EXECUTION COPY

 

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Published CUSIP Number:                         

 

$50,000,000

 

CREDIT AGREEMENT

 

Dated as of November 3, 2004

 

among

 

REWARDS NETWORK INC.,

as Borrower,

 

BANK OF AMERICA, N.A.,

as Administrative Agent

 

and

 

L/C Issuer,

 

and

 

The Other Lenders Party Hereto

 

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TABLE OF CONTENTS

 

Section

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        Page

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ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS 1.01    Defined Terms    1 1.02    Other
Interpretive Provisions    23 1.03    Accounting Terms    23 1.04    Rounding   
24 1.05    Times of Day    24 1.06    Letter of Credit Amounts    24 ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS 2.01    Loans    24 2.02    Borrowings,
Conversions and Continuations of Loans    24 2.03    Letters of Credit    26
2.04    Prepayments    34 2.05    Termination or Reduction of Commitments    34
2.06    Repayment of Loans    35 2.07    Interest    35 2.08    Fees    35 2.09
   Computation of Interest and Fees    36 2.10    Evidence of Debt    36 2.11   
Payments Generally; Agent’s Clawback    37 2.12    Sharing of Payments    38
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY 3.01    Taxes    39 3.02    Illegality   
41 3.03    Inability to Determine Rates    41 3.04    Increased Costs    42 3.05
   Compensation for Losses    43 3.06    Mitigation Obligations; Replacement of
Lenders    44 3.07    Survival    44

 

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ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS 4.01    Conditions of Initial Credit
Extension    44 4.02    Conditions to all Credit Extensions    46 ARTICLE V.
REPRESENTATIONS AND WARRANTIES 5.01    Existence, Qualification and Power;
Compliance with Laws    46 5.02    Authorization; No Contravention    46 5.03   
Governmental Authorization; Other Consents    47 5.04    Binding Effect    47
5.05    Financial Statements; No Material Adverse Effect    47 5.06   
Litigation    48 5.07    No Default    48 5.08    Ownership of Property; Liens
   48 5.09    Insurance    48 5.10    Taxes    48 5.11    ERISA Compliance    48
5.12    Subsidiaries    49 5.13    Margin Regulations; Investment Company Act;
Public Utility Holding Company Act    49 5.14    Disclosure    50 5.15   
Compliance with Laws    50 5.16    Intellectual Property; Licenses, Etc    50
5.17    Material Agreements    50 ARTICLE VI.
AFFIRMATIVE COVENANTS 6.01    Financial Statements    51 6.02    Certificates;
Other Information    51 6.03    Notices    52 6.04    Payment of Obligations   
53 6.05    Preservation of Existence, Etc    53 6.06    Maintenance of
Properties    53 6.07    Maintenance of Insurance    53 6.08    Compliance with
Laws    53

 

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6.09    Books and Records    54 6.10    Inspection Rights    54 6.11    Use of
Proceeds    54 6.12    Financial Covenants    54 6.13    Additional Guarantors
   55 6.14    RTR Funding    55 ARTICLE VII.
NEGATIVE COVENANTS 7.01    Liens    55 7.02    Investments    57 7.03   
Indebtedness    58 7.04    Fundamental Changes    58 7.05    Dispositions    59
7.06    Restricted Payments    59 7.07    Change in Nature of Business    60
7.08    Transactions with Affiliates    60 7.09    Burdensome Agreements    60
7.10    Acquisitions    61 7.11    Use of Proceeds    61 7.12    Payment of
Subordinated Indebtedness    61 7.13    Modifications to Subordinated Note
Documents    62 ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES 8.01    Events of Default    62 8.02    Remedies
Upon Event of Default    64 8.03    Application of Funds    65 ARTICLE IX.
ADMINISTRATIVE AGENT 9.01    Appointment and Authorization of Administrative
Agent    66 9.02    Rights as a Lender    66 9.03    Exculpatory Provisions   
66 9.04    Reliance by Administrative Agent    67 9.05    Delegation of Duties
   67

 

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9.06    Resignation of Agent    67 9.07    Non-Reliance on Agent and Other
Lenders    68 9.08    No Other Duties, Etc    68 9.09    Administrative Agent
May File Proofs of Claim    69 9.10    Guaranty Matters    69 ARTICLE X.
MISCELLANEOUS 10.01    Amendments, Etc    69 10.02    Notices; Effectiveness;
Electronic Communications    71 10.03    No Waiver; Cumulative Remedies    72
10.04    Expenses; Indemnity; Damage Waiver    72 10.05    Payments Set Aside   
74 10.06    Successors and Assigns    74 10.07    Treatment of Certain
Information; Confidentiality    77 10.08    Right of Setoff    77 10.09   
Interest Rate Limitation    78 10.10    Replacement of Lenders    78 10.11   
Counterparts; Integration; Effectiveness    79 10.12    Survival of
Representations and Warranties    79 10.13    Severability    79 10.14   
Governing Law; Jurisdiction; Etc    79 10.15    Waiver of Right to Trial by Jury
   80 10.16    USA PATRIOT Act Notice    81 10.17    Time of the Essence    81
10.18    Designation as Senior Debt    81

 

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SCHEDULES

 

2.01    Commitments and Applicable Percentages 5.06    Litigation 5.12   
Subsidiaries and Other Equity Investments 7.01    Existing Liens 7.03   
Existing Indebtedness 10.02    Administrative Agent’s Office, Certain Addresses
for Notices

 

EXHIBITS

 

Form of      A    Loan Notice B    Note C    Compliance Certificate D   
Assignment and Assumption E    Guaranty

 

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CREDIT AGREEMENT

 

CREDIT AGREEMENT (this “Agreement”) is entered into as of November 3, 2004,
among REWARDS NETWORK INC., a Delaware corporation (“Borrower”), each lender
from time to time party hereto (collectively, the “Lenders” and individually, a
“Lender”), and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer.

 

Borrower has requested that the Lenders provide a revolving credit facility,
with a letter of credit subfacility, and the Lenders are willing to do so on the
terms and conditions set forth herein. In consideration of the mutual covenants
and agreements herein contained, the parties hereto covenant and agree as
follows:

 

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

 

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

 

“Account” means any right to payment of a monetary obligation owing to Borrower
or any Subsidiary, whether constituting an “account”, “chattel paper”,
“instruments”, “investment property” or a “general intangible” (each terms in
quotations having the definition ascribed to such term in Section 9-102 of the
Uniform Commercial Code as in effect in the State of Illinois from time to
time).

 

“Account Debtor” means any Person obligated on any Account.

 

“Accounts Payable” means all trade accounts payable of Borrower and its
Subsidiaries on a consolidated basis (other than Accounts Payable – Rights to
Receive).

 

“Accounts Payable – Rights to Receive” means all amounts owing by Borrower and
its Subsidiaries on such date to Restaurants in connection with the acquisition
of Rights to Receive (which are listed on the balance sheet of Borrower as
“Accounts Payable – Rights to Receive”).

 

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition by
Borrower or a Subsidiary of all or substantially all of the assets of a Person,
or of any business or division of a Person, or (b) the acquisition by Borrower
or a Subsidiary of in excess of 50% of the Equity Interests of any Person (other
than a Person already a Subsidiary), or otherwise causing any Person to become a
Subsidiary.

 

“Administrative Agent” or “Agent” means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

 

“Administrative Agent’s Office” means Agent’s address and, as appropriate,
account as set forth on Schedule 10.02, or such other address or account as
Agent may from time to time notify Borrower and Lenders.

 

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

 

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

 

“Agent Fee Letter” has the meaning specified in Section 2.08(a).

 

“Aggregate Commitments” means the Commitments of all Lenders.

 

“Agreement” means this Credit Agreement.

 

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time. If the commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02 or if the Aggregate
Commitments have expired, then the Applicable Percentage of each Lender shall be
determined based on the Applicable Percentage of such Lender most recently in
effect, giving effect to any subsequent assignments. The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.

 

“Applicable Rate” means, from time to time, the following percentages per annum,
based upon the Leverage Ratio as set forth in the most recent Compliance
Certificate received by Agent pursuant to Section 6.02(b):

 

Applicable Rate

 

Pricing

Level

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Leverage Ratio

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Applicable Rate for

Eurodollar Rate Loans

and Letter of Credit Fee

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Commitment

Fee

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1

   < 1.50 to 1.00    1.25%    0.25%

2

  

³ 1.50 to 1.00 but

< 2.00 to 1.00

   1.50%    0.30%

3

  

³ 2.00 to 1.00 but

< 2.50 to 1.00

   1.75%    0.40%

4

   ³ 2.50 to 1.00    2.00%    0.50%

 

Any increase or decrease in the Applicable Rate resulting from a change in the
Leverage Ratio shall become effective as of the 5th Business Day immediately
following the date a Compliance Certificate is delivered pursuant to Section
6.02(b); provided, however, that if a Compliance Certificate is not delivered
when due in accordance with such Section, then Pricing Level 4 shall apply
commencing on the 5th Business Day following the date such Compliance
Certificate was

 

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required to have been delivered (giving effect to any applicable grace periods)
until the 5th Business Day following delivery of the overdue Compliance
Certificate (at which time the Applicable Rate calculated therein shall take
effect). The Applicable Rate in effect from the Closing Date through the date
that a Compliance Certificate with respect to the fiscal quarter ending
September 30, 2004 is delivered or required to be delivered pursuant to Section
6.02(b) shall be determined based upon Pricing Level 2.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by Agent, in substantially the form
of Exhibit D or any other form approved by Agent.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

 

“Audited 2003 Financial Statements” means the audited consolidated balance sheet
of Borrower and its Subsidiaries for the fiscal year ended December 31, 2003,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of Borrower and its Subsidiaries,
including the notes thereto.

 

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.05, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate”. The “prime rate” is a rate set by Bank of America based
upon various factors including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurodollar Rate Loans, having the same Interest Period, made
by each of the Lenders pursuant to Section 2.01.

 

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“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where Administrative Agent’s Office is located and, if such
day relates to any Eurodollar Rate Loan, means any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.

 

“Cash Collateralize” has the meaning specified in Section 2.03(g).

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

 

“Change of Control” means, with respect to Borrower, an event or series of
events by which:

 

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
except that a person or group shall be deemed to have “beneficial ownership” of
all securities that such person or group has the right to acquire (such right,
an “option right”), whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of 40% or more of the equity
securities of Borrower entitled to vote for members of the board of directors or
equivalent governing body of Borrower on a fully-diluted basis (and taking into
account all such securities that such person or group has the right to acquire
pursuant to any option right);

 

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of Borrower cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or

 

(c) any “person” or “group” (as such terms are defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934) otherwise shall have acquired,
whether by ownership of voting securities, contract or otherwise, or shall have
entered into any written agreement (excluding letters of intent and similar
agreements which provide primarily for exclusivity of negotiation) that, upon
consummation thereof, will result in its or their acquisition of (x) the

 

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power to exercise, directly or indirectly, a controlling influence over the
management or policies of such Person, or (y) control over the equity securities
of such Person entitled to vote for members of the board of directors or
equivalent governing body of such Person on a fully-diluted basis (and taking
into account all such securities that such individual(s) or entity(s) or group
has the right to acquire pursuant to any option right) representing 40% or more
of the combined voting power of such securities.

 

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

 

“Code” means the Internal Revenue Code of 1986.

 

“Commitment” means, as to each Lender, its obligation to make Loans to Borrower
pursuant to Section 2.01 and to purchase participations in L/C Obligations, in
an aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender’s name on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

 

“Consolidated EBITDA” means, for any period, for Borrower and its Subsidiaries
on a consolidated basis, the sum of net income, less income or plus loss from,
in either case, discontinued operations and extraordinary items, plus income
taxes, plus interest expense, plus depreciation, depletion, and amortization
and, in the case of any permitted Acquisition, calculated on a pro forma basis
reasonably acceptable to Agent.

 

“Consolidated Funded Indebtedness” means, as of any date of determination, for
Borrower and its Subsidiaries on a consolidated basis, without duplication, the
sum of (a) the outstanding principal amount of all obligations, whether current
or long-term, for borrowed money (including Obligations hereunder) and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all direct
obligations arising under letters of credit (including standby and commercial),
bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d)
all obligations in respect of the deferred purchase price of property or
services (other than (x) trade accounts payable in the ordinary course of
business and (y) contingent obligations, including earn-outs or similar
contingent purchase price adjustments), (e) Attributable Indebtedness in respect
of capital leases and Synthetic Lease Obligations, (f) without duplication, all
Guarantees with respect to outstanding Indebtedness of the types specified in
clauses (a) through (e) above of Persons other than Borrower or any Subsidiary,
and (g) all Indebtedness of the types referred to in clauses (a) through (f)
above of any partnership or joint venture (other than a joint venture that is
itself a corporation or limited liability company) in which Borrower or a
Subsidiary is a general partner or joint venturer, unless such Indebtedness is
expressly made non-recourse to Borrower or such Subsidiary.

 

“Consolidated Net Indebtedness” means, as of any date of determination, for
Borrower and its Subsidiaries on a consolidated basis, the sum of (a)
Consolidated Funded Indebtedness

 

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less (without duplication) (b) an amount, if positive, equal to (i) the sum of
(A) all cash and cash equivalents of Borrower and its Domestic Subsidiaries as
of such date plus (B) the value of all marketable securities of Borrower and its
Domestic Subsidiaries as of such date less (ii) $10,000,000.

 

“Contract” means, with respect to a Restaurant, an agreement governing the
purchase of Meals and Credits under the Registered Card Program between Borrower
or any Subsidiary and such Restaurant and any agreement with any other Person
guaranteeing such agreement.

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound
(other than such Person’s Organization Documents).

 

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

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

 

“Credits” means any Meal credits under the Registered Card Program purchased by
Borrower or any Subsidiary pursuant to a Contract with a Restaurant.

 

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

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Defaulted Right to Receive” means a Right to Receive: (a) as to which no
Credits have been used within the immediately preceding 52 weeks; provided that
if a Right to Receive relates to an initial advance made to a Start-up
Restaurant, such Right to Receive shall not be characterized as a “Defaulted
Right to Receive” prior to the fourteenth week of such Restaurant’s operations;
(b) as to which an Event of Bankruptcy has occurred and is continuing with
respect to the Restaurant which is the obligor with respect thereto; and (c)
which has been identified by Borrower, any of its Subsidiaries or Agent as
uncollectible or has been, or should be, in the reasonable judgment of Agent
written off as uncollectible.

 

“Default Rate” means (a) when used with respect to Obligations other than L/C
Fees an interest rate equal to (i) the Base Rate plus (ii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used
with respect to L/C Fees, a rate equal to the Applicable Rate plus 2% per annum.

 

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“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Loans, participations in L/C Obligations required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to Agent or any other Lender any
other amount required to be paid by it hereunder within two Business Days of the
date when due, unless the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

 

“De Minimis Acquisition” means any Acquisition having a purchase price not in
excess of $2,000,000; provided that the aggregate purchase price for all such
Acquisitions shall not exceed $8,000,000 during the term of this Agreement.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

 

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

 

“Domestic Subsidiary” means a Subsidiary of Borrower that is organized under the
laws of the United States or any political subdivision thereof.

 

“Eligible Account” means, at any time, each Account (other than a Right to
Receive) that is owed to Borrower or a Subsidiary, other than any Account:

 

(a) (i) as to which the payment thereof is more than 60 days past due as
determined by the due date stated on the invoice therefor (or if such Account is
not paid by reference to any invoice in the ordinary course of business but
instead by reference to the terms of the agreements creating such Account, such
Account has not remained unpaid beyond 60 days after the due date therefor),
(ii) as to which an Event of Bankruptcy has occurred and is continuing with
respect to the Account Debtor which is the obligor with respect thereto; or
(iii) which has been identified by Borrower, any of its Subsidiaries or Agent as
uncollectible or has been, or should be, in the reasonable judgment of Agent
written off as uncollectible;

 

(b) that arises under a written Contractual Obligation other than one that,
together with such Account related thereto, is in full force and effect and
constitutes the legal, valid and binding obligation of the related Account
Debtor, enforceable against such Account Debtor in accordance with its terms,
except as may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to or affecting creditors’ rights generally
and (ii) general principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance, regardless of whether considered in a
proceeding at equity or at law;

 

(c) that, together with the Contractual Obligation related thereto, contravenes
in any material respect any Laws applicable thereto (including, without
limitation, Laws relating to truth in lending, fair credit billing, fair credit
reporting, equal credit

 

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opportunity, fair debt collection practices and privacy) and with respect to
which any part of the Contract related thereto is in violation of any such Law
in any material respect, in any such case, as determined by a final and
nonappealable judgment by a court of competent jurisdiction;

 

(d) that was not generated in the ordinary course of business of Borrower or a
Subsidiary;

 

(e) that is subject to any Lien or, in the reasonable judgment of Agent, has
been compromised, adjusted or modified (including by the extension of time for
payment or the granting of any discounts, allowances or credits) or is subject
to reduction by virtue of rights of counterclaim, recoupment or set off;
provided, however, that any Account that has been compromised, adjusted or
modified or is otherwise subject to reduction only in part shall remain an
Eligible Account to the extent not so compromised, adjusted, modified or subject
to reduction;

 

(f) that is owing by an Account Debtor that is obligated to Borrower and its
Subsidiaries respecting Accounts the aggregate unpaid balance of which exceeds
two percent (2%) of the aggregate unpaid balance of all Accounts owing to
Borrower and its Subsidiaries at such time by all Account Debtors, provided that
this exclusion shall only apply to the extent of such excess; or

 

(g) that is owing by an Account Debtor that (i) is an Affiliate of Borrower or
any of its Subsidiaries, (ii) is not located in the United States or a U.S.
territory or in Canada, (iii) is a Governmental Authority, or (iv) is subject of
any proceedings under any Debtor Relief Law.

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; or (c) any
other Person (other than a natural person) approved by (i) Agent and the L/C
Issuer, and (ii) unless an Event of Default has occurred and is continuing,
Borrower (each such approval not to be unreasonably withheld or delayed);
provided that, notwithstanding the foregoing, “Eligible Assignee” shall not
include Borrower or any of Borrower’s Affiliates or Subsidiaries.

 

“Eligible Restaurant” means each Restaurant that satisfies the following
eligibility criteria:

 

(a) the Restaurant is not an Affiliate of Borrower or any of its Subsidiaries;

 

(b) the Restaurant is located in the United States or a U.S. territory or in
Canada;

 

(c) the Restaurant is not a Governmental Authority;

 

(d) the Restaurant is not the subject of any proceedings under any Debtor Relief
Law; and

 

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(e) the Restaurant has had activity/usage in the prior 52 weeks, provided that
such limitation shall not apply to a Start-up Restaurant prior to the 91st day
of such Start-up Restaurant’s operations.

 

“Eligible Rights to Receive” means all Rights to Receive that are owing by an
Eligible Restaurant, other than any Right to Receive:

 

(a) that is a Defaulted Right to Receive;

 

(b) that arises under a Contract other than one that, together with such Right
to Receive related thereto, is in full force and effect and constitutes the
legal, valid and binding obligation of the related Restaurant, enforceable
against such Restaurant in accordance with its terms, except as may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium or similar Laws
relating to or affecting creditors’ rights generally and (ii) general principles
of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance, regardless of whether considered in a proceeding at equity
or at law;

 

(c) that, together with the Contract related thereto, contravenes in any
material respect any Laws applicable thereto (including, without limitation,
Laws relating to truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and privacy) and with
respect to which any part of the Contract related thereto is in violation of any
such Law in any material respect, in any such case, as determined by a final and
nonappealable judgment by a court of competent jurisdiction;

 

(d) that was not generated in the ordinary course of business of Borrower or a
Subsidiary;

 

(e) that is subject to any Lien or, in the reasonable judgment of Agent, has
been compromised, adjusted or modified (including by the extension of time for
payment or the granting of any discounts, allowances or credits) or is subject
to reduction by virtue of rights of counterclaim, recoupment or set off;
provided, however, that any Right to Receive that has been compromised, adjusted
or modified or is otherwise subject to reduction only in part shall remain an
Eligible Right to Receive to the extent not so compromised, adjusted, modified
or subject to reduction;

 

(f) that is owing by a Start-up Restaurant other than a Start-up Restaurant the
majority owner of which is affiliated with at least one other Eligible
Restaurant participating in the Registered Card Program;

 

(g) that is owing by a Restaurant that is obligated to Borrower and its
Subsidiaries respecting Rights to Receive the aggregate unpaid balance of which
exceeds two percent (2%) of the aggregate unpaid balance of all Rights to
Receive owing to

 

9

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Borrower and its Subsidiaries at such time by all Restaurants, provided that
this exclusion shall only apply to the extent of such excess; or

 

(h) that is owing by a Start-up Restaurant to the extent that the unpaid balance
of all Rights to Receive owing by Start-up Restaurants exceeds five percent (5%)
of the aggregate unpaid balance of all Rights to Receive owing to Borrower and
its Subsidiaries at such time by all Restaurants, provided that this exclusion
shall only apply to the extent of such excess.

 

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

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

 

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

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

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by Borrower or any ERISA

 

10

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Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or
any ERISA Affiliate.

 

“Eurodollar Base Rate” has the meaning specified in the definition of Eurodollar
Rate.

 

“Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar
Rate Loan, a rate per annum determined by Agent pursuant to the following
formula:

 

Eurodollar Rate

   =    Eurodollar Base Rate               

1.00 – Eurodollar Reserve Percentage

    

 

Where,

 

“Eurodollar Base Rate” means, for such Interest Period (rounded upwards, as
necessary, to the nearest 1/100 of 1%) the rate per annum equal to the British
Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by
Agent from time to time) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period. If such rate is not available at such time for any reason,
then the “Eurodollar Base Rate” for such Interest Period shall be the rate per
annum determined by Agent to be the rate at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.

 

“Eurodollar Reserve Percentage” means, for any day during any Interest Period,
the reserve percentage (expressed as a decimal, carried out to five decimal
places) in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred to
as “Eurocurrency liabilities”). The Eurodollar Rate for each outstanding
Eurodollar Rate Loan shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.

 

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

 

11

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“Event of Bankruptcy” means, with respect to any Person, (a) that such Person
(i) shall generally not pay its debts as such debts become due or (ii) shall
admit in writing its inability to pay its debts generally or (iii) shall make a
general assignment for the benefit of creditors; (b) any proceeding shall be
instituted by or against such Person seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
and, in the case of a proceeding instituted by a party other than such Person,
such proceeding shall continue undismissed, unstayed and in effect for a period
of 60 consecutive days or (c) if such Person is a corporation or other legal
entity, such Person or any Subsidiary shall take any corporate or other
entity-level action to authorize any of the actions set forth in the preceding
clauses (a) or (b).

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Excluded Taxes” means, with respect to Agent, any Lender, the L/C Issuer or any
other recipient of any payment to be made by or on account of any obligation of
Borrower hereunder, (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable Lending Office is
located, (b) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which Borrower is located and
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by Borrower under Section 10.10), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party hereto (or designates a new lending office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with Section 3.01(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from Borrower
with respect to such withholding tax pursuant to Section 3.01(a).

 

“Federal Funds Rate” means, 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 on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by Agent.

 

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

 

12

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“Foreign Subsidiary” means a Subsidiary of Borrower that is not a Domestic
Subsidiary.

 

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

 

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

 

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

 

“Guarantors” means, collectively or individually as the context may indicate,
each of the Domestic Subsidiaries of Borrower at the Closing Date (other than
RTR Funding) and each other Domestic Subsidiary of Borrower who becomes a party
to the Guaranty by the execution and delivery of a Guaranty Joinder Agreement.

 

13

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“Guaranty” means the Guaranty made by the Guarantors in favor of Agent for the
benefit of the Lenders, substantially in the form of Exhibit E, as supplemented
from time to time by the execution and delivery of Guaranty Joinder Agreements
pursuant to Section 6.13 or otherwise.

 

“Guaranty Joinder Agreement” means each Guaranty Joinder Agreement,
substantially in the form thereof attached to the Guaranty, executed and
delivered by a Domestic Subsidiary to Agent for the benefit of the Lenders
pursuant to Section 6.13 or otherwise.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature, in each case regulated pursuant to any
Environmental Law.

 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

 

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

 

(c) net obligations of such Person under any Swap Contract;

 

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than (x) Accounts Payable - Rights to Receive in the
ordinary course of business, (y) Accounts Payable in the ordinary course of
business that are not past due for more than 60 days after the date on which
such Account Payable was created and (z) contingent obligations, including
earn-outs or similar contingent purchase price adjustments);

 

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

 

(f) capital leases and Synthetic Lease Obligations;

 

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, whether mandatory or by virtue of the happening of a
particular event or series of events, on or prior to the date that is 91 days
after the Maturity Date, valued, in the case of a redeemable preferred interest,
at the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends; and

 

(h) all Guarantees of such Person in respect of any of the foregoing.

 

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For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees” has the meaning specified in Section 10.04(b).

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the last Business Day of each March, June,
September and December and the Maturity Date.

 

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six months
(or, if available to all Lenders, nine or 12 months) thereafter, as selected by
Borrower in its Loan Notice; provided that:

 

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

 

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

 

(iii) no Interest Period shall extend beyond the Maturity Date.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of all or
substantially all of the assets of another Person that constitute a business
unit. For purposes of compliance with Section 7.02, the amount of any Investment
shall be the

 

15

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amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

 

“IRS” means the United States Internal Revenue Service.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

 

“Issuer Documents” means with respect to any Letter of Credit, the L/C
Application, and any other document, agreement and instrument entered into by
the L/C Issuer and Borrower (or any Subsidiary) or in favor of the L/C Issuer
and relating to any such Letter of Credit.

 

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.

 

“L/C Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C
Issuer.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

 

“L/C Expiration Date” means the day that is seven days prior to the Maturity
Date then in effect (or, if such day is not a Business Day, the next preceding
Business Day).

 

“L/C Fee” has the meaning specified in Section 2.03(i).

 

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

 

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all outstanding Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be

 

16

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deemed to be “outstanding” in the amount so remaining available to be drawn
(but, subject to applicable provisions relating to Cash Collateralization of
Letters of Credit, no violation of this Agreement shall be attributable solely
to such extended period of available drawing).

 

“L/C Sublimit” means an amount equal to $5,000,000. The L/C Sublimit is part of,
and not in addition to, the Aggregate Commitments.

 

“Lender” has the meaning specified in the introductory paragraph hereto.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify Borrower and Agent.

 

“Letter of Credit” means any standby letter of credit issued hereunder.

 

“Leverage Ratio” means, as of any date of determination, for Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a) Consolidated Net
Indebtedness as of such date to (b) Consolidated EBITDA for the most recently
ended period of four fiscal quarters.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Loan” has the meaning specified in Section 2.01.

 

“Loan Documents” means this Agreement, each Note, each Issuer Document, the
Agent Fee Letter and the Guaranty.

 

“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from
one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant
to Section 2.02(a), which, if in writing, shall be substantially in the form of
Exhibit A.

 

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

 

“Loan Party Net Income” means, for any period of measurement thereof, the net
income, calculated in accordance with GAAP, of Borrower and the Guarantors on a
consolidated basis for such period, and, in the case of any permitted
Acquisition, calculated on a pro forma basis reasonably acceptable to Agent.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties or condition
(financial or otherwise) of Borrower and its Subsidiaries taken as a whole; (b)
a material impairment of the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document to which it is a party.

 

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“Material Agreement” means, as of any date of determination thereof, any
Contractual Obligation of Borrower or any Subsidiary which individually produced
20% or more of the gross revenues of Borrower and its Subsidiaries for the
fiscal quarter of Borrower most recently ended and for which financial
statements have been delivered hereunder or are publicly available.

 

“Maturity Date” means July 13, 2008.

 

“Maximum Available Amount” means, as of any date of measurement thereof, the
Aggregate Commitments in effect on such date or, if Senior Debt exceeds
$20,000,000 on such date, the lesser of (a) the Aggregate Commitments in effect
on such date and (b) an amount equal to the following measured as of the last
day of the most recently ended fiscal quarter of Borrower: (i) the sum of (x)
50% of Net Eligible Rights to Receive and (y) 80% of Eligible Accounts less (ii)
Accounts Payable.

 

“Meals” means food and beverages.

 

“Member Agreements” means all of the agreements executed by Members in
connection with the Registered Card Program in which Members either register or
use their credit card accounts with a Restaurant and receive rebates and/or
other benefits in connection with the food and beverages purchased by such
Members at Restaurants.

 

“Members” means Persons who are parties to the Member Agreements.

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which Borrower or any ERISA Affiliate makes or
is obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

 

“Net Eligible Rights to Receive” means, as of any date of measurement thereof,
all Eligible Rights to Receive on such date less all Accounts Payable – Rights
to Receive.

 

“Net Worth” means, as of any date of measurement thereof for Borrower and its
Subsidiaries on a consolidated basis, the value of total assets (including
leaseholds and leasehold improvements and reserves against assets but excluding
monies due from Affiliates, officers, directors, employees, shareholders,
members or managers) less Total Liabilities.

 

“Note” means a promissory note made by Borrower in favor of a Lender evidencing
Loans made by such Lender, substantially in the form of Exhibit B.

 

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit or any Related Credit
Arrangement, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

 

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“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

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

 

“Outstanding Amount” means (a) with respect to Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Loans occurring on such date; and (b) with respect
to any L/C Obligations on any date, the amount of such L/C Obligations on such
date after giving effect to any L/C Credit Extension occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such
date, including as a result of any reimbursements by Borrower of Unreimbursed
Amounts.

 

“Participant” has the meaning specified in Section 10.06(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by Borrower or any
ERISA Affiliate or to which Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.

 

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

 

“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) other than a Multiemployer Plan that is established by Borrower
or, with respect to any such plan that is subject to Section 412 of the Code or
Title IV of ERISA, any ERISA Affiliate.

 

“Register” has the meaning specified in Section 10.06(c).

 

“Registered Card Program” mean a program operated by Borrower or any of its
Subsidiaries pursuant to which Members receive rebates and/or other benefits in
connection with food and beverage purchases at Restaurants, hotels or other
merchants by registering or using their credit card accounts in accordance with
terms of the Member Agreements.

 

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“Related Credit Arrangement” means, collectively, any Related Swap Contracts and
any Related Treasury Management Arrangements.

 

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

 

“Related Swap Contracts” means all Swap Contracts which are entered into or
maintained with the Lender or an Affiliate of the Lender.

 

“Related Treasury Management Arrangement” means all arrangements for the
delivery of treasury management services to or for the benefit of any Loan Party
which are entered into or maintained with the Lender or an Affiliate of the
Lender.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Loans, a Loan Notice, and (b) with respect to an L/C Credit
Extension, a L/C Application.

 

“Required Lenders” means, as of any date of determination, (a) if there are two
or fewer Lenders, all of the Lenders, (b) if there are more than two Lenders but
fewer than five Lenders, Lenders having more than 66  2/3% of the Aggregate
Commitments or, if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, Lenders holding in the aggregate more than 66  2/3% of
the Total Outstandings (with the aggregate amount of each Lender’s risk
participation and funded participation in L/C Obligations being deemed “held” by
such Lender for purposes of this definition), and (c) if there are five or more
Lenders, Lenders having more than 50% of the Aggregate Commitments or, if the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 8.02,
Lenders holding in the aggregate more than 50% of the Total Outstandings (with
the aggregate amount of each Lender’s risk participation and funded
participation in L/C Obligations being deemed “held” by such Lender for purposes
of this definition); provided that, the Commitment of, and the portion of the
Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

 

“Responsible Officer” means the chief executive officer, president, chief
financial officer, vice president-finance, treasurer or assistant treasurer of a
Loan Party. Any document delivered hereunder that is signed by a Responsible
Officer of a Loan Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively presumed to have
acted on behalf of such Loan Party.

 

“Restaurant” means, with respect to any Contract, the Person or Persons
obligated to provide Credits or make payments with respect to such Contract,
including any guarantor thereof.

 

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“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest or on account of
any return of capital to Borrower’s stockholders, partners or members (or the
equivalent Person thereof).

 

“Rights to Receive” means all outstanding rights to receive and indebtedness
owing to Borrower or any Subsidiary by a Restaurant under a Contract, whether
constituting an account, chattel paper, instruments, investment property or
general intangible, including, without limitation, all (a) rights to receive
Meals or Credits in respect thereof under the Registered Card Program purchased
by Borrower or any Subsidiary thereof from any Restaurant pursuant to any
Contract, (b) rights of Borrower or any Subsidiary to, in and under any Contract
with a Restaurant, and (c) rights of Borrower or any Subsidiary, whether now
existing or hereafter arising, to recover payments from a Restaurant’s account
in connection with the purchase of Meals by any Member at such Restaurant.

 

“RTR Funding” means RTR Funding LLC, a Delaware limited liability company.

 

“Senior Debt” means Indebtedness of Borrower and its Subsidiaries other than the
Subordinated Notes and other Subordinated Liabilities.

 

“Start-up Restaurant” means any newly opened Restaurant that has operated for
less than six months.

 

“Subordinated Liabilities” means the obligations with respect to the
Subordinated Notes and any other liabilities subordinated to the Obligations in
a manner reasonably acceptable to Agent in its sole discretion.

 

“Subordinated Note Documents” means the Subordinated Notes, the Subordinated
Note Indenture and all other instruments and agreements executed or delivered by
any Loan Party to or in favor of any of the holders of the Subordinated Notes or
the trustee under the Subordinated Note Indenture.

 

“Subordinated Note Indenture” means that certain Indenture dated as of October
15, 2003, as amended and restated as of February 4, 2004, between Borrower and
LaSalle Bank National Association, as Trustee.

 

“Subordinated Notes” means the 3.25% convertible subordinated debentures of
Borrower due 2023 in the original maximum principal amount of $70,000,000 issued
pursuant to the Subordinated Note Indenture.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or

 

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indirectly through one or more intermediaries, or both, by such Person. Unless
otherwise specified, all references herein to a “Subsidiary” or to
“Subsidiaries” shall refer to a Subsidiary or Subsidiaries of Borrower; provided
that, “Subsidiary” shall not include 47K Corp., a New Jersey corporation for
purposes of this Agreement and the other Loan Documents.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

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

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under a
so-called synthetic, tax retention or similar off-balance sheet lease (but
excluding any obligations under a true operating lease of any such Person).

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

 

“Threshold Amount” means $2,500,000.

 

“Total Liabilities” means the sum of current liabilities plus long term
liabilities.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

 

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

 

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

 

“United States” and “U.S.” mean the United States of America.

 

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

 

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

 

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Loan Document, Subordinated Note Document or
Organization Document) shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (iii) the words “herein,” “hereof” and “hereunder” and
words of similar import when used in any Loan Document, shall be construed to
refer to such Loan Document in its entirety and not to any particular provision
thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, the Loan Document in which such references appear,
(v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

(b) 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”.

 

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

 

1.03 Accounting Terms. (a) Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in

 

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effect from time to time, applied in a manner consistent with that used in
preparing the Audited 2003 Financial Statements, except as otherwise
specifically prescribed herein.

 

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

 

1.04 Rounding. Any financial ratios required to be maintained by Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

 

1.05 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Central time (daylight or standard, as applicable).

 

1.06 Letter of Credit Amounts. Unless otherwise specified herein the amount of a
Letter of Credit at any time shall be deemed to be the stated amount of such
Letter of Credit in effect at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such Letter of Credit shall be deemed to be the
maximum stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

 

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01 Loans. Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a “Loan”) to Borrower from time
to time, on any Business Day during the Availability Period, in an aggregate
amount not to exceed at any time outstanding the amount of such Lender’s
Commitment; provided, however, that after giving effect to any Borrowing, (a)
the Total Outstandings shall not exceed the Maximum Available Amount, and (b)
the aggregate Outstanding Amount of the Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations shall not
exceed such Lender’s Commitment. Within the limits of each Lender’s Commitment,
and subject to the other terms and conditions hereof, Borrower may borrow under
this Section 2.01, prepay under Section 2.04, and reborrow under this Section
2.01. Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.

 

2.02 Borrowings, Conversions and Continuations of Loans. (a) Each Borrowing,
each conversion of Loans from one Type to the other, and each continuation of
Eurodollar Rate

 

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Loans shall be made upon Borrower’s irrevocable notice to Agent, which may be
given by telephone. Each such notice must be received by Agent not later than
10:00 a.m. (i) three Business Days prior to the requested date of any Borrowing
of, conversion to or continuation of Eurodollar Rate Loans or of any conversion
of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of
any Borrowing of Base Rate Loans in duration as provided in the definition of
“Interest Period”, whereupon Agent shall give prompt notice to Lenders of such
request and determine whether the requested Interest Period is acceptable to all
of them; provided, however, that if Borrower wishes to request Eurodollar Rate
Loans having an Interest Period other than one, two, three or six months in
duration as provided in the definition of “Interest Period”, the applicable
notice must be received by Agent not later than 10:00 a.m., four Business Days
prior to the requested date of any Borrowing of, conversion to or continuation
of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base
Rate Loans, whereupon not later than 10:00 a.m., three Business Days before the
requested date of any such Borrowing of, conversion to or continuation of
Eurodollar Rate Loans (the “Eurodollar Cut-Off Time”), Agent shall notify
Borrower (which notice may be by telephone) whether or not the requested
Interest Period has been consented to by all Lenders. Each telephonic notice by
Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery
to Agent of a written Loan Notice, appropriately completed and signed by a
Responsible Officer of Borrower. Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of
$2,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided
in Sections 2.03(c), each Borrowing of or conversion to Base Rate Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each Loan Notice (whether telephonic or written) shall specify (i)
whether Borrower is requesting a Borrowing, a conversion of Loans from one Type
to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested
date of the Borrowing, conversion or continuation, as the case may be (which
shall be a Business Day), (iii) the principal amount of Loans to be borrowed,
converted or continued, (iv) the Type of Loans to be borrowed or to which
existing Loans are to be converted, and (v) if applicable, the duration of the
Interest Period with respect thereto. If Borrower delivers a Loan Notice for a
new Borrowing but fails to specify a Type of Loan, then the applicable Loans
shall be made as Eurodollar Rate Loans having an Interest Period of one month if
such Loan Notice was submitted prior to the Eurodollar Cut-Off Time, and
otherwise as Base Rate Loans. If Borrower requests a Borrowing of, conversion
to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fails
to specify an Interest Period, it will be deemed to have specified an Interest
Period of one month. In addition to the foregoing, at any time that a Eurodollar
Rate Loan is outstanding, if Borrower fails either to (x) deliver a Loan Notice
requesting a conversion or continuation of such Eurodollar Rate Loan or (y)
notify Agent of Borrower’s intent to prepay such Eurodollar Rate Loan in
accordance with Section 2.04, in either case prior to 10:00 a.m. on that date
that is three Business Days prior to the expiration of the then-current Interest
Period for such Eurodollar Rate Loan, Borrower will be deemed to have submitted
a Loan Notice requesting that such Loan be continued as a Eurodollar Rate Loan
having an Interest Period of one month.

 

(b) Following receipt (or deemed receipt) of a Loan Notice, Agent shall promptly
notify each Lender of the amount of its Applicable Percentage of the applicable
Loans. In the case of a Borrowing, each Lender shall make the amount of its Loan
available to Agent in immediately available funds at Administrative Agent’s
Office not later than 12:00 noon on the Business Day specified in the applicable
Loan Notice. Upon satisfaction of the applicable

 

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conditions set forth in this Section and in Section 4.02 (and, if such Borrowing
is the initial Credit Extension, Section 4.01), Agent shall make all funds so
received available to Borrower in like funds as received by Agent either by (i)
crediting the account of Borrower on the books of Bank of America with the
amount of such funds or (ii) wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) Agent by
Borrower; provided, however, that if, on the date the Loan Notice with respect
to such Borrowing is given by Borrower, there are L/C Borrowings outstanding,
then the proceeds of such Borrowing first, shall be applied, to the payment in
full of any such L/C Borrowings, and second, shall be made available to Borrower
as provided above.

 

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans without the consent of the Required
Lenders, and the Required Lenders may demand that any or all of the then
outstanding Eurodollar Rate Loans be converted immediately to Base Rate Loans
and Borrower agrees to pay all amounts due under Section 3.05 in accordance with
the terms thereof due to any such conversion.

 

(d) Agent shall promptly notify Borrower and Lenders of the interest rate
applicable to any Interest Period for Eurodollar Rate Loans upon determination
of such interest rate.

 

(e) After giving effect to all Borrowings, all conversions of Loans from one
Type to the other, and all continuations of Loans as the same Type, there shall
not be more than five Interest Periods in effect with respect to Loans.

 

2.03 Letters of Credit.

 

(a) The Letter of Credit Commitment.

 

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the other Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until the L/C Expiration Date, to issue Letters of Credit for
the account of Borrower, and to amend or extend Letters of Credit previously
issued by it, in accordance with subsection (b) below, and (2) to honor drawings
under the Letters of Credit; and (B) the Lenders severally agree to participate
in Letters of Credit issued for the account of Borrower and any drawings
thereunder; provided that after giving effect to any L/C Credit Extension with
respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the
Maximum Available Amount, (y) the aggregate Outstanding Amount of the Loans of
any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations shall not exceed such Lender’s Commitment, or (z) the
Outstanding Amount of the L/C Obligations shall not exceed the L/C Sublimit.
Each request by Borrower for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by Borrower that the L/C Credit Extension
so requested complies with the conditions set forth in the proviso to the
preceding sentence. Within the foregoing limits, and subject to the terms and
conditions hereof, Borrower’s ability to obtain Letters of Credit shall be fully
revolving, and accordingly Borrower may, during the foregoing period, obtain

 

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Letters of Credit to replace Letters of Credit that have expired or that have
been drawn upon and reimbursed.

 

(ii) The L/C Issuer shall not issue any Letter of Credit if:

 

(A) subject to Section 2.03(b)(iv), the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of issuance or last
extension, unless the Required Lenders have approved such expiry date; or

 

(B) the expiry date of such requested Letter of Credit would occur after the L/C
Expiration Date, unless all the Lenders have approved such expiry date.

 

(iii) The L/C Issuer shall be under no obligation to issue any Letter of Credit
if:

 

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital requirement (for
which the L/C Issuer is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which the L/C
Issuer in good faith deems material to it;

 

(B) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer;

 

(C) except as otherwise agreed by Agent and the L/C Issuer, such Letter of
Credit is in an initial stated amount less than $100,000;

 

(D) such Letter of Credit is to be denominated in a currency other than Dollars;

 

(E) a default of any Lender’s obligations to fund under Section 2.03(c) exists
or any Lender is at such time a Defaulting Lender hereunder, unless the L/C
Issuer has entered into satisfactory arrangements with Borrower or such Lender
to eliminate the L/C Issuer’s risk with respect to such Lender; or

 

(F) unless specifically provided for in this Agreement, such Letter of Credit
contains any provisions for automatic reinstatement of the stated amount after
any drawing thereunder.

 

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would
not be permitted at such time to issue such Letter of Credit in its amended form
under the terms hereof.

 

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(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

 

(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (A) provided to Agent
in Article IX with respect to any acts taken or omissions suffered by the L/C
Issuer in connection with Letters of Credit issued by it or proposed to be
issued by it and Issuer Documents pertaining to such Letters of Credit as fully
as if the term “Administrative Agent” or “Agent” as used in Article IX included
the L/C Issuer with respect to such acts or omissions, and (B) as additionally
provided herein with respect to the L/C Issuer.

 

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit.

 

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of Borrower delivered to the L/C Issuer (with a copy to Agent) in
the form of a L/C Application, appropriately completed and signed by a
Responsible Officer of Borrower. Such L/C Application must be received by the
L/C Issuer and Agent not later than 10:00 a.m. at least two Business Days (or
such later date and time as Agent and the L/C Issuer may agree in a particular
instance in their sole discretion) prior to the proposed issuance date or date
of amendment, as the case may be. In the case of a request for an initial
issuance of a Letter of Credit, such L/C Application shall specify in form and
detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such L/C Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the Letter of
Credit to be amended; (B) the proposed date of amendment thereof (which shall be
a Business Day); (C) the nature of the proposed amendment; and (D) such other
matters as the L/C Issuer may require. Additionally, Borrower shall furnish to
the L/C Issuer and Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or Agent may require.

 

(ii) Promptly after receipt of any L/C Application at the address set forth in
Section 10.02 for receiving L/C Applications and related correspondence, the L/C
Issuer will confirm with Agent (by telephone or in writing) that Agent has
received a copy of such L/C Application from Borrower and, if not, the L/C
Issuer will provide Agent with a copy thereof. Unless the L/C Issuer has
received written notice from any Lender, Agent or any Loan Party, at least one
Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions in Article
IV shall not then be satisfied, then, subject to the terms and conditions
hereof, the

 

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L/C Issuer shall, on the requested date, issue a Letter of Credit for the
account of Borrower or enter into the applicable amendment, as the case may be,
in each case in accordance with the L/C Issuer’s usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Issuer a risk participation in such Letter of Credit in an
amount equal to the product of such Lender’s Applicable Percentage times the
amount of such Letter of Credit.

 

(iii) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to Borrower and Agent a true and
complete copy of such Letter of Credit or amendment.

 

(iv) If Borrower so requests in any applicable L/C Application, the L/C Issuer
may, in its sole and absolute discretion, agree to issue a Letter of Credit that
has automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit the L/C
Issuer to prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer,
Borrower shall not be required to make a specific request to the L/C Issuer for
any such extension. Once an Auto-Extension Letter of Credit has been issued, the
Lenders shall be deemed to have authorized (but may not require) the L/C Issuer
to permit the extension of such Letter of Credit at any time to an expiry date
not later than the L/C Expiration Date; provided, however, that the L/C Issuer
shall not permit any such extension if (A) the L/C Issuer has determined that it
would not be permitted, or would have no obligation, at such time to issue such
Letter of Credit in its revised form (as extended) under the terms hereof (by
reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five Business Days before the
Non-Extension Notice Date (1) from Agent that the Required Lenders have elected
not to permit such extension or (2) from Agent, any Lender or Borrower that one
or more of the applicable conditions specified in Section 4.02 is not then
satisfied, and in each such case directing the L/C Issuer not to permit such
extension.

 

(c) Drawings and Reimbursements; Funding of Participations.

 

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify Borrower and
Agent thereof. Not later than 11:00 a.m. on the date of any payment by the L/C
Issuer under a Letter of Credit (each such date, an “Honor Date”), if Borrower
shall have received notice of the applicable drawing prior to 10:00 a.m. on the
Honor Date (or, if such notice is received later than 10:00 a.m. on the Honor
Date, then not later than 11:00 a.m. on (x) the Business Day that Borrower
receives such notice, if such notice is received prior to 10:00 a.m., or (y) the
Business Day immediately following the day that Borrower receives such notice,
if such notice is received after 10:00 a.m.), Borrower shall

 

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reimburse the L/C Issuer through Agent in an amount equal to the amount of such
drawing. If Borrower fails to so reimburse the L/C Issuer by such time, Agent
shall promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Lender’s Applicable Percentage thereof. In such event, Borrower shall be deemed
to have requested a Borrowing of Base Rate Loans to be disbursed on the Honor
Date in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.02 for the principal amount of Base
Rate Loans, but subject to the amount of the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02 (other than the
delivery of a Loan Notice). Any notice given by the L/C Issuer or Agent pursuant
to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

 

(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds
available to Agent for the account of the L/C Issuer at the Administrative
Agent’s Office in an amount equal to its Applicable Percentage of the
Unreimbursed Amount not later than 12:00 noon on the Business Day specified in
such notice by Agent, whereupon, subject to the provisions of Section
2.03(c)(iii), each Lender that so makes funds available shall be deemed to have
made a Base Rate Loan to Borrower in such amount and Borrower’s obligation to
repay the Unreimbursed Amount shall be deemed discharged and replaced to the
extent of such deemed Base Rate Loan. Agent shall remit the funds so received to
the L/C Issuer.

 

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02
cannot be satisfied or for any other reason, Borrower shall be deemed to have
incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the Default Rate.
In such event, each Lender’s payment to Agent for the account of the L/C Issuer
pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Lender in satisfaction of its participation obligation under this Section
2.03.

 

(iv) Until each Lender funds its Loan or L/C Advance pursuant to this Section
2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s Applicable Percentage of such
amount shall be solely for the account of the L/C Issuer.

 

(v) Each Lender’s obligation to make Loans or L/C Advances to reimburse the L/C
Issuer for amounts drawn under Letters of Credit, as contemplated by this
Section 2.03(c), shall be absolute and unconditional and shall not be affected
by any circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the L/C Issuer, Borrower or
any other Person for any reason whatsoever; (B) the occurrence or continuance of
a Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing; provided,

 

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however, that each Lender’s obligation to make Loans pursuant to this Section
2.03(c) is subject to the conditions set forth in Section 4.02 (other than
delivery by Borrower of a Loan Notice). No such making of an L/C Advance shall
relieve or otherwise impair the obligation of Borrower to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any Letter of
Credit, together with interest as provided herein.

 

(vi) If any Lender fails to make available to Agent for the account of the L/C
Issuer any amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting through
Agent), on demand, such amount with interest thereon for the period from the
date such payment is required to the date on which such payment is immediately
available to the L/C Issuer at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the L/C Issuer in accordance with
banking industry rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by the LC/ Issuer in connection
with the foregoing. A certificate of the L/C Issuer submitted to any Lender
(through Agent) with respect to any amounts owing under this clause (vi) shall
be conclusive absent manifest error.

 

(d) Repayment of Participations.

 

(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Lender such Lender’s L/C Advance in respect of
such payment in accordance with Section 2.03(c), if Agent receives for the
account of the L/C Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by Agent), Agent will
distribute within a reasonable time to such Lender its Applicable Percentage
thereof (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s L/C Advance was outstanding) in
the same funds as those received by Agent.

 

(ii) If any payment received by Agent for the account of the L/C Issuer pursuant
to Section 2.03(c)(i) is required to be returned under any of the circumstances
described in Section 10.05 (including pursuant to any settlement entered into by
the L/C Issuer in its discretion), each Lender shall pay to Agent for the
account of the L/C Issuer its Applicable Percentage thereof on demand of Agent,
plus interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of Lenders under this clause shall
survive the payment in full of the Obligations and the termination of this
Agreement.

 

(e) Obligations Absolute. The obligation of Borrower to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing
shall be absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including
the following:

 

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

 

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(ii) the existence of any claim, counterclaim, setoff, defense or other right
that Borrower or any Subsidiary may have at any time against any beneficiary or
any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;

 

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

 

(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

 

(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, Borrower or any
Subsidiary.

 

Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with Borrower’s instructions or other irregularity, Borrower will
immediately notify the L/C Issuer. Borrower shall be conclusively deemed to have
waived any such claim against the L/C Issuer and its correspondents unless such
notice is given as aforesaid.

 

(f) Role of L/C Issuer. Each Lender and Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Lender for (i)
any action taken or omitted in connection herewith at the request or with the
approval of Lenders or the Required Lenders, as applicable; (ii) any action
taken or omitted in the absence of gross negligence or willful misconduct; or
(iii) the due execution, effectiveness, validity or enforceability of any
document or instrument related to any Letter of Credit or Issuer Document.
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude Borrower’s
pursuing such rights

 

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and remedies as it may have against the beneficiary or transferee at law or
under any other agreement. None of the L/C Issuer, Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of the
L/C Issuer, shall be liable or responsible for any of the matters described in
clauses (i) through (v) of Section 2.03(e); provided, however, that anything in
such clauses to the contrary notwithstanding, Borrower may have a claim against
the L/C Issuer, and the L/C Issuer may be liable to Borrower, to the extent, but
only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by Borrower which Borrower proves were caused by the L/C
Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

 

(g) Cash Collateral. Upon the request of Agent, (i) if the L/C Issuer has
honored any full or partial drawing request under any Letter of Credit and such
drawing has resulted in an L/C Borrowing, or (ii) if, as of the L/C Expiration
Date, any L/C Obligation for any reason remains outstanding, Borrower shall, in
each case, immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations. Sections 2.04 and 8.02(c) set forth certain additional requirements
to deliver Cash Collateral hereunder. For purposes hereof, “Cash Collateralize”
means to pledge and deposit with or deliver to Agent, for the benefit of the L/C
Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit
account balances or other collateral acceptable to Agent and the L/C Issuer
pursuant to documentation in form and substance satisfactory to Agent and the
L/C Issuer (which documents are hereby consented to by Lenders). Derivatives of
such term have corresponding meanings. Borrower hereby grants to Agent, for the
benefit of the L/C Issuer and Lenders, a security interest in all such cash,
deposit accounts and all balances therein and all proceeds of the foregoing.
Cash collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Bank of America.

 

(h) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer
and Borrower when a Letter of Credit is issued, the rules of the ISP shall apply
thereto.

 

(i) L/C Fees. Borrower shall pay to Agent for the account of each Lender in
accordance with its Applicable Percentage a L/C fee (the “L/C Fee”) for each
Letter of Credit equal to the Applicable Rate times the daily amount available
to be drawn under such Letter of Credit. For purposes of computing the daily
amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.06. L/C Fees
shall be (i) computed on a quarterly basis in arrears and (ii) due and payable
on the last Business Day of each March, June, September and December, commencing
with the first such date to occur after the issuance of such Letter of Credit,
on the L/C Expiration Date and thereafter on demand. If there is any change in
the Applicable Rate during any quarter, the daily amount available to be drawn
under each Letter of Credit shall be computed and multiplied by the Applicable
Rate separately for each period during such quarter that such Applicable Rate
was in effect. Notwithstanding anything to the contrary contained herein, upon
the request of the

 

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Required Lenders, while any Event of Default exists, all L/C Fees shall accrue
at the Default Rate.

 

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
Borrower shall pay directly to the L/C Issuer for its own account a fronting fee
with respect to each Letter of Credit in the amount of 0.125% times the daily
amount available to be drawn under such Letter of Credit. Such fronting fee
shall be payable on a quarterly basis in arrears and due on the last Business
Day of each March, June, September and December, commencing with the first such
date to occur after the issuance of such Letter of Credit, on the L/C Expiration
Date and thereafter on demand. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06. In addition,
Borrower shall pay directly to the L/C Issuer for its own account the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit as from time
to time in effect. Such individual customary fees and standard costs and charges
are due and payable on demand and are nonrefundable.

 

(k) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Documents, the terms hereof shall
control.

 

2.04 Prepayments. (a) Borrower may, upon notice to Agent, at any time or from
time to time voluntarily prepay Loans in whole or in part without premium or
penalty; provided that (i) such notice must be received by Agent not later than
10:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar
Rate Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any
prepayment of Eurodollar Rate Loans shall be in a principal amount of $2,000,000
or a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of
Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid. Agent will
promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s Applicable Percentage of such prepayment. If such notice
is given by Borrower, Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued
interest on the amount prepaid, together with any additional amounts required
pursuant to Section 3.05. Each such prepayment shall be applied to the Loans of
Lenders in accordance with their respective Applicable Percentages.

 

(b) If for any reason the Total Outstandings at any time exceed the Maximum
Available Amount, Borrower shall immediately prepay Loans and/or Cash
Collateralize the L/C Obligations in an aggregate amount equal to such excess;
provided, however, that Borrower shall not be required to Cash Collateralize the
L/C Obligations pursuant to this Section 2.04(b) unless after the prepayment in
full of the Loans the Total Outstandings exceed the Maximum Available Amount.

 

2.05 Termination or Reduction of Commitments. Borrower may, upon notice to
Agent, terminate the Aggregate Commitments, or from time to time permanently
reduce the Aggregate Commitments; provided that (a) any such notice shall be
received by Agent not later

 

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than 10:00 a.m. five Business Days prior to the date of termination or
reduction, (b) any such partial reduction shall be in an aggregate amount of
$5,000,000 or any whole multiple of $1,000,000 in excess thereof, (c) Borrower
shall not terminate or reduce the Aggregate Commitments if, after giving effect
thereto and to any concurrent prepayments hereunder, the Total Outstandings
would exceed the Maximum Available Amount, and (d) if, after giving effect to
any reduction of the Aggregate Commitments, the L/C Sublimit exceeds the Maximum
Available Amount, such L/C Sublimit shall be automatically reduced by the amount
of such excess. Agent will promptly notify the Lenders of any such notice of
termination or reduction of the Aggregate Commitments. Any reduction of the
Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Applicable Percentage. All fees accrued until the effective
date of any termination of the Aggregate Commitments shall be paid on the
effective date of such termination.

 

2.06 Repayment of Loans. Borrower shall repay to Lenders on the Maturity Date
the aggregate principal amount of Loans outstanding on such date.

 

2.07 Interest. (a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate.

 

(b) (i) Upon the request of the Required Lenders, while any Event of Default
exists, Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(ii) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.

 

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

 

2.08 Fees. In addition to certain fees described in subsections (i) and (j) of
Section 2.03:

 

(a) Agent’s Fees. Borrower shall pay to Agent for Agent’s own account, fees in
the amounts and at the times specified in the letter agreement, dated July 16,
2004 (the “Agent Fee Letter”), between Borrower and Agent. Such fees shall be
fully earned when paid and shall be nonrefundable for any reason whatsoever.

 

(b) Lenders’ Upfront Fee. On the Closing Date, Borrower shall pay to Agent, for
the account of each Lender, an upfront fee as has been separately agreed upon in
writing in the amounts so specified. Such upfront fees are for the credit
facilities committed by Lenders under

 

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this Agreement and are fully earned on the date paid. The upfront fee paid to
each Lender is solely for its own account and is nonrefundable for any reason
whatsoever.

 

(c) Commitment Fee. Borrower shall pay to Agent for the account of each Lender
in accordance with its Applicable Percentage a commitment fee equal to the
Applicable Rate times the actual daily amount by which the Aggregate Commitments
exceed the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding
Amount of L/C Obligations. The commitment fee shall accrue at all times during
the Availability Period, including at any time during which one or more of the
conditions in Article IV is not met (provided that, such commitment fee shall
not accrue for any Lender during any times that such Lender is a Defaulting
Lender), and shall be due and payable quarterly in arrears on the last Business
Day of each March, June, September and December, commencing with the first such
date to occur after the Closing Date, and on the Maturity Date. The commitment
fee shall be calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.

 

2.09 Computation of Interest and Fees. All computations of interest for Base
Rate Loans when the Base Rate is determined by Bank of America’s “prime rate”
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each Loan for the day on which the Loan
is made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.11(a), bear
interest for one day. Each determination by Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

2.10 Evidence of Debt. (a) The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
Agent in the ordinary course of business. The accounts or records maintained by
Agent and each Lender shall be conclusive absent manifest error of the amount of
the Credit Extensions made by Lenders to Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of Borrower hereunder to pay any amount
owing with respect to the Obligations. In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
Agent in respect of such matters, the accounts and records of Agent shall
control in the absence of manifest error. Upon the request of any Lender made
through Agent, Borrower shall execute and deliver to such Lender (through Agent)
a Note, which shall evidence such Lender’s Loans in addition to such accounts or
records. Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

 

(b) In addition to the accounts and records referred to in subsection (a), each
Lender and Agent shall maintain in accordance with its usual practice accounts
or records evidencing the purchases and sales by such Lender of participations
in Letters of Credit. In the event of any conflict between the accounts and
records maintained by Agent and the accounts and records of

 

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any Lender in respect of such matters, the accounts and records of Agent shall
control in the absence of manifest error.

 

2.11 Payments Generally; Agent’s Clawback.

 

(a) (i) General. All payments to be made by Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by Borrower
hereunder shall be made to Agent, for the account of the respective Lenders to
which such payment is owed, at the Administrative Agent’s Office in Dollars and
in immediately available funds not later than 11:00 a.m. on the date specified
herein. Agent will promptly distribute to each Lender its Applicable Percentage
(or other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender’s Lending Office. All payments received
by Agent after 11:00 a.m. shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue. If any
payment to be made by Borrower shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case
may be.

 

(ii) Borrower hereby authorizes Agent, if and to the extent any payment of
principal, interest or fees under this Agreement or any Note is not made when
due, to deduct any such amount from any or all of the accounts of Borrower
maintained at Agent. Agent agrees to provide written notice to Borrower of any
automatic deduction made pursuant to this Section 2.11(a)(ii) showing in
reasonable detail the amounts of such deduction. Lenders agree to reimburse
Borrower based on their Applicable Percentage for any amounts deducted from such
accounts in excess of amount due hereunder and under any other Loan Documents.

 

(b) (i) Funding by Lenders; Presumption by Agent. Unless Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to Agent such Lender’s share of such
Borrowing, Agent may assume that such Lender has made such share available on
such date in accordance with Section 2.02 and may, in reliance upon such
assumption, make available to Borrower a corresponding amount. In such event, if
a Lender has not in fact made its share of the applicable Borrowing available to
Agent, then the applicable Lender and Borrower severally agree to pay to Agent
forthwith on demand such corresponding amount in immediately available funds
with interest thereon, for each day from and including the date such amount is
made available to Borrower to but excluding the date of payment to Agent, at (A)
in the case of a payment to be made by such Lender, the greater of the Federal
Funds Rate and a rate determined by Agent in accordance with banking industry
rules on interbank compensation, plus any administrative, processing or similar
fees customarily charged by Agent in connection with the foregoing and (B) in
the case of a payment to be made by Borrower, the interest rate applicable to
Base Rate Loans. If Borrower and such Lender shall pay such interest to Agent
for the same or an overlapping period, Agent shall promptly remit to Borrower
the amount of such interest paid by Borrower for such period. If such Lender
pays its share of the applicable Borrowing to Agent, then the amount so paid
shall constitute such Lender’s Loan

 

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included in such Borrowing. Any payment by Borrower shall be without prejudice
to any claim Borrower may have against a Lender that shall have failed to make
such payment to Agent.

 

(ii) Payments by Borrower; Presumptions by Agent. Unless Agent shall have
received notice from Borrower prior to the date on which any payment is due to
Agent for the account of the Lenders or the L/C Issuer hereunder that Borrower
will not make such payment, Agent may assume that Borrower has made such payment
on such date in accordance herewith and may, in reliance upon such assumption,
distribute to Lenders or the L/C Issuer, as the case may be, the amount due. In
such event, if Borrower has not in fact made such payment, then each of Lenders
or the L/C Issuer, as the case may be, severally agrees to repay to Agent
forthwith on demand the amount so distributed to such Lender or the L/C Issuer,
in immediately available funds with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to Agent, at the greater of the Federal Funds Rate and a rate determined
by Agent in accordance with banking industry rules on interbank compensation. A
notice of Agent to any Lender or Borrower with respect to any amount owing under
this subsection (b) shall be conclusive, absent manifest error.

 

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
Agent funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to Borrower
by Agent because the conditions to the applicable Credit Extension set forth in
Article IV are not satisfied or waived in accordance with the terms hereof,
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

 

(d) Obligations of Lenders Several. The obligations of Lenders hereunder to make
Loans, to fund participations in Letters of Credit and to make payments under
Section 10.04(c) are several and not joint. The failure of any Lender to make
any Loan, to fund any such participation or to make any payment under Section
10.04(c) on any date required hereunder shall not relieve any other Lender of
its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan, purchase
its participation or to make its payment under Section 10.04(c).

 

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

 

2.12 Sharing of Payments. If any Lender shall, by exercising any right of setoff
or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of the Loans made by it, or the participations in L/C
Obligations held by it resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of such Loans or participations and accrued
interest thereon greater than its pro rata share thereof as provided herein,
then the Lender receiving such greater proportion shall (a) notify Agent of such
fact, and (b) purchase (for cash at face value) participations in the Loans and
subparticipations in L/C Obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such

 

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payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Loans and other
amounts owing them, provided that:

 

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

 

(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by Borrower pursuant to and in accordance with the express terms of
this Agreement or (y) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or
subparticipations in L/C Obligations to any assignee or participant, other than
to Borrower or any Subsidiary thereof (as to which the provisions of this
Section shall apply).

 

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation, but subject to Section 10.08.

 

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01 Taxes.

 

(a) Payments Free of Taxes. Any and all payments by Borrower to or on account of
any obligation of Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if Borrower shall be required by any
applicable law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section), Agent, Lender or L/C Issuer, as the
case may be, receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrower shall make such deductions, and (iii)
Borrower shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

(b) Payment of Other Taxes by Borrower. Without limiting the provisions of
subsection (a) above, Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

 

(c) Indemnification by Borrower. Borrower shall indemnify Agent, each Lender and
the L/C Issuer, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by Agent, such Lender or the L/C Issuer, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally

 

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imposed or asserted by the relevant Governmental Authority. In order to receive
reimbursement under this Section 3.01, a certificate as to the amount of such
payment or liability shall be delivered to Borrower by a Lender or the L/C
Issuer (with a copy to Agent), or by Agent on its own behalf or on behalf of a
Lender or the L/C Issuer, which certificate shall be conclusive absent manifest
error. Notwithstanding the foregoing, Borrower shall not be required to make any
payments or reimburse Agent, any Lender or the L/C Issuer under this Section
3.01 with respect to any Taxes, Other Taxes or other amounts imposed on or paid
by Agent, such Lender or the L/C Issuer more than 180 days before the date of
which a request for payment or reimbursement is delivered to Borrower.

 

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by Borrower to a Governmental Authority,
Borrower shall deliver to Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to Agent.

 

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to Borrower (with a copy to Agent), at the time or times
prescribed by applicable law or reasonably requested by Borrower or Agent, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if requested by Borrower or Agent, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by Borrower or Agent as will enable Borrower or Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements. Without limiting the generality of the foregoing, any
Foreign Lender shall deliver to Borrower and Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of Borrower or Agent, but only if such Foreign
Lender is legally entitled to do so), whichever of the following is applicable:

 

(i) duly completed copies of IRS Form W-8BEN claiming eligibility for benefits
of an income tax treaty to which the United States of America is a party,

 

(ii) duly completed copies of IRS Form W-8ECI,

 

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of Borrower
within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly
completed copies of Internal Revenue Service Form W-8BEN, or

 

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(iv) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit Borrower to determine the withholding or deduction
required to be made.

 

(f) Treatment of Certain Refunds. If Agent, any Lender or the L/C Issuer
determines, in its sole discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by Borrower or with respect
to which Borrower has paid additional amounts pursuant to this Section, it shall
pay to Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of Agent, such Lender or the L/C Issuer, as
the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund), provided that
Borrower, upon the request of Agent, such Lender or the L/C Issuer, agrees to
repay the amount paid over to Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to Agent, such Lender or
the L/C Issuer in the event Agent, such Lender or the L/C Issuer is required to
repay such refund to such Governmental Authority. This subsection shall not be
construed to require Agent, any Lender or the L/C Issuer to make available its
tax returns (or any other information relating to its taxes that it deems
confidential) to Borrower or any other Person.

 

3.02 Illegality. If any Lender determines that any Change in Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, or any Governmental Authority has imposed material restrictions
on the authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the London interbank market, then, on notice thereof by such Lender
to Borrower through Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies Agent and Borrower that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, Borrower shall, upon demand from such Lender (with a copy to
Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such
Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion,
Borrower shall also pay accrued interest on the amount so prepaid or converted
and all amounts due under Section 3.05 in accordance with the terms thereof due
to such prepayment or conversion.

 

3.03 Inability to Determine Rates. If Agent determines in connection with any
request for a Eurodollar Rate Loan or a conversion to or continuation thereof
that (a) Dollar deposits are not being offered to banks in the London interbank
eurodollar market for the applicable amount and Interest Period of such
Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for
determining the Eurodollar Base Rate for any requested Interest Period with
respect to a proposed Eurodollar Rate Loan, or (c) the Eurodollar Base Rate for
any requested Interest Period with respect to a proposed Eurodollar Rate Loan
does not adequately and fairly reflect the cost to such Lenders of funding such
Loan, Agent will promptly so notify

 

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Borrower and each Lender. Thereafter, the obligation of Lenders to make, convert
or continue Eurodollar Rate Loans shall be suspended until Agent (upon the
instruction of the Required Lenders) revokes such notice. Upon receipt of such
notice, Borrower may revoke any pending request for a Borrowing of, conversion
to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to
have converted such request into a request for a Borrowing of Base Rate Loans in
the amount specified therein.

 

3.04 Increased Costs.

 

(a) Increased Costs Generally. If any Change in Law shall:

 

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in the Eurodollar Rate) or the L/C
Issuer;

 

(ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter
of Credit or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender or the L/C Issuer in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of,
or any change in the rate of, any Excluded Tax payable by such Lender or the L/C
Issuer); or

 

(iii) impose on any Lender or the L/C Issuer or the London interbank market any
other condition, cost or expense affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or
of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, Borrower will pay
to such Lender or the L/C Issuer, as the case may be, such additional amount or
amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered in accordance with
Section 3.04(c) below.

 

(b) Capital Requirements. If any Lender or the L/C Issuer determines that any
Change in Law affecting such Lender or the L/C Issuer or any Lending Office of
such Lender or such Lender’s or the L/C Issuer’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or the L/C Issuer’s capital or on the capital of such
Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the L/C Issuer, to a level below that which such Lender or the
L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have
achieved but for such Change in Law (taking into consideration such

 

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Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the
L/C Issuer’s holding company with respect to capital adequacy), then from time
to time Borrower will pay to such Lender or the L/C Issuer, as the case may be,
such additional amount or amounts as will compensate such Lender or the L/C
Issuer or such Lender’s or the L/C Issuer’s holding company for any such
reduction suffered.

 

(c) Certificates for Reimbursement. Any Lender or the L/C Issuer requesting
compensation under this Section 3.04 shall deliver a certificate to Borrower
(with copy to Agent) setting forth in reasonable detail the amount or amounts
necessary to compensate such Lender or the L/C Issuer or its holding company, as
the case may be, as specified in subsection (a) or (b) of this Section, which
certificate shall be conclusive absent manifest error. Borrower shall pay such
Lender or the L/C Issuer, as the case may be, the amount shown as due on any
such certificate within ten days after receipt thereof.

 

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

 

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to Agent)
from time to time, Borrower shall promptly (and in no event later than 10 days
after such written demand) compensate such Lender for and hold such Lender
harmless from any loss, cost or expense incurred by it as a result of:

 

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise); or

 

(b) any failure by Borrower (for a reason other than the failure of such Lender
to make a Loan) to prepay, borrow, continue or convert any Loan other than a
Base Rate Loan on the date or in the amount notified by Borrower;

 

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained but excluding any loss of
anticipated profits. Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing. For purposes of
calculating amounts payable by Borrower to Lenders under this Section 3.05, each
Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at
the Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan
by a matching deposit or other borrowing in the London interbank eurodollar
market for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded. Borrower

 

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shall not be required to compensate a Lender pursuant to this Section 3.05 for
any amounts incurred or arising hereunder more than 180 days prior to the date
that such Lender delivers the written demand therefor, which written demand
shall set forth in reasonable detail the calculation upon which such Lender
determined such amount and shall be conclusive absent manifest error.

 

3.06 Mitigation Obligations; Replacement of Lenders.

 

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section
3.02, then such Lender shall use reasonable efforts to designate a different
Lending Office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

(b) Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section
3.01, or if any Lender gives notice pursuant to Section 3.02 in connection with
an occurrence or state of affairs not shared by all Lenders, Borrower may
replace any such Lender in accordance with Section 10.10.

 

3.07 Survival. All of Borrower’s obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

 

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01 Conditions of Initial Credit Extension. The obligation of the L/C Issuer
and each Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

 

(a) Agent’s receipt of the following, each of which shall be originals or
telecopies (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each dated
the Closing Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date) and each in form and substance satisfactory
to Agent and each of the Lenders:

 

(i) executed counterparts of this Agreement and the Guaranty, sufficient in
number for distribution to Agent, each Lender and Borrower;

 

(ii) a Note executed by Borrower in favor of each Lender requesting a Note;

 

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(iii) such certificates of resolutions or other action and incumbency
certificates of Responsible Officers of each Loan Party as Agent may require
evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Loan Party is a party;

 

(iv) such documents and certifications as Agent may reasonably require to
evidence that each Loan Party is duly organized or formed, and that each Loan
Party is validly existing, in good standing and qualified to engage in business
in its respective jurisdiction of organization or formation;

 

(v) a favorable opinion of counsel to the Loan Parties acceptable to Agent
addressed to Agent and each Lender, as to the matters set forth concerning the
Loan Parties and the Loan Documents in form and substance satisfactory to Agent;

 

(vi) a certificate of a Responsible Officer of each Loan Party either (A)
attaching copies of all consents, licenses and approvals required in connection
with the execution, delivery and performance by such Loan Party and the validity
against such Loan Party of the Loan Documents to which it is a party, and such
consents, licenses and approvals shall be in full force and effect, or (B)
stating that no such consents, licenses or approvals are so required;

 

(vii) a certificate signed by a Responsible Officer of Borrower certifying that
the conditions specified in Sections 4.02(a) and (b) have been satisfied;

 

(viii) a duly completed Compliance Certificate as of the last day of the fiscal
quarter of Borrower most recently ended prior to the Closing Date, signed by a
Responsible Officer of Borrower; and

 

(ix) such other assurances, certificates, documents, consents or opinions as
Agent, the L/C Issuer or the Required Lenders reasonably may require with
reasonable advance notice.

 

(b) Any fees required to be paid on or before the Closing Date shall have been
paid.

 

(c) Unless waived by Agent, Borrower shall have paid all fees, charges and
disbursements of counsel to Agent, plus such additional amounts of such fees,
charges and disbursements as shall constitute its reasonable estimate of such
fees, charges and disbursements incurred or to be incurred by it through the
closing proceedings (provided that such estimate shall not thereafter preclude a
final settling of accounts between Borrower and Agent), in either case, to the
extent invoiced prior to the Closing Date.

 

Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Agent shall have received notice from such
Lender prior to the proposed Closing Date specifying its objection thereto.

 

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4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension is subject to the following conditions
precedent (other than clauses (a) and (b) below in the case of any Request for
Credit Extension pertaining solely to a conversion or continuation of Loans):

 

(a) The representations and warranties of Borrower and each other Loan Party
contained in Article V or any other Loan Document shall be true and correct on
and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that for
purposes of this Section 4.02, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01.

 

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

 

(c) Agent and, if applicable, the L/C Issuer shall have received a Request for
Credit Extension in accordance with the requirements hereof, along with any
other items required under Section 2.03 in connection with a Letter of Credit,
if applicable.

 

Each Request for Credit Extension submitted by Borrower (other than a Request
for Credit Extension pertaining solely to a conversion or continuation of Loans)
shall be deemed to be a representation and warranty that the conditions
specified in Sections 4.02(a) and (b) have been satisfied on and as of the date
of the applicable Credit Extension.

 

ARTICLE V. REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to Agent and the Lenders that:

 

5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan Party
and each Subsidiary thereof (a) is duly organized or formed, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to own its assets
and carry on its business, (c) is duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b), (c) or (d), to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.

 

5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its

 

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property is subject, except in the case of both clauses (b)(i) and (b)(ii) as
could not reasonably be expected to have a Material Adverse Affect; or (c)
violate any Law except as could not reasonably be expected to have a Material
Adverse Effect. Each Loan Party and each Subsidiary thereof is in compliance
with all Contractual Obligations referred to in clause (b)(i), except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.

 

5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, governmental license or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan Document
except those that either (a) have been obtained and are in full force and
effect, or (b) are not required to be obtained or made prior to the date this
representation or warranty is made.

 

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms except as may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the enforcement of creditors’ rights generally which may be in effect and to
general principles of equity (regardless of whether considered in proceedings in
equity or at law).

 

5.05 Financial Statements; No Material Adverse Effect. (a) The Audited 2003
Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; (ii) fairly present the financial condition of Borrower and its
consolidated Subsidiaries as of the date thereof and their results of operations
for the period covered thereby in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein; and (iii) show or disclose, as appropriate in accordance with GAAP, all
material indebtedness and other liabilities, direct or contingent, of Borrower
and its consolidated Subsidiaries as of the date thereof, including liabilities
for taxes, material commitments and Indebtedness.

 

(b) The unaudited consolidated balance sheet of Borrower and its Subsidiaries
dated June 30, 2004, and the related consolidated statements of income or
operations and cash flows for the fiscal quarter ended on that date (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, and (ii) fairly
present the financial condition of Borrower and its consolidated Subsidiaries as
of the date thereof and their results of operations for the period covered
thereby, subject, in the case of clauses (i) and (ii), to the absence of
footnotes and to normal year-end audit adjustments.

 

(c) Since the date of the Audited 2003 Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.

 

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5.06 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of Borrower after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against Borrower or any of its Subsidiaries or
against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement or any other Loan Document, or any of the transactions
contemplated hereby, or (b) except as specifically disclosed in Schedule 5.06,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

5.07 No Default. Neither Borrower nor any Subsidiary is in default under or with
respect to any Contractual Obligation that could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. No Default
has occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.

 

5.08 Ownership of Property; Liens. Each of Borrower and each Subsidiary has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The property of
Borrower and its Subsidiaries is subject to no Liens, other than Liens permitted
by Section 7.01.

 

5.09 Insurance. The properties of Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of Borrower,
in such amounts (after giving effect to any self-insurance compatible with the
following standards), with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where Borrower or the applicable Subsidiary
operates.

 

5.10 Taxes. Borrower and its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those (a) which are being contested in
good faith by appropriate proceedings diligently conducted and for which
adequate reserves have been provided in accordance with GAAP (or, to the extent
necessary or appropriate in connection with any Foreign Subsidiary, generally
accepted accounting principles as in effect from time to time in such Foreign
Subsidiary’s jurisdiction of organization) or (b) for which the failure so to
file or pay could not reasonably be expected to have a Material Adverse Effect.
There is no proposed tax assessment against Borrower or any Subsidiary that
would, if made, have a Material Adverse Effect.

 

5.11 ERISA Compliance. (a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other Federal or state
Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS or an application for
such a letter is currently being processed by the IRS with respect thereto and,
to the best knowledge of Borrower, nothing has occurred which would prevent, or
cause the loss of, such qualification. Borrower and each ERISA Affiliate have
made all required contributions to each Plan subject to Section 412 of the Code,
except for a failure to

 

48

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contribute that would not result in a Lien in excess of the Threshold Amount
under Section 412(n) of the Code. No application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.

 

(b) There are no pending or, to the best knowledge of Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

 

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; and (v) neither Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to Sections 4069 or
4212(c) of ERISA, except for an event described in clauses (i) through (v) which
individually or in the aggregate with all such events does not incur liability
to Borrower and/or any ERISA Affiliate in excess of the Threshold Amount.

 

5.12 Subsidiaries. As of the Closing Date, Borrower has no Subsidiaries other
than those specifically disclosed in Part (a) of Schedule 5.12, and all of the
outstanding Equity Interests in such Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by a Loan Party in the amounts
specified on Part (a) of Schedule 5.12 free and clear of all Liens (other than
Liens permitted by Section 7.01 that are not created, incurred, assumed or
suffered to exist in connection with any Indebtedness). Borrower has no equity
investments in any other corporation or entity other than those specifically
disclosed in Part (b) of Schedule 5.12 or acquired after the Closing Date in
compliance with the terms of this Agreement. All of the outstanding Equity
Interests in Borrower have been validly issued and are fully paid and
nonassessable.

 

5.13 Margin Regulations; Investment Company Act; Public Utility Holding Company
Act. (a) Borrower is not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock.

 

(b) Neither Borrower nor any Subsidiary (i) is a “holding company”, or a
“subsidiary company” of a “holding company”, or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company”, within the meaning
of the Public Utility Holding Company Act of 1935, or (ii) is or is required to
be registered as an “investment company” under the Investment Company Act of
1940.

 

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5.14 Disclosure. No report, financial statement, certificate or other written
information furnished by or on behalf of any Loan Party to Agent or any Lender
in connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Loan Document (in each
case, as modified or supplemented by other information so furnished) contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that, with respect to projected
financial information, Borrower represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time of preparation.

 

5.15 Compliance with Laws. Each of Borrower and each Subsidiary is in compliance
in all material respects with the requirements of all Laws and all orders,
writs, injunctions and decrees applicable to it or to its properties, except in
such instances in which (a) such requirement of Law (including all Environmental
Laws) or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

5.16 Intellectual Property; Licenses, Etc. Except as could not reasonably be
expected to have a Material Adverse Effect, Borrower and its Subsidiaries own,
or possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other Person. To
the best knowledge of Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by Borrower or any Subsidiary materially infringes
upon any rights held by any other Person. No claim or litigation regarding any
of the foregoing is pending or, to the best knowledge of Borrower, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

 

5.17 Material Agreements. Neither Borrower nor any Subsidiary is a party to any
Material Agreement as of the Closing Date. Each Material Agreement is in full
force and effect and is enforceable by Borrower in accordance with its terms. To
the knowledge of Borrower, no party to any Material Agreement is in breach of or
has failed to perform or is in default under, or has given or received any
notice of any proposed or threatened termination of, any Material Agreement.

 

50

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ARTICLE VI. AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied (other than contingent
indemnity obligations), or any Letter of Credit shall remain outstanding,
Borrower shall, and shall (except in the case of the covenants set forth in
Sections 6.01, 6.02, 6.03 and 6.12) cause each Subsidiary to:

 

6.01 Financial Statements. Deliver to Agent a sufficient number of copies for
delivery by Agent to each Lender (except in the case of electronic deliveries
complying with Section 10.02(b)), in form and detail reasonably satisfactory to
Agent and the Required Lenders:

 

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of Borrower, a consolidated balance sheet of Borrower and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, to be audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and shall not be
subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit;

 

(b) as soon as available, but in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of Borrower, a
consolidated balance sheet of Borrower and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated statements of income or
operations and cash flows for such fiscal quarter and for the portion of
Borrower’s fiscal year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal quarter of the previous fiscal
year and the corresponding portion of the previous fiscal year, all in
reasonable detail, certified by a Responsible Officer of Borrower as fairly
presenting the financial condition, results of operations, shareholders’ equity
and cash flows of Borrower and its Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes; and

 

(c) as soon as available, but in any event by the end of each fiscal year of
Borrower, an annual budget for the next succeeding fiscal year of Borrower to
include a consolidated balance sheet of Borrower and its Subsidiaries for the
next succeeding fiscal year of Borrower, and the related consolidated statements
of income or operations and cash flows, all in reasonable detail, certified by a
Responsible Officer of Borrower.

 

6.02 Certificates; Other Information. Deliver to Agent a sufficient number of
copies for delivery by Agent to each Lender (except in the case of electronic
deliveries complying with Section 10.02(b)), in form and detail reasonably
satisfactory to Agent and the Required Lenders:

 

(a) concurrently with the delivery of the financial statements referred to in
Section 6.01(a), a certificate of its independent certified public accountants
certifying such financial statements and stating that in making the examination
necessary therefor no knowledge was obtained of any Default or, if any such
Default shall exist, stating the nature and status of such event;

 

(b) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of Borrower, which Compliance Certificate shall include, in
form satisfactory to Agent, a calculation of the Maximum Available Amount as of
the last day of the fiscal quarter or year for which such financial statements
are being delivered;

 

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(c) promptly after any request by Agent or any Lender, copies of any detailed
audit reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of Borrower by
independent accountants in connection with the accounts or books of Borrower or
any Subsidiary, or any audit of any of them;

 

(d) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of Borrower, and copies of all annual, regular, periodic and special reports and
registration statements which Borrower may file or be required to file with the
Securities and Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to Agent
pursuant hereto;

 

(e) promptly after distribution thereof to the relevant Persons, copies of each
notice or communication sent to holders, purchasers or creditors (or any agent
or trustee of any of the foregoing) with respect to the Subordinated Notes or
any other Indebtedness with an outstanding principal amount in excess of
$2,500,000, in each case solely to the extent such notice or communication
addresses any of (i) a default or incipient default thereunder, (ii) a waiver or
amendment with respect thereto, or (iii) a prepayment of any amounts thereunder;

 

(f) promptly, and in any event within five Business Days after receipt thereof
by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from the Securities and Exchange Commission (or
comparable agency in any applicable non-U.S. jurisdiction) concerning any
investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Loan Party or any
Subsidiary thereof; and

 

(g) promptly following a request therefor, such additional information regarding
the business, financial or corporate affairs of Borrower or any Subsidiary, or
compliance with the terms of the Loan Documents, as Agent may from time to time
reasonably request.

 

6.03 Notices. Promptly upon any Responsible Officer of Borrower obtaining
knowledge thereof, notify Agent and each Lender:

 

(a) of the occurrence of any Default;

 

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including any such matter resulting from (i) breach
or non-performance of, or any default under, a Contractual Obligation of
Borrower or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;

 

(c) of the occurrence of any ERISA Event;

 

(d) of any material change in accounting policies or financial reporting
practices by Borrower or any Subsidiary; or

 

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(e) the occurrence of any actual or asserted breach or non-performance of, or
any actual or asserted default under, or any proposed or threatened termination
of, any Material Agreement.

 

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of Borrower setting forth details of the occurrence referred
to therein, including the provision of any Loan Document breached in connection
with any Default, and stating what action Borrower has taken and proposes to
take with respect thereto.

 

6.04 Payment of Obligations. Pay and discharge as the same shall become due and
payable, all its material obligations and liabilities, including (a) all
material tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, unless the same are being contested in good faith
by appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP (or, to the extent necessary or appropriate in connection
with any Foreign Subsidiary, generally accepted accounting principles as in
effect from time to time in such Foreign Subsidiary’s jurisdiction of
organization) are being maintained by Borrower or such Subsidiary; (b) all
lawful and material claims which, if unpaid, would by law become a Lien upon its
property; and (c) all material Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.

 

6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by Section
7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of
its business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

 

6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; and (b) make
all necessary repairs thereto and renewals and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

 

6.07 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of Borrower insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts (after giving effect to any self-insurance compatible with the
following standards) as are customarily carried under similar circumstances by
such other Persons.

 

6.08 Compliance with Laws. Comply in all material respects with the requirements
of all Laws and all orders, writs, injunctions and decrees applicable to it or
to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b)

 

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the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.

 

6.09 Books and Records. (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied (or, to the extent necessary or appropriate in connection with any
Foreign Subsidiary, generally accepted accounting principles as in effect from
time to time in such Foreign Subsidiary’s jurisdiction of organization) shall be
made of all financial transactions and matters involving the assets and business
of Borrower or such Subsidiary, as the case may be; and (b) maintain such books
of record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over Borrower or such
Subsidiary, as the case may be.

 

6.10 Inspection Rights. Permit representatives and independent contractors of
Agent and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom (it being understood that abstracts from the minutes of Board of
Directors meetings may be made, but full copies of such minutes may not be made
unless Borrower otherwise consents), and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of Agent or such Lender and at such reasonable times during
normal business hours, not more frequently than twice per year for Agent and all
Lenders combined, upon reasonable advance notice to Borrower; provided, however,
that when an Event of Default exists Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of Borrower at any time during normal business hours
and with reasonable (or, in the case of Agent, with or without) advance notice.

 

6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for general
corporate purposes (including permitted Acquisitions) not in contravention of
any Law or of any Loan Document.

 

6.12 Financial Covenants.

 

(a) Profitability. Maintain positive Loan Party Net Income for each quarterly
accounting period, calculated as of the last day of each fiscal quarter of
Borrower.

 

(b) Leverage Ratio. Maintain the Leverage Ratio as of the last day of each
fiscal quarter of Borrower not exceeding the ratios specified below during the
periods specified below:

 

Period

--------------------------------------------------------------------------------

   Ratios

--------------------------------------------------------------------------------

December 31, 2004 through June 30, 2006

   3.00 to 1.00

September 30, 2006 and thereafter

   2.75 to 1.00

 

This ratio will be calculated as of the end of each reporting period for which
this Agreement requires Borrower to deliver financial statements.

 

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(c) Net Worth. Maintain on a consolidated basis Net Worth, calculated as of the
last day of each fiscal quarter of Borrower, equal to at least the sum of the
following:

 

(i) $71,893,850; plus

 

(ii) the sum of 50% of net income after income taxes (without subtracting
losses) earned in each quarterly accounting period commencing with the fiscal
quarter of Borrower ending on September 30, 2004; plus

 

(iii) the sum of 100% of net proceeds from any equity securities issued by
Borrower after the Closing Date; plus

 

(iv) any increase in Borrower’s and its Subsidiaries’ consolidated stockholders’
equity resulting from the conversion of debt securities to equity securities
after the date of this Agreement.

 

6.13 Additional Guarantors. Notify Agent at the time that any Person becomes a
Domestic Subsidiary, and promptly thereafter (and in any event within 30 days or
such longer period as may be agreed to by Agent in its discretion), cause such
Person to (a) become a Guarantor by executing and delivering to Agent a Guaranty
Joinder Agreement or such other document as Agent shall deem appropriate for
such purpose, and (b) deliver to Agent documents of the types referred to in
clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of counsel to
such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to in clause
(a)), all in form, content and scope reasonably satisfactory to Agent.

 

6.14 RTR Funding. On or before June 15, 2005, or such longer period as may be
agreed by Agent in its discretion, cause RTR Funding to either (a) dissolve or
(b) become a Guarantor by executing and delivering to Agent a Guaranty Joinder
Agreement or such other document as Agent shall deem appropriate for such
purpose and deliver to Agent documents of the types referred to in clauses (iii)
and (iv) of Section 4.01(a) and favorable opinions of counsel to RTR Funding
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the Guaranty Joinder Agreement or such other document as
Agent shall deem appropriate for such purpose), all in form, content and scope
reasonably satisfactory to Agent.

 

ARTICLE VII. NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied (other than contingent
indemnity obligations), or any Letter of Credit shall remain outstanding,
Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly:

 

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

 

(a) Liens pursuant to any Loan Document;

 

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(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals, refinancings or extensions thereof, provided that (i) the property
covered thereby is not changed, (ii) the amount secured or benefited thereby is
not increased, (iii) the direct or any contingent obligor with respect thereto
is not changed, and (iv) any renewal, refinancing or extension of the
obligations secured or benefited thereby is permitted by Section 7.03;

 

(c) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP (or, to the extent necessary or appropriate in connection
with any Foreign Subsidiary, generally accepted accounting principles as in
effect from time to time in such Foreign Subsidiary’s jurisdiction of
organization);

 

(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;

 

(e) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA in excess of the Threshold
Amount;

 

(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

 

(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property arising in the ordinary course of business, and which do
not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
applicable Person;

 

(h) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h) or securing appeal or other surety bonds
related to such judgments;

 

(i) Liens securing Indebtedness permitted under Section 7.03(c); provided that
(i) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost of the property being acquired on the date of acquisition;

 

(j) bankers’ liens and rights of setoff arising by operation of law and
contractual rights of setoff;

 

(k) any Lien existing on any property or assets prior to the acquisition thereof
by Borrower or any Subsidiary or existing on any property or assets of any
Person that becomes a Subsidiary or is merged or consolidated with Borrower or
any Subsidiary after the date hereof

 

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prior to the time such Person becomes a Subsidiary or is so merged or
consolidated; provided that (i) such acquisition, merger, consolidation or
becoming a Subsidiary is a transaction permitted by this Agreement, (ii) such
Lien is not created in contemplation of or in connection with such acquisition,
merger or consolidation or such Person becoming a Subsidiary, as the case may
be, (iii) such Lien shall not apply to any other property or assets of Borrower
or any Subsidiary and (iv) such Lien shall secure only those obligations which
it secures on the date of such acquisition, merger or consolidation or the date
such Person becomes a Subsidiary, as the case may be, and renewals, refinancings
and extensions thereof that do not increase the outstanding principal amount
thereof;

 

(l) Liens consisting of the interest or title of a lessor, lessee, licensor or
licensee under a lease or license otherwise permitted by this Agreement; and

 

(m) Liens securing Indebtedness permitted under Section 7.03(e).

 

7.02 Investments. Make any Investments, except:

 

(a) Investments held by Borrower or such Subsidiary in the form of cash, cash
equivalents or short-term marketable debt securities;

 

(b) advances to officers, directors and employees of Borrower and Subsidiaries
in an aggregate amount not to exceed $1,000,000 at any time outstanding, for
travel, entertainment, relocation and analogous ordinary business purposes;

 

(c) Investments of Borrower in any wholly-owned Subsidiary (other than RTR
Funding unless and until RTR Funding becomes a party to the Guaranty) and
Investments of any wholly-owned Subsidiary in Borrower or in another
wholly-owned Subsidiary (other than RTR Funding unless and until RTR Funding
becomes a party to the Guaranty); provided, however, that notwithstanding the
foregoing, Borrower’s or any wholly-owned Subsidiary’s direct or indirect
Investment in RTR Funding may be increased as a result of transfers, in one or a
series of transactions, of Equity Interests in RTR Funding from the holders
thereof as of the Closing Date to Borrower or any of its wholly-owned
Subsidiaries;

 

(d) Investments incurred in order to consummate Acquisitions not otherwise
prohibited herein;

 

(e) Investments consisting of extensions of credit in the nature of Accounts
arising from the grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in order
to prevent or limit loss;

 

(f) Guarantees permitted by Section 7.03;

 

(g) Investments existing on the Closing Date and identified on Schedule 5.12
hereto; and

 

(h) additional Investments in an aggregate amount not to exceed $5,000,000.

 

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7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

 

(a) Indebtedness under the Loan Documents;

 

(b) Indebtedness existing on the date hereof and described in Schedule 7.03
(including the Subordinated Notes) and renewals, refinancings or extensions
thereof that do not increase the maximum aggregate principal amount thereof and,
in the case of the Subordinated Notes, that do not modify the other terms
(including subordination provisions) thereof in a manner that would not be
permitted by Section 7.13;

 

(c) other Indebtedness in an aggregate amount outstanding not to exceed
$10,000,000 at any one time;

 

(d) Guarantees of Borrower or any Subsidiary in respect of Indebtedness of
Borrower or any Subsidiary otherwise permitted hereunder; and

 

(e) Indebtedness owing (i) by a Loan Party to another Loan Party, (ii) by a
wholly-owned Subsidiary that is not a Guarantor to another wholly-owned
Subsidiary that is not a Guarantor, or (iii) by a Subsidiary that is not a Loan
Party to any Loan Party.

 

7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except, so long as no Default
exists or would result therefrom:

 

(a) any Subsidiary (other than RTR Funding unless and until RTR Funding becomes
a party to the Guaranty) may merge with (i) Borrower, provided that Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that when any wholly-owned Subsidiary is merging with
another Subsidiary, the wholly-owned Subsidiary shall be the continuing or
surviving Person, and, provided, further, that if a Guarantor is merging with
another Subsidiary, the Guarantor shall be the surviving Person;

 

(b) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to Borrower or to another Subsidiary (other
than RTR Funding unless and until RTR Funding becomes a party to the Guaranty);
provided that if the transferor in such a transaction is a wholly-owned
Subsidiary, then the transferee must either be Borrower or a wholly-owned
Subsidiary and, provided, further, that if the transferor of such assets is a
Guarantor, the transferee must either be Borrower or a Guarantor;

 

(c) any merger necessary to consummate an Acquisition permitted by Section 7.10;

 

(d) any Subsidiary may be dissolved or liquidated so long as prior to the
consummation thereof such Subsidiary has substantially no assets or operations
or all or substantially all of its assets and operations have been Disposed of
in a transaction permitted by Section 7.04 or Section 7.05; and

 

(e) RTR Funding may be dissolved or liquidated to the extent required to comply
with Section 6.14.

 

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7.05 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:

 

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

 

(b) Dispositions of inventory in the ordinary course of business;

 

(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

 

(d) Dispositions of property by any Subsidiary to Borrower or to a wholly-owned
Subsidiary (other than RTR Funding unless and until RTR Funding becomes a party
to the Guaranty) or by Borrower to any wholly-owned Subsidiary (other than RTR
Funding unless and until RTR Funding becomes a party to the Guaranty);

 

(e) additional Dispositions of assets having a book value not exceeding
$1,000,000 in the aggregate in any fiscal year; and

 

(f) Dispositions permitted by Section 7.04;

 

provided, however, that any Disposition pursuant to clauses (b) and (c) shall be
for fair market value.

 

7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:

 

(a) each Subsidiary may make Restricted Payments, whether directly or
indirectly, to Borrower and so long as no Default shall have occurred and be
continuing, or would result therefrom, each Subsidiary may make Restricted
Payments to Guarantors and any other Person that owns an Equity Interest in such
Subsidiary, ratably according to their respective holdings of the type of Equity
Interest in respect of which such Restricted Payment is being made;

 

(b) Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity
Interests of such Person;

 

(c) Borrower and each Subsidiary may purchase, redeem or otherwise acquire
Equity Interests issued by it with the proceeds received from the substantially
concurrent issue of new shares of its common stock or other common Equity
Interests;

 

(d) so long as no Default shall have occurred and be continuing, or would result
therefrom, Borrower and its Subsidiaries may make Restricted Payments as
required by and in accordance with stock option plans or other benefit plans for
management or employees of Borrower and its Subsidiaries; and

 

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(e) so long as no Default shall have occurred and be continuing, or would result
therefrom, Borrower may declare or pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire for cash Equity Interests issued by it or
make cash payments in accordance with the terms of the Senior Indenture in lieu
of issuing shares of its common stock in connection with any event thereunder
which triggers a conversion of the Subordinated Notes into common stock of
Borrower, in each case, provided that (i) both immediately before and
immediately after such payment, purchase, redemption or acquisition, the Maximum
Available Amount exceeds the Total Outstandings by at least $20,000,000, and
(ii) upon giving pro forma effect to such action as of the date thereof and as
of the last day of the most recently ended fiscal quarter, no Default would have
occurred as a result thereof.

 

7.07 Change in Nature of Business.

 

(a) Engage in any material line of business substantially different from those
lines of business conducted by Borrower and its Subsidiaries on the date hereof
or any business substantially related or incidental thereto or logical
extensions thereof.

 

(b) In the case of RTR Funding, engage in any material business activity other
than owning the assets owned by it on the Closing Date, or own any significant
asset other than such Investments, or have any material liabilities other than
its liabilities as of the Closing Date, in each case unless and until RTR
Funding becomes a party to the Guaranty.

 

7.08 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of Borrower, whether or not in the ordinary course of business,
other than on fair and reasonable terms substantially as favorable to Borrower
or such Subsidiary as would be obtainable by Borrower or such Subsidiary at the
time in a comparable arm’s length transaction with a Person other than an
Affiliate, provided that the foregoing restriction shall not apply to
transactions (i) between or among Borrower and any Guarantor, (ii) between or
among Guarantors, or (iii) between or among Subsidiaries that are not Guarantors
(other than any such transaction involving RTR Funding); provided, further, that
compensation for financial advisory or other services that is paid to Affiliates
approved as fair and reasonable compensation pursuant to a good faith
determination by the Board of Directors or, if necessary, the corporate
governance or audit committee of Borrower, shall be seemed to be comparable to
that obtainable in a comparable arm’s length transaction.

 

7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than
this Agreement or any other Loan Document) or Organization Document (other than
the Organization Documents as in effect on the Closing Date of RTR Funding,
Rewards Network Canada LP, an Ontario limited partnership, or Rewards Network
Canada GP Corp., an unlimited liability company existing under the laws of Nova
Scotia) that (a) limits the ability (i) of any Subsidiary to make Restricted
Payments to Borrower or any Guarantor or to otherwise transfer property to
Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness
of Borrower, (iii) of Borrower or any Subsidiary to create, incur, assume or
suffer to exist Liens on property of such Person; provided, however, that this
clause (iii) (v) shall not apply to restrictions and conditions imposed by law,
(w) shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary permitted hereunder pending such
sale, provided such restrictions and conditions apply only to the Subsidiary
that is

 

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to be sold, (x) shall not apply to customary provisions in leases, license
agreements and other contracts restricting the assignment thereof, (y) shall not
apply to limitations or restrictions imposed on a Subsidiary that is a joint
venture in the related joint venture agreement or any other Organization
Document thereof, and (z) shall not prohibit any negative pledge incurred or
provided in favor of any holder of secured Indebtedness permitted under Section
7.03(b) or (c) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; or (b) requires the
grant of a Lien to secure an obligation of such Person if a Lien is granted to
secure another obligation of such Person.

 

7.10 Acquisitions. Enter into any agreement, contract, binding commitment or
other arrangement providing for any Acquisition, or take any action to solicit
the tender of securities or proxies in respect thereof in order to effect any
Acquisition, unless (a) such Acquisition is a De Minimis Acquisition and no
Default or Event of Default shall exist either immediately prior to or
immediately after giving effect to such De Minimis Acquisition, or (b) each of
the following conditions has been satisfied with respect to such Acquisition:
(i) such Acquisition is undertaken in accordance with all applicable Laws, (ii)
the prior, effective written consent or approval to such Acquisition of the
board of directors or equivalent governing body of the acquiree is obtained,
(iii) no Default or Event of Default shall exist either immediately prior to or
immediately after giving effect to such Acquisition, and Borrower shall have
furnished to Agent (A) pro forma historical financial statements as of the end
of the most recently completed fiscal year of Borrower and most recent interim
fiscal quarter, if applicable, giving effect to such Acquisition, and (B) a
Compliance Certificate prepared on a historical pro forma basis as of the date
of the Audited 2003 Financial Statements or, if later, as of the most recent
date for which financial statements have been furnished pursuant to Section
6.01(a) or (b), giving effect to such Acquisition, which Compliance Certificate
shall demonstrate that no Default or Event of Default would exist immediately
after giving effect thereto, (iv) after giving effect to such Acquisition,
Borrower and its Subsidiaries remain in compliance with Section 7.07, (v) after
giving effect to such Acquisition, the Maximum Available Amount exceeds the
Total Outstandings by at least $20,000,000, and (vi) after giving effect to any
such Acquisition consummated as a merger with Borrower or a Guarantor, Borrower
or such Guarantor shall be the continuing or surviving Person.

 

7.11 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

 

7.12 Payment of Subordinated Indebtedness. Make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property) of
or in respect of, or otherwise satisfy, any Subordinated Liability, including on
account of any purchase, redemption, retirement, acquisition, cancellation or
termination thereof, except (a) to the extent (i) required by and in accordance
with the terms of the Subordinated Note Indenture and the Subordinated Notes and
(ii) Borrower is allowed to make payments in the form of junior securities
pursuant to Section 5.8 of the Subordinated Note Indenture, and (b) so long as
no Default exists or will exist immediately thereafter, (x) regularly scheduled
payments of interest in respect of any other Subordinated Liability and (y)
redemptions of up to $10,000,000 in aggregate principal amount

 

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of Subordinated Notes; provided, in the case of this clause (y), that (i) both
immediately before and immediately after such redemption, the Maximum Available
Amount exceeds the Total Outstandings by at least $20,000,000, and (ii) upon
giving pro forma effect to such action as of the last day of the most recently
ended fiscal quarter, no Default would have occurred as a result thereof.

 

7.13 Modifications to Subordinated Note Documents. Amend, modify or change in
any manner any of the terms or provisions of any Subordinated Note Document or
any other instrument or agreement evidencing or relating to any Subordinated
Liability so that the terms and conditions thereof are less favorable to Agent
and the Lenders than the terms of the relevant Subordinated Note Document or
other instrument or agreement evidencing or relating to any Subordinated
Liability as of the Closing Date.

 

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

 

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

 

(a) Non-Payment. Borrower or any other Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, or (ii) within three Business Days after the same becomes due, any
interest on any Loan or on any L/C Obligation, or any fee due hereunder, or
(iii) within five Business Days after the same becomes due, any other amount
payable hereunder or under any other Loan Document; or

 

(b) Specific Covenants. Borrower fails to perform or observe any term, covenant
or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05(a), 6.10, 6.11,
6.12, 6.13 or 6.14 or Article VII; or

 

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days after notice thereof has been given to Borrower by Agent
at the request of any Lender; or

 

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of Borrower or any
other Loan Party herein or in any other Loan Document shall be incorrect or
misleading when made or deemed made; or

 

(e) Cross-Default. (i)(A) Borrower or any Subsidiary fails to make any payment
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) in respect of (1) the Subordinated Notes or (2) any other
Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness
under Swap Contracts) having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than the Threshold
Amount, or (B) Borrower or any Subsidiary fails to observe or perform any other
agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such

 

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Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to be demanded
or to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem such Indebtedness to be made, prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be
demanded; or (ii) there occurs under any Swap Contract an Early Termination Date
(as defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which Borrower or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which Borrower or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Swap Termination Value
owed by Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount; or

 

(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or

 

(g) Inability to Pay Debts; Attachment. (i) Borrower or any Subsidiary becomes
unable or admits in writing its inability or fails generally to pay its debts as
they become due, or (ii) any writ or warrant of attachment or execution or
similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or

 

(h) Judgments. There is entered against Borrower or any Subsidiary (i) a final
judgment or order for the payment of money in an aggregate amount exceeding the
Threshold Amount (to the extent not covered by independent third-party insurance
as to which the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 30 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect or the judgment has not been paid; or

 

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount; (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time exceeds the Threshold Amount; or (iii) Borrower or any
ERISA Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201

 

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of ERISA under a Multiemployer Plan in an aggregate amount in excess of the
Threshold Amount; or

 

(j) Invalidity of Loan Documents. Any Loan Document or any provision thereof, at
any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party contests
in any manner the validity or enforceability of any Loan Document or any
provision thereof; or any Loan Party denies that it has any or further liability
or obligation under any Loan Document, or purports to revoke, terminate or
rescind any Loan Document or any provision thereof; or

 

(k) Change of Control. There occurs any Change of Control; or

 

(l) Material Agreements. (i) Any Material Agreement is terminated or expires
unless a replacement for such Material Agreement in form and substance
reasonably satisfactory to Agent is entered into within 60 days of such
termination or expiration; (ii) there occurs a default by any Person in the
performance or observance of any material term of any Material Agreement which
is not cured within the applicable cure period; or (iii) any provision of any
Material Agreement is amended in any manner that adversely affects any material
right of Borrower thereunder, as determined in the good faith judgment of Agent;
or

 

(m) Subordination Agreements. The subordination provisions of any Subordinated
Liability, at any time after the incurrence of such Subordinated Liability,
cease to be in full force and effect; or Borrower, any Subsidiary or Affiliate
of Borrower or any holder of any Subordinated Liability contests in any manner
the validity or enforceability of such subordination provisions; or any holder
of any Subordinated Liability or Loan Party breaches any such subordination
provision.

 

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, Agent shall, at the request of, or may, with the consent of, the
Required Lenders, take any or all of the following actions:

 

(a) declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

 

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by Borrower;

 

(c) require that Borrower Cash Collateralize the L/C Obligations (in an amount
equal to the then Outstanding Amount thereof); and

 

(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;

 

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provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of Borrower to Cash Collateralize the L/C Obligations as aforesaid
shall automatically become effective, in each case without further act of Agent
or any Lender.

 

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by Agent in the
following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to Agent and amounts payable under Article III) payable
to Agent in its capacity as such;

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest and other
amounts expressly described in clauses Third, Fourth and Fifth below) payable to
Lenders, Affiliates of a Lender and the L/C Issuer (including fees, charges and
disbursements of counsel to the respective Lenders, Affiliates of a Lender and
the L/C Issuer and amounts payable under Article III), ratably among them in
proportion to the amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, L/C Borrowings and other Obligations, ratably
among Lenders and the L/C Issuer in proportion to the respective amounts
described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings or constituting Swap Termination
Values owing to any Lender or any Affiliate of any Lender under Related Swap
Contracts that have been terminated and as to which Agent shall have received
notice of such termination and the Swap Termination Value thereof from the
applicable Lender or Affiliate of a Lender, ratably among Lenders, any such
Affiliates and the L/C Issuer in proportion to the respective amounts described
in this clause Fourth held by them;

 

Fifth, to Agent for the account of the L/C Issuer, to Cash Collateralize that
portion of L/C Obligations comprised of the aggregate undrawn amount of Letters
of Credit; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to Borrower or as otherwise required by Law.

 

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur;
provided, however, that if Borrower is required to

 

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Cash Collateralize the L/C Obligations following an Event of Default, such
amount (to the extent not already applied as provided herein, and not otherwise
required to be maintained as Cash Collateral pursuant to the terms of this
Agreement in the absence of such Event of Default) shall be returned to Borrower
after such Event of Default has been cured or waived so long as no other Default
then exists. If any amount remains on deposit as Cash Collateral after all then
existing Events of Default have been cured or waived or all Letters of Credit
have either been fully drawn or expired, such remaining amount shall be applied
to the other Obligations, if any, in the order set forth above.

 

ARTICLE IX. ADMINISTRATIVE AGENT

 

9.01 Appointment and Authorization of Administrative Agent. Each of the Lenders
and the L/C issuer hereby irrevocably appoints Bank of America to act on its
behalf as the Administrative Agent hereunder and under the other Loan Documents
and authorizes Agent to take such actions on its behalf and to exercise such
powers as are delegated to Agent by the terms hereof and thereof, together with
such actions and powers as are reasonably incidental thereto. The provisions of
this Article are solely for the benefit of Agent, the Lenders and the L/C
Issuer, and neither Borrower nor any other Loan Party shall have rights as a
third party beneficiary of any of such provisions.

 

9.02 Rights as a Lender. The Person serving as Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not Agent and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated or unless the context otherwise
requires, include the Person serving as Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money
to, act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of business with Borrower or any Subsidiary or
other Affiliate thereof as if such Person were not Agent hereunder and without
any duty to account therefor to Lenders.

 

9.03 Exculpatory Provisions. Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, Agent:

 

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

 

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents), provided that Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose Agent to
liability or that is contrary to any Loan Document or applicable Law; and

 

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information

 

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relating to Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as Agent or any of its Affiliates in any
capacity.

 

(d) Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as Agent shall believe in
good faith shall be necessary, under the circumstances as provided in Sections
8.02 and 10.01) or (ii) in the absence of its own gross negligence or willful
misconduct. Agent shall be deemed not to have knowledge of any Default unless
and until written notice describing such Default is given to Agent by Borrower,
a Lender or the L/C Issuer. Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to Agent.

 

9.04 Reliance by Administrative Agent. Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan, or
the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless Agent shall
have received notice to the contrary from such Lender or the L/C Issuer prior to
the making of such Loan or the issuance of such Letter of Credit. Agent may
consult with legal counsel (who may be counsel for Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

9.05 Delegation of Duties. Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub agents appointed by Agent. Agent and any such sub
agent may perform any and all of its duties and exercise its rights and powers
by or through their respective Related Parties. The exculpatory provisions of
this Article shall apply to any such sub agent and to the Related Parties of
Agent and any such sub agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.

 

9.06 Resignation of Agent. Agent may at any time give notice of its resignation
to Lenders, the L/C Issuer and Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
Borrower, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with

 

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an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may on behalf of Lenders and the L/C Issuer, appoint a
successor Agent meeting the qualifications set forth above; provided that if
Agent shall notify Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by Agent on
behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the
retiring Agent shall continue to hold such collateral security until such time
as a successor Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through Agent shall instead be made
by or to each Lender and the L/C Issuer directly, until such time as the
Required Lenders appoint a successor Agent as provided for above in this
Section. Upon the acceptance of a successor’s appointment as Agent hereunder,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Agent, and the
retiring Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by Borrower to a successor
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between Borrower and such successor. After the retiring Agent’s
resignation hereunder and under the other Loan Documents, the provisions of this
Article and Section 10.04 shall continue in effect for the benefit of such
retiring Agent, its sub agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while the retiring
Administrative Agent was acting as Administrative Agent.

 

Any resignation by Bank of America as Agent pursuant to this Section shall also
constitute its resignation as L/C Issuer. Upon the acceptance of a successor’s
appointment as Agent hereunder, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring L/C
Issuer, (b) the retiring L/C Issuer shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor L/C Issuer shall issue letters of credit in substitution
for the Letters of Credit, if any, outstanding at the time of such succession or
make other arrangement reasonably satisfactory to the retiring L/C Issuer to
effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit.

 

9.07 Non-Reliance on Agent and Other Lenders. Each Lender and the L/C Issuer
acknowledges that it has, independently and without reliance upon Agent or any
other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender and the L/C Issuer also
acknowledges that it will, independently and without reliance upon Agent or any
other Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

 

9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, no
Lender holding a title listed on the cover page hereof shall have any powers,
duties or

 

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responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as Agent, a Lender or the L/C Issuer hereunder.

 

9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, Agent (irrespective of whether the principal of any Loan or L/C
Obligation shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether Agent shall have made any demand on
Borrower) shall be entitled and empowered, by intervention in such proceeding or
otherwise

 

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of Lenders, the L/C Issuer
and Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of Lenders, the L/C Issuer and Agent and their
respective agents and counsel and all other amounts due Lenders, the L/C Issuer
and Agent under Sections 2.03(i) and (j), 2.08 and 10.04) allowed in such
judicial proceeding; and

 

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

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to Agent and, in the event
that Agent shall consent to the making of such payments directly to Lenders and
the L/C Issuer, to pay to Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of Agent and its agents and counsel, and
any other amounts due Agent under Sections 2.09 and 10.04. Nothing contained
herein shall be deemed to authorize Agent to authorize or consent to or accept
or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or to authorize Agent to vote in respect of the claim of any
Lender in any such proceeding.

 

9.10 Guaranty Matters. Each Lender and the L/C Issuer hereby irrevocably
authorizes Agent, at its option and in its discretion, to release any Guarantor
from its obligations under the Guaranty if such Person ceases to be a Subsidiary
as a result of a transaction permitted hereunder. Upon request by Agent at any
time, each Lender and the L/C Issuer will confirm in writing Agent’s authority
to release any Guarantor from its obligations under the Guaranty pursuant to
this Section 9.10.

 

ARTICLE X. MISCELLANEOUS

 

10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by Borrower or any
other Loan Party therefrom, shall be effective unless in writing signed by the
Required Lenders and Borrower or the applicable Loan Party, as the case may be,
and acknowledged by Agent, and

 

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each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:

 

(a) waive any condition set forth in Section 4.01(a) without the written consent
of each Lender; provided, however, in the sole discretion of Agent, only a
waiver by Agent shall be required with respect to immaterial matters or items
specified in Section 4.01(a)(iii) or (iv) with respect to which Borrower has
given assurances satisfactory to Agent that such items shall be delivered
promptly following the Closing Date;

 

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;

 

(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment (excluding mandatory prepayments) of principal, interest, fees or other
amounts due to Lenders (or any of them) hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;

 

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or (subject to clause (iii) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document, without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of Borrower to pay interest or L/C Fees at the Default Rate or (ii)
to amend any financial covenant hereunder (or any defined term used therein)
even if the effect of such amendment would be to reduce the rate of interest on
any Loan or L/C Borrowing or to reduce any fee payable hereunder;

 

(e) change Section 2.12 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;

 

(f) change any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender; or

 

(g) release any Guarantor from the Guaranty except in accordance with the terms
of any Loan Document (or any transaction approved by the Required Lenders)
without the written consent of each Lender;

 

and, provided, further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the L/C Issuer in addition to the Lenders required
above, affect the rights or duties of the L/C Issuer under this Agreement or any
Issuer Document relating to any Letter of Credit issued or to be issued by it;
(ii) no amendment, waiver or consent shall, unless in writing and signed by
Agent in addition to the Lenders required above, affect the rights or duties of
Agent under this Agreement or any other Loan Document; and (iii) the Agent Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto. Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the

 

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Commitment of such Lender may not be increased or extended without the consent
of such Lender.

 

10.02 Notices; Effectiveness; Electronic Communications.

 

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

 

(i) if to Borrower, Agent or the L/C Issuer, to the address, telecopier number,
electronic mail address or telephone number specified for such Person on
Schedule 10.02; and

 

(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such
subsection (b).

 

(b) Electronic Communications. Notices and other communications to Lenders and
the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by Agent, provided that the foregoing shall not apply to
notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or
the L/C Issuer, as applicable has notified Agent that it is incapable of
receiving notices under such Article by electronic communication. Agent or
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications. Unless Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address shall
be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next business day for the recipient, and (ii)
notices or communications posted to an Internet or intranet website shall be
deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

 

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(c) Change of Address, Etc. Each of Borrower, Agent and the L/C Issuer may
change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to Borrower, Agent and the L/C Issuer.

 

(d) Reliance by Agent, L/C Issuer and Lenders. Agent, the L/C Issuer and Lenders
shall be entitled to rely and act upon any notices (including telephonic Loan
Notices) purportedly given by or on behalf of Borrower even if (i) such notices
were not made in a manner specified herein, were incomplete or were not preceded
or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
Borrower shall indemnify Agent, the L/C Issuer, each Lender and the Related
Parties of each of them from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by
or on behalf of Borrower. All telephonic notices to and other telephonic
communications with Agent may be recorded by Agent, and each of the parties
hereto hereby consents to such recording.

 

10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer
or Agent to exercise, and no delay by any such Person in exercising, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

 

10.04 Expenses; Indemnity; Damage Waiver.

 

(a) Costs and Expenses. Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for Agent), in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by Agent, any Lender or
the L/C Issuer (including the fees, charges and disbursements of any counsel for
Agent, any Lender or the L/C Issuer), in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

(b) Indemnification by Borrower. Borrower shall indemnify Agent (and any
sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of
any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the

 

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fees, charges and disbursements of any counsel for any Indemnitee), incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to Borrower or
any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto, in all cases, whether or not caused by or arising, in whole or in
part, out of the comparative, contributory or sole negligence of the Indemnitee;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
(x) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by Borrower or
any other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if Borrower
or such Loan Party has obtained a final and nonappealable judgment in its favor
on such claim as determined by a court of competent jurisdiction.

 

(c) Reimbursement by Lenders. To the extent that Borrower for any reason fails
to indefeasibly pay any amount required under subsection (a) or (b) of this
Section to be paid by it to Agent (or any sub-agent thereof), the L/C Issuer or
any Related Party of any of the foregoing, each Lender severally agrees to pay
to Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the
case may be, such Lender’s Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against Agent (or any such sub-agent) or the L/C Issuer in its
capacity as such, or against any Related Party of any of the foregoing acting
for Agent (or any such sub-agent) or L/C Issuer in connection with such
capacity. The obligations of the Lenders under this subsection (c) are subject
to the provisions of Section 2.11(d).

 

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, Borrower shall not assert, and hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed by it through

 

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telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

 

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

 

(f) Survival. The agreements in this Section shall survive the resignation of
Agent and the L/C Issuer, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

10.05 Payments Set Aside. To the extent that any payment by or on behalf of
Borrower is made to Agent, the L/C Issuer or any Lender, or Agent, the L/C
Issuer or any Lender exercises its right of setoff, and such payment or the
proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by Agent, the L/C Issuer or such Lender
in its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and (b)
each Lender, the L/C Issuer severally agrees to pay to Agent upon demand its
applicable share (without duplication) of any amount so recovered from or repaid
by Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect. The obligations of the Lenders and the L/C Issuer under clause
(b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.

 

10.06 Successors and Assigns.

 

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither Borrower nor any
other Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of Agent, the L/C Issuer
and each Lender and no Lender may assign or otherwise transfer any of its rights
or obligations hereunder except (i) to an Eligible Assignee in accordance with
the provisions of subsection (b) of this Section, (ii) by way of participation
in accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Related Parties of each of Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans (including
for purposes of this subsection (b),

 

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participations in L/C Obligations) at the time owing to it); provided that (i)
except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding
thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to Agent or, if “Trade Date” is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of Agent and, so long as no Event of Default has occurred
and is continuing, Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned; (iii) any assignment of a Commitment must be approved by Agent and the
L/C Issuer unless the Person that is the proposed assignee is itself a Lender
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); and (iv) the parties to each assignment shall execute and deliver to
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500 and the Eligible Assignee, if it shall not be a Lender, shall
deliver to Agent an Administrative Questionnaire. Subject to acceptance and
recording thereof by Agent pursuant to subsection (c) of this Section, from and
after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto) but shall continue to be entitled to the benefits of Sections
3.01, 3.04, 3.05 and 10.04 with respect to facts and circumstances occurring
prior to the effective date of such assignment. Upon request, Borrower (at its
expense) shall execute and deliver a Note to the assignee Lender. Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section.

 

(c) Register. Agent, acting solely for this purpose as an agent of Borrower,
shall maintain at Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, and Borrower, Agent and the Lenders may treat each Person whose name
is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by each of Borrower and the L/C
Issuer, at any reasonable time and from time to time upon reasonable prior
notice. In addition, at any time that a request for a consent for a material or
substantive change to the Loan Documents is pending, any Lender wishing to
consult with other Lenders in connection therewith may request and receive from
Agent a copy of the Register.

 

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(d) Participations. Any Lender may at any time, without the consent of, or
notice to, Borrower or Agent, sell participations to any Person (other than a
natural person or Borrower or any of Borrower’s Affiliates or Subsidiaries)
(each, a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans (including such Lender’s participations in L/C Obligations)
owing to it); provided that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) Borrower,
Agent, the L/C Issuer and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 10.01 that affects such Participant. Subject to subsection
(e) of this Section, Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.12 as though it were a
Lender.

 

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with Borrower’s prior written consent. A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.01 unless Borrower is notified o f the participation sold
to such Participant and such Participant agrees, for the benefit of Borrower, to
comply with Section 3.01(e) as though it were a Lender.

 

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

(g) Electronic Execution of Assignments. The words “execution”, “signed”,
“signature”, and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

 

(h) Resignation as L/C Issuer. Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to

 

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subsection (b) above, Bank of America may, upon 30 days’ notice to Borrower and
the Lenders, resign as L/C Issuer. In the event of any such resignation as L/C
Issuer, Borrower shall be entitled to appoint from among Lenders a successor L/C
Issuer hereunder; provided, however, that no failure by Borrower to appoint any
such successor shall affect the resignation of Bank of America as L/C Issuer, as
the case may be. If Bank of America resigns as L/C Issuer, it shall retain all
the rights and obligations of the L/C Issuer hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as L/C
Issuer and all L/C Obligations with respect thereto through the expiry date or
dates thereof (including the right to require the Lenders to make Base Rate
Loans or fund risk participations in Unreimbursed Amounts pursuant to Section
2.03(c)).

 

10.07 Treatment of Certain Information; Confidentiality. Each of Agent, Lenders
and the L/C Issuer agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its Affiliates
and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, advisors and representatives (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority,
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to Borrower and its obligations, (g) with the consent of Borrower or
(h) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this Section or (y) becomes available to Agent, any
Lender, the L/C Issuer or any of their respective Affiliates on a
nonconfidential basis from a source other than Borrower. For purposes of this
Section, “Information” means all information received from Borrower or any
Subsidiary relating to Borrower or any Subsidiary or any of their respective
businesses, other than any such information that is available to Agent, any
Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by
Borrower or any Subsidiary, provided that, in the case of information received
from Borrower or any Subsidiary after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time, to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
of Borrower

 

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or any other Loan Party against any and all of the obligations of Borrower or
such Loan Party now or hereafter existing under this Agreement or any other Loan
Document to such Lender or the L/C Issuer or any such Affiliate, irrespective of
whether or not such Lender or the L/C Issuer shall have made any demand under
this Agreement or any other Loan Document and although such obligations of
Borrower or such Loan Party may be contingent or unmatured or are owed to a
branch or office of such Lender or the L/C Issuer different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
each Lender, the L/C Issuer and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff)
that such Lender, the L/C Issuer or their respective Affiliates may have. Each
Lender and the L/C Issuer agrees to notify Borrower and Agent promptly after any
such setoff and application, provided that the failure to give such notice shall
not affect the validity of such setoff and application.

 

10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If Agent or any Lender shall
receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to Borrower. In determining whether the interest contracted
for, charged, or received by Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.

 

10.10 Replacement of Lenders. If any Lender requests compensation under Section
3.04, if Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01,
if any Lender gives a notice pursuant to Section 3.02 in connection with an
occurrence or state of affairs not shared by all Lenders, if any Lender is a
Defaulting Lender, or if any Lender declines to approve a requested amendment,
waiver or consent that has received the approval of the Required Lenders but
also requires the approval of such Lender, then Borrower may, at its sole
expense and effort, upon notice to such Lender and Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 10.06), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided that:

 

(a) Borrower shall have paid to Agent the assignment fee specified in Section
10.06(b);

 

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or
Borrower (in the case of all other amounts);

 

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(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

 

(d) such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Borrower to require such assignment and delegation cease
to apply.

 

10.11 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become effective when it shall have been executed by
Agent and when Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto. Delivery of
an executed counterpart of a signature page of this Agreement by telecopy shall
be effective as delivery of a manually executed counterpart of this Agreement.

 

10.12 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by Agent and
each Lender, regardless of any investigation made by Agent or any Lender or on
their behalf and notwithstanding that Agent or any Lender may have had notice or
knowledge of any Default at the time of any Credit Extension, and shall continue
in full force and effect as long as any Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding.

 

10.13 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10.14 Governing Law; Jurisdiction; Etc.

 

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS, INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ.,
BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS, OF THE STATE OF
ILLINOIS.

 

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(b) SUBMISSION TO JURISDICTION. BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY
AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS SITTING IN COOK COUNTY AND
OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF ILLINOIS, AND
ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH ILLINOIS STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT, ANY LENDER OR THE L/C
ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ANY OTHER LOAN PARTY OR
ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c) WAIVER OF VENUE. BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

10.15 Waiver of Right to Trial by Jury. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS

 

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REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and Agent (for itself and not on behalf of any Lender)
hereby notifies Borrower that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”), it is required to obtain, verify and record information that identifies
Borrower, which information includes the name and address of Borrower and other
information that will allow such Lender or Agent, as applicable, to identify
Borrower in accordance with the Act.

 

10.17 Time of the Essence. Time is of the essence of the Loan Documents.

 

10.18 Designation as Senior Debt. All Obligations shall be “Designated Senior
Indebtedness” for purposes of and as defined in the Subordinated Note Indenture.

 

[Remainder of the page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

REWARDS NETWORK INC.,

as Borrower

By:   /s/    KENNETH R. POSNER        

Name:

  Kenneth R. Posner

Title:

 

Senior Vice President, Finance and

Administration, and Chief Financial Officer

BANK OF AMERICA, N.A.,

as Administrative Agent

By:   /s/    DAVID A. JOHANSON        

Name:

  David A. Johanson

Title:

  Vice President BANK OF AMERICA, N.A.,

as a Lender and L/C Issuer

By:   /s/    CHRIS D. BUCKNER        

Name:

  Chris D. Buckner

Title:

  Senior Vice President LASALLE BANK NATIONAL ASSOCIATION,

as a Lender

By:   /s/    MICHAEL PERRY        

Name:

  Michael Perry

Title:

  Vice President

 

Form of Guaranty