Exhibit 10.1

 

EXECUTION COPY

 

REVOLVING CREDIT AGREEMENT

 

Dated as of July 23, 2004

 

among

 

MCCORMICK & SCHMICK ACQUISITION CORP.,

MCCORMICK & SCHMICK RESTAURANT CORP.,

MCCORMICK & SCHMICK MARYLAND LIQUOR, INC.,

MCCORMICK & SCHMICK ACQUISITION I TEXAS, INC.,

MCCORMICK & SCHMICK ACQUISITION II TEXAS, INC.,

MCCORMICK & SCHMICK ACQUISITION TEXAS LP,

MCCORMICK & SCHMICK ACQUISITION III TEXAS, INC.,

MCCORMICK & SCHMICK’S ATLANTA II, LLC,

MCCORMICK & SCHMICK’S HACKENSACK, LLC,

MCCORMICK & SCHMICK ORLANDO, LLC,

MCCORMICK & SCHMICK DALLAS, LP,

MCCORMICK & SCHMICK DALLAS LIQUOR, INC.,

MCCORMICK & SCHMICK AUSTIN, LP,

MCCORMICK & SCHMICK AUSTIN LIQUOR, INC.,

 

(collectively, the “Borrowers”)

 

THE LENDERS LISTED ON SCHEDULE 1 HERETO,

 

FLEET NATIONAL BANK, as Administrative Agent,

 

with

 

BANC OF AMERICA SECURITIES LLC, as Arranger

 

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

TABLE OF CONTENTS

 

 

1.

DEFINITIONS AND RULES OF INTERPRETATION

 

 

 

 

 

 

 

1.1.

Definitions

 

 

 

 

 

 

 

1.2. [a04-12707_1ex10d1.htm#RulesOfInterpretation_]

Rules of Interpretation [a04-12707_1ex10d1.htm#RulesOfInterpretation_]

 

 

 

 

 

 

2. [a04-12707_1ex10d1.htm#TheRevolvingCreditFacility_]

THE REVOLVING CREDIT FACILITY
[a04-12707_1ex10d1.htm#TheRevolvingCreditFacility_]

 

 

 

 

 

 

 

2.1. [a04-12707_1ex10d1.htm#CommitmentToLendRevolvingCreditLoan]

Commitment to Lend Revolving Credit Loans
[a04-12707_1ex10d1.htm#CommitmentToLendRevolvingCreditLoan]

 

 

 

 

 

 

 

2.2. [a04-12707_1ex10d1.htm#CommitmentFee]

Commitment Fee [a04-12707_1ex10d1.htm#CommitmentFee]

 

 

 

 

 

 

 

2.3. [a04-12707_1ex10d1.htm#ReductionOfTotalRevolvingCreditComm]

Reduction of Total Revolving Credit Commitment
[a04-12707_1ex10d1.htm#ReductionOfTotalRevolvingCreditComm]

 

 

 

 

 

 

 

2.4. [a04-12707_1ex10d1.htm#TheNotes]

The Notes [a04-12707_1ex10d1.htm#TheNotes]

 

 

 

 

 

 

 

2.5. [a04-12707_1ex10d1.htm#InterestOnRevolvingCreditLoans]

Interest on Revolving Credit Loans
[a04-12707_1ex10d1.htm#InterestOnRevolvingCreditLoans]

 

 

 

 

 

 

 

2.6. [a04-12707_1ex10d1.htm#RequestsForRevolvingCreditLoans]

Requests for Revolving Credit Loans
[a04-12707_1ex10d1.htm#RequestsForRevolvingCreditLoans]

 

 

 

 

 

 

 

2.7. [a04-12707_1ex10d1.htm#ConversionOptions_]

Conversion Options [a04-12707_1ex10d1.htm#ConversionOptions_]

 

 

 

 

 

 

 

 

2.7.1. [a04-12707_1ex10d1.htm#ConversionToDifferentTypeOfRevolvin]

Conversion to Different Type of Revolving Credit Loan
[a04-12707_1ex10d1.htm#ConversionToDifferentTypeOfRevolvin]

 

 

 

 

 

 

 

 

2.7.2. [a04-12707_1ex10d1.htm#ContinuationOfTypeOfRevolvingCredit]

Continuation of Type of Revolving Credit Loan
[a04-12707_1ex10d1.htm#ContinuationOfTypeOfRevolvingCredit]

 

 

 

 

 

 

 

 

2.7.3. [a04-12707_1ex10d1.htm#EurodollarRateLoans]

Eurodollar Rate Loans [a04-12707_1ex10d1.htm#EurodollarRateLoans]

 

 

 

 

 

 

 

2.8. [a04-12707_1ex10d1.htm#FundsForRevolvingCreditLoan_]

Funds for Revolving Credit Loan
[a04-12707_1ex10d1.htm#FundsForRevolvingCreditLoan_]

 

 

 

 

 

 

 

 

2.8.1. [a04-12707_1ex10d1.htm#FundingProcedures]

Funding Procedures [a04-12707_1ex10d1.htm#FundingProcedures]

 

 

 

 

 

 

 

 

2.8.2. [a04-12707_1ex10d1.htm#AdvancesByAdministrativeAgen]

Advances by Administrative Agent
[a04-12707_1ex10d1.htm#AdvancesByAdministrativeAgen]

 

 

 

 

 

 

 

2.9. [a04-12707_1ex10d1.htm#RepaymentOfRevolvingCreditLoan]

Repayment of Revolving Credit Loans
[a04-12707_1ex10d1.htm#RepaymentOfRevolvingCreditLoan]

 

 

 

 

 

 

 

 

2.9.1. [a04-12707_1ex10d1.htm#Maturity_]

Maturity [a04-12707_1ex10d1.htm#Maturity_]

 

 

 

 

 

 

 

 

2.9.2. [a04-12707_1ex10d1.htm#MandatoryRepaymentsOfTheRevolvingCr]

Mandatory Repayments of the Revolving Credit Loans
[a04-12707_1ex10d1.htm#MandatoryRepaymentsOfTheRevolvingCr]

 

 

 

 

 

 

 

 

2.9.3. [a04-12707_1ex10d1.htm#OptionalRepaymentsOfTheRevolvingCre]

Optional Repayments of the Revolving Credit Loans
[a04-12707_1ex10d1.htm#OptionalRepaymentsOfTheRevolvingCre]

 

 

 

 

 

 

 

 

2.9.4. [a04-12707_1ex10d1.htm#ApplicationOfPaymentsPriorToAnEven]

Application of Payments Prior to an Event of Default
[a04-12707_1ex10d1.htm#ApplicationOfPaymentsPriorToAnEven]

 

 

 

 

 

 

3. [a04-12707_1ex10d1.htm#AdditionalFinancing_]

ADDITIONAL FINANCING [a04-12707_1ex10d1.htm#AdditionalFinancing_]

 

 

 

 

 

 

4. [a04-12707_1ex10d1.htm#MandatoryRepaymentOfRevolvingCredit]

MANDATORY REPAYMENT OF REVOLVING CREDIT LOANS
[a04-12707_1ex10d1.htm#MandatoryRepaymentOfRevolvingCredit]

 

 

 

 

 

 

 

4.1. [a04-12707_1ex10d1.htm#IntentionallyOmitted]

Intentionally Omitted [a04-12707_1ex10d1.htm#IntentionallyOmitted]

 

 

 

 

 

 

 

4.2. [a04-12707_1ex10d1.htm#ProceedsOfCertainEvents]

Proceeds of Certain Events [a04-12707_1ex10d1.htm#ProceedsOfCertainEvents]

 

 

 

 

 

 

 

4.3. [a04-12707_1ex10d1.htm#ApplicationOfPayments_]

Application of Payments [a04-12707_1ex10d1.htm#ApplicationOfPayments_]

 

 

i

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

 

 

4.4. [a04-12707_1ex10d1.htm#DeliveryOfProceeds_]

Delivery of Proceeds [a04-12707_1ex10d1.htm#DeliveryOfProceeds_]

 

 

 

 

 

 

5. [a04-12707_1ex10d1.htm#LettersOfCredit]

LETTERS OF CREDIT [a04-12707_1ex10d1.htm#LettersOfCredit]

 

 

 

 

 

 

 

5.1. [a04-12707_1ex10d1.htm#LetterOfCreditCommitments]

Letter of Credit Commitments [a04-12707_1ex10d1.htm#LetterOfCreditCommitments]

 

 

 

 

 

 

 

 

5.1.1. [a04-12707_1ex10d1.htm#CommitmentToIssueLettersOfCredi]

Commitment to Issue Letters of Credit
[a04-12707_1ex10d1.htm#CommitmentToIssueLettersOfCredi]

 

 

 

 

 

 

 

 

5.1.2. [a04-12707_1ex10d1.htm#LetterOfCreditApplications]

Letter of Credit Applications [a04-12707_1ex10d1.htm#LetterOfCreditApplications]

 

 

 

 

 

 

 

 

5.1.3. [a04-12707_1ex10d1.htm#TermsOfLettersOfCredit]

Terms of Letters of Credit [a04-12707_1ex10d1.htm#TermsOfLettersOfCredit]

 

 

 

 

 

 

 

 

5.1.4. [a04-12707_1ex10d1.htm#ReimbursementObligationsOfLenders]

Reimbursement Obligations of Lenders
[a04-12707_1ex10d1.htm#ReimbursementObligationsOfLenders]

 

 

 

 

 

 

 

 

5.1.5. [a04-12707_1ex10d1.htm#ParticipationsOfLenders]

Participations of Lenders [a04-12707_1ex10d1.htm#ParticipationsOfLenders]

 

 

 

 

 

 

 

5.2. [a04-12707_1ex10d1.htm#ReimbursementObligationOfTheBorrower]

Reimbursement Obligation of the Borrowers
[a04-12707_1ex10d1.htm#ReimbursementObligationOfTheBorrower]

 

 

 

 

 

 

 

5.3. [a04-12707_1ex10d1.htm#LetterOfCreditPayments]

Letter of Credit Payments [a04-12707_1ex10d1.htm#LetterOfCreditPayments]

 

 

 

 

 

 

 

5.4. [a04-12707_1ex10d1.htm#ObligationsAbsolut]

Obligations Absolute [a04-12707_1ex10d1.htm#ObligationsAbsolut]

 

 

 

 

 

 

 

5.5. [a04-12707_1ex10d1.htm#RelianceByIssuer]

Reliance by Issuer [a04-12707_1ex10d1.htm#RelianceByIssuer]

 

 

 

 

 

 

 

5.6. [a04-12707_1ex10d1.htm#LetterOfCreditFee]

Letter of Credit Fee [a04-12707_1ex10d1.htm#LetterOfCreditFee]

 

 

 

 

 

 

 

5.7. [a04-12707_1ex10d1.htm#ExistingLettersOfCredit_]

Existing Letters of Credit [a04-12707_1ex10d1.htm#ExistingLettersOfCredit_]

 

 

 

 

 

 

6. [a04-12707_1ex10d1.htm#CertainGeneralProvisions]

CERTAIN GENERAL PROVISIONS [a04-12707_1ex10d1.htm#CertainGeneralProvisions]

 

 

 

 

 

 

 

6.1. [a04-12707_1ex10d1.htm#Fees]

Fees [a04-12707_1ex10d1.htm#Fees]

 

 

 

 

 

 

 

6.2. [a04-12707_1ex10d1.htm#FundsForPayments]

Funds for Payments [a04-12707_1ex10d1.htm#FundsForPayments]

 

 

 

 

 

 

 

 

6.2.1. [a04-12707_1ex10d1.htm#PaymentsToAdministrativeAgen]

Payments to Administrative Agent
[a04-12707_1ex10d1.htm#PaymentsToAdministrativeAgen]

 

 

 

 

 

 

 

 

6.2.2. [a04-12707_1ex10d1.htm#Nooffsetetc]

No Offset, etc [a04-12707_1ex10d1.htm#Nooffsetetc]

 

 

 

 

 

 

 

 

6.2.3. [a04-12707_1ex10d1.htm#Nonu_s_Lenders_]

Non-U.S. Lenders [a04-12707_1ex10d1.htm#Nonu_s_Lenders_]

 

 

 

 

 

 

 

 

6.2.4. [a04-12707_1ex10d1.htm#Exclusion]

Exclusion [a04-12707_1ex10d1.htm#Exclusion]

 

 

 

 

 

 

 

6.3. [a04-12707_1ex10d1.htm#Computations]

Computations [a04-12707_1ex10d1.htm#Computations]

 

 

 

 

 

 

 

6.4. [a04-12707_1ex10d1.htm#InabilityToDetermineEurodollarRate_]

Inability to Determine Eurodollar Rate
[a04-12707_1ex10d1.htm#InabilityToDetermineEurodollarRate_]

 

 

 

 

 

 

 

6.5. [a04-12707_1ex10d1.htm#Illegality]

Illegality [a04-12707_1ex10d1.htm#Illegality]

 

 

 

 

 

 

 

6.6. [a04-12707_1ex10d1.htm#Additionalcostsetc]

Additional Costs, etc [a04-12707_1ex10d1.htm#Additionalcostsetc]

 

 

 

 

 

 

 

6.7. [a04-12707_1ex10d1.htm#CapitalAdequacy_]

Capital Adequacy [a04-12707_1ex10d1.htm#CapitalAdequacy_]

 

 

 

 

 

 

 

6.8. [a04-12707_1ex10d1.htm#CertificateReplacementOfLender]

Certificate; Replacement of Lenders
[a04-12707_1ex10d1.htm#CertificateReplacementOfLender]

 

 

ii

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

 

 

6.9. [a04-12707_1ex10d1.htm#Indemnity_]

Indemnity [a04-12707_1ex10d1.htm#Indemnity_]

 

 

 

 

 

 

 

6.10. [a04-12707_1ex10d1.htm#InterestAfterDefault]

Interest After Default [a04-12707_1ex10d1.htm#InterestAfterDefault]

 

 

 

 

 

 

 

 

6.10.1. [a04-12707_1ex10d1.htm#OverdueAmounts]

Overdue Amounts [a04-12707_1ex10d1.htm#OverdueAmounts]

 

 

 

 

 

 

 

 

6.10.2. [a04-12707_1ex10d1.htm#AmountsNotOverdue]

Amounts Not Overdue [a04-12707_1ex10d1.htm#AmountsNotOverdue]

 

 

 

 

 

 

 

 

6.10.3. [a04-12707_1ex10d1.htm#Lettersofcdit]

Letters of Credit [a04-12707_1ex10d1.htm#Lettersofcdit]

 

 

 

 

 

 

 

6.11. [a04-12707_1ex10d1.htm#ConcerningJointAndSeveralLiabilityO]

Concerning Joint and Several Liability of the Borrowers
[a04-12707_1ex10d1.htm#ConcerningJointAndSeveralLiabilityO]

 

 

 

 

 

 

7. [a04-12707_1ex10d1.htm#CollateralSecurityAndParentGuarant]

COLLATERAL SECURITY AND PARENT GUARANTY
[a04-12707_1ex10d1.htm#CollateralSecurityAndParentGuarant]

 

 

 

 

 

 

 

7.1. [a04-12707_1ex10d1.htm#SecurityOfBorrowers]

Security of Borrowers [a04-12707_1ex10d1.htm#SecurityOfBorrowers]

 

 

 

 

 

 

 

7.2. [a04-12707_1ex10d1.htm#ParentGuarantyAndParentPledgeAgreem]

Parent Guaranty and Parent Pledge Agreement
[a04-12707_1ex10d1.htm#ParentGuarantyAndParentPledgeAgreem]

 

 

 

 

 

 

8. [a04-12707_1ex10d1.htm#RepresentationsAndWarranties]

REPRESENTATIONS AND WARRANTIES
[a04-12707_1ex10d1.htm#RepresentationsAndWarranties]

 

 

 

 

 

 

 

8.1. [a04-12707_1ex10d1.htm#CorporateAuthority]

Corporate Authority [a04-12707_1ex10d1.htm#CorporateAuthority]

 

 

 

 

 

 

 

 

8.1.1. [a04-12707_1ex10d1.htm#IncorporationGoodStanding]

Incorporation; Good Standing [a04-12707_1ex10d1.htm#IncorporationGoodStanding]

 

 

 

 

 

 

 

 

8.1.2. [a04-12707_1ex10d1.htm#Authorization]

Authorization [a04-12707_1ex10d1.htm#Authorization]

 

 

 

 

 

 

 

 

8.1.3. [a04-12707_1ex10d1.htm#Enforceability_]

Enforceability [a04-12707_1ex10d1.htm#Enforceability_]

 

 

 

 

 

 

 

8.2. [a04-12707_1ex10d1.htm#GovernmentalApprovals]

Governmental Approvals [a04-12707_1ex10d1.htm#GovernmentalApprovals]

 

 

 

 

 

 

 

8.3. [a04-12707_1ex10d1.htm#TitleToPropertiesLeases_]

Title to Properties; Leases [a04-12707_1ex10d1.htm#TitleToPropertiesLeases_]

 

 

 

 

 

 

 

8.4. [a04-12707_1ex10d1.htm#FinancialStatementsAndProjection]

Financial Statements and Projections
[a04-12707_1ex10d1.htm#FinancialStatementsAndProjection]

 

 

 

 

 

 

 

 

8.4.1. [a04-12707_1ex10d1.htm#FiscalYearFiscalQuarters]

Fiscal Year; Fiscal Quarters [a04-12707_1ex10d1.htm#FiscalYearFiscalQuarters]

 

 

 

 

 

 

 

 

8.4.2. [a04-12707_1ex10d1.htm#FinancialStatements]

Financial Statements [a04-12707_1ex10d1.htm#FinancialStatements]

 

 

 

 

 

 

 

 

8.4.3. [a04-12707_1ex10d1.htm#ProFormaBalanceSheetAndProjections]

Pro Forma Balance Sheet and Projections
[a04-12707_1ex10d1.htm#ProFormaBalanceSheetAndProjections]

 

 

 

 

 

 

 

8.5. [a04-12707_1ex10d1.htm#Nomaterialadversechangesetc]

No Material Adverse Changes, etc
[a04-12707_1ex10d1.htm#Nomaterialadversechangesetc]

 

 

 

 

 

 

 

8.6. [a04-12707_1ex10d1.htm#Franchisespatentscopyrightsliquor]

Franchises, Patents, Copyrights, Liquor Management Agreements, etc
[a04-12707_1ex10d1.htm#Franchisespatentscopyrightsliquor]

 

 

 

 

 

 

 

8.7. [a04-12707_1ex10d1.htm#Litigation]

Litigation [a04-12707_1ex10d1.htm#Litigation]

 

 

 

 

 

 

 

8.8. [a04-12707_1ex10d1.htm#MaterialContractsNoMateriallyAdvers]

Material Contracts; No Materially Adverse Contracts, etc
[a04-12707_1ex10d1.htm#MaterialContractsNoMateriallyAdvers]

 

 

 

 

 

 

 

8.9. [a04-12707_1ex10d1.htm#Compliancewithotherinstrumentslaws]

Compliance with Other Instruments, Laws, etc
[a04-12707_1ex10d1.htm#Compliancewithotherinstrumentslaws]

 

 

 

 

 

 

 

8.10. [a04-12707_1ex10d1.htm#TaxStatus_]

Tax Status [a04-12707_1ex10d1.htm#TaxStatus_]

 

 

iii

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

 

 

8.11. [a04-12707_1ex10d1.htm#NoEventOfDefault_]

No Event of Default [a04-12707_1ex10d1.htm#NoEventOfDefault_]

 

 

 

 

 

 

 

8.12. [a04-12707_1ex10d1.htm#HoldingCompanyAndInvestmentCompanyA]

Holding Company and Investment Company Acts
[a04-12707_1ex10d1.htm#HoldingCompanyAndInvestmentCompanyA]

 

 

 

 

 

 

 

8.13. [a04-12707_1ex10d1.htm#AbsenceOfFinancing]

Absence of Financing Statements, etc [a04-12707_1ex10d1.htm#AbsenceOfFinancing]

 

 

 

 

 

 

 

8.14. [a04-12707_1ex10d1.htm#PerfectionOfSecurity]

Perfection of Security Interest [a04-12707_1ex10d1.htm#PerfectionOfSecurity]

 

 

 

 

 

 

 

8.15. [a04-12707_1ex10d1.htm#CertainTransactions]

Certain Transactions [a04-12707_1ex10d1.htm#CertainTransactions]

 

 

 

 

 

 

 

8.16. [a04-12707_1ex10d1.htm#EmployeeBenefit]

Employee Benefit Plans [a04-12707_1ex10d1.htm#EmployeeBenefit]

 

 

 

 

 

 

 

 

8.16.1. [a04-12707_1ex10d1.htm#InGeneral]

In General [a04-12707_1ex10d1.htm#InGeneral]

 

 

 

 

 

 

 

 

8.16.2. [a04-12707_1ex10d1.htm#Terminability]

Terminability of Welfare Plans [a04-12707_1ex10d1.htm#Terminability]

 

 

 

 

 

 

 

 

8.16.3. [a04-12707_1ex10d1.htm#GuaranteedPension]

Guaranteed Pension Plans [a04-12707_1ex10d1.htm#GuaranteedPension]

 

 

 

 

 

 

 

 

8.16.4. [a04-12707_1ex10d1.htm#Multiemplo]

Multiemployer Plans [a04-12707_1ex10d1.htm#Multiemplo]

 

 

 

 

 

 

 

8.17. [a04-12707_1ex10d1.htm#UseOfProceeds]

Use of Proceeds [a04-12707_1ex10d1.htm#UseOfProceeds]

 

 

 

 

 

 

 

 

8.17.1. [a04-12707_1ex10d1.htm#Gen]

General [a04-12707_1ex10d1.htm#Gen]

 

 

 

 

 

 

 

 

8.17.2. [a04-12707_1ex10d1.htm#Regulation]

Regulations U and X [a04-12707_1ex10d1.htm#Regulation]

 

 

 

 

 

 

 

 

8.17.3. [a04-12707_1ex10d1.htm#IneligibleS]

Ineligible Securities [a04-12707_1ex10d1.htm#IneligibleS]

 

 

 

 

 

 

 

8.18. [a04-12707_1ex10d1.htm#Environmental]

Environmental Compliance [a04-12707_1ex10d1.htm#Environmental]

 

 

 

 

 

 

 

8.19. [a04-12707_1ex10d1.htm#Bsidiaries]

Subsidiaries, etc [a04-12707_1ex10d1.htm#Bsidiaries]

 

 

 

 

 

 

 

8.20. [a04-12707_1ex10d1.htm#BankAccounts]

Bank Accounts [a04-12707_1ex10d1.htm#BankAccounts]

 

 

 

 

 

 

 

8.21. [a04-12707_1ex10d1.htm#SubordinatedD]

Subordinated Debt Documents; Equity Documents; Warrant Documents
[a04-12707_1ex10d1.htm#SubordinatedD]

 

 

 

 

 

 

 

8.22. [a04-12707_1ex10d1.htm#Solvency_]

Solvency [a04-12707_1ex10d1.htm#Solvency_]

 

 

 

 

 

 

 

8.23. [a04-12707_1ex10d1.htm#Restaurants]

Restaurants [a04-12707_1ex10d1.htm#Restaurants]

 

 

 

 

 

 

 

8.24. [a04-12707_1ex10d1.htm#FranchiseAgreements]

Franchise Agreements [a04-12707_1ex10d1.htm#FranchiseAgreements]

 

 

 

 

 

 

 

8.25. [a04-12707_1ex10d1.htm#Leases_]

Leases [a04-12707_1ex10d1.htm#Leases_]

 

 

 

 

 

 

 

8.26. [a04-12707_1ex10d1.htm#Disclosu]

Disclosure [a04-12707_1ex10d1.htm#Disclosu]

 

 

 

 

 

 

 

8.27. [a04-12707_1ex10d1.htm#ChangeOfControl]

Change of Control [a04-12707_1ex10d1.htm#ChangeOfControl]

 

 

 

 

 

 

9. [a04-12707_1ex10d1.htm#Affirmati]

AFFIRMATIVE COVENANTS [a04-12707_1ex10d1.htm#Affirmati]

 

 

 

 

 

 

 

9.1. [a04-12707_1ex10d1.htm#PunctualPayment]

Punctual Payment [a04-12707_1ex10d1.htm#PunctualPayment]

 

 

iv

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

 

 

9.2. [a04-12707_1ex10d1.htm#MaintenanceO]

Maintenance of Office [a04-12707_1ex10d1.htm#MaintenanceO]

 

 

 

 

 

 

 

9.3. [a04-12707_1ex10d1.htm#RecordsAndAccounts]

Records and Accounts [a04-12707_1ex10d1.htm#RecordsAndAccounts]

 

 

 

 

 

 

 

9.4. [a04-12707_1ex10d1.htm#FinancialStatements]

Financial Statements, Certificates and Information
[a04-12707_1ex10d1.htm#FinancialStatements]

 

 

 

 

 

 

 

9.5. [a04-12707_1ex10d1.htm#Notices_]

Notices [a04-12707_1ex10d1.htm#Notices_]

 

 

 

 

 

 

 

 

9.5.1. [a04-12707_1ex10d1.htm#Default]

Defaults [a04-12707_1ex10d1.htm#Default]

 

 

 

 

 

 

 

 

9.5.2. [a04-12707_1ex10d1.htm#Environmenta]

Environmental Events [a04-12707_1ex10d1.htm#Environmenta]

 

 

 

 

 

 

 

 

9.5.3. [a04-12707_1ex10d1.htm#NotificationOf]

Notification of Claim against Collateral [a04-12707_1ex10d1.htm#NotificationOf]

 

 

 

 

 

 

 

 

9.5.4. [a04-12707_1ex10d1.htm#NoticeOfLitigation]

Notice of Litigation and Judgments [a04-12707_1ex10d1.htm#NoticeOfLitigation]

 

 

 

 

 

 

 

 

9.5.5. [a04-12707_1ex10d1.htm#NoticeOfBank]

Notice of Bank Accounts [a04-12707_1ex10d1.htm#NoticeOfBank]

 

 

 

 

 

 

 

 

9.5.6. [a04-12707_1ex10d1.htm#NoticeOfReal]

Notice of Real Estate [a04-12707_1ex10d1.htm#NoticeOfReal]

 

 

 

 

 

 

 

9.6. [a04-12707_1ex10d1.htm#LegalExistence]

Legal Existence; Maintenance of Properties
[a04-12707_1ex10d1.htm#LegalExistence]

 

 

 

 

 

 

 

9.7. [a04-12707_1ex10d1.htm#Insurance_]

Insurance [a04-12707_1ex10d1.htm#Insurance_]

 

 

 

 

 

 

 

 

9.7.1. [a04-12707_1ex10d1.htm#RequiredInsurance]

Required Insurance [a04-12707_1ex10d1.htm#RequiredInsurance]

 

 

 

 

 

 

 

 

9.7.2. [a04-12707_1ex10d1.htm#InsuranceProceeds]

Insurance Proceeds [a04-12707_1ex10d1.htm#InsuranceProceeds]

 

 

 

 

 

 

 

 

9.7.3. [a04-12707_1ex10d1.htm#NoticeOfCancellation]

Notice of Cancellation [a04-12707_1ex10d1.htm#NoticeOfCancellation]

 

 

 

 

 

 

 

9.8. [a04-12707_1ex10d1.htm#Taxes]

Taxes [a04-12707_1ex10d1.htm#Taxes]

 

 

 

 

 

 

 

9.9. [a04-12707_1ex10d1.htm#InspectionOf]

Inspection of Properties and Books, etc [a04-12707_1ex10d1.htm#InspectionOf]

 

 

 

 

 

 

 

 

9.9.1. [a04-12707_1ex10d1.htm#General_]

General [a04-12707_1ex10d1.htm#General_]

 

 

 

 

 

 

 

 

9.9.2. [a04-12707_1ex10d1.htm#EnvironmentalAssessments]

Environmental Assessments [a04-12707_1ex10d1.htm#EnvironmentalAssessments]

 

 

 

 

 

 

 

 

9.9.3. [a04-12707_1ex10d1.htm#CommunicationsWith]

Communications with Accountants [a04-12707_1ex10d1.htm#CommunicationsWith]

 

 

 

 

 

 

 

9.10. [a04-12707_1ex10d1.htm#ComplianceWithLaws]

Compliance with Laws, Contracts, Licenses, and Permits
[a04-12707_1ex10d1.htm#ComplianceWithLaws]

 

 

 

 

 

 

 

9.11. [a04-12707_1ex10d1.htm#MployeeBenefit]

Employee Benefit Plans [a04-12707_1ex10d1.htm#MployeeBenefit]

 

 

 

 

 

 

 

9.12. [a04-12707_1ex10d1.htm#Use]

Use of Proceeds [a04-12707_1ex10d1.htm#Use]

 

 

 

 

 

 

 

9.13. [a04-12707_1ex10d1.htm#AdditionalMortgaged]

Additional Mortgaged Property; Notice of Leases
[a04-12707_1ex10d1.htm#AdditionalMortgaged]

 

 

 

 

 

 

 

9.14. [a04-12707_1ex10d1.htm#ConductOfBusiness]

Conduct of Business; Restaurants [a04-12707_1ex10d1.htm#ConductOfBusiness]

 

 

 

 

 

 

 

9.15. [a04-12707_1ex10d1.htm#Intentionally]

Intentionally Omitted [a04-12707_1ex10d1.htm#Intentionally]

 

 

 

 

 

 

 

9.16. [a04-12707_1ex10d1.htm#Ank]

Bank Accounts [a04-12707_1ex10d1.htm#Ank]

 

 

v

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

 

 

9.17. [a04-12707_1ex10d1.htm#AdditionalSubsidiaries]

Additional Subsidiaries [a04-12707_1ex10d1.htm#AdditionalSubsidiaries]

 

 

 

 

 

 

 

9.18. [a04-12707_1ex10d1.htm#AmendmentsTo]

Amendments to Documents [a04-12707_1ex10d1.htm#AmendmentsTo]

 

 

 

 

 

 

 

9.19. [a04-12707_1ex10d1.htm#FurtherAssurances]

Further Assurances [a04-12707_1ex10d1.htm#FurtherAssurances]

 

 

 

 

 

 

 

9.20. [a04-12707_1ex10d1.htm#PostclosingDeliveryRequirements]

Post-Closing Delivery Requirements
[a04-12707_1ex10d1.htm#PostclosingDeliveryRequirements]

 

 

 

 

 

 

10. [a04-12707_1ex10d1.htm#CertainNegative]

CERTAIN NEGATIVE COVENANTS [a04-12707_1ex10d1.htm#CertainNegative]

 

 

 

 

 

 

 

10.1. [a04-12707_1ex10d1.htm#RestrictionsOn]

Restrictions on Indebtedness [a04-12707_1ex10d1.htm#RestrictionsOn]

 

 

 

 

 

 

 

10.2. [a04-12707_1ex10d1.htm#Estrictions]

Restrictions on Liens [a04-12707_1ex10d1.htm#Estrictions]

 

 

 

 

 

 

 

 

10.2.1. [a04-12707_1ex10d1.htm#PermittedLiens]

Permitted Liens [a04-12707_1ex10d1.htm#PermittedLiens]

 

 

 

 

 

 

 

 

10.2.2. [a04-12707_1ex10d1.htm#RestrictionsOnNegative]

Restrictions on Negative Pledges and Upstream Limitations
[a04-12707_1ex10d1.htm#RestrictionsOnNegative]

 

 

 

 

 

 

 

10.3. [a04-12707_1ex10d1.htm#RestrictionsOnInvestments_]

Restrictions on Investments [a04-12707_1ex10d1.htm#RestrictionsOnInvestments_]

 

 

 

 

 

 

 

10.4. [a04-12707_1ex10d1.htm#RestrictedPayments_]

Restricted Payments [a04-12707_1ex10d1.htm#RestrictedPayments_]

 

 

 

 

 

 

 

10.5. [a04-12707_1ex10d1.htm#MergersDisposition]

Mergers; Disposition of Assets; Acquisitions
[a04-12707_1ex10d1.htm#MergersDisposition]

 

 

 

 

 

 

 

 

10.5.1. [a04-12707_1ex10d1.htm#Merger]

Mergers [a04-12707_1ex10d1.htm#Merger]

 

 

 

 

 

 

 

 

10.5.2. [a04-12707_1ex10d1.htm#DispositionOf]

Disposition of Assets [a04-12707_1ex10d1.htm#DispositionOf]

 

 

 

 

 

 

 

 

10.5.3. [a04-12707_1ex10d1.htm#Acquisitions]

Acquisitions [a04-12707_1ex10d1.htm#Acquisitions]

 

 

 

 

 

 

 

10.6. [a04-12707_1ex10d1.htm#SaleAndLeaseback]

Sale and Leaseback [a04-12707_1ex10d1.htm#SaleAndLeaseback]

 

 

 

 

 

 

 

10.7. [a04-12707_1ex10d1.htm#ComplianceWithEnvironmental]

Compliance with Environmental Laws
[a04-12707_1ex10d1.htm#ComplianceWithEnvironmental]

 

 

 

 

 

 

 

10.8. [a04-12707_1ex10d1.htm#EmployeeB]

Employee Benefit Plans [a04-12707_1ex10d1.htm#EmployeeB]

 

 

 

 

 

 

 

10.9. [a04-12707_1ex10d1.htm#BusinessA]

Business Activities [a04-12707_1ex10d1.htm#BusinessA]

 

 

 

 

 

 

 

10.10. [a04-12707_1ex10d1.htm#FiscalYearFiscal]

Fiscal Year; Fiscal Quarters [a04-12707_1ex10d1.htm#FiscalYearFiscal]

 

 

 

 

 

 

 

10.11. [a04-12707_1ex10d1.htm#TransactionsWith]

Transactions with Affiliates [a04-12707_1ex10d1.htm#TransactionsWith]

 

 

 

 

 

 

 

10.12. [a04-12707_1ex10d1.htm#Bank]

Bank Accounts [a04-12707_1ex10d1.htm#Bank]

 

 

 

 

 

 

 

10.13. [a04-12707_1ex10d1.htm#Franchise]

Franchises [a04-12707_1ex10d1.htm#Franchise]

 

 

 

 

 

 

 

10.14. [a04-12707_1ex10d1.htm#RestrictionsOnAmendments]

Restrictions on Amendments to Documents
[a04-12707_1ex10d1.htm#RestrictionsOnAmendments]

 

 

 

 

 

 

 

 

10.14.1. [a04-12707_1ex10d1.htm#WarrantDocumentsEquity]

Warrant Documents; Equity Documents
[a04-12707_1ex10d1.htm#WarrantDocumentsEquity]

 

 

 

 

 

 

 

 

10.14.2. [a04-12707_1ex10d1.htm#AcquisitionDocuments]

Acquisition Documents [a04-12707_1ex10d1.htm#AcquisitionDocuments]

 

 

 

 

 

 

 

 

10.14.3. [a04-12707_1ex10d1.htm#Subordinated]

Subordinated Debt [a04-12707_1ex10d1.htm#Subordinated]

 

 

vi

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

 

 

 

10.14.4. [a04-12707_1ex10d1.htm#CertainAmendments]

Certain Amendments [a04-12707_1ex10d1.htm#CertainAmendments]

 

 

 

 

 

 

 

10.15. [a04-12707_1ex10d1.htm#Capitalization_]

Capitalization [a04-12707_1ex10d1.htm#Capitalization_]

 

 

 

 

 

 

 

10.16. [a04-12707_1ex10d1.htm#MaximumNumberOfUnprofitable]

Maximum Number of Unprofitable Restaurants
[a04-12707_1ex10d1.htm#MaximumNumberOfUnprofitable]

 

 

 

 

 

 

11. [a04-12707_1ex10d1.htm#FinancialCovenants]

FINANCIAL COVENANTS [a04-12707_1ex10d1.htm#FinancialCovenants]

 

 

 

 

 

 

 

11.1. [a04-12707_1ex10d1.htm#AdjustedLeverage]

Adjusted Leverage Ratio [a04-12707_1ex10d1.htm#AdjustedLeverage]

 

 

 

 

 

 

 

11.2. [a04-12707_1ex10d1.htm#Consolidated]

Consolidated Cash Flow Ratio [a04-12707_1ex10d1.htm#Consolidated]

 

 

 

 

 

 

 

11.3. [a04-12707_1ex10d1.htm#GrowthCapitalExpenditures]

Growth Capital Expenditures [a04-12707_1ex10d1.htm#GrowthCapitalExpenditures]

 

 

 

 

 

 

12. [a04-12707_1ex10d1.htm#ClosingConditions_]

CLOSING CONDITIONS [a04-12707_1ex10d1.htm#ClosingConditions_]

 

 

 

 

 

 

 

12.1. [a04-12707_1ex10d1.htm#LoanDocuments]

Loan Documents [a04-12707_1ex10d1.htm#LoanDocuments]

 

 

 

 

 

 

 

12.2. [a04-12707_1ex10d1.htm#CertifiedCopiesOf]

Certified Copies of Governing Documents
[a04-12707_1ex10d1.htm#CertifiedCopiesOf]

 

 

 

 

 

 

 

12.3. [a04-12707_1ex10d1.htm#CorporateOrOther]

Corporate or Other Action [a04-12707_1ex10d1.htm#CorporateOrOther]

 

 

 

 

 

 

 

12.4. [a04-12707_1ex10d1.htm#IncumbencyCe]

Incumbency Certificate [a04-12707_1ex10d1.htm#IncumbencyCe]

 

 

 

 

 

 

 

12.5. [a04-12707_1ex10d1.htm#ValidityO]

Validity of Liens [a04-12707_1ex10d1.htm#ValidityO]

 

 

 

 

 

 

 

12.6. [a04-12707_1ex10d1.htm#PerfectionC]

Perfection Certificates and Uniform Commercial Code Search Results
[a04-12707_1ex10d1.htm#PerfectionC]

 

 

 

 

 

 

 

12.7. [a04-12707_1ex10d1.htm#LandlordConsents]

Landlord Consents; Mortgages [a04-12707_1ex10d1.htm#LandlordConsents]

 

 

 

 

 

 

 

12.8. [a04-12707_1ex10d1.htm#CertificatesOfInsurance]

Certificates of Insurance [a04-12707_1ex10d1.htm#CertificatesOfInsurance]

 

 

 

 

 

 

 

12.9. [a04-12707_1ex10d1.htm#SolvencyCertificate]

Solvency Certificate [a04-12707_1ex10d1.htm#SolvencyCertificate]

 

 

 

 

 

 

 

12.10. [a04-12707_1ex10d1.htm#OpinionOfCounsel]

Opinion of Counsel [a04-12707_1ex10d1.htm#OpinionOfCounsel]

 

 

 

 

 

 

 

12.11. [a04-12707_1ex10d1.htm#CapitalStructure]

Capital Structure [a04-12707_1ex10d1.htm#CapitalStructure]

 

 

 

 

 

 

 

12.12. [a04-12707_1ex10d1.htm#MinimumConsolidated]

Minimum Consolidated EBITDA [a04-12707_1ex10d1.htm#MinimumConsolidated]

 

 

 

 

 

 

 

12.13. [a04-12707_1ex10d1.htm#NoMaterialAdverse]

No Material Adverse Change [a04-12707_1ex10d1.htm#NoMaterialAdverse]

 

 

 

 

 

 

 

12.14. [a04-12707_1ex10d1.htm#A1214financialstatementsand]

Financial Statements and Projections
[a04-12707_1ex10d1.htm#A1214financialstatementsand]

 

 

 

 

 

 

 

12.15. [a04-12707_1ex10d1.htm#NoLitigation_NoLitig]

No Litigation [a04-12707_1ex10d1.htm#NoLitigation_NoLitig]

 

 

 

 

 

 

 

12.16. [a04-12707_1ex10d1.htm#ConsentsAndApprovals]

Consents and Approvals [a04-12707_1ex10d1.htm#ConsentsAndApprovals]

 

 

 

 

 

 

 

12.17. [a04-12707_1ex10d1.htm#EmploymentAgreements]

Employment Agreements; Employee Incentive Plans
[a04-12707_1ex10d1.htm#EmploymentAgreements]

 

 

 

 

 

 

 

12.18. [a04-12707_1ex10d1.htm#OtherDocumentation]

Other Documentation [a04-12707_1ex10d1.htm#OtherDocumentation]

 

 

vii

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

 

 

12.19. [a04-12707_1ex10d1.htm#PayoffAndTermination]

Payoff and Termination of Existing Credit Agreement; Refinancing of Loans
[a04-12707_1ex10d1.htm#PayoffAndTermination]

 

 

 

 

 

 

 

12.20. [a04-12707_1ex10d1.htm#ConsummationOfInitial]

Consummation of Initial Public Offering
[a04-12707_1ex10d1.htm#ConsummationOfInitial]

 

 

 

 

 

 

 

12.21. [a04-12707_1ex10d1.htm#MaximumBorrowingOn]

Maximum Borrowing on Closing Date [a04-12707_1ex10d1.htm#MaximumBorrowingOn]

 

 

 

 

 

 

 

12.22. [a04-12707_1ex10d1.htm#PaymentOfFeesAnd]

Payment of Fees and Expenses [a04-12707_1ex10d1.htm#PaymentOfFeesAnd]

 

 

 

 

 

 

 

12.23. [a04-12707_1ex10d1.htm#DisbursementI]

Disbursement Instructions [a04-12707_1ex10d1.htm#DisbursementI]

 

 

 

 

 

 

13. [a04-12707_1ex10d1.htm#A13conditionstoallborrowings]

CONDITIONS TO ALL BORROWINGS
[a04-12707_1ex10d1.htm#A13conditionstoallborrowings]

 

 

 

 

 

 

 

13.1. [a04-12707_1ex10d1.htm#RepresentationsT]

Representations True; No Event of Default
[a04-12707_1ex10d1.htm#RepresentationsT]

 

 

 

 

 

 

 

13.2. [a04-12707_1ex10d1.htm#NoLegalImpediment]

No Legal Impediment [a04-12707_1ex10d1.htm#NoLegalImpediment]

 

 

 

 

 

 

 

13.3. [a04-12707_1ex10d1.htm#ProceedingsAnd]

Proceedings and Documents [a04-12707_1ex10d1.htm#ProceedingsAnd]

 

 

 

 

 

 

14. [a04-12707_1ex10d1.htm#EventsOfDefault]

EVENTS OF DEFAULT; ACCELERATION; ETC [a04-12707_1ex10d1.htm#EventsOfDefault]

 

 

 

 

 

 

 

14.1. [a04-12707_1ex10d1.htm#Aeventsofdefault]

Events of Default and Acceleration [a04-12707_1ex10d1.htm#Aeventsofdefault]

 

 

 

 

 

 

 

14.2. [a04-12707_1ex10d1.htm#TerminationOfCommitments]

Termination of Commitments [a04-12707_1ex10d1.htm#TerminationOfCommitments]

 

 

 

 

 

 

 

14.3. [a04-12707_1ex10d1.htm#Remedies]

Remedies [a04-12707_1ex10d1.htm#Remedies]

 

 

 

 

 

 

 

14.4. [a04-12707_1ex10d1.htm#DistributionOf]

Distribution of Collateral Proceeds [a04-12707_1ex10d1.htm#DistributionOf]

 

 

 

 

 

 

15. [a04-12707_1ex10d1.htm#TheAgent_]

THE AGENT [a04-12707_1ex10d1.htm#TheAgent_]

 

 

 

 

 

 

 

15.1. [a04-12707_1ex10d1.htm#Appointment]

Appointment and Authority [a04-12707_1ex10d1.htm#Appointment]

 

 

 

 

 

 

 

15.2. [a04-12707_1ex10d1.htm#RightsAsA]

Rights as a Lender [a04-12707_1ex10d1.htm#RightsAsA]

 

 

 

 

 

 

 

15.3. [a04-12707_1ex10d1.htm#Exculpatory]

Exculpatory Provisions [a04-12707_1ex10d1.htm#Exculpatory]

 

 

 

 

 

 

 

15.4. [a04-12707_1ex10d1.htm#RelianceByAdministrative]

Reliance by Administrative Agent
[a04-12707_1ex10d1.htm#RelianceByAdministrative]

 

 

 

 

 

 

 

 

15.4.1. [a04-12707_1ex10d1.htm#Neral]

General [a04-12707_1ex10d1.htm#Neral]

 

 

 

 

 

 

 

 

15.4.2. [a04-12707_1ex10d1.htm#NonrelianceOnAdministrative]

Non-Reliance on Administrative Agent and Other Lenders
[a04-12707_1ex10d1.htm#NonrelianceOnAdministrative]

 

 

 

 

 

 

 

 

15.4.3. [a04-12707_1ex10d1.htm#DelegationOf]

Delegation of Duties [a04-12707_1ex10d1.htm#DelegationOf]

 

 

 

 

 

 

 

15.5. [a04-12707_1ex10d1.htm#Payments_]

Payments [a04-12707_1ex10d1.htm#Payments_]

 

 

 

 

 

 

 

 

15.5.1. [a04-12707_1ex10d1.htm#PaymentsToAdministrative]

Payments to Administrative Agent
[a04-12707_1ex10d1.htm#PaymentsToAdministrative]

 

 

 

 

 

 

 

 

15.5.2. [a04-12707_1ex10d1.htm#Distribution]

Distribution by Administrative Agent [a04-12707_1ex10d1.htm#Distribution]

 

 

 

 

 

 

 

 

15.5.3. [a04-12707_1ex10d1.htm#DelinquentLenders]

Delinquent Lenders [a04-12707_1ex10d1.htm#DelinquentLenders]

 

 

viii

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

 

 

15.6. [a04-12707_1ex10d1.htm#ReimbursementBy]

Reimbursement by Lenders [a04-12707_1ex10d1.htm#ReimbursementBy]

 

 

 

 

 

 

 

15.7. [a04-12707_1ex10d1.htm#ResignationByAdministrative]

Resignation by Administrative Agent
[a04-12707_1ex10d1.htm#ResignationByAdministrative]

 

 

 

 

 

 

 

15.8. [a04-12707_1ex10d1.htm#AdministrativeAgent]

Administrative Agent May File Proof of Claims
[a04-12707_1ex10d1.htm#AdministrativeAgent]

 

 

 

 

 

 

 

15.9. [a04-12707_1ex10d1.htm#NoOtherDuties]

No Other Duties, Etc. [a04-12707_1ex10d1.htm#NoOtherDuties]

 

 

 

 

 

 

16. [a04-12707_1ex10d1.htm#AssignmentAnd]

ASSIGNMENT AND PARTICIPATION [a04-12707_1ex10d1.htm#AssignmentAnd]

 

 

 

 

 

 

 

16.1. [a04-12707_1ex10d1.htm#SuccessorsAndAssigns]

Successors and Assigns; Conditions to Assignment
[a04-12707_1ex10d1.htm#SuccessorsAndAssigns]

 

 

 

 

 

 

 

16.2. [a04-12707_1ex10d1.htm#CertainRepresentationsAnd]

Certain Representations and Warranties; Limitations; Covenants
[a04-12707_1ex10d1.htm#CertainRepresentationsAnd]

 

 

 

 

 

 

 

16.3. [a04-12707_1ex10d1.htm#Register_The]

Register [a04-12707_1ex10d1.htm#Register_The]

 

 

 

 

 

 

 

16.4. [a04-12707_1ex10d1.htm#Participations_]

Participations [a04-12707_1ex10d1.htm#Participations_]

 

 

 

 

 

 

 

16.5. [a04-12707_1ex10d1.htm#AssigneeOrParticipant]

Assignee or Participant Affiliated with the Borrowers
[a04-12707_1ex10d1.htm#AssigneeOrParticipant]

 

 

 

 

 

 

 

16.6. [a04-12707_1ex10d1.htm#MiscellaneousAssignment]

Miscellaneous Assignment Provisions
[a04-12707_1ex10d1.htm#MiscellaneousAssignment]

 

 

 

 

 

 

 

16.7. [a04-12707_1ex10d1.htm#Syndication_]

Syndication [a04-12707_1ex10d1.htm#Syndication_]

 

 

 

 

 

 

17. [a04-12707_1ex10d1.htm#ProvisionsOfGeneral]

PROVISIONS OF GENERAL APPLICATIONS [a04-12707_1ex10d1.htm#ProvisionsOfGeneral]

 

 

 

 

 

 

 

17.1. [a04-12707_1ex10d1.htm#Setof]

Setoff [a04-12707_1ex10d1.htm#Setof]

 

 

 

 

 

 

 

17.2. [a04-12707_1ex10d1.htm#Expense]

Expenses [a04-12707_1ex10d1.htm#Expense]

 

 

 

 

 

 

 

17.3. [a04-12707_1ex10d1.htm#Indemnificati]

Indemnification [a04-12707_1ex10d1.htm#Indemnificati]

 

 

 

 

 

 

 

17.4. [a04-12707_1ex10d1.htm#TreatmentOfCertain]

Treatment of Certain Confidential Information
[a04-12707_1ex10d1.htm#TreatmentOfCertain]

 

 

 

 

 

 

 

 

17.4.1. [a04-12707_1ex10d1.htm#Confidentiali]

Confidentiality [a04-12707_1ex10d1.htm#Confidentiali]

 

 

 

 

 

 

 

 

17.4.2. [a04-12707_1ex10d1.htm#PriorNotification]

Prior Notification [a04-12707_1ex10d1.htm#PriorNotification]

 

 

 

 

 

 

 

 

17.4.3. [a04-12707_1ex10d1.htm#Othe]

Other [a04-12707_1ex10d1.htm#Othe]

 

 

 

 

 

 

 

17.5. [a04-12707_1ex10d1.htm#SurvivalOfCovenants]

Survival of Covenants, Etc [a04-12707_1ex10d1.htm#SurvivalOfCovenants]

 

 

 

 

 

 

 

17.6. [a04-12707_1ex10d1.htm#Notic]

Notices [a04-12707_1ex10d1.htm#Notic]

 

 

 

 

 

 

 

17.7. [a04-12707_1ex10d1.htm#Governi]

Governing Law [a04-12707_1ex10d1.htm#Governi]

 

 

 

 

 

 

 

17.8. [a04-12707_1ex10d1.htm#Headi]

Headings [a04-12707_1ex10d1.htm#Headi]

 

 

 

 

 

 

 

17.9. [a04-12707_1ex10d1.htm#Counterpa]

Counterparts [a04-12707_1ex10d1.htm#Counterpa]

 

 

 

 

 

 

 

17.10. [a04-12707_1ex10d1.htm#EntireAgreement]

Entire Agreement, Etc [a04-12707_1ex10d1.htm#EntireAgreement]

 

 

 

 

 

 

 

17.11. [a04-12707_1ex10d1.htm#WaiverOfJury]

Waiver of Jury Trial [a04-12707_1ex10d1.htm#WaiverOfJury]

 

 

ix

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

 

 

17.12. [a04-12707_1ex10d1.htm#Consents]

Consents, Amendments, Waivers, Etc [a04-12707_1ex10d1.htm#Consents]

 

 

 

 

 

 

 

17.13. [a04-12707_1ex10d1.htm#BorrowersRepresentative]

Borrowers’ Representative [a04-12707_1ex10d1.htm#BorrowersRepresentative]

 

 

 

 

 

 

 

17.14. [a04-12707_1ex10d1.htm#Severab]

Severability [a04-12707_1ex10d1.htm#Severab]

 

 

 

 

 

 

 

17.15. [a04-12707_1ex10d1.htm#UsaPatriot]

USA Patriot Act Notice [a04-12707_1ex10d1.htm#UsaPatriot]

 

 

x

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

 

 

Exhibits

 

 

Exhibit A

Form of Note

Exhibit B

Form of Loan Request

Exhibit C

Form of Compliance Certificate

Exhibit D

Form of Agency Account Agreement

Exhibit E

Form of Assignment and Acceptance

Exhibit F

Form of Landlord Waiver

Exhibit G

Form of Instrument of Accession

 

 

 

Schedules

 

 

Schedule 1

Lenders and Commitments

Schedule 1.1

MS Division Restaurants

Schedule 8.3

Title to Properties; Leases

Schedule 8.4.2

Financial Statement Exceptions

Schedule 8.6(a)

Franchises, Patents, Copyrights, etc.

Schedule 8.6(b)

Liquor Management Agreements

Schedule 8.7

Litigation

Schedule 8.8

Material Contracts

Schedule 8.15

Certain Transactions

Schedule 8.16

Employee Benefit Plans

Schedule 8.18

Environmental Compliance

Schedule 8.19

Subsidiaries, Etc.

Schedule 8.20

Bank Accounts

Schedule 8.23

Restaurants

Schedule 8.25

Leases

Schedule 10.1

Existing Indebtedness

Schedule 10.2

Existing Liens

Schedule 10.3

Existing Investments

Schedule 12.7

Leasehold Mortgages Delivered on the Closing Date

 

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

 

REVOLVING CREDIT AGREEMENT

 

This REVOLVING CREDIT AGREEMENT is made as of July 23, 2004, by and among
MCCORMICK & SCHMICK ACQUISITION CORP., a Delaware corporation (“MSAC”),
MCCORMICK & SCHMICK RESTAURANT CORP., a Delaware corporation (“MSRC”), MCCORMICK
& SCHMICK MARYLAND LIQUOR, INC., a Maryland corporation, MCCORMICK & SCHMICK
ACQUISITION I TEXAS, INC., a Texas corporation (“MS Acquisition I”), MCCORMICK &
SCHMICK ACQUISITION II TEXAS, INC., a Delaware corporation (“MS Acquisition
II”), MCCORMICK & SCHMICK ACQUISITION TEXAS LP, a Texas limited partnership,
MCCORMICK & SCHMICK ACQUISITION III TEXAS, INC., a Texas corporation, MCCORMICK
& SCHMICK’S ATLANTA II, LLC, a Delaware limited liability company, MCCORMICK &
SCHMICK’S HACKENSACK, LLC, a Delaware limited liability company, MCCORMICK &
SCHMICK ORLANDO, LLC, a Delaware limited liability company, MCCORMICK & SCHMICK
DALLAS, L.P., a Texas limited partnership, MCCORMICK & SCHMICK DALLAS LIQUOR,
INC., a Texas corporation, MCCORMICK & SCHMICK AUSTIN, LP, a Texas limited
partnership, MCCORMICK & SCHMICK AUSTIN LIQUOR, INC., a Texas corporation, and
each of the other Subsidiaries of MSAC which shall from time to time hereafter
become a party hereto pursuant to §9.17 (collectively, the “Borrowers”), the
lending institutions listed on Schedule 1 as Lenders, FLEET NATIONAL BANK, as
administrative agent for itself and such other Lenders and BANC OF AMERICA
SECURITIES LLC, as arranger.

 

1.             DEFINITIONS AND RULES OF INTERPRETATION.

 

1.1.         Definitions.  The following terms shall have the meanings set forth
in this §1 or elsewhere in the provisions of this Credit Agreement referred to
below:

 

A&M Acquisition.  The acquisition by the Borrowers of three full-service Angelo
and Maxie’s restaurants in New York, Washington, D.C. and Virginia from Angelo
and Maxie’s Inc., a Delaware corporation.

 

A&M Acquisition Agreement.  The Asset Purchase Agreement, dated as of January 7,
2004, among West 52nd Street, Inc., CH-AM Acquisition, Inc., Angelo and Maxie’s,
Inc., MSAC and MSRC, as in effect without giving effect to any additional
amendments, modifications or waivers of the terms thereof other than amendments,
modifications and waivers permitted by §10.14.2, certified copies of which have
been delivered to the Administrative Agent.

 

A&M Acquisition Documents.  The A&M Acquisition Agreement, including all
exhibits and schedules thereto, and all other agreements, side letters and
documents executed in connection therewith, each in the form delivered to the

 

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

 

Administrative Agent on or prior to the Closing Date, together with amendments
or modifications thereto permitted pursuant to §10.14.2.

 

Acknowledgment and Consent. The Acknowledgment and Consent, dated as of the
Closing Date, and as the same may be amended from time to time hereafter, among
MS Acquisition I, MS Acquisition II and the Administrative Agent and in form and
substance satisfactory to the Administrative Agent.

 

Acquired Assets.  See §10.5.

 

Acquisition.  Any transaction, or any series of related transactions,
consummated prior to or after the Closing Date, in which the Borrowers or any
Subsidiary of a Borrower (in one transaction or as the most recent transaction
in a series of transactions) (a) acquires any business or all or substantially
all of the assets of any Person or any division or business unit thereof,
whether through purchase of assets, merger or otherwise, (b) directly or
indirectly acquires control of at least a majority (in number of votes) of the
Equity Interests of a corporation which have ordinary voting power for the
election of directors or (c) directly or indirectly acquires control of a
majority ownership in any partnership or joint venture.

 

Acquisition Documents.  Each of the 2001 Acquisition Documents, the A&M
Acquisition Documents, and all other agreements, side letters and documents
executed in connection with any Acquisition together with amendments or
modifications thereto permitted pursuant to §10.14.2.

 

Additional Security Documents.  All mortgages, pledge agreements, security
agreements and other security documents and all guarantees of the Obligations
entered into after the date hereof pursuant to §§9.17 and/or 9.19.

 

Adjusted Leverage Ratio.  As at any date of determination, the ratio of (a)
Consolidated Rental Expense for the Reference Period ending on such date
(multiplied by eight (8)) plus Consolidated Funded Indebtedness outstanding on
such date to (b) Consolidated EBITDAR for the Reference Period ending on such
date.

 

Adjustment Date.  The first day of the month immediately following the month in
which a Compliance Certificate is to be delivered by the Borrowers pursuant to
§9.4(d).

 

Administrative Agent.  Fleet, acting as agent for the Lenders and each other
Person appointed as the successor Administrative Agent in accordance with §15.9.

 

Administrative Agent’s Office.  The Administrative Agent’s office located at 100
Federal Street, Boston, Massachusetts 02110, or at such other location as the
Administrative Agent may designate in writing from time to time.

 

Administrative Agent’s Special Counsel.  Bingham McCutchen LLP or such other
counsel as may be approved by the Administrative Agent.

 

2

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

 

Affected Lenders.  See §6.8(c).

 

Affiliate.  Any Person that would be considered to be an affiliate of any
Borrower or a Lender (as the context requires) under Rule 144(a) of the Rules
and Regulations of the Securities and Exchange Commission, as in effect on the
date hereof, if such Borrower or such Lender were issuing securities.

 

Agency Accounts.  See §9.16.

 

Agency Account Agreements.  See §9.16.

 

Applicable Margin.  For each period commencing on an Adjustment Date through the
date immediately preceding the next Adjustment Date (each a “Rate Adjustment
Period”), the Applicable Margin with respect to Revolving Credit Loans (in each
case, for Base Rate Loans and Eurodollar Rate Loans) and for the Letters of
Credit shall be the applicable percentage set forth below with respect to each
such Revolving Credit Loan or Letter of Credit, as the case may be,
corresponding to the Adjusted Leverage Ratio, as determined for the most recent
Reference Period ending immediately prior to the applicable Rate Adjustment
Period:

 

 

 

 

 

Revolving Credit Loans

 

Level

 

Adjusted Leverage Ratio

 

Base Rate Loans

 

Eurodollar Rate
Loans and Letters
of Credit

 

I

 

< 3.00:1

 

0.25

%

1.75

%

II

 

> 3.00:1

 

0.75

%

2.25

%

 

Notwithstanding the foregoing, (a) for the period commencing on the Closing Date
through the Adjustment Date immediately following the date of delivery by the
Borrowers to the Administrative Agent of a Compliance Certificate for the fiscal
period ending March 26, 2005, the Applicable Margin shall be that percentage
corresponding to Level II in the table above; and (b) if the Borrowers fail to
deliver any Compliance Certificate pursuant to §9.4(d) hereof, then for the
period commencing on the date after the day on which such Compliance Certificate
was due through the date which is five (5) Business Days after such Compliance
Certificate is delivered, the Applicable Margin shall be that percentage
corresponding to Level II in the table above.

 

Applicable Pension Legislation.  At any time, any pension or retirement benefits
legislation (be it national, federal, provincial, territorial or otherwise) then
applicable to any Borrower.

 

3

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

 

Approved Fund.  Any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

Arranger. Banc of America Securities LLC.

 

Asset Sale.  Any one or series of related transactions in which a Borrower or
any Subsidiary of a Borrower conveys, sells, leases, licenses or otherwise
disposes of, directly or indirectly, any of its properties, businesses or assets
(including in connection with a sale and leaseback transaction and the sale or
issuance of Equity Interests of any Subsidiary other than to a Borrower or any
wholly-owned Subsidiary of a Borrower but excluding any dispositions included in
the definition of “Casualty Event”) whether owned on the Closing Date or
thereafter acquired.

 

Assignment and Acceptance.  See §16.1.

 

Audited Financials.  Collectively, the audited consolidated balance sheets of
the Borrowers and their Subsidiaries dated December 27, 2003 and the audited
consolidated statement of income and cash flow of the Borrowers and their
Subsidiaries for the fiscal year ended December 27, 2003 (in each case with
related footnote disclosures).

 

Avado.  Avado Brands, Inc., a Georgia corporation.

 

Balance Sheet Date.  December 27, 2003.

 

Bank of America. Bank of America, N.A.

 

Base Rate.  The higher of (a) the variable annual rate of interest so announced
from time to time by the Administrative Agent as its “prime rate”, such rate
being a reference rate and not necessarily representing the lowest or best rate
being charged to any customer, and (b) one-half of one percent (0.5%) above the
Federal Funds Effective Rate.  For the purposes of this definition, “Federal
Funds Effective Rate” shall mean for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three funds brokers of recognized standing selected by the
Administrative Agent.  Changes in the Base Rate resulting from any changes in
the Administrative Agent’s “prime rate” shall take place immediately without
notice or demand of any kind.

 

Base Rate Loans.  Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.

 

4

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

 

Bell Atlantic Consent.  The Written Consent of The Bell Atlantic Master Trust,
dated as of June 14, 2004 by Mellon Bank, N.A., solely in its capacity as
trustee for the Bell Atlantic Master Trust (as directed by Verizon Investment
Management Corp.).

 

Borrower(s).  As defined in the preamble hereto.

 

BRS.  Bruckmann, Rosser, Sherrill & Co. II, L.P., a limited partnership
organized under the laws of Delaware.

 

BRS Affiliate. (i) Any Person or account which is controlled by or under common
control with or managed by or under common management with, directly or
indirectly, BRS or any director, officer or employee of BRS, (ii) any director,
officer or employee of BRS or any family member of such director, officer or
employee, or (iii) any trust or other Person established by or for the benefit
of any director, officer or employee of BRS or family member thereof and
controlled by such director, officer, employee or family member.

 

Business Day.  Any day on which banking institutions in Boston, Massachusetts
and New York, New York, are open for the transaction of banking business and, in
the case of Eurodollar Rate Loans, also a day which is a Eurodollar Business
Day.

 

California Proposition 65.  The California Safe Drinking Water and Toxic
Enforcement Act of 1986, as amended.

 

Capital Assets.  Fixed assets, both tangible (such as land, buildings, fixtures,
machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with GAAP.

 

Capital Expenditures.  Amounts paid or Indebtedness incurred by the Borrowers or
any of their Subsidiaries (net of any tenant improvement allowances related to a
Restaurant) in connection with (i) the purchase or lease by a Borrower or any of
its Subsidiaries of Capital Assets that would be required to be capitalized and
shown on the balance sheet of such Person in accordance with GAAP, including
without limitation or duplication, maintenance capital, build-out and new store
expenditures, (ii) without duplication, Consolidated Restaurant Pre-Opening
Costs, and (iii) the lease of any assets by a Borrower or any of its
Subsidiaries as lessee under any Synthetic Lease to the extent that such assets
would have been Capital Assets had the Synthetic Lease been treated for
accounting purposes as a Capitalized Lease.

 

Capitalized Leases.  Leases under which a Borrower or any of its Subsidiaries is
the lessee or obligor, the discounted future rental payment obligations under
which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with GAAP.

 

5

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

 

Cash Equivalents.  Any of the following: (a) marketable direct or guaranteed
obligations of the United States of America that mature within one (1) year from
the date of purchase by such Borrower; (b) demand deposits, certificates of
deposit, bank acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000; and (c) securities commonly known as
“commercial paper” issued by a corporation organized and existing under the laws
of the United States of America or any state thereof that at the time of
purchase have been rated and the ratings for which are not less than “P 1” if
rated by Moody’s, and not less than “A 1” if rated by S&P.

 

Casualty Event.  With respect to any property (including any interest in
property) of a Borrower or any of its Subsidiaries, any loss of, damage to, or
condemnation or other taking of, such property for which such Person receives
insurance proceeds, proceeds of a condemnation award or other compensation.

 

CERCLA.  See §8.18(a).

 

Change of Control. At any time, the occurrence of one or more of the following
events:  (a) any “person” or “group” (as such terms are used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), excluding any Sponsor, shall become, or obtain rights (whether by means
of warrants, options or otherwise) to become, the “beneficial owner” (as defined
in Rule 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
20% or more of the Voting Stock of the Parent unless the Sponsors own Voting
Stock having a greater percentage of the general voting power of the outstanding
Voting Stock than that held by such person or group, (b) the replacement of a
majority of the board of directors of the Parent or any of the Borrowers over a
two-year period from the directors who constituted the board of directors of
such Person at the beginning of such period, and such replacement shall not (i)
have been approved by a vote of at least a majority of the board of directors of
such Person then still in office who either were members of such board of
directors at the beginning of such period or whose election as a member of such
board of directors was previously so approved, or (ii) have been elected or
nominated for election by a Sponsor which owns Voting Stock of such Person; or
(c) the Parent shall cease to own directly or through a Borrower one hundred
percent (100%) of the issued and outstanding Equity Interests of the Borrowers.

 

CH.  Castle Harlan, Inc., a Delaware corporation.

 

CH Affiliate. (i) Any Person or account which is controlled by or under common
control with or managed by or under common management with, directly or
indirectly, CH or any director, officer or employee of CH, (ii) any director,
officer or employee of CH or any family member of such director, officer or
employee, or (iii) any trust or other Person established by or for the benefit
of any director, officer or employee of CH or family member thereof and
controlled by such director, officer, employee or family member.

 

6

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

 

Closing Date.  The first date on which the conditions set forth in §12 have been
satisfied and any Revolving Credit Loans are to be made or any Letter of Credit
is to be issued or continued hereunder.

 

Code.  The Internal Revenue Code of 1986, as amended.

 

Collateral.  All of the property, rights and interests of the Parent, the
Borrowers and their Subsidiaries that are or are intended to be subject to the
Liens created by the Security Documents.

 

Collateral Assignment of Acquisition Documents.  The Collateral Assignment of
Acquisition Documents, dated as of the Closing Date, and as the same may be
amended from time to time hereafter, among MSAC and the Administrative Agent and
in form and substance satisfactory to the Administrative Agent.

 

Commitment Fee.  See §2.2.

 

Compliance Certificate.  See §9.4(d).

 

Concentration Account.  Account number 3752149724 with Bank of America.

 

Consolidated or consolidated.  With reference to any term defined herein, shall
mean that term as applied to the accounts of the Borrowers and their
Subsidiaries, consolidated in accordance with GAAP.

 

Consolidated Cash Flow.  For any period, (a) Consolidated EBITDAR of the
Borrowers and their Subsidiaries for such period, minus (b) cash income taxes
paid during such period by the Borrowers and their Subsidiaries, minus (c)
Maintenance Capital Expenditures made by the Borrowers and their Subsidiaries
during such period.

 

Consolidated Cash Flow Ratio.  As at the end of any Reference Period, the ratio
of (a) Consolidated Cash Flow for such Reference Period to (b) Consolidated
Financial Obligations for such Reference Period plus Consolidated Rental Expense
for such Reference Period; provided that for purposes of calculating the
Consolidated Cash Flow Ratio for any Reference Period ending prior to December
25, 2004, there shall be excluded from the determination of “Financial
Obligations” for such period all payments made by the Borrowers in respect of
principal, interest or fees pursuant to the 2001 Credit Agreement and the 2003
Credit Agreement.

 

Consolidated EBITDA.  With respect to any fiscal period, an amount equal to the
sum of (a) Consolidated Pre-Tax Income of the Borrowers and their Subsidiaries
for such fiscal period, plus (b) in each case to the extent deducted in the
calculation of such Person’s Consolidated Pre-Tax Income and without
duplication, (i) depreciation and amortization for such period, plus (ii)
Consolidated Restaurant Pre-Opening Costs for such period, plus (iii)
Consolidated Total Interest Expense paid or accrued during such period, plus
(iv) noncash charges for rental expenses for such period,

 

7

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

 

plus (v) one-time noncash unamortized financing costs associated with the 2001
Credit Agreement and the 2003 Credit Agreement, plus (vi) all one-time upfront
fees (including without limitation bank fees and broker fees and commissions)
and other amounts paid, and all costs and expenses (including attorneys’ fees
and fees of other professionals) incurred and paid, by the Borrowers in
connection with (1) the consummation of the financing contemplated hereby, (2)
the termination of the Management Agreements and the Officer Fees, in an
aggregate amount not to exceed $3,000,000, (3) the termination or continuation
of the Interest Rate Agreements outstanding on the Closing Date, and (4) the
consummation of the initial public offering by MSSR of the common stock of MSSR
pursuant to an effective S-1 Registration Statement under the Securities Act of
1933, as amended, plus (vii) all costs and expenses incurred and paid by the
Borrowers and their Subsidiaries which are associated with compliance with
California Proposition 65 and with California employment wage and hour
litigation, in an aggregate amount not to exceed $2,000,000 during the period
from the Closing Date through to the Maturity Date, plus (viii) net losses from
sales of assets, whether or not extraordinary (excluding sales in the ordinary
course of business), plus (ix) impairment charges in connection with the
impairment or disposal of long-lived assets (including in connection with the
closure of restaurants) in accordance with Financial Accounting Standard Board
Statement No. 144, in an aggregate amount not to exceed $3,000,000 during the
period from the Closing Date through to the Maturity Date, plus (x) an aggregate
amount of $450,000 in connection with the A&M Acquisition, plus (xi) minority
interests and accrued dividends and accretions paid during such period with
respect to the Convertible Preferred Stock, in an aggregate amount not to exceed
$4,000,000 from and after the Closing Date, and minus (c) to the extent not
deducted in the calculation of Consolidated Pre-Tax Income, GAAP deferred rent
credits for such period and minus (d) net gains on sales of assets, whether or
not extraordinary (excluding sales in the ordinary course of business), and
other extraordinary gains.

 

Consolidated EBITDAR.  For any period, the sum of (a) the Consolidated EBITDA of
the Borrowers and their Subsidiaries for such period, plus (b) Consolidated
Rental Expense for such period.

 

Consolidated Financial Obligations.  For any period, the sum of (a) all
scheduled payments of principal or mandatory redemption amounts and fees on
Indebtedness (including any Subordinated Debt) of the Borrowers and their
Subsidiaries, including Capitalized Leases and including Synthetic Leases, due
and payable during such period or within six (6) Business Days following the
last day of such period, plus (b) Consolidated Total Interest Expense for such
period.  Demand obligations shall be deemed to be due and payable during any
period during which such obligations are outstanding.

 

Consolidated Funded Indebtedness.  With respect to the Borrowers and their
Subsidiaries, the sum, without duplication, of (a) the aggregate amount of
Indebtedness of the Borrowers and their Subsidiaries, on a consolidated basis,
to the extent relating to (i) the borrowing of money or the obtaining of credit,
including the issuance of notes or bonds or Indebtedness issued in connection
with the conversion of

 

8

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

 

any Equity Interests, (ii) the deferred purchase price of assets (other than
trade payables incurred in the ordinary course of business), (iii) Synthetic
Leases and Capitalized Leases, and (iv) the maximum drawing amount of all
letters of credit (including Letters of Credit hereunder) outstanding and
bankers acceptances, plus (b) Indebtedness of the type referred to in clause (a)
of another Person guaranteed by the Borrowers and any of their Subsidiaries;
provided that, for the avoidance of doubt, subclause (i) shall not include any
derivative contracts (as defined below in the definition of “Indebtedness”).

 

Consolidated Net Income (or Deficit).  The consolidated net income (or deficit)
of the Borrowers and their Subsidiaries, after deduction of all expenses, taxes,
and other proper charges, determined in accordance with GAAP, after eliminating
therefrom all extraordinary non-recurring items of income.

 

Consolidated Pre-Tax Income.  For any period, Consolidated Net Income (or
Deficit) for such period plus, to the extent deducted from the calculation of
Consolidated Net Income (or Deficit), income tax paid or payable for such
period, determined in accordance with GAAP.

 

Consolidated Rental Expense.  For any period, the sum of (a) all minimum rental
expense of the Borrowers and their Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, incurred under any rental agreements
or leases of real or personal property, including space leases and ground
leases, other than obligations in respect of any Capitalized Leases or any
Synthetic Leases, minus (b) noncash charges for rental expenses for such period,
plus (c) any GAAP deferred rent credits for such period deducted from
Consolidated EBITDA pursuant to clause (c) of the definition of ‘Consolidated
EBITDA’.

 

Consolidated Restaurant Pre-Opening Costs. “Start-up costs” (as such term is
defined in SOP 98-5 published by the American Institute of Certified Public
Accountants) related to the acquisition, opening and organizing of new
Restaurants, such costs including, without limitation, the cost of feasibility
studies, staff-training and recruiting, and travel costs for employees engaged
in such start-up activities.

 

Consolidated Total Interest Expense.  For any period, the aggregate amount of
cash interest required to be paid by the Borrowers and their Subsidiaries during
such period on all Indebtedness (including the Subordinated Debt) of the
Borrowers and their Subsidiaries outstanding during all or any part of such
period, whether such interest was or is required to be reflected as an item of
expense or capitalized, including (a) payments consisting of interest in respect
of any Capitalized Lease or any Synthetic Lease, (b) commitment fees and letter
of credit fees incurred in connection with the borrowing of money and (c)
facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money other than the financing provided under
this Credit Agreement and the other Loan Documents.

 

9

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Conversion Request.  A notice given by the Borrowers to the Administrative Agent
of the Borrowers’ election to convert or continue a Revolving Credit Loan in
accordance with §2.7.

 

Convertible Preferred Stock.  The Parent’s 13% Senior Exchangeable Preferred
Stock, par value $1.00 per share, issued pursuant to the Stock and Warrant
Purchase Agreement.

 

Credit Agreement.  This Revolving Credit Agreement, including the Schedules and
Exhibits hereto.

 

Default.  See §14.1.

 

Delinquent Lender.  See §15.5.3.

 

Developer.  Vineyard Creek, LLC, a California limited liability company.

 

Distribution.  The declaration or payment of any dividend on or in respect of
any shares of any class of Equity Interests of a Person, other than dividends
payable solely in Equity Interests of such Person; the purchase, redemption,
defeasance, retirement or other acquisition of any shares of any class of Equity
Interests of a Person, directly or indirectly through a Subsidiary of such
Person or otherwise (including the setting apart of assets for a sinking or
other analogous fund to be used for such purpose); the return of capital by a
Person to its shareholders as such; or any other distribution on or in respect
of any shares of any class of Equity Interests of such Person.

 

Dollars or $.  Dollars in lawful currency of the United States of America.

 

Domestic Lending Office.  Initially, the office of each Lender designated as
such in Schedule 1 hereto; thereafter, such other office of such Lender, if any,
located within the United States that will be making or maintaining Base Rate
Loans.

 

Drawdown Date.  The date on which any Revolving Credit Loan is made or is to be
made, and the date on which any Revolving Credit Loan is converted or continued
in accordance with §2.7.

 

EBITDA Margin.  As at any date of determination, the percentage obtained by
dividing (a) the Consolidated EBITDA of the Borrowers as at the end of the most
recently ended Reference Period for which the Borrowers have delivered a
Compliance Certificate by (b) the consolidated revenue (as determined in
accordance with GAAP) of the Borrowers for such Reference Period.

 

Eligible Assignee.  Means (a) any Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, and (ii) unless an Event of Default has
occurred and is continuing, the Borrowers (each such approval not to be
unreasonably withheld or

 

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delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall
not include the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries.

 

Employee Benefit Plan.  Any employee benefit plan within the meaning of §3(3) of
ERISA maintained or contributed to by the Borrowers, or any ERISA Affiliate if
any Borrower has any liability for such plan, other than a Guaranteed Pension
Plan or a Multiemployer Plan.

 

Environmental Laws.  See §8.18(a).

 

EPA.  See §8.18(b).

 

Equity Documents.  The Registration Rights Agreement, dated as of August 22,
2001, by and among MS LLC, BRS, Castle Harlan Partners III, L.P., Julie Frist,
David B. Pittaway, Bell Atlantic Master Trust and the other Members referenced
therein.

 

Equity Interests.  All equity interests of a Person, including, without
limitation, any (a) common or preferred stock, (b) limited or general
partnership interests, (c) limited liability company membership interests, (d)
options, warrants, or other rights to purchase or acquire any Equity Interest,
or (e) securities convertible into any Equity Interest.

 

Equity Issuance.  The sale or issuance by the Parent, any Borrower or any of its
Subsidiaries of any of its Equity Interests to any Person other than, in the
case of the Borrowers, another Borrower.

 

ERISA.  The Employee Retirement Income Security Act of 1974, as amended.

 

ERISA Affiliate.  Any Person which is treated as a single employer with any of
the Borrowers under §414 of the Code.

 

ERISA Reportable Event.  A reportable event with respect to a Guaranteed Pension
Plan within the meaning of §4043 of ERISA and the regulations promulgated
thereunder.

 

Eurocurrency Reserve Rate.  For any day with respect to a Eurodollar Rate Loan,
the maximum rate (expressed as a decimal) at which any bank subject thereto
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against “Eurocurrency Liabilities” (as
that term is used in Regulation D), if such liabilities were outstanding.  The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.

 

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Eurodollar Business Day.  Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Administrative Agent
in its sole discretion acting in good faith.

 

Eurodollar Lending Office.  Initially, the office of each Lender designated as
such in Schedule 1 hereto; thereafter, such other office of such Lender, if any,
that shall be making or maintaining Eurodollar Rate Loans.

 

Eurodollar Rate.  For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (a) the rate at which Dollar deposits for
such Interest Period are offered based on information presented on the page of
the Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period and in an amount comparable to the amount of the Eurodollar
Rate Loan of the Administrative Agent to which such Interest Period applies as
of 10:00 a.m. (Boston time) two (2) Eurodollar Business Days prior to the
beginning of such Interest Period or (b) if such information on such Telerate
Page (or any successor thereto) is not available, the arithmetic average of the
rates per annum (rounded upwards to the nearest 1/16 of one percent) of the rate
at which the Reference Lender’s Eurodollar Lending Office is offered Dollar
deposits two Eurodollar Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations of such Eurodollar Lending Office are
customarily conducted, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to the amount
of the Eurodollar Rate Loan of the Administrative Agent to which such Interest
Period applies; divided by in the case of a rate determined by either clause (a)
or clause (b) above, a number equal to 1.00 minus the Eurocurrency Reserve Rate,
if applicable.

 

Eurodollar Rate Loans.  Revolving Credit Loans bearing interest calculated by
reference to the Eurodollar Rate.

 

Event of Default.  See §14.1.

 

Existing Letters of Credit.  See §5.7.

 

Fee Letter.  The fee letter, dated on or prior to the Closing Date, between the
Borrowers and the Administrative Agent.

 

Fees.  Collectively, the Commitment Fee, the Letter of Credit Fees, the Fronting
Fees and the fees payable pursuant to the Fee Letter.

 

Financial Affiliate.  A Subsidiary of the bank holding company controlling any
Lender, which Subsidiary is engaging in any of the activities permitted by §4(e)
of the Bank Holding Company Act of 1956 (12 U.S.C. §1843).

 

Fleet.  Fleet National Bank, a national banking association.

 

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FQ1, FQ2, FQ3, FQ4. The first, second, third and fourth fiscal quarters,
respectively, of a specified fiscal year.

 

Franchise Agreement.  Each franchise agreement between a Borrower or any
Subsidiary of a Borrower and a third Person which sets forth the terms and
conditions for the operation by such Person, as a franchisee, of a restaurant.

 

Fronting Fee. See §5.6.

 

GAAP or generally accepted accounting principles.  (a) When used in §11, whether
directly or indirectly through reference to a capitalized term used therein,
means (i) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the fiscal year ended on the Balance Sheet Date, and (ii) to the
extent consistent with such principles, the accounting practice of the Borrowers
reflected in the Audited Financials for the year ended on the Balance Sheet
Date, and (b) when used in general, other than as provided above, means
principles that are (i) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (ii) consistently applied with past financial statements of
the Borrowers adopting the same principles, provided that in each case referred
to in this definition of “GAAP” a certified public accountant would, insofar as
the use of such accounting principles is pertinent, be in a position to deliver
an unqualified opinion (other than a qualification regarding changes in GAAP) as
to financial statements in which such principles have been properly applied;
provided, that despite FASB 150, redeemable preferred stock of any Borrower
shall not, for purposes of this Credit Agreement, be treated as “Indebtedness”.
In the event any “Accounting Changes” (as defined below) shall occur and such
changes affect financing covenants, standards or terms in this Credit Agreement,
then the Borrowers and the Lenders agree to enter into negotiations in order to
amend such provisions of this Credit Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating the
financial condition of the Borrowers shall be the same as if such Accounting
Changes had not been made, and until such time as such an amendment shall have
been executed and delivered by the Borrowers and the Required Lenders, (a) all
financial covenants, standards and terms in this Credit Agreement shall be
calculated and/or construed as if such Accounting Changes had not been made, and
(b) the Borrowers shall prepare footnotes to the financial statements required
to be delivered hereunder that show the differences between the financial
statements delivered (which reflect such Accounting Changes) and the basis for
calculating financial covenant compliance (without reflecting such Accounting
Changes) and the basis for calculating financial covenant compliance (without
reflecting such Accounting Changes).  “Accounting Changes” means: (x) changes in
accounting principles required by GAAP and implemented by the Company and (y)
changes in accounting principles recommended by the Borrowers’ certified public
accountants.

 

Governing Documents.  With respect to any Person, its certificate or articles of
incorporation, partnership agreement, membership agreement or other similar

 

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charter agreement, as applicable, its by-laws and all shareholder agreements,
voting trusts and similar arrangements applicable to any of its Equity
Interests.

 

Governmental Authority.  Any foreign, federal, state, regional, local, municipal
or other government, or any department, commission, board, bureau, agency,
public authority or instrumentality thereof, or any court or arbitrator.

 

Growth Capital Expenditures.  Without duplication, Capital Expenditures related
to the construction, acquisition or opening of new Restaurants during any fiscal
year, plus Capital Expenditures relating to any Permitted Acquisition during any
fiscal year, plus to the extent not included in the calculation of such Capital
Expenditures, Consolidated Restaurant Pre-Opening Costs plus Capital
Expenditures relating to the conversion and/or remodeling of any existing
Restaurant; provided, however, that the purchase price paid by the Borrowers
and/or their Subsidiaries for the A&M Acquisition shall not constitute and shall
not be included for purposes of Growth Capital Expenditures.

 

Guaranteed Pension Plan.  Any employee pension benefit plan within the meaning
of §3(2) of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate the benefits of which are guaranteed on termination in full or in part
by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

 

Hazardous Substances.  See §8.18(b).

 

Incurrence Ratio.  As at any date of determination, the maximum Adjusted
Leverage Ratio permitted under §11.1 as at the end of the most recently ended
Reference Period for which the Borrowers have delivered a Compliance
Certificate, less 0.25.

 

Indebtedness.  As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:

 

(a)   every obligation of such Person for money borrowed,

 

(b)   every obligation of such Person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses,

 

(c)   every reimbursement obligation of such Person with respect to letters of
credit, bankers’ acceptances or similar facilities issued for the account of
such Person,

 

(d)   every obligation of such Person issued or assumed as the deferred purchase
price of property or services (including securities repurchase agreements but
excluding trade accounts payable or accrued liabilities arising in the ordinary
course of business which are not overdue or which are being contested in good

 

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faith and for which the Borrowers maintain sufficient reserves in accordance
with GAAP),

 

(e)   every obligation of such Person under any Capitalized Lease,

 

(f)    every obligation of such Person under any Synthetic Lease,

 

(g)   all sales by such Person of (i) accounts or general intangibles for money
due or to become due, (ii) chattel paper, instruments or documents creating or
evidencing a right to payment of money or (iii) other receivables (collectively
“receivables”), whether pursuant to a purchase facility or otherwise, other than
in connection with the disposition of the business operations of such Person
relating thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of such Person
to pay any discount, interest, fees, indemnities, penalties, recourse, expenses
or other amounts in connection therewith,

 

(h)   every obligation of such Person (an “equity related purchase obligation”)
to purchase, redeem, retire or otherwise acquire for value any Equity Interests
of such Person or any rights measured by the value of such Equity Interests,

 

(i)    every obligation of such Person under any forward contract, futures
contract, swap, option or other financing agreement or arrangement (including,
without limitation, caps, floors, collars and similar agreements), the value of
which is dependent upon interest rates, currency exchange rates, commodities or
other indices (a “derivative contract”),

 

(j)    every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent that such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is not
liable therefor and such terms are enforceable under applicable law, and

 

(k)   every obligation, contingent or otherwise, of such Person guaranteeing, or
having the economic effect of guarantying or otherwise acting as surety for, any
obligation of a type described in any of clauses (a) through (j) (the “primary
obligation”) of another Person (the “primary obligor”), in any manner, whether
directly or indirectly, and including, without limitation, any obligation of
such Person (i) to purchase or pay (or advance or supply funds for the purchase
of) any security for the payment of such primary obligation, (ii) to purchase
property, securities or services for the purpose of assuring the payment of such
primary obligation, or (iii) to maintain working capital, equity capital or
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.

 

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The “amount” or “principal amount” of any Indebtedness at any time of
determination represented by (i) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (ii) any
Capitalized Lease shall be the principal component of the aggregate of the
rentals obligation under such Capitalized Lease payable over the term thereof
that is not subject to termination by the lessee, (iii) any sale of receivables
shall be the amount of unrecovered capital or principal investment of the
purchaser (other than any of the Borrowers or any of their wholly-owned
Subsidiaries) thereof, excluding amounts representative of yield or interest
earned on such investment, (iv) any Synthetic Lease shall be the stipulated loss
value, termination value or other equivalent amount, (v) any derivative contract
shall be the maximum amount of any termination or loss payment required to be
paid by such Person if such derivative contract were, at the time of
determination, to be terminated by reason of any event of default or early
termination event thereunder, whether or not such event of default or early
termination event has in fact occurred, (vi) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price and (vii) any guaranty or other contingent liability referred
to in clause (k) shall be an amount equal to the stated or determinable amount
of the primary obligation in respect of which such guaranty or other contingent
obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.

 

Indemnified Liabilities.  See §17.3.

 

Indemnified Person.  See §17.3.

 

Ineligible Securities.  Securities which may not be underwritten or dealt in by
member banks of the Federal Reserve System under Section 16 of the Banking Act
of 1933 (12 U.S.C. §24, Seventh), as amended.

 

Initial Public Offering.  An initial public offering by MSSR of the common stock
of MSSR pursuant to an effective S-1 Registration Statement under the Securities
Act of 1933, as amended, which consists of at least thirty-nine point six
percent (39.6%) of issued and outstanding capital stock of MSSR after giving
effect to such offering.

 

Instrument of Accession.  See §3.

 

Interest Payment Date.  (a) As to any Base Rate Loan, the last day of the
calendar quarter with respect to interest accrued during such calendar quarter,
including, without limitation, the calendar quarter which includes the Drawdown
Date of such Base Rate Loan; and (b) as to any Eurodollar Rate Loan in respect
of which the Interest Period is (i) three (3) months or less, the last day of
such Interest Period and (ii) more than three (3) months, the date that is three
(3) months from the first day of such Interest Period and, in addition, the last
day of such Interest Period.

 

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Interest Period.  With respect to each Revolving Credit Loan, (a) initially, the
period commencing on the Drawdown Date of such Loan and ending on the last day
of one of the periods set forth below, as selected by the Borrowers in a Loan
Request or as otherwise required by the terms of this Credit Agreement (i) for
any Base Rate Loan, the last day of the calendar quarter; and (ii) for any
Eurodollar Rate Loan, one (1), two (2), three (3) or six (6) months; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Revolving Credit Loan and ending on the last
day of one of the periods set forth above, as selected by the Borrowers in a
Conversion Request; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:

 

(A)          if any Interest Period with respect to a Eurodollar Rate Loan would
otherwise end on a day that is not a Eurodollar Business Day, that Interest
Period shall be extended to the next succeeding Eurodollar Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Eurodollar Business Day;

 

(B)           if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the next
succeeding Business Day;

 

(C)           if the Borrowers shall fail to give notice as provided in §2.7,
the Borrowers shall be deemed to have requested a conversion of the affected
Eurodollar Rate Loan to a Base Rate Loan and the continuance of all Base Rate
Loans as Base Rate Loans on the last day of the then current Interest Period
with respect thereto;

 

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

 

(E)           any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.

 

Interest Rate Agreement.  Any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate futures contract,
interest rate option agreement or other similar agreement or arrangement to
which any Borrower and any Lender is a party and is designed to protect the
Borrowers against fluctuations in interest rates.

 

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Investments.  All expenditures made and all liabilities incurred (contingently
or otherwise) for the acquisition of stock or Indebtedness of, or for loans,
advances, capital contributions or transfers of property to, or in respect of
any guaranties (or other commitments as described under Indebtedness), or
obligations of, any Person.  In determining the aggregate amount of Investments
outstanding at any particular time: (a) the amount of any Investment represented
by a guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (b) there shall be included as an
Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (c) there shall be deducted
in respect of each such Investment any amount received as a return of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.

 

Lender Affiliate.  (a) With respect to any Lender, (i) an Affiliate of such
Lender or (ii) any entity (whether a corporation, partnership, limited liability
company, trust or legal entity) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by such Lender or
an Affiliate of such Lender and (b) with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other entity
(whether a corporation, partnership, limited liability company, trust or other
legal entity) that is a fund that invests in bank loans and similar extensions
of credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.

 

Lenders.  Each of the lending institutions listed on Schedule 1 hereto and any
other Person who becomes an assignee of any rights and obligations of a Lender
pursuant to §16 or who agrees to advance additional Revolving Credit Loans
pursuant to §3 and is approved by the Borrowers.

 

Letter of Credit.  See §5.1.1.

 

Letter of Credit Application.  See §5.1.1.

 

Letter of Credit Fee.  See §5.6.

 

Letter of Credit Participation.  See §5.1.4.

 

Lien.  Any mortgage, deed of trust, security interest, pledge, hypothecation,
assignment, attachment, deposit arrangement, encumbrance, lien (statutory,
judgment or otherwise), or other security agreement or preferential arrangement
of any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any Capitalized Lease, any Synthetic Lease, any financing
lease involving substantially the same economic effect as any of the foregoing
and the filing of

 

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any financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction).

 

Liquidity.  At any time, the sum of (a) all cash and Cash Equivalents of the
Borrowers plus (b) the Total Revolving Credit Commitment, minus the aggregate of
(A) the Maximum Drawing Amount, (B) all Unpaid Reimbursement Obligations, and
(C) outstanding Revolving Credit Loans (after giving effect to all amounts
requested).

 

Liquor Management Agreement.  Any agreement or contract between any of the
Borrowers and any of the Sellers pursuant to which such Borrower has obtained
the consent of such Seller to use liquor licenses issued to such Seller in the
operation of a particular Restaurant following the consummation of the 2001
Acquisition.

 

Loan Documents.  This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Fee Letter and the Security Documents,
and each other document or agreement entered into in connection herewith and
therewith.

 

Loan Request.  See §2.6.

 

Maintenance Capital Expenditures. Capital Expenditures that are not Growth
Capital Expenditures.  For the avoidance of doubt, Maintenance Capital
Expenditures shall include investments in new point of sale systems or
accounting systems.

 

Management Agreements.  Collectively, the Management Agreements, each dated as
of August 22, 2001, by and among CH, BRS, MSAC, and MSRC.

 

Material Adverse Effect.  With respect to any event or occurrence of whatever
nature (including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding):

 

(a)   a material adverse effect on the business, properties,  condition
(financial or otherwise), assets, operations or income of MSRC individually, or
the Borrowers and their Subsidiaries taken as a whole;

 

(b)   an adverse effect on the ability of MSRC individually, or the Borrowers
and their Subsidiaries, taken as a whole, to perform any of their respective
Obligations under any of the Loan Documents; or

 

(c)   any impairment of (i) the validity, binding effect or enforceability of
this Credit Agreement or any of the other Loan Documents, (ii) the rights,
remedies or benefits available to the Administrative Agent or any Lender under
any Loan Document, or (iii) the attachment, perfection or priority of any Lien
of the Administrative Agent under the Security Documents on any material portion
of the Collateral.

 

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Material Contracts.  Written or oral agreements or commitments of or relating to
the Parent, the Borrowers or their Subsidiaries that involve monetary
obligations of more than $500,000 per year.

 

Maturity Date. July 23, 2009.

 

Maximum Drawing Amount.  The maximum aggregate amount that the beneficiaries may
at any time draw under outstanding Letters of Credit, as such aggregate amount
may be reduced from time to time pursuant to the terms of the Letters of Credit.

 

Membership Interest Pledge Agreement. The Membership Interest Pledge Agreement,
dated as of the Closing Date, among MSAC and the Administrative Agent, and as
the same may be amended from time to time hereafter, and in form and substance
satisfactory to the Administrative Agent.

 

Moody’s.  Moody’s Investors Services, Inc.

 

Mortgaged Property.  Any Real Estate which is subject to any Mortgage.

 

Mortgages.  The several mortgages and deeds of trust, executed and delivered
from time to time from and after the Closing Date, as the same may have been
amended as of the Closing Date and as each of the same may be amended from time
to time hereafter, from the Borrowers and their Subsidiaries to the
Administrative Agent with respect to the fee and leasehold interests of the
Borrowers and their Subsidiaries in the Real Estate and in form and substance
reasonably satisfactory to the Administrative Agent.

 

MSAC.  As defined in the preamble hereto.

 

MS Acquisition I. McCormick & Schmick Acquisition I Texas, Inc., a Texas
corporation.

 

MS Acquisition II.  McCormick & Schmick Acquisition II Texas, Inc., a Delaware
corporation.

 

MS Division.  Avado (but only with respect to the Restaurants listed on Schedule
1.1 hereto operated by Avado as of March 31, 2001 and immediately prior to
August 22, 2001 and the assets and the liabilities directly related thereto),
MSHC and the MSHC Subsidiaries.

 

MSHC.  McCormick & Schmick Holding Corp., a Georgia corporation.

 

MSHC Subsidiaries.  Collectively, McCormick & Schmick Holding Corp., a Delaware
corporation, McCormick & Schmick Operating Corp., a Georgia corporation,
McCormick & Schmick TX General, Inc., a Georgia corporation, McCormick & Schmick
Limited, Inc., a Georgia corporation, McCormick & Schmick of Texas, LP, a Texas
limited partnership, McCormick & Schmick’s SCP VIII, Inc., an Oregon
corporation, McCormick

 

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& Schmick’s RMP III, Inc., an Oregon corporation, McCormick & Schmick of
Montgomery County, Inc., a Georgia corporation, and McCormick and Schmick TX
Liquor, Inc., a Texas corporation.

 

MS LLC.  McCormick & Schmick Holdings, LLC, a Delaware limited liability
company, which was merged with MSSR on or about the Closing Date, with MSSR
being the surviving entity.

 

MSRC.  As defined in the preamble hereto.

 

MSSR.  McCormick & Schmick’s Seafood Restaurants, Inc., a Delaware corporation,
which was merged with and into MS LLC on or about the Closing Date, with MSSR
being the surviving entity.

 

Multiemployer Plan.  Any multiemployer plan within the meaning of §3(37) of
ERISA maintained or contributed to by any of the Borrowers or any ERISA
Affiliate.

 

Net Cash Equity Issuance Proceeds.  With respect to any Equity Issuance, the
excess of the gross cash proceeds received by such Person for such Equity
Issuance after deduction of all reasonable and customary transaction expenses
(including, without limitation, underwriting discounts and commissions) actually
incurred in connection with such a sale or other issuance.

 

Net Cash Sale Proceeds.  The net cash proceeds received by a Person in respect
of any Asset Sale, less the sum of (a) all reasonable out-of-pocket fees,
commissions and other reasonably and customary direct expenses actually incurred
in connection with such Asset Sale, including the amount of any transfer or
documentary taxes required to be paid by such Person in connection with such
Asset Sale, and (b) the aggregate amount of cash so received by such Person
which is required to be used to retire (in whole or in part) any Indebtedness
(other than under the Loan Documents) of such Person permitted by this Credit
Agreement that was secured by a Lien permitted by this Credit Agreement having
priority over the Liens (if any) of the Administrative Agent (for the benefit of
the Administrative Agent and the Lenders) with respect to such assets
transferred and which is required to be repaid in whole or in part (which
repayment, in the case of any other revolving credit arrangement or multiple
advance arrangement, reduces the commitment thereunder) in connection with such
Asset Sale.

 

Net Cash Debt Proceeds.  With respect to any issuance of Subordinated Debt,  the
excess of the net cash proceeds received by such Person for such issuance after
deduction of all reasonable and customary transaction expenses (including,
without limitation, out-of-pocket expenses, underwriting discounts and
commissions) actually incurred in connection with such an issuance.

 

New Lending Office. See §6.2.4.

 

Non-U.S. Lender. See §6.2.3.

 

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Note Pledge Agreement.  The Note Pledge Agreement, dated as of the Closing Date,
and as the same may be amended from time to time hereafter, among the MSRC and
the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.

 

Note Record.  A Record with respect to a Note.

 

Notes. See §2.4.

 

Notice of Redemption.  The letter, dated June 9, 2004 from MSAC to The Bell
Atlantic Master Trust, c/o Mellon Bank, N.A., with respect to the redemption of
the Convertible Preferred Stock.

 

Obligations.  All indebtedness, obligations and liabilities of any of the
Borrowers and their Subsidiaries to any of the Lenders and the Administrative
Agent, individually or collectively, existing on the date of this Credit
Agreement or arising thereafter, direct or indirect, joint or several, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or any
Interest Rate Agreement or in respect of any of the Revolving Credit Loans made
or Reimbursement Obligations incurred or any of the Notes, Letter of Credit
Applications, Letters of Credit or other instruments at any time evidencing any
thereof.

 

Officer Fees.  Collectively, the fees payable by the Borrowers to William
McCormick and/or Douglas Schmick pursuant to the terms of each of the Covenant
Not to Compete Agreements, each dated as of January 1, 2004 by and between MSAC
and William McCormick and Douglas Schmick, as applicable.

 

outstanding.  With respect to the Revolving Credit Loans, the aggregate unpaid
principal thereof as of any date of determination.

 

Parent.  McCormick & Schmick Acquisition Corp. II, a Delaware corporation.

 

Parent Guaranty.  The Parent Guaranty, dated as of the Closing Date, as the same
may be amended from time to time hereafter, made by Parent in favor of the
Lenders and the Administrative Agent pursuant to which the Parent guaranties to
the Lenders and the Administrative Agent the payment and performance of the
Obligations and in form and substance satisfactory to the Lenders and the
Administrative Agent.

 

Parent Pledge Agreement.  The Stock Pledge Agreement, dated as of the Closing
Date, and as the same may be amended from time to time hereafter, between the
Parent and the Administrative Agent and in form and substance satisfactory to
the Administrative Agent.

 

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Partnership Pledge Agreement.  The Collateral Assignment of Partnership
Interests, dated as of the Closing Date, and as the same may be amended from
time to time hereafter, among MS Acquisition I, MS Acquisition II and the
Administrative Agent and in form and substance satisfactory to the
Administrative Agent.

 

PBGC.  The Pension Benefit Guaranty Corporation created by §4002 of ERISA and
any successor entity or entities having similar responsibilities.

 

Perfection Certificates.  The Perfection Certificates as defined in the Security
Agreement.

 

Permitted Acquisition.  Any Acquisition consummated after the Closing Date, by
any Borrower or any Subsidiary of a Borrower, so long as, in each case, either
the Required Lenders have given their written consent to such Acquisition or all
of the following conditions are satisfied:

 

(a)           after giving effect to the Acquisition, the assets comprising such
business (as used in this definition, the “Acquired Assets”) shall be owned or
leased exclusively by a Borrower or a Subsidiary of a Borrower;

 

(b)           any Indebtedness incurred or assumed in connection with the
Acquisition is Indebtedness permitted under §10.1 or its incurrence is consented
to by the Required Lenders;

 

(c)           in the case of a merger or consolidation, a Borrower, or a
wholly-owned direct or indirect Subsidiary of a Borrower, is the surviving
entity;

 

(d)           the Borrowers and their Subsidiaries shall have complied with the
requirements of §9.17 hereof;

 

(e)           the Borrowers shall have demonstrated to the reasonable
satisfaction of the Administrative Agent that, immediately after giving effect
to the Acquisition (including the making of any Revolving Credit Loans required
to finance such Acquisition and the incurrence of any Indebtedness required to
finance the Acquisition), all covenants (including covenants contained in §11 of
this Credit Agreement) contained herein would have been satisfied on a pro forma
basis as at the end of and for the most recently ended Reference Period;

 

(f)            the Borrowers shall have Liquidity (assuming pro-forma covenant
compliance) of at least $10,000,000 after giving effect to the Acquisition;

 

(g)           no Default or Event of Default is continuing immediately prior to
the Acquisition, and no Default or Event of Default would result from the
Acquisition immediately after such Acquisition;

 

(h)           the Administrative Agent shall have received reasonably
satisfactory evidence that the business to be acquired has complied with, and,
immediately

 

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following the consummation of the Acquisition, is in compliance with, in all
material respects, all applicable laws; and

 

(i)            prior to the closing of the Acquisition, the Borrowers have
delivered to the Administrative Agent the definitive acquisition documents
between the applicable Borrower or one of their Subsidiaries and the applicable
selling entities.

 

Permitted ECF Growth CapEx Amount.  For any period, (a) Consolidated Net Income
of the Borrowers and their Subsidiaries, plus (b) depreciation and amortization
for such period, plus (c) all one-time upfront fees (including without
limitation bank fees and broker fees and commissions) paid, and all deferred
loan and other costs and expenses (including attorneys’ fees and fees of other
professionals) incurred and paid, by the Borrowers in connection with this
Credit Agreement, plus (d) minority interest (as defined in GAAP), minus (e)
Capital Expenditures during such period.

 

Permitted Liens.  Liens permitted by §10.2.

 

Person.  Any individual, corporation, limited liability company, partnership,
limited liability partnership, trust, other unincorporated association,
business, or other legal entity, and any Governmental Authority.

 

Pledge Agreement.  The Stock Pledge Agreement, dated as of the Closing Date, and
as the same may be amended from time to time hereafter, among the Borrowers and
the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.

 

Pro Forma Balance Sheet.  See §8.4.3.

 

RCRA.  See §8.18(a).

 

Real Estate.  All real property at any time owned or leased (as lessee or
sublessee) by any of the Borrowers or any of their Subsidiaries.

 

Real Estate Documentation. See §9.13(c).

 

Real Estate Leases.  Leases, including ground leases and space leases, pursuant
to which any of the Borrowers or any of their Subsidiaries leases Real Estate.

 

Record.  The grid attached to a Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by any Lender with
respect to any Revolving Credit Loan referred to in such Note.

 

Reference Lender.  Fleet.

 

Reference Period.  As of any date of determination, the period of four (4)
consecutive fiscal quarters of the Borrowers and their Subsidiaries ending on
such date,

 

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or if such date is not a fiscal quarter end date, the period of four (4)
consecutive fiscal quarters most recently ended (in each case treated as a
single accounting period); provided, however, (a) solely for purposes of
calculating the Adjusted Leverage Ratio and Consolidated Cash Flow Ratio set
forth in §11.1 and 11.2, until four (4) fiscal quarters of the Borrowers and
their Subsidiaries have elapsed since June 26, 2004, “Reference Period” shall
mean, such shorter period of one (1), two (2) or three (3) full fiscal quarters
elapsed since June 26, 2004 and (b) solely for purposes of calculating the
Consolidated Funded Indebtedness for purposes of the Adjusted Leverage Ratio in
§§11.1, until four (4) fiscal quarters of the Borrowers and their Subsidiaries
have elapsed since June 26, 2004, the actual amount of Consolidated Funded
Indebtedness shall be multiplied by twenty-five percent (25%) for every fiscal
quarter in such shorter Reference Period.

 

Register.  See §16.3.

 

Reimbursement Obligation.  The Borrowers’ obligation to reimburse the
Administrative Agent and the Lenders on account of any drawing under any Letter
of Credit as provided in §5.2.

 

Related Parties. 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.

 

Required Lenders.  As of any date, any combination of Lenders the sum of whose
aggregate Revolving Credit Commitments constitute at least sixty-six and
two-thirds percent (66 2/3%) of the sum of the Total Revolving Credit
Commitment, or, if the Total Revolving Credit Commitment has been terminated or
if the Maturity Date has occurred, any combination of Lenders holding at least
sixty-six and two-thirds percent (66 2/3%) of the total outstanding principal
amount of the Revolving Credit Loans on such date; provided that at any time
when there are not more than two (2) Lenders, “Required Lenders” shall mean all
Lenders.

 

Restaurant.  A particular restaurant at a particular location that is owned or
operated by a Borrower or a Subsidiary of a Borrower.

 

Restricted Payment.  In relation to the Borrowers and their Subsidiaries, any
(a) Distribution, (b) payment or prepayment by any Borrower or any of its
Subsidiaries of any amounts to such Borrower’s or such Subsidiary’s equity
holders or to any Affiliates of such equity holders or of such Borrower, in each
case, other than to a Borrower, (c) payment or prepayment of any amounts in
respect of any Subordinated Debt, (d) payments in respect of derivatives or
other transactions with any financial institution, commodities or stock exchange
or clearinghouse (a “Derivatives Counterparty”) obligating a Borrower or any of
its Subsidiaries to make payments to such Derivatives Counterparty as a result
of any change in market value of any Equity Interests of such Borrower or such
Subsidiary, or (e) any payments to any Sponsor.

 

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Revolving Credit Commitment.  With respect to each Lender, the amount set forth
on Schedule 1 hereto (as adjusted from time to time pursuant to §§3 and/or 16)
as the amount of such Lender’s commitment to make Revolving Credit Loans to, and
to participate in the issuance, extension and renewal of Letters of Credit for
the account of, the Borrowers, as the same may be reduced or increased from time
to time pursuant to §3 or §16 hereof; or if such commitment is terminated
pursuant to the provisions hereof, zero.

 

Revolving Credit Commitment Percentage.  With respect to each Lender, the
percentage set forth on Schedule 1 hereto as such Lender’s percentage of the
Total Revolving Credit Commitments as such percentage may be adjusted pursuant
to §3 or §16.

 

Revolving Credit Loans.  Revolving credit loans made or to be made by the
Lenders to the Borrowers pursuant to §2.

 

Santa Rosa Pledge Agreement.  The Pledge and Security Agreement, dated as of
June 7, 2002, by Developer and MSRC, whereby Developer granted a Lien on certain
furniture, fixtures and equipment located at Developer’s Santa Rosa, California
restaurant in favor of MSRC.

 

Santa Rosa Transaction.  Collectively, the (a) management and consulting
services to be provided by MSRC to Developer in connection with Developer’s
Santa Rosa, California restaurant pursuant to a Management Agreement, dated June
6, 2002, between Developer and MSRC, and (b) $400,000 loan advanced by MSRC to
Developer evidenced by a promissory note, dated as of June 7, 2002, issued by
Developer in favor of MSRC, and secured by the Santa Rosa Pledge Agreement.

 

SARA.  See §8.18(a).

 

Security Agreement.  The Security Agreement, dated as of the Closing Date, and
as the same may be amended from time to time hereafter, among the Borrowers,
each of the Subsidiaries of the Borrowers and the Administrative Agent, in form
and substance satisfactory to the Administrative Agent.

 

Security Documents.  The Parent Guaranty, the Security Agreement, the Parent
Pledge Agreement, the Pledge Agreement, the Partnership Pledge Agreement,
Membership Interest Pledge Agreement, the Note Pledge Agreement, the
Acknowledgment and Consent, the Mortgages, the Trademark Assignment, the Agency
Account Agreements, the Collateral Assignment of Acquisition Documents, each
Additional Security Document, and all other instruments and documents, including
without limitation Uniform Commercial Code financing statements, required to be
executed or delivered pursuant to any Security Document.

 

Sellers.  Collectively, Avado, MSHC, and each of the Persons listed on Schedule
1.1D of the 2001 Acquisition Agreement.

 

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S&P.  Standard & Poor’s Ratings Group.

 

Sponsor(s).  Collectively or individually, BRS, the BRS Affiliates, CH and/or
the CH Affiliates, as the context requires.

 

Stock and Warrant Purchase Agreement.  The Stock and Warrant Purchase Agreement,
dated as of August 22, 2001, between Mellon Bank, N.A., as trustee for The Bell
Atlantic Master Trust, and the Parent, and all exhibits and attachments thereto,
as in effect on August 22, 2001 and as the same has been supplemented, amended
or modified from time to time through the Closing Date, in each case in form and
substance reasonably satisfactory to the Administrative Agent.

 

Subordinated Debt.  Collectively, (a) unsecured Indebtedness of any Borrower or
any of its Subsidiaries permitted by §10.1(c) and evidenced by the Subordinated
Debt Documents and (b) unsecured Indebtedness of the Parent permitted pursuant
to §4.2(a) of the Parent Guaranty.

 

Subordinated Debt Documents.  Each document evidencing the Subordinated Debt
which has been delivered to the Administrative Agent in form and substance
reasonably satisfactory to the Required Lenders, together with amendments or
modifications thereto permitted pursuant to §10.14.3.

 

Subsidiary.  Any corporation, partnership, limited liability company,
association, trust, or other business entity of which the designated parent
shall at any time own directly or indirectly through a Subsidiary or
Subsidiaries at least a majority (by number of votes) of the outstanding Voting
Stock.

 

Synthetic Lease.  Any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for U.S. income tax purposes.

 

Termination Documents.  Collectively, the (a) Form of Termination of BRS and CH
Management Agreements, effective as of June 25, 2004, between MSAC, MSRC, MSSR,
BRS and CH, (b) Termination of Covenant Not to Compete, dated as of June 25,
2004, between MSAC, MS LLC, MSSR and Douglas L. Schmick, and (c) Termination of
Covenant Not to Compete, dated as of June 25, 2004, between MSAC, MS LLC, MSSR
and William P. McCormick, in each case in form and substance reasonably
satisfactory to the Administrative Agent.

 

Total Revolving Credit Commitment.  The sum of the Revolving Credit Commitments
of the Lenders, as in effect from time to time, which as of the Closing Date
shall be equal to the aggregate principal amount of $40,000,000, as such amount
may be decreased from time to time pursuant to the terms hereof or increased
after the Closing Date pursuant to the terms and conditions set forth in §3.

 

Trademark Assignment.  The Trademark Collateral Security and Pledge Agreement,
dated as of the Closing Date, as the same may be amended from time to time

 

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hereafter, made by the Borrowers in favor of the Administrative Agent and the
Assignment of Trademarks executed in connection therewith, all in form and
substance satisfactory to the Administrative Agent.

 

Type.  As to any Revolving Credit Loan its nature as a Base Rate Loan or a
Eurodollar Rate Loan.

 

2001 Acquisition.  The acquisition by the Borrowers from the Sellers of
substantially all of the assets of the MS Division of the Sellers.

 

2001 Acquisition Agreement.  Collectively, the (a) Asset Purchase Agreement,
dated as of June 7, 2001, among Sellers and MSAC, as amended by the First
Amendment of Asset Purchase Agreement, dated as of August 22, 2001, and (b) Bill
of Sale and Assignment and Assumption Agreement, dated December 10, 2001, among
MSRC and Sellers, each as in effect without giving effect to any additional
amendments, modifications or waivers of the terms thereof other than amendments,
modifications and waivers permitted by §10.14.2, certified copies of which have
been delivered to the Administrative Agent.

 

2001 Acquisition Documents.  The 2001 Acquisition Agreement, including all
exhibits and schedules thereto, and all other agreements, side letters and
documents executed in connection therewith, each in the form delivered to the
Administrative Agent prior to the Closing Date, together with amendments or
modifications thereto permitted pursuant to §10.14.2.

 

2001 Credit Agreement.  The Revolving Credit and Term Loan Agreement, dated as
of August 22, 2001, by and among certain of the Borrowers, Fleet and certain
other lending institutions party thereto.

 

2003 Credit Agreement.  The Amended and Restated Revolving Credit  Agreement,
dated as of October 28, 2003, by and among the Borrowers, Fleet and certain
other lending institutions party thereto.

 

Uniform Commercial Code. The Uniform Commercial Code as in effect in any
applicable jurisdiction.

 

Uniform Customs. See §5.1.3.

 

Unpaid Reimbursement Obligation.  Any Reimbursement Obligation for which the
Borrowers do not reimburse the Administrative Agent and the Lenders on the date
specified in, and in accordance with, §5.2.

 

Unprofitable Restaurant.  At the relevant time of reference thereto, any
Restaurant (a) which has been in operation for at least twelve (12) months and
(b) whose individual “Restaurant EBITDA” (as identified on the Borrowers’
financial statements applied consistently from and after the Closing Date) is
less than $1 for the twelve (12) most recently ended fiscal months; provided
that, solely for purposes of determining

 

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whether any Restaurant is an Unprofitable Restaurant, it shall be assumed that,
for the first six (6) months after any Restaurant commences operation, the
“Restaurant EBITDA” of such Restaurant shall be the greater of (i) its actual
“Restaurant EBITDA” for such period or (ii) $1.

 

Voting Stock.  Equity Interests, of any class or classes (however designated),
the holders of which are at the time entitled, as such holders, to vote for the
election of a majority of the directors (or persons performing similar
functions) of the corporation, general partner or partnership, limited liability
company, association, trust or other business entity involved, whether or not
the right so to vote exists by reason of the happening of a contingency.

 

Warrant Documents.  Collectively, (a) the Stock and Warrant Purchase Agreement,
(b) the Class A-2 Common Units Purchase Warrant issued August 22, 2001 by MS LLC
to Mellon Bank, N.A., as Trustee for The Bell Atlantic Master Trust pursuant to
the Stock and Warrant Purchase Agreement, (c) the Preferred Units Purchase
Warrant issued August 22, 2001 by MS LLC to Mellon Bank, N.A., as Trustee for
The Bell Atlantic Master Trust pursuant to the Stock and Warrant Purchase
Agreement, and (d) the Bell Atlantic Consent, in each case together with
amendments or modifications thereto.

 

1.2.         Rules of Interpretation.

 

(a)           A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement unless
specifically specified to the contrary, either in the defined term referring to
such document or agreement or otherwise.

 

(b)           The singular includes the plural and the plural includes the
singular.

 

(c)           A reference to any law includes any amendment or modification to
such law.

 

(d)           A reference to any Person includes its permitted successors and
permitted assigns.

 

(e)           Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a consistent basis by the accounting entity
to which they refer.

 

(f)            The words “include”, “includes” and “including” are not limiting.

 

(g)           All terms not specifically defined herein or by GAAP, which terms
are defined in the Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts, have the meanings assigned to them therein, with the term
“instrument” being that defined under Article 9 of the Uniform Commercial Code.

 

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(h)           Reference to a particular “§” refers to that section of this
Credit Agreement unless otherwise indicated.

 

(i)            The words “herein”, “hereof”, “hereunder” and words of like
import shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.

 

(j)            Unless otherwise expressly indicated, in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including,” the words “to” and “until” each mean “to but
excluding,” and the word “through” means “to and including.”

 

(k)           This Credit Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters.  All such limitations, tests and measurements are, however, cumulative
and are to be performed in accordance with the terms thereof.

 

(l)            This Credit Agreement and the other Loan Documents are the result
of negotiation among, and have been reviewed by counsel to, among others, the
Administrative Agent and the Borrowers and are the product of discussions and
negotiations among all parties.  Accordingly, this Credit Agreement and the
other Loan Documents are not intended to be construed against the Administrative
Agent or any of the Lenders merely on account of the Administrative Agent’s or
any Lender’s involvement in the preparation of such documents.

 

2.             THE REVOLVING CREDIT FACILITY.

 

2.1.         Commitment to Lend Revolving Credit Loans.  Subject to the terms
and conditions set forth in this Credit Agreement, each of the Lenders severally
agrees to lend to the Borrowers, and the Borrowers may borrow, repay and
reborrow from time to time from the Closing Date up to but not including the
Maturity Date upon notice by the Borrowers to the Administrative Agent given in
accordance with §2.6, such sums as are requested by the Borrowers up to a
maximum aggregate amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Lender’s Revolving Credit Commitment
minus such Lender’s Revolving Credit Commitment Percentage of the sum of the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations, provided that
the sum of the outstanding amount of the Revolving Credit Loans (after giving
effect to all amounts requested) plus the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not at any time exceed the Total Revolving
Credit Commitment at such time.  The Revolving Credit Loans shall be made pro
rata in accordance with each Lender’s Revolving Credit Commitment Percentage. 
Each request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by the Borrowers that the conditions set forth in
§12 and §13, in the case of the initial Revolving Credit Loans to be

 

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made on the Closing Date, and §13, in the case of all other Revolving Credit
Loans, have been satisfied on the date of such request.

 

2.2.         Commitment Fee.  The Borrowers jointly and severally agree to pay
to the Administrative Agent for the accounts of the Lenders in accordance with
their respective Revolving Credit Commitment Percentages a commitment fee (the
“Commitment Fee”) calculated at the rate of three-eighths of one percent
(0.375%) per annum on the average daily amount during each calendar quarter or
portion thereof from the Closing Date to the Maturity Date by which the Total
Revolving Credit Commitment minus the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the outstanding amount of Revolving
Credit Loans during such calendar quarter.  The Commitment Fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the Closing Date, with a final payment on the Maturity Date or any
earlier date on which the Revolving Credit Commitments shall terminate.

 

2.3.         Reduction of Total Revolving Credit Commitment.  The Borrowers
shall have the right at any time and from time to time upon five (5) Business
Days prior written notice to the Administrative Agent to reduce by $1,000,000 or
an integral multiple of $500,000 in excess thereof or to terminate entirely the
Total Revolving Credit Commitment, whereupon the Revolving Credit Commitments of
the Lenders shall be reduced pro rata in accordance with their respective
Revolving Credit Commitment Percentages of the amount specified in such notice
or, as the case may be, terminated.  Promptly after receiving any notice of the
Borrowers delivered pursuant to this §2.3, the Administrative Agent will notify
the Lenders of the substance thereof.  Upon the effective date of any such
reduction or termination, the Borrowers shall pay to the Administrative Agent
for the respective accounts of the Lenders the full amount of any Commitment Fee
then accrued on the amount of the reduction.  No reduction or termination of the
Revolving Credit Commitments may be reinstated.  In addition, the Total
Revolving Credit Commitment shall be reduced in accordance with §4.3.

 

2.4.         The Notes.  The Revolving Credit Loans shall be evidenced by
separate promissory notes of the Borrowers in substantially the form of
Exhibit A hereto (each a “Note”), dated as of the Closing Date (or such other
date on which a Lender may become a party hereto in accordance with §3 or §16
hereof) and completed with appropriate insertions.  One Note shall be payable to
the order of each Lender in a principal amount equal to such Lender’s Revolving
Credit Commitment or, if less, the outstanding amount of all Revolving Credit
Loans made by such Lender, plus interest accrued thereon, as set forth below. 
Each of the Borrowers irrevocably authorizes each Lender to make or cause to be
made, at or about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal on such Lender’s Note, an
appropriate notation on such Lender’s Note Record reflecting the making of such
Revolving

 

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Credit Loan or (as the case may be) the receipt of such payment.  The
outstanding amount of the Revolving Credit Loans set forth on such Lender’s Note
Record shall be prima facie evidence of the principal amount thereof owing and
unpaid to such Lender, but the failure to record, or any error in so recording,
any such amount on such Lender’s Note Record shall not limit or otherwise affect
the obligations of the Borrowers hereunder or under any Note to make payments of
principal of or interest on any Note when due.

 

2.5.         Interest on Revolving Credit Loans.  Except as otherwise provided
in §6.10,

 

(a)           Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest Period
with respect thereto at the rate per annum equal to the Base Rate plus the
Applicable Margin with respect to Base Rate Loans.

 

(b)           Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable Margin
with respect to Eurodollar Rate Loans.

 

The Borrowers jointly and severally promise to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect thereto.

 

2.6.         Requests for Revolving Credit Loans.  The Borrowers shall give to
the Administrative Agent written notice in the form of Exhibit B hereto (or
telephonic notice confirmed in a writing in the form of Exhibit B hereto) of
each Revolving Credit Loan requested hereunder (a “Loan Request”) (a) prior to
1:00 p.m. (Boston time) of the proposed Drawdown Date of any Base Rate Loan and
(b) prior to 1:00 p.m. (Boston time) on the third Eurodollar Business Day prior
to the proposed Drawdown Date of any Eurodollar Rate Loan.  Each such notice
shall specify (i) the principal amount of the Revolving Credit Loan requested,
(ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii) the
Interest Period for such Revolving Credit Loan and (iv) the Type of such
Revolving Credit Loan.  Promptly upon receipt of any such notice, the
Administrative Agent shall notify each of the Lenders thereof.  Each Loan
Request shall be irrevocable and binding on the Borrowers and shall obligate the
Borrowers to accept the Revolving Credit Loan requested from the Lenders on the
proposed Drawdown Date.  Each Loan Request shall be in a minimum aggregate
amount of $500,000 or an integral multiple of $500,000 in excess thereof.

 

2.7.         Conversion Options.

 

2.7.1.      Conversion to Different Type of Revolving Credit Loan.  The
Borrowers may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type,

 

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provided that (a) with respect to any such conversion of a Base Rate Loan to a
Eurodollar Rate Loan, the Borrowers shall give the Administrative Agent at least
three (3) Eurodollar Business Days prior written notice of such election; (b)
with respect to any such conversion of a Eurodollar Rate Loan into a Base Rate
Loan, such conversion shall only be made on the last day of the Interest Period
with respect thereto and (c) no Revolving Credit Loan may be converted into a
Eurodollar Rate Loan when any Default or Event of Default has occurred and is
continuing.  On the date on which such conversion is being made each Lender
shall take such action as is necessary to transfer its Revolving Credit
Commitment Percentage of such Revolving Credit Loans to its Domestic Lending
Office or its Eurodollar Lending Office, as the case may be.  All or any part of
outstanding Revolving Credit Loans of any Type may be converted into a Revolving
Credit Loan of another Type as provided herein, provided that any conversion of
a Base Rate Loan into a Eurodollar Rate Loan shall be in an aggregate principal
amount of $500,000 or an integral multiple of $500,000 in excess thereof.  Each
Conversion Request relating to the conversion of a Revolving Credit Loan to a
Eurodollar Rate Loan shall be irrevocable by the Borrowers.

 

2.7.2.      Continuation of Type of Revolving Credit Loan.  Any Revolving Credit
Loan of any Type may be continued as a Revolving Credit Loan of the same Type
upon the expiration of an Interest Period with respect thereto by compliance by
the Borrowers with the notice provisions contained in §2.7.1; provided that no
Eurodollar Rate Loan may be continued as such when any Default or Event of
Default has occurred and is continuing, but shall be automatically converted to
a Base Rate Loan on the last day of the first Interest Period relating thereto
ending during the continuance of any Default or Event of Default of which
officers of the Administrative Agent active upon the Borrowers’ account have
actual knowledge.  In the event that the Borrowers fail to provide any such
notice with respect to the continuation of any Eurodollar Rate Loan as such,
then such Eurodollar Rate Loan shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating thereto.  The
Administrative Agent shall notify the Lenders promptly when any such automatic
conversion contemplated by this §2.7 is scheduled to occur.

 

2.7.3.      Eurodollar Rate Loans.  Any conversion to or from Eurodollar Rate
Loans shall be in such amounts and be made pursuant to such elections so that,
after giving effect thereto, the aggregate principal amount of all Eurodollar
Rate Loans having the same Interest Period shall not be less than $500,000 or an
integral multiple of $500,000 in excess thereof.  No more than six (6) Revolving
Credit Loans that are Eurodollar Rate Loans having different Interest Periods
may be outstanding at any time.

 

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2.8.         Funds for Revolving Credit Loan.

 

2.8.1.      Funding Procedures.  Not later than 3:00 p.m. (Boston time) on the
proposed Drawdown Date of any Revolving Credit Loans, each of the Lenders will
make available to the Administrative Agent, at the Administrative Agent’s
Office, in immediately available funds, the amount of such Lender’s Revolving
Credit Commitment Percentage of the amount of the requested Revolving Credit
Loans.  Upon receipt from each Lender of such amount, and upon receipt of the
documents required by §§12 and 13 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Administrative Agent will make
available to the Borrowers the aggregate amount of such Revolving Credit Loans
made available to the Administrative Agent by the Lenders.  The failure or
refusal of any Lender to make available to the Administrative Agent at the
aforesaid time and place on any Drawdown Date the amount of its Revolving Credit
Commitment Percentage of the requested Revolving Credit Loans shall not relieve
any other Lender from its several obligation hereunder to make available to the
Administrative Agent the amount of such other Lender’s Revolving Credit
Commitment Percentage of any requested Revolving Credit Loans.

 

2.8.2.      Advances by Administrative Agent.  The Administrative Agent may,
unless notified to the contrary by any Lender prior to a Drawdown Date, assume
that such Lender has made available to the Administrative Agent on such Drawdown
Date the amount of such Lender’s Revolving Credit Commitment Percentage of the
Revolving Credit Loans to be made on such Drawdown Date, and the Administrative
Agent may (but it shall not be required to), in reliance upon such assumption,
make available to the Borrowers a corresponding amount.  If any Lender makes
available to the Administrative Agent such amount on a date after such Drawdown
Date, such Lender shall pay to the Administrative Agent on demand an amount
equal to the product of (a) the average computed for the period referred to in
clause (c) below, of the weighted average interest rate paid by the
Administrative Agent for federal funds acquired by the Administrative Agent
during each day included in such period, times (b) the amount of such Lender’s
Revolving Credit Commitment Percentage of such Revolving Credit Loans, times (c)
a fraction, the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of such Lender’s
Revolving Credit Commitment Percentage of such Revolving Credit Loans shall
become immediately available to the Administrative Agent, and the denominator of
which is 360.  A statement of the Administrative Agent submitted to such Lender
with respect to any amounts owing under this paragraph shall be prima facie
evidence of the amount due and owing to the Administrative Agent by such
Lender.  If the amount of such Lender’s Revolving Credit Commitment Percentage
of

 

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such Revolving Credit Loans is not made available to the Administrative Agent by
such Lender within three (3) Business Days following such Drawdown Date, the
Administrative Agent shall be entitled to recover such amount from the Borrowers
on demand, with interest thereon at the rate per annum applicable to the
Revolving Credit Loans made on such Drawdown Date.

 

2.9.         Repayment of Revolving Credit Loans.

 

2.9.1.      Maturity.  The Borrowers jointly and severally promise to pay on the
Maturity Date, and there shall become absolutely due and payable on the Maturity
Date, all of the Revolving Credit Loans outstanding on such date, together with
any and all accrued and unpaid interest thereon.

 

2.9.2.      Mandatory Repayments of the Revolving Credit Loans.  If at any time
the sum of the outstanding amount of the Revolving Credit Loans, the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations exceeds the Total
Revolving Credit Commitment at such time, then the Borrowers shall immediately
pay the amount of such excess to the Administrative Agent for the respective
accounts of the Lenders for application:  first, to any Unpaid Reimbursement
Obligations; second, to the Revolving Credit Loans; and third, to provide to the
Administrative Agent cash collateral for Reimbursement Obligations as
contemplated by §5.2(b) and (c).  Each payment of any Unpaid Reimbursement
Obligations or prepayment of Revolving Credit Loans shall be allocated among the
Lenders, in proportion, as nearly as practicable, to such Lender’s funded share
of the Reimbursement Obligation or (as the case may be) the respective unpaid
principal amount of each Lender’s Note, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion.

 

2.9.3.      Optional Repayments of the Revolving Credit Loans.  The Borrowers
shall have the right, at their election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
of any Eurodollar Rate Loans pursuant to this §2.9.3 may be made only on the
last day of the Interest Period relating thereto.  The Borrowers shall give the
Administrative Agent (a) no later than 1:00 p.m. (Boston time), prior written
notice on the date of any proposed prepayment pursuant to this §2.9.3 of Base
Rate Loans, and (b) no later than 1:00 p.m. (Boston time), two (2) Eurodollar
Business Days prior written notice of any proposed prepayment pursuant to this
§2.9.3 of Eurodollar Rate Loans, in each case specifying the proposed date of
prepayment of Revolving Credit Loans and the principal amount to be prepaid. 
Each such partial prepayment of the Revolving

 

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Credit Loans shall be in an integral multiple of $100,000, shall be accompanied
by the payment of accrued interest on the principal prepaid to the date of
prepayment and shall be applied, in the absence of instruction by the Borrowers,
first to the principal of Base Rate Loans and then to the principal of
Eurodollar Rate Loans.  Each partial prepayment shall be allocated among the
Lenders, in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Lender’s Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.

 

2.9.4.      Application of Payments Prior to an Event of Default.  Prior to the
occurrence of an Event of Default, if, and solely to the extent that, after
giving effect to the prepayment of any Base Rate Loans then outstanding, any
prepayment required to be made pursuant to §4.2 would require the Borrowers to
compensate any Lender pursuant to §6.9 with respect to any breakage costs
associated with Eurodollar Rate Loans, the Borrowers may at their option deposit
in their Concentration Account on the date of prepayment required under §4.2, as
applicable, cash in an amount equal to the aggregate amount of the Eurodollar
Rate Loans otherwise required to be prepaid on such date.  On the last day of
each Interest Period applicable to any such Eurodollar Rate Loans, the Borrowers
shall withdraw and pay in immediately available funds to the Administrative
Agent amounts then held in the Concentration Account and deposited therein
pursuant to this §2.9.4 sufficient to repay such Eurodollar Rate Loans of each
Lender.

 

3.             ADDITIONAL FINANCING.

 

At any time, and from time to time, the Borrowers may solicit the Lenders and
any other lending institutions to provide the Borrowers with additional
commitments to make Revolving Credit Loans under this Credit Agreement in an
aggregate amount not to exceed ten million dollars ($10,000,000), subject to the
limitations set forth below.  Neither the Administrative Agent nor any Lender
shall have any obligation to provide the Borrowers with all or any part of such
additional Revolving Credit Commitment; provided that by execution of this
Credit Agreement, the Administrative Agent and the Lenders shall be deemed to
have consented, without the need for further or subsequent consent, (a) to such
additional Revolving Credit Commitments which any other Lender or lending
institution may agree to provide for the Revolving Credit Loans which may be
advanced in respect thereof and any resulting changes in the Revolving Credit
Commitment Percentage, and (b) any amendments which may be made to the Loan
Documents in order to evidence and document such Revolving Credit Commitments
and Revolving Credit Loans to the extent that any such amendment (i) does not
amend any of the provisions specified in §17.12(a) as requiring the consent of
each Lender affected thereby, (ii) does not modify the relative priority of the
Revolving Credit Loans (including any such new Revolving Credit Loans) and
Revolving Credit Commitments (including any such new Revolving Credit
Commitments) with respect to the payment,

 

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guarantees, collateral or other collateral support, and (iii) is consistent with
all other requirements of this §3.  Any such additional Revolving Credit
Commitments (and the revolving Credit Loans funded pursuant thereto) shall be
otherwise treated (and be subject to the same as terms and conditions) as
Revolving Credit Commitments and Revolving Credit Loans hereunder.
Notwithstanding anything to the contrary set forth herein, no additional
Revolving Credit Commitments shall be permitted hereunder and no additional
Revolving Credit Loans may be advanced in respect thereof unless (1) no Default
or Event of Default shall have occurred and be then continuing or would result
immediately after giving effect to such additional Revolving Credit Commitments
and the Revolving Credit Loans to be advanced in respect thereof, assuming that
such Revolving Credit Loans were fully advanced on the effective date of such
additional commitments, (2) the Borrowers shall have delivered to the
Administrative Agent a Compliance Certificate demonstrating compliance with the
terms of the Credit Agreement immediately after giving pro forma effect to such
loans to be advanced in respect of the additional commitment and the application
of the proceeds thereof, such compliance to be calculated based on the
Borrowers’ Consolidated EBITDAR reported in connection with the preparation of
the Borrowers’ Compliance Certificate most recently delivered to the
Administrative Agent, (3) with respect to each lending institution not yet a
party hereto providing additional Revolving Credit Commitments, such lending
institution shall have become a party to this Credit Agreement (and become
subject to all the rights and obligations of a Lender hereunder) by executing
and delivering to the Administrative Agent an original, executed Instrument of
Accession in the form of Exhibit G hereto (an “Instrument of Accession”), (4)
the Borrowers shall have delivered to the Administrative Agent and the Lenders
notice that such solicitation has been made and, prior to the effectiveness of
such additional Revolving Credit Commitment, copies of all documents and
instruments related thereto and (5) the Borrowers shall have delivered to the
Administrative Agent copies of updated financial projections through the
Maturity Date.

 

4.             MANDATORY REPAYMENT OF REVOLVING CREDIT LOANS.

 

In addition to payments in respect of Revolving Credit Loans pursuant to §2.9,
the Revolving Credit Loans shall be repaid as follows:

 

4.1.         Intentionally Omitted.

 

4.2.         Proceeds of Certain Events.  Concurrently with the receipt (after
the Closing Date) by any of the Borrowers or any of their Subsidiaries of:

 

(a)           subject to the reinvestment provisions of §10.5.2, Net Cash Sale
Proceeds in excess of $500,000 per annum from Asset Sales (other than proceeds
from the sale, lease, license or other disposition of assets in the ordinary
course of business consistent with past practices);

 

(b)           Net Cash Equity Issuance Proceeds from an Equity Issuance by the
Parent, the Borrowers or any of their Subsidiaries (other than amounts not to

 

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exceed $500,000 in the aggregate after the date hereof arising from (i) any such
sale or issuance to its existing shareholders other than in connection with a
public offering of the equity securities of any Borrower and (ii) the sale or
issuance to any employee or director of such Borrower or such Subsidiary
pursuant to any stock option plan or compensatory arrangement approved by the
board of directors of such Person in the ordinary course of business and
consistent with past practices);

 

(c)           proceeds relating to (i) Casualty Events, less reasonable expenses
relating to such Casualty Events, which have not been reinvested in the
Borrowers’ business within two hundred and seventy (270) days of receipt of such
proceeds subject to §9.7.2, provided that, if (A) within such 270-day period
after the earlier to occur of receipt of such proceeds by the Borrowers or
receipt of such proceeds by the Administrative Agent, the Borrowers enter into
an agreement (which may be a purchase order) pursuant to which such reinvestment
shall be made, a copy of which shall be provided to the Administrative Agent,
and (B) within four hundred five (405) days following receipt of such proceeds
by the Borrowers or the Administrative Agent, the Borrowers shall have
completed, or shall have made significant progress toward completion of, such
reinvestment of such proceeds, then the Borrowers shall not be required to
prepay the Revolving Credit Loans in accordance with §4.3 but shall in any event
comply with §4.4 (provided, however, if a Default or Event of Default has
occurred and is continuing, such proceeds shall be immediately paid to the
Administrative Agent), and (ii) any tax refund with respect to any taxable year;
or

 

(d)           Net Cash Debt Proceeds from an issuance by the Parent, the
Borrowers or any of their Subsidiaries of Subordinated Debt;

 

then the Borrowers shall pay to the Administrative Agent for the respective
accounts of the Lenders an amount equal to one hundred percent (100%) of such
proceeds, to be applied in the manner set forth in §4.3 or, if applicable, §4.4.

 

4.3.         Application of Payments.  All mandatory prepayments pursuant to
§4.2 shall be applied to the principal of the outstanding Revolving Credit Loans
for application in accordance with the provisions of §2.9.2 and concurrently
with such prepayment, to reduce permanently the Total Revolving Credit
Commitment in an amount equal to such prepayment.  In the event that at the time
of such mandatory prepayment event, there are no outstanding Revolving Credit
Loans, the Total Revolving Credit Commitment shall be permanently reduced by the
amount that would otherwise have been prepaid pursuant to §4.2 had Revolving
Credit Loans been outstanding.  Any prepayment of principal of the Revolving
Credit Loans shall include all interest accrued to the date of such prepayment.

 

4.4.         Delivery of Proceeds.  The Borrowers shall deliver to the
Administrative Agent, promptly upon receipt thereof, all Net Cash Sale Proceeds
or proceeds relating to Casualty Events that may have to be applied to prepay
the

 

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Revolving Credit Loans if not reinvested as permitted in §4.2(a) and (b), to be
held as Collateral pending reinvestment in accordance with such §§4.2(a) and
(b).  Upon the Borrowers’ request, any cash amounts delivered to the
Administrative Agent to be held as Collateral under this §4.4 may be applied to
repay Revolving Credit Loans.

 

5.             LETTERS OF CREDIT.

 

5.1.         Letter of Credit Commitments.

 

5.1.1.      Commitment to Issue Letters of Credit.  Subject to the terms and
conditions hereof and the execution and delivery by the Borrowers of a letter of
credit application on the Administrative Agent’s customary form (a “Letter of
Credit Application”), the Administrative Agent on behalf of the Lenders and in
reliance upon the agreement of the Lenders set forth in §5.1.4 and upon the
representations and warranties of the Borrowers contained herein, agrees, in its
individual capacity, to issue, extend and renew for the account of a Borrower
one or more standby or documentary letters of credit (individually, a “Letter of
Credit”), in such form as may be requested from time to time by such Borrower
and agreed to by the Administrative Agent; provided, however, that, after giving
effect to such request, (a) the sum of the aggregate Maximum Drawing Amount and
all Unpaid Reimbursement Obligations shall not exceed $10,000,000 at any one
time and (b) the sum of (i) the Maximum Drawing Amount on all Letters of Credit,
(ii) all Unpaid Reimbursement Obligations, and (iii) the amount of all Revolving
Credit Loans outstanding shall not exceed the Total Revolving Credit Commitment
at such time.  Notwithstanding the foregoing, the Administrative Agent shall
have no obligation to issue any Letter of Credit to support or secure any
Indebtedness of a Borrower or any of its Subsidiaries to the extent that such
Indebtedness was incurred prior to the proposed issuance date of such Letter of
Credit, unless in any such case such Borrower demonstrates to the satisfaction
of the Administrative Agent that (x) such prior incurred Indebtedness was then
fully secured by a prior perfected and unavoidable security interest in
collateral provided by such Borrower or such Subsidiary to the proposed
beneficiary of such Letter of Credit or (y) such prior incurred Indebtedness was
then secured or supported by a letter of credit issued for the account of such
Borrower or such Subsidiary and the reimbursement obligation with respect to
such letter of credit was fully secured by a prior perfected and unavoidable
security interest in collateral provided to the issuer of such letter of credit
by such Borrower or such Subsidiary.

 

5.1.2.      Letter of Credit Applications.  Each Letter of Credit Application
shall be completed to the reasonable satisfaction of the Administrative Agent. 
In the event that any provision of any Letter of

 

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Credit Application shall be inconsistent with any provision of this Credit
Agreement, then the provisions of this Credit Agreement shall, to the extent of
any such inconsistency, govern.

 

5.1.3.      Terms of Letters of Credit.  Each Letter of Credit issued, extended
or renewed hereunder shall, among other things, (a) provide for the payment of
sight drafts for honor thereunder when presented in accordance with the terms
thereof and when accompanied by the documents described therein, and (b) have an
expiry date no later than the earlier of (x) one (1) year from the date of
issuance, extension or renewal thereof, or (y) the date which is fourteen (14)
days (or, if the Letter of Credit is confirmed by a confirmer or otherwise
provides for one or more nominated persons, forty-five (45) days) prior to the
Maturity Date.  Each Letter of Credit so issued, extended or renewed shall be
subject to either (i) the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500 or any
successor version thereto adopted by the Administrative Agent in the ordinary
course of its business as a letter of credit issuer and in effect at the time of
issuance of such Letter of Credit (the “Uniform Customs”) or (ii) the
International Standby Practices (ISP98), International Chamber of Commerce
Publication No. 590, or any successor code of standby letter of credit practices
among banks adopted by the Administrative Agent in the ordinary course of its
business as a standby letter of credit issuer and in effect at the time of
issuance of such Letter of Credit.

 

5.1.4.      Reimbursement Obligations of Lenders.  Each Lender severally agrees
that it shall be absolutely liable, without regard to the occurrence of any
Default or Event of Default or any other condition precedent whatsoever, to the
extent of such Lender’s Revolving Credit Commitment Percentage, to reimburse the
Administrative Agent on demand for the amount of each draft paid by the
Administrative Agent under each Letter of Credit to the extent that such amount
is not reimbursed by the Borrowers pursuant to §5.2 (such agreement for a Lender
being called herein the “Letter of Credit Participation” of such Lender).

 

5.1.5.      Participations of Lenders.  Each such payment made by a Lender shall
be treated as the purchase by such Lender of a participating interest in the
Borrowers’ Reimbursement Obligation under §5.2 in an amount equal to such
payment.  Each Lender shall share in accordance with its participating interest
in any interest which accrues pursuant to §5.2.

 

5.2.         Reimbursement Obligation of the Borrowers.  In order to induce the
Administrative Agent to issue, extend and renew each Letter of Credit and the
Lenders to participate therein, the Borrowers hereby jointly and severally agree
to

 

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reimburse or pay to the Administrative Agent, for the account of the
Administrative Agent or (as the case may be) the Lenders, with respect to each
Letter of Credit issued, extended or renewed by the Administrative Agent
hereunder,

 

(a)           except as otherwise expressly provided in §5.2(b) and (c), on each
date that any draft presented under such Letter of Credit is honored by the
Administrative Agent, or the Administrative Agent otherwise makes a payment with
respect thereto, (i) the amount paid by the Administrative Agent under or with
respect to such Letter of Credit, and (ii) the amount of any taxes, fees,
charges or other costs and expenses whatsoever incurred by the Administrative
Agent or any Lender in connection with any payment made by the Administrative
Agent or any Lender under, or with respect to, such Letter of Credit,

 

(b)           upon the reduction (but not termination) of the Total Revolving
Credit Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Administrative Agent
for the benefit of the Lenders and the Administrative Agent as cash collateral
for all Reimbursement Obligations, and

 

(c)           upon the termination of the Total Revolving Credit Commitment, or
the acceleration of the Reimbursement Obligations with respect to all Letters of
Credit in accordance with §14, an amount equal to the then Maximum Drawing
Amount on all Letters of Credit, which amount shall be held by the
Administrative Agent for the benefit of the Lenders and the Administrative Agent
as cash collateral for all Reimbursement Obligations.

 

Each such payment shall be made to the Administrative Agent at the
Administrative Agent’s Office in immediately available funds.  Interest on any
and all amounts remaining unpaid by the Borrowers under this §5.2 at any time
from the date such amounts become due and payable (whether as stated in this
§5.2, by acceleration or otherwise) until payment in full (whether before or
after judgment) shall be payable to the Administrative Agent on demand at the
rate specified in §6.10 for overdue principal on the Revolving Credit Loans.

 

5.3.         Letter of Credit Payments.  If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the
Administrative Agent shall notify the Borrowers within a reasonable amount of
time of the date and amount of the draft presented or demand for payment and of
the date and time when it expects to pay such draft or honor such demand for
payment.  If the Borrowers fail to reimburse the Administrative Agent as
provided in §5.2 on or before the date that such draft is paid or other payment
is made by the Administrative Agent, the Administrative Agent may at any time
thereafter notify the Lenders of the amount of any such Unpaid Reimbursement
Obligation.  No later than 3:00 p.m. (Boston time) on the Business Day next
following the receipt of such notice, each Lender shall make available to the
Administrative

 

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Agent, at the Administrative Agent’s Office, in immediately available funds,
such Lender’s Revolving Credit Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Administrative Agent for federal
funds acquired by the Administrative Agent during each day included in such
period, times (b) the amount equal to such Lender’s Revolving Credit Commitment
Percentage of such Unpaid Reimbursement Obligation, times (c) a fraction, the
numerator of which is the number of days that elapse from and including the date
the Administrative Agent paid the draft presented for honor or otherwise made
payment to the date on which such Lender’s Revolving Credit Commitment
Percentage of such Unpaid Reimbursement Obligation shall become immediately
available to the Administrative Agent, and the denominator of which is 360.  The
responsibility of the Administrative Agent to the Borrowers and the Lenders
shall be only to determine that the documents (including each draft) delivered
under each Letter of Credit in connection with such presentment shall be in
conformity in all material respects with such Letter of Credit.

 

5.4.         Obligations Absolute.  The Borrowers’ obligations under this §5
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrowers may have or have had against the Administrative Agent, any
Lender or any beneficiary of a Letter of Credit.  Each of the Borrowers further
agrees with the Administrative Agent and the Lenders that the Administrative
Agent and the Lenders shall not be responsible for, and the Borrowers’
Reimbursement Obligations under §5.2 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among any Borrower, the
beneficiary of any Letter of Credit or any financing institution or other party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Borrowers against the beneficiary of any Letter of Credit or
any such transferee.  The Administrative Agent and the Lenders shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit.  Each of the Borrowers agrees that any action taken or
omitted by the Administrative Agent or any Lender under or in connection with
each Letter of Credit and the related drafts and documents, if done in good
faith, shall be binding upon the Borrowers and shall not result in any liability
on the part of the Administrative Agent or any Lender to the Borrowers.

 

5.5.         Reliance by Issuer.  To the extent not inconsistent with §5.4, the
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype

 

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message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Administrative Agent.  The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Credit Agreement unless it shall first have received such advice or concurrence
of the Required Lenders as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Credit
Agreement in accordance with a request of the Required Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
the Lenders and all future holders of the Notes or of a Letter of Credit
Participation.

 

5.6.         Letter of Credit Fee.  With respect to each Letter of Credit issued
hereunder, the Borrowers shall pay to the Administrative Agent a fee (each a
“Letter of Credit Fee”) for each Letter of Credit issued or renewed by the
Administrative Agent at a rate per annum equal to the Applicable Margin in
effect from time to time with respect to Eurodollar Rate Loans, on the Maximum
Drawing Amount of such Letter of Credit for the period such Letter of Credit is
outstanding.  The Administrative Agent shall, in turn, remit to each Lender such
Lender’s Revolving Credit Commitment Percentage of the Letter of Credit Fee.  In
addition, the Borrowers shall pay the Administrative Agent, for its own account,
a Fronting Fee (the “Fronting Fee”) equal to one-quarter of one percent (0.250%)
per annum on the Maximum Drawing Amount of such Letter of Credit for the period
such Letter of Credit is outstanding.  The Letter of Credit Fee and the Fronting
Fee shall be payable quarterly in arrears on the last day of each calendar
quarter for the calendar quarter then ending.  In respect of each Letter of
Credit, the Borrowers shall also pay to the Administrative Agent, for its own
account, at such time or times as such charges are customarily made by the
Administrative Agent, the Administrative Agent’s customary issuance, amendment,
negotiation or document examination and other administrative fees as in effect
from time to time.

 

5.7.         Existing Letters of Credit.  The Borrowers and the Lenders each
agree that (a) any letter of credit which has been previously issued by Fleet
under the 2003 Credit Agreement (the “Existing Letters of Credit”) for the
account of a Borrower or any Subsidiary of a Borrower, shall be deemed a Letter
of Credit issued under and governed by this Credit Agreement, (b) this Credit
Agreement supercedes any and all prior agreements between the Borrowers or any
of their Subsidiaries and Fleet with respect to the Existing Letters of Credit,
and (c) all Existing Letters of Credit, from and after the Closing Date, shall
be subject to and governed by the terms of this Credit Agreement.

 

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6.             CERTAIN GENERAL PROVISIONS.

 

6.1.         Fees.  The Borrowers jointly and severally agree to pay all fees
described in the Fee Letter in the amounts and at the times and otherwise in
accordance with the terms specified therein.

 

6.2.         Funds for Payments.

 

6.2.1.      Payments to Administrative Agent.  All payments of principal,
interest, Reimbursement Obligations, the Commitment Fee, the Letter of Credit
Fees and the Fronting Fees and any other amounts due hereunder or under any of
the other Loan Documents (except as otherwise provided in such Loan Documents)
shall be made on the due date thereof to the Administrative Agent in Dollars at
the Administrative Agent’s Office or at such other place that the Administrative
Agent may from time to time designate, in each case at or about 11:00 a.m.
(Boston time or other local time at the place of payment) and in immediately
available funds.

 

6.2.2.      No Offset, etc.  All payments by the Borrowers hereunder and under
any of the other Loan Documents shall be made without recoupment, setoff or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or levied by
any jurisdiction or any political subdivision thereof or taxing or other
authority therein (other than any such deductions or withholdings which the
Borrowers are compelled by law to make on or with respect to, or measured by,
the income of the Administrative Agent, any Lender, any assignee or any
participant, including without limitation, franchise taxes imposed on or with
respect to, or measured by, net income of such Person, in each case by any
jurisdiction, subdivision thereof or taxing or other Governmental Authority
therein in which the Administrative Agent, such Lender, such assignee or such
participant is organized, has its principal place of business, maintains a
lending office or is otherwise subject to tax) and other deductions, or
withholdings which the Borrowers are compelled by law to make such deduction or
withholding.  If any such obligation is imposed upon the Borrowers with respect
to any amount payable by them hereunder or under any of the other Loan
Documents, the Borrowers will pay to the Administrative Agent, for the account
of the Lenders or (as the case may be) the Administrative Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable the
Lenders or the Administrative Agent to receive the same net amount which the
Lenders or the Administrative Agent would have received on such due date had no
such obligation been imposed upon the Borrowers. The

 

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Borrowers will deliver promptly to the Administrative Agent certificates or
other evidence reasonably acceptable to the Administrative Agent for all taxes
or other charges deducted from or paid with respect to payments made by the
Borrowers hereunder or under such other Loan Document.

 

6.2.3.      Non-U.S. Lenders.  If any Lender, any transferee or the
Administrative Agent is not a U.S. Person as defined in Section 7701(a)(30) of
the Code for federal income tax purposes (a “Non-U.S. Lender”), such Lender,
transferee or the Administrative Agent hereby agrees that, if and to the extent
that it is legally able to do so, it shall, prior to the date of the first
payment by the Borrowers hereunder to be made to such Lender or the
Administrative Agent or for such Non-U.S. Lender’s or the Administrative Agent’s
account, deliver to the Borrowers and the Administrative Agent, as applicable,
such certificates, documents or other evidence, as and when required by the Code
or Treasury Regulations issued pursuant thereto, including (a) in the case of a
Non-U.S. Lender that is a “bank” for purposes of Section 881(c)(3)(A) of the
Code, two (2) duly completed copies of Internal Revenue Service Form W-8BEN or
Form W-8ECI and any other certificate or statement of exemption required by
Treasury Regulations, or any subsequent versions thereof or successors thereto,
properly completed and duly executed by such Lender or the Administrative Agent
establishing that with respect to payments of principal, interest or fees
hereunder it is (i) not subject to United States federal withholding tax under
the Code because such payment is effectively connected with the conduct by such
Lender or Administrative Agent of a trade or business in the United States or
(ii) totally exempt or partially exempt from United States federal withholding
tax under a provision of an applicable tax treaty and (b) in the case of a
Non-U.S. Lender that is not a “bank” for purposes of Section 881(c)(3)(A) of the
Code, a certificate in form and substance reasonably satisfactory to the
Administrative Agent and the Borrowers and to the effect that (i) such Non-U.S.
Lender is not a “bank” for purposes of Section 881(c)(3)(A) of the Code, is not
subject to regulatory or other legal requirements as a bank in any jurisdiction,
and has not been treated as a bank for purposes of any tax, securities law or
other filing or submission made to any governmental authority, any application
made to a rating agency or qualification for any exemption from any tax,
securities law or other legal requirements, (ii) is not a ten (10) percent
shareholder for purposes of Section 881(c)(3)(B) of the Code and (iii) is not a
controlled foreign corporation receiving interest from a related person for
purposes of Section 881(c)(3)(C) of the Code, together with a properly completed
Internal Revenue Service Form W-8 or W-9, as applicable (or successor forms to
establish exemption from withholding of US taxes).  Each Lender or the 
Administrative Agent agrees that it shall, to the extent any form previously
delivered by it pursuant to this section is no longer effective, and in any case
promptly upon the Borrowers’ or the Administrative Agent’s reasonable request

 

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therefor, deliver to the  Borrowers and the Administrative Agent, as applicable,
if and to the extent it is legally able to do so, a properly completed and
executed Form W-8BEN, Form W-8ECI, Form W-8 or W-9, as applicable (or any
successor forms thereto).

 

6.2.4.      Exclusion.  The Borrowers shall not be required to pay any
additional amount to any Non-U.S. Lender pursuant to §6.2.3 or §6.6 hereof in
respect of any United States federal withholding tax if and to the extent that
(i) the obligation to withhold amounts with respect to such United States
federal withholding tax existed on the date such Non-U.S. Lender became a party
to this Credit Agreement or, with respect to a different lending office
designated by such Non-U.S. Lender as its applicable lending office (a “New
Lending Office”), the date such Non-U.S. Lender designated such New Lending
Office as a result of an assignment, transfer or designation made at the request
of the Borrowers, provided, however, this clause (i) shall not apply to the
extent that the indemnity payment or additional amounts any transferee, or
Lender through a New Lending Office, would be entitled to receive without regard
to this clause (i) do not exceed the indemnity payment or additional amounts
that the Person making the assignment or transfer to such transferee, or Lender
making the designation of such New Lending Office, would have been entitled to
receive in the absence of such assignment, transfer or designation, or (ii)  the
obligation to pay such additional amounts would not have arisen but for a
failure by such Non-U.S. Lender to deliver the forms specified in §6.2.3.

 

6.3.         Computations.  All computations of interest on the Revolving Credit
Loans and of Fees shall be based on a 360-day year and paid for the actual
number of days elapsed.  Except as otherwise provided in the definition of the
term “Interest Period” with respect to Eurodollar Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension.

 

6.4.         Inability to Determine Eurodollar Rate.  In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Administrative Agent shall determine or be notified by the Required Lenders that
(a) adequate and reasonable methods do not exist for ascertaining the Eurodollar
Rate that would otherwise determine the rate of interest to be applicable to any
Eurodollar Rate Loan during any Interest Period or (b) the Eurodollar Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to the Lenders of making or maintaining their Eurodollar
Rate Loans during such period, the Administrative Agent shall forthwith give
notice of such determination (which shall be conclusive and binding on the
Borrowers and the Lenders) to the Borrowers and the Lenders.  In

 

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such event (i) any Loan Request or Conversion Request with respect to Eurodollar
Rate Loans shall be automatically withdrawn and shall be deemed a request for
Base Rate Loans, (ii) each Eurodollar Rate Loan will automatically, on the last
day of the then current Interest Period relating thereto, become a Base Rate
Loan, and (iii) the obligations of the Lenders to make Eurodollar Rate Loans
shall be suspended until the Administrative Agent or the Required Lenders
determine that the circumstances giving rise to such suspension no longer exist,
whereupon the Administrative Agent or, as the case may be, the Administrative
Agent upon the instruction of the Required Lenders, shall so notify the
Borrowers and the Lenders.

 

6.5.         Illegality.  Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Rate Loans, such Lender shall forthwith give notice of such
circumstances to the Borrowers and the other Lenders and thereupon (a) the
commitment of such Lender to make Eurodollar Rate Loans or convert Base Rate
Loans to Eurodollar Rate Loans shall forthwith be suspended and (b) such
Lender’s Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if
any, shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law.  The Borrowers hereby jointly and severally
agree promptly to pay the Administrative Agent for the account of such Lender,
upon demand by such Lender, any additional amounts necessary to compensate such
Lender for any costs incurred by such Lender in making any conversion in
accordance with this §6.5, including any interest or fees payable by such Lender
to lenders of funds obtained by it in order to make or maintain its Eurodollar
Rate Loans hereunder.

 

6.6.         Additional Costs, etc.  If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the Administrative Agent by any central bank
or other fiscal, monetary or other authority (whether or not having the force of
law), shall:

 

(a)           subject any Lender or the Administrative Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of Credit, such
Lender’s Revolving Credit Commitment or the Revolving Credit Loans (other than
taxes based upon or measured by the income or profits of such Lender or the
Administrative Agent), or

 

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(b)           materially change the basis of taxation (except for changes in
taxes based on or measured by net income or profits) of payments to any Lender
of the principal of or the interest on any Revolving Credit Loans or any other
amounts payable to any Lender or the Administrative Agent under this Credit
Agreement or any of the other Loan Documents, or

 

(c)           impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or letters of credit issued by,
or commitments of an office of any Lender, or

 

(d)           impose on any Lender or the Administrative Agent any other
conditions or requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Revolving Credit Loans, such Lender’s
Revolving Credit Commitment, or any class of loans, letters of credit or
commitments of which any of the Revolving Credit Loans or such Lender’s
Revolving Credit Commitment forms a part, and the result of any of the foregoing
is:

 

(i)            to increase the cost to any Lender of making, funding, issuing,
renewing, extending or maintaining any of the Revolving Credit Loans or such
Lender’s Revolving Credit Commitment or any Letter of Credit, or

 

(ii)           to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Lender or the Administrative Agent
hereunder on account of such Lender’s Revolving Credit Commitment, any Letter of
Credit or any of the Revolving Credit Loans, or

 

(iii)          to require such Lender or the Administrative Agent to make any
payment or to forego any interest or Reimbursement Obligation or other sum
payable hereunder, the amount of which payment or foregone interest or
Reimbursement Obligation or other sum is calculated by reference to the gross
amount of any sum receivable or deemed received by such Lender or the
Administrative Agent from the Borrowers hereunder,

 

then, and in each such case, the Borrowers will, upon demand made by such Lender
or (as the case may be) the Administrative Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to such Lender or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Lender or the Administrative Agent for such additional cost,

reduction, payment or foregone interest or Reimbursement Obligation or other
sum.

 

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6.7.         Capital Adequacy.  If after the date hereof any Lender or the
Administrative Agent determines that (a) the adoption of or change in any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) regarding capital requirements for Lenders or Lender
holding companies or any change in the interpretation or application thereof by
a Governmental Authority with appropriate jurisdiction, or (b) compliance by
such Lender or the Administrative Agent or any corporation controlling such
Lender or the Administrative Agent with any law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law) of any
such entity regarding capital adequacy, has the effect of reducing the return on
such Lender’s or the Administrative Agent’s commitment with respect to any
Revolving Credit Loans to a level below that which such Lender or the
Administrative Agent could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or the Administrative
Agent’s then existing policies with respect to capital adequacy and assuming
full utilization of such entity’s capital) by any amount reasonably deemed by
such Lender or (as the case may be) the Administrative Agent to be material,
then such Lender or the Administrative Agent may notify the Borrowers of such
fact.  To the extent that the amount of such reduction in the return on capital
is not reflected in the Base Rate, the Borrowers jointly and severally agree to
pay such Lender or (as the case may be) the Administrative Agent for the amount
of such reduction in the return on capital as and when such reduction is
determined upon presentation by such Lender or (as the case may be) the
Administrative Agent of a certificate in accordance with §6.8 hereof.  Each
Lender shall allocate such cost increases among its customers in good faith and
on an equitable basis.

 

6.8.         Certificate; Replacement of Lenders.  (a)       A certificate
setting forth any additional amounts payable pursuant to §§6.6 or 6.7 and a
brief explanation of such amounts which are due, submitted by any Lender or the
Administrative Agent to the Borrowers, shall be conclusive, absent manifest
error, that such amounts are due and owing.

 

(a)           Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of §§6.2.2, 6.6 or 6.7 with respect to such Lender, it
will, if requested in writing by the Borrowers, use commercially reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Revolving Credit Loans affected by such event
with the object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no material economic, legal or
regulatory disadvantage; provided, further, that nothing in this §6.8 shall
affect or postpone any of the obligations of the Borrowers or the rights of any
Lender or the Administrative Agent pursuant to §§6.2.2, 6.6 or 6.7.

 

(b)           Upon receipt by the Borrowers from any Lender (an “Affected
Lender”) of a claim under §§6.2.2, 6.6 or 6.7, the Borrowers may:

 

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(i)            request one or more of the other Lenders to acquire and assume
all or part of such Affected Lender’s Revolving Credit Loans and Revolving
Credit Commitment, as applicable, provided that no Lender shall be required to
accede to any such request; or

 

(ii)           replace such Affected Lender with another Lender; provided that
(A) such other Lender agrees to be the replacement Lender, (B) such replacement
does not conflict with any requirement of law, (C) no Default or Event of
Default shall have occurred and be continuing at the time of such replacement,
(D) the Borrowers shall repay, or the replacement Lender shall purchase, at the
full principal or face amount of all Revolving Credit Loans, accrued interest,
fees and other amounts owing to such replaced Lender prior to the date of
replacement, (E) the Borrowers shall be liable to such replaced Lender in
accordance with §6.9 with respect to any prepayment or purchase of Eurodollar
Rate Loans, (F) the replacement Lender, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (G) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
§16 (provided that the Borrowers or the replacement Lender shall be obligated to
pay the registration and processing fee) and (H) the Borrowers shall pay all
additional amounts (if any) required pursuant to §§6.2.2, 6.6 or 6.7, as the
case may be, to the extent such additional amounts were incurred on or prior to
the consummation of such replacement.

 

6.9.         Indemnity.  The Borrowers jointly and severally agree to indemnify
each Lender and to hold each Lender harmless from and against any loss, cost or
expense (including loss of anticipated profits) that such Lender may sustain or
incur as a consequence of (a) default by the Borrowers in payment of the
principal amount of or any interest on any Eurodollar Rate Loans as and when due
and payable, including any such loss or expense arising from interest or fees
payable by such Lender to banks of funds obtained by it in order to maintain its
Eurodollar Rate Loans, (b) default by the Borrowers in making a borrowing or
conversion after the Borrowers have given (or are deemed to have given) a Loan
Request, or a Conversion Request relating thereto in accordance with §2.6 or
§2.7 or (c) the making of any payment of a Eurodollar Rate Loan or the making of
any conversion of any such Revolving Credit Loan to a Base Rate Loan on a day
that is not the last day of the applicable Interest Period with respect thereto,
including interest or fees payable by such Lender to lenders of funds obtained
by it in order to maintain any such Revolving Credit Loans.

 

6.10.       Interest After Default.

 

6.10.1.    Overdue Amounts.  Overdue principal and (to the extent permitted by
applicable law) interest on the Revolving Credit Loans and all other overdue
amounts payable hereunder or under any of the other

 

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Loan Documents shall bear interest compounded monthly and payable on demand at a
rate per annum equal to two percent (2%) above the rate of interest which would
otherwise be applicable thereto (or, if no rate of interest is then applicable
thereto, two percent (2%) above the rate of interest which would be applicable
to any Base Rate Loans) until such amount shall be paid in full (after as well
as before judgment).

 

6.10.2.    Amounts Not Overdue.  During the continuance of a Default or an Event
of Default the principal of the Revolving Credit Loans not overdue shall, until
such Default or Event of Default has been cured or remedied or such Default or
Event of Default has been waived by the Required Lenders pursuant to §17.12,
bear interest at a rate per annum equal to the rate of interest applicable to
overdue principal pursuant to §6.10.1.

 

6.10.3.    Letters of Credit.  The Unpaid Reimbursement Obligations and (to the
extent permitted by law) unpaid interest thereon (as provided in this sentence)
shall bear interest compounded monthly and payable on demand at a rate per annum
equal to the Base Rate plus the Applicable Margin then in effect for Base Rate
Loans then in effect plus two percent (2%) per annum until such amount shall be
paid in full (after as well as before judgment).

 

6.11.       Concerning Joint and Several Liability of the Borrowers.

 

Notwithstanding anything to the contrary contained in §§10.3, 10.5.2(c),
10.5.3(d) or 16.8:

 

(a)           Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lenders and the Administrative Agent under
this Credit Agreement, for the mutual benefit, directly and indirectly, of each
of the Borrowers and in consideration of the undertakings of each other Borrower
to accept joint and several liability for the Obligations.

 

(b)           Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrowers, with respect to the
payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this §6.11), it being the intention of
the parties hereto that all the Obligations shall be the joint and several
obligations of each of the Borrowers without preferences or distinction among
them.

 

(c)           If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of the Obligations in accordance with the terms thereof, then in each such
event

 

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the other Borrowers will make such payment with respect to, or perform, such
Obligation.

 

(d)           The Obligations of each of the Borrowers under the provisions of
this §6.11 constitute the full recourse Obligations of each of the Borrowers
enforceable against each such Borrower to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Credit Agreement or the other Loan Documents or any other circumstance
whatsoever as to any other Borrower.

 

(e)           Except as otherwise expressly provided herein, each Borrower
hereby waives promptness, diligence, presentment, demand, protest, notice of
acceptance of its joint and several liability, notice of any and all advances of
the Revolving Credit Loans made under this Credit Agreement and the Notes,
notice of occurrence of any Default or Event of Default (except to the extent
notice is expressly required to be given pursuant to the terms of this Credit
Agreement or any of the other Loan Documents), or of any demand for any payment
under this Credit Agreement, notice of any action at any time taken or omitted
by the Administrative Agent or the Lenders under or in respect of any of the
Obligations hereunder, any requirement of diligence and, generally, all demands,
notices and other formalities of every kind in connection with this Credit
Agreement and the other Loan Documents.  Each Borrower hereby waives all
defenses which may be available by virtue of any valuation, stay, moratorium law
or other similar law now or hereafter in effect, any right to require the
marshaling of assets of the Borrowers and any other entity or Person primarily
or secondarily liable with respect to any of the Obligations, and all suretyship
defenses generally.  Each Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment, or place or manner for
payment, compromise, refinancing, consolidation or renewals of any of the
Obligations hereunder, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by the Administrative Agent and
the Lenders at any time or times in respect of any default by any Borrower in
the performance or satisfaction of any term, covenant, condition or provision of
this Credit Agreement and the other Loan Documents, any and all other
indulgences whatsoever by the Administrative Agent and the Lenders in respect of
any of the Obligations hereunder, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
such Obligations or the addition, substitution or release, in whole or in part,
of any Borrower or any other entity or Person primarily or secondarily liable
for any Obligation.  Such Borrower further agrees that its Obligations shall not
be released or discharged, in whole or in part, or otherwise affected by the
adequacy of any rights which the Administrative Agent or any Lender may have
against any collateral security or other means of obtaining repayment of any of
the Obligations, the impairment of any collateral security securing the
Obligations, including, without limitation, the failure to protect or preserve
any rights which the Administrative Agent or any Lender may have in such
collateral security or the substitution, exchange, surrender, release, loss or

 

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destruction of any such collateral security, any other act or omission which
might in any manner or to any extent vary the risk of such Borrower, or
otherwise operate as a release or discharge of such Borrower, all of which may
be done without notice to such Borrower; provided, however, that the foregoing
shall in no way be deemed to create commercially unreasonable standards as to
the Administrative Agent’s duties as secured party under the Loan Documents (as
such rights and duties are set forth therein).  If for any reason any of the
other Borrowers has no legal existence or is under no legal obligation to
discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from any of the other Borrowers by reason of such other Borrower’s
insolvency, bankruptcy or reorganization or by other operation of law or for any
reason, this Credit Agreement and the other Loan Documents to which it is a
party shall nevertheless be binding on such Borrower to the same extent as if
such Borrower at all times had been the sole obligor on such Obligations. 
Without limiting the generality of the foregoing, each Borrower assents to any
other action or delay in acting or failure to act on the part of the
Administrative Agent and the Lenders, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder which might, but for the
provisions of this §6.11, afford grounds for terminating, discharging or
relieving such Borrower, in whole or in part, from any of its obligations under
this §6.11, it being the intention of each Borrower that, so long as any of the
Obligations hereunder remain unsatisfied, the obligations of such Borrower under
this §6.11 shall not be discharged except by performance and then only to the
extent of such performance.  The Obligations of each Borrower under this §6.11
shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to any reconstruction or similar proceeding with respect to any
other Borrower, or any of the Lenders.  The joint and several liability of the
Borrowers hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
ownership, membership, constitution or place of formation of any Borrower or the
Lenders.  Each of the Borrowers acknowledges and confirms that it has itself
established its own adequate means of obtaining from each of the other Borrowers
on a continuing basis all information desired by such Borrower concerning the
financial condition of each of the other Borrowers and that each such Borrower
will look to each of the other Borrowers and not to the Administrative Agent or
any Lender in order for such Borrower to keep adequately informed of changes in
each of the other Borrowers’ respective financial conditions.

 

(f)            The provisions of this §6.11 are made for the benefit of the
Lenders and the Administrative Agent and their respective permitted successors
and assigns, and may be enforced by it or them from time to time against any or
all of the Borrowers as often as occasion therefor may arise and without
requirement on the part of the Lenders or the Administrative Agent or such
successor or assign first to marshall any of its or their claims or to exercise
any of its or their rights

 

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against any of the other Borrowers or to exhaust any remedies available to it or
them against any of the other Borrowers or to resort to any other source or
means of obtaining payment of any of the Obligations hereunder or to elect any
other remedy.  The provisions of this §6.11 shall remain in effect until all of
the Obligations shall have been paid in full or otherwise fully satisfied.  If
at any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by any
Lender or the Administrative Agent upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or otherwise, the provisions of this
§6.11 will forthwith be reinstated in effect, as though such payment had not
been made.

 

(g)           Each of the Borrowers hereby agrees that it will not enforce any
of its rights of reimbursement, contribution, subrogation or the like against
the other Borrowers with respect to any liability incurred by it hereunder or
under any of the other Loan Documents, any payments made by it to any of the
Lenders or the Administrative Agent with respect to any of the Obligations or
any collateral security therefor until such time as all of the Obligations have
been irrevocably paid in full in cash.  Any claim which any Borrower may have
against any other Borrower with respect to any payments to the Lenders or the
Administrative Agent hereunder or under any other Loan Documents are hereby
expressly made subordinate and junior in right of payment, without limitation as
to any increases in the Obligations arising hereunder or thereunder, to the
prior payment in full of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full before any payment or distribution of any character,
whether in cash, securities or other property, shall be made to any other
Borrower therefor.

 

(h)           Each of the Borrowers hereby agrees that the payment of any
amounts due with respect to the indebtedness owing by any Borrower to any other
Borrower is hereby subordinated to the prior payment in full in cash of the
Obligations.  Each Borrower hereby agrees that after the occurrence and during
the continuance of any Default or Event of Default, such Borrower will not
demand, sue for or otherwise attempt to collect any indebtedness of any other
Borrower owing to such Borrower until the Obligations shall have been paid in
full in cash.  If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for the Administrative Agent and be paid over to the Administrative Agent for
the pro rata accounts of the Lenders to be applied to repay the Obligations.

 

7.             COLLATERAL SECURITY AND PARENT GUARANTY.

 

7.1.         Security of Borrowers.  The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to

 

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priority under applicable law) in all of the assets of the Borrowers and their
Subsidiaries, whether now owned or hereafter acquired, pursuant to the terms of
the Security Documents to which the Borrowers are party.

 

7.2.         Parent Guaranty and Parent Pledge Agreement.  The Obligations shall
also be guaranteed pursuant to the terms of the Parent Guaranty.  The
obligations of the Parent under the Parent Guaranty shall be in turn secured by
a perfected first priority security interest and pledge in all of the Equity
Interests of MSAC, whether now owned or hereafter acquired, pursuant to the
terms of the Parent Pledge Agreement.

 

8.             REPRESENTATIONS AND WARRANTIES.

 

The Borrowers represent and warrant to the Lenders and the Administrative Agent
as follows:

 

8.1.         Corporate Authority.

 

8.1.1.      Incorporation; Good Standing.  Each of the Parent, the Borrowers and
their Subsidiaries (a) is a corporation, limited partnership or limited
liability company as shown on Schedule 8.19, duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
formation, (b) has all requisite powers to own its property and conduct its
business as now conducted and as presently contemplated, and (c) is in good
standing as a foreign corporation, limited partnership or limited liability
company, as applicable, and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure to be
so qualified would not have a Material Adverse Effect.

 

8.1.2.      Authorization.  The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which any of the Parent, the
Borrowers or any of their Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the corporate,
limited partnership or limited liability company authority, as applicable, of
such Person, (b) have been duly authorized by all necessary entity proceedings,
(c) do not and will not conflict with or result in any breach or contravention
of any provision of law, statute, rule or regulation to which the Parent, any of
the Borrowers or any of their Subsidiaries is subject or any judgment, order,
writ, injunction, license or permit applicable to, or any agreement or other
instrument binding upon, the Parent, any of the Borrowers or any of their
Subsidiaries, except for any such breach or contravention which could not
reasonably be expected to have a Material Adverse Effect and (d) do not conflict
with any provision of the Governing Documents of the Parent, any of the
Borrowers or any of their Subsidiaries.

 

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8.1.3.      Enforceability.  The execution and delivery of this Credit Agreement
and the other Loan Documents to which the Parent, any of the Borrowers or any of
their Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors’ rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.

 

8.2.         Governmental Approvals.  The execution, delivery and performance by
the Parent, the Borrowers and their Subsidiaries of this Credit Agreement and
the other Loan Documents to which the Parent, the Borrowers or any of their
Subsidiaries is or is to become a party and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
Governmental Authority other than those already obtained and other than those as
to which the failure to obtain such approval or consent could not reasonably be
expected to have a Material Adverse Effect.

 

8.3.         Title to Properties; Leases.  Attached as Schedule 8.3 hereto, as
such Schedule 8.3 may be updated from time to time in accordance with the
provisions of §9.5.6, is a complete and accurate list of Real Estate owned or
leased by the Borrowers.  The Borrowers and their Subsidiaries own or lease all
of the assets reflected in the Audited Financials as of the Balance Sheet Date
or acquired since that date, subject to no Liens or other rights of others,
except Permitted Liens.

 

8.4.         Financial Statements and Projections.

 

8.4.1.      Fiscal Year; Fiscal Quarters.  Each of the Parent, the Borrowers and
their Subsidiaries has a fiscal year which ends on the Saturday closest to
December 31 of each calendar year.  The fiscal quarters of the Borrowers and
their Subsidiaries end on the Saturday closest to March 31, June 30, September
30 and December 31 of each calendar year.

 

8.4.2.      Financial Statements.  There has been furnished to each of the
Lenders the Audited Financials.  To the best of the Borrowers’ knowledge, except
as set forth on Schedule 8.4.2 hereto, the Audited Financials have been prepared
in accordance with GAAP and fairly present in all material respects the
financial condition of the Borrowers and their Subsidiaries as at the dates
thereof and the result of operations for the fiscal period then ended.

 

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8.4.3.      Pro Forma Balance Sheet and Projections.  The Borrowers have
delivered to the Administrative Agent a consolidated pro forma balance sheet as
of June 26, 2004 reflecting the borrowings hereunder on the Closing Date (the
“Pro Forma Balance Sheet”), which Pro Forma Balance Sheet has been prepared in
good faith on the basis of the assumptions stated therein.  The projections of
the annual operating budgets of the Borrowers and their Subsidiaries on a
consolidated basis, balance sheets and cash flow statements for the 2004 to 2009
fiscal years, copies of which have been delivered to each Lender, disclose all
assumptions made with respect to general economic, financial and market
conditions used in formulating such projections.  To the knowledge of the
Borrowers or any of their Subsidiaries, no facts exist that (individually or in
the aggregate) would result in any material change in any of such projections. 
The projections are based upon reasonable estimates and assumptions, have been
prepared on the basis of the assumptions stated therein and reflect the
reasonable estimates of the Borrowers of the results of operations and other
information projected therein.  There are no contingent liabilities of the
Borrowers or their Subsidiaries as of the Closing Date involving material
amounts, known to the officers of the Borrowers, which are not disclosed in the
Pro Forma Balance Sheet.

 

8.5.         No Material Adverse Changes, etc.  Since the Balance Sheet Date, to
the knowledge of the Borrowers, there has been no event or occurrence which has
had a material adverse effect on the Borrowers and their Subsidiaries taken as a
whole.

 

8.6.         Franchises, Patents, Copyrights, Liquor Management Agreements,
etc.  Except as set forth on Schedule 8.6(a) hereto, the Borrowers and each of
their Subsidiaries possess all franchises, patents, copyrights, trademarks,
trade names, licenses (including liquor licenses) and permits, and rights in
respect of the foregoing, adequate for the conduct of their business
substantially as now conducted without known conflict with any rights of
others.  Schedule 8.6(b) hereto sets forth a list of all Liquor Management
Agreements.

 

8.7.         Litigation.  Except as set forth in Schedule 8.7 hereto, there are
no actions, suits, proceedings or, to the knowledge of the Borrowers,
investigations of any kind pending or, to the knowledge of the Borrowers,
threatened against any of the Parent, the Borrowers or any of their
Subsidiaries, that (a) if adversely determined, might, either in any case or in
the aggregate, have a Material Adverse Effect, or (b) question the validity of
this Credit Agreement or any of the other Loan Documents, the Subordinated Debt
Documents (if any), or the Equity Documents or any action taken or to be taken
pursuant hereto or thereto.

 

8.8.         Material Contracts; No Materially Adverse Contracts, etc.  Except
as set forth on Schedule 8.8 hereto, none of the Parent, the Borrowers or any of
their Subsidiaries are party to, or after giving affect to any Acquisition, are

 

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obligated under, any Material Contracts.  None of the Borrowers nor any of their
Subsidiaries is subject to any Governing Document or other legal restriction, or
any judgment, decree, order, law, statute, rule or regulation that has or is
expected in the future to have a Material Adverse Effect.  None of the Borrowers
nor any of their Subsidiaries is a party to any contract or agreement that has
or is expected, in the judgment of the Borrowers’ officers, to have any Material
Adverse Effect.

 

8.9.         Compliance with Other Instruments, Laws, etc.  None of the
Borrowers nor any of their Subsidiaries is in violation of any provision of its
Governing Documents, or any agreement or instrument to which it may be subject
or by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could have a Material Adverse Effect.  Any and all approvals by
any federal, state or local liquor authority necessary for the continued
operation of any Restaurant with full liquor service have been received and
remain in full force and effect or alternative arrangements (including execution
of Liquor Management Agreements) which are satisfactory to the Administrative
Agent have been made in order to permit such continued operation, except where
the failure thereof would not have a Material Adverse Effect.

 

8.10.       Tax Status.  The Borrowers and their Subsidiaries (a) have made or
filed all federal, state and foreign income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
(b) have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate in accordance with GAAP for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply.  There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction
other than claims being contested in good faith by appropriate proceedings for
which no Lien has been imposed (other than Permitted Liens) and for which
adequate reserves have been set aside in accordance with GAAP.

 

8.11.       No Event of Default.  No Default or Event of Default has occurred
and is continuing.

 

8.12.       Holding Company and Investment Company Acts.  None of the Parent,
the Borrowers or any of their Subsidiaries is a “holding company”, or a
“subsidiary company” of a “holding company”, or an “affiliate” of a “holding
company”, as such terms are defined in the Public Utility Holding Company Act of
1935; nor is it an “investment company”, or an “affiliated company” or a
“principal underwriter” of an “investment company”, as such terms are defined in
the Investment Company Act of 1940.

 

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8.13.                     Absence of Financing Statements, etc.  Except with
respect to Permitted Liens, there is no financing statement, security agreement,
chattel mortgage, real estate mortgage or other document filed or recorded with
any filing records, registry or other public office, that purports to cover,
affect or give notice of any present or possible future Lien on any assets or
property of any of the Parent, the Borrowers or any of their Subsidiaries or any
rights relating thereto, including assets acquired as part of any Acquisition
and rights relating to such assets.

 

8.14.                     Perfection of Security Interest.  All filings,
assignments, pledges and deposits of documents or instruments have been made or
will be made, and all other actions have been taken or will be taken that are
necessary or advisable, under applicable law, to establish and perfect the
Administrative Agent’s security interest in the Collateral.  The Collateral and
the Administrative Agent’s rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses.

 

8.15.                     Certain Transactions.  Except for the transactions
listed on Schedule 8.15 and arm’s length transactions pursuant to which a
Borrower or any of its Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable than such Borrower or such Subsidiary
could obtain from third parties, none of the officers, directors, or employees
of any of the Borrowers, any of their Subsidiaries or any Sponsor or any
Affiliate of a Borrower, any Subsidiary of a Borrower or any Sponsor is
presently a party to any transaction with any of the Borrowers or any of their
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.

 

8.16.                     Employee Benefit Plans.

 

8.16.1.           In General.  Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all material
respects with the provisions of ERISA and all Applicable Pension Legislation
and, to the extent applicable, the Code, except where the failure to comply
could not reasonably be expected to have a Material Adverse Effect.  The
Borrowers have heretofore delivered to the Administrative Agent the most
recently completed annual report, Form 5500, with all required attachments, and
actuarial statements required to be submitted under §103(d) of ERISA, with
respect to each Guaranteed Pension Plan maintained or contributed to by the
Parent or any Subsidiary of the Parent.

 

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8.16.2.           Terminability of Welfare Plans.  Except as set forth on
Schedule 8.16 hereto and except as would not reasonably be expected to have a
Material Adverse Effect, no Employee Benefit Plan, which is an employee welfare
benefit plan within the meaning of §3(1) or §3(2)(B) of ERISA, provides benefit
coverage subsequent to termination of employment, except as required by Title I,
Part 6 of ERISA or the applicable state insurance laws.

 

8.16.3.           Guaranteed Pension Plans.  Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien provisions
of §302(f) of ERISA, or otherwise, has been timely made.  No waiver of an
accumulated funding deficiency or extension of amortization periods has been
received with respect to any Guaranteed Pension Plan, and none of the Borrowers
nor any ERISA Affiliate is obligated to or has posted security in connection
with an amendment to a Guaranteed Pension Plan pursuant to §307 of ERISA or
§401(a)(29) of the Code.  No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by the
Borrowers or any ERISA Affiliate with respect to any Guaranteed Pension Plan and
there has not been any ERISA Reportable Event (other than an ERISA Reportable
Event as to which the requirement of thirty (30) days notice has been waived),
or any other event or condition which presents a material risk of termination of
any Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within twelve months of the
date of this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of §4001 of ERISA did not exceed the
aggregate value of the assets of all such Guaranteed Pension Plans, disregarding
for this purpose the benefit liabilities and assets of any Guaranteed Pension
Plan with assets in excess of benefit liabilities.

 

8.16.4.           Multiemployer Plans.  None of the Borrowers nor any ERISA
Affiliate has incurred any material liability (including secondary liability) to
any Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under §4201 of ERISA or as a result of a sale of assets
described in §4204 of ERISA.  None of the Borrowers nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of §4241 or §4245 of ERISA or is at risk of
entering reorganization or becoming insolvent, or that any Multiemployer Plan
intends to terminate or has been terminated under §4041A of ERISA.

 

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8.17.                     Use of Proceeds.

 

8.17.1.           General.  On the Closing Date, proceeds of the Revolving
Credit Loans shall be used to (a) refinance all outstanding loans under the 2003
Credit Agreement, (b) pay the fees and expenses associated with the execution of
this Credit Agreement, (c) pay the fees associated with the termination of the
Management Agreements and the Officer Fees in an aggregate amount of up to
$3,000,000, and (d) redeem shares of the Convertible Preferred Stock.  After the
Closing Date, all future Revolving Credit Loans shall be used for (a) Permitted
Acquisitions, (b) payment of fees associated with the termination of the
Management Agreements and the Officer Fees in an aggregate amount (when combined
with any such fees paid on the Closing Date) of up to $3,000,000, (c) the
acquisition and/or construction of new Restaurants and to upgrade existing
Restaurants, in each case in accordance with the terms hereof, and (d) for
working capital and general corporate purposes.  The Borrowers will obtain
Letters of Credit solely for working capital and general corporate purposes.

 

8.17.2.           Regulations U and X.  No portion of any Loan is to be used,
and no portion of any Letter of Credit is to be obtained, for the purpose of
purchasing or carrying any “margin security” or “margin stock” as such terms are
used in Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224.

 

8.17.3.           Ineligible Securities.  No portion of the proceeds of any
Revolving Credit Loans is to be used, and no portion of any Letter of Credit is
to be obtained, for the purpose of knowingly purchasing, or providing credit
support for the purchase of, during the underwriting or placement period or
within thirty (30) days thereafter, any Ineligible Securities underwritten or
privately placed by a Financial Affiliate.

 

8.18.                     Environmental Compliance.  Except as set forth on
Schedule 8.18 hereto:

 

(a)          none of the Borrowers, their Subsidiaries or any operator of the
Real Estate or any operations thereon is in violation, or alleged violation, of
any judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under the
Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended (“CERCLA”), the
Superfund Amendments and Reauthorization Act of 1986 (“SARA”), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
state, local or foreign law, statute, regulation, ordinance, order or decree
relating to health, safety or the environment (hereinafter “Environmental
Laws”), which violation would reasonably be expected to have a material adverse
effect on the environment or a Material Adverse Effect;

 

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(b)         none of the Borrowers nor any of their Subsidiaries has received
written notice from any third party including, without limitation, any
Governmental Authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency (“EPA”) as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B, where such circumstances would
reasonably be expected to have a Material Adverse Effect; (ii) that any
hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substances as
defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42
U.S.C. §9601(33) and any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws (“Hazardous
Substances”) which any one of them has generated, transported or disposed of has
been found at any site at which a Governmental Authority has conducted or has
ordered that any Borrower or any of its Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any Environmental
Law, where such circumstances would reasonably be expected to have a Material
Adverse Effect; or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or administrative proceeding
arising out of any third party’s incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the release of Hazardous
Substances where such circumstances would reasonably be expected to have a
Material Adverse Effect;

 

(c)          except as could not reasonably be expected to result in a Material
Adverse Effect, (i) no portion of the Real Estate has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and to the best of the Borrowers’
knowledge, no underground tank or other underground storage receptacle for
Hazardous Substances is located on any portion of the Real Estate; (ii) in the
course of any activities conducted by the Borrowers, their Subsidiaries or
operators of its properties, no Hazardous Substances have been generated or are
being used on the Real Estate except in accordance with applicable Environmental
Laws; (iii) there have been no releases (i.e. any past or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or threatened releases of Hazardous Substances
on, upon, into or from the properties of any of the Borrowers or their
Subsidiaries, which releases would reasonably be expected to have a Material
Adverse Effect; and (iv) to the best of the Borrowers’ knowledge, there have
been no releases on, upon, from or into any real property in the vicinity of any
of the Real Estate which, through soil or groundwater contamination, may have
come to be located on, and which would reasonably be expected to have a Material
Adverse Effect; and

 

(d)         none of the Borrowers and their Subsidiaries, any Mortgaged Property
or any of the other Real Estate is subject, as a result of the transactions
contemplated hereby, to any applicable Environmental Law requiring the
performance of Hazardous Substances site assessments, or the removal or

 

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remediation of Hazardous Substances, or the giving of notice to any Governmental
Authority or the recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the transactions set forth herein
and contemplated hereby, or as a condition to the recording of any Mortgage or
to the effectiveness of any other transactions contemplated hereby.

 

(e)          This §8.18 contains the sole representations and warranties of the
Borrowers with respect to environmental matters.

 

8.19.                     Subsidiaries, etc.  Schedule 8.19, as such Schedule
8.19 may be updated from time to time in accordance with the provisions of
§9.17, sets forth the only Subsidiaries of MSAC, together with information on
each of the Borrowers’ jurisdictions of incorporation or organization, the type
of organization of each of the Borrowers and their Subsidiaries, the number and
class of authorized and issued Equity Interests of the Borrowers and each of
their Subsidiaries and the owners of all such issued Equity Interests.  Except
as set forth on Schedule 8.19 hereto, none of the Borrowers nor any of their
Subsidiaries is engaged in any joint venture or partnership with any other
Person.

 

8.20.                     Bank Accounts.  Schedule 8.20, as such Schedule 8.20
may be updated from time to time in accordance with the provisions of §9.5.5,
sets forth the account numbers and location of all bank accounts of each
Borrower and its Subsidiaries.

 

8.21.                     Subordinated Debt Documents; Equity Documents; Warrant
Documents.

 

(a)          In the event that the Borrowers incur Subordinated Debt pursuant to
§10.1(c), the Borrowers shall have furnished to the Administrative Agent true,
complete and correct copies of the Subordinated Debt Documents (including
schedules, exhibits and annexes thereto).  Such Subordinated Debt Documents
shall not subsequently be amended, supplemented or modified except in accordance
with §10.14.3, and constitute the complete understanding among the parties
thereto in respect of the matters and transactions covered thereby.

 

(b)         The Equity Documents previously furnished to the Administrative
Agent have not subsequently been amended, supplemented, or modified and
constitute the complete understanding among the parties thereto in respect of
the matters and transactions covered thereby except for amendments (i) prior to
the Closing Date, delivered to the Administrative Agent in accordance with §9.18
of the Existing Credit Agreement and (ii) on or following the Closing Date,
delivered to the Administrative Agent in accordance with §9.18 hereof.

 

(c)                                  The Warrant Documents previously furnished
to the Administrative Agent have not subsequently been amended, supplemented, or
modified and constitute the complete understanding among the parties thereto in
respect of the matters and transactions covered thereby except for amendments
(i) prior to the

 

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Closing Date, delivered to the Administrative Agent in accordance with §9.18 of
the Existing Credit Agreement and (ii) on or following the Closing Date,
delivered to the Administrative Agent in accordance with §9.18 hereof.

 

8.22.                     Solvency.  Both before and after giving effect to the
execution, delivery and performance of this Credit Agreement and the other Loan
Documents, the Borrowers and their Subsidiaries, on a consolidated basis, are
Solvent.  As used herein, “Solvent” shall mean that each of the Borrowers and
their Subsidiaries (i) have assets having a fair value in excess of their
liabilities, (ii) have assets having a fair value in excess of the amount
required to pay their liabilities on existing debts as such debts become
absolute and mature, and (iii) have, and expect to continue to have, access to
adequate capital for the conduct of their business and the ability to pay their
debts from time to time incurred in connection with the operation of their
business as such debts mature.

 

8.23.                     Restaurants.  Schedule 8.23 sets forth, as of the
Closing Date, the names and addresses of each Restaurant and identifies, as of
the Closing Date, which of those Restaurants are operated and/or managed under a
franchise agreement or restaurant management agreement by any of the Borrowers
or any of their Subsidiaries (whether as franchisor and a franchisee, in the
case of a franchise agreement).

 

8.24.                     Franchise Agreements.  The Borrowers have delivered to
the Administrative Agent true and complete copies of any Franchise Agreements to
which any of the Borrowers or any of their Subsidiaries is party.

 

8.25.                     Leases.  Except as set forth on Schedule 8.25 hereto,
neither the execution, delivery and performance of this Credit Agreement nor the
other Loan Documents, nor any Subordinated Debt Documents (if any), to which any
of the Parent, the Borrowers or any of their Subsidiaries is a party, including
the pledge by the Parent and the Borrowers of all of the issued and outstanding
Equity Interests of the Borrowers and the exercise by the Administrative Agent
of its rights to take possession of, or otherwise control, such Equity
Interests, will create a default under any Real Estate Lease under which any of
the Borrowers or any of their Subsidiaries is presently a lessee or sublessee,
which is likely to have a Material Adverse Effect.

 

8.26.                     Disclosure.  None of this Credit Agreement or any of
the other Loan Documents contains any untrue statement of a material fact or
omits to state a material fact (known to the Borrowers or any of their
Subsidiaries in the case of any document or information not furnished by the
Borrower or any of their Subsidiaries) necessary in order to make the statements
herein or therein not misleading.  There is no fact known to the Borrowers or
any of their Subsidiaries which has a Material Adverse Effect, or which is
reasonably likely in the future to have a Material Adverse Effect, exclusive of
effects resulting from changes in general economic conditions, legal standards
or regulatory conditions.

 

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8.27.                     Change of Control.  After giving effect to the Initial
Public Offering and the redemption of the Convertible Preferred Stock pursuant
to the terms of the Notice of Redemption, if on the date hereof the holders of
the Warrant Documents elect to exercise all of their rights thereunder to
acquire shares of common stock of MSSR, no Change of Control (as defined herein)
would occur immediately upon and following such acquisition.

 

9.                                      AFFIRMATIVE COVENANTS.

 

Each of the Borrowers covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding
or any Lender has any obligation to make any Revolving Credit Loan or the
Administrative Agent has any obligation to issue, extend or renew any Letters of
Credit:

 

9.1.                            Punctual Payment.  The Borrowers will duly and
punctually pay or cause to be paid the principal and interest on the Revolving
Credit Loans, all Reimbursement Obligations, the Fees and all other amounts
provided for in this Credit Agreement and the other Loan Documents to which any
of the Borrowers or any of their Subsidiaries is a party, all in accordance with
the terms of this Credit Agreement and such other Loan Documents.

 

9.2.                            Maintenance of Office.  Each of the Borrowers
will, and will cause each of its Subsidiaries to, maintain its chief executive
office at the location identified in the Perfection Certificate delivered by it
pursuant to the Security Agreement, or at such other place in the United States
of America as such Person shall designate upon written notice to the
Administrative Agent, where notices, presentations and demands to or upon such
Person in respect of the Loan Documents to which such Person is a party may be
given or made.

 

9.3.                            Records and Accounts.  Each of the Borrowers
will (a) keep, and cause each of its Subsidiaries to keep, true and accurate
records and books of account in which complete, true and correct entries will be
made in accordance with GAAP, (b) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves, and (c) at all times engage
PricewaterhouseCoopers or other independent certified public accountants
reasonably satisfactory to the Required Lenders as the independent certified
public accountants of the Borrowers and their Subsidiaries and will not permit
more than thirty (30) days to elapse between the cessation of such firm’s (or
any successor firm’s) engagement as the independent certified public accountants
of the Borrowers and their Subsidiaries and the appointment in such capacity of
a successor firm as shall be reasonably satisfactory to the Administrative
Agent.

 

9.4.                            Financial Statements, Certificates and
Information.  The Borrowers will deliver to each of the Lenders:

 

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(a)          as soon as practicable, but in any event not later than ninety (90)
days after the end of each fiscal year of the Borrowers, the consolidated
balance sheet of MSSR and its Subsidiaries as at the end of such year, and the
related consolidated statement of income and consolidated statement of cash flow
for such year, each setting forth in comparative form the figures for the
previous fiscal year and all such consolidated statements to be in reasonable
detail, prepared in accordance with GAAP, and certified, without qualification
and without an expression of uncertainty as to the ability of MSSR or any of its
Subsidiaries to continue as going concerns, by PricewaterhouseCoopers or by
other independent certified public accountants reasonably satisfactory to the
Required Lenders, together with a written statement from such accountants to the
effect that they have read a copy of this Credit Agreement, and that, in making
the examination necessary to said certification, they have obtained no knowledge
of any Default or Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they shall disclose
in such statement any such Default or Event of Default; provided that such
accountants shall not be liable to the Lenders for failure to obtain knowledge
of any Default or Event of Default;

 

(b)         as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the fiscal quarters of the Borrowers, (i)
copies of the unaudited consolidated balance sheet of MSSR and its Subsidiaries
as at the end of such quarter, and the related consolidated statement of income
and consolidated statement of cash flow for such fiscal quarter and the portion
of such Persons’ fiscal year then elapsed, setting forth in each case in
comparative form the figures for the corresponding period or periods of the
previous fiscal year and the comparisons to projections for such period, all in
reasonable detail and prepared in accordance with GAAP (subject to year-end
adjustments and footnote information required by GAAP), together with a
certification by the principal financial or accounting officer of MSSR that the
information contained in such financial statements fairly presents in all
material respects the financial position of MSSR and its Subsidiaries on the
date thereof (subject to year-end adjustments and footnote information required
by GAAP); and (ii) statements of sales and statements of net earnings before
interest, taxes, depreciation and amortization expense, on a summarized
Restaurant-by-Restaurant basis, for each Restaurant operated by any of the
Borrowers or their Subsidiaries, setting forth in each case in comparative form
the statements for the corresponding period or periods of the prior fiscal year
and a comparison to the projections for such period, such statements to be in a
form satisfactory to the Required Lenders;

 

(c)          as soon as practicable, but in any event within thirty (30) days
after the end of each month in each fiscal year of MSSR, unaudited monthly
consolidated financial statements of MSSR and its Subsidiaries for such month
and the portion of such Persons’ fiscal year then ending, setting forth in each
case in comparative form the figures for the corresponding period or periods of
the previous fiscal year and the comparisons to projections for such period,
prepared in accordance

 

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with GAAP (subject to year-end adjustments and footnote information required by
GAAP), together with a certification by the principal financial or accounting
officer of MSSR that the information contained in such financial statements
fairly presents in all material respects the financial condition of MSSR and its
Subsidiaries on the date thereof (subject to year-end adjustments and footnote
information required by GAAP), including a list of any new Restaurant locations
as required pursuant to §9.14;

 

(d)         simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrowers in substantially the
form of Exhibit C hereto (a “Compliance Certificate”) and setting forth in
reasonable detail computations evidencing compliance with the covenants
contained in §11 and (if applicable) reconciliations to reflect changes in GAAP
since the Balance Sheet Date;

 

(e)          simultaneously with the delivery of the financial statements
referred to in subsection (a) above, a statement certified by the principal
financial or accounting officer of the Borrowers setting forth in reasonable
detail computations of the Consolidated Excess Operating Cash Flow for the
fiscal year then ended;

 

(f)            contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or, sent to the equity holders of the Parent or any of the Borrowers;

 

(g)         within forty-five (45) days after the beginning of each fiscal year
of the Borrowers and, if a Default or Event of Default shall have occurred and
be continuing, from time to time upon the request of the Administrative Agent,
projections and budgets of the Borrowers and their Subsidiaries organized for
the next fiscal year on a month-by-month and quarter-by-quarter basis updating
those projections delivered to the Lenders and referred to in §8.4.3 or, if
applicable, updating any later such projections delivered in response to a
request pursuant to this §9.4(g);

 

(h)         all information sent to the directors of the Borrowers regarding the
opening of new Restaurants;

 

(i)                                     all notices and other information sent
to any holder of Subordinated Debt in its capacity as such; and

 

(j)             from time to time such other financial data and information
(including accountants, management letters) as the Administrative Agent or any
Lender may reasonably request.

 

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9.5.                            Notices.

 

9.5.1.                  Defaults.  The Borrowers will notify the Administrative
Agent and each of the Lenders in writing of the occurrence of any Default or
Event of Default promptly upon becoming aware thereof, together with a
reasonably detailed description thereof, and the actions the Borrowers propose
to take with respect thereto.  If any Person shall give any notice or take any
other action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with respect to which
any of the Borrowers or any of their Subsidiaries is a party or obligor in
excess of $1,000,000, whether as principal, guarantor, surety or otherwise, the
Borrowers shall forthwith give written notice thereof to the Administrative
Agent and each of the Lenders, describing the notice or action and the nature of
the claimed default.

 

9.5.2.                  Environmental Events.  The Borrowers will promptly give
notice to the Administrative Agent (a) of any violation of any Environmental Law
that the Borrowers or any of their Subsidiaries reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any Governmental Authority where
such violation could reasonably be expected to have a Material Adverse Effect,
and (b) upon becoming aware of any inquiry, proceeding, investigation, or other
action, including a written notice from any agency of potential environmental
liability, of any Governmental Authority that could reasonably be expected to
have a Material Adverse Effect.

 

9.5.3.                  Notification of Claim against Collateral.  The Borrowers
will, immediately upon becoming aware thereof, notify the Administrative Agent
in writing of any setoff, claims (including, with respect to the Real Estate,
environmental claims), withholdings or other defenses to which any material
portion of the Collateral, or the Administrative Agent’s rights with respect to
such Collateral, are subject.

 

9.5.4.                  Notice of Litigation and Judgments.  The Borrowers will,
and will cause each of their Subsidiaries to, give notice to the Administrative
Agent in writing within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting any of the Borrowers or any of their Subsidiaries or to which any of
the Borrowers or any of their Subsidiaries is or becomes a party involving an
uninsured claim against any of the Borrowers or any of their Subsidiaries that
could reasonably be expected to have a Material Adverse Effect and stating the
nature and status of such litigation or proceedings.  The Borrowers will, and
will cause each of their Subsidiaries to, give notice to the Administrative
Agent, in writing, in form and detail satisfactory to the Administrative Agent,
within ten (10) days of any judgment not covered by insurance,

 

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final or otherwise, against any of the Borrowers or any of their Subsidiaries in
an amount in excess of $1,000,000.

 

9.5.5.                  Notice of Bank Accounts.  The Borrowers will, and will
cause each of their Subsidiaries to, give notice to the Administrative Agent in
writing of any such Person creating or opening any additional bank accounts
simultaneously with the delivery of the financial statements referred to in
§9.4(c) but in any event no later than one month after the opening of such
account.  In such event, upon receipt by the Administrative Agent of such
notice, Schedule 8.20 shall be deemed to have been amended to include each such
new bank account set forth in such notice.

 

9.5.6.                  Notice of Real Estate.  Without prejudice to §9.13, the
Borrowers will, and will cause each of their Subsidiaries to, give notice to the
Administrative Agent in writing of any such Person acquiring any additional (i)
leased Real Estate to the extent such Real Estate is leased for a term of five
(5) years or longer or such leased Real Estate is for office space where books
and records relating to the Borrowers’ business shall be maintained, or (ii)
owned Real Estate, simultaneously with the delivery of the financial statements
referred to in §9.4(c) but in any event no later than one month after such
acquisition. In such event, upon receipt by the Administrative Agent of such
notice, Schedule 8.3 shall be deemed to have been amended to include each such
additional Real Estate set forth in such notice.

 

9.6.                            Legal Existence; Maintenance of Properties. 
Each of the Borrowers will do or cause to be done all things necessary to
preserve and keep in full force and effect its legal existence, rights and
franchises and those of its Subsidiaries.  Each of the Borrowers (i) will cause
all of its properties and those of its Subsidiaries used or useful in the
conduct of its business or the business of its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment except where the failure to do so could not reasonably be expected to
result in a Material Adverse Effect, (ii) will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of such Borrower may be necessary so that the business carried on
in connection therewith may be properly conducted at all times, except where the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect, and (iii) will, and will cause each of its Subsidiaries to,
continue to engage primarily in the businesses now conducted by them and in
related businesses; provided that nothing in this §9.6 shall prevent any of the
Borrowers from discontinuing the operation and maintenance of any of its
properties or any of those of its Subsidiaries if such discontinuance is, in the
judgment of such Borrower, desirable in the conduct of its or their business and
that do not in the aggregate have a Material Adverse Effect.

 

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9.7.                            Insurance.

 

9.7.1.                  Required Insurance.  Each of the Borrowers will, and
will cause each of their Subsidiaries to, maintain with financially sound and
reputable insurers insurance with respect to its properties and business against
such casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for such periods
as may be reasonable and prudent.  Without limiting the foregoing, (a) such
insurance shall be in such minimum amounts that such Person will not be deemed a
co-insurer under applicable insurance laws, regulations and policies and
otherwise shall be in such amounts, contain such terms, be in such forms and be
for such periods as may be reasonably satisfactory to the Administrative Agent,
(b) all such insurance shall be payable (other than liability insurance, which
shall name the Administrative Agent as an additional insured) to the
Administrative Agent as loss payee under a “standard” or “New York” loss payee
clause for the benefit of the Lenders and the Administrative Agent (c) each such
Person will (i) keep all of its physical property insured with casualty or
physical hazard insurance on an “all risks” basis, with flood and earthquake
coverages if available at commercially reasonable rates and to the extent that a
given property lies within either a flood and/or an earthquake zone, as
applicable, and electronic data processing coverage, with a full replacement
cost endorsement and an “agreed amount” clause in an amount equal to one hundred
percent (100%) of the full replacement cost of such property, subject to
aggregate sublimits for flood and earthquake equal to those generally maintained
by businesses engaged in similar activities in similar geographic areas, (ii)
maintain all such workers’ compensation or similar insurance as may be required
by law and (iii) maintain, in amounts and with deductibles equal to those
generally maintained by businesses engaged in similar activities in similar
geographic areas, general public liability insurance against claims of bodily
injury, death or property damage occurring, on, in or about the properties of
such Person; and business interruption insurance.  Each of the Borrowers will,
and will cause each of its Subsidiaries to, maintain insurance on the Mortgaged
Properties in accordance with the terms of the Mortgages.

 

9.7.2.                  Insurance Proceeds.  The proceeds of any casualty
insurance in respect of any casualty loss of any of the Collateral shall,
subject to the rights, if any, of other parties with a prior interest in the
property covered thereby, (i) so long as no Event of Default has occurred and is
continuing and to the extent that the amount of such proceeds is less than
$2,500,000, be disbursed to the applicable Borrower for reinvestment in such
Borrower’s business and (ii) in all other circumstances, be held by the
Administrative Agent as cash collateral for the Obligations.  The

 

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Administrative Agent may, so long as no Event of Default has occurred and is
continuing and the Borrowers are not required to apply such proceeds to prepay
the Obligations pursuant to §4.2 or have not elected to reinvest such proceeds
pursuant to §§4.2 and 4.4, disburse from time to time all or any part of such
proceeds so held as cash collateral, upon such terms and conditions as the
Administrative Agent may reasonably prescribe, for direct application by such
Borrower solely to the repair or replacement of such Borrower’s property so
damaged or destroyed or other reinvestment in the Borrowers’ business; provided
that, so long as no Event of Default has occurred and is continuing, the
Borrowers shall at all times and in any event have the rights set forth in the
last sentence of §4.4.  In the event that such proceeds have not been reinvested
in the Borrowers’ business within two hundred seventy (270) days after the
earlier to occur of receipt thereof by the Borrowers or receipt thereof by the
Administrative Agent, the Administrative Agent shall apply all or any part of
such proceeds to the Obligations as provided in §§4.2 and 4.3; provided that, if
(A) within such 270-day period after the earlier to occur of receipt of such
proceeds by the Borrowers or receipt of such proceeds by the Administrative
Agent, the Borrowers enter into an agreement (which may be a purchase order)
pursuant to which such reinvestment shall be made, a copy of which shall be
provided to the Administrative Agent, and (B) within four hundred five (405)
days following receipt of such proceeds by the Borrowers or the Administrative
Agent, the Borrowers shall have completed, or shall have made significant
progress toward completion of, such reinvestment with such proceeds, then the
Borrowers shall not be required to prepay the Revolving Credit Loans pursuant to
§§4.2 and 4.3 but shall in any event comply with §4.4.

 

9.7.3.                  Notice of Cancellation.  All policies of insurance shall
provide for at least thirty (30) days prior written cancellation notice to the
Administrative Agent; provided, however, in the event of cancellation for
non-payment of premiums, such policies of insurance shall provided for at least
ten (10) days prior written cancellation notice to the Administrative Agent.  In
the event of failure by any Borrower to provide and maintain insurance as herein
provided, the Administrative Agent may, at its option, provide such insurance
and charge the amount thereof to such Borrower; provided that the Administrative
Agent shall provide prompt notice to the Borrowers of any such action taken by
the Administrative Agent.  The Borrowers shall furnish to the Administrative
Agent, on an annual basis within thirty (30) days after the end of each fiscal
year, certificates of insurance and policies evidencing compliance with the
foregoing insurance provisions.

 

9.8.                            Taxes.  The Borrowers will, and will cause each
of their Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental

 

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charges imposed upon it, its Real Estate, its sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid would by law become a Lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if such Borrower or
such Subsidiary shall have set aside on its books adequate reserves in
accordance with GAAP with respect thereto; and provided, further, that the
Borrowers and each of their Subsidiaries will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any Lien that may have attached as security therefor, unless such
proceedings are stayed at the time of determination.

 

9.9.                            Inspection of Properties and Books, etc.

 

9.9.1.                  General.  No more frequently than once during any fiscal
quarter or, if a Default or Event of Default shall have occurred and be
continuing, from time to time upon the request of the Administrative Agent or
any Lender, each of the Borrowers shall permit the Lenders, through the
Administrative Agent or any of the Lenders’ other designated representatives, to
visit and inspect any of the properties of such Borrower or any of its
Subsidiaries, to examine the books of account of such Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom unless and to
the extent that a confidentiality agreement with an unaffiliated third party to
which such Borrower or such Subsidiary is bound would otherwise prohibit such
disclosure, in which case such Borrower or such Subsidiary agrees to use
commercially reasonable efforts to obtain the consent of such Person to such
disclosure), and to discuss the affairs, finances and accounts of such Borrower
and its Subsidiaries with, and to be advised as to the same by, its and their
officers, all upon reasonable prior notice during normal business hours at such
reasonable times as the Administrative Agent or any Lender may reasonably
request.

 

9.9.2.                  Environmental Assessments.  Upon the occurrence and
during the continuance of an Event of Default, the Administrative Agent may
require the Borrowers to obtain an environmental assessment or audit reasonable
under the circumstances, prepared by a hydrogeologist, an independent engineer
or other qualified consultant or expert approved by the Administrative Agent to
evaluate or confirm, (a) whether any Hazardous Materials are present in the soil
or water at any Mortgaged Property and (b) whether the use and operation of any
Mortgaged Property complies with all Environmental Laws.  Environmental
assessments may include without limitation detailed visual inspections of any
Mortgaged Property including any and all storage areas, storage tanks, drains,
dry wells and leaching areas, and the taking of soil samples, surface water

 

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samples and ground water samples, as well as such other investigations or
analyses as the Administrative Agent deems appropriate.  The reasonable costs of
such environmental assessments shall be paid by the Borrowers.

 

9.9.3.                  Communications with Accountants.  The Borrowers
authorize the Administrative Agent and, if accompanied by the Administrative
Agent, the Lenders to communicate directly with the Borrowers’ independent
certified public accountants and authorizes such accountants to disclose to the
Administrative Agent and the Lenders any and all financial statements and other
supporting financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other affairs of
the Borrowers or any of their Subsidiaries to the extent prepared for the
Borrowers.  At the reasonable request of the Administrative Agent, the Borrowers
shall deliver a letter addressed to such accountants instructing them to comply
with the provisions of this §9.9.3.

 

9.10.                     Compliance with Laws, Contracts, Licenses, and
Permits.  Each of the Borrowers will, and will cause each of their Subsidiaries
to, comply in all material respects with (a) the applicable laws and regulations
wherever its business is conducted, including all Environmental Laws, (b) the
provisions of its Governing Documents, (c) all agreements and instruments by
which it or any of its properties may be bound and (d) all applicable decrees,
orders, and judgments.  If any authorization, consent, approval, permit or
license from any officer, agency or instrumentality of any government shall
become necessary or required in order that the Borrowers or any of their
Subsidiaries may fulfill any of their obligations hereunder or any of the other
Loan Documents to which any Borrower or such Subsidiary is a party, the
Borrowers will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
the Borrowers or such Subsidiary to obtain such authorization, consent,
approval, permit or license and furnish the Administrative Agent and the Lenders
with evidence thereof.  Without limiting the foregoing, each of the Borrowers
will, and will cause each of its Subsidiaries to, obtain any and all approvals
by any federal, state or local liquor authority necessary for the continued
operation at all times of any Restaurant operated by any of the Borrowers or
their Subsidiaries with full liquor service unless the failure to obtain such
approvals would not have a Material Adverse Effect.

 

9.11.                     Employee Benefit Plans.  The Borrowers will (a)
promptly upon request of the Administrative Agent, upon filing the same with the
Department of Labor or Internal Revenue Service a copy of the most recent
actuarial statement required to be submitted under §103(d) of ERISA and Annual
Report, Form 5500, with all required attachments, in respect of each Guaranteed
Pension Plan, and (b) promptly upon receipt or dispatch, furnish to the
Administrative Agent any notice, report or demand sent or received in respect of
a Guaranteed Pension Plan under

 

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§§302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under §§4041A, 4202, 4219, 4242, or 4245 of ERISA.

 

9.12.                     Use of Proceeds.  The Borrowers will use the proceeds
of the Revolving Credit Loans and obtain Letters of Credit solely for the
purposes set forth in §8.17.1.

 

9.13.                     Additional Mortgaged Property; Notice of Leases.

 

(a)          If, after the Closing Date, any of the Borrowers or any of their
Subsidiaries acquires a fee interest in real estate that has a fair market value
of $500,000 or more, such Borrower shall, or shall cause such Subsidiary to,
deliver forthwith to the Administrative Agent for the benefit of the Lenders and
the Administrative Agent a fully executed valid and enforceable first priority
mortgage or deed of trust over such acquired real estate free and clear of all
defects and encumbrances except for Permitted Liens.

 

(b)         If, after the Closing Date, any of the Borrowers or any of their
Subsidiaries intends to lease real estate for a term in excess of five (5)
years, or to lease office space where they intend to maintain books and records
relating to their businesses, the Borrowers shall use reasonable best efforts to
ensure that such lease permits the Administrative Agent to obtain a first
priority leasehold mortgage over such leased real estate and to obtain from the
landlord a waiver substantially in the form of Exhibit F hereto.  Upon the
execution of such lease, the Borrowers or such Subsidiary shall promptly deliver
to the Administrative Agent a copy of such lease, and, to the extent permitted
by the applicable lease and required by the Administrative Agent, the Borrowers
or such Subsidiary shall deliver forthwith to the Administrative Agent for the
benefit of the Lenders and the Administrative Agent a fully executed, valid and
enforceable first priority leasehold mortgage over such leased real estate, free
and clear of all defects and encumbrances except for Permitted Liens.

 

(c)          Each such mortgage, leasehold mortgage or deed of trust referred to
in §9.13(a) and (b) shall be substantially in the form of the Mortgages
delivered on or about the Closing Date, together with evidences of insurance
with the Administrative Agent named as loss payee and additional insured and
other documents and certificates with respect to such real estate, (such
evidence of insurance and other documents and certificates referred to in this
§9.13 as “Real Estate Documentation”) as was required for Real Estate of the
Borrowers or any of their Subsidiaries as of the Closing Date or as otherwise
reasonably required by the Administrative Agent.

 

(d)         If, after the Closing Date, any of the Borrowers or their
Subsidiaries leases real estate or any lease of Real Estate is extended or
otherwise modified in any respect, the Borrowers shall, or shall cause such
Subsidiary to, use reasonable efforts to cause the relevant lessor to execute
and deliver a notice of lease (to the

 

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extent that a notice of lease is not already recorded in respect of such lease)
in form meeting all statutory and recording requirements of the jurisdiction in
which the relevant real property is located.

 

9.14.                     Conduct of Business; Restaurants.  The Borrowers will,
and will cause each of their Subsidiaries to, continue to engage only in the
business of owning, operating and (subject to the consent of the Administrative
Agent, such consent not to be unreasonably withheld) managing full-service
restaurants which (other than the managed restaurants) operate using the
restaurant concepts used by the Borrowers on the Closing Date, and in businesses
and activities reasonably related thereto.  The Borrowers shall inform each of
the Lenders of any new Restaurant locations simultaneously with the delivery of
the financial statements referred to in §9.4(c) but in any event no later than
one (1) month after the opening of a new Restaurant location and the entering
into a lease for, or the acquisition of, the premises for a new Restaurant.  The
Parent will continue to engage only in the business of owning the Equity
Interests of the Borrowers and shall not own any assets other than the Equity
Interests of the Borrowers.

 

9.15.                     Intentionally Omitted.

 

9.16.                     Bank Accounts.  The Borrowers will, and will cause
each of their Subsidiaries to, cause all cash receipts, checks and cash proceeds
of accounts receivable and other Collateral of the Borrowers and their
Subsidiaries to be deposited only into (i) depository accounts with financial
institutions that have entered into agency account agreements in substantially
the form of Exhibit D hereto (such agency account agreements referred to herein
as “Agency Account Agreements” and such depository accounts with financial
institutions that have entered into such Agency Account Agreements referred to
herein as “Agency Accounts”) or (ii) the Concentration Account, in each case as
such accounts are identified on Schedule 8.20 hereto.  The Agency Account
Agreements shall provide that at any time following the occurrence of a Default
or an Event of Default, the Administrative Agent shall be entitled to direct the
financial institutions party thereto to cause all funds of the Borrowers and
their Subsidiaries held in the Agency Accounts at such financial institutions to
be transferred immediately and at any time thereafter to the Agent to be applied
to the Obligations or held as Collateral, as the Administrative Agent deems
appropriate.  The Borrowers shall cause (A) all cash receipts and checks in
excess of $50,000 at each Restaurant to be deposited into an Agency Account or a
Concentration Account, on at least two (2) separate Business Days during each
week (a “week”, for the purposes of this §9.16, being deemed to begin at the
beginning of each Monday and end at the end of the following Friday) and (B) all
funds in each Agency Account or any other account of the Borrowers or any of
their Subsidiaries in excess of $35,000 (or, to the extent that more than one
Restaurant makes deposits to one Agency Account, the sum of $35,000 multiplied
by the number of Restaurants making deposits into such Agency Account) to be
deposited in the Concentration Account on a daily basis on each Business Day.

 

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The Borrowers shall at all times maintain a Concentration Account with a
financial institution that has entered into an Agency Account Agreement with the
Administrative Agent and the Borrowers that is in all respects satisfactory to
the Administrative Agent.

 

9.17.                     Additional Subsidiaries.  In the event that, after the
date hereof, any of the Borrowers or any of their Subsidiaries creates any new
Subsidiary or acquires a new Subsidiary in accordance with §10.5.3, (a) such new
Subsidiary shall, concurrently with such event or as soon as practicable
thereafter, execute and deliver to the Administrative Agent an instrument of
joinder and accession, in form and substance satisfactory to the Administrative
Agent, pursuant to which such new Subsidiary shall join the Credit Agreement as
a Borrower and the Security Documents as a grantor of security thereunder as if
such new Subsidiary was an original signatory hereto and thereto, and (b) the
Borrowers and/or such new Subsidiary (as the case may be) shall deliver such
other instruments and documents, including without limitation allonges to the
Notes in form and substance satisfactory to the Administrative Agent, Perfection
Certificates, Uniform Commercial Code financing statements and stock or other
certificates representing all of the issued and outstanding Equity Interests of
such new domestic Subsidiary and sixty-five percent (65%) of non-U.S.
Subsidiaries, with accompanying stock powers or other instruments of transfer
duly executed in blank, in each case required to be executed or delivered
pursuant to such Security Documents in order to grant to or maintain the
Administrative Agent’s first priority perfected security interest in and to the
assets of and the Equity Interests issued by such new Subsidiaries.  Further,
contemporaneously with the formation or acquisition of such new Subsidiary, the
Borrowers and/or such new Subsidiary shall execute and/or deliver to the
Administrative Agent such other documentation as the Administrative Agent may
reasonably request in furtherance of the intent of this §9.17, including without
limitation an updated Schedule 8.19 hereto and documentation of the type
required to be supplied by the Borrowers and their Subsidiaries as a condition
precedent to the initial Revolving Credit Loans made hereunder pursuant to §12,
as applicable to such new Subsidiary or acquisition permitted pursuant to
§10.5.3.

 

9.18.                     Amendments to Documents.  The Borrowers will promptly
furnish to the Administrative Agent any amendment, supplement or modification to
any of the Acquisition Documents, the Warrant Documents, the Equity Documents or
the Subordinated Debt Documents executed or delivered following the Closing
Date, as such documents may amended or modified pursuant to §10.14.

 

9.19.                     Further Assurances.  The Borrowers will, and will
cause each of their Subsidiaries to, cooperate with the Lenders and the
Administrative Agent and execute such further instruments and documents as the
Lenders or the Administrative Agent shall reasonably request to carry out to
their satisfaction the

 

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transactions contemplated by this Credit Agreement and the other Loan Documents.

 

9.20.                     Post-Closing Delivery Requirements.

 

(a)          No later than forty-five (45) days after the Closing Date, the
Borrowers shall have delivered to the Administrative Agent, Agency Account
Agreements, in form and substance reasonably satisfactory to the Administrative
Agent, for each depository account of the Borrowers and each of their
Subsidiaries and as identified on Schedule 8.20 of the Credit Agreement.

 

(b)         The Borrowers will use their commercially reasonable efforts to
execute and deliver to the Administrative Agent, in form reasonably acceptable
to the Administrative Agent, no later than sixty (60) days after the Closing
Date, leasehold mortgages or leasehold deeds of trust (and related consents), as
applicable, for the following locations (i) Providence Biltmore Hotel, Kennedy
Plaza, Providence, RI; (ii) 235 SW First Avenue, Portland, OR; (iii) Pittsburgh,
PA; (iv) CNN Center, Atlanta, GA; (v) 8100 East Union Avenue, Denver, CO; and
(vi) Mall at the Millenia, 4200 Conroy Road, Space A-146, Orlando, FL.

 

(c)          The Borrowers will use their commercially reasonable efforts to
execute and deliver to the Administrative Agent, in form reasonably acceptable
to the Administrative Agent, no later than sixty (60) days after the Closing
Date, landlord subordination agreements, landlord consents and/or lien waivers,
as applicable, for the following leased locations: (i) North Park Shopping
Center, Dallas, TX; (ii) Providence Biltmore Hotel, Kennedy Plaza, Providence,
RI; (iii) 235 SW First Avenue, Portland, OR; (iv) Bridgewater Mall, NJ; (v)
Pittsburgh, PA; (vi) CNN Center, Atlanta, GA; (vii) 8100 East Union Avenue,
Denver, CO; and (viii) Mall at the Millenia, 4200 Conroy Road, Space A-146,
Orlando, FL.

 

10.                               CERTAIN NEGATIVE COVENANTS.

 

The Borrowers covenant and agree that, so long as any Revolving Credit Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Lender has any obligation to make any Revolving Credit Loan or the
Administrative Agent has any obligations to issue, extend or renew any Letters
of Credit:

 

10.1.                     Restrictions on Indebtedness.  None of the Borrowers
will, nor will permit any of its Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:

 

(a)          Indebtedness to the Lenders and the Administrative Agent arising
under any of the Loan Documents;

 

(b)         endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;

 

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(c)          Subordinated Debt; provided that (i) the aggregate principal amount
of such Subordinated Debt plus the aggregate principal amount of Subordinated
Debt incurred by the Parent shall not exceed $10,000,000 at any time and (ii)
prior to the incurrence of any such Subordinated Debt, the Borrowers shall have
demonstrated pro forma compliance with the covenants set forth in §11.2 for the
Reference Period most recently ended and projected compliance with all covenants
hereunder for the four (4) fiscal quarters following the incurrence of such
Subordinated Debt; and provided, further, such Subordinated Debt (i) shall be
expressly subordinated and made junior to the payment and performance in full of
the Obligations on terms which are reasonably satisfactory in all respects to
the Required Lenders, (ii) shall have a final maturity not earlier than the
Maturity Date, and (iii) shall otherwise contain terms and provisions reasonably
satisfactory to the Required Lenders;

 

(d)         Indebtedness incurred in connection with the acquisition of any real
or personal property by such Borrower or such Subsidiary or under any
Capitalized Lease, and any refinancings, renewals and replacements thereof which
contain terms no more onerous to the Borrowers than the Indebtedness so
refinanced, renewed or replaced, provided that the aggregate principal amount of
such Indebtedness (including any such Indebtedness outstanding on the Closing
Date) of all of the Borrowers and their Subsidiaries shall not exceed the
aggregate amount of $3,000,000 at any one time;

 

(e)          Indebtedness in respect of interest rate agreements, swaps or
similar arrangements entered into to protect the Borrowers from changes in
interest rates and not for speculative purposes;

 

(f)            Indebtedness not otherwise permitted by this §10.1 existing on
the Closing Date and listed and described on Schedule 10.1 hereto and any
refinancings thereof not to exceed such original principal amount and on terms
and conditions substantially similar thereto; and

 

(g)         Indebtedness of a Subsidiary of a Borrower owing to such Borrower
and Indebtedness of one Borrower owing to another Borrower; provided that all
such intercompany Indebtedness permitted by this §10.1(g), and all instruments
(if any) evidencing any thereof, shall be pledged and delivered to the
Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, as security for the Obligations pursuant to the provisions of the
applicable Security Documents, and the Administrative Agent shall have a first
priority perfected lien and security interest therein; and provided further that
all such intercompany Indebtedness shall be subordinated to the Obligations on
terms satisfactory to the Administrative Agent;

 

(h)         guarantees by a Borrower or a Subsidiary of a Borrower of
Indebtedness otherwise permitted under this §10.1;

 

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(i)             Indebtedness consisting of contingent obligations of any
Borrower or any of its Subsidiaries to repurchase or otherwise redeem Equity
Interests of MSSR from former employees of MSSR, a Borrower or any of their
Subsidiaries pursuant to the terms of the Equity Documents or other employee
compensation plans of the Borrowers and their Subsidiaries and matured
obligations to repurchase or otherwise redeem such stock to the extent such
repurchase or redemption is permitted under §10.4(d); and

 

(j)             other unsecured Indebtedness not otherwise permitted hereunder
in an aggregate principal amount of $2,500,000, provided that no Default or
Event of Default has occurred and is continuing at the time of the incurrence of
such unsecured Indebtedness or would result after giving effect thereto.

 

10.2.                     Restrictions on Liens.

 

10.2.1.           Permitted Liens.  None of the Borrowers will, nor will permit
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any Lien upon any of its property or assets of any
character whether now owned, leased or hereafter acquired, or upon the income or
profits therefrom; (b) transfer any of such property or assets or the income or
profits therefrom for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment of
its general creditors; (c) acquire, or agree or have an option to acquire, any
property or assets upon conditional sale or other title retention or purchase
money security agreement, device or arrangement; (d) suffer to exist any claim
or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or (e) sell, assign, pledge or otherwise transfer any “receivables”
as defined in clause (g) of the definition of the term “Indebtedness,” with or
without recourse; provided that the Borrowers or any of their Subsidiaries may
create or incur or suffer to be created or incurred or to exist:

 

(i)                                     Liens to secure claims in respect of
taxes, assessments and other government charges in respect of obligations not
overdue or which are being contested in good faith or Liens on properties to
secure claims for labor, material or supplies in respect of obligations not
overdue or which are being contested in good faith and for which adequate
reserves have been set aside in accordance with GAAP;

 

(ii)                                  deposits or pledges made in connection
with, or to secure payment of, workmen’s compensation, unemployment insurance,
old age pensions or other social security obligations, statutory obligations,
insurance contracts, performance bonds issued in the ordinary course of business
and other similar obligations;

 

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(iii)                               Liens on properties in respect of judgments
or awards that have been in force for less than the applicable period for taking
an appeal so long as execution is not levied thereunder or in respect of which
such Borrower or such Subsidiary shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of which a stay of execution
shall have been obtained pending such appeal or review and for which adequate
reserves have been set aside in accordance with GAAP;

 

(iv)                              Liens of carriers, warehousemen, mechanics and
materialmen, and other like Liens on properties in existence in respect of
obligations not overdue or which are being contested in good faith and for which
adequate reserves have been set aside in accordance with GAAP;

 

(v)                                 encumbrances on Real Estate consisting of
easements, rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto, landlord’s or
lessor’s liens, liens that would be disclosed by an accurate survey, and other
minor Liens, provided that none of such Liens (A) interferes materially and
adversely with the use of the property affected in the ordinary conduct of the
business of the Borrowers and their Subsidiaries, and (B) individually or in the
aggregate have a Material Adverse Effect;

 

(vi)                              Liens existing on the Closing Date and listed
on Schedule 10.2 hereto;

 

(vii)                           purchase money security interests in or purchase
money mortgages on real or personal property acquired (in the case of purchase
money security interests) or leased (in the case of Capitalized Leases) to
secure purchase money Indebtedness or Capitalized Leases of the type and amount
permitted by §10.1(d), incurred in connection with the acquisition or lease of
such property, which security interests or mortgages cover only the real or
personal property so acquired or leased;

 

(viii)                        Liens on each Mortgaged Property as and to the
extent permitted by the Mortgage applicable thereto;

 

(ix)                                Liens in favor of the Administrative Agent
for the benefit of the Lenders and the Administrative Agent under the Loan
Documents and any Interest Rate Agreements;

 

(x)                                   Liens which replace Liens otherwise
permitted hereunder so long as (i) such replacement Liens do not secure
Indebtedness in an amount in excess of the amount of the original Indebtedness
secured thereby and (ii) such Liens encumber no more than the assets encumbered
by the Liens replaced thereby;

 

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(xi)                                claims and demands of the type specified in
clause (d) above to the extent such claims or demands are not otherwise
permitted pursuant to this §10.2.1 if and to the extent such claims or demands
(x) are not matured or due and payable or (y) are being actively contested in
good faith and for which adequate reserves have been set aside in accordance
with GAAP and; provided that any such claim or demand outstanding for more than
ninety (90) days after the date on which it became due and payable does not
exceed $5,000,000; and

 

(xii)                             licenses of intellectual property granted in
the ordinary course of business.

 

10.2.2.           Restrictions on Negative Pledges and Upstream Limitations. 
None of the Borrowers will, nor will permit any of its Subsidiaries to, (a)
enter into or permit to exist any arrangement or agreement (excluding the Credit
Agreement and the other Loan Documents) which directly or indirectly prohibits
such Borrower or any of its Subsidiaries from creating, assuming or incurring
any Lien upon its properties, revenues or assets or those of any of its
Subsidiaries whether now owned or hereafter acquired, or (b) enter into any
agreement, contract or arrangement (excluding the Credit Agreement and the other
Loan Documents) restricting the ability of any Subsidiary of such Borrower to
pay or make dividends or distributions in cash or kind to the Borrowers, to make
loans, advances or other payments of whatsoever nature to the Borrowers, or to
make transfers or distributions of all or any part of its assets to the
Borrowers; in each case other than (i) restrictions on specific assets which
assets are the subject of purchase money security interests to the extent
permitted under §10.2.1, and (ii) customary anti-assignment provisions contained
in leases and licensing agreements entered into by such Borrower or such
Subsidiary in the ordinary course of its business.

 

10.3.                     Restrictions on Investments.  None of the Borrowers
will, nor will permit any of its Subsidiaries to, make or permit to exist or to
remain outstanding any Investment except Investments in:

 

(a)          Cash Equivalents;

 

(b)         Investments existing on the Closing Date and listed on Schedule 10.3
hereto;

 

(c)          Investments with respect to Indebtedness permitted by §10.1(g) or
(h) so long as such entities remain (i) a Borrower or (ii) a Subsidiary of a
Borrower, as the case may be;

 

(d)         Investments consisting of Investments by a Borrower in another
Borrower or by a Borrower in any of its Subsidiaries, including Investments

 

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effected as a result of the transfer of assets between Borrowers permitted
pursuant to §10.5.2(c) and §10.5.3(d);

 

(e)          Investments consisting of promissory notes received as proceeds of
asset dispositions permitted by §10.5.2; provided that the aggregate value of
such promissory notes received in connection with any such asset disposition
shall not exceed fifty percent (50%) of the aggregate value of the proceeds of
such asset disposition;

 

(f)            Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary course
of business not to exceed $250,000 in the aggregate at any time outstanding;

 

(g)         securities (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;

 

(h)         Investments consisting of Capitalized Leases permitted hereunder;

 

(i)             Investments consisting of Interest Rate Agreements entered into
by any Borrower to protect the Borrowers from changes in interest rates and not
for speculative purposes;

 

(j)             the Investments related to the Santa Rosa Transaction, so long
as such Investments are secured by the Santa Rosa Pledge Agreement and any other
Investment made by a Borrower in connection with a restaurant management
agreement pursuant to §9.14 provided (i) any such other Investment is consented
to by the Administrative Agent (such consent not to be unreasonably withheld)
and (ii) if requested by the Administrative Agent, the property or assets which
are the subject of such Investment are made part of the Collateral subject to
the Security Documents; and

 

(k)          Investments consisting of performance bonds or advance payment
bonds, in each case issued in the ordinary course of business

 

provided, however, that, with the exception of promissory notes referred to in
§10.3(e) evidencing Indebtedness in an amount less than or equal to $50,000, and
loans and advances referred to in §10.3(f), such Investments will be considered
Investments permitted by this §10.3 only if all actions have been taken to the
reasonable satisfaction of the Administrative Agent to provide to the
Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, a first priority perfected security interest in all of such Investments
free of all Liens other than Permitted Liens.

 

10.4.                     Restricted Payments.  None of the Borrowers will, nor
will permit any of its Subsidiaries to, make any Restricted Payments, other
than:

 

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(a)          Distributions by any Borrower to any other Borrower or by any
Subsidiary of a Borrower to such Borrower;

 

(b)         payments by the Borrowers to the Parent to enable the Parent to pay
costs and expenses incurred in the ordinary course of business as a holding
company, including, without limitation, payment of administrative costs and
expenses; provided that (A) the aggregate amount of all such amounts payable in
any fiscal year of the Borrowers under this subparagraph (b) shall not exceed
$500,000 plus reasonable board fees payable to members of the board of directors
of the Parent, the Borrowers or MSSR who are not part of the management of the
Borrowers, the Parent or MSSR or affiliated with the Sponsors and reasonable out
of pocket expenses incurred by members of the board of directors or observers of
the Parent, the Borrowers or MSSR and (B) the Administrative Agent shall have
received a Compliance Certificate for the Reference Period most recently ended;

 

(c)          payments by the Borrowers to the Parent to permit the Parent to pay
federal and state income taxes, franchise taxes and other similar licensing
expenses incurred in the ordinary course of business which are owed or payable
by the Parent; and

 

(d)         so long as no Event of Default is then continuing, Distributions in
an amount not to exceed $500,000 per annum and $2,000,000 in the aggregate
during the period from the Closing Date through to the Maturity Date to be used
to repurchase or otherwise redeem Equity Interests of MSSR from former employees
of MSSR, the Borrowers or their Subsidiaries pursuant to the terms of the
employee compensation plans of MSSR, the Borrowers and their Subsidiaries;
provided that the portion of such Distributions equal to cash payments received
by MSSR, any Borrower or any of their Subsidiaries from the subsequent sale of
such repurchased or redeemed capital stock for cash to any employee of MSSR, the
Borrowers and their Subsidiaries at the commencement of such Person’s employment
shall not be deemed to be a Distribution for purposes of this §10.4(d); and

 

(e)                                  Distributions by any Borrower to the Parent
solely for the purpose of paying interest on Subordinated Debt incurred by the
Parent so long as (i) no Default or Event of Default shall have occurred and be
continuing or would result after giving effect to any such Distribution, (ii)
the Borrowers shall have delivered to the Administrative Agent a pro forma
Compliance Certificate demonstrating compliance with the financial covenants set
forth in §11 after giving effect to such Distribution, (iii) the aggregate
amount of such Distributions, together with any interest paid by the Borrowers
on Subordinated Debt incurred by the Borrowers pursuant to §10.1(c), shall not
exceed during any fiscal year that amount equal to interest which has accrued on
outstanding Subordinated Debt during such year, and (iv) such Distributions are
applied by the Parent solely to pay such interest expense not earlier than the
regularly scheduled payment date therefor; and

 

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(f)            so long as no Event of Default has occurred and is then
continuing, payments by the Borrowers to the Parent to enable the Parent to pay
on or before July 25, 2004 the payments required under the Termination
Documents.

 

In furtherance of the foregoing, the Borrowers shall not make any Restricted
Payments, and the Parent shall not accept any Restricted Payments, if such
payments would be used to redeem or prepay the principal amount of any
Indebtedness of the Parent.

 

10.5.                     Mergers; Disposition of Assets; Acquisitions.

 

10.5.1.           Mergers.  None of the Borrowers will, nor will permit any of
its Subsidiaries to, become a party to any merger, amalgamation or consolidation
except (a) the merger or consolidation of one (1) or more Borrowers with and
into another Borrower and (b) the merger or consolidation of one (1) or more
Subsidiaries of a Borrower with and into a Borrower.

 

10.5.2.           Disposition of Assets.  None of the Borrowers will, nor will
permit any of its Subsidiaries to, become a party to or agree to or effect any
disposition of assets (excluding any disposition included in the definition of
“Casualty Event”), other than (a) the sale of inventory or licensing of
intellectual property in the ordinary course of business and the disposition of
obsolete assets, (b) the disposition of property as part of a sale and leaseback
transaction permitted under §10.6 in the ordinary course of business consistent
with past practices, (c) assignments, dispositions or transfers by one Borrower
to one or more of the other Borrowers of any rights, property, Indebtedness,
business or other asset of the transferring Borrower (whether tangible or
intangible and including, without limitation, membership interests and
goodwill), together with any liability associated therewith; provided that the
Borrowers (i) provide at least thirty (30) days prior written notice to the
Administrative Agent (or such lesser period as may be consented to by the
Administrative Agent) and (ii) execute and deliver Security Documents and such
further instruments, if and to the extent requested by the Administrative Agent,
in form and substance satisfactory to the Administrative Agent, and do, or cause
to be done, such further acts as may be necessary or proper in the opinion of
the Administrative Agent to evidence, continue, preserve and perfect the
security for the Obligations provided by the Borrowers, and (d) the sale of up
to two (2) Unprofitable Restaurants in any year, provided that the proceeds of
such sales of Unprofitable Restaurants are reinvested in new or existing
Restaurants within two hundred seventy (270) days thereafter or are used to
repay or prepay the Obligations pursuant to §4.2(a); provided, further, that, if
(A) within such 270-day period after receipt of such proceeds by the Borrowers,
the Borrowers enter into an agreement pursuant to which such reinvestment shall
be made, a copy of which shall be provided to the Administrative Agent, and (B)
within four

 

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hundred five (405) days following receipt of such proceeds by the Borrowers, the
Borrowers shall have completed, or shall have made significant progress toward
completion of, such reinvestment with such proceeds, then the Borrowers shall
not be required to prepay the Revolving Credit Loans pursuant to §§4.2 and 4.3
but shall in any event comply with §4.4.  Nothing in this §10.5.2 is intended to
prohibit any Borrower or any of the their Subsidiaries from conditionally
agreeing to dispose of any assets subject to the prior approval of the Lenders
required by §17.12 if (i) such Borrower or Subsidiary will not be subject to any
penalties in connection with such agreement in the event that the Lenders
required by §17.12 do not consent to such disposition or (ii) such disposition
is contingent upon the prior or simultaneous repayment of all of the Obligations
hereunder.  The Administrative Agent may release any Collateral disposed of by
any Borrower or any Subsidiary of any Borrower if such disposition is in
compliance with this §10.5.2 and otherwise in accordance with the terms hereof.

 

10.5.3.           Acquisitions.  None of the Borrowers will, nor will permit any
of its Subsidiaries to, agree to or effect any asset acquisition or stock
acquisition except (a) Growth Capital Expenditures permitted pursuant to §11.4,
(b) Maintenance Capital Expenditures incurred in the ordinary course of business
to maintain the assets of such Borrower and its Subsidiaries or to insure
compliance with applicable laws and regulations, (c) the acquisition of
inventory, equipment, furnishings and other similar assets (not including
Restaurants or real property) in the ordinary course of business consistent with
past practices, (d) acquisitions by a Borrower effected as a result of the
transfer of assets or obligations between Borrowers permitted pursuant to
§10.5.2(c) and (e) Permitted Acquisitions; provided that during the period from
the Closing Date through to the Maturity Date the aggregate purchase price for
all Permitted Acquisitions consummated by the Borrowers during such period shall
not exceed $10,000,000.

 

10.6.                     Sale and Leaseback.  None of the Borrowers will, nor
will permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby any Borrower or any of its Subsidiaries shall sell or
transfer any property owned by it in order then or thereafter to lease such
property or lease other property that such Borrower or such Subsidiary intends
to use for substantially the same purpose as the property being sold or
transferred; provided that, so long as no Event of Default has occurred and is
continuing, the Borrowers and their Subsidiaries may enter into sale and
leaseback transactions with respect to property and equipment in an aggregate
amount not to exceed $2,500,000 during the period from the Closing Date through
to the Maturity Date; and provided, further, that (a) the terms of the sale as
such are comparable to terms which could be obtained in an arms length sale
among unaffiliated parties not involving a sale and leaseback transaction, (b)
the terms of the lease as such are comparable to

 

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terms which could be obtained in an arms length commercial operating lease among
unaffiliated parties and (c) the proceeds of such sale and leaseback transaction
are applied in accordance with §4.2.

 

10.7.                     Compliance with Environmental Laws.  None of the
Borrowers will, nor will permit any of its Subsidiaries to, other than in
compliance with all applicable Environmental Laws except where the failure to do
so would not result in a Material Adverse Effect (a) use any of the Real Estate
or any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances, (b) cause or permit to be located on any of the Real
Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (c) generate any Hazardous Substances on any of the Real
Estate, (d) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (e) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law.

 

10.8.                     Employee Benefit Plans.  No Borrower nor any ERISA
Affiliate will:

 

(a)          engage in any “prohibited transaction” within the meaning of §406
of ERISA or §4975 of the Code which could reasonably be expected to result in a
material liability for any of the Borrowers or any of their Subsidiaries; or

 

(b)         permit any Guaranteed Pension Plan to incur an “accumulated funding
deficiency”, as such term is defined in §302 of ERISA, whether or not such
deficiency is or may be waived; or

 

(c)          fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which could
reasonably be expected to result in the imposition of a lien or encumbrance on
the assets of any of the Borrowers or any of their Subsidiaries pursuant to
§302(f) or §4068 of ERISA; or

 

(d)         amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to §307 of ERISA or §401(a)(29) of the Code by any
of the Borrowers;

 

(e)          permit or take any action which would result in the aggregate
benefit liabilities (within the meaning of §4001 of ERISA) of all Guaranteed
Pension Plans exceeding the value of the aggregate assets of such Plans
disregarding for this purpose the benefit liabilities and assets of any such
Plan with assets in excess of benefit liabilities by more than $500,000; or

 

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(f)            permit or take any action which would contravene any Applicable
Pension Legislation, except to the extent that any such action could not
reasonably be expected to have a Material Adverse Effect.

 

10.9.                     Business Activities.  None of the Borrowers will, nor
will permit any of its Subsidiaries to, engage directly or indirectly (whether
through Subsidiaries or otherwise) in any type of business other than the
businesses conducted by the Borrowers and their Subsidiaries immediately prior
to the Closing Date and operating and (subject to the consent of the
Administrative Agent, such consent not to be unreasonably withheld) managing
full-service restaurants (including, without limitation, MSRC’s performance of
services and its Investment related to the Santa Rosa Transaction) which (other
than the managed restaurants) operate using the restaurant concepts used by the
Borrowers on the Closing Date, and, in each case, in related businesses.

 

10.10.              Fiscal Year; Fiscal Quarters.  None of the Borrowers will,
nor will permit any of its Subsidiaries to, change the date of the end of its
fiscal year or fiscal quarters from those set forth in §8.4.1.

 

10.11.              Transactions with Affiliates.  None of the Borrowers will,
nor will permit any of its Subsidiaries to, engage in any transaction with any
Affiliate or Sponsor or any officer, director or employee of an Affiliate or a
Sponsor, (other than for services as employees, officers and directors or
transactions with other Borrowers or any Subsidiary of the Borrower), including
any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such Person or, to the knowledge
of such Borrower, any corporation, partnership, trust or other entity in which
any such Person has a substantial interest or is an officer, director, trustee
or partner, on terms more favorable to such Person than would have been
obtainable on an arm’s-length basis in the ordinary course of business; provided
that so long as no Default or Event of Default has occurred and is continuing,
the foregoing restriction shall not apply to payments permitted under §10.4(b)
and (c).  The Borrowers shall not pay any fees to members of the board of
directors other than reasonable fees payable to outside non-affiliated board
members of the board of directors who are not part of the management of the
Borrowers or affiliated with the Sponsors.

 

10.12.              Bank Accounts.  None of the Borrowers will, nor will permit
any of its Subsidiaries to, (a) establish any bank accounts after the Closing
Date other than the Agency Accounts and the Concentration Account without the
Administrative Agent’s prior written consent, (b) violate directly or indirectly
any Agency Account Agreement or other bank agency or lock box agreement in favor
of the Administrative Agent for the benefit of the Lenders and the
Administrative Agent with respect to such account; or (c) deposit into Account
No. 3750714986 with Bank of America, any amounts in excess of amounts necessary
to pay current payroll obligations (including payroll taxes) with respect to
management

 

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by $30,000 or more, (d) deposit into Account No. 3750714973 with Bank of
America, any amounts in excess of amounts necessary to pay current payroll
obligations (including payroll taxes) with respect to non-management employees
by $20,000, or (e) establish additional payroll accounts following the Closing
Date.

 

10.13.              Franchises.  None of the Borrowers will, nor will permit any
of its Subsidiaries to, enter into any Franchise Agreement as a franchisor.

 

10.14.              Restrictions on Amendments to Documents.

 

10.14.1.    Warrant Documents; Equity Documents.  None of the Borrowers will,
nor will permit any of its Subsidiaries to amend, supplement or otherwise modify
(pursuant to a waiver or otherwise) the terms of the Warrant Documents or the
Equity Documents in any manner which could have an adverse effect on the Lenders
without the prior written consent of the Administrative Agent.

 

10.14.2.    Acquisition Documents.  None of the Borrowers will, nor will permit
any of its Subsidiaries to, amend, supplement or otherwise modify (pursuant to a
waiver or otherwise) any material term or condition of any of the Acquisition
Documents in any manner which could have an adverse effect on the Lenders
without the prior written consent of the Administrative Agent.

 

10.14.3.    Subordinated Debt.  None of the Borrowers will, nor will permit any
of its Subsidiaries to, amend, supplement or otherwise modify the terms of any
Subordinated Debt Documents approved by the Required Lenders pursuant to
§10.1(c), or prepay, redeem or repurchase any of the Subordinated Debt. 
Notwithstanding the foregoing, the terms of the Subordinated Debt and the
Subordinated Debt Documents may be amended, supplemented or otherwise modified
(a) solely to conform to amendments made to this Credit Agreement and the other
Loan Documents, (b) to waive defaults thereunder or to amend covenants in order
to make them less restrictive on the Borrowers or (c) solely to permit the
exchange of Subordinated Debt for common stock of the Parent or other Equity
Interests of the Parent with similar attributes; provided that a certified copy
of such amendment, modification or waiver is promptly delivered to the
Administrative Agent and such amendment, modification or waiver is reasonably
satisfactory to the Required Lenders.

 

10.14.4.    Certain Amendments.  Notwithstanding the foregoing and for the
avoidance of doubt, the Parent and the Borrowers may amend and restate Parent’s
amended and restated certificate of incorporation in order to (i) conform the
definition of “Change in Control” contained therein to the definition of “Change
of Control” contained in

 

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this Credit Agreement and (ii) update the references to the “credit agreement”
and the “guaranty” referred to in the Parent’s amended and restated certificate
of incorporation to refer to this Credit Agreement and the Parent Guaranty;
provided that the Borrowers comply with the requirements of §9.18 in connection
with any such amendment.

 

10.15.              Capitalization.  None of the Borrowers will issue any Equity
Interests having debt-like features such as mandatory cash dividends, mandatory
redemption provisions or other provisions which create monetary obligations on
such Borrower that become due and payable in cash during a period when any
Revolving Credit Loans or Letters of Credit are outstanding or any Revolving
Credit Commitments are outstanding.

 

10.16.              Maximum Number of Unprofitable Restaurants.  None of the
Borrowers will, nor will permit any of its Subsidiaries to, permit the ratio of
(a) the aggregate number of Unprofitable Restaurants to (b) the aggregate number
of Restaurants to be more than ten percent (10%) at any time.

 

11.                               FINANCIAL COVENANTS.

 

The Borrowers covenant and agree that, so long as any Revolving Credit Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Lender has any obligation to make any Revolving Credit Loan or the
Administrative Agent has any obligation to issue, extend or renew any Letters of
Credit:

 

11.1.                     Adjusted Leverage Ratio.  As at the end of any fiscal
quarter occurring after the Closing Date, the Adjusted Leverage Ratio for the
Reference Period then ended shall not exceed the ratio set forth opposite such
fiscal quarter in such table:

 

Fiscal Quarter

 

Ratio

 

Closing Date through FQ2 2005

 

4.25:1.00

 

FQ3 2005 and Thereafter

 

4.00:1.00

 

 

11.2.                     Consolidated Cash Flow Ratio.  As at the end of any
fiscal quarter referenced in the table below, the Consolidated Cash Flow Ratio
for the Reference Period then ended shall not be less than the ratio set forth
opposite such fiscal quarter in such table:

 

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Fiscal Quarter

 

Ratio

 

FQ4 2004

 

1.50:1.00

 

FQ1 2005 through FQ4 2005

 

1.75:1.00

 

FQ1 2006 and Thereafter

 

2.00:1.00

 

 

11.3.                     Growth Capital Expenditures.  The Borrowers will not
make, and will not permit any of their Subsidiaries to make, aggregate Growth
Capital Expenditures or construct, acquire or open new Restaurants during any
fiscal year that exceed the amounts and numbers set forth in the table below
opposite such fiscal year, provided that notwithstanding the foregoing maximum
amounts, commencing with the Borrowers’ 2005 fiscal year, the maximum amount of
Growth Capital Expenditures permitted in each fiscal year shall be increased by
(x) up to 100% of the Permitted ECF Growth CapEx Amount for such fiscal year and
(y) one hundred (100%) of the unused Permitted ECF Growth CapEx Amounts from
prior fiscal years:

 

Period

 

Maximum Growth
Capital Expenditures

 

 

 

 

 

Fiscal year 2004

 

$

21,000,000

 

Fiscal year 2005

 

$

21,000,000

 

Fiscal year 2006

 

$

23,000,000

 

Fiscal year 2007

 

$

25,000,000

 

Fiscal year 2008

 

$

30,000,000

 

 

Notwithstanding the foregoing, the Borrowers will not commit to open any new
Restaurants (including without limitation entering into any lease, purchase
agreement, construction contract or other agreement or arrangement relating to
the acquisition, build-out or refurbishment of any property in connection with
the opening or anticipated opened of a new Restaurant), or make Growth Capital
Expenditures a Borrower was not previously committed to make:

 

(A)                              at any time during which (x) a Default or Event
of Default is continuing or (y) when the Adjusted Leverage Ratio as at the end
of the most recently ended Reference Period for which the Borrowers have
delivered a Compliance Certificate exceeds the Incurrence Ratio; and

 

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(B)                                which would require their use of Permitted
ECF Growth CapEx Amounts, at any time during which the EBITDA Margin as at the
end of the most recently ended Reference Period for which the Borrowers have
delivered a Compliance Certificate is then less than ten percent (10%).

 

For purposes of testing quarterly compliance with this §11.3, the Borrowers
shall aggregate Growth Capital Expenditures incurred year-to-date for the then
current fiscal year and the Growth Capital Expenditures projected in good faith
and based on reasonable assumptions to be made during the balance of such fiscal
year after taking into account the Borrowers’ outstanding commitments and
projections relating to the opening of new Restaurants.

 

12.                               CLOSING CONDITIONS.

 

The obligations of the Lenders to make Revolving Credit Loans and of the
Administrative Agent to issue any initial Letters of Credit shall be subject to
the satisfaction of the following conditions precedent on or prior to July 23,
2004:

 

12.1.                     Loan Documents.  Each of Loan Documents shall have
been duly executed and delivered by the respective parties thereto, and each
Loan Document shall be in full force and effect and shall be in form and
substance satisfactory to each of the Lenders.  Each Lender shall have received
a fully executed copy of each such document.

 

12.2.                     Certified Copies of Governing Documents.  Each of the
Lenders shall have received from each of the Borrowers and each of their
Subsidiaries a copy, certified by a duly authorized officer of such Person to be
true and complete on the Closing Date, of each of its Governing Documents as in
effect on such date of certification.

 

12.3.                     Corporate or Other Action.  All corporate (or other)
action necessary for the valid execution, delivery and performance by each of
the Borrowers and each of their Subsidiaries of this Credit Agreement and the
other Loan Documents to which it is or is to become a party shall have been duly
and effectively taken, and evidence thereof satisfactory to the Lenders shall
have been provided to each of the Lenders.

 

12.4.                     Incumbency Certificate.  Each of the Lenders shall
have received from each of the Borrowers and their Subsidiaries an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of such Person, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
such Person, each of the Loan Documents to which such Person is or is to become
a party on or after the Closing Date; (b) in the case of the Borrowers, to make
Loan Requests and Conversion Requests and to apply for Letters of Credit; and
(c) to give notices and to take other action on its behalf under the Loan
Documents.

 

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12.5.                     Validity of Liens.  The Security Documents shall be
effective to create, or to have created, in favor of the Administrative Agent a
legal, valid and enforceable first priority (except for Permitted Liens entitled
to priority under applicable law) security interest in and Lien upon the
Collateral.  All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Administrative Agent to
protect and preserve such security interests shall have been duly effected.  The
Administrative Agent shall have received evidence thereof in form and substance
satisfactory to the Administrative Agent.

 

12.6.                     Perfection Certificates and Uniform Commercial Code
Search Results.  The Administrative Agent shall have received from the Parent
and each of the Borrowers and their Subsidiaries a completed and fully executed
Perfection Certificate and the results of Uniform Commercial Code searches (and
the equivalent thereof in all applicable foreign jurisdictions) with respect to
the Collateral, indicating no Liens other than Permitted Liens and otherwise in
form and substance satisfactory to the Administrative Agent.

 

12.7.                     Landlord Consents; Mortgages.  The Borrowers and their
Subsidiaries shall have delivered to the Administrative Agent the consents
requested by the Administrative Agent to receive, as part of the Security
Documents, a collateral assignment of each leasehold of personal property, and a
mortgage of each leasehold of real property identified on Schedule 12.7 hereto,
together in each case with such estoppel certificates as the Administrative
Agent may request.

 

12.8.                     Certificates of Insurance.  The Administrative Agent
shall have received (a) a certificate of insurance from an independent insurance
broker dated as of a date preceding the Closing Date by not more than five (5)
Business Days, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreement and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer), which certificates shall
state that the Administrative Agent is an additional insured and in respect of
all insurance (other than liability insurance, which shall state that the
Administrative Agent as an additional insured) a loss payee.

 

12.9.                     Solvency Certificate.  Each of the Lenders shall have
received an officer’s certificate of the Borrowers dated as of the Closing Date
as to the solvency of the Borrowers on a consolidated basis following the
consummation of the transactions contemplated herein and in form and substance
satisfactory to the Lenders.

 

12.10.              Opinion of Counsel.  Each of the Lenders and the
Administrative Agent shall have received a favorable legal opinion addressed to
the Lenders and

 

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the Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Administrative Agent, from:

 

(a)          Kirkland & Ellis LLP,  counsel to the Borrowers and their
Subsidiaries with respect to the financing contemplated by this Credit
Agreement;

 

(b)         Victor & Bernstein, PC, counsel to the Borrowers with respect to
liquor law compliance;

 

(c)                                  Thompson & Knight LLP, special counsel to
the Borrowers and their Subsidiaries in Texas; and

 

(d)                                 Ballard Spahr Andrews & Ingersoll, LLP,
special counsel to the Borrowers and their Subsidiaries in Maryland.

 

12.11.              Capital Structure.  The Administrative Agent shall be
satisfied with the capital structure of the Borrowers and their Subsidiaries.

 

12.12.              Minimum Consolidated EBITDA.  The Administrative Agent shall
have received evidence satisfactory to the Administrative Agent that the
Borrowers’ Consolidated EBITDA for the twelve (12) month period ended June 26,
2004 shall be equal to at least $24,500,000.

 

12.13.              No Material Adverse Change.  The Administrative Agent shall
be satisfied that there shall have occurred no material adverse change in the
business, operations, assets, management, properties, financial condition,
income or prospects of the Borrowers and their Subsidiaries taken as a whole
since the Balance Sheet Date.

 

12.14.              Financial Statements and Projections.  The Administrative
Agent shall have received copies of the financial statements and projections
described in §8.4, and the Administrative Agent shall be satisfied that such
financial statements fairly present in all material respects the financial
condition of the Borrowers and their Subsidiaries as at the close of business on
the date thereof and the results of operations for the fiscal period then ended
and compliance with the terms and conditions hereof.  The Administrative Agent
shall have received a certificate demonstrating that on the Closing Date, the
ratio of (a) Consolidated Funded Indebtedness of the Borrowers on such date
(after giving effect to all Revolving Credit Loans to be made on the Closing
Date) to (b) Consolidated EBITDA for the twelve (12) month period ended June 26,
2004 is no more than 3.40:1.00.  The Administrative Agent shall have received a
statement of the sources and uses of funds in connection with the financing
contemplated by this Credit Agreement and such statement of sources and uses
shall be satisfactory in all material respects to the Administrative Agent.

 

12.15.              No Litigation.  No litigation, inquiry, injunction or
restraining order shall be pending, entered or threatened against the Parent,
any Borrower or

 

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any Subsidiary of any Borrower that, in the reasonable opinion of the
Administrative Agent, could reasonably be expected to have a Material Adverse
Effect on (i) the transactions contemplated hereby, (ii) the business, assets,
liabilities (actual or contingent), operations, condition (financial or
otherwise) of the Borrowers, taken as a whole, (iii) the ability of the
Borrowers to perform their obligations under the Loan Documents, (iv) the rights
and remedies of the Administrative Agent and the Lenders under the Loan
Documents, or (v) the perfection or priority of any security interests granted
to the Administrative Agent under the Loan Documents.

 

12.16.              Consents and Approvals.  The Administrative Agent shall have
received evidence that all material governmental and third-party approvals
(including liquor licenses, Liquor Management Agreements and other consents to
the extent reasonably obtainable and excluding landlord consents to the extent
required under §12.7) necessary or advisable in connection with and the credit
facilities contemplated hereby and the continuing operations of the Borrowers
shall have been obtained and shall be in full force and effect, and all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or otherwise
impose materially adverse conditions on the Borrowers taken as a whole, or the
credit facilities contemplated hereby.

 

12.17.              Employment Agreements; Employee Incentive Plans.  There
shall have been made available for review by the Administrative Agent and the
Lenders true and correct copies of (a) any material agreement with respect to
the management of any Borrower or any of its Subsidiaries; (b) any material
employment agreements entered into by any Borrower or any of its Subsidiaries;
and (c) any employee incentive plans, including stock option agreements and
other similar arrangements, including any amendments thereto, in each case,
entered into following the date of the 2003 Credit Agreement, with each of the
foregoing to be reasonably satisfactory to the Administrative Agent.

 

12.18.              Other Documentation.  All other material agreements,
including any tax sharing agreements or other financing arrangements of the
Borrowers and their Subsidiaries, in each case, entered into following the date
of the 2003 Credit Agreement shall be reasonably satisfactory in form and
substance to the Administrative Agent.

 

12.19.              Payoff and Termination of Existing Credit Agreement;
Refinancing of Loans.  All outstanding loans other obligations and liabilities
under the 2003 Credit Agreement shall have been paid in full and all commitments
thereunder shall have been terminated on the Closing Date and all interest
accrued on such loans and other obligations thereunder shall have been paid in
full as of the Closing Date.

 

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12.20.              Consummation of Initial Public Offering.  Each of the
following shall have occurred: (a) the consummation of the Initial Public
Offering; (b) the receipt of a minimum amount of net cash proceeds from the
Initial Public Offering of $66,960,000, which proceeds shall be used, among
other things, to (i) prepay, redeem or repurchase in whole the Convertible
Preferred Stock pursuant to the Notice of Redemption, and (ii) repay debt under
the 2003 Credit Agreement; (c) the termination of the Management Agreements and
the Officer Fees pursuant to the Termination Documents and copies of such
Termination Documents shall have been delivered to the Administrative Agent and
be in form and substance reasonably satisfactory to the Administrative Agent,
and (d) receipt by the Administrative Agent of copies of the Warrant Documents,
as in effect after giving effect to the transactions contemplated to occur in
connection with the closing of the Initial Public Offering.

 

12.21.              Maximum Borrowing on Closing Date.  After giving effect to
all transactions to occur on the Closing Date, not more than $25,000,000 of
Revolving Credit Loans (excluding for such purposes the Maximum Drawing Amount
of all outstanding Letters of Credit) shall be outstanding.

 

12.22.              Payment of Fees and Expenses.  The Borrowers shall have paid
to the Lenders or the Administrative Agent, as appropriate, the Fees pursuant to
§§5.6 and 6.1.  The Borrowers shall have reimbursed the Administrative Agent
for, or paid directly, all reasonable fees, costs and expenses incurred by the
Administrative Agent’s Special Counsel and local counsel to the Administrative
Agent and the Lenders (including, without limitation, the fees, costs and
expenses required to be paid pursuant to the Fee Letter in all relevant
jurisdictions in connection with the closing of the transactions contemplated
hereby.

 

12.23.              Disbursement Instructions.  The Administrative Agent shall
have received disbursement instructions from the Borrowers with respect to the
proceeds of the Revolving Credit Loans to be made on the Closing Date.

 

13.                               CONDITIONS TO ALL BORROWINGS.

 

The obligations of the Lenders to make any Revolving Credit Loan, and of the
Administrative Agent to issue, extend or renew any Letter of Credit, in each
case whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:

 

13.1.                     Representations True; No Event of Default.  Each of
the representations and warranties of any of the Borrowers contained in this
Credit Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Credit Agreement (i) that are
qualified as to materiality shall be true in all respects, and (ii) that are not
qualified as to materiality shall be true in all material respects, as of the
date as of which they were made and shall also be true in all respects, or true
in all material

 

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respects, as applicable,  at and as of the time of the making of such Revolving
Credit  Loan or the issuance, extension or renewal of such Letter of Credit,
with the same effect as if made at and as of that time (except to the extent of
changes resulting from transactions contemplated or permitted by this Credit
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially adverse,
and to the extent that such representations and warranties relate expressly to
an earlier date) and no Default or Event of Default shall have occurred and be
continuing.

 

13.2.                     No Legal Impediment.  No change shall have occurred in
any law or regulations thereunder or interpretations thereof that in the
reasonable opinion of any Lender would make it illegal for such Lender to make
such Revolving Credit Loan or to participate in the issuance, extension or
renewal of such Letter of Credit or in the reasonable opinion of the
Administrative Agent would make it illegal for the Administrative Agent to
issue, extend or renew such Letter of Credit.

 

13.3.                     Proceedings and Documents.  All proceedings in
connection with the transactions contemplated by this Credit Agreement, the
other Loan Documents and all other documents incident thereto shall be
reasonably satisfactory in substance and in form to the Lenders and to the
Administrative Agent and the Administrative Agent’s Special Counsel, and the
Lenders, the Administrative Agent and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Administrative Agent may reasonably request.

 

14.                               EVENTS OF DEFAULT; ACCELERATION; ETC.

 

14.1.                     Events of Default and Acceleration.  If any of the
following events (each an “Event of Default” or, if the giving of notice or the
lapse of time or both is required, then, prior to such notice or lapse of time,
each a “Default”) shall occur:

 

(a)          the Borrowers shall fail to pay any principal of the Revolving
Credit Loans or any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;

 

(b)         the Borrowers shall fail to pay any interest on the Revolving Credit
Loans, any Fees, or other sums due hereunder or under any of the other Loan
Documents, when the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other date fixed
for payment;

 

(c)                                  any of the Borrowers (i) shall fail to
comply with any of its covenants contained in §§9.5, the first sentence of
§§9.6, 9.7, 9.9, 9.12, 9.15, 9.17, 10 or 11 or any of the covenants contained in
any of the Mortgages, or (ii) shall fail to

 

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comply with its covenants contained in §9.4 for a period in excess of five (5)
days;

 

(d)                                 the Parent, any Borrower or any of its
Subsidiaries shall fail to perform any term, covenant or agreement contained
herein or in any of the other Loan Documents (other than those specified
elsewhere in this §14.1) for thirty (30) days after written notice of such
failure has been given to the Parent or such Borrower by the Administrative
Agent;

 

(e)                                  any representation or warranty of the
Parent, any Borrower or any of its Subsidiaries in this Credit Agreement or any
of the other Loan Documents or in any other document or instrument delivered
pursuant to or in connection with this Credit Agreement shall prove to have been
false in any material respect upon the date when made or deemed to have been
made or repeated;

 

(f)            (i) the Parent, any Borrower or any of its Subsidiaries shall (A)
fail to pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or in respect of any
Capitalized Leases in an aggregate amount in excess of $750,000, or (B) fail to
observe or perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing borrowed money or credit
received or in respect of any Capitalized Leases in an aggregate amount in
excess of $750,000 for such period of time as would permit (assuming the giving
of appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof, or any such
holder or holders shall rescind or shall have a right to rescind the purchase of
any such obligations, or (ii) any Indebtedness in an aggregate amount in excess
of $750,000 of the Parent, any Borrower or any of its Subsidiaries shall be
declared due and payable or be required to be prepaid prior to a regularly
scheduled maturity date or amortization payment date;

 

(g)         the Parent, any Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of the Parent, such Borrower or any of its Subsidiaries
or of any substantial part of the assets of the Parent, such Borrower or any of
its Subsidiaries or shall commence any case or other proceeding relating to the
Parent, such Borrower or any of its Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect, or
shall take any action to authorize or in furtherance of any of the foregoing, or
if any such petition or application shall be filed or any such case or other
proceeding shall be commenced against the Parent, such Borrower or any of its
Subsidiaries and the Parent, such Borrower or any of its Subsidiaries shall
indicate its approval thereof, consent thereto or acquiescence

 

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therein or such petition or application shall not have been dismissed within
forty-five (45) days following the filing thereof;

 

(h)         a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating the Parent, any Borrower or any of its
Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of the
Parent, any Borrower or any of its Subsidiaries in an involuntary case under
federal bankruptcy laws as now or hereafter constituted;

 

(i)             there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, any final judgment against the Parent,
any Borrower or any of its Subsidiaries that, with other outstanding final
judgments, undischarged, against the Parent, any Borrower or any of its
Subsidiaries exceeds in the aggregate $750,000;

 

(j)             the holders of all or any part of any Subordinated Debt shall
accelerate the maturity of all or any part of such Subordinated Debt,
Subordinated Debt shall be prepaid, redeemed or repurchased in whole or in part
or an offer to prepay, redeem or repurchase any Subordinated Debt in whole or in
part shall have been made; provided that any Subordinated Debt may be exchanged
for common stock of the Parent or other Equity Interests of the Parent with
similar attributes as common stock;

 

(k)          if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Administrative Agent’s security interests, mortgages
or liens in a substantial portion of the Collateral shall cease to be perfected,
or shall cease to have the priority contemplated by the Security Documents, in
each case otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Lenders, or any
action at law, suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of the
Parent, the Borrowers or any of their respective stockholders, or any court or
any other Governmental Authority of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the effect
that, any one or more of the Loan Documents is illegal, invalid or unenforceable
in accordance with the terms thereof;

 

(l)             the Parent or any Borrower incurs any liability to the PBGC or a
Guaranteed Pension Plan pursuant to Title IV of ERISA in an aggregate amount
exceeding $750,000, or the Parent or any Borrower is assessed withdrawal
liability pursuant to Title IV of ERISA by a Multiemployer Plan requiring
aggregate annual payments exceeding $750,000, or any of the following occurs
with respect to a Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a
failure to make a required installment or other payment (within the meaning of
§302(f)(1) of ERISA), provided that the Administrative Agent determines in its

 

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reasonable discretion that such event (A) could be expected to result in
liability of the Parent, any Borrower or any of its Subsidiaries to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding $750,000 and (B)
could reasonably be expected to constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC, for the appointment by the appropriate
United States District Court of a trustee to administer such Guaranteed Pension
Plan or for the imposition of a lien in favor of such Guaranteed Pension Plan;
or (ii) the appointment by a United States District Court of a trustee to
administer such Guaranteed Pension Plan; or (iii) the institution by the PBGC of
proceedings to terminate such Guaranteed Pension Plan;

 

(m)       any Borrower or any of its Subsidiaries shall be enjoined, restrained
or in any way prevented by the order of any Governmental Authority from
conducting any material part of the business of MSRC, individually, or the
Borrowers and their Subsidiaries, taken as a whole, and such order shall
continue in effect for more than thirty (30) consecutive days;

 

(n)         there shall (i) occur any material damage to, or loss, theft or
destruction of, any Collateral or any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty, which in any such
case causes, for more than thirty (30) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of any
Borrower or any of its Subsidiaries if such event or circumstance is not covered
by insurance and (ii) such occurrence would have a Material Adverse Effect;

 

(o)         the Parent, any Borrower or any of its Subsidiaries shall be
indicted for a state or federal crime, or any civil or criminal action shall
otherwise have been brought against such Person, a punishment for which in any
such case is reasonably likely to include the forfeiture of any assets of such
Person having a fair market value in excess of $750,000;

 

(p)         a Change of Control shall occur;

 

(q)         the Parent (i) directly or indirectly, beneficially or otherwise,
holds or owns stock or other securities of any Person (other than the Borrowers
or Subsidiaries of the Borrowers and other than Investments permitted under
§10.3), (ii) conducts any activity which is inconsistent with activities which
are normal and customary for a holding company, provided that the Parent may
issue Subordinated Debt so long as such issuance is in accordance with §4 of the
Guaranty and §10.1(c) of this Credit Agreement, or (iii) owns any material
assets other than the Equity Interests of MSAC; or

 

(r)            the Parent amends, supplements or otherwise modifies the terms of
any Subordinated Debt Documents previously approved by the Required Lenders
pursuant to §10.1(c) other than (i) solely to conform to amendments made to this
Credit Agreement and the other Loan Documents, (ii) to waive defaults

 

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thereunder or to amend covenants in order to make them less restrictive on the
Parent or (iii) solely to permit the exchange of Subordinated Debt for common
stock of the Parent or other Equity Interests of the Parent with similar
attributes as common stock; provided that a certified copy of such amendment,
modification or waiver is promptly delivered to the Administrative Agent and
such amendment, modification or waiver is reasonably satisfactory to the
Required Lenders;

 

then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Required Lenders shall, by
notice in writing to the Borrowers declare all amounts owing with respect to
this Credit Agreement, the Notes and the other Loan Documents and all
Reimbursement Obligations to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrowers; provided
that in the event of any Event of Default specified in §§14.1(g), 14.1(h) or
14.1(j), all such amounts shall become immediately due and payable automatically
and without any requirement of notice from the Administrative Agent or any
Lender.

 

14.2.                     Termination of Commitments.  If any one or more of the
Events of Default specified in §§14.1(g), 14.1(h) or 14.1(j) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Lenders shall be relieved of all further obligations to make Revolving Credit
Loans to the Borrowers and the Administrative Agent shall be relieved of all
further obligations to issue, extend or renew Letters of Credit.  If any other
Event of Default shall have occurred and be continuing, the Administrative Agent
may and, upon the request of the Required Lenders shall, by notice to the
Borrowers, terminate the unused portion of the credit hereunder, and upon such
notice being given such unused portion of the credit hereunder shall terminate
immediately and each of the Lenders shall be relieved of all further obligations
to make Revolving Credit Loans and the Administrative Agent shall be relieved of
all further obligations to issue, extend or renew Letters of Credit.  No
termination of the credit hereunder shall relieve the Borrowers or any of their
Subsidiaries of any of the Obligations.

 

14.3.                     Remedies.  In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Lenders
shall have accelerated the maturity of the Revolving Credit Loans pursuant to
§14.1, each Lender, if owed any amount with respect to the Revolving Credit
Loans or the Reimbursement Obligations, may, with the consent of the Required
Lenders but not otherwise, proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations to
such Lender are evidenced, including as permitted by applicable law the
obtaining of the exparte appointment of a receiver, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other

 

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legal or equitable right of such Lender.  No remedy herein conferred upon any
Lender or the Administrative Agent or the holder of any Note or purchaser of any
Letter of Credit Participation is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.

 

14.4.                     Distribution of Collateral Proceeds.  In the event
that, following the occurrence or during the continuance of any Default or Event
of Default, the Administrative Agent or any Lender, as the case may be, receives
any monies in connection with the enforcement of any the Security Documents, or
otherwise with respect to the realization upon any of the Collateral, such
monies shall be distributed for application as follows:

 

(a)          First, to the payment of, or (as the case may be) the reimbursement
of the Administrative Agent for or in respect of all reasonable out-of-pocket
costs, expenses, disbursements and losses which shall have been incurred or
sustained by the Administrative Agent in connection with the collection of such
monies by the Administrative Agent, for the exercise, protection or enforcement
by the Administrative Agent of all or any of the rights, remedies, powers and
privileges of the Administrative Agent or the Lenders under this Credit
Agreement or any of the other Loan Documents or in respect of the Collateral or
in support of any provision of adequate indemnity to the Administrative Agent
against any taxes or liens which by law shall have, or may have, priority over
the rights of the Administrative Agent to such monies;

 

(b)         Second, to all other Obligations in such order or preference as the
Required Lenders may determine; provided, however, that (i) distributions shall
be made (A) pari passu among Obligations with respect to the Administrative
Agent’s fee and all other Obligations and (B) with respect to each type of
Obligation owing to the Lenders, such as interest, principal, fees and expenses,
among the Lenders pro rata, and (ii) the Administrative Agent may in its
discretion make proper allowance to take into account any Obligations not then
due and payable;

 

(c)          Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Lenders and the Administrative Agent of
all of the Obligations, to the payment of any obligations required to be paid
pursuant to §9-608(a)(1)(c) or §9-615(a)(3) of the Uniform Commercial Code of
the Commonwealth of Massachusetts; and

 

(d)         Fourth, the excess, if any, shall be returned to the Borrowers or to
such other Persons as are entitled thereto.

 

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15.                               THE AGENT.

 

15.1.                     Appointment and Authority.  Each Lender hereby
irrevocably appoints Fleet to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers delegated
to the Administrative Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto.

 

15.2.                     Rights as a Lender.  The Person serving as the
Administrative Agent hereunder shall have the same rights and powers in its
capacity as Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative 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 the Parent, the Borrowers
or any Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.

 

15.3.                     Exculpatory Provisions.  The Administrative 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, the Administrative Agent:

 

(a)          shall not be subject to any fiduciary or other implied duties to
the Lenders, 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 the Administrative 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 the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative 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 relating to the Parent, the Borrowers or
their Subsidiaries or any of their respective Affiliates that is communicated to
or obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.

 

The Administrative 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

 

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percentage of the Lenders as shall be necessary, or as the Administrative Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in §17.2 and §14.3) or (ii) in the absence of its own gross negligence
or willful misconduct.  The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until notice describing such Default is
given to the Administrative Agent by the Borrowers or a Lender.

 

The Administrative 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 Credit 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 Credit Agreement, any other
Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in §12 and §13 or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

15.4.                     Reliance by Administrative Agent.

 

15.4.1.           General.  The Administrative 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.  The Administrative 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, the Administrative Agent may
presume that such condition is satisfactory to such Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender
prior to the making of such Loan or the issuance of such Letter of Credit.  The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrowers or their Subsidiaries), 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.

 

15.4.2.           Non-Reliance on Administrative Agent and Other Lenders.  Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed

 

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appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.  Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative 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 Credit Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or
thereunder.

 

15.4.3.           Delegation of Duties.  The Administrative 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
the Administrative Agent.  The Administrative 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
§15 shall apply to any such sub-agent and to the Related Parties of the
Administrative 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 Administrative Agent.

 

15.5.                     Payments.

 

15.5.1.           Payments to Administrative Agent.  A payment by the Borrowers
to the Administrative Agent hereunder or under any of the other Loan Documents
for the account of any Lender shall constitute a payment to such Lender.  The
Administrative Agent agrees promptly to distribute to each Lender such Lender’s
pro rata share of payments received by the Administrative Agent for the account
of the Lenders except as otherwise expressly provided herein or in any of the
other Loan Documents.

 

15.5.2.           Distribution by Administrative Agent.  If in the opinion of
the Administrative Agent the distribution of any amount received by it in such
capacity hereunder, under the Notes or under any of the other Loan Documents
might involve it in liability, it may refrain from making such distribution
until its right to make such distribution shall have been adjudicated by a court
of competent jurisdiction.  If a court of competent jurisdiction shall adjudge
that any amount received and distributed by the Administrative Agent is to be
repaid, each Person to whom any such distribution shall have been made shall
either repay to the Administrative Agent its proportionate share of the amount
so adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.

 

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15.5.3.           Delinquent Lenders.  Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Lender that fails (a) to make available to the Administrative Agent its pro rata
share of any Revolving Credit Loan or to purchase any Letter of Credit
Participation or (b) to comply with the provisions of §17.1 with respect to
making dispositions and arrangements with the other Lenders, where such Lender’s
share of any payment received, whether by setoff or otherwise, is in excess of
its pro rata share of such payments due and payable to all of the Lenders, in
each case as, when and to the full extent required by the provisions of this
Credit Agreement, shall be deemed delinquent (a “Delinquent Lender”) and shall
be deemed a Delinquent Lender until such time as such delinquency is satisfied. 
A Delinquent Lender shall be deemed to have assigned any and all payments due to
it from the Borrowers, whether on account of outstanding Revolving Credit Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the remaining
nondelinquent Lenders for application to, and reduction of, their respective pro
rata shares of all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations.  The Delinquent Lender hereby authorizes the Administrative Agent
to distribute such payments to the nondelinquent Lenders in proportion to their
respective pro rata shares of all outstanding Revolving Credit Loans and Unpaid
Reimbursement Obligations.  A Delinquent Lender shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Revolving Credit Loans and Unpaid
Reimbursement Obligations of the nondelinquent Lenders, the Lenders’ respective
pro rata shares of all outstanding Revolving Credit Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately prior to
such delinquency and without giving effect to the nonpayment causing such
delinquency.  At any time before a Delinquent Lender shall have satisfied in
full a delinquency as provided in the foregoing sentence, the Borrowers shall
have the same rights and remedies with respect to such Delinquent Lender as the
Borrowers have with respect to any Affected Lender set forth in §6.8(c) hereof.

 

15.6.                     Reimbursement by Lenders.  To the extent that the
Borrowers for any reason fails to indefeasibly pay any amount required under
§17.2 or §17.3 to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent) or such
Related Party, as the case may be, such Lender’s Revolving Credit Commitment
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 the
Administrative Agent (or any such sub-agent) in its capacity as such, or against
any Related Party acting for the

 

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Administrative Agent (or any such sub-agent) in connection with such capacity. 
The obligations of the Lenders under this §15.6 are several and the failure or
refusal of any Lender to reimburse the Administrative Agent for its portion of
such unpaid amount shall not relieve any other Lender from its several
obligation hereunder.  The undertaking in this §15.6 shall survive termination
of the Total Revolving Credit Commitment, the payment of all other Obligations
and the resignation of the Administrative Agent.

 

15.7.                     Resignation by Administrative Agent.  The
Administrative Agent may at any time give at least sixty (60) days notice of its
resignation to the Lenders and the Borrowers.  Upon receipt of any such notice
of resignation, the Required Lenders shall have the right, in consultation with
the Borrowers, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the United
States.  Unless a Default or an Event of Default shall have occurred and be
continuing, such successor shall be reasonably acceptable to the Borrowers.  If
no such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders, appoint a successor
Administrative Agent having a rating of “A” or its equivalent by S&P and meeting
the qualifications set forth above.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring Administrative Agent and the term “Administrative Agent” shall mean
such successor administrative agent and the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder and under the other Loan
Documents. The Borrowers agrees to pay the fees of the successor Administrative
Agent as may be agreed between the Borrowers and such successor Administrative
Agent.  After any retiring Administrative Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this §15 and §§17.2 and 17.3
shall continue in effect for the benefit of the retiring Administrative 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 Fleet as Administrative Agent pursuant to this §15 shall also
constitute its resignation as issuer of Letters of Credit.  Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring issuer of Letters of Credit, (b) the
retiring issuer of Letters of Credit shall be discharged from all of its
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor issuer of Letters of Credit 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 satisfactory to the retiring issuer of
Letters of Credit to effectively assume the obligations of the retiring issuer
of Letters of Credit with respect to such Letters of Credit

 

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15.8.                     Administrative Agent May File Proof of Claims.  In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Parent, the Borrowers or any Subsidiary, the
Administrative Agent (irrespective of whether the principal of any Revolving
Credit Loan or Reimbursement Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower or any other
Person primarily or secondarily liable) 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 Revolving Credit Loans,
Reimbursement 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 the Lenders and the Administrative Agent (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Lenders and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders and the Administrative Agent under §5.6, §6
and §17.2) 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 to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under §6 and §17.2.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

15.9.                     No Other Duties, Etc..  Anything herein to the
contrary notwithstanding, none of the arrangers listed on the cover page hereof
shall have any powers, duties or responsibilities under this Credit Agreement or
any of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent or a Lender hereunder.

 

16.                               ASSIGNMENT AND PARTICIPATION.

 

16.1.                     Successors and Assigns; Conditions to Assignment. 
(a)                                The provisions of this Credit Agreement shall
be binding upon and inure to the benefit

 

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of the parties hereto and their respective successors and assigns permitted
hereby, except that (x) the Borrowers may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender; provided, that notwithstanding the foregoing, each Borrower may, at any
time and from time to time, assign or otherwise transfer to one or more of the
other Borrowers, its obligations, as “primary obligor” for any Obligations under
any Loan Document; provided further that no such assignment or transfer shall
have any impact whatsoever on any Borrower’s joint and several liability (as set
forth in §6.11 and elsewhere in this Credit Agreement) for all Obligations and
(y) 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 clause (b) of this §16.1, (ii) by way of participation in accordance with the
provisions of §16.3, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of §16.5 (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in
this Credit 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 §16.3 and, to
the extent expressly contemplated hereby, an Indemnified Person) any legal or
equitable right, remedy or claim under or by reason of this Credit Agreement.

 

(a)          Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Credit Agreement
(including all or a portion of its Revolving Credit Commitment and the Revolving
Credit Loans (including for purposes of this clause (b), participations in
Reimbursement 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 Revolving Credit Commitment and the Revolving Credit Loans at the time
owing to it or in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund with respect to a Lender, the aggregate amount of the
Revolving Credit Commitment (which for this purpose includes Revolving Credit
Loans outstanding thereunder) subject to each such assignment, determined as of
the date the Assignment and Acceptance (as defined below) with respect to such
assignment is delivered to the Administrative Agent or, if “Effective Date” is
specified in the Assignment and Acceptance, as of the Effective Date, shall not
be less than $2,000,000, in respect of assignments of Revolving Credit
Commitments and/or Revolving Credit Loans unless, in each case, each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrowers 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 Credit Agreement with respect to the Revolving Credit
Loans or the Revolving Credit Commitment assigned; (iii) any assignment of a
Revolving Credit Commitment must be approved by the Administrative Agent 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

 

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each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance substantially in the form of Exhibit E hereto (an
“Assignment and Acceptance”), together with a processing and recordation fee of
$3,500 and the Eligible Assignee, if not a Lender, shall deliver to the
Administrative Agent an administrative questionnaire in the form supplied by the
Administrative Agent, provided, further, that no Lender may assign its interest,
rights and obligations under this Credit Agreement to a competitor of the
Borrowers or any of their Subsidiaries, or an adverse party in any legal or
arbitration proceeding with the Borrowers or any of their Subsidiaries (as
determined by the Borrowers).  Subject to acceptance and recording thereof by
the Administrative Agent pursuant to §16.2, from and after the effective date
specified in each Assignment and Acceptance, the Eligible Assignee thereunder
shall be a party to this Credit Agreement and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Credit Agreement, and the assigning Lender thereunder shall,
to the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Credit Agreement (and, in the case of
an Assignment and Acceptance covering all of the assigning Lender’s rights and
obligations under this Credit Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of §§6.2, 6.6, 6.7,
6.9, 17.2 and 17.3 with respect to facts and circumstances occurring prior to
the effective date of such assignment).  Upon request, the Borrower (at its
expense) shall execute and deliver a Note(s) to the assignee Lender.  Any
assignment or transfer by a Lender of rights or obligations under this Credit
Agreement that does not comply with this clause (b) shall be treated for
purposes of this Credit Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with §16.3.

 

16.2.                     Certain Representations and Warranties; Limitations;
Covenants.  By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each other and
the other parties hereto as follows:

 

(a)          other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, the assigning Lender makes no representation or warranty, express
or implied, and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents or any
other instrument or document furnished pursuant hereto or the attachment,
perfection or priority of any security interest or mortgage,

 

(b)         the assigning Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrowers and
their Subsidiaries or any other Person primarily or secondarily liable in
respect of any

 

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of the Obligations, or the performance or observance by the Borrowers and their
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations of any of their obligations under this Credit Agreement
or any of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto;

 

(c)          such assignee confirms that it has received a copy of this Credit
Agreement, together with copies of the most recent financial statements referred
to in §8.4 and §9.4 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance;

 

(d)                                 such assignee will, independently and
without reliance upon the assigning Lender, the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Credit Agreement;

 

(e)                                  such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Credit Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto;

 

(f)            such assignee agrees that it will perform in accordance with the
Credit Agreement and the other Loan Documents all of the obligations that by the
terms thereof are required to be performed by it as a Lender;

 

(g)         such assignee represents and warrants that it is legally authorized
to enter into such Assignment and Acceptance;

 

(h)         such assignee acknowledges that it has made arrangements with the
assigning Lender satisfactory to such assignee with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit; and

 

(i)             such assignee acknowledges that it has complied with the
provisions of §6.2.3 to the extent applicable.

 

16.3.                     Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Revolving Credit Commitments of, and principal amounts of the Revolving Credit
Loans and Reimbursement Obligations owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders shall treat each Person whose name is

 

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recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Credit Agreement, notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrowers 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 other
substantive change to the Loan Documents is pending, any Lender wishing to
consult with other Lenders in connection therewith may request and receive from
the Administrative Agent a copy of the Register.  Upon its receipt of an
Assignment and Acceptance executed by the parties to such assignment, together
with each Note subject to such assignment, the Administrative Agent shall (a)
record the information contained therein in the Register, and (b) give prompt
notice thereof to the Borrowers and the Lenders (other than the assigning
Lender). Within five (5) Business Days after receipt of such notice, the
Borrowers, at their own expense, shall execute and deliver to the Administrative
Agent, in exchange for each surrendered Note, a new Note to the order of such
Assignee in an amount equal to the amount assumed by such Assignee pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained some
portion of its obligations hereunder, a new Note to the order of the assigning
Lender in an amount equal to the amount retained by it hereunder.  Such new
Notes shall provide that they are replacements for the surrendered Notes, shall
be in an aggregate principal amount equal to the aggregate principal amount of
the surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the assigned
Notes. The surrendered Notes shall be cancelled and returned to the Borrowers.

 

16.4.                     Participations. 
(a)                                            Any Lender may at any time,
without the consent of, or notice to, the Borrowers or the Administrative Agent,
sell participations to any Person (other than a natural person or the Borrowers
or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in
all or a portion of such Lender’s rights and/or obligations under this Credit
Agreement (including all or a portion of its Revolving Credit Commitment and/or
the Revolving Credit Loans (including such Lender’s Letter of Credit
Participations) owing to it); provided that (i) each such participation shall be
in an amount of not less than $2,000,000, (ii) such Lender’s obligations under
this Credit Agreement shall remain unchanged, (iii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and (iv) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Credit
Agreement; provided, further, no Lender may sell a participation to a competitor
of the Borrowers or any of their Subsidiaries, or an adverse party in any legal
or arbitration proceeding with the Borrowers or any of their Subsidiaries (as
determined by the Borrowers).  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 Credit Agreement and to approve any amendment,
modification or waiver of any  provision of this Credit Agreement; provided that
such agreement or instrument may provide that such

 

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Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in clauses (a) and (b) of §17.12 that
directly affects such Participant.  Subject to clause (b) of this §16.4, the
Borrower agrees that each Participant shall be entitled to the benefits of
§§6.2, 6.6, 6.7 and 6.9 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to §16.1.  To the extent permitted
by law, each Participant also shall be entitled to the benefits of §17.1 as
though it were a Lender, provided such Participant agrees to be subject to §17.1
as though it were a Lender.

 

(a)          A Participant shall not be entitled to receive any greater payment
under §6.2, §6.6, or §6.7 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 the Borrower’s prior
written consent.  A Participant that would be a Non-U.S. Lender if it were a
Lender shall not be entitled to the benefits of §6.2 unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with §6.3.3 as though it were
a Lender.

 

16.5.                     Assignee or Participant Affiliated with the
Borrowers.  If any Eligible Assignee is an Affiliate of the Borrowers or any of
their Subsidiaries, then any such assignee Lender shall have no right to (a)
attend meetings of the Lenders or (b) vote as a Lender hereunder or under any of
the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Administrative Agent
pursuant to §14.1 or §14.2, and the determination of the Required Lenders shall
for all purposes of this Credit Agreement and the other Loan Documents be made
without regard to such Eligible Assignee’s interest in any of the Revolving
Credit Loans or Reimbursement Obligations.  If any Lender sells a participating
interest in any of the Revolving Credit Loans or Reimbursement Obligations to
the Borrowers or an Affiliate of any Borrower, then such transferor Lender shall
promptly notify the Administrative Agent of the sale of such participation and
such transferor Lender shall have no right to vote as a Lender hereunder or
under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Administrative Agent
pursuant to §14.1 or §14.2 to the extent that such participation is beneficially
owned by the Borrowers or any Affiliate of any Borrower, and the determination
of the Required Lenders shall for all purposes of this Credit Agreement and the
other Loan Documents be made without regard to the interest of such transferor
Lender in the Revolving Credit Loans or Reimbursement Obligations to the extent
of such participation.

 

16.6.                     Miscellaneous Assignment Provisions.  Any Lender may
at any time pledge or assign a security interest in all or any portion of its
rights under this Credit Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no

 

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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.

 

16.7.                     Syndication.  The Borrowers hereby agree to use
commercially reasonable efforts to assist and cooperate with the Arranger in
efforts to complete the syndication of the Revolving Credit Commitment and
Revolving Credit Loans hereunder, including, but not limited to, promptly
preparing and providing materials and information reasonably deemed necessary by
the Arranger to successfully complete and otherwise facilitate such syndication,
including, without limitation, all projections required to be delivered pursuant
to §§8.4.3, 9.4(b) and 9.4(g).  The Borrowers and each of their directors,
officers, employees and agents shall, at the reasonable request of the Arranger,
use commercially reasonable efforts to meet with potential lenders and provide
such additional information as such Persons may reasonably request.  The terms
of the Fee Letter shall survive the Closing Date.

 

17.                               PROVISIONS OF GENERAL APPLICATIONS.

 

17.1.                     Setoff.  The Borrowers hereby grant to the
Administrative Agent and each of the Lenders a continuing lien, security
interest and right of setoff as security for all liabilities and obligations to
the Administrative Agent and each Lender, whether now existing or hereafter
arising, upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of the
Administrative Agent or such Lender or any Lender Affiliate and their successors
and assigns or in transit to any of them.  Regardless of the adequacy of any
collateral, if any of the Obligations are due and payable and have not been paid
or any Event of Default shall have occurred, any deposits or other sums credited
by or due from any of the Lenders to any of the Borrowers and any securities or
other property of any of the Borrowers in the possession of such Lender may be
applied to or set off by such Lender against the payment of Obligations and any
and all other liabilities, direct, or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, of the Borrowers to such
Lender.  ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.  Each of the Lenders agrees with each other Lender that (a)
if an amount to be set off is to be applied to Indebtedness of any of the
Borrowers to such Lender, other than Indebtedness evidenced by the Notes held by
such Lender or constituting Reimbursement Obligations owed to such Lender, such
amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Notes held by such Lender or constituting
Reimbursement Obligations owed to such Lender, and (b) if such Lender shall
receive from any of

 

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the Borrowers, whether by voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim evidenced by the Notes held
by, or constituting Reimbursement Obligations owed to, such Lender by
proceedings against such Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by, or Reimbursement Obligations owed to, such Lender any amount in excess of
its ratable portion of the payments received by all of the Lenders with respect
to the Notes held by, and Reimbursement Obligations owed to, all of the Lenders,
such Lender will make such disposition and arrangements with the other Lenders
with respect to such excess, either by way of distribution, pro tanto assignment
of claims, subrogation or otherwise as shall result in each Lender receiving in
respect of the Notes held by it or Reimbursement Obligations owed it, its
proportionate payment as contemplated by this Credit Agreement; provided that if
all or any part of such excess payment is thereafter recovered from such Lender,
such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.

 

17.2.                     Expenses.  The Borrowers jointly and severally agree
to pay, upon receipt of an invoice therefor, (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any stamp,
documentary or similar taxes (including any interest and penalties in respect
thereto) payable by the Administrative Agent or any of the Lenders on or with
respect to the transactions contemplated by this Credit Agreement (the Borrowers
hereby jointly and severally agreeing to indemnify the Administrative Agent and
each Lender with respect thereto), (c) the reasonable fees, expenses and
disbursements of the Administrative Agent’s Special Counsel or any local counsel
to the Administrative Agent incurred in connection with the preparation,
syndication, administration or interpretation of the Loan Documents and other
instruments mentioned herein, each closing hereunder, any amendments,
modifications, approvals, consents or waivers hereto or hereunder, or the
cancellation of any Loan Document upon payment in full in cash of all of the
Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, (d) the reasonable fees, expenses and disbursements of the
Administrative Agent or any of its affiliates incurred by the Administrative
Agent or such affiliate in connection with the preparation, syndication,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, including all title insurance premiums and surveyor,
engineering, appraisal and examination charges, (e) any reasonable fees, costs,
expenses and bank charges, including bank charges for returned checks, incurred
by the Administrative Agent in establishing, maintaining or handling any agency
accounts, lock box accounts and other accounts for the collection of any of the
Collateral, (f) all reasonable out-of-pocket expenses (including without
limitation reasonable attorneys’ fees and costs, which attorneys may be
employees of any Lender or the Administrative Agent, and reasonable consulting,
accounting, appraisal, investment banker and

 

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similar professional fees and charges) incurred by any Lender or the
Administrative Agent in connection with (i) the enforcement of or preservation
of rights under any of the Loan Documents against the Borrowers or any of their
Subsidiaries or the administration thereof after the occurrence of a Default or
Event of Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to any Lender’s or the Administrative
Agent’s relationship with the Borrowers or any of their Subsidiaries and (g) all
reasonable fees, expenses and disbursements of any Lender or the Administrative
Agent incurred in connection with Uniform Commercial Code searches, Uniform
Commercial Code filings, intellectual property searches, intellectual property
filings or mortgage recordings.  The covenants contained in this §17.2 shall
survive payment or satisfaction in full of all other Obligations.

 

17.3.                     Indemnification.  The Borrowers jointly and severally
agree to indemnify and hold harmless the Administrative Agent, its affiliates
and each of the Lenders and their respective affiliates, officers, and directors
(each such Person an “Indemnified Person”) from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (a) any actual
or proposed use by any of the Borrowers or any of their Subsidiaries of the
proceeds of any of the Revolving Credit Loans or Letters of Credit, (b) the
reversal or withdrawal of any provisional credits granted by the Administrative
Agent to the Borrowers upon the transfer of funds from lock box, bank agency,
concentration accounts or otherwise under any cash management arrangements with
any of the Borrowers or any of their Subsidiaries or in connection with the
provisional honoring of funds transfers, checks or other items, (c) any actual
or alleged infringement of any patent, copyright, trademark, service mark or
similar right of any of the Borrowers or any of their Subsidiaries comprised in
the Collateral, (d) any of the Borrowers or any of their Subsidiaries entering
into or performing this Credit Agreement or any of the other Loan Documents or
(e) with respect to each of the Borrowers and their Subsidiaries and their
respective properties and assets, the violation of any Environmental Law, the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such investigation,
litigation or other proceeding (all the foregoing, collectively, the
“Indemnified Liabilities”), except to the extent any of the foregoing
Indemnified Liabilities result from the gross negligence or willful misconduct
of any such Indemnified Person.  In litigation, or the preparation therefor,
such Indemnified Person shall be entitled to select its own counsel provided;
that notwithstanding the foregoing indemnity, the Borrowers shall jointly and

 

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severally be liable to pay promptly the reasonable fees and expenses for only
one such counsel for the Administrative Agent, its affiliates and the Lenders. 
If, and to the extent that the obligations of the Borrowers under this §17.3 are
unenforceable for any reason, the Borrowers hereby agree to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law.  The covenants contained in this §17.3 shall
survive payment or satisfaction in full of all other Obligations.

 

17.4.                     Treatment of Certain Confidential Information.

 

17.4.1.           Confidentiality.  Each of the Lenders and the Administrative
Agent agrees, on behalf of itself and each of its affiliates, directors,
officers, employees, representatives and any person who manages the
Administrative Agent or such Lender, to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking and financial industry practices, any non-public information
supplied to it by any of the Sponsors, the Borrowers or any of their
Subsidiaries or Affiliates pursuant to this Credit Agreement that is identified
by such Person as being confidential at the time the same is delivered to the
Lenders or the Administrative Agent, provided that nothing herein shall limit
the disclosure of any such information (a) after such information shall have
become public other than through a violation of this §17.4, or becomes available
to any of the Lenders or the Administrative Agent on a nonconfidential basis
from a source other than the Borrowers, (b) to the extent required by statute,
law, rule, regulation or judicial process, (c) to counsel or financial advisers
for any of the Lenders or the Administrative Agent, (d) to bank examiners or any
other regulatory or self-regulatory authority having or reasonably claiming to
have jurisdiction over any Lender or the Administrative Agent, or to auditors or
accountants, (e) to the Administrative Agent, any Lender or any Financial
Affiliate, (f) in connection with any litigation to which any one or more of the
Lenders, the Administrative Agent or any Financial Affiliate is a party, or in
connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (g) to a Lender Affiliate or a Subsidiary or affiliate of
the Administrative Agent, (h) to any actual or prospective assignee, pledgee or
participant or any actual or prospective counterparty (or its advisors) to any
swap or derivative transactions referenced to credit or other risks or events
arising under this Credit Agreement or any other Loan Document so long as such
assignee, participant or counterparty, as the case may be, agrees to be bound by
the provisions of §17.4 or (i) with the prior written consent of the Borrowers. 
Moreover, each of the Administrative Agent, the Lenders and any Financial
Affiliate is hereby expressly permitted by the Borrowers to refer to any of the
Borrowers and their Subsidiaries in connection with any advertising, promotion
or marketing undertaken by the Administrative

 

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Agent, such Lender or such Financial Affiliate and, for such purpose, the
Administrative Agent, such Lender or such Financial Affiliate may utilize any
trade name, trademark, logo or other distinctive symbol associated with the
Borrowers or any of their Subsidiaries or any of their businesses.

 

17.4.2.           Prior Notification.  Unless specifically prohibited by
applicable law or court order, each of the Lenders and the Administrative Agent
shall, prior to disclosure thereof, notify the Borrowers of any request for
disclosure of any such non-public information by any Governmental Authority
representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender by such Governmental
Authority) or pursuant to legal process.

 

17.4.3.           Other.  In no event shall any Lender or the Administrative
Agent be obligated or required to return any materials furnished to it or any
Financial Affiliate by the Borrowers or any of their Subsidiaries.  The
obligations of each Lender under this §17.4 shall supersede and replace the
obligations of such Lender under any confidentiality letter in respect of this
financing signed and delivered by such Lender to the Borrowers prior to the date
hereof and shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Revolving Credit Loans or
Reimbursement Obligations from any Lender. The covenants contained in this §17.4
shall survive payment or satisfaction in full of all of the Obligations.

 

17.5.                     Survival of Covenants, Etc.  All covenants,
agreements, representations and warranties made herein, in the Notes, in any of
the other Loan Documents or in any documents or other papers delivered by or on
behalf of the Borrowers or any of their Subsidiaries pursuant hereto shall be
deemed to have been relied upon by the Lenders and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Lenders of any of the Revolving Credit Loans
and the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any Letter
of Credit or any amount due under this Credit Agreement or the Notes or any of
the other Loan Documents remains outstanding or any Lender has any obligation to
make any Revolving Credit Loans or the Administrative Agent has any obligation
to issue, extend or renew any Letter of Credit, and for such further time as may
be otherwise expressly specified in this Credit Agreement.  All statements
contained in any certificate or other paper required to be delivered to any
Lender or the Administrative Agent at any time by or on behalf of any of the
Borrowers or any of their Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by such Borrower or such Subsidiary hereunder.

 

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17.6.                     Notices.  Except as otherwise expressly provided in
this Credit Agreement, all notices and other communications made or required to
be given pursuant to this Credit Agreement or the Notes or any Letter of Credit
Applications shall be in writing and shall be delivered by hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telecopy or facsimile and confirmed by delivery
via courier or postal service, addressed as follows:

 

(a)          if to any Borrower or the Parent, c/o Bruckmann, Rosser, Sherill &
Co., Inc., 126 East 56th Street, New York, New York 10022, Attention: Harold O.
Rosser, J. Rice Edmonds and Kristen Ankerbrandt, fax: (212) 521-3799; with
copies to Castle Harlan Partners, III, L.P., 150 East 58th St., New York, New
York 10155, Attention: David B. Pittaway and Justin Wender, fax: (212) 207-8042;
and copies to Kirkland & Ellis LLP, Citigroup Center, 153 East 53rd St., New
York, New York 10022-4675, Attention: Kim Taylor, fax: (212) 446-4900; and
copies to Schulte, Roth & Zabel LLP, 919 Third Ave., New York, New York 10022,
Attention: Marc Weingarten, fax: (212) 593-5955, Stoel Rives LLP, 900 SW Fifth
Avenue, Suite 2600, Portland, Oregon 97204-1268, Attention: Robert J. Moorman
and James M. Kearney, fax: (503) 220-2480 or at such other address for notice as
such Borrower or the Parent, as applicable, shall last have furnished in writing
to the Person giving the notice;

 

(b)         if to the Administrative Agent, at 100 Federal Street, Boston,
Massachusetts 02110, USA, Attention: Cristin O’Hara, Director, fax: (617)
434-0637, with copies to Bingham McCutchen LLP, 150 Federal Street, Boston,
Massachusetts 02110, Attention: Sula R. Fiszman, Esq., fax: (617) 951-8736, or
such other address for notice as the Administrative Agent shall last have
furnished in writing to the Person giving the notice; and

 

(c)          if to any Lender, at such Lender’s address set forth on Schedule 1
hereto, or such other address for notice as such Lender shall have last
furnished in writing to the Person giving the notice.

 

Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (i) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
the receipt thereof by such officer or the sending of such facsimile and (ii) if
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.  Any notice or other communication
to be made hereunder or under the Notes or any Letter of Credit Applications,
even if otherwise required to be in writing under other provisions of this
Credit Agreement, the Notes or any Letter of Credit Applications, may
alternatively be made in an electronic record transmitted electronically under
such authentication and other procedures as the parties hereto may from time to
time agree in writing (but not an electronic record), and such electronic
transmission shall be effective at the time set forth in such procedures. 
Unless otherwise expressly provided in such procedures, such an electronic
record shall be equivalent to a writing under the other

 

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provisions of this Credit Agreement, the Notes or any Letter of Credit
Applications, and such authentication, if made in compliance with the procedures
so agreed by the parties hereto in writing (but not an electronic record), shall
be equivalent to a signature under the other provisions of this Credit
Agreement, the Notes or any Letter of Credit Applications.

 

17.7.                     Governing Law.  THIS CREDIT AGREEMENT AND, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE
CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL
PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW).  EACH PARTY HERETO AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN
AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON SUCH PERSON BY MAIL AT THE ADDRESS
SPECIFIED IN §17.6.  EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT
SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

 

17.8.                     Headings.  The captions in this Credit Agreement are
for convenience of reference only and shall not define or limit the provisions
hereof.

 

17.9.                     Counterparts.  This Credit Agreement and any amendment
hereof may be executed in several counterparts and by each party on a separate
counterpart, each of which when executed and delivered shall be an original, and
all of which together shall constitute one instrument.  In proving this Credit
Agreement it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.  Delivery by
facsimile by any of the parties hereto of an executed counterpart hereof or of
any amendment or waiver hereto shall be as effective as an original executed
counterpart hereof or of such amendment or waiver and shall be considered a
representation that an original executed counterpart hereof or such amendment or
waiver, as the case may be, will be delivered.

 

17.10.              Entire Agreement, Etc.  The Loan Documents and any other
documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby.

 

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Neither this Credit Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in §17.12.

 

17.11.              Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS CREDIT AGREEMENT, THE NOTES OR ANY OF THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF
THE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE
REVOLVING CREDIT LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES THAT IT
WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  Except as prohibited by law, each
party hereto hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages.  Each party hereto (a) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waivers and (b) acknowledges that each party has been induced to enter
into this Credit Agreement, the other Loan Documents to which it is a party by,
among other things, the waivers and certifications contained herein.

 

17.12.              Consents, Amendments, Waivers, Etc.  Any consent or approval
required or permitted by this Credit Agreement to be given by the Lenders may be
given, and any term of this Credit Agreement, the other Loan Documents or any
other instrument related hereto or mentioned herein may be amended, and the
performance or observance by any of the Borrowers or any of their Subsidiaries
of any terms of this Credit Agreement, the other Loan Documents or such other
instrument or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Borrowers and the
written consent of the Required Lenders. Notwithstanding the foregoing, no
amendment, modification or waiver shall:

 

(a)          without the written consent of the Borrowers and each Lender:

 

(i)                                     reduce or forgive the principal amount
of any Revolving Credit Loans or Reimbursement Obligations, or reduce the rate
of interest

 

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on the Notes or the amount of the Commitment Fee, the Letter of Credit Fees or
any other fees payable for the account of all of the Lenders (other than (A)
interest accruing pursuant to §6.10 following the effective date of any waiver
by the Required Lenders of the Default or Event of Default relating thereto or
(B) as a result of a change in the definition of Adjusted Leverage Ratio or any
of the components thereof or the method of calculation thereof);

 

(ii)                                  (A) increase the amount of such Lender’s
Revolving Credit Commitment (other than in accordance with §3), (b) extend the
expiration date of such Lender’s Revolving Credit Commitment or (C) change the
requirement that any scheduled payments of principal of the Revolving Credit
Loans or voluntary or mandatory prepayments of the Revolving Credit Loans or
reductions in the Revolving Credit Commitments be applied pro rata to all
Revolving Credit Loans outstanding within the outstanding Revolving Credit
Commitments;

 

(iii)                               postpone or extend the Maturity Date or any
other regularly scheduled dates for payments of principal of, or interest on,
the Revolving Credit Loans or Reimbursement Obligations or any Fees or other
amounts payable to such Lender (it being understood that (A) a waiver of the
application of the default rate of interest pursuant to §6.10 and (B) any vote
to rescind any acceleration made pursuant to §14.1 of amounts owing with respect
to the Revolving Credit Loans and other Obligations shall require only the
approval of the Required Lenders);

 

(iv)                              other than pursuant to a transaction permitted
by the terms of this Credit Agreement, release all or any portion of the
Collateral with a book value equal to or greater than 50% of the aggregate book
value of the Collateral prior to such release (excluding, if any Borrower
becomes a debtor under the federal Bankruptcy Code, the release of “cash
collateral”, as defined in Section 363(a) of the federal Bankruptcy Code
pursuant to a cash collateral stipulation with the debtor approved by the
Required Lenders) or the Parent from its obligations under the Parent Guaranty;

 

(v)                                 amend or waive any provision of this Credit
Agreement which requires pro-rata distributions to each of the Lenders by the
Administrative Agent of payments and/or proceeds received from the Borrowers or
the Parent by the Administrative Agent hereunder; and

 

(vi)                              amend or waive this §17.12 or the definition
of Required Lenders;

 

(b)         without the written consent of the Administrative Agent, amend or
waive §15, the amount or time of payment of any Letter of Credit Fees or other

 

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fees payable for the Administrative Agent’s account or any other provision
applicable to the Administrative Agent.

 

No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon.  No course of dealing or delay or omission
on the part of the Administrative Agent or any Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto.  No
notice to or demand upon the Borrowers shall entitle the Borrowers to other or
further notice or demand in similar or other circumstances.

 

Notwithstanding the foregoing, the parties hereto acknowledge and agree that the
Administrative Agent may, without the consent of any Lender, (x) release its
liens on the Collateral solely to the extent that such Collateral is sold or
otherwise disposed of in accordance with the terms of this Credit Agreement,
including without limitation, §10.5.2 or (y) take any and all action necessary,
including, without limitation, entering into joinder and accession agreements
with additional Subsidiaries and amendments to any of the Security Documents,
all in furtherance of the provisions of §9.17.

 

17.13.              Borrowers’ Representative.  Each of the Borrowers hereby
irrevocably appoints MSAC as such Borrower’s representative and agent for all
purposes under this Credit Agreement and authorizes MSAC, on behalf of each such
Borrower and in each such Borrower’s name to give and receive all notices and
documents, certificates and instruments to be given or received by the Borrowers
or any of them in connection with this Credit Agreement and the other Loan
Documents, including receipt of service of legal process in connection with any
suit or proceeding arising under, or in connection with the transactions
contemplated by this Credit Agreement, delivery of Loan Requests, Conversion
Requests, Compliance Certificates and requests for waivers and amendments and to
acknowledge or consent to any amendments, waivers or assignments.

 

17.14.              Severability.  The provisions of this Credit Agreement are
severable and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.

 

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

 

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Administrative Agent, as applicable, to identify the Borrowers in accordance
with the Act.

 

123

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IN WITNESS WHEREOF, the undersigned have duly executed this Credit Agreement as
a sealed instrument as of the date first set forth above.

 

 

MCCORMICK & SCHMICK
ACQUISITION CORP.

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK
RESTAURANT CORP.

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK
MARYLAND LIQUOR, INC.

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK
ACQUISITION I TEXAS, INC.

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK
ACQUISITION II TEXAS, INC.

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

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

 

 

MCCORMICK & SCHMICK
ACQUISITION TEXAS LP

 

 

 

 

 

By:

McCormick & Schmick Acquisition I

 

 

Texas, Inc., its General Partner

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK
ACQUISITION III TEXAS, INC.

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK’S
ATLANTA II, LLC

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK’S
HACKENSACK, LLC

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK
ORLANDO, LLC

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

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

 

 

MCCORMICK & SCHMICK DALLAS,
LP

 

 

 

 

 

 

 

 

 

By:

McCormick & Schmick Acquisition I
Texas, Inc., its General Partner

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK DALLAS
LIQUOR, INC.

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK AUSTIN,
LP

 

 

 

 

 

By:

 McCormick & Schmick Acquisition I
Texas, Inc., its General Partner

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

 

 

 

 

MCCORMICK & SCHMICK AUSTIN
LIQUOR, INC.

 

 

 

 

 

 

 

 

 

By:

/s/ DOUGLAS L. SCHMICK

 

 

 

Name:  Douglas L. Schmick

 

 

 

Title:  President

 

 

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

 

 

FLEET NATIONAL BANK, individually
and as Administrative Agent

 

 

 

 

 

 

 

 

 

By:

/s/ CRISTIN O’HARA

 

 

 

Cristin O’Hara

 

 

 

Director

 

 

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

 

October 12, 2004

 

 

McCormick & Schmick Acquisition Corp.

McCormick & Schmick Restaurant Corp.

McCormick & Schmick Maryland Liquor, Inc.

McCormick & Schmick Acquisition Texas, LP

McCormick & Schmick Acquisition I Texas, Inc.

McCormick & Schmick Acquisition II Texas, Inc.

McCormick & Schmick Acquisition III Texas, Inc.

McCormick & Schmick’s Atlanta II, LLC

McCormick & Schmick’s Hackensack, LLC

McCormick & Schmick Orlando, LLC

McCormick & Schmick Dallas, LP

McCormick & Schmick Dallas Liquor, Inc.

McCormick & Schmick Austin, LP

McCormick & Schmick Austin Liquor, Inc.

c/o McCormick & Schmick Management Group

720 Southwest Washington Street

Suite 550

Portland, Oregon 97205

Attn: Emanuel N. Hilario

 

Re:          Amendment to Post-Closing Delivery Requirements

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Revolving Credit Agreement, dated as of
July 23, 2004 (as amended and in effect from time to time, the “Credit
Agreement”), among each of you, as Borrowers, the lenders from time to time
party thereto, Fleet National Bank, as Administrative Agent and Banc of America
Securities LLC, as arranger.  Terms defined in the Credit Agreement and used
without definition herein shall have the same respective meanings herein as in
the Credit Agreement.

 

As evidenced by their signature below, the Borrowers and the Required Lenders
hereby agree that Section 9.20(a), (b) and (c) of the Credit Agreement are
hereby deleted in their entirety and substituted with the following therefor:

 

“(a)         No later than ninety (90) days after the Closing Date, the
Borrowers shall have delivered to the Administrative Agent, Agency Account
Agreements, in form and substance reasonably satisfactory to the Administrative
Agent, for each depository

 

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

 

account of the Borrowers and each of their Subsidiaries and as identified on
Schedule 8.20 of the Credit Agreement.

 

(b)           The Borrowers will use their commercially reasonable efforts to
execute and deliver to the Administrative Agent, in form reasonably acceptable
to the Administrative Agent, no later than ninety (90) days after the Closing
Date, leasehold mortgages or leasehold deeds of trust (and related consents), as
applicable, for the following locations (i) Providence Biltmore Hotel, Kennedy
Plaza, Providence, RI; (ii) 235 SW First Avenue, Portland, OR; (iii) Pittsburgh,
PA; (iv) CNN Center, Atlanta, GA; (v) 8100 East Union Avenue, Denver, CO; and
(vi) Mall at the Millenia, 4200 Conroy Road, Space A-146, Orlando, FL.

 

(c)           The Borrowers will use their commercially reasonable efforts to
execute and deliver to the Administrative Agent, in form reasonably acceptable
to the Administrative Agent, no later than ninety (90) days after the Closing
Date, landlord subordination agreements, landlord consents and/or lien waivers,
as applicable, for the following leased locations: (i) North Park Shopping
Center, Dallas, TX; (ii) Providence Biltmore Hotel, Kennedy Plaza, Providence,
RI; (iii) 235 SW First Avenue, Portland, OR; (iv) Bridgewater Mall, NJ; (v)
Pittsburgh, PA; (vi) CNN Center, Atlanta, GA; (vii) 8100 East Union Avenue,
Denver, CO; and (viii) Mall at the Millenia, 4200 Conroy Road, Space A-146,
Orlando, FL.”

 

This letter agreement may be executed in any number of counterparts, which shall
together constitute but one and the same agreement.  THIS LETTER AGREEMENT SHALL
FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.  This letter agreement shall take
effect as a sealed instrument as of the date first hereinabove written.  This
letter agreement shall be binding on the parties hereto and their respective
successors and assigns.

 

[Signature page follows]

 

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

 

Please indicate your agreement with the foregoing by signing this letter
agreement where indicated below and returning it to Cristin O’Hara at Fleet
National Bank, 100 Federal Street, Boston, Massachusetts 02110.

 

 

 

 

 

 

 

Very truly yours,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FLEET NATIONAL BANK, as

 

 

 

 

 

 

  Administrative Agent and as Lender

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ CRISTIN O’HARA

 

 

 

 

 

 

 

 

Name:

Cristin O’Hara

 

 

 

 

 

 

 

 

Title:

Director

 

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

 

MCCORMICK & SCHMICK ACQUISITION CORP.

 

 

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

MCCORMICK & SCHMICK RESTAURANT CORP.

 

 

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

MCCORMICK & SCHMICK MARYLAND LIQUOR, INC.

 

 

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

MCCORMICK & SCHMICK ACQUISITION I TEXAS, INC.

 

 

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

MCCORMICK & SCHMICK ACQUISITION II TEXAS, INC.

 

 

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

MCCORMICK & SCHMICK ACQUISITION III TEXAS, INC.

 

 

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

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

 

MCCORMICK & SCHMICK ACQUISITION TEXAS, LP

 

By:

McCormick & Schmick Acquisition I Texas, Inc.,

 

 

its General Partner

 

 

 

 

 

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

 

MCCORMICK & SCHMICK’S ATLANTA II, LLC

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

 

MCCORMICK & SCHMICK’S HACKENSACK, LLC

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

MCCORMICK & SCHMICK ORLANDO, LLC

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

 

MCCORMICK & SCHMICK DALLAS, LP

 

By:

McCormick & Schmick Acquisition I Texas, Inc.,

 

 

its General Partner

 

 

 

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

MCCORMICK & SCHMICK DALLAS LIQUOR, INC.

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

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

 

MCCORMICK & SCHMICK AUSTIN, LP

 

By:

McCormick & Schmick Acquisition I Texas, Inc.,

 

 

its General Partner

 

 

 

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

 

MCCORMICK & SCHMICK AUSTIN LIQUOR, INC.

 

By:

/s/

 

 

 

Name:

 

 

 

Title:

 

 

 

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