuer " means (a) LaSalle, with respect to the Existing Letters of Credit and (b) JPMorgan, in its capacity as issuer of each other Letter of Credit, together with any replacement letter of credit issuer arising under subsection 10.01(b) .

        " Joint Venture " means the Empire Joint Venture and any other single-purpose corporation, partnership, limited liability company, joint venture or other similar legal arrangement (whether created by contract or conducted through a separate legal entity) now or hereafter formed by the Company or any of its Subsidiaries with another Person in order to conduct a common venture or enterprise with such Person.

        " JPMorgan "—see the preamble.

        " JPMSI " means J.P. Morgan Securities Inc.

        " Judgment Currency " has the meaning specified in Section 11.18 .

        " LaSalle " means LaSalle Bank National Association.

        " L/C Advance " means each Lender's participation in any L/C Borrowing in accordance with its Pro Rata Share.

        " L/C Amendment Application " means an application form for amendment of outstanding letters of credit as shall at any time be in use by the applicable Issuer, as such Issuer shall request.

        " L/C Application " means an application form for issuances of letters of credit as shall at any time be in use by the applicable Issuer, as such Issuer shall request.

        " L/C Borrowing " means an extension of credit resulting from a drawing under any Letter of Credit which shall not have been reimbursed on the date when made or converted into a Borrowing of Loans pursuant to subsection 3.03(d) .

        " L/C Commitment " means the commitment of the Issuers to Issue and/or maintain, and the commitment of the Lenders severally to participate in, Letters of Credit from time to time Issued or outstanding under Article III , in an aggregate amount not to exceed $150,000,000 on any date; provided that the L/C Commitment is a part of the Aggregate Commitment, rather than a separate, independent commitment.

        " L/C Obligations " means at any time the sum of (a) the aggregate undrawn amount of all Letters of Credit then outstanding, plus (b) the amount of all unreimbursed drawings under all Letters of Credit, including all outstanding L/C Borrowings.

        " L/C-Related Documents " means the Letters of Credit, the L/C Applications, the L/C Amendment Applications and any other document relating to any Letter of Credit, including any standard form documents used by the applicable Issuer for letter of credit issuances.

        " Lead Agents " means, collectively, the Administrative Agent, the Syndication Agent and the Arrangers, and " Lead Agent " means any of them.

10

        " Lender " has the meaning specified in the introductory clause hereto. References to the "Lenders" shall include each financial institution acting as an Issuer and the Swing Line Lender; for purposes of clarification only, to the extent such Person may have any rights or obligations in addition to those of the Lenders due to its status as an Issuer or as Swing Line Lender, respectively, its status as such will be specifically referenced.

        " Lending Office " means, as to any Lender, the office or offices, branches, subsidiaries or affiliates of such Lender specified as its applicable lending office in such Lender's Administrative Questionnaire, or such other office or offices, branches, subsidiaries or affiliates as such Lender may from time to time notify the Company and the Administrative Agent.

        " Letters of Credit " means (a) each Existing Letter of Credit, and (b) any standby or commercial letter of credit Issued by JPMorgan pursuant to Article III on or after the date of this Agreement.

        " Leverage Ratio " means, as of any date of determination, the ratio of (a) all Funded Debt of the Company and its Subsidiaries determined on a consolidated basis as of such date to (b) EBITDA for the period of four fiscal quarters ending on such date.

        " Lien " means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance, lien (statutory or other) or preferential arrangement of any kind or nature whatsoever in respect of any property (including those created by, arising under or evidenced by any conditional sale or other title retention agreement, the interest of a lessor under a capital lease, any financing lease having substantially the same economic effect as any of the foregoing, or the filing of any financing statement naming the owner of the asset to which such lien relates as debtor, under the Uniform Commercial Code or any comparable law) and any contingent or other agreement to provide any of the foregoing, but not including the interest of a lessor under an operating lease.

        " Loan " means an extension of credit by a Lender to the Company under Article II or Article III in the form of a Revolving Loan, Swing Line Loan or L/C Advance.

        " Loan Documents " means this Agreement, each Note, the Agent Fee Letter, the L/C-Related Documents, the Subsidiary Guaranty, the Rate Swap Documents and all other documents delivered to the Administrative Agent or any Lender in connection herewith.

        " Loan Parties " means, collectively, the Company and each Guarantor, and " Loan Party " means any of them.

        " Margin Stock " means "margin stock" as such term is defined in Regulation T, U or X of the FRB.

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

        " Multiemployer Plan " means a "multiemployer plan", within the meaning of Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes, is making or is obligated to make contributions or, during the preceding three calendar years, has made, or has been obligated to make, contributions.

        " Net Worth " means the consolidated shareholders' equity of the Company and its Subsidiaries as determined in accordance with GAAP.

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        " Note " means a promissory note executed by the Company in favor of a Lender pursuant to subsection 2.02(b) .

        " Note Agreements " means, collectively, (a) the Amended and Restated Private Shelf Agreement dated as of October 3, 2000 between the Company and the purchasers named therein, (b) the Note Purchase Agreement dated as of March 1, 2002 between the Company and the purchasers named therein and (c) the Master Note Purchase Agreement dated as of March 15, 2005 between the Company and the purchasers named therein.

        " Notice of Borrowing " means a Notice of Borrowing/Conversion/Continuation in substantially the form of Exhibit A .

        " Obligations " means all advances, debts, liabilities, obligations, covenants and duties arising under any Loan Document owing by the Company or any Subsidiary to any Lender, the Administrative Agent or any Indemnified Person, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due or now existing or hereafter arising.

        " Offshore Currency " means at any time any Additional Offshore Currency and any Designated Offshore Currency.

        " Offshore Currency Loan " means any Offshore Rate Loan denominated in an Offshore Currency.

        " Offshore Currency Loan Sublimit " means $25,000,000.

        " Offshore Rate " means, for any Interest Period, with respect to Offshore Rate Loans comprising part of the same Borrowing, the rate of interest per annum (rounded upward to the next 1/100th of 1%) determined by the Administrative Agent as follows:

        Where,

        " Eurodollar Reserve Percentage " means for any day during any Interest Period, the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the FRB to which any Lender is subject for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the FRB), which reserve percentages shall include those imposed pursuant to such Regulation D; provided that (i) Offshore Rate Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation and (ii) the Eurodollar Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any such reserve percentage; and

        " LIBO Rate " means, with respect to any Offshore Rate Loan for any Interest Period, the rate appearing on the Reuters BBA LIBOR Rates page 3750 (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m. (London time), two Business Days prior to the commencement of such Interest Period (or, in the case of an Offshore Rate Loan denominated in pounds sterling, on the first day of such Interest Period), as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the "LIBO Rate" with respect to such Offshore Rate Loan for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the

12

 

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 Business Days prior to the commencement of such Interest Period (or, in the case of an Offshore Rate Loan denominated in pounds sterling, on the first day of such Interest Period).

        The Offshore Rate shall be adjusted automatically as to all Offshore Rate Loans then outstanding as of the effective date of any change in the Eurodollar Reserve Percentage.

        " Offshore Rate Loan " means a Revolving Loan that bears interest based on the Offshore Rate and may be an Offshore Currency Loan or a Loan denominated in Dollars.

        " Organization Documents " means, for any Person, the certificate or articles of formation and the bylaws or similar governing documents of such Person, any certificate of determination or instrument relating to the rights of preferred equityholders of such Person, any rights or similar agreement with respect to the equityholders of such Person, and all applicable resolutions of the board of directors or similar governing body (or any committee thereof) of such Person.

        " Other Taxes " means any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, this Agreement or any other Loan Documents.

        " Overnight Rate " means, for any day, the rate of interest per annum at which overnight deposits in the relevant Applicable Currency, in the amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by JPMorgan's London Branch to major banks in the London or other applicable offshore interbank market.

        " Participant " has the meaning specified in subsection 11.08(e) .

        " PBGC " means the Pension Benefit Guaranty Corporation, or any Governmental Authority succeeding to any of its principal functions under ERISA.

        " Pension Plan " means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which the Company or any ERISA Affiliate sponsors, maintains, or to which it makes, is making or is obligated to make contributions, or otherwise has any liability, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years.

        " Permitted Acquisitions " has the meaning specified in Section 8.04 .

        " Permitted Liens " has the meaning specified in Section 8.01 .

        " Permitted Swap Obligations " means all obligations (contingent or otherwise) of the Company existing or arising under Swap Contracts, provided that each of the following criteria is satisfied: (a) such obligations are (or were) entered into by the Company in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments or assets held or reasonably anticipated by such Person, or changes in the value of securities issued by the Company in conjunction with a securities repurchase program not otherwise prohibited hereunder, and not for purposes of speculation or taking a "market view", and (b) such Swap Contracts do not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party (i.e; such Swap Contracts do not elect the "first method" of calculating a termination payment) under the 1992 Master ISDA Agreement.

        " Person " means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or Governmental Authority.

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        " Plan " means an employee benefit plan (as defined in Section 3(3) of ERISA) which the Company or any ERISA Affiliate sponsors or maintains or to which the Company or any ERISA Affiliate makes, is making or is obligated to make contributions or otherwise has any liability and includes any Pension Plan.

        " Prime Rate " means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank as its prime rate in effect at its office located at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

        " Pro Rata Share " means, as to any Lender, (a) at any time at which the Aggregate Commitment remains outstanding, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of such Lender's Commitment divided by the Aggregate Commitment, and (b) after the termination of the Aggregate Commitment, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of the Effective Amount of such Lender's outstanding Loans (including such Lender's ratable share of outstanding Swing Line Loans and L/C Obligations) divided by the aggregate Effective Amount of the outstanding Loans and L/C Obligations of all of the Lenders.

        " Rate Swap Documents " means, collectively, all Swap Contracts entered into between the Company and any Lender or any Affiliate of a Lender in respect of any portion of the Obligations.

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

        " Rental Expense " means, for any period, the sum of (a) all store rental payments, (b) all common area maintenance payments and (c) all real estate taxes paid by the Company and its Subsidiaries, in each case, with respect to non-franchised store locations.

        " Reportable Event " means any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC.

        " Required Lenders " means at any time Lenders then holding more than 50% of the Aggregate Commitment (or if the Aggregate Commitment has been terminated, then the Effective Amount of outstanding Revolving Loans and Swing Line Loans, plus the Effective Amount of L/C Obligations).

        " Requirement of Law " means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which the Person or any of its property is subject.

        " Responsible Officer " means the chief financial officer of the Company or any other officer having substantially the same authority and responsibility.

        " Revolving Loan " has the meaning specified in Section 2.01 .

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

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

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        " Solvent " means, when used with respect to a Person, that (a) the fair saleable value of the assets of such Person is in excess of the total amount of the present value of its liabilities (including for purposes of this definition all liabilities (including loss reserves as determined by such Person), whether or not reflected on a balance sheet prepared in accordance with GAAP and whether direct or indirect, fixed or contingent, secured or unsecured, disputed or undisputed), (b) such Person is able to pay its debts or obligations in the ordinary course as they mature and (c) such Person does not have unreasonably small capital to carry out its business as conducted and as proposed to be conducted. " Solvency " shall have a correlative meaning.

        " Specified Acquisition Debt " means Indebtedness of a Person that was the subject of an Acquisition by the Company or any Subsidiary in an aggregate amount not to exceed $10,000,000 at any one time outstanding that (a) remains outstanding no more than 90 days after the date on which such Acquisition was consummated, (b) is the subject of a default under the terms thereof solely as a result of the consummation of such Acquisition, and (c) has not been accelerated or otherwise become immediately repayable and in respect of which the lenders thereof have not exercised any available remedies.

        " Spot Rate " for a currency means the rate quoted by JPMorgan as the spot rate for the purchase by JPMorgan of such currency with another currency through its FX Trading Office at approximately 11:00 a.m. (London time) on the date two Business Days prior to the date as of which the foreign exchange computation is made.

        " Subsidiary " of a Person means any corporation, association, partnership, limited liability company, joint venture (excluding, in the case of the Company or a Subsidiary, any Joint Venture) or other business entity the accounts of which would be consolidated with those of such Person in such Person's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date. Unless the context otherwise clearly requires, references herein to a "Subsidiary" refer to a Subsidiary of the Company.

        " Subsidiary Guaranty " means the Guaranty dated as of the Effective Date by certain of the Subsidiaries in favor of the Administrative Agent and the Lenders, substantially in the form attached hereto as Exhibit D .

        " Surety Instruments " means all letters of credit (including standby and commercial), banker's acceptances, bank guaranties, shipside bonds, performance bonds, surety bonds and similar instruments.

        " Swap Contract " means any agreement, whether or not in writing, relating to any transaction that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond, note or bill option, interest rate option, forward foreign exchange transaction, cap, collar or floor transaction, currency swap, cross-currency rate swap, swaption, currency option or any other, similar transaction (including any option to enter into any of the foregoing) or any combination of the foregoing, and, unless the context otherwise clearly requires, any master agreement relating to or governing any or all of the foregoing.

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

        " Swing Line Commitment " means at any time, the obligation of the Swing Line Lender to make Swing Line Loans pursuant to Section 2.05 .

15

        " Swing Line Lender " means JPMorgan, in its capacity as the provider of Swing Line Loans.

        " Swing Line Loan " means a Loan made by the Swing Line Lender.

        " Syndication Agent " means Bank of America, N.A. in its capacity as syndication agent for the Lenders hereunder.

        " Taxes " means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of each Lender and the Administrative Agent, respectively, taxes imposed on or measured by its net income by the jurisdiction (or any political subdivision thereof) under the laws of which such Lender or the Administrative Agent, as the case may be, is organized or maintains a Lending Office.

        " Termination Date " means the earlier to occur of:

(a)

July 12, 2012; and

(b)

the date on which the Aggregate Commitment terminates in accordance with the provisions of this Agreement.

 

        A " Type " of Loan means its status as either a Base Rate Loan or an Offshore Rate Loan.

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

        " United States " and " U.S. " each means the United States of America.

        " Wholly-Owned " means any corporation, association, partnership, limited liability company, joint venture or other business entity in which (other than directors' qualifying shares or other immaterial local ownership required by law) 100% of the equity interests of each class having ordinary voting power, and 100% of the equity interests of every other class, in each case, at the time as of which any determination is being made, is owned, beneficially and of record, by the Company, or by one or more of the other Wholly-Owned Subsidiaries, or both.

        1.02     Other Interpretive Provisions.     (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

        (b)   The words "hereof", "herein", "hereunder" and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and subsection, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

        (c)   (i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.

        (ii)   The term "including" is not limiting and means "including without limitation."

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

        (iv)  The term "property" includes any kind of property or asset, real, personal or mixed, tangible or intangible.

        (d)   Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, (ii) references to any statute or regulation are to

16

be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such statute or regulation and (iii) any reference to a particular time means such time in Chicago, Illinois.

        (e)   The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

        (f)    This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. Unless otherwise expressly provided, any reference to any act of the Administrative Agent or the Lenders by way of consent, approval or waiver shall be deemed modified by the phrase "in its/their sole discretion".

        (g)   This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Administrative Agent, the Company and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Lenders or the Administrative Agent merely because of the Lenders' or the Administrative Agent's involvement in their preparation.

        1.03     Accounting Principles.     (a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP, consistently applied.

        (b)   References herein to "fiscal year" and "fiscal quarter" refer to such fiscal periods of the Company.

        (c)   If any change in GAAP occurs after the date of this Agreement and such change results in a material variation in the method of calculation of financial covenants or other terms of this Agreement, then the Company, the Administrative Agent and the Lenders agree to amend such provisions of this Agreement so as to equitably reflect such change so that the criteria for evaluating the Company's financial condition will be the same after such change as if such change had not occurred.

        1.04     Currency Equivalents Generally.     For all purposes of this Agreement (but not for purposes of the preparation of any financial statements delivered pursuant hereto), the equivalent in any Offshore Currency or other currency of an amount in Dollars, and the equivalent in Dollars of an amount in any Offshore Currency or other currency, shall be determined at the Spot Rate.

ARTICLE II

THE CREDITS

        2.01     Amounts and Terms of Commitments.     Each Lender severally agrees, on the terms and conditions set forth herein, to make loans to the Company denominated in Dollars or in an Offshore Currency (each such loan, a " Revolving Loan ") from time to time on any Business Day during the period from the Effective Date to the Termination Date, in an aggregate principal Dollar Equivalent amount not to exceed at any time outstanding the amount set forth opposite such Lender's name on Schedule 2.01 (such amount, as the same may be reduced under Section 2.07 or as a result of one or more assignments under Section 11.08 , such Lender's " Commitment "); provided that, after giving effect to any Borrowing of Revolving Loans, the Effective Amount of all outstanding Loans and of all L/C Obligations, shall not at any time exceed the Aggregate Commitment; provided further , that the Effective Amount of the Revolving Loans of any Lender plus the participation of such Lender in the Dollar Equivalent of the Effective Amount of all L/C Obligations and such Lender's Pro Rata Share of the Effective Amount of any outstanding Swing Line Loans shall not at any time exceed such Lender's Commitment; and provided further , that after giving effect to any Borrowing of Offshore Currency Loans, the sum of the Effective Amount of all outstanding Offshore Currency Loans plus the Effective

17

Amount of all outstanding Swing Line Loans denominated in Additional Offshore Currencies shall not exceed the Offshore Currency Loan Sublimit. Within the limits of each Revolving Lender's Commitment, and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.01 , prepay under Section 2.08 and reborrow under this Section 2.01.

        2.02     Loan Accounts.     (a) The Loans made by each Lender and the Letters of Credit Issued by the Issuers shall be evidenced by one or more accounts or records maintained by such Lender or Issuer, as the case may be, in the ordinary course of business. The accounts or records maintained by the Administrative Agent, each Issuer and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Company and the Letters of Credit Issued for the account of the Company, and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Company hereunder to pay any amount owing with respect to the Loans or any Letter of Credit.

        (b)   Upon the request of any Lender made through the Administrative Agent, the Loans made by such Lender may be evidenced by a Note, instead of or in addition to loan accounts. Each such Lender shall record on the schedule annexed to its Note the date, amount and maturity of each Loan made by it and the amount and Applicable Currency of each payment of principal made by the Company with respect thereto. Each such Lender is irrevocably authorized by the Company to make such recordation on its Note, and each Lender's record shall be conclusive absent manifest error; provided that the failure of a Lender to make, or an error in making, a notation thereon with respect to any Loan shall not limit or otherwise affect the obligations of the Company hereunder or under such Lender's Note.

        2.03     Procedure for Borrowing.     (a) Each Borrowing (other than an L/C Advance) shall be made upon the Company's irrevocable notice delivered to the Administrative Agent in the form of a Notice of Borrowing (which notice must be received by the Administrative Agent prior to 12:00 noon (i) three Business Days prior to the requested Borrowing Date, in the case of Offshore Rate Loans denominated in Dollars, (ii) four Business Days prior to the requested Borrowing Date, in the case of Offshore Currency Loans, and (iii) on the requested Borrowing Date, in the case of Base Rate Loans), specifying:

        (A)  the amount of such Borrowing, which shall be in an aggregate minimum amount of (1) in the case of a Borrowing of Base Rate Loans, $500,000 or any multiple of $100,000 in excess thereof, (2) in the case of a Borrowing of Offshore Rate Loans denominated in Dollars, $1,000,000 or any multiple of $500,000, and (3) in the case of Offshore Currency Loans, $1,000,000 or any multiple of 500,000 units of the Applicable Currency in excess thereof;

        (B)  the requested Borrowing Date, which shall be a Business Day;

        (C)  the Type of Loans comprising such Borrowing and in the case of an Offshore Rate Loan, the Applicable Currency;

        (D)  with respect to Offshore Rate Loans, the duration of the Interest Period applicable to such Loans included in such notice; provided that if such Notice of Borrowing fails to specify the duration of the Interest Period for any Borrowing comprised of Offshore Rate Loans, such Interest Period shall be one month; and

        (E)  wire instructions pursuant to which the proceeds of such Borrowing are to be disbursed.

        (b)   The Administrative Agent will promptly notify each Lender of its receipt of any Notice of Borrowing and of the amount of such Lender's Pro Rata Share of that Borrowing.

        (c)   Each Lender will make the amount of its Pro Rata Share of each Borrowing available to the Administrative Agent for the account of the Company at the Administrative Agent's Payment Office on the Borrowing Date requested by the Company in Same Day Funds and in the requested currency (i) in the case of a Borrowing comprised of Loans in Dollars, by 2:00 p.m., and (ii) in the case of a

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Borrowing comprised of Offshore Currency Loans, by such time as the Administrative Agent may specify. The aggregate of the amounts made available to the Administrative Agent by the Lenders will promptly thereafter be made available to the Company pursuant to the wire instructions set forth in the applicable Notice of Borrowing in like funds as received by the Administrative Agent.

        (d)   After giving effect to any Borrowing or any conversion or continuation of Loans pursuant to Section 2.04 , unless the Administrative Agent shall otherwise consent, there may not be more than 10 different Interest Periods in effect.

        (e)   The Company hereby authorizes the Lenders and the Administrative Agent to accept Notices of Borrowing based on telephonic notices made by any Person that the Administrative Agent or any Lender in good faith believes to be acting on behalf of the Company. The Company agrees to deliver promptly to the Administrative Agent a written confirmation of each telephonic notice, signed by a Responsible Officer or an authorized designee. If the written confirmation differs in any material respect from the action taken by the Administrative Agent and the Lenders, the records of the Administrative Agent and the Lenders shall govern absent manifest error.

        2.04     Conversion and Continuation Elections.     (a) The Company may, upon irrevocable notice to the Administrative Agent in accordance with subsection 2.04(b) :

        (i)    elect, as of any Business Day, in the case of Base Rate Loans, or as of the last day of the applicable Interest Period, in the case of Offshore Rate Loans, to convert Loans (or any part thereof in an amount not less than $500,000 or that is in an integral multiple of $100,000 in excess thereof) into Loans of any other Type; or

        (ii)   elect as of the last day of the applicable Interest Period, to continue Offshore Rate Loans having Interest Periods expiring on such day (or any part thereof in an amount not less than $500,000, or that is in an integral multiple of $100,000 in excess thereof);

provided that if at any time the aggregate amount of Offshore Rate Loans denominated in Dollars in respect of any Borrowing is reduced, by payment, prepayment, or conversion of part thereof to be less than $500,000, such Offshore Rate Loans denominated in Dollars shall automatically convert into Base Rate Loans, and on and after such date the right of the Company to continue such Loans as, and convert such Loans into, Offshore Rate Loans shall terminate.

        (b)   The Company shall deliver a Notice of Borrowing to be received by the Administrative Agent not later than 12:00 noon at least (i) three Business Days in advance of the applicable Conversion/Continuation Date, if the relevant Loans are to be converted into or continued as Offshore Rate Loans in Dollars, (ii) four Business Days in advance of the Conversion/Continuation Date, if the relevant Loans are to be converted into or continued as Offshore Currency Loans, and (iii) on the Conversion/Continuation Date, if the relevant Loans are to be converted into Base Rate Loans, specifying:

        (A)  the proposed Conversion/Continuation Date;

        (B)  the aggregate amount of Loans to be converted or continued;

        (C)  the Type of Loans resulting from the proposed conversion or continuation and in the case of an Offshore Rate Loan, the Applicable Currency; and

        (D)  other than in the case of conversions into Base Rate Loans, the duration of the requested Interest Period.

        (c)   If upon the expiration of any Interest Period applicable to Offshore Rate Loans denominated in Dollars, the Company has failed to timely select a new Interest Period to be applicable to such Offshore Rate Loans, or if any Default or Event of Default then exists, the Company shall be deemed to have elected to convert such Offshore Rate Loans into Base Rate Loans effective as of the expiration date of such Interest Period. If the Company has failed to select a new Interest Period to be

19

applicable to Offshore Currency Loans prior to the fourth Business Day in advance of the expiration date of the current Interest Period applicable thereto as provided in subsection 2.04(b) , or if any Default or Event of Default shall then exist, subject to the provisions of subsection 2.06(d) , the Company shall be deemed to have elected to continue such Offshore Currency Loans for a one-month Interest Period.

        (d)   The Administrative Agent will promptly notify each Lender of its receipt of a Notice of Borrowing, or, if no timely notice is provided by the Company, the Administrative Agent will promptly notify each Lender of the details of any automatic conversion. All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Loans, with respect to which the notice was given, held by each Lender.

        (e)   Unless the Required Lenders otherwise consent, during the existence of a Default or Event of Default, the Company may not elect to have a Loan in Dollars converted into or continued as an Offshore Rate Loan in Dollars, or an Offshore Currency Loan continued on the basis of an Interest Period exceeding one month.

        (f)    The Company hereby authorizes the Lenders and the Administrative Agent to accept Notices of Conversion/Continuation based on telephonic notices made by any Person the Administrative Agent or any Lender in good faith believes to be acting on behalf of the Company. The Company agrees to deliver promptly to the Administrative Agent a written confirmation of each telephonic notice, signed by a Responsible Officer. If the written confirmation differs in any material respect from the action taken by the Administrative Agent and the Lenders, the records of the Administrative Agent and the Lenders shall govern absent manifest error.

        2.05     The Swing Line Loans .    (a) Subject to the terms and conditions hereof, the Swing Line Lender agrees to make Swing Line Loans to the Company denominated in Dollars or in an Offshore Currency from time to time prior to the Termination Date in an aggregate principal amount at any one time outstanding not to exceed a Dollar Equivalent of $20,000,000; provided that (i) after giving effect to any Swing Line Loan, the Effective Amount of all Revolving Loans, Swing Line Loans and L/C Obligations at such time shall not exceed the Aggregate Commitment at such time, (ii) the Swing Line Lender shall not be required to make a Swing Line Loan to refinance an outstanding Swing Line Loan, (iii) the Effective Amount of all outstanding Offshore Currency Loans plus the Effective Amount of all outstanding Swing Line Loans denominated in Offshore Currencies shall not exceed the Offshore Currency Loan Sublimit and (iv) notwithstanding Section 2.01 , the aggregate amount of the Revolving Loans and Swing Line Loans of the Swing Line Lender, plus the participation of the Swing Line Lender in the Dollar Equivalent of the Effective Amount of all L/C Obligations, may exceed JPMorgan's Commitment so long as the condition set forth in the previous proviso is satisfied. Prior to the Termination Date, the Company may use the Swing Line Commitment by borrowing, prepaying the Swing Line Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. All Swing Line Loans denominated in Dollars shall bear interest at the Base Rate and shall not be entitled to be converted into Loans that bear interest at any other rate. Each Swing Line Loan denominated in an Offshore Currency shall bear interest at a rate separately agreed to by the Company and the Swing Line Lender; provided that upon the purchase by the Lenders of participating interests in such Swing Line Loan pursuant to clause (e) below, such Swing Line Loan shall be redenominated in Dollars on the basis of the Spot Rate and shall thereafter bear interest at the Base Rate.

        (b)   The Company may borrow under the Swing Line Commitment on any Business Day until the Termination Date; provided that the Company shall give the Swing Line Lender irrevocable written notice signed by a Responsible Officer or an authorized designee (which notice must be received by the Swing Line Lender prior to (i) 2:00 p.m. on the requested borrowing date, in the case of a Swing Line Loan denominated in Dollars, or (ii) 10:30 a.m. three Business Days prior to the requested borrowing date, in the case of a Swing Line Loan denominated in an Offshore Currency (or, in each case, such

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other time as the Swing Line Lender and the Company may agree)) with a copy to the Administrative Agent specifying the amount of the requested Swing Line Loan, which shall be in a minimum amount of $250,000 and an integral multiple of (x) if denominated in Dollars, $250,000, or (y) if denominated in an Offshore Currency, 250,000 units of such currency. The proceeds of the Swing Line Loan will be made available by the Swing Line Lender to the Company in immediately available funds at the office of the Swing Line Lender by 4:00 p.m. on the requested date of borrowing. The Company may, at any time and from time to time on any Business Day, prepay the Swing Line Loans, in whole or in part, without premium or penalty, by notifying the Swing Line Lender, prior to 3:00 p.m. (A) in the case of a Swing Line Loan denominated in Dollars, on the date of prepayment, and (B) in the case of a Swing Line Loan denominated in an Offshore Currency, three Business Days prior to the date of prepayment, of the date, amount and currency of prepayment, with a copy to the Administrative Agent. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein. Partial prepayments shall be in a minimum amount of $250,000 and an integral multiple of (1) if denominated in Dollars, $250,000, and (2) if denominated in an Offshore Currency, 250,000 units of such currency.

        (c)   If any Swing Line Loan shall remain outstanding at 11:00 a.m. on the earlier of (i) the 15 ^th  day following the date of such Swing Line Loan and (ii) the last day of a calendar month following the date of such Swing Line Loan (so long as such day is at least two Business Days after such Swingline Loan is made), and if by such time on such earlier day the Administrative Agent shall have received neither (x) a Notice of Borrowing delivered by the Company pursuant to Section 2.03 requesting that Revolving Loans be made pursuant to Section 2.01 on the immediately succeeding Business Day in an amount at least equal to the principal amount of such Swing Line Loan nor (y) any other notice satisfactory to the Administrative Agent indicating the Company's intent to repay such Swing Line Loan on or before the immediately succeeding Business Day with funds obtained from other sources, then on such Business Day the Swing Line Lender shall (and on any Business Day the Swing Line Lender in its sole discretion may), on behalf of the Company (which hereby irrevocably directs the Swing Line Lender to act on its behalf) request the Administrative Agent to notify each Lender to make a Revolving Loan that is (A) in an amount equal to such Lender's Pro Rata Share of the amount of such Swing Line Loan and (B) denominated in the Applicable Currency of such Swing Line Loan; provided that, if such Swing Line Loan is denominated in an Additional Offshore Currency for which a Borrowing of Revolving Loans would be unavailable pursuant to Section 2.06(c) , such Swing Line Loan shall be redenominated in Dollars on the basis of the Spot Rate prior to the making of such Revolving Loans by the Lenders. Unless any of the events described in subsection 9.01(f) or (g) shall have occurred with respect to the Company (in which event the procedures of clause (e) of this Section 2.05 shall apply) each Lender shall make the proceeds of its Revolving Loan available to the Administrative Agent for the account of the Swing Line Lender at the Administrative Agent's Payment Office in immediately available funds prior to 1:00 p.m. on the Business Day next succeeding the date such notice is given. The proceeds of such Revolving Loans shall be immediately applied to repay the outstanding Swing Line Loans. Effective on the day such Revolving Loans are made, the portion of the Swing Line Loans so paid shall no longer be outstanding as Swing Line Loans. The Company shall pay to the Swing Line Lender in the Applicable Currency, promptly following the Swing Line Lender's demand, the amount of its outstanding Swing Line Loans to the extent amounts received from the Lenders are not sufficient to repay in full such outstanding Swing Line Loans.

        (d)   Notwithstanding anything herein to the contrary, the Swing Line Lender (i) shall not be obligated to make any Swing Line Loan if the conditions set forth in Article V have not been satisfied and (ii) shall not make any requested Swing Line Loan if, prior to 3:00 p.m. on the date of such requested Swing Line Loan, it has received a written notice from the Administrative Agent or any Lender directing it not to make further Swing Line Loans because one or more of the conditions specified in Article V are not then satisfied.

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        (e)   If prior to the making of a Revolving Loan required to be made pursuant to subsection 2.05(c) an Event of Default described in subsection 9.01(f) or 9.01(g) shall have occurred and be continuing with respect to the Company, each Lender will, on the date such Revolving Loan was to have been made pursuant to the notice described in subsection 2.05(b) , purchase a participating interest in each outstanding Swing Line Loans in an amount equal to its Pro Rata Share of the Effective Amount of such Swing Line Loan; provided that, if such Swing Line Loan is denominated in an Additional Offshore Currency that would be unavailable for a Borrowing of Revolving Loans pursuant to Section 2.06(c) , such Swing Line Loan shall be redenominated in Dollars on the basis of the Spot Rate immediately prior to such purchase. Each Lender will immediately transfer to the Administrative Agent for the benefit of the Swing Line Lender the amount of its participation in immediately available funds in the Applicable Currency.

        (f)    Whenever, at any time after a Lender has purchased a participating interest in a Swing Line Loan, the Swing Line Lender receives any payment on account thereof, the Swing Line Lender will distribute to the Administrative Agent for delivery to each Lender its participating interest in such amount (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) and in the Applicable Currency; provided that in the event that such payment received by the Swing Line Lender is required to be returned, such Lender will return to the Administrative Agent for delivery to the Swing Line Lender any portion thereof previously distributed by the Swing Line Lender to it.

        (g)   Each Lender's obligation to make the Revolving Loans referred to in subsection 2.05(c) and to purchase participating interests pursuant to subsection 2.05(e) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any set-off, counterclaim, recoupment, defense or other right which such Lender or the Company may have against the Swing Line Lender, the Company or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default, (iii) any adverse change in the condition (financial or otherwise) of the Company, (iv) any breach of this Agreement or any other Loan Document by the Company, any Subsidiary or any other Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

        2.06     Utilization of Commitments in Offshore Currencies.     

        (a)   The Administrative Agent will determine the Dollar Equivalent amount with respect to any (i) Borrowing comprised of Offshore Currency Loans as of the requested Borrowing Date, (ii) Swing Line Loan denominated in an Offshore Currency, (iii) outstanding Offshore Currency Loans and outstanding Swing Line Loans denominated in Offshore Currencies as of the last Business Day of each calendar quarter and (iv) outstanding Offshore Currency Loans and outstanding Swing Line Loans denominated in Offshore Currencies as of any redenomination date pursuant to this Section 2.06 or Section 4.05 (each such date under clauses (i) through (iv) , a " Computation Date "). Upon receipt of any Notice of Borrowing, the Administrative Agent will promptly notify each Revolving Lender thereof and of the amount of such Lender's Pro Rata Share of the applicable Borrowing. In the case of a Borrowing comprised of Offshore Currency Loans, the related Notice of Borrowing will provide the approximate amount of each Lender's Pro Rata Share of such Borrowing, and the Administrative Agent will, upon the determination of the Dollar Equivalent amount of the Borrowing as specified in such Notice of Borrowing, promptly notify each Lender of the exact amount of such Lender's Pro Rata Share of such Borrowing.

        (b)   The Company shall be entitled to request that Revolving Loans hereunder also be permitted to be made in any other lawful currency constituting a eurocurrency (excluding Dollars), in addition to the eurocurrencies specified in the definition of "Designated Offshore Currency", that in the opinion of the Required Lenders is at such time freely traded in the offshore interbank foreign exchange markets and is freely transferable and freely convertible into Dollars (an " Additional Offshore Currency "). The

22

 

Company shall deliver to the Administrative Agent any request for designation of an Additional Offshore Currency in accordance with Section 11.02 , to be received by the Administrative Agent not later than 11:00 a.m. at least ten Business Days in advance of the date of any Borrowing hereunder proposed to be made in such Additional Offshore Currency. Upon receipt of any such request the Administrative Agent will promptly notify the Lenders thereof, and each Lender will use its best efforts to respond to such request within two Business Days of receipt thereof and any failure to respond in such time period shall be deemed to be a rejection thereof. Each Lender may grant or accept such request in its sole discretion. The Administrative Agent will promptly notify the Company of the acceptance or rejection of any such request.

        (c)   In the case of a proposed Borrowing comprised of Loans denominated in an Additional Offshore Currency, the Lenders shall be under no obligation to make Offshore Currency Loans in the requested Additional Offshore Currency as part of such Borrowing if the Administrative Agent has received notice from any Lender by 2:00 p.m. four Business Days prior to the day of such Borrowing that such Lender cannot provide Loans in the requested Additional Offshore Currency, in which event the Administrative Agent will give notice to the Company and the Lenders no later than 9:30 a.m. on the third Business Day prior to the requested date of such Borrowing that the Borrowing in the requested Additional Offshore Currency is not then available to all Lenders. If the Administrative Agent shall have so notified the Company that any such Borrowing in a requested Additional Offshore Currency is not then available, the Company may, by notice to the Administrative Agent not later than 10:30 a.m. three Business Days prior to the requested date of such Borrowing, withdraw the Notice of Borrowing relating to such requested Borrowing. If, prior to such time, the Company withdraws such Notice of Borrowing, the Borrowing requested therein shall not occur and the Administrative Agent will promptly so notify each Lender. If, prior to such time, the Company does not withdraw such Notice of Borrowing and does not request the making of a Swing Line Loan in such Additional Offshore Currency, the Administrative Agent will promptly so notify each Lender and such Notice of Borrowing shall be deemed to be a Notice of Borrowing that requests a Borrowing comprised of Base Rate Loans in an aggregate amount equal to the amount of the originally requested Borrowing as expressed in Dollars in such Notice of Borrowing, and in such notice by the Administrative Agent to each Lender the Administrative Agent will state such aggregate amount of such Borrowing in Dollars and such Lender's Pro Rata Share thereof.

        (d)   In the case of a proposed continuation of Offshore Currency Loans for an additional Interest Period pursuant to Section 2.04 , the Lenders shall be under no obligation to continue such Offshore Currency Loans if the Administrative Agent has received notice from any of the Lenders by 4:00 p.m. three Business Days prior to the day of such continuation that such Lender cannot continue to provide Loans in the Offshore Currency, in which event the Administrative Agent will give notice to the Company not later than 9:00 a.m. on the second Business Day prior to the requested date of such continuation that the continuation of such Offshore Currency Loans in the Offshore Currency is not then available, and notice thereof also will be given promptly by the Administrative Agent to the Lenders. If the Administrative Agent shall have so notified the Company that any such continuation of Offshore Currency Loans is not then available, any Notice of Borrowing with respect thereto shall be deemed withdrawn and such Offshore Currency Loans shall be redenominated into Base Rate Loans in Dollars with effect from the last day of the Interest Period with respect to any such Offshore Currency Loans. The Administrative Agent will promptly notify the Company and the Lenders of any such redenomination and in such notice by the Administrative Agent to each Lender the Administrative Agent will state the aggregate Dollar Equivalent amount of the redenominated Offshore Currency Loans as of the Computation Date with respect thereto and such Lender's Pro Rata Share thereof.

        (e)   Notwithstanding anything herein to the contrary, during the existence of a Default or an Event of Default, upon the request of the Required Lenders, all or any part of any outstanding Offshore Currency Loans shall be redenominated and converted into Base Rate Loans in Dollars with

23

 

effect from the last day of the Interest Period with respect to any such Offshore Currency Loans. The Administrative Agent will promptly notify the Company of any such redenomination and conversion request.

        2.07     Voluntary Termination or Reduction of Revolving Loan Commitments.     (a) The Company may, upon not less than five Business Days' prior notice to the Administrative Agent, terminate the Commitments, or permanently reduce the Commitments by an aggregate minimum amount of $5,000,000 or any multiple of $1,000,000 in excess thereof; unless , after giving effect thereto and to any prepayments of Loans made on the effective date thereof, (a) the then outstanding Dollar Equivalent Effective Amount of all Revolving Loans, Swing Line Loans and L/C Obligations together would exceed the amount of the Aggregate Commitment then in effect, (b) the Effective Amount of all L/C Obligations then outstanding would exceed the L/C Commitment or (c) the sum of the Effective Amount of all outstanding Offshore Currency Loans and the Effective Amount of all outstanding Swing Line Loans would exceed the Offshore Currency Loan Sublimit. Once reduced in accordance with this Section, the Commitments may not be increased. Any reduction of the Commitments shall be applied to each Lender according to its Pro Rata Share. If and to the extent specified by the Company in the notice to the Administrative Agent, some or all of the reduction in the Aggregate Commitment shall be applied to reduce the L/C Commitment and/or the Offshore Currency Loan Sublimit. All accrued commitment fees and letter of credit fees to, but not including, the effective date of any reduction or termination of Commitments, shall be paid on the effective date of such reduction or termination.

        (b)   At no time shall the Swing Line Commitment exceed the Aggregate Commitment, and any reduction of the Aggregate Commitment which reduces the Aggregate Commitment below the then-current amount of the Swing Line Commitment shall result in an automatic corresponding reduction of the Swing Line Commitment to the amount of the Aggregate Commitment, as so reduced, without any action on the part of the Swing Line Lender. At no time shall the Swing Line Commitment exceed the Commitment of the Swing Line Lender, and any reduction of the Aggregate Commitment which reduces the Commitment of the Swing Line Lender below the then-current amount of the Swing Line Commitment shall result in an automatic corresponding reduction of the Swing Line Commitment to the amount of the Commitment of the Swing Line Lender, as so reduced, without any action on the part of the Swing Line Lender.

        2.08     Prepayments.     (a) Subject to Section 4.04 , the Company may, at any time or from time to time, upon not less than four Business Days' irrevocable notice to the Administrative Agent in the case of Offshore Rate Loans, and not later than 12:00 noon on the prepayment date, in the case of Base Rate Loans, prepay Revolving Loans ratably among the Lenders in whole or in part, in minimum Dollar Equivalent amounts of $500,000 or any Dollar Equivalent multiple of $100,000 in excess thereof. Such notice of prepayment shall specify the date and amount of such prepayment and whether such prepayment is of Base Rate Loans or Offshore Rate Loans, or any combination thereof, and the Applicable Currency. Such notice shall not thereafter be revocable by the Company and the Administrative Agent will promptly notify each Lender of its receipt of any such notice, and of such Lender's Pro Rata Share of such prepayment. If such notice is given by the Company, the Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together, in the case of Offshore Rate Loans, with accrued interest to each such date on the amount prepaid and any amounts required pursuant to Section 4.04 .

        (b)   Subject to Section 4.04 , if on any Computation Date the Administrative Agent shall have determined that the Dollar Equivalent Effective Amount of all Loans then outstanding exceeds the combined Commitments of the Lenders by more than $250,000 due to a change in applicable rates of exchange between Dollars and the Offshore Currency, then the Administrative Agent may and at the direction of the Required Lenders shall give notice to the Company that a prepayment is required under this Section, and the Company agrees thereupon to promptly (but in no event later than three

24

 

Business Days following receipt of such notice) make prepayments of Loans such that, after giving effect to all such prepayments, the Effective Amount of all Loans plus the Effective Amount of L/C Obligations does not exceed the combined Commitments.

        (c)   Subject to Section 4.04 , if on any date the Effective Amount of all Revolving Loans and Swing Line Loans then outstanding plus the Effective Amount of all L/C Obligations exceeds the Aggregate Commitment, the Company shall immediately, and without notice or demand, prepay the outstanding principal amount of the Revolving Loans and L/C Advances by an amount equal to the applicable excess.

        2.09     Repayment .    The Company shall repay to the Lenders on the Termination Date the aggregate principal amount of Loans outstanding on such date.

        2.10     Interest.     (a) Each Revolving Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing Date at a rate per annum equal to (i) the Offshore Rate or the Base Rate, as the case may be (and subject to the Company's right to convert to other Types of Loans under Section 2.04 ), plus (ii) in the case of Offshore Rate Loans, (x) the Applicable Margin and (y) if such Loans are Offshore Currency Loans, the Associated Costs Rate, if applicable.

        (b)   Interest on each Loan shall be paid in arrears on each Interest Payment Date. During the existence of any Event of Default, interest on all Loans shall be paid on demand of the Administrative Agent (or the Administrative Agent at the request or with the consent of the Required Lenders).

        (c)   Notwithstanding subsection 2.10(a) , while any Event of Default under subsection 9.01(a) exists, after acceleration or, upon request of the Required Lenders during the existence of any other Event of Default, the Company shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the amount of all outstanding Obligations, at a rate per annum (the " Default Rate ") which is determined by adding 2% per annum to the applicable interest rate otherwise then in effect for such Obligations; provided that on and after the expiration of any Interest Period applicable to any Offshore Rate Loan outstanding on the date of occurrence of such Event of Default or acceleration, the principal amount of such Loan shall, during the continuation of such Event of Default or after acceleration, bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin plus 2%. The Administrative Agent will use reasonable efforts to give the Company notice of the imposition of the Default Rate; provided that the failure of the Administrative Agent to give such notice shall not affect the Company's obligations to pay the Default Rate.

        (d)   Anything herein to the contrary notwithstanding, the obligations of the Company to any Lender hereunder shall be subject to the limitation that payments of interest shall not be required for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by such Lender would be contrary to the provisions of any law applicable to such Lender limiting the highest rate of interest that may be lawfully contracted for, charged or received by such Lender, and in such event the Company shall pay such Lender interest at the highest rate permitted by applicable law.

        2.11     Fees .    In addition to certain fees described in Section 3.08 :

        (a)    Agent's and JPMSI's Fees .    The Company shall pay such fees to the Administrative Agent and JPMSI as are required by the letter agreement between the Company, the Administrative Agent and JPMSI dated June 6, 2007 (the " Agent Fee Letter ").

        (b)    Facility Fees .    The Company shall pay to the Administrative Agent for the account of each Lender a facility fee on the average daily amount of such Lender's Commitment (regardless of usage), computed on a quarterly basis in arrears on the last Business Day of each calendar quarter, equal to the Applicable Facility Fee Percentage. For purposes of calculating utilization under this subsection, the Commitments shall be deemed used to the extent of the Effective Amount of Revolving Loans then

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outstanding plus the Effective Amount of L/C Obligations then outstanding, and shall not be deemed used by a Lender's Pro Rata Share of Swing Line Loans. Such facility fee shall accrue from the Effective Date to the Termination Date and shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter, commencing on September 30, 2007, through the Termination Date, with the final payment to be made on the Termination Date; provided that, in connection with any reduction or termination of Commitments under Section 2.07 or an increase of Commitments under Section 2.17 , the accrued facility fee calculated for the period ending on such date shall also be paid on the date of such reduction or termination, with the following quarterly payment being calculated on the basis of the period from such reduction or termination date to such quarterly payment date. The facility fees provided in this subsection shall accrue at all times after the above-mentioned commencement date, including at any time during which one or more conditions in Article V are not met.

        2.12     Computation of Fees and Interest.     (a) All computations of interest for Base Rate Loans when the Base Rate is determined by the Prime Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365/366-day year); provided that computations of interest for Offshore Currency Loans will be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed if that is the market standard for the applicable Offshore Currency. Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof.

        (b)   For purposes of determining utilization of each Lender's Commitment in order to calculate the facility fees due under subsection 2.11(b) and whether or not utilization-based additions to the Base Rate and the Applicable Margin are applicable, the amount of any outstanding Revolving Loan which is an Offshore Currency Loan on any date shall be determined based upon the Dollar Equivalent amount as of the most recent Computation Date with respect to such Offshore Currency Loan.

        (c)   Each determination of an interest rate or a Dollar Equivalent amount by the Administrative Agent shall be conclusive and binding on the Company and the Lenders in the absence of manifest error. The Administrative Agent will, at the request of the Company or any Lender, deliver to the Company or such Lender, as the case may be, a statement showing the quotations used by the Administrative Agent in determining any interest rate or Dollar Equivalent amount.

        2.13     Payments by the Company.     

        (a)   All payments to be made by the Company shall be made without set-off, recoupment or counterclaim. Except as otherwise expressly provided herein, all payments by the Company shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent's Payment Office, and, with respect to principal of, interest on, and any other amounts relating to, any Offshore Currency Loan, shall be made in the Offshore Currency in which such Loan is denominated or payable, and, with respect to all other amounts payable hereunder, shall be made in Dollars. Such payments shall be made in Same Day Funds, and (i) in the case of Offshore Currency payments, no later than such time on the dates specified herein as may be determined by the Administrative Agent to be necessary for such payment to be credited on such date in accordance with normal banking procedures in the place of payment, and (ii) in the case of any Dollar payments, no later than 11:00 a.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as expressly provided herein) of such principal, interest, fees or other amounts, in like funds as received. Any payment which is received by the Administrative Agent later than 11:00 a.m. or later than the time specified by the Administrative Agent as provided in clause (i) above (in the case of Offshore Currency payments), shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue.

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        (b)   Subject to the provisions set forth in the definition of "Interest Period" herein, whenever any payment is due on a day other than a Business Day, such payment shall be made on the following Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be.

        (c)   Unless the Administrative Agent receives notice from the Company prior to the date on which any payment is due to the Lenders that the Company will not make such payment in full as and when required, the Administrative Agent may assume that the Company has made such payment in full to the Administrative Agent on such date in Same Day Funds and the Administrative Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Company has not made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent on demand such amount distributed to such Lender, together with interest thereon at the Federal Funds Rate or, in the case of a payment in an Offshore Currency, the Overnight Rate, for each day from the date such amount is distributed to such Lender until the date repaid.

        2.14     Payments by the Lenders to the Administrative Agent.     (a) Unless the Administrative Agent receives notice from a Lender on or prior to the Effective Date or, with respect to any Borrowing after the Effective Date, at least one Business Day prior to the date of such Borrowing, that such Lender will not make available as and when required hereunder to the Administrative Agent for the account of the Company the amount of that Lender's Pro Rata Share of the Borrowing, the Administrative Agent may assume that each Lender has made such amount available to the Administrative Agent in Same Day Funds on the Borrowing Date and the Administrative Agent may (but shall not be so required), in reliance upon such assumption, make available to the Company on such date a corresponding amount. If and to the extent any Lender shall not have made its full amount available to the Administrative Agent in Same Day Funds and the Administrative Agent in such circumstance has made available to the Company such amount, that Lender shall on the Business Day following such Borrowing Date make such amount available to the Administrative Agent, together with interest at the Federal Funds Rate, or, in the case of a payment in an Offshore Currency, the Overnight Rate, for each day during such period, together with any overdraft or similar costs incurred by the Administrative Agent as the result of the failure of such Lender to make such funds available to the Administrative Agent. A notice of the Administrative Agent submitted to any Lender with respect to amounts owing under this subsection (a) shall be conclusive absent manifest error. If such amount is so made available, such payment to the Administrative Agent shall constitute such Lender's Revolving Loan on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to the Administrative Agent on the Business Day following the Borrowing Date, the Administrative Agent will notify the Company of such failure to fund and, upon demand by the Administrative Agent, the Company shall pay such amount to the Administrative Agent for the Administrative Agent's account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing.

        (b)   The failure of any Lender to make any Loan on any Borrowing Date shall not relieve any other Lender of any obligation hereunder to make a Loan on such Borrowing Date, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on any Borrowing Date.

        2.15     Sharing of Payments, Etc.     If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Revolving Loans made by it any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder), such Lender shall immediately (a) notify the Administrative Agent of such fact and (b) purchase from the other Lenders such participations in the Revolving Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment pro rata with each of them; provided that if all or any portion of such excess payment is thereafter

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recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Company agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 11.10 ) with respect to such participation as fully as if such Lender were the direct creditor of the Company in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Lenders following any such purchases or repayments.

        2.16     Subsidiary Guaranty.     All obligations of the Company under this Agreement and all other Loan Documents shall be unconditionally guaranteed by the Guarantors pursuant to the Subsidiary Guaranty.

        2.17     Increase in Commitments; Additional Lenders.     (a) The Company may, upon at least 10 Business Days' notice to the Administrative Agent (of which notice the Administrative Agent shall promptly provide a copy to the Lenders); provided that the Company has not previously terminated all or any portion of the Commitments pursuant to Section 2.07 hereof; and provided , further , that before and after giving effect to the Commitment Increase (as defined below) no Event of Default has occurred and is continuing or would result therefrom, propose to increase the Commitments (the aggregate amount of any such increase, the " Commitment Increase "), to be allocated among the Lenders in a manner mutually acceptable to the Company and the Administrative Agent. Each requested Commitment Increase shall be in an aggregate minimum amount of $25,000,000 or any multiple of $1,000,000 in excess thereof; provided that (i) the Company shall not be permitted to make more than one request for a Commitment Increase during any fiscal year of the Company and (ii) the aggregate amount of all such increases shall not exceed $150,000,000.

        (b)   The Company, with the consent of the Administrative Agent (which shall not be unreasonably withheld or delayed prior to the occurrence and continuance of an Event of Default or a Default), but without the consent of any other Lenders, may designate one or more other banks or other financial institutions (which may be, but need not be, one or more of the existing Lenders; and for greater certainty, no existing Lender shall have any obligation to increase its Commitment) which at the time agree in the case of any such bank or financial institution that is an existing Lender to increase its applicable Commitment and, in the case of any other such bank or financial institution (each an " Additional Lender "), to become a party to this Agreement. The sum of the increases in the Commitments of the existing Lenders pursuant to this subsection (b) plus the Commitments of the Additional Lenders shall not in the aggregate exceed the amount of the Commitment Increase.

        (c)   An increase in the Commitments pursuant to this Section 2.17 shall become effective upon the receipt by the Administrative Agent of an agreement in form and substance 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, together with such evidence of appropriate corporate authorization on the part of the Company with respect to the Commitment Increase as the Administrative Agent may reasonably request, if any.

        (d)   Upon the effectiveness of a Commitment Increase pursuant to this Section 2.17 , the Commitment amounts set forth on Schedule 2.01 shall be deemed amended, reflecting the increases of the Commitments of existing Lenders and the addition of the new Commitments of the Additional

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Lenders, if any. Concurrently with the effectiveness of such increase and any additional extension of credit in connection therewith, each Lender shall fund its Pro Rata Share of the outstanding Revolving Loans, Swing Loans and overdue L/C Obligations relating to L/C Advances, if any, to the Administrative Agent, so that after giving effect thereto each Lender, including the Additional Lenders, if any, holds its Pro Rata Share of the outstanding Revolving Loans, Swing Loans and L/C Obligations relating to each Loan to which it is a party, and the Company shall pay to each Lender all amounts due under Article IV hereof as a result of any prepayment of any outstanding Offshore Rate Loans resulting from any Lender's funding of Loans previously funded by other Lenders.

ARTICLE III

THE LETTERS OF CREDIT

        3.01     The Letter of Credit Subfacility.     (a) On the terms and conditions set forth herein (i) each Issuer agrees, (A) from time to time on any Business Day, during the period from the Effective Date to the day which is five days prior to the Termination Date, to issue Letters of Credit for the account of the Company and to amend or renew Letters of Credit previously issued by it, in accordance with subsections 3.02(c) and 3.02(d) , and (B) to honor drafts under the Letters of Credit; and (ii) the Lenders severally agree to participate in Letters of Credit Issued for the account of the Company; provided that (x) no Issuer shall be obligated to Issue, and no Lender shall be obligated to participate in, any Letter of Credit if as of the date of Issuance of such Letter of Credit (the " Issuance Date ") (1) the Effective Amount o