Exhibit 10.1

LOGO [g44375graphicex10_1.jpg]

 

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Published CUSIP Number: 69865XAH9

$675,000,000

THIRD AMENDED AND RESTATED

CREDIT AGREEMENT

among

THE PANTRY, INC.,

as Borrower,

THE DOMESTIC SUBSIDIARIES OF THE BORROWER

FROM TIME TO TIME PARTIES HERETO,

as Guarantors,

THE LENDERS PARTIES HERETO,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

and

BMO CAPITAL MARKETS,

as Co-Syndication Agents

and

COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A. “RABOBANK

NEDERLAND”, NEW YORK BRANCH

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

Dated as of May 15, 2007

J.P. MORGAN SECURITIES INC.

and

WACHOVIA CAPITAL MARKETS, LLC,

as Joint Lead Arrangers and Joint Bookrunners

 

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TABLE OF CONTENTS

 

         Page ARTICLE I DEFINITIONS    1

Section 1.1

  Defined Terms.    1

Section 1.2

  Other Definitional Provisions.    35

Section 1.3

  Accounting Terms.    36

Section 1.4

  Time References.    36

Section 1.5

  Execution of Documents.    36 ARTICLE II THE LOANS; AMOUNT AND TERMS    37

Section 2.1

  Revolving Loans.    37

Section 2.2

  Term Loan Facility.    38

Section 2.3

  Incremental Facilities.    42

Section 2.4

  Letter of Credit Subfacility.    43

Section 2.5

  Swingline Loan Subfacility.    47

Section 2.6

  Fees.    49

Section 2.7

  Commitment Reductions.    50

Section 2.8

  Prepayments.    51

Section 2.9

  Minimum Borrowing Amounts and Lending Offices.    53

Section 2.10

  Default Rate and Payment Dates.    53

Section 2.11

  Conversion and Continuation Options.    54

Section 2.12

  Computation of Interest and Fees.    54

Section 2.13

  Pro Rata Treatment and Payments.    55

Section 2.14

  Non-Receipt of Funds by the Administrative Agent.    57

Section 2.15

  Inability to Determine Interest Rate.    59

Section 2.16

  Yield Protection.    59

Section 2.17

  Illegality.    61

Section 2.18

  Indemnity.    61

Section 2.19

  Taxes.    62

Section 2.20

  Indemnification; Nature of Issuing Lender’s Duties.    64

Section 2.21

  Replacement of Lenders.    65 ARTICLE III REPRESENTATIONS AND WARRANTIES    67

Section 3.1

  Organization; Qualification; Good Standing; Subsidiaries; Etc.    67

Section 3.2

  Authorization of Borrowing, Etc.    68

Section 3.3

  Financial Condition.    69

Section 3.4

  No Material Adverse Change; No Restricted Junior Payments.    70

Section 3.5

  Title to Properties; Collateral Locations.    70

Section 3.6

  Litigation.    71

Section 3.7

  Taxes.    71

Section 3.8

  Contractual Obligations; Restrictive Agreements; Material Contracts.    71

Section 3.9

  Governmental Regulation.    72

Section 3.10

  Securities Activities.    72

Section 3.11

  Employee Benefit Plans.    72

Section 3.12

  Broker’s Fees.    73

Section 3.13

  Environmental Protection.    73

Section 3.14

  Employee Matters.    74

 

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Section 3.15

  Solvency.    74

Section 3.16

  Matters Relating to Collateral.    75

Section 3.17

  Related Agreements.    75

Section 3.18

  Disclosure.    76

Section 3.19

  Permits.    76

Section 3.20

  Indebtedness.    77

Section 3.21

  Intellectual Property.    77

Section 3.22

  Investments.    77

Section 3.23

  Insurance.    77

Section 3.24

  Anti-Terrorism Laws.    77

Section 3.25

  Compliance with OFAC Rules and Regulations.    78

Section 3.26

  Compliance with FCPA.    78

Section 3.27

  VoiceStream Wireless.    78 ARTICLE IV CONDITIONS PRECEDENT    78

Section 4.1

  Conditions to Closing Date and Initial Loans.    78

Section 4.2

  Conditions to All Extensions of Credit.    82 ARTICLE V AFFIRMATIVE COVENANTS
   84

Section 5.1

  Financial Statements and Other Reports.    84

Section 5.2

  Corporate Existence, Etc.    89

Section 5.3

  Payment of Taxes, Claims and Other Obligations; Tax Consolidation.    89

Section 5.4

  Maintenance of Properties; Insurance.    90

Section 5.5

  Books and Records; Inspection Rights.    91

Section 5.6

  Compliance with Laws, Etc.    91

Section 5.7

  Environmental Review and Investigation, Disclosure, Etc.    91

Section 5.8

  Hazardous Materials Activities; Environmental Claims/Violations.    94

Section 5.9

  Additional Guarantors.    94

Section 5.10

  Pledged Assets.    95

Section 5.11

  Matters Relating to Additional Real Property Collateral.    95

Section 5.12

  Use of Proceeds.    98

Section 5.13

  Post-Closing Covenant; Further Assurances.    98 ARTICLE VI NEGATIVE COVENANTS
   99

Section 6.1

  Indebtedness.    99

Section 6.2

  Liens and Related Matters.    101

Section 6.3

  Investments; Joint Ventures.    103

Section 6.4

  Contingent Obligations.    104

Section 6.5

  Restricted Junior Payments.    105

Section 6.6

  Financial Covenants.    106

Section 6.7

  Restriction on Fundamental Changes, Asset Sales and Acquisitions.    106

Section 6.8

  Sales and Leasebacks.    109

Section 6.9

  Sale or Discount of Receivables.    110

Section 6.10

  Transactions with Shareholders and Affiliates.    110

Section 6.11

  Disposal of Subsidiary Capital Stock; Formation of New Subsidiaries.    111

Section 6.12

  Conduct of Business.    111

Section 6.13

  Restrictions on Certain Amendments; Senior Debt Status.    111

Section 6.14

  Fiscal Year; State of Organization; Accounting Practices.    112

 

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Section 6.15

  Management Fees.    113

Section 6.16

  Letters of Credit.    113

Section 6.17

  Maximum Consolidated Capital Expenditures.    113 ARTICLE VII EVENTS OF
DEFAULT    113

Section 7.1

  Events of Default.    113

Section 7.2

  Acceleration; Remedies.    116 ARTICLE VIII THE AGENT    118

Section 8.1

  Appointment and Authority.    118

Section 8.2

  Nature of Duties.    118

Section 8.3

  Exculpatory Provisions.    119

Section 8.4

  Reliance by Administrative Agent.    120

Section 8.5

  Notice of Default.    120

Section 8.6

  Non-Reliance on Administrative Agent and Other Lenders.    121

Section 8.7

  Indemnification.    121

Section 8.8

  Administrative Agent in Its Individual Capacity.    121

Section 8.9

  Successor Administrative Agent.    122

Section 8.10

  Collateral and Guaranty Matters.    122 ARTICLE IX MISCELLANEOUS    123

Section 9.1

  Amendments, Waivers and Release of Collateral.    123

Section 9.2

  Notices.    126

Section 9.3

  No Waiver; Cumulative Remedies.    127

Section 9.4

  Survival of Representations and Warranties.    127

Section 9.5

  Payment of Expenses and Taxes; Indemnity.    127

Section 9.6

  Successors and Assigns; Participations.    129

Section 9.7

  Right of Set-off; Sharing of Payments.    132

Section 9.8

  Table of Contents and Section Headings.    134

Section 9.9

  Counterparts.    134

Section 9.10

  Effectiveness.    134

Section 9.11

  Severability.    134

Section 9.12

  Integration.    134

Section 9.13

  Governing Law.    135

Section 9.14

  Consent to Jurisdiction and Service of Process.    135

Section 9.15

  Confidentiality.    135

Section 9.16

  Acknowledgments.    137

Section 9.17

  Waivers of Jury Trial.    137

Section 9.18

  USA Patriot Act Notice.    137 ARTICLE X GUARANTY    138

Section 10.1

  The Guaranty.    138

Section 10.2

  Bankruptcy.    138

Section 10.3

  Nature of Liability.    139

Section 10.4

  Independent Obligation.    139

Section 10.5

  Authorization.    139

Section 10.6

  Reliance.    140

Section 10.7

  Waiver.    140

Section 10.8

  Limitation on Enforcement.    141

 

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Section 10.9

  Confirmation of Payment.    141

Section 10.10

  Release of Guarantor.    142

 

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Schedules

 

Schedule 1.1-1    Account Designation Letter Schedule 1.1-3    Material
Contracts Schedule 1.1-4    Existing Letters of Credit Schedule 1.1-5   
Existing Hedging Agreements Schedule 1.1-6    Commitments Schedule 2.1(b)(i)   
Form of Notice of Borrowing Schedule 2.1(e)    Form of Revolving Note
Schedule 2.2(d)    Form of Term Note Schedule 2.5(d)    Form of Swingline Note
Schedule 2.8(a)    Form of Notice of Prepayment Schedule 2.11    Form of Notice
of Conversion/Extension Schedule 3.1-1    Jurisdictions of
Incorporation/Organization Schedule 3.1-2    Subsidiaries; Capital Structure
Schedule 3.2(b)    Conflicts with Contractual Obligations; Consents
Schedule 3.5(b)    Real Properties Schedule 3.5(c)    Locations of Collateral
Schedule 3.7    Tax Assessments Schedule 3.11    ERISA Schedule 3.13   
Environmental Matters Schedule 3.17    Related Agreements Schedule 3.21   
Intellectual Property Schedule 3.23    Insurance Schedule 4.1-1    Form of
Secretary’s Certificate Schedule 4.1-2    Form of Solvency Certificate
Schedule 5.9    Form of Joinder Agreement Schedule 5.13    Mortgaged Properties
Schedule 6.1    Indebtedness Schedule 6.2    Liens Schedule 6.3    Investments
Schedule 6.4    Contingent Obligations Schedule 6.8-1    Existing Sale and
Leaseback Transactions Schedule 6.8-2    Permitted Sale and Leaseback Properties
Schedule 9.6    Form of Assignment and Assumption

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 15, 2007, among THE
PANTRY, INC., a Delaware corporation, (the “Borrower”), those Domestic
Subsidiaries of the Borrower identified as a “Guarantor” on the signature pages
hereto and such other Domestic Subsidiaries of the Borrower as may from time to
time become a party hereto (individually a “Guarantor” and collectively the
“Guarantors”), the several banks and other financial institutions as may from
time to time become parties to this Credit Agreement (individually a “Lender”
and collectively the “Lenders”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as
administrative agent for the Lenders hereunder (in such capacity, the
“Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower, the guarantors party thereto, the lenders party thereto
and Wachovia Bank, National Association, as administrative agent, are parties to
that certain Second Amended and Restated Credit Agreement dated as of
December 29, 2005 (as amended and modified, the “Existing Credit Agreement”);

WHEREAS, the Lenders have agreed to amend and restate the Existing Credit
Agreement on the terms and conditions hereinafter set forth;

WHEREAS, in connection with the refinancing of the Existing Credit Agreement in
accordance with the terms hereof, the Borrower has requested that the Lenders
make loans and other financial accommodations to the Borrower in the amount of
$675,000,000, as more particularly described herein; and

WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Defined Terms.

As used in this Credit Agreement, terms defined in the preamble to this Credit
Agreement have the meanings therein indicated, and the following terms have the
following meanings:

“Account Designation Letter” shall mean the Notice of Account Designation Letter
dated the Closing Date from the Borrower to the Administrative Agent
substantially in the form attached hereto as Schedule 1.1-1.

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“Additional Acquisition” shall have the meaning set forth in Section 6.7(d).

“Additional Credit Party” shall mean each Person that becomes a Guarantor by
execution of a Joinder Agreement in accordance with Section 5.9.

“Additional Loan” shall have the meaning set forth in Section 2.3.

“Additional Mortgage” shall have the meaning set forth in Section 5.11(a).

“Additional Mortgage Policy” shall have the meaning set forth in
Section 5.11(a).

“Additional Mortgaged Property” shall have the meaning set forth in
Section 5.11(a).

“Administrative Agent” shall have the meaning set forth in the first paragraph
of this Credit Agreement and any successors in such capacity.

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

“Affiliate Agreements” shall mean, collectively, all employment agreements,
consulting agreements, and any other agreements, documents or arrangements
between any Credit Party and any of its Affiliates, executive officers,
directors, shareholders or any Affiliates of any such officers, directors or
shareholders.

“Agents” shall mean the Administrative Agent, JPMorgan Chase Bank, National
Association and BMO Capital Markets, as the Co-Syndication Agents, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank Nederland”, New
York Branch and Wells Fargo Bank, National Association, as Co-Documentation
Agents.

“Agreement” or “Credit Agreement” shall mean this Third Amended and Restated
Credit Agreement, as amended, modified or supplemented from time to time in
accordance with its terms.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “Prime
Rate” shall mean, at any time, the rate of interest per annum publicly announced
from time to time by Wachovia at its principal office in Charlotte, North
Carolina as its prime rate. Each change in the Prime Rate shall be effective as
of the opening of business on the day such change in the Prime Rate occurs. The
parties hereto acknowledge that the rate announced publicly by Wachovia as its
Prime Rate is an index or base rate and shall not necessarily be its lowest or
best rate charged to its customers or other banks; and “Federal Funds Effective
Rate” shall mean, for any day, 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 on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published on
the next succeeding Business Day, the

 

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average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive in the absence of manifest error) that
it is unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Alternate Base
Rate shall be determined without regard to clause (b) of the first sentence of
this definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
opening of business on the date of such change.

“Alternate Base Rate Loans” shall mean Loans that bear interest at an interest
rate based on the Alternate Base Rate.

“Applicable Margin” shall mean, for any day, the rate per annum set forth below
opposite the applicable Level then in effect, it being understood that the
Applicable Margin for (a) Revolving Loans that are Alternate Base Rate Loans
shall be the percentage set forth under the column “Alternate Base Rate Margin
for Revolving Loans,” (b) Revolving Loans that are LIBOR Rate Loans and the
Letter of Credit Fee shall be the percentage set forth under the column “LIBOR
Rate Margin for Revolving Loans/Letter of Credit Fee”, (c) the portion of the
Term Loan consisting of Alternate Base Rate Loans shall be the percentage set
forth under the column “Alternate Base Rate Margin for Term Loan,” (d) the
portion of the Term Loan consisting of LIBOR Rate Loans shall be the percentage
set forth under the column “LIBOR Rate Margin for Term Loan” and (e) the
Commitment Fee shall be the percentage set forth under the column “Commitment
Fee”:

 

Level

  

Consolidated

Total Leverage

Ratio

   Alternate
Base Rate
Margin for
Revolving
Loans     LIBOR
Rate
Margin for
Revolving
Loans/
Letter of
Credit Fee     Alternate
Base Rate
Margin for
Term
Loan     LIBOR
Rate
Margin for
Term
Loan     Commitment
Fee   I    ³ 4.00 to 1.00    0.50 %   1.75 %   0.50 %   1.75 %   0.50 % II   
> 3.00 to 1.00 but
< 4.00 to 1.0    0.25 %   1.50 %   0.25 %   1.50 %   0.375 % III    £ 3.00 to
1.0    0.00 %   1.25 %   0.25 %   1.50 %   0.375 %

The Applicable Margin shall, in each case, be determined and adjusted quarterly
on the date five (5) Business Days after the date on which the Administrative
Agent has received from the Borrower the quarterly financial information and
certifications required to be delivered to the Administrative Agent and the
Lenders in accordance with the provisions of Sections 5.1(a), (b) and (c) (each
an “Interest Determination Date”). Such Applicable Margin shall be effective
from such Interest Determination Date until the next Interest Determination
Date. Notwithstanding the foregoing, until financial statements are delivered
for the second full Fiscal Quarter following

 

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the Closing Date, the initial Applicable Margin for (i) Revolving Loans that are
Alternate Base Rate Loans shall be 0.25%, (ii) Revolving Loans that are LIBOR
Rate Loans and the Letter of Credit Fee shall be 1.50%, (iii) the portion of the
Term Loan consisting of Alternate Base Rate Loans shall be 0.50%, (iv) the
portion of the Term Loan consisting of LIBOR Rate Loans shall be 1.75% and
(v) the Commitment Fee shall be 0.375%. If the Borrower shall fail to provide
the financial information and certifications in accordance with the provisions
of Sections 5.1(a) and (c), the Applicable Margin shall, on the date five
(5) Business Days after the date by which the Borrower was so required to
provide such financial information and certifications to the Administrative
Agent and the Lenders, be based on Level I until such time as such information
and certifications are provided, whereupon the Level shall be determined by the
then current Consolidated Total Leverage Ratio. In the event that any financial
statement or certification delivered pursuant to Section 5.1 is shown to be
inaccurate (regardless of whether this Agreement or the Commitments are in
effect when such inaccuracy is discovered), and such inaccuracy, if corrected,
would have led to the application of a higher Applicable Margin for any period
(an “Applicable Period”) than the Applicable Margin applied for such Applicable
Period, then the Borrower shall immediately (i) deliver to the Administrative
Agent a corrected compliance certificate for such Applicable Period,
(ii) determine the Applicable Margin for such Applicable Period based upon the
corrected compliance certificate, and (iii) immediately pay to the
Administrative Agent the accrued additional interest owing as a result of such
increased Applicable Margin for such Applicable Period, which payment shall be
promptly applied by the Administrative Agent in accordance with Section 2.13. It
is acknowledged and agreed that nothing contained herein shall limit the rights
of the Administrative Agent and the Lenders under the Credit Documents,
including their rights under Sections 2.10 and 7.1 and other of their respective
rights under this Agreement.

“Arrangers” shall mean J.P. Morgan Securities Inc. and Wachovia Capital Markets,
LLC as joint lead arrangers and joint bookrunners.

“Approved Fund” shall mean any Fund that is administered, managed or
underwritten 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.

“Asset Disposition” shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of the Borrower or any of its
Subsidiaries whether by sale, lease, transfer or otherwise. The term “Asset
Disposition” shall not include (a) the sale, lease or transfer of assets
permitted by Sections 6.7(a), (b) and (e) or Section 6.8 (with respect to Real
Property Assets acquired after the Closing Date only) hereof, (b) any Recovery
Event or (c) any issuance by the Borrower of its Capital Stock.

“Assignment and Assumption” shall mean an assignment and assumption entered into
by a Lender and an assignee under Section 9.6(b) (with the consent of any party
whose consent is required by such Section), and accepted by the Administrative
Agent, in substantially the form of Schedule 9.6 or any other form approved by
the Administrative Agent.

 

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“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

“Borrower” shall have the meaning set forth in the first paragraph of this
Credit Agreement.

“Borrowing Date” shall mean, in respect of any Loan, the date such Loan is made.

“Business Day” shall mean a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term “Business Day” shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.

“Capital Lease” shall mean any lease of property, real, personal or mixed, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.

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

“Cash” shall mean money, currency or a credit balance in a Deposit Account.

“Cash Equivalents” shall mean (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition (“Government Obligations”),
(b) U.S. dollar denominated time deposits, certificates of deposit, Eurodollar
time deposits and Eurodollar certificates of deposit of (i) any domestic
commercial bank of recognized standing having capital and surplus in excess of
$250,000,000 or (ii) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Moody’s is at least P-1 or the
equivalent thereof (any such bank being an “Approved Bank”), in each case with
maturities of not more than 364 days from the date of acquisition,
(c) commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and
maturing within six months of the date of acquisition, (d) repurchase agreements
with a bank or trust company (including a Lender) or a recognized securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of America,
(e) obligations of any state of the United States or any political subdivision
thereof for the payment of the principal and redemption price of and interest on

 

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which there shall have been irrevocably deposited Government Obligations
maturing as to principal and interest at times and in amounts sufficient to
provide such payment, (f) auction preferred stock rated A (or the equivalent
thereof) or better by S&P or A2 (or the equivalent thereof) or better by Moody’s
and with a maturity not to exceed twenty-four (24) months and (g) money market
mutual funds (i) that invest substantially all of their assets in investments of
the types referenced in clauses (a) – (f) and (ii) having the highest rating
available from S&P or Moody’s.

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

“Change of Control” shall mean (a) any Person or “group” shall have acquired or
hold “beneficial ownership,” directly or indirectly, of, or shall have acquired
or hold by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of,
or control over, Voting Stock of the Borrower (or other securities convertible
into such Voting Stock) representing 35% or more of the combined voting power of
all Voting Stock of the Borrower or 35% or more of the economic interests of the
Borrower, (b) the Continuing Directors shall cease for any reason to constitute
a majority of the members of the board of directors of the Borrower then in
office or (c) a “Change of Control” as defined in the Senior Subordinated Note
Indenture, the Subordinated Convertible Note Indenture or the indenture or other
documentation pursuant to which any Subordinated Indebtedness or unsecured
Indebtedness permitted under subsection 6.1(f) is issued shall have occurred. As
used herein, “beneficial ownership” and “group” shall have the meanings provided
in Rule 13d-3 and Rule 13d-5, respectively, of the Securities and Exchange
Commission under the Securities Exchange Act of 1934.

“Closing Date” shall mean the date of this Credit Agreement.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

“Collateral” shall mean a collective reference to the collateral which is
identified in, and at any time will be covered by, the Security Documents and
any other collateral from time to time securing the Credit Party Obligations.

“Collateral Account” shall have the meaning set forth in the Collateral Account
Agreement.

“Collateral Account Agreement” shall mean the Collateral Account Agreement
executed and delivered by the Borrower and the Administrative Agent on the
Closing Date, as such Collateral Account Agreement may be amended, modified,
supplemented or restated from time to time.

 

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“Commitment” shall mean the Revolving Commitment, the LOC Commitment, the
Swingline Commitment, the Initial Term Loan Commitment and the Delayed Draw Term
Loan Commitment, individually or collectively, as appropriate.

“Commitment Fee” shall have the meaning set forth in Section 2.6(a).

“Commitment Percentage” shall mean the Revolving Commitment Percentage, the
Initial Term Loan Commitment Percentage and/or the Delayed Draw Term Loan
Commitment Percentage, as appropriate.

“Commitment Period” shall mean the period from and including the Closing Date to
but not including the Revolving Commitment Termination Date.

“Confidential Information” shall have the meaning set forth in Section 9.15.

“Consolidated Capital Expenditures” shall mean, for any period, the sum of the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including Additional Acquisitions and Development
Property Expenditures, but excluding (a) expenditures made in connection with
any Permitted Acquisition, and (b) expenditures financed with the proceeds of
Capital Leases and purchase money Indebtedness permitted by Section 6.1(c)) by
the Credit Parties and their Subsidiaries during such period that, in conformity
with GAAP, are included in “additions to property, plant or equipment” or
comparable items reflected in the consolidated statement of cash flows of the
Credit Parties and their Subsidiaries net of the amount of (i) any reimbursement
payments made to the Borrower or any of its Subsidiaries by any third parties in
connection with any such expenditures, and (ii) any sale and leaseback
transaction proceeds received by the Borrower or any of its Subsidiaries from
any third parties in connection with any such expenditure to the extent such
proceeds are applied in accordance with Section 2.8(b), in each case, to the
extent that such expenditures have actually been made by the Borrower or its
Subsidiaries for such Fiscal Year.

“Consolidated EBITDA” shall mean, for any period, the sum of (a) Consolidated
Net Income for such period, plus (b) an amount which, in the determination of
Consolidated Net Income, has been deducted for (i) Consolidated Interest Expense
for such period, (ii) total federal, state, local and foreign income, franchise,
value added and similar taxes for such period, (iii) total depreciation expense
for such period, (iv) total amortization expense for such period, including but
not limited to amortization of leasehold improvements and amortization of
goodwill, organization costs and other intangibles, (v) fees and expenses
incurred in connection with the closing of the first amendment to the Existing
Credit Agreement and this Credit Agreement (including for this purpose any
expense or write-off associated with the refinancing of outstanding principal
amounts under the Existing Credit Agreement), any secondary offering of the
Borrower’s Capital Stock and similar capital events (including, without
limitation, debt and equity issuances), and (vi) non-cash compensation expenses
arising from the issuance of stock, options to purchase stock and stock
appreciation rights to the management of the Borrower, plus/minus (c) an amount
which, in the determination of Consolidated Net Income, has been deducted (or
added as the case may be) for other non-recurring non-cash items (excluding
reserves for future cash charges) decreasing or increasing Consolidated Net
Income,

 

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minus (d) non-cash charges previously added back to Consolidated Net Income in
determining Consolidated EBITDA to the extent such non-cash charges have become
cash charges during such period (to the extent included in the calculation of
Consolidated Net Income), all of the foregoing as determined on a consolidated
basis for the Credit Parties and their Subsidiaries in conformity with GAAP.

“Consolidated EBITDAR” shall mean, for any period, the sum of (a) Consolidated
Net Income for such period, plus (b) an amount which, in the determination of
Consolidated Net Income, has been deducted for (i) Consolidated Interest Expense
for such period, (ii) total federal, state, local and foreign income, franchise,
value added and similar taxes for such period, (iii) total depreciation expense
for such period, (iv) total amortization expense for such period, including but
not limited to amortization of leasehold improvements and to amortization of
goodwill, organization costs and other intangibles, (v) Consolidated Rent
Expense, (vi) fees and expenses incurred in connection with the closing of the
first amendment to the Existing Credit Agreement and this Credit Agreement
(including for this purpose any expense or write-off associated with the
refinancing of outstanding principal amounts under the Existing Credit
Agreement), any secondary offering of the Borrower’s Capital Stock and similar
capital events (including, without limitation, debt and equity issuances), and
(vii) non-cash compensation expenses arising from the issuance of stock, options
to purchase stock and stock appreciation rights to the management of the
Borrower, plus/minus (c) an amount which, in the determination of Consolidated
Net Income, has been deducted (or added as the case may be) for other
non-recurring non-cash items (excluding reserves for future cash charges)
decreasing or increasing Consolidated Net Income, minus (d) non-cash charges
previously added back to Consolidated Net Income in determining Consolidated
EBITDAR to the extent such non-cash charges have become cash charges during such
period (to the extent included in the calculation of Consolidated Net Income),
all of the foregoing as determined on a consolidated basis for the Credit
Parties and their Subsidiaries in conformity with GAAP.

“Consolidated Interest Coverage Ratio” shall mean, as of any date of
determination, the ratio of (a) Consolidated Pro Forma EBITDA for the four
consecutive Fiscal Quarter period ending on or immediately prior to such date of
determination to (b) Consolidated Interest Expense for the four consecutive
Fiscal Quarter period ending as of the last day of the Fiscal Quarter of the
Borrower ending on or immediately prior to such date of determination.

“Consolidated Interest Expense” shall mean, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of the Credit Parties and their Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of the
Credit Parties and their Subsidiaries, including Letter of Credit Fees and net
cash costs under Hedging Agreements (excluding any mark-to-market adjustments
related to any Hedging Agreements), but excluding, however, any amortization or
write-off of deferred financing costs, any prepayment penalties with respect to
any issuances of Indebtedness and any amounts referred to in Section 2.6 payable
to the Administrative Agent and the Lenders on or before the Closing Date.

“Consolidated Net Income” shall mean, for any period, the net income (or loss)
of the Credit Parties and their Subsidiaries on a consolidated basis for such
period taken as a single

 

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accounting period determined in conformity with GAAP; provided that there shall
be excluded (a) the income (or loss) of any Person (other than a Subsidiary of
the Borrower) in which any other Person (other than the Borrower or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of cash
dividends or other distributions actually paid to the Borrower or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of the Borrower or is
merged into or consolidated with the Borrower or any of its Subsidiaries or such
Person’s assets are acquired by the Borrower or any of its Subsidiaries, (c) any
after-tax gains or losses attributable to asset sales of any Pension Plan,
(d) the cumulative effect of any adopted accounting change included in the
current Fiscal Year’s income statement and (e) (to the extent not included in
clauses (a) through (d) above) any net extraordinary gains or net non-cash
extraordinary losses.

“Consolidated Pro Forma EBITDA” shall mean, for any consecutive four Fiscal
Quarter period, without duplication, (a) Consolidated EBITDA for such four
Fiscal Quarter period, plus (b) for any Material Acquisition consummated during
such four Fiscal Quarter period, (i) EBITDA of such acquired business determined
as though such business were acquired as of the first day of such period by the
Credit Parties and their Subsidiaries, plus (ii) the amount of any historical
extraordinary or nonrecurring costs or expenses or other verifiable costs or
expenses that will not continue after the acquisition date (including without
limitation excess owner/management compensation), plus (iii) any reasonable
operating expenses (including, without limitation, allocated general and
administrative expenses) to be eliminated and any costs savings resulting from
the inclusion of such acquired business under existing contractual arrangements,
in each case that are (A) certified pursuant to an Officer’s Certificate as
reasonably likely to occur within one year after such acquisition, (B) supported
by reasonable facts, (C) not duplicative of eliminated operating expenses and
cost savings previously recognized and (D) are approved by the Administrative
Agent minus (c) for any Material Disposition occurring during such four Fiscal
Quarter period, EBITDA attributable to such disposition as though such
disposition occurred as of the first day of such period by the Credit Parties
and their Subsidiaries.

“Consolidated Pro Forma EBITDAR” shall mean, for any consecutive four Fiscal
Quarter period, without duplication, (a) Consolidated EBITDAR for such four
Fiscal Quarter period, plus (b) for any Material Acquisition consummated during
such four Fiscal Quarter period, (i) EBITDAR of such acquired business
determined as though such business were acquired as of the first day of such
period by the Credit Parties and their Subsidiaries, plus (ii) the amount of any
historical extraordinary or nonrecurring costs or expenses or other verifiable
costs or expenses that will not continue after the acquisition date (including
without limitation excess owner/management compensation), plus (iii) any
reasonable operating expenses (including, without limitation, allocated general
and administrative expenses) to be eliminated and any costs savings resulting
from the inclusion of such acquired business under existing contractual
arrangements, in each case that are (A) certified pursuant to an Officer’s
Certificate as reasonably likely to occur within one year after such
acquisition, (B) supported by reasonable facts, (C) not duplicative of
eliminated operating expenses and cost savings previously recognized and (D) are
approved by the Administrative Agent minus (c) for any Material Disposition
occurring during such four Fiscal Quarter period, EBITDAR attributable to such
disposition as though such disposition occurred as of the first day of such
period by the Credit Parties and their Subsidiaries.

 

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“Consolidated Rent Expense” shall mean, for any period, all cash rent expense of
the Credit Parties and their Subsidiaries on a consolidated basis for such
period, as determined in accordance with GAAP.

“Consolidated Senior Secured Leverage Ratio” shall mean, as of any date of
determination, the ratio of (a) Consolidated Total Debt (other than Subordinated
Indebtedness and unsecured Indebtedness) as of the last day of the Fiscal
Quarter of the Borrower ending on or immediately prior to such date net of cash
and Cash Equivalents (but only to the extent such cash and Cash Equivalents
shall not be subject to any Lien in favor of a third party other than Permitted
Encumbrances permitted pursuant to Section 6.2(a)(i)) in excess of $40,000,000
on the balance sheet of the Borrower as of the last day of such Fiscal Quarter
to (b) Consolidated Pro Forma EBITDA for the four consecutive Fiscal Quarter
period ending on or immediately prior to such date of determination.

“Consolidated Total Adjusted Leverage Ratio” shall mean, as of any date of
determination, the ratio of (a) Consolidated Total Debt as of the last day of
the Fiscal Quarter of the Borrower ending on or immediately prior to such date
net of cash and Cash Equivalents (but only to the extent such cash and Cash
Equivalents shall not be subject to any Lien in favor of a third party other
than Permitted Encumbrances permitted pursuant to Section 6.2(a)(i)) in excess
of $40,000,000 on the balance sheet of the Borrower as of the last day of such
Fiscal Quarter plus an amount equal to eight (8) times Consolidated Rent Expense
to (b) Consolidated Pro Forma EBITDAR for the four consecutive Fiscal Quarter
period ending on or immediately prior to such date of determination.

“Consolidated Total Debt” shall mean, as of any date of determination, all
Indebtedness of the Credit Parties and their Subsidiaries other than (a) Letters
of Credit to the extent undrawn, (b) customary indemnification obligations
entered into in connection with an asset sale, a Permitted Acquisition or
Development Property Expenditure permitted under this Agreement and
(c) customary purchase price adjustments based on differences between estimated
assets or liabilities at closing and subsequent final determination of such
assets or liabilities following closing, in each case determined on a
consolidated basis in accordance with GAAP

“Consolidated Total Leverage Ratio” shall mean, as of any date of determination,
the ratio of (a) Consolidated Total Debt as of the last day of the Fiscal
Quarter of the Borrower ending on or immediately prior to such date net of cash
and Cash Equivalents (but only to the extent such cash and Cash Equivalents
shall not be subject to any Lien in favor of a third party other than Permitted
Encumbrances permitted pursuant to Section 6.2(a)(i)) in excess of $40,000,000
on the balance sheet of the Borrower as of the last day of such Fiscal Quarter
to (b) Consolidated Pro Forma EBITDA for the four consecutive Fiscal Quarter
period ending on or immediately prior to such date of determination.

“Consolidated Working Capital” shall mean, at any time, the excess of
(i) current assets (excluding cash and Cash Equivalents) of the Credit Parties
and their Subsidiaries on a

 

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consolidated basis at such time less (ii) current liabilities (but excluding the
current portion of any long-term Indebtedness) of the Credit Parties and their
Subsidiaries on a consolidated basis at such time, all in accordance with GAAP.

“Contingent Obligation” shall mean, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person (a) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof,
(b) with respect to any letter of credit issued for the account of that Person
or as to which that Person is otherwise liable for reimbursement of drawings, or
(c) under Hedge Agreements. Contingent Obligations shall include (i) the direct
or indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or sale
with recourse by such Person of the obligation of another, and (ii) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (A) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (B) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (A) or (B) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.

“Continuing Directors” shall mean the directors of the Borrower on the Closing
Date and each other director, if in each case such other director’s nomination
for election to the board of directors of the Borrower is recommended by a
majority of the then serving members of the board of directors.

“Contractual Obligation” shall mean, as applied to any Person, any provision of
any Capital Stock issued by that Person or of any material indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.

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

“Convertible Hedging Agreement” shall mean any convertible note hedge
transactions entered into for the purpose of hedging equity or other risks, and
not for speculative purposes, in connection with the issuance of any
Subordinated Indebtedness convertible into equity of the Borrower pursuant to
its terms and permitted pursuant to Section 6.1(f).

 

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“Copyright Licenses” shall mean any written agreement naming any Credit Party as
licensor and granting any right under any Copyright including, without
limitation, any thereof referred to in Schedule 3.21.

“Copyrights” shall mean (a) all registered United States copyrights in all
Works, now existing or hereafter created or acquired, all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, registrations, recordings and applications in the United
States Copyright office including, without limitation, any thereof referred to
in Schedule 3.21, and (b) all renewals thereof including, without limitation,
any thereof referred to in Schedule 3.21.

“Credit Documents” shall mean this Credit Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, any Assignment and Assumption, the LOC
Documents and the Security Documents and all other agreements, documents,
certificates and instruments delivered to the Administrative Agent or any Lender
by any Credit Party in connection therewith (other than any agreement, document,
certificate or instrument related to a Hedging Agreement).

“Credit Party” or “Credit Parties” shall mean any of the Borrower or the
Guarantors, individually or collectively, as appropriate.

“Credit Party Obligations” shall mean, without duplication, (a) all of the
obligations, indebtedness and liabilities of the Credit Parties to the Lenders
(including the Issuing Lender) and the Administrative Agent, whenever arising,
under this Credit Agreement, the Notes or any of the other Credit Documents
including principal, interest, fees, reimbursements and indemnification
obligations and other amounts (including, but not limited to, any interest
accruing after the occurrence of a filing of a petition of bankruptcy under the
Bankruptcy Code with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (b) all liabilities
and obligations, whenever arising, owing from the Credit Parties or any of their
Subsidiaries to any Hedging Agreement Provider arising under any Secured Hedging
Agreement permitted pursuant to Section 6.3(g).

“Debt Issuance” shall mean the incurrence of any Indebtedness for borrowed money
by any Credit Party or any of its Subsidiaries (excluding, for purposes hereof,
any issuance by the Borrower of its Capital Stock or any Indebtedness of the
Credit Parties and their Subsidiaries permitted to be incurred pursuant to
Section 6.1 hereof).

“Default” shall mean any of the events specified in Section 7.1, whether or not
any requirement for the giving of notice or the lapse of time, or both, or any
other condition, has been satisfied.

“Defaulting Lender” shall mean, at any time, any Lender that, at such time
(a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender when due an amount owed by such Lender pursuant to the terms of this
Credit Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.

 

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“Delayed Draw Commitment Fee” shall have the meaning set forth in Section 2.6.

“Delayed Draw Commitment Termination Date” shall mean the earlier to occur of
(a) May 15, 2008, (b) the fourth Delayed Draw Funding Date, and (c) the date
upon which the Delayed Draw Term Loan Committed Amount is fully funded.

“Delayed Draw Funding Date” shall mean any Business Day occurring during the
Delayed Draw Period in which the Borrower delivers a Notice of Borrowing in
accordance with Section 2.2(b); provided, however, there shall be no more than
four (4) Delayed Draw Funding Dates during the term of this Agreement.

“Delayed Draw Period” shall mean the period from and including the Closing Date
to and including the Delayed Draw Commitment Termination Date.

“Delayed Draw Term Loan” shall have the meaning set forth in Section 2.2(b).

“Delayed Draw Term Loan Commitment” shall mean, with respect to each Delayed
Draw Term Loan Lender, the commitment of such Delayed Draw Term Loan Lender to
make its portion of the Delayed Draw Term Loan in a principal amount equal to
such Delayed Draw Term Loan Lender’s Delayed Draw Term Loan Commitment
Percentage of the Delayed Draw Term Loan Committed Amount.

“Delayed Draw Term Loan Commitment Percentage” shall mean, for any Delayed Draw
Term Loan Lender, the percentage identified as its Delayed Draw Term Loan
Commitment Percentage on Schedule 1.1-6 or in the Register.

“Delayed Draw Term Loan Committed Amount” shall have the meaning set forth in
Section 2.2(b).

“Delayed Draw Term Loan Lender” shall mean a Lender holding a Delayed Draw Term
Loan Commitment or a portion of the outstanding Delayed Draw Term Loan.

“Deposit Account” shall mean a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.

“Development Property” shall mean real property acquired by the Credit Parties
for the purpose of developing and constructing one or more operating stores.

“Development Property Expenditure” shall mean any expenditure in order to
acquire or develop a Development Property by the Credit Parties, other than as
part of a Permitted Acquisition.

“Disqualified Capital Stock” shall mean, with respect to any Person, Capital
Stock of such Person as to which (a) the maturity, (b) mandatory redemption or
(c) redemption,

 

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repurchase, conversion or exchange at the option of the holder thereof occurs,
or may occur, on or prior to the date that is six months after the Term Loan
Maturity Date; provided, however, that such Capital Stock that would not
otherwise be characterized as Disqualified Capital Stock under this definition
shall not constitute Disqualified Capital Stock solely as a result of provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem Capital Stock upon the occurrence of a “change of control” occurring
prior to the Term Loan Maturity Date, if (i) such repurchase obligation may not
be triggered unless an Event of Default under this Agreement also arises and
(ii) no such repurchase or redemption is permitted to be consummated unless and
until all Credit Party Obligations (other than inchoate indemnification and
reimbursement obligations) shall have been satisfied in full.

“Dollars” and “$” shall mean dollars in lawful currency of the United States of
America.

“Domestic Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s Domestic Lending Office with the Administrative
Agent; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans of such Lender are to be made.

“Domestic Subsidiary” shall mean any Subsidiary that is organized and existing
under the laws of the United States or any state or commonwealth thereof or
under the laws of the District of Columbia.

“EBITDA” shall mean for any business acquired by the Credit Parties and their
Subsidiaries, “Consolidated EBITDA” as defined herein substituting references to
such acquired business for references to “the Credit Parties and their
Subsidiaries” as used in such definition.

“EBITDAR” shall mean for any business acquired by the Credit Parties and their
Subsidiaries, “Consolidated EBITDAR” as defined herein substituting references
to such acquired business for references to “the Credit Parties and their
Subsidiaries” as used in such definition.

“Employee Benefit Plan” shall mean any “employee benefit plan” as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by the
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates.

“Environmental Claim” shall mean any written investigation, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any governmental authority or any other
Person, arising (a) pursuant to or in connection with any actual or alleged
violation of any Environmental Law, (b) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity, or (c) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.

“Environmental Laws” shall mean any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any

 

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other published requirements of Governmental Authorities relating to
(a) environmental matters, including those relating to any Hazardous Materials
Activity, (b) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (c) occupational safety and health, industrial hygiene,
land use or the protection of human, plant or animal health or welfare, in any
manner applicable to the Borrower or any of its Subsidiaries or any Facility,
including the Comprehensive Environmental Response, Compensation, and Liability
Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation Act
(49 U.S.C. § 1801 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act
(33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), the Oil Pollution
Act (33 U.S.C. § 2701 et seq.) and the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. § 11001 et seq.), each as amended or supplemented,
any analogous present or future state or local statutes or laws, and any
regulations promulgated pursuant to any of the foregoing.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.

“ERISA Affiliate” shall mean, as applied to any Person, (a) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Code of which that Person is a member; (b) any trade or
business (whether or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the Code
of which that Person is a member; and (c) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Code of which that
Person, any corporation described in clause (a) above or any trade or business
described in clause (b) above is a member. Any former ERISA Affiliate of the
Borrower or any of its Subsidiaries shall continue to be considered an ERISA
Affiliate of the Borrower or such Subsidiary within the meaning of this
definition with respect to the period such entity was an ERISA Affiliate of the
Borrower or such Subsidiary and with respect to liabilities arising after such
period for which the Borrower or such Subsidiary could be liable under the Code
or ERISA.

“ERISA Event” shall mean (a) a “reportable event” within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (b) the failure to meet the minimum funding
standards of Section 412 of the Code with respect to any Pension Plan (whether
or not waived in accordance with Section 412(d) of the Code) or the failure to
make by its due date a required installment under Section 412(m) of the Code
with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (c) the distribution of a notice of intent
to terminate or the actual termination of an Employee Benefit Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (d) the withdrawal by the Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates from any Pension
Plan with two or more contributing sponsors or the termination of any such
Pension Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA;
(e) the institution by the PBGC of proceedings to terminate any Pension Plan, or
the occurrence of any event or condition which constitutes grounds under ERISA
for the termination of, or the appointment of a trustee to

 

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administer, any Pension Plan; (f) the imposition of liability on the Borrower,
any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (g) the withdrawal of the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by the Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or it is insolvent pursuant to Section 4241 or 4245 of ERISA, or
that it intends to terminate or has terminated under Section 4041A or 4042 of
ERISA; (h) the occurrence of an act or omission which could give rise to the
imposition on the Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43
of the Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of
ERISA in respect of any Employee Benefit Plan; (i) the assertion of a material
claim (other than routine claims for benefits or for a qualified domestic
relations order) against any Employee Benefit Plan other than a Multiemployer
Plan or the assets thereof, or against the Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates in connection with any Employee Benefit
Plan; (j) receipt from the Internal Revenue Service of notice of the failure of
any Pension Plan (or any other Employee Benefit Plan intended to be qualified
under Section 401(a) of the Code) to qualify under Section 401(a) of the Code,
or the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Code; (k) the imposition of
a Lien pursuant to Section 401(a)(29) or 412(n) of the Code or pursuant to ERISA
with respect to any Pension Plan; or (l) the adoption of an amendment to any
Employee Benefit Plan requiring the provision of security to such Employee
Benefit Plan pursuant to Section 307 of ERISA.

“Eurodollar Reserve Percentage” shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

“Event of Default” shall mean any of the events specified in Section 7.1;
provided, however, that any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.

“Excess Cash Flow” shall mean, with respect to each Fiscal Year for the Credit
Parties and their Subsidiaries on a consolidated basis, an amount equal to
(a) Consolidated EBITDA for such period minus (b) Consolidated Capital
Expenditures actually made by any Credit Party or Subsidiary for such period to
the extent not financed with the proceeds of Indebtedness minus (c) Scheduled
Debt Payments made during such period minus (d) Consolidated Interest Expense
actually paid in cash by a Credit Party or Subsidiary for such period minus
(e) amounts actually paid in cash in respect of total federal, state, local and
foreign income, value added and similar taxes for such period minus
(f) increases or plus decreases in Consolidated Working Capital for such period
from the same period in the prior Fiscal Year minus (g) cash paid during such
Fiscal

 

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Year as consideration in connection with a Permitted Acquisition to the extent
such cash paid has not been previously deducted in calculating Excess Cash Flow
for a prior Fiscal Year pursuant to clause (h), minus (h) cash to be paid as
consideration in connection with a Permitted Acquisition to the extent such
Permitted Acquisition will not be financed with the proceeds of Indebtedness and
to the extent a Credit Party has entered into a letter of intent during such
Fiscal Year with respect to such Permitted Acquisition; provided that, if such
letter of intent (or the purchase agreement with respect to such Permitted
Acquisition) is terminated or if such Permitted Acquisition is not consummated,
the Borrower shall promptly prepay the Loans and/or cash collateralize the LOC
Obligations in an amount equal to such cash to the extent required by, and in
accordance with the terms of, Section 2.8(b)(v).

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Lender or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) taxes imposed on
or measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located or it is deemed to be
doing business, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
Borrower is located and (c) in the case of a Foreign Lender, any withholding tax
that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new lending office) or is
attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 2.19, except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.19.

“Existing Hedging Agreements” shall mean the Hedging Agreements described on
Schedule 1.1-5.

“Existing Letters of Credit” shall mean the letters of credit described by date
of issuance, amount, purpose and the date of expiry on Schedule 1.1-4 hereto.

“Extension of Credit” shall mean, as to any Lender, the making of a Loan by such
Lender or the issuance of, or participation in, a Letter of Credit by such
Lender.

“Facilities” shall mean any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased or operated by the Borrower or any of its Subsidiaries or any of
their respective predecessors or Affiliates.

“Federal Funds Effective Rate” shall have the meaning set forth in the
definition of “Alternate Base Rate”.

“Fee Letter” shall mean the letter agreement dated April 9, 2007 addressed to
the Borrower from JPMorgan Chase Bank, National Association, J.P. Morgan
Securities Inc., Wachovia, Wachovia Capital Markets, LLC, BMO Capital Markets
Financing, Inc., and Bank of Montreal (acting under its trade name BMO Capital
Markets), as amended, modified or otherwise supplemented.

 

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“Financial Plan” shall have the meaning set forth in Section 5.1(l).

“First Priority” shall mean, with respect to any Lien purported to be created in
any Collateral pursuant to any Security Document, that (a) such Lien has
priority over any other Lien on such Collateral other than any Permitted
Encumbrances having priority by operation of law over the Liens purported to be
created pursuant to the Security Documents and (b) such Lien is the only Lien
(other than Permitted Encumbrances permitted pursuant to Section 6.2(a)(i)) to
which such Collateral is subject.

“Fiscal Quarter” shall mean a fiscal quarter of any Fiscal Year.

“Fiscal Year” shall mean the fiscal year of the Credit Parties and their
Subsidiaries ending on the last Thursday in September of each calendar year.

“Flood Hazard Property” shall mean a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.

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

“Fund” shall mean any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“GAAP” shall mean generally accepted accounting principles in effect in the
United States of America applied on a consistent basis, subject, however, in the
case of determination of compliance with the financial covenants set out in
Section 6.6 to the provisions of Section 1.3.

“Government Acts” shall have the meaning set forth in Section 2.20.

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

“Governmental Authorization” shall mean any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.

 

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“Guarantor” shall mean any of the Domestic Subsidiaries identified as a
“Guarantor” on the signature pages hereto and the Additional Credit Parties
which execute a Joinder Agreement, together with their successors and permitted
assigns.

“Guaranty” shall mean the guaranty of the Guarantors set forth in Article X.

“Hazardous Materials” shall mean (a) any chemical, material or substance at any
time defined as or included in the definition of “hazardous substances”,
“hazardous wastes”, “hazardous materials”, “extremely hazardous waste”, acutely
hazardous waste”, “radioactive waste”, “biohazardous waste”, “pollutant”, “toxic
pollutant”, “contaminant”, “restricted hazardous waste”, “infectious waste”,
“toxic substances”, or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, “TCLP toxicity” or “EP toxicity” or words of similar import under any
applicable Environmental Laws); (b) any oil, petroleum, petroleum fraction or
petroleum derived substance; (c) any drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude oil,
natural gas or geothermal resources; (d) any flammable substances or explosives;
(e) any radioactive materials; (f) any asbestos-containing materials; (g) urea
formaldehyde foam insulation; (h) electrical equipment which contains any oil or
dielectric fluid containing polychlorinated biphenyls; (i) pesticides; and
(j) any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority or which may or could pose a
hazard to the health and safety of the owners, occupants or any Persons in the
vicinity of any Facility or to the indoor or outdoor environment.

“Hazardous Materials Activity” shall mean any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.

“Hedging Agreement Provider” shall mean any Person that enters into a Secured
Hedging Agreement with a Credit Party or any of its Subsidiaries that is
permitted by Section 6.3(g) to the extent such Person is (a) a Lender, (b) an
Affiliate of a Lender, (c) any other Person that was a Lender (or an Affiliate
of a Lender) at the time it entered into the Secured Hedging Agreement but has
ceased to be a Lender (or whose Affiliate has ceased to be a Lender) under the
Credit Agreement or (d) a party to an Existing Hedging Agreement.

“Hedging Agreements” shall mean, with respect to any Person, any agreement
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.

 

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“Incremental Facility” shall have the meaning set forth in Section 2.3.

“Indebtedness” shall mean, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of property or services purchased by such Person (other
than any such obligations incurred under ERISA or which represent accounts
payable incurred in the ordinary course of business and due within six months of
the incurrence thereof) which would appear as liabilities on a balance sheet of
such Person in accordance with GAAP, (e) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (f) all Contingent Obligations of
such Person with respect to Indebtedness of another Person, (g) the principal
portion of all obligations of such Person under Capital Leases, (h) all
Disqualified Capital Stock issued by such Person, (i) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product, and
(j) the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer. Obligations under Hedging
Agreements shall constitute Contingent Obligations, but not Indebtedness.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

“Indemnitee” shall have the meaning set forth in Section 9.5(b).

“Initial Term Loan” shall have the meaning set forth in Section 2.2(a).

“Initial Term Loan Commitment” shall mean, with respect to each Initial Term
Loan Lender, the commitment of such Initial Term Loan Lender to make its portion
of the Initial Term Loan in a principal amount equal to such Initial Term Loan
Lender’s Initial Term Loan Commitment Percentage of the Initial Term Loan
Committed Amount.

“Initial Term Loan Commitment Percentage” shall mean, for any Initial Term Loan
Lender, the percentage identified as its Initial Term Loan Commitment Percentage
on Schedule 1.1-6 or in the Register.

“Initial Term Loan Committed Amount” shall have the meaning set forth in
Section 2.2(a).

“Initial Term Loan Lender” shall mean a Lender holding a Initial Term Loan
Commitment or a portion of the outstanding Initial Term Loan.

 

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“Intellectual Property” shall mean all Copyrights, Copyright Licenses, Patents,
Patent Licenses, Trademarks and Trademark Licenses.

“Interest Coverage Incurrence Test” shall mean the requirement that the
Consolidated Interest Coverage Ratio shall be greater than 2.25 to 1.0; provided
that, for purposes of determining the Interest Coverage Incurrence Test for any
incurrence of Indebtedness pursuant to Section 6.1(f), the Consolidated Interest
Coverage Ratio shall be calculated to include the Consolidated Interest Expense
with respect to such Indebtedness on a pro forma basis as if such Indebtedness
had been incurred at the beginning of the period of determination of the
Consolidated Interest Coverage Ratio.

“Interest Payment Date” shall mean (a) as to any Alternate Base Rate Loan, the
last day of each March, June, September and December and on the applicable
Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three
months or less, the last day of such Interest Period, and (c) as to any LIBOR
Rate Loan having an Interest Period longer than three months, each day which is
three months after the first day of such Interest Period and the last day of
such Interest Period.

“Interest Period” shall mean, with respect to any LIBOR Rate Loan,

(a) initially, the period commencing on the Borrowing Date or conversion date,
as the case may be, with respect to such LIBOR Rate Loan and ending one, two,
three or six months thereafter, as selected by the Borrower in the notice of
borrowing or notice of conversion given with respect thereto; and

(b) thereafter, each period commencing on the last day of the immediately
preceding Interest Period applicable to such LIBOR Rate Loan and ending one,
two, three or six months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than three Business Days prior to
the last day of the then current Interest Period with respect thereto; provided
that the foregoing provisions are subject to the following:

(i) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end
on a day that is not a Business Day, such Interest Period shall be extended to
the next succeeding 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 Business Day;

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

(iii) if the Borrower shall fail to give notice as provided above, the Borrower
shall be deemed to have selected an Alternate Base Rate Loan to replace the
affected LIBOR Rate Loan;

 

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(iv) no Interest Period in respect of any Loan shall extend beyond the
applicable Maturity Date and, further with regard to the Term Loan, no Interest
Period shall extend beyond any principal amortization payment date unless the
portion of the Term Loan consisting of Alternate Base Rate Loans together with
the portion of the Term Loan consisting of LIBOR Rate Loans with Interest
Periods expiring prior to or concurrently with the date such principal
amortization payment date is due, is at least equal to the amount of such
principal amortization payment due on such date; and

(v) no more than ten (10) LIBOR Rate Loans may be in effect at any time. For
purposes hereof, LIBOR Rate Loans with different Interest Periods shall be
considered as separate LIBOR Rate Loans, even if they shall begin on the same
date and have the same duration, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new LIBOR Rate Loan with a single
Interest Period.

“Investment” shall mean (a) any direct or indirect purchase or other acquisition
by the Borrower or any of its Subsidiaries of, or of a beneficial interest in,
any Capital Stock of any other Person, (b) any direct or indirect redemption,
retirement, purchase or other acquisition for value, by any Subsidiary of the
Borrower from any Person other than the Borrower or any of its Subsidiaries, of
any Capital Stock of such Person, or (c) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar items in the ordinary course of business) or
capital contribution by the Borrower or any of its Subsidiaries to any other
Person (other than a wholly-owned Subsidiary of the Borrower), including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.

“Issuing Lender” shall mean, as the context may require, either Wachovia or any
Lender designated by the Borrower and approved by the Administrative Agent,
together with any successor to any such issuing lender hereunder.

“Issuing Lender Fees” shall have the meaning set forth in Section 2.6(c).

“Joinder Agreement” shall mean a Joinder Agreement substantially in the form of
Schedule 5.9, executed and delivered by an Additional Credit Party in accordance
with the provisions of Section 5.9.

“Joint Venture” shall mean a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that in no event shall any Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.

 

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“Lender” shall have the meaning set forth in the first paragraph of this Credit
Agreement.

“Letters of Credit” shall mean (a) any letter of credit issued by the Issuing
Lender pursuant to Section 2.4 and (b) any Existing Letter of Credit, in each
case as such letter of credit may be amended, modified, extended, renewed or
replaced from time to time.

“Letter of Credit Fee” shall have the meaning set forth in Section 2.6(b).

“LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then “LIBOR” shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 a.m. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.

“LIBOR Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s LIBOR Lending Office with the Administrative Agent;
and thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.

“LIBOR Rate” shall mean a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:

 

LIBOR Rate =   LIBOR           1.00 – Eurodollar Reserve Percentage  

“LIBOR Rate Loan” shall mean Loans the rate of interest applicable to which is
based on the LIBOR Rate.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any priority or other security agreement or preferential arrangement
having the practical effect of any

 

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of the foregoing, of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).

“Loan” shall mean a Revolving Loan, a Swingline Loan, Initial Term Loan and/or
the Delayed Draw Term Loan, as appropriate.

“LOC Commitment” shall mean the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase participation interests in the Letters of Credit up to such Lender’s
“LOC Commitment” as specified on Schedule 1.1-6 or in the Register, as such
amount may be reduced from time to time in accordance with the provisions
hereof.

“LOC Committed Amount” shall have the meaning set forth in Section 2.4(a).

“LOC Documents” shall mean, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (a) the rights and obligations of the parties
concerned or (b) any collateral security for such obligations.

“LOC Mandatory Borrowing” shall have the meaning set forth in Section 2.4(e).

“LOC Obligations” shall mean, at any time, the sum of (a) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (b) the aggregate amount
of all drawings under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.

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

“Material Acquisition” shall mean any acquisition of assets and/or a business
(including any acquisition of the Capital Stock or other equity interests of
another Person) or series of such related acquisitions (a) that constitutes a
Permitted Acquisition and (b) with respect to which, the total consideration for
which exceeds $1,000,000.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Credit Parties and their Subsidiaries taken as a whole, (b) the ability of the
Borrower or any Guarantor to perform its obligations, when such obligations are
required to be performed, under this Credit Agreement, any of the Notes or any
other Credit Document or (c) the validity or enforceability of this Credit
Agreement, any of the Notes or any of the other Credit Documents or the rights
or remedies of the Administrative Agent or the Lenders hereunder or thereunder
or the perfection or priority of any Lien in favor of the Administrative Agent
on any material portion of the Collateral.

 

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“Material Contract” shall mean each of the contracts set forth on Schedule 1.1-3
annexed hereto and any other contract or other arrangement to which the Borrower
or any of its Subsidiaries is a party (other than the Credit Documents) for
which breach, nonperformance, cancellation or failure to renew could reasonably
be expected to have a Material Adverse Effect.

“Material Disposition” shall mean any disposition of assets or series of related
dispositions of assets with a fair market value greater than $1,000,000.

“Maturity Date” shall mean (i) with respect to the Term Loan, the Term Loan
Maturity Date and (ii) with respect to the Revolving Loans, the Revolving
Commitment Termination Date.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgage” shall mean a security instrument (whether designated as a deed of
trust, a mortgage, a deed to secure debt or by any similar title) executed and
delivered by any Credit Party in favor of the Administrative Agent, in such form
as may be approved by the Administrative Agent in its sole discretion, in each
case with such changes thereto as may be recommended by the Administrative
Agent’s local counsel based on local laws or customary local mortgage, deed to
secured debt or deed of trust practices, as such security instrument may be
amended, supplemented or otherwise modified from time to time.

“Mortgage Notice Date” shall mean the end of the second Fiscal Quarter or the
end of the fourth Fiscal Quarter, as appropriate, of any Fiscal Year.

“Mortgaged Property” shall mean any real property of the Credit Parties subject
to a Mortgage.

“Multiemployer Plan” shall mean any Employee Benefit Plan which is a
“multiemployer plan” as defined in Section 3(37) of ERISA.

“Net Cash Consideration” shall mean, with respect to any Permitted Acquisition,
(a) the gross purchase price paid by the Credit Parties and their Subsidiaries
with respect to such Permitted Acquisition, reduced by (b) the net cash proceeds
received by or to be received by the Credit Parties and their Subsidiaries from
any sale and leaseback of real property acquired through such Permitted
Acquisition and permitted under Section 6.8 to the extent (i) such sale and
leaseback is consummated simultaneously with such Permitted Acquisition or
(ii) a commitment letter, letter of intent or other binding contract pursuant to
which such sale and leaseback will be provided has been executed and is in full
force and effect as of the date of such Permitted Acquisition, and such sale and
leaseback is consummated within 90 days after the date of such Permitted
Acquisition in accordance with the terms of such commitment letter, letter of
intent or binding contract (a copy of which shall be provided to the
Administrative Agent prior to the consummation of such Permitted Acquisition).

“Net Cash Proceeds” shall mean the aggregate Cash proceeds received by any
Credit Party or any Subsidiary in respect of any Asset Disposition, Debt
Issuance or Recovery Event

 

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(including any Cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received), net of (a) direct costs (including, without limitation, legal,
accounting and investment banking fees, and sales commissions), (b) taxes
reasonably estimated to be actually payable in connection with such Asset
Disposition, Debt Issuance or Recovery Event as a result of such Asset
Disposition, Debt Issuance or Recovery Event, (c) with respect to any Asset
Disposition or Recovery Event, payment of the principal amount, premium or
penalty, if any, on any Indebtedness (other than the Obligations) secured by a
Lien on the assets or Capital Stock sold and required to be repaid because of
such Asset Disposition or Recovery Event, and (d) with respect to any Asset
Disposition, reasonable reserves established in good faith by the Borrower (and
reasonably acceptable to the Administrative Agent) in respect of (i) possible
adjustments to the sale price, (ii) any retained liabilities or obligations
relating to the assets sold and (iii) indemnification obligations undertaken
with respect to indemnification provisions and representations and warranties in
connection with such Asset Disposition. “Net Cash Proceeds” shall include,
without limitation, any Cash received upon the sale or other disposition of any
non-cash consideration received by any Credit Party or any Subsidiary in any
Asset Disposition, Debt Issuance or Recovery Event.

“Note” or “Notes” shall mean the Revolving Notes, the Swingline Note and/or the
Term Notes, collectively, separately or individually, as appropriate.

“Notice of Borrowing” shall mean the written notice of borrowing as referenced
and defined in Section 2.1(b)(i), 2.2(b)(i) or 2.5(b)(i), as appropriate.

“Notice of Conversion” shall mean the written notice of extension or conversion
as referenced and defined in Section 2.11.

“Obligations” shall mean, collectively, Loans and LOC Obligations and all other
obligations of the Credit Parties to the Administrative Agent and the Lenders
under the Credit Documents.

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

“Officer’s Certificate” shall mean, as applied to any corporation, a certificate
executed on behalf of such corporation by a Responsible Officer; provided that
every Officers’ Certificate with respect to the compliance with a condition
precedent to the making of any Loans hereunder shall include (a) a statement
that the Responsible Officer making or giving such Officers’ Certificate has
read such condition and any definitions or other provisions contained in this
Agreement relating thereto, (b) a statement that, in the opinion of the signers,
they have made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not
such condition has been complied with, and (c) a statement as to whether, in the
opinion of the signers, such condition has been complied with.

 

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“Operating Lease” shall mean, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.

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

“Participant” has the meaning assigned to such term in clause (d) of
Section 9.6.

“Participation Interest” shall mean the purchase by a Lender of a participation
interest in Letters of Credit as provided in Section 2.4 and in Swingline Loans
as provided in Section 2.5.

“Patent License” shall mean all agreements, whether written or oral, providing
for the grant by or to a Credit Party of any right to manufacture, use or sell
any invention covered by a Patent, including, without limitation, any thereof
referred to in Schedule 3.21.

“Patents” shall mean (a) all letters patent of the United States or any other
country and all reissues and extensions thereof, including, without limitation,
any thereof referred to in Schedule 3.21, and (b) all applications for letters
patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any thereof referred to in Schedule 3.21.

“Patriot Act” shall mean the USA Patriot Act, Title III of Pub. L. 107-56,
signed into law October 26, 2001, as amended, modified or replaced from time to
time.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA, or any successor thereto.

“Pension Plan” shall mean any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Section 412 of the Internal Revenue Code or
Section 302 of ERISA.

“Permitted Acquisition” shall mean an acquisition of assets or a business
effected in accordance with the provisions of Section 6.7(d).

“Permitted Encumbrances” shall mean the following types of Liens (excluding any
such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Code or by
ERISA, any such Lien relating to or imposed in connection with any Environmental
Claim, and any such Lien expressly prohibited by any applicable terms of any of
the Security Documents):

(a) Liens for taxes, assessments or governmental charges or claims the payment
of which is not, at the time, required by Section 5.3;

(b) statutory Liens of landlords, statutory Liens of banks and rights of
set-off, statutory Liens of carriers, warehousemen, mechanics, repairmen,
workmen and materialmen, and other Liens imposed by law, in each case incurred
in the ordinary

 

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course of business (i) for amounts not yet overdue or (ii) for amounts that are
overdue and that (in the case of any such amounts overdue for a period in excess
of 30 days) are being contested in good faith by appropriate proceedings, so
long as (A) such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts, and (B) in
the case of a Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;

(c) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money), so long as no foreclosure,
sale or similar proceedings have been commenced with respect to any portion of
the Collateral on account thereof;

(d) any attachment or judgment Lien not constituting an Event of Default under
Section 7.1(h);

(e) leases or subleases granted to third parties in accordance with any
applicable terms of the Security Documents and not interfering in any material
respect with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries or resulting in a material diminution in the value of any
Collateral as security for the Credit Party Obligations;

(f) easements, rights-of-way, restrictions, encroachments, and other minor
defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries or result in a material diminution in
the value of any Collateral as security for the Credit Party Obligations;

(g) any (i) interest or title of a lessor or sublessor under any lease permitted
under this Agreement, (ii) restriction or encumbrance that the interest or title
of such lessor or sublessor may be subject to, or (iii) subordination of the
interest of the lessee or sublessee under such lease to any restriction or
encumbrance referred to in the preceding clause (ii), so long as the holder of
such restriction or encumbrance agrees to recognize (if required to do so
pursuant to the provisions of such lease) the rights of such lessee or sublessee
under such lease;

(h) Liens arising from filing Uniform Commercial Code financing statements
relating to leases permitted by this Agreement or consignments or similar
arrangements relating to the sale of goods in the ordinary course of business;

(i) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods;

(j) any zoning or similar law or right reserved to or vested in any Governmental
Authority to control or regulate the use of any real property;

 

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(k) Liens securing obligations (other than obligations representing Indebtedness
for borrowed money) under operating, reciprocal easement or similar agreements
entered into in the ordinary course of business of the Borrower and its
Subsidiaries;

(l) licenses of Intellectual Property rights granted by the Borrower or any of
its Subsidiaries in the ordinary course of business and not interfering in any
material respect with the ordinary conduct of the business of the Borrower or
such Subsidiary; and

(m) Liens in favor of a Hedging Agreement Provider in connection with any
Secured Hedging Agreement, but only if such Hedging Agreement Provider and the
Administrative Agent, on behalf of the Lenders, shall share pari passu in the
Collateral subject to such Liens.

“Permitted Investments” shall have the meaning set forth in Section 6.3.

“Permitted Liens” shall have the meaning set forth in Section 6.2.

“Permitted Sale Leaseback Transactions” shall mean sale leaseback transactions
that are permitted pursuant to Section 6.8 of this Agreement.

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

“Pledge Agreement” shall mean the Third Amended and Restated Pledge Agreement
dated as of the Closing Date to be executed in favor of the Administrative
Agent, for the benefit of the Lenders, by the Borrower and each of the other
Credit Parties, as amended, modified, restated or supplemented from time to
time.

“Pledged Collateral” shall have the meaning set forth in the Pledge Agreement.

“Prime Rate” shall have the meaning set forth in the definition of Alternate
Base Rate.

“PTO” shall mean the United States Patent and Trademark Office.

“Real Property Asset” shall mean, at any time of determination, any interest
then owned by any Credit Party in any real property.

“Recovery Event” shall mean (a) theft, loss, physical destruction or damage,
taking or similar event with respect to any property or assets owned by the
Borrower or any of its Subsidiaries which results in the receipt by the Borrower
or any of its Subsidiaries of any cash insurance proceeds or condemnation award
payable by reason thereof and (b) any event resulting in the receipt by the
Borrower or any of its Subsidiaries of business interruption insurance proceeds.

“Register” shall have the meaning set forth in Section 9.6(c).

 

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“Related Agreements” shall mean, collectively, the Related Financing Documents
and the Affiliate Agreements.

“Related Financing Documents” shall mean, collectively, the Senior Subordinated
Notes, the Senior Subordinated Note Indenture, the Senior Subordinated
Convertible Notes, the Senior Subordinated Convertible Note Indenture and all
other agreements or instruments delivered pursuant to or in connection with any
of the foregoing including any purchase agreement or registration rights
agreement.

“Related Parties” shall mean, 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.

“Release” shall mean any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Materials into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), including the movement
of any Hazardous Materials through the air, soil, surface water or groundwater.

“Required Delayed Draw Term Loan Lenders” shall mean, as of any date of
determination, Delayed Draw Term Loan Lenders holding at least a majority of the
outstanding Delayed Draw Term Loans and the outstanding Delayed Draw Term Loan
Commitments (to the extent such Delayed Draw Term Loan Commitments have not been
funded and remain in effect); provided, however, that if any Delayed Draw Term
Loan Lender shall be a Defaulting Lender at such time, then there shall be
excluded from the determination of Required Delayed Draw Term Loan Lenders,
Obligations owing to such Defaulting Lender and such Defaulting Lender’s Delayed
Draw Term Loan Commitments.

“Required Initial Term Loan Lenders” shall mean, as of any date of
determination, Initial Term Loan Lenders holding at least a majority of the
outstanding Initial Term Loan; provided, however, that if any Lender shall be a
Defaulting Lender at such time, then there shall be excluded from the
determination of Required Initial Term Loan Lenders, Obligations owing to such
Defaulting Lender.

“Required Lenders” shall mean, as of any date of determination, Lenders holding
at least a majority of (a) the outstanding Revolving Commitments, Delayed Draw
Term Loan Commitments (to the extent such Delayed Draw Term Loan Commitments
have not been funded and remain in effect), Initial Term Loan and Delayed Draw
Term Loan or (b) if the Commitments have been terminated, the outstanding Loans
and Participation Interests; provided, however, that if any Lender shall be a
Defaulting Lender at such time, then there shall be excluded from the
determination of Required Lenders, Credit Party Obligations (including
Participation Interests) owing to such Defaulting Lender and such Defaulting
Lender’s Commitments.

“Required Revolving Lenders” shall mean, as of any date of determination,
Revolving Lenders holding at least a majority of (a) the outstanding Revolving
Commitments or (b) if the

 

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Revolving Commitments have been terminated, the outstanding Revolving Loans and
Participation Interests; provided, however, that if any Revolving Lender shall
be a Defaulting Lender at such time, then there shall be excluded from the
determination of Required Revolving Lenders, Obligations (including
Participation Interests) owing to such Defaulting Lender and such Defaulting
Lender’s Revolving Commitments.

“Required Term Loan Lenders” shall mean, as of any date of determination,
Lenders holding at least a majority of the outstanding Initial Term Loans,
Delayed Draw Term Loans and the Delayed Draw Term Loan Commitments (to the
extent such Delayed Draw Term Loan Commitments have not been funded and remain
in effect); provided, however, that if any such Lender shall be a Defaulting
Lender at such time, then there shall be excluded from the determination of
Required Term Loan Lenders, Obligations owing to such Defaulting Lender and such
Defaulting Lender’s Term Loan Commitments.

“Requirement of Law” shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

“Responsible Officer” shall mean any executive officer and, with respect to
financial matters, the chief financial officer, chief accounting officer,
controller or treasurer.

“Restricted Junior Payment” shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of the
Borrower now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (b) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of the Borrower
now or hereafter outstanding, (c) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of the Borrower now or hereafter outstanding, and
(d) except for any refinancings, exchanges, extensions and renewals permitted
pursuant to Section 6.1(f), any payment or prepayment of principal of, premium,
if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Subordinated Indebtedness.

“Revolving Commitment” shall mean, with respect to each Revolving Lender, the
commitment of such Revolving Lender to make Revolving Loans in an aggregate
principal amount at any time outstanding up to the amount of such Revolving
Lender’s “Revolving Commitment” as specified in on Schedule 1.1-6 or in the
Register, as such amount may be reduced or increased from time to time in
accordance with the terms hereof.

“Revolving Commitment Percentage” shall mean, for each Revolving Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule 1.1-6
or in the Register, as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6(c).

 

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“Revolving Commitment Termination Date” shall mean the date that is six
(6) years after the Closing Date.

“Revolving Committed Amount” shall have the meaning set forth in Section 2.1.

“Revolving Facility” shall mean Revolving Commitments and the Extensions of
Credit made pursuant to Sections 2.1, 2.4 and 2.5.

“Revolving Lender” shall mean, as of any date of determination, a Lender holding
a Revolving Commitment, a Revolving Loan or a Participation Interest on such
date.

“Revolving Loans” shall have the meaning set forth in Section 2.1.

“Revolving Note” or “Revolving Notes” shall mean the promissory notes of the
Borrower in favor of each of the Lenders evidencing the Revolving Loans provided
pursuant to Section 2.1(e), individually or collectively, as appropriate, as
such promissory notes may be amended, modified, supplemented, extended, renewed
or replaced from time to time.

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

“Sanctioned Country” shall mean a country subject to a sanctions program
identified on the list maintained by OFAC and made publicly available, or as
otherwise published from time to time.

“Sanctioned Person” shall mean (i) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC and made publicly
available, or as otherwise published from time to time, or (ii) (A) an agency of
the government of a Sanctioned Country, (B) an organization controlled by a
Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the
extent subject to a sanctions program administered by OFAC.

“Scheduled Debt Payments” shall mean, as of any date of determination for the
Credit Parties and their Subsidiaries, the sum of all scheduled payments of
principal on Indebtedness for the applicable period ending on the date of
determination (including the principal component of payments due on Capital
Leases during the applicable period ending on the date of determination), as
such scheduled payments may be adjusted from time to time as a result of
mandatory prepayments made pursuant to Section 2.8(b).

“Secured Hedging Agreement” shall mean (a) any Existing Hedging Agreement and
(b) any Hedging Agreement (other than any Convertible Hedging Agreement) between
a Credit Party and a Hedging Agreement Provider, as amended, modified,
supplemented, extended or restated from time to time.

“Security Agreement” shall mean the Third Amended and Restated Security
Agreement dated as of the Closing Date given by the Borrower and the other
Credit Parties to the Administrative Agent, for the benefit of the Lenders, as
amended, modified or supplemented from time to time in accordance with its
terms.

 

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“Security Documents” shall mean the Security Agreement, the Pledge Agreement,
the Mortgages, the Additional Mortgages, the Collateral Account Agreement and
any other documents executed and delivered in connection with the granting,
attachment and perfection of the Administrative Agent’s security interests and
liens arising thereunder, including, without limitation, Uniform Commercial Code
financing statements.

“Senior Secured Leverage Incurrence Test” shall mean the requirement that the
Consolidated Senior Secured Leverage Ratio shall be less than 4.0 to 1.0.

“Senior Subordinated Convertible Note Indenture” shall mean the indenture dated
as of November 22, 2005, among the Borrower, the guarantors named therein and
U.S. Bank National Association as successor to Wachovia, as trustee, pursuant to
which the Senior Subordinated Convertible Notes were issued, as such indenture
may be amended from time to time to the extent permitted under Section 6.13.

“Senior Subordinated Convertible Notes” shall mean the 3.0% Senior Subordinated
Convertible Notes due 2012 of the Borrower issued pursuant to the Senior
Subordinated Convertible Note Indenture, as such convertible notes may be
amended from time to time to the extent permitted under Section 6.13.

“Senior Subordinated Note Indenture” shall mean the indenture dated as of
February 13, 2004, among the Borrower, the guarantors named therein and U.S.
Bank National Association as successor to Wachovia, as trustee, pursuant to
which the Senior Subordinated Notes were issued, as such indenture may be
amended from time to time to the extent permitted under Section 6.13.

“Senior Subordinated Notes” shall mean the 7.75% Senior Subordinated Notes due
2014 of the Borrower issued pursuant to the Senior Subordinated Note Indenture,
as such notes may be amended from time to time to the extent permitted under
Section 6.13.

“Solvent” shall mean, with respect to any Person, as of the date of
determination that such Person is “solvent” within the meaning given that term
and similar terms under applicable laws relating to fraudulent transfers and
conveyances. For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.

“Subordinated Indebtedness” shall mean (a) the Indebtedness of the Borrower
evidenced by the Senior Subordinated Notes, the Indebtedness of the Borrower
evidenced by the Senior Subordinated Convertible Notes and any subordinated
indebtedness issued in compliance with Section 6.1(f) and (b) any other
Indebtedness of the Borrower subordinated in right of payment to the Credit
Party Obligations pursuant to documentation containing maturities, amortization
schedules, covenants, defaults, remedies, subordination provisions and other
material terms in form and substance reasonably satisfactory to the
Administrative Agent.

 

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“Subsidiary” shall mean, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a “Subsidiary” or to “Subsidiaries” in this Credit Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding up to
the Swingline Committed Amount, and the commitment of the Lenders to purchase
participation interests in the Swingline Loans as provided in
Section 2.5(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.

“Swingline Committed Amount” shall have the meaning set forth in Section 2.5(a).

“Swingline Lender” shall mean Wachovia or any successor swingline lender
hereunder.

“Swingline Loan” or “Swingline Loans” shall have the meaning set forth in
Section 2.5(a).

“Swingline Mandatory Borrowing” shall have the meaning set forth in
Section 2.5(b)(ii).

“Swingline Note” shall mean the promissory note of the Borrower in favor of the
Swingline Lender evidencing the Swingline Loans provided pursuant to
Section 2.5(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

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

“Term Loan Commitment” shall mean the Initial Term Loan Commitment and/or the
Delayed Draw Term Loan Commitment, as applicable.

“Term Loan Lender” shall mean, as of any date of determination, a Lender holding
a Term Loan Commitment or a Term Loan on such date.

“Term Loan Maturity Date” shall mean the date that is seven (7) years after the
Closing Date.

“Term Loans” shall mean, collectively, the Initial Term Loan and the Delayed
Draw Term Loan.

 

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“Term Note” or “Term Notes” shall mean the promissory notes of the Borrower in
favor of each of the Term Loan Lenders evidencing the portion of the applicable
Term Loan provided pursuant to Section 2.2, individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.

“Trademark License” shall mean any agreement, written or oral, providing for the
grant by or to a Credit Party of any right to use any Trademark, including,
without limitation, any thereof referred to in Schedule 3.21.

“Trademarks” shall mean (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade dress and
service marks, logos and other source or business identifiers, and the goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in Schedule 3.21, and (b) all renewals
thereof, including, without limitation, any thereof referred to in
Schedule 3.21.

“Tranche” shall mean the collective reference to LIBOR Rate Loans whose Interest
Periods begin and end on the same day. A Tranche may sometimes be referred to as
a “LIBOR Tranche”.

“Transfer Closing Date” shall have the meaning set forth in each Assignment and
Assumption.

“Type” shall mean, as to any Loan, its nature as an Alternate Base Rate Loan or
LIBOR Rate Loan, as the case may be.

“Voting Stock” shall mean, with respect to any Person, Capital Stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.

“Wachovia” shall mean Wachovia Bank, National Association, a national banking
association.

“Works” shall mean all works which are subject to copyright protection pursuant
to Title 17 of the United States Code.

Section 1.2 Other Definitional Provisions.

The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be

 

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deemed to be followed by the phrase “without limitation.” The word “will” shall
be construed to have the same meaning and effect as the word “shall.” Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to
any law or regulation herein shall, unless otherwise specified, refer to such
law or regulation as amended, modified or supplemented from time to time and
(f) the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

Section 1.3 Accounting Terms.

Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower shall notify the Administrative Agent that it
wishes to amend any covenant in Section 6.6 to appropriately reflect the effect
of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Section 6.6 for such purpose), then the Borrower’s compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders.

Section 1.4 Time References.

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

Section 1.5 Execution of Documents.

Unless otherwise specified, all Credit Documents and all other certificates
executed in connection therewith must be signed by a Responsible Officer.

 

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ARTICLE II

THE LOANS; AMOUNT AND TERMS

Section 2.1 Revolving Loans.

(a) Revolving Commitment. During the Commitment Period, subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make available to
the Borrower from time to time such Revolving Lender’s Revolving Commitment
Percentage of revolving credit loans (“Revolving Loans”) in an aggregate
principal amount of up to TWO HUNDRED AND TWENTY-FIVE MILLION DOLLARS
($225,000,000) (as increased from time to time as provided in Section 2.3 and as
reduced from time to time as provided in Section 2.7, the “Revolving Committed
Amount”) for the purposes hereinafter set forth; provided, however, that
(i) with regard to each Revolving Lender individually, the sum of such Revolving
Lender’s Revolving Commitment Percentage of outstanding Revolving Loans plus
such Revolving Lender’s Revolving Commitment Percentage of outstanding Swingline
Loans plus such Revolving Lender’s Revolving Commitment Percentage of LOC
Obligations shall not exceed such Revolving Lender’s Revolving Commitment, and
(ii) with regard to the Revolving Lenders collectively, the sum of the
outstanding Revolving Loans plus outstanding Swingline Loans plus LOC
Obligations shall not exceed the Revolving Committed Amount. Revolving Loans may
consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
thereof, as the Borrower may request, and may be repaid and reborrowed in
accordance with the provisions hereof; provided that all Revolving Loans made on
the Closing Date or for the two Business Days following the Closing Date shall
only consist of Alternate Base Rate Loans.

(b) Revolving Loan Borrowings.

(i) Notice of Borrowing. The Borrower may request a Revolving Loan borrowing by
delivering a Notice of Borrowing (or telephone notice promptly confirmed in
writing by delivery of a Notice of Borrowing, which delivery may be by fax) to
the Administrative Agent not later than 12:00 p.m. on the Business Day prior to
the date of requested borrowing in the case of Alternate Base Rate Loans, and on
the third Business Day prior to the date of the requested borrowing in the case
of LIBOR Rate Loans. Each such request for borrowing shall be irrevocable, shall
be substantially in the form of the Notice of Borrowing (a “Notice of
Borrowing”) attached hereto as Schedule 2.1(b)(i) and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount to be borrowed,
(D) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR
Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the
Interest Period(s) therefor. If the Borrower shall fail to specify in any such
Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR
Rate Loan, then such notice shall be deemed to be a request for an Interest
Period of one month, or (II) the type of Revolving Loan requested, then such

 

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notice shall be deemed to be a request for an Alternate Base Rate Loan
hereunder. The Administrative Agent shall give notice to each Revolving Lender
promptly, of each Notice of Borrowing, the contents thereof and each such
Revolving Lender’s share thereof.

(ii) Advances. Each Revolving Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Administrative
Agent for the account of the Borrower, in Dollars and in funds immediately
available to the Administrative Agent, at the office of the Administrative Agent
specified in Section 9.2, or such other office as the Administrative Agent may
designate in writing, upon reasonable advance notice by 1:00 p.m. on the date
specified in the applicable Notice of Borrowing. Such borrowing will then be
made available to the Borrower by the Administrative Agent by crediting the
account of the Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Revolving Lenders and
in like funds as received by the Administrative Agent.

(c) Repayment. The principal amount of all Revolving Loans shall be due and
payable in full on the Revolving Commitment Termination Date.

(d) Interest. Subject to the provisions of Section 2.10, Revolving Loans shall
bear interest as follows:

(i) Alternate Base Rate Loans. During such periods as Revolving Loans shall be
comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall
bear interest at a per annum rate equal to the sum of the Alternate Base Rate
plus the Applicable Margin; and

(ii) LIBOR Rate Loans. During such periods as Revolving Loans shall be comprised
of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per
annum rate equal to the sum of the LIBOR Rate plus the Applicable Margin.

Interest on Revolving Loans shall be payable in arrears on each Interest Payment
Date.

(e) Revolving Notes. Upon the request of a Revolving Lender, such Revolving
Lender’s Revolving Commitment shall be evidenced by a duly executed promissory
note of the Borrower to such Revolving Lender in substantially the form of
Schedule 2.1(e). The Borrower covenants and agrees to pay the Revolving Loans in
accordance with the terms of this Agreement.

Section 2.2 Term Loan Facility.

(a) Initial Term Loan. Subject to the terms and conditions hereof, each Initial
Term Loan Lender severally agrees to make available to the Borrower (through the
Administrative Agent) on the Closing Date such Initial Term Loan Lender’s
Initial Term

 

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Loan Commitment Percentage of a term loan in Dollars (the “Initial Term Loan”)
in the aggregate principal amount of THREE HUNDRED FIFTY MILLION DOLLARS
($350,000,000) (the “Initial Term Loan Committed Amount”), for the purposes
hereinafter set forth. The Initial Term Loan may consist of Alternate Base Rate
Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may
request; provided, however, that on the Closing Date and for the two Business
Days following the Closing Date, a Initial Term Loan borrowing shall only
consist of Alternate Base Rate Loans unless the Borrower delivers to the
Administrative Agent a funding indemnity letter in form and substance
satisfactory to the Administrative Agent at least three (3) Business Days prior
to the Closing Date. Amounts repaid or prepaid on the Initial Term Loan may not
be reborrowed.

(i) Repayment of Initial Term Loan. The principal amount of the Initial Term
Loan shall be repaid in twenty-eight (28) consecutive quarterly installments as
follows, unless accelerated sooner pursuant to Section 7.2:

 

Principal Amortization Payment Date

  

Initial Term Loan

Principal Amortization

Payment

September 30, 2007    $ 875,000 December 31, 2007    $ 875,000 March 31, 2008   
$ 875,000 June 30, 2008    $ 875,000 September 30, 2008    $ 875,000
December 31, 2008    $ 875,000 March 31, 2009    $ 875,000 June 30, 2009    $
875,000 September 30, 2009    $ 875,000 December 31, 2009    $ 875,000 March 31,
2010    $ 875,000 June 30, 2010    $ 875,000 September 30, 2010    $ 875,000
December 31, 2010    $ 875,000 March 31, 2011    $ 875,000 June 30, 2011    $
875,000 September 30, 2011    $ 875,000 December 31, 2011    $ 875,000

 

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March 31, 2012    $ 875,000 June 30, 2012    $ 875,000 September 30, 2012    $
875,000 December 31, 2012    $ 875,000 March 31, 2013    $ 875,000 June 30, 2013
   $ 875,000 September 30, 2013    $ 875,000 December 31, 2013    $ 875,000
March 31, 2014    $ 875,000 Term Loan Maturity Date     
 
  The remaining
principal amount
then outstanding

The outstanding principal amount of the Initial Term Loan and all accrued but
unpaid interest and other amounts payable with respect to the Initial Term Loan
shall be repaid on the Term Loan Maturity Date.

(b) Delayed Draw Term Loan. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each Delayed
Draw Term Loan Lender severally agrees to make available to the Borrower
(through the Administrative Agent) on each Delayed Draw Funding Date, in
accordance with clause (C) below, such Delayed Draw Term Loan Lender’s Delayed
Draw Term Loan Commitment Percentage of a term loan in Dollars (each a “Delayed
Draw Term Loan”) in the aggregate principal amount after giving effect to all
Delayed Draw Term Loan borrowings of up to ONE HUNDRED MILLION DOLLARS
($100,000,000) (the “Delayed Draw Term Loan Committed Amount”) for the purposes
hereinafter set forth. A Delayed Draw Term Loan borrowing may consist of
Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Borrower may request; provided, however, that on the Closing Date and for the
two (2) Business Days following the Closing Date, a Delayed Draw Term Loan
borrowing shall only consist of Alternate Base Rate Loans. Amounts repaid or
prepaid on a Delayed Draw Term Loan may not be reborrowed.

(i) Delayed Draw Term Loan Borrowings.

(A) Notice of Borrowing. The Borrower may request, up to four (4) times during
the Delayed Draw Period, a Delayed Draw Term Loan borrowing by delivering a
Notice of Borrowing (or telephone notice promptly confirmed in writing by
delivery of a Notice of Borrowing which delivery may be by fax) to the
Administrative Agent not later than 12:00 p.m. on the date of the requested
borrowing in the case of Alternate Base Rate Loans and on the third Business Day
prior to the date of the

 

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requested borrowing in the case of LIBOR Rate Loans. Each such Notice of
Borrowing shall be irrevocable and shall specify and certify (1) that a Delayed
Draw Term Loan borrowing is requested, (2) the date of the requested borrowing
(which shall be a Business Day), (3) the aggregate principal amount to be
borrowed, (4) whether the borrowing shall be comprised of Alternate Base Rate
Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are
requested, the Interest Period(s) therefor and (5) that, after giving pro forma
effect to the requested Delayed Draw Term Loan borrowing, the Borrower will be
in compliance with all financial covenants set forth in Section 6.6. If the
Borrower shall fail to specify in any such Notice of Borrowing (y) an applicable
Interest Period in the case of a LIBOR Rate Loan, then such notice shall be
deemed to be a request for an Interest Period of one month or (z) the type of
Loan requested, then such notice shall be deemed to be a request for an
Alternate Base Rate Loan hereunder. The Administrative Agent shall give notice
to each Delayed Draw Term Loan Lender promptly upon receipt of each Notice of
Borrowing, the contents thereof and each such Delayed Draw Term Lender’s share
thereof.

(B) Minimum Amounts. Each Delayed Draw Term Loan borrowing that is made as an
Alternate Base Rate Loan shall be in a minimum aggregate amount of $1,500,000
and in integral multiples of $500,000 in excess thereof (or the remaining amount
of the Delayed Draw Term Loan Committed Amount, if less). Each Delayed Draw Term
Loan borrowing that is made as a LIBOR Rate Loan shall be in a minimum aggregate
amount of $1,500,000 and in integral multiples of $500,000 in excess thereof (or
the remaining amount of the Delayed Draw Term Loan Committed Amount, if less).

(C) Advances. Each Delayed Draw Term Loan Lender will make its Delayed Draw Term
Loan Commitment Percentage of each Delayed Draw Term Loan borrowing available to
the Administrative Agent, for the account of the Borrower, in Dollars and in
funds immediately available to the Administrative Agent, at the office of the
Administrative Agent specified in Section 9.2, or at such other office as the
Administrative Agent may designate in writing, upon reasonable advance notice by
1:00 p.m. on the date specified in the applicable Notice of Borrowing. Such
borrowing will then be made available to the Borrower by the Administrative
Agent by crediting the account of the Borrower on the books of such office with
the aggregate of the amounts made available to the Administrative Agent by the
Delayed Draw Term Loan Lenders and in like funds as received by the
Administrative Agent.

(ii) Repayment of Delayed Draw Term Loan. The outstanding amount under the
Delayed Draw Term Loan (if any) shall be repaid in quarterly installments. The
Borrower shall repay 0.25% of the outstanding Delayed Draw

 

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Term Loan (if any) (A) on the last day of the Fiscal Quarter following the
Fiscal Quarter in which the first drawing under the Delayed Draw Term Loan was
made and (B) on the last day of each Fiscal Quarter of the Borrower thereafter.
The outstanding principal amount of the Delayed Draw Term Loan shall be due and
payable on the Term Loan Maturity Date, unless accelerated sooner pursuant to
Section 7.2.

(c) Interest on the Term Loan. Subject to the provisions of Section 2.10, the
Term Loan shall bear interest as follows:

(i) Alternate Base Rate Loans. During such periods as the Term Loan shall be
comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall
bear interest at a per annum rate equal to the sum of the Alternate Base Rate
plus the Applicable Margin; and

(ii) LIBOR Rate Loans. During such periods as the Term Loan shall be comprised
of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per
annum rate equal to the sum of the LIBOR Rate plus the Applicable Margin.

Interest on the Term Loan shall be payable in arrears on each Interest Payment
Date.

(d) Term Notes. Upon the request of a Term Loan Lender, such Term Loan Lender’s
Initial Term Loan Commitment and/or Delayed Draw Term Loan Commitment shall be
evidenced by a duly executed promissory note of the Borrower to such Term Loan
Lender in substantially the form of Schedule 2.2(d). The Borrower covenants and
agrees to pay the Term Loans in accordance with the terms of this Agreement.

Section 2.3 Incremental Facilities.

Subject to the terms and conditions set forth herein, the Borrower shall have
the right, at any time and from time to time prior to the Revolving Commitment
Termination Date, to incur additional Indebtedness under this Agreement in an
aggregate amount of up to $200,000,000 (each, an “Incremental Facility”) which
may be borrowed in the form of (a) one or more increases to the Revolving
Committed Amount (the “Additional Revolving Loans”) and/or (b) a term loan
facility (the “Additional Term Loan”; together with any Additional Revolving
Loans, the “Additional Loans”), in an aggregate amount of up to $200,000,000.
The following terms and conditions shall apply: (i) the aggregate amount of all
Additional Loans shall not at any time exceed $200,000,000, (ii) any Additional
Revolving Loans shall have the same terms as the existing Revolving Loans,
(iii) the terms and conditions of any Additional Term Loans shall be reasonably
satisfactory to the Administrative Agent and the Additional Loan Lenders (as
such term is defined below), (iv) the loans made under any Incremental Facility
shall constitute Credit Party Obligations, (v) any Additional Term Loan shall
not have a shorter maturity or weighted average life than the Term Loan, and
shall have other terms and conditions reasonably acceptable to the
Administrative Agent, (vi) any Additional Loans shall be entitled to the same
voting rights as the existing Loans and shall be entitled to receive proceeds of
prepayments on

 

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the same basis as comparable Loans, (vii) the Borrower shall have received
commitments from one or more existing Lenders or from other banks, financial
institutions or investment funds, in each case in accordance with the terms set
forth below (such Persons being referred to herein as the “Additional Loan
Lenders”); provided that no existing Lender shall be required to provide a
commitment with respect to such Incremental Facility, (viii) each Additional
Loan shall be in a minimum principal amount of $10,000,000 and integral
multiples of $1,000,000 in excess thereof, (ix) the proceeds of any Additional
Loans will be used to finance capital expenditures and working capital and other
general corporate purposes, including Permitted Acquisitions, (x) the Borrower
shall execute such promissory notes as are necessary and requested by the
Additional Loan Lenders to reflect the Additional Loans, (ix) the interest rate
margins with respect to any Additional Term Loan shall be determined by the
Borrower and the Additional Term Loan lenders providing such Additional Term
Loan, (x) the conditions to Extensions of Credit in Section 4.1(b) and (c) and
Section 4.2 shall have been satisfied and (xi) the Administrative Agent shall
have received from the Borrower an Officer’s Certificate, in form and substance
reasonably satisfactory to the Administrative Agent, demonstrating that, after
giving effect to any such Additional Loan, the Borrower will be (A) in
compliance with the Senior Secured Leverage Incurrence Test and (B) in pro forma
compliance with all financial covenants set forth in Section 6.6. The Borrower
may invite other banks, financial institutions and investment funds reasonably
acceptable to the Administrative Agent to join this Credit Agreement as Lenders
hereunder for a portion of the Additional Loans, provided that such other banks,
financial institutions and investment funds shall enter into such joinder
agreements to give effect thereto as the Administrative Agent and the Borrower
may reasonably request. In the case of Additional Revolving Loans, the existing
Lenders shall make such assignments (which assignments shall not be subject to
the requirements set forth in Section 9.6(c)) of the outstanding Revolving Loans
and Participation Interests to the Additional Loan Lenders providing any
Additional Revolving Loans so that, after giving effect to such assignments,
each Lender holding a Revolving Commitment (including such Additional Loan
Lenders) will hold Revolving Loans and Participation Interests equal to its
Commitment Percentage of all outstanding Revolving Loans, Swingline Loans and
LOC Obligations. Notwithstanding any provision of this Credit Agreement to the
contrary, the Administrative Agent is authorized (with the consent of the
Borrower and the Additional Loan Lenders), to enter into, on behalf of all
Lenders, any amendment, modification or supplement to this Credit Agreement or
any other Credit Document as may be necessary to incorporate the terms of any
Additional Loans.

Section 2.4 Letter of Credit Subfacility.

(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, during the Commitment Period the Issuing Lender shall
issue, and the Revolving Lenders shall participate in, Letters of Credit for the
account of the Borrower from time to time upon request in a form acceptable to
the Issuing Lender; provided, however, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed ONE HUNDRED TWENTY MILLION DOLLARS
($120,000,000) (the “LOC Committed Amount”), (ii) the sum of outstanding
Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall not
at any time exceed the Revolving Committed Amount, (iii) all Letters of Credit
shall be denominated in Dollars and

 

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(iv) Letters of Credit shall be issued for lawful corporate purposes and may be
issued as standby letters of credit, including in connection with workers’
compensation and other insurance programs, and trade letters of credit. Except
as otherwise expressly agreed upon by all the Revolving Lenders, no Letter of
Credit shall have an original expiry date more than twelve (12) months from the
date of issuance; provided, however, so long as no Default or Event of Default
has occurred and is continuing and subject to the other terms and conditions to
the issuance of Letters of Credit hereunder, the expiry dates of Letters of
Credit may be extended annually or periodically from time to time on the request
of the Borrower or by operation of the terms of the applicable Letter of Credit
to a date not more than twelve (12) months from the date of extension; provided,
further, that no Letter of Credit, as originally issued or as extended, shall
have an expiry date (or potential draw date) extending beyond the date that is
ten (10) days prior to the Revolving Commitment Termination Date (including an
expiry date after the Revolving Commitment Termination Date), unless such Letter
of Credit is or will be cash collateralized (x) by an amount equal to 105% of
the maximum amount available to be drawn thereunder and (y) on other terms
satisfactory to the Issuing Lender. Each Letter of Credit shall comply with the
related LOC Documents. The issuance and expiry date of each Letter of Credit
shall be a Business Day. Any Letters of Credit issued hereunder shall be in a
minimum original face amount of $25,000 (or such lesser amount as approved by
the Issuing Lender). Wachovia shall be the Issuing Lender on all Letters of
Credit issued after the Closing Date. The Borrower’s reimbursement obligations
in respect of each Existing Letter of Credit, and each Lender’s participation
obligations in connection therewith, shall be governed by the terms of this
Credit Agreement.

(b) Notice and Reports. The request for the issuance of a Letter of Credit shall
be submitted to the Issuing Lender at least five (5) Business Days prior to the
requested date of issuance, or such shorter period in each instance as may be
agreed to by the Issuing Lender. The Issuing Lender will promptly upon request
provide to the Administrative Agent for dissemination to the Revolving Lenders a
detailed report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have occurred since
the date of any prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as well as any
payments or expirations which may have occurred. The Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the Letters
of Credit. The Issuing Lender will provide to the Administrative Agent promptly
upon request a summary report of the nature and extent of LOC Obligations then
outstanding.

(c) Participations. Each Revolving Lender, (i) on the Closing Date with respect
to each Existing Letter of Credit and (ii) upon issuance of any other Letter of
Credit, shall be deemed to have purchased without recourse a risk participation
from the Issuing Lender in such Letter of Credit and the obligations arising
thereunder and any collateral relating thereto, in each case in an amount equal
to its Revolving Commitment Percentage of the obligations under such Letter of
Credit and shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing Lender
therefor and discharge when due, its Revolving

 

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Commitment Percentage of the obligations arising under such Letter of Credit.
Without limiting the scope and nature of each Revolving Lender’s participation
in any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any LOC Document, each such Revolving
Lender shall pay to the Issuing Lender its Revolving Commitment Percentage of
such unreimbursed drawing in same day funds on the day of notification by the
Issuing Lender of an unreimbursed drawing pursuant to and in accordance with the
provisions of subsection (d) hereof. The obligation of each Revolving Lender to
so reimburse the Issuing Lender shall be absolute and unconditional and shall
not be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided.

(d) Reimbursement. In the event of any drawing under any Letter of Credit, the
Issuing Lender will promptly notify the Borrower and the Administrative Agent.
The Borrower shall reimburse the Issuing Lender on the day on which the drawing
under any Letter of Credit (with the proceeds of a Revolving Loan obtained
hereunder or otherwise) is honored in same day funds as provided herein or in
the LOC Documents. If the Borrower shall fail to reimburse the Issuing Lender as
provided herein, the unreimbursed amount of such drawing shall bear interest at
a per annum rate equal to the Alternate Base Rate plus two percent (2%) for so
long as such amount shall be unreimbursed. Unless the Borrower shall notify the
Issuing Lender and the Administrative Agent prior to 11:00 a.m. on the date the
drawing is honored of its intent to otherwise reimburse the Issuing Lender, the
Borrower shall be deemed to have requested a Revolving Loan (a “LOC Mandatory
Borrowing”) in the amount of the drawing as provided in subsection (e) hereof,
the proceeds of which will be used to satisfy the reimbursement obligations. The
Borrower’s reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of set-off,
counterclaim or defense to payment the Borrower may claim or have against the
Issuing Lender, the Administrative Agent, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including without limitation
any defense based on any failure of the Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit. The
Issuing Lender will promptly notify the other Revolving Lenders of the amount of
any unreimbursed drawing and each Revolving Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars and in
immediately available funds, the amount of such Revolving Lender’s Revolving
Commitment Percentage of such unreimbursed drawing. Such payment shall be made
on the day such notice is received by such Revolving Lender from the Issuing
Lender if such notice is received at or before 2:00 p.m., otherwise such payment
shall be made at or before 12:00 p.m. on the Business Day next succeeding the
day such notice is received. If such Revolving Lender does not pay such amount
to the Issuing Lender in full upon such request, such Revolving Lender shall, on
demand, pay to the Administrative Agent for the account of the Issuing Lender
interest on the unpaid amount during the period from the date of such drawing
until such Revolving Lender pays such amount to the Issuing Lender in full at a
rate per annum equal to, if paid within two (2) Business Days of the date of
drawing, the Federal Funds Effective Rate and thereafter at

 

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a rate equal to the Alternate Base Rate. Each Revolving Lender’s obligation to
make such payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the Credit Party Obligations under the Credit
Documents and shall be made without any offset, abatement, withholding or
reduction whatsoever.

(e) Repayment with Revolving Loans. On any day on which the Borrower shall have
requested, or been deemed to have requested, a Revolving Loan to reimburse a
drawing under a Letter of Credit, the Administrative Agent shall give notice to
the Revolving Lenders that a Revolving Loan has been requested or deemed
requested in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans (each
such borrowing, a “Mandatory LOC Borrowing”) shall be immediately made (without
giving effect to any termination of the Commitments pursuant to Section 7.2) pro
rata based on each Revolving Lender’s respective Revolving Commitment Percentage
(determined before giving effect to any termination of the Commitments pursuant
to Section 7.2). The proceeds of such LOC Mandatory Borrowing shall be paid
directly to the Issuing Lender for application to the respective LOC
Obligations. Each Revolving Lender hereby irrevocably agrees to make such
Revolving Loans immediately upon any such request or deemed request on account
of each LOC Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date notwithstanding (i) the amount of
LOC Mandatory Borrowing may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event
of Default then exists, (iv) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required in Section 2.1(b),
(v) the date of such LOC Mandatory Borrowing, or (vi) any reduction in the
Revolving Committed Amount after any such Letter of Credit may have been drawn
upon. In the event that any LOC Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code), then each
such Revolving Lender hereby agrees that it shall forthwith fund (as of the date
the LOC Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) its Participation Interests in the outstanding LOC Obligations;
provided, further, that in the event any Revolving Lender shall fail to fund its
Participation Interest on the date the LOC Mandatory Borrowing would otherwise
have occurred, then the amount of such Revolving Lender’s unfunded Participation
Interest therein shall bear interest payable by such Revolving Lender to the
Issuing Lender upon demand, at the rate equal to, if paid within two (2)
Business Days of such date, the Federal Funds Effective Rate, and thereafter at
a rate equal to the Alternate Base Rate.

(f) Modification, Extension. The issuance of any supplement, modification,
amendment, renewal, or extension to any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.

 

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(g) Uniform Customs and Practices. The Issuing Lender shall have the Letters of
Credit be subject to The Uniform Customs and Practice for Documentary Credits,
as published as of the date of issue by the International Chamber of Commerce
(the “UCP”), in which case the UCP may be incorporated therein and deemed in all
respects to be a part thereof.

(h) Designation of Subsidiaries as Account Parties. Notwithstanding anything to
the contrary set forth in this Credit Agreement, including without limitation
Section 2.4(a), a Letter of Credit issued hereunder shall upon the request of
the Borrower be issued for the account of any Subsidiary of the Borrower,
provided that notwithstanding such request, the Borrower shall be the actual
account party for all purposes of this Credit Agreement for such Letter of
Credit and such request shall not affect the Borrower’s reimbursement
obligations hereunder with respect to such Letter of Credit.

Section 2.5 Swingline Loan Subfacility.

(a) Swingline Commitment. During the Commitment Period, subject to the terms and
conditions hereof, the Swingline Lender, in its individual capacity, agrees to
make certain revolving credit loans to the Borrower (each a “Swingline Loan”
and, collectively, the “Swingline Loans”) for the purposes hereinafter set
forth; provided, however, (i) the aggregate amount of Swingline Loans
outstanding at any time shall not exceed FIFTEEN MILLION DOLLARS ($15,000,000)
(the “Swingline Committed Amount”), and (ii) the sum of the outstanding
Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall not
exceed the Revolving Committed Amount. Swingline Loans hereunder may be repaid
and reborrowed in accordance with the provisions hereof.

(b) Swingline Loan Borrowings.

(i) Notice of Borrowing and Disbursement. The Swingline Lender will make
Swingline Loans available to the Borrower on any Business Day upon written
request made by the Borrower not later than 12:00 p.m. on such Business Day. A
notice of request for Swingline Loan borrowing shall be made in the form of
Schedule 2.1(b)(i) with appropriate modifications (which notice may be made by
fax). Not later than 4:00 p.m. on the Borrowing Date specified in a notice in
respect of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent for the account of the Borrower, in Dollars and in funds
immediately available to the Administrative Agent, at the office of the
Administrative Agent specified in Section 9.2 or such other office as the
Administrative Agent may designate in writing the requested Swingline Loans.
Such borrowing will then be made available to the Borrower by the Administrative
Agent by crediting the account of the Borrower on the books of such office with
the aggregate of the amounts made available to the Administrative Agent by the
Swingline Lender and in like funds as received by the Administrative Agent.

 

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(ii) Repayment of Swingline Loans. Each Swingline Loan borrowing shall be due
and payable on the Revolving Commitment Termination Date. The Swingline Lender
may, at any time, in its sole discretion, by written notice to the Borrower and
the Administrative Agent, demand repayment of its Swingline Loans by way of a
Revolving Loan borrowing, in which case the Borrower shall be deemed to have
requested a Revolving Loan borrowing comprised entirely of Alternate Base Rate
Loans in the amount of such Swingline Loans; provided, however, that, in the
following circumstances, any such demand shall also be deemed to have been given
one Business Day prior to each of (i) the Revolving Commitment Termination Date,
(ii) the occurrence of any Event of Default described in Section 7.1(f) or
Section 7.1(g), (iii) upon acceleration of the Credit Party Obligations under
the Credit Documents, whether on account of an Event of Default described in
Section 7.1(f) or Section 7.1(g) or any other Event of Default, and (iv) the
exercise of remedies in accordance with the provisions of Section 7.2 hereof
(each such Revolving Loan borrowing made on account of any such deemed request
therefor as provided herein being hereinafter referred to as a “Swingline
Mandatory Borrowing”). Each Revolving Lender hereby irrevocably agrees to make
such Revolving Loans promptly upon any such request or deemed request on account
of each Swingline Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the same such date notwithstanding (A) the
amount of Swingline Mandatory Borrowing may not comply with the minimum amount
for borrowings of Revolving Loans otherwise required hereunder, (B) whether any
conditions specified in Section 4.2 are then satisfied, (C) whether a Default or
an Event of Default then exists, (D) failure of any such request or deemed
request for Revolving Loans to be made by the time otherwise required in
Section 2.1(b)(i), (E) the date of such Swingline Mandatory Borrowing, or
(F) any reduction in the Revolving Committed Amount or termination of the
Revolving Commitments immediately prior to such Swingline Mandatory Borrowing or
contemporaneously therewith. In the event that any Swingline Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code), then each Revolving Lender hereby agrees that it shall
forthwith purchase (as of the date the Swingline Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Swingline
Lender such participations in the outstanding Swingline Loans as shall be
necessary to cause each such Revolving Lender to share in such Swingline Loans
ratably based upon its respective Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments pursuant to
Section 7.2); provided that (I) all interest payable on the Swingline Loans
shall be for the account of the Swingline Lender until the date as of which the
respective Revolving Lender’s participation is purchased, and (II) at the time
any purchase of participations pursuant to this sentence is actually made, the
purchasing Revolving Lender shall be required to pay to the Swingline Lender
interest on the principal amount of such participation purchased for each

 

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day from and including the date upon which the purchase occurs hereunder to but
excluding the date of payment for such participation, at the rate equal to, if
paid within two (2) Business Days of the date of the Swingline Mandatory
Borrowing, the Federal Funds Effective Rate, and thereafter at a rate equal to
the Alternate Base Rate.

(c) Interest on Swingline Loans. Subject to the provisions of Section 2.10,
Swingline Loans shall bear interest at a per annum rate equal to the Alternate
Base Rate plus the Applicable Margin for Revolving Loans that are Alternate Base
Rate Loans. Interest on Swingline Loans shall be payable in arrears on each
Interest Payment Date.

(d) Swingline Note. The Swingline Loans shall be evidenced by a duly executed
promissory note of the Borrower to the Swingline Lender in the original amount
of the Swingline Committed Amount and substantially in the form of
Schedule 2.5(d). The Borrower covenants and agrees to pay the Swingline Loans in
accordance with the terms of this Agreement.

Section 2.6 Fees.

(a) Commitment Fee. In consideration of the Revolving Commitments, the Borrower
agrees to pay to the Administrative Agent for the ratable benefit of the
Revolving Lenders a commitment fee (the “Commitment Fee”) in an amount equal to
the Applicable Margin per annum on the average daily unused amount of the
Revolving Committed Amount. For purposes of computation of the Commitment Fee,
LOC Obligations and Swingline Loans shall be considered usage of the Revolving
Committed Amount. The Commitment Fee shall be payable quarterly on the last
Business Day of each calendar quarter for such calendar quarter then ending.

(b) Letter of Credit Fees. In consideration of the LOC Commitments, the Borrower
agrees to pay to the Issuing Lender for the ratable benefit of the Revolving
Lenders a fee (the “Letter of Credit Fee”) equal to the Applicable Margin per
annum on the average daily maximum amount available to be drawn under each
Letter of Credit from the date of issuance to the date of expiration. In
addition to such Letter of Credit Fee, the Issuing Lender shall charge, and
retain for its own account without sharing by the other Revolving Lenders, an
additional facing fee (the “Letter of Credit Facing Fee”) of one-quarter of one
percent (0.25%) per annum on the average daily maximum amount available to be
drawn under each such Letter of Credit issued by it. The Issuing Lender shall
promptly pay over to the Administrative Agent for the ratable benefit of the
Revolving Lenders (including the Issuing Lender in its capacity as a Revolving
Lender), the Letter of Credit Fee. The Letter of Credit Fee and the Letter of
Credit Facing Fee shall be payable quarterly in arrears on the last Business Day
of each calendar quarter for such calendar quarter then ending.

(c) Issuing Lender Fees. In addition to the Letter of Credit Fees payable
pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing Lender
for its own account without sharing by the other Lenders the reasonable and
customary charges

 

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from time to time of the Issuing Lender with respect to the amendment, transfer,
administration, cancellation and conversion of, and drawings under, such Letters
of Credit (collectively, the “Issuing Lender Fees”).

(d) Administrative Fee. The Borrower agrees to pay to the Administrative Agent
the annual administrative fee as described in the Fee Letter.

(e) Delayed Draw Commitment Fee. The Borrower agrees to pay to the
Administrative Agent, for the pro rata benefit of the Delayed Draw Term Loan
Lenders, a ticking fee (the “Delayed Draw Commitment Fee”) in an amount equal to
(i) for the six months immediately following the Closing Date, 0.75% and
(ii) thereafter until the first anniversary of the Closing Date, 0.875%, in each
case per annum on the aggregate daily amount of the Delayed Draw Term Loan
Committed Amount less any drawings of the Delayed Draw Term Loan (computed on
the basis of the actual number of days elapsed over a 360-day year), which
Delayed Draw Commitment Fee shall accrue from the Closing Date to, and shall be
payable in full to the Administrative Agent on, the earlier to occur of (A) the
Delayed Draw Commitment Termination Date and (B) the date the Delayed Draw Term
Loan Commitments are terminated, regardless of whether any Delayed Draw Funding
Date actually occurs.

Section 2.7 Commitment Reductions.

(a) Voluntary Reductions. The Borrower shall have the right to terminate or
permanently reduce the unused portion of the Revolving Committed Amount and/or
the Delayed Draw Term Loan Committed Amount at any time or from time to time
upon not less than five Business Days’ prior notice (which notice may be made by
fax) to the Administrative Agent (which shall notify the Revolving Lenders
and/or the Delayed Draw Term Loan Lenders, as applicable, thereof as soon as
practicable) of each such termination or reduction, which notice shall specify
the effective date thereof and the amount of any such reduction which shall be
in a minimum amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof and shall be irrevocable and effective upon receipt by the
Administrative Agent, provided that no such reduction or termination shall be
permitted if after giving effect thereto, and to any prepayments of the Loans
made on the effective date thereof, (i) with respect to termination or reduction
of the Revolving Committed Amount, the sum of the outstanding Revolving Loans
plus outstanding Swingline Loans plus LOC Obligations would exceed the Revolving
Committed Amount or (ii) with respect to termination or reduction of the Delayed
Draw Term Loan Committed Amount, the sum of outstanding Delayed Draw Term Loans
would exceed the Delayed Draw Term Loan Committed Amount.

(b) Revolving Commitment Termination Date. The Revolving Commitment, the
Swingline Commitment and the LOC Commitment shall automatically terminate on the
Revolving Commitment Termination Date.

 

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(c) Delayed Draw Commitment Termination Date. The Delayed Draw Term Loan
Commitments shall automatically terminate on the Delayed Draw Commitment
Termination Date.

Section 2.8 Prepayments.

(a) Optional Prepayments. The Borrower shall have the right to prepay Loans in
whole or in part from time to time; provided, however, that each partial
prepayment of a Revolving Loan and the Term Loans shall be in a minimum
principal amount of $1,000,000 and integral multiples of $500,000 in excess
thereof, and each partial prepayment of a Swingline Loan shall be in a minimum
principal amount of $100,000 and integral multiples of $50,000 in excess
thereof. The Borrower shall give the Administrative Agent (which shall notify
the Lenders thereof as soon as practicable) three Business Days’ irrevocable
notice (which notice may be made by fax) of an optional payment in the case of
LIBOR Rate Loans and one Business Day’s irrevocable notice in the case of
Alternate Base Rate Loans, such notice to be substantially in the form of
Schedule 2.8(a). All optional prepayments pursuant to this Section 2.8(a) shall
be applied as the Borrower may elect. All prepayments under this Section 2.8(a)
shall be subject to Section 2.18, but otherwise without premium or penalty.
Interest on the principal amount prepaid shall be payable on the date that a
prepayment is made hereunder through the date of prepayment. Amounts prepaid on
the Term Loan may not be reborrowed.

(b) Mandatory Prepayments.

(i) Revolving Committed Amount. If at any time after the Closing Date, the sum
of the outstanding Revolving Loans plus outstanding Swingline Loans plus LOC
Obligations shall exceed the Revolving Committed Amount, the Borrower
immediately shall prepay the Loans in an amount sufficient to eliminate such
excess (such prepayment to be applied as set forth in clause (vi) below).

(ii) Asset Dispositions. Promptly following any Asset Disposition by any Credit
Party or any of their Subsidiaries in excess of $15,000,000 in the aggregate
(for all Asset Dispositions) in any Fiscal Year, the Borrower shall prepay the
Loans and/or cash collateralize the LOC Obligations in an aggregate amount equal
to the Net Cash Proceeds derived from such Asset Disposition (such prepayment to
be applied as set forth in clause (vi) below); provided, however, that so long
as no Default or Event of Default has occurred and is continuing, such Net Cash
Proceeds shall not be required to be so applied to the extent the Borrower
delivers to the Administrative Agent a certificate stating that the Borrower
intends to reinvest such Net Cash Proceeds in additional assets or properties
utilized or intended to be utilized in any business permitted under Section 6.12
(including Permitted Acquisitions) within 360 days of the receipt of such Net
Cash Proceeds, it being expressly agreed that any Net Cash Proceeds not so
reinvested by the end of the applicable period shall be applied to repay the
Loans and/or cash collateralize the LOC Obligations immediately thereafter as
set forth in clause (vi) below.

 

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(iii) Issuances. Immediately upon receipt by any Credit Party or any of their
Subsidiaries of proceeds from any Debt Issuance, the Borrower shall prepay the
Loans in an aggregate amount equal to one hundred percent (100%) of the Net Cash
Proceeds of such Debt Issuance (each such prepayment to be applied as set forth
in clause (vi) below).

(iv) Recovery Event. Promptly following the receipt of Cash proceeds from a
Recovery Event in excess of $10,000,000 in the aggregate (for all Recovery
Events) in any Fiscal Year by any Credit Party or any of their Subsidiaries, the
Borrower shall prepay the Loans and/or cash collateralize the LOC Obligations in
an aggregate amount equal to such Net Cash Proceeds (such prepayment to be
applied as set forth in clause (vi) below); provided, however, that, so long as
no Default or Event of Default has occurred and is continuing at the time of
such Recovery Event, (A) the Credit Parties and their Subsidiaries may retain
Net Cash Proceeds consisting of business interruption insurance proceeds and
(B) any other Net Cash Proceeds shall not be required to be so applied to the
extent the Borrower delivers to the Administrative Agent a certificate stating
that the Borrower intends to use such Net Cash Proceeds to repair, restore or
replace the assets subject to the Recovery Event within 360 days of the receipt
of such Net Cash Proceeds, it being expressly agreed that any Net Cash Proceeds
not so reinvested by the end of the applicable period shall be applied to repay
the Loans and/or cash collateralize the LOC Obligations immediately thereafter
as set forth in clause (vi) below.

(v) Excess Cash Flow. If the Consolidated Total Leverage Ratio is greater than
3.50 to 1.0 at the end of any Fiscal Year (commencing with the Fiscal Year
ending September 27, 2007), within 95 days after such Fiscal Year end, the
Borrower shall prepay the Loans and/or cash collateralize the LOC Obligations in
an amount equal to the lesser of (a) 50% of the Excess Cash Flow earned during
such Fiscal Year minus any voluntary prepayments of the Term Loan pursuant to
Section 2.8(a) made during such Fiscal Year or (b) the amount of prepayment
necessary to lower the Consolidated Total Leverage Ratio to 3.50 to 1.00, after
giving pro forma effect to such prepayment. Any payments of Excess Cash Flow
shall be applied as set forth in clause (vi) below.

(vi) Application of Mandatory Prepayments. All amounts required to be paid
pursuant to this Section 2.8(b) shall be applied as follows: (A) with respect to
all amounts prepaid pursuant to Section 2.8(b)(i), to the Revolving Loans and
then (after all Revolving Loans have been repaid) to the Collateral Account in
respect of LOC Obligations, (B) with respect to all amounts prepaid pursuant to
Sections 2.8(b)(ii) through (v), (1) first, pro rata to the Term Loans (ratably
to the remaining amortization payments relating thereto) and (2) second, after
full payment of the Term Loans, to the Revolving Loans without a

 

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corresponding reduction in the Revolving Commitments and (after all Revolving
Loans have been repaid) to the Collateral Account in respect of LOC Obligations.
Within the parameters of the applications set forth above, prepayments shall be
applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in
direct order of Interest Period maturities. All prepayments under this
Section 2.8(b) shall be subject to Section 2.18 and be accompanied by interest
on the principal amount prepaid through the date of prepayment. In the event any
amount required to be paid pursuant to this Section 2.8(b) is required to be
applied to repay any LIBOR Rate Loan on any day other than the last day of the
applicable Interest Period, so long as no Default or Event of Default has
occurred and is continuing, the Borrower may request that such repayment amounts
not be applied to the applicable LIBOR Rate Loan immediately, but rather be
deposited in the Collateral Account. The Administrative Agent shall apply all
such deposited amounts to repay the applicable LIBOR Rate Loans, in each case as
of the last day of their respective Interest Periods (or, at the direction of
the Borrower, at any earlier date) until the allocable amounts held in the
Collateral Account for payment of such LIBOR Rate Loans have been exhausted.
Upon the occurrence of a Default or an Event of Default, the Administrative
Agent may, in its sole discretion, immediately apply all amounts held in the
Collateral Account for payment of LIBOR Rate Loans to satisfy any of the
Obligations.

(c) Hedging Obligations Unaffected. Any prepayment made pursuant to this
Section 2.8 shall not affect the Borrower’s obligation to continue to make
payments under any Hedging Agreement, which shall remain in full force and
effect notwithstanding such prepayment, subject to the terms of such Hedging
Agreement.

Section 2.9 Minimum Borrowing Amounts and Lending Offices.

(a) Minimum Borrowing Amounts. Each Revolving Loan which is an Alternate Base
Rate Loan shall be in a minimum aggregate amount of $1,000,000 and in integral
multiples of $50,000 in excess thereof (or the remaining amount of the Revolving
Committed Amount, if less). Each Revolving Loan which is a LIBOR Rate Loan shall
be in a minimum aggregate amount of $2,000,000 and in integral multiples of
$100,000 in excess thereof. Each Swingline Loan borrowing shall be in a minimum
aggregate amount of $50,000 and in integral amounts of $25,000 in excess
thereof.

(b) Lending Offices. LIBOR Rate Loans shall be made by each Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

Section 2.10 Default Rate and Payment Dates.

Upon the occurrence and during the continuance of an Event of Default under
Section 7.1(a), at the option of the Required Lenders, all outstanding principal
of and, to the extent permitted by law, accrued interest on the Loans and any
other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Alternate Base Rate plus the
Applicable Margin plus 2%).

 

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Section 2.11 Conversion and Continuation Options.

(a) The Borrower may, in the case of Revolving Loans and the Term Loan, elect
from time to time to convert Alternate Base Rate Loans to LIBOR Rate Loans, by
giving the Administrative Agent at least three Business Days’ prior irrevocable
written notice (which notice may be by fax) of such election. A form of Notice
of Conversion/ Extension is attached as Schedule 2.11. If the date upon which an
Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a
Business Day, then such conversion shall be made on the next succeeding Business
Day and during the period from such last day of an Interest Period to such
succeeding Business Day such Loan shall bear interest as if it were an Alternate
Base Rate Loan. All or any part of outstanding Alternate Base Rate Loans may be
converted as provided herein; provided that (i) no Loan may be converted into a
LIBOR Rate Loan when any Default or Event of Default has occurred and is
continuing and (ii) partial conversions shall be in an aggregate principal
amount of $2,000,000 or a whole multiple of $100,000 in excess thereof, or in
any amount less than $2,000,000 which may represent the aggregate principal
amount of all outstanding LIBOR Rate Loans.

(b) Any LIBOR Rate Loans may be continued as such upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
notice provisions contained in Section 2.11(a); provided, that no LIBOR Rate
Loan may be continued as such when any Default or Event of Default has occurred
and is continuing, in which case such Loan shall be automatically converted to
an Alternate Base Rate Loan at the end of the applicable Interest Period with
respect thereto. If the Borrower shall fail to give timely notice of an election
to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not
permitted hereunder, such LIBOR Rate Loans shall be automatically converted to
Alternate Base Rate Loans at the end of the applicable Interest Period with
respect thereto.

Section 2.12 Computation of Interest and Fees.

(a) Interest payable hereunder with respect to Alternate Base Rate Loans based
on the Prime Rate shall be calculated on the basis of a year of 365 days (or 366
days, as applicable) for the actual days elapsed. All other fees, interest and
all other amounts payable hereunder shall be calculated on the basis of a
360 day year for the actual days elapsed. The Administrative Agent shall as soon
as practicable notify the Borrower and the Lenders of each determination of a
LIBOR Rate on the Business Day of the determination thereof. Any change in the
interest rate on a Loan resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such change
in the Alternate Base Rate shall become effective. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change.

 

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(b) Each determination of an interest rate by the Administrative Agent pursuant
to any provision of this Credit Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error. The Administrative
Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the computations used by the Administrative Agent in determining any
interest rate.

(c) It is the intent of the Lenders and the Credit Parties to conform to and
contract in strict compliance with applicable usury law from time to time in
effect. All agreements between the Lenders and the Credit Parties are hereby
limited by the provisions of this paragraph which shall override and control all
such agreements, whether now existing or hereafter arising and whether written
or oral. In no way, nor in any event or contingency (including but not limited
to prepayment or acceleration of the maturity of any Obligation), shall the
interest taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction of any of
the Credit Documents or any other document, interest would otherwise be payable
in excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which would,
apart from this provision, be in excess of the maximum nonusurious amount, an
amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
the Loans and not to the payment of interest, or refunded to the Borrower or the
other payor thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right to demand
payment of the Loans or any other Indebtedness evidenced by any of the Credit
Documents does not include the right to receive any interest which has not
otherwise accrued on the date of such demand, and the Lenders do not intend to
charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to the Lenders with respect to the Loans
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any renewal or
extension) of the Loans so that the amount of interest on account of such
indebtedness does not exceed the maximum nonusurious amount permitted by
applicable law.

Section 2.13 Pro Rata Treatment and Payments.

(a) Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Revolving
Commitment Percentages of the Revolving Lenders. Subject to the terms of this
Section 2.13(a) and to Section 2.13(b), each payment under this Credit Agreement
or any Note shall be applied, first, to any fees then due and owing by the
Borrower pursuant to Section 2.6, second, to interest then due and owing in
respect of the Credit Party Obligations of the Borrower, third, to principal
then due and owing hereunder and under the Credit Party Obligations

 

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of the Borrower and, fourth, to all amounts then due and owing in respect of the
Credit Party Obligations. Each payment on account of any fees pursuant to
Section 2.6 shall be made pro rata in accordance with the respective amounts due
and owing (except as to the portion of the Letter of Credit retained by the
Issuing Lender and the Issuing Lender Fees). Each payment (other than
prepayments) by the Borrower on account of principal of and interest on the
Revolving Loans and on the Term Loan shall be made pro rata to the Lenders
according to the respective amounts due and owing. Prepayments made pursuant to
Section 2.17 shall be applied in accordance with such Section. Each mandatory
prepayment on account of principal of the Loans shall be applied in accordance
with Section 2.8(b). All payments (including prepayments) to be made by the
Borrower on account of principal, interest, fees and other amounts shall be made
without defense, set-off or counterclaim and shall be made to the Administrative
Agent for the account of the Lenders at the Administrative Agent’s office on
record with the Borrower in Dollars and in immediately available funds not later
than 12:00 p.m. on the date when due. The Administrative Agent shall distribute
such payments to the Lenders entitled thereto promptly upon receipt in like
funds as received. If any payment hereunder (other than payments on the LIBOR
Rate Loans) becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Rate Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.

(b) Allocation of Payments After Exercise of Remedies. Notwithstanding any other
provisions of this Credit Agreement to the contrary, after the exercise of
remedies (other than the invocation of default interest pursuant to
Section 2.10) by the Administrative Agent or the Lenders pursuant to Section 7.2
(or after the Commitments shall automatically terminate and the Loans (with
accrued interest thereon) and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall automatically become due and payable in
accordance with the terms of such Section), all amounts collected or received by
the Administrative Agent or any Lender on account of the Credit Party
Obligations or any other amounts outstanding under any of the Credit Documents
or in respect of the Collateral shall be paid over or delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable attorneys’ and consultants’ fees) of
the Administrative Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
Administrative Agent with respect to the Collateral under or pursuant to the
terms of the Security Documents;

SECOND, to payment of any fees owed to the Administrative Agent in its capacity
as such;

 

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THIRD, to the payment of all reasonable and documented out-of-pocket costs and
expenses (including, without limitation, reasonable attorneys’ and consultants’
fees unless otherwise prohibited by this Agreement) of each of the Lenders in
connection with enforcing its rights under the Credit Documents or otherwise
with respect to the Credit Party Obligations owing to such Lender;

FOURTH, to the payment of all of the Credit Party Obligations consisting of
accrued fees and interest, and including with respect to any Secured Hedging
Agreement, any fees, premiums and scheduled periodic payments due under such
Secured Hedging Agreement and any interest accrued thereon;

FIFTH, to the payment of the outstanding principal amount of the Credit Party
Obligations and the payment or cash collateralization of the outstanding LOC
Obligations, and including with respect to any Secured Hedging Agreement, any
breakage, termination or other payments to the extent then due under such
Secured Hedging Agreement and any interest accrued thereon;

SIXTH, to all other Credit Party Obligations and other obligations which shall
have become due and payable under the Credit Documents or otherwise and not
repaid pursuant to clauses “FIRST” through “FIFTH” above;

SEVENTH, the payment of the surplus to whomever may be lawfully entitled to
receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans and
LOC Obligations held by such Lender bears to the aggregate then outstanding
Loans and LOC Obligations) of amounts available to be applied pursuant to
clauses “THIRD”, “FOURTH”, “FIFTH,” and “SIXTH” above; and (iii) to the extent
that any amounts available for distribution pursuant to clause “FIFTH” above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by the Administrative Agent in the Collateral Account
and applied (A) first, to reimburse the Issuing Lender from time to time for any
drawings under such Letters of Credit and (B) then, following the expiration of
all Letters of Credit, to all other obligations of the types described in
clauses “FIFTH,” and “SIXTH” above, and thereafter pursuant to clause “SEVENTH,”
in the manner provided in this Section 2.13(b). Notwithstanding the foregoing
terms of this Section 2.13(b), only Collateral proceeds and payments under the
Guaranty with respect to Secured Hedging Agreements shall be applied to
obligations under any Secured Hedging Agreement.

Section 2.14 Non-Receipt of Funds by the Administrative Agent.

(a) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received written notice from a Lender prior to
the proposed date of any Extension of Credit that such Lender will not make
available to the Administrative Agent such Lender’s share of such Extension of
Credit, the

 

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Administrative Agent may assume that such Lender has made such share available
on such date in accordance with this Agreement and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Extension of
Credit available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation and (ii) in the case of a payment to be made by the
Borrower, the interest rate applicable to Alternate Base Rate Loans. If the
Borrower and such Lender shall pay such interest to the Administrative Agent for
the same or an overlapping period, the Administrative Agent shall promptly remit
to the Borrower the amount of such interest paid by the Borrower for such
period. If such Lender pays its share of the applicable Extension of Credit to
the Administrative Agent, then the amount so paid shall constitute such Lender’s
Loan included in such Extension of Credit. Any payment by the Borrower shall be
without prejudice to any claim the Borrower may have against a Lender that shall
have failed to make such payment to the Administrative Agent.

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

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under subsections (a) and (b) of this Section shall be
conclusive, absent manifest error.

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

 

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(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Term Loans and Revolving Loans, to fund participations in Letters of Credit
and Swingline Loans and to make payments pursuant to Section 9.5(c) are several
and not joint. The failure of any Lender to make any Loan, to fund any such
participation or to make any such payment under Section 9.5(c) on any date
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Loan, to purchase its participation
or to make its payment under Section 9.5(c).

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

Section 2.15 Inability to Determine Interest Rate.

Notwithstanding any other provision of this Agreement, if (a) the Administrative
Agent shall reasonably determine (which determination shall be conclusive and
binding absent manifest error) that, by reason of circumstances affecting the
relevant market, reasonable and adequate means do not exist for ascertaining the
LIBOR Rate for such Interest Period, or (b) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two (2) Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall remain as or be
converted into Alternate Base Rate Loans. Until any such notice has been
withdrawn by the Administrative Agent, no further Loans shall be made as,
continued as, or converted into, LIBOR Rate Loans for the Interest Periods so
affected.

Section 2.16 Yield Protection.

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

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

 

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(ii) subject any Lender or the Issuing Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any participation in a
Letter of Credit or any LIBOR Rate Loan made by it, or change the basis of
taxation of payments to such Lender or the Issuing Lender in respect thereof
(except for Indemnified Taxes or Other Taxes covered by Section 2.19 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or the Issuing Lender); or

(iii) impose on any Lender or the Issuing Lender or the London interbank market
any other condition, cost or expense affecting this Agreement or LIBOR Rate
Loans made by such Lender or any Letter of Credit or participation therein;

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

(b) Capital Requirements. If any Lender or the Issuing Lender determines that
any Change in Law affecting such Lender or the Issuing Lender or any lending
office of such Lender or such Lender’s or the Issuing Lender’s holding company,
if any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the Issuing Lender’s capital or on the
capital of such Lender’s or the Issuing Lender’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the Issuing Lender, to a level below that which such Lender
or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or
the Issuing Lender’s holding company with respect to capital adequacy), then
from time to time the Borrower will pay to such Lender or the Issuing Lender, as
the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding
company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or the Issuing
Lender setting forth the amount or amounts necessary to compensate such Lender
or the Issuing Lender or its holding company, as the case may be, as specified
in subsection (a) or (b) of this Section and delivered to the Borrower shall be
conclusive absent manifest

 

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error. The Borrower shall pay such Lender or the Issuing Lender, as the case may
be, the amount shown as due on any such certificate within ten (10) Business
Days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender or the Issuing
Lender to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender’s or the Issuing Lender’s right to demand such
compensation, provided that the Borrower shall not be required to compensate a
Lender or the Issuing Lender pursuant to this Section for any increased costs
incurred or reductions suffered, as the case may be, to the extent that such
Lender or the Issuing Lender fails to make a demand for such compensation more
than nine (9) months after becoming aware of such Change in Law giving arise to
such increased costs or reductions.

Section 2.17 Illegality.

Notwithstanding any other provision of this Credit Agreement, if any Change in
Law by the relevant Governmental Authority to any Lender shall make it unlawful
for such Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans
as contemplated by this Credit Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Administrative Agent and
the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
until the Administrative Agent shall give notice that the condition or situation
which gave rise to the suspension shall no longer exist, and (c) such Lender’s
Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the
last day of the Interest Period for such Loans or within such earlier period as
required by law as Alternate Base Rate Loans. The Borrower hereby agrees to
promptly pay any Lender, upon its demand, any additional amounts necessary to
compensate such Lender for actual and direct costs (but not including
anticipated profits) reasonably incurred by such Lender in making any repayment
in accordance with this Section including, but not limited to, any interest or
fees payable by such Lender to lenders of funds obtained by it in order to make
or maintain its LIBOR Rate Loans hereunder. A certificate (which certificate
shall include a description of the basis for the computation) as to any
additional amounts payable pursuant to this Section submitted by such Lender,
through the Administrative Agent, to the Borrower shall be conclusive in the
absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its LIBOR Lending Office) to avoid or to
minimize any amounts which may otherwise be payable pursuant to this Section;
provided, however, that such efforts shall not cause the imposition on such
Lender of any additional costs or legal or regulatory burdens deemed by such
Lender in its sole discretion to be material.

Section 2.18 Indemnity.

The Borrower hereby agrees to indemnify each Lender and to hold such Lender
harmless from any funding loss or expense which such Lender may sustain or incur
as a consequence of (a) default by the Borrower in payment of the principal
amount of or interest on any Loan by such Lender in accordance with the terms
hereof, (b) default by the Borrower in accepting a

 

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borrowing after the Borrower has given a notice in accordance with the terms
hereof, (c) default by the Borrower in making any prepayment after the Borrower
has given a notice in accordance with the terms hereof, and/or (d) the making by
the Borrower of a prepayment of a Loan, or the conversion thereof, on a day
which is not the last day of the Interest Period with respect thereto, in each
case including, but not limited to, any such loss or expense arising from
interest or fees payable by such Lender to lenders of funds obtained by it in
order to maintain its Loans hereunder. A certificate as to any additional
amounts payable pursuant to this Section (which certificate shall include a
description of the basis for the computation) submitted by any Lender, through
the Administrative Agent, to the Borrower (which certificate must be delivered
to the Administrative Agent within thirty days following such default,
prepayment or conversion) shall be conclusive in the absence of manifest error.
The agreements in this Section shall survive termination of this Credit
Agreement and payment of the Notes and all other amounts payable hereunder.

Section 2.19 Taxes.

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

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

(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Lender, within ten
(10) Business Days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the Issuing Lender, as the case may be, and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or the Issuing Lender (with a copy to the Administrative
Agent), or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Lender, shall be conclusive absent manifest error.

 

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

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Credit
Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.

(f) Foreign Lenders. Without limiting the generality of the foregoing, in the
event that the Borrower is resident for tax purposes in the United States of
America, any Foreign Lender shall deliver to the Borrower and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the request of the Borrower or
the Administrative Agent, but only if such Foreign Lender is legally entitled to
do so), whichever of the following is applicable:

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

(ii) duly completed copies of Internal Revenue Service Form W-8ECI,

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

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

 

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

Section 2.20 Indemnification; Nature of Issuing Lender’s Duties.

(a) In addition to its other obligations under Section 2.4, the Borrower hereby
agrees to protect, indemnify, pay and save each Issuing Lender harmless from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys’ fees) that the Issuing
Lender may incur or be subject to as a consequence, direct or indirect, of
(i) the issuance of any Letter of Credit or (ii) the failure of the Issuing
Lender to honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions, herein
called “Government Acts”).

(b) As between the Borrower and the Issuing Lender, the Borrower shall assume
all risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuing Lender shall not be responsible: (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) for the validity or sufficiency of any instrument transferring or assigning
or purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of a Letter of Credit to comply fully with conditions required in order to draw
upon a Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by

 

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mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) for errors in interpretation of technical terms; (vi) for any loss or delay
in the transmission or otherwise of any document required in order to make a
drawing under a Letter of Credit or of the proceeds thereof; and (vii) for any
consequences arising from causes beyond the control of the Issuing Lender,
including, without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender’s rights or powers
hereunder.

(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put the Issuing
Lender under any resulting liability to the Borrower. It is the intention of the
parties that this Credit Agreement shall be construed and applied to protect and
indemnify the Issuing Lender against any and all risks involved in the issuance
of the Letters of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts or omissions,
whether rightful or wrongful, of any Government Authority. The Issuing Lender
shall not, in any way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.

(d) Nothing in this Section 2.20 is intended to limit the reimbursement
obligation of the Borrower contained in Section 2.4(d) hereof. The obligations
of the Borrower under this Section 2.20 shall survive the termination of this
Credit Agreement. No act or omissions of any current or prior beneficiary of a
Letter of Credit shall in any way affect or impair the rights of the Issuing
Lender to enforce any right, power or benefit under this Credit Agreement.

(e) Notwithstanding anything to the contrary contained in this Section 2.20, the
Borrower shall have no obligation to indemnify the Issuing Lender in respect of
any liability incurred by the Issuing Lender arising out of, and the Borrower
shall retain all rights it may have against the Issuing Lender by reason of, the
gross negligence or willful misconduct of the Issuing Lender (including action
not taken by the Issuing Lender), as determined by a court of competent
jurisdiction.

Section 2.21 Replacement of Lenders.

If (a) any Lender requests compensation under Section 2.16 or is unable to make
or maintain LIBOR Rate Loans in accordance with the terms of Section 2.17,
(b) the Borrower is required to pay any additional amount to any Lender (other
than the Administrative Agent in its capacity as a Lender) or any Governmental
Authority for the account of any Lender (other than the Administrative Agent in
its capacity as a Lender) pursuant to Section 2.19, (c) any Lender defaults in
its obligation to fund Loans hereunder, or (d) any Lender (other than Wachovia)
fails to consent to any proposed amendment, modification, termination, waiver or
consent with respect to any provision hereof or of any other Credit Document
that requires the unanimous approval of all of the

 

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Lenders, the approval of all of the Lenders affected thereby or the approval of
a class of Lenders, in each case in accordance with the terms of Section 9.1,
then the Borrower may, at its sole expense, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate at par, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 9.6), all of its interests, rights and obligations
under the Credit Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment),
provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 9.6;

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LOC Obligations,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Credit Documents (including any amounts under
Sections 2.16, 2.17 and 2.19) from the assignee (to the extent of such
outstanding principal) or the Borrower (to the extent of such outstanding
interest, fees and other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.16 or payments required to be made pursuant to Section 2.19,
such assignment will result in a reduction in such compensation or payments
thereafter;

(iv) in the case of any such assignment resulting from a Lender’s failure to
consent as described in clause (d), (A) the consent of the Required Lenders (or,
with respect to any proposed amendment, modification, termination, waiver or
consent requiring the approval of all Lenders affected thereby or a class of
Lenders, the consent of the Lenders in such group of affected Lenders or such
class holding a majority of the outstanding Loans and Commitments with respect
to such group or class) entitled to vote thereon shall have been obtained with
respect to such amendment, modification, termination, waiver or consent and
(B) the assignee shall approve such amendment, modification, termination, waiver
or consent; and

(v) such assignment does not conflict with applicable law.

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

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the Lenders to enter into this Credit Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that:

Section 3.1 Organization; Qualification; Good Standing; Subsidiaries; Etc.

(a) Organization and Powers. Each Credit Party is a corporation, limited
liability company or partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization as
specified in Schedule 3.1-1 annexed hereto. Each Credit Party has all requisite
power and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Credit
Documents and Related Agreements to which it is a party and to carry out the
transactions contemplated thereby.

(b) Qualification and Good Standing. Each Credit Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and will not have a Material Adverse Effect.

(c) Conduct of Business. The Borrower and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to Section 6.12.

(d) Subsidiaries. All of the Subsidiaries of the Borrower as of the Closing Date
are identified in Schedule 3.1-2 annexed hereto, as such Schedule 3.1-2 may be
supplemented from time to time pursuant to the provisions of Section 5.1(o). The
Capital Stock of each of the Subsidiaries of the Borrower identified in
Schedule 3.1-2 annexed hereto is duly authorized, validly issued, fully paid and
nonassessable and none of such Capital Stock constitutes Margin Stock. Each of
the Subsidiaries of the Borrower identified in Schedule 3.1-2 annexed hereto is
a corporation, limited liability company or partnership duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation or organization set forth therein, has all requisite power and
authority to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, and is qualified to do business and
in good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such power and
authority has not had and will not have a Material Adverse Effect.
Schedule 3.1-2 annexed hereto correctly sets forth for the Borrower and each of
its Subsidiaries (i) the ownership interest of the Borrower and each of its
Subsidiaries in each of the Subsidiaries of the Borrower identified therein and
(ii) the number of issued and outstanding shares of Capital Stock of each such
Subsidiary and the owners thereof.

 

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Section 3.2 Authorization of Borrowing, Etc.

(a) Authorization of Borrowing. The execution, delivery and performance of the
Credit Documents and the Related Agreements have been duly authorized by all
necessary corporate, limited liability company or partnership action on the part
of each Credit Party that is a party thereto.

(b) No Conflict. The execution, delivery and performance by the Credit Parties
of the Credit Documents and the Related Agreements to which they are parties and
the consummation of the transactions contemplated by the Credit Documents and
such Related Agreements do not and will not (i) violate in any material respect
any provision of any law or any governmental rule or regulation applicable to
the Borrower or any of its Subsidiaries, or violate the Certificate or
Articles of Incorporation or the Bylaws of the Borrower or any of its
Subsidiaries or any order, judgment or decree of any Governmental Authority
binding on the Borrower or any of its Subsidiaries, (ii) except as set forth in
Schedule 3.2(b), conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
the Borrower or any of its Subsidiaries, (iii) result in or require the creation
or imposition of any Lien upon any of the properties or assets of the Borrower
or any of its Subsidiaries (other than any Liens created under any of the Credit
Documents in favor of the Administrative Agent on behalf of the Lenders), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Borrower or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed on Schedule 3.2(b).

(c) Governmental Consents. The execution, delivery and performance by Credit
Parties of the Credit Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Credit
Documents and such Related Agreements do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any Governmental Authority except for (i) filings and recordings
required to create or protect the Liens contemplated by the Security Documents
and (ii) filings required under the federal securities laws disclosing this
Agreement and the transactions contemplated hereby.

(d) Binding Obligation. Each of the Credit Documents and Related Agreements has
been duly executed and delivered by each Credit Party that is a party thereto
and is the legally valid and binding obligation of such Credit Party,
enforceable against such Credit Party in accordance with its respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors’ rights generally or by
equitable principles relating to enforceability.

(e) Valid Issuance of Borrower’s Capital Stock, Senior Subordinated Notes and
Senior Subordinated Convertible Notes.

 

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(i) Borrower’s Capital Stock. The Capital Stock of the Borrower is duly and
validly issued, fully paid and nonassessable. No stockholder of the Borrower has
or will have any preemptive rights to subscribe for any additional Capital Stock
of the Borrower. The issuance and sale of the outstanding Capital Stock of the
Borrower either (A) has been registered or qualified under applicable federal
and state securities laws or (B) is exempt therefrom.

(ii) Senior Subordinated Notes. The Borrower had the corporate power and
authority to issue the Senior Subordinated Notes at the time they were issued.
The Senior Subordinated Notes are the legally valid and binding obligations of
the Borrower, enforceable against the Borrower in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability. The
subordination provisions of the Senior Subordinated Notes are enforceable
against the holders thereof and the Loans and all other monetary Credit Party
Obligations are within the definition of “Senior Indebtedness” included in such
provisions. The Senior Subordinated Notes either (A) have been registered or
qualified under applicable federal and state securities laws or (B) are exempt
therefrom.

(iii) Senior Subordinated Convertible Notes. The Borrower had the corporate
power and authority to issue the Senior Subordinated Convertible Notes at the
time they were issued. The Senior Subordinated Convertible Notes are the legally
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles relating to
enforceability. The subordination provisions of the Senior Subordinated
Convertible Notes are enforceable against the holders thereof and the Loans and
all other monetary Credit Party Obligations are within the definition of “Senior
Indebtedness” included in such provisions. The Senior Subordinated Convertible
Notes either (A) have been registered or qualified under applicable federal and
state securities laws or (B) are exempt therefrom.

Section 3.3 Financial Condition.

The Borrower has heretofore delivered to the Lenders, at the Lenders’ request,
the following financial statements and information: (a) audited financial
statements of the Borrower and its Subsidiaries for the Fiscal Years 2004, 2005
and 2006, consisting of balance sheets and the related consolidated and
consolidating statements of income, stockholders’ equity and cash flows for each
such period, (b) a pro forma balance sheet of the Borrower and its Subsidiaries
as of December 28, 2006, (c) unaudited financial statements of the Borrower and
its Subsidiaries for the period from September 28, 2006 to the last day of the
most recent quarter ending prior to the Closing Date for which such financial
statements are available and (d) five-year projections for the Borrower and its
Subsidiaries, all in reasonable detail, in form and substance satisfactory to
the Administrative Agent and certified by the chief financial officer of the
Borrower that

 

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(i) with respect to the audited financial statements, the results of their
operations and their cash flows for the periods indicated fairly present the
financial condition of the Borrower and its Subsidiaries as at the dates
indicated and (ii) with respect to the pro forma balance sheet and the
projections were prepared in good faith based upon, to the best of such
officer’s knowledge, reasonable assumptions. None of the Borrower nor any of its
Subsidiaries has (and will not have following the Closing Date) any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the foregoing
financial statements or the notes thereto and which in any such case is material
and adverse in relation to the business, operations, properties, assets, or
condition (financial or otherwise) of the Borrower and its Subsidiaries, taken
as a whole.

Section 3.4 No Material Adverse Change; No Restricted Junior Payments.

Since September 28, 2006, (i) no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect and
(ii) neither the Borrower nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Junior Payment or agreed to do so except as permitted by Section 6.5.

Section 3.5 Title to Properties; Collateral Locations.

(a) Title to Properties; Liens. The Borrower and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in Section 3.3 or in the most recent financial
statements delivered pursuant to Section 5.1, in each case except for assets
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under Section 6.7. Except as permitted by
this Agreement, all such properties and assets are free and clear of Liens.

(b) Real Property. As of the Closing Date, Schedule 3.5(b) annexed hereto
contains a true, accurate and complete list of (i) all fee properties (including
those currently designated as Development Properties) and (ii) all leases,
subleases or assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) affecting each Real Property
Asset of any Credit Party, regardless of whether such Credit Party is the
landlord or tenant (whether directly or as an assignee or successor in interest)
under such lease, sublease or assignment. Except as specified in Schedule 3.5(b)
annexed hereto, each agreement listed in clause (ii) of the immediately
preceding sentence is in full force and effect and the Credit Parties do not
have knowledge of any default that has occurred and is continuing thereunder
which, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect, and each such agreement constitutes the legally
valid and binding obligation of each applicable Credit Party, enforceable
against such Credit Party in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors’ rights generally or by equitable
principles.

 

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(c) Location of Collateral. Set forth in Schedule 3.5(c) is (i) a list of all
locations where any tangible personal property of the Borrower and its
Subsidiaries is located as of the Closing Date and (ii) the chief executive
office and principal place of business of the Borrower and its Subsidiaries as
of the Closing Date.

Section 3.6 Litigation.

There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of the Borrower or any of
its Subsidiaries) at law or in equity, or before or by any Governmental
Authority, domestic or foreign (including any Environmental Claims) that are
pending or, to the knowledge of the Credit Parties, threatened against or
affecting the Borrower or any of its Subsidiaries or any property of the
Borrower or any of its Subsidiaries and that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. Neither the
Borrower nor any of its Subsidiaries (a) is in violation of any applicable laws
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, or (b) is subject
to or in default with respect to any final judgments, writs, injunctions,
decrees, rules or regulations of any court or any other Governmental Authority,
domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.

Section 3.7 Taxes.

Except to the extent permitted by Section 5.3, all tax returns and reports of
the Borrower and its Subsidiaries required to be filed by any of them have been
timely filed, and all taxes shown on such tax returns to be due and payable and
all assessments, fees and other governmental charges upon the Borrower and its
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises which are due and payable have been paid prior to delinquency.
Except as set forth in Schedule 3.7, the Credit Parties know of no proposed tax
assessment against the Borrower or any of its Subsidiaries which is not being
actively contested by the Borrower or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.

Section 3.8 Contractual Obligations; Restrictive Agreements; Material Contracts.

(a) Neither the Borrower nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.

 

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(b) Neither the Borrower nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.

(c) All Material Contracts are in full force and effect and no material defaults
currently exist thereunder.

Section 3.9 Governmental Regulation.

Neither the Borrower nor any of its Subsidiaries is subject to regulation under
the Investment Company Act of 1940 or under any other federal or state statute
or regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Credit Party Obligations
unenforceable.

Section 3.10 Securities Activities.

(a) Neither the Borrower nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.

(b) No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Borrower
and its Subsidiaries taken as a group do not own Margin Stock except as
identified in the financial statements referred to in Section 3.3 and
Section 5.1 and the aggregate value of all Margin Stock owned by the Borrower
and its Subsidiaries taken as a group does not exceed 25% of the value of their
assets.

Section 3.11 Employee Benefit Plans.

(a) The Borrower, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder with respect
to each Employee Benefit Plan in all material respects, and have performed all
their obligations under each Employee Benefit Plan. Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Code is so qualified.

(b) No ERISA Event has occurred or is reasonably expected to occur.

(c) Except to the extent required under Section 4980B of the Code or except as
set forth in Schedule 3.11 annexed hereto, no Employee Benefit Plan provides
health or welfare benefits (through the purchase of insurance or otherwise) for
any retired or former employee of the Borrower, any of its Subsidiaries or any
of their respective ERISA Affiliates.

 

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(d) As of the most recent valuation date for any Pension Plan, the amount of
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), does not exceed $1,000,000.

(e) As of the most recent valuation date for each Multiemployer Plan for which
the actuarial report is available, the potential liability of the Borrower, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $1,000,000.

(f) Prior to December 31, 2007, no “accumulated funding deficiency” (within the
meaning of Section 412 of the Code or Section 402 of ERISA) of $1,000,000 or
more has occurred or is reasonably expected to occur. Effective for plan years
starting on or after January 1, 2008, the “minimum required contribution”
required under Section 430(a)(2) of the Code to satisfy the “minimum funding
standards” of Section 412(a)(2) of the Code (both, as added by the Pension
Protection Act) has been contributed to any Pension Plan maintained by the
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates.

Section 3.12 Broker’s Fees.

No broker’s or finder’s fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and the Borrower
hereby indemnifies the Lenders against, and agrees that it will hold the Lenders
harmless from, any claim, demand or liability for any such broker’s or finder’s
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.

Section 3.13 Environmental Protection.

Except as set forth in Schedule 3.13 annexed hereto:

(a) neither the Borrower nor any of its Subsidiaries nor any of their respective
Facilities or operations are subject to any outstanding written order, consent
decree or settlement agreement with any Person relating to (i) any Environmental
Law, (ii) any Environmental Claim, or (iii) any Hazardous Materials Activity
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;

 

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(b) neither the Borrower nor any of its Subsidiaries has received any letter or
request for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable
state law;

(c) there are and, to the Credit Parties’ knowledge, have been no conditions,
occurrences, or Hazardous Materials Activities which could reasonably be
expected to form the basis of an Environmental Claim against the Borrower or any
of its Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect;

(d) each of the Borrower and its Subsidiaries maintains an environmental
management system for its and each of its Subsidiaries’ operations that
demonstrates a commitment to material environmental compliance and includes
procedures for (i) preparing and updating written compliance manuals covering
pertinent regulatory areas, (ii) tracking changes in applicable Environmental
Laws and modifying operations to comply with new requirements thereunder,
(iii) training employees to comply with applicable environmental requirements
and updating such training as necessary, (iv) performing regular internal
compliance audits of each Facility and ensuring correction of any incidents of
non-compliance detected by means of such audits, and (v) reviewing the
compliance status of off-site waste disposal facilities; and

(e) compliance with all current or reasonably foreseeable future requirements
pursuant to or under Environmental Laws will not, individually or in the
aggregate, have a reasonable possibility of giving rise to a Material Adverse
Effect.

Notwithstanding anything in this Section to the contrary, no event or condition
has occurred or is occurring with respect to the Borrower or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on Schedule 3.13 annexed hereto, which individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect.

Section 3.14 Employee Matters.

There are no collective bargaining agreements or Multiemployer Plans covering
the employees of the Borrower or any of its Subsidiaries as of the Closing Date
and none of the Borrower or any of their Subsidiaries (a) has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last five years or (b) has knowledge of any potential or pending strike, walkout
or work stoppage.

Section 3.15 Solvency.

Each Credit Party is and, upon the incurrence of any Credit Party Obligations by
such Credit Party on any date on which this representation is made, will be,
Solvent.

 

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Section 3.16 Matters Relating to Collateral.

(a) Creation, Perfection and Priority of Liens. Subject to Sections 5.10 and
5.11, the execution and delivery of the Security Documents by the Credit
Parties, together with (i) the actions taken on or prior to the date hereof
pursuant to Sections 4.1(d), 5.10 and 5.11 and the filing of any Uniform
Commercial Code financing statements and PTO filings delivered to the
Administrative Agent for filing (but not yet filed) and the recording of any
Mortgages or amendments to Mortgages delivered to the Administrative Agent for
recording (but not yet recorded), and (ii) the delivery to the Administrative
Agent of any Pledged Collateral will be, upon the due and proper completion of
such filings and recordings, effective to create or to continue in favor of the
Administrative Agent for the benefit of the Lenders, as security for the Credit
Party Obligations, a valid and perfected First Priority Lien on all of the
Collateral, subject to the periodic filing of Uniform Commercial Code
continuation statements in respect of Uniform Commercial Code financing
statements filed by or on behalf of the Administrative Agent.

(b) Governmental Authorizations. No authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority is required for
either (i) the pledge or grant by any Credit Party of the Liens purported to be
created in favor of the Administrative Agent pursuant to any of the Security
Documents or (ii) the exercise by the Administrative Agent of any rights or
remedies in respect of any Collateral (whether specifically granted or created
pursuant to any of the Security Documents or created or provided for by
applicable law), except for filings or recordings contemplated by
Section 3.16(a) and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.

(c) Absence of Third-Party Filings. Except such as may have been filed in favor
of the Administrative Agent as contemplated by Section 3.16(a) or except as such
may constitute Permitted Encumbrances, (i) no effective Uniform Commercial Code
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office and (ii) no effective filing covering all or any part of the Intellectual
Property is on file in the PTO.

(d) Margin Regulations. The pledge of the Pledged Collateral pursuant to the
Pledge Agreement does not violate Regulation T, U or X of the Board of Governors
of the Federal Reserve System.

(e) Information Regarding Collateral. All information supplied to the
Administrative Agent by or on behalf of any Credit Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.

Section 3.17 Related Agreements.

The Borrower has made available to the Administrative Agent complete and correct
copies of each Related Agreement and of all exhibits and schedules thereto.
Schedule 3.17

 

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annexed hereto lists all Affiliate Agreements as of the Closing Date. Except as
set forth in Schedule 3.17 annexed hereto, none of the Related Agreements have
been amended, amended and restated, supplemented, restated or otherwise modified
on or before the Closing Date since the date any such Related Agreement was
first entered into.

Section 3.18 Disclosure.

No representation or warranty (except with respect to projections and pro forma
financial information that are covered in the next sentence) of the Borrower or
any of its Subsidiaries contained in any Credit Document or Related Agreement or
in any other document, certificate or written statement furnished to the Lenders
by or on behalf of the Borrower or any of its Subsidiaries for use in connection
with the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state a material fact (known to the
Borrower or any of its Subsidiaries, in the case of any document not furnished
by the Borrower and its Subsidiaries) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by the Borrower to be reasonable at the time made, it being recognized
by the Lenders that such projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections may differ materially from the projected results. There are no facts
known (or which should upon the reasonable exercise of diligence be known) to
the Credit Parties (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to the Lenders for use in
connection with the transactions contemplated hereby.

Section 3.19 Permits.

Each of the Credit Parties, prior to and after giving effect to the transactions
contemplated by the Credit Documents and the Related Agreements, has such
certificates, permits, licenses, franchises, consents, approvals, authorizations
and clearances that are material to the condition (financial or otherwise),
business or operations of any Credit Party (“Permits”) and is (and will be
immediately after the consummation of such transactions) in compliance in all
respects with all applicable laws as are necessary to own, lease or operate its
properties and to conduct its businesses in the manner as presently conducted
and to be conducted immediately after the consummation of such transactions
except where failure to be in compliance could not reasonably be expected to
result in a Material Adverse Effect, and all such Permits are valid and in full
force and effect and will be valid and in full force and effect immediately upon
consummation of such transactions except for those where the failure to be valid
or in effect could not reasonably be expected to result in a Material Adverse
Effect. Each of the Credit Parties, prior to and after giving effect to such
transactions, is and will be in compliance in all respects with its obligations
under such Permits except where failure to be in compliance could not reasonably
be expected to result in a Material Adverse Effect, and no event has occurred
that allows, or after notice or lapse of time would allow, revocation or
termination of such Permits except where such revocation or termination could
not reasonably be expected to result in a Material Adverse Effect.

 

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Section 3.20 Indebtedness.

Except as otherwise permitted under Section 6.1 and Section 6.4, the Borrower
and its Subsidiaries have no Indebtedness.

Section 3.21 Intellectual Property.

Each of the Borrower and its Subsidiaries owns, or has the legal right to use,
all trademarks, tradenames, copyrights, technology, know-how, processes and
other intellectual property necessary for each of them to conduct its business
as currently conducted. Set forth on Schedule 3.21 is a list of all Intellectual
Property owned by the Borrower and its Subsidiaries. Except as provided on
Schedule 3.21, no claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property of the Borrower
and its Subsidiaries or the validity or effectiveness of any such Intellectual
Property, nor do the Borrower or any of its Subsidiaries know of any such claim,
and, to the knowledge of the Borrower and its Subsidiaries, the use of such
Intellectual Property by the Borrower or any of its Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. Schedule 3.21 may be updated from time to time by the Borrower
to include new Intellectual Property by giving written notice thereof to the
Administrative Agent.

Section 3.22 Investments.

All Investments of each of the Borrower and its Subsidiaries are Permitted
Investments.

Section 3.23 Insurance.

The insurance coverage of the Credit Parties and their Subsidiaries as of the
Closing Date is outlined as to carrier, policy number, expiration date, type and
amount on Schedule 3.23 and such insurance coverage complies the requirements
set forth in Section 5.4(b).

Section 3.24 Anti-Terrorism Laws.

Neither any Credit Party nor any of its Subsidiaries is an “enemy” or an “ally
of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act
of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended.
Neither any Credit Party nor any or its Subsidiaries is in violation of (a) the
Trading with the Enemy Act, as amended, (b) any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto or (c) the Patriot Act. None of the Credit Parties (i) is a blocked
person described in section 1 of the Anti-Terrorism Order or (ii) to the best of
its knowledge, engages in any dealings or transactions, or is otherwise
associated, with any such blocked person.

 

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Section 3.25 Compliance with OFAC Rules and Regulations.

None of the Credit Parties or their Subsidiaries or their respective Affiliates
(i) is a Sanctioned Person, (ii) has more than 15% of its assets in Sanctioned
Countries, or (iii) derives more than 15% of its operating income from
investments in, or transactions with Sanctioned Persons or Sanctioned Countries.
No part of the proceeds of any Extension of Credit hereunder will be used
directly or indirectly to fund any operations in, finance any investments or
activities in or make any payments to, a Sanctioned Person or a Sanctioned
Country.

Section 3.26 Compliance with FCPA.

Each of the Credit Parties and their Subsidiaries is in compliance with the
Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq., and any foreign
counterpart thereto. None of the Credit Parties or their Subsidiaries has made a
payment, offering, or promise to pay, or authorized the payment of, money or
anything of value (a) in order to assist in obtaining or retaining business for
or with, or directing business to, any foreign official, foreign political
party, party official or candidate for foreign political office, (b) to a
foreign official, foreign political party or party official or any candidate for
foreign political office, and (c) with the intent to induce the recipient to
misuse his or her official position to direct business wrongfully to such Credit
Party or its Subsidiary or to any other Person, in violation of the Foreign
Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq.

Section 3.27 VoiceStream Wireless.

The Uniform Commercial Code financing statements referenced in Schedule 6.2
naming a Credit Party as debtor and Voicestream Wireless Corp. as secured party
relate to amounts currently in dispute by Voicestream Wireless Corp. and the
Credit Parties. All amounts owed to Voicestream Wireless Corp. relating to such
financing statements will not exceed $50,000 at any time.

ARTICLE IV

CONDITIONS PRECEDENT

Section 4.1 Conditions to Closing Date and Initial Loans.

This Credit Agreement shall become effective upon, and the obligation of each
Lender to make the initial Revolving Loans and the Term Loan on the Closing Date
is subject to, the satisfaction of the following conditions precedent:

(a) Execution of Agreement. The Administrative Agent shall have received
(i) counterparts of this Credit Agreement for the Credit Parties, the
Administrative Agent and each Lender, (ii) for the account of each Revolving
Lender and Term Loan Lender that request a Note, a Revolving Note and Term Note,
as applicable, (iii) for the account of the Swingline Lender, the Swingline
Note, and (iv) counterparts of the Security

 

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Agreement, the Pledge Agreement, each Mortgage to be entered into as of the
Closing Date and each other Security Document, in each case conforming to the
requirements of this Credit Agreement and executed by a duly authorized
Responsible Officer of each party thereto.

(b) Authority Documents. The Administrative Agent shall have received the
following, together with a secretary’s certificate in substantially the form of
Schedule 4.1-1 annexed hereto:

(i) Certificates of Incorporation; Charter Documents. Copies of the certificates
of incorporation or other charter documents, as applicable, of each Credit Party
certified to be true and complete as of a recent date by the appropriate
governmental authority of the state of its incorporation and by a secretary or
assistant secretary of such Credit Party as of the Closing Date to be true and
correct and in force and effect as of the Closing Date

(ii) Resolutions. Copies of resolutions of the board of directors or comparable
managing body of each Credit Party approving and adopting the Credit Documents,
the transactions contemplated therein and authorizing execution and delivery
thereof, certified by a Responsible Officer of such Credit Party as of the
Closing Date to be true and correct and in force and effect as of such date.

(iii) Bylaws. A copy of the bylaws or comparable operating agreement of each
Credit Party certified by a Responsible Officer of such Credit Party as of the
Closing Date to be true and correct and in force and effect as of such date.

(iv) Good Standing. Copies of (A) certificates of good standing, existence or
its equivalent with respect to each Credit Party certified as of a recent date
by the appropriate governmental authorities of the state of incorporation and
each other state in which the failure to so qualify and be in good standing
could reasonably be expected to have a Material Adverse Effect on the business
or operations of the Borrower and its Subsidiaries in such state and (B) to the
extent available, a certificate indicating payment of all corporate franchise
taxes certified as of a recent date by the appropriate governmental taxing
authorities.

(v) Incumbency. An incumbency certificate of each Credit Party certified by a
secretary or assistant secretary to be true and correct as of the Closing Date.

(c) Legal Opinions of Counsel. The Administrative Agent shall have received
opinions of legal counsel for the Credit Parties, dated the Closing Date and
addressed to the Administrative Agent and the Lenders, which opinions shall
provide, among other things, that the execution and delivery of the Credit
Documents by the Credit Parties and the consummation of the transactions
contemplated thereby will not violate the corporate instruments and material
agreements of the Credit Parties, and shall otherwise be in form and substance
acceptable to the Administrative Agent and the Lenders.

 

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(d) Personal Property Collateral. The Administrative Agent shall have received,
in form and substance satisfactory to the Administrative Agent:

(i) searches of Uniform Commercial Code filings in the jurisdiction of the chief
executive office of each Credit Party and each jurisdiction where any Collateral
is located or where a filing would need to be made in order to perfect the
Lenders’ security interest in the Collateral, copies of the financing statements
on file in such jurisdictions and evidence that no Liens exist other than
Permitted Liens;

(ii) Uniform Commercial Code financing statements for each appropriate
jurisdiction as is necessary, in the Administrative Agent’s sole discretion, to
perfect the Lenders’ security interests in the Collateral;

(iii) duly executed consents as are necessary, in the Administrative Agent’s
sole discretion, to perfect the Lenders’ security interest in the Collateral,
including, without limitation estoppel letters, consents and/or waivers from
landlords to the extent the Borrower is able to secure such letters, consents
and waivers after using commercially reasonable efforts;

(iv) searches of ownership of Intellectual Property in the appropriate
governmental offices and such patent/trademark/copyright filings as requested by
the Administrative Agent in order to perfect the Administrative Agent’s security
interest in the Intellectual Property; and

(v) stock or membership certificates, to the extent not previously delivered to
the Administrative Agent, evidencing the Capital Stock pledged to the
Administrative Agent pursuant to the Pledge Agreement, along with duly executed
in blank undated stock or transfer powers.

(e) Liability, Casualty, Business Interruption and Environmental Insurance. The
Administrative Agent shall have received copies of insurance policies or
certificates of insurance evidencing liability, casualty, business interruption
and environmental insurance meeting the requirements set forth herein or in the
Security Documents. The Administrative Agent shall be named as loss payee,
mortgagee and/or additional insured, as its interest may appear, on all such
insurance policies for the benefit of the Lenders.

(f) Fees. The Administrative Agent, the Arrangers and the Lenders shall have
received all fees, if any, owing pursuant to the Fee Letter and Section 2.6.

(g) Litigation. There shall not exist any pending, ongoing or threatened
litigation, investigation, injunction, order or claim affecting or relating
(i) to the Credit Parties or any of their Subsidiaries, or (ii) this Credit
Agreement or the other Credit

 

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Documents that has not been settled, dismissed, vacated, discharged or
terminated prior to the Closing Date which, in the case of clause (i), could be
reasonably expected to have a Material Adverse Effect.

(h) Solvency Certificate. The Administrative Agent shall have received an
Officer’s Certificate for the Credit Parties prepared by the chief financial
officer of the Borrower as to the financial condition, solvency and related
matters of the Borrower and of the Credit Parties taken as a whole, in each case
after giving effect to the initial borrowings under the Credit Documents, in
substantially the form of Schedule 4.1-2 hereto.

(i) Account Designation Letter. The Administrative Agent shall have received the
executed Account Designation Letter in the form of Schedule 1.1-1 hereto.

(j) Consents. The Administrative Agent shall have received evidence that all
governmental, shareholder and material third party consents and approvals
necessary in connection with the financings and other transactions contemplated
hereby have been obtained and all applicable waiting periods have expired
without any action being taken by any authority that could restrain, prevent or
impose any material adverse conditions on such transactions or that could seek
or threaten any of such transactions.

(k) Compliance with Laws. The financings and other transactions contemplated
hereby shall be in compliance in all material respects with all applicable laws
and regulations (including all applicable securities and banking laws, rules and
regulations).

(l) Bankruptcy. There shall be no bankruptcy or insolvency proceedings with
respect to any Credit Party.

(m) Material Adverse Effect. Since September 28, 2006, there shall be no event
that has had, or could reasonably be expected to have, a material adverse change
in the business, properties, operations or condition (financial or otherwise) of
the Borrower and its Subsidiaries, taken as a whole.

(n) Financial Statements. The Administrative Agent shall have received copies of
the financial statements referred to in Section 3.3 hereof, each in form and
substance satisfactory to it.

(o) Termination of Existing Indebtedness. All existing Indebtedness (except for
Indebtedness permitted by the terms of this Credit Agreement and the Existing
Credit Agreement which is amended and restated hereby) for borrowed money of the
Borrower and its Subsidiaries shall have been repaid in full and all commitments
relating thereto shall have been terminated and all Liens relating thereto shall
have been terminated.

(p) Officer’s Certificates. The Administrative Agent shall have received a
certificate or certificates executed by a Responsible Officer of the Borrower as
of the

 

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Closing Date stating that (i) no action, suit, investigation or proceeding is
pending, ongoing or, to the knowledge of any Credit Party, threatened in any
court or before any other Governmental Authority that purports to affect any
Credit Party or any other transaction contemplated by the Credit Documents,
which action, suit, investigation or proceeding could be reasonably expected to
have a Material Adverse Effect and (ii) immediately after giving effect to this
Credit Agreement, the other Credit Documents, and all the transactions
contemplated therein to occur on such date, (A) no Default or Event of Default
exists, (B) all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and (C) the
Credit Parties are in compliance with each of the financial covenants set forth
in Section 6.6.

(q) Patriot Act Certificate. The Administrative Agent shall have received, at
least five (5) Business Days prior to the Closing Date, a certificate
satisfactory thereto, for benefit of itself and the Lenders, provided by the
Borrower that sets forth information required by the Patriot Act including,
without limitation, the identity of the Borrower, the name and address of the
Borrower and other information that will allow the Administrative Agent or any
Lender, as applicable, to identify the Borrower in accordance with the Patriot
Act.

(r) Structure. The Agents shall be reasonably satisfied with the corporate and
capital structure and management of the Borrower and its Subsidiaries after
giving effect to the transactions contemplated hereby and with the aggregate
amount of fees and expenses payable in connection with the consummation of the
Transactions.

(s) Collateral Account Agreement. The Administrative Agent shall have received a
fully executed copy of the Collateral Account Agreement in form and substance
satisfactory thereto.

(t) Additional Matters. All other documents and legal matters in connection with
the transactions contemplated by this Credit Agreement shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel.

Section 4.2 Conditions to All Extensions of Credit.

The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:

(a) Representations and Warranties. The representations and warranties made by
the Credit Parties herein, in the Security Documents or which are contained in
any certificate furnished at any time under or in connection herewith shall
(i) with respect to representations and warranties that contain a materiality
qualification, be true and correct and (ii) with respect to representations and
warranties that do not contain a materiality qualification, be true and correct
in all material respects, in each case on and as of the date of such Extension
of Credit as if made on and as of such date except for any representation or
warranty made as of an earlier date, which representation and warranty shall
remain true and correct as of such earlier date.

 

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(b) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Extension
of Credit to be made on such date unless such Default or Event of Default shall
have been waived in accordance with this Credit Agreement.

(c) Compliance with Commitments. Immediately after giving effect to the making
of any such Extension of Credit (and the application of the proceeds thereof),
the sum of outstanding Revolving Loans plus outstanding Swingline Loans plus LOC
Obligations shall not exceed the Revolving Committed Amount.

(d) Additional Conditions to Revolving Loans. If a Revolving Loan is requested,
all conditions set forth in Section 2.1 shall have been satisfied.

(e) Additional Conditions to Initial Term Loan. If the Initial Term Loan is
requested, all conditions set forth in Section 2.2(a) shall have been satisfied
or waived by the Required Lenders.

(f) Additional Conditions to Delayed Draw Term Loan. If a borrowing under the
Delayed Draw Term Loan is requested, (i) all conditions set forth in
Section 2.2(b) shall have been satisfied or waived by the Required Lenders and
(ii) the Borrower shall be in pro forma compliance with all the financial
covenants set forth in Section 6.6.

(g) Additional Conditions to Additional Loans. If an Additional Loan is
requested, all conditions set forth in Section 2.3 shall have been satisfied or
waived by the Required Lenders.

(h) Additional Conditions to Letters of Credit. If the issuance of a Letter of
Credit is requested, all conditions set forth in Section 2.4 shall have been
satisfied.

(i) Additional Conditions to Swingline Loans. If a Swingline Loan is requested,
all conditions set forth in Section 2.5 shall have been satisfied.

Each request for an Extension of Credit and each acceptance by the Borrower of
any such Extension of Credit shall be deemed to constitute representations and
warranties by the Borrower as of the date of such Extension of Credit that the
applicable conditions in subsections (a) through (i) of this Section have been
satisfied.

 

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ARTICLE V

AFFIRMATIVE COVENANTS

The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Credit Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations (other than inchoate indemnification and reimbursement
obligations) together with interest, Commitment Fees and all other amounts owing
to the Administrative Agent or any Lender hereunder and under the other Credit
Documents, are paid in full, the Credit Parties shall, and shall cause each of
their Subsidiaries, to perform the covenants set forth in this Article V.

Section 5.1 Financial Statements and Other Reports.

The Borrower will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. The Borrower will deliver to the Administrative Agent and the
Lenders:

(a) Quarterly Financials. As soon as available and in any event within 45 days
after the end of each of the first three Fiscal Quarters of each Fiscal Year and
within 90 days after the end of the fourth Fiscal Quarter of each Fiscal Year,
(i) the consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as at the end of such Fiscal Quarter and the related consolidated
and consolidating statements of income, stockholders’ equity and cash flows of
the Borrower and its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year, all
in reasonable detail and certified by the chief financial officer of the
Borrower that they fairly present, in all material respects, the financial
condition of the Borrower and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments, and
(ii) a narrative report describing the operations of the Borrower and its
Subsidiaries in the form prepared for presentation to senior management for such
Fiscal Quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter;

(b) Year-End Financials. As soon as available and in any event within 90 days
after the end of each Fiscal Year, (i) the consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated and consolidating statements of income,
stockholders’ equity and cash flows of the Borrower and its Subsidiaries for
such Fiscal Year, which shall be audited by Deloitte & Touche LLP or other
independent certified public accountants of recognized national standing
selected by the Borrower, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the

 

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corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, all in reasonable detail and certified by the chief
financial officer of the Borrower that they fairly present, in all material
respects, the financial condition of the Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, (ii) a narrative report describing the operations of the
Borrower and its Subsidiaries in the form prepared for presentation to senior
management for such Fiscal Year, and (iii) in the case of such consolidated
financial statements, a report thereon of Deloitte & Touche LLP or other
independent certified public accountants of recognized national standing
selected by the Borrower, with respect to such consolidated financial statements
reported on without a material qualification or exception, including a “going
concern” or like qualification or exception, or qualification indicating that
the scope of the audit was inadequate to permit such independent certified
public accountants to certify such financial statements without such
qualification;

(c) Officers’ and Compliance Certificates. Together with each delivery of
financial statements of the Borrower and its Subsidiaries pursuant to
subsections (a) and (b) above, an Officers’ Certificate of the Borrower
(i) stating that the signers have reviewed the terms of this Agreement and have
made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of the Borrower and its Subsidiaries
during the accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as at the
date of such Officers’ Certificate, of any condition or event that constitutes a
Default or an Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action
the Borrower has taken, is taking and proposes to take with respect thereto and
(ii) demonstrating in reasonable detail compliance during and at the end of the
applicable accounting periods with the negative covenants contained in
Article VI;

(d) Reconciliation Statements. If, as a result of any change in accounting
principles and policies from those used in the preparation of the audited
financial statements referred to in Section 3.3, the consolidated financial
statements of the Borrower and its Subsidiaries delivered pursuant to
subsections (a), (b) or (l) of this Section 5.1 will differ in any material
respect from the consolidated financial statements that would have been
delivered pursuant to such subsections had no such change in accounting
principles and policies been made, then (i) together with the first delivery of
financial statements pursuant to subsections (a), (b) or (l) of this Section 5.1
following such change, consolidated financial statements of the Borrower and its
Subsidiaries for (A) the current Fiscal Year to the effective date of such
change and (B) the two full Fiscal Years immediately preceding the Fiscal Year
in which such change is made, in each case prepared on a pro forma basis as if
such change had been in effect during such periods, and (ii) together with each
delivery of financial statements pursuant to subsections (a), (b) or (l) of this
Section 5.1 following such change, a written statement of the chief accounting
officer or chief financial officer of the Borrower setting forth the differences
(including any differences that would affect any calculations relating to the
financial covenants set forth in Section 6.6) which would have resulted if such
financial statements had been prepared without giving effect to such change;

 

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(e) Accountants’ Certification. Beginning with the Fiscal Year ending September,
2007, together with each delivery of consolidated financial statements of the
Borrower and its Subsidiaries pursuant to subsection (b) above, a written
statement by the independent certified public accountants responsible for the
preparation of such consolidated financial statements stating that in making the
examination necessary to prepare such consolidated financial statements no
knowledge was obtained of any Event of Default under Section 6.6, except as
specified in such certificate;

(f) Accountants’ Reports. Promptly upon receipt thereof (unless restricted by
applicable professional standards), copies of all special project reports,
annual management recommendation letters or other annual reports submitted in
writing to the audit committee of the Borrower’s board of directors by
independent certified public accountants in connection with each annual, interim
or special audit of the financial statements of the Borrower and its
Subsidiaries made by such accountants;

(g) SEC Filings and Press Releases. Promptly upon their becoming available,
copies of (i) all financial statements, reports, notices and proxy statements
sent or made available generally by the Borrower to its security holders or by
any Subsidiary of the Borrower to its security holders other than the Borrower
or another Subsidiary of the Borrower, (ii) all regular and periodic reports and
all registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by the Borrower or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
Governmental Authority or private regulatory authority, and (iii) all press
releases and other statements made available generally by the Borrower or any of
its Subsidiaries to the public concerning material developments in the business
of the Borrower or any of its Subsidiaries; provided, however, the Borrower
shall not be required to deliver the foregoing information to (A) the
Administrative Agent and the Lenders if such information is readily available to
such Persons through an online service such as EDGAR, unless specifically
required by the Administrative Agent and (B) the Lenders to the extent such
information has been delivered to the Administrative Agent and the Borrower has
confirmed that such information has been made available to the Lenders by the
Administrative Agent through an online service such as IntraLinks or otherwise
distributed by the Administrative Agent to the Lenders;

(h) Events of Default, etc. Promptly (but in any event within three (3) Business
Days thereof) upon any officer of a Credit Party or any of its Subsidiaries
obtaining knowledge (i) of any condition or event that constitutes a Default or
an Event of Default, or becoming aware that any Lender has given any notice
(other than to the Administrative Agent) or taken any other action with respect
to a claimed Default or Event of Default, (ii) that any Person has given any
notice to the Borrower or any of its Subsidiaries or taken any other action with
respect to a claimed default or event or condition of the type referred to in
Section 7.1(b) or (iii) of the occurrence of any event or change that has caused
or evidences, either in any case or in the aggregate, a Material

 

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Adverse Effect, an Officers’ Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Default or Event
of Default, default, event or condition, and what action the Credit Parties have
taken, are taking and propose to take with respect thereto;

(i) Litigation or Other Proceedings. Promptly upon any officer of any Credit
Party or any of its Subsidiaries obtaining knowledge of (i) the institution of,
or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting the Borrower or any of its Subsidiaries or any
property of the Borrower or any of its Subsidiaries (collectively,
“Proceedings”) not previously disclosed in writing by a Credit Party to the
Lenders or (ii) any material development in any Proceeding that, in any case:

(A) if adversely determined, has a reasonable possibility of giving rise to a
Material Adverse Effect; or

(B) seeks to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated hereby;

written notice thereof together with such other information as may be reasonably
available to the Credit Parties to enable the Lenders and their counsel to
evaluate such matters;

(j) ERISA Events. Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event that could reasonably be expected to
result in a material liability, a written notice specifying the nature thereof,
what action the Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates has taken, is taking or proposes to take with respect thereto
and, when known, any action taken or threatened by the Internal Revenue Service,
the Department of Labor or the PBGC with respect thereto;

(k) ERISA Notices. With reasonable promptness, copies of (i) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by the
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan; (ii) all
notices received by the Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an
ERISA Event that could reasonably be expected to result in a material liability;
and (iii) copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as the Administrative Agent shall
reasonably request;

(l) Financial Plans. As soon as practicable and in any event no later than 60
days after the beginning of each Fiscal Year, a consolidated plan and financial
forecast for such Fiscal Year (the “Financial Plan” for such Fiscal Year),
including (i) forecasted

 

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consolidated balance sheet and forecasted consolidated statements of income and
cash flows of the Borrower and its Subsidiaries for such Fiscal Year (prepared
on a quarterly basis), together with an explanation of the assumptions on which
such forecasts are based, and (ii) such other information and projections as any
Lender may reasonably request;

(m) Insurance. As soon as practicable and in any event by the last day of each
Fiscal Year, a report in form and substance satisfactory to the Administrative
Agent outlining all material insurance coverage maintained as of the date of
such report by the Borrower and its Subsidiaries and all material insurance
coverage planned to be maintained by the Borrower and its Subsidiaries in the
immediately succeeding Fiscal Year;

(n) Board of Directors. With reasonable promptness, written notice of any change
in the board of directors of the Borrower, which notice will be deemed to have
been properly delivered if such change is promptly disclosed in filings made
with the SEC or press releases and delivered or made available to the
Administrative Agent and Lenders under subsection (g) above;

(o) New Subsidiaries. Promptly upon any Person becoming a Subsidiary of the
Borrower, a written notice setting forth with respect to such Person (a) the
date on which such Person became a Subsidiary of the Borrower and (b) all of the
data required to be set forth in Schedule 3.1-2 annexed hereto with respect to
all Subsidiaries of the Borrower (it being understood that such written notice
shall be deemed to supplement Schedule 3.1-2 annexed hereto for all purposes of
this Agreement);

(p) Material Contracts. Promptly, and in any event within 10 Business Days after
any Material Contract of the Borrower or any of its Subsidiaries is terminated
or amended in a manner that is materially adverse to the Borrower or such
Subsidiary, as the case may be, a written statement describing such event with
copies of such material amendments, and an explanation of any actions being
taken with respect thereto;

(q) Uniform Commercial Code Search Report. As promptly as practicable after the
filing by the Administrative Agent of any Uniform Commercial Code financing
statements pursuant to the terms hereof or the Security Documents, upon the
request of the Administrative Agent, copies of completed Uniform Commercial Code
searches evidencing the proper filing, recording and indexing of all such
Uniform Commercial Code financing statements and listing all other effective
financing statements that name such Credit Party as debtor, together with copies
of all such other financing statements not previously delivered to the
Administrative Agent by or on behalf of the Borrower or such Credit Party;

(r) Collateral Information. Upon the reasonable request of the Administrative
Agent, the Borrower shall provide to the Administrative Agent (i) an updated
list of all locations of any Collateral and (ii) an updated list of any or all
of the Intellectual Property of the Borrower and its Subsidiaries.

 

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(s) Asset Dispositions, Etc. Within 90 days after the end of each Fiscal Year of
the Borrower, a certificate containing information regarding the amount of all
Asset Dispositions, and Debt Issuances that were made during the prior Fiscal
Year and amounts received in connection with any Recovery Event during the prior
Fiscal Year together with a statement demonstrating a calculation of Excess Cash
Flow;

(t) Environmental Report. As soon as practicable and in any event within 30 days
after the end of each Fiscal Year, a management report in form and substance
satisfactory to the Administrative Agent summarizing the status of any
environmental remediation actions taken by the Borrower and its Subsidiaries
during the previous Fiscal Year, any reserves established by the Borrower and
its Subsidiaries with respect to such remediation actions, all expenses incurred
by the Borrower and its Subsidiaries in connection with such remediation actions
and any change to the Borrower’s environmental insurance coverage; and

(u) Other Information. With reasonable promptness, such other information and
data with respect to the Borrower or any of its Subsidiaries as from time to
time may be reasonably requested by any Lender through the Administrative Agent.

Section 5.2 Corporate Existence, Etc.

Except as permitted under Section 6.7, the Borrower will, and will cause each of
its Subsidiaries to, at all times preserve and keep in full force and effect its
corporate existence and all rights and franchises material to its business;
provided, however, that neither the Borrower nor any of its Subsidiaries shall
be required to preserve any such right or franchise if the board of directors of
the Borrower or such Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to the Borrower, such Subsidiary or the Lenders.

Section 5.3 Payment of Taxes, Claims and Other Obligations; Tax Consolidation.

(a) The Borrower will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (i) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (ii) in the case of a charge or claim which has or may become
a Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim.

 

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(b) The Borrower will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than the Borrower or any of its Subsidiaries).

Section 5.4 Maintenance of Properties; Insurance.

(a) Maintenance of Properties. The Borrower will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of the Borrower and its Subsidiaries (including
all Intellectual Property) and from time to time will make or cause to be made
all appropriate repairs, renewals and replacements thereof.

(b) Insurance. The Borrower will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance, casualty
insurance and environmental insurance with respect to liabilities, losses or
damage in respect of the assets, properties and businesses of the Borrower and
its Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for corporations similarly situated in the industry;
provided that environmental insurance shall not be required for properties in a
state where any environmental liabilities or losses would be indemnified or
reimbursed by a trust fund established by such state and such trust fund is
solvent. Without limiting the generality of the foregoing, the Borrower will
maintain or cause to be maintained (i) to the extent not adequately self-insured
in a manner reasonably deemed adequate by the Administrative Agent and
consistent with the Borrower’s past practices of self-insurance, flood insurance
with respect to each Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, in each case in compliance
with any applicable regulations of the Board of Governors of the Federal Reserve
System, and (ii) replacement value casualty insurance on the Collateral under
such policies of insurance, with such insurance companies, in such amounts, with
such deductibles, and covering such risks as are at all times satisfactory to
the Administrative Agent in its commercially reasonable judgment. Each such
policy of insurance shall (A) name the Administrative Agent for the benefit of
the Lenders as an additional insured thereunder as its interests may appear and
(B) in the case of each business interruption and casualty insurance policy,
contain a loss payable clause or endorsement, satisfactory in form and substance
to the Administrative Agent, that names the Administrative Agent for the benefit
of the Lenders as the loss payee or mortgagee thereunder and provides for at
least 30 days prior written notice to the Administrative Agent of any
modification or cancellation of such policy.

 

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Section 5.5 Books and Records; Inspection Rights.

The Borrower shall, and shall cause each of its Subsidiaries, to keep proper
books of records and account in which complete entries consistent with sound
business practices sufficient to support the preparation of financial statements
conforming with GAAP shall be made of its dealings and transactions in relation
to its businesses and activities. The Borrower shall, and shall cause each of
its Subsidiaries to, permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of the Borrower or of any of
its Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants
(provided that the Borrower may, if it so chooses, be present at or participate
in any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.

Section 5.6 Compliance with Laws, Etc.

The Borrower shall comply, and shall cause each of its Subsidiaries to comply,
with the requirements of all applicable laws, rules, regulations and orders of
any Governmental Authority (including all Environmental Laws), noncompliance
with which could reasonably be expected to cause, individually or in the
aggregate, a Material Adverse Effect.

Section 5.7 Environmental Review and Investigation, Disclosure, Etc.

(a) Environmental Review and Investigation.

(i) The Borrower agrees that the Administrative Agent may, from time to time and
in its reasonable discretion, retain, at the Borrower’s expense, an independent
professional consultant to review any environmental audits, investigations,
analyses and reports relating to Hazardous Materials prepared by or for the
Borrower with respect to any Mortgaged Property; and

(ii) in the event (A) the Administrative Agent reasonably believes that the
Borrower has breached any representation, warranty or covenant contained in
Sections 3.6, 3.13, 5.6, 5.7 or 5.8 or that there has been a material violation
of Environmental Laws at any Facility or by the Borrower or any of its
Subsidiaries at any other location or (B) a Default or Event of Default has
occurred and is continuing, the Borrower agrees that the Administrative Agent
may, from time to time and in its reasonable discretion, (i) retain, at the
Borrower’s expense, an independent professional consultant to review any
environmental audits, investigations, analyses and reports relating to Hazardous
Materials prepared by or for the Borrower and (ii) subject to the terms of any
applicable lease, conduct its own investigation of any Facility; provided that,
in the case of any Facility no longer owned, leased, operated or used by the
Borrower or any of its Subsidiaries, the Borrower shall only be obligated to
make reasonable efforts to obtain permission for the Administrative Agent’s
professional consultant to conduct an investigation of such Facility.

 

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For purposes of conducting any review and/or investigation pursuant to
subsection (a) or (b) above, subject to the terms of any applicable lease, the
Borrower hereby grants to the Administrative Agent and its agents, employees,
consultants and contractors the right to enter into or onto any Facilities
currently owned, leased, operated or used by the Borrower or any of its
Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith. Any such investigation of any
Facility shall be conducted, unless otherwise agreed to by the Borrower and the
Administrative Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the ongoing
operations at such Facility or to cause any damage or loss to any property at
such Facility. The Borrower and the Administrative Agent hereby acknowledge and
agree that any report of any investigation conducted at the request of the
Administrative Agent pursuant to this Section will be obtained and shall be used
by the Administrative Agent and the Lenders solely for the purposes of the
Lenders’ internal credit decisions, to monitor and police the Loans and to
protect the Lenders’ security interests created by the Credit Documents. The
Administrative Agent agrees to deliver a copy of any such report to the Borrower
with the understanding that the Borrower acknowledges and agrees that (1) it
will indemnify and hold harmless the Administrative Agent and each Lender from
any costs, losses or liabilities relating to the Borrower’s use of or reliance
on such report, (2) neither the Administrative Agent nor any Lender makes any
representation or warranty with respect to such report, and (3) by delivering
such report to the Borrower, neither the Administrative Agent nor any Lender is
requiring or recommending the implementation of any suggestions or
recommendations contained in such report.

(b) Environmental Disclosure. The Borrower will deliver to the Administrative
Agent and the Lenders:

(i) Environmental Audits and Reports. As soon as practicable following receipt
thereof, copies of all environmental audits, investigations, analyses and
reports of any kind or character, whether prepared by personnel of the Borrower
or any of its Subsidiaries or by independent consultants, Governmental
Authorities or any other Persons, with respect to significant environmental
matters at any Facility which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect or with respect to
any Environmental Claims which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;

(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon the
occurrence thereof, written notice describing in reasonable detail (A) any
Release required to be reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws the existence of which
has a reasonable possibility of resulting in one or more Environmental

 

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Claims having, individually or in the aggregate, a material adverse effect on
the Mortgaged Property or Mortgage Properties where the Release occurred or a
Material Adverse Effect, and (B) any remedial action taken by the Borrower or
any other Person in response to (1) any Hazardous Materials Activities the
existence of which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a material
adverse effect on the Mortgaged Property or Mortgage Properties where the
Hazardous Materials Activities occurred or a Material Adverse Effect, or (2) any
Environmental Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a material adverse effect on the Mortgaged Property
or Mortgage Properties to which the Environmental Claims relate or a Material
Adverse Effect;

(iii) Written Communications Regarding Environmental Claims, Releases, Etc. As
soon as practicable following the sending or receipt thereof by the Borrower or
any of its Subsidiaries, a copy of any and all written communications with
respect to (A) any Environmental Claims that, individually or in the aggregate,
have a reasonable possibility of resulting in a material adverse effect on the
Mortgaged Property or Mortgage Properties to which such Environmental Claims
relate or a Material Adverse Effect, (B) any Release required to be reported to
any federal, state or local governmental or regulatory agency the existence of
which has a reasonable possibility of resulting in one or more Environmental
Claims having, individually or in the aggregate, a material adverse effect on
the Mortgaged Property or Mortgage Properties to which the Environmental Claims
relate or a Material Adverse Effect, and (C) any request for information from
any governmental agency that suggests such agency is investigating whether the
Borrower or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity that, individually or in the aggregate, have a
reasonable possibility of resulting in a material adverse effect on the
Mortgaged Property or Mortgage Properties at which the Hazardous Materials
Activity occurred or a Material Adverse Effect;

(iv) Notice of Certain Proposed Actions Having Environmental Impact. Prompt
written notice describing in reasonable detail (A) any proposed acquisition of
stock, assets, or property by the Borrower or any of its Subsidiaries that could
reasonably be expected to (1) expose the Borrower or any of its Subsidiaries to,
or result in, Environmental Claims that, individually or in the aggregate, have
a reasonable possibility of resulting in a material adverse effect on the
Mortgaged Property or Mortgage Properties to which the Environmental Claims
relate or a Material Adverse Effect or (2) affect the ability of the Borrower or
any of its Subsidiaries to maintain in full force and effect all material
Governmental Authorizations required under any Environmental Laws for their
respective operations and (b) any proposed action to be taken by the Borrower or
any of its Subsidiaries to modify current operations in a manner that could
reasonably be expected to subject the Borrower or any of its Subsidiaries to any
material additional obligations or requirements under any Environmental Laws;
and

 

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(v) Other Information. With reasonable promptness, such other documents and
information as from time to time may be reasonably requested by the
Administrative Agent in relation to any matters disclosed pursuant to this
Section.

Section 5.8 Hazardous Materials Activities; Environmental Claims/Violations.

(a) Remedial Actions Relating to Hazardous Materials Activities. The Borrower
shall, to the extent required by applicable law and orders of Governmental
Authorities having jurisdiction, promptly undertake, and shall cause each of its
Subsidiaries promptly to undertake, any and all investigations, studies,
sampling, testing, abatement, cleanup, removal, remediation or other response
actions necessary to remove, remediate, clean up or abate any Hazardous
Materials Activity on, under or about any Facility that is in violation of any
Environmental Laws. In the event the Borrower or any of its Subsidiaries
undertakes any such action with respect to any Hazardous Materials, the Borrower
or such Subsidiary shall conduct and complete such action in compliance with all
applicable Environmental Laws and in accordance with the policies, orders and
directives of all federal, state and local Governmental Authorities except when,
and only to the extent that, the Borrower’s or such Subsidiary’s liability with
respect to such Hazardous Materials Activity is being contested in good faith by
the Borrower or such Subsidiary.

(b) Actions with Respect to Environmental Claims and Violations of Environmental
Laws. The Borrower shall promptly take, and shall cause each of its Subsidiaries
promptly to take, any and all actions necessary to (i) cure any material
violation of applicable Environmental Laws by the Borrower or its Subsidiaries
except when, and only to the extent that, the Borrower’s or such Subsidiary’s
liability with respect to such Hazardous Materials Activity is being contested
in good faith by the Borrower or such Subsidiary and (ii) make an appropriate
response to any Environmental Claim against the Borrower or any of its
Subsidiaries and discharge any obligations it may have to any Person thereunder.

Section 5.9 Additional Guarantors.

The Credit Parties will cause each of their Domestic Subsidiaries with assets in
excess of $1,000,000 or current annualized revenues in excess of $1,000,000,
whether newly formed, after acquired or otherwise existing, to promptly (and in
any event within sixty (60) days (or such longer period of time as agreed to by
the Administrative Agent) after its formation or acquisition) become a Guarantor
hereunder by way of execution of a Joinder Agreement; provided that at any time
the value of assets and annualized revenues of all Domestic Subsidiaries of the
Borrower that are not Credit Parties exceeds $5,000,000 in the aggregate, the
Credit Parties will cause Domestic Subsidiaries that are not Credit Parties to
promptly become Guarantors hereunder until the value of assets and annualized
revenues of all Domestic

 

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Subsidiaries of the Borrower that are not Credit Parties are less than or equal
to $5,000,000 in the aggregate. The guaranty obligations of any such Additional
Credit Party shall be secured by, among other things, the Collateral (subject to
prohibitions on the granting of security interests imposed by state gaming laws
and regulations with regard to any gaming license and related assets used by the
Credit Parties) of the Additional Credit Party and a pledge of 100% of the
Capital Stock or other equity interest of its Domestic Subsidiaries and 65% of
the Capital Stock or other equity interest of its first-tier Foreign
Subsidiaries, and a pledge by the Borrower or other Credit Party which is the
owner of the Capital Stock or other equity interest in such Subsidiary of 100%
of such Capital Stock or other equity interest. In connection with the
foregoing, the Credit Parties shall deliver to the Administrative Agent, with
respect to each new Guarantor to the extent applicable, substantially the same
documentation required pursuant to Sections 4.1(b)-(d), 5.10 and 5.11 and such
other documents or agreements as the Administrative Agent may reasonably
request.

Section 5.10 Pledged Assets.

Each Credit Party will grant a First Priority Lien (subject in each case to
Permitted Liens) in favor of the Administrative Agent in its real and personal
property pursuant to the terms and conditions of the Security Documents or such
other security documents as the Administrative Agent shall reasonably request,
provided, no Lien shall be granted by any Credit Party in favor of the
Administrative Agent (a) if any such security interest is prohibited by
applicable state gaming laws and regulations with regard to any gaming license
and related assets used by such Credit Party, (b) on any leasehold interest held
by a Credit Party in any leased store property or (c) on any property subject to
a sale leaseback transaction permitted by Section 6.8. Each Credit Party shall
adhere to the covenants regarding personal property as set forth in the Security
Documents.

Section 5.11 Matters Relating to Additional Real Property Collateral.

(a) Additional Real Property Collateral. From and after the Closing Date, in the
event that (i) the Borrower or any Guarantor acquires any fee interest in real
property or (ii) at the time any Person becomes a Guarantor, such Person owns or
holds any fee interest in real property, in either case excluding (x) any such
Real Property Asset held for sale as approved by the Administrative Agent,
(y) any such Real Property Asset the encumbrancing of which requires the consent
of any applicable then-existing senior lienholder, where the Borrower and its
Subsidiaries are unable to obtain such senior lienholder’s consent and (z) so
long as no Event of Default shall have occurred and be continuing, any such Real
Property Asset that the Borrower or such Guarantor intends to sell and lease
back in accordance with Section 6.8 within ninety (90) days of the date of
acquisition of such Real Property Asset, the date a store begins operation on a
Development Property, or the date such Person becomes a Guarantor, as the case
may be (any such non-excluded Real Property Asset described in the foregoing
clauses (i) or (ii) being an “Additional Mortgaged Property”), the Borrower will
promptly notify the Administrative Agent of that fact and the Borrower or such
Guarantor shall deliver to the Administrative Agent, on or before the next
Mortgage Notice Date which occurs at least 30 days after such Person acquires
such Additional Mortgaged Property or becomes a

 

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Guarantor (or such longer period of time as agreed to by the Administrative
Agent) or, in the case of any such Real Property Asset which was excluded from
being an Additional Mortgaged Property pursuant to clause (y) above, and which
was not sold and leased back within the applicable 90-day period, on or before
the next Mortgage Notice Date which occurs at least thirty (30) days after the
expiration of such 90-day period, as the case may be, all or any of the
following to the extent requested by the Administrative Agent in its sole
discretion:

(A) Additional Mortgage. A fully executed and notarized Mortgage (an “Additional
Mortgage”), duly recorded in all appropriate places in all applicable
jurisdictions, encumbering the interest of such Credit Party in such Additional
Mortgaged Property;

(B) Opinions of Counsel. Unless otherwise approved by the Administrative Agent,
with respect to each Additional Mortgaged Property with a fair market value of
$5,000,000 or more or which Additional Mortgaged Property is located in a
jurisdiction as to which the Administrative Agent, the Lenders or their
predecessors under the Existing Credit Agreement have not previously received an
opinion as to the enforceability of the form of Mortgage to be executed with
respect to such Mortgaged Property (1) a favorable opinion of counsel to such
Credit Party, in form and substance satisfactory to the Administrative Agent and
its counsel, as to the due authorization, execution and delivery by such Credit
Party of such Additional Mortgage and such other matters as the Administrative
Agent may reasonably request, and (2) an opinion of counsel (which counsel shall
be reasonably satisfactory to the Administrative Agent) in the state in which
such Additional Mortgaged Property is located with respect to the enforceability
of the form of Additional Mortgage to be recorded in such states and such other
matters (including any matters governed by the laws of such state regarding
personal property security interests in respect of any Collateral) as the
Administrative Agent may reasonably request, in each case in form and substance
reasonably satisfactory to the Administrative Agent;

(C) Title Insurance. Unless otherwise approved by the Administrative Agent, with
respect to each Additional Mortgaged Property with a fair market value of
$5,000,000 or more or if any Credit Party is purchasing title insurance or is
otherwise being provided with title insurance with respect to such Additional
Mortgaged Property, an ALTA mortgagee title insurance policy or an unconditional
commitment therefor (an “Additional Mortgage Policy”) with respect to such
Additional Mortgaged Property, in an amount satisfactory to the Administrative
Agent, insuring fee simple title to such Additional Mortgaged Property vested in
such Credit Party and assuring the Administrative Agent that such Additional
Mortgage creates a valid and enforceable First Priority mortgage Lien on such
Additional Mortgaged Property, subject only to a

 

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standard survey exception, which Additional Mortgage Policy (1) shall include an
endorsement for mechanics’ liens, for future advances under this Agreement and
for any other matters reasonably requested by the Administrative Agent and
(2) shall provide for affirmative insurance and such reinsurance as the
Administrative Agent may reasonably request, all of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent;

(D) Title Report. Unless otherwise approved by the Administrative Agent, with
respect to each Additional Mortgaged Property with a fair market value in excess
of $3,500,000 or more or with respect to which any Credit Party has received a
title report, a title report issued by a title company with respect thereto, in
form and substance satisfactory to the Administrative Agent, and copies of all
recorded documents listed as exceptions to title or otherwise referred to in
such title report;

(E) Matters Relating to Flood Hazard Properties. (1) Evidence, which may be in
the form of a letter from an insurance broker or a municipal engineer, as to
(x) whether such Additional Mortgaged Property is a Flood Hazard Property and
(y) if so, whether the community in which such Flood Hazard Property is located
is participating in the National Flood Insurance Program, (2) if such Additional
Mortgaged Property is a Flood Hazard Property, such Credit Party’s written
acknowledgement of receipt of written notification from the Administrative Agent
(x) that such Additional Mortgaged Property is a Flood Hazard Property and
(y) as to whether the community in which such Flood Hazard Property is located
is participating in the National Flood Insurance Program, and (3) in the event
such Additional Mortgaged Property is a Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program, evidence
that the Borrower has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the Board of
Governors of the Federal Reserve System; and

(F) Environmental Audit. Unless otherwise approved by the Administrative Agent,
with respect to each Additional Mortgaged Property with a fair market value in
excess of $3,500,000, reports and other information, in form, scope and
substance satisfactory to the Administrative Agent, concerning any environmental
hazards or liabilities to which the Borrower or any of its Subsidiaries may be
subject with respect to such Additional Mortgaged Property; provided that,
notwithstanding the foregoing, the Borrower shall provide to the Administrative
Agent any environmental reports or other environmental information the Borrower
has received with respect to such Additional Mortgaged Property.

 

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(b) Florida Real Property. In the event that the real property securing the
Credit Party Obligations located in the State of Florida increases in value
after the Closing Date by an amount that the Administrative Agent in the
exercise of its reasonable discretion deems to be material, then the Borrower
hereby agrees upon request by the Administrative Agent to amend the Mortgages on
the Florida real property to reflect such increase in value and to pay any
recording or other real property taxes or fees arising as a result of such
increased value and the recording of such amendments.

Section 5.12 Use of Proceeds.

The proceeds of the Extensions of Credit shall be used solely by the Borrower as
follows:

(a) with respect to the Loans, to (i) refinance certain existing indebtedness of
the Borrower, including indebtedness associated with the Existing Credit
Agreement, (ii) pay fees and expenses in connection with the Credit Documents,
and (iiiii) provide for working capital and other general corporate purposes of
the Borrower and its Subsidiaries, including Permitted Acquisitions; and

(b) the Letters of Credit shall be used only for or in connection with appeal
bonds, reimbursement obligations arising in connection with surety and
reclamation bonds, reinsurance, domestic or international trade transactions and
obligations not otherwise aforementioned relating to transactions entered into
by the applicable account party in the ordinary course of business.

Section 5.13 Post-Closing Covenant; Further Assurances.

(a) Real Property Collateral. Within 90 days after the Closing Date (or such
extended period of time as agreed to by the Administrative Agent), the
Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent:

(i) fully executed and notarized mortgage instruments (amendments or new
mortgage instruments, as applicable) encumbering the Real Property Assets on
Schedule 5.13;

(ii) a title report obtained by the Credit Parties in respect of 30 mortgaged
Real Property Assets listed on Schedule 5.13, as selected by the Arrangers in
their reasonable discretion; provided that the Arrangers shall have the right,
in their reasonable discretion, to require title reports for additional
mortgaged Real Property Assets listed on Schedule 5.13 to the extent the initial
title reports reflect any Lien (other than a Permitted Encumbrance or
non-material Lien) on one or more of such 30 mortgaged Real Property Assets;

(iii) an opinion of counsel to the Credit Parties for each jurisdiction in which
the mortgaged Real Property Assets listed Schedule 5.13 are located; and

 

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(iv)(A) evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to (1) whether any mortgaged Real Property Asset
listed on Schedule 5.13 is a Flood Hazard Property and (2) if so, whether the
community in which such Flood Hazard Property is located is participating in the
National Flood Insurance Program, (B) if any such mortgaged Real Property Asset
is a Flood Hazard Property, such Credit Party’s written acknowledgement of
receipt of written notification from the Administrative Agent (1) that such
mortgaged Real Property Asset is a Flood Hazard Property and (2) as to whether
the community in which such Flood Hazard Property is located is participating in
the National Flood Insurance Program, and (3) in the event such mortgaged Real
Property Asset is a Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, evidence that the Borrower
has obtained flood insurance in respect of such Flood Hazard Property to the
extent required under the applicable regulations of the Board of Governors of
the Federal Reserve System.

(b) Further Assurances. Upon the request of the Administrative Agent promptly
perform or cause to be performed any and all acts and file or cause to be filed
any and all documents for filing under the provisions of the Uniform Commercial
Code or any other Requirement of Law which are necessary or advisable to
maintain in favor of the Administrative Agent, for the benefit of the Lenders,
Liens on the Collateral that are duly perfected in accordance with all
applicable Requirements of Law.

ARTICLE VI

NEGATIVE COVENANTS

The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Credit Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations (except for inchoate indemnification and reimbursement
obligations) together with interest, Commitment Fees and all other amounts owing
to the Administrative Agent or any Lender hereunder and under the other Credit
Documents, are paid in full, the Credit Parties and their Subsidiaries shall be
subject to the restrictions set forth in this Article VI.

Section 6.1 Indebtedness.

The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:

(a) the Credit Parties may become and remain liable with respect to the Credit
Party Obligations (including, without limitation, the Incremental Facilities);

 

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(b) the Borrower and its Subsidiaries may become and remain liable with respect
to Contingent Obligations permitted by Section 6.4 and, upon any matured
obligations actually arising pursuant thereto, the Indebtedness corresponding to
the Contingent Obligations so extinguished;

(c) the Borrower and its Subsidiaries may become and remain liable with respect
to Indebtedness in respect of Capital Leases and Indebtedness, including
Indebtedness recognized due to any sale and leaseback transaction permitted by
Section 6.8, incurred in the ordinary course of business to finance the cost of
acquisition or the cost of construction, improvement or remodeling of an asset
used in the business of the Borrower and its Subsidiaries; provided that (i) the
principal amount of such Indebtedness does not exceed the sum of 100% of such
cost of acquisition, construction, improvement or remodeling, plus the
reasonable fees and expenses incurred in connection therewith, (ii) any lien or
encumbrance securing such Indebtedness is placed on such asset not more than 90
days after its acquisition or the completion of construction, improvement or
remodeling, as the case may be and (iii) the Borrower is in pro forma compliance
with the Senior Secured Leverage Incurrence Test;

(d) the Borrower may become and remain liable with respect to Indebtedness to
any Guarantor, and any Guarantor may become and remain liable with respect to
Indebtedness to the Borrower or any other Guarantor; provided that (i) all such
intercompany Indebtedness shall be evidenced by promissory notes and such
promissory notes shall be delivered to the Administrative Agent together with
such allonges or endorsements as the Administrative Agent may require, (ii) all
such intercompany Indebtedness owed by the Borrower to any of the Guarantors
shall be subordinated in right of payment to the payment in full of the Credit
Party Obligations pursuant to the terms of the applicable promissory notes or an
intercompany subordination agreement and (iii) any payment by any Guarantor
under the Guaranty shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by such Guarantor to the Borrower or to any other
Guarantor for whose benefit such payment is made;

(e) the Borrower and its Subsidiaries, as applicable, may remain liable with
respect to Indebtedness described in Schedule 6.1 annexed hereto and renewals,
refinancings or extensions thereof in a principal amount not in excess of that
outstanding as of the Closing Date and as the date of such renewal, refinancing
or extension;

(f) so long as the Borrower is in pro forma compliance with the Interest
Coverage Incurrence Test and no Default or Event of Default has occurred and is
continuing or would otherwise arise as a result of the incurrence of the
Indebtedness, the Credit Parties may become and remain liable with respect to
Subordinated Indebtedness or unsecured Indebtedness and refinancings, exchanges,
extensions and renewals thereof; provided that (i) the terms and conditions of
such Indebtedness shall be consistent with market terms for similar issuances at
such time and (ii) such Indebtedness shall otherwise be on terms and conditions
reasonably acceptable to the Administrative Agent;

 

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(g) the Borrower and its Subsidiaries may become and remain liable with respect
to Indebtedness in respect of (i) customary indemnification obligations entered
into in connection with any Permitted Acquisition, Development Property
Expenditure or asset sale permitted under this Agreement and (ii) customary
purchase price adjustments in connection with any Permitted Acquisition,
Development Property Expenditure or asset sale permitted under this Agreement
based on differences between estimated assets or liabilities at closing and the
subsequent final determination of such assets or liabilities following closing;

(h) the Borrower and its Subsidiaries may become and remain liable in the
ordinary course of business in respect of netting services, overdraft protection
and other services in connection with deposit accounts; provided that the
aggregate amount of such Indebtedness shall not exceed $5,000,000 at any time;

(i) the Borrower and its Subsidiaries may become and remain liable for
Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument inadvertently drawn against insufficient
funds in the ordinary course of business; provided that such Indebtedness is
extinguished within two (2) Business Days of the incurrence of such
Indebtedness; and

(j) the Borrower and its Subsidiaries may become and remain liable with respect
to other Indebtedness (including Indebtedness assumed in any Permitted
Acquisition or Development Property Expenditure) in an aggregate principal
amount not to exceed $45,000,000 at any time outstanding.

Section 6.2 Liens and Related Matters.

(a) Prohibition on Liens. The Borrower shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except the following Liens shall be permitted (the
“Permitted Liens”):

(i) Permitted Encumbrances;

(ii) Liens granted pursuant to the Security Documents;

(iii) Liens existing as of the Closing Date and described in Schedule 6.2
annexed hereto; provided that (A) no such Lien shall at any time be extended to
cover property or assets other than the property or assets subject thereto on
the Closing Date and (B) the principal amount of the Indebtedness secured by
such Liens shall not be increased, extended, renewed, refunded or refinanced
except as permitted pursuant to the terms of Section 6.1;

 

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(iv)(A) purchase money Liens securing Indebtedness (and refinancings thereof)
permitted under Section 6.1(c) to the extent such Liens extend only to the
assets financed with such Indebtedness and (B) Liens on escrow or other similar
accounts and the deposits therein, established to hold funds that support
customary indemnification and purchase price adjustment obligations permitted
under Sections 6.1(g) and 6.4(c); and

(v) other Liens or notices of Liens securing or relating to Indebtedness
(including Indebtedness and Liens assumed in any Permitted Acquisition or
Development Property Expenditure) in an aggregate amount not to exceed
$25,000,000 at any time outstanding; provided that such Liens shall not encumber
any property or assets constituting Collateral, unless such property or assets
are acquired in a Permitted Acquisition or Development Property Expenditure and
such Liens (A) encumbered such property or assets immediately prior to the
consummation of such Permitted Acquisition or Development Property Expenditure,
(B) were not granted in anticipation of such Permitted Acquisition or
Development Property Expenditure and (C) do not and will not encumber any other
property or assets of the Credit Parties and their Subsidiaries.

(b) Equitable Lien in Favor of the Lenders. If the Borrower or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Permitted Liens, it
shall make or cause to be made effective provision whereby the Credit Party
Obligations will be secured by such Lien equally and ratably with any and all
other Indebtedness secured thereby as long as any such Indebtedness shall be so
secured; provided that, notwithstanding the foregoing, this covenant shall not
be construed as a consent by the Required Lenders to the creation or assumption
of any such Lien that is not a Permitted Lien.

(c) No Further Negative Pledges. Except with respect to (i) specific property
encumbered to secure Indebtedness permitted pursuant to the terms of
Section 6.1(c), (ii) escrow or other similar accounts and the deposits therein,
established to hold funds that support customary indemnification and purchase
price adjustment obligations permitted under Sections 6.1(b) and 6.4(c),
(iii) specific property to be sold pursuant to an executed agreement with
respect to an asset sale permitted pursuant to the terms of Section 6.7, or
(iv) subject to compliance with Section 6.12, prohibitions on Liens or
restrictions imposed by gaming laws or regulations in any jurisdiction as such
laws or regulations affect the Borrower’s or its Subsidiaries’ assets used in
their video poker and lottery ticket sales activities, neither the Borrower nor
any of its Subsidiaries shall enter into any agreement (other than the Senior
Subordinated Note Indenture, the Senior Subordinated Convertible Note Indenture
or any other agreement prohibiting only the creation of Liens securing
Subordinated Indebtedness) prohibiting the creation or assumption of any Lien
upon any of its properties or assets, whether now owned or hereafter acquired.

 

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(d) No Restrictions on Subsidiary Distributions to the Borrower or Other
Subsidiaries. Except as provided herein, the Borrower will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary’s Capital Stock owned by the Borrower or
any other Subsidiary of the Borrower, (ii) repay or prepay any Indebtedness owed
by such Subsidiary to the Borrower or any other Subsidiary of the Borrower,
(iii) make loans or advances to the Borrower or any other Subsidiary of the
Borrower, or (iv) transfer any of its property or assets to the Borrower or any
other Subsidiary of the Borrower; provided that the foregoing clause (iv) shall
not apply to (A) restrictions or conditions imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness,
(B) arising by virtue of any agreement, option or right with respect to the sale
or transfer of any asset permitted by Section 6.7 and (C) customary provisions
in leases, licenses or other contracts restricting the assignment, subletting or
sublicensing or transfer thereof.

Section 6.3 Investments; Joint Ventures.

The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make, own or hold any Investment in any Person,
including any Joint Venture, except the following Investments shall be permitted
(the “Permitted Investments”):

(a) the Borrower and its Subsidiaries may make and own Investments in Cash
Equivalents;

(b) the Borrower and its Subsidiaries may make Investments in any Credit Party;

(c) the Borrower and its Subsidiaries may make intercompany loans permitted
under subsection 6.1(d);

(d) the Borrower and its Subsidiaries may make and own Investments in connection
with Permitted Acquisitions made in accordance with Section 6.7(d); provided
that such Permitted Acquisitions shall at all times be Subsidiaries of the
Borrower;

(e) the Borrower and its Subsidiaries may continue to own the Investments owned
by them and described in Schedule 6.3 annexed hereto;

(f) the Borrower or any of its Subsidiaries may make loans to their employees
for the purpose of purchasing Capital Stock of the Borrower; provided that the
aggregate amount of such loans shall not exceed $2,000,000 at any time
outstanding and such loans are in compliance with all Requirements of Law
(including, without limitation, the Sarbanes-Oxley Act of 2002, as amended);

 

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(g) the Credit Parties may enter into and permit to exist (i) Secured Hedging
Agreements and other Hedging Agreements entered into in order to manage existing
or anticipated interest rate, exchange rate or commodity price risks in the
ordinary course of business and not for speculative purposes and
(ii) Convertible Hedging Agreements; and

(h) the Borrower and its Subsidiaries may make and own other Investments in an
aggregate amount not to exceed at any time $10,000,000 plus, with respect to
Investments made in any Fiscal Year, any unused amount for Restricted Junior
Payments permitted under Section 6.5(e) for such Fiscal Year; provided that such
Investments are in compliance with all Requirements of Law (including, without
limitation, the Sarbanes-Oxley Act of 2002, as amended).

Section 6.4 Contingent Obligations.

The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:

(a) Subsidiaries of the Borrower may become and remain liable with respect to
Contingent Obligations in respect of the Guaranty;

(b) the Credit Parties may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit, surety bonds issued in the ordinary
course that are required by applicable law or regulation and Hedging Agreements
and Convertible Hedging Agreements permitted pursuant to Section 6.3(g);

(c) the Borrower and its Subsidiaries may become and remain liable with respect
to Contingent Obligations in respect of customary indemnification and purchase
price adjustment obligations permitted pursuant to Section 6.1(g);

(d) the Borrower and its Subsidiaries may become and remain liable with respect
to Contingent Obligations under guarantees in the ordinary course of business of
the obligations of suppliers, customers, franchisees and licensees of the
Borrower and its Subsidiaries in an aggregate amount not to exceed at any time
$5,000,000;

(e) the Borrower and its Subsidiaries, as applicable, may remain liable with
respect to Contingent Obligations described in Schedule 6.4 annexed hereto;

(f) Guarantors may become and remain liable with respect to Contingent
Obligations arising under guarantees of Indebtedness to the extent such
Indebtedness is issued pursuant to and in accordance with the terms of
Section 6.1(f) hereof; provided that (i) such guarantee shall be unsecured to
the extent such guarantee is of unsecured Indebtedness and (ii) such guarantee
shall constitute Subordinated Indebtedness to the extent such guarantee is of
Subordinated Indebtedness;

(g) the Borrower may become and remain liable with respect to Contingent
Obligations under guarantees in respect of Capital Leases and Operating Leases

 

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permitted hereunder that are entered into by the Borrower’s Subsidiaries in the
ordinary course of business or under guarantees in respect of obligations of the
Borrower’s Subsidiaries (other than Indebtedness for borrowed money) permitted
hereunder that are incurred in the ordinary course of business;

(h) the Borrower and its Subsidiaries may become and remain liable with respect
to other Contingent Obligations; provided that the maximum aggregate liability,
contingent or otherwise, of the Borrower and its Subsidiaries in respect of all
such Contingent Obligations shall at no time exceed $10,000,000; and

(i) the Borrower and its Subsidiaries may become and remain liable with respect
to Contingent Obligations with respect to Indebtedness of a Credit Party under
Permitted Sale Leaseback Transactions.

Section 6.5 Restricted Junior Payments.

The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that (a) the Borrower may make regularly
scheduled payments of interest in respect of any Indebtedness permitted under
Section 6.1(f) hereof in accordance with the terms of, and only to the extent
required by, and subject to the subordination provisions contained in, the
Senior Subordinated Indenture, the Senior Subordinated Convertible Note
Indenture or the indenture or other contract pursuant to which such other
Subordinated Indebtedness is issued, as the case may be, in each case, as such
indenture or other contract may be amended from time to time to the extent
permitted under Section 6.13(b), (b) the Borrower may make Restricted Junior
Payments pursuant to and in accordance with stock option plans, stock purchase
plans or other benefit plans for management or employees of the Borrower or any
Subsidiary including the redemption or purchase of shares of common stock of the
Borrower held by former employees of the Borrower or any Subsidiary following
the termination of their employment, in an amount not to exceed $2,000,000
during the term of this Agreement (plus any amounts received by the Borrower
after the Closing Date and prior to making such Restricted Junior Payment from
the issuance of additional shares of its common stock to members of management
or employees of the Borrower and its Subsidiaries), (c) the Borrower may make
Restricted Junior Payments with proceeds from an issuance of its Capital Stock
or from the issuance of Indebtedness, in each case, in replacement of, or
exchange for, Indebtedness permitted under Section 6.1(f) to the extent such
equity issuance or Indebtedness is issued on terms reasonably satisfactory to
the Administrative Agent; provided that in each case (i) the Borrower shall be
in pro forma compliance with Section 6.6 both before and after giving pro forma
effect to each such Restricted Junior Payment and (ii) no Default or Event of
Default shall have occurred and be continuing or would otherwise arise as a
result of any such Restricted Junior Payment, (d) so long as no Default or Event
of Default shall have occurred and be continuing or would result therefrom, the
Borrower may make payments of fractional shares upon conversion of the Senior
Subordinated Convertible Notes on or after the Closing Date if required to do so
by the holders thereof and (e) so long as the Borrower is in pro forma
compliance with the Senior Secured Leverage Incurrence Test and no Default or
Event of Default has occurred and is continuing or would result therefrom, the
Borrower may make Restricted Junior Payment in an aggregate amount not to exceed
(i) $35,000,000 per Fiscal Year plus (ii) the amount of Excess Cash Flow not
required to be prepaid pursuant to Section 2.8(b)(v) for the previous Fiscal
Year.

 

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Section 6.6 Financial Covenants.

Commencing on the day immediately following the Closing Date, the Borrower
shall, and shall cause its Subsidiaries to, comply with the following financial
covenants:

(a) Consolidated Total Adjusted Leverage Ratio. The Consolidated Total Adjusted
Leverage Ratio, as of the last day of each Fiscal Quarter of the Borrower
occurring during the periods indicated below, shall be less than or equal to the
following:

 

Period

   Ratio

Fiscal Quarter ending September 27, 2007 through and including Fiscal Quarter
ending June 25, 2009

   6.50 to 1.00

Fiscal Quarter ending September 24, 2009 and each Fiscal Quarter ending
thereafter

   6.25 to 1.00

(b) Consolidated Interest Coverage Ratio. The Consolidated Interest Coverage
Ratio, as of the last day of each Fiscal Quarter of the Borrower (beginning with
the fiscal quarter ending September 27, 2007), shall be greater than or equal to
2.25 to 1.00 at all times.

Section 6.7 Restriction on Fundamental Changes, Asset Sales and Acquisitions.

The Borrower shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of the Borrower or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or Capital Stock or
other evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:

(a) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, (i) any Guarantor or other Subsidiary of
the Borrower may be merged with or into the Borrower or any wholly-owned
Guarantor, or be liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to the
Borrower or any wholly-owned Guarantor and (ii) in connection with any Permitted
Acquisition, the Borrower or any Guarantor may merge into or consolidate with
any other Person or permit any other Person to merge into or consolidate with
it; provided that (A) if such merger involves the Borrower, the Borrower shall
be the continuing or surviving corporation and (B) if such a merger involves a
wholly-owned Guarantor, such wholly-owned Guarantor shall be the continuing or

 

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surviving corporation or such continuing or surviving corporation shall be a
wholly-owned Subsidiary of the Borrower and shall comply with Sections 5.9, 5.10
and 5.11 hereof;

(b) the Borrower and its Subsidiaries may sell inventory in the ordinary course
of business and dispose of obsolete, worn out or surplus property in the
ordinary course of business (but excluding dispositions of underperforming
assets);

(c) subject to Section 6.11, the Borrower and its Subsidiaries may make
(i) asset sales and dispositions (including sales and dispositions of
underperforming assets) not otherwise permitted by this Section 6.7 of assets
having a fair market value not in excess of $20,000,000 in the aggregate in any
four Fiscal Quarter period, or $90,000,000 in the aggregate during the term of
this Credit Agreement; provided that properties acquired in Permitted
Acquisitions shall be excluded from the foregoing baskets to the extent the sale
of such properties is contemplated at the time of such Permitted Acquisitions,
and (ii) sale and leasebacks permitted by Section 6.8; provided that (A) the
consideration received for such assets shall be in an amount at least equal to
the fair market value thereof, (B) at least 80% of the consideration received
shall be Cash and (C) the Net Cash Proceeds of such asset sales shall be applied
as required by Section 2.8(b)(ii);

(d) the Borrower or any Subsidiary of the Borrower may make acquisitions (each a
“Permitted Acquisition”) of assets and businesses (including acquisitions of the
Capital Stock or other equity interests of another Person); provided that:

(i) immediately prior to and after giving effect to any such acquisition, the
Borrower and its Subsidiaries shall be in compliance with the provisions of
Section 6.12 hereof;

(ii) such Person becomes a Subsidiary of the Borrower, or such business,
property or other assets are acquired by the Borrower or a Subsidiary of the
Borrower;

(iii) prior to the consummation of any such acquisition that would result in the
Borrower having completed Permitted Acquisitions for Net Cash Consideration
exceeding $10,000,000 in any Fiscal Quarter, the Borrower shall deliver to the
Administrative Agent (A) an Officers’ Certificate (1) certifying that no Default
or Event of Default under this Agreement shall then exist or shall occur as a
result of such acquisition and (2) demonstrating, in a manner consistent with
past practices or otherwise acceptable to the Administrative Agent, that after
giving effect to such acquisition and to all Indebtedness to be incurred or
assumed or repaid in connection with or as consideration for such acquisition,
that the Borrower would be in pro forma compliance with the Senior Secured
Leverage Incurrence Test for the four consecutive Fiscal Quarter period ending
on or immediately prior to the date of the proposed acquisition; provided that
if such acquisition is consummated during the first 45 days after the end of a
Fiscal

 

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Quarter, then such pro forma compliance shall be determined for the four
consecutive Fiscal Quarter period ending on the last day of the penultimate
Fiscal Quarter prior to the date of such acquisition, (B) a copy of all
environmental reports obtained in connection with such acquisition and a copy of
the principal documents (e.g., purchase agreement, merger agreement) related to
such acquisition, (C) for any acquisition with Net Cash Consideration in excess
of $50,000,000, a copy, prepared in conformity with GAAP or otherwise acceptable
to the Administrative Agent, of financial statements (audited financial
statements to the extent available) of the Person or business so acquired for
the immediately preceding four consecutive Fiscal Quarter period corresponding
to the calculation period for the financial covenants in the preceding
clause (A) (and, if an asset purchase, pro forma financial statements on a
historical basis), (D) for any acquisition with Net Cash Consideration in excess
of $200,000,000, copies, prepared in conformity with GAAP or otherwise
acceptable to the Administrative Agent, of audited financial statements of the
Person or business so acquired for the most recent available Fiscal Year, and of
unaudited financial statements prepared in a manner consistent with such
Person’s most recent audited financial statements for the four consecutive
Fiscal Quarter period corresponding to the calculation period for the financial
covenants in the preceding clause (A) (and, if an asset purchase, pro forma
financial statements on a historical basis); provided that, if audited financial
statements are not available for a period exceeding two Fiscal Quarters
following the date of the most recent audited financial statements provided for
the Person or business so acquired, then the Borrower also will provide a due
diligence report in form and substance acceptable to the Administrative Agent
from a third party auditor acceptable to the Administrative Agent and (E) such
other information as the Administrative Agent may reasonably request;

(iv) the Borrower shall, and shall cause its Subsidiaries to, comply with the
requirements of Sections 5.9, 5.10 and 5.11 hereof with respect to such
acquisitions;

(v) after giving effect to such acquisition, there shall be at least $20,000,000
of borrowing availability under the Revolving Committed Amount;

(vi) such acquisition is not a “hostile” acquisition and has been approved by
the board of directors and/or shareholders of the Borrower and the Person that
is the subject of the acquisition; and

(vii) with respect to any single acquisition (or series of related acquisitions)
of 20 or more stores or any single acquisition (or series of related
acquisitions) where the purchase price is equal to or greater than $20,000,000,
such Person has EBITDA for the twelve month period ending as of the most recent
Fiscal Quarter end of such Person prior to the acquisition date in an amount
greater than $0, after giving effect to all adjustments to EBITDA permitted
pursuant to Regulation S-X and any cost savings or synergies acceptable to the
Administrative Agent;

 

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provided, however, to the extent an acquisition fails to meet the requirements
set forth in Section 6.7(d)(iii)(A)(2) or Section 6.7(d)(v) above, but otherwise
satisfies the other requirements set forth in this Section 6.7(d), the Borrower
and its Subsidiaries may make such acquisition (each an “Additional
Acquisition”) subject to the following conditions: (1) no more than 10 stores
may be acquired in any Fiscal Year pursuant to Additional Acquisitions, (2) the
total consideration paid for Additional Acquisitions in any Fiscal Year shall
not exceed $50,000,000 in the aggregate, (3) for purposes of this Credit
Agreement, any such Additional Acquisition shall be treated as a capital
expenditure rather than a Permitted Acquisition and shall be included in the
calculation of Consolidated Capital Expenditures for the relevant period and
(4) each such Additional Acquisition shall be subject to the approval of the
Administrative Agent, not to be unreasonably withheld; provided, further, it is
understood and agreed that an acquisition of a Development Property shall
constitute a Consolidated Capital Expenditure unless it is part of a Permitted
Acquisition.

(e) the Borrower may amend its Certificate of Incorporation to create and issue
classes or series of preferred stock pursuant thereto; provided that any class
or series of preferred stock issued under such authorized “blank check”
preferred stock shall not be Disqualified Capital Stock;

(f) the Borrower may terminate any Hedging Agreement permitted pursuant to
Section 6.3(g); and

(g) the Borrower and its Subsidiaries may make transfers of any of their
properties or assets to another Person in transactions in which 80% of the
consideration received by the transferor consists of properties or assets (other
than Cash) that will be used in the business of the transferor; provided that
(i) the aggregate fair market value (as determined in good faith by the board of
directors of the Borrower) of the property or assets being transferred by the
Borrower or such Subsidiary is not greater than the aggregate fair market value
(as determined in good faith by the board of directors of the Borrower) of the
property or assets received by the Borrower or such Subsidiary in such exchange,
(ii) the aggregate fair market value (as determined in good faith by the board
of directors of the Borrower) of all property or assets transferred by the
Borrower and any of its Subsidiaries in connection with such exchanges in any
Fiscal Year shall not exceed $20,000,000 and (iii) the terms of any such
transaction shall be reasonably satisfactory to the Administrative Agent.

Section 6.8 Sales and Leasebacks.

The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (a) which the Borrower or any of its Subsidiaries has sold
or transferred or is to sell or transfer to any other Person (other than the

 

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Borrower or any of its Subsidiaries) or (b) which the Borrower or any of its
Subsidiaries intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by the Borrower or any
of its Subsidiaries to any Person (other than the Borrower or any of its
Subsidiaries) in connection with such lease; provided that (i) the Borrower and
its Subsidiaries may remain liable as lessee or as a guarantor or other surety
with respect to any lease entered into by the Borrower or any such Subsidiary
prior to the Closing Date and set forth on Schedule 6.8-1 annexed hereto,
(ii) to the extent such sale and leaseback transaction relates to properties or
assets owned by the Borrower or any of its Subsidiaries as of the Closing Date
and set forth on Schedule 6.8-2 or acquired by the Borrower or any of its
Subsidiaries after the Closing Date, including any Development Property, the
Borrower and its Subsidiaries may become liable as lessee, guarantor or other
surety with respect to new leases that would otherwise be prohibited by this
Section 6.8 to the extent that (A) such lease, if a Capital Lease, is permitted
pursuant to Section 6.1(c), (B) the consideration received is at least equal to
the fair market value of the property sold as determined in good faith by the
Borrower’s board of directors or a duly-appointed executive committee thereof,
(C) such sale and leaseback transaction occurs within 90 days of (1) the
acquisition or completion of construction, improvement or remodeling, as the
case may be, of such property or asset by the Borrower or any of its
Subsidiaries, or (2) the date a store begins operations on a Development
Property; (D) the aggregate amount of assets sold pursuant to all sales and
leasebacks (excluding the properties listed on Schedule 6.8-2 and properties
acquired in Permitted Acquisitions that are made subject to sale leaseback
transactions contemplated at the time of such Permitted Acquisitions with
respect to such properties) made after the Closing Date shall not exceed
$20,000,000 and (E) the Net Cash Proceeds derived from the sale and leaseback of
such sold properties or assets owned by the Borrower and its Subsidiaries shall
be applied in accordance with Section 2.8(b)(ii) and (iii) without limiting the
foregoing terms of this Section 6.8, the Borrower and its Subsidiaries shall
have the right to subject existing properties of the Borrower and its
Subsidiaries or properties acquired in Permitted Acquisitions to Permitted Sale
Leaseback Transactions in exchange for properties that are already subject to
such Permitted Sale Leaseback Transactions in an aggregate amount not to exceed
$10,000,000 in value for the exchanged properties during any Fiscal Year and
$25,000,000 in value for the exchanged properties during the term of this
Agreement.

Section 6.9 Sale or Discount of Receivables.

The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.

Section 6.10 Transactions with Shareholders and Affiliates.

The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of Capital Stock of the
Borrower or with any Affiliate of the Borrower or of any such holder
(collectively “Related Persons”) on terms that are less favorable to the
Borrower or that Subsidiary, as the case may be, than those that might be
obtained at the time in an arm’s length

 

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transaction from Persons who are not Related Persons; provided that the
foregoing restriction shall not apply to (a) any transaction between the
Borrower and any of its wholly-owned Subsidiaries or between any of its
wholly-owned Subsidiaries, (b) reasonable and customary fees paid to members of
the board of directors of the Borrower, (c) compensation arrangements and
benefit plans for officers and other employees of the Borrower and its
Subsidiaries entered into or maintained or established in the ordinary course of
business and in accordance with historic practices of the Borrower and its
Subsidiaries, (d) any Investment made in accordance with Section 6.3 or (e) any
payment of cash dividends or repurchase of Capital Stock of the Borrower to the
extent permitted by Section 6.5.

Section 6.11 Disposal of Subsidiary Capital Stock; Formation of New
Subsidiaries.

(a) Disposal of Subsidiary Capital Stock. Except for any sale of 100% of the
Capital Stock of any of its Subsidiaries in compliance with the provisions of
Section 6.7(c), the Borrower shall not:

(i) directly or indirectly sell, assign, pledge or otherwise encumber or dispose
of any shares of Capital Stock of any of its Subsidiaries, except to qualify
directors if required by applicable law; or

(ii) permit any of its Subsidiaries directly or indirectly to sell, assign,
pledge or otherwise encumber or dispose of any shares of Capital Stock of any of
its Subsidiaries (including such Subsidiary), except to the Borrower, another
Subsidiary of the Borrower, or to qualify directors if required by applicable
law.

(b) Formation of New Subsidiaries. The Borrower will not, nor will it permit any
Subsidiary to, create, form or acquire any Subsidiaries, except for Domestic
Subsidiaries which are joined as Additional Credit Parties if required in
accordance with the terms hereof.

Section 6.12 Conduct of Business.

From and after the Closing Date, the Borrower shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than the businesses
engaged in by the Borrower and its Subsidiaries on the Closing Date and similar
or related businesses. The fair market value of the consolidated assets utilized
by the Borrower and its Subsidiaries in gaming activities and the revenue
derived by the Borrower and its Subsidiaries from gaming activities shall not
exceed an amount equal to 4% of the consolidated assets and 4% of the
consolidated revenues, respectively, of the Borrower and its Subsidiaries.

Section 6.13 Restrictions on Certain Amendments; Senior Debt Status.

(a) Amendments or Waivers of Certain Related Agreements. Neither the Borrower
nor any of its Subsidiaries will agree to any material amendment to, or waive
any of its material rights under, any Related Agreement (other than any Related

 

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Agreement evidencing or governing any Subordinated Indebtedness) after the
Closing Date without in each case obtaining the prior written consent of
Required Lenders to such amendment or waiver.

(b) Amendments of Documents Relating to Subordinated Indebtedness. The Borrower
shall not, and shall not permit any of its Subsidiaries to, amend or otherwise
change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Subordinated Indebtedness (or a
trustee or other representative on their behalf) which would be adverse to the
Borrower or the Lenders.

(c) Designation of “Designated Senior Indebtedness”. The Borrower shall not
designate any Indebtedness as “Designated Senior Indebtedness” (as defined in
the Senior Subordinated Note Indenture, the Senior Convertible Note Indenture or
the indenture pursuant to which any Subordinated Indebtedness permitted under
Section 6.1(f) is issued) for purposes of the Senior Subordinated Note
Indenture, Senior Convertible Note Indenture or such other indenture without the
prior written consent of Required Lenders.

(d) Amendments to Organizational Documents. The Borrower shall not, and shall
not permit any of its Subsidiaries to, amend, modify or change its certificate
of incorporation, certificate of designation (or corporate charter or other
similar organizational document) operating agreement or bylaws (or other similar
document) in any respect that is materially adverse to the interests of the
Lenders.

Section 6.14 Fiscal Year; State of Organization; Accounting Practices.

No Credit Party shall (a) change its Fiscal Year-end from the last Thursday in
September without the consent of the Administrative Agent, (b) change its state
of incorporation or organization without the consent of the Administrative Agent
or (c) change its accounting policies and practices (except in accordance with
GAAP) in any manner adverse to the interests of the Lenders.

 

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Section 6.15 Management Fees.

The Borrower shall not, nor shall they permit any of its Subsidiaries, directly
or indirectly, to pay any management, consulting or similar fees to any
Affiliate or to any manager, director, officer or employee of the Borrower or
any of its Subsidiaries.

Section 6.16 Letters of Credit.

The maximum amount of all letters of credit issued (including Letters of Credit
issued hereunder) or bankers’ acceptances facilities created for the account of
the Borrower and its Subsidiaries and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed), shall not exceed $180,000,000 in the
aggregate at any one time.

Section 6.17 Maximum Consolidated Capital Expenditures.

The Borrower shall not, and shall not permit any of its Subsidiaries to, make
Consolidated Capital Expenditures in any Fiscal Year in an aggregate amount in
excess of (a) the greater of (i) $150,000,000 and (ii) 50% of the Borrower’s
Consolidated Pro Forma EBITDA for the immediately preceding Fiscal Year plus
(b) up to 50% of the unused amount available for Consolidated Capital
Expenditures under this Section for the immediately preceding Fiscal Year
(excluding any carry forward available from any prior Fiscal Year); provided,
that with respect to any Fiscal Year, Consolidated Capital Expenditures made
during any such Fiscal Year shall be deemed to be made first with respect to the
applicable limitation for such Fiscal Year under subsection (a)(i) or (a)(ii)
above and then with respect to any carry forward amount under subsection
(b) above to the extent applicable.

ARTICLE VII

EVENTS OF DEFAULT

Section 7.1 Events of Default.

An Event of Default shall exist upon the occurrence of any of the following
specified events (each an “Event of Default”):

(a) Payment Default. (i) Failure by the Borrower to pay any installment of
principal of any Loan when due, whether at stated maturity, by acceleration, by
notice of voluntary prepayment, by mandatory prepayment or otherwise;
(ii) failure by the Borrower to pay when due any amount payable to the Issuing
Lender in reimbursement of any drawing under a Letter of Credit (it being
understood that the payment of such amount with the proceeds of Revolving Loans
in accordance with Section 2.4(d) hereof shall not be a failure by the Borrower
to pay when due such amount); or (iii) failure by the Borrower to pay any
interest on any Loan or any fee or any other amount due under this Agreement
within five days after the date due; or

 

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(b) Defaults in Other Agreements. (i) Failure of the Borrower or any of its
Subsidiaries to pay when due any principal of or interest on or any other amount
payable in respect of one or more items of Indebtedness (other than Indebtedness
referred to in Section 7.1(a)) or Contingent Obligations with an aggregate
principal amount of $20,000,000 or more, in each case beyond the end of any
grace period provided therefor; or (ii) breach or default by the Borrower or any
of its Subsidiaries with respect to any other material term of (A) one or more
items of Indebtedness or Contingent Obligations in the aggregate principal
amounts referred to in clause (i) above or (B) any loan agreement, mortgage,
indenture or other agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s), if the effect of such breach or default is to cause,
or to permit the holder or holders of such Indebtedness or Contingent
Obligation(s) or the beneficiary or beneficiaries of such Indebtedness or
Contingent Obligation(s) (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, that Indebtedness or
Contingent Obligation(s) to become or be declared due and payable prior to its
stated maturity or the stated maturity of any underlying obligation, as the case
may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or (iii) breach or default of any payment obligation under any
Secured Hedging Agreement following any applicable grace period; or

(c) Breach of Certain Covenants. Failure of the Borrower to perform or comply
with any term or condition contained in Sections 5.1(c), 5.1(h), 5.2, 5.12 or
Article VI of this Agreement; provided that any breach by a Credit Party of the
financial covenants in Section 6.6 shall only constitute an Event of Default
with respect to the Revolving Facility and shall not constitute an Event of
Default with respect to the Term Loan until the earlier of (i) the Required
Revolving Lenders or the Administrative Agent on behalf of the Required
Revolving Lenders exercise any remedy pursuant to the terms of Section 7.2
and/or the Revolving Commitments are terminated and the outstanding Revolving
Loans and LOC Obligations are accelerated as a result of such breach in
accordance with the terms of Section 7.2 or (ii) so long as such Event of
Default has not been cured or waived by the Required Revolving Lenders, thirty
(30) days after the date the delivery of the most recent covenant compliance
certificate is required under Section 5.1(c); or

(d) Breach of Representation and Warranty. Any representation, warranty,
certification or other statement made by the Borrower or any of its Subsidiaries
in any Credit Document or in any statement or certificate at any time given by
the Borrower or any of its Subsidiaries in writing pursuant hereto or thereto or
in connection herewith or therewith shall be false or misleading in any material
respect on the date as of which made or deemed made; or

(e) Other Defaults Under Credit Documents. Any Credit Party shall default in the
performance of or compliance with any term contained in this Agreement or any of
the other Credit Documents, other than any such term referred to in any other
subsections of this Section, and such default shall not have been remedied or
waived within 30 days after its occurrence; or

 

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(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) A court having
jurisdiction in the premises shall enter a decree or order for relief in respect
of the Borrower or any of its Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal or state law;
or (ii) an involuntary case shall be commenced against the Borrower or any of
its Subsidiaries under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the Borrower or any of its Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or (iii) there shall
have occurred the involuntary appointment of an interim receiver, trustee or
other custodian of the Borrower or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of the Borrower or any of its Subsidiaries, and any such event
described in clause (ii) or (iii) shall continue for 60 days unless dismissed,
bonded or discharged; or

(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (i) The Borrower or any
of its Subsidiaries shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or the
Borrower or any of its Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) the Borrower or any of its Subsidiaries shall be unable, or
shall fail generally, or shall admit in writing its inability, to pay its debts
as such debts become due; or (iii) the Board of Directors of the Borrower or any
of its Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clauses (i) or (ii) above; or

(h) Judgments and Attachments. Any money judgment, writ or warrant of attachment
or similar process involving in the aggregate at any time an amount in excess of
$20,000,000 (except to the extent adequately covered by insurance as to which a
solvent and unaffiliated insurance company has not denied coverage) shall be
entered or filed against the Borrower or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 90 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or

(i) Dissolution. Any order, judgment or decree shall be entered against the
Borrower or any of its Subsidiaries decreeing the dissolution or split up of the
Borrower or that Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or

 

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(j) Employee Benefit Plans. There shall occur one or more ERISA Events which
individually or in the aggregate results in or might reasonably be expected to
result in liability of the Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates in excess of $2,000,000 during the term of this
Agreement; or there shall exist an amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for
all Pension Plans (excluding for purposes of such computation any Pension Plans
with respect to which assets exceed benefit liabilities), which exceeds
$2,000,000; or

(k) Change of Control. There shall occur a Change of Control; or

(l) Invalidity of Guaranty; Failure of Security; Repudiation of Credit Party
Obligations. At any time after the execution and delivery thereof, (i) the
Guaranty for any reason, other than the satisfaction in full of all Credit Party
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Security Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Credit Party Obligations or any
other termination of such Security Document in accordance with the terms hereof
or thereof) or shall be declared null and void, or the Administrative Agent
shall not have or shall cease to have a valid and perfected First Priority Lien
in any Collateral purported to be covered thereby, in each case for any reason
other than the failure of the Administrative Agent or any Lender to take any
action within its control, or (iii) any Credit Party shall contest the validity
or enforceability of any Credit Document (or the priority or perfection of any
Lien granted thereunder) in writing or deny in writing that it has any further
liability, including with respect to future advances by the Lenders, under any
Credit Document to which it is a party; or

(m) Seniority of Credit Party Obligations. Any default (which is not waived or
cured within the applicable period of grace) or event of default shall occur
under any of the Senior Subordinated Notes, Senior Subordinated Convertible
Notes or any other Subordinated Indebtedness, or the subordination provisions
contained therein shall cease to be in full force and effect or to give the
Lenders the rights, powers and privileges purported to be created thereby, or
the Credit Party Obligations shall fail to be deemed senior Indebtedness under
the terms of the Senior Subordinated Notes, the Senior Subordinated Convertible
Notes or any other Subordinated Indebtedness; or

(n) Uninsured Loss. Any uninsured damage to or loss, theft or destruction of any
assets of the Credit Parties or any of their Subsidiaries (except to the extent
adequately covered by insurance as to which a solvent and unaffiliated insurance
company has not denied coverage) shall occur that is in excess of $10,000,000.

Section 7.2 Acceleration; Remedies.

Upon the occurrence and during the continuance of an Event of Default, then, and
in any such event:

(a) if such event is an Event of Default specified in Section 7.1(f) or
(g) above, automatically the Commitments shall immediately terminate and the
Loans (with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall immediately become due and payable;

 

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(b) if such event is an Event of Default specified in Section 7.1 that only
applies to the Revolving Facility in accordance with the terms thereof, any or
all of the following actions may be taken:

(i) with the written consent of the Required Revolving Lenders, the
Administrative Agent may, or upon the written request of the Required Revolving
Lenders, the Administrative Agent shall, by written notice to the Borrower,
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate;

(ii) the Administrative Agent may, or upon the written request of the Required
Revolving Lenders, the Administrative Agent shall, by written notice to the
Borrower, declare the Revolving Loans, Swingline Loans and LOC Obligations (with
accrued interest on any of the foregoing) and all other amounts owing under this
Credit Agreement and the Revolving Notes with respect to the Revolving Facility
to be due and payable forthwith and direct the Borrower to pay to the
Administrative Agent cash collateral as security for the LOC Obligations for
subsequent drawings under then outstanding Letters of Credit an amount equal to
the maximum amount of which may be drawn under Letters of Credit then
outstanding, whereupon the same shall immediately become due and payable; and/or

(iii) with the written consent of the Required Revolving Lenders, the
Administrative Agent may, or upon the written request of the Required Revolving
Lenders, the Administrative Agent shall, exercise such other rights and remedies
with respect to the Revolving Facility as provided under the Credit Documents
and under applicable law;

provided that if the Administrative Agent exercises any remedy pursuant to this
subsection (b), (A) prior to the Delayed Draw Commitment Termination Date,
(y) the Required Initial Term Loan Lenders shall have the right to direct in
writing the Administrative Agent to exercise any such remedy with respect to the
Initial Term Loan and (z) the Required Delayed Draw Term Loan Lenders shall have
the right to direct in writing the Administrative Agent to exercise any such
remedy with respect to the Delayed Draw Term Loan Commitment and Delayed Draw
Term Loan or (B) after the Delayed Draw Commitment Termination Date, the
Required Term Loan Lenders shall have the right to direct in writing the
Administrative Agent to exercise any such remedy with respect to the Term Loan;
and

 

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(c) if such event is any other Event of Default (including, without limitation,
any Event of Default under Section 7.1 that applies to the Revolving Facility
and the Term Loan), any or all of the following actions may be taken:

(i) the Administrative Agent may, or upon the written request of the Required
Lenders, the Administrative Agent shall, by written notice to the Borrower,
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate;

(ii) the Administrative Agent may, or upon the written request of the Required
Lenders, the Administrative Agent shall, by written notice to the Borrower,
declare the Loans (with accrued interest thereon) and all other amounts owing
under this Credit Agreement and the Notes to be due and payable forthwith and
direct the Borrower to pay to the Administrative Agent cash collateral as
security for the LOC Obligations for subsequent drawings under then outstanding
Letters of Credit an amount equal to the maximum amount of which may be drawn
under Letters of Credit then outstanding, whereupon the same shall immediately
become due and payable; and/or

(iii) the Administrative Agent may, or upon the written request of the Required
Lenders, the Administrative Agent shall, exercise such other rights and remedies
as provided under the Credit Documents and under applicable law.

ARTICLE VIII

THE AGENT

Section 8.1 Appointment and Authority.

Each of the Lenders and the Issuing Lender hereby irrevocably appoints Wachovia
to act on its behalf as the Administrative Agent hereunder and under the other
Credit Documents and authorizes the Administrative Agent to take such actions on
its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such actions and powers as
are reasonably incidental thereto. The provisions of this Article are solely for
the benefit of the Administrative Agent, the Lenders and the Issuing Lender, and
neither the Borrower nor any other Credit Party shall have rights as a third
party beneficiary of any of such provisions.

Section 8.2 Nature of Duties.

Anything herein to the contrary notwithstanding, none of the joint lead
bookrunners, Arrangers or other agents listed on the cover page hereof shall
have any powers, duties or responsibilities under this Agreement or any of the
other Credit Documents, except in its capacity, as applicable, as the
Administrative Agent, a Lender or the Issuing Lender hereunder. Without limiting
the foregoing, none of the Lenders or other Persons so identified shall have or

 

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be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

The Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Credit 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 Article 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.

Section 8.3 Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Credit Documents. Without limiting
the generality of the foregoing, the Administrative Agent:

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

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Credit 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 Credit 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 Credit Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Credit
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its 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 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 Sections 9.1 and 7.2) or (ii) in the absence of its
own gross negligence or willful misconduct.

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 Agreement or any other Credit Document, (ii) the
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document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Credit Document or any other agreement,
instrument or document or (v) the satisfaction of any condition set forth in
Article IV or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.

Section 8.4 Reliance by Administrative Agent.

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 or the Issuing Lender, the Administrative Agent may presume that
such condition is satisfactory to such Lender or the Issuing Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the Issuing 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 Borrower; provided that no attorney-client relationship
will arise or be deemed to exist based on any such consultation), 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.

Section 8.5 Notice of Default.

The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Agreement expressly requires that such action be taken, or not taken, only
with the consent or upon the authorization of the Required Lenders, or all of
the Lenders, as the case may be.

 

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Section 8.6 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender and the Issuing Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representation or warranty to it
and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of any Credit Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender and the Issuing 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 appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the Issuing 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 Agreement,
any other Credit Document or any related agreement or any document furnished
hereunder or thereunder.

Section 8.7 Indemnification.

The Lenders agree to indemnify the Administrative Agent, the Issuing Lender, and
the Swingline Lender in its capacity hereunder and their Affiliates and their
respective officers, directors, agents and employees (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective Commitment Percentages in
effect on the date on which indemnification is sought under this Section, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Credit Party Obligations) be imposed on, incurred
by or asserted against any such indemnitee in any way relating to or arising out
of any Credit Document or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by any such indemnitee under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from such indemnitee’s gross negligence or willful misconduct, as
determined by a court of competent jurisdiction. The agreements in this Section
shall survive the termination of this Agreement and payment of the Notes, any
Reimbursement Obligation and all other amounts payable hereunder.

Section 8.8 Administrative Agent in Its Individual Capacity.

The Person serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not 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

 

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capacity for and generally engage in any kind of business with the Borrower 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.

Section 8.9 Successor Administrative Agent.

The Administrative Agent may at any time give written notice of its resignation
to the Lenders, the Issuing Lender and the Borrower. Upon receipt of any such
notice of resignation, the Required Lenders shall have the right to appoint a
successor, which may be an Affiliate of any such bank and so long as there is no
Default or Event of Default, such successor agent shall be approved by the
Borrower with such approval not to be unreasonably withheld. 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 and the Issuing Lender,
appoint a successor Administrative Agent meeting the qualifications set forth
above provided that if the Administrative Agent shall notify the Borrower and
the Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (a) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Credit Documents (except that in
the case of any Collateral held by the Administrative Agent on behalf of the
Lenders or the Issuing Lender under any of the Credit Documents, the retiring
Administrative Agent shall continue to hold such Collateral until such time as a
successor Administrative Agent is appointed) and (b) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the Issuing
Lender directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this paragraph. 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 (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Credit Documents (if not already
discharged therefrom as provided above in this paragraph). The fees payable by
the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring Administrative Agent’s resignation hereunder and
under the other Credit Documents, the provisions of this Article and Section 9.5
shall continue in effect for the benefit of such 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.

Section 8.10 Collateral and Guaranty Matters.

(a) The Lenders irrevocably authorize and direct the Administrative Agent:

(i) to release any Lien on any Collateral granted to or held by the
Administrative Agent under any Credit Document (A) upon termination of the
Commitments and payment in full of all Credit Party Obligations (other than

 

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contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (B) that is transferred or to be transferred as part of or in
connection with any sale or other disposition permitted under Section 6.7, or
(C) subject to Section 9.1, if approved, authorized or ratified in writing by
the Required Lenders;

(ii) to subordinate any Lien on any Collateral granted to or held by the
Administrative Agent under any Credit Document to the holder of any Lien on such
property that is permitted by Section 6.2; and

(iii) to release any Guarantor from its obligations under the applicable
Guaranty if such Person ceases to be a Guarantor as a result of a transaction
permitted hereunder.

(b) In connection with a termination or release pursuant to this Section, the
Administrative Agent shall promptly execute and deliver to the applicable Credit
Party, at the Borrower’s expense, all documents that the applicable Credit Party
shall reasonably request to evidence such termination or release. Upon request
by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent’s authority to release or subordinate its
interest in particular types or items of Collateral, or to release any Guarantor
from its obligations under the Guaranty pursuant to this Section.

ARTICLE IX

MISCELLANEOUS

Section 9.1 Amendments, Waivers and Release of Collateral.

Neither this Credit Agreement, nor any of the Notes, nor any of the other Credit
Documents, nor any terms hereof or thereof may be amended, supplemented, waived
or modified except in accordance with the provisions of this Section nor may the
Collateral be released except as specifically provided herein or in the Security
Documents or in accordance with the provisions of this Section. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Credit Agreement or
the other Credit Documents or changing in any manner the rights of the Lenders
or of the Borrower hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders may specify in such instrument, any of the
requirements of this Credit Agreement or the other Credit Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, waiver, supplement, modification or release
shall:

(i) without the written consent of each Lender directly affected thereby:
(A) reduce or forgive the principal amount, or extend the scheduled date

 

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of payment or maturity, of any Loan or Note or any installment thereon; or
(B) reduce the stated rate of or forgive any interest or fee payable hereunder
(other than interest at the increased post-default rate) or extend or waive the
scheduled date of any payment of interest or fee; or (C) provide for Interest
Periods greater than six months; or (D) increase the amount or extend the
expiration date of any Lender’s Commitment; provided that it is understood and
agreed that (1) no waiver, reduction or deferral of a mandatory prepayment
required pursuant to Section 2.8(b), nor any amendment of Section 2.8(b) or the
definitions of Asset Disposition, Debt Issuance, Excess Cash Flow or Recovery
Event, shall constitute a reduction or forgiveness of the amount of, or an
extension of the scheduled date or maturity of, or any Loan or Note or any
installment thereon, (2) any reduction in the stated rate of interest on
Revolving Loans shall only require the written consent of each Lender holding a
Revolving Commitment and (3) any reduction in the stated rate of interest on the
Term Loan shall only require the written consent of each Lender holding a
portion of the outstanding Term Loan, or

(ii) amend, modify or waive any provision of this Section or change the
percentage specified in the definition of Required Lenders without the written
consent of each Lender directly affected thereby, or

(iii) amend, modify or waive any provision of Section 2.13(a) or any other term
with respect to the priority of any Loan or the pro rata treatment of payments
without the written consent of each Lender directly affected thereby, or

(iv) amend, modify or waive the order in which Credit Party Obligations are paid
in Section 2.8(b) or Section 2.13(b) without the written consent of each Lender
and each Hedging Agreement Provider directly affected thereby, or

(v) except as otherwise permitted by this Agreement, release all or
substantially all of the Guarantors from their obligations under the Guaranty
without the written consent of all of the Lenders, or

(vi) release all or substantially all of the Collateral without the written
consent of all of the Lenders, or

(vii) amend, modify or waive any provision of the Credit Documents requiring
consent, approval or request of the Required Lenders or all Lenders, without the
written consent of all of the Required Lenders or the Lenders as appropriate, or

(viii) amend, modify or waive any provision of the Credit Documents affecting
the rights or duties of the Administrative Agent (including Article VIII), the
Issuing Lender or the Swingline Lender without the written consent of the
Administrative Agent, the Issuing Lender or the Swingline Lender, as applicable,
in addition to the Lenders required herein to take such action, or

 

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(ix) without the consent of the Required Revolving Lenders or the Required
Delayed Draw Term Loan Lenders, as applicable, amend, modify or waive any
provision in Section 2.3 or 4.2 or waive any Default or Event of Default (or
amend any Credit Document to effectively waive any existing Default or Event of
Default) if the effect of such amendment, modification or waiver is that the
Revolving Lenders or the Delayed Draw Term Loan Lenders, as applicable, shall be
required to fund Revolving Loans or Delayed Draw Term Loans, as applicable, when
such Revolving Lenders or Delayed Draw Term Loan Lenders would otherwise not be
required to so fund pursuant to the terms of Section 2.3 and 4.2, or

(x) amend or modify the definition of Credit Party Obligations to delete or
exclude any obligation or liability described therein without the written
consent of each Lender directly affected thereby, or

(xi) amend the definitions of “Hedging Agreement,” “Secured Hedging Agreement,”
or “Hedging Agreement Provider” without the consent of any Hedging Agreement
Provider that would be adversely affected thereby.

Any such waiver, any such amendment, supplement or modification and any such
release shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the other Credit Parties, the Lenders, the Issuing Lender, the
Administrative Agent and all future holders of the Notes. In the case of any
waiver, the Borrower, the other Credit Parties, the Lenders, the Issuing Lender
and the Administrative Agent shall be restored to their former position and
rights hereunder and under the outstanding Loans and Notes and other Credit
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.

Notwithstanding the foregoing, any amendment, waiver or other modification to
the financial covenants set forth in Section 6.6 or any component definition of
such financial covenants shall only require the consent of the Required
Revolving Lenders; provided that any amendment, waiver or other modification to
a component definition of the financial covenants in Section 6.6 shall only
apply to the computation of such financial covenants.

Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9 and
Section 8.10); provided, however, that the Administrative Agent will provide
written notice to the Borrower of any such amendment, modification or waiver. In
addition, the Borrower and the Lenders hereby authorize the Administrative Agent
to modify this Credit Agreement by unilaterally amending or supplementing
Section 9.2 from time to time in the manner requested by the Borrower, the
Administrative Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; provided, however, that the
Administrative Agent shall promptly deliver a copy of any such modification to
the Borrower and each Lender.

 

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Notwithstanding the fact that the consent of all Lenders is required in certain
circumstances as set forth above, (x) each Lender is entitled to vote as such
Lender sees fit on any bankruptcy reorganization plan that affects the Loans,
and each Lender acknowledges that the provisions of Section 1126(c) of the
Bankruptcy Code supersedes the unanimous consent provisions set forth herein and
(y) the Required Lenders may consent to allow a Credit Party to use Cash
collateral in the context of a bankruptcy or insolvency proceeding.

Section 9.2 Notices.

Except as otherwise provided in Article II, all notices, requests and demands to
or upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) when delivered by hand, (b) when
transmitted via telecopy (or other facsimile device) to the number set out
herein, (c) the next Business Day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or
(d) the third Business Day following the day on which the same is sent by
certified or registered mail, postage prepaid, in each case, addressed as
follows in the case of the Borrower, the other Credit Parties and the
Administrative Agent, and at the addresses provided to the Borrower in the case
of the Lenders, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:

 

The Borrower and the

other Credit Parties:

  

The Pantry, Inc.

1801 Douglas Drive

   Sanford, North Carolina 27330    Attention:   Chief Financial Officer   
Telecopier:   (919) 774-3329    Telephone:   (919) 774-6700
Administrative Agent:   

Wachovia Bank, National Association, as Administrative Agent

Charlotte Plaza

   201 South College Street, CP8    Charlotte, North Carolina 28288-0680   
Attention:   Syndication Agency Services    Telecopier:   (704) 383-0288   
Telephone:   (704) 374-2698    with a copy to:      Wachovia Bank, National
Association    One Wachovia Center, TW-5    Charlotte, North Carolina 28288-0760
   Attention:   Michael Jordan    Telecopier:   (704) 383-6647    Telephone:  
(704) 383-8155

 

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Section 9.3 No Waiver; Cumulative Remedies.

No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

Section 9.4 Survival of Representations and Warranties.

All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Credit Agreement and the Notes
and the making of the Loans, provided that all such representations and
warranties shall terminate on the date upon which the Commitments have been
terminated and all amounts owing hereunder and under any Notes have been paid in
full.

Section 9.5 Payment of Expenses and Taxes; Indemnity.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Agents, the Arrangers and their respective Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent) in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Credit Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Lender and the Swingline Lender in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or Swingline Loan or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by any Agent,
any Arranger, any Lender, the Issuing Lender or the Swingline Lender (including
the reasonable fees, charges and disbursements of any counsel for the any Agent,
any Arranger, any Lender, the Issuing Lender or the Swingline Lender) in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Credit Documents, including its rights under
this Section, or (B) in connection with the Loans made or Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit; provided, except to the extent a conflict of interest exists that
requires separate legal counsel, the Borrower shall be obligated to pay the
reasonable fees and out-of-pocket expenses of only one counsel for the Lenders
(other than counsel to the Arrangers, the Agents, the Issuing Lender and the
Swingline Lender) in connection with the enforcement or protection of their
rights.

(b) Indemnification by the Borrower. The Borrower shall indemnify each Agent
(and any sub-agent thereof), each Arranger, each Lender, the Issuing Lender and

 

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

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under paragraph (a) or (b) of this
Section to be paid by it to the Administrative Agent (or any sub-agent thereof),
the Issuing Lender, Swingline Lender or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the Issuing Lender, Swingline Lender or such Related Party,
as the case may be, such Lender’s 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), Swingline
Lender or the Issuing Lender in its capacity as such, or against any Related
Party of any of the foregoing acting for the Administrative Agent (or any such
sub-agent), Swingline Lender or Issuing Lender in connection with such capacity.

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, any claim
against any

 

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Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Credit Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof. No Indemnitee referred to in paragraph (b) above shall be liable for
any damages arising from the unauthorized use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Credit Documents or the transactions contemplated hereby
or thereby.

(e) Payments. All amounts due under this Section shall be payable promptly/not
later than five (5) Business Days after demand therefor.

Section 9.6 Successors and Assigns; Participations.

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

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

 

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(B) in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date) shall not be less than $1,000,000, in the case of any assignment in
respect of a revolving facility, or $1,000,000, in the case of any assignment in
respect of a term facility, unless each of the Administrative Agent and, so long
as no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);
provided, that Commitments and outstanding Loans of related Approved Funds shall
be aggregated for purposes of determining compliance with such minimum
assignment amounts.

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations among separate Tranches
on a non-pro rata basis.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund;

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of (i) a
Revolving Commitment if such assignment is to a Person that is not a Lender with
a Commitment in respect of such facility, an Affiliate of such Lender or an
Approved Fund with respect to such Lender or (ii) a Term Loan Commitment to a
Person who is not a Lender, an Affiliate of a Lender or an Approved Fund; and

(C) the consent of the Issuing Lender (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of a Revolving
Commitment if such assignment is to a Person that is not a Lender with a
Commitment in respect of such facility, an Affiliate of such Lender or an
Approved Fund with respect to such Lender.

 

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(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500, and the assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided that no more than one such fee shall be payable in
connection with simultaneous assignments to or by two or more Approved Funds.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 2.16 and 9.5 with respect to facts and circumstances
occurring prior to the effective date of such assignment. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in Charlotte, North
Carolina a copy of each Assignment and Assumption delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person

 

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(other than a natural person or the Borrower or any of the Borrower’s Affiliates
or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent and the
Lenders, Issuing Lender and Swingline Lender shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that affects such Participant. Subject
to paragraph (e) of this Section, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.16 and 2.18 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.7 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.13 as though
it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 2.16 and 2.19 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 Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.19 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 Section 2.19 as though it were a Lender.

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

Section 9.7 Right of Set-off; Sharing of Payments.

(a) If an Event of Default shall have occurred and be continuing, each Lender,
the Issuing Lender, and each of their respective Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by applicable
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any

 

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

(b) If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other obligations hereunder resulting in such Lender’s receiving
payment of a proportion of the aggregate amount of its Loans and accrued
interest thereon or other such obligations greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (i) notify the Administrative Agent of such fact, and (ii) purchase (for
cash at face value) participations in the Loans and such other obligations of
the other Lenders, or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

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

(ii) the provisions of this paragraph shall not be construed to apply to (A) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or (B) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans or
participations in Letters of Credit to any assignee or participant, other than
to the Borrower or any Subsidiary thereof (as to which the provisions of this
paragraph shall apply).

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

 

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Section 9.8 Table of Contents and Section Headings.

The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Credit
Agreement.

Section 9.9 Counterparts.

This Credit Agreement may be executed by one or more of the parties to this
Credit Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Credit Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

Section 9.10 Effectiveness.

This Credit Agreement shall become effective on the date on which all of the
parties hereto have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent pursuant to
Section 9.2 or, in the case of the Lenders, shall have given to the
Administrative Agent written, telecopied or telex notice (actually received) at
such office that the same has been signed and mailed to it. Upon this Credit
Agreement becoming effective, the Existing Credit Agreement shall be deemed
amended and restated by this Credit Agreement and all obligations of the lenders
under the Existing Credit Agreement to make extensions of credit thereunder
shall terminate. This Credit Agreement shall not constitute a novation of the
Existing Credit Agreement or the obligations of the Credit Parties thereunder.

Section 9.11 Severability.

Any provision of this Credit Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

Section 9.12 Integration.

This Credit Agreement and the Notes represent the agreement of the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent, the Borrower or any Lender relative to the subject matter
hereof not expressly set forth or referred to herein or in the Notes.

 

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Section 9.13 Governing Law.

This Credit Agreement and the Notes and the rights and obligations of the
parties under this Credit Agreement and the Notes shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

Section 9.14 Consent to Jurisdiction and Service of Process.

All judicial proceedings brought against the Borrower and/or any other Credit
Party with respect to this Credit Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of New York, and, by execution and delivery of this Credit
Agreement, each of the Borrower and the other Credit Parties accepts, for itself
and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Credit
Agreement from which no appeal has been taken or is available. Each of the
Borrower and the other Credit Parties irrevocably agrees that all service of
process in any such proceedings in any such court may be effected by mailing a
copy thereof by registered or certified mail (or any substantially similar form
of mail), postage prepaid, to it at its address set forth in Section 9.2 or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto, such service being hereby acknowledged by the Borrower and the
other Credit Parties to be effective and binding service in every respect. Each
of the Borrower, the other Credit Parties, the Administrative Agent and the
Lenders irrevocably waives any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non conveniens
which it may now or hereafter have to the bringing of any such action or
proceeding in any such jurisdiction. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
the Administrative Agent or any Lender to bring proceedings against the Borrower
or the other Credit Parties in the court of any other jurisdiction.

Section 9.15 Confidentiality.

(a) Each of the Administrative Agent, the Lenders and the Issuing Lender agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to (i) its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and will agree to keep such Information confidential, which
agreement may be in the form of an electronic acknowledgement) and (ii) its
Funds and to its and its Funds’ respective partners, directors, officers,
employees, agents, advisors and other representatives (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e)

 

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in connection with the exercise of any remedies hereunder, under any other
Credit Document or Secured Hedging Agreement or any action or proceeding
relating to this Agreement, any other Credit Document or Secured Hedging
Agreement or the enforcement of rights hereunder or thereunder, (f) subject to
an agreement containing provisions substantially the same as those of this
Section, to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement,
(g) (i) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (ii) an
investor or prospective investor in securities issued by an Approved Fund that
also agrees that Information shall be used solely for the purpose of evaluating
an investment in such securities issued by the Approved Fund, (iii) a trustee,
collateral manager, servicer, backup servicer, noteholder or secured party in
connection with the administration, servicing and reporting on the assets
serving as collateral for securities issued by an Approved Fund, or (iv) a
nationally recognized rating agency that requires access to information
regarding the Credit Parties, the Loans and Credit Documents in connection with
ratings issued in respect of securities issued by an Approved Fund (in each
case, it being understood that the Persons to whom such disclosure is made will
be informed of the confidential nature of such information and instructed to
keep such information confidential), (h) with the consent of the Borrower or
(i) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender, the Issuing Lender or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower.

For purposes of this Section, “Information” means all information received from
the Borrower or any of its Subsidiaries relating to the Borrower or any of its
Subsidiaries or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the
Issuing Lender on a nonconfidential basis prior to disclosure by the Borrower or
any of its Subsidiaries, provided that, in the case of information received from
the Borrower or any of its Subsidiaries after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

(b) Borrower will cooperate with the Administrative Agent in connection with the
publication of certain materials and/or information provided by or on behalf of
the Borrower to the Administrative Agent and Lenders (collectively, “Information
Materials”) pursuant to this Article IX and will designate Information Materials
(A) that are either available to the public or not material with respect to the
Borrower and its Subsidiaries or any of their respective securities for purposes
of United States federal and state securities laws, as “Public Information” and
(B) that are not Public Information as “Private Information”.

 

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Section 9.16 Acknowledgments.

The Borrower and the other Credit Parties each hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
each Credit Document;

(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower or any other Credit Party arising out
of or in connection with this Credit Agreement and the relationship between the
Administrative Agent and the Lenders, on one hand, and the Borrower and the
other Credit Parties, on the other hand, in connection herewith is solely that
of debtor and creditor; and

(c) no joint venture exists among the Lenders or among the Borrower or the other
Credit Parties and the Lenders.

Section 9.17 Waivers of Jury Trial.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER CREDIT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

Section 9.18 USA Patriot Act Notice.

Each Lender and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of the
Patriot Act it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.

 

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ARTICLE X

GUARANTY

Section 10.1 The Guaranty.

In order to induce the Lenders to enter into this Agreement and any Hedging
Agreement Provider to enter into any Secured Hedging Agreement and to extend
credit hereunder and thereunder and in recognition of the direct benefits to be
received by the Guarantors from the Extensions of Credit hereunder and any
Secured Hedging Agreement, each of the Guarantors hereby agrees with the
Administrative Agent, the Lenders and the Hedging Agreement Providers as
follows: each Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all Credit Party Obligations. If any or all of the indebtedness becomes
due and payable hereunder or under any Secured Hedging Agreement, each Guarantor
unconditionally promises to pay such indebtedness to the Administrative Agent,
the Lenders, the Hedging Agreement Providers, or their respective order, or
demand, together with any and all reasonable expenses which may be incurred by
the Administrative Agent or the Lenders in collecting any of the Credit Party
Obligations. The Guaranty set forth in this Article X is a guaranty of timely
payment and not of collection. The word “indebtedness” is used in this Article X
in its most comprehensive sense and includes any and all advances, debts,
obligations and liabilities of the Borrower, including specifically all Credit
Party Obligations, arising in connection with this Agreement, the other Credit
Documents or any Secured Hedging Agreement, in each case, heretofore, now, or
hereafter made, incurred or created, whether voluntarily or involuntarily,
absolute or contingent, liquidated or unliquidated, determined or undetermined,
whether or not such indebtedness is from time to time reduced, or extinguished
and thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.

Notwithstanding any provision to the contrary contained herein or in any other
of the Credit Documents, to the extent the obligations of a Guarantor shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).

Section 10.2 Bankruptcy.

Additionally, each of the Guarantors unconditionally and irrevocably guarantees
jointly and severally the payment of any and all Credit Party Obligations of the
Borrower to the Lenders and any Hedging Agreement Provider whether or not due or
payable by the Borrower upon the occurrence of any of the events specified in
Section 7.1(f) or Section 7.1(g) and unconditionally promises to pay such Credit
Party Obligations to the Administrative Agent for the account of the Lenders and
to any such Hedging Agreement Provider, or order, on demand, in lawful money of

 

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the United States. Each of the Guarantors further agrees that to the extent that
the Borrower or a Guarantor shall make a payment or a transfer of an interest in
any property to the Administrative Agent, any Lender or any Hedging Agreement
Provider, which payment or transfer or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, or otherwise is avoided,
and/or required to be repaid to the Borrower or a Guarantor, the estate of the
Borrower or a Guarantor, a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such avoidance or repayment, the obligation or part thereof intended
to be satisfied shall be revived and continued in full force and effect as if
said payment had not been made.

Section 10.3 Nature of Liability.

The liability of each Guarantor hereunder is exclusive and independent of any
security for or other guaranty of the Credit Party Obligations of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor’s liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Credit Party
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent, the Lenders or any Hedging Agreement Provider on the
Credit Party Obligations which the Administrative Agent, such Lenders or such
Hedging Agreement Provider repay the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each of the Guarantors waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.

Section 10.4 Independent Obligation.

The obligations of each Guarantor hereunder are independent of the obligations
of any other Guarantor or the Borrower, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is brought
against any other Guarantor or the Borrower and whether or not any other
Guarantor or the Borrower is joined in any such action or actions.

Section 10.5 Authorization.

Each of the Guarantors authorizes the Administrative Agent, each Lender and each
Hedging Agreement Provider without notice or demand (except as shall be required
by applicable statute and cannot be waived), and without affecting or impairing
its liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of the Credit Party Obligations or any part thereof in
accordance with this Agreement and any Secured Hedging Agreement, as applicable,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any Guarantor or any other party for the payment of this
Guaranty or the Credit Party Obligations and exchange, enforce waive and release
any such security, (c) apply such

 

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security and direct the order or manner of sale thereof as the Administrative
Agent and the Lenders in their discretion may determine, (d) release or
substitute any one or more endorsers, Guarantors, the Borrower or other obligors
and (e) to the extent otherwise permitted herein, release or substitute any
Collateral.

Section 10.6 Reliance.

It is not necessary for the Administrative Agent, the Lenders or any Hedging
Agreement Provider to inquire into the capacity or powers of the Borrower or the
officers, directors, members, partners or agents acting or purporting to act on
its behalf, and any Credit Party Obligations made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.

Section 10.7 Waiver.

(a) Each of the Guarantors waives any right (except as shall be required by
applicable statute and cannot be waived) to require the Administrative Agent,
any Lender or any Hedging Agreement Provider to (i) proceed against the
Borrower, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrower, any other guarantor or any other
party, or (iii) pursue any other remedy in the Administrative Agent’s, any
Lender’s or any Hedging Agreement Provider’s power whatsoever. Each of the
Guarantors waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party other than payment in full of
the Credit Party Obligations (other than contingent indemnity obligations),
including without limitation any defense based on or arising out of the
disability of the Borrower, any other guarantor or any other party, or the
unenforceability of the Credit Party Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower other
than payment in full of the Credit Party Obligations. The Administrative Agent
may, at its election, foreclose on any security held by the Administrative Agent
or a Lender by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Administrative Agent or any Lender may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the liability
of any Guarantor hereunder except to the extent the Credit Party Obligations
have been paid in full and the Commitments have been terminated. Each of the
Guarantors waives any defense arising out of any such election by the
Administrative Agent or any of the Lenders, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of the Guarantors against the Borrower or any other party or any
security.

(b) Each of the Guarantors waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notice of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional Credit
Party Obligations. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower’s financial condition and assets, and of
all other circumstances

 

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bearing upon the risk of nonpayment of the Credit Party Obligations and the
nature, scope and extent of the risks which such Guarantor assumes and incurs
hereunder, and agrees that neither the Administrative Agent nor any Lender shall
have any duty to advise such Guarantor of information known to it regarding such
circumstances or risks.

(c) Each of the Guarantors hereby agrees it will not exercise any rights of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the U.S. Bankruptcy Code, or
otherwise) to the claims of the Lenders or any Hedging Agreement Provider
against the Borrower or any other guarantor of the Credit Party Obligations of
the Borrower owing to the Lenders or such Hedging Agreement Provider
(collectively, the “Other Parties”) and all contractual, statutory or common law
rights of reimbursement, contribution or indemnity from any Other Party which it
may at any time otherwise have as a result of this Guaranty until such time as
the Credit Party Obligations shall have been paid in full and the Commitments
have been terminated. Each of the Guarantors hereby further agrees not to
exercise any right to enforce any other remedy which the Administrative Agent,
the Lenders or any Hedging Agreement Provider now have or may hereafter have
against any Other Party, any endorser or any other guarantor of all or any part
of the Credit Party Obligations of the Borrower and any benefit of, and any
right to participate in, any security or collateral given to or for the benefit
of the Lenders and/or the Hedging Agreement Providers to secure payment of the
Credit Party Obligations of the Borrower until such time as the Credit Party
Obligations (other than contingent indemnity obligations) shall have been paid
in full and the Commitments have been terminated.

Section 10.8 Limitation on Enforcement.

The Lenders and the Hedging Agreement Providers agree that this Guaranty may be
enforced only by the action of the Administrative Agent acting upon the
instructions of the Required Lenders or such Hedging Agreement Provider (only
with respect to obligations under the applicable Secured Hedging Agreement) and
that no Lender or Hedging Agreement Provider shall have any right individually
to seek to enforce or to enforce this Guaranty, it being understood and agreed
that such rights and remedies may be exercised by the Administrative Agent for
the benefit of the Lenders under the terms of this Agreement and for the benefit
of any Hedging Agreement Provider under any Secured Hedging Agreement. The
Lenders and the Hedging Agreement Providers further agree that this Guaranty may
not be enforced against any director, officer, employee or stockholder of the
Guarantors.

Section 10.9 Confirmation of Payment.

The Administrative Agent and the Lenders will, upon request after payment of the
Credit Party Obligations which are the subject of this Guaranty and termination
of the Commitments relating thereto, confirm to the Borrower, the Guarantors or
any other Person that such indebtedness and obligations have been paid and the
Commitments relating thereto terminated, subject to the provisions of
Section 10.2.

 

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Section 10.10 Release of Guarantor.

A Guarantor shall be released from all of its obligations under this Guaranty at
any time (i) such Guarantor sells all of its assets and ceases to exist or
merges with or into the Borrower or any other wholly-owned Guarantor, in any
case on terms permitted by this Agreement, (ii) the Borrower sells all of the
Capital Stock of such Guarantor to a Person that is not a Credit Party, or
(iii) such Guarantor ceases to hold assets in excess of $1,000,000 or to have
annualized revenues in excess of $1,000,000, in each case in a transaction in
permitted by the terms of this Agreement; provided that at any one time the
value of assets and annualized revenues of all Domestic Subsidiaries of the
Borrower that are not Credit Parties shall not exceed $5,000,000 in the
aggregate.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.

 

BORROWER:  

THE PANTRY, INC.,

a Delaware corporation

  By:  

/s/ Daniel J. Kelly

  Name:   Daniel J. Kelly   Title:   Chief Financial Officer, Vice President –
Finance and Secretary GUARANTORS:  

R. & H. MAXXON, INC.,

a South Carolina corporation

  By:  

/s/ Daniel J. Kelly

  Name:   Daniel J. Kelly   Title:   Executive Vice President and Assistant    
Secretary  

KANGAROO, INC.,

a Georgia corporation

  By:  

/s/ Daniel J. Kelly

  Name:   Daniel J. Kelly   Title:   Executive Vice President and Assistant
Secretary

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

ADMINISTRATIVE AGENT AND LENDERS:  

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and a Lender

  By:  

/s/ Jorge A. Gonzalez

  Name:   Jorge A. Gonzalez   Title:   Managing Director

[signature pages continue]

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THE GOVERNOR AND COMPANY OF THE BANK

OF IRELAND, as a Lender

By:  

/s/ Richard Cameron

Name:   Richard Cameron Title:   Senior Vice President By:  

/s/ Peter Dancy

Name:   Peter Dancy Title:   Managing Director

[signature pages continue]

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BMO CAPITAL MARKETS FINANCING, INC.,

as a Lender

By:  

/s/ Graeme Robertson

Name:   Graeme Robertson Title:   Vice President

[signature pages continue]

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CAROLINA FIRST BANK, as a Lender By:  

/s/ Charles D. Chamberlain

Name:   Charles D. Chamberlain Title:   Executive Vice President

[signature pages continue]

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CREDIT INDUSTRIEL ET COMMERCIAL,

as a Lender

By:  

/s/ Anthony Rock

Name:   Anthony Rock Title:   Managing Director By:  

/s/ Marcus Edward

Name:   Marcus Edward Title:   Managing Director

[signature pages continue]

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ISRAEL DISCOUNT BANK OF NEW YORK,

as a Lender

By:  

/s/ Andy Ballta

Name:   Andy Ballta Title:   First VP By:  

/s/ Walter T. Duffy III

Name:   Walter T. Duffy III Title:   First VP

[signature pages continue]

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JPMORGAN CHASE BANK, N.A., as a Lender By:  

/s/ Robert P. Carswell

Name:   Robert P. Carswell Title:   Vice President

[signature pages continue]

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NORTH FORK BUSINESS CAPITAL

CORPORATION, as a Lender

By:  

/s/ Ron Walker

Name:   Ron Walker Title:   Vice President

[signature pages continue]

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RAYMOND JAMES BANK FSB, as a Lender By:  

/s/ Andrew D. Hahn

Name:   Andrew D. Hahn Title:   Vice President

[signature pages continue]

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

RZB FINANCE LLC, as a Lender By:  

/s/ Randall Abrams

Name:   Randall Abrams Title:   Vice President By:  

/s/ Christoph Hoedl

Name:   Christoph Hoedl Title:   Group Vice President

[signature pages continue]

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STATE BANK OF INDIA, as a Lender By:  

/s/ Ashok Wanchoo

Name:   Ashok Wanchoo Title:   Vice President & Head (Credit)

[signature pages continue]

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SUNTRUST BANK, as a Lender By:  

/s/ Kelly Gunter

Name:   Kelly Gunter Title:   Vice President

[signature pages continue]

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UNITED OVERSEAS BANK LIMITED, NEW YORK

AGENCY, as a Lender

By:  

/s/ George Lim

Name:   George Lim Title:   SVP & GM By:  

/s/ Mario Sheng

Name:   Mario Sheng Title:   AVP

[signature pages continue]

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WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agent and a Lender

By:  

/s/ S. Michael St. Geme

Name:   S. Michael St. Geme Title:   Senior Vice President

[signature pages continue]

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COOPERATIVE CENTRALE RAIFFEISEN- BOERENLEENBANK B.A. “RABOBANK NEDERLAND”, NEW
YORK BRANCH,

as a Lender

By:  

/s/ Theodore W. Cox

Name:   Theodore W. Cox Title:   Executive Director By:  

/s/ Rebecca Morrow

Name:   Rebecca Morrow Title:   Executive Director

[signature pages continue]

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REGIONS BANK, as a Lender By:  

/s/ Elaine B. Passman

Name:   Elaine B. Passman Title:   Vice President

[signature pages continue]

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GENERAL ELECTRIC CAPITAL CORPORATION,

as a Lender

By:  

/s/ Rebecca A. Ford

Name:   Rebecca A. Ford Title:   Duly Authorized Signatory

[signature pages end]