“ Agent ” or “ Agents ” means the Administrative Agent; provided, that, solely for purposes of Sections 7.02, 7.04, 7.05, 8.04, 8.07(b)(iv), 8.08 and 8.12 of this Agreement the term “Agent” or “Agents”, as the case may be, shall include each financial institution named on the signature page or facing page hereof as an agent and the Arranger.

 

“ Agent Parties ” has the meaning set forth in Section 8.l3(b) .

 

“ Agreement ” means this Revolving Credit Agreement as it may be amended, supplemented or otherwise modified from time to time.

 

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

 

“ Applicable Margin ” means, for any period for which any interest payment is to be made with respect to any Advance, the interest rate per annum derived by dividing (i) the sum of Daily Margins for each of the days included in such period by (ii) the number of days included in such period.

 

“ Arranger ” means CGMI as sole lead arranger and book runner.

 

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

 

“ Assuming Lender ” has the meaning specified in Section 2.16(d).

 

“ Assumption Agreement ” has the meaning specified in Section 2.16(d)(ii).

 

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

 

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

 

(a)                                   the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate (which is a rate set by Citibank based upon various factors including Citibank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate);

 

(b)                                  the sum of (A) 1/2 of one percent per annum, plus (B) the rate obtained by dividing (x) the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks (such three-week moving average being determined weekly by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank, in either case adjusted to the nearest 1/4 of one

 

2

 

percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent), by (y) a percentage equal to 100% minus the average of the daily percentages specified during such three-week period by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including, but not limited to, any marginal reserve requirements for Citibank in respect of liabilities consisting of or including (among other liabilities) three-month nonpersonal time deposits of at least $100,000), plus (C) the average during such three-week period of the daily net annual assessment rates estimated by Citibank for determining the current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation for insuring three-month deposits in the United States; or

 

(c)                                   1/2 of one percent per annum above the Federal Funds Rate.

 

“ Base Rate Advance ” means an Advance which bears interest at a rate per annum determined on the basis of the Base Rate, as provided in Section 2.06(a).

 

“ Borrower ” means Hormel Foods Corporation, a Delaware corporation.

 

“ Borrowing ” means a borrowing consisting of simultaneous Advances of the same Type made on the same day pursuant to the same Notice of Borrowing by each of the Lenders pursuant to Section 2.02(a).

 

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

 

“ Capital Lease ” means, with respect to any Person, any lease of any property by that Person as lessee which would, in conformity with GAAP, be required to be accounted for as a capital lease on the balance sheet of that Person.

 

“ CGMI ” means Citigroup Global Markets Inc.

 

“ Citibank ” means Citibank, N.A.

 

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

 

“ Commitment ” means as to any Lender (a) the amount set forth opposite such Lender’s name on Schedule II hereto, (b) if such Lender has become a Lender hereunder pursuant to an Assumption Agreement, the amount set forth in such Assumption Agreement or (c) if such Lender has entered into an Assignment and Acceptance, the amount set forth for such Lender in the Register maintained by the Agent pursuant to Section 8.07(c), as such amount may be reduced pursuant to Section 2.04 or increased pursuant to Section 2.16.

 

“ Commitment Date ” has the meaning specified in Section 2.16(b).

 

“ Commitment Increase ” has the meaning specified in Section 2.16(a).

 

3

 

“ Commitment Termination Date ” means [June 1], 2010 or such earlier date as the Commitments may be terminated pursuant to Section 2.04 or Section 6.01.

 

“ Communications ” has the meaning set forth in Section 8.13(a).

 

“ Compliance Certificate ” means a certificate substantially in the form of Exhibit B hereto, delivered to the Lenders by the Borrower pursuant to Section 5.01(b)(iii).

 

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

 

“ CUSA ” means Citicorp USA, Inc.

 

“ Daily Margin ” means, for any date of determination, for the designated Level, Utilization Ratio applicable to such date of determination and Type of Advance, the following interest rates per annum:

 

		Daily Margin when Utilization Ratio is equal to or less than 0.50:1.00				Daily Margin when Utilization Ratio is greater than 0.50:1.00
		TYPE OF ADVANCE				TYPE OF ADVANCE
		Base Rate Advance		EURO Rate Advance		Base Rate Advance		EURO Rate Advance
Level 1		0	%	0.1450	%	0.050	%	0.1950	%
Level 2		0	%	0.1850	%	0.050	%	0.2350	%
Level 3		0	%	0.2200	%	0.075	%	0.2950	%
Level 4		0	%	0.3250	%	0.125	%	0.4500	%
Level 5		0	%	0.4250	%	0.175	%	0.6000	%

 

For purposes of this definition, (a) “ Utilization Ratio ” means, as of any date of determination, the ratio of (1) the Total Utilization of Commitments to (2) the aggregate outstanding amount of all Commitments (whether used or unused) in effect as of such date, (b) if any change in the rating established by S&P or Moody’s with respect to Long-Term Debt shall result in a change in the Level, the change in the Daily Margin shall be effective as of the date on which such rating change is publicly announced, and (c) if the ratings established by both of S&P and Moody’s with respect to Long-Term Debt are unavailable for any reason for any day, then the applicable level for such day shall be deemed to be Level 5 (or, if the Requisite Lenders consent in writing, such other Level as may be reasonably determined by the Requisite Lenders from a rating with respect to Long-Term Debt for such day established by another rating agency reasonably acceptable to the Requisite Lenders).

 

“ Debt ” means (i) indebtedness for borrowed money or for the deferred purchase price of property or services, (ii) obligations as lessee under Capital Leases, or (iii) obligations under guarantees in respect of indebtedness or in respect of obligations of others of the kinds referred to in clause (i) or (ii) above.

 

4

 

“ Designating Lender ” has the meaning specified in Section 8.07(g).

 

“ Dollars ” and the sign “ $ ” each means lawful money of the United States of America.

 

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

 

“ EBITDA ” means, for any period, consolidated net income (excluding extraordinary, unusual, or nonrecurring gains or losses), plus provision for income taxes of the Borrower and its Subsidiaries, plus interest expense of the Borrower and its Subsidiaries, plus depreciation expense of the Borrower and its Subsidiaries, plus amortization of intangibles of the Borrower and its Subsidiaries, as determined on a consolidated basis in conformity with GAAP.

 

“ Effective Date ” means the date on which all of the conditions in Section 3.01 were satisfied or waived, which date was [June 1], 2005.

 

“ Eligible Assignee ” means (i) 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; (ii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economical 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 country in which it is organized or another country which is also a member of the OECD; and (iii) any Person engaged in the business of lending and that is an Affiliate of a Lender or of a Person of which a Lender is a Subsidiary.

 

“ Environmental Law ” means any and all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions of any federal, state or local governmental authority within the United States or any State or territory thereof and which relate to the environment or the release of any materials into the environment.

 

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

 

“ ERISA Affiliate ” means any Person who for purposes of Title IV of ERISA is a member of the Borrower’s controlled group, or under common control with the Borrower, within the meaning of Section 414 of the Code and the regulations promulgated and rulings issued thereunder.

 

“ ERISA Event ” means (i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto has been waived by the PBGC; (ii) the provision by the administrator of any Pension Plan of a notice of intent to terminate such Pension Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of operations at a facility by the Borrower or an ERISA Affiliate in the circumstances described in

 

5

 

Section 4062(e) of ERISA; (iv) the withdrawal by the Borrower or an ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (v) the failure by the Borrower or any ERISA Affiliate to make a payment to a Pension Plan required under Section 302(f)(1) of ERISA, which Section imposes a lien for failure to make required payments; (vi) the adoption of an amendment to a Pension Plan requiring the provision of security to such Pension Plan, pursuant to Section 307 of ERISA; or (vii) the institution by the PBGC of proceedings to terminate a Pension Plan, pursuant to Section 4042 of ERISA, or the occurrence of any event or condition which, in the reasonable judgment of the Borrower, might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, a Pension Plan.

 

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

 

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

 

“ Eurodollar Rate Advance ” means an Advance that bears interest as provided in Section 2.06(b).

 

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

 

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

 

“ Existing Credit Agreement ” means that certain Credit Agreement dated as of October 20, 2003, by and among the Borrower, the Administrative Agent, the banks named therein and the other parties thereto.

 

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

 

6

 

“ Funded Indebtedness ” means Debt with balances outstanding.

 

“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.

 

“ Hormel Foundation ” is a Minnesota non-profit corporation organized for religious, charitable, scientific, literary or educational purposes.  The Hormel Foundation is a public foundation.  The Hormel Foundation is the beneficial owner of 46.34% of common stock of The Hormel Foods Corporation as of May 13, 2005.

 

“ Hostile Acquisition ” means the acquisition of the capital stock or other equity interests of a Person (the “Target”) through a tender offer or similar solicitation of the owners of such capital stock or other equity interests which has not been approved (prior to such acquisition) by resolutions of the Board of Directors of the Target or by similar action if the Target is not a corporation or as to which such approval has been withdrawn.

 

“ Increase Date ” has the meaning specified in Section 2.16(a).

 

“ Increasing Lender ” has the meaning specified in Section 2.16(b).

 

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

 

“ Interest Period ” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance, or on the date of continuation of such Advance as a Eurodollar Rate Advance upon expiration of successive Interest Periods applicable thereto, or on the date of Conversion of a Base Rate Advance into a Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the provisions below.  The duration of each such Interest Period shall be one, two, three or six months, as the Borrower may select in the Notice of Borrowing or the Notice of Conversion/Continuation for such Advance; provided , however , that:

 

(i)                                      the Borrower may not select any Interest Period in respect of Advances that ends after the Commitment Termination Date;

 

(ii)                                   Interest Periods commencing on the same date for Advances comprising part of the same Borrowing shall be of the same duration; and

 

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

 

7

 

“ Lenders ” means the Lenders listed on Schedule I hereof, each Assuming Lender that shall become a party hereto pursuant to Section 2.16 and each Eligible Assignee that shall become a party hereto pursuant to Section 8.07.

 

“ Level ” means Level 1, Level 2, Level 3, Level 4 or Level 5, as the case may be.

 

“ Level 1 ” means that, as of any date of determination, the Long-Term Debt carries either of the following ratings:

 

“A+” from S&P

 

“A1” from Moody’s

 

“ Level 2 ” means that, as of any date of determination, the criteria of Level 1 are not satisfied and the Long-Term Debt carries either of the following ratings:

 

“A” from S&P

 

“A2” from Moody’s

 

“ Level 3” me ans that, as of any date of determination, the criteria of neither Level 1 nor Level 2 are satisfied and the Long-Term Debt carries either of the following ratings:

 

“A-” from S&P

 

“A3” from Moody’s

 

“ Level 4 ” means that, as of any date of determination, the criteria of neither Level 1, Level 2 nor Level 3 are satisfied and the Long-Term Debt carries either of the following ratings:

 

“BBB+” from S&P

 

“Baa1” from Moody’s

 

“ Level 5 ” means that, as of any date of determination, the criteria of neither Level 1, Level 2, Level 3 nor Level 4 are satisfied.

 

“ Lien ” means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement and any lease in the nature thereof).

 

“ Loan Documents ” means this Agreement and the related documents.

 

“ Long-Term Debt ” means senior, unsecured, long term debt securities of the Borrower.

 

“ Margin Stock ” has the meaning assigned to that term in Regulation U promulgated by the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

8

 

“ Material Subsidiary ” means any Subsidiary of the Borrower having total assets in excess of $20,000,000.

 

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

 

“ Multiemployer Plan ” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate of the Borrower is making, or is obligated to make, contributions or has Withdrawal Liability.

 

“ Multiple Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the Borrower or an ERISA Affiliate and at least one Person other than the Borrower and its ERISA Affiliates or (ii) was so maintained and in respect of which the Borrower or an ERISA Affiliate could have liability under Section 4063, 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

 

“ Net Income ” means net income in accordance with GAAP.

 

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

 

“ Notice of Conversion/Continuation ” means a notice substantially in the form of Exhibit C hereto, delivered to the Administrative Agent by the Borrower pursuant to Section 2.08.

 

“ Payment Office ” means the principal office of CUSA, located on the date hereof at 2 Penns Way, Suite 200, New Castle, Delaware 19720 (or such other place as the Administrative Agent may designate by notice to the Borrower and the Lenders from time to time).

 

“ PBGC ” means the U.S. Pension Benefit Guaranty Corporation.

 

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

 

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

 

“ Platform ” has the meaning set forth in Section 8.13(b) .

 

“ Potential Event of Default ” means a condition or event which, after notice or lapse of time or both, would constitute an Event of Default if that condition or event were not cured or removed within any applicable grace or cure period.

 

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

 

“ Requisite Lenders ” means at any time Lenders holding greater than 51% of the then aggregate unpaid principal amount of the Advances held by Lenders, or, if no such principal amount is then outstanding, Lenders having greater than 51% of the Commitments ( provided that, for purposes hereof, neither the Borrower, nor any of its Affiliates, if a Lender, shall be included in (i) the Lenders holding such amount of the Advances or having such amount of the Commitments or

 

9

 

(ii) determining the aggregate unpaid principal amount of the Advances or the total Commitments).

 

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

 

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

 

“ Single Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the Borrower or any ERISA Affiliate and no Person other than the Borrower and its ERISA Affiliates or (ii) was so maintained and in respect of which the Borrower or an ERISA Affiliate could have liability under Section 4062 or 4069 of ERISA in the event such plan has been or were to be terminated.

 

“ SPV ” has the meaning specified in Section 8.07(g).

 

“ Subsidiary ” of any Person means, as of any time of determination, any corporation, association, partnership, limited liability company or other business entity of which more than 50% of the total voting power of shares of stock or other securities entitled to vote in the election of directors, managers or trustees thereof is at such time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof.

 

“ Total Utilization of Commitments ” means at any date of determination the aggregate principal amount of all Advances outstanding at such date.

 

“ Type ” means, with reference to an Advance, a Base Rate Advance or a Eurodollar Rate Advance.

 

“ Withdrawal Liability ” has the meaning given such term under Part I of Subtitle E of Title IV of ERISA.

 

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

 

Section 1.03   Accounting Terms .   All accounting terms not specifically defined herein shall be construed in accordance with GAAP.  All computations determining compliance with financial covenants or terms, including definitions used therein, shall be prepared in accordance with generally accepted accounting principles in effect at the time of the preparation of, and in conformity with those used to prepare, the historical financial statements delivered to the Lenders pursuant to Section 4.01(e).  If at any time the computations for determining compliance with financial covenants or provisions relating thereto utilize generally accepted accounting principles different than those then being utilized in the financial statements being delivered to the Lenders, such financial statements shall be accompanied by a reconciliation statement.

 

10

 

ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES

 

Section 2.01   The Advances .

 

Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until the Commitment Termination Date in an aggregate amount not to exceed at any time outstanding such Lender’s Commitment; provided that (i) in no event shall the aggregate principal amount of Advances from any Lender outstanding at any time exceed its Commitment then in effect and (ii) the Total Utilization of Commitments shall not exceed the aggregate Commitments then in effect.

 

Each Borrowing shall be in an aggregate amount not less than $5,000,000 or a multiple of $1,000,000 in excess thereof and shall consist of Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments.  Within the limits of each Lender’s Commitment, the Borrower may from time to time borrow, prepay pursuant to Section 2.05(b) and reborrow under this Section 2.01.

 

Section 2.02   Making the Advances .

 

Each Borrowing shall be made on notice, given not later than (x) 11:00 A.M. (New York City time) on the date of a proposed Borrowing consisting of Base Rate Advances and (y) 11:00 A.M. (New York City time) on the third Business Day prior to the date of a proposed Borrowing consisting of Eurodollar Rate Advances, by the Borrower to the Administrative Agent, which shall give to each Lender prompt notice thereof by telecopier.  Each such notice of a Borrowing (a “ Notice of Borrowing ”) shall be sent by telecopier, confirmed immediately in writing, in substantially the form of Exhibit D hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing comprised of Eurodollar Rate Advances, the initial Interest Period for each such Advance.  The Borrower may, subject to the conditions herein provided, borrow more than one Borrowing on any Business Day.  Each Lender shall, before 2:00 P.M. (New York City time) in the case of a Borrowing consisting of Base Rate Advances and before 11:00 A.M. (New York City time) in the case of a Borrowing consisting of Eurodollar Rate Advances, in each case on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at its address referred to in Section 8.02, in same day funds, such Lender’s ratable portion of such Borrowing.  After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower at the Administrative Agent’s aforesaid address.

 

Anything in subsection (a) above to the contrary notwithstanding,

 

(i)                                      the Borrower may not select Eurodollar Rate Advances for any Borrowing or with respect to the Conversion or continuance of any Borrowing if the aggregate amount of such Borrowing or such Conversion or continuance is less than $5,000,000;

 

11

 

(ii)                                   there shall be no more than eight Interest Periods relating to Borrowings consisting of Eurodollar Rate Advances outstanding at any time;

 

(iii)                                if any Lender shall, at least one Business Day before the date of any requested Borrowing, notify the Administrative Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other governmental authority asserts that it is unlawful, for such Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, the Commitment of such Lender to make Eurodollar Rate Advances or to Convert all or any portion of Base Rate Advances shall forthwith be suspended until the Administrative Agent shall notify the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist and such Lender’s then outstanding Eurodollar Rate Advances, if any, shall be converted to Base Rate Advances as of the end of any applicable Interest Period or at such earlier time as may be legally required; to the extent that such affected Eurodollar Rate Advances become Base Rate Advances, all payments of principal that would have been otherwise applied to such Eurodollar Rate Advances shall be applied instead to such Lender’s Base Rate Advances; provided that if Requisite Lenders are subject to the same illegality or assertion of illegality, then the right of the Borrower to select Eurodollar Rate Advances for such Borrowing or any subsequent Borrowing or to Convert all or any portion of Base Rate Advances shall forthwith be suspended until the Administrative Agent shall notify the Borrower that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be a Base Rate Advance; and

 

(iv)                               if the Requisite Lenders shall, at least one Business Day before the date of any requested Borrowing, notify the Administrative Agent that the Adjusted Eurodollar Rate for Eurodollar Rate Advances comprising such Borrowing will not adequately reflect the cost to such Requisite Lenders of making, funding or maintaining their respective Eurodollar Rate Advances for such Borrowing, the right of the Borrower to select Eurodollar Rate Advances for such Borrowing or any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be made as a Base Rate Advance.

 

Each Notice of Borrowing shall be irrevocable and binding on the Borrower.  In the case of any Borrowing which the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing or by reason of the termination of hedging or other similar arrangements, in each case when such Advance is not made on such date (other than by reason of (i) a breach of a Lender’s obligations hereunder or (ii) a suspension of Eurodollar Rate Advances under clauses (iii), (iv) or (v) of paragraph (b) of this Section 2.02), including without limitation, as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III.

 

Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such

 

12

 

Lender’s ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount.  If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate.  If such Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender’s Advance as part of such Borrowing for purposes of this Agreement.

 

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

 

Section 2.03  Fees .

 

Facility Fees .  The Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee on such Lender’s daily average Commitment, whether used or unused, from the Effective Date in the case of each Lender and from the effective date specified in the Assumption Agreement or in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Commitment Termination Date, payable quarterly in arrears on the last day of each March, June, September and December during the term of such Lender’s Commitment, commencing June 30, 2005, and on the Commitment Termination Date, in an amount equal to the product of (i) such Lender’s daily average Commitment, whether used or unused, in effect during the period for which such payment that is to be made times (ii) the weighted average rate per annum that is derived from the rates determined pursuant to the table set forth below based upon ratings on the Long-Term Debt:

 

Level		Facility Fee Rate
1		0.055	%
2		0.065	%
3		0.080	%
4		0.100	%
5		0.150	%

 

If any change in the rating established by S&P or Moody’s with respect to Long-Term Debt shall result in a change in the Level, the change in the facility fee shall be effective as of the date on which such rating change is publicly announced.  If the ratings established by both S&P and Moody’s with respect to Long-Term Debt are unavailable for any reason for any day, then the applicable Level for purposes of calculating the facility fee for such day shall be deemed to be Level 5 (or, if the Requisite Lenders consent in writing, such other Level as may be reasonably

 

13

 

determined by the Requisite Lenders from a rating with respect to Long-Term Debt for such day established by another rating agency reasonably acceptable to the Requisite Lenders).

 

Agents’ Fees .  The Borrower agrees to pay to the Administrative Agent and the Arranger the fees payable to each such Agent pursuant to the fee letter dated as of April 22, 2005, among the Borrower, CUSA and CGMI, in the amounts and at the times specified in such letter.

 

Section 2.04  Optional Termination and Reduction of the Commitments .   The Borrower shall have the right, upon at least three (3) Business Days’ notice to the Administrative Agent, to terminate in whole or reduce ratably in part the unused portions of the respective Commitments of the Lenders; provided that (i) each partial reduction shall be in the aggregate amount of $10,000,000 or a multiple of $1,000,000 in excess thereof, and (ii) the aggregate of the Commitments of the Lenders shall not be reduced to an amount which is less than the Total Utilization of Commitments.  Once so reduced or terminated pursuant to this Section 2.04, Commitments of the Lenders shall not be reinstated.

 

Section 2.05  Repayment and Prepayment of Advances .

 

Mandatory Repayment on Certain Date .  The Borrower shall repay the outstanding principal amount of each Advance on the Commitment Termination Date.

 

Voluntary Prepayments of Borrowings .

 

(i)                                      The Borrower shall have no right to prepay any principal amount of any Advances other than as provided in this subsection (b).

 

(ii)                                   The Borrower may, upon notice to the Administrative Agent no later than 11:00 A.M. (New York time) (A) on the date the Borrower proposes to prepay, in the case of Base Rate Advances and (B) at least five (5) Business Days’ notice to the Administrative Agent in the case of Eurodollar Rate Advances, stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding principal amounts of the Advances comprising part of the same Borrowing in whole or ratably in part; provided , however , that (x) each partial prepayment shall be in an aggregate principal amount not less than $2,000,000 and multiples of $1,000,000 in excess thereof, and (y) in the case of any such prepayment of any Eurodollar Rate Advance, the Borrower shall pay all accrued interest to the date of such prepayment on the portion of such Eurodollar Rate Advance being prepaid and shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(b).

 

Section 2.06  Interest on Advances .   The Borrower shall pay to each Lender interest accrued on the principal amount of each Advance outstanding from time to time from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

 

Base Rate Advances .  If such Advance is a Base Rate Advance, a rate per annum equal at all times to (i) the Base Rate in effect from time to time plus (ii) the Applicable Margin, if any, payable quarterly in arrears on the last day of each March, June, September and December during the term of this Agreement, commencing June 30, 2005, and on the Commitment

 

14

 

Termination Date; provided that any amount of principal, interest, fees and other amounts payable under this Agreement (including, without limitation, the principal amount of Base Rate Advances, but excluding the principal amount of Eurodollar Rate Advances) which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear interest from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to 2% per annum above the Base Rate in effect from time to time.

 

Eurodollar Rate Advances .  If such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during the Interest Period for such Advance to the sum of (i) the Adjusted Eurodollar Rate for such Interest Period plus (ii) the Applicable Margin, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on the day which occurs during such Interest Period three months from the first day of such Interest Period; provided that any principal amount of any Eurodollar Rate Advance which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear interest from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to (A) during the Interest Period applicable to such Eurodollar Rate Advance, the greater of (x) 2% per annum above the Base Rate in effect from time to time and (y) 2% per annum above the rate per annum required to be paid on such amount immediately prior to the date on which such amount became due and (B) after the expiration of such Interest Period, 2% per annum above the Base Rate in effect from time to time.

 

Section 2.07  Interest Rate Determination .   The Administrative Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rate determined by the Administrative Agent for purposes of Section 2.06(a) or 2.06(b).

 

Section 2.08  Voluntary Conversion or Continuation of Advances .

 

The Borrower may on any Business Day, upon delivery of a Notice of Conversion/Continuation to the Administrative Agent not later than 12:00 noon (New York City time) on the third Business Day prior to the date of such Notice of Conversion/Continuation, and subject to the provisions of Section 2.02(b), (1) Convert all Advances of one Type comprising the same Borrowing into Advances of another Type and (2) upon the expiration of any Interest Period applicable to Advances which are Eurodollar Rate Advances, continue all (or, subject to Section 2.02(b), any portion of) such Advances as Eurodollar Rate Advances and the succeeding Interest Period(s) of such continued Advances shall commence on the last day of the Interest Period of the Advances to be continued; provided , however , that any Conversion of any Eurodollar Rate Advances into Base Rate Advances shall be made on, and only on, the last day of an Interest Period for such Eurodollar Rate Advances.  Each such Notice of Conversion/Continuation shall, within the restrictions specified above, specify (i) the date of such continuation or Conversion, (ii) the Advances (or, subject to Section 2.02(b), any portion thereof) to be continued or Converted, (iii) if such continuation is of, or such Conversion is into, Eurodollar Rate Advances, the duration of the Interest Period for each such Advance, and (iv) in the case of a continuation of or a Conversion into a Eurodollar Rate Advance, that no Potential Event of Default or Event of Default has occurred and is continuing.

 

If, upon the expiration of the then existing Interest Period applicable to any Advance which is a Eurodollar Rate Advance, the Borrower shall not have delivered a Notice of

 

15

 

Conversion/Continuation in accordance with this Section 2.08, then such Advance shall upon such expiration automatically be Converted to a Base Rate Advance.

 

After the occurrence of and during the continuance of a Potential Event of Default or an Event of Default, the Borrower may not elect to have an Advance be made or continued as, or Converted into, a Eurodollar Rate Advance after the expiration of any Interest Period then in effect for that Advance.

 

Section 2.09  Increased Costs .

 

If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements in the case of Eurodollar Rate Advances included in the Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand by such Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost; provided that Borrower shall have no obligation to pay an additional amount in respect of any increased cost attributable to the period before 90 days prior to the date of such demand.  A certificate as to the amount and manner of calculation of such increased cost, submitted to the Borrower and the Administrative Agent by such Lender, shall be conclusive and binding for all purposes, absent manifest error.

 

If any Lender determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender’s commitment to lend hereunder and other commitments of this type, then, upon demand by such Lender (with a copy of such demand to the Administrative Agent), the Borrower shall immediately pay to the Administrative Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender’s commitment to lend hereunder; provided that Borrower shall have no obligation to pay an additional amount in respect of any additional amount attributable to the period before 90 days prior to the date of such demand.  A certificate as to such amounts and the manner of calculation thereof submitted to the Borrower and the Administrative Agent by such Lender shall be conclusive and binding for all purposes, absent manifest error.

 

If a Lender shall change its Applicable Lending Office, such Lender shall not be entitled to receive any greater payment under Section 2.09 or 2.11 than the amount such Lender would have been entitled to receive if it had not changed its Applicable Lending Office, unless such change was made at the request of the Borrower or at a time when the circumstances giving rise to such greater payment did not exist.

 

16

 

Section 2.10  Payments and Computations .

 

The Borrower shall make each payment hereunder not later than 1:00 P.M. (New York City time) on the day when due in Dollars to the Administrative Agent at its address referred to in Section 8.02 in same day funds.  Subject to the immediately succeeding sentence, the Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest or facility fees ratably (other than amounts payable pursuant to Section 2.09 or 2.11) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.  Upon receipt of principal or interest paid after an Event of Default and an acceleration or a deemed acceleration of amounts due hereunder, the Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest ratably in accordance with each Lender’s outstanding Advances (other than amounts payable pursuant to Section 2.09 or 2.11) to the Lenders for the account of their respective Applicable Lending Offices.  Upon any Assuming Lender becoming a Lender hereunder as a result of a Commitment Increase pursuant to Section 2.16, and upon the Agent’s receipt of such Lender’s Assumption Agreement and recording of the information contained therein in the Register, from and after the applicable Increase Date, the Agent shall make all payments hereunder and under any Notes issued in connection therewith in respect of the interest assumed thereby to the Assuming Lender.  Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 8.07(c), from and after the effective date specified in such Assignment and Acceptance, the Administrative Agent shall make all payments hereunder in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

 

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

 

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

 

Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in

 

17

 

reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent that the Borrower shall not have so made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate.

 

Section 2.11  Taxes .

 

Any and all payments by the Borrower hereunder shall be made, in accordance with Section 2.10, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding (i) in the case of each Lender and each Agent, taxes imposed on its income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender or such Agent (as the case may be) is organized or any political subdivision thereof or in which its principal office is located, (ii) in the case of each Lender taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction of such Lender’s Applicable Lending Office or any political subdivision thereof and (iii) in the case of each Lender and each Agent, taxes imposed by the United States by means of withholding at the source if and to the extent that such taxes shall be in effect and shall be applicable on the date hereof in the case of each Bank and on the effective date of the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender, on payments to be made to the Agents or such Lender’s Applicable Lending Office (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “ Taxes ”).  If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender or either Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.11) such Lender or such Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

 

In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from the execution, delivery or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as “ Other Taxes ”).

 

The Borrower will indemnify each Lender and each Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.11) paid by such Lender or such Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be made within 30 days from the date such Lender or such Agent (as the case may be) makes written demand therefor.

 

18

 

Within 30 days after the date of any payment of Taxes, the Borrower will furnish to the Administrative Agent, at its address referred to in Section 8.02, the original or a certified copy of a receipt evidencing payment thereof.

 

Each Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement, in the case of each Bank, and on the date of the Assumption Agreement or the Assignment and Acceptance pursuant to which it becomes a Lender, in the case of each other Lender, and from time to time thereafter if requested in writing by the Borrower (but only so long as such Lender remains lawfully able to do so), shall provide the Borrower with (i) Internal Revenue Service Form W-8BEN or W-8EC1, as appropriate, or any successor form prescribed by the Internal Revenue Service, to establish that such Lender is not subject to United States withholding tax with respect to any payments to such Lender of interest payable under this Agreement and (ii) to the extent it does not act or ceases to act for its own account with respect to any sums paid or payable to such Lender hereunder (for example, in the case of a typical participation by such Lender), Internal Revenue Service Form W-8IMY or any successor form prescribed by the Internal Revenue Service to establish that the Lender is not acting for its own account with respect to a portion of any such sums paid or payable to such Lender.  If the form provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from “Taxes” as defined in Section 2.11(a).

 

For any period with respect to which a Lender has failed to provide the Borrower with the appropriate form described in Section 2.11(e) (other than if such failure is due to a change in law occurring subsequent to the date on which a form originally was required to be provided, or if such form otherwise is not required under the first sentence of subsection (e) above), such Lender shall not be entitled to indemnification under Section 2.11(a) with respect to Taxes imposed by the United States; provided, however, that should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall, at the expense of such Lender, take such steps as the Lender shall reasonably request to assist the Lender to recover such Taxes.

 

Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 2.11 shall survive the payment in full of principal and interest hereunder.

 

Section 2.12  Sharing of Payments, Etc .   If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Advances made by it (other than pursuant to Section 2.09 or 2.11) in excess of its ratable share of payments on account of the Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Advances made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided , however , that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so

 

19

 

recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.12 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.

 

Section 2.13  Evidence of Debt .

 

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

 

The Register maintained by the Administrative Agent pursuant to Section 8.07(c) shall include a control account, and a subsidiary account for each Lender, in which accounts (taken together) shall be recorded (i) the date, amount and tenor, as applicable, of each Borrowing, the Type of Advances comprising such Borrowing and the Interest Period applicable thereto, (ii) the terms of each Assumption Agreement and each Assignment and Acceptance delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, and (iv) the amount of any sum received by the Administrative Agent from the Borrower hereunder and each Lender’s share thereof.

 

The entries made in the Register shall be conclusive and binding for all purposes, absent manifest error.

 

If, in the opinion of any Lender, a promissory note or other evidence of debt is required, appropriate or desirable to reflect or enforce the indebtedness of the Borrower resulting from the Advances made, or to be made, by such Lender to the Borrower, then, upon request of such Lender, the Borrower shall promptly execute and deliver to such Lender a promissory note substantially in the form of Exhibit E, payable to the order of such Lender in an amount up to the maximum amount of Advances payable or to be payable by the Borrower to the Lender from time to time hereunder.

 

Section 2.14  Use of Proceeds .

 

Advances shall be used by the Borrower for commercial paper backup and for general corporate purposes, including acquisition financing; provided that proceeds of Advances and proceeds of commercial paper as to which this Agreement provides backup shall not be used for any Hostile Acquisition.

 

No portion of the proceeds of any Advances under this Agreement shall be used by the Borrower or any of its Subsidiaries in any manner which might cause the Advances or the application of such proceeds to violate, or require any Lender to make any filing or take any other action under, Regulation U, Regulation T, or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation of such Board or to violate the Securities Exchange Act of 1934, in each case as in effect on the date or dates of such Advances and such use of proceeds.

 

20

 

Section 2.15  Substitution of Lenders .   If any Lender requests compensation from the Borrower under Section 2.09(a) or (b) or Section 2.11, the Borrower shall have the right, with the assistance of the Agents, to seek one or more Eligible Assignees (which may be one or more of the Lenders) reasonably satisfactory to the Administrative Agent and the Borrower to purchase the Advances and assume the Commitments of such Lender, and the Borrower, the Administrative Agent, such Lender, and such Eligible Assignees shall execute and deliver an appropriately completed Assignment and Acceptance pursuant to Section 8.07(a) hereof to effect the assignment of rights to and the assumption of obligations by such Eligible Assignees; provided that (i) such requesting Lender shall be entitled to compensation under Section 2.09 and 2.11 for any costs incurred by it prior to its replacement, (ii) no Event of Default, or Potential Event of Default, has occurred and is continuing, (iii) the Borrower has satisfied all of its obligations under the Loan Documents relating to such Lender, including without limitation obligations, if any, under Section 8.04(b) and (iv) the Borrower shall have paid the Administrative Agent a $3,500 administrative fee if such replacement Lender is not an existing Lender.

 

Section 2.16  Increase in the Aggregate Commitments .

 

The Borrower may, at any time but in any event not more than once in any calendar year prior to the Termination Date, by notice to the Agent, request that the aggregate amount of the Commitment be increased by an amount of $5,000,000 or an integral multiple thereof (each a “ Commitment Increase ”) to be effective as of a date that is at least 90 days prior to the scheduled Termination Date then in effect (the “ Increase Date ”) as specified in the related notice to the Agent; provided , however that (i) in no event shall the aggregate amount of the Commitments at any time exceed $275,000,000 and (ii) on the date of any request by the Borrower for a Commitment Increase and on the related Increase Date, (A) the Long Term Debt carries a rating of “BBB+” or better from S&P and a rating of “Baa1” or better from Moody’s, (B) the representations and warranties of the Borrower contained in Section 4.01 are correct and (C) no event has occurred and is continuing, or would result from such Commitment Increase, which constitutes an Event of Default or a Potential Event of Default.

 

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

 

Promptly following each Commitment Date, the Agent shall notify the Borrower as to the amount, if any, by which the Lenders are willing to participate in the requested Commitment Increase.  If the aggregate amount by which the Lenders are willing to participate in any

 

21

 

requested Commitment Increase on any such Commitment Date is less than the requested Commitment Increase, then the Borrower may extend offers to one or more Eligible Assignees to participate in any portion of the requested Commitment Increase that has not been committed to by the Lenders as of the applicable Commitment Date; provided , however , that the Commitment of each such Eligible Assignee shall be in an amount of $10,000,000 or more.

 

On each Increase Date, each Eligible Assignee that accepts an offer to participate in a requested Commitment Increase in accordance with Section 2.16(b) and (c) (each such Eligible Assignee, an “ Assuming Lender ”) shall become a Lender party to this Agreement as of such Increase Date and the Commitment of each Increasing Lender for such requested Commitment Increase shall be so increased by such amount (or by the amount allocated to such Lender pursuant to the last sentence of Section 2.16(b)) as of such Increase Date; provided , however , that the Agent shall have received on or before such Increase Date the following, each dated such date:

 

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

 

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

 

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

 

On each Increase Date, upon fulfillment of the conditions set forth in the immediately preceding sentence of this Section 2.16(d), the Agent shall notify the Lenders (including, without limitation, each Assuming Lender) and the Borrower, on or before 1:00 P.M. (New York City time), by telecopier, of the occurrence of the Commitment Increase to be effected on such Increase Date and shall record in the Register the relevant information with respect to each Increasing Lender and each Assuming Lender on such date.

 

ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING

 

Section 3.01  Conditions Precedent to Effectiveness .

 

The effectiveness of the Agreement is subject to the prior or concurrent satisfaction of the following conditions and the Administrative Agent shall receive for the account of each Lender party to the Agreement the following, each, unless otherwise noted, dated the Effective Date, and in form and substance satisfactory to the Administrative Agent and the Arranger:

 

(i)                                      Copies of resolutions of the Board of Directors of the Borrower (or its Executive Committee, together with evidence of the authority of the Executive Committee) approving this Agreement, and of all documents evidencing other necessary corporate action and

 

22

 

governmental approvals, if any, with respect to this Agreement, certified as of a recent date prior to the Effective Date;

 

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

 

(iii)                                Certified copies of the Borrower’s Certificate of Incorporation, together with good standing certificates from the State of Delaware and the State of Minnesota, each to be dated a recent date prior to the Effective Date;

 

(iv)                               Copies of the Borrower’s Bylaws, certified as of the Effective Date by its Secretary or an Assistant Secretary;

 

(v)                                  Executed originals of this Agreement and the other documents to be delivered by the Borrower hereunder;

 

(vi)                               A favorable opinion of James W. Cavanaugh, Senior Vice President and General Counsel to the Borrower, substantially in the form of Exhibit F hereto;

 

(vii)                            A favorable opinion of Shearman & Sterling LLP, counsel for the Agents, substantially in the form of Exhibit G hereto;

 

(viii)                         A certificate of an authorized officer of the Borrower to the effect that since October 30, 2004, there has been no material adverse change in the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a whole;

 

(ix)                                 A certificate of an authorized officer of the Borrower, in form and substance satisfactory to the Administrative Agent, to the effect that (i) the representations and warranties in Section 4.01 are correct on and as of the Effective Date, to the same extent as though made on and as of the Effective Date, except to the extent that any such representation or warranty expressly relates only to an earlier date, in which case they were correct as of such earlier date; (b) such Borrower has performed in all material respects all agreements and satisfied all conditions which this Agreement provides shall be performed and satisfied by it on or before the Effective Date; and (c) no event has occurred and is continuing, or would result from the Borrowings made on and as of the Effective Date or from the application of the proceeds from such Borrowings, which constitutes an Event of Default or a Potential Event of Default;

 

(x)                                    Payment of up front fees to the Lenders, as agreed by and among the Arranger, Lenders and the Borrower;

 

(xi)                                 Evidence of (A) the contemporaneous repayment of any indebtedness of the Borrower under the Existing Credit Agreement (including borrowings and accrued interest), (B) the contemporaneous payment of fees payable, if any, by the Borrower under the Existing Credit Agreement and (C) the contemporaneous termination of the Existing Credit Agreement on the Effective Date, which shall be deemed to occur upon the payments referred to in clauses (A) and (B) above.

 

23

 

The Administrative Agent shall have received such other approvals, opinions or documents as the Requisite Lenders through the Administrative Agent may reasonably request (which request shall be made in sufficient time to allow the Borrower to comply therewith).

 

Section 3.02  Conditions Precedent to Each Borrowing .   The obligation of each Lender to make an Advance on the occasion of a Borrowing (including the initial Borrowing) shall be subject to the further conditions precedent that (x) the Administrative Agent shall have received a Notice of Borrowing with respect thereto in accordance with Section 2.02 and (y) on the date of such Borrowing the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Borrowing such statements are true):

 

(i)                                      The representations and warranties of the Borrower contained in Section 4.01 (other than in Section 4.01(e)(ii)) are correct on and as of the date of such Borrowing, before and after giving effect to such Borrowing and to the application of the proceeds therefrom, as though made on and as of such date, except to the extent that any such representation or warranty expressly relates only to an earlier date, in which case they were correct as of such earlier date;

 

(ii)                                   No event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, which constitutes an Event of Default or a Potential Event of Default.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

 

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

 

Due Organization, etc.   The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. Each Material Subsidiary is listed in Schedule 4.01(a)  and is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization in which failure to be so duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization would have a material adverse effect on the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a whole.  The Borrower and each of its Material Subsidiaries are qualified to do business in and are in good standing under the laws of each jurisdiction in which failure to be so qualified would have a material adverse effect on the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a whole.

 

Due Authorization, etc.   The execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Borrower’s Certificate of Incorporation or (ii) applicable law or any material contractual restriction binding on or affecting the Borrower or any of its Material Subsidiaries.

 

24

 

Governmental Consent .  No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, other than those that have been obtained, all of which are listed on Schedule 4.01(c).

 

Validity .  This Agreement is the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms subject to the effect of applicable bankruptcy, insolvency, arrangement, moratorium and other similar laws affecting creditors’ rights generally and to the application of general principles of equity.

 

Condition of the Borrower .  (i) The consolidated balance sheet of the Borrower and its Subsidiaries as at October 30, 2004, and the related consolidated statements of income and retained earnings of the Borrower and its Subsidiaries for the fiscal year then ended, copies of which have been previously furnished to each Bank, fairly present the consolidated financial condition of the Borrower and its Subsidiaries as at such date and the results of the operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in accordance with GAAP consistently applied, and (ii) since October 30, 2004, there has been no material adverse change in the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a whole.

 

Litigation .  (i) There is no pending action, investigation or proceeding against the Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator, and (ii) to the knowledge of the Borrower, there is no pending or threatened action, investigation or proceeding affecting the Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator, which, in either case, in the reasonable judgment of the Borrower could reasonably be expected to materially adversely affect the financial