EX-10.1 4 a2090748zex-10_1.txt EXIBIT 10.1 Exhibit 10.1 ------------------------------------------------------------------------------- 364-DAY TERM LOAN AGREEMENT dated as of October 4, 2002 STAPLES, INC. THE LENDERS NAMED HEREIN, FLEET NATIONAL BANK, AS AGENT, WITH FLEET SECURITIES, INC. HAVING ACTED AS ARRANGER ------------------------------------------------------------------------------- TABLE OF CONTENTS

PAGE ---- SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION...................................................1 SECTION 1.1. DEFINITIONS..........................................................................1 SECTION 1.2. RULES OF INTERPRETATION.............................................................15 SECTION 2. THE 364-DAY TERM LOAN FACILITY...........................................................16 SECTION 2.1. COMMITMENT TO LEND..................................................................16 SECTION 2.2. THE TERM NOTES......................................................................16 SECTION 2.3. MATURITY AND OTHER REPAYMENTS OF TERM LOAN..........................................17 2.3.1. MATURITY....................................................................17 2.3.2. OPTIONAL PREPAYMENTS OF TERM LOAN...........................................17 2.3.3. MANDATORY PREPAYMENTS.......................................................17 2.3.4. APPLICATION OF PAYMENTS.....................................................17 SECTION 2.4. INTEREST ON TERM LOAN...............................................................17 2.4.1. INTEREST RATES............................................................17 SECTION 2.5. CONVERSION OPTIONS..................................................................18 SECTION 2.5.1. CONVERSION OF THE TERM LOAN........................................18 SECTION 2.5.2. CONTINUATION OF A EURODOLLAR RATE LOAN.............................18 SECTION 3. CERTAIN GENERAL PROVISIONS; FEES.........................................................18 SECTION 3.1. CLOSING AND AGENT FEES.............................................................18 SECTION 3.2. FACILITY FEE.......................................................................19 SECTION 3.3. FUNDS FOR PAYMENTS.................................................................19 SECTION 3.3.1. PAYMENTS TO AGENT..................................................19 SECTION 3.3.2. NO OFFSET, ETC.....................................................19 SECTION 3.3.3. WITHHOLDING........................................................19 SECTION 3.4. COMPUTATIONS.......................................................................20 SECTION 3.5. INABILITY TO DETERMINE EURODOLLAR RATE.............................................20 SECTION 3.6. ILLEGALITY.........................................................................21 SECTION 3.7. ADDITIONAL COSTS, ETC..............................................................21 SECTION 3.8. CAPITAL ADEQUACY...................................................................22 SECTION 3.9. CERTIFICATE........................................................................23 SECTION 3.10. INDEMNITY..........................................................................23 SECTION 3.11. INTEREST ON OVERDUE AMOUNTS........................................................23 SECTION 3.12. REPLACEMENT OF INDIVIDUAL LENDERS..................................................24 SECTION 3.13. GUARANTIES.........................................................................24 SECTION 4. REPRESENTATIONS AND WARRANTIES...........................................................25 SECTION 4.1. CORPORATE AUTHORITY................................................................25 SECTION 4.1.1. INCORPORATION; GOOD STANDING.......................................25 SECTION 4.1.2. AUTHORIZATION......................................................25 SECTION 4.1.3. ENFORCEABILITY.....................................................25 SECTION 4.2. GOVERNMENTAL APPROVALS.............................................................26 SECTION 4.3. TITLE TO PROPERTIES; LEASES........................................................26

-ii- SECTION 4.4. FINANCIAL STATEMENTS; FISCAL YEAR..................................................26 SECTION 4.5. NO MATERIAL CHANGES, ETC...........................................................26 SECTION 4.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC...............................................27 SECTION 4.7. LITIGATION.........................................................................27 SECTION 4.8. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.......................................27 SECTION 4.9. TAX STATUS.........................................................................27 SECTION 4.10. NO EVENT OF DEFAULT................................................................27 SECTION 4.11. HOLDING COMPANY AND INVESTMENT COMPANY ACTS........................................28 SECTION 4.12. EMPLOYEE BENEFIT PLANS.............................................................28 SECTION 4.12.1. IN GENERAL........................................................28 SECTION 4.12.2. TERMINABILITY OF WELFARE PLANS....................................28 SECTION 4.12.3. GUARANTEED PENSION PLANS..........................................28 SECTION 4.12.4. MULTIEMPLOYER PLANS...............................................29 SECTION 4.13. REGULATIONS U AND X, ETC...........................................................29 SECTION 4.14. ENVIRONMENTAL COMPLIANCE...........................................................29 SECTION 4.15. SUBSIDIARIES, ETC..................................................................30 SECTION 4.16. PURCHASE AGREEMENT.................................................................30 SECTION 4.17. PERMITTED DEBT.....................................................................30 SECTION 5. AFFIRMATIVE COVENANTS OF THE BORROWER....................................................30 SECTION 5.1. PUNCTUAL PAYMENT...................................................................30 SECTION 5.2. MAINTENANCE OF OFFICE..............................................................30 SECTION 5.3. RECORDS AND ACCOUNTS...............................................................31 SECTION 5.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION.................................31 SECTION 5.5. NOTICES............................................................................32 SECTION 5.6. LEGAL EXISTENCE; MAINTENANCE OF PROPERTIES.........................................32 SECTION 5.7. INSURANCE..........................................................................33 SECTION 5.8. TAXES..............................................................................33 SECTION 5.9. INSPECTION OF PROPERTIES AND BOOKS, ETC............................................33 SECTION 5.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS.............................34 SECTION 5.11. EMPLOYEE BENEFIT PLANS.............................................................34 SECTION 5.12. USE OF PROCEEDS....................................................................34 SECTION 5.13. LICENSES AND PERMITS...............................................................34 SECTION 5.14. CLOSING OF ACQUISITION.............................................................34 SECTION 5.15. PRO FORMA COMPLIANCE CERTIFICATE...................................................35 SECTION 5.16. FURTHER ASSURANCES.................................................................35 SECTION 6. CERTAIN NEGATIVE COVENANTS OF THE BORROWER...............................................35 SECTION 6.1. RESTRICTIONS ON INDEBTEDNESS.......................................................35 SECTION 6.2. RESTRICTIONS ON LIENS..............................................................37 SECTION 6.3. RESTRICTIONS ON INVESTMENTS........................................................39 SECTION 6.4. DISTRIBUTIONS......................................................................40 SECTION 6.5. EMPLOYEE BENEFIT PLANS.............................................................40 SECTION 6.6. MERGER AND CONSOLIDATION; ACQUISITIONS.............................................41 SECTION 6.7. DISPOSITION OF ASSETS AND SALE-LEASEBACK TRANSACTIONS..............................41 SECTION 6.8. SUBORDINATED DEBT..................................................................41 -iii- SECTION 7. FINANCIAL COVENANTS OF THE BORROWER......................................................42 SECTION 7.1. FIXED CHARGE COVERAGE RATIO........................................................42 SECTION 7.2. ADJUSTED FUNDED DEBT TO TOTAL CAPITALIZATION RATIO.................................42 SECTION 8. CONDITIONS PRECEDENT.....................................................................42 SECTION 8.1. CLOSING CONDITIONS.................................................................42 SECTION 8.1.1. LOAN DOCUMENTS.....................................................42 SECTION 8.1.2. CERTIFIED COPIES OF CHARTER DOCUMENTS..............................42 SECTION 8.1.3. CORPORATE ACTION...................................................43 SECTION 8.1.4. INCUMBENCY CERTIFICATE.............................................43 SECTION 8.1.5. OPINION OF COUNSEL.................................................43 SECTION 8.1.6. PAYMENT OF FEES....................................................43 SECTION 8.1.7. COMPLIANCE CERTIFICATE.............................................43 SECTION 8.1.8. UCC SEARCH RESULTS.................................................43 SECTION 8.1.9. CERTIFICATE OF INSURANCE...........................................43 SECTION 8.1.10. NO MATERIAL ADVERSE CHANGE........................................43 SECTION 8.1.11. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT.........................44 SECTION 8.1.12. NO LEGAL IMPEDIMENT...............................................44 SECTION 8.1.13. GOVERNMENTAL REGULATION...........................................44 SECTION 8.1.14. PROCEEDINGS AND DOCUMENTS.........................................44 SECTION 8.2. CONDITIONS TO FUNDING...............................................................44 SECTION 8.2.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT..........................44 SECTION 8.2.2. NO LEGAL IMPEDIMENT................................................45 SECTION 8.2.3. EUROPEAN COMMISSION APPROVAL.......................................45 SECTION 8.2.4. COMPLIANCE CERTIFICATE.............................................45 SECTION 8.2.5. DEADLINE FOR INITIAL DRAWDOWN......................................45 SECTION 9. EVENTS OF DEFAULT; ACCELERATION; ETC.....................................................45 SECTION 9.1. EVENTS OF DEFAULT AND ACCELERATION.................................................45 SECTION 9.2. REMEDIES...........................................................................49 SECTION 10. SETOFF..................................................................................49 SECTION 11. THE AGENT...............................................................................50 SECTION 11.1. AUTHORIZATION......................................................................50 SECTION 11.2. EMPLOYEES AND AGENTS...............................................................50 SECTION 11.3. NO LIABILITY.......................................................................51 SECTION 11.4. NO REPRESENTATIONS.................................................................51 SECTION 11.4.1. GENERAL...........................................................51 SECTION 11.4.2. CLOSING DOCUMENTATION, ETC........................................51 SECTION 11.5. PAYMENTS...........................................................................52 SECTION 11.5.1. PAYMENTS TO AGENT.................................................52 SECTION 11.5.2. DISTRIBUTION BY AGENT.............................................52 SECTION 11.5.3. DELINQUENT LENDERS................................................52 SECTION 11.6. HOLDERS OF TERM NOTES..............................................................52 SECTION 11.7. INDEMNITY..........................................................................52 SECTION 11.8. AGENT AS LENDER; ETC...............................................................53 -iv- SECTION 11.9. RESIGNATION........................................................................53 SECTION 11.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT.....................................53 SECTION 12. EXPENSES................................................................................53 SECTION 13. INDEMNIFICATION.........................................................................54 SECTION 14. SURVIVAL OF COVENANTS, ETC..............................................................55 SECTION 15. ASSIGNMENT AND PARTICIPATION............................................................55 SECTION 15.1. CONDITIONS TO ASSIGNMENT BY LENDERS................................................55 SECTION 15.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.....................56 SECTION 15.3. REGISTER...........................................................................56 SECTION 15.4. NEW TERM NOTES.....................................................................57 SECTION 15.5. PARTICIPATIONS.....................................................................57 SECTION 15.6. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER...............................57 SECTION 15.7. MISCELLANEOUS ASSIGNMENT PROVISIONS................................................58 SECTION 15.8. ASSIGNMENT BY BORROWER.............................................................58 SECTION 16. NOTICES, ETC............................................................................58 SECTION 17. GOVERNING LAW...........................................................................59 SECTION 18. HEADINGS................................................................................59 SECTION 19. COUNTERPARTS............................................................................60 SECTION 20. ENTIRE AGREEMENT, ETC...................................................................60 SECTION 21. WAIVER OF JURY TRIAL....................................................................60 SECTION 22. CONSENTS, AMENDMENTS, WAIVERS, ETC......................................................60 SECTION 23. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION...........................................61 SECTION 23.1. CONFIDENTIALITY....................................................................61 SECTION 23.2. PRIOR NOTIFICATION.................................................................62 SECTION 23.3. OTHER..............................................................................62 SECTION 24. SEVERABILITY............................................................................62 -v- EXHIBITS AND SCHEDULES Exhibit A Form of Conversion Request Exhibit B Form of Term Note Exhibit C Form of Guaranty Exhibit D Form of Compliance Certificate Exhibit E Form of Assignment and Acceptance Schedule 1 Lenders Schedule 2 Guarantors Schedule 4.3 Title to Properties, Leases Schedule 4.7 Litigation Schedule 4.9 Taxes Schedule 4.12 Pension Liabilities Schedule 4.14 Environmental Compliance Schedule 4.15(a) Subsidiaries Schedule 4.15(b) Joint Ventures and Partnerships Schedule 4.15(c) Equity Interests of 50% or Less Schedule 6.1 Existing Indebtedness Schedule 6.2 Existing Liens Schedule 6.3 Existing Investments 364-DAY TERM LOAN AGREEMENT This 364-DAY TERM LOAN AGREEMENT, dated as of October 4, 2002, is by and among (a) STAPLES, INC. (the "BORROWER"), a Delaware corporation having its principal place of business at 500 Staples Drive, Framingham, MA 01701, (b) FLEET NATIONAL BANK and the other lending institutions listed on SCHEDULE 1 attached hereto (the "LENDERS") and (c) FLEET NATIONAL BANK, as administrative agent (in such capacity, the "AGENT") for the Lenders. SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION. SECTION 1.1. DEFINITIONS. The following terms shall have the meanings set forth in this Section 1 or elsewhere in the provisions of this Credit Agreement referred to below: ACQUIRED BUSINESS. The Guilbert mail order office products business to be acquired by the Borrower in accordance with the terms of Purchase Agreement. ADJUSTMENT DATE. The date which is three (3) Business Days after a Compliance Certificate is delivered by the Borrower pursuant to Section 5.4(c) hereof. AFFILIATE. Any Person that would be considered to be an affiliate of a Person under Rule 144(a) of the Rules and Regulations of the Securities and Exchange Commission, as in effect on the Closing Date, if such Person were issuing securities. AGENT. As defined in the preamble hereto. AGENT FEES. See Section 3.1 hereof. AGENT'S HEAD OFFICE. The Agent's office located at 100 Federal Street, Boston, Massachusetts 02110, or at such other location as the Agent may designate from time to time. AGENT'S SPECIAL COUNSEL. Bingham McCutchen LLP or such other counsel as may be approved by the Agent. APPLICABLE MARGIN. The Applicable Margin shall be in effect for each period commencing on an Adjustment Date through the date immediately preceding the next Adjustment Date (each a "RATE ADJUSTMENT PERIOD") based on a determination of the Fixed Charge Coverage Ratio and the Senior Debt Rating. The Fixed Charge Coverage Ratio shall be determined as at the end of the fiscal period for which financial statements and a Compliance Certificate have most recently been delivered to the Agent pursuant to section 6.4 and the Senior Debt Rating shall be determined as of the last day of the preceding Rate Adjustment Period. The Applicable Margin shall be the applicable rate PER ANNUM, corresponding to the lower of the Levels set forth in the table below (with Level I being the lowest level and Level VI being the highest level) corresponding to the Fixed Charge -2- Coverage Ratio or the Senior Debt Rating, PROVIDED THAT if the Fixed Charge Coverage Ratio and Senior Debt Rating are more than one Level apart, the Applicable Margin shall be one Level below the higher of the two applicable Levels. In the event that the Senior Debt Ratings assigned by Moody's and S&P are not equivalent, the following criteria shall determine which Level shall be applicable to the Senior Debt Rating: (a) if the Senior Debt Ratings are one Level apart, the Level applicable to the Senior Debt Rating shall be the lower of the two Levels and (b) if the Senior Debt Ratings are more than one Level apart, the Level applicable to the Senior Debt Rating shall be one Level below the higher of the two Levels. For purposes of clarity, the parties hereto acknowledge that the Applicable Margin with respect to a Eurodollar Rate Loan shall be the rate per annum set forth in column D in the table below.

----------------------------------------------------------------------------------------------------------- A B C D ----------------------------------------------------------------------------------------------------------- LEVEL FIXED CHARGE COVERAGE SENIOR DEBT RATING EURODOLLAR RATE LOAN RATIO ----------------------------------------------------------------------------------------------------------- I Greater than/equal to 2.75:1 S&P: A- 0.500% Moody's: A3 or better ----------------------------------------------------------------------------------------------------------- II Greater than/equal to 2.50:1 S&P: BBB+ 0.750% and Moody's: Baa1 or better Less than 2.75:1 ----------------------------------------------------------------------------------------------------------- III Greater than/equal to 2.25:1 S&P: BBB 0.875% and Moody's: Baa2 or better Less than 2.50:1 ----------------------------------------------------------------------------------------------------------- IV Greater than/equal to 2.00:1 S&P: BBB- 1.125% and Moody's: Baa3 or better Less than 2.25:1 ----------------------------------------------------------------------------------------------------------- V Greater than/equal to 1.75:1 S&P: BB+ 1.500% and Moody's: Ba1 or better Less than 2.00:1 ----------------------------------------------------------------------------------------------------------- VI Less than 1.75:1 lower than 1.750% S&P: BB+ Moody's: Ba1 or unrated -----------------------------------------------------------------------------------------------------------

Notwithstanding the foregoing, (A) for the period commencing on the Closing Date through the date immediately preceding the first Adjustment Date, the Applicable Margin shall be that corresponding to Level III in the table above, and (B) if the Borrower fails to deliver any Compliance Certificate pursuant to section 5.4(c) hereof then, for the period commencing on the date such Compliance Certificate was due through the date immediately preceding the Adjustment Date that occurs immediately following the date on which such Compliance Certificate is delivered, the Applicable Margin shall be the Applicable Margin corresponding to Level VI above, and (C) on and after the date nine (9) months after the Closing Date, each Applicable Margin set forth above shall be increased by one-quarter of one percent (0.25%). -3- APPLICABLE PENSION LEGISLATION. At any time, any pension or retirement benefits legislation (be it national, federal, provincial, territorial or otherwise) then applicable to the Borrower or any of its Subsidiaries. APPROVED FUND. Any Fund 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. APPROVED LENDING GROUP. Any of (i) the lenders under the Revolving Credit Agreement, (ii) any other Lender approved in accordance with section 15 hereof, (iii) an Affiliate of any such lenders or (iv) an Approved Fund of any such lenders. ARRANGER. Fleet Securities, Inc., a Massachusetts corporation. ASSIGNMENT AND ACCEPTANCE. See section 15.1 hereof. BALANCE SHEET DATE. February 2, 2002. BASE RATE. The higher of (a) the annual rate of interest announced from time to time by Fleet at its office in Boston, Massachusetts, as its "prime rate" and (b) one-half of one percent (1/2%) per annum above the Federal Funds Effective Rate. For the purposes of this definition, "FEDERAL FUNDS EFFECTIVE RATE" shall mean for any day, the rate per annum equal 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 that is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three funds brokers of recognized standing selected by the Agent. Changes in the Base Rate resulting from any changes in Fleet's "prime rate" shall take place immediately without notice or demand of any kind. BASE RATE LOAN. The Term Loan when bearing interest calculated by reference to the Base Rate. BORROWER. As defined in the preamble hereto. BUSINESS DAY. Any day on which banking institutions in Boston, Massachusetts and New York, New York, are open for the transaction of banking business and, in the case of a Eurodollar Rate Loan, also a day which is a Eurodollar Business Day. -4- CAPITAL STOCK. With respect to any corporation, partnership, trust, unincorporated association, joint venture, limited liability company, or other legal or business entity, any and all shares, interests, participations or other equivalent (however designated) of capital stock of such entity, any and all limited or general partnership interests and equivalent ownership interests in such entity, any and all warrants and options to purchase any of the foregoing, and any securities convertible into any of the foregoing. CAPITALIZED LEASES. Leases under which the Borrower or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP. CAPITAL MARKETS OFFERING. Any public or private debt offering, including any offering of convertible securities, by the Borrower or any of its Subsidiaries. CERCLA. The Comprehensive Environmental Response, Compensation and Liability Act of 1980. CLOSING DATE. The first date on which the conditions set forth in section 8.1 hereof have been satisfied, which shall be no later than October 31, 2002. CODE. The Internal Revenue Code of 1986. COMPLIANCE CERTIFICATE. See section 5.4(c) hereof. CONFIDENTIAL INFORMATION. All information relating to the Borrower or any of its Subsidiaries that is labeled by the Borrower or such Subsidiary as confidential at the time such information is supplied by the Borrower or such Subsidiary to a Lender, other than information which (a) is public knowledge or generally available to the public, or (b) is obtained by any of the Lenders, whether prior to or after disclosure to such Lender by the Borrower or any of its Subsidiaries, from a source other than the Borrower or any of its Subsidiaries, provided that such information is not known by such Lender to have been disclosed by any party in violation of a confidentiality agreement with the Borrower or any of its Subsidiaries, any other obligation of nondisclosure with respect to the Borrower or any of its Subsidiaries or any applicable statutory or regulatory limitation imposed on the disclosure of such information. CONSOLIDATED OR CONSOLIDATED. With reference to any term defined herein, shall mean that term as applied to the accounts of the Borrower and its Subsidiaries, consolidated in accordance with GAAP. CONSOLIDATED ADJUSTED FUNDED DEBT. With respect to the Borrower and its Subsidiaries, as at any date of determination, on a consolidated basis, the aggregate of (a) Consolidated Total Funded Debt as of such date PLUS (b) (i) Rental Expense for the period of twelve consecutive months then ended MULTIPLIED BY (ii) eight (8). -5- CONSOLIDATED EBIT. Consolidated net income (or deficit) of the Borrower and its Subsidiaries, after deducting all expenses and other proper charges other than interest expense, taxes and any noncash nonrecurring charges, and excluding (a) all extraordinary and nonrecurring items of income but not losses (except to the extent such extraordinary losses are offset by such extraordinary income) and (b) all income or loss from any corporation, partnership, limited liability company, joint venture or other entity in which the Borrower or any of its Subsidiaries holds not more than a fifty percent (50%) ownership interest, as determined in accordance with GAAP; PROVIDED that (i) there shall be excluded in calculating consolidated net income (or deficit) for purposes of this definition any noncash losses attributable to the use of a fair value methodology for recognition and measurement of impairment of goodwill not identified with impaired assets in accordance with Accounting Principles Board Opinion No. 142 and (ii) for purposes of calculating the Obligor Group Requirement, the Persons included in the calculation of Consolidated EBIT shall be as set forth in the definition of Obligor Group Requirement. CONSOLIDATED TOTAL ASSETS. All assets of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP. CONSOLIDATED TOTAL FUNDED DEBT. With respect to the Borrower and its Subsidiaries, as at any date of determination, on a consolidated basis, the aggregate (without duplication) of (a) all outstanding Indebtedness of the Borrower and its Subsidiaries relating to or in respect of (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds and standby letters of credit outstanding but excluding documentary letters of credit, (ii) the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) any Synthetic Leases or any Capitalized Leases, and (iv) the Securitization, PLUS (b) all Indebtedness of the type referred to in clause (a) of another Person guaranteed by the Borrower or any of its Subsidiaries. CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate amount of interest required to be paid or accrued by the Borrower and its Subsidiaries during such period on all Indebtedness of the Borrower and its Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of Capitalized Leases and Synthetic Leases, and including facility fees, commitment fees, usage fees, agency fees, balance deficiency fees, and similar fees or expenses in connection with the borrowing of money, as determined in accordance with GAAP. CONTINGENT LIABILITIES. Any guaranties, endorsements, obligations to reimburse the issuer in respect of any letters of credit, agreements to purchase or provide funds for the payment of obligations of others, or other liabilities which would be classified as contingent in accordance with GAAP consistently applied, excluding, however, (a) product warranties given in the ordinary course of business, (b) endorsements of checks or other negotiable instruments for deposit or collection in the ordinary course of -6- business, and (c) reimbursement obligations in respect of documentary trade letters of credit. CONVERSION REQUEST. A notice given by the Borrower to the Agent in substantially the form of EXHIBIT A hereto of the Borrower's election to convert or continue an interest rate option in accordance with section 2.5 hereof. CREDIT AGREEMENT. This 364-Day Term Loan Agreement, including the Schedules and Exhibits hereto. DEFAULT. See section 9.1 hereof. DELINQUENT LENDER. See section 11.5.3 hereof. DISTRIBUTION. The declaration or payment of any dividend on or in respect of any shares of any class of Capital Stock of the Borrower, other than dividends payable solely in shares of common stock of the Borrower; the purchase, redemption, or other retirement of any shares of any class of Capital Stock of the Borrower, directly or indirectly through a Subsidiary of the Borrower or otherwise; the return of capital by the Borrower to its shareholders as such; or any other distribution on or in respect of any shares of any class of Capital Stock of the Borrower. DOLLARS or $. Dollars in lawful currency of the United States of America. DOMESTIC LENDING OFFICE. Initially, the office of each Lender designated as such in SCHEDULE 1 attached hereto; thereafter, such other office of such Lender, if any, located within the United States that will be making or maintaining a Base Rate Loan. DOMESTIC SUBSIDIARY. Any Subsidiary that is organized under the laws of the United States of America, any state or territory thereof or the District of Columbia. DRAWDOWN DATE. The date on which the Term Loan is made in accordance with the terms hereof (the "Initial Drawdown Date"), and any date on which the interest rate option with respect to the Term Loan is converted or continued in accordance with section 2.5 hereof. EC APPROVALS. See section 8.2.3 hereof. ELIGIBLE ASSIGNEE. Any of (a) a commercial bank or finance company organized under the laws of the United States, or any State thereof or the District of Columbia, and having total assets in excess of $1,000,000,000; (b) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof or the District of Columbia, and having a net worth of at least $100,000,000, calculated in accordance with generally accepted accounting principles; (c) 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 -7- any such country, and having total assets in excess of $1,000,000,000, or the central bank of any country which is a member of the OECD, PROVIDED, in each case, that such bank (i) 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 (ii) has delivered to the Agent, on the date on which the Assignment and Acceptance to which such Eligible Assignee is a party becomes effective, the forms referred to in section 3.3.3 hereof; (d) a Lender or an Affiliate of a Lender; (e) Approved Fund and (f) other Person (other than a natural person), in each case, approved in accordance with section 15.1 hereof. EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of section 3(3) of ERISA maintained or contributed to by the Borrower, other than a Guaranteed Pension Plan or a Multiemployer Plan. ENVIRONMENTAL LAWS. Any judgment, decree, order, law, license, rule or regulation pertaining to environmental matters, including without limitation, those arising under the Resource Conservation and Recovery Act ("RCRA"), CERCLA, the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any state or local statute, regulation, ordinance, order or decree relating to health, safety or the environment. ENVIRONMENTAL NOTICE. Any notice to the Borrower or any of its Subsidiaries from any third party including, without limitation: any federal, state or local governmental authority, (a) that it has been identified by the United States Environmental Protection Agency as a potentially responsible party under CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B; (b) that any Hazardous Substances which it has generated, transported or disposed of has been found at any site at which a federal, state or local agency or other third party has conducted or has ordered that the Borrower or any of its Subsidiaries conduct a remedial investigation, removal or other response action pursuant to any Environmental Law; or (c) that it is or shall be a named party to any claim, action, cause of action, complaint, or legal or administrative proceeding in connection with the release of Hazardous Substances. EQUITY ISSUANCE. The sale or issuance by the Borrower or any of its Subsidiaries of any of its Capital Stock excluding (i) such issuances as part of mergers or other acquisitions and (ii) any such sales or issuances between the Borrower and its Affiliates or to any employee of the Borrower or its Affiliates. ERISA. The Employee Retirement Income Security Act of 1974. ERISA AFFILIATE. Any Person which is treated as a single employer with the Borrower under section 414 of the Code. -8- ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed Pension Plan within the meaning of section 4043 of ERISA and the regulations promulgated thereunder as to which the requirement of notice has not been waived. EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar Rate Loan, the maximum rate (expressed as a decimal) at which any bank subject thereto would be required to maintain reserves under Regulation D of the Board of Governors of the Federal Reserve System (or any successor or similar regulations relating to such reserve requirements) against "EUROCURRENCY LIABILITIES" (as that term is used in Regulation D), if such liabilities were outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on and as of the effective date of any change in the Eurocurrency Reserve Rate. EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for international business (including dealings in Dollar deposits) in London or such other interbank market as may be selected by the Agent in its sole discretion acting in good faith. EURODOLLAR LENDING OFFICE. Initially, the office of each Lender designated as such in SCHEDULE 1 attached hereto; thereafter, such other office of such Lender, if any, that shall be making or maintaining a Eurodollar Rate Loan. EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar Rate Loan, the rate of interest equal to (a) the rate (rounded upwards to the nearest 1/16 of one percent) per annum at which the Reference Lender's Eurodollar Lending Office is offered Dollar deposits two (2) Eurodollar Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where the eurodollar and foreign currency and exchange operations of such Eurodollar Lending Office are customarily conducted, for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to the amount of the Eurodollar Rate Loan to which such Interest Period applies, divided by (b) a number equal to 1.00 MINUS the Eurocurrency Reserve Rate. EURODOLLAR RATE LOAN. The Term Loan or the Term Loan Amount, as applicable, when bearing interest calculated by reference to the Eurodollar Rate. EVENT OF DEFAULT. See section 9.1 hereof. FACILITY FEE. See section 3.2 hereof. FEE LETTER. See section 3.1 hereof. FINANCIAL AFFILIATE. A Subsidiary of the bank holding company controlling any Lender, which Subsidiary is engaging in any of the activities permitted by section 4(e) of the Bank Holding Company Act of 1956 (12 U.S.C. section 1843). -9- FIXED CHARGE COVERAGE RATIO. See section 7.1 hereof. FLEET. Fleet National Bank, a national banking association, in its individual capacity. FUND. Any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business. GAAP OR GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in sections 6 and 7 hereof and in the calculation of the Obligor Group Requirement, whether directly or indirectly through reference to a capitalized term used therein, means (i) principles that are consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and (ii) to the extent consistent with such principles, the accounting practice of the Borrower reflected in its financial statements for the year ended on the Balance Sheet Date, and (b) when used in general, other than as provided above, means principles that are (i) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time, and (ii) consistently applied with past financial statements of the Borrower adopting the same principles, provided that in each case referred to in this definition of GAAP a certified public accountant would, insofar as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification regarding changes in GAAP) as to financial statements in which such principles have been properly applied. GUARANTEED PENSION PLAN. Any employee pension benefit plan within the meaning of section 3(2) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan. GUARANTIES. The Guaranty by each Guarantor in favor of the Agent for the benefit of the Lenders and the Agent, dated as of the date hereof, and each additional guaranty executed by a Subsidiary acquired or formed after the date hereof. GUARANTORS. Those Subsidiaries of the Borrower listed on SCHEDULE 2 attached hereto, as such schedule may be modified from time to time in accordance with section 3.13 hereof. GUILBERT ACQUISITION. The purchase by the Borrower of certain assets substantially on the terms set forth in the Purchase Agreement. GUILBERT ACQUISITION CLOSING DATE: The date on which the conditions set forth in the Purchase Agreement have been satisfied or waived and the Guilbert Acquisition has occurred. -10- HAZARDOUS SUBSTANCES. Any hazardous waste, as defined by 42 U.S.C. section 6903(5), any hazardous substances as defined by 42 U.S.C. section 9601(14), any pollutant or contaminant as defined by 42 U.S.C. section 9601(33) and any toxic substances, oil or hazardous materials or other chemicals or substances regulated by any Environmental Laws. INDEBTEDNESS. All obligations, contingent and otherwise, that in accordance with GAAP should be classified upon the obligor's balance sheet as liabilities, or to which reference should be made by footnotes thereto, including in any event and whether or not so classified: (a) all debt and similar monetary obligations, whether direct or indirect; (b) all liabilities secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; (c) all obligations in respect of interest rate protection arrangements and exchange rate protection arrangements; (d) all guarantees, endorsements and other contingent obligations whether direct or indirect in respect of indebtedness of others, including any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the obligations to reimburse the issuer in respect of any letters of credit; and (e) every obligation of such Person under any Synthetic Lease. INITIAL DRAWDOWN DATE. See definition of Drawdown Date. INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day of the calendar quarter which includes the Drawdown Date thereof and (b) as to any Eurodollar Rate Loan in respect of which the Interest Period is (i) 3 months or less, the last day of such Interest Period and (ii) more than 3 months, the date that is 3 months from the first day of such Interest Period, the last day of each 3 month period thereafter, and, in addition, the last day of such Interest Period. INTEREST PERIOD. (a)(i) for any Base Rate Loan, the last day of the calendar quarter; and (ii) for any Eurodollar Rate Loan, 1, 2, 3 or 6 months, and (b) thereafter, each period commencing on the last day of the next preceding Interest Period and ending on the last day of one of the periods set forth above, as selected by the Borrower in a Conversion Request; PROVIDED that all of the foregoing provisions relating to Interest Periods are subject to the following: (A) if any Interest Period with respect to a Eurodollar Rate Loan would otherwise end on a day that is not a Eurodollar Business Day, that Interest Period shall be extended to the next succeeding Eurodollar Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Eurodollar Business Day; -11- (B) if any Interest Period with respect to a Base Rate Loan would end on a day that is not a Business Day, that Interest Period shall end on the next succeeding Business Day; (C) if the Borrower shall fail to give notice as provided in section 2.5 hereof, the Borrower shall be deemed to have requested a conversion of the affected Eurodollar Rate Loan to a Base Rate Loan and the continuance of a Base Rate Loan as a Base Rate Loan on the last day of the then current Interest Period with respect thereto; (D) any Interest Period relating to any Eurodollar Rate Loan that begins on the last Eurodollar 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 Eurodollar Business Day of a calendar month; and (E) any Interest Period that would otherwise extend beyond the Maturity Date shall end on the Maturity Date. INVESTMENTS. All expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of stock or Indebtedness of, or for loans, advances, capital contributions or transfers of property to, or in respect of any guaranties (or other commitments as described under Indebtedness), or obligations of, any Person. In determining the aggregate amount of Investments outstanding at any particular time: (a) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding; (b) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (c) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (d) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (b) may be deducted when paid; and (e) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof. JOINDER AGREEMENTS. Joinder agreements in a form of acceptable to the Agent pursuant to which Subsidiaries of the Borrower become parties to and agree to be bound by the provisions of the Guaranty as a Guarantor. LENDER AFFILIATE. With respect to any Lender, (a) an Affiliate of such Lender or (b) any Approved Fund. LENDERS. As defined in the preamble hereto, which term shall include any other Person who becomes an assignee of any rights and obligations of a Lender pursuant to -12- section 16 hereof. Unless the context otherwise requires, the term "Lenders" includes the Agent in its capacity as lender of the Term Loan. LOAN DOCUMENTS. This Credit Agreement, the Term Notes, the Guaranties, the Fee Letter and any other documents delivered pursuant to this Credit Agreement. MARGIN REGULATIONS. See section 4.13 hereof. MATURITY DATE. The date 364 days after the Closing Date or such earlier date as the Term Loan is paid or payable in full, or in the event that the Borrower does not consummate the Guilbert Acquisition on or before December 31, 2002, then December 31, 2002. MEASUREMENT PERIOD. See section 7.1 hereof. MOODY'S. Moody's Investors Service, Inc. MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of section 3(37) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate. NET CASH CAPITAL MARKETS OFFERING PROCEEDS. With respect to any Capital Markets Offering, the excess of the gross cash proceeds received by such Person for Capital Markets Offering after deduction of all reasonable and customary transaction expenses (including, without limitation, underwriting discounts and commissions) actually incurred in connection with such an offering. NET CASH EQUITY ISSUANCE PROCEEDS. With respect to any Equity Issuance, the excess of the gross cash proceeds received by such Person for such Equity Issuance after deduction of all reasonable and customary transaction expenses (including, without limitation, underwriting discounts and commissions) actually incurred in connection with such a sale or other issuance. OBLIGATIONS. All indebtedness, obligations and liabilities of any of the Borrower and its Subsidiaries arising or incurred under this Credit Agreement or any of the other Loan Documents or in respect of the Term Loan or other instruments at any time evidencing any thereof, whether existing on the date of this Credit Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise. OBLIGOR GROUP. Collectively, the Borrower and the Guarantors (including any Subsidiary of the Borrower which as of any date of determination has become a Guarantor pursuant to the provisions of this Credit Agreement). -13- OBLIGOR GROUP REQUIREMENT. The requirement that, as of any date of determination, Consolidated EBIT of the Obligor Group for the Measurement Period most recently ended shall not be less than $275,000,000. PBGC. The Pension Benefit Guaranty Corporation created by section 4002 of ERISA and any successor entity or entities having similar responsibilities. PERMITTED LIENS. Liens, security interests and other encumbrances permitted under section 6.2 hereof. PERSON. Any individual, corporation, limited liability company, partnership, limited liability partnership, trust, unincorporated association, business, or other legal entity, and any government or any governmental agency or political subdivision thereof. PURCHASE AGREEMENT: The Sale and Purchase Agreement, dated as of August 21, 2002, by and among Guilbert, Reliable UK, VPC Systems and the Borrower. RATE ADJUSTMENT PERIOD. See definition of Applicable Margin. REAL ESTATE. All real property at any time owned or leased (as lessee or sublessee) by the Borrower or any of its Subsidiaries. RECORD. The grid attached to a Term Note, or the continuation of such grid, or any other similar record, including computer records, maintained by any Lender with respect to any Loan referred to in such Term Note. REFERENCE LENDER. Fleet. RENTAL EXPENSE. All obligations of the Borrower or any of its Subsidiaries under any rental agreements or leases of real property relating to retail stores, other than obligations in respect of Capitalized Leases and Synthetic Leases. REPLACEMENT LENDER. See section 3.12 hereof. REQUIRED LENDERS. As of any date, the Lenders holding more than fifty percent (50%) of the outstanding principal amount of the Term Loan on such date. REVOLVING CREDIT AGREEMENT. That certain Revolving Credit Agreement, dated as of June 21, 2002, among (a) the Borrower, (b) the lenders named therein, (c) Fleet, as administrative agent, (d) Citicorp USA, Inc. and Wachovia Bank, National Association, as co-syndication agents, and (e) HSBC Bank USA and JPMorgan Chase Bank, as co-documentation agents. S&P. Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc. -14- SECURITIZATION. The securitization by the Borrower and certain of its Subsidiaries of up to $300,000,000 of third-party accounts receivable on the terms and conditions set forth in the (a) Receivables Purchase Agreement, dated as of October 27, 2000, among the Borrower, Lincolnshire Funding, LLC, Corporate Receivables Corporation, the financial institutions from time to time party thereto as Purchasers, and Citicorp North America, Inc., as Agent, and (b) Receivables Sale Agreement, dated as of October 27, 2000, among the Borrower, Quill Corporation, Staples Contract & Commercial, Inc. and Hackensack Funding, LLC, each as delivered to the Agent prior to the Closing Date and as in effect on the Closing Date, and in each case as amended with the consent of the Lenders, and any replacement or successor accounts receivable financing facility which contains terms and conditions which are substantially similar to the securitization described in clauses (a) and (b). SENIOR DEBT RATING. The rating issued by S&P or Moody's with respect to unsecured Indebtedness of the Borrower not maturing within twelve months, issued without third-party credit enhancement, and not subordinated by its term in right of payment to other Indebtedness of the Borrower. In the event that no such ratings are available on such unsecured Indebtedness of the Borrower, the Senior Debt Rating shall be the rating implied, in the reasonable discretion of the Agent, to such unsecured Indebtedness by reference to such other Indebtedness of the Borrower as shall be so rated. STOCKHOLDERS' EQUITY. As at any date of determination, the sum of (a) the capital accounts including common stock and preferred stock, but excluding treasury stock of the Borrower PLUS (b) the earned surplus and capital surplus of the Borrower (excluding adjustments to translate foreign assets and liabilities for changes in foreign exchange rates made in accordance with Financial Accounting Standards Board Statement No. 52), as determined in accordance with GAAP. SUBORDINATED DEBT. Unsecured Indebtedness of the Borrower or any of its Subsidiaries that is expressly subordinated and made junior to the payment and performance of the Obligations, and evidenced as such by a written instrument containing subordination provisions in form and substance approved by the Required Lenders in writing. SUBSIDIARY. Any corporation, association, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes) of the outstanding Voting Stock and the accounts of which are consolidated with the Borrower in accordance with GAAP. SUBSTITUTED LENDER. See section 3.12 hereof. SYNTHETIC LEASE. Any lease of goods or other property, whether real or personal, which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax purposes. -15- TERM LOAN. The term loan made or to be made by the Lenders to the Borrower on the Closing Date in the principal amount of $325,000,000 pursuant to section 2.1. TERM LOAN AMOUNT. With respect to each Lender, such Lender's Term Loan Percentage MULTIPLIED BY the amount of the Term Loan, as the same may be reduced from time to time in accordance with the terms of this Credit Agreement. TERM LOAN PERCENTAGE. With respect to each Lender, the percentage set forth on SCHEDULE 1 attached hereto. TERM NOTE. See section 4.2. VOTING STOCK. Stock or similar interests, of any class or classes (however designated), the holders of which are at the time entitled, as such holders, to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, trust or other business entity involved, whether or not the right so to vote exists by reason of the happening of a contingency. SECTION 1.2. RULES OF INTERPRETATION. (a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Credit Agreement. (b) The singular includes the plural and the plural includes the singular. (c) A reference to any law includes any amendment or modification to such law. (d) A reference to any Person includes its permitted successors and permitted assigns. (e) Accounting terms not otherwise defined herein have the meanings assigned to them by generally accepted accounting principles applied on a consistent basis by the accounting entity to which they refer. (f) The words "INCLUDE", "INCLUDES" and "INCLUDING" are not limiting. (g) All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code as in effect in the Commonwealth of Massachusetts, have the meanings assigned to them therein, with the term "instrument" being that defined under Article 9 of the Uniform Commercial Code. -16- (h) Reference to a particular "section" refers to that section of this Credit Agreement unless otherwise indicated. (i) The words "HEREIN", "HEREOF", "HEREUNDER" and words of like import shall refer to this Credit Agreement as a whole and not to any particular section or subdivision of this Credit Agreement. (j) Unless otherwise expressly indicated, 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." (k) This Credit Agreement and the 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, however, cumulative and are to be performed in accordance with the terms thereof. (l) This Credit Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Agent and the Borrower and are the product of discussions and negotiations among all parties. Accordingly, this Credit Agreement and the other Loan Documents are not intended to be construed against the Agent or any of the Lenders merely on account of the Agent's or any Lender's involvement in the preparation of such documents. SECTION 2. THE 364-DAY TERM LOAN FACILITY. SECTION 2.1. COMMITMENT TO LEND. (a) subject to the terms and conditions set forth in this Credit Agreement, each Lender agrees to lend to the Borrower on the Initial Drawdown Date the amount equal to its Term Loan Percentage of the principal amount of Three Hundred Twenty-Five Million Dollars ($325,000,000); (b) this Credit Agreement, and the obligations of the Lenders hereunder (including the obligation of the Lenders to lend the Term Loan to the Borrower), shall terminate, and the provisions of this Credit Agreement shall no longer have force or effect, if the Term Loan has not been advanced to the Borrower on or before December 31, 2002; and (c) the Agent's Special Counsel shall hold the Term Notes in escrow and (i) shall release such Term Notes to the Lenders on the Initial Drawdown Date or (ii) shall return such Term Notes to the Borrower upon the termination of this Credit Agreement and the obligations of the Lenders hereunder in accordance with this section 2.1. SECTION 2.2. THE TERM NOTES. The Term Loan shall be evidenced by separate promissory notes of the Borrower in substantially the form of EXHIBIT B hereto (each a "TERM NOTE"), dated the Closing Date (or such other date on which a Lender may become a party hereto in accordance with section 15 hereof) and completed with appropriate insertions. One Term Note shall be payable to the order of each Lender in a principal amount equal to such Lender's Term Loan Amount and representing the obligation of the Borrower to pay to such Lender such principal amount, plus interest accrued -17- thereon, as set forth below. The Borrower irrevocably authorizes each Lender to make or cause to be made a notation on such Lender's Term Note Record reflecting the original principal amount of such Lender's Term Loan Percentage of the Term Loan and, at or about the time of such Lender's receipt of any principal payment on such Lender's Term Note, an appropriate notation on such Lender's Term Note Record reflecting such payment. The aggregate unpaid amount set forth on such Lender's Term Note Record shall be PRIMA FACIE evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender's Term Note Record shall not affect the obligations of the Borrower hereunder or under any Term Note to make payments of principal of and interest on any Term Note when due. SECTION 2.3. MATURITY AND OTHER REPAYMENTS OF TERM LOAN. 2.3.1. MATURITY. The Borrower promises to pay on the Maturity Date, and there shall become absolutely due and payable on the Maturity Date, all of the outstanding principal amount of the Term Loan on such date, together with any and all accrued and unpaid interest thereon. 2.3.2. OPTIONAL PREPAYMENTS OF TERM LOAN. The Borrower shall have the right, at its election, to prepay the Term Loan on or before the Maturity Date, as a whole or in part, at any time, subject to section 3.10, without penalty or premium. The Borrower shall give the Agent, prior written notice no later than 1:00 p.m., Boston time, three (3) Business Days' prior to any proposed prepayment pursuant to this section 2.3.2 of the Term Notes, and specifying the proposed date of prepayment and the principal amount to be prepaid. Each such partial prepayment of the Term Loan shall be in an integral multiple of $5,000,000, shall be accompanied by the payment of accrued interest on the principal prepaid to the date of prepayment. 2.3.3. MANDATORY PREPAYMENTS. The Borrower shall pay to the Agent for the respective accounts of the Lenders an amount equal to one hundred percent (100%) of (i) Net Cash Equity Issuance Proceeds or (ii) Net Cash Capital Markets Offering Proceeds other than $325,000,000 in debt offering proceeds described in the offering memorandum dated September 25, 2002, in each case, concurrently with the receipt thereof by the Borrower or any Subsidiary. 2.3.4. APPLICATION OF PAYMENTS. All payments made shall be allocated among the Lenders in proportion, as nearly as practicable, to the respective outstanding amounts of each Lender's Term Loan Percentage, with adjustments to the extent practicable to equalize any prior prepayments not exactly in proportion. No amounts repaid with respect to the Term Loan may be reborrowed. SECTION 2.4. INTEREST ON TERM LOAN. 2.4.1. INTEREST RATES. Except as otherwise provided in section 3.11: -18- (a) Each Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate per annum equal to the Base Rate. (b) Each Eurodollar Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the Eurodollar Rate determined for such Interest Period PLUS the Applicable Margin. The Borrower promises to pay interest in arrears on each Interest Payment Date. SECTION 2.5. CONVERSION OPTIONS. SECTION 2.5.1. CONVERSION OF THE TERM LOAN. The Borrower may elect from time to time to convert the interest rate with respect to the Term Loan, PROVIDED that (a) with respect to any such conversion of a Eurodollar Rate Loan to a Base Rate Loan, the Borrower shall give the Agent at least one (1) Business Day's prior written notice of such election; (b) with respect to any such conversion of a Base Rate Loan to a Eurodollar Rate Loan, the Borrower shall give the Agent at least three (3) Eurodollar Business Days' prior written notice of such election; (c) with respect to any such conversion of a Eurodollar Rate Loan into a Base Rate Loan, such conversion shall only be made on the last day of the Interest Period with respect thereto; and (d) no Base Rate Loan may be converted into a Eurodollar Rate Loan when any Default or Event of Default has occurred and is continuing. Each Conversion Request relating to the conversion of the Term Loan to a Eurodollar Rate Loan shall be irrevocable by the Borrower. SECTION 2.5.2. CONTINUATION OF A EURODOLLAR RATE LOAN. Any Eurodollar Rate Loan may be continued as a Eurodollar Rate Loan upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the notice provisions contained in section 2.5.1 hereof; PROVIDED that no Eurodollar Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, but shall be automatically converted to a Base Rate Loan on the last day of the first Interest Period relating thereto ending during the continuance of any Default or Event of Default of which officers of the Agent active upon the Borrower's account have actual knowledge. In the event that the Borrower fails to provide any such notice with respect to continuation of a Eurodollar Rate Loan as such, then such Eurodollar Rate shall be automatically converted to a Base Rate Loan on the last day of the Interest Period relating thereto. The Agent shall notify the Lenders and the Borrower promptly when any such automatic conversion contemplated by this section 2.5.2 is scheduled to occur. SECTION 3. CERTAIN GENERAL PROVISIONS; FEES. SECTION 3.1. CLOSING AND AGENT FEES. The Borrower shall pay (a) to the Agent for the accounts of the Lenders on the Closing Date a closing fee as set forth in that certain letter agreement, dated as of the September 18, 2002 (as such agreement may be amended and in effect from time to time, the "FEE LETTER") by and among the Borrower, the Agent and -19- the Arranger and (b) the fees (the "AGENT FEES") to the Agent and the Arranger in the amounts and at the times set forth in the Fee Letter. SECTION 3.2. FACILITY FEE During the period from the date 31 days after the Closing Date through but excluding the Initial Drawdown Date, the Borrower agrees to pay to the Agent for the accounts of the Lenders in accordance with their respective Term Loan Percentages a facility fee (the "FACILITY FEE"), which shall be calculated for each day at a per annum rate of 0.150% on the undrawn principal amount of the Term Loan. The Facility Fee shall be payable quarterly in arrears on the last day of each calendar quarter for the calendar quarter then ended commencing on the first such date following the date 31 days after the Closing Date, with a final payment on the Initial Drawdown Date or any earlier date that the obligation of the Lenders to lend the Term Loan to the Borrower shall terminate. SECTION 3.3. FUNDS FOR PAYMENTS. SECTION 3.3.1. PAYMENTS TO AGENT. All payments of principal, interest and any other fees or amounts due hereunder or under any of the other Loan Documents shall be made to the Agent, for the respective accounts of the Lenders and the Agent, at the Agent's Head Office or at such other location in the Boston, Massachusetts area that the Agent may from time to time designate, in each case in immediately available funds. SECTION 3.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder and under any of the other Loan Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrower is compelled by law to make such deduction or withholding. If any such obligation is imposed upon the Borrower with respect to any amount payable by it hereunder or under any of the other Loan Documents, other than (a) with respect to taxes based upon the Agent's or any Lender's net income, or (b) with respect to amounts owing to a Lender that (i) is not incorporated under the laws of the United States of America or a state thereof and (ii) has not delivered to the Agent the forms referred to in section 3.3.3 hereof, the Borrower will pay to the Agent, for the account of the Lenders or (as the case may be) the Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Lenders or the Agent to receive the same net amount which the Lenders or the Agent would have received on such due date had no such obligation been imposed upon the Borrower. The Borrower will deliver promptly to the Agent certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrower hereunder or under such other Loan Document. SECTION 3.3.3. WITHHOLDING. Each Lender and the Agent that is not a U.S. Person as defined in Section 7701(a)(30) of the Code for federal income tax purposes (a "NON- -20- U.S. LENDER") hereby agrees that, if and to the extent it is legally able to do so, it shall, on the date it becomes a Lender hereunder, deliver to the Borrower and the Agent such certificates, documents or other evidence, as and when required by the Code or Treasury Regulations issued pursuant thereto, including (a) in the case of a Non-U.S. Lender that is a "bank" for purposes of Section 881(c)(3)(A) of the Code, two (2) duly completed copies of Internal Revenue Service Form W-8BEN or Form W-8ECI and any other certificate or statement of exemption required by Treasury Regulations, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Lender or the Agent establishing that with respect to payments of principal, interest or fees hereunder it is (i) not subject to United States federal withholding tax under the Code because such payment is effectively connected with the conduct by such Lender or Agent of a trade or business in the United States or (ii) totally exempt from United States federal withholding tax under a provision of an applicable tax treaty and (b) in the case of a Non-U.S. Lender that is not a "bank" for purposes of Section 881(c)(3)(A) of the Code, a certificate in form and substance reasonably satisfactory to the Agent and the Borrower and to the effect that (i) such Non-U.S. Lender is not a "bank" for purposes of Section 881(c)(3)(A) of the Code, is not subject to regulatory or other legal requirements as a bank in any jurisdiction, and has not been treated as a bank for purposes of any tax, securities law or other filing or submission made to any governmental authority, any application made to a rating agency or qualification for any exemption from any tax, securities law or other legal requirements, (ii) is not a ten (10) percent shareholder for purposes of Section 881(c)(3)(B) of the Code and (iii) is not a controlled foreign corporation receiving interest from a related person for purposes of Section 881(c)(3)(C) of the Code, together with a properly completed Internal Revenue Service Form W-8 or W-9, as applicable (or successor forms). Each Lender or the Agent agrees that it shall, promptly upon a change of its lending office or the selection of any additional lending office, to the extent the forms previously delivered by it pursuant to this section are no longer effective, and promptly upon the Borrower's or the Agent's reasonable request after the occurrence of any other event (including the passage of time) requiring the delivery of a Form W-8BEN, Form W-8ECI, Form W-8 or W-9 in addition to or in replacement of the forms previously delivered, deliver to the Borrower and the Agent, as applicable, if and to the extent it is properly entitled to do so, a properly completed and executed Form W-8BEN, Form W-8ECI, Form W-8 or W-9, as applicable (or any successor forms thereto). SECTION 3.4. COMPUTATIONS. All computations of interest on a Base Rate Loan and other fees shall be based on a 365-day or 366-day year, as applicable, and all computations of interest on a Eurodollar Rate Loan shall be based on a 360-day year, and, in each case, paid for the actual number of days elapsed. Except as otherwise provided in the definition of the term "INTEREST PERIOD" with respect to a Eurodollar Rate Loan, whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension. SECTION 3.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the commencement of any Interest Period relating to any Eurodollar Rate Loan, the Agent -21- shall determine or be notified by the Required Lenders that adequate and reasonable methods do not exist for ascertaining the Eurodollar Rate that would otherwise determine the rate of interest to be applicable to any Eurodollar Rate Loan during any Interest Period, the Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrower and the Lenders) to the Borrower and the Lenders. In such event (a) any Conversion Request with respect to a Eurodollar Rate Loan shall be automatically withdrawn and shall be deemed a request for a Base Rate Loan, (b) each Eurodollar Rate Loan will automatically, on the last day of the then current Interest Period relating thereto, become a Base Rate Loan, and (c) the obligations of the Lenders to make a Eurodollar Rate Loan shall be suspended until the Agent or the Required Lenders, as applicable, determine that the circumstances giving rise to such suspension no longer exist, whereupon the Agent or, as the case may be, the Agent upon the instruction of the Required Lenders, shall so notify the Borrower and the Lenders. SECTION 3.6. ILLEGALITY. Notwithstanding any other provisions herein, if any present or future law, regulation, treaty or directive or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain a Eurodollar Rate Loan, such Lender shall forthwith give notice of such circumstances to the Borrower and the other Lenders and thereupon the commitment of such Lender to make or convert to a Eurodollar Rate Loan shall forthwith be suspended and such Lender's Term Loan Amount then outstanding as a Eurodollar Rate Loan, if any, shall be converted automatically to Base Rate Loan on the last day of each Interest Period applicable to such Eurodollar Rate Loan or within such earlier period as may be required by law. The Borrower hereby agrees promptly to pay the Agent for the account of such Lender, upon demand by such Lender, any additional amounts necessary to compensate such Lender for any costs incurred by such Lender in making any conversion in accordance with this section 3.6, including any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or maintain its Eurodollar Rate Loan hereunder. SECTION 3.7. ADDITIONAL COSTS, ETC. If any change after the Closing Date to any present applicable law or if any future applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Lender or the Agent by any central bank or other fiscal, monetary or other authority (whether or not having the force of law), shall: (a) subject any Lender or the Agent to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Credit Agreement, the other Loan Documents or the Term Loan (other than taxes based upon or measured by the income or profits of such Lender or the Agent), or (b) materially change the basis of taxation (except for changes in taxes on income or profits) of payments to any Lender of the principal of or the interest on the -22- Term Loan or any other amounts payable to any Lender or the Agent under this Credit Agreement or any of the other Loan Documents, or (c) impose or increase or render applicable (other than to the extent specifically provided for elsewhere in this Credit Agreement) any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law) against assets held by, or deposits in or for the account of, or loans by, any Lender, or (d) impose on any Lender or the Agent any other conditions or requirements with respect to this Credit Agreement, the other Loan Documents or the Term Loan, and the result of any of the foregoing is: (i) to increase the cost to any Lender, of making, funding, issuing, renewing, extending or maintaining its Term Loan Amount, or (ii) to reduce the amount of principal, interest, or other amount payable to such Lender or the Agent hereunder, or (iii) to require such Lender or the Agent to make any payment or to forego any interest or other sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Lender or the Agent from the Borrower hereunder, then, in each such case and to the extent that the amount such additional cost, reduction, payment, foregone interest or other sum is not reflected in the Base Rate or the Eurodollar Rate, the Borrower will, upon demand made by such Lender or (as the case may be) the Agent at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender or the Agent such additional amounts as will be sufficient to compensate such Lender or the Agent for such additional cost, reduction, payment or foregone interest or other sum (without duplication for recovery of such amounts under any other provision hereof), PROVIDED that the Borrower shall not be liable to any Lender or the Agent for costs incurred more than sixty (60) days prior to receipt by the Borrower of such demand for payment from such Lender or (as the case may be) the Agent unless such costs were incurred prior to such 60-day period solely as a result of such present or future applicable law being retroactive to a date which occurred prior to such 60-day period. SECTION 3.8. CAPITAL ADEQUACY. If after the Closing Date any Lender or the Agent determines that the adoption of or change in any law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) regarding capital requirements for banks or bank holding companies or any change in the interpretation or application thereof by a court or governmental authority with appropriate -23- jurisdiction has the effect of reducing the return on such Lender's or the Agent's the Term Loan Amount to a level below that which such Lender or the Agent could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or the Agent's then existing policies with respect to capital adequacy and assuming full utilization of such entity's capital) by any amount deemed by such Lender or (as the case may be) the Agent to be material, then such Lender or the Agent may notify the Borrower of such fact. To the extent that the amount of such reduction in the return on capital is not reflected in the Base Rate or the Eurodollar Rate then the Borrower agrees to pay such Lender or (as the case may be) the Agent for the amount of such reduction in the return on capital as and when such reduction is determined upon presentation by such Lender or (as the case may be) the Agent of a certificate in accordance with section 3.9 hereof, PROVIDED that the Borrower shall not be liable to any Lender or the Agent for costs incurred more than sixty (60) days prior to receipt by the Borrower of the notice referred to in the immediately preceding sentence from such Lender or (as the case may be) the Agent. Each Lender shall allocate such cost increases among its customers in good faith and on an equitable basis. SECTION 3.9. CERTIFICATE. A certificate setting forth any additional amounts payable pursuant to sections 3.7 or 3.8 hereof and a brief explanation of such amounts which are due, submitted by any Lender or the Agent to the Borrower, shall be conclusive, absent manifest error, that such amounts are due and owing. If the Borrower is required to pay any additional amounts pursuant to sections 3.7 or 3.8 hereof with respect to any Lender, the Borrower may, following payment in full of the amount or amounts due set forth in such certificate, take the actions permitted by section 3.12 hereof to replace such Lender. SECTION 3.10. INDEMNITY. The Borrower agrees to indemnify each Lender and to hold each Lender harmless from and against all redeployment costs or expenses that such Lender may reasonably sustain or incur as a consequence of (a) default by the Borrower in payment of the principal amount of or any interest on any Eurodollar Rate Loan as and when due and payable, including any such cost or expense arising from interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain its Eurodollar Rate Loan, (b) default by the Borrower in making a conversion after the Borrower has given (or is deemed to have given) a Conversion Request relating thereto in accordance with section 2.5 hereof, or (c) the making of any payment of a Eurodollar Rate Loan or the making of any conversion of any such Eurodollar Rate Loan to a Base Rate Loan on a day that is not the last day of the applicable Interest Period with respect thereto, including, without limitation, any payments made under sections 2.3.2, 2.3.3 or 3.12, including interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain the Eurodollar Rate Loan. SECTION 3.11. INTEREST ON OVERDUE AMOUNTS. Overdue principal and (to the extent permitted by applicable law) interest on the Term Loan and all other overdue amounts payable hereunder or under any of the other Loan Documents, if not repaid on or before the fifth calendar day following the day such payment was due, shall bear interest from the due date thereof, compounded monthly and payable on demand at any time from and after fifth calendar day following the day -24- such payment was due, at a rate per annum equal to two percent (2%) above the rate of interest then applicable thereto (or, if no rate of interest is then applicable there to, the Base Rate until such amount shall be paid in full (after as well as before judgment)). SECTION 3.12. REPLACEMENT OF INDIVIDUAL LENDERS. Upon the happening of any of the events set forth in sections 3.6, 3.7 or 3.8, the Borrower may (PROVIDED that at the time no Default or Event of Default exists or would result after giving effect to the Borrower's action) replace each affected Lender (a "SUBSTITUTED LENDER"), subject to the following conditions: (a) the Borrower shall have delivered to the Agent not less than ten (10) Business Days prior to the exercise of its rights under this section 3.12 a written commitment in form and substance satisfactory to the Agent and each of the Lenders from a banking institution (the "REPLACEMENT LENDER") reasonably acceptable to the Agent and each of the remaining Lenders (other than the Substituted Lender) in which such Replacement Lender agrees to become a "LENDER" under this Credit Agreement, having a Term Loan Amount in the amount of the Substituted Lender's Term Loan Amount; (b) the Borrower shall have given appropriate notice of any prepayment under this section 3.12 as required by section 3.7 and subject to all other provisions of this Credit Agreement; (c) the Substituted Lender shall have assigned, pursuant to section 15 hereof, the Term Loan Amount and other Obligations of such Substituted Lender to the Replacement Lender and such Replacement Lender shall have become a Lender under this Credit Agreement having a Term Loan Amount in the amount of such Substitute Lender's Term Loan Amount; and (d) the Borrower shall have paid all other Obligations owed to the Substituted Lender. SECTION 3.13. GUARANTIES. The payment and performance of the Obligations shall be guaranteed by each Guarantor pursuant to the Guaranties, each of which shall be in the form of EXHIBIT C hereto. The Borrower may cause additional Subsidiaries of the Borrower to become Guarantors hereunder (if such Subsidiaries become guarantors of the Revolving Credit Agreement) by causing such Subsidiary or Subsidiaries to agree to be bound by the provisions of the Guaranty, to execute and deliver a Joinder Agreement and to deliver such legal opinions and other documents and instruments as the Agent may request. The Agent and the Lenders hereby agree that they shall, upon the written request of the Borrower and at the cost and expense of the Borrower, release any Guarantor from its obligations to the Agent and the Lenders under the Guaranty to which such Guarantor is a party if, and only if, (a) no Default or Event of Default shall have occurred and be continuing on the date of such release, (b) the Borrower shall be in compliance with the Obligor Group Requirement after giving effect to such release, (c) the Borrower shall have delivered to the Agent and the Lenders on the date of such -25- release a certificate signed by an authorized officer of the Borrower and evidence satisfactory to the Agent and the Lenders showing compliance with the provisions of clauses (a) and (b) hereof and (d) such Guarantor has been released as a guarantor of the Revolving Credit Agreement. The Borrower shall deliver to the Lenders an updated SCHEDULE 2 upon the release or addition of any Guarantor as provided in this section 3.13. SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to the Lenders and the Agent as follows: SECTION 4.1. CORPORATE AUTHORITY. SECTION 4.1.1. INCORPORATION; GOOD STANDING. The Borrower and each Guarantor (a) is a corporation or, as the case may be, a Massachusetts Business Trust duly organized, validly existing and in good standing under the laws of its state of incorporation or organization, (b) has all requisite corporate or, as the case may be, trust power to own its property and conduct its business as now conducted and as presently contemplated, and (c) is in good standing as a foreign corporation and is duly authorized to do business in each jurisdiction where such qualification is necessary except where a failure to be so qualified would not have a materially adverse effect on the business, assets or financial condition of the Borrower. SECTION 4.1.2. AUTHORIZATION. The execution, delivery and performance of this Credit Agreement and the other Loan Documents by the Borrower and each Guarantor which is or is to become a party thereto, and the transactions contemplated hereby and thereby (a) are within the corporate or, as the case may be, trust authority of such Person, (b) have been duly authorized by all necessary corporate or, as the case may be, trust proceedings, (c) do not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which such Person is subject which would have a material adverse effect either individually or in the aggregate on the Borrower and its Subsidiaries taken as a whole or on the ability of such Person to fulfill its obligations under this Credit Agreement and the other Loan Documents to which it is a party, (d) do not conflict with or result in any breach or contravention of any judgment, order, writ, injunction, license or permit applicable to the Borrower or any Guarantor and (e) do not conflict with any provision of the corporate charter or bylaws or, as the case may be, the Agreement and Declaration of Trust of, or any agreement or other instrument binding upon, the Borrower or any Guarantor. SECTION 4.1.3. ENFORCEABILITY. The execution and delivery of this Credit Agreement and the other Loan Documents to which the Borrower or any Guarantor is or is to become a party will result in valid and legally binding obligations of such Person enforceable against it in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors' rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought. -26- SECTION 4.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by the Borrower and the Guarantors of this Credit Agreement and the other Loan Documents to which the Borrower or any Guarantor is or is to become a party and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing with, any governmental agency or authority other than those already obtained. SECTION 4.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 4.3 hereto, the Borrower and its Subsidiaries own all of the assets reflected in the consolidated balance sheet of the Borrower as at the Balance Sheet Date or acquired since that date (except property and assets sold or otherwise disposed of in the ordinary course of business since that date), subject to no rights of others, including any mortgages, leases, conditional sales agreements, title retention agreements, liens or other encumbrances except Permitted Liens. SECTION 4.4. FINANCIAL STATEMENTS; FISCAL YEAR. (a) There has been furnished to each of the Lenders an audited consolidated balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date, and consolidated statements of income and cash flow of the Borrower and its Subsidiaries for the fiscal year then ended, certified by Ernst & Young LLP. Such balance sheet and statements of income and cash flows have been prepared in accordance with GAAP and fairly present the financial condition of the Borrower and its Subsidiaries as at the close of business on the date thereof and the results of operations for the fiscal year then ended. There are no contingent liabilities of the Borrower or any of its Subsidiaries as of such date involving material amounts, known to the officers of the Borrower, which were not disclosed in such balance sheet and the notes related thereto. (b) There has been furnished to each of the Lenders an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at August 3, 2002, and unaudited consolidated statements of income and cash flow of the Borrower and its Subsidiaries for the fiscal quarter then ended. Such balance sheet and statements of income and cash flows have been prepared in accordance with GAAP and fairly present the financial condition of the Borrower and its Subsidiaries as at the close of business on the date thereof and the results of operations for the fiscal quarter then ended (subject to year-end adjustments). There are no contingent liabilities of the Borrower or any of its Subsidiaries as of such date involving material amounts, known to the officers of the Borrower, which were not disclosed in such balance sheet and the notes related thereto. (c) The Borrower has a fiscal year which is the 52/53 week period ending on the Saturday closest to January 31st of each year. SECTION 4.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has occurred no change in the operations, business, properties, assets or financial condition of the Borrower and its Subsidiaries as shown on or reflected in the consolidated balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date, or the consolidated statements of income and cash flows for the fiscal year then ended, other than changes in the ordinary course of business that have not had any materially adverse effect either -27- individually or in the aggregate on the business, assets or financial condition of the Borrower and its Subsidiaries taken as a whole. Since the Balance Sheet Date, the Borrower has not made any Distributions except Distributions made in compliance with section 6.4 hereof. SECTION 4.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower and each of its Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade names, licenses and permits, and rights in respect of the foregoing, adequate for the conduct of its business substantially as now conducted without known conflict with any rights of others. SECTION 4.7. LITIGATION. Except as set forth in SCHEDULE 4.7 hereto, there are no actions, suits, proceedings or investigations of any kind pending or, to the best of the Borrower's knowledge, threatened against the Borrower or any of its Subsidiaries before any court, tribunal or administrative agency or board that, if adversely determined, might, either in any case or in the aggregate, materially adversely affect the properties, assets, financial condition or business of the Borrower and its Subsidiaries taken as a whole, or materially impair the right of the Borrower and each of its Subsidiaries to carry on business substantially as now conducted by it, or result in any substantial liability not adequately covered by insurance, or for which adequate reserves are not maintained on the consolidated balance sheet of the Borrower and its Subsidiaries or which question the validity of this Credit Agreement or any of the other Loan Documents, or any action taken or to be taken pursuant hereto or thereto. SECTION 4.8. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower nor any of its Subsidiaries is in violation of any provision of its charter documents, bylaws (or equivalent constitutive documents), or any agreement or instrument to which it may be subject or by which it or any of its properties may be bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that could result in the imposition of substantial penalties or materially and adversely affect the financial condition, properties or business of the Borrower and its Subsidiaries taken as a whole. SECTION 4.9. TAX STATUS. The Borrower and each of its Subsidiaries (a) has made or filed all applicable federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (b) has paid all taxes and other governmental assessments and charges shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and by appropriate proceedings and (c) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. Except as set forth on SCHEDULE 4.9 attached hereto, there are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Borrower know of no basis for any such claim. SECTION 4.10. NO EVENT OF DEFAULT. No Default or Event of Default has occurred and is continuing. -28- SECTION 4.11. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower nor any of its Subsidiaries is a "HOLDING COMPANY", or a "SUBSIDIARY COMPANY" of a "HOLDING COMPANY", or an "AFFILIATE" of a "HOLDING COMPANY", as such terms are defined in the Public Utility Holding Company Act of 1935; nor is such Person an "INVESTMENT COMPANY", or a "PRINCIPAL UNDERWRITER" of an "INVESTMENT COMPANY", or a company controlled by an "INVESTMENT COMPANY", as such terms are defined in the Investment Company Act of 1940. SECTION 4.12. EMPLOYEE BENEFIT PLANS. SECTION 4.12.1. IN GENERAL. Each Employee Benefit Plan has been maintained and operated in compliance in all material respects with the provisions of ERISA, all Applicable Pension Legislation, and, to the extent applicable, the Code, including but not limited to the provisions thereunder respecting the bonding of fiduciaries and other persons handling plan funds as required by section 412 of ERISA. No prohibited transaction has occurred that would result in material liability for the Borrower or any of its Subsidiaries. SECTION 4.12.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan which is an employee welfare benefit plan within the meaning of section 3(1) or section 3(2)(B) of ERISA provides benefit coverage subsequent to termination except as required by Title I, Subtitle B, Part 6 of ERISA or applicable state law. The Borrower may terminate each such Plan at any time (or at any time subsequent to the expiration of any applicable bargaining agreement) in the discretion of the Borrower without liability to any Person other than for claims arising or benefits accruing prior to termination. SECTION 4.12.3. GUARANTEED PENSION PLANS. Each contribution required to be made to a Guaranteed Pension Plan, whether required to be made to avoid the incurrence of an accumulated funding deficiency, the notice or lien provisions of section 302(f) of ERISA, or otherwise, has been timely made. No waiver of an accumulated funding deficiency or extension of amortization periods has been received with respect to any Guaranteed Pension Plan, and neither the Borrower nor any ERISA Affiliate is obligated to or has posted security in connection with an amendment to a Guaranteed Pension Plan pursuant to section 307 of ERISA or section 401(a)(29) of the Code. No liability to the PBGC (other than required insurance premiums, all of which have been paid) has been incurred by the Borrower or any ERISA Affiliate with respect to any Guaranteed Pension Plan and there has not been any ERISA Reportable Event, or any other event or condition which presents a material risk of termination of any Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed Pension Plan (which in each case occurred within twelve months of the date of this representation), and on the actuarial methods and assumptions employed for that valuation, except as set forth on SCHEDULE 4.12 attached hereto, the aggregate benefit liabilities of all such Guaranteed Pension Plans within the meaning of section 4001 of ERISA did not exceed the aggregate value of the assets of all such Guaranteed Pension Plans, disregarding for this purpose the benefit liabilities and assets of any Guaranteed Pension Plan with assets in excess of benefit liabilities. -29- SECTION 4.12.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any ERISA Affiliate has incurred any material liability (including secondary liability) to any Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan under section 4201 of ERISA or as a result of a sale of assets described in section 4204 of ERISA. Neither the Borrower nor any ERISA Affiliate has been notified that any Multiemployer Plan is in reorganization or insolvent under and within the meaning of section 4241 or section 4245 of ERISA or is at risk of entering reorganization or becoming insolvent, or that any Multiemployer Plan intends to terminate or has been terminated under section 4041A of ERISA. SECTION 4.13. REGULATIONS U AND X, ETC. The proceeds of the Term Loan shall be used for the purposes described in section 5.12 hereof. No portion of the Term Loan is to be used for the purpose of purchasing or carrying any "MARGIN SECURITY" or "MARGIN STOCK" (as such terms are used in Regulations U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224 (the "MARGIN REGULATIONs")) in violation of the Margin Regulations. SECTION 4.14. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all reasonably necessary steps to investigate the past and present condition and usage of the Real Estate and the operations conducted thereon and, based upon such diligent investigation, has determined that: (a) none of the Borrower, its Subsidiaries nor any operator of the Real Estate or any operations thereon is in violation, or alleged violation, of any Environmental Laws, which violation would have a material adverse effect on the business, assets or financial condition of the Borrower and its Subsidiaries taken as a whole; (b) neither the Borrower nor any of its Subsidiaries has received any Environmental Notice during the last five (5) years that has the potential to materially affect the assets, liabilities, financial condition or operations of the Borrower and its Subsidiaries taken as a whole, except as set forth on SCHEDULE 4.14 hereto; (c) except as set forth on SCHEDULE 4.14 attached hereto: (i) no portion of the Real Estate has been used for the handling, processing, storage or disposal of Hazardous Substances; and no underground tank or other underground storage receptacle for Hazardous Substances is located on any portion of the Real Estate; in each case except in accordance with applicable Environmental Laws the noncompliance with which would have a material adverse effect on the business, assets or financial condition of the Borrower and its Subsidiaries, taken as a whole; (ii) in the course of any activities conducted by the Borrower or operators of its properties, no Hazardous Substances have been generated or are being used on the Real Estate except in accordance with applicable Environmental Laws the noncompliance with which would have a material adverse effect on the business, assets or financial condition of the Borrower and its Subsidiaries, taken as a whole; (iii) there have been no releases or threatened releases of Hazardous Substances on, upon, into or from the properties of the Borrower or any of its -30- Subsidiaries, which releases would have a material adverse effect on the business, assets or financial condition of the Borrower and its Subsidiaries, taken as a whole; (iv) to the best of the Borrower's knowledge, there have been no releases on, upon, from or into any real property in the vicinity of any of the Real Estate which, through soil or groundwater contamination, may have come to be located on the Real Estate and which would have a material adverse effect on the Borrower and its Subsidiaries, taken as a whole; and (v) in addition, any Hazardous Substances that have been generated on any of the Real Estate have, to the best of the Borrower's knowledge, been transported offsite only as required under and in compliance with applicable Environmental Laws. SECTION 4.15. SUBSIDIARIES, ETC. As of the Closing Date, other than those Subsidiaries of the Borrower described on SCHEDULE 4.15(a) attached hereto, the Borrower has no other Subsidiaries. As of the Closing Date, except as set forth on SCHEDULE 4.15(b) attached hereto, neither the Borrower nor any Subsidiary of the Borrower is engaged in any joint venture or partnership with any other Person. As of the Closing Date, except as set forth on SCHEDULE 4.15(c) attached hereto, neither the Borrower nor any Subsidiary of the Borrower owns or has acquired an equity interest of fifty percent (50%) or less in any other Person. The Borrower hereby agrees to deliver to the Lenders an updated SCHEDULE 4.15(a), SCHEDULE 4.15(b) or SCHEDULE 4.15(c), as applicable, upon the acquisition or formation by the Borrower of any Subsidiary, the formation of any joint venture or partnership by the Borrower or any of its Subsidiaries with any other Person or the acquisition by the Borrower or any of its Subsidiaries of an equity interest of fifty percent (50%) or less in any other Person, in each case in accordance with the provisions of this Credit Agreement. SECTION 4.16. PURCHASE AGREEMENT. The Borrower has furnished to the Agent true, complete and correct copies of the Purchase Agreement (excluding schedules, exhibits and annexes thereto) as of the date hereof. SECTION 4.17. PERMITTED DEBT. The incurrence of the Indebtedness hereunder, including without limitation, the Obligations, will be permitted by the terms of all other Indebtedness as of the date of such incurrence. SECTION 5. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower covenants and agrees that, so long as the Term Loan or any other Obligation is outstanding: SECTION 5.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause to be paid the principal and interest on the Term Loan, the Agent Fees, all other fees and other amounts provided for in this Credit Agreement and the other Loan Documents to which the Borrower is a party, all in accordance with the terms of this Credit Agreement and such other Loan Documents. SECTION 5.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief executive office in Framingham, Massachusetts, or at such other place in the United States of America as the Borrower shall designate upon written notice to the Agent, where -31- notices, presentations and demands to or upon the Borrower in respect of the Loan Documents to which the Borrower is a party may be given or made. SECTION 5.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each of its Subsidiaries to keep, true and accurate records and books of account in which full, true and correct entries will be made in accordance with GAAP and (b) maintain adequate accounts and reserves for all taxes, depreciation, depletion, obsolescence and amortization of its properties and the properties of its Subsidiaries, contingencies, and other reserves. SECTION 5.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower will deliver to the Agent (and the Agent will promptly, after receipt thereof, deliver to the Lenders): (a) as soon as practicable, but in any event not later than ninety (90) days after the end of each fiscal year of the Borrower, the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such year, and the related consolidated statement of income and consolidated statement of cash flow for such year, each setting forth in comparative form the figures for the previous fiscal year and all such consolidated statements to be in reasonable detail, prepared in accordance with GAAP, and certified without qualification by Ernst & Young LLP or by other independent certified public accountants reasonably satisfactory to the Agent; (b) as soon as practicable, but in any event not later than forty-five (45) days after the end of each of the first three fiscal quarters of the Borrower, copies of the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such quarter, and the related consolidated statement of income and consolidated statement of cash flow for the portion of the Borrower's fiscal year then elapsed, all in reasonable detail and prepared in accordance with GAAP, together with a certification by the chief financial officer or the treasurer of the Borrower that to the best of the Borrower's knowledge, the information contained in such financial statements fairly presents the financial position of the Borrower and its Subsidiaries on the date thereof (subject to year-end adjustments); (c) simultaneously with the delivery of the financial statements referred to in subsections (a) and (b) above, a statement certified by the chief financial officer or the treasurer of the Borrower in substantially the form of EXHIBIT D attached hereto (a "COMPLIANCE CERTIFICATE") and setting forth in reasonable detail computations evidencing compliance with the covenants contained in section 7 hereof, a calculation of the Obligor Group Requirement and (if applicable) reconciliations to reflect changes in GAAP since the Balance Sheet Date; (d) from time to time such other financial data and information as the Agent or any Lender may reasonably request; and -32- (e) (i) promptly upon becoming aware of the occurrence of any actual or claimed "EVENT OF TERMINATION" under and as defined in any of the documents relating to the Securitization, notice thereof, which notice shall describe such Event of Termination and indicate what steps the Borrower and its Subsidiaries are taking to remedy the same and (ii) promptly upon request therefor, such other information with respect to the Securitization as the Agent shall reasonably request. All Confidential Information concerning the Borrower supplied by the Borrower to the Lenders pursuant to the terms hereof will be held in confidence by the Lenders and the Lenders shall not disclose such Confidential Information except as permitted by section 23 of this Credit Agreement. SECTION 5.5. NOTICES. The Borrower will promptly notify the Agent for the benefit of the Lenders in writing of the occurrence of any Default or Event of Default. The Borrower will promptly give notice to the Agent for the benefit of the Lenders (a) of any material violation of any Environmental Law that the Borrower or any of its Subsidiaries reports in writing or is reportable by such Person in writing (or for which any written report supplemental to any oral report is made) to any federal, state or local environmental agency and (b) upon becoming aware thereof, of any inquiry, proceeding, investigation, or other action, including a notice from any agency of potential environmental liability, or any federal, state or local environmental agency or board, that has the potential to materially affect the assets, liabilities, financial conditions or operations of the Borrower. The Borrower will give notice to the Agent for the benefit of the Lenders in writing within fifteen (15) days of becoming aware of any litigation or proceedings threatened in writing or any pending litigation and proceedings affecting the Borrower or any of its Subsidiaries or to which the Borrower or any of its Subsidiaries is or becomes a party involving an uninsured claim against the Borrower or any of its Subsidiaries that could reasonably be expected to have a materially adverse effect on the Borrower and its Subsidiaries taken as a whole and stating the nature and status of such litigation or proceedings. The Borrower will, and will cause each of its Subsidiaries to, give notice to the Agent for the benefit of the Lenders, in writing, in form and detail satisfactory to the Agent, within ten (10) days of any judgment not covered by insurance, final or otherwise, against the Borrower or any of its Subsidiaries in an amount in excess of $1,000,000. SECTION 5.6. LEGAL EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence, rights and franchises and those of its Subsidiaries and will not, and will not cause or permit any of the Guarantors to, convert to a limited liability company or a limited liability partnership unless simultaneously with such conversion the Borrower or such Guarantor shall have executed and delivered to the Agent all documentation which the Agent reasonably determines is necessary to continue the Borrower's or such Guarantor's obligations in respect of this Credit Agreement or the Guaranty, as applicable. It (a) will cause all of its properties and those of its Subsidiaries used or useful in the conduct of its business or the business of its Subsidiaries to be maintained and kept in good condition, repair and working order and supplied with all necessary -33- equipment, (b) will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Borrower may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times, and (c) will, and will cause each of its Subsidiaries to, continue to engage primarily in the businesses now conducted by them and in related businesses; PROVIDED that nothing in this section 5.6 shall prevent the Borrower from discontinuing the operation and maintenance of any of its properties or any of those of its Subsidiaries if such discontinuance is, in the judgment of the Borrower, desirable in the conduct of its or their business and does not in the aggregate materially adversely affect the business of the Borrower and its Subsidiaries on a consolidated basis. SECTION 5.7. INSURANCE. The Borrower will, and will cause each of its Subsidiaries to, maintain with financially sound and reputable insurers insurance with respect to its properties and business against such casualties and contingencies as shall be in accordance with the general practices of businesses engaged in similar activities in similar geographic areas and in amounts, containing such terms, in such forms and for such periods as may be reasonable and prudent. At the request of the Agent, the Borrower shall deliver from time to time a summary schedule indicating all insurance then in force with respect to the Borrower and its Subsidiaries. SECTION 5.8. TAXES. The Borrower will, and will cause each of its Subsidiaries to, duly pay and discharge, or cause to be paid and discharged, before the same shall become overdue, all taxes, assessments and other governmental charges imposed upon it and its real properties, sales and activities, or any part thereof, or upon the income or profits therefrom, as well as all claims for labor, materials, or supplies that if unpaid might by law become a lien or charge upon any of its property; PROVIDED that any such tax, assessment, charge, levy or claim need not be paid if the validity or amount thereof shall currently be contested in good faith by appropriate proceedings and if the Borrower or such Subsidiary shall have set aside on its books adequate reserves with respect thereto; and PROVIDED FURTHER that the Borrower and each Subsidiary of the Borrower will pay all such taxes, assessments, charges, levies or claims forthwith upon the commencement of proceedings to foreclose any lien that may have attached as security therefor or shall have obtained such bonding as may be required to release such lien. SECTION 5.9. INSPECTION OF PROPERTIES AND BOOKS, ETC. The Borrower shall permit the Lenders, through the Agent or any of the Lenders' other designated representatives, no more frequently than once each calendar year, or more frequently as determined by the Lenders upon the occurrence and during the continuance of an Event of Default, to visit and inspect any of the properties of the Borrower or any of its Subsidiaries, and each such inspection, if no Event of Default has occurred and is continuing, shall be at the Lenders' expense. The Borrower shall also permit the Lenders, through the Agent or any of the Lenders' other designated representatives, to examine the books of account of the Borrower and its Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Borrower and its Subsidiaries with, and to be advised as to the same by, its and their officers, all at such reasonable -34- times and intervals as the Agent or any Lender may reasonably request. The Borrower authorizes the Agent and, if accompanied by the Agent, the Lenders to communicate directly with the Borrower's independent certified public accountants and authorizes such accountants to disclose to the Agent and the Lenders any and all financial statements and other supporting financial documents and schedules with respect to the business, financial condition and other affairs of the Borrower or any of its Subsidiaries. SECTION 5.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The Borrower will, and will cause each of its Subsidiaries to, comply with (a) the applicable laws and regulations wherever its business is conducted, including all Environmental Laws, (b) the provisions of its charter documents and by-laws (or equivalent constitutive documents), (c) all agreements and instruments by which it or any of its properties may be bound and (d) all applicable decrees, orders, and judgments, in each case if noncompliance with which would have a material adverse effect on the business, assets or financial condition of the Borrower and its Subsidiaries, taken as a whole, or on the ability of the Borrower or any of the Guarantors to fulfill its obligations under this Credit Agreement or any of the other Loan Documents to which such Person is a party. If any authorization, consent, approval, permit or license from any officer, agency or instrumentality of any government shall become necessary or required in order that the Borrower may fulfill any of its obligations hereunder or any of the other Loan Documents to which the Borrower is a party, the Borrower will, or (as the case may be) will cause such Subsidiary to, immediately take or cause to be taken all reasonable steps within the power of the Borrower or such Subsidiary to obtain such authorization, consent, approval, permit or license and furnish the Agent and the Lenders with evidence thereof. SECTION 5.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon request of the Agent, furnish to the Agent a copy of the most recent actuarial statement required to be submitted under section 103(d) of ERISA and Annual Report, Form 5500, with all required attachments, in respect of each Guaranteed Pension Plan and (b) promptly upon receipt or dispatch, furnish to the Agent any notice, report or demand sent or received in respect of a Guaranteed Pension Plan under sections 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under sections 4041A, 4202, 4219, 4242, or 4245 of ERISA. SECTION 5.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Term Loan to finance, in part, the Guilbert Acquisition. SECTION 5.13. LICENSES AND PERMITS. The Borrower will maintain and renew any and all licenses or permits now held or hereafter acquired by the Borrower or any of its Subsidiaries unless the loss, suspension, revocation or failure to renew any such licenses or permits would not have a material adverse effect on the business or financial condition of the Borrower and such Subsidiary. SECTION 5.14. CLOSING OF ACQUISITION. The Borrower shall consummate the Guilbert Acquisition substantially in accordance with the terms of the Purchase Agreement no -35- later than December 31, 2002. The Borrower shall give the Agent prompt written notice thereof. SECTION 5.15. PRO FORMA COMPLIANCE CERTIFICATE. The Borrower shall deliver to the Lenders a Compliance Certificate, dated as of the Guilbert Acquisition Closing Date, and based on financial statements prepared on a PRO FORMA basis which include the Obligations and any other financing arrangements made by the Borrower in connection with the Guilbert Acquisition and all interest, fees and expenses related thereto. SECTION 5.16. FURTHER ASSURANCES. The Borrower will, and will cause each of the Guarantors to, cooperate with the Lenders and the Agent and execute such further instruments and documents as the Lenders or the Agent shall reasonably request to carry out to their satisfaction the transactions contemplated by this Credit Agreement and the other Loan Documents. SECTION 6. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants and agrees that, so long as the Term Loan or any other Obligation is outstanding: SECTION 6.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume, guarantee or become or remain liable, contingently or otherwise, with respect to Indebtedness other than: (a) Indebtedness to the Lenders and the Agent arising under any of the Loan Documents; (b) current liabilities of the Borrower or such Subsidiary incurred in the ordinary course of business not incurred through (i) the borrowing of money, or (ii) the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services; (c) Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment therefor shall not at the time be required to be made in accordance with the provisions of section 5.8 hereof; (d) Indebtedness in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which the Borrower or such Subsidiary shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review; (e) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business; -36- (f) Indebtedness in respect of documentary letters of credit issued in the ordinary course of business; (g) Indebtedness of the Borrower in respect of interest rate protection arrangements and exchange rate protection arrangements; (h) Indebtedness existing on the Closing Date and listed and described on SCHEDULE 6.1 hereto or any refinancing thereof on substantially similar terms as the Indebtedness being refinanced; (i) Subordinated Debt; (j) obligations under Capitalized Leases; (k) Indebtedness incurred by the Borrower and its Subsidiaries under the Securitization; (l) Indebtedness in respect of intercompany loans, guaranties and, so long as no Default or Event of Default shall have occurred and be continuing at the time such Indebtedness is incurred, other Investments and contingent obligations to make Investments, (i) from the Borrower to any of its Subsidiaries or of any of its Subsidiaries' obligations or (ii) between Subsidiaries of the Borrower or of any of the Borrower's Subsidiaries' obligations, or (iii) from any Subsidiary of the Borrower to the Borrower or of any of the Borrower's obligations; (m) Indebtedness incurred in connection with the acquisition after the Closing Date of any real or personal property by the Borrower or any Subsidiary of the Borrower as contemplated by section 6.2(ix) hereof; (n) Indebtedness secured by a lien on Real Estate of the Borrower or its Subsidiaries; PROVIDED that the aggregate amount of Indebtedness permitted pursuant to this section 6.1(n) shall not, at any time, exceed the fair market value of the Real Estate securing such Indebtedness; (o) other Indebtedness of the Borrower and its Subsidiaries (whether or not such Subsidiaries are Guarantors), PROVIDED that (i) with respect to Indebtedness incurred by the Borrower or a Guarantor, such Indebtedness contains covenants that are no more restrictive on the Borrower or such Guarantor than the covenants contained in this Credit Agreement and (ii) immediately after such incurrence of Indebtedness, and after g