Exhibit 10.1

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CREDIT AGREEMENT

 

among

 

STONEMOR OPERATING LLC, as Borrower,

 

VARIOUS ADDITIONAL BORROWERS,

 

STONEMOR GP LLC, as Guarantor,

 

STONEMOR PARTNERS L.P., as Guarantor,

 

VARIOUS LENDING INSTITUTIONS,

 

and

 

FLEET NATIONAL BANK

as Administrative Agent, Swingline Lender and Letter of Credit Issuer

 

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Dated September 20, 2004

 

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BANC OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Sole Book Manager

 

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TABLE OF CONTENTS

 

     Page

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SECTION 1. DEFINITIONS

   1

SECTION 2. AMOUNT AND ACQUISITIONS OF CREDIT

   27

2.1. COMMITMENTS

   27

2.2. MINIMUM BORROWING AMOUNTS, ETC.

   30

2.3. NOTICE OF BORROWING

   30

2.4. DISBURSEMENT OF FUNDS

   31

2.5. NOTES

   31

2.6. CONVERSION OF LOANS

   32

2.7. PRO RATA BORROWINGS

   33

2.8. INTEREST

   33

2.9. INTEREST PERIODS

   34

2.10. INCREASED COSTS; ILLEGALITY; ETC.

   35

2.11. COMPENSATION

   37

2.12. CHANGE OF LENDING OFFICE

   38

2.13. REPLACEMENT OF LENDERS

   39

2.14. BORROWER FUNDS ADMINISTRATOR

   40

SECTION 3. LETTERS OF CREDIT

   41

3.1. LETTERS OF CREDIT

   41

3.2. LETTER OF CREDIT REQUESTS

   42

3.3. LETTER OF CREDIT PARTICIPATIONS

   43

3.4. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS

   45

3.5. INCREASED COSTS

   46

3.6. APPLICABILITY OF ISP; CONFLICTS; ETC.

   46

SECTION 4. FEES; COMMITMENTS

   47

4.1. FEES

   47

4.2. VOLUNTARY TERMINATION OR REDUCTION OF UNUTILIZED COMMITMENTS

   48

4.3. TERMINATION OF COMMITMENTS

   48

SECTION 5. PAYMENTS

   49

5.1. VOLUNTARY PREPAYMENTS

   49

5.2. MANDATORY REPAYMENTS

   50

5.3. METHOD AND PLACE OF PAYMENT

   53

5.4. NET PAYMENTS

   53

SECTION 6. CONDITIONS PRECEDENT TO INITIAL CREDIT EVENTS

   56

6.1. EXECUTION OF AGREEMENT; NOTES

   56

6.2. OFFICER’S CERTIFICATE

   56

6.3. OPINIONS OF COUNSEL

   56

6.4. CORPORATE DOCUMENTS; PROCEEDINGS

   56

6.5. ADVERSE CHANGE, ETC.

   57

6.6. LITIGATION

   57

6.7. APPROVALS

   57

6.8. TERMINATION OF EXISTING CREDIT AGREEMENTS

   57

6.9. NOTE PURCHASE AGREEMENT

   58

6.10. INTERCREDITOR AGREEMENT

   59

6.11. SECURITY DOCUMENTS; ETC.

   59

6.12. MATERIAL AGREEMENTS

   60

6.13. SOLVENCY CERTIFICATE; INSURANCE CERTIFICATES

   61

6.14. FINANCIAL INFORMATION

   62

 

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6.15. PAYMENT OF EXISTING INDEBTEDNESS AGREEMENTS

   62

6.16. PAYMENT OF FEES

   62

SECTION 7. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS

   62

7.1. NO DEFAULT; REPRESENTATIONS AND WARRANTIES

   62

7.2. NOTICE OF BORROWING; LETTER OF CREDIT REQUEST

   63

SECTION 8. REPRESENTATIONS AND WARRANTIES

   63

8.1. COMPANY STATUS

   63

8.2. COMPANY POWER AND AUTHORITY

   63

8.3. NO VIOLATION

   64

8.4. LITIGATION

   64

8.5. USE OF PROCEEDS; MARGIN REGULATIONS

   65

8.6. GOVERNMENTAL APPROVALS

   65

8.7. INVESTMENT COMPANY ACT

   65

8.8. PUBLIC UTILITY HOLDING COMPANY ACT

   65

8.9. TRUE AND COMPLETE DISCLOSURE

   65

8.10. FINANCIAL CONDITION; FINANCIAL STATEMENTS

   66

8.11. SECURITY INTERESTS

   67

8.12. COMPLIANCE WITH ERISA

   67

8.13. CAPITALIZATION

   69

8.14. SUBSIDIARIES

   69

8.15. INTELLECTUAL PROPERTY, ETC.

   69

8.16. COMPLIANCE WITH STATUTES; AGREEMENTS, ETC.

   70

8.17. ENVIRONMENTAL MATTERS

   70

8.18. PROPERTIES

   71

8.19. LABOR RELATIONS

   71

8.20. TAX RETURNS AND PAYMENTS

   71

8.21. EXISTING INDEBTEDNESS

   72

8.22. INSURANCE

   72

8.23. TRANSACTION

   72

8.24. TAX SHELTER REGULATIONS

   72

8.25. COMMON ENTERPRISE

   72

8.26. COMPLIANCE WITH CEMETERY LAWS

   73

8.27. FOREIGN ASSETS CONTROL REGULATIONS, ETC.

   73

SECTION 9. AFFIRMATIVE COVENANTS

   74

9.1. INFORMATION COVENANTS

   74

9.2. BOOKS, RECORDS AND INSPECTIONS

   77

9.3. INSURANCE

   77

9.4. PAYMENT OF TAXES

   78

9.5. CORPORATE FRANCHISES

   78

9.6. COMPLIANCE WITH STATUTES; ETC.

   79

9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS

   79

9.8. ERISA

   80

9.9. GOOD REPAIR

   81

9.10. END OF FISCAL YEARS; FISCAL QUARTERS

   81

9.11. ADDITIONAL SECURITY; FURTHER ASSURANCES

   81

9.12. USE OF PROCEEDS

   83

9.13. OWNERSHIP OF SUBSIDIARIES

   83

9.14. PERMITTED ACQUISITIONS

   83

9.15. MAINTENANCE OF COMPANY SEPARATENESS

   84

9.16. CLEAN DOWN

   85

9.17. PERFORMANCE OF OBLIGATIONS

   85

9.18. MARGIN REGULATIONS

   85

9.19. MAINTENANCE OF TRUST FUNDS AND TRUST ACCOUNTS

   85

 

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9.20. AMENDMENT TO NOTE PURCHASE DOCUMENT COVENANTS

   85

SECTION 10. NEGATIVE COVENANTS

   86

10.1. CHANGES IN BUSINESS; ETC.

   86

10.2. CONSOLIDATION; MERGER; SALE OR PURCHASE OF ASSETS; ETC.

   86

10.3. LIENS

   88

10.4. INDEBTEDNESS

   90

10.5. ADVANCES; INVESTMENTS; LOANS

   91

10.6. LIMITATION ON DIVIDENDS AND REDEMPTIONS

   92

10.7. TRANSACTIONS WITH AFFILIATES

   93

10.8. CONSOLIDATED INTEREST COVERAGE RATIO

   93

10.9. LEVERAGE RATIO

   94

10.10. MINIMUM EBITDA

   94

10.11. TRUST FUNDS

   94

10.12. LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF INDEBTEDNESS;
MODIFICATIONS OF ORGANIZATION DOCUMENTS

   94

10.13. LIMITATION ON ISSUANCE OF EQUITY INTERESTS

   95

10.14. LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES

   95

10.15. LIMITATION ON THE CREATION OF SUBSIDIARIES AND JOINT VENTURES

   95

10.16. LIMITATION ON FEES FOR INTELLECTUAL PROPERTY, ETC.

   96

SECTION 11. EVENTS OF DEFAULT

   96

11.1. PAYMENTS

   96

11.2. REPRESENTATIONS, ETC.

   96

11.3. COVENANTS

   96

11.4. DEFAULT UNDER OTHER AGREEMENTS

   96

11.5. BANKRUPTCY, ETC.

   97

11.6. ERISA

   97

11.7. SECURITY DOCUMENTS

   98

11.8. GUARANTY

   98

11.9. JUDGMENTS

   98

11.10. OWNERSHIP

   99

11.11. INTERCREDITOR AGREEMENT

   99

SECTION 12. THE AGENTS

   99

12.1. DELEGATION OF DUTIES

   100

12.2. LIABILITY OF AGENTS

   100

12.3. RELIANCE BY ADMINISTRATIVE AGENT

   100

12.4. NOTICE OF DEFAULT

   101

12.5. CREDIT DECISION; DISCLOSURE OF INFORMATION BY THE AGENTS

   101

12.6. INDEMNIFICATION

   102

12.7. AGENTS IN THEIR INDIVIDUAL CAPACITIES

   102

12.8. SUCCESSOR AGENTS

   103

12.9. ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM

   103

12.10. COLLATERAL AND GUARANTY MATTERS

   104

12.11. OTHER AGENTS; ARRANGERS AND MANAGERS

   105

SECTION 13. MISCELLANEOUS

   105

13.1. AMENDMENT OR WAIVER

   105

13.2. NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES

   106

13.3. NO WAIVER; CUMULATIVE REMEDIES

   107

13.4. ATTORNEY COSTS, EXPENSES AND TAXES

   107

13.5. INDEMNIFICATION BY THE BORROWERS

   108

13.6. PAYMENTS SET ASIDE

   109

13.7. SUCCESSORS AND ASSIGNS

   109

13.8. CONFIDENTIALITY

   113

 

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13.9. SET-OFF

   114

13.10. INTEREST RATE LIMITATION

   114

13.11. COUNTERPARTS

   115

13.12. INTEGRATION

   115

13.13. SURVIVAL

   115

13.14. SEVERABILITY

   115

13.15. GOVERNING LAW

   115

13.16. WAIVER OF RIGHT TO TRIAL BY JURY

   116

13.17. USA PATRIOT ACT NOTICE

   116

13.18. LIMITATION ON ADDITIONAL AMOUNTS; CASH COLLATERAL, ETC.

   116

13.19. PAYMENTS PRO RATA; SHARING OF PAYMENTS

   117

13.20. CALCULATIONS; COMPUTATIONS

   118

13.21. EFFECTIVENESS

   118

13.22. HEADINGS DESCRIPTIVE

   118

13.23. DOMICILE OF LOANS AND COMMITMENTS

   118

SECTION 14. THE CREDIT PARTY GUARANTY

   118

14.1. THE CREDIT PARTY GUARANTY

   118

14.2. BANKRUPTCY

   119

14.3. NATURE OF LIABILITY

   119

14.4. INDEPENDENT OBLIGATION

   120

14.5. AUTHORIZATION

   120

14.6. RELIANCE

   121

14.7. SUBORDINATION

   121

14.8. WAIVER

   121

14.9. ACKNOWLEDGEMENT OF JOINT AND SEVERAL LIABILITY

   123

 

SCHEDULE I    List of Lenders and Commitments SCHEDULE II    Administrative
Agent Addresses SCHEDULE III    Real Properties SCHEDULE IV    Existing
Indebtedness SCHEDULE V    Pension Plans SCHEDULE VI    Existing Investments
SCHEDULE VII    Subsidiaries SCHEDULE VIII    Insurance SCHEDULE IX    Existing
Liens SCHEDULE X    Capitalization SCHEDULE XI    Litigation SCHEDULE XII   
Appraised Properties

 

EXHIBIT A

 

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  Form of Notice of Borrowing EXHIBIT B-1   -   Form of Acquisition Note EXHIBIT
B-2   -   Form of Revolving Note EXHIBIT B-3   -   Form of Swingline Note
EXHIBIT C   -   Form of Letter of Credit Request EXHIBIT D   -   Form of Section
5.4(b)(ii) Certificate EXHIBIT E   -   Form of Borrowing Base Certificate
EXHIBIT F   -   Form of Compliance Certificate EXHIBIT G   -   Form of Pledge
Agreement EXHIBIT H   -   Form of Security Agreement

 

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EXHIBIT I

  -   Form of Solvency Certificate

EXHIBIT J

  -   Form of Assignment and Assumption Agreement

EXHIBIT K

  -   Form of Intercreditor Agreement

EXHIBIT L

  -   Seller Subordination Provisions

 

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CREDIT AGREEMENT, dated September 20, 2004, among StoneMor GP LLC, a Delaware
limited liability company (the “General Partner”), StoneMor Partners L.P., a
Delaware limited partnership (the “Partnership”), StoneMor Operating LLC, a
Delaware limited liability company (the “Operating Company”), the Subsidiaries
of the Operating Company set forth on Schedule VII hereto (together with the
Operating Company, each individually a “Borrower” and collectively, the
“Borrowers”), the Lenders from time to time party hereto, and Fleet National
Bank, a Bank of America company, a national banking association, as
Administrative Agent for the benefit of the Lenders (in such capacity, the
“Administrative Agent”). Unless otherwise defined herein, all capitalized terms
used herein and defined in Section 1 are used herein as so defined.

 

BACKGROUND

 

A. Subject to and upon the terms and conditions herein set forth, the Lenders
are willing to make available to the Borrowers the credit facilities provided
for herein;

 

NOW, THEREFORE, IT IS AGREED:

 

SECTION 1. Definitions.

 

As used herein, the following terms have the meanings herein specified unless
the context otherwise requires. Defined terms in this Agreement shall include in
the singular number the plural and in the plural number the singular.

 

“Accommodation Payment” has the meaning provided in Section 14.9(c).

 

“Account Receivable” means an “account”, “tangible chattel paper” or “note”, as
defined in the UCC, in favor of a Borrower.

 

“Act” has the meaning provided in Section 13.17.

 

“Acquired Person” has the meaning provided in the definition of Permitted
Acquisition.

 

“Acquisition Lender” means, at any time, each Lender with an Acquisition Loan
Commitment or with outstanding Acquisition Loans.

 

“Acquisition Loan Commitment” means, with respect to each Lender, the amount set
forth opposite such Lender’s name in Schedule I directly below the column
entitled “Acquisition Loan Commitment” as the same may be partially reduced or
terminated pursuant to Sections 4.2, 4.3 and/or 11.

 

“Acquisition Loan Maturity Date” means September 20, 2008.

 

“Acquisition Loans” has the meaning provided in Section 2.1(a).

 

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“Acquisition Note” has the meaning provided in Section 2.5(a).

 

“Additional Security Documents” has the meaning provided in Section 9.11.

 

“Administrative Agent” has the meaning provided in the first paragraph of this
Agreement and shall include any successor to the Administrative Agent appointed
pursuant to Section 12.9.

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by, or under direct or indirect common control with
such Person; provided, however, that for purposes of Section 10.7, an Affiliate
of any Credit Party shall include any Person that directly or indirectly owns
more than 10% of the partnership interests or membership interests in the
Partnership or General Partner, any Senior Manager, or any director or manager
of any Credit Party.

 

“Agent-Related Persons” means the Administrative Agent and the Collateral Agent,
together with their respective Affiliates (including, in the case of Fleet, Banc
of America Securities LLC, in its capacity as sole lead arranger and sole book
manager), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.

 

“Aggregate Consideration” means, with respect to any Permitted Acquisition, the
sum (without duplication) of (i) the fair market value of the Partnership Common
Units (based on the average closing trading price of the Partnership Common
Units for the 20 trading days immediately prior to the date of such Permitted
Acquisition on the stock exchange on which the Partnership Common Units are
listed or, if the Partnership Common Units are not so listed, the good faith
determination of the senior management of the General Partner) issued (or to be
issued) as consideration in connection with such Permitted Acquisition, (ii) the
aggregate amount of all cash paid (or to be paid) by the Partnership or any of
its Subsidiaries as consideration in connection with such Permitted Acquisition
(including, without limitation, payment, as consideration, of fees and costs and
expenses in connection therewith) and the contingent cash purchase price or
other earnout obligations of the Partnership and its Subsidiaries incurred in
connection therewith (as determined in good faith by the senior management of
the General Partner), (iii) the aggregate principal amount of all Indebtedness
assumed, incurred and/or issued in connection with such Permitted Acquisition to
the extent permitted by Section 10.4, (iv) the fair market value (as determined
in good faith by the senior management of the General Partner) of any Preferred
Equity issued in connection with such Permitted Acquisition and (v) the fair
market value (determined in good faith by senior management of the General
Partner) of all other consideration payable in connection with such Permitted
Acquisition.

 

“Agreement” means this Credit Agreement, as the same may be from time to time
modified, amended, restated and/or supplemented.

 

“Applicable Margin” means, subject to adjustment pursuant to the following
provisions of this definition, a percentage per annum equal to the related Level
III margin, provided that, commencing with the certificate delivered in
accordance with the Section 9.1(e) for the fiscal quarter of the Partnership
ended March 31, 2005, from and after each day of

 

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delivery (each, a “Start Date”) of the most recent certificate delivered in
accordance with the Section 9.1(e) (each an “Officer’s Certificate”), to and
including the applicable End Date described below, the Applicable Margin for any
Tranche (and Type) of Loans shall be as set forth below opposite the Leverage
Ratio indicated in such Officer’s Certificate (subject to Permitted Acquisition
adjustments described below):

 

    

Leverage Ratio

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   Revolving and
Acquisition Loan
Eurodollar Margin
and Letter of
Credit Fee

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    Revolving and
Acquisition Loan
(and Swingline
Loan) Base Rate
Margin

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    Unused
Commitment
Fee

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Level I

  

Less than or equal to 1.50 to 1.0

   2.50 %   0.00 %   0.375 %

Level II

  

Greater than 1.50 to 1.0 but less than or equal to 2.50 to 1.0

   3.00 %   0.50 %   0.50 %

Level III

  

Greater than 2.50 to 1.0

   3.50 %   1.00 %   0.50 %

 

The Leverage Ratio shall be determined based on the most recent Officer’s
Certificate delivered pursuant to Section 9.1(e); provided that, at the time of
the consummation of any Permitted Acquisition, an Authorized Officer of the
General Partner shall deliver to the Administrative Agent a certificate setting
forth the calculation of the Leverage Ratio on a Pro Forma Basis (solely to give
effect to all Permitted Acquisitions, if any, consummated on or prior to the
date of the delivery of such certificate and any Indebtedness incurred or
assumed in connection therewith) as of the last day of the last Calculation
Period ended prior to the date on which such Permitted Acquisition is
consummated for which financial statements have been made available (or were
required to be made available) pursuant to Section 9.1(a) or (b), as the case
may be, and the date of such consummation shall be deemed to be a Start Date and
the Applicable Margins for the relevant Tranche and Type of Loan which shall be
thereafter applicable (until same are changed or cease to apply in accordance
with the following sentences) shall be based upon the Leverage Ratio as so
calculated. The Applicable Margins so determined for such Tranche and Type of
Loan shall apply from the relevant Start Date to the earliest of (x) the date on
which the next certificate is delivered to the Administrative Agent, (y) the
date on which the next Permitted Acquisition is consummated or (z) the date
which is 45 days following the last day of the Test Period in which the previous
Start Date occurred (such earliest date, the “End Date”), at which time, if no
certificate has been delivered to the Administrative Agent indicating an
entitlement to new (or a continuing entitlement to previously effective)
Applicable Margins for such Tranche and Type of Loan (and thus commencing a new
Start Date), the Applicable Margins for such Tranche and Type of Loan shall be
those set forth at Level III.

 

“Approved Fund” has the meaning provided in Section 13.7(g).

 

“Approved Installment Agreement” means a pre-need installment agreement, in a
form currently approved for use by all applicable governmental authorities (as
such form may be

 

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modified from time to time in a manner reasonably acceptable to the
Administrative Agent), and complying with all applicable laws, between a
Borrower and an individual pursuant to which such Borrower has agreed to provide
for and sell to such individual cemetery services and/or Cemetery Property.

 

“Asset Sale” means any sale, transfer or other disposition by any Credit Party
to any Person other than another Credit Party of any asset (including, without
limitation, any capital stock or other Equity Interests of another Person, but
excluding the sale by such Person of its own Equity Interests) of such Credit
Party other than sales, transfers or other dispositions of (a) inventory, worn
or obsolete equipment, and Cemetery Property made in the ordinary course of
business, (b) real property made in the ordinary course of business, while no
Default or Event of Default exists, to the extent the aggregate value of such
real property disposed of in any fiscal year is not in excess of $3,000,000, and
(c) Equity Interests in the Partnership made by the General Partner as required
by the terms of the Partnership Agreement.

 

“Assignment and Assumption Agreement” means an Assignment and Assumption
Agreement substantially in the form of Exhibit J (appropriately completed).

 

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

 

“Authorized Officer” means, with respect to (i) delivering financial information
and officer’s certificates pursuant to this Agreement, the chief financial
officer, the chief executive officer, the chief operating officer, the corporate
controller, any treasurer or other financial officer of the General Partner and
(ii) any other matter in connection with this Agreement or any other Credit
Document, any officer (or a person or persons so designated by such officer) of
the General Partner or the Operating Company, as the case may be, in each case
to the extent reasonably acceptable to the Administrative Agent.

 

“Bankruptcy Code” has the meaning provided in Section 11.5.

 

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

 

“Base Rate Loan” means each Loan bearing interest at the rates provided in
Section 2.8(a) (subject to any increases pursuant to Section 2.8(c)).

 

“Borrower” and “Borrowers” has the meaning provided in the first paragraph of
this Agreement.

 

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“Borrowing” means and include (i) the borrowing of Swingline Loans from Fleet on
a given date and (ii) the borrowing of one Type of Loan pursuant to a single
Tranche by the Borrowers from all of the Lenders having Commitments (and/or
outstanding Loans) with respect to such Tranche on a pro rata basis on a given
date (or resulting from conversions on a given date), having in the case of
Eurodollar Loans the same Interest Period; provided that Base Rate Loans
incurred pursuant to Section 2.10(b) shall be considered part of any related
Borrowing of Eurodollar Loans.

 

“Borrowing Base” means, at any time, an amount equal to the sum of eighty
percent (80%) of aggregate Eligible Accounts Receivables; provided however that,
the Administrative Agent may, in its reasonable discretion, adjust the advance
rate set forth above, set up reserves or change the definition of Eligible
Accounts Receivable from time to time as the Administrative Agent determines is
necessary based on the audits conducted by the Administrative Agent or other
information made available to the Administrative Agent.

 

“Borrowing Base Certificate” means a full and complete certificate in the form
attached hereto as Exhibit E, certified as true, correct and complete by an
Authorized Officer.

 

“Business Day” means (i) for all purposes other than as covered by clause (ii)
below, any day excluding Saturday, Sunday and any day which shall be in
Philadelphia, Pennsylvania, a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.

 

“Calculation Period” has the meaning provided in Section 9.14.

 

“Capital Expenditures” means, with respect to any Person, for any period, all
expenditures by such Person which should be capitalized in accordance with GAAP
during such period and are, or are required to be, included in property, plant
or equipment reflected on the consolidated balance sheet of such Person
(including, without limitation, expenditures for maintenance and repairs which
should be so capitalized in accordance with GAAP) and, without duplication, the
amount of all Capitalized Lease Obligations incurred by such Person during such
period.

 

“Capital Lease,” as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.

 

“Capitalized Lease Obligations” means all obligations under Capital Leases of
the Partnership or any of its Subsidiaries, in each case taken at the amount
thereof accounted for as liabilities in accordance with GAAP.

 

“Cash Equivalents” means: (i) marketable securities issued or directly and
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of

 

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the United States of America or any political subdivision of any such state of
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having the highest rating
obtainable from S&P or Moody’s; (iii) commercial paper maturing no more than one
year from the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates
of deposit or bankers’ acceptances maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s, issued by any Lender or any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia having unimpaired capital and surplus
of not less than $250,000,000 (each Lender and each such commercial bank being
herein called a “Cash Equivalent Bank”); and (v) Eurodollar time deposits having
a maturity of less than one year purchased directly from any Cash Equivalent
Bank (provided such deposit is with such Cash Equivalent Bank or any other Cash
Equivalent Bank).

 

“Cemetery Management Agreement” an agreement pursuant to which any Borrower
agrees to manage the operations of any Person in the business of providing
cemetery services and/or Cemetery Property.

 

“Cemetery Property” means, at any time as to any Borrower, such Borrower’s
interest in its real or personal property of the type sold or transferred
pursuant to Approved Installment Agreements which property (a) has not, at such
time, been sold or transferred to, and (b) is not under contract to be sold or
transferred to, any other Person.

 

“Certificate of Indebtedness” means an agreement delivered to a Borrower from a
non-profit cemetery which evidences an enforceable obligation to pay money
together with a right to vote in connection with all shareholder decisions.

 

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

 

(a) any two of the individuals acting as chairman, chief executive officer or
chief financial officer of the Partnership on the date hereof shall cease to
hold such positions (unless replaced by individuals reasonably satisfactory to
the Required Lenders within 90 days after any such individual ceases to hold
such position);

 

(b) any Person or group of Person, which do not, on the Effective Date, hold
Equity Interests in the Partnership or the General Partner, thereafter obtain
beneficial ownership or voting control of twenty percent (20%) or more of the
Equity Interests in the Partnership or the General Partner;

 

(c) the General Partner ceases to act as the sole general partner of the
Partnership;

 

(d) the Partnership ceases to own 100% of the Equity Interests in the Operating
Company; or

 

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(e) except as otherwise expressly permitted by this Agreement, the Operating
Company ceases to own, directly or indirectly, 100% of the Equity Interest in
each of the other Borrowers.

 

“Change in Law” has the meaning provided in Section 11.6.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.

 

“Collateral” means all of the Collateral as defined in each of the Security
Documents.

 

“Collateral Agent” means Fleet, acting as collateral agent for the Secured
Creditors.

 

“Collective Bargaining Agreements” has the meaning provided in Section 6.12.

 

“Commitment” means any of the commitments of any Lender, i.e., whether the
Acquisition Loan Commitment or the Revolving Loan Commitment.

 

“Company” means any corporation, limited liability company, partnership or other
business entity (or the adjectival form thereof, where appropriate).

 

“Consolidated EBITDA” means, for any period, the Consolidated Net Income of the
Partnership and its Subsidiaries, plus, in each case to the extent actually
deducted in determining Consolidated Net Income for such period, without
duplication, (i) consolidated interest expense of the Partnership and its
Subsidiaries, (ii) provision for income taxes, (iii) depreciation and
amortization expense, (iv) non-cash cost for Cemetery Property and real property
sold, (v) any extraordinary losses, (vi) losses from sales of assets other than
inventory and Cemetery Property and real property sold in the ordinary course of
business, (vii) other non-cash items (including, without limitation, one-time
charges associated with “cheap stock” compensation expense), and (viii)
reasonable fees, costs and expenses incurred in connection with the Transaction
and the restructuring of the Existing Credit Agreement, minus, in each case to
the extent actually included in determining Consolidated Net Income for such
period, without duplication, (i) any extraordinary gains, (ii) gains from sales
of assets other than inventory and Cemetery Property and real property sold in
the ordinary course of business, (iii) any write-downs of non-current assets
relating to impairments or the sale of non-current assets, incurred in
connection with stock options, stock appreciation rights or similar equity
rights, (iv) the amount of non-cash gains during such period (other than as a
result of deferral of purchase price with respect to notes or installment sales
contracts received in connection with sales of Cemetery Property); and (v) other
non-cash items. Consolidated EBITDA shall be adjusted for any changes in net
Deferred Revenue (excluding Deferred Margin), net Accounts Receivable,
Merchandise Liability (including Merchandise Liabilities converted to Accounts
Payable in the normal course of business and to be paid within 15 days of the
date of determination) and Merchandise Trust (excluding any change in Trust
Income Receivable), as each such term is

 

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defined in the consolidated balance sheet of the Partnership, but excluding any
increases pursuant to purchase accounting pursuant to future acquisitions.

 

“Consolidated Funded Debt” means, as of any date of determination, for the
Partnership and its Subsidiaries on a consolidated basis, without duplication,
the sum of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including, without limitation, (i) all
Obligations hereunder; provided that, if as of any date of determination the
Borrowers during the twelve (12) month period immediately preceding such date
have reduced the amount of Interim Borrowings to not more than $5,000,000 for
any 30 consecutive day period during such period as contemplated by Section 9.16
hereof, the amount of outstanding Revolving Loans to be included for these
purposes shall be the lesser of (x) $5,000,000 and (y) the maximum outstanding
amount of Revolving Loans that was outstanding during the most recent 30
consecutive day period, (ii) all Seller Subordinated Debt and (iii) all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments), (b) all purchase money Indebtedness, (c) all direct
obligations arising under letters of credit, bankers’ acceptances, bank
guaranties, surety bonds and similar instruments, (d) all obligations in respect
of the deferred purchase price of property or services (other than trade
accounts payable in the ordinary course of business), (e) Attributable
Indebtedness in respect of capital leases and Synthetic Lease Obligations, (f)
all Contingent Obligations with respect to outstanding Indebtedness of the types
specified in clauses (a) through (e) above of Persons other than the Partnership
or any of its Subsidiaries, and (g) all Indebtedness of the types referred to in
clauses (a) through (f) above of any partnership or joint venture (other than a
joint venture that is itself a corporation or limited liability company) in
which the Partnership or any of its Subsidiaries is a general partner or joint
venturer, unless such Indebtedness is expressly made non-recourse to the
Partnership or such Subsidiary.

 

“Consolidated Interest Coverage Ratio” for any period means the ratio of
Consolidated EBITDA to Consolidated Net Interest Expense for such period.

 

“Consolidated Net Income” means, for any period, the net after tax income (or
loss) of the Partnership and its Subsidiaries determined on a consolidated basis
in accordance with GAAP, provided that in determining Consolidated Net Income of
the Partnership and its Subsidiaries (i) the net income of any of Person which
is not a Subsidiary of the Partnership or is accounted for by the Partnership by
the equity method of accounting shall be included only to the extent of the
payment of dividends or disbursements by such Person to the Partnership or a
Subsidiary of the Partnership during such period, and (ii) except for
determinations expressly required to be made on a Pro Forma Basis, the net
income (or loss) of any Person accrued prior to the date it becomes a Subsidiary
or all or substantially all of the property or assets of such Person are
acquired by a Subsidiary shall be excluded from such determination.

 

“Consolidated Net Interest Expense” means, for any period, (i) the total
consolidated interest expense of the Partnership and its Subsidiaries for such
period (calculated without regard to any limitations on payment thereof) payable
in respect of any Indebtedness plus (ii) without duplication, that portion of
Capitalized Lease Obligations of the Partnership and its Subsidiaries on a
consolidated basis representing the interest factor for such period.

 

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“Contingent Obligations” means as to any Person any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations (“primary obligations”) of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include endorsements of instruments for deposit
or collection or standard contractual indemnities entered into, in each case in
the ordinary course of business. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the maximum reasonably anticipated liability
in respect thereof, as determined by such Person in good faith.

 

“Controlled Non-Profit” means a Borrower which (a) is organized as a non-profit
entity, whether pursuant to Section 501 of the Code or otherwise, or (b) which
has contracted with any Borrower for the provisions of services under a Cemetery
Management Agreement; provided that, such term shall not, in any case, be deemed
to include Willowbrook Cemetery.

 

“Conversion” means the transactions pursuant to which Cornerstone Family
Services LLC, a Delaware limited liability company, Cornerstone Family Services,
Inc., a Delaware corporation, and various of their Affiliates reorganize by
forming the General Partner, the Partnership, certain of the Borrowers and
certain other Affiliates, for the purpose of the Partnership qualifying as a
publicly traded limited partnership under Section 7704 of the Code, all in
accordance with the terms and provisions of Form S-1.

 

“Credit Documents” means this Agreement, the Notes, the Intercreditor Agreement,
each Security Document and any other guarantees or security documents executed
and delivered for the benefit of the Secured Creditors in accordance with the
requirements of this Agreement.

 

“Credit Event” means the making of a Loan (other than a Revolving Loan made
pursuant to a Mandatory Borrowing) or the issuance of a Letter of Credit.

 

“Credit Party” means each of the General Partner, the Partnership and the
Borrowers.

 

“Credit Party Guaranty” means the guaranty of the General Partner, the
Partnership and the Borrowers pursuant to Section 14.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief

 

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laws of the United States or other applicable jurisdictions from time to time in
effect and affecting the rights of creditors generally.

 

“Default” means any event, act or condition which with notice or lapse of time,
or both, would constitute an Event of Default.

 

“Defaulting Lender” means any Lender with respect to which a Lender Default is
in effect.

 

“Documents” means and include (i) the Credit Documents, and (ii) the Note
Purchase Documents.

 

“Effective Date” means the date on which all the conditions set forth in Section
6 hereto have been met to the satisfaction of the Administrative Agent.

 

“Eligible Account Receivable” means an Account Receivable of a Borrower (other
than a Controlled Non-Profit) that meets all of the following requirements on
its date of invoice or other origination date and continuing thereafter until
collected:

 

(a) such Account Receivable represents a bona fide transaction evidenced by an
Approved Installment Agreement;

 

(b) an installment, or portion thereof, under such Account Receivable has been
paid within the immediately preceding sixty (60) days and such Account
Receivable has not been repudiated by the related account debtor;

 

(c) such Account Receivable, to the extent evidenced by chattel paper or an
instrument of any kind, is evidenced by only one original which is kept at the
chief executive office (or, if required by law, the applicable local office) of
the applicable Borrower, provided that, if required by law, such Borrower may
deliver the original to a trustee for a Trust Account and/or may deliver an
additional original to the account debtor thereon;

 

(d) the related Approved Installment Agreement, (i) to the extent created or
entered into after the date hereof, shall be stamped or stickered on its face to
indicate that has been assigned to Fleet, in its capacity as collateral agent
for various secured creditors pursuant to the Intercreditor Agreement, and (ii)
otherwise shall be stored in a filing cabinet prominently marked to
appropriately indicate that the contents thereof have been assigned to the
Collateral Agent as noted above;

 

(e) the account debtor with respect to such Account Receivable is not insolvent
or the subject of any bankruptcy or insolvency proceedings of any kind;

 

(f) such Account Receivable is a valid, legally enforceable obligation of the
account debtor with respect thereto and is not subject to any present, or
contingent, and the Borrower has no knowledge or reason to believe there are any
facts which are the basis for any future, offset or counterclaim or other
defense on the part of such account debtor, including, without limitation, any
account payable owing by such Person to such account debtor;

 

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(g) such Account Receivable shall be subject to a valid and perfected first
priority Lien in favor of the Collateral Agent (for the benefit of the Secured
Parties), subject to no Lien, except for Liens in favor of the Collateral Agent
(for the benefit of the Secured Parties) and other Permitted Liens;

 

(h) all statutory rescission periods with respect to each such Account
Receivable have ended; and

 

(i) such Account Receivable is not deemed ineligible by the Administrative
Agent;

 

provided that, for the purpose of calculating the Borrowing Base, the amount of
any Eligible Account Receivable which will be included in such calculation will
be equal to the gross amount of such Eligible Account Receivable, less, with
respect to such Eligible Account Receivable, (a) all collection reserves, (b)
without duplication, all imputed interest earnings, (c) the portion of such
Eligible Account Receivable required to be paid into any Trust Account, and (d)
any unpaid sales commission.

 

“Eligible Assignee” has the meaning provided in Section 13.7(g).

 

“Employee Benefit Plans” has the meaning set forth in Section 6.12.

 

“Employment Agreements” has the meaning set forth in Section 6.12.

 

“End Date” has the meaning provided in the definition of Applicable Margin.

 

“Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating in any way
to any liability, potential for liability, violation, or alleged violation by or
of any Credit Party under any Environmental Law (hereafter “Claims”) or any
permit issued to any Credit Party under any such law, including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.

 

“Environmental Law” means any federal, state or local law, statute, rule,
regulation, ordinance, code, policy having the force and effect of law, or rule
of common law now or hereafter in effect, in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment relating to the environment,
or Hazardous Materials or the protection of human health and safety.

 

“Equity Interests” of any Person means any and all capital stock, limited or
general partnership interests, limited liability company membership interests,
beneficial interests in a trust (other than a Trust Account), shares, interests,
rights to purchase or acquire, warrants, options, participations, Certificates
of Indebtedness, or other equivalents of or interest in (however designated)
equity of such Person.

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

 

“ERISA Affiliate” means each person (as defined in Section 3(9) of ERISA) which
together with any Credit Party would be deemed to be a “single employer” within
the meaning of Section 414(b), (c), (m) or (o) of the Code and any general
partnership of which any Credit Party is or has been a general partner.

 

“Eurodollar Loans” means each Loan bearing interest at the rates provided in
Section 2.8(b) (subject to any increases pursuant to Section 2.8(c)).

 

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

 

“Event of Default” has the meaning provided in Section 11.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Existing Credit Agreement” means that certain Amended and Restated Credit
Agreement dated as of October 27, 1999, among Cornerstone Family Services, Inc.,
as borrower, certain financial institutions party thereto, as lenders, and
Wachovia Bank, National Association, as a lender, administrative agent and as
collateral agent, as such agreement has been amended, modified and supplemented
from time to time through the Effective Date.

 

“Existing Indebtedness” has the meaning provided in Section 8.21.

 

“Existing Indebtedness Agreements” has the meaning provided in Section 6.12.

 

“Facing Fee” has the meaning provided in Section 4.1(c).

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the

 

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

 

“Fees” means all amounts payable pursuant to, or referred to in, Section 4.1.

 

“Fleet” means Fleet National Bank, in its individual capacity, and any successor
corporation thereto by merger, consolidation or otherwise.

 

“Form S-1” means the Partnership’s Form S-1 Registration Statement first filed
with the SEC on April 9, 2004, as amended prior to the Effective Date, and
declared effective with the SEC.

 

“Fund” has the meaning provided in Section 13.7(g).

 

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time; it being understood and agreed that
determinations in accordance with GAAP for purposes of Applicable Margins and
Sections 5.2, 9.14 and 10, including defined terms as used therein, and for all
purposes of determining the Leverage Ratio, are subject (to the extent provided
therein) to Section 13.20(a).

 

“General Partner” has the meaning provided in the first paragraph of this
Agreement.

 

“GP Agreement” means that certain Amended and Restated Limited Liability
Agreement of StoneMor GP LLC, a Delaware limited liability company, dated as of
September 20, 2004, as may be amended, restated or otherwise modified in
accordance with the terms of this Agreement.

 

“Guaranteed Obligations” means (i) as to any Borrower, all obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities of any other Borrower
owing under each Swap Contract entered into by such other Borrower with any Swap
Creditor, whether now in existence or hereafter arising, and the due performance
and compliance by each such other Borrower with all terms, conditions and
agreements contained therein and (ii) as to the General Partner and the
Partnership, (x) the principal and interest on each Note issued to each Lender,
and all Loans made under this Agreement, all reimbursement obligations and
Unpaid Drawings with respect to Letters of Credit, together with all the other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of any
other Credit Party to any Secured Creditor now existing or hereafter incurred
under, arising out of or in connection with this Agreement and each other Credit
Document and the due performance and compliance by the Credit Parties with all
the terms, conditions and agreements contained in this Agreement and each other
Credit Document to which it is a party and (y) all obligations (including

 

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obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of the Borrowers owing under
each Swap Contract entered into by any Borrower with any Swap Creditor, whether
now in existence or hereafter arising, and the due performance and compliance by
each Credit Party with all terms, conditions and agreements contained therein.

 

“Guarantor” means each Credit Party in its capacity as a guarantor of its
Guaranteed Obligations pursuant to Section 14.

 

“Hazardous Materials” means (a) any petrochemical or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
and (b) any chemicals, materials or substances either (i) defined by or pursuant
to any Environmental Law as “hazardous substances,” “hazardous wastes,”
“hazardous materials,” “restricted hazardous materials,” “extremely hazardous
wastes,” “restrictive hazardous wastes,” “toxic substances,” “toxic pollutants”,
“hazardous air pollutants,” “air pollutant,” or “pollutant,” or (ii) otherwise
regulated by an Environmental Law.

 

“Indebtedness” of any Person means, without duplication, (i) all Obligations and
other indebtedness of such Person for borrowed money, (ii) the deferred purchase
price of assets or services payable to the sellers thereof or any of such
seller’s assignees which in accordance with GAAP would be shown on the liability
side of the balance sheet of such Person but excluding deferred rent and trade
payables not overdue by more than 90 days, both as determined in accordance with
GAAP, (iii) the amount under all letters of credit issued for the account of
such Person and, without duplication, all drafts drawn thereunder, including all
Letter of Credit Outstandings, (iv) all Indebtedness of a second Person secured
by any Lien on any property owned by such first Person, whether or not such
Indebtedness has been assumed; such amount, for purposes of this clause (iv)
being limited to the value of such property, (v) all Capitalized Lease
Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vii) all obligations under
any Swap Contract, (viii) all Contingent Obligations of such Person, and (ix)
all Synthetic Lease Obligations, provided that Indebtedness shall not include
trade payables and accrued expenses, in each case arising in the ordinary course
of business. The amount of any obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date. The
amount of any Synthetic Lease Obligation as of any date shall be deemed to be
the amount of Attributable Indebtedness in respect thereof as of such date.

 

“Indebtedness To Be Refinanced” means all of the obligations under the Existing
Credit Agreement.

 

“Indemnified Liabilities” has the meaning provided in Section 13.5.

 

“Indemnitees” has the meaning provided in Section 13.5.

 

“Intercompany Loan” means a loan permitted pursuant to Section 10.5(v).

 

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“Intercompany Note” means any promissory note evidencing an Intercompany Loan.

 

“Intercreditor Agreement” has the meaning provided in Section 6.10.

 

“Interest Determination Date” means, with respect to any Eurodollar Loan, the
second Business Day prior to the commencement of any Interest Period relating to
such Eurodollar Loan.

 

“Interest Period” with respect to any Eurodollar Loan, means the interest period
applicable thereto, as determined pursuant to Section 2.9.

 

“Interim Borrowing” means any Revolving Loan designated by the Borrowers in a
Notice of Borrowing as being for the purpose of funding a regularly scheduled
quarterly distribution by the Partnership in accordance with the Partnership
Agreement.

 

“Investment” has the meaning provided in the preamble to Section 10.5.

 

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

 

“L/C Participant” has the meaning provided in Section 3.3(a).

 

“L/C Supportable Indebtedness” means (i) obligations of the Borrowers or its
Subsidiaries incurred in the ordinary course of business with respect to
insurance obligations and workers’ compensation, surety bonds and other similar
statutory obligations, (ii) performance obligations under supply, service or
construction contracts, including, without limitation, bid and/or performance
and/or payment bonds or guarantees related to the foregoing and (iii) such other
obligations of the Borrowers as are reasonably acceptable to the Administrative
Agent and the Letter of Credit Issuer and otherwise permitted to exist pursuant
to the terms of this Agreement.

 

“Leasehold” of any Person means all of the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.

 

“Lender” means each financial institution listed on Schedule I, as well as any
Person that becomes a “Lender” hereunder pursuant to Section 2.13 or 13.7(b).

 

“Lender Default” means (i) the wrongful refusal (which has not been retracted)
of a Lender to make available its portion of any Borrowing (including any
Mandatory Borrowing) or to fund its portion of any unreimbursed payment under
Section 3.3 or (ii) a Lender having notified the Administrative Agent and/or the
Borrowers that it does not intend to comply with its obligations under Section
2.1(a), 2.1(b), 2.1(d) or 3.3 in circumstances where such non-compliance would
constitute a breach of such Lender’s obligations under the respective Section.

 

“Letter of Credit” has the meaning provided in Section 3.1(a).

 

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“Letter of Credit Fee” has the meaning provided in Section 4.1(b).

 

“Letter of Credit Issuer” means Fleet, any affiliate of Fleet which, at the
request of a Borrower, agrees in such Lender’s (or affiliate’s) sole discretion
to become a Letter of Credit Issuer for purposes of issuing Letters of Credit
pursuant to Section 3.

 

“Letter of Credit Outstandings” means, at any time, the sum of, without
duplication, (i) the aggregate Stated Amount of all outstanding Letters of
Credit at such time and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit at such time.

 

“Letter of Credit Request” has the meaning provided in Section 3.2(a).

 

“Leverage Ratio” means on any date of determination the ratio of (i)
Consolidated Funded Debt on such date to (ii) Consolidated EBITDA for the Test
Period most recently ended on or prior to such date; provided that Consolidated
EBITDA shall be determined on a Pro Forma Basis to give effect to all Permitted
Acquisitions (if any) actually made during such most recently ended Test Period.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or similar
statement or notice filed under the UCC or any similar recording or notice
statute, and any lease having substantially the same effect as the foregoing).

 

“Loan” means each Acquisition Loan, each Revolving Loan and each Swingline Loan.

 

“Management Agreements” has the meaning provided in Section 6.12.

 

“Mandatory Borrowing” has the meaning provided in Section 2.1(d).

 

“Margin Regulations” means Regulations T, U and X, collectively.

 

“Margin Stock” has the meaning provided in Regulation U.

 

“Material” means material in relation to the business, properties, assets,
operations, liabilities, prospects or financial condition of the Credit Parties
taken as a whole.

 

“Material Adverse Effect” means (i) a material adverse effect on the business,
properties, assets, operations, liabilities, prospects or financial condition of
the Credit Parties taken as a whole or (ii) a material adverse effect (x) on the
rights or remedies of the Lenders or the Administrative Agent hereunder or under
any other Credit Document or (y) on the ability of the Credit Parties taken as a
whole to perform their obligations to the Lenders or the Administrative Agent
hereunder or under any other Credit Document.

 

“Maturity Date” with respect to any Tranche of Loans, means the Acquisition Loan
Maturity Date, the Revolving Loan Maturity Date or the Swingline Expiry Date, as
the case may be.

 

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“Maximum Rate” has the meaning provided in Section 13.10.

 

“Maximum Swingline Amount” means $5,000,000.

 

“Merchandise Trust” means a trust fund, pre-need trust, pre-construction trust
or other reserve, trust, escrow or any similar arrangement established and
administered by a Borrower as required in accordance with applicable law to
receive and administer the aggregate of all amounts derived from the sale of
services and personal property, such as foundations, markers, memorials,
memorial bases, monuments, urns, vases, vaults and caskets, used in connection
with the final disposition, memorialization, interment, entombment, or inurnment
of human remains.

 

“Minimum Borrowing Amount” means (i) for Revolving Loans, $500,000, (ii) for
Acquisition Loans, $1,000,000, and (iii) for Swingline Loans, $100,000.

 

“Moody’s” mean Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage” means each mortgage, deed to secure debt or deed of trust pursuant to
which any Credit Party has granted to the Collateral Agent a mortgage lien on
such Credit Party’s Mortgaged Property.

 

“Mortgage Policies” has the meaning provided in Section 6.11.

 

“Mortgaged Property” means (i) each Real Property owned by any Credit Party and
designated as a Mortgaged Property on Schedule III and (ii) each Real Property
owned or leased by any Credit Party and designated as a Mortgaged Property
pursuant to Section 9.11.

 

“Multiemployer Plan” means (i) any plan, as defined in Section 4001(a)(3) of
ERISA, which is maintained or contributed to (or to which there is an obligation
to contribute to) by any Credit Party or an ERISA Affiliate and that is subject
to Title IV of ERISA, and (ii) each such plan for the five year period
immediately following the latest date on which any Credit Party or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan if, for purposes of this clause (ii), such Credit Party or ERISA Affiliate
could currently incur any liability under such plan.

 

“Net Cash Proceeds” means, for any event requiring a repayment of Loans pursuant
to Section 5.2, the gross cash proceeds (including any cash received by way of
deferred payment pursuant to a promissory note, receivable or otherwise, but
only as and when received) received from such event, net, without duplication,
of the related Credit Party’s (i) reasonable transaction costs (including, as
applicable, any underwriting, brokerage or other customary discounts and selling
commissions and reasonable legal, advisory and other fees and expenses
associated therewith) relating to such event at the time of, or within 30 days
after, the date of such event and (ii) the estimated marginal increase in income
taxes which will be payable by the Partnership’s consolidated group with respect
to the fiscal year in which the event occurs as a result of such event.

 

“Net Sale Proceeds” means for any Asset Sale, the gross cash proceeds (including
any cash received by way of deferred payment pursuant to a promissory note,
receivable or

 

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otherwise, but only as and when received) received from any sale of assets, net,
without duplication, of the related Credit Party’s (i) reasonable transaction
costs (including, without limitation, any underwriting, brokerage or other
customary discounts and selling commissions and reasonable legal, advisory and
other fees and expenses, including title and recording expenses and sale and
transfer taxes, associated therewith) and payments of unassumed liabilities
relating to the assets sold at the time of, or within 30 days after, the date of
such sale, (ii) the amount of such gross cash proceeds required to be used to
repay any Indebtedness (other than Indebtedness of the Lenders pursuant to this
Agreement) which is secured by the respective assets which were sold, and (iii)
the estimated marginal increase in income taxes which will be payable by the
Partnership’s consolidated group with respect to the fiscal year in which the
sale occurs as a result of such sale. Net Sale Proceeds shall not include any
trade-in-credits or purchase price reductions received by the Partnership or any
of its Subsidiaries in connection with an exchange of equipment for replacement
equipment that is the functional equivalent of such exchanged equipment.

 

“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

 

“Non-Interim Borrowing” means a Borrowing of a Revolving Loan which is not an
Interim Borrowing.

 

“Note” means each Acquisition Note, each Revolving Note and the Swingline Note.

 

“Note Purchase Agreement” means that certain Note Purchase Agreement 7.66%
Senior Secured Notes due 2009, dated as of September 20, 2004, from the Credit
Parties to the Purchasers, as the same may be amended, modified and/or
supplemented from time to time in accordance with the terms hereof and thereof.

 

“Note Purchase Documents” means the Note Purchase Agreement, the Intercreditor
Agreement, and the related guarantees, pledge agreements, security agreements,
mortgages, notes and other agreements and instruments entered into in connection
with the Note Purchase Agreement, in each case as the same may be amended,
modified and/or supplemented from time to time in accordance with the terms
hereof and thereof.

 

“Notice of Borrowing” has the meaning provided in Section 2.3(a).

 

“Notice of Conversion” has the meaning provided in Section 2.6.

 

“Notice Office” means, with respect to notices for payments, requests for credit
extensions or other notices, the relevant office of the Administrative Agent as
set forth on Schedule II hereto or such other office as the Administrative Agent
may designate to the Operating Company and the Lenders from time to time.

 

“Obligations” means all amounts, direct or indirect, contingent or absolute, of
every type or description, and at any time existing, owing to the Administrative
Agent, the Collateral Agent, any Letter of Credit Issuer or any Lender pursuant
to the terms of this Agreement or any other Credit Document.

 

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“Officer’s Certificate” has the meaning provided in the definition of Applicable
Margin.

 

“Operating Company” has the meaning provided in the first paragraph of this
Agreement.

 

“Participant” has the meaning provided in Section 13.7(d).

 

“Partnership” has the meaning provided in the first paragraph of this Agreement.

 

“Partnership Agreement” means that certain First Amended and Restated Agreement
of Limited Partnership of StoneMor Partners L.P. dated as of September 20, 2004,
as may be amended, restated or otherwise modified in accordance with the terms
of this Agreement.

 

“Partnership Common Units” has the meaning provided in Section 8.13.

 

“Partnership Subordinated Units” has the meaning provided in Section 8.13.

 

“Payment Office” means the Administrative Agent’s address and, as appropriate,
account, as set forth on Schedule II, or such other address or account as the
Administrative Agent may from time to time notify the Operating Company and the
Lenders of.

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.

 

“Pension Plan” has the meaning provided in Section 8.12.

 

“Permitted Acquisition” means the non-hostile (approved by the board of
directors or similar governing body of Acquired Person) acquisition by a
Borrower of assets constituting a business, division or product line of any
Person organized in, and doing business solely within, the United States, not
already a Subsidiary of the Partnership, or of 100% of the capital stock or
other Equity Interests of any such Person, which Person shall, as a result of
such acquisition, become a Subsidiary of such Borrower, provided that: (A) the
consideration paid by such Borrower consists solely of (i) Partnership Common
Units, (ii) cash (including proceeds of Acquisition Loans), and (iii) any Seller
Subordinated Debt in accordance with the requirements of Section 10.4; (B) in
the case of the acquisition of 100% of the capital stock or other Equity
Interests of any Person, such Person (the “Acquired Person”) shall own no
capital stock or other Equity Interests of any other Person unless the Acquired
Person owns 100% of the capital stock or other Equity Interests of such other
Person; (C) the acquired business or assets constitute a Permitted Business; (D)
the acquisition has been approved by the Operating Company’s Board of Managers;
(E) the receipt by the Administrative Agent and Lenders, not less than (x)
thirty (30) days prior to the acquisition, of (i) the approval package to be
presented to the Operating Company’s Board of Managers and (ii) all appraisals
completed in connection therewith, for any acquisition the consideration for
which is greater than $5,000,000 and (y) ten (10) Business Days prior to the
acquisition, the approval package to be presented to the Operating Company’s
Board of Managers, for any acquisition the consideration for which is less than
or equal to $5,000,000; and (F) Required Lender approval (not to be unreasonably
withheld, conditioned or delayed) for any acquisition with an Aggregate
Consideration in excess of $2,500,000 and any series of

 

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acquisitions aggregating over $20,000,000 in Aggregate Consideration in any
consecutive twelve month period shall be required. Notwithstanding anything to
the contrary contained in the immediately preceding sentence, an acquisition
which does not otherwise meet the requirements set forth above in the definition
of “Permitted Acquisition” shall constitute a Permitted Acquisition if, and to
the extent, the Required Lenders agree in writing that such acquisition shall
constitute a Permitted Acquisition for purposes of this Agreement.

 

“Permitted Business” means any business engaged in or related to the cemetery
and funeral home business in the United States and the provision of product and
services in connection therewith.

 

“Permitted Encumbrances” means (i) those liens, encumbrances and other matters
affecting title to any Real Property and found reasonably acceptable by the
Collateral Agent, (ii) as to any particular Real Property at any time, such
easements, encroachments, covenants, conditions, restrictions, rights of way,
minor defects, irregularities or encumbrances on title which could not
reasonably be expected to materially impair such Real Property for the purpose
for which it is held by the mortgagor thereof, or the lien held by the
Collateral Agent, (iii) zoning and other municipal ordinances which are not
violated in any material respect by the existing improvements and the present
use made by the mortgagor thereof of the premises, (iv) general real estate
taxes and assessments not yet delinquent, and (v) such other similar items as
the Collateral Agent may consent to (such consent not to be unreasonably
withheld).

 

“Permitted Liens” has the meaning provided in Section 10.3.

 

“Perpetual Care Trust” means a trust fund, pre-need trust, pre-construction
trust or other reserve, trust, escrow or any similar arrangement established and
administered by a Borrower as required in accordance with applicable law for the
purpose of receiving the aggregate of all amounts derived from the sale of
interests in real property, or fixtures, including, without limitation,
mausoleums, niches, columbaria, urns, or crypts, used in connection with the
final disposition, memorialization, interment, entombment, or inurnment of human
remains and set aside in reserve, trust, escrow or any similar arrangement and
administering such amounts for the perpetual care and maintenance of cemetery
lots, graves, grounds, landscaping, roads, paths, parking lots, fences,
mausoleums, columbaria, vaults, crypts, utilities, and other improvements,
structures and embellishments.

 

“Person” means any individual, partnership, joint venture, firm, corporation,
limited liability company, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.

 

“Plan” means (i) any pension plan as defined in Section 3(2) of ERISA (other
than a Multiemployer Plan), which is maintained or contributed to by (or to
which there is an obligation to contribute of) any Credit Party or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which any Credit Party or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan to the extent
that any Credit Party or an ERISA Affiliate could, in the reasonable opinion of
the Lenders, reasonably be expected to have any liability under such Plan; and
(ii) any other benefit

 

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arrangement, obligation or practice whether or not legally enforceable, to
provide benefits, other than salary, as compensation for services rendered.

 

“Pledge Agreement” has the meaning provided in Section 6.11(a).

 

“Pledge Agreement Collateral” shall mean all “Collateral” as defined in the
Pledge Agreement.

 

“Preferred Equity” as applied to the capital stock or other Equity Interests of
any Person, means capital stock or other Equity Interests of such Person (other
than common stock or units of such Person) of any class or classes (however
designated) that ranks prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of capital stock or other
Equity Interests of any other class of such Person.

 

“Pro Forma Balance Sheet” has the meaning provided in Section 6.14.

 

“Pro Forma Basis” means, in connection with any calculation of compliance with
any financial covenant or financial term, the calculation thereof after giving
effect on a pro forma basis to the Permitted Acquisition then being consummated
as well as any other Permitted Acquisition consummated after the first day of
the relevant Test Period or Calculation Period (in each case, based on the best
available historical financial information provided by the Permitted Acquisition
target(s) as of the date of delivery, whether prepared in accordance with GAAP
or otherwise, and accepted by the Borrowers in the exercise of their reasonable
business judgment), as the case may be, and on or prior to the date of the
respective Permitted Acquisition then being effected, adjusted to eliminate
expenses reasonably expected to be eliminated by the Borrowers pursuant to
synergies and other efficiencies of the acquisition, and adjusted for income,
gains and losses from any Permitted Acquisition’s Trust Accounts, using a net
asset value of Perpetual Care Trusts multiplied by ten-year Treasury Rate plus
150 basis points and Merchandise Trusts multiplied by five-year Treasury Rate
plus 150 basis points; provided that, for purposes of calculations pursuant to
Section 9.14 to the extent applicable, such calculations shall also give effect
on a pro forma basis to (a) the incurrence of any Indebtedness after the first
day of the relevant Calculation Period as if such Indebtedness had been incurred
(and the proceeds thereof applied) on the first day of the relevant Calculation
Period and (b) the permanent repayment of any Indebtedness after the first day
of the relevant Calculation Period as if such Indebtedness had been retired or
redeemed on the first day of the relevant Calculation Period (in each case,
based on the historical financial information described above).

 

“Projections” means the detailed projected consolidated financial statements of
the Partnership and its Subsidiaries certified by a Senior Manager of the
Partnership for the five fiscal years after the Effective Date and made
available to the Lenders on or prior to the Effective Date.

 

“Purchasers” means the initial purchasers of notes pursuant to the Note Purchase
Agreement, together with any successors thereto as holders of such notes.

 

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“Qualified IPO” means the Partnership’s bona fide initial underwritten sale to
the public of common units representing limited partner interests in the
Partnership pursuant to Form S-1.

 

“Quarterly Payment Date” means the last Business Day of each March, June,
September and December.

 

“Real Property” of any Person means all of the right, title and interest of such
Person in and to land, improvements and fixtures, including Leaseholds.

 

“Receivables” means all accounts receivable (including, without limitation, all
rights to payment created by or arising from sales of goods, leases of goods or
the rendering of services no matter how evidenced and whether or not earned by
performance or constituting an account under the UCC).

 

“Recovery Event” means the receipt by any Credit Party of any insurance or
condemnation proceeds (other than proceeds from business interruption insurance)
payable (i) by reason of theft, physical destruction or damage or any other
similar event with respect to any properties or assets of such Credit Party,
(ii) by reason of any condemnation, taking, seizing or similar event with
respect to any properties or assets of such Credit Party or (iii) under any
policy of insurance required to be maintained under Section 9.3.

 

“Register” has the meaning provided in Section 13.7(c).

 

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.

 

“Regulation T” means Regulation T of the Board of Governors of the Federal
Reserve System as from to time in effect and any successor to all or any portion
thereof.

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof.

 

“Regulation X” means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or any
portion thereof.

 

“Release” means disposing, discharging, injecting, spilling, pumping, leaking,
leaching, dumping, emitting, escaping, emptying, seeping, placing, pouring and
the like, into or upon any land or water or air, or otherwise entering into the
environment.

 

“Replaced Lender” has the meaning provided in Section 2.13.

 

“Replacement Lender” has the meaning provided in Section 2.13.

 

“Reportable Event” means an event described in Section 4043(c) of ERISA with
respect to a Plan that is subject to Title IV of ERISA other than those events
as to which the 30-day

 

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notice period is waived under subsection .22, .23, .25, .27, or .28 of PBGC
Regulation Section 4043.

 

“Required Lenders” means Non-Defaulting Lenders, the sum of whose outstanding
Acquisition Loan Commitments and Revolving Loan Commitments (or after the
termination thereof, outstanding Acquisition Loans, Revolving Loans and RL
Percentage of outstanding Swingline Loans and Letter of Credit Outstandings)
represent an amount greater than 50% of the sum of all Acquisition Loan
Commitments and Revolving Loan Commitments of Non-Defaulting Lenders (or after
the termination thereof, the sum of the then total outstanding Acquisition Loans
and Revolving Loans of Non-Defaulting Lenders and the aggregate RL Percentages
of all Non-Defaulting Lenders of the total outstanding Swingline Loans and
Letter of Credit Outstandings at such time).

 

“Revolving Loan” has the meaning provided in Section 2.1(b).

 

“Revolving Loan Commitment” means, with respect to each RL Lender, the amount
set forth opposite such Lender’s name in Schedule I directly below the column
entitled “Revolving Loan Commitment,” as the same may be (x) reduced from time
to time pursuant to Sections 4.2, 4.3 and/or Section 11 or (y) adjusted from to
time as a result of assignments to or from such Lender pursuant to Section 2.13
or 13.7(b).

 

“Revolving Loan Maturity Date” means September 20, 2007.

 

“Revolving Note” has the meaning provided in Section 2.5(a).

 

“RL Lender” means at any time each Lender with a Revolving Loan Commitment or
with outstanding Revolving Loans or any participation in one or more outstanding
Letters of Credit.

 

“RL Percentage” of any Lender at any time means a fraction (expressed as a
percentage) the numerator of which is the Revolving Loan Commitment of such
Lender at such time and the denominator of which is the Total Revolving Loan
Commitment at such time, provided that if the RL Percentage of any Lender is to
be determined after the Total Revolving Loan Commitment has been terminated,
then the RL Percentages of the Lenders shall be determined immediately prior
(and without giving effect) to such termination.

 

“S&P” means Standard & Poor’s Ratings Services, a division of McGraw Hill, Inc.,
and any successor thereto.

 

“Scheduled Repayment” has the meaning provided in Section 5.2(b).

 

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

 

“Seller Subordinated Debt” has the meaning set forth in Section 10.4(vi).

 

“Section 5.4(b)(ii) Certificate” has the meaning provided in Section 5.4(b)(ii).

 

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“Secured Creditors” means the Administrative Agent, the Collateral Agent, the
Lenders, Letter of Credit Issuers and Swap Creditors.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Security Agreement” has the meaning provided in Section 6.11(b).

 

“Security Agreement Collateral” means all “Collateral” as defined in the
Security Agreement.

 

“Security Documents” means and include the Security Agreement, the Pledge
Agreement, each Mortgage and each Additional Security Document, if any.

 

“Senior Manager” means any chairman, president, chief executive officer, chief
financial officer or similar officer of the General Partner, the Partnership or
the Operating Company.

 

“Shareholders’ Agreements” has the meaning provided in Section 6.12.

 

“Start Date” has the meaning provided in the definition of Applicable Margin.

 

“Stated Amount” of each Letter of Credit shall, at any time, mean the maximum
amount available to be drawn thereunder (in each case determined (i) without
regard to whether any conditions to drawing thereunder could then be met, (ii)
after giving effect to any step-up or increase in the maximum amount to be made
available under such Letter of Credit after the issuance thereof, but (iii)
after giving effect to all previous drawings made thereunder).

 

“Subsidiary” of any Person means and includes (i) any corporation more than 50%
of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, limited liability
company, association, joint venture or other entity (other than a corporation)
in which such Person directly or indirectly through Subsidiaries, has more than
a 50% equity interest at the time; provided that no Trust Account shall be
deemed to be a Subsidiary.

 

“Swap Contract” means (a) any and all interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedging
agreement or other similar agreement or arrangement, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., or any other master
agreement (any such master agreement, together with any related schedules, a
“Master Agreement”), including any such obligations or liabilities under any
Master Agreement.

 

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“Swap Creditor” means any Lender or Affiliate of any Lender with whom any
Borrower has entered into a Swap Contract.

 

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

 

“Swingline Expiry Date” means the date which is five Business Days prior to the
Revolving Loan Maturity Date.

 

“Swingline Lender” means Fleet acting in its capacity as a lender of Swingline
Loans.

 

“Swingline Loan” has the meaning provided in Section 2.1(c).

 

“Swingline Note” has the meaning provided in Section 2.5(a).

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

 

“Tax Allocation Agreements” has the meaning provided in Section 6.12.

 

“Tax Benefit” has the meaning provided in Section 5.4(c).

 

“Taxes” has the meaning provided in Section 5.4(a).

 

“Test Period” means each period of four consecutive fiscal quarters then last
ended, in each case taken as one accounting period.

 

“Total Acquisition Loan Commitment” means the sum of the Acquisition Loan
Commitments of each of the Lenders.

 

“Total Commitment” means the sum of the Total Acquisition Loan Commitment and
the Total Revolving Loan Commitment.

 

“Total Revolving Loan Commitment” means the sum of the Revolving Loan
Commitments of each of the Lenders.

 

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“Total Unutilized Acquisition Loan Commitment” means, at any time, (i) the Total
Acquisition Loan Commitment at such time less (ii) the sum of the aggregate
principal amount of all Acquisition Loans made.

 

“Total Unutilized Revolving Loan Commitment” means, at any time, (i) the Total
Revolving Loan Commitment at such time less (ii) the sum of the aggregate
principal amount of all Revolving Loans and Swingline Loans outstanding at such
time plus the Letter of Credit Outstandings at such time.

 

“Tranche” means the respective facility and commitments utilized in making Loans
hereunder, with there being three separate Tranches: (i) Acquisition Loans, (ii)
Revolving Loans and (iii) Swingline Loans.

 

“Transaction” means, collectively, (i) the Conversion, (ii) a Qualified IPO,
(iii) the entering into of the Note Purchase Documents and the incurrence of all
loans thereunder, (iv) the entering into of the Credit Documents and the
incurrence of all Loans and issuance of all Letters of Credit on the Effective
Date, and (v) the payment of fees and expenses in connection with the foregoing.

 

“Trust Accounts” means, collectively, the Perpetual Care Trusts and Merchandise
Trusts.

 

“Trust Funds” means, at the time of any determination thereof, in connection
with the Trust Accounts, the aggregate of all amounts required by applicable law
to be set aside in reserve, trust, escrow or any similar arrangement.

 

“Type” means any type of Loan determined with respect to the interest option
applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
relevant jurisdiction.

 

“UFCA” has the meaning provided in 14.9(c).

 

“UFTA” has the meaning provided in 14.9(c).

 

“Unfunded Current Liability” of any Plan means the amount, if any, by which the
actuarial present value of the accumulated plan benefits under the Plan as of
the close of its most recent plan year exceeds the fair market value of the
assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan’s actuary in the most recent annual valuation of the Plan.

 

“Unpaid Drawing” has the meaning provided in Section 3.4(a).

 

“Unused Commitment Fee” has the meaning provided in Section 4.1(a).

 

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“Unutilized Acquisition Loan Commitment” with respect to any Acquisition Lender
at any time means such Acquisition Lender’s Acquisition Loan Commitment at such
time less the aggregate principal amount of all Acquisition Loans made by such
Acquisition Lender.

 

“Unutilized Revolving Loan Commitment” with respect to any RL Lender at any time
means such RL Lender’s Revolving Loan Commitment at such time less the sum of
(i) the aggregate outstanding principal amount of all Revolving Loans made by
such RL Lender and (ii) such RL Lender’s RL Percentage of the total Letter of
Credit Outstandings at such time.

 

“Written” (whether lower or upper case) or “in writing” means any form of
written communication or a communication by means of telex, facsimile device,
electronic mail or cable.

 

SECTION 2. Amount and Acquisitions of Credit.

 

2.1. Commitments. (a) Acquisition Loans. Subject to and upon the terms and
conditions set forth herein, each Acquisition Lender severally agrees, at any
time and from time to time on and after the Effective Date and prior to the
Acquisition Loan Maturity Date, to make one or more term loans (each, an
“Acquisition Loan” and, collectively, the “Acquisition Loans”) to the Borrowers,
which Acquisition Loans:

 

(i) shall, at the option of the Borrowers, be incurred and maintained as, and/or
converted into, Base Rate Loans or Eurodollar Loans, provided that except as
otherwise specifically provided in Section 2.10(b), all Acquisition Loans made
as part of the same Borrowing shall at all times be of the same Type;

 

(ii) shall not exceed for any Lender at any time an aggregate original principal
amount which then equals the Acquisition Loan Commitment of such Lender at such
time;

 

(iii) shall not exceed for all Lenders at any time an aggregate original
principal amount which exceeds the Total Acquisition Loan Commitment then in
effect; and

 

(iv) shall be for Permitted Acquisitions compliant with the definition thereof.

 

Once repaid, Acquisition Loans incurred hereunder may not be reborrowed.

 

(b) Revolving Loans. Subject to and upon the terms and conditions set forth
herein, each RL Lender severally agrees, at any time and from time to time on
and after the Effective Date and prior to the Revolving Loan Maturity Date, to
make one or more revolving loans (each, a “Revolving Loan” and, collectively,
the “Revolving Loans”) to the Borrowers, which Revolving Loans:

 

(i) shall, at the option of the Borrowers, be incurred and maintained as, and/or
converted into, Base Rate Loans or Eurodollar Loans, provided that except as

 

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otherwise specifically provided in Section 2.10(b), all Revolving Loans made as
part of the same Borrowing shall at all times be of the same Type;

 

(ii) may be repaid and reborrowed in accordance with the provisions hereof;

 

(iii) shall not exceed, for any Lender, at any time an aggregate outstanding
principal amount which, when added to such Lender’s RL Percentage of the sum of
(x) the Letter of Credit Outstandings at such time (exclusive of Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) and (y) the aggregate
principal amount of all Swingline Loans then outstanding (exclusive of Swingline
Loans which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans), equals the
Revolving Loan Commitment of such Lender at such time; and

 

(iv) shall not exceed, for all Lenders, at any time an aggregate outstanding
principal amount which, when added to (x) the Letter of Credit Outstandings at
such time (exclusive of Unpaid Drawings which are repaid with the proceeds of,
and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) and (y) the aggregate principal amount of all Swingline Loans
then outstanding (exclusive of Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans), equals the lesser of (A) the Total Revolving
Loan Commitment and (B) the Borrowing Base, as then in effect.

 

(c) Swingline Loans. Subject to and upon the terms and conditions set forth
herein, the Swingline Lender in its capacity as such agrees to make at any time
and from time to time on and after the Effective Date and prior to the Swingline
Expiry Date, a revolving loan or revolving loans to the Borrowers (each, a
“Swingline Loan” and, collectively, the “Swingline Loans”), which Swingline
Loans:

 

(i) shall be made and maintained as Base Rate Loans;

 

(ii) may be repaid and reborrowed in accordance with the provisions hereof;

 

(iii) shall not exceed in aggregate principal amount at any time outstanding,
when combined with (x) the aggregate principal amount of all Revolving Loans
then outstanding and (y) the Letter of Credit Outstandings at such time, the
Total Revolving Loan Commitment at such time (after giving effect to any changes
thereto on such date); and

 

(iv) shall not exceed in aggregate principal amount at any time outstanding the
Maximum Swingline Amount.

 

Notwithstanding anything contained in this Section 2.1(c), (i) the Swingline
Lender shall not be obligated to make any Swingline Loans at a time when a
Lender Default exists unless the Swingline Lender has entered into arrangements
satisfactory to it and the Borrowers to eliminate

 

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the Swingline Lender’s risk with respect to the Defaulting Lender’s or
Defaulting Lenders’ participation in such Swingline Loans, including by cash
collateralizing such Defaulting Lender’s or Defaulting Lenders’ RL Percentage(s)
of the outstanding Swingline Loans and (ii) the Swingline Lender will not make a
Swingline Loan after it has received written notice from the Borrowers or the
Administrative Agent (at the direction of the Required Lenders) stating that a
Default or an Event of Default exists until such time as the Swingline Lender
shall have received a written notice of (i) rescission of such notice from the
party or parties originally delivering the same or (ii) a waiver of such Default
or Event of Default from the Required Lenders.

 

(d) On any Business Day, the Swingline Lender may, in its sole discretion, give
notice to the RL Lenders that its outstanding Swingline Loans shall be funded
with a Borrowing of Revolving Loans (provided that each such notice shall be
deemed to have been automatically given upon the occurrence of a Default or an
Event of Default under Section 11.5 or upon the exercise of any of the remedies
provided in the last paragraph of Section 11), in which case a Borrowing of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a “Mandatory
Borrowing”) shall be made on the immediately succeeding Business Day by all RL
Lenders pro rata based on each RL Lender’s RL Percentage (determined before
giving effect to any termination of the Revolving Loan Commitments pursuant to
the last paragraph of Section 11), and the proceeds thereof shall be applied
directly to repay the Swingline Lender for such outstanding Swingline Loans.
Each RL Lender hereby irrevocably agrees to make Revolving Loans upon one
Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the date specified in
writing by the Swingline Lender notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise
required hereunder, (ii) whether any conditions specified in Section 6 or 7 are
then satisfied, (iii) whether a Default or an Event of Default has occurred and
is continuing, (iv) the date of such Mandatory Borrowing and (v) the amount of
the Total Revolving Loan Commitment at such time. In the event that any
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 with respect to the Borrowers), then each
RL Lender (other than the Swingline Lender) hereby agrees that it shall
forthwith purchase from the Swingline Lender (without recourse or warranty) such
assignment of the outstanding Swingline Loans as shall be necessary to cause the
RL Lenders to share in such Swingline Loans ratably based upon their respective
RL Percentages (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 11),
provided that (x) all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date the respective assignment is
purchased and, to the extent attributable to the purchased assignment, shall be
payable to the RL Lender purchasing same from and after such date of purchase
(or, if earlier, from the date on which the Mandatory Borrowing would otherwise
have occurred, so long as the payments required by following clause (y) have in
fact been made) and (y) at the time any purchase of assignments pursuant to this
sentence is actually made, the purchasing RL Lender shall be required to pay the
Swingline Lender interest on the principal amount of the assignment purchased
for each day from and including the day upon which the Mandatory Borrowing would
otherwise have occurred to but excluding the date of payment for such
assignment, at the rate otherwise applicable to Revolving Loans maintained as
Base Rate Loans hereunder for each day thereafter.

 

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2.2. Minimum Borrowing Amounts, etc. The aggregate principal amount of each
Borrowing of Loans under a respective Tranche shall not be less than the Minimum
Borrowing Amount applicable to such Tranche, provided that Mandatory Borrowings
shall be made in the amounts required by Section 2.1(d). More than one Borrowing
may be incurred on any day, provided that at no time shall there be outstanding
more than six (6) Borrowings of Eurodollar Loans.

 

2.3. Notice of Borrowing. (a) Whenever the Borrowers desire to make a Borrowing
of Loans hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Administrative Agent at its Notice Office, prior
to 12:00 Noon (Philadelphia time), at least three Business Days’ prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans and at least one Business Day’s prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Base Rate
Loans to be made hereunder. Each such written notice or written confirmation of
telephonic notice (each, a “Notice of Borrowing”) shall, except as otherwise
expressly provided in Section 2.10, be irrevocable, and, in the case of each
written notice and each confirmation of telephonic notice, shall be given by an
Authorized Officer of the Borrowers in the form of Exhibit A, appropriately
completed to specify: (i) the aggregate principal amount of the Loans to be made
pursuant to such Borrowing, (ii) the date of such Borrowing (which shall be a
Business Day), (iii) whether the respective Borrowing shall consist of
Acquisition Loans or Revolving Loans (and, if Revolving Loans, whether they
represent an Interim Borrowing), (iv) whether the respective Borrowing shall
consist of Base Rate Loans or, to the extent permitted hereunder, Eurodollar
Loans and, if Eurodollar Loans, the Interest Period to be initially applicable
thereto, and (v) in the case of a Borrowing of Acquisition Loans, a reference to
the officer’s certificate, if any, delivered in accordance with Section 9.14.
The Administrative Agent shall promptly give each Lender which is required to
make Loans of the Tranche specified in the respective Notice of Borrowing,
written notice (or telephonic notice promptly confirmed in writing) of each
proposed Borrowing, of such Lender’s proportionate share thereof and of the
other matters required by the immediately preceding sentence to be specified in
the Notice of Borrowing.

 

(b) (i) Whenever the Borrowers desire to incur Swingline Loans hereunder, it
shall give the Swingline Lender not later than 2:00 P.M. (Philadelphia time) on
the day such Swingline Loan is to be made, written notice (or telephonic notice
promptly confirmed in writing) of each Swingline Loan to be made hereunder. Each
such notice shall be irrevocable and shall specify in each case (x) the date of
such Borrowing (which shall be a Business Day) and (y) the aggregate principal
amount of the Swingline Loan to be made pursuant to such Borrowing.

 

(ii) Mandatory Borrowings shall be made upon the notice (or deemed notice)
specified in Section 2.1(d), with the Borrowers irrevocably agreeing, by their
incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set
forth in such Section 2.1(d).

 

(c) Without in any way limiting the obligation of the Borrowers to confirm in
writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or the Swingline Lender (in the case of a Borrowing of
Swingline Loans) or the Letter of Credit Issuer

 

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(in the case of the issuance of Letters of Credit), as the case may be, may,
prior to receipt of written confirmation, act without liability upon the basis
of such telephonic notice, believed by the Administrative Agent, the Swingline
Lender or the Letter of Credit Issuer, as the case may be, in good faith to be
from an Authorized Officer of the Borrowers. In each such case, the
Administrative Agent’s, the Swingline Lender’s or the respective Letter of
Credit Issuer’s record of the terms of such telep honic notice shall be
conclusive evidence of the contents of such notice, absent manifest error.

 

2.4. Disbursement of Funds. (a) Not later than 1:00 P.M. (Philadelphia time) on
the date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, not later than 3:00 P.M. (Philadelphia time) on the date specified in
Section 2.3(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (Philadelphia time) on the date specified in Section 2.1(d)), each
Lender with a Commitment under the respective Tranche will make available its
pro rata share (determined in accordance with Section 2.7), if any, of each
Borrowing requested to be made on such date (or in the case of Swingline Loans,
the Swingline Lender shall make available the full amount thereof) in the manner
provided below. All amounts shall be made available to the Administrative Agent
in immediately available funds at the Payment Office and the Administrative
Agent promptly will make available to the Borrowers by depositing to its account
at the Payment Office the aggregate of the amounts so made available in the type
of funds received. Unless the Administrative Agent shall have been notified by
any Lender prior to the date of Borrowing that such Lender does not intend to
make available to the Administrative Agent its portion of the Borrowing or
Borrowings to be made on such date, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on such
date of Borrowing, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrowers a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
and the Administrative Agent has made available same to the Borrowers, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent shall promptly notify the Borrowers, and the Borrowers shall immediately
pay such corresponding amount to the Administrative Agent. The Administrative
Agent shall also be entitled to recover on demand from such Lender or the
Borrowers, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to the Borrowers to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if paid
by such Lender, the overnight Federal Funds Rate or (y) if paid by the
Borrowers, the then applicable rate of interest, calculated in accordance with
Section 2.8.

 

(b) Nothing in this Agreement shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrowers may have against any Lender as a result of any default by such
Lender hereunder.

 

2.5. Notes. (a) The Borrowers’ obligation to pay the principal of, and interest
on, all the Loans made to it by each Lender shall be set forth on the Register
maintained by the Administrative Agent pursuant to Section 13.7(c) and shall be
evidenced (i) if Acquisition Loans, by a promissory note substantially in the
form of Exhibit B-1 with blanks appropriately

 

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completed in conformity herewith (each, a “Acquisition Note” and, collectively,
the “Acquisition Notes”), (ii) if Revolving Loans, by a promissory note
substantially in the form of Exhibit B-2 with blanks appropriately completed in
conformity herewith (each, a “Revolving Note” and, collectively, the “Revolving
Notes”) and (iii) if Swingline Loans, by a promissory note substantially in the
form of Exhibit B-3 with blanks appropriately completed in conformity herewith
(the “Swingline Note”).

 

(b) The Acquisition Note issued to each Acquisition Lender shall (i) be executed
by the Borrowers, (ii) be payable to such Lender or its permitted registered
assigns and be dated the Effective Date (or, in the case of any Acquisition Note
issued after the Effective Date, the date of issuance thereof), (iii) be in a
stated principal amount equal to the Acquisition Loan Commitment of such Lender
on the Effective Date (or, in the case of any Acquisition Note issued after the
Effective Date, in a stated principal amount equal to the outstanding principal
amount of the Acquisition Loan of such Lender on the date of the issuance
thereof) and be payable in the principal amount of Acquisition Loans evidenced
thereby from time to time, (iv) mature on the Acquisition Loan Maturity Date,
(v) bear interest as provided in the appropriate clause of Section 2.8 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary repayment as provided in Section
5.1 and mandatory repayment as provided in Section 5.2 (including amortization
of principal amounts as provided in Section 5.2(b)) and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.

 

(c) The Revolving Note issued to each RL Lender shall (i) be executed by the
Borrowers, (ii) be payable to such RL Lender or its permitted registered assigns
and be dated the date of issuance thereof, (iii) be in a stated principal amount
equal to the Revolving Loan Commitment of such RL Lender and be payable in the
principal amount of the outstanding Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 2.8 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 5.1 and mandatory repayment as
provided in Section 5.2, and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.

 

(d) The Swingline Note issued to the Swingline Lender shall (i) be executed by
the Borrowers, (ii) be payable to the Swingline Lender or its permitted
registered assigns and be dated the Effective Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
principal amount of the outstanding Swingline Loans evidenced thereby, (iv)
mature on the Swingline Expiry Date, (v) bear interest as provided in Section
2.8 in respect of the Base Rate Loans evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 5.1 and mandatory repayment as
provided in Section 5.2 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.

 

2.6. Conversion of Loans. The Borrowers shall have the option to convert on any
Business Day occurring on or after the Effective Date, all or a portion at least
equal to the applicable Minimum Borrowing Amount of the outstanding principal
amount of Loans (other than Swingline Loans, which shall at all times be
maintained as Base Rate Loans) made pursuant to one or more Borrowings of one or
more Types of Loans under a single Tranche into a Borrowing or Borrowings of
another Type of Loan under such Tranche; provided that (i) except

 

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as otherwise provided in Section 2.10(b) or unless the Borrowers pay all
breakage costs and other amounts owing to each Lender pursuant to Section 2.11
concurrently with any such conversion, Eurodollar Loans may be converted into
Base Rate Loans only on the last day of an Interest Period applicable to the
Loans being converted, and no partial conversion of a Borrowing of Eurodollar
Loans shall reduce the outstanding principal amount of the Eurodollar Loans made
pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable
thereto, and (ii) unless the Required Lenders otherwise agree, Base Rate Loans
may only be converted into Eurodollar Loans if no Default or Event of Default is
in existence on the date of the conversion. Each such conversion shall be
effected by the Borrowers by giving the Administrative Agent at its Notice
Office, prior to 12:00 Noon (Philadelphia time), at least three Business Days’
(or one Business Day’s in the case of a conversion into Base Rate Loans) prior
written notice (or telephonic notice promptly confirmed in writing) (each, a
“Notice of Conversion”) specifying the Loans to be so converted, the
Borrowing(s) pursuant to which the Loans were made and, if to be converted into
a Borrowing of Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Lender prompt notice of any
such proposed conversion affecting any of its Loans. Upon any such conversion,
the proceeds thereof will be deemed to be applied directly on the day of such
conversion to prepay the outstanding principal amount of the Loans being
converted.

 

2.7. Pro Rata Borrowings. All Borrowings of Acquisition Loans and Revolving
Loans under this Agreement shall be incurred by the Borrowers from the Lenders
pro rata on the basis of such Lenders’ Acquisition Loan Commitments or Revolving
Loan Commitments, as the case may be, in each case as in effect on the date of
the respective Borrowing; provided that all Borrowings of Revolving Loans made
pursuant to a Mandatory Borrowing shall be incurred from the RL Lenders pro rata
on the basis of their respective RL Percentages. It is understood that no Lender
shall be responsible for any default by any other Lender of its obligation to
make Loans hereunder and that each Lender shall be obligated to make the Loans
to be made by it hereunder, regardless of the failure of any other Lender to
fulfill its commitments hereunder.

 

2.8. Interest. (a) The unpaid principal amount of each Base Rate Loan shall bear
interest from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Base Rate Loan and (ii)
the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section
2.6, at a rate per annum which shall at all times be the relevant Applicable
Margin plus the Base Rate, each as in effect from time to time.

 

(b) The unpaid principal amount of each Eurodollar Loan shall bear interest from
the date of the Borrowing thereof until the earlier of (i) the maturity (whether
by acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of
such Eurodollar Loan to a Base Rate Loan pursuant to Section 2.6, 2.9 or
2.10(b), as applicable, at a rate per annum which shall at all times be the
relevant Applicable Margin plus the Eurodollar Rate for such Interest Period,
each as in effect from time to time.

 

(c) Overdue principal and, to the extent permitted by law, overdue interest in
respect of each Loan shall bear interest at a rate per annum equal to the
greater of (x) the rate which is 2% in excess of the rate borne by such Loans
immediately prior to the respective payment default and (y) the rate which is 2%
in excess of the rate otherwise applicable to Base

 

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Rate Loans from time to time. Interest which accrues under this Section 2.8(c)
shall be payable on demand.

 

(d) Interest shall accrue from and including the date of any Borrowing to but
excluding the date of any repayment thereof and shall be payable (i) in respect
of each Base Rate Loan, quarterly in arrears on each Quarterly Payment Date,
(ii) in respect of each Eurodollar Loan, on (x) the date of any conversion into
a Base Rate Loan pursuant to Section 2.6, 2.9 or 2.10(b), as applicable (on the
amount converted) and (y) the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months, on
each date occurring at three month intervals after the first day of such
Interest Period and (iii) in respect of each Loan, on (x) the date of any
prepayment or repayment thereof (on the amount prepaid or repaid), (y) at
maturity (whether by acceleration or otherwise) and (z) after such maturity, on
demand.

 

(e) All computations of interest hereunder shall be made in accordance with
Section 13.20(b).

 

(f) Upon each Interest Determination Date, the Administrative Agent shall
determine the Eurodollar Rate for the respective Interest Period or Interest
Periods and shall promptly notify the Borrowers and the Lenders thereof. Each
such determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto.

 

2.9. Interest Periods. At the time the Borrowers give a Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, a
Borrowing of Eurodollar Loans (in the case of the initial Interest Period
applicable thereto) or prior to 12:00 Noon (Philadelphia time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans (in the case of any subsequent Interest Period),
the Borrowers shall have the right to elect by giving the Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrowers, be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above:

 

(a) the initial Interest Period for any Borrowing of Eurodollar Loans shall
commence on the date of such Borrowing (including the date of any conversion
from a Borrowing of Base Rate Loans) and each Interest Period occurring
thereafter in respect of such Borrowing shall commence on the day on which the
next preceding Interest Period applicable thereto expires;

 

(b) if any Interest Period for any Borrowing of Eurodollar Loans begins on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the last Business
Day of such calendar month;

 

(c) if any Interest Period would otherwise expire on a day which is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day, provided that if any Interest Period for any Borrowing of Eurodollar Loans
would otherwise expire on a day which is not a Business Day but is a day of the
month after which no

 

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further Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;

 

(d) no Interest Period for a Borrowing under a Tranche shall be selected which
would extend beyond the respective Maturity Date for such Tranche;

 

(e) unless the Required Lenders otherwise agree, no Interest Period may be
elected at any time when a Default or an Event of Default is then in existence;
and

 

(f) no Interest Period in respect of any Borrowing of Acquisition Loans shall be
elected which extends beyond any date upon which a Scheduled Repayment will be
required to be made under Section 5.2(b) if, after giving effect to the election
of such Interest Period, the aggregate principal amount of such Acquisition
Loans which have Interest Periods which will expire after such date will be in
excess of the aggregate principal amount of such Acquisition Loans then
outstanding less the aggregate amount of such required Scheduled Repayment.

 

If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrowers have failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to the respective Borrowing of
Eurodollar Loans as provided above, the Borrowers shall be deemed to have
elected to convert such Borrowing into a Borrowing of Base Rate Loans effective
as of the expiration date of such current Interest Period.

 

2.10. Increased Costs; Illegality; etc. (a) In the event that (x) in the case of
clause (i) below, the Administrative Agent or (y) in the case of clauses (ii)
and (iii) below, any Lender, shall have determined in good faith (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):

 

(i) on any Interest Determination Date, that, by reason of any changes arising
after the Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or

 

(ii) at any time, that such Lender shall incur increased costs or reductions in
the amounts received or receivable hereunder with respect to any Eurodollar
Loans because of (x) any change since the date of this Agreement in any
applicable law, governmental rule, regulation, guideline, order or request
(whether or not having the force of law), or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline, order or request, such as, for
example, but not limited to, (A) a change in the basis of taxation of payment to
any Lender of the principal of or interest on such Eurodollar Loans or any other
amounts payable hereunder (except for changes with respect to any tax imposed
on, measured by or determined by reference to, the net income, net profits of
such Lender or any franchise tax imposed in lieu thereof pursuant to the laws of
the jurisdiction in which such Lender is organized, or in which such Lender’s
principal office or applicable lending office is located or any subdivision
thereof or therein), provided, however, that the Borrowers’

 

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obligations to pay any additional amounts claimed under this Section
2.10(a)(ii)(x)(A) shall be subject to the provisions contained in Section
5.4(c); provided further that taxes that are otherwise addressed by Section 5.4
are not subject to a claim under this Section 2.10 or (B) a change in official
reserve requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar Rate
and/or (y) other circumstances arising since the date of this Agreement
affecting such Lender, the interbank Eurodollar market or the position of such
Lender in such market (whether or not such Lender was a Lender at the time of
such occurrence, but subject to the last sentence of Section 13.7(j)); or

 

(iii) at any time since the Effective Date, that the making or continuance of
any Eurodollar Loan has become unlawful whether by compliance by such Lender
with any law, governmental rule, regulation, guideline or order, or otherwise
(or would conflict with any governmental rule, regulation, guideline, request or
order not having the force of law but with which such Lender customarily
complies even though the failure to comply therewith would not be unlawful), or
has become impracticable as a result of a change or contingency occurring after
the Effective Date which materially and adversely affects the interbank
Eurodollar market;

 

then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrowers, which written notice shall set forth such Lender’s
(or the Administrative Agent’s, as the case may be) basis for asserting its
rights under this Section 2.10(a) and the calculation, in reasonable detail, of
any such additional amounts claimed hereunder, and (except in the case of clause
(i)) to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter, (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies the
Borrowers and the Lenders that the circumstances giving rise to such notice by
the Administrative Agent no longer exist, and any Notice of Borrowing or Notice
of Conversion given by the Borrowers with respect to Eurodollar Loans which have
not yet been incurred (including by way of conversion) shall be deemed rescinded
by the Borrowers, (y) in the case of clause (ii) above, the Borrowers agree,
subject to the provisions of Section 13.18 (to the extent applicable), to pay to
such Lender, upon written demand therefor, such additional amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as shall be
required to compensate such Lender for such increased costs or reductions in
amounts received or receivable hereunder but without duplication of any payments
due under Section 5.4 (with the written notice as to the additional amounts owed
to such Lender, submitted to the Borrowers by such Lender in accordance with the
foregoing to be, absent manifest error, final, conclusive and binding upon all
parties hereto, although the failure to give any such notice shall not release
or diminish any of the Borrowers’ obligations to pay additional amounts pursuant
to this Section 2.10(a) upon the subsequent receipt of such notice) and (z) in
the case of clause (iii) above, the Borrowers shall take one of the actions
specified in Section 2.10(b) as promptly as possible and, in any event, within
the time period required by law.

 

(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 2.10(a)(ii) or (iii), the Borrowers may at their sole
option (and in the case of

 

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a Eurodollar Loan affected pursuant to Section 2.10(a)(iii), the Borrowers
shall) either (i) if the affected Eurodollar Loan is then being made pursuant to
a Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the
Borrowers were notified by a Lender pursuant to Section 2.10(a)(ii) or (iii)),
or (ii) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days’ notice to the Administrative Agent, require the affected Lender
to convert each such Eurodollar Loan into a Base Rate Loan (which conversion, in
the case of the circumstance described in Section 2.10(a)(iii), shall occur no
later than the last day of the Interest Period then applicable to such
Eurodollar Loan or such earlier day as shall be required by applicable law);
provided that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this Section 2.10(b).

 

(c) If any Lender shall have determined after the Effective Date that the
adoption or effectiveness after the Effective Date of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or any change
after the Effective Date in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender’s or such other corporation’s capital or assets as
a consequence of such Lender’s Commitment or Commitments hereunder or its
obligations hereunder to a level below that which such Lender or such other
corporation could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender’s or such other corporation’s
policies with respect to capital adequacy), then from time to time, upon written
demand by such Lender (with a copy to the Administrative Agent), accompanied by
the notice referred to in the last sentence of this clause (c), the Borrowers
agree, subject to the provisions of Section 13.18 (to the extent applicable), to
pay to such Lender such additional amount or amounts as will compensate such
Lender or such other corporation for such reduction in the rate of return to
such Lender or such other corporation. Each Lender, upon determining in good
faith that any additional amounts will be payable pursuant to this Section
2.10(c), will give prompt written notice thereof to the Borrowers (a copy of
which shall be sent by such Lender to the Administrative Agent), which notice
shall set forth such Lender’s basis for asserting its rights under this Section
2.10(c) and the calculation, in reasonable detail, of such additional amounts
claimed hereunder, although the failure to give any such notice shall not
release or diminish the Borrowers’ obligations to pay additional amounts
pursuant to this Section 2.10(c) upon the subsequent receipt of such notice. A
Lender’s reasonable good faith determination of compensation owing under this
Section 2.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.

 

2.11. Compensation. The Borrowers shall, subject to the provisions of Section
13.18 (to the extent applicable), compensate each Lender, promptly upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Lender to fund its Eurodollar Loans) which such Lender may sustain: (i) if
for any reason a Borrowing of, or conversion from or into, Eurodollar Loans does
not occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion given by the Borrowers

 

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(whether or not withdrawn by the Borrowers or deemed withdrawn pursuant to
Section 2.10(a)); (ii) if any repayment (including any repayment made pursuant
to Section 5.1 or 5.2 or as a result of an acceleration of the Loans pursuant to
Section 11 or as a result of the replacement of a Lender (other than a
Defaulting Lender) pursuant to Section 2.13 or 13.1(b)) or conversion of any
Eurodollar Loans of the Borrowers occurs on a date which is not the last day of
an Interest Period applicable thereto; (iii) if any prepayment of any Eurodollar
Loans is not made on any date specified in a notice of prepayment given by the
Borrowers; or (iv) as a consequence of (x) any other default by the Borrowers to
repay its Eurodollar Loans when required by the terms of this Agreement or (y)
an election made by the Borrowers pursuant to Section 2.10(b). Each Lender’s
calculation of the amount of compensation owing pursuant to this Section 2.11
shall be made in good faith. A Lender’s basis for requesting compensation
pursuant to this Section 2.11 and a Lender’s calculation of the amount thereof,
shall, absent manifest error, be final and conclusive and binding on all parties
hereto.

 

2.12. Change of Lending Office. Each Lender agrees that upon the occurrence of
any event giving rise to the operation of Section 2.10(a)(ii) or (iii), Section
2.10(c), Section 3.5 or Section 5.4 with respect to such Lender, it will, if
requested by the applicable Borrowers, use reasonable efforts (subject to
overall policy considerations of such Lender) to designate another lending
office for any Loans or Letters of Credit affected by such event, provided that
such designation is made on such terms that such Lender and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 2.12 shall affect or postpone any of the
obligations of the Borrowers or the rights of any Lender provided in Sections
2.10, 3.5 and 5.4.

 

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2.13. Replacement of Lenders. (x) If any Lender becomes a Defaulting Lender, (y)
upon the occurrence of any event giving rise to the operation of Section
2.10(a)(ii) or (iii), Section 2.10(c), Section 3.5 or Section 5.4 with respect
to any Lender which results in such Lender charging to the Borrowers increased
costs materially in excess of the average costs being charged by the other
Lenders in respect of such contingency or (z) in the case of a refusal by a
Lender to consent to a proposed change, waiver, discharge or termination with
respect to this Agreement which has been approved by the Required Lenders as
provided in Section 13.1(b), the Borrowers shall have the right, in accordance
with Section 13.7(b), if no Default or Event of Default then exists or would
exist after giving effect to such replacement, to replace such Lender (the
“Replaced Lender”) with one or more other Eligible Assignee or Assignees, none
of whom shall constitute a Defaulting Lender at the time of such replacement
(collectively, the “Replacement Lender”) and each of whom shall be reasonably
acceptable to the Administrative Agent or, at the option of the Borrowers, to
replace only (a) any Commitment (and outstandings pursuant thereto) of the
Replaced Lender with an identical Commitment provided by the Replacement Lender
or (b) in the case of a replacement as provided in Section 13.1(b) where the
consent of the respective Lender is required with respect to less than all
Tranches of its Loans or Commitments, the Commitments and/or outstanding Loans
of such Lender in respect of each Tranche where the consent of such Lender would
otherwise be individually required, with identical Commitments and/or Loans of
the respective Tranche provided by the Replacement Lender; provided that:

 

(i) at the time of any replacement pursuant to this Section 2.13, the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.7(b) (and with all fees payable pursuant to
said Section 13.7(b) to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the Commitments and outstanding Loans
(or, in the case of the replacement of only (a) the Revolving Loan Commitment,
the Revolving Loan Commitment and outstanding Revolving Loans and participations
in Letter of Credit Outstandings and/or (b) the outstanding Acquisition Loans,
the outstanding Acquisition Loans) of, and in each case (except for the
replacement of only the outstanding Acquisition Loans of the respective Lender)
participations in Letters of Credit by, the Replaced Lender and, in connection
therewith, shall pay to (x) the Replaced Lender in respect thereof an amount
equal to the sum of (A) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans (or of the Loans of the respective Tranche
being replaced) of the Replaced Lender, (B) an amount equal to all Unpaid
Drawings (unless there are no Unpaid Drawings with respect to the Tranche being
replaced) that have been funded by (and not reimbursed to) such Replaced Lender,
together with all then unpaid interest with respect thereto at such time and (C)
an amount equal to all accrued, but theretofore unpaid, Fees owing to the
Replaced Lender (but only with respect to the relevant Tranche, in the case of
the replacement of less than all Tranches of Loans then held by the respective
Replaced Lender) pursuant to Section 4.1, (y) except in the case of the
replacement of only the outstanding Acquisition Loans of a Replaced Lender, each
Letter of Credit Issuer an amount equal to such Replaced Lender’s RL Percentage
of any Unpaid Drawing relating to Letters of Credit issued by such Letter of
Credit Issuer (which at such time remains an Unpaid Drawing) to the extent such
amount was not theretofore funded by such Replaced Lender and (z) in the case of
any replacement of Revolving Loan Commitments, the Swingline Lender an amount
equal to such Replaced Lender’s RL Percentage of any Mandatory Borrowing to the
extent such amount was not theretofore funded by such Replaced Lender; and

 

(ii) all obligations of the Credit Parties, if any, then owing to the Replaced
Lender (other than those (a) specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid, but including all amounts, if any, owing under Section 2.11 or (b)
relating to any Tranche of Loans and/or Commitments of the respective Replaced
Lender which will remain outstanding after giving effect to the respective
replacement) shall be paid in full to such Replaced Lender concurrently with
such replacement.

 

Upon the execution of the respective Assignment and Assumption Agreements by the
respective Replacement Lender, the payment of amounts referred to in clauses (i)
and (ii) above, recordation of the assignment on the Register by the
Administrative Agent pursuant to Section 13.7(c) and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the Borrowers, (x) the Replacement Lender shall become a
Lender hereunder and, unless the respective Replaced Lender continues to have
outstanding Acquisition Loans and/or a Revolving Loan Commitment hereunder, the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions under this Agreement (including, without
limitation, Sections 2.10, 2.11, 3.5, 5.4, 13.4, 13.5 and 13.19), which shall
survive as to such Replaced Lender and (y) except in the case

 

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of the replacement of only outstanding Acquisition Loans, the RL Percentages of
the Lenders shall be automatically adjusted at such time to give effect to such
replacement. In connection with any replacement of Lenders pursuant to, and as
contemplated by, this Section 2.13, the Borrowers hereby irrevocably authorize
the Administrative Agent to take all necessary action, in the name of the
Borrowers, as described above in this Section 2.13 in order to effect the
replacement of the respective Lender or Lenders in accordance with the preceding
provisions of this Section 2.13.

 

2.14. Borrower Funds Administrator.

 

(a) Borrowers maintain an integrated cash management system reflecting their
interdependence on one another and the mutual benefits shared among them as a
result of their respective operations. In order to efficiently fund and operate
their respective businesses and minimize the number of borrowings which they
will make under this Agreement and thereby reduce the administrative costs and
record keeping required in connection therewith, including the necessity to
enter into and maintain separately identified and monitored borrowing
facilities, Borrowers have requested, and Administrative Agent and Lenders have
agreed that, subject to Section 14.9, all Loans will be advanced to and for the
account of Borrowers (other than the Controlled Non-Profits) on a joint and
several basis in accordance with the other provisions hereof. Each Borrower
hereby acknowledges that it will be receiving a direct benefit from each Loan
made pursuant to this Agreement.

 

(b) Each Borrower hereby designates, appoints, authorizes and empowers the
Operating Company as its agent to act as specified in this Agreement and each of
the other Credit Documents and the Operating Company hereby acknowledges such
designation, authorization and empowerment, and accepts such appointment. Each
Borrower hereby irrevocably authorizes and directs the Operating Company to take
such action on its behalf under the provisions of this Agreement and the other
Credit Documents, and any other instruments, documents and agreements referred
to herein or therein, and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Operating Company by the respective terms and provisions hereof and thereof, and
such other powers as are reasonably incidental thereto, including, without
limitation, to take the following actions for and on such Borrower’s behalf:

 

(i) to submit on behalf of each Borrower, Notices of Borrowing and Letter of
Credit Requests to the Administrative Agent and the Letter of Credit Issuer in
accordance with the provisions of this Agreement;

 

(ii) to receive on behalf of each Borrower the proceeds of Loans in accordance
with the provisions of this Agreement, such proceeds to be disbursed to or for
the account of the applicable Borrower as soon as practicable after its receipt
thereof; and

 

(iii) to submit and receive on behalf of each Borrower, Compliance Certificates
and all other certificates, notices and other communications given or required
to be given hereunder.

 

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The Operating Company is further authorized and directed by each Borrower to
take all such actions on behalf of such Borrower necessary to exercise the
specific power granted in clauses (i) through (iii) above and to perform such
other duties hereunder and under the other Credit Documents, and deliver such
documents as delegated to or required of the Operating Company by the terms
hereof or thereof. The agency relationship established pursuant to this Section
2.14(b) is for administrative convenience only and such agency relationship
shall not extend to any matter outside the scope of the Credit Documents.

 

(c) The administration by Administrative Agent and Lenders of the credit
facilities under this Agreement as a co-borrowing facility with a funds
administrator in the manner set forth herein is solely as an accommodation to
Borrowers and at their request and neither the Administrative Agent nor any
Lender shall incur any liability to any Credit Party as a result thereof.

 

SECTION 3. Letters of Credit.

 

3.1. Letters of Credit. (a) Subject to and upon the terms and conditions herein
set forth, any Borrower may request a Letter of Credit Issuer at any time and
from time to time on or after the Effective Date and prior to the 90th day
preceding the Revolving Loan Maturity Date to issue, for the account of such
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Indebtedness,
irrevocable sight standby letters of credit in a form customarily used by such
Letter of Credit Issuer or in such other form as has been approved by such
Letter of Credit Issuer (each such Letter of Credit, a “Letter of Credit” and,
collectively, the “Letters of Credit”).

 

(b) Subject to and upon the terms and conditions set forth herein, each Letter
of Credit Issuer hereby agrees that it will, at any time and from time to time
on and after the Effective Date and prior to the 90th day preceding the
Revolving Loan Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of any Borrower one or more Letters of
Credit, in support of such L/C Supportable Indebtedness as is permitted to
remain outstanding hereunder. Notwithstanding the foregoing, no Letter of Credit
Issuer shall be under any obligation to issue any Letter of Credit if at the
time of such issuance:

 

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

 

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(ii) such Letter of Credit Issuer shall have received written notice from any
Borrower or the Administrative Agent (at the request of the Required Lenders)
prior to the issuance of such Letter of Credit of the type described in clause
(vi) of Section 3.1(c) or the second sentence of Section 3.2(b); or

 

(iii) the issuance of such Letter of Credit would violate any laws or one or
more policies of such Letter of Credit Issuer generally applicable to account
parties.

 

(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued the
Stated Amount of which, when added to the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid on the date of, and prior to the
issuance of, the respective Letter of Credit) at such time, would exceed either
(x) $5,000,000 or (y) when added to the aggregate principal amount of all
Revolving Loans then outstanding and all Swingline Loans then outstanding, the
Total Revolving Loan Commitment at such time; (ii) each Letter of Credit shall
have an expiry date occurring not later than one year after such Letter of
Credit’s date of issuance, provided that any such Letter of Credit may be
extendable for successive periods each of up to one year, but not beyond the
30th day preceding the Revolving Loan Maturity Date, on terms acceptable to the
respective Letter of Credit Issuer; (iii) no Letter of Credit shall have an
expiry date occurring later than the 30th day prior to the Revolving Loan
Maturity Date; (iv) the Stated Amount of each Letter of Credit shall not be less
than $100,000 or in each case such lesser amount as is reasonably acceptable to
the respective Letter of Credit Issuer; and (vi) no Letter of Credit Issuer will
issue any Letter of Credit after it has received written notice from the
Borrowers or the Administrative Agent (at the request of the Required Lenders)
stating that a Default or an Event of Default exists until such time as such
Letter of Credit Issuer shall have received a written notice of (x) rescission
of such notice from the party or parties originally delivering the same or (y) a
waiver of such Default or Event of Default by the Required Lenders.

 

(d) Notwithstanding the foregoing, in the event a Lender Default exists, no
Letter of Credit Issuer shall be required to issue any Letter of Credit unless
the respective Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrowers to eliminate such Letter of Credit Issuer’s
risk with respect to the participation in Letters of Credit of the Defaulting
Lender or Defaulting Lenders, including by cash collateralizing such Defaulting
Lender’s or Defaulting Lenders’ RL Percentage(s) of the Letter of Credit
Outstandings, as the case may be.

 

3.2. Letter of Credit Requests. (a) Whenever any Borrower desires that a Letter
of Credit be issued, such Borrower shall give the Administrative Agent and the
respective Letter of Credit Issuer written notice thereof at least four (4)
Business Days (or such shorter period as may be acceptable to the respective
Letter of Credit Issuer) prior to the proposed date of issuance (which shall be
a Business Day) which written notice shall be in the form of Exhibit C (each, a
“Letter of Credit Request”) and specify the currency in which the requested
Letter of Credit is to be denominated. Each Letter of Credit Request shall
include any other documents as such Letter of Credit Issuer customarily requires
in connection therewith.

 

(b) The making of each Letter of Credit Request, and the acceptance of the
benefits of each Letter of Credit issued hereunder, shall be deemed to be a
representation and warranty by the Borrowers that such Letter of Credit may be
issued in accordance with, and it

 

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will not violate the requirements of, the second sentence of Section 3.1(b) or
Section 3.1(c). Unless the respective Letter of Credit Issuer has received
notice from the Administrative Agent (at the direction of the Required Lenders)
before it issues a Letter of Credit that one or more of the applicable
conditions specified in Section 6 or 7, as the case may be, are not then
satisfied, or that the issuance of such Letter of Credit would violate the
second sentence of Section 3.1(b) or Section 3.1(c), then such Letter of Credit
Issuer may issue the requested Letter of Credit for the account of the Borrowers
in accordance with such Letter of Credit Issuer’s usual and customary practice.
In no event shall any Letter of Credit Issuer have any obligation or liability
to the L/C Participants as a result the failure of any Letter of Credit to
conform to the purpose or beneficiary requirements set forth in Section 3.1(a).

 

3.3. Letter of Credit Participations. (a) Immediately upon the issuance by a
Letter of Credit Issuer of any Letter of Credit, such Letter of Credit Issuer
shall be deemed to have sold and transferred to each other RL Lender, and each
such RL Lender (each, an “L/C Participant”) shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such L/C Participant’s RL Percentage, in such Letter of Credit,
each substitute Letter of Credit, each drawing made thereunder and the
obligations of the Borrowers under this Agreement with respect thereto (although
Letter of Credit Fees shall be payable directly to the Administrative Agent for
the account of the RL Lenders as provided in Section 4.1(b) and the L/C
Participants shall have no right to receive any portion of any Facing Fees with
respect to such Letters of Credit) and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments or the RL
Percentages of the RL Lenders pursuant to Section 2.13 or 13.7(b), it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings with respect thereto, there shall be an automatic adjustment to the
participations pursuant to this Section 3.3 to reflect the new RL Percentages of
the assigning and assignee Lender or of all RL Lenders, as the case may be.

 

(b) In determining whether to pay under any Letter of Credit, no Letter of
Credit Issuer shall have any obligation relative to the L/C Participants other
than to determine that any documents required to be delivered under such Letter
of Credit have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Letter of Credit Issuer under or in connection with
any Letter of Credit issued by it if taken or omitted in the absence of gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision), shall not create for such
Letter of Credit Issuer any resulting liability to any Borrower or any Lender.

 

(c) In the event that any Letter of Credit Issuer makes any payment under any
Letter of Credit issued by it and the Borrowers shall not have reimbursed such
amount in full to the Letter of Credit Issuer pursuant to Section 3.4(a), such
Letter of Credit Issuer shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each L/C Participant of such failure,
and each such L/C Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of such Letter of Credit Issuer in U.S.
Dollars and in same day funds, the amount of such L/C Participant’s RL
Percentage of such payment (in the case of a payment under a Letter of Credit
denominated in a currency other than U.S. Dollars, taking the Dollar Equivalent
of the amount of the respective payment on the date such payment

 

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is made). If the Administrative Agent so notifies any L/C Participant required
to fund a payment under a Letter of Credit prior to 11:00 A.M. (Philadelphia
time) on any Business Day, such L/C Participant shall make available to the
Administrative Agent at the Payment Office for the account of the respective
Letter of Credit Issuer such L/C Participant’s RL Percentage of the amount of
such payment on such Business Day in same day funds (and, to the extent such
notice is given after 11:00 A.M. (Philadelphia time) on any Business Day, such
L/C Participant shall make such payment on the immediately following Business
Day). If and to the extent such L/C Participant shall not have so made its RL
Percentage of the amount of such payment available to the Administrative Agent
for the account of the respective Letter of Credit Issuer, such L/C Participant
agrees to pay to the Administrative Agent for the account of such Letter of
Credit Issuer, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the
Administrative Agent for the account of the Letter of Credit Issuer at the
overnight Federal Funds Rate. The failure of any L/C Participant to make
available to the Administrative Agent for the account of the respective Letter
of Credit Issuer its RL Percentage of any payment under any Letter of Credit
issued by it shall not relieve any other L/C Participant of its obligation
hereunder to make available to the Administrative Agent for the account of such
Letter of Credit Issuer its applicable RL Percentage of any payment under any
such Letter of Credit on the date required, as specified above, but no L/C
Participant shall be responsible for the failure of any other L/C Participant to
make available to the Administrative Agent for the account of such Letter of
Credit Issuer such other L/C Participant’s RL Percentage of any such payment.

 

(d) Whenever any Letter of Credit Issuer receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
such Letter of Credit Issuer any payments from the L/C Participants pursuant to
clause (c) above, such Letter of Credit Issuer shall pay to the Administrative
Agent and the Administrative Agent shall promptly pay to each L/C Participant
which has paid its RL Percentage thereof, in U.S. Dollars and in same day funds,
an amount equal to such L/C Participant’s RL Percentage of the principal amount
thereof and interest thereon accruing after the purchase of the respective
participations.

 

(e) Each Letter of Credit Issuer shall, promptly after each issuance of, or
amendment or modification to, a Letter of Credit issued by it, give the
Administrative Agent, each L/C Participant and the Borrowers written notice of
the issuance of, or amendment or modification to, such Letter of Credit.

 

(f) The obligations of the L/C Participants to make payments to the
Administrative Agent for the account of the respective Letter of Credit Issuer
with respect to Letters of Credit issued by it shall be irrevocable and not
subject to counterclaim, set-off or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:

 

(i) any lack of validity or enforceability of this Agreement or any of the other
Credit Documents;

 

(ii) the existence of any claim, set-off, defense or other right which the
Partnership or any of its Subsidiaries may have at any time against a
beneficiary named

 

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in a Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), any Agent, any Letter of Credit Issuer,
any Lender, or other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Partnership or
any of its Subsidiaries and the beneficiary named in any such Letter of Credit);

 

(iii) any draft, certificate or other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;

 

(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or

 

(v) the occurrence of any Default or Event of Default.

 

3.4. Agreement to Repay Letter of Credit Drawings. (a) The Borrowers hereby
agree to reimburse each Letter of Credit Issuer, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by such Letter of Credit Issuer under any
Letter of Credit issued by it (each such amount so paid or disbursed until
reimbursed, an “Unpaid Drawing”) no later than three Business Days after the
Administrative Agent notifies the Borrowers of such payment or disbursement,
with interest on the amount so paid or disbursed by such Letter of Credit
Issuer, to the extent not reimbursed prior to 2:00 P.M. (Philadelphia time) on
the date of such payment or disbursement, from and including the date paid or
disbursed to but not including the date such Letter of Credit Issuer is
reimbursed therefor at a rate per annum which shall be the then Applicable
Margin for Revolving Loans maintained as Base Rate Loans plus the Base Rate,
each as in effect from time to time (plus an additional 2% per annum if not
reimbursed by the third Business Day after the date the Borrowers are given
notice of such payment or disbursement), such interest also to be payable on
demand; provided that it is understood and agreed, however, that the notices
referred to above in this clause (a) shall not be required to be given if a
Default or an Event of Default under Section 11.5 shall have occurred and be
continuing (in which case the Unpaid Drawings shall be due and payable
immediately without presentment, demand, protest or notice of any kind (all of
which are hereby waived by each Credit Party) and shall bear interest at a rate
per annum which shall be (x) until the third Business Day following the
respective Unpaid Drawing, the Applicable Margin for Revolving Loans maintained
as Base Rate Loans plus the Base Rate, each as in effect from time to time, and
(y) at all times on and after the third Business Day following the respective
Drawing, the rate per annum specified in preceding clause (x) plus 2%). Each
Letter of Credit Issuer shall provide the Borrowers prompt notice of any payment
or disbursement made by it under any Letter of Credit issued by it, although the
failure of, or delay in, giving any such notice shall not release or diminish
the obligations of the Borrowers under this Section 3.4(a) or under any other
Section of this Agreement.

 

(b) The Borrowers’ obligation under this Section 3.4 to reimburse the respective
Letter of Credit Issuer with respect to Unpaid Drawings on Letters of Credit
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the

 

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Borrowers may have or have had against such Letter of Credit Issuer, any Agent
or any Lender, including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit issued by it to conform to the terms of
the Letter of Credit or any nonapplication or misapplication by the beneficiary
of the proceeds of such drawing; provided, however, that the Borrowers shall not
be obligated to reimburse such Letter of Credit Issuer for any wrongful payment
made by such Letter of Credit Issuer under a Letter of Credit issued by it as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of such Letter of Credit Issuer (as determined by a court of
competent jurisdiction in a final and non-appealable decision).

 

3.5. Increased Costs. If after the Effective Date, any Letter of Credit Issuer
or any L/C Participant determines in good faith that the adoption or
effectiveness after the Effective Date of any applicable law, rule or
regulation, order, guideline or request or any change therein, or any change
after the Effective Date in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Letter of Credit
Issuer or any L/C Participant with any request or directive (whether or not
having the force of law) by any such authority, central bank or comparable
agency shall either (i) impose, modify or make applicable any reserve, deposit,
capital adequacy or similar requirement against Letters of Credit issued by such
Letter of Credit Issuer or such L/C Participant’s participation therein, or (ii)
impose on any Letter of Credit Issuer or any L/C Participant any other
conditions directly or indirectly affecting this Agreement, any Letter of Credit
or such L/C Participant’s participation therein; and the result of any of the
foregoing is to increase the cost to such Letter of Credit Issuer or such L/C
Participant of issuing, maintaining or participating in any Letter of Credit, or
to reduce the amount of any sum received or receivable by such Letter of Credit
Issuer or such L/C Participant hereunder or reduce the rate of return on its
capital with respect to Letters of Credit, then, upon written demand to the
Borrowers by such Letter of Credit Issuer or such L/C Participant (a copy of
which notice shall be sent by such Letter of Credit Issuer or such L/C
Participant to the Administrative Agent), accompanied by the certificate
described in the last sentence of this Section 3.5, the Borrowers agree, subject
to the provisions of Section 13.18 (to the extent applicable), to pay to such
Letter of Credit Issuer or such L/C Participant such additional amount or
amounts as will compensate such Letter of Credit Issuer or such L/C Participant
for such increased cost or reduction. A certificate submitted to the Borrowers
by such Letter of Credit Issuer or such L/C Participant, as the case may be (a
copy of which certificate shall be sent by such Letter of Credit Issuer or such
L/C Participant to the Administrative Agent), setting forth in reasonable detail
the basis for the determination of such additional amount or amounts necessary
to compensate such Letter of Credit Issuer or such L/C Participant as aforesaid
shall be final and conclusive and binding on the Borrowers absent manifest
error, although the failure to deliver any such certificate shall not release or
diminish the Borrowers’ obligations to pay additional amounts pursuant to this
Section 3.5 upon subsequent receipt of such certificate.

 

3.6. Applicability of ISP; Conflicts; etc. (a) Unless otherwise expressly agreed
by the respective Letter of Credit Issuer and the Borrowers when a Letter of
Credit is issued, the rules of the ISP shall apply to each Letter of Credit.

 

(b) In the event of any conflict between the terms hereof and the terms of any
Letter of Credit Request (or related application), the terms hereof shall
control.

 

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SECTION 4. Fees; Commitments.

 

4.1. Fees. (a) Unused Commitment Fee. The Borrowers shall pay to the
Administrative Agent for distribution to each Lender, based on its pro rata
share of the Commitment, an unused commitment fee (the “Unused Commitment Fee”)
for the period from the Effective Date to but not including the final Maturity
Date (or such earlier date as the Commitments shall have been terminated),
computed at a rate for each day equal to the relevant Applicable Margin then in
effect on the aggregate daily average Unutilized Revolving Loan Commitment and
Unutilized Acquisition Loan Commitment of such Lender. Accrued Unused Commitment
Fees shall be due and payable quarterly in arrears on each Quarterly Payment
Date and on each Maturity Date (or such earlier date upon which either
Commitment is terminated).

 

(b) Letter of Credit Fee. The Borrowers shall pay to the Administrative Agent
for pro rata distribution to each RL Lender (based on their respective RL
Percentages as from time to time in effect) in U.S. Dollars, a fee in respect of
each Letter of Credit (the “Letter of Credit Fee”) computed at a rate per annum
equal to the Applicable Margin for Revolving Loans maintained as Eurodollar
Loans then in effect on the average daily Stated Amount of such Letter of
Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day on or after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.

 

(c) Facing Fee. The Borrowers shall pay to each Letter of Credit Issuer, for its
own account, in U.S. Dollars, a fee in respect of each Letter of Credit issued
by such Letter of Credit Issuer (the “Facing Fee”) computed at the rate of 1/8
of 1% per annum on the daily Stated Amount of such Letter of Credit; provided
that in no event shall the annual Facing Fee with respect to each Letter of
Credit be less than $250; it being agreed that (x) on the date of issuance of
any Letter of Credit and on each anniversary thereof prior to the termination of
such Letter of Credit, if $250 will exceed the amount of Facing Fees that will
accrue with respect to such Letter of Credit for the immediately succeeding
12-month period, the full $250 shall be payable on the date of issuance of such
Letter of Credit and on each such anniversary thereof prior to the termination
of such Letter of Credit and (y) if on the date of the termination of any Letter
of Credit, $250 actually exceeds the amount of Facing Fees paid or payable with
respect to such Letter of Credit for the period beginning on the date of the
issuance thereof (or if the respective Letter of Credit has been outstanding for
more than one year, the date of the last anniversary of the issuance thereof
occurring prior to the termination of such Letter of Credit) and ending on the
date of the termination thereof, an amount equal to such excess shall be paid as
additional Facing Fees with respect to such Letter of Credit on the next date
upon which Facing Fees are payable in accordance with the immediately succeeding
sentence. Except as provided in the immediately preceding sentence, accrued
Facing Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and upon the first day on or after the termination of the Total
Revolving Loan Commitment upon which no Letters of Credit remain outstanding.

 

(d) Customary Charges. The Borrowers shall pay directly to each Letter of Credit
Issuer upon each issuance of, payment under, and/or amendment of, a Letter of
Credit issued by such Letter of Credit Issuer such amount as shall at the time
of such issuance, payment or amendment be the administrative charge which such
Letter of Credit Issuer is customarily charging for issuances of, payments under
or amendments of, letters of credit issued by it.

 

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(e) Agent Fees. The Borrowers shall pay to each Agent, for its own account, such
other fees as may be agreed to in writing from time to time between the
Borrowers and such Agent, when and as due.

 

(f) Computation. All computations of Fees shall be made in accordance with
Section 13.20(b).

 

4.2. Voluntary Termination or Reduction of Unutilized Commitments. (a) Upon at
least three Business Days’ prior notice from an Authorized Officer of the
Borrowers to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrowers shall have the right, without premium or penalty, to terminate or
partially reduce the Total Unutilized Revolving Loan Commitment or Total
Unutilized Acquisition Loan Commitment, in whole or in part, provided that (i)
any such termination or partial reduction shall apply to proportionately and
permanently reduce the Revolving Loan Commitment or the Acquisition Loan
Commitment, as applicable, of each Lender with such a Commitment and (ii) any
partial reduction pursuant to this Section 4.2(a) shall be in integral multiples
of $1,000,000.

 

(b) In the event of a refusal by a Lender to consent to a proposed change,
waiver, discharge or termination with respect to this Agreement which has been
approved by the requisite Lenders in accordance with Section 13.1(a), the
Borrowers shall have the right, subject to obtaining the consents required by
Section 13.1(b), upon five Business Days’ prior written notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), to terminate the entire
Revolving Loan Commitment of such Lender, so long as all Loans, together with
accrued and unpaid interest, Fees and all other amounts, if any, then owing to
such Lender (including all amounts, if any, owing pursuant to Section 2.11 but
excluding amounts owing in respect of Acquisition Loans maintained by such
Lender, if such Acquisition Loans are not being repaid pursuant to Section
13.1(b)) are repaid concurrently with the effectiveness of such termination (at
which time Schedule I shall be deemed modified to reflect such changed amounts)
and at such time, unless the respective Lender continues to have outstanding
Acquisition Loans hereunder, such Lender shall no longer constitute a “Lender”
for purposes of this Agreement, except with respect to indemnifications under
this Agreement (including, without limitation, Sections 2.10, 2.11, 3.5, 5.4,
13.4, 13.5 and 13.19), which shall survive as to such repaid Lender.

 

4.3. Termination of Commitments. Each Commitment (and the related Commitment of
each Lender) shall terminate in its entirety on the Maturity Date for such
Commitment.

 

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SECTION 5. Payments.

 

5.1. Voluntary Prepayments. The Borrowers shall have the right to prepay the
Loans, and the right to allocate such prepayments to Revolving Loans, Swingline
Loans and/or Acquisition Loans as the Borrowers elect, in whole or in part,
without premium or penalty except as otherwise provided in this Agreement, from
time to time on the following terms and conditions:

 

(i) the Borrowers shall give the Administrative Agent at its Notice Office
written notice (or telephonic notice promptly confirmed in writing) of their
intent to prepay the Loans, whether such Loans are Acquisition Loans, Revolving
Loans or Swingline Loans, the amount of such prepayment, the Type of Loans to be
repaid and (in the case of Eurodollar Loans) the specific Borrowing(s) pursuant
to which made, which notice (I) shall be given by the Borrowers prior to 10:00
A.M. (Philadelphia time) (x) at least one Business Day prior to the date of such
prepayment in the case of Base Rate Loans, (y) on the date of such prepayment in
the case of Swingline Loans and (z) at least three Business Days prior to the
date of such prepayment in the case of Eurodollar Loans and (II) shall, except
in the case of Swingline Loans, promptly be transmitted by the Administrative
Agent to each of the Lenders;

 

(ii) each prepayment (other than prepayments in full of (x) all outstanding Base
Rate Loans or (y) any outstanding Borrowing of Eurodollar Loans) shall be in an
aggregate principal amount of at least (x) $1,000,000, in the case of Eurodollar
Loans, (y) $500,000, in the case of Revolving Loans and Acquisition Loans
maintained as Base Rate Loans and (z) $100,000, in the case of Swingline Loans
and, in each case, if greater, in integral multiples of $100,000, provided, that
no partial prepayment of Eurodollar Loans made pursuant to a Borrowing shall
reduce the aggregate principal amount of the Eurodollar Loans outstanding
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto;

 

(iii) at the time of any prepayment of Eurodollar Loans pursuant to this Section
5.1 on any date other than the last day of the Interest Period applicable
thereto, the Borrowers shall pay the amounts required pursuant to Section 2.11;

 

(iv) except as provided in clause (vi) below, each prepayment in respect of any
Loans made pursuant to a Borrowing shall be applied pro rata among such Loans
made pursuant to such Borrowing, provided, that at the Borrowers’ election in
connection with any prepayment of Revolving Loans pursuant to this Section 5.1,
such prepayment shall not be applied to any Revolving Loans of a Defaulting
Lender;

 

(v) each prepayment of principal of Acquisition Loans pursuant to this Section
5.1 shall be applied to reduce the then remaining Scheduled Repayments pro rata
(based upon the then remaining principal amounts of the Scheduled Repayments
after giving effect to all prior reductions thereto); provided that (x) at any
time the Borrowers may, at their option, direct that any voluntary prepayment of
Acquisition Loans pursuant to this Section 5.1 (except pursuant to clause (vi)
below) be applied (in which case it shall be applied) (I) first, to reduce the
first four immediately succeeding Scheduled Repayments (after giving effect to
all prior reductions thereto) as of the date of the respective payments pursuant
to this Section 5.1 in direct order of maturity and (II) second, to the extent
in excess thereof, as otherwise provided above without regard to this proviso
and (y) repayments of Acquisition Loans pursuant to clause (vi) below shall only
apply to reduce the then remaining Scheduled Repayments to the extent the
Acquisition Loans so repaid are not replaced (and are not required to be
replaced) pursuant to Section 13.1(b), with any such reductions to reduce the
then remaining Scheduled Repayments in

 

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the manner provided above in this clause (v) (without regard to preceding clause
(x) of this proviso), unless otherwise specifically agreed by the Required
Lenders; and

 

(vi) in the event of a refusal by a Lender to consent to a proposed change,
waiver, discharge or termination with respect to this Agreement which has been
approved by the requisite Lenders in accordance with Section 13.1(a), the
Borrowers shall have the right, subject to obtaining the consents required by
Section 13.1(b), upon five Business Days’ prior written notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), elect to repay all Loans of
such Lender (including all amounts, if any, owing pursuant to Section 2.11),
together with accrued and unpaid interest, Fees and all other amounts, if any,
then owing to such Lender (or owing to such Lender with respect to each Tranche
which gave rise to the need to obtain such Lender’s individual consent), so long
as the related Commitment(s) of such Lender are terminated concurrently with the
repayment of Loans of any Lender pursuant to this clause (vi) (at which time
Schedule I shall be deemed modified to reflect the changed Commitments).

 

5.2. Mandatory Repayments. (a) If on any date the sum of (x) the aggregate
outstanding principal amount of Revolving Loans and Swingline Loans (after
giving effect to all other repayments thereof on such date) and (y) the Letter
of Credit Outstandings on such date, exceeds the Total Revolving Loan Commitment
as then in effect, the Borrowers shall repay on such date, the principal of
Swingline Loans, and if no Swingline Loans are or remain outstanding, the
principal of Revolving Loans in an aggregate amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and all
outstanding Revolving Loans, the aggregate amount of Letter of Credit
Outstandings exceeds the Total Revolving Loan Commitment as then in effect, the
Borrowers shall pay to the Administrative Agent at the Payment Office on such
date an amount in cash equal to such excess (up to the aggregate amount of
Letter of Credit Outstandings at such time) and the Administrative Agent shall
hold such payment as security for the obligations of the Borrowers to the
Lenders hereunder pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Administrative Agent.

 

(b) In addition to any other mandatory repayments pursuant to this Section 5.2,
the Borrowers shall be required to repay the principal amount of each
Acquisition Loan in quarterly installments, based on a six year principal
amortization schedule of equal quarterly payments, with the first such quarterly
principal payment to be made on the date fifteen (15) months following the date
such Acquisition Loan was made, with quarterly principal payments to be made on
each three (3) month interval thereafter (each a “Scheduled Repayment”),
provided that if there shall be no corresponding date in any applicable month in
which any such principal payment would otherwise be due, such payment shall be
due on the last Business Day of such month.

 

(c) In addition to any other mandatory repayments pursuant to this Section 5.2,
on each date on or after the Effective Date upon which any Credit Party receives
Net Sale Proceeds from any Asset Sale, an amount equal to 100% of the Net Sale
Proceeds from such Asset Sale shall be applied as a mandatory repayment in
accordance with the requirements of Sections 5.2(f); provided that (i) aggregate
Net Sale Proceeds received during such fiscal year

 

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may be retained by such Credit Party without giving rise to a mandatory
repayment as otherwise required above, so long as no Default or Event of Default
exists at the time such Net Sale Proceeds are received and an Authorized Officer
of the such Credit Party has delivered a certificate to the Administrative Agent
and the Collateral Agent on or prior to such date stating that such Net Sale
Proceeds shall be used to purchase capital assets used or to be used in the
businesses permitted pursuant to Section 10.1 (including, without limitation
(but only to the extent permitted by Section 9.14), the purchase of the Equity
Interests of a Person engaged in such businesses) within 180 days following the
date of receipt of such Net Sale Proceeds from such Asset Sale (which
certificate shall set forth the estimates of the proceeds to be so expended) and
(ii) if all or any portion of such Net Sale Proceeds not required to be so
applied as a mandatory repayment are not so used within such 180 day period,
such remaining portion shall be applied on the last day of such 180 day period
(or such earlier date, if any, as such Credit Party determines not to reinvest
the Net Sale Proceeds relating to such Asset Sale as set forth above) as a
mandatory repayment as provided above (without regard to this proviso).

 

(d) In addition to any other mandatory repayments pursuant to this Section 5.2,
on each date on or after the Effective Date on which any Credit Party receives
any cash proceeds from (i) any incurrence of Indebtedness (other than
Indebtedness permitted to be incurred pursuant to Section 10.4 as in effect on
the Effective Date), (ii) any issuance of Equity Interests by the Partnership
(other than the cash proceeds of the issuance of Equity Interests to the extent
issued in connection with a Permitted Acquisition that is completed within 180
days before or after the date of receipt of such cash proceeds) or (iii) any
issuance of capital stock or other Equity Interests by, or cash capital
contributions to, any Subsidiary of the Partnership (other than (x) issuances of
common Equity Interests to the Partnership or any other Subsidiary of the
Partnership by the Partnership or any other Subsidiary of the Partnership, and
(y) cash capital contributions to any Subsidiary of the Partnership by the
Partnership or any Subsidiary of the Partnership), an amount equal to 100% of
the Net Cash Proceeds of the respective incurrence of Indebtedness, issuance of
Equity Interests or cash capital contribution shall be applied as a mandatory
repayment in accordance with the requirements of Sections 5.2(f) and (g).

 

(e) In addition to any other mandatory repayments pursuant to this Section 5.2,
within 10 days following each date on or after the Effective Date on which any
Credit Party receives any proceeds from any Recovery Event (other than proceeds
from Recovery Events in an amount less than $500,000 per Recovery Event), an
amount equal to 100% of the proceeds of such Recovery Event (net of reasonable
costs (including, without limitation, legal costs and expenses) and taxes
incurred in connection with such Recovery Event and the amount of such proceeds
required to be used to repay any Indebtedness (other than Indebtedness of the
Lenders pursuant to this Agreement) which is secured by the respective assets
subject to such Recovery Event) shall be applied as a mandatory repayment in
accordance with the requirements of Section 5.2(f); provided that (x) so long as
no Default or Event of Default then exists and such proceeds do not exceed
$500,000, such proceeds shall not be required to be so applied on such date to
the extent that an Authorized Officer of such Credit Party has delivered a
certificate to the Administrative Agent and the Collateral Agent on or prior to
such date stating that such proceeds shall be used or shall be committed to be
used to replace or restore any properties or assets in respect of which such
proceeds were paid within 180 days following the date of such Recovery Event
(which certificate shall set forth the estimates of the proceeds to be so
expended), and (y) so long as no Default or Event of Default then exists and to
the extent that (a) the amount of such

 

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proceeds exceeds $500,000, and (b) an Authorized Officer of such Credit Party
has delivered to the Administrative Agent and the Collateral Agent a certificate
on or prior to the date the application would otherwise be required pursuant to
this Section 5.2(e) in the form described in clause (x) above, then the entire
amount of the proceeds of such Recovery Event and not just the portion in excess
of $500,000 shall be deposited with the Collateral Agent pursuant to a cash
collateral arrangement reasonably satisfactory to the Administrative Agent and
the Collateral Agent whereby such proceeds shall be disbursed to such Credit
Party from time to time as needed to pay or reimburse such Credit Party in
connection with the replacement or restoration of the respective properties or
assets (pursuant to such certification requirements as may be established by the
Administrative Agent and the Collateral Agent), provided further, that at any
time while an Event of Default has occurred and is continuing, the Required
Lenders may, subject to the terms of the Intercreditor Agreement, direct the
Collateral Agent (in which case the Administrative Agent shall, and is hereby
authorized by the Credit Parties to, follow said directions) to apply any or all
proceeds then on deposit in such collateral account to the repayment of
Obligations hereunder in the same manner as proceeds would be applied pursuant
to Section 5.2(f), and provided further, that if all or any portion of such
proceeds not required to be applied as a mandatory repayment pursuant to the
second preceding proviso (whether pursuant to clause (x) or (y) thereof) are not
so used within 180 days after the date of the respective Recovery Event then
such remaining portion not used shall be applied on the date occurring 180 days
after the date of the respective Recovery as a mandatory repayment in accordance
with the requirements of Section 5.2(f).

 

(f) Each amount required to be applied pursuant to Sections 5.2(c), (d) and (e)
in accordance with this Section 5.2(f) shall be applied on and after the
Effective Date in accordance with the provisions of the Intercreditor Agreement;
provided that, if no Indebtedness is outstanding under the Purchase Agreement or
the Placement Notes, such amounts will be applied, first, to the extent the
Administrative Agent, in its sole determination, determines that such amounts
relate to assets acquired in a Permitted Acquisition or of a Borrower so
acquired, such amounts shall be used to repay the amounts outstanding under any
Acquisition Loan used to fund such Permitted Acquisition, and, second, to the
extent such Acquisition Loans are paid in full, and as to all other amounts
required to be applied pursuant to Sections 5.2(c), (d) and (e), such amounts
shall be applied pro rata among all outstanding Loans, and, in either case, all
such repayments of outstanding Acquisition Loans shall be applied to reduce the
then remaining Scheduled Repayments in the inverse order in which such payments
would be due (based upon the then remaining Scheduled Repayments after giving
effect to all prior reductions thereto).

 

(g) With respect to each repayment of Loans required by this Section 5.2, the
Borrowers may designate the Types of Loans of the respective Tranche which are
to be repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings of the respective Tranche pursuant to which made, provided that: (i)
repayments of Eurodollar Loans pursuant to this Section 5.2 may only be made on
the last day of an Interest Period applicable thereto unless all Eurodollar
Loans of the respective Tranche with Interest Periods ending on such date of
required repayment and all Base Rate Loans of the respective Tranche have been
paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of Base Rate Loans; and (iii) each repayment

 

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of any Tranche of Loans made pursuant to a Borrowing shall be applied pro rata
among such Tranche of Loans. In the absence of a designation by the Borrowers as
described in the preceding sentence, the Administrative Agent shall, subject to
the above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 2.11.

 

(h) In addition, if at any time, for any reason the sum of the aggregate
principal amount of all Revolving Loans and Swingline Loans outstanding at such
time plus the Letter of Credit Outstandings at such time is greater than either
(x) the Total Revolving Loan Commitment or (y) the Borrowing Base, then
Borrowers, without prior notice from the Administrative Agent or any Lender,
shall promptly repay such excess to the Administrative Agent for the benefit of
the Lenders. The amounts paid pursuant to the preceding sentence shall first be
applied against outstanding Revolving Loans and the excess shall be held by the
Administrative Agent as cash collateral to secure payment of outstanding Letters
of Credit. Each such prepayment of Revolving Loans shall be accompanied by
accrued and unpaid interest on the amount prepaid to the date of prepayment and
any amounts payable under Section 2.11 in connection with such prepayment.

 

(i) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, (i) all then outstanding Swingline Loans shall be repaid in full on
the Swingline Expiry Date, (ii) all other then outstanding Loans shall be repaid
in full on the respective Maturity Date for such Loans and (iii) unless the
Required Lenders shall otherwise agree in writing in their sole discretion, all
outstanding Loans shall be repaid in full upon the occurrence of a Change of
Control.

 

(j) Notwithstanding anything to the contrary contained in this Agreement,
neither the exercise of the underwriters’ over-allotment option nor the
redemption by the Partnership of Partnership Common Units or Partnership
Subordinated Units in connection with any such exercise, in each case, as
exercised within thirty days of the Effective Date and as otherwise described in
the prospectus included in Form S-1 will constitute an Event of Default or
trigger a requirement for a mandatory prepayment under this Section 5.2.

 

5.3. Method and Place of Payment. Except as otherwise specifically provided
herein, all payments under this Agreement or any Note shall be made to the
Administrative Agent for the ratable account of the Lender or Lenders entitled
thereto not later than 12:00 Noon (Philadelphia time) on the date when due and
shall be made in immediately available funds at the Payment Office. Any payments
under this Agreement or under any Note which are made later than 12:00 Noon
(Philadelphia time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder or under any Note shall
be stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall accrue during such extension at the
applicable rate in effect immediately prior to such extension.

 

5.4. Net Payments. (a) All payments made by any Credit Party hereunder or under
any Credit Document or under any Note will be made without setoff, counterclaim
or other defense. Except as provided in Section 5.4(b), all such payments will
be made free and clear of, and without deduction or withholding for, any present
or future taxes, levies, imposts, duties,

 

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fees, assessments or other charges of whatever nature now or hereafter imposed
by any jurisdiction or by any political subdivision or taxing authority thereof
or therein with respect to such payments (but excluding, except as provided in
the second succeeding sentence, any tax imposed on, measured by or determined by
reference to the net income or net profits of a Lender or franchise taxes
imposed in lieu thereof pursuant to the laws of the jurisdiction in which it is
organized or the jurisdiction in which the principal office or applicable
lending office of such Lender is located or any political subdivision of any
such jurisdiction) and all interest, penalties or similar liabilities with
respect to such nonexcluded taxes, levies, imposts, duties, fees, assessments or
other charges (all such nonexcluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as “Taxes”). If any
Taxes are so levied, imposed or collected through withholding or deduction, the
Borrowers (or any other Credit Party making the payment) agree to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. If any amounts are payable in
respect of Taxes pursuant to the preceding sentence, the Borrowers (or any other
Credit Party making the payment) agree to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the net
income or net profits of such Lender pursuant to the laws of the jurisdiction in
which such Lender is organized or in which the principal office or applicable
lending office of such Lender is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located and for any withholding of taxes as such Lender shall
determine are payable by, or withheld from, such Lender in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The Borrowers (or the respective Credit Party) will
furnish to the Administrative Agent within 45 days after the date the payment of
any Taxes is due pursuant to applicable law certified copies of tax receipts or
other documentation evidencing such payment by the Borrowers (or such Credit
Party). The Credit Parties jointly and severally agree to indemnify and hold
harmless each Lender, and reimburse such Lender upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Lender; provided
that such Lender shall have provided the Credit Party with evidence, reasonably
satisfactory to such Credit Party, of the payment of such Taxes.

 

(b) Each Lender that is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees to
deliver to the Borrowers and the Administrative Agent on or prior to the
Effective Date, or in the case of a Lender that is an assignee or transferee of
an interest under this Agreement pursuant to Section 2.13 or 13.7 (unless the
respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Lender, (i) two accurate and complete original signed copies of Internal Revenue
Service Form W-8ECI or W-8BEN (with respect to a complete exemption under an
income tax treaty) (or successor forms) certifying to such Lender’s entitlement
as of such date to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form W-8ECI or W-8BEN
(with respect to a complete exemption under an income tax treaty) pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit D (any
such certificate, a “Section 5.4(b)(ii)

 

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Certificate”) and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN with respect to the portfolio interest
exemption (or successor form) certifying to such Lender’s entitlement as of such
date to a complete exemption from United States withholding tax with respect to
payments of interest to be made under this Agreement and under any Note. In
addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrowers and the Administrative Agent two new accurate and complete
original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN
(with respect to the benefits of an income tax treaty), or Form W-8BEN (with
respect to the portfolio interest exemption) and a Section 5.4(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
complete exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrowers and the Administrative Agent of its inability to deliver
any such Form or Certificate in which case such Lender shall not be required to
deliver any such Form or Certificate pursuant to this Section 5.4(b).
Notwithstanding anything to the contrary contained in Section 5.4(a), but
subject to Section 13.7(b) and the immediately succeeding sentence, (x) the
Borrowers shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Borrowers U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrowers shall not be obligated pursuant to Section 5.4(a) hereof to gross-up
payments to be made to a Lender in respect of income or similar taxes imposed by
the United States if (I) such Lender has not provided to the Borrowers the
Internal Revenue Service Forms required to be provided to the Borrowers pursuant
to this Section 5.4(b) or (II) in the case of a payment to a Lender, to the
extent that such Forms do not establish a complete exemption from withholding of
such taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 5.4 and except as set forth in Section
13.7(b), the Borrowers agree to pay additional amounts and to indemnify each
Lender in the manner set forth in Section 5.4(a) (without regard to the identity
of the jurisdiction requiring the deduction or withholding) in respect of any
amounts deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes that are effective after the Effective Date
in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of such Taxes (or, if later, the date such Lender became party to
this Agreement).

 

(c) If the Borrowers pay any additional amount under this Section 5.4 to a
Lender and such Lender determines in its sole discretion that it has actually
received or realized in connection therewith any refund or any reduction of,
release or remission for or credit against, its Tax liabilities in or with
respect to the taxable year in which the additional amount is paid (a “Tax
Benefit”), such Lender shall pay to the Borrowers an amount that the Lender
shall, in its sole discretion, determine is equal to the net benefit, after tax,
which was obtained by the Lender in such year as a consequence of such refund,
reduction, release or remission for or credit; provided that (i) any Lender may
determine in its sole discretion consistent with the policies of such Lender
whether to seek a Tax Benefit, (ii) any Taxes that are imposed on a Lender as a

 

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result of a disallowance or reduction (including through the expiration of any
tax carryover or carryback of such Lender that otherwise would not have expired)
of any Tax Benefit with respect to which such Lender has made a payment to the
Borrowers pursuant to this Section 5.4(c) shall be treated as a Tax for which
the Borrowers are obligated to indemnify such Lender pursuant to this Section
5.4 without any exclusions or defenses, (iii) nothing in this Section 5.4(c)
shall require a Lender to disclose any confidential information to the Borrowers
(including, without limitation, its tax returns), and (iv) no Lender shall be
required to pay any amounts pursuant to this Section 5.4(c) at any time a
Default or Event of Default then exists.

 

(d) The provisions of this Section 5.4 shall be subject to the provisions of
Section 13.18 (to the extent applicable).

 

SECTION 6. Conditions Precedent to Initial Credit Events. The obligation of each
Lender to make each Loan hereunder, and the obligation of the Letter of Credit
Issuer to issue each Letter of Credit hereunder, in either case on the Effective
Date, is subject, at the time of the making of such Loans or the issuance of
such Letters of Credit to the satisfaction of the following conditions:

 

6.1. Execution of Agreement; Notes. There shall have been delivered to the
Administrative Agent for the account of each Lender which has requested the same
the appropriate Acquisition Note and Revolving Note and to the Swingline Lender
if so requested, the Swingline Note, in each case executed by the Borrowers and
in the amount, maturity and as otherwise provided herein.

 

6.2. Officer’s Certificate. The Administrative Agent shall have received a
certificate from the General Partner, dated such date signed by an Authorized
Officer of the Partnership, stating that all of the applicable conditions set
forth in Sections 6.8, 6.9 and 7.1 (other than such conditions that are
expressly subject to the satisfaction of any Agent and/or the Required Lenders),
have been satisfied on such date.

 

6.3. Opinions of Counsel. The Administrative Agent shall have received opinions,
addressed to the Administrative Agent, the Collateral Agent and each of the
Lenders and dated the Effective Date, from (i) Blank Rome LLP counsel to the
Credit Parties, which opinion shall cover such matters regarding the Credit
Documents, the Note Purchase Documents and other documents and matters incident
to the Transaction contemplated herein as the Administrative Agent may
reasonably request, and be in form and substance reasonably satisfactory to the
Administrative Agent, (ii) Vinson & Elkins, as to certain securities and tax
matters, (iii) Willkie Farr & Gallagher LLP, as to certain private placement
matters, (iii) local counsel to the Borrowers, as to the Mortgages and other
Credit Documents relating to Real Property, and (iv) special counsel to the
Credit Parties as to such other matters as the Administrative Agent may
reasonably request, which opinion or opinions shall be in form, scope and
substance reasonably satisfactory to the Administrative Agent.

 

6.4. Corporate Documents; Proceedings. (a) The Administrative Agent shall have
received from each Credit Party an officer’s certificate, dated the Effective
Date, signed by the chairman, a vice-chairman, the president or any
vice-president of such Credit Party, and attested to by the secretary or any
assistant secretary of such Credit Party, together with copies of

 

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the certificate of incorporation, by-laws or equivalent organizational documents
of such Credit Party and the resolutions of such Credit Party referred to in
such certificate and all of the foregoing (including each such certificate of
incorporation, by-laws or other organizational document) shall be reasonably
satisfactory to the Administrative Agent.

 

(b) All Company proceedings and all instruments and agreements in connection
with the transactions contemplated by this Agreement and the other Documents
shall be reasonably satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received all information and
copies of all certificates, documents and papers, including good standing
certificates, bring-down certificates and any other records of Company
proceedings and governmental approvals, if any, which the Administrative Agent
reasonably may have requested in connection therewith, such documents and
papers, where appropriate, to be certified by proper Company or governmental
authorities.

 

6.5. Adverse Change, etc. Nothing shall have occurred since December 31, 2003
which (i) the Required Lenders or any Agent shall reasonably determine (x) has
had or (y) could reasonably be expected to have, a Material Adverse Effect or
(ii) has had a material adverse effect on the Transaction.

 

6.6. Litigation. Other than as set forth on Schedule XI hereto, there are no
actions, suits, proceedings or investigations pending or, to any Credit Party’s
knowledge, threatened, nor has any Credit Party received any notices of a claim,
(a) with respect to any Document, or any portion of the Transaction, or (b)
against any Credit Party (i) as to which the amount in controversy is in excess
of $100,000 (unless coverage for such claim has been acknowledged by the related
insurer, subject to standard deductibles) or (ii) if adversely determined could
reasonably be expected to result in a Material Adverse Effect.

 

6.7. Approvals. All (i) necessary governmental, regulatory and third party
approvals and filings in connection with any Existing Indebtedness, all portions
of the Transaction, the transactions contemplated by the Documents and otherwise
referred to herein or therein shall have been obtained or filed, including,
without limitation, Form S-1, and remain in full force and effect and evidence
thereof shall have been provided to the Administrative Agent, and (ii)
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the Transaction, the making of the Loans and
the transactions contemplated by the Documents or otherwise referred to herein
or therein. Additionally, there shall not exist any judgment, order, injunction
or other restraint issued or filed or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially adverse
conditions upon, or materially delaying, or making economically unfeasible, the
consummation of the Transaction or the making of the Loans.

 

6.8. Termination of Existing Credit Agreements. (a) All commitments under the
Existing Credit Agreement shall have been terminated, all loans outstanding
thereunder and under all Indebtedness To Be Refinanced shall have been repaid in
full, together with all accrued and unpaid interest thereon, all accrued and
unpaid fees thereon shall have been paid in full, all letters of credit issued
thereunder shall have been terminated and all other amounts owing pursuant to
the Existing Credit Agreement shall have been repaid in full.

 

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(b) All security interests in respect of, and Liens securing, the Indebtedness
To Be Refinanced shall have been terminated and released to the satisfaction of
the Administrative Agent, and the Administrative Agent shall have received all
such releases as may have been requested by the Administrative Agent, which
releases shall be in form and substance satisfactory to the Administrative
Agent. Without limiting the foregoing, there shall have been delivered (i)
proper termination statements (Form UCC-3 or the appropriate equivalent) for
filing under the UCC of each jurisdiction where a financing statement (Form
UCC-1 or the equivalent) was filed with respect to the Partnership or any of its
Subsidiaries in connection with the security interests securing the Indebtedness
To Be Refinanced and the documentation related thereto, (ii) a termination or
reassignment of any security interest in, or Lien on, any patents, trademarks,
copyrights or similar interests of the Partnership or any of its Subsidiaries on
which filings have been made to secure obligations under the Existing Credit
Agreement, fully executed by the appropriate parties, (iii) terminations of all
mortgages, leasehold mortgages, deeds of trust and leasehold deeds of trust
created with respect to property of the Partnership or any of its Subsidiaries,
in each case, to secure the obligations in respect of the Existing Credit
Agreement, all of which shall be in form, scope and substance reasonably
satisfactory to the Administrative Agent and (iv) all collateral owned by the
Partnership or any of its Subsidiaries in the possession of any of the creditors
in respect of the Indebtedness To Be Refinanced or any collateral agent or
trustee under any related security document shall have been returned to the
Partnership or such Subsidiary.

 

(c) After giving effect to the Transaction, the Credit Parties shall not have
outstanding any Indebtedness other than Indebtedness permitted pursuant to
Section 10.4, and all such Indebtedness which is to remain outstanding after the
Effective Date shall not be subject to any default or event of default existing
thereunder or arising as a result of the Transaction and the other transactions
contemplated hereby.

 

(d) The net proceeds to the Partnership of its Qualified IPO and the issuance of
the notes pursuant to the Note Purchase Agreement shall be adequate to repay in
full (i) all amounts required to be paid pursuant to (a) above, and (ii) all
costs, fees and expenses in connection with each portion of the Transaction.

 

6.9. Note Purchase Agreement. (a) The Operating Company shall have received the
net cash proceeds from the issuance of notes by it under the Note Purchase
Agreement.

 

(b) (i) The incurrence of Indebtedness pursuant to the Note Purchase Agreement
shall have been consummated in accordance with the terms and conditions of the
applicable Documents therefor and all applicable law, (ii) the Administrative
Agent shall have received true and correct copies of all Note Purchase
Documents, certified as such by an appropriate officer of the Partnership, (ii)
all such Note Purchase Documents and all terms and conditions thereof
(including, without limitation, amortization, maturities, interest rates,
covenants, defaults, remedies, guaranties and guarantors) shall be in form and
substance reasonably satisfactory to each Agent and the Required Lenders, (iii)
all such Note Purchase Documents shall be in full force and effect and (iv) all
conditions precedent to the consummation of the incurrence of loans pursuant to
the Note Purchase Agreement as set forth therein shall have been satisfied, and
not waived unless consented to by each Agent and the Required Lenders, to the
reasonable satisfaction of each Agent and the Required Lenders.

 

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6.10. Intercreditor Agreement. Each Credit Party, the Administrative Agent, the
Lenders, the Purchasers and the Collateral Agent shall have duly authorized,
executed and delivered the Intercreditor Agreement in the form of Exhibit K
hereto (as amended, modified, restated and/or supplemented from time to time,
the “Intercreditor Agreement”), and the Intercreditor Agreement shall be in full
force and effect.

 

6.11. Security Documents; etc. (a) Each Credit Party shall have duly authorized,
executed and delivered the Pledge Agreement in the form of Exhibit G (as
amended, modified, restated and/or supplemented from time to time in accordance
with the terms thereof and hereof, the “Pledge Agreement”) and shall have
delivered to the Collateral Agent, as pledgee thereunder, all of the
certificated Pledge Agreement Collateral referred to therein then owned by such
Credit Party and required to be pledged pursuant to the terms thereof, (x)
endorsed in blank in the case of promissory notes, Intercompany Notes and
Certificates of Indebtedness or (y) accompanied by executed and undated transfer
powers in the case of certificated Equity Interests, along with evidence that
all other actions necessary or, in the reasonable opinion of the Collateral
Agent, desirable, to perfect the security interests purported to be created by
the Pledge Agreement have been taken, and the Pledge Agreement shall be in full
force and effect.

 

(b) Each Credit Party shall have duly authorized, executed and delivered a
Security Agreement in the form of Exhibit H (as amended, modified, restated
and/or supplemented from time to time in accordance with the terms thereof and
hereof, the “Security Agreement”) covering all of the Security Agreement
Collateral, together with:

 

(i) Financing Statements (Form UCC-1) or appropriate local equivalent in
appropriate form for filing under the UCC or appropriate local equivalent of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to be
created by the Security Agreement and the Pledge Agreement;

 

(ii) uniform commercial code, tax, and judgment lien search results against each
Credit Party evidencing the absence of Liens on each such Credit Party’s Real
Property, personal property and other assets other than Permitted Liens;

 

(iii) evidence of the completion of all other recordings and filings of, or with
respect to, the Security Agreement as may be necessary or, in the reasonable
opinion of the Collateral Agent, desirable, to perfect the security interests
purported to be created by the Security Agreement and the Pledge Agreement; and

 

(iv) evidence that all other actions necessary or, in the reasonable opinion of
the Collateral Agent, desirable, to perfect the security interests purported to
be created by the Security Agreement have been taken,

 

and the Security Agreement and the Pledge Agreement shall be in full force and
effect.

 

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(c) The Collateral Agent shall have received:

 

(i) fully executed counterparts of Mortgages in form and substance consistent
with applicable law of the jurisdictions in which the Real Property is located
and reasonably satisfactory to the Collateral Agent, which Mortgages shall cover
such of the Real Property owned or leased by the Partnership or any of its
Subsidiaries (after giving effect to the Transaction) as are designated on
Schedule III as a Mortgaged Property, together with Borrowers’ escrow
instructions to the title insurer evidencing that counterparts of the Mortgages
have been delivered to the title insurance company insuring the lien of such
Mortgage for recording in all places to the extent necessary or, in the
reasonable opinion of the Collateral Agent, desirable to effectively create a
valid and enforceable first priority mortgage lien on each Mortgaged Property in
favor of the Collateral Agent (or such other trustee as may be required or
desirable under local law) for the benefit of the Secured Creditors, subject to
Permitted Encumbrances;

 

(ii) Title insurance policies issued by a reputable title insurer selected by
Borrowers and reasonably satisfactory to the Collateral Agent (“Mortgage
Policies”) on each Mortgaged Property in amounts satisfactory to the
Administrative Agent and the Required Lenders (but not to exceed the fair or
reasonable market value of such Mortgaged Property) assuring the Collateral
Agent that the Mortgages on such Mortgaged Properties are valid and enforceable
first priority mortgage liens on the respective Mortgaged Properties, free and
clear of all defects and encumbrances except Permitted Encumbrances and such
Mortgage Policies shall otherwise be on a standard 1970 or 1992 American Land
Title Association form title insurance policy and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders and shall
include, as appropriate, an endorsement for future advances under this Agreement
and the Notes and for any other matter that the Collateral Agent may request,
shall not include an exception for mechanics’ liens or creditors’ rights, and
shall provide for affirmative insurance and such reinsurance (including direct
access agreements) as the Collateral Agent may request;

 

(iii) satisfactory copies of “Phase I” environmental reports prepared within 60
days prior to the Effective Date in connection with the Mortgaged Property
described on Schedule XII hereto.

 

(iv) appraisals of the Mortgaged Property described on Schedule XII hereto.

 

6.12. Material Agreements. There shall have been made available for inspection
and copying to the Administrative Agent, at its request, true and correct
copies, certified (in the case of the agreements referred to in clause (ii),
(iii), (vi) and (vii) below) as true and complete by an Authorized Officer of
the General Partner of:

 

(i) all Plans (and for each Plan that is required to file an annual report on
Internal Revenue Service Form 5500-series, a copy of the most recent such report
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information), and for each Plan that is a “single-employer plan,”
as defined in Section 4001(a)(15) of ERISA, the most recently prepared actuarial
valuation therefor) and any other “employee

 

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benefit plans,” as defined in Section 3(3) of ERISA, and any other material
agreements, plans or arrangements, with or for the benefit of current or former
employees of any Credit Party or any ERISA Affiliate (provided that the
foregoing shall apply in the case of any multiemployer plan, as defined in
4001(a)(3) of ERISA, only to the extent that any document described therein is
in the possession of any Credit Party or any ERISA Affiliate or reasonably
available thereto from the sponsor or trustee of any such plan) (collectively,
the “Employee Benefit Plans”);

 

(ii) all agreements (including, without limitation, shareholders’ agreements,
subscription agreements and registration rights agreements) entered into by any
Credit Party governing the terms and relative rights of the Equity Interests of
the entity that is a party to such agreement and any agreements entered into by
shareholders relating to any such entity with respect to its Equity Interests to
which such entity is also a party (collectively, the “Shareholders’
Agreements”);

 

(iii) all material agreements entered into by any Credit Party with respect to
the management of any Credit Party after giving effect to the Transaction
(including consulting agreements and other management advisory agreements but
excluding employment agreements) (collectively, the “Management Agreements”);

 

(iv) all collective bargaining agreements applying or relating to any employee
of any Credit Party after giving effect to the Transaction (collectively, the
“Collective Bargaining Agreements”);

 

(v) all agreements evidencing or relating to any Existing Indebtedness of any
Credit Party in excess of $250,000 (collectively, the “Existing Indebtedness
Agreements”);

 

(vi) any tax sharing or tax allocation agreements entered into by any Credit
Party (collectively, the “Tax Allocation Agreements”); and

 

(vii) all material employment agreements entered into by any Credit Party
(collectively, the “Employment Agreements”).

 

all of which Employee Benefit Plans, Shareholders’ Agreements, Management
Agreements, Collective Bargaining Agreements, Existing Indebtedness Agreements,
Tax Allocation Agreements and Employment Agreements shall be in full force and
effect on the Effective Date.

 

6.13. Solvency Certificate; Insurance Certificates. The Administrative Agent
shall have received:

 

(a) a solvency certificate in the form of Exhibit I from the chief financial
officer of the General Partner, dated the Effective Date, and supporting the
conclusion that, after giving effect to the Transaction and the incurrence of
all financings contemplated herein, the Partnership (on a stand-alone basis),
the Operating Company (on a stand-alone basis), the Partnership and its
Subsidiaries (on a consolidated basis) and the Operating Company and its
Subsidiaries (on a consolidated basis), in each case, taking into account any
rights of subrogation and contribution among the Credit Parties, are not

 

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insolvent and will not be rendered insolvent by the indebtedness incurred in
connection herewith, will not be left with unreasonably small capital with which
to engage in its or their respective businesses and will not have incurred debts
beyond its or their ability to pay such debts as they mature and become due; and

 

(b) evidence of insurance complying with the requirements of Section 9.3 for the
business and properties of the Credit Parties, in scope, form and substance
reasonably satisfactory to the Administrative Agent and the Required Lenders and
naming the Collateral Agent as an additional insured and/or loss payee, and
stating that such insurance shall not be canceled or materially revised without
at least 30 days’ prior written notice by the insurer to the Collateral Agent.

 

6.14. Financial Information. There shall have been delivered to the
Administrative Agent: (a) true and correct copies of the financial statements
referred to in Section 8.10(b); (b) an unaudited pro forma consolidated balance
sheet of the Partnership and its Subsidiaries, prepared in accordance with GAAP,
as of June 30, 2004, calculated as if the Transaction and the incurrence of all
Indebtedness (including the Loans) contemplated herein had occurred on such date
(the “Pro Forma Balance Sheet”); (c) a completed Borrowing Base Certificate,
prepared as of July 31, 2004; and (d) a reasonably satisfactory funds flow
statement related to the Transaction.

 

6.15. Payment of Existing Indebtedness Agreements. Evidence that all Existing
Indebtedness Agreements, other than those described on Schedule IV, shall been
paid in full; and any commitments thereunder have terminated, including, without
limitations, the obligations under the Existing Credit Agreement.

 

6.16. Payment of Fees. All costs, fees and expenses, and all other compensation
due to the Administrative Agent, the Collateral Agent and the Lenders
(including, without limitation, legal fees and expenses) shall have been paid to
the extent then due.

 

SECTION 7. Conditions Precedent to All Credit Events. The obligation of each
Lender to make Loans (including Loans made on the Effective Date, but excluding
Mandatory Borrowings made after the Effective Date, which shall be made as
provided in Section 2.1(d)), and the obligation of a Letter of Credit Issuer to
issue any Letter of Credit, is subject, at the time of each such Credit Event
(except as hereinafter indicated), to the satisfaction of the following
conditions:

 

7.1. No Default; Representations and Warranties. At the time of each such Credit
Event and immediately after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).

 

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7.2. Notice of Borrowing; Letter of Credit Request. (a) Prior to the making of
each Loan (excluding Swingline Loans and Mandatory Borrowings), the
Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 2.3(a). Prior to the making of any Swingline Loan, the
Swingline Lender shall have received the notice required by Section 2.3(b)(i).

 

(b) Prior to the issuance of each Letter of Credit, the Administrative Agent and
the respective Letter of Credit Issuer shall have received a Letter of Credit
Request meeting the requirements of Section 3.2(a).

 

The occurrence of the initial Borrowing and the acceptance of the benefits or
proceeds of each Credit Event shall constitute a representation and warranty by
each of the Partnership and the Borrowers to each Agent and each of the Lenders
that all the conditions specified in Section 6 (with respect to Credit Events
occurring on the Effective Date) and in this Section 7 (with respect to each
Credit Event) (other than such conditions that are expressly subject to the
satisfaction of the Administrative Agent, Collateral Agent and/or the Required
Lenders) exist as of that time. All of the Notes, certificates, legal opinions
and other documents and papers referred to in Section 6 and in this Section 7,
unless otherwise specified, shall be delivered to the Administrative Agent at
the Notice Office for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
in form and substance satisfactory to the Lenders.

 

SECTION 8. Representations and Warranties. In order to induce the Lenders to
enter into this Agreement and to make the Loans and issue and/or participate in
the Letters of Credit provided for herein, each of the Partnership and the
Borrowers makes the following representations and warranties with the Lenders,
in each case after giving effect to the Transaction, all of which shall survive
the execution and delivery of this Agreement, the making of the Loans and the
issuance of the Letters of Credit (with the occurrence of the Effective Date and
each Credit Event on or after the Effective Date being deemed to constitute a
representation and warranty that the matters specified in this Section 8 are
true and correct in all material respects on and as of the date of each such
Credit Event, unless stated to relate to a specific earlier date in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date):

 

8.1. Company Status. Each of the Credit Parties (i) is a duly organized and
validly existing Company in good standing under the laws of the jurisdiction of
its organization, (ii) has the Company power and authority to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in all jurisdictions where it is required to be so
qualified and where the failure to be so qualified (x) has had or (y) could
reasonably be expected to have, a Material Adverse Effect. The General Partner
is the sole general partner of the Partnership.

 

8.2. Company Power and Authority. Each of the Credit Parties has the Company
power and authority to execute, deliver and carry out the terms and provisions
of the Documents to which it is a party and has taken all necessary Company
action to authorize the execution, delivery and performance of the Documents to
which it is a party. Each of Credit Parties has

 

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duly executed and delivered each Document to which it is a party and each such
Document constitutes the legal, valid and binding obligation of such Person
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors’ rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).

 

8.3. No Violation. Neither the execution, delivery or performance by any Credit
Party of the Documents to which it is a party, nor compliance by any Credit
Party with the terms and provisions thereof, nor the consummation of the
transactions contemplated herein or therein,

 

(a) on the Effective Date, (i) will contravene, conflict with or result in a
breach or default under any applicable law, statute, rule or regulation, or any
order, writ, injunction, judgment, ruling or decree of any court, arbitrator or
governmental instrumentality, (ii) will contravene, constitute a default under,
conflict or be inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or (other
than pursuant to the Security Documents) result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of any Credit Party pursuant to the terms of any indenture, mortgage,
deed of trust, loan agreement, credit agreement or any other agreement or
instrument to which any Credit Party is a party or by which it or any of its
property or assets are bound or to which it may be subject (including, without
limitation, the Existing Indebtedness Agreements) or (iii) will contravene or
violate any provision of the certificate of incorporation, by-laws, certificate
of partnership, partnership agreement, certificate of limited liability company,
limited liability company agreement or equivalent organizational document, as
the case may be, any Credit Party, or

 

(b) after the Effective Date, (i) will contravene, conflict with or result in a
breach or default under any material provision of any material applicable law,
statute, rule or regulation, or any order, writ, injunction, judgment, ruling or
decree of any court, arbitrator or governmental instrumentality, (ii) will
contravene, constitute a default under, conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Security
Documents) result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of any Credit Party
pursuant to the terms of any material indenture, mortgage, deed of trust, loan
agreement, credit agreement or any other material agreement or instrument to
which any Credit Party is a party or by which it or any of its property or
assets are bound or to which it may be subject (including, without limitation,
the Existing Indebtedness Agreements) or (iii) will contravene or violate any
provision of the certificate of incorporation, by-laws, certificate of
partnership, partnership agreement, certificate of limited liability company,
limited liability company agreement or equivalent organizational document, as
the case may be, any Credit Party.

 

8.4. Litigation. Other than as set forth on Schedule XI hereto as of the
Effective Date, there are no actions, suits, proceedings or investigations
pending or, to any Credit Party’s knowledge, threatened against or affecting,
nor has any Credit Party received any notices of a claim, (a) with respect to
any Document, or any portion of the Transaction, or (b) against any Credit Party
(i) as to which the amount in controversy is in excess of $100,000 (unless, to
the

 

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extent such controversy arise after the Effective Date, coverage for such claim
has been acknowledged by the related insurer, subject to standard deductibles)
or (ii) that if adversely determined could, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. Additionally,
there does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the occurrence of any Credit Event.

 

8.5. Use of Proceeds; Margin Regulations. (a) The proceeds of the Acquisition
Loans shall be utilized by the Borrowers to finance Permitted Acquisitions.

 

(b) The proceeds of all Revolving Loans and Swingline Loans shall be utilized to
finance working capital requirements, finance Capital Expenditures, and other
general corporate purposes of the Borrowers (which in no case will include
Permitted Acquisitions). The proceeds of all Interim Borrowings shall be
utilized by the Borrowers solely to fund regularly scheduled quarterly
distributions by the Partnership in accordance with the Partnership Agreement.
The proceeds of Non-Interim Borrowings and Swingline Loans shall not be utilized
by the Borrowers to (i) fund any distributions by the Partnership, whether
scheduled quarterly or otherwise and whether in accordance with the Partnership
Agreement or not, or (ii) repay Interim Borrowings.

 

(c) No part of any Credit Event (or the proceeds thereof) will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof nor the occurrence of any other Credit Event will
violate or be inconsistent with the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.

 

8.6. Governmental Approvals. Except as may have been obtained or made on or
prior to the Effective Date (and which remain in full force and effect on the
Effective Date), no order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by, any
foreign or domestic governmental or public body or authority, or any subdivision
thereof, is required to authorize or is required in connection with (i) the
execution, delivery and performance of any Document (other than filings
contemplated by the Security Documents) or (ii) the legality, validity, binding
effect or enforceability of any Document.

 

8.7. Investment Company Act. None of the Credit Parties is, or has at any time
been, an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.

 

8.8. Public Utility Holding Company Act. None the Credit Parties is, or has at
any time been, a “holding company,” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company,” within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

 

8.9. True and Complete Disclosure. All factual information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of the Credit Parties
in writing to the Administrative Agent, the Collateral Agent or any Lender
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement

 

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or any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of any such
Persons in writing to the Administrative Agent, the Collateral Agent or any
Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided. It is understood that the Projections and the Pro
Forma Balance Sheet and other pro forma calculations and budgets furnished or to
be furnished hereunder do not constitute factual information for purposes of
this Section 8.9. There are no facts known to any Credit Party which, either
individually or in the aggregate, (x) have had a Material Adverse Effect or (y)
could reasonably be expected to have a Material Adverse Effect, which 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.

 

8.10. Financial Condition; Financial Statements. (a) On and as of the Effective
Date, on a pro forma basis after giving effect to the Transaction, and to all
Indebtedness (including the Loans) incurred, and to be incurred, and Liens
created, and to be created, by each Credit Party in connection therewith, with
respect to (i) the Partnership (on a stand-alone basis), (ii) the Operating
Company (on a stand-alone basis), (iii) the Partnership and its Subsidiaries (on
a consolidated basis) and (iv) the Operating Company and its Subsidiaries (on a
consolidated basis), in each case, taking into account any rights of subrogation
and contribution among the Credit Parties (x) the sum of the assets, at a fair
valuation, of the Partnership (on a stand-alone basis), the Operating Company
(on a stand-alone basis), the Partnership and its Subsidiaries (on a
consolidated basis) and the Operating Company and its Subsidiaries (on a
consolidated basis) will exceed its or their debts, (y) it has or they have not
incurred nor intended to, nor believes or believe that it or they will, incur
debts beyond its or their ability to pay such debts as such debts mature and (z)
it or they will have sufficient capital with which to conduct its or their
business. For purposes of this Section 8.10, “debt” means any liability on a
claim, and “claim” means (i) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.

 

(b) (i) The audited consolidated statements of financial condition of
Cornerstone Family Services, Inc. and its Subsidiaries as of December 31, 2003,
and the related consolidated statements of income and cash flow for such date,
(ii) the unaudited consolidated balance sheet of Cornerstone Family Services,
Inc. and its Subsidiaries as of the end of the fiscal quarter of the Partnership
ended June 30, 2004, and the related consolidated statements income and cash
flow for the fiscal quarter then ended, and (iii) the Pro Forma Balance Sheet,
all furnished to the Lenders prior to the Effective Date, in each case present
fairly in all material respects the financial condition of the Partnership and
its Subsidiaries at the date of such statements of financial condition and the
results of operations of the Partnership and its Subsidiaries for the periods
covered thereby (or, in the case of the Pro Forma Balance Sheet, presents a good
faith estimate of the consolidated pro forma financial condition of the
Partnership as at the date of the preparation thereof after giving effect to the
Transaction at the date thereof or for the period covered thereby), subject, in
the case of unaudited financial

 

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statements, to normal year-end adjustments. All such financial statements (other
than the aforesaid Pro Forma Balance Sheet) have been prepared in accordance
with GAAP and practices consistently applied, except, in the case of the
quarterly and monthly statements, for the omission of footnotes and ordinary end
of period adjustments and accruals (all of which are of a recurring nature and
none of which individually, or in the aggregate, would be material).

 

(c) After giving effect to the Transaction, since December 31, 2003 (but
assuming the Transaction had occurred immediately prior to such date), nothing
has occurred that (x) has had a Material Adverse Effect or (y) could reasonably
be expected to have a Material Adverse Effect.

 

(d) Except as fully reflected in the financial statements described in Sections
8.10(b) and as otherwise permitted by Section 10.4, (i) there were as of the
Effective Date (and after giving effect to any Loans made, and transactions
occurring, on such date), no liabilities or obligations with respect to the
Partnership or any of its Subsidiaries of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due) which, either
individually or in the aggregate, (x) have had a Material Adverse Effect or (y)
could reasonably be expected to have a Material Adverse Effect and (ii) neither
the Partnership nor any Borrower knows of any basis for the assertion against
the Partnership or any of its Subsidiaries of any such liability or obligation
which, either individually or in the aggregate, (x) have had a Material Adverse
Effect or (y) could reasonably be expected to have a Material Adverse Effect.

 

(e) The Projections have been prepared on a basis consistent with the financial
statements referred to in Section 8.10(b), and are based on good faith estimates
and assumptions made by the management of the Partnership, which assumptions
such management believed were reasonable on the Effective Date, it being
recognized by the Lenders that such projections of 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 from the projected results contained therein and
such differences may be material.

 

8.11. Security Interests. On and after the Effective Date, each of the Security
Documents creates (or after the execution, delivery and recordation thereof will
create), as security for the Obligations, a valid and enforceable perfected
security interest in and Lien on all of the Collateral subject thereto, superior
to and prior to the rights of all third Persons (except as set forth in the next
parenthetical), and subject to no other Liens (except that (i) the Security
Agreement Collateral may be subject to Permitted Liens, (ii) the Pledge
Agreement Collateral may be subject to the Liens described in clauses (i) and
(v) of Section 10.3 and (iii) the security interest and mortgage lien created on
any Mortgaged Property may be subject to Permitted Liens), in favor of the
Collateral Agent. No filings or recordings are required in order to perfect the
security interests created under any Security Document except for filings or
recordings required in connection with any such Security Document which shall
have been made on or prior to the Effective Date as contemplated by Section 6.11
or on or prior to the execution and delivery thereof to the extent contemplated
by Sections 9.11 and 10.15.

 

8.12. Compliance with ERISA. Schedule V sets forth, as of the Effective Date,
each Plan and each Multiemployer Plan that is a pension plan within the meaning
of Section 3(2) of ERISA (a “Pension Plan”) of the Partnership. Each Pension
Plan (and each related trust,

 

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insurance contract or fund, if any) is in, and the material compliance thereof
has been in, material compliance with its terms and with all applicable laws,
including, without limitation, ERISA and the Code; each Pension Plan (and each
related trust, if any) which is intended to be qualified under Section 401(a) of
the Code has received a determination letter or an opinion letter since January
1, 2001 from the Internal Revenue Service to the effect that it meets the
requirements of Sections 401(a) and 501(a) of the Code; no Reportable Event has
occurred that could reasonably be expected to result in any Material liability
for the Partnership, any Subsidiary of the Partnership or any ERISA Affiliate;
no Multiemployer Plan is insolvent or in reorganization; except as set forth on
Schedule V with respect to the Pension Plans set forth therein, no Pension Plan
has an Unfunded Current Liability which, when added to the aggregate amount of
Unfunded Current Liabilities with respect to all other Plans (after taking into
account the amount of Unfunded Current Liabilities set forth on Schedule V with
respect to the Pension Plans set forth thereon), exceeds $250,000; no Pension
Plan which is subject to Section 412 of the Code or Section 302 of ERISA has an
accumulated funding deficiency, within the meaning of such sections of the Code
or ERISA, or has applied for or received a waiver of an accumulated funding
deficiency or an extension of any amortization period, within the meaning of
Section 412 of the Code or Section 303 or 304 of ERISA; all contributions
required to be made with respect to a Plan and a Multiemployer Plan have been
timely made; neither the Partnership nor any Subsidiary of the Partnership nor
any ERISA Affiliate has incurred any Material liability (including any indirect,
contingent or secondary liability) to or on account of a Pension Plan or a
Multiemployer Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of
the Code or, to the knowledge of the Partnership or the Borrowers, reasonably
expects to incur any such Material liability under any of the foregoing sections
with respect to any Pension Plan or a Multiemployer Plan; no condition exists
which presents a Material risk to the Partnership or any Subsidiary of the
Partnership or any ERISA Affiliate of incurring a Material liability to or on
account of a Pension Plan or a Multiemployer Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate or appoint a trustee to administer any Pension Plan which is subject
to Title IV of ERISA; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Pension Plan (other than routine claims for benefits) is pending,
expected or, to the knowledge of the Partnership or the Borrowers, threatened
that could reasonably be expected to result in any Material liability for the
Partnership, any Subsidiary of the Partnership or any ERISA Affiliate; using
actuarial assumptions and computation methods consistent with Part 1 of subtitle
E of Title IV of ERISA, the Partnership and its Subsidiaries and ERISA
Affiliates would not have any Material liabilities to any Multiemployer Plan in
the event of a withdrawal therefrom, as of the close of the most recent fiscal
year of each such Multiemployer Plan ended prior to the date of the most recent
Credit Event; each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of the Partnership, any Subsidiary of the Partnership, or any ERISA
Affiliate has at all times been operated in compliance with the provisions of
Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code except to
the extent that such noncompliance would not result in a Material liability;
each group health plan (as defined in 45 Code of Federal Regulations Section
160.103) which covers or has covered employees or former employees of the
Partnership, any Subsidiary of the Partnership or any ERISA Affiliate has at all
times been operated in compliance with the provisions of the Health Insurance
Portability and Accountability Act of

 

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1996 and the regulations promulgated thereunder, except to the extent that any
such failure could not reasonably be expected to result in a Material liability;
no lien imposed under the Code or ERISA on the assets of the Partnership or any
Subsidiary of the Partnership or any ERISA Affiliate exists or to the knowledge
of the Partnership or the Borrowers, could reasonably be expected to arise on
account of any Plan or any Multiemployer Plan; and the Partnership and its
Subsidiaries do not maintain or contribute to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) which provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) the obligations with respect to which could reasonably be expected to
have a Material Adverse Effect.

 

8.13. Capitalization. On the Effective Date and after giving effect to the
Transaction and the other transactions contemplated hereby, the outstanding
Equity Interests in the Partnership shall consist of (i) the general partner
interest in the Partnership, (ii) the incentive distribution rights, (iii)
4,239,782 common units (such common units, together with any subsequently issued
or issuable common units of the Partnership, collectively, the “Partnership
Common Units”) and (iv) 4,239,782 subordinated units (the “Partnership
Subordinated Units”). On the Effective Date, and after giving effect to the
Transaction and the other transactions contemplated hereby, all outstanding
Equity Interests in the Partnership have been duly and validly issued and are
fully paid and free of any preemptive rights. As of the Effective Date, except
as set forth on Schedule X hereto, the Partnership does not have outstanding any
securities convertible into or exchangeable for its units or outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims for the issuance of the Partnership Common Units.
All of the outstanding Equity Interests in each Borrower have been validly
issued, are fully paid and (to the extent applicable) nonassessable and, except
as set forth on Schedule VII hereto, are owned by a Credit Party free and clear
of any Lien other than any Lien in favor of the Collateral Agent.

 

8.14. Subsidiaries. On and as of the Effective Date and after giving effect to
the Transaction, the Partnership has no Subsidiaries other than the Borrowers,
and the Borrowers have no Subsidiaries other than those other Borrowers
described as such on Schedule VII. Schedule VII correctly sets forth, as of the
Effective Date and after giving effect to the Transaction, the percentage
ownership (direct and indirect) of each Credit Party in each class of capital
stock or other Equity Interests of each of its Subsidiaries and also identifies
the direct owner thereof. All outstanding shares of Equity Interests of each
Borrower have been duly and validly issued, are fully paid and, in the case of
the corporate Borrowers, non-assessable, and have been issued free of any
preemptive rights. No Borrower has outstanding any securities convertible into
or exchangeable for its Equity Interests or outstanding any right to subscribe
for or to purchase, or any options or warrants for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of or any calls,
commitments or claims of any character relating to, its Equity Interests or any
stock appreciation or similar rights. On the Effective Date, no encumbrance or
restriction not permitted by Section 10.14 exists.

 

8.15. Intellectual Property, etc. Each of the Credit Parties owns or has the
rights to use all patents, trademarks, permits, service marks, trade names,
technology copyrights, licenses, franchises and formulas, or other rights with
respect to the foregoing, reasonably necessary for the conduct of its business,
without any known conflict with the rights of others

 

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which, or the failure to obtain which, as the case may be, (x) has had (unless
same has ceased to exist in all respects) or (y) could reasonably be expected to
have, a Material Adverse Effect. To the best knowledge of the Credit Parties, no
product of any Credit Party infringes in any material respect any license,
permit, franchise, authorization, patent, copyright, service mark, trademark,
trade name or other right owned by any other Person, and to the best knowledge
of the Credit Parties, there is no material violation by any Person of any
rights of any Credit Party with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by any Credit Party.

 

8.16. Compliance with Statutes; Agreements, etc. Each of the Credit Parties is
in compliance with (i) all applicable statutes, regulations, rules and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property and (ii) all contracts and agreements to which it is a party,
except such non-compliance as could not reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect.

 

8.17. Environmental Matters. (a) Each of the Credit Parties has complied with,
and on the date of each Credit Event is in compliance with, applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws and no Credit Party is liable for any Material penalties,
fines or forfeitures for failure to comply with any of the foregoing. There are
no pending or past Environmental Claims, or, to the best knowledge of any Credit
Party, any threatened Environmental Claims against any Credit Party or any Real
Property owned or operated by any Credit Party. There are no facts,
circumstances, conditions or occurrences on any Real Property now or formerly
owned or operated by any Credit Party or on any property adjoining or in the
vicinity of any such Real Property that would reasonably be expected (i) to form
the basis of an Environmental Claim against any Credit Party or any such Real
Property or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property by any Credit Party under any applicable Environmental Law. To the
extent that the current or former operations of any Credit Party require such
Credit Party to apply for and obtain a permit under any Environmental Law, such
permit has either been granted to, or timely applied for by, the Credit Party,
and such Credit Party, if such permit has not yet been granted, does not have
any reason to believe that the application for such a permit will be denied or
that compliance with such permit will have a Material Adverse Effect.

 

(b) Hazardous Materials have not at any time been generated, used, treated or
stored on, or transported to or from, any Real Property now or formerly owned or
operated by any Credit Party except in compliance with applicable Environmental
Laws and as may be reasonably required in connection with the operation, use and
maintenance of such Real Property by a Credit Party’s business. Hazardous
Materials have not at any time been Released or threatened to be Released on or
from any Real Property owned or operated by any Credit Party or by any person
acting for or under contract to such Credit Party, or to the knowledge of the
Credit Party, by any other Person in respect of Real Property owned or operated
by such Credit Party, except in compliance with applicable Environmental Laws.
At any Real Property formerly owned or operated by any Credit Party or by any
person acting for or under contract to such Credit Party, or, to the knowledge
of the Credit Party, by any other Person, there was not, during the time such
Credit Party, or any Person owning or operating such Real Property for

 

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such Credit Party owned or operated such Real Property, any Release or threat of
Release of any Hazardous Materials onto or from such Real Property.

 

(c) Notwithstanding anything to the contrary in this Section 8.17, the
representations made in this Section 8.17 shall only be untrue if the aggregate
effect of all conditions, failures, noncompliances, Environmental Claims,
Hazardous Materials, Releases and presence of underground storage tanks, in each
case of the types described above, (x) has had or (y) could reasonably be
expected to have, a Material Adverse Effect.

 

8.18. Properties. All Real Property owned by any Credit Party and all material
Leaseholds leased by any Credit Party, in each case as of the Effective Date and
after giving effect to the Transaction, and the nature of the interest therein,
is correctly set forth in Schedule III. Each Credit Party has good and
marketable title to, or a validly subsisting leasehold interest in, all material
properties owned or leased by it, including all Real Property reflected in
Schedule III and in the financial statements (including the Pro Forma Balance
Sheet) referred to in Section 8.10(b) (except such properties sold in the
ordinary course of business since the dates of the respective financial
statements referred to therein), free and clear of all Liens, other than
Permitted Liens.

 

8.19. Labor Relations. No Credit Party is engaged in any unfair labor practice
that (x) has had or (y) could reasonably be expected to have, a Material Adverse
Effect. There is (i) no unfair labor practice complaint pending against any
Credit Party or, to the knowledge of any Credit Party, threatened against any of
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against any Credit Party or, to the knowledge of any Credit Party,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against any Credit Party or, to the knowledge of any Credit
Party, threatened against any Credit Party and (iii) no union representation
question existing with respect to the employees of any Credit Party and no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as (x) has not had and (y) could not reasonably be expected to
have, a Material Adverse Effect.

 

8.20. Tax Returns and Payments. Each Credit Party has timely filed all federal
income tax returns and all other tax returns, domestic and foreign, required to
be filed by it and has paid all taxes and assessments payable by it which have
become due, except for (a) tax returns (other than Federal tax returns), the
failure of which to file could not reasonably be expected to be Material and (b)
taxes and assessments (i) the amount of which is not individually or in the
aggregate Material or (ii) being contested in good faith and adequately
disclosed and fully provided for on the financial statements of such Credit
Party in accordance with GAAP. Each Credit Party has at all times paid, or has
provided adequate reserves (in the good faith judgment of the management of such
Credit Party) for the payment of, all federal, state and foreign income taxes
applicable for all prior fiscal years and for the current fiscal year to date.
There is no material action, suit, proceeding, investigation, audit, or claim
now pending or, to the knowledge of any Credit Party, threatened by any
authority regarding any taxes relating to any Credit Party. No Credit Party
knows of any basis for any other taxes or assessments that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
No Credit Party has entered into an agreement or waiver or been requested to
enter into an

 

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agreement or waiver extending any statute of limitations relating to the payment
or collection of taxes of any Credit Party, or is aware of any circumstances
that would cause the taxable years or other taxable periods of any Credit Party
not to be subject to the normally applicable statute of limitations. The income
of the Partnership, of the Operating Company and of the Subsidiaries of the
Operating Company that are intended by the Partnership to be treated as
disregarded entities pursuant to Treas. Reg. Section 301.7701-3, is not subject
to federal income tax at the company level.

 

8.21. Existing Indebtedness. Schedule IV sets forth a true and complete list of
all Indebtedness of the Credit Parties as of the Effective Date and which is to
remain outstanding after giving effect to the Transaction (excluding (i) the
Obligations and (ii) the Indebtedness pursuant to the Note Purchase Documents)
(the “Existing Indebtedness”), in each case showing the aggregate principal
amount thereof and the name of the respective borrower and any other entity
which directly or indirectly guaranteed such debt.

 

8.22. Insurance. Set forth on Schedule VIII hereto is a true, correct and
complete summary of all insurance carried by each Credit Party on and as of the
Effective Date (immediately after giving effect to the Transaction), with the
amounts insured set forth therein.

 

8.23. Transaction. At the time of consummation thereof, each element of the
Transaction shall have been consummated in all material respects in accordance
with the terms of the relevant Documents therefor and all applicable laws. At
the time of consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to make or
consummate each element of the Transaction in all material respects in
accordance with the terms of the relevant Documents therefor and all applicable
laws have been obtained, given, filed or taken and are or will be in full force
and effect (or effective judicial relief with respect thereto has been
obtained). All applicable waiting periods with respect thereto have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Transaction. Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon any element of the Transaction, the occurrence
of any Credit Event, or the performance by any Credit Party of their respective
obligations under the Documents and all applicable laws.

 

8.24. Tax Shelter Regulations. The Borrowers do not intend to treat any Loan or
Letter of Credit and related transactions as being a “reportable transaction”
(within the meaning of Treasury Regulation Section 1.6011-4). In the event any
Borrower determines to take any action inconsistent with such intention, it will
promptly notify the Administrative Agent thereof. If any Borrower so notifies
the Administrative Agent, such Borrower acknowledges that one or more of the
Lenders may treat its Loans, its interest in Swingline Loans and/or Letters of
Credit as part of a transaction that is subject to Treasury Regulation Section
301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists
and other records required by such Treasury Regulation.

 

8.25. Common Enterprise. Each Borrower is engaged solely in a Permitted Business
as of the Effective Date. These operations require financing on a basis such
that the

 

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credit supplied can be made available from time to time to the Borrowers, as
required for the continued successful operation of the Borrowers as a whole. The
Borrowers have requested the Lender to make credit available hereunder primarily
for the purposes set forth in Section 8.5. The Credit Parties expect to derive
benefit, directly or indirectly, from a portion of the credit extended by the
Lenders hereunder, both in its separate capacity and as a member of the group of
companies, since the successful operation and condition of the Credit Parties is
dependent on the continued successful performance of the functions of the group
as a whole. The Credit Parties acknowledge that, but for the agreement by each
of the Credit Parties to execute and deliver this Agreement, the Administrative
Agent and the Lenders would not have made available the credit facilities
established on the terms set forth herein.

 

8.26. Compliance with Cemetery Laws. Each of the Credit Parties has complied in
all material respects with, and on the date of each Credit Event is in material
compliance with, all applicable federal, state, and local laws, regulations,
administrative orders, and other orders governing the operation of cemeteries,
the providing of cemetery services, and the sale of cemetery merchandise,
including, but not limited to: (1) obtaining and maintaining valid registration,
permits, and certificates to conduct the cemetery business from the appropriate
governmental authorities; (2) employing qualified representatives, employees,
and sales agents who are registered with the appropriate governmental
authorities; (3) submitting all required notices, records, statements,
affidavits, financial reports and other documents, in form and substance, to the
appropriate governmental authorities; (4) selling cemetery merchandise and
cemetery services, including making required disclosures, in accordance with
applicable laws; (5) using contracts, agreements, and other documents in form,
wording and substance that comply with applicable laws; (6) establishing,
funding and administering trust or escrow accounts, including, but not limited
to, Trust Accounts, in accordance with applicable laws; (7) appointing qualified
trustees and escrow agents to manage and administer trust funds established
under applicable state laws; (8) maintaining and caring for cemeteries with the
standard of care required by applicable laws; (9) constructing columbaria and
mausoleums in accordance with applicable laws; (10) canceling contracts for
cemetery services and cemetery merchandise, including making refunds to
consumers, in accordance with applicable laws; (11) owning no more than the
maximum amount of land permitted for cemetery and burial use under applicable
laws; and (12) establishing cemeteries in areas permitted by applicable laws.
Furthermore, there are no pending or, to the knowledge of any Credit Party,
threatened claims or suspensions against the Credit Parties by any person,
entity or governmental authority related to the operation of cemeteries, the
providing of cemetery services, and the sale of cemetery merchandise.

 

8.27. Foreign Assets Control Regulations, etc. No Credit Event nor any Credit
Party’s use of the proceeds thereof will violate (a) the Trading with the Enemy
Act, as amended, or (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. Without limiting
the foregoing, no Issuer (a) is or will become a person whose property or
interests in property are blocked pursuant to Section 1 of Executive Order 13224
of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)) or (b) knowingly engages or will engage in any dealings or transactions,
or be otherwise associated, with any such person. The Credit Parties are in
compliance with the Uniting And Strengthening America By Providing

 

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Appropriate Tools Required To Intercept And Obstruct Terrorism Act (USA Patriot
Act of 2001).

 

SECTION 9. Affirmative Covenants. Each Credit Party hereby covenants and agrees
that as of the Effective Date and thereafter for so long as this Agreement is in
effect and until the Total Commitment and all Letters of Credit have terminated,
and the Loans, Notes and Unpaid Drawings, together with interest, Fees and all
other Obligations (other than any indemnities described in Section 13.13(b)
which are not then due and payable) incurred hereunder, are paid in full:

 

9.1. Information Covenants. The Partnership will furnish, or will cause to be
furnished, to the Administrative Agent and each Lender:

 

(a) Quarterly Financial Statements. Within 45 days after the close of the first
three quarterly accounting periods in each fiscal year of the Partnership, the
consolidated balance sheet of the Partnership and its Subsidiaries as at the end
of such quarterly accounting period and the related consolidated statements of
income and retained earnings and of cash flows for such quarterly accounting
period and for the elapsed portion of the fiscal year ended with the last day of
such quarterly accounting period, all of which shall be in reasonable detail and
certified by the senior financial officer or other Authorized Officer of the
General Partner that they fairly present in all material respects the financial
condition of the Partnership and its Subsidiaries as of the dates indicated and
the results of their operations and changes in their cash flows for the periods
indicated, subject to normal year-end audit adjustments and the absence of
footnotes.

 

(b) Annual Financial Statements. Within 95 days after the close of each fiscal
year of the Partnership, the audited consolidated balance sheet of the
Partnership and its Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of cash
flows for such fiscal year, certified by independent certified public
accountants of recognized national standing as shall be reasonably acceptable to
the Administrative Agent, in each case to the effect that such statements fairly
present in all material respects the financial condition of the Partnership and
its Subsidiaries as of the dates indicated and the results of their operations
and changes in financial position for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years, together with a certificate
of such accounting firm stating that in the course of its regular audit of the
business of the Partnership and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, no Default or Event of
Default which has occurred and is continuing as a result of Sections 10.8, 10.9
or 10.10 has come to their attention or, if such a Default or an Event of
Default has come to their attention, a statement as to the nature thereof.

 

(c) Monthly Financial Statements; Borrowing Base Certificates. Within (i) 35
days after the last day of each month (or 45 day after the last day of any month
that is the end of a fiscal quarter), the consolidated balance sheet of the
Partnership and its Subsidiaries as at the end of such monthly accounting period
and the related consolidated statements of income and retained earnings and of
cash flows for such monthly accounting period and accounts receivable and, to
the extent requested by the Administrative Agent or the Required Lenders or
provided to the Noteholders, accounts payable agings, all of which shall be in
reasonable detail and certified

 

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by the senior financial officer or other Authorized Officer of the General
Partner that they fairly present in all material respects the financial
condition of the Partnership and its Subsidiaries as of the dates indicated and
the results of their operations and changes in their cash flows for the periods
indicated, subject to normal year-end audit adjustments and the absence of
footnotes, and (ii) 30 days after the last day of each month a duly executed
Borrowing Base Certificate setting forth the Borrowing Base as of the last day
of such calendar month.

 

(d) Budgets, etc. Not more than 60 days after the commencement of each fiscal
year of the Partnership, consolidated budgets of the Partnership and its
Subsidiaries in reasonable detail for each of the four fiscal quarters of such
fiscal year, in each case as prepared by management in accordance with GAAP and
setting forth the principal assumptions upon which such budgets are based.

 

(e) Compliance Certificates. At the time of the delivery of the financial
statements provided for in Sections 9.1(a) and (b), a compliance certificate of
the senior financial officer or other Authorized Officer of the General Partner,
in the form set forth as Exhibit F hereto, to the effect that no Default or
Event of Default exists or, if any Default or Event of Default does exist,
specifying the nature and extent thereof, which certificate shall, if delivered
in connection with the financial statements in respect of a period ending on the
last day of a fiscal quarter or fiscal year of the Partnership, set forth the
calculations required to establish whether the Partnership and its Subsidiaries
were in compliance with the provisions of Sections 10.8 through and including
10.10, inclusive, as at the end of such fiscal quarter or year, as the case may
be.

 

(f) Notice of Default or Litigation. Promptly, and in any event within five
Business Days after an officer of any Credit Party obtains actual knowledge
thereof, notice of (i) the occurrence of any event which constitutes a Default
or an Event of Default, which notice shall specify the nature and period of
existence thereof and what action such Credit Party proposes to take with
respect thereto, (ii) any litigation or proceeding pending or threatened (x)
against any Credit Party which (I) has had or (II) could reasonably be expected,
to have a Material Adverse Effect, (y) with respect to any material Indebtedness
of any Credit Party or (z) with respect to any Document, (iii) any material
governmental investigation pending or threatened against any Credit Party and
(iv) any other event which (x) has had or (y) could reasonably be expected to
have, a Material Adverse Effect.

 

(g) Management Letters. Promptly upon receipt thereof, a copy of any “management
letter” submitted to any Credit Party by its independent accountants in
connection with any annual, interim or special audit made by them of the books
of such Credit Party and management’s responses thereto.

 

(h) Environmental Matters. Promptly after any officer of any Credit Party
obtains actual knowledge of any of the following (but only to the extent that
any of the following, either individually or in the aggregate, (x) has had or
(y) could reasonably be expected to have, (a) a Material Adverse Effect or (b) a
cost to such Credit Party in excess of $100,000), written notice of:

 

(i) any pending or threatened Environmental Claim against any Credit Party or
any Real Property now, formerly, or hereafter owned or operated by any Credit
Party;

 

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(ii) any condition or occurrence on any Real Property now, formerly, or
hereafter owned or operated by any Credit Party that (x) results in
noncompliance by any Credit Party with any applicable Environmental Law or (y)
could reasonably be anticipated to form the basis of an Environmental Claim any
Credit Party or any such Real Property;

 

(iii) any condition or occurrence on any Real Property now, formerly, or
hereafter owned or operated by any Credit Party that could reasonably be
anticipated to cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability by such Credit Party of its
interest in such Real Property under any Environmental Law; and

 

(iv) the taking of any removal or remedial action in response to the actual or
alleged presence of any Hazardous Material on any Real Property now, formerly,
or hereafter owned or operated by any Credit Party.

 

All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Credit Party’s response or proposed response thereto. In addition, the Credit
Parties agree to provide the Lenders with copies of such detailed reports
relating to any of the matters set forth in clauses (i)-(iv) above as may
reasonably be requested by the Administrative Agent or the Required Lenders.

 

(i) Reports. Promptly upon transmission thereof, (i) copies of any filings and
registrations with, and reports to, the SEC by any Credit Party, (ii) copies of
all financial information, notices and reports as the Credit Parties shall send
to the Purchasers, (iii) following any public issuance of debt or equity
securities of any Credit Party, copies of all financial statements, proxy
statements, notices and reports as such Credit Party shall send generally to
analysts and the holders of any class of Equity Interests or Indebtedness in
their capacity as such holders (to the extent not theretofore delivered to the
Lenders pursuant to this Agreement) and (iv) with reasonable promptness, such
other information or documents (financial or otherwise) as the Administrative
Agent on its own behalf or on behalf of the Required Lenders may reasonably
request from time to time.

 

(j) Change in Senior Management. Promptly upon knowledge by any Credit Party of
any change or intended change in the person holding any Senior Manager position.

 

(k) Investments. Monthly summaries, prepared by the Partnership’s investment
advisors, describing all investments of Trust Funds.

 

(l) Material Adverse Effect. Without duplication of any other provision of this
Section 9.1, notice of any event which could reasonably be expected to have a
Material Adverse Effect.

 

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(m) Accounting Terms. If at the time of delivery of any annual or quarterly
financial statement under Section 9.1 there is a material variation between the
application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the December 31, 2003 financial statements referred to above
(“Frozen GAAP”) and such variation effects the computations used in determining
compliance with Sections 9.14 and 10, including in each case definitions used
therein, then an Authorized Officer of the General Partner shall deliver to the
Administrative Agent and the Lenders at the same time as the delivery of such
annual or quarterly financial statements (i) a description in reasonable detail
of such variation and (ii) management prepared annual or quarterly financial
statements prepared in accordance with Frozen GAAP. In addition, the General
Partner shall deliver to the Administrative Agent and the Lenders such other
reconciliation documentation as the Required Lenders may reasonably request.

 

(n) Phase II Reports. Within 60 days after the Closing Date, the Parent shall
deliver to each holder of Notes satisfactory copies of “Phase II” environmental
reports prepared for any of the ten properties listed on Schedule XII for which
any Phase I environmental for such property delivered pursuant to Section
6.11(c)(iii) recommends the undertaking of a “Phase II” report.

 

(o) Bring Down Opinion. Within 30 days of the anniversary of the Closing Date
falling in 2007, the Credit Parties will cause to be delivered to the Collateral
Agent a “bring down” perfection opinion of Blank Rome LLP (or such other counsel
reasonably acceptable to the Required Lenders) in form and substance reasonably
satisfactory to the Required Lenders and their counsel.

 

(p) Other Information. From time to time, such other information or documents
(financial or otherwise) with respect to any Credit Party as the Administrative
Agent or any Lender (through the Administrative Agent) may reasonably request.

 

9.2. Books, Records and Inspections. Each Credit Party keep proper books of
record and account in which full, true and correct entries in conformity with
GAAP and all material requirements of law shall be made of all dealings and
transactions in relation to its business and activities. Without limiting any
additional similar requirements set forth in any Security Document, each Credit
Party will permit, upon reasonable prior notice to the senior financial officer
or other Authorized Officer of the General Partner or the Operating Company,
officers and designated representatives of the Administrative Agent or the
Required Lenders, up to twice in any calendar year at the expense of the
Borrowers, and at any time after an Event of Default has occurred, at the
expense of the Borrowers, to visit and inspect any of the properties or assets
of the Credit Parties in whomsoever’s possession, and to examine the books of
account of the Credit Parties and discuss the affairs, finances and accounts of
the Credit Parties with, and be advised as to the same by, their officers and
independent accountants, all at such reasonable times and intervals and to such
reasonable extent as the Administrative Agent or the Required Lenders may
desire.

 

9.3. Insurance. (a) Each Credit Party (i) maintain, with financially sound and
reputable insurance companies, insurance on all its property in at least such
amounts and against at least such risks as is consistent and in accordance with
industry practice and (ii) furnish to the

 

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Administrative Agent and each of the Lenders, upon request, full information as
to the insurance carried. In addition to the requirements of the immediately
preceding sentence, the Partnership will at all times cause insurance of the
types described in Schedule VIII to be maintained (with the same scope of
coverage as that described in Schedule VIII) at levels which are consistent with
its practices immediately before the Effective Date, or otherwise in form, scope
and amount reasonably acceptable to the Administrative Agent. Such insurance
shall include physical damage insurance on all real and personal property
(whether now owned or hereafter acquired) on an all risk basis and business
interruption insurance. The provisions of this Section 9.3 shall be deemed
supplemental to, but not duplicative of, the provisions of any Security
Documents that require the maintenance of insurance.

 

(b) Each Credit Party, at all times keep all of its property (except real or
personal property leased or financed through third parties in accordance with
this Agreement) insured in favor of the Collateral Agent, and all policies or
certificates with respect to such insurance (and any other insurance maintained
by, or on behalf of, any Credit Party) (i) shall be endorsed to the Collateral
Agent’s satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as certificate holder, mortgagee and
loss payee with respect to real property, certificate holder and loss payee with
respect to personal property, additional insured with respect to general
liability and umbrella liability coverage and certificate holder with respect to
workers’ compensation insurance), (ii) shall state that such insurance policies
shall not be canceled or materially changed without at least 30 days prior
written notice thereof by the respective insurer to the Collateral Agent and
(iii) shall be delivered to the Collateral Agent.

 

(c) If any Credit Party shall fail to maintain all insurance in accordance with
this Section 9.3, or if any Credit Party shall fail to so name the Collateral
Agent as an additional insured, mortgagee or loss payee, as the case may be, or
so deliver all certificates with respect thereto, the Administrative Agent
and/or the Collateral Agent shall have the right (but shall be under no
obligation), upon 5 Business Days prior written notice to the Partnership, to
procure such insurance, and the Credit Parties agree jointly and severally to
reimburse the Administrative Agent or the Collateral Agent, as the case may be,
for all costs and expenses of procuring such insurance.

 

9.4. Payment of Taxes. Each Credit Party will pay and discharge all material
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, in each case on a
timely basis, and all lawful claims for material sums that have become due and
payable which, if unpaid, could reasonably be expected to become a Lien not
otherwise permitted under Section 10.3(i); provided that no Credit Party shall
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings if it has maintained and
continues to maintain adequate reserves with respect thereto in accordance with
GAAP.

 

9.5. Corporate Franchises. Each Credit Party will do all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises, authority to do business, licenses, certifications,
accreditations and patents, except for rights, franchises, authority to do
business, licenses, certifications, accreditations and patents the loss of which
(individually and in the aggregate) (x) have not had and (y) could not
reasonably be

 

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expected to have, a Material Adverse Effect; provided, however, that any
transaction permitted by Section 10.2 (including, without limitation, the
dissolution of any Subsidiary of the Partnership permitted pursuant to said
Section) will not constitute a breach of this Section 9.5.

 

9.6. Compliance with Statutes; etc. Each Credit Party will comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including, without
limitation, regulations, administrative orders and other orders referred to in
Section 8.26), except for such noncompliance as (x) have not had and (y) could
not reasonably be expected to have, a Material Adverse Effect.

 

9.7. Compliance with Environmental Laws. (a) (i) The Partnership will comply
with all Environmental Laws applicable to the ownership or use of its Real
Property now or hereafter owned or operated by the Credit Parties, and will
promptly pay or cause to be paid all costs and expenses incurred in connection
with such compliance, and will keep or cause to be kept all such Real Property
free and clear of any Liens imposed pursuant to such Environmental Laws and (ii)
no Credit Party will generate, use, treat, store, Release, dispose of, threaten
to Release, or permit the generation, use, treatment, storage, release or
disposal of, Hazardous Materials on any Real Property now or hereafter owned or
operated by any Credit Party, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property, except in material
compliance with applicable Environmental Laws and as may be reasonably required
in connection with the operation, use and maintenance of such Real Property by
any Credit Party’s business, unless any failures to comply with the requirements
specified in clause (i) or (ii) above, either individually or in the aggregate,
(x) have not had and (y) could not reasonably be expected to have, a Material
Adverse Effect. If any Credit Party or any tenant or occupant of any Real
Property now or hereafter owned or operated by such Credit Party, causes or
permits any intentional or unintentional act or omission resulting in the
presence or Release or threat of Release of any Hazardous Material (except in
material compliance with applicable Environmental Laws) at or from any Real
Property, the Credit Party agrees, if required to do so under any final
applicable directive or order of any governmental agency, to undertake, and/or
to cause any of its Subsidiaries, tenants or occupants to undertake, at their
sole expense, any clean up, removal, remedial or other action required pursuant
to Environmental Laws to remove and clean up any Hazardous Materials from any
Real Property, and, if required by any governmental agency under applicable law
to restore any natural resources, except where the failure to do so could not
reasonably be expected to have, a Material Adverse Effect.

 

(b) At the written request of the Administrative Agent or the Required Lenders,
which request shall specify in reasonable detail the basis therefor, at any time
and from time to time, the Partnership and the Operating Company will provide,
at their sole cost and expense, a Phase I environmental site assessment report
(and any additional reports required thereby) which has been prepared, in
accordance with the applicable ASTM standard, by an environmental consulting
firm approved by the Administrative Agent, and such approval will not be
unreasonably withheld, and which concerns any Real Property now or hereafter
owned or operated by any Credit Party, and addresses the matters in clause (i)
or (ii) below which give rise to such request (or, in the case of a request
pursuant to following clause (i), addresses such matter as may be requested by
the Administrative Agent or the Required Lenders) and estimates the range of the
potential costs of any removal, remedial or other corrective or restorative
action

 

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in connection with any such matter; provided that in no event shall such request
be made unless (i) a Default or Event of Default has occurred and is continuing
or (ii) the Lenders receive notice under Section 9.1(h) for any event referred
to in said Section which, either individually or in the aggregate, (x) has had
or (y) could reasonably be expected to have, (a) a Material Adverse Effect or
(b) a remedial cost to the Credit Parties in excess of $100,000. If any Credit
Party fail to provide the same within 60 days after such request was made, the
Administrative Agent may order the same, and the Credit Parties shall grant and
hereby do grant, to the Administrative Agent and the Lenders and their agents
reasonable access to such Real Property and specifically grant the
Administrative Agent and the Lenders and their agents an irrevocable
non-exclusive license, subject to the right of tenants, to undertake such an
assessment, all at the expense of the Credit Parties. In such an event, the
Credit Parties shall and hereby do release the Lenders and their agents from any
and all Environmental Claims concerning any investigation into or assessment of
the Real Property which Lenders may cause to be made.

 

9.8. ERISA. As soon as possible and, in any event, within ten (10) Business Days
after any Plan, Credit Party or any ERISA Affiliate knows or has reason to know
of the occurrence of any of the following, the Partnership will deliver to the
Administrative Agent a certificate of the chief financial officer or other
Authorized Officer of the General Partner setting forth in reasonable detail
information as to such occurrence and the action, if any, that the Plan, such
Credit Party or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed by the Plan, the
Credit Party, the Plan administrator or such ERISA Affiliate to or with, the
PBGC or any other governmental agency, or a Plan or Multiemployer Plan
participant, and any notices received by the Partnership, such Subsidiary or
ERISA Affiliate from the PBGC or other governmental agency or a Plan or
Multiemployer Plan participant or the Plan administrator with respect thereto:
that a Reportable Event has occurred (except to the extent that the Partnership
has previously delivered to the Administrative Agent a certificate and notices
(if any) concerning such event pursuant to the next clause hereof); that a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application may be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to be
made with respect to a Plan or Multiemployer Plan has not been timely made,
except to the extent that any failure to make such contribution would not result
in a Material liability; that a Plan or Multiemployer Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has a Material Unfunded Current Liability and, to the
knowledge of the Partnership or the Borrowers, that a Multiemployer Plan has a
Material Unfunded Current Liability (assuming, solely for this purpose, that the
term “Unfunded Current Liability” also applies to Multiemployer Plans) not
previously disclosed to the Lenders prior to the Effective Date; that
proceedings may be or have been instituted to terminate or appoint a trustee to
administer a Plan which is subject to Title IV of ERISA; that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan or Multiemployer Plan; that any Credit Party or any

 

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ERISA Affiliate will or may incur any Material liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan or Multiemployer Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan or
Multiemployer Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that any Credit Party may incur any Material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or any Plan. Each
Credit Party will deliver to each of the Lenders copies of any records,
documents or other information that must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA. Each Credit Party will also
deliver to each of the Lenders upon request a complete copy of the annual report
(on Internal Revenue Service Form 5500-series) of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information) required
to be filed with the Internal Revenue Service. In addition to any certificates
or notices delivered to the Lenders pursuant to the first sentence hereof,
copies of annual reports and any records, documents or other information
required to be furnished to the PBGC or any other government agency, and any
material notices received by the Partnership, any Subsidiary of the Partnership
or any ERISA Affiliate with respect to any Plan or received from any government
agency or plan administrator or sponsor or trustee with respect to any
Multiemployer Plan, shall be delivered to the Lenders no later than ten (10)
Business Days after the date such annual report has been filed with the Internal
Revenue Service or such records, documents and/or information has been furnished
to the PBGC or any other government agency or such notice has been received by
the Partnership, the Subsidiary or the ERISA Affiliate, as applicable. If, at
any time after the Effective Date, any Credit Party or any ERISA Affiliate
maintains, or contributes to (or incurs an obligation to contribute to), a
pension plan as defined in Section 3(2) of ERISA which is not set forth in
Schedule V, as may be updated from time to time, then the Partnership shall
deliver to the Administrative Agent an updated Schedule V as soon as possible
and, in any event, within thirty (30) days after such Credit Party or such ERISA
Affiliate maintains, or contributes to (or incurs an obligation to contribute
to), such pension plan. Such updated Schedule V shall supersede and replace the
existing Schedule V.

 

9.9. Good Repair. The Partnership will, and will cause each of its Subsidiaries
to, ensure that its material properties and equipment used in its business are
kept in good repair, working order and condition, ordinary wear and tear
excepted, and that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto, to the extent and in the manner
consistent with past practices.

 

9.10. End of Fiscal Years; Fiscal Quarters. The General Partner will, for
financial reporting purposes, cause (i) each Credit Party’s fiscal year to end
on December 31 of each year and (ii) itself, and cause each Credit Party to
maintain fiscal quarters consistent therewith and with the past practices of the
any Credit Parties as in effect on the Effective Date.

 

9.11. Additional Security; Further Assurances. (a) Each Credit Party will grant
to the Collateral Agent security interests and mortgages in such assets and real
property of the

 

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Partnership and such Subsidiaries as are not covered by the original Security
Documents (subject to the applicable exceptions contained therein), and as may
be reasonably requested from time to time by the Administrative Agent or the
Required Lenders (collectively, the “Additional Security Documents”). The
Additional Security Documents or instruments related thereto shall be duly
recorded or filed in such manner and in such places as are required by law to
establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Security Documents and
all taxes, fees and other charges payable in connection therewith shall be paid
in full.

 

(b) Each Credit Party will, at the expense of the Credit Parties, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent from time to
time such schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, limited powers of attorney, certificates,
real property surveys (it being understood that the Borrowers shall be under no
obligation to obtain any such survey), reports and other assurances or
instruments and take such further steps relating to the Collateral covered by
any of the Security Documents as the Collateral Agent may reasonably require in
order for the Collateral Agent to fully enforce its rights under the Security
Documents. Furthermore, the Partnership shall cause to be delivered to the
Collateral Agent such opinions of counsel, title insurance and other related
documents as may be reasonably requested by the Collateral Agent to assure
itself that this Section 9.11 has been complied with.

 

(c) The Partnership agrees to cause each Subsidiary of the Partnership
established or created in accordance with Section 10.15 to execute and deliver a
counterpart hereto (and/or an assumption agreement in form and substance
satisfactory to the Administrative Agent) whereby such Subsidiary shall become a
party hereto as a Borrower hereunder.

 

(d) The Partnership will cause each Subsidiary of the Partnership established or
created in accordance with Section 10.15 to grant to the Collateral Agent a Lien
(subject only to Permitted Liens) on property (tangible and intangible) of such
Subsidiary upon terms and with exceptions similar to those set forth in the
Security Documents, as appropriate, and reasonably satisfactory in form and
substance to the Administrative Agent and Required Lenders. In connection with
the actions required to be taken pursuant to the immediately preceding sentence,
the respective Subsidiary shall become a party to the various existing Security
Documents by executing counterparts thereof and/or assumption agreements
relating thereto (together with the delivery of updated schedules) in each case
pursuant to documentation in form and substance reasonably satisfactory to the
Administrative Agent, or shall enter into and deliver such new Security
Documents as may be requested by the Administrative Agent or the Required
Lenders. The Borrowers shall cause each such Subsidiary of the Borrowers, at its
own expense, to execute, acknowledge and deliver, or cause the execution,
acknowledgment and delivery of, and thereafter register, file or record in any
appropriate governmental office, any document or instrument reasonably deemed by
the Collateral Agent to be necessary or desirable for the creation and
perfection of the foregoing Liens. The Borrowers will cause each of such
Subsidiaries to take all actions reasonably requested by the Administrative
Agent (including, without limitation, the filing of UCC-1’s) in connection with
the granting of such security interests.

 

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(e) At any time after the Effective Date at which any Borrower receives or has
performed on its behalf any survey of any Mortgaged Property (it being
understood that the Borrowers shall be under no obligation to obtain any such
survey), the Borrowers shall promptly thereafter deliver a copy of such survey
to the Administrative Agent.

 

(f) Each of the Credit Parties agrees that each action required above by this
Section 9.11 shall be completed as soon as possible, but in no event later than
60 days after such action is either requested to be taken by the Collateral
Agent, the Administrative Agent or the Required Lenders or required to be taken
by the Partnership and its Subsidiaries pursuant to the terms of this Section
9.11; provided that (i) each newly acquired or created Subsidiary of the
Partnership shall be required to take the actions specified above concurrently
(or promptly thereafter) with the creation or acquisition thereof (directly or
indirectly) by a Credit Party, and (ii) in no event will any Credit Party or any
of its Subsidiaries be required to take any action, other than using its
commercially reasonable efforts, to obtain consents from third parties with
respect to its compliance with this Section 9.11.

 

9.12. Use of Proceeds. All proceeds of the Loans shall be used as provided in
Section 8.5.

 

9.13. Ownership of Subsidiaries. Except as reflected on Schedule VII, the
Borrowers will directly or indirectly own 100% of the Equity Interests of each
Subsidiary of the Borrowers.

 

9.14. Permitted Acquisitions. (a) Subject to the provisions of this Section 9.14
and the requirements contained in the definition of Permitted Acquisition, the
Operating Company and any of its Subsidiaries may from time to time effect
Permitted Acquisitions, so long as (in each case except to the extent the
Required Lenders otherwise specifically agree in writing in the case of a
specific Permitted Acquisition): (i) no Default or Event of Default shall be in
existence at the time of the consummation of the proposed Permitted Acquisition
or immediately after giving effect thereto; (ii) the Operating Company shall
have given the Administrative Agent and the Lenders prior written notice of the
proposed Permitted Acquisition in accordance with the definition thereof; (iii)
calculations are made by the Operating Company of (x) compliance with the
covenants contained in Sections 10.8, 10.9 and 10.10 for the period of four
consecutive fiscal quarters (taken as one accounting period) most recently ended
prior to the date of such Permitted Acquisition (each, a “Calculation Period”),
on a Pro Forma Basis as if the respective Permitted Acquisition (as well as all
other Permitted Acquisitions theretofore consummated after the first day of such
Calculation Period) had occurred on the first day of such Calculation Period,
and such recalculations shall show that such financial covenants would have been
complied with if the Permitted Acquisition had occurred on the first day of such
Calculation Period (for this purpose, if the first day of the respective
Calculation Period occurs prior to the Effective Date, calculated as if the
covenants contained in said Sections 10.8, 10.9 and 10.10 had been applicable
from the first day of the Calculation Period) and (y) compliance, on a Pro Forma
Basis, with Sections 10.8, 10.9 and 10.10 immediately after giving effect to the
consummation of the respective Permitted Acquisition (for this purpose, using
the same ratio which will be required to be met on the last day of the first
fiscal quarter ended on or after the date upon which the respective Permitted
Acquisition is consummated), and the Partnership shall be in compliance
therewith; (iv) after giving effect to the updating of schedules to reflect

 

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transactions related to Permitted Acquisitions, all representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Permitted Acquisition (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date; and (v) the Partnership shall have delivered to the Administrative
Agent on the earlier of (x) the delivery of the Notice of Borrowing of an
Acquisition Loan, or (y) the date of the consummation of such proposed Permitted
Acquisition, an officer’s certificate executed by an Authorized Officer of the
General Partner, certifying to the best of such officer’s knowledge, compliance
with the requirements of preceding clauses (i) through (v), inclusive, and
containing the calculations required by the preceding clause (iii).

 

(b) At the time of each Permitted Acquisition involving the creation or
acquisition of a Subsidiary, or the acquisition of capital stock or other Equity
Interest of any Person, all capital stock or other Equity Interests thereof
created or acquired in connection with such Permitted Acquisition shall be
pledged for the benefit of the Secured Creditors pursuant to, and to the extent
required by, the Pledge Agreement in accordance with the requirements of Section
10.15.

 

(c) The Borrowers shall cause each Subsidiary which is formed to effect, or is
acquired pursuant to, a Permitted Acquisition to comply with, and to execute and
deliver, all of the documentation required by, Sections 9.11 and 10.15, to the
reasonable satisfaction of the Administrative Agent.

 

(d) The consummation of each Permitted Acquisition shall be deemed to be a
representation and warranty by each Credit Party that the certifications by a
Credit Party (or by one or more of its respective Authorized Officers on its
behalf) pursuant to Section 9.14(a), are true and correct and that all
conditions thereto have been satisfied and that same is permitted in accordance
with the terms of this Agreement, which representation and warranty shall be
deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 7 and 11.

 

9.15. Maintenance of Company Separateness. The Partnership will, and will cause
each of its Subsidiaries to, satisfy customary Company formalities, including,
as applicable, the holding of regular board of directors’ and shareholders’
meetings or action by directors or shareholders without a meeting and the
maintenance of Company offices and records. Neither the Partnership nor any of
its Subsidiaries shall take any action, or conduct its affairs in a manner,
which could reasonably be expected to result in the Company existence of the
Partnership or any of its Subsidiaries being ignored, or in the assets and
liabilities of the Partnership or any of its Subsidiaries being substantively
consolidated with those of any other such Person in a bankruptcy, reorganization
or other insolvency proceeding (it being understood and agreed that the entering
into of the Credit Documents and the Note Purchase Documents by the Partnership
and its Subsidiaries, and the performance of their respective obligations
thereunder, shall not in and of itself be taken into account for purposes of
determining compliance with the foregoing covenant).

 

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9.16. Clean Down. The Borrowers will repay all Interim Borrowings so that, for a
period of not less than thirty (30) consecutive days during each twelve (12)
month period prior to the Revolving Loan Maturity Date, the aggregate
outstanding principal balance of all Interim Borrowings will be equal to or less
than $5,000,000.

 

9.17. Performance of Obligations. the Partnership will, and will cause each of
its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, deed of trust, indenture, loan agreement or credit agreement and each
other material agreement, contract or instrument by which it is bound, except
such non-performances as (x) have not caused and (y) could not reasonably be
expected to cause, individually or in the aggregate, a Default or Event of
Default hereunder or a Material Adverse Effect.

 

9.18. Margin Regulations. No Credit Party will hold any Margin Stock. Each
Credit Party will comply with all of the requirements of Regulations T, U and X.

 

9.19. Maintenance of Trust Funds and Trust Accounts. Each Borrower shall set
aside in the appropriate Trust Account, all applicable Trust Funds at the time
such funds are received by such Borrower, and the Borrower shall establish and
maintain all of the funding obligations of each of the Trust Accounts in
accordance with applicable law.

 

9.20. Amendment to Note Purchase Document Covenants. If the Credit Parties shall
at any time after the Effective Date amend or modify any Note Purchase Document
in a manner that requires any Credit Party to make a mandatory prepayment,
comply with a covenant or add an event of default that either is not at such
time included in this Agreement or, if such mandatory prepayment, covenant or
event of default shall already be included in this Agreement, is more
restrictive upon any Credit Party than such existing mandatory prepayment,
covenant or event of default, each such mandatory prepayment, covenant and each
event of default, definition and other provision relating to such mandatory
prepayment, covenant or event of default in such Note Purchase Document (as
amended or modified from time to time thereafter) shall be automatically deemed
to be incorporated by reference in this Agreement, mutatis mutandis, as if then
set forth herein in full. Promptly after any such amendment or modification, the
Credit Parties will (i) furnish to the Administrative Agent and the Lenders a
copy of each such mandatory prepayment, covenant and each event of default,
definition and other provisions related thereto and (ii) execute and deliver to
the Administrative Agent and each Lender an instrument, in form and substance
reasonably satisfactory to the Required Lenders, modifying this Agreement by
adding or modifying, as the case may be, the full text of such mandatory
prepayment, covenant and the events of default, definitions and other related
provisions.

 

SECTION 10. Negative Covenants. Each Credit Party hereby covenants and agrees
that as of the Effective Date and thereafter for so long as this Agreement is in
effect and until the Total Commitment has terminated, no Letters of Credit or
Notes are outstanding and the Loans, together with interest, Fees and all other
Obligations (other than any indemnities described in Section 13.13(b) which are
not then due and payable) incurred hereunder, are paid in full:

 

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10.1. Changes in Business; etc. No Credit Party will engage in any business
other than the Permitted Business. Notwithstanding the foregoing:

 

(i) the General Partner will not itself: (A) engage in a Permitted Business; (B)
own any significant assets (other than (I) its general partnership Equity
Interest in the Partnership, (II) cash to be loaned, dividended, contributed
and/or otherwise promptly applied for purposes not otherwise prohibited by this
Agreement and (III) other assets used or held in connection with the performance
of activities permitted to be conducted by the General Partner); or (C) have any
liabilities (other than those liabilities for which it is responsible under this
Agreement, the Documents to which it is a party, the GP Agreement, and any other
Indebtedness permitted to be incurred by the General Partner pursuant to Section
10.4); provided however, the conduct of business restriction above shall not
prohibit (or be construed to prohibit), the General Partner or its employees
from conducting the activities contemplated to be conducted by the General
Partner under the GP Agreement and the Partnership Agreement, and other
administrative, management or ordinary course “holding company” activities
necessary or desirable in connection with the operation of the Permitted
Business through the General Partner and the Borrowers (including, without
limitation, intercompany management functions and the provision of umbrella
policies); and

 

(ii) the Partnership will not itself: (A) engage in a Permitted Business; (B)
own any significant assets (other than (I) the Equity Interests in the Operating
Company, (II) any Intercompany Loan permitted to be made by it pursuant to
Section 10.5(v), whether or not evidenced by an Intercompany Note, (III) cash to
be loaned, dividended, contributed and/or otherwise promptly applied for
purposes not otherwise prohibited by this Agreement, and (IV) other assets used
or held in connection with the performance of activities permitted to be
conducted by the Partnership); or (C) have any liabilities (other than those
liabilities for which it is responsible under this Agreement, the Partnership
Agreement, the Documents to which it is a party, any Intercompany Loan permitted
to be incurred by it pursuant to Section 10.5(v) and any other Indebtedness
permitted to be incurred by the Partnership pursuant to Section 10.4); provided
however, the conduct of business restriction contained in clause (A) above shall
not prohibit (or be construed to prohibit) the Partnership from conducting
administrative and other ordinary course “holding company” activities necessary
or desirable in connection with the operation of the Permitted Business through
the Borrowers.

 

10.2. Consolidation; Merger; Sale or Purchase of Assets; etc. Each Credit Party
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of all or any part of its property
or assets (other than Cemetery Property in the ordinary course of business), or
enter into any partnerships, joint ventures or sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person or agree to do any of the foregoing at any future time, except that the
following shall be permitted:

 

(i) the Credit Parties may, as lessee or licensee, enter into operating leases
and licenses, in the ordinary course of business with respect to real or
personal property;

 

(ii) Capital Expenditures to the extent not in violation of this Agreement;

 

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(iii) Investments permitted pursuant to Section 10.5;

 

(iv) the Credit Parties may, in the ordinary course of business, sell or
otherwise dispose of tangible assets which, in the reasonable opinion of such
Person, are obsolete, uneconomic or worn-out;

 

(v) any Credit Party may sell tangible assets, so long as (A) no Default or
Event of Default then exists or would result therefrom, (B) each such sale is in
an arm’s-length transaction and such Credit Party receives at least fair market
value (as determined in good faith by such Credit Party), (C) the total
consideration received by such Credit Party is paid at the time of the closing
of such sale in cash, and (D) the Net Sale Proceeds therefrom are applied and/or
reinvested as (and to the extent) required by Section 5.2(c);

 

(vi) any Credit Party may sell or discount, in each case without recourse and in
the ordinary course of business, overdue accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof and not as part of any financing transaction;

 

(vii) any Credit Party may grant licenses, leases or subleases to third Persons
in the ordinary course of business not interfering in any material respect with
the business of any Credit Party;

 

(viii) any Borrower may transfer assets to any other Borrower, so long as the
security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets so
transferred shall remain in full force and effect and perfected (to at least the
same extent as in effect immediately prior to such transfer);

 

(ix) any Borrower may merge with and into, may convert into or be dissolved or
liquidated into any other Borrower, so long as (A) the security interests
granted to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Security Documents in the assets of such Borrower shall remain
in full force and effect and perfected (to at least the same extent as in effect
immediately prior to such merger, conversion, dissolution or liquidation) and
(B) such merger, conversion, dissolution or liquidation does not violate the
terms of the Partnership Agreement or otherwise result in negative tax
consequences for the Partnership;

 

(x) any Credit Party may sell or exchange specific items of equipment, so long
as the purpose of each such sale or exchange is to acquire (and results within
90 days of such sale or exchange in the acquisition of) replacement items of
equipment which are the functional equivalent of the item of equipment so sold
or exchanged;

 

(xi) any Borrower shall be permitted to make Permitted Acquisitions, so long as
such Permitted Acquisitions are effected in accordance with the requirements of
Section 9.14; and

 

(xii) any Borrower shall be permitted to make sales, transfers or other
dispositions of real property made in the ordinary course of business, while no
Default or

 

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Event of Default exists, to the extent the aggregate value of such real property
disposed of in any fiscal year by all Borrowers is not in excess of $3,000,000;

 

(xiii) the General Partner may sell, transfer or dispose of Equity Interests in
the Partnership as required by the terms of the Partnership Agreement or any
employee benefit plan of a Credit Party; and

 

(xii) the Transaction shall be permitted.

 

To the extent the Required Lenders waive the provisions of this Section 10.2
with respect to the sale or other disposition of any Collateral, or any
Collateral is sold or otherwise disposed of as permitted by this Section 10.2,
such Collateral (unless transferred to a Credit Party) shall be sold or
otherwise disposed of free and clear of the Liens created by the Security
Documents and the Administrative Agent shall take such actions (including,
without limitation, directing the Collateral Agent to take such actions) as are
appropriate in connection therewith.

 

10.3. Liens. Each Credit Party will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of such Credit Party, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including any
sales of accounts receivable or notes with or without recourse to any Credit
Party) or assign any right to receive income, except for the following
(collectively, the “Permitted Liens”):

 

(i) inchoate Liens for taxes, assessments or governmental charges or levies not
yet due and payable or Liens for taxes, assessments or governmental charges or
levies being contested in good faith and by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP;

 

(ii) Liens in respect of property or assets of a Credit Party imposed by law
which were incurred in the ordinary course of business and which have not arisen
to secure Indebtedness for borrowed money, such as carriers’, warehousemen’s and
mechanics’ Liens, statutory landlord’s Liens, and other similar Liens arising in
the ordinary course of business, and which either (x) do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of such Credit Party or
(y) are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
or asset subject to such Lien;

 

(iii) Liens created by or pursuant to the Security Documents and the
Intercreditor Agreement;

 

(iv) Liens in existence on the Effective Date which are listed, and the property
subject thereto described, in Schedule IX, plus any extensions or renewals of
such Liens, provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase from that amount
outstanding at the time of any such renewal, replacement or extension and (y)
any such renewal, replacement or extension

 

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does not encumber any additional assets or properties of the Partnership or any
of its Subsidiaries;

 

(v) Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Section 11.9, provided that no cash or
other property shall be pledged by any Credit Party as security therefor;

 

(vi) Liens (other than any Lien imposed by ERISA) (x) incurred or deposits made
in the ordinary course of business of any Credit Party in connection with
workers’ compensation, unemployment insurance and other types of social
security, (y) to secure the performance by any Credit Party of tenders,
statutory obligations (other than excise taxes), surety, stay and customs bonds,
statutory 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) or (z) to secure the
performance by any Credit Party of leases of Real Property, to the extent
incurred or made in the ordinary course of business consistent with past
practices;

 

(vii) licenses, leases or subleases granted to third Persons in the ordinary
course of business not interfering in any material respect with the business of
any Credit Party;

 

(viii) Permitted Encumbrances;

 

(ix) Liens arising from or related to precautionary UCC financing statements
regarding operating leases entered into by any Credit Party;

 

(x) Liens created pursuant to Capital Leases permitted pursuant to Section
10.4(iv), provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y) the Lien
encumbering the asset giving rise to the Capitalized Lease Obligation does not
encumber any other asset of any Credit Party;

 

(xi) Liens arising pursuant to purchase money mortgages or security interests
securing Indebtedness representing the purchase price (or financing of the
purchase price within 30 days after the respective purchase) of assets acquired
after the Effective Date by any Credit Party, provided that (i) any such Liens
attach only to the assets so purchased, (ii) the Indebtedness secured by any
such Lien does not exceed the lesser of the fair market value or the purchase
price of the property being purchased at the time of the incurrence of such
Indebtedness and (iii) the Indebtedness secured thereby is permitted to be
incurred pursuant to Section 10.4(iv);

 

(xii) 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;

 

(xiii) bankers liens and rights of setoff with respect to customary depository
arrangements entered into in the ordinary course of business; and

 

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(xiv) any Lien or other restriction on the use of property (including cash)
deposited in any Trust Fund, to the extent imposed by law or by the terms of the
agreement governing such Trust Fund.

 

10.4. Indebtedness. No Credit Party will, nor will permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:

 

(i) (x) Indebtedness of the Credit Parties incurred pursuant to this Agreement
and the other Credit Documents and (y) Indebtedness of the Credit Parties
incurred pursuant to the Note Purchase Documents in an aggregate outstanding
principal amount not to exceed $80,000,000 at any time (as from time to time
reduced by principal repayments thereof);

 

(ii) Existing Indebtedness outstanding on the Effective Date and listed on
Schedule IV, without giving effect to any subsequent extension, renewal or
refinancing thereof except to the extent expressly permitted by Schedule IV;

 

(iii) Indebtedness under Swap Contracts entered into to protect the Borrowers
against fluctuations in interest rates in respect of Indebtedness otherwise
permitted under this Agreement;

 

(iv) Capitalized Lease Obligations and Indebtedness of any Credit Party
representing purchase money Indebtedness secured by Liens permitted pursuant to
Section 10.3(x) or 10.3(xi), provided that (i) all such Capitalized Lease
Obligations are permitted under this Agreement and (ii) the sum of (x) the
aggregate of such Capitalized Lease Obligations outstanding at any time plus (y)
the aggregate principal amount of such purchase money Indebtedness outstanding
at such time shall not exceed $5,000,000;

 

(v) Indebtedness of the Partnership and its Subsidiaries constituting
Intercompany Loans permitted by Section 10.5(v);

 

(vi) Indebtedness to a seller of a Borrower or assets acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed at the time of a Permitted
Acquisition of an asset securing such Indebtedness), provided that (i) such
Indebtedness is subordinated to the Obligations on terms reasonably satisfactory
to the Administrative Agent and the Required Lenders and substantially in the
form set forth on Exhibit L hereto, and (ii) at the time of such Permitted
Acquisition, such Indebtedness does not exceed 25% of the total value of the
assets of the Subsidiary so acquired, or of the assets so acquired, as the case
may be (such Indebtedness described above in this Section 10.4(vi) being “Seller
Subordinated Debt”);

 

(vii) Contingent Obligations of the Credit Parties related to each other’s
Indebtedness to the extent that such Indebtedness is otherwise permitted under
this Section 10.4;

 

(viii) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business so

 

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long as such Indebtedness is extinguished within three Business Days of the
incurrence thereof;

 

(ix) Indebtedness of the Borrowers evidenced by completion guarantees,
performance bonds and surety bonds incurred in the ordinary course of business
for purposes of insuring the performance of the Borrowers; and

 

(x) Indebtedness of the Borrowers arising from agreements of the Borrowers
providing for indemnification, adjustment of purchase price, earn out or other
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or a Subsidiary of any Borrower permitted
under this Agreement, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or Subsidiary for
the purpose of financing such acquisition, provided that the maximum assumable
liability in respect of all such Indebtedness (other than indemnification
provisions) shall at no time exceed the gross proceeds actually received by such
Borrower in connection with such disposition.

 

10.5. Advances; Investments; Loans. No Credit Party will, nor will permit any of
its Subsidiaries to, lend money or extend credit or make advances to any Person,
or purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person, or purchase or own
a futures contract or otherwise become liable for the purchase or sale of
currency or other commodities at a future date in the nature of a futures
contract (each of the foregoing an “Investment” and, collectively,
“Investments”), except:

 

(i) any Borrower may acquire and hold receivables owing to it, if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary terms of such Borrower;

 

(ii) the Borrowers may acquire and own investments (including debt obligations)
received in connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of business;

 

(iii) the Borrowers may enter into Swap Contracts in compliance with Section
10.4(iii);

 

(iv) Investments in existence on the Effective Date and listed on Schedule VI
shall be permitted, without giving effect to any additions thereto or
replacements thereof;

 

(v) (x) the Partnership may make intercompany loans and advances to the
Borrowers, (y) the Borrowers may make intercompany loans and advances to any
other Borrower and (z) the Borrowers may make intercompany loans and advances to
the Partnership for the purpose of making payments permitted pursuant to Section
10.6 and to the Partnership or the General Partner for the purpose of paying
ordinary business expenses;

 

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(vi) loans and advances by any Credit Party to officers and employees of such
Credit Party, in each case incurred in the ordinary course of business, in an
aggregate outstanding principal amount for all Credit Parties not to exceed
$500,000 at any time (determined without regard to any write-downs or write-offs
of such loans and advances) shall be permitted;

 

(vii) any Credit Party may make cash equity contributions to its Subsidiaries;

 

(viii) the Borrowers may make Permitted Acquisitions in accordance with the
relevant requirements of Section 9.14 and the component definitions therein;

 

(ix) the Credit Parties may own the Equity Interests of their respective
Subsidiaries in existence on the Effective Date or thereafter created or
acquired in accordance with the terms of this Agreement;

 

(x) the Borrowers may acquire and hold non-cash consideration issued by the
purchaser of assets in connection with a sale of such assets to the extent
permitted by Section 10.2(iv);

 

(xi) the Borrowers may invest Trust Funds in accordance with reasonable business
practices and applicable law;

 

(xii) the Borrowers may make advances to suppliers in the ordinary course for
the purpose of prepaying purchases of inventory; and

 

(xiii) the Credit Parties may maintain bank accounts and Cash Equivalents in
accordance with the terms of the Security Agreement and other Secured Debt
Agreements.

 

10.6. Limitation on Dividends and Redemptions. No Credit Party will declare or
pay any dividends on, or make any other distribution in respect of, any class of
Equity Interests, nor will any Credit Party directly or indirectly make any
capital contribution of any nature to or purchase, redeem, acquire or retire any
Equity Interests in any Credit Party (whether such interests are now or
hereafter issued, outstanding or created), or cause or permit any reduction or
retirement of any Equity Interests of any Credit Party, while any Loan or
Commitment hereunder is outstanding, provided that:

 

(a) the Partnership and the General Partner shall be permitted to make regularly
scheduled quarterly distributions to its general and limited partners or members
to the extent set forth in the Partnership Agreement and the GP Agreement,
respectively, each as in effect as of the Effective Date if, (i) at the time
such distribution is made no Default or Event of Default exists, or would exist
after giving effect to such distribution, and (ii) for the fiscal quarter most
recently ended prior to the date of such distribution and the chief financial
officer of the Partnership or General Partner, as applicable, delivers to the
Administrative Agent a certificate that the above conditions have been
satisfied; and

 

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(b) any Borrower may pay to any other Borrower or the Partnership any dividends
on, or make any other distribution in respect of, any class of its capital stock
or any partnership, limited liability company or other interest in it.

 

10.7. Transactions with Affiliates. No Credit Party will, nor will permit any of
its Subsidiaries to, enter into any transaction or series of transactions with
any Credit Party or any Affiliate of any Credit Party other than on terms and
conditions substantially as favorable to the Partnership or such Subsidiary as
would be reasonably expected to be obtainable by the Partnership or such
Subsidiary at the time in a comparable arm’s-length transaction with a Person
other than an Affiliate; provided that the following shall in any event be
permitted: (i) the Transaction; (ii) intercompany transactions among Credit
Parties to the extent expressly permitted by Sections 10.2, 10.4, 10.5, 10.6,
10.13 and 10.15 shall be permitted (including the payment of interest and
principal on intercompany Indebtedness permitted by Section 10.4); (iii) the
payment of consulting or other fees to any Credit Party in the ordinary course
of business; (iv) customary fees to non-officer directors (or equivalents) of
the General Partner; (v) the Credit Parties may perform their respective
obligations under the Employment Agreements in effect on the Effective Date,
under employee benefit plans of any Credit Party and under any other employment
arrangements with respect to the procurement of services with their respective
officers and employees, and enter into and perform their respective obligations
under renewals or replacements of such arrangements, in each case so long as
such employment arrangements or renewals and replacements thereof are entered
into in the ordinary course of business; (vi) Distributions may be paid by
Credit Parties to the extent permitted by Section 10.6; (vii) payments may be
made pursuant to any Tax Allocation Agreement; (viii) Credit Parties may enter
into transactions with employees and/or officers of the Credit Parties in the
ordinary course of business so long as any such material transaction has been
approved by the governing bodies of such Credit Parties; and (ix) the Credit
Parties may perform their respective obligations under (A) the Omnibus
Agreement, dated as of the date hereof, among certain Credit Parties and certain
of their Affiliates, and (B) the Assignment Agreement, dated as of the date
hereof, between McCown De Leeuw & Co. IV, L.P. and the Partnership. In no event
shall any management, consulting or similar fee be paid or payable by the
Partnership or any of its Subsidiaries to any Affiliate, except as specifically
provided in this Section 10.7.

 

10.8. Consolidated Interest Coverage Ratio. The Partnership will not permit the
Consolidated Interest Coverage Ratio for any Test Period to be less than 3.50 to
1.00.

 

Notwithstanding anything to the contrary contained in this Agreement, for all
determinations of the Consolidated Interest Coverage Ratio made for any Test
Period ended prior to (but not after) the first anniversary of the Effective
Date, the Consolidated Net Interest Expense used in the calculation of such
ratio shall be (a) calculated for the period from the Effective Date through the
last date of the applicable Test Period and (b) then multiplied by a fraction
with (i) a numerator of 360 and (ii) a denominator equal to the number of days
in such period. In addition, for purposes of making determinations pursuant to
Section 9.14, the Consolidated Interest Coverage Ratio shall be calculated on a
Pro Forma Basis (it being understood that this sentence shall not affect any
adjustments required pursuant to the definitions of Consolidated Net Interest
Expense or Consolidated EBITDA).

 

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10.9. Leverage Ratio. The Partnership will not permit the Leverage Ratio on the
last day of any fiscal quarter to be greater than 3.50 to 1.00.

 

Notwithstanding anything to the contrary contained in this Agreement, all
determinations of the Leverage Ratio for purposes of this Section 10.9 shall
include Consolidated EBITDA as calculated on a Pro Forma Basis to give effect to
all Permitted Acquisitions, if any, effected during the respective Test Period
for which Consolidated EBITDA is being determined.

 

10.10. Minimum EBITDA. The Partnership will not permit Consolidated EBITDA for
any Test Period to be less than $21,000,000 plus 80% of aggregate of all
Consolidated EBITDA for each Person acquired in a Permitted Acquisition, as
determined for such Person as of the date of such Permitted Acquisition.

 

10.11. Trust Funds. Except as otherwise permitted by applicable law, no Credit
Party will withdraw or otherwise remove any monies or other assets (whether
principal, interest or other earnings) from any Trust Account except for the
purpose of providing the merchandise or services which are intended to be
provided out of such Trust Account.

 

10.12. Limitation on Voluntary Payments and Modifications of Indebtedness;
Modifications of Organization Documents. No Credit Party will, nor will permit
any of its Subsidiaries to:

 

(i) amend or modify, or permit the amendment or modification of, any provision
of any Partnership Common Unit or Partnership Subordinated Unit or of any
agreement (including, without limitation, certificate of designation) relating
thereto in a manner that is inconsistent with the Partnership Agreement or that
could reasonably be expected to be adverse in any material respect to the
interests of the Lenders;

 

(ii) make (or give any notice in respect of) any voluntary or optional payment
or prepayment on or redemption, repurchase or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person, money or securities before due for the
purpose of paying when due), or any prepayment or redemption (except as
expressly required under the terms of the relevant agreement) as a result of any
asset sale, change of control or similar event of any Indebtedness pursuant to
the Note Purchase Documents or any Existing Indebtedness, or, after the
incurrence or issuance thereof, any Seller Subordinated Debt;

 

(iii) amend, modify or change, in any way adverse to the interests of the
Lenders, any Note Purchase Document; or

 

(iv) amend, modify or change in any way adverse to the interests of the Lenders
in any material respect any Existing Indebtedness, any Seller Subordinated Debt,
any Tax Allocation Agreement, any Management Agreement, the Partnership
Agreement, its certificate of incorporation, by-laws, certificate of
partnership, partnership agreement, certificate of limited liability company,
limited liability company agreement or any agreement entered into by it, with
respect to its capital stock or other Equity Interests (including any
Shareholders’ Agreement), or enter into any new Tax Allocation Agreement,
Management Agreement or agreement with respect to its capital stock or

 

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other Equity Interests which could reasonably be expected to be adverse in any
material respect to the interests of the Lenders or, in the case of any
Management Agreement, which involves the payment by any Credit Party of any
amount which could give rise to a violation of this Agreement; provided that,
the foregoing clause shall not restrict (x) the ability of Partnership or the
General Partner to amend the Partnership Agreement or the GP Agreement,
respectively, to authorize the issuance of Equity Interests otherwise permitted
to be issued pursuant to the terms of this Agreement, or (y) the ability of the
Partnership to amend its organizational documents to adopt customary takeover
defenses for a public company, such as classification of its board of directors,
requirements for notice of acquisition of shares and other similar measures.

 

10.13. Limitation on Issuance of Equity Interests. (a) No Credit Party will, nor
will permit any of its Subsidiaries to, issue (i) any Preferred Equity (or any
options, warrants or rights to purchase Preferred Equity), other than issuances
by the Partnership of Partnership Common Units and Partnership Subordinated
Units or (ii) any mandatorily redeemable common Equity Interests.

 

(b) The Borrowers shall not issue any Equity Interests (including by way of
sales of treasury stock), except (i) for transfers and replacements of then
outstanding shares of capital stock or other Equity Interests, (ii) for stock
splits, stock dividends and additional issuances which do not decrease the
percentage ownership of the Partnership or any of its Subsidiaries in any class
of the Equity Interests of such Subsidiaries, (iii) to qualify directors to the
extent required by applicable law and (iv) Subsidiaries formed after the
Effective Date pursuant to Section 10.15 may issue Equity Interests in
accordance with the requirements of Section 10.15. All Equity Interests issued
in accordance with this Section 10.13(b) shall, to the extent required by the
Pledge Agreement, be delivered to the Collateral Agent for pledge pursuant to
the Pledge Agreement.

 

10.14. Limitation on Certain Restrictions on Subsidiaries. The Partnership will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective, any
encumbrance or restriction on the ability of any such Subsidiary to (x) pay
dividends or make any other distributions on its capital stock or any other
Equity Interest or participation in its profits owned by any Borrower, or pay
any Indebtedness owed to any Borrower, (y) make loans or advances to any
Borrower or (z) transfer any of its properties or assets to any Borrower, except
for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement, the other Credit Documents, and the Note
Purchase Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of any Borrower, (iv)
customary provisions restricting assignment of any contract entered into by any
Borrower in the ordinary course of business, and (vi) the Partnership Agreement
as in effect on the Effective Date.

 

10.15. Limitation on the Creation of Subsidiaries and Joint Ventures. (a)
Notwithstanding anything to the contrary contained in this Agreement, the
Partnership will not, and will not permit any of its Subsidiaries to, establish,
create or acquire after the Effective Date any Subsidiary; provided that the
Borrowers shall be permitted to establish, create and, to the extent permitted
by Section 9.14, acquire wholly-owned Subsidiaries so long as, in each case, (i)
at least 30 days prior written notice thereof is given to the Administrative
Agent (or such lesser

 

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prior written notice as may be agreed to by the Administrative Agent in any
given case), (ii) the Equity Interests of such new Subsidiary are promptly
pledged pursuant to, and to the extent required by, this Agreement and the
Pledge Agreement and the certificates, if any, representing such Equity
Interests, together with appropriate transfer powers duly executed in blank, are
delivered to the Collateral Agent, (iii) such new Subsidiary promptly executes a
counterpart hereto and of the Pledge Agreement and the Security Agreement, and
(iv) to the extent requested by the Administrative Agent or the Required
Lenders, takes all actions required pursuant to Section 9.11. In addition, each
new Subsidiary that is required to execute any Credit Document shall execute and
deliver, or cause to be executed and delivered, all other relevant documentation
of the type described in Section 6 as such new Subsidiary would have had to
deliver if such new Subsidiary were a Credit Party on the Effective Date.

 

(b) the Partnership will not, and will not permit any of its Subsidiaries to,
enter into any partnerships or joint ventures.

 

10.16. Limitation on Fees for Intellectual Property, etc. No Credit Party nor
any Affiliate of any Credit Party will charge the Administrative Agent, the
Collateral Agent or any Lender a fee to use any patent, trademark, permit,
service mark, trade name, technology copyright, license, franchise or formula,
or other rights with respect to the foregoing, which any Credit Party or any
Affiliate may own or have a right to use.

 

SECTION 11. Events of Default. Upon the occurrence of any of the following
specified events (each, an “Event of Default”):

 

11.1. Payments. The Borrowers shall (i) default in the payment when due of any
principal of the Loans (including, without limitation, any mandatory prepayment
required pursuant to Section 5.2 and any payment of Revolving Loans necessary to
comply with Section 9.16) or (ii) default, and such default shall continue for
three or more Business Days, in the payment when due of any Unpaid Drawing, any
interest on the Loans or any Fees or any other amounts owing hereunder or under
any other Credit Document; or

 

11.2. Representations, etc. Any representation, warranty or statement made by
any Credit Party herein or in any other Credit Document or in any statement or
certificate delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or

 

11.3. Covenants. Any Credit Party shall (a) default in the due performance or
observance by it of any term, covenant or agreement contained in Section 9.1,
Sections 9.12 through 9.19 or Section 10, or (b) default in the due performance
or observance by it of any term, covenant or agreement (other than those
referred to in Section 11.1, 11.2 or clause (a) of this Section 11.3) contained
in this Agreement and such default shall continue unremedied for a period of at
least 30 days after notice to the defaulting party by the Administrative Agent
or the Required Lenders; or

 

11.4. Default Under Other Agreements. (a) any Credit Party shall (i) default in
any payment with respect to any Indebtedness (other than the Obligations) beyond
the period of grace, if any, provided in the instrument or agreement under which
Indebtedness was created or

 

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(ii) default in the observance or performance of any agreement or condition
relating to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required), any such Indebtedness to become due prior to
its stated maturity (it being understood that a default or other event or
condition described above in this clause (ii) shall cease to constitute an Event
of Default if and when same has been cured or otherwise ceases to exist, in each
case prior to the taking of any action by the Administrative Agent or the
Required Lenders pursuant to the last paragraph of this Section 11); or (b) any
Indebtedness (other than the Obligations) of any Credit Party shall be declared
to be due and payable, or shall be required to be prepaid other than by a
regularly scheduled required prepayment or as a mandatory prepayment (unless
such required prepayment or mandatory prepayment results from a default
thereunder or an event of the type that constitutes an Event of Default), prior
to the stated maturity thereof; provided that it shall not constitute an Event
of Default pursuant to clause (a) or (b) of this Section 11.4 unless the
principal amount of any one issue of such Indebtedness, or the aggregate amount
of all such Indebtedness referred to in clauses (a) and (b) above, exceeds
$500,000 at any one time; or

 

11.5. Bankruptcy, etc. Any Credit Party shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled
“Bankruptcy,” as now or hereafter in effect, or any successor thereto (the
“Bankruptcy Code”); or an involuntary case is commenced against the Partnership
or any of its Subsidiaries and the petition is not controverted within 20 days,
or is not dismissed within 90 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of the Partnership or any of its
Subsidiaries; or the Partnership or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Partnership or
any of its Subsidiaries; or there is commenced against the Partnership or any of
its Subsidiaries any such proceeding which remains undismissed for a period of
90 days; or the Partnership or any of its Subsidiaries is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Partnership or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 90 days; or the
Partnership or any of its Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate action is taken by the Partnership or any
of its Subsidiaries for the purpose of effecting any of the foregoing; or

 

11.6. ERISA. (a) Any Plan shall fail to satisfy the minimum funding standard
required for any plan year or part thereof under Section 412 of the Code or
Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is

 

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subject to Title IV of ERISA shall have had or could reasonably be expected to
have a trustee appointed to administer such Plan, any Plan or, to the knowledge
of the Partnership or the Borrowers, Multiemployer Plan which is subject to
Title IV of ERISA is, shall have been or could reasonably be expected to be
terminated or to be the subject of termination proceedings under ERISA, any Plan
shall have an Unfunded Current Liability, a contribution required to be made
with respect to a Plan or Multiemployer Plan has not been timely made, the
Partnership or any Subsidiary of the Partnership or any ERISA Affiliate has
incurred or could reasonably be expected to incur any liability to or on account
of a Plan or Multiemployer Plan under Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code and/or the Health Insurance Portability and Accountability Act of 1996, as
amended, or the Partnership or any Subsidiary of the Partnership has incurred or
could reasonably be expected to incur liabilities pursuant to one or more
employee welfare benefit plans (as defined in Section 3(1) of ERISA) that
provide benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or Plans, a “default” within the meaning of
Section 4219(c)(5) of ERISA, shall occur with respect to any Plan or
Multiemployer Plan, any applicable law, rule or regulation is adopted, changed
or interpreted, or the interpretation or administration thereof is changed, in
each case after the date hereof, by any governmental authority or agency or by
any court (a “Change in Law”), or, as a result of a Change in Law, an event
occurs following a Change in Law, with respect to or otherwise affecting any
Plan or Multiemployer Plan; (b) there shall result from any such event or events
described above in this Section 11.6 the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a liability
resulting from any event described in clause (a) above; and (c) such lien,
security interest or liability, individually and/or in the aggregate, in the
reasonable opinion of the Required Lenders, (x) has had or (y) could reasonably
be expected to have, a Material Adverse Effect; or

 

11.7. Security Documents. (a) Any Security Document shall cease to be in full
force and effect, or shall cease to give the Collateral Agent for the benefit of
the Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby, in favor of the Collateral Agent, superior to and prior to the
rights of all third Persons (except as permitted by Section 10.3), and subject
to no other Liens (except as permitted by Section 10.3), or (b) any Credit Party
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any such Security
Document and such default shall continue beyond any cure or grace period
specifically applicable thereto pursuant to the terms of any such Security
Document; or

 

11.8. Guaranty. The Credit Party Guaranty or any provision thereof shall cease
to be in full force and effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor’s obligations
under the Credit Party Guaranty or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Credit Party Guaranty; or

 

11.9. Judgments. One or more judgments or decrees shall be entered against any
Credit Party involving a liability (to the extent not paid or covered by
insurance (with any portion of any judgment or decree not so covered to be
included in any determination

 

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hereunder)) in excess of $500,000 for all such judgments and decrees and all
such judgments or decrees shall not have been vacated, discharged or stayed or
bonded pending appeal within 60 days from the entry thereof; or

 

11.10. Ownership. There occurs any Change of Control; or

 

11.11. Intercreditor Agreement. The Intercreditor Agreement or any provision
thereof shall cease to be in full force and effect;

 

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Lenders, by written notice to the Borrowers, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against any Credit
Party, except as otherwise specifically provided for in this Agreement (provided
that if an Event of Default specified in Section 11.5 shall occur, the result
which would occur upon the giving of written notice by the Administrative Agent
as specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitment terminated,
whereupon the Commitment of each Lender shall forthwith terminate immediately
and any Unused Commitment Fees shall forthwith become due and payable without
any other notice of any kind; (ii) declare the principal of and any accrued
interest in respect of all Loans and all Obligations owing hereunder (including
Unpaid Drawings) to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrowers; (iii) enforce, as Collateral Agent (or
direct the Collateral Agent to enforce), any or all of the Liens and security
interests created pursuant to the Security Documents; (iv) terminate any Letter
of Credit which may be terminated in accordance with its terms; (v) direct the
Borrowers to pay (and the Borrowers hereby agree upon receipt of such notice, or
upon the occurrence of any Event of Default specified in Section 11.5, to pay)
to the Collateral Agent at the Payment Office such additional amounts of cash,
to be held as security for the Borrowers’ reimbursement obligations in respect
of Letters of Credit then outstanding, equal to the aggregate Stated Amount of
all Letters of Credit then outstanding; and (vi) apply any cash collateral as
provided in Section 5.2.

 

SECTION 12. The Agents. (a) Each Lender hereby irrevocably appoints, designates
and authorizes Fleet as Administrative Agent and as Collateral Agent for such
Lender (for purposes of this Section 12, the term “Agents” means Fleet in its
capacity as Administrative Agent hereunder and in its capacity as Collateral
Agent hereunder and pursuant to the Security Documents), to act on its behalf
under the provisions of this Agreement and each other Credit Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Credit Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere herein or in any other Credit Document, no
Agent shall have any duties or responsibilities, except those expressly set
forth herein, nor shall any Agent have or be deemed to have any fiduciary
relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Credit Document or otherwise exist against the
Agents. Without limiting the generality of the foregoing sentence, the use of
the term “agent” herein and in the other Credit

 

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Documents with reference to the Agents is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

 

(b) The Letter of Credit Issuer shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith,
and the Letter of Credit Issuer shall have all of the benefits and immunities
(i) provided to the Administrative Agent in this Section 12 with respect to any
acts taken or omissions suffered by the Letter of Credit Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
applications and agreements for letters of credit pertaining to such Letters of
Credit as fully as if the term “Agent” as used in this Section 12 and in the
definition of “Agent-Related Person” included the Letter of Credit Issuer with
respect to such acts or omissions, and (ii) as additionally provided herein with
respect to the Letter of Credit Issuer.

 

12.1. Delegation of Duties. Each Agent may execute any of its duties under this
Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact, including such sub-agents as shall be deemed necessary by
such Agent, and shall be entitled to advice of counsel and other consultants or
experts concerning all matters pertaining to such duties. No Agent shall be
responsible for the negligence or misconduct of any agent, sub-agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct. Any such agent, sub-agent or other Person retained or employed
pursuant to this Section 12.2 shall have all the benefits and immunities
provided to any Agent in this Section 12 with respect to any acts taken or
omissions suffered by such Person in connection herewith or therewith, as fully
as if the term “Agent” as used in this Section 12 and in the definition of
“Agent-Related Person” included such additional Persons with respect to such
acts or omissions.

 

12.2. Liability of Agents. No Agent-Related Person shall (a) be liable for any
action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Credit Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct in connection
with its duties expressly set forth herein), or (b) be responsible in any manner
to any Lender or participant for any recital, statement, representation or
warranty made by any Credit Party or any officer thereof, contained herein or in
any other Credit Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by any Agent under or in
connection with, this Agreement or any other Credit Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Credit Document, or for any failure of any Credit Party or any other
party to any Credit Document to perform its obligations hereunder or thereunder.
No Agent-Related Person shall be under any obligation to any Lender or
participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Credit Document, or to inspect the properties, books or records of any
Credit Party or any Affiliate thereof.

 

12.3. Reliance by Administrative Agent. (a) Each Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, communication,
signature, resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to

 

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be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to any Credit Party), independent accountants and other experts selected
by such Agent. Each Agent shall be fully justified in failing or refusing to
take any action under any Credit Document unless such Agent shall first receive
such advice or concurrence of the Required Lenders as such Agent deems
appropriate and, if such Agent so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Credit Document in accordance
with a request or consent of the Required Lenders (or such greater number of
Lenders as may be expressly required hereby in any instance) and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders.

 

(b) For purposes of determining compliance with the conditions specified in
Sections 6, 7 and 9.14, the Administrative Agent and each Lender shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to the Administrative Agent and/or a Lender unless
the Administrative Agent shall have received notice from an objecting Agent or
Lender prior to the Effective Date or other relevant date of determination, as
the case may be, specifying its objection thereto. Without limiting the
foregoing, it is understood and agreed that each Lender has the right to request
from the Administrative Agent a copy of any item required to be delivered
pursuant to Sections 6, 7 or 9.14 which is required to be satisfactory in form,
scope and substance to the Administrative Agent.

 

12.4. 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, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Administrative Agent for the account of the Lenders, unless
the Administrative Agent shall have received written notice from a Lender or the
Borrowers referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default.” The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
Section 11; provided, however, that unless and until the Administrative Agent
has received any such direction, 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 or in the best
interest of the Lenders.

 

12.5. Credit Decision; Disclosure of Information by the Agents. Each Lender
acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any
Credit Party or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to each Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has

 

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deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Credit Parties, and all applicable bank or other
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrowers.
Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Credit Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Credit Parties. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by an Agent herein, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of any of the Credit Parties or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.

 

12.6. Indemnification. Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand each Agent-Related Person
(to the extent not reimbursed by or on behalf of any Credit Party and without
limiting the obligation of any Credit Party to do so), pro rata, and hold
harmless each Agent-Related Person from and against any and all Indemnified
Liabilities incurred by it; provided, however, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person’s own gross negligence or willful misconduct, provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section 12.7. Without limitation of the foregoing, each Lender shall reimburse
each Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including legal fees) incurred by such Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Credit Document, or any document contemplated by or referred to
herein, to the extent that such Agent is not reimbursed for such expenses by or
on behalf of the Borrowers. The undertaking in this Section 12.7 shall survive
termination of the Total Commitment, the payment of all other Obligations and
the resignation of the Agents.

 

12.7. Agents in their Individual Capacities. Each Agent and its Affiliates may
make loans to, enter into Swap Contracts with, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Credit Parties and their respective Affiliates as
though such Agent were not an Agent, the Swingline Lender (if applicable) or the
Letter of Credit Issuer (if applicable) hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, any Agent or its Affiliates may receive information regarding any
Credit Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Credit Party or such Affiliate) and
acknowledge that no Agent shall be under any obligation to provide such
information to them. With respect to its Loans and all Obligators owing it, any
Agent shall have

 

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the same rights and powers under this Agreement as any other Lender and may
exercise such rights and powers as though it were not an Agent, the Swingline
Lender (if applicable) or a Letter of Credit Issuer (if applicable), and the
terms “Lender” and “Lenders” include any Agent in its individual capacity.

 

12.8. Successor Agents. The Administrative Agent may resign as Administrative
Agent upon 30 days’ notice to the Lenders; provided that any such resignation by
Fleet shall also constitute its resignation as Letter of Credit Issuer and
Swingline Lender. If the Administrative Agent resigns under this Agreement, the
Required Lenders shall appoint from among the Lenders a successor administrative
agent for the Lenders, which successor administrative agent shall be consented
to by the Borrowers at all times other than during the existence of an Event of
Default (which consent of the Borrowers shall not be unreasonably withheld or
delayed). If no successor administrative agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrowers, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, the
Person acting as such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent, Letter of Credit
Issuer and Swingline Lender and the respective terms “Administrative Agent,”
“Letter of Credit Issuer” and “Swingline Lender” means such successor
administrative agent, Letter of Credit issuer and Swingline lender, and the
retiring Administrative Agent’s appointment, powers and duties as Administrative
Agent shall be terminated and the retiring Letter of Credit Issuer’s and
Swingline Lender’s rights, powers and duties as such shall be terminated,
without any other or further act or deed on the part of such retiring Letter of
Credit Issuer or Swingline Lender or any other Lender, other than the obligation
of the successor Letter of Credit Issuer to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or to make other arrangements satisfactory to the retiring Letter of
Credit Issuer to effectively assume the obligations of the retiring Letter of
Credit Issuer with respect to such Letters of Credit. After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Section 12 and Sections 13.4 and 13.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.

 

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

 

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, Letter of Credit Outstandings and all
other Obligations

 

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that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Agents under Sections 4.1 and 13.4) allowed in such judicial proceeding; and

 

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

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 4.1 and 13.4.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

12.10. Collateral and Guaranty Matters. The Lenders irrevocably authorize of the
Administrative Agent (including in its capacity as Collateral Agent), at its
option and in its discretion:

 

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Security Document (i) upon termination of the Total Commitment
and payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit, (ii)
that is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Credit Document (other than a sale to the
Partnership or any of its Subsidiaries), or (iii) subject to Section 13.1, if
approved, authorized or ratified in writing by the Required Lenders;

 

(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Security Document to the holder of any Lien on
such property that is permitted by Sections 10.3(x), (xi) and (xii); and

 

(c) to release any Subsidiary of the Operating Company from its obligations
under the Credit Party Guaranty if such Person ceases to be a Subsidiary of the
Operating Company as a result of a transaction permitted hereunder.

 

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 property, or to release
any Subsidiary of the Partnership from its obligations under the Credit Party
Guaranty pursuant to this Section 12.11.

 

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12.11. Other Agents; Arrangers and Managers. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as an
arranger or book manager shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or 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.

 

SECTION 13. Miscellaneous Amendment or Waiver.

 

(a) Neither this Agreement nor any other Credit Document nor any terms hereof or
thereof may be changed, waived, discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by the respective Credit
Parties party thereto and the Required Lenders, provided that no such change,
waiver, discharge or termination shall, without the consent of each Lender (with
Obligations being directly affected thereby in the case of the following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note or extend the
stated maturity of any Letter of Credit beyond the Revolving Loan Maturity Date,
or reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement shall not constitute
a reduction in any rate of interest or fees for purposes of this clause (i),
notwithstanding the fact that such amendment or modification actually results in
such a reduction, provided that such amendment or modification was not made
primarily for the purpose of reducing the interest rate or Fees hereunder), (ii)
release all or substantially all of the Collateral (except as expressly provided
herein and in the Security Documents) under all the Security Documents, (iii)
amend, modify or waive any provision of this Section 13.1 (except for technical
amendments with respect to additional extensions of credit pursuant to this
Agreement which afford the protections to such additional extensions of credit
of the type provided to the Acquisition Loans and the Revolving Loan Commitments
on the Effective Date) or otherwise amend the definition of Required Lenders,
(iv) reduce the percentage specified in the definition of Required Lenders (it
being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Required Lenders on substantially the same basis as the
extensions of Acquisition Loans, and Revolving Loan Commitments are included on
the Effective Date), (v) consent to the assignment or transfer by any Credit
Party of any of their rights and obligations under this Agreement or (vi) amend
or modify Section 13.19(a); provided further, that no such change, waiver,
discharge or termination shall (A) be effective without the written
acknowledgment (though not consent) of the Administrative Agent (such
acknowledgment not to be unreasonably withheld or delayed), (B) increase the
Commitments of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Commitment shall not constitute an increase of the
Commitment of any Lender, and that an increase in the available portion of any
Commitment of any Lender shall not constitute an increase in the Commitment of
such Lender), (C) without the consent of each Letter of Credit Issuer, amend,
modify or waive any provision of Section 3 or alter its rights or obligations
with respect to Letters of Credit, (D) without the consent of the Swingline
Lender, alter its rights or obligations with respect to Swingline Loans, (E)
without the consent of the respective Agent

 

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affected thereby, amend, modify or waive any provision of Section 12 as same
applies to such Agent or any other provision as same relates to the rights or
obligations of such Agent, (F) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations of
the Collateral Agent, or (G) without the consent of the Acquisition Lenders,
reduce the amount of or extend the date of any Scheduled Repayment.

 

(b) If, in connection with any proposed change, waiver, discharge or termination
of or to any of the provisions of this Agreement as contemplated by clauses (i)
through (v), inclusive, of the first proviso to Section 13.1(a), the consent of
the Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then the Borrowers shall have
the right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clause (A) or (B) below, to either
(A) replace each such non-consenting Lender or Lenders (or, at the option of the
Borrowers if the respective Lender’s consent is required with respect to less
than all Tranches of Loans (or related Commitments), to replace only the
Commitments and/or Loans of the respective non-consenting Lender which gave rise
to the need to obtain such Lender’s individual consent) with one or more
Replacement Lenders pursuant to Section 2.13 so long as at the time of such
replacement, each such Replacement Lender consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Lender’s
Commitments (if such Lender’s consent is required as a result of its
Commitments) and/or repay each Tranche of outstanding Loans of such Lender which
gave rise to the need to obtain such Lender’s consent and/or cash collateralize
its applicable RL Percentage of the Letter of Credit of Outstandings, in
accordance with Sections 4.2(b) and/or 5.1(vi), provided that, unless the
Commitments which are terminated and Loans which are repaid pursuant to
preceding clause (B) are immediately replaced in full at such time through the
addition of new Lenders or the increase of the Commitments and/or outstanding
Loans of existing Lenders (who in each case must specifically consent thereto),
then in the case of any action pursuant to preceding clause (B), the Required
Lenders (determined after giving effect to the proposed action) shall
specifically consent thereto, provided further, that the Borrowers shall not
have the right to replace a Lender, terminate its Commitment or repay its Loans
solely as a result of the exercise of such Lender’s rights (and the withholding
of any required consent by such Lender) pursuant to the second proviso to
Section 13.1(a).

 

13.2. Notices and Other Communications; Facsimile Copies. (a) General. Unless
otherwise expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including by facsimile
transmission). All such written notices shall be mailed certified or registered
mail, faxed or delivered to the applicable address, facsimile number or (subject
to subsection (b) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on the
signature page or Schedule II hereto, or to such other address, facsimile
number, electronic mail address or telephone number as shall be designated by
such party in a notice to the other parties hereto, provided however that, all
notices to any Credit Parties shall be delivered to the Operating Company.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business

 

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hours for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient). Notices delivered through
electronic communications to the extent provided in subsection (b) below, shall
be effective as provided in such subsection (b).

 

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Section 2, 3 or 4 if such Lender has notified the
Administrative Agent that it is incapable of receiving notices under such
Sections by electronic communication. The Administrative Agent or any Credit
Party may, in their discretion, agree to accept notices and other communications
to it hereunder by electronic communications pursuant to procedures approved by
it, provided that approval of such procedures may be limited to particular
notices or communications.

 

(c) Effectiveness of Facsimile Documents and Signatures. Credit Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents
and signatures shall, subject to applicable law, have the same force and effect
as manually-signed originals and shall be binding on all Credit Parties, the
Administrative Agent, the Collateral Agent, and the Lenders. The Administrative
Agent may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

 

(d) Reliance by Administrative Agent and Lenders. The Administrative Agent, the
Collateral Agent and the Lenders shall each be entitled to rely and act upon any
notices (including telephonic Notices of Borrowing) believed by it in good faith
to have been given by or on behalf of any Credit Party even if (i) such notices
were not made in a manner specified herein, were incomplete or were not preceded
or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
The Credit Parties shall indemnify each Agent-Related Person and each Lender
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice believed by the respective such Person in good faith
to have been given by or on behalf of the Borrowers or any other Credit Party.
All telephonic notices to and other communications with the Administrative Agent
may be recorded by the Administrative Agent or any other party, and each of the
parties hereto hereby consents to such recording.

 

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

 

13.4. Attorney Costs, Expenses and Taxes. The Borrowers agree (a) to pay or
reimburse the Administrative Agent and the Collateral Agent for all reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation, negotiation and

 

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execution of this Agreement and the other Credit Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all legal fees, and (b) to pay or
reimburse the Administrative Agent, the Collateral Agent and the Lenders for all
reasonable out-of-pocket costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or the other Credit Documents (including all such costs and
expenses incurred during any “workout” or restructuring in respect of the
Obligations and during any legal proceeding, including any proceeding under any
Debtor Relief Law), including all legal fees. The foregoing costs and expenses
shall include all search, filing, recording, title insurance and appraisal
charges and fees and taxes related thereto, and other out-of-pocket expenses
incurred by any Agent or the Collateral Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent and
the Collateral Agent. All amounts due under this Section 13.4 shall be payable
within ten Business Days after demand therefor. The agreements in this Section
shall survive the termination of the Total Commitments and repayment of all
other Obligations.

 

13.5. Indemnification by the Borrowers. Whether or not the transactions
contemplated hereby are consummated, the Borrowers shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the “Indemnitees”) from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, and reasonable out-of-pocket costs, expenses and disbursements (including
legal fees) of any kind or nature whatsoever which may at any time be imposed
on, incurred by or asserted against any such Indemnitee in any way relating to
or arising out of or in connection with (a) the execution, delivery,
enforcement, performance or administration of any Credit Document or any other
agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the consummation of the transactions contemplated
thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use
of the proceeds therefrom (including any refusal by the Letter of Credit Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), or (c) any actual or alleged presence Release, or
threat of Release of Hazardous Materials on or from any property formerly,
currently, or hereafter owned or operated by the Partnership or any of its
Subsidiaries or any Environmental Claim related in any way to the Partnership or
any of its Subsidiaries, or (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation, litigation or
proceeding) and regardless of whether any Indemnitee is a party thereto (all the
foregoing, collectively, the “Indemnified Liabilities”), in all cases, whether
or not caused by or arising, in whole or in part, out of the negligence of the
Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements 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. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other

 

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similar information transmission systems in connection with this Agreement, nor
shall any Indemnitee have any liability for any indirect or consequential
damages relating to this Agreement or any other Credit Document or arising out
of its activities in connection herewith or therewith (whether before or after
the Effective Date). All amounts due under this Section 13.5 shall be payable
within ten Business Days after demand therefor. The agreements in this Section
shall survive the resignation of the Administrative Agent, the replacement of
any Lender, the termination of the total Commitment and the repayment,
satisfaction or discharge of all the other Obligations.

 

13.6. Payments Set Aside. To the extent that any payment by or on behalf of the
Borrowers is made to any Agent, the Collateral Agent or any Lender, or any
Agent, the Collateral Agent or any Lender exercises its right of set-off, and
such payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by such Agent, the Collateral
Agent or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief Law
or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the applicable
Federal Funds Rate from time to time in effect, in the applicable currency of
such recovery or payment.

 

13.7. Successors and Assigns. (a) 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 no Credit Party may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection (d)
of this Section, or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection (d)
of this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

(b) Any Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in Letters of Credit and in Swingline Loans) at
the time owing to it); provided that (i) except in the case of an assignment of
the entire remaining amount of the assigning Lender’s Commitment and the Loans
at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund (as defined in subsection (g) of this
Section) with respect to a Lender, the aggregate amount of the Commitment and/or
(without duplication) Loans subject to

 

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each such assignment, determined as of the date the Assignment and Assumption
Agreement with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption
Agreement, as of the Trade Date, shall not be less than (x) $2,000,000, in the
case of an assignment of Revolving Loan Commitments (and related Obligations)
and (y) $2,000,000, in the case of an assignment of Acquisition Loans, unless
each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrowers otherwise consent (each such consent
not to be unreasonably withheld or delayed); (ii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender’s
rights and obligations under this Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not apply to rights in
respect of Swingline Loans; (iii) any assignment of a Revolving Loan Commitment
must be approved by each of the Administrative Agent, each Letter of Credit
Issuer and the Swingline Lender unless the Person that is the proposed assignee
is itself a Lender (whether or not the proposed assignee would otherwise qualify
as an Eligible Assignee); and (iv) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption Agreement,
together with a processing and recordation fee of $3,500. Subject to acceptance
and recording thereof by the Administrative Agent pursuant to subsection (c) of
this Section, from and after the effective date specified in each Assignment and
Assumption Agreement, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption Agreement, 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 Agreement, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Assumption Agreement 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 2.10, 2.11, 3.5,
5.4, 13.4 and 13.5 with respect to facts and circumstances occurring prior to
the effective date of such assignment). Upon request, the Borrowers (at their
expense) shall execute and deliver a Note to the assignee Lender. Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section.

 

(c) The Administrative Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at the Notice Office a copy of each Assignment and
Assumption Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and Letter of Credit Outstandings 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 Borrowers, the Administrative Agent,
the Collateral 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 Borrowers at any reasonable
time and from time to time upon reasonable prior notice. In addition, at any
time that a request for a consent for a material or other substantive change to
the Credit Documents is pending, any Lender wishing to consult with other
Lenders in connection therewith may request and receive from the Administrative
Agent a copy of the Register.

 

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(d) Any Lender may at any time, without the consent of, or notice to, the
Borrowers or the Administrative Agent, sell participations to any Person (other
than a natural person or the Partnership’ Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
Loans (including such Lender’s participations in Letters of Credit Outstandings
and/or Swingline 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 Borrowers, the Administrative Agent, the
Collateral Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this 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, except to the extent
such amendment, modification or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Loan Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant’s participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment or of a
mandatory repayment of Loans shall not constitute a change in the terms of such
participation, that an increase in any Commitment or Loan shall be permitted
without the consent of any participant if the participant’s participation is not
increased as a result thereof and that any amendment or modification to the
financial definitions in this Agreement shall not constitute a reduction in any
rate of interest or fees for purposes of this clause (i)), (ii) consent to the
assignment or transfer by the Partnership or the Borrowers of any of their
rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Security Documents) supporting the Loans hereunder
in which such participant is participating. Subject to subsection (e) of this
Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 2.10, 2.11, 3.5 and 5.4 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 13.9 as though it were a Lender, provided
such Participant agrees to be subject to Section 13.19(b) as though it were a
Lender.

 

(e) A Participant shall not be entitled to receive any greater payment under
Sections 2.10, 2.11, 3.5 and 5.4 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
Borrowers’ prior written consent. A Participant that would be a non-U.S. Lender
for purposes of Section 5.4 if it were a Lender shall not be entitled to the
benefits of Section 5.4 unless the Borrowers are notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrowers, to comply with Section 5.4 as though it were a Lender.

 

(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement (including under its Note(s), if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal

 

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Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(g) As used herein, the following terms have the following meanings:

 

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

 

“Fund” means 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.

 

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

 

(h) Notwithstanding anything to the contrary contained herein, if at any time
Fleet assigns all of its Commitment and Loans pursuant to subsection (b) above,
Fleet may, (i) upon 30 days’ notice to the Borrowers and the Lenders, resign as
Letter of Credit Issuer and/or (ii) upon 30 days’ notice to the Borrowers,
resign as Swingline Lender. In the event of any such resignation as Letter of
Credit Issuer or Swingline Lender, the Borrowers shall be entitled to appoint
from among the Lenders a successor Letter of Credit Issuer or Swingline Lender
hereunder; provided, however, that no failure by the Borrowers to appoint any
such successor shall affect the resignation of Fleet as Letter of Credit Issuer
or Swingline Lender, as the case may be. If Fleet resigns as Letter of Credit
Issuer, it shall retain all the rights and obligations of the Letter of Credit
Issuer hereunder with respect to all Letters of Credit Outstandings as of the
effective date of its resignation as Letter of Credit Issuer and all Letter of
Credit Outstandings with respect thereto (including the right to require the
Lenders to fund risk participations in Unpaid Drawings pursuant to Section
3.3(c)). If Fleet resigns as Swingline Lender, it shall retain all the rights of
the Swingline Lender provided for hereunder with respect to Swingline Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Mandatory Borrowings pursuant to
Section 2.1(d).

 

(i) Notwithstanding anything to the contrary contained in Section 13.7(b) above,
at any time after the termination of the Total Revolving Loan Commitment, if any
Revolving Loans or Letters of Credit remain outstanding, assignments may be made
as provided above in said Section, except that the respective assignment shall
be of a portion of the outstanding Revolving Loans of the respective RL Lender
and its participation in Letters of Credit and its obligation to make Mandatory
Borrowings, although any such assignment effected after the termination of the
Total Revolving Loan Commitment shall not release the assigning RL Lender from
its obligations as an L/C Participant with respect to outstanding Letters of
Credit or to fund its share of any Mandatory Borrowing (although the respective
assignee may

 

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agree, as between itself and the respective assigning RL Lender, that it shall
be responsible for such amounts).

 

(j) At the time of each assignment pursuant to Section 13.7(b) to a Person which
is not already a Lender hereunder and which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall provide to the Borrowers and the
Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable a Section 5.4(b)(ii) Certificate) described in Section 5.4(b). To the
extent that an assignment of all or any portion of a Lender’s Commitment and
outstanding Obligations pursuant to Section 2.13 or Section 13.7(b) would, due
to circumstances existing at the time of such assignment, result in increased
costs under Section 2.10, 2.11, 3.5 and 5.4 from those being charged by the
respective assigning Lender prior to such assignment, then the Borrowers shall
not be obligated to pay such increased costs (although the Borrowers shall be
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective assignment).

 

13.8. Confidentiality. Each of the Administrative Agent and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Credit Document or any action or proceeding
relating to this Agreement or any other Credit Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrowers and their obligations, (g) with the consent of the Borrowers or
(h) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this Section or (y) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrowers or (i) to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty’s professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty agrees to be bound by the provisions of this
Section 13.8). For purposes of this Section, “Information” means all information
received from the Partnership or any of its Subsidiaries or any of their
respective businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Partnership or any of its Subsidiaries; provided that, in the
case of information received from the Partnership or any Subsidiary after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care

 

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to maintain the confidentiality of such Information as such Person would accord
to its own confidential information.

 

Notwithstanding anything herein to the contrary, “Information” shall not
include, and the Credit Parties, each Agent, each Lender and the respective
Affiliates of each of the foregoing (and the respective partners, directors,
officers, employees, agents, advisors and other representatives of each of the
foregoing and their Affiliates) may disclose to any and all Persons, without
limitation of any kind (a) any information with respect to the U.S. federal and
state income tax treatment of the transactions contemplated hereby and any facts
that may be relevant to understanding such tax treatment, which facts shall not
include for this purpose the names of the parties or any other Person named
herein, or information that would permit identification of the parties or such
other Persons, or any pricing terms or other nonpublic business or financial
information that is unrelated to such tax treatment or facts, and (b) all
materials of any kind (including opinions or other tax analyses) relating to
such tax treatment or facts that are provided to any of the Persons referred to
above.

 

13.9. Set-off. In addition to any rights and remedies of the Lenders provided by
law, upon the occurrence and during the continuance of any Event of Default,
after obtaining the prior written consent of the Administrative Agent, each
Lender (acting in any capacity hereunder) is authorized at any time and from
time to time, without prior notice to the Borrowers or any other Credit Party,
any such notice being waived by the Borrowers (on their own behalf and on behalf
of each Credit Party) to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time owing by, such
Lender to or for the credit or the account of the respective Credit Parties
against any and all Obligations owing to such Lender hereunder or under any
other Credit Document, now or hereafter existing, irrespective of whether or not
the Administrative Agent or such Lender shall have made demand under this
Agreement or any other Credit Document and although such Obligations may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or indebtedness. Each Lender agrees promptly to notify the
Borrowers and the Administrative Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.

 

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

 

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13.11. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

13.12. Integration. This Agreement, together with the other Credit Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Credit Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Credit
Document shall not be deemed a conflict with this Agreement. Each Credit
Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.

 

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

 

(b) All indemnities set forth herein including, without limitation, in Sections
2.10, 2.11, 3.5, 5.4, 12.7, 13.4 and 13.5, shall, subject to the provisions of
Section 13.18 (to the extent applicable), survive the execution and delivery of
this Agreement and the making and repayment of the Loans.

 

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

 

13.15. Governing Law. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE COMMONWEALTH; PROVIDED
THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.

 

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT MAY BE BROUGHT IN THE

 

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COURTS OF THE COMMONWEALTH OF PENNSYLVANIA SITTING IN THE CITY OF PHILADELPHIA,
OR OF THE UNITED STATES FOR THE EASTERN DISTRICT OF THE COMMONWEALTH, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH CREDIT PARTY, THE ADMINISTRATIVE
AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH CREDIT PARTY, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
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 ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY CREDIT DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. EACH CREDIT PARTY, THE ADMINISTRATIVE AGENT AND EACH
LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

 

13.16. Waiver of Right to Trial by Jury. EACH CREDIT PARTY, THE ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY CREDIT DOCUMENT OR IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY CREDIT DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

 

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

 

13.18. Limitation on Additional Amounts; Cash Collateral, etc. (a)
Notwithstanding anything to the contrary contained in Sections 2.10, 2.11, 3.5
and 5.4 of this Agreement, unless a Lender gives notice to the Borrowers that it
is obligated to pay an amount under such Section within three months after the
later of (x) the date the Lender incurs the respective increased costs, Taxes,
loss, expense or liability, reduction in amounts received or receivable or
reduction in return on capital or (y) the date such Lender has actual knowledge
of its incurrence of the respective increased costs, Taxes, loss, expense or
liability, reductions in

 

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amounts received or receivable or reduction in return on capital, then such
Lender shall only be entitled to be compensated for such amount pursuant to said
Section 2.10, 2.11, 3.5 and 5.4, as the case may be, to the extent of the costs,
Taxes, loss, expense or liability, reduction in amounts received or receivable
or reduction in return on capital that are incurred or suffered on or after the
date which occurs three months prior to such Lender giving notice to the
Borrowers that it is obligated to pay the respective amounts pursuant to said
Section 2.10, 2.11, 3.5 and 5.4, as the case may be. This Section 13.18 shall
have no applicability to any Section of this Agreement other than said Sections
2.10, 2.11, 3.5 and 5.4.

 

(b) So long as no Default or Event of Default shall exist and be continuing, at
any time that the Borrowers have on deposit with the Collateral Agent any cash
collateral securing any of the Obligations, the Borrowers shall have the right
to direct the Collateral Agent to invest such cash collateral in Cash
Equivalents reasonably satisfactory to the Administrative Agent until such time
as such Cash Collateral is applied to the repayment of Obligations or otherwise
disbursed in accordance with the provisions of this Agreement and the other
Credit Documents.

 

13.19. Payments Pro Rata; Sharing of Payments. (a) The Administrative Agent
agrees that promptly after its receipt of each payment from or on behalf of any
Credit Party in respect of any Obligations of such Credit Party, it shall,
except as otherwise provided in this Agreement, distribute such payment to the
Lenders (other than any Lender that has consented in writing to waive its pro
rata share of such payment) pro rata based upon their respective shares, if any,
of the Obligations with respect to which such payment was received.

 

(b) If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of the Loans (other than the Swingline Loans) made by it, or
the participations in Letter of Credit Outstandings or in Swingline Loans held
by it, any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them and/or such subparticipations in the
participations in Letter of Credit Outstandings or Swingline Loans held by them,
as the case may be, as shall be necessary to cause such purchasing Lender to
share the excess payment in respect of such Loans or such participations, as the
case may be, pro rata with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Lender under any of the circumstances described in Section 13.6 (including
pursuant to any settlement entered into by the purchasing Lender in its
discretion), such purchase shall to that extent be rescinded and each other
Lender shall repay to the purchasing Lender the purchase price paid therefor,
together with an amount equal to such paying Lender’s ratable share (according
to the proportion of (i) the amount of such paying Lender’s required repayment
to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered, without further interest thereon. The Borrowers
agree that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 13.9) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation. The Administrative Agent will
keep records (which shall be conclusive and binding in the absence of manifest
error)

 

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of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section shall from and after such purchase have
the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.

 

(c) Notwithstanding anything to the contrary contained herein, the provisions of
the preceding Sections 13.19(a) and (b) shall be subject to the express
provisions of this Agreement which require, or permit, differing payments to be
made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

 

13.20. Calculations; Computations. (a) The financial statements to be furnished
to the Lenders pursuant hereto shall be made and prepared in accordance with
GAAP consistently applied throughout the periods involved (except as set forth
in the notes thereto or as otherwise disclosed in writing by the Borrowers to
the Lenders); provided that except as otherwise specifically provided herein,
all computations determining the Applicable Margins and compliance with Sections
5.2, 9.14 and 10, including in each case definitions used therein, shall, in
each case, utilize accounting principles and policies in effect at the time of
the preparation of, and in conformity with those used to prepare, the December
31, 2003 financial statements of the Partnership delivered to the Lenders
pursuant to Section 8.10(b); provided further, that to the extent expressly
required pursuant to the provisions of this Agreement, certain calculations
shall be made on a Pro Forma Basis.

 

(b) All computations of interest (except as provided in the immediately
succeeding sentence) and Fees hereunder shall be made on the actual number of
days elapsed over a year of 360 days. All computations of Base Rate interest
hereunder shall be made on the actual number of days elapsed over a year of
365/366 days.

 

13.21. Effectiveness. This Agreement shall become effective on the Effective
Date. The Administrative Agent will give the Credit Parties and each Lender
prompt written notice of the occurrence of the Effective Date.

 

13.22. Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

 

13.23. Domicile of Loans and Commitments. Each Lender may transfer and carry its
Loans and/or Commitments at, to or for the account of any branch office,
subsidiary or affiliate of such Lender; provided that the Borrowers shall not be
responsible for costs arising under Sections 2.10, 2.11, 3.5 and 5.4 resulting
from any such transfer (other than a transfer pursuant to Section 2.12) to the
extent such costs would not otherwise be applicable to such Lender in the
absence of such transfer.

 

SECTION 14. THE CREDIT PARTY GUARANTY.

 

14.1. The Credit Party Guaranty. In order to induce the Lenders to enter into
this Agreement and to extend credit hereunder and to induce the Lenders or any
of their respective

 

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affiliates to enter into and/or maintain Swap Contracts, and in recognition of
the direct benefits to be received by each Credit Party from the proceeds of the
Loans, the issuance of the Letters of Credit and the entering into and
maintenance of Swap Contracts, each Credit Party hereby agrees with the Lenders
as follows: each Credit Party hereby unconditionally and irrevocably guarantees,
as primary obligor and not merely as surety the full and prompt payment when
due, whether upon maturity, acceleration or otherwise, of any and all of the
Guaranteed Obligations. If any or all of the Guaranteed Obligations becomes due
and payable, each Credit Party unconditionally promises to pay such
indebtedness, or order, on demand, together with any and all reasonable
out-of-pocket costs and expenses which may be incurred by the Secured Creditors
in collecting any of the Guaranteed Obligations. This Credit Party Guaranty is a
guaranty of payment and not of collection. This Credit Party Guaranty is a
continuing one and all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon. If claim is ever made upon any Secured Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including any Borrower), then and in such event each
Credit Party agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Credit Party, notwithstanding any
revocation of this Credit Party Guaranty or any other instrument evidencing any
liability of any other Borrower, and such Credit Party shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.

 

14.2. Bankruptcy. Additionally, each Credit Party unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
to the Secured Creditors whether or not due or payable by any Borrower upon the
occurrence of any of the events specified in Section 11.5, and unconditionally
promises to pay such indebtedness to the Secured Creditors, or order, on demand.

 

14.3. Nature of Liability. The liability of each Credit Party hereunder is
exclusive and independent of any guaranty of the Guaranteed Obligations whether
executed by such Credit Party, any other guarantor or by any other party, and
the liability of each Credit Party hereunder is not affected or impaired by (a)
any direction as to application of payment by any 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 Guaranteed Obligations,
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 any Borrower, or (e) any payment made to the Secured Creditors on the
Guaranteed Obligations which any such Secured Creditor repays to any Borrower
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each Credit Party waives any
right to the deferral or modification of its obligations hereunder by reason of
any such proceeding, or (f) any action or inaction of the type described in
Section 14.5, or (g) the lack of validity or enforceability of any Credit
Document or any other instrument relating thereto.

 

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14.4. Independent Obligation. No invalidity, irregularity or unenforceability of
all or any part of the Guaranteed Obligations shall affect, impair or be a
defense to this Credit Party Guaranty, and this Credit Party Guaranty shall be
primary, absolute and unconditional notwithstanding the occurrence of any event
or the existence of any other circumstances which might constitute a legal or
equitable discharge of a surety or guarantor except payment in full of the
Guaranteed Obligations of each Credit Party. The obligations of each Credit
Party hereunder are independent of the obligations of any Borrower, any other
guarantor or any other Person and a separate action or actions may be brought
and prosecuted against either Credit Party whether or not action is brought
against any Borrower, any other guarantor or any other Person and whether or not
any Borrower, any other guarantor or any other Person be joined in any such
action or actions. Each Credit Party waives, to the full extent permitted by
law, the benefit of any statute of limitations affecting its liability hereunder
or the enforcement thereof. Any payment by any Borrower with respect to any
Guaranteed Obligations or other circumstance which operates to toll any statute
of limitations as to such Borrower shall operate to toll the statute of
limitations as to the relevant Credit Party.

 

14.5. Authorization. Each Credit Party authorizes the Secured Creditors 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) change the manner, place or terms of payment of, and/or change or extend the
time of payment of, renew, increase, accelerate or alter, any of the Guaranteed
Obligations (including any increase or decrease in the rate of interest thereon)
or any liability incurred directly or indirectly in respect thereof, and this
Credit Party Guaranty shall apply to the Guaranteed Obligations as so changed,
extended, renewed, increased or altered;

 

(b) take and hold security for the payment of the Guaranteed Obligations and
sell, exchange, release, impair, surrender, realize upon or otherwise deal with
in any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof, and/or any offset there against;

 

(c) exercise or refrain from exercising any rights against any Borrower or
others or otherwise act or refrain from acting;

 

(d) release or substitute any one or more endorsers, guarantors, any Borrower or
other obligors;

 

(e) settle or compromise any of the Guaranteed Obligations or any liability
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of any Borrower to its
respective creditors other than the Secured Creditors;

 

(f) apply any sums by whomsoever paid or howsoever realized to any liability or
liabilities of any Borrower to the Secured Creditors regardless of what
liability or liabilities of such Borrower remain unpaid;

 

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(g) consent to or waive any breach of, or any act, omission or default under,
this Agreement, any other Credit Document, any Swap Contract or any of the
instruments or agreements referred to herein or therein, or otherwise amend,
modify or supplement this Agreement, any other Credit Document, any Swap
Contract or any of such other instruments or agreements; and/or

 

(h) take any other action which would, under otherwise applicable principles of
common law, give rise to a legal or equitable discharge of such Credit Party
from its liabilities under this Credit Party Guaranty.

 

14.6. Reliance. It is not necessary for the Secured Creditors to inquire into
the capacity or powers of any Borrower or the officers, directors, partners or
agents acting or purporting to act on their behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder by the relevant Credit Party.

 

14.7. Subordination. Any of the indebtedness of any Credit Party now or
hereafter owing to any other Credit Party is hereby subordinated to the
Guaranteed Obligations of such Credit Party owing to the Secured Creditors; and
if the Administrative Agent so requests at a time when an Event of Default
exists, all such indebtedness of such Credit Party to such other Credit Party
shall be collected, enforced and received by such Credit Party for the benefit
of the Secured Creditors and be paid over to the Administrative Agent on behalf
of the Secured Creditors on account of the Guaranteed Obligations of such Credit
Party to the Secured Creditors, but without affecting or impairing in any manner
the liability of any Credit Party under the other provisions of this Credit
Party Guaranty. No Credit Party shall assign to any Person any note or
negotiable instrument evidencing any of the indebtedness of any Credit Party to
such Credit Party, except to another Credit Party or the Administrative Agent.
Without limiting the generality of the foregoing, each Credit Party hereby
agrees with the Secured Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Credit
Party Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.

 

14.8. Waiver. (a) Each Credit Party waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Secured
Creditor to (i) proceed against any Credit Party, any other guarantor or any
other party, (ii) proceed against or exhaust any security held from any Credit
Party, any other guarantor or any other party or (iii) pursue any other remedy
in any Secured Creditor’s power whatsoever. Each Credit Party waives any defense
based on or arising out of any defense of any Borrower, any other guarantor or
any other party, other than payment in full in cash of the Guaranteed
Obligations, based on or arising out of the disability of any Credit Party, any
other guarantor or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of any Credit Party other than payment in full in cash of the
Guaranteed Obligations. The Secured Creditors may, at their election, foreclose
on any security held by the Administrative Agent or any other Secured Creditor
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

 

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Secured Creditors may have against any Credit Party or any other party, or any
security, without affecting or impairing in any way the liability of either
Credit Party hereunder except to the extent the Guaranteed Obligations of each
Credit Party have been paid in full in cash. Each Credit Party waives any
defense arising out of any such election by the Secured Creditors, even though
such election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Credit Party against any Credit
Party or any other party or any security.

 

(b) Each Credit Party waives all presentments, demands for performance, protests
and notices, including, without limitation, notices of nonperformance, notices
of protest, notices of dishonor, notices of acceptance of this Credit Party
Guaranty, and notices of the existence, creation, modification or incurring of
new or additional Guaranteed Obligations. Each Credit Party assumes all
responsibility for being and keeping itself informed of each Borrower’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks which each Credit Party assumes and incurs hereunder, and
agrees that the Secured Creditors shall have no duty to advise such Credit Party
of information known to them regarding such circumstances or risks.

 

(c) Until such time as the Guaranteed Obligations have been paid in full in
cash, each Credit Party hereby waives all rights of subrogation which it may at
any time otherwise have as a result of this Credit Party Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code, or otherwise) to the
claims of the Secured Creditors against any other guarantor of the Guaranteed
Obligations and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any Borrower or any other
guarantor which it may at any time otherwise have as a result of this Credit
Party Guaranty.

 

(d) Each Credit Party warrants and agrees that each of the waivers set forth
above is made with full knowledge of its significance and consequences and that
if any of such waivers are determined to be contrary to any applicable law of
public policy, such waivers shall be effective only to the maximum extent
permitted by law.

 

(e) Should a claim be made upon Administrative Agent or any Lender at any time
for repayment of any amount received by Administrative Agent or any Lender in
payment of the Obligations, or any part thereof, whether received from any
Credit Party or received by Administrative Agent or any Lender as the proceeds
of Collateral, by reason of: (1) any judgment, decree or order of any court or
administrative body having jurisdiction over Administrative Agent or any Lender
or any of their property, or (2) any settlement or compromise of any such claim
effected by Administrative Agent or any Lender, in its sole discretion, with the
claimant (including a Credit Party), each Credit Party shall remain liable to
Administrative Agent or any such Lender for the amount so repaid to the same
extent as if such amount had never originally been received by Administrative
Agent or any such Lender, notwithstanding any termination hereof or the
cancellation of any note or other instrument evidencing any of the Obligations.
To the extent Administrative Agent is required to repay any such amount, each
Lender shall, to the extent Administrative Agent previously paid to such Lender
a portion of the amount which must be repaid, upon demand of Administrative
Agent,

 

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return to Administrative Agent the amount which had previously been paid by
Administrative Agent to such Lender.

 

(f) To the extent that any payment to, or realization by, any Lender or
Administrative Agent on the Obligations exceeds the limitations of this Section
14 and is otherwise subject to avoidance and recovery in any such proceeding,
the amount subject to avoidance shall in all events be limited to the amount by
which such actual payment or realization exceeds such limitation, and this
Agreement as limited shall in all events remain in full force and effect and be
fully enforceable against such Credit Party. This Section 14 is intended solely
to reserve the rights of Lenders and Administrative Agent hereunder against each
Credit Party, in such proceeding to the maximum extent permitted by applicable
Debtor Relief Laws and neither the Credit Parties, any guarantor of the
Obligations nor any other Person shall have any right, claim or defense under
this Section 14 that would not otherwise be available under applicable Debtor
Relief Laws in such proceeding.

 

14.9. Acknowledgement of Joint and Several Liability. (a) Each Borrower (other
than the Controlled Non-Profits) acknowledges that it is jointly and severally
liable for all of the Obligations under the Credit Documents. Each Borrower
expressly understands, agrees and acknowledges that (i) Borrowers are all
affiliated entities by common ownership, (ii) each Borrower desires to have the
availability of one common credit facility instead of separate credit
facilities, (iii) each Borrower has requested that the Lenders extend such a
common credit facility on the terms herein provided, (iv) the Lenders will be
lending against, and relying on a lien upon, all of Borrowers’ assets even
though the proceeds of any particular loan made hereunder may not be advanced
directly to a particular Borrower, (v) each Borrower will nonetheless benefit by
the making of all such loans by each Lender and the availability of a single
credit facility of a size greater than each could independently warrant, (vi)
all of the representations, warranties, covenants, obligations, conditions,
agreements and other terms contained in the Credit Documents shall be applicable
to and shall be binding upon each Borrower, and (vii) the Borrowers have each
executed the Notes as co-makers of the Notes and that it would not be able to
obtain the credit provided by the Lenders hereunder without the financial
support provided by the other Borrowers.

 

(b) Each Borrower (other than the Controlled Non-Profits) hereby guarantees the
prompt payment and performance in full of all Obligations. Such guarantee
constitutes a guarantee of payment and not of collection. Each Borrower’s
obligations under this Agreement shall, to the fullest extent permitted by law,
be unconditional irrespective of (i) the validity or enforceability, avoidance,
or subordination of the Obligations of any other Credit Party or of any
promissory note or other document evidencing all or any part of the Obligations
of any other Credit Party, (ii) the absence of any attempt to collect the
Obligations from any other Credit Party, or any other security therefor, or the
absence of any other action to enforce the same, (iii) the waiver, consent,
extension, forbearance, or granting of any indulgence by Administrative Agent
and/or any Lender with respect to any provision of any instrument evidencing the
Obligations of any other Credit Party or any part thereof, or any other
agreement now or hereafter executed by any other Credit Party and delivered to
Administrative Agent and/or any Lender, (iv) the failure by Administrative Agent
and/or any Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for the
Obligations of any other Credit Party, (v) Administrative Agent’s and/or any
Lender’s election,

 

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in any proceeding instituted under the Bankruptcy Code, of the application of
Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or grant of a
security interest by any other Credit Party, as debtor-in-possession under
Section 364 of the Bankruptcy Code, (vii) the disallowance of all or any portion
of Administrative Agent’s and/or any Lender’s claim(s) for the repayment of the
Obligations of any other Credit Party under Section 502 of the Bankruptcy Code,
or (viii) any other circumstances which might constitute a legal or equitable
discharge or defense of a guarantor or of any other Credit Party (other than
actual indefeasible payment in full in cash). With respect to any Borrower’s
obligations arising as a result of the joint and several liability of Borrowers
hereunder with respect to Borrowings or other Credit Events made to or for any
of the other Borrowers hereunder, such Borrower waives, until the Obligations
shall have been indefeasibly paid in full and this Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy which
Administrative Agent and/or any Lender now has or may hereafter have against any
other Credit Party, or any endorser of all or any part of the Obligations, and
any benefit of, and any right to participate in, any security or collateral
given to Administrative Agent and/or any Lender to secure payment of the
Obligations or any other liability of any Borrower to Administrative Agent
and/or any Lender. During the existence of any Event of Default, Administrative
Agent may proceed directly and at once, without notice, against any Borrower to
collect and recover the full amount, or any portion of the Obligations, without
first proceeding against any other Credit Party or any other Person, or against
any security or collateral for the Obligations. Each Borrower consents and
agrees that Administrative Agent shall be under no obligation to marshal any
assets in favor of any Borrower or against or in payment of any or all of the
Obligations.

 

(c) Each Borrower (other than the Controlled Non-Profits) is obligated to repay
the Obligations as joint and several obligors under this Agreement. To the
extent that any Credit Party shall, under this Agreement as a joint and several
obligor, repay any of the Obligations constituting Borrowings or Credit Events
made to or for another Borrower hereunder or other Obligations incurred directly
and primarily by any other Borrower (an ”Accommodation Payment”), then the
Borrower making such Accommodation Payment shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Borrowers in an
amount, for each of such other Borrowers, equal to a fraction of such
Accommodation Payment, the numerator of which fraction is such other Borrower’s
Allocable Amount and the denominator of which is the sum of the Allocable
Amounts of all of the Borrowers. As of any date of determination, the “Allocable
Amount” of each Borrower shall be equal to the maximum amount of liability for
Accommodation Payments which could be asserted against such Borrower hereunder
without (i) rendering such Borrower “insolvent” within the meaning of Section
101 (31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer
Act (“UFTA”) or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”),
(ii) leaving such Borrower with unreasonably small capital or assets, within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section
5 of the UFCA, or (iii) leaving such Borrower unable to pay its debts as they
become due within the meaning of Section 548 of the Bankruptcy Code or Section 4
of the UFTA, or Section 5 of the UFCA. All rights and claims of contribution,
indemnification, and reimbursement under this Section 14.9 shall be subordinate
in right of payment to the prior payment in full of the Obligations. The
provisions of this Section 14.9 shall, to the extent inconsistent with any
provision in any Credit Document, supersede such inconsistent provision.

 

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(d) If (i) any court holds that Borrowers are guarantors and not jointly and
severally liable or (ii) bankruptcy or reorganization proceedings at any time
are instituted by or against any Borrower under any Debtor Relief Law, each
Borrower hereby: (A) until indefeasible payment in full in cash of the
Obligations, expressly and irrevocably waives, to the fullest extent possible,
on behalf of such Borrower, any and all rights at law or in equity to
subrogation, to reimbursement, to exoneration, to contribution, to
indemnification, to set off or to any other rights that could accrue to a surety
against a principal, to a guarantor against a maker or obligor, to an
accommodation party against the party accommodated, to a holder or transferee
against a maker, or to the holder of a claim against any Person, and which such
Borrower may have or hereafter acquire against any Person in connection with or
as a result of such Borrower’s execution, delivery and/or performance of this
Agreement, or any other documents to which such Borrower is a party or
otherwise; (B) expressly and irrevocably waives any “claim” (as such term is
defined in the Bankruptcy Code) of any kind against any other Borrower, and
further agrees that it shall not have or assert any such rights against any
Person (including any surety), either directly or as an attempted set off to any
action commenced against such Borrower by Administrative Agent or a Lender or
any other Person; and (C) acknowledges and agrees (I) that this waiver is
intended to benefit Administrative Agent and Lenders and shall not limit or
otherwise affect such Borrower’s liability hereunder or the enforceability of
this Agreement, and (II) that Administrative Agent and Lenders and their
successors and assigns are intended beneficiaries of this waiver, and agreements
set forth in this Section 14.9 and their rights under this Section 14.9 shall
survive payment in full of the Obligations.

 

(e) This Agreement shall in all respects be continuing, absolute and
unconditional, and shall remain in full force and effect with respect to each
Borrower until all Obligations shall have been indefeasibly fully paid. No
compromise, settlement, release or discharge of, or indulgence with respect to,
or failure, neglect or omission to enforce or exercise any right against, any
one or Borrowers shall release or discharge the other Borrowers.

 

(f) Notwithstanding anything to the contrary contained in this Agreement or the
other Credit Documents, each Controlled Non-Profit shall be liable only for that
portion of the Obligations evidenced by (i) any Loan or other extension of
credit made to, or for the benefit of, such entity hereunder or under any other
Credit Document, (ii) any loan, advance or other distribution to such entity of
proceeds of any Loan or other extension of credit made to any other Borrower
hereunder, and (iii) its proportionate share of all Loans and other extensions
of credit made hereunder to fund any administrative and other management related
fees, costs and expenses of the General Partner, the Partnership, the Operating
Company or any Borrower providing services to such Controlled Non-Profit
pursuant to a Cemetery Management Agreement; and the Collateral of such
Controlled Non-Profit shall only secure, or be utilized to repay, such portion
of the obligations described above.

 

*    *    *

 

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Credit Agreement as of the date first above
written.

 

Address:

 

4 Penn Center
PA7-188-11-01
1600 J.F.K. Boulevard
Philadelphia, Pennsylvania 19103

Facsimile: 267.675.0366

     

FLEET NATIONAL BANK, as

Administrative Agent and a Lender

              By:   /s/    Kenneth G. Wood          

Name: Kenneth G. Wood

         

Title: Senior Vice President

3 Terry Drive
Newtown, Pennsylvania 18940
Facsimile: 215.497.8575      

SOVEREIGN BANK

              By:   /s/    Karl F. Shultz          

Name: Karl F. Shultz

         

Title: Vice President

One Commerce Square
2005 Market Street, Second Floor
Philadelphia, Pennsylvania 19103
Facsimile: 215.557.6209      

COMMERCE BANK, N.A.

              By:   /s/    Peter L. Davis          

Name: Peter L. Davis

         

Title: Senior Vice President

 

S-1 [Credit Agreement]

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

                STONEMOR GP LLC                               By:      
/s/    Paul Waimberg                

Name:  Paul Waimberg

               

Title:    Vice President

               

STONEMOR PARTNERS L.P.

               

By:

 

STONEMOR GP LLC

                   

its General Partner

                                  By:       /s/    Paul Waimberg                

Name:

 

Paul Waimberg

               

Title:

 

Vice President

155 Rittenhouse Circle
Bristol, Pennsylvania 19007
Facsimile: 215.826.2851          

STONEMOR OPERATING LLC

                  By:       /s/    Paul Waimberg                

Name:

 

Paul Waimberg

               

Title:

 

Vice President

 

S-2 [Credit Agreement]

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

Alleghany Memorial Park LLC Alleghany Memorial Park Subsidiary, Inc. Altavista
Memorial Park LLC Altavista Memorial Park Subsidiary, Inc. Arlington Development
Company Augusta Memorial Park Perpetual Care Company Bedford County Memorial
Park LLC Bedford County Memorial Park Subsidiary LLC Bethel Cemetery Association
Beth Israel Cemetery Association of Woodbridge, New Jersey Birchlawn Burial Park
LLC Birchlawn Burial Park Subsidiary, Inc. Blue Ridge Memorial Gardens LLC Blue
Ridge Memorial Gardens Subsidiary LLC Butler County Memorial Park LLC Butler
County Memorial Park Subsidiary, Inc. Cedar Hill Funeral Home, Inc. Cemetery
Investments LLC Cemetery Investments Subsidiary, Inc. Cemetery Management
Services, L.L.C. Cemetery Management Services of Mid-Atlantic States, L.L.C.
Cemetery Management Services of Ohio, L.L.C. Cemetery Management Services of
Pennsylvania, L.L.C. Chartiers Cemetery LLC Chartiers Cemetery Subsidiary LLC
Clover Leaf Park Cemetery Association CMS West LLC CMS West Subsidiary LLC
Columbia Memorial Park LLC Columbia Memorial Park Subsidiary, Inc. The Corapolis
Cemetery Company The Coraopolis Cemetery Parent LLC The Coraopolis Cemetery
Subsidiary LLC Cornerstone Family Insurance Services, Inc. Cornerstone Family
Services of New Jersey, Inc. Cornerstone Family Services of West Virginia LLC
Cornerstone Family Services of West Virginia Subsidiary, Inc. Cornerstone
Funeral and Cremation Services LLC

 

By:   /s/    Paul Waimberg    

Name:     Paul Waimberg    

Title:    As   Vice President for each of the    

    above-named Credit Parties

 

S-3 [Credit Agreement]

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

Covenant Acquisition LLC Covenant Acquisition Subsidiary, Inc. Crown Hill
Cemetery Association Eloise B. Kyper Funeral Home, Inc. Glen Haven Memorial Park
LLC Glen Haven Memorial Park Subsidiary, Inc. Green Lawn Memorial Park LLC Green
Lawn Memorial Park Subsidiary LLC Henlopen Memorial Park LLC Henlopen Memorial
Park Subsidiary, Inc. Henry Memorial Park LLC Henry Memorial Park Subsidiary,
Inc. J.V. Walker LLC J.V. Walker Subsidiary LLC Juniata Memorial Park LLC
Juniata Memorial Park Subsidiary LLC KIRIS LLC KIRIS Subsidiary, Inc.
Lakewood/Hamilton Cemetery LLC Lakewood/Hamilton Cemetery Subsidiary, Inc.
Lakewood Memory Gardens South LLC Lakewood Memory Gardens South Subsidiary, Inc.
Laurel Hill Memorial Park LLC Laurel Hill Memorial Park Subsidiary, Inc.
Laurelwood Cemetery Company Laurelwood Cemetery Parent LLC Laurelwood Cemetery
Subsidiary LLC Laurelwood Holding Company Legacy Estates, Inc. Locustwood
Cemetery Association Loewen [Virginia] LLC Loewen [Virginia] Subsidiary, Inc.
Lorraine Park Cemetery LLC Lorraine Park Cemetery Subsidiary, Inc. Melrose Land
LLC Melrose Land Subsidiary LLC Modern Park Development LLC Modern Park
Development Subsidiary, Inc. Morris Cemetery Perpetual Care Company Mount
Lebanon Cemetery LLC

 

By:   /s/    Paul Waimberg    

Name:     Paul Waimberg    

Title:    As   Vice President for each of the    

    above-named Credit Parties

 

S-4 [Credit Agreement]

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

Mount Lebanon Cemetery Subsidiary LLC Mt. Airy Cemetery, Inc. Mt. Airy Cemetery
Parent LLC Mt. Airy Cemetery Subsidiary LLC Oak Hill Cemetery LLC Oak Hill
Cemetery Subsidiary, Inc. Osiris Holding Finance Company Osiris Holding of
Maryland LLC Osiris Holding of Maryland Subsidiary, Inc. Osiris Holding of
Pennsylvania LLC Osiris Holding of Pennsylvania Subsidiary LLC Osiris Holding of
Rhode Island LLC Osiris Holding of Rhode Island Subsidiary, Inc. Osiris
Management, Inc. Osiris Telemarketing Corp. Perpetual Gardens.Com, Inc. The
Prospect Cemetery LLC The Prospect Cemetery Subsidiary LLC Prospect Hill
Cemetery LLC Prospect Hill Cemetery Subsidiary LLC PVD Acquisitions LLC PVD
Acquisitions Subsidiary, Inc. Riverside Cemetery LLC Riverside Cemetery
Subsidiary LLC Riverview Memorial Gardens LLC Riverview Memorial Gardens
Subsidiary LLC Rockbridge Memorial Gardens LLC Rockbridge Memorial Gardens
Subsidiary Company Rolling Green Memorial Park LLC Rolling Green Memorial Park
Subsidiary LLC Rose Lawn Cemeteries LLC Rose Lawn Cemeteries Subsidiary,
Incorporated Roselawn Development LLC Roselawn Development Subsidiary
Corporation Russell Memorial Cemetery LLC Russell Memorial Cemetery Subsidiary,
Inc. Shenandoah Memorial Park LLC Shenandoah Memorial Park Subsidiary, Inc.

 

By:    /s/    Paul Waimberg    

Name:       Paul Waimberg

Title:         As Vice President for each of the

             above-named Credit Parties

 

S-5 [Credit Agreement]

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

Southern Memorial Sales LLC Southern Memorial Sales Subsidiary, Inc. Springhill
Memory Gardens LLC Springhill Memory Gardens Subsidiary, Inc. Star City Memorial
Sales LLC Star City Memorial Sales Subsidiary, Inc. Stitham LLC Stitham
Subsidiary, Incorporated Sunset Memorial Gardens LLC Sunset Memorial Gardens
Subsidiary, Inc. Sunset Memorial Park LLC Sunset Memorial Park Subsidiary, Inc.
Temple Hill LLC Temple Hill Subsidiary Corporation Tioga County Memorial Gardens
LLC Tioga County Memorial Gardens Subsidiary LLC Tri-County Memorial Gardens LLC
Tri-County Memorial Gardens Subsidiary LLC Twin Hills Memorial Park and
Mausoleum LLC Twin Hills Memorial Park and Mausoleum Subsidiary LLC The Valhalla
Cemetery Company LLC The Valhalla Cemetery Subsidiary Corporation Virginia
Memorial Service LLC Virginia Memorial Service Subsidiary Corporation WNCI LLC W
N C Subsidiary, Inc. Westminster Cemetery LLC Westminster Cemetery Subsidiary
LLC Wicomico Memorial Parks LLC Wicomico Memorial Parks Subsidiary, Inc.
Willowbrook Management Corp. Woodlawn Memorial Gardens LLC Woodlawn Memorial
Gardens Subsidiary LLC Woodlawn Memorial Park Association Woodlawn Memorial Park
Parent LLC Woodlawn Memorial Park Subsidiary LLC

 

By:     /s/    Paul Waimberg    

Name:     Paul Waimberg    

Title:       As Vice President for each of the    

    above-named Credit Parties

 

S-6 [Credit Agreement]

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

 

SCHEDULE I

 

LIST OF LENDERS AND COMMITMENTS

 

Lender

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

   Revolving Loan
Commitment

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

   Acquisition Loan
Commitment

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

Fleet National Bank

   $ 5,357,142.86    $ 9,642,857.14

Sovereign Bank

   $ 3,571,428.57    $ 6,428,571.43

Commerce Bank, N.A.

   $ 3,571,428.57    $ 6,428,571.43

Total

   $ 12,500,000    $ 22,500,000

 

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

 

SCHEDULE II

 

ADMINISTRATIVE AGENT ADDRESSES

 

For Payments and Requests for Credit Extensions

 

Fleet National Bank

Agency Management

Mail Stop: NY5-526-28-01

1633 Broadway

New York, NY 10019

Attention: Dawn Marie Matos

Facsimile No.: (646) 366-4508

E-mail: dawn_marie_matos@fleet.com

 

Fleet National Bank

4 Penn Center

PA7-188-11-01

1600 J.F.K. Boulevard

Philadelphia, PA 19103

Attention: Kenneth G. Wood

Facsimile No.: (267) 675-0366

E-mail: kenneth_g_wood@fleet.com

 

Other Notices to Administrative Agent:

 

Fleet National Bank

4 Penn Center

PA7-188-11-01

1600 J.F.K. Boulevard

Philadelphia, PA 19103

Attention: Kenneth G. Wood

Facsimile No.: (267) 675-0366

E-mail: kenneth_g_wood@fleet.com

 

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

SCHEDULE III

 

REAL PROPERTY

 

OWNED REAL PROPERTY

 

All of the properties listed below are owned by a Borrower as indicated below
and are deemed a Mortgaged Property:

 

Property*

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

 

State Locations/County

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

 

Property Owner

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

    Alabama     Valhalla Cemetery   Bessemer/Midfield; Jefferson   The Valhalla
Cemetery Company LLC     Connecticut     None             Delaware     Henlopen
Memorial Park   Milton; Sussex   Henlopen Memorial Park LLC     Georgia    
Lakewood Memory Gardens South   Rossville; Catoosa   Lakewood Memory Gardens
South LLC     Maryland     Hillcrest Burial   Cumberland; Allegany   Modern Park
Development LLC Lincoln Memorial   Suitland; Prince Georges   Osiris Holding of
Maryland LLC Lorraine Park Cemetery   Baltimore; Baltimore   Lorraine Park
Cemetery LLC Spring Hill Memory Gardens   Hebron; Wicomico   Spring Hill Memory
Gardens LLC Sunset Memorial Park   Cumberland; Allegany   Sunset Memorial Park
LLC Washington National Cemetery   Suitland; Prince Georges   WNCI LLC Wicomico
Memorial Park   Salisbury; Wicomico   Wicomico Memorial Parks LLC Cedar Hill
Cemetery   Suitland; Prince Georges   Osiris Holding of Maryland LLC Cedar Hill
Funeral Home   Suitland; Prince Georges   Cedar Hill Funeral Home, Inc. Columbia
Memorial Park   Columbia; Howard   Columbia Memorial Park LLC Glen Haven
Memorial Park   Glen Burnie; Anne Arundel   Glen Haven Memorial Park LLC     New
Jersey     None        

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

Property*

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

 

State Locations/County

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

 

Property Owner

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

    Ohio     Crown Hill Cemetery   Twinsburg; Summit   Crown Hill Cemetery
Association and Crown Hill Mausoleum Company Butler County Memorial Park  
Hamilton; Butler   Butler County Memorial Park LLC     Pennsylvania    
Allegheny County Memorial Park   McCandless; Allegheny   Bedford County Memorial
Park LLC Bethlehem Memorial Park   Bethlehem; Northampton   Melrose Land LLC
Blair Memorial Park   Altoona; Blair   Bedford County Memorial Park LLC Blue
Ridge Memorial Gardens   Harrisburg; Dauphin   Blue Ridge Memorial Gardens LLC
Castleview Memorial Park   New Castle; Lawrence   Bedford County Memorial Park
LLC Centre County Memorial Park   State College; Centre   Bedford County
Memorial Park LLC Chartiers Cemetery   Pittsburgh; Allegheny   Chartiers
Cemetery LLC Coraopolis Cemetery   Coraopolis; Allegheny   The Coraopolis
Cemetery Company Crestview Memorial Park   Grove City; Mercer   Bedford County
Memorial Park LLC Cumberland Valley Memorial Gardens   Carlisle; Cumberland  
Osiris Holding of Pennsylvania LLC Eloise B. Kyper Funeral Home   State College;
Centre   Eloise B. Kyper Funeral Home, Inc. Erie County Memorial Gardens   Erie;
Erie   Bedford County Memorial Park LLC Grand View Memorial Park   Annville;
Lebanon   Bedford County Memorial Park LLC Greene County Memorial Park  
Waynesburg; Greene   Bedford County Memorial Park LLC Greenlawn Burial Estates
(for additional 110 acres see Semper Concrete Vault Plant)   Franklin Twp.;
Butler   Bedford County Memorial Park LLC Green Lawn Memorial Park   Clinton
Twp.; Lycoming   Green Lawn Memorial Park LLC Greenwood Cemetery   Lancaster;
Lancaster   Osiris Holding of Pennsylvania LLC Juniata Memorial Park  
Lewistown; Mifflin   Juniata Memorial Park LLC Lakewood Memorial Park  
Cheswick; Allegheny   Bedford County Memorial Park LLC Laurelwood Cemetery  
Stroudburg; Monroe   Laurelwood Cemetery Company

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

Property*

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

 

State Locations/County

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

 

Property Owner

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

Lawn Haven Burial Estates (Plus adjacent 80 acre parcel)   Worthington;
Armstrong   Bedford County Memorial Park LLC The Morris Cemetery   Phoenixville;
Chester   J.V. Walker LLC Mount Airy Cemetery   Natrona Heights; Allegheny   Mt.
Airy Cemetery, Inc. Mount Lebanon Cemetery   Pittsburgh; Allegheny   Mount
Lebanon Cemetery LLC Mount Royal Memorial Park   Glenshaw; Allegheny   Bedford
County Memorial Park LLC Mount Zion Cemetery & Mausoleum   Pottstown; Chester  
Bedford County Memorial Park LLC Parklawn Memorial Gardens   Ridgeway; Elk  
Osiris Holding of Pennsylvania LLC Pinewood Memorial Park   Cranberry Township;
Butler   Bedford County Memorial Park LLC Pleasant View Cemetery   Sinking
Spring; Berks   Osiris Holding of Pennsylvania LLC Prospect Cemetery   East
Stroudsburg; Monroe   The Prospect Cemetery LLC Prospect Hill   Harrisburg;
Dauphin   Prospect Hill Cemetery LLC Riverside Cemetery   Norristown; Montgomery
  Riverside Cemetery LLC Riverview Memorial Gardens   Halifax; Dauphin  
Riverview Memorial Gardens LLC Rolling Green Cemetery   Westchester; Chester  
Rolling Green Memorial Park LLC Roselawn Memorial Gardens   Meadville; Crawford
  Bedford County Memorial Park LLC Semper Concrete Vault Plant (this is 110
acres adjacent to Greenlawn Burial Estates)   Butler; Butler   CMS West LLC
South Side Cemetery   Pittsburgh; Allegheny   Bedford County Memorial Park LLC
Sunset Hill Memorial Gardens   Cranberry; Venango   Bedford County Memorial Park
LLC Tioga County Memorial Gardens   Charleston Twp; Tioga   Tioga County
Memorial Gardens LLC Tri-County Memorial Gardens   Lewisberry; York   Tri-County
Memorial Gardens LLC Twin Hills Memorial   Muncy; Lycoming   Twin Hills Memorial
Park & Mausoleum Corporation Voegtly Cemetery   Pittsburgh; Allegheny   CMS West
LLC Westminster Cemetery   Carlisle; Cumberland   Westminster Cemetery LLC
Woodlawn Cemetery   Alquippa; Beaver   Bedford County Memorial Park LLC Woodlawn
Memorial Gardens   Harrisburg; Dauphin   Woodlawn Memorial Gardens LLC

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

Property*

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

 

State Locations/County

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

 

Property Owner

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

Woodlawn Memorial Park   Allentown; Lehigh   Woodlawn Memorial Park Association
    Rhode Island     Newport Cemetery   Middletown; Newport   Osiris Holding of
Rhode Island LLC Trinity Cemetery   Portsmouth; Newport   Osiris Holding of
Rhode Island LLC     Tennessee     Lakewood Memory Gardens East   Chattanooga;
Hamilton   Lakewood/Hamilton Cemetery LLC Lakewood Memory Gardens West  
Chattanooga; Hamilton   Lakewood/Hamilton Cemetery LLC Hamilton Memorial Park  
Hixson; Hamilton   Lakewood/Hamilton Cemetery LLC     Virginia     Allegheny
Memorial Park   Covington; Alleghany   Alleghany Memorial Park LLC Altavista
Memorial Park   Altavista; Campbell   Altavista Memorial Park LLC Augusta
Memorial Park   Waynesboro; Augusta   Virginia Memorial Service LLC Birchlawn
Burial Park   Pearisburg; Giles   Birchlawn Burial Park LLC Briarwood Memorial
Garden   Amherst; Amherst   Stitham LLC

Crestview Memorial Park

(Plus adjacent parcel of 11 acres)

  LaCrosse; Mecklenburg   Covenant Acquisition LLC

Evergreen Memorial Gardens

(Plus 8 additional acres)

  Luray; Page   PVD Acquisitions LLC Fort Hill Memorial Park   Lynchburg;  
Stitham LLC Henry Memorial Park   Bassett; Henry   Henry Memorial Park LLC
Hillcrest Memory Gardens   Jeffersonton; Culpepper   PVD Acquisitions LLC

Laurel Hill Memorial Park

Laurel Hill Funeral Home

  Spotsylvania; Spotsylvania   Laurel Hill Memorial Park LLC Mount Rose Cemetery
  Glade Spring; Washington   Rose Lawn Cemeteries LLC Northern Neck Memorial
Gardens   Fredricksburg; Northumberland   Covenant Acquisition LLC Oaklawn
Mausoleum and Memory Gardens   Staunton (Independent City); Augusta   Southern
Memorial Sales LLC Heide Memorial Pet Cemetery   Staunton (Independent City);
Augusta   KIRIS LLC Oak Hill Cemetery   Fredricksburg; Spotsylvania   Oak Hill
Cemetery LLC Old Dominion Memorial Park   Roanoke; Botetourt   Star City
Memorial Sales LLC Panorama Memorial Gardens   Strasburg; Warrent   PVD
Acquisitions LLC

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

Property*

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

 

State Locations/County

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

 

Property Owner

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

Powell Valley Memorial Gardens   Big Stone Gap; Wise   Loewen [Virginia] LLC
Rockbridge Memorial Gardens (Plus adjacent parcel of 1.01 acres)   Lexington;
Rockbridge   Rockbridge Memorial Gardens LLC Roosevelt Memorial Park  
Chesapeake   Cemetery Investments LLC Roselawn Burial Park & Funeral Home  
Martinsville   Roselawn Development LLC Roselawn Cemetery   Marion; Smyth   Rose
Lawn Cemeteries LLC Roselawn Memorial Gardens   Christiansburg; Montgomery  
Loewen [Virginia] LLC

Rosewood Memorial Gardens

(Plus adjacent 8.04 acres)

  Rural Retreat; Wythe   Loewen [Virginia] LLC Russell Memorial Cemetery  
Lebanon; Russell   Russell Memorial Cemetery LLC Shenandoah Memorial Park  
Winchester; Frederick   Shenandoah Memorial Park LLC Sunset Memorial Gardens  
Fredricksburg; Spotsylvania   Sunset Memorial Gardens LLC Temple Hill Memorial
Park   Castlewood, Russell   Temple Hill LLC Virginia Monument Company (This is
the 0.727 acres adjacent to Roselawn Cemetery)   Marion; Smyth   Rose Lawn
Cemeteries LLC Virginia Memorial Park   Forest; Bedford   Stitham LLC     West
Virginia     Beverly Hills Cemetery   Westover; Monongalia   Cornerstone Family
Services of West Virginia LLC Clendenin Memorial Park   Dunbar; Kanawha  
Cornerstone Family Services of West Virginia LLC Evergreen Cemetery North/South
  Parkersburg; Wood   Cornerstone Family Services of West Virginia LLC Fairview
Memorial Gardens   Hamlin, Lincoln   Cornerstone Family Services of West
Virginia LLC Floral Hills Garden of Memories   Sissonville; Kanawha  
Cornerstone Family Services of West Virginia LLC Floral Hills Memorial Gardens  
Mt. Clare; Harrison   Cornerstone Family Services of West Virginia LLC Forest
Memorial Park   Milton; Cabell   Cornerstone Family Services of West Virginia
LLC Forest Lawn Memorial Gardens and Mausoleum   West Huntingdon; Cabell  
Cornerstone Family Services of West Virginia LLC Grandview Memorial Park and
Mausoleum (Plus additional 5.06 acres)   Dunbar; Kanawha   Cornerstone Family
Services of West Virginia LLC

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

Property*

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

 

State Locations/County

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

 

Property Owner

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

Grandview Memorial Gardens (Plus additional 21 acres)   Fairmount; Kanawha  
Cornerstone Family Services of West Virginia LLC Greenbrier Burial Park  
Greenbrier; Summers   Cornerstone Family Services of West Virginia LLC Guyan
Memorial Gardens   Pecks Mill; Logan   Cornerstone Family Services of West
Virginia LLC Halcyon Hills Memorial Gardens   Wheeling; Marshall   Cornerstone
Family Services of West Virginia LLC Highland Hills Memorial Gardens  
Follansbee; Brooke   Cornerstone Family Services of West Virginia LLC Highland
Memory Gardens   Pecks Mill; Logan   Cornerstone Family Services of West
Virginia LLC Jackson County Memory Gardens   Cottageville; Jackson   Cornerstone
Family Services of West Virginia LLC Montgomery Memorial Park   London; Kanawha
  Cornerstone Family Services of West Virginia LLC Palm Memorial Gardens  
Matheny; Wyoming   Cornerstone Family Services of West Virginia LLC Parkview
Memorial Gardens   Wheeling; Marshall   Cornerstone Family Services of West
Virginia LLC Pineview Cemetery   Orgas; Boone   Cornerstone Family Services of
West Virginia LLC Resthaven Memorial Park (Plus additional 0.71 acres)  
Princeton; Mercer   Cornerstone Family Services of West Virginia LLC Restlawn
Memorial Gardens   Bluefield; Mercer   Cornerstone Family Services of West
Virginia LLC Restwood Memorial Gardens   Jumpin Branch District; Summers  
Cornerstone Family Services of West Virginia LLC Shadow Lawn Memory Gardens  
Newell; Hancock   Cornerstone Family Services of West Virginia LLC Spring Valley
Memory Gardens (Plus adjacent 1.453 acres)   West Huntingdon; Wayne  
Cornerstone Family Services of West Virginia LLC Sunset Memorial Park - S
Charleston   South Charleston; Kanawha   Cornerstone Family Services of West
Virginia LLC Sunset Memorial Park - Beckley   Beckley; Raleigh   Cornerstone
Family Services of West Virginia LLC Valley View Memorial Park   Hurricane;
Putnam   Cornerstone Family Services of West Virginia LLC West Virginia Memorial
Gardens   Calvin; Nicholas   Cornerstone Family Services of West Virginia LLC
White Chapel Memorial Gardens   Barboursville; Cabell   Cornerstone Family
Services of West Virginia LLC Woodlawn Memorial Park   Bluefield; Mercer  
Cornerstone Family Services of West Virginia LLC

 

* See Annex B to Security Agreement for addresses.

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

LEASED PROPERTIES

 

Leases as Landlord/Lessor

 

1. Lease Agreement dated May 25, 2000 between Bedford County Memorial Park,
Inc., as landlord, and Crown Atlantic Company LLC, as tenant:

 

  Location: Mt. Royal Memorial Park, 2700 Mt. Royal Road, Glenshaw, Pennsylvania

  Use: Communications Cell tower

  Term: Five (5) years from May 25, 2000 with four (4) automatic five (5) year
extensions and one (1) 4-year, 11 month extension

 

2. Oral Lease between Mt. Airy Cemetery, Inc., as landlord, and Michael Shane,
as tenant:

 

  Location: Mt. Airy Cemetery, 2800 Old Freeport Road, Natrona Heights,
Pennsylvania

  Use: Lease of a house to Michael Shane

  Term: Month to month. Michael Shane is the superintendent of the cemetery

 

3. Lease dated April 10, 2001 between Voegtly Cemetery, as landlord, and The
Lamar Companies, as tenant:

 

  Location: Voegtly Cemetery, Pittsburgh, Pennsylvania

  Use: Right to install a Billboard at the site

  Term: Five (5) years, expires March 14, 2006. Automatic renewal for an
additional five (5) year term, thereafter automatic year to year renewals

 

4. Real Estate Lease dated January 1, 1996 between The Prospect Cemetery, as
landlord, and Matthew Outdoor Advertising Acquisition Co. L.P.:

 

  Location: Prospect Cemetery, 501 East Prospect Street, East Stroudsburg,
Pennsylvania

  Use: Right to install a Billboard at the site

  Term: for five (5) years, with automatic renewal from year to year.

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

5. Funeral Home Lease between Bedford County Memorial Park, Inc., as landlord,
and Matthew Arena Funeral Home, P.C., as tenant:

 

  Location: Mt. Royal Memorial Park, 2700 Mt. Royal Boulevard, Glenshaw,
Pennsylvania

  Use: Lease is for the funeral home constructed by Cornerstone

  Term: Ten (10) years from May 1, 2001 to April 30, 2011

 

6. Agreement with Bernard Stoecklein that allows Walter Stoecklein to utilize an
area of the Lakewood Memorial Park at 943 Route 10, Cheswick, Pennsylvania as a
pasture for his horse:

 

Agreement was part of the acquisition agreement when Loewen acquired the CMS
West entities and expires in 2007.

 

7. License Agreement dated February 11, 2003 between PVD Acquisitions, Inc., as
landlord, and The Church at Waterlick, as tenant:

 

  Location: Panorama Memorial Gardens, Strasburg, North River District, Warren
County, Virginia

  Use: Revocable license for area approximately 200 feet by 1,227.5 feet for use
for church functions.

  Term: for five (5) years, expiring February 11. 2008, unless terminated
sooner.

 

8. Lease dated December 19, 2003 with Option to Purchase between Chartiers
Cemetery Company, as landlord, and Pennsylvania-American Water Company, as
tenant:

 

  Location: Chartiers Cemetery, Pittsburgh, Allegheny County, Pennsylvania

  Use: Lease is for land for Tenant to construct and operate a pressure reducing
valve station and a below grade meter vault (for municipal water service).

  Term: Ninety-nine (99) years from January 1, 2004 to December 31, 2103 with
one option to renew for ninety-nine (99) additional years, plus an option to
purchase by Tenant at any time during the term.

 

Leases as Tenant/Lessee

 

1. Lease dated February 22, 2002 between Rittenhouse Circle Partners, L.P., as
landlord, and Cornerstone Family Services, Inc., as tenant:

 

  Location: Cornerstone Headquarters, 155 Rittenhouse Circle, Bristol,
Pennsylvania

  Use: Office building

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

  Term: Expires February 28, 2012

 

2. Agreement of Lease dated January 31, 1994 and First Amendment to Office Lease
dated March 1999 between Corporate Plaza Associates, L.L.C. (as successor to
Metropolitan Life Insurance Company), as landlord, and Osiris Management, Inc.
(as successor to Shipper Management Group), as tenant:

 

  Location: Metropolitan Corporate Plaza, 485 Route One, Building B, Iselin, New
Jersey

  Use: General office use

  Term: Expires May 31, 2004

 

3. Lease Agreement dated June 7, 1999 between Resun Leasing Incorporated, as
lessor, and Cornerstone Family Services, Inc., as lessee:

 

  Location: Westminster Cemetery, 1159 Newville Road, Carlisle, Pennsylvania

  Use: Lease of two (2) modular 12 by 44 foot trailer units

  Term: Month-to-month

 

4. Lease dated April 30, 2000 between 401 Pilgrim Associates, as landlord, and
Cornerstone Family Services, Inc., as tenant:

 

  Location: 401 Pilgrim Lane, Drexel Hill, Pennsylvania

  Use: Sales office

  Term: Four (4) years and four (4) months to expire October 1, 2004

 

5. Lease Agreement dated November 2, 2000 between Howard Fine, as landlord, and
Glen Haven Memorial Park, Inc., as tenant:

 

  Location: Suites D and E, 7231 Ritchie Highway, Glen Burnie, Maryland.

  Use: General office

  Term: Expires January 31, 2003

 

6. Lease dated November 1, 1999 between BRIT Limited Partnership, as landlord,
and Cornerstone Family Services, Inc., as tenant:

 

  Location: Suite 121, Building 1000, Century Plaza, 10630 Little Patuxent
Parkway, Columbia, Maryland

  Use: General office

  Term: Expires October 31, 2000, was renewed for an additional one year period
and lease provides for automatic one year renewals

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

7. Lease dated September 18, 1996 with GE Capital Modular Space (now presumably
this is Resun Leasing Incorporated), as lessor:

 

  Location: Bethlehem Memorial Park, Bethlehem, Pennsylvania

  Use: Lease of two 12 by 44 foot trailer units

  Term: Lease appears to be on a month to month basis with 60 days prior notice
to terminate required

 

8. Lease dated August 6, 1997 with GE Capital Modular Space (now Resun Leasing
Incorporated), as lessor:

 

  Location: Parklawn Memorial Gardens, Route 219, Boot Jack Road, Ridgway,
Pennsylvania

  Use: Lease of two 12 by 64 foot trailer units

  Term: Lease appears to be on a month to month basis with 60 days prior notice
to terminate required

 

9. Lease dated June 2, 1999 with Storage USA, as lessor:

 

  Location: Storage Unit #0070, 2900 Ford Road, Bristol, Pennsylvania

  Use: Lease of a 10 by 25 foot storage unit

  Term: Month to month

 

10. Lease dated January 26, 2000 between William B. Consolo, as landlord, and
Crown Hill Cemetery, as tenant:

 

  Location: 2194 East Enterprise Road, Twinsburg, Ohio

  Use: Office and warehouse use

  Term: Three (3) years from the date which is ten days after substantial
completion of the improvements (probably sometime in February 2003)

 

11. Lease dated May 8, 1998 with GE Capital Modular Space (now presumably this
is Resun Leasing Incorporated), as lessor:

 

  Location: Twin Hills Memorial Park, Muncy, Pennsylvania

  Use: Lease of two 12 by 48 foot trailer units

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

  Term: Lease appears to be on a month to month basis with 60 days prior notice
to terminate required

 

12. Oral Lease for warehouse space used to store caskets for the Roselawn Burial
Park and Funeral Home which is located in Martinsville, Virginia.

 

13. Lease Agreement dated November 22, 2002 between Roger L. DeVille and
Cornerstone Family Services, Inc.

 

  Location: Suite 109, Village Court East 3969 Convenience Circle, N.W., Canton,
OH

  Use: Office Space, 3,348 Square Feet

  Term: Expires December 31, 2007

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

SCHEDULE IV

 

EXISTING INDEBTEDNESS

 

Capitalized lease obligations/purchase money indebtedness specifically relating
to the UCC filings listed on Schedule IX.

 

Approximately $2,367,000 in seller notes (see footnote 8 to consolidated
financial statements included in Form S-1), all to be paid at or shortly after
the Effective Date with proceeds of the Qualified IPO).

 

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

SCHEDULE V

 

PENSION PLANS

 

401K Retirement and Savings Plan – American Funds: offered to all employees who
were not included in collectively bargained agreements.

 

Employees of the not-for-profit cemeteries listed below participate in a
combined 401(k) plan named “Cemetery Association Plan” rather than the
Cornerstone Family Services, Inc. 401(k) plan, with the exception of Mt. Lebanon
Cemetery grounds employees who are collectively bargained and have pension
benefit plans negotiated pursuant to a collectively bargained agreement:

 

Willowbrook Cemetery

395 N. Main Street

Westport, CT 06880

 

Beth Israel Cemetery

US Hwy 1

Woodbridge, NJ 07095

 

Cloverleaf Memorial Park

Gill Lane

Iselin, NJ 08830

 

Mt. Lebanon Cemetery

Routes 1 & 35

Woodbridge, NJ 07095

 

Locustwood Cemetery

1500 Route 70 West

Cherry Hill, NJ 08002

 

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

SCHEDULE VI

 

EXISTING INVESTMENTS

 

Entity

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

  

Certificates of
Indebtedness
Issued

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

  

Holder of Certificates Outstanding

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

Beth Israel Cemetery Association of Woodbridge, New Jersey (non-profit
association)    $22,510,730    StoneMor Operating LLC Bethel Cemetery
Association (non-profit association)    $240,556    Arlington Development
Company Clover Leaf Park Cemetery Association (non-profit association)   
$325,625    StoneMor Operating LLC Locustwood Cemetery Association (non-profit
association)    $2,060,000    StoneMor Operating LLC Mt. Airy Cemetery, Inc.   
$147,000    StoneMor Operating LLC

 

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

SCHEDULE VII

 

SUBSIDIARIES

 

ALABAMA

 

Entity

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

  

Ownership Of Equity Outstanding

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

The Valhalla Cemetery Company LLC    100% - StoneMor Operating LLC The Valhalla
Cemetery Subsidiary Corporation    100% - The Valhalla Cemetery Company LLC

 

CONNECTICUT

 

Entity

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

  

Ownership Of Equity Outstanding

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

Willow Brook Management Corp.    100% - Laurelwood Holding Company

 

DELAWARE

 

Entity

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

  

Ownership Of Equity Outstanding

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

Henlopen Memorial Park LLC    100% - StoneMor Operating LLC Osiris Holding
Finance Company    100% - Henlopen Memorial Park Subsidiary, Inc. Osiris Holding
of Maryland LLC    100% - StoneMor Operating LLC Perpetual Gardens.Com, Inc.   
100% - Henlopen Memorial Park Subsidiary, Inc. Cornerstone Family Insurance
Services, Inc.    100% - Henlopen Memorial Park Subsidiary, Inc. Henlopen
Memorial Park Subsidiary, Inc.    100% - Henlopen Memorial Park LLC Cornerstone
Funeral and Cremation Services LLC    100% - Henlopen Memorial Park Subsidiary,
Inc. Cemetery Management Services, L.L.C.    100% - Henlopen Memorial Park
Subsidiary, Inc. Cemetery Management Services of Mid-Atlantic States, L.L.C.   
100% - Cemetery Management Services, L.L.C. Cemetery Management Services of
Ohio, L.L.C.    100% - Cemetery Management Services, L.L.C. Cemetery Management
Services of Pennsylvania, L.L.C.    100% - Cemetery Management Services, L.L.C.
Glen Haven Memorial Park LLC    100% - StoneMor Operating LLC Lorraine Park
Cemetery LLC    100% - StoneMor Operating LLC WNCI LLC    100% - StoneMor
Operating LLC

 

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

GEORGIA

 

Entity

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

  

Ownership Of Equity Outstanding

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

Lakewood Memory Gardens South LLC    100% - StoneMor Operating LLC Lakewood
Memory Gardens South Subsidiary, Inc.    100% - Lakewood Memory Gardens South
LLC

 

MARYLAND

 

Entity

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

  

Ownership Of Equity Outstanding

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

Cedar Hill Funeral Home, Inc.    100% - Sunset Memorial Park, Inc. Columbia
Memorial Park LLC    100% - StoneMor Operating LLC Modern Park Development LLC
   100% - StoneMor Operating LLC Springhill Memory Gardens LLC    100% -
StoneMor Operating LLC Sunset Memorial Park LLC    100% - StoneMor Operating LLC
Wicomico Memorial Parks LLC    100% - StoneMor Operating LLC Columbia Memorial
Park Subsidiary, Inc.    100% - Columbia Memorial Park LLC Glen Haven Memorial
Park Subsidiary, Inc.    100% - Glen Haven Memorial Park LLC Lorraine Park
Cemetery Subsidiary, Inc.    100% - Lorraine Park Cemetery LLC Modern Park
Development Subsidiary, Inc.    100% - Modern Park Development Springhill Memory
Gardens Subsidiary, Inc.    100% - Springhill Memory Gardens LLC Sunset Memorial
Park Subsidiary, Inc.    100% - Sunset Memorial Park LLC W N C Subsidiary, Inc.
   100% - WNCI LLC Wicomico Memorial Parks Subsidiary, Inc.    100% - Wicomico
Memorial Parks LLC Osiris Holding of Maryland Subsidiary, Inc.    100% - Osiris
Holding of Maryland LLC

 

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

NEW JERSEY

 

Entity

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

  

Ownership Of Equity Outstanding

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

Arlington Development Company    100% - Cornerstone Family Services of New
Jersey, Inc. Osiris Management, Inc.    100% - Cornerstone Family Services of
West Virginia Subsidiary, Inc. Bethel Cemetery Association    Owners of
interment space have one vote for each grave, crypt and niche owned, and each
owner of a certificate of indebtedness or certificate of interest has one vote
for each $250 of value thereof. There are no other voting rights. Clover Leaf
Park Cemetery Association    Owners of interment space have one vote for each
grave, crypt and niche owned, and each owner of a certificate of indebtedness or
certificate of interest has one vote for each $250 of value thereof. There are
no other voting rights. Locustwood Cemetery Association    Owners of interment
space have one vote for each grave, crypt and niche owned, and each owner of a
certificate of indebtedness or certificate of interest has one vote for each
$250 of value thereof. There are no other voting rights. Beth Israel Cemetery
Association of Woodbridge, New Jersey    Owners of interment space have one vote
for each grave, crypt and niche owned, and each owner of a certificate of
indebtedness or certificate of interest has one vote for each $250 of value
thereof. There are no other voting rights. Legacy Estates, Inc.    100% -
Cornerstone Family Services of New Jersey, Inc. Cornerstone Family Services of
New Jersey, Inc.    100% - StoneMor Operating LLC

 

NEW YORK

 

Entity

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

  

Ownership Of Equity Outstanding

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

Osiris Telemarketing Corp.    100% - Cornerstone Family Services of West
Virginia Subsidiary, Inc.

 

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

OHIO

 

Entity

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

  

Ownership Of Equity Outstanding

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

Butler County Memorial Park LLC    100% - StoneMor Operating LLC Butler County
Memorial Park Subsidiary, Inc.    100% - Butler County Memorial Park LLC Crown
Hill Cemetery Association    Only the governing board of members has voting
rights. Vacancies on the board are filled by vote of the remaining members.

 

PENNSYLVANIA

 

Entity

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

  

Ownership Of Equity Outstanding

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

Blue Ridge Memorial Gardens LLC    100% - StoneMor Operating LLC CMS West LLC   
100% - StoneMor Operating LLC Green Lawn Memorial Park LLC    100% - StoneMor
Operating LLC Juniata Memorial Park LLC    100% - StoneMor Operating LLC Eloise
B. Kyper Funeral Home, Inc.    100% - CMS West Subsidiary LLC Laurelwood Holding
Company    100% - StoneMor Operating LLC Laurelwood Cemetery Company    100% -
Laurelwood Holding Company Melrose Land LLC    100% - StoneMor Operating LLC
Osiris Holding of Pennsylvania LLC    100% - StoneMor Operating LLC Riverview
Memorial Gardens LLC    100% - StoneMor Operating LLC Rolling Green Memorial
Park LLC    100% - StoneMor Operating LLC Tri-County Memorial Gardens LLC   
100% - StoneMor Operating LLC J.V. Walker LLC    100% - StoneMor Operating LLC
Chartiers Cemetery LLC    100% - StoneMor Operating LLC The Prospect Cemetery
LLC    100% - StoneMor Operating LLC Twin Hills Memorial Park and Mausoleum LLC
   100% - StoneMor Operating LLC Tioga County Memorial Gardens LLC    100% -
StoneMor Operating LLC Bedford County Memorial Park LLC    100% - StoneMor
Operating LLC The Coraopolis Cemetery Company    100% - Laurelwood Holding
Company Mt. Airy Cemetery, Inc.    Only holders of certificates of indebtedness
have voting rights. Mount Lebanon Cemetery LLC    100% - StoneMor Operating LLC
Prospect Hill Cemetery LLC    100% - StoneMor Operating LLC Riverside Cemetery
LLC    100% - StoneMor Operating LLC Westminster Cemetery LLC    100% - StoneMor
Operating LLC Woodlawn Memorial Park Association    Only members (for which
membership certificates are issued) have voting rights. Woodlawn Memorial
Gardens LLC    100% - StoneMor Operating LLC Morris Cemetery Perpetual Care
Company    100% - StoneMor Operating LLC

 

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

Entity

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

  

Ownership Of Equity Outstanding

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

Bedford County Memorial Park Subsidiary LLC    100% - Laurelwood Holding Company
Blue Ridge Memorial Gardens Subsidiary LLC    100% - Laurelwood Holding Company
Chartiers Cemetery Subsidiary LLC    100% - Laurelwood Holding Company CMS West
Subsidiary LLC    100% - Laurelwood Holding Company Green Lawn Memorial Park
Subsidiary LLC    100% - Laurelwood Holding Company J.V. Walker Subsidiary LLC
   100% - Laurelwood Holding Company Juniata Memorial Park Subsidiary LLC   
100% - Laurelwood Holding Company Melrose Land Subsidiary LLC    100% -
Laurelwood Holding Company Laurelwood Cemetery Subsidiary LLC    100% - StoneMor
Operating LLC Mount Lebanon Cemetery Subsidiary LLC    100% - Laurelwood Holding
Company Mt. Airy Cemetery Subsidiary LLC    100% - StoneMor Operating LLC Osiris
Holding of Pennsylvania Subsidiary LLC    100% - Laurelwood Holding Company
Prospect Hill Cemetery Subsidiary LLC    100% - Laurelwood Holding Company
Riverside Cemetery Subsidiary LLC    100% - Laurelwood Holding Company Riverview
Memorial Gardens Subsidiary LLC    100% - Laurelwood Holding Company Rolling
Green Memorial Park Subsidiary LLC    100% - Laurelwood Holding Company The
Coraopolis Cemetery Subsidiary LLC    100% - StoneMor Operating LLC The Prospect
Cemetery Subsidiary LLC    100% - Laurelwood Holding Company

 

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

Entity

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

  

Ownership Of Equity Outstanding

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

Tioga County Memorial Gardens Subsidiary LLC

   100% - Laurelwood Holding Company

Tri-County Memorial Gardens Subsidiary LLC

   100% - Laurelwood Holding Company

Twin Hills Memorial Park and Mausoleum Subsidiary LLC

   100% - Laurelwood Holding Company

Westminster Cemetery Subsidiary LLC

   100% - Laurelwood Holding Company

Woodlawn Memorial Gardens Subsidiary LLC

   100% - StoneMor Operating LLC

Woodlawn Memorial Park Subsidiary LLC

   100% - Laurelwood Holding Company

Mt. Airy Cemetery Parent LLC

   100% - StoneMor Operating LLC

The Coraopolis Cemetery Parent LLC

   100% - StoneMor Operating LLC

Laurelwood Cemetery Parent LLC

   100% - StoneMor Operating LLC

Woodlawn Memorial Park Parent LLC

   100% - StoneMor Operating LLC

 

RHODE ISLAND

 

Entity

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

  

Ownership Of Equity Outstanding

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

Osiris Holding of Rhode Island LLC

   100% - StoneMor Operating LLC

Osiris Holding of Rhode Island Subsidiary, Inc.

   100% - Osiris Holding of Rhode Island LLC

 

TENNESSEE

 

Entity

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

  

Ownership Of Equity Outstanding

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

Lakewood/Hamilton Cemetery LLC

   100% - StoneMor Operating LLC

Lakewood/Hamilton Cemetery Subsidiary, Inc.

   100% - Lakewood/Hamilton Cemetery LLC

 

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

VIRGINIA

 

Entity

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

  

Ownership Of Equity Outstanding

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

Allegheny Memorial Park LLC

   100% - StoneMor Operating LLC

Altavista Memorial Park LLC

   100% - StoneMor Operating LLC

Birchlawn Burial Park LLC

   100% - StoneMor Operating LLC

Cemetery Investments LLC

   100% - StoneMor Operating LLC

Covenant Acquisition LLC

   100% - StoneMor Operating LLC

Henry Memorial Park LLC

   100% - StoneMor Operating LLC

KIRIS LLC

   100% - StoneMor Operating LLC

Laurel Hill Memorial Park LLC

   100% - StoneMor Operating LLC

Loewen [Virginia] LLC

   100% - StoneMor Operating LLC

Oak Hill Cemetery LLC

   100% - StoneMor Operating LLC

PVD Acquisitions LLC

   100% - StoneMor Operating LLC

Rockbridge Memorial Gardens LLC

   100% - StoneMor Operating LLC

Rose Lawn Cemeteries LLC

   100% - StoneMor Operating LLC

Roselawn Development LLC

   100% - StoneMor Operating LLC

Russell Memorial Cemetery LLC

   100% - StoneMor Operating LLC

Shenandoah Memorial Park LLC

   100% - StoneMor Operating LLC

Southern Memorial Sales LLC

   100% - StoneMor Operating LLC

Star City Memorial Sales LLC

   100% - StoneMor Operating LLC

Stitham LLC

   100% - StoneMor Operating LLC

Sunset Memorial Gardens LLC

   100% - StoneMor Operating LLC

Temple Hill LLC

   100% - StoneMor Operating LLC

Virginia Memorial Service LLC

   100% - StoneMor Operating LLC

Augusta Memorial Park Perpetual Care Company

   100% - StoneMor Operating LLC

Alleghany Memorial Park Subsidiary, Inc.

   100% - Alleghany Memorial Park LLC

Altavista Memorial Park Subsidiary, Inc.

   100% - Altavista Memorial Park LLC

Birchlawn Burial Park Subsidiary, Inc.

   100% - Birchlawn Burial Park LLC

Cemetery Investments Subsidiary, Inc.

   100% - Cemetery Investments LLC

Covenant Acquisition Subsidiary, Inc.

   100% - Covenant Acquisition LLC

Henry Memorial Park Subsidiary, Inc.

   100% - Henry Memorial Park LLC

KIRIS Subsidiary, Inc.

   100% - StoneMor Operating LLC

Laurel Hill Memorial Park Subsidiary, Inc.

   100% - Laurel Hill Memorial Park LLC

Loewen [Virginia] Subsidiary, Inc.

   100% - Loewen [Virginia] LLC

Oak Hill Cemetery Subsidiary, Inc.

   100% - Oak Hill Cemetery LLC

PVD Acquisitions Subsidiary, Inc.

   100% - PVD Acquisitions LLC

Rockbridge Memorial Gardens Subsidiary Company

   100% - Rockbridge Memorial Gardens LLC

Rose Lawn Cemeteries Subsidiary, Incorporated

   100% - Rose Lawn Cemeteries LLC

Roselawn Development Subsidiary Corporation

   100% - Roselawn Development LLC

Russell Memorial Cemetery Subsidiary, Inc.

   100% - Russell Memorial Cemetery LLC

Shenandoah Memorial Park Subsidiary, Inc.

   100% - Shenandoah Memorial Park LLC

Southern Memorial Sales Subsidiary, Inc.

   100% - Southern Memorial Sales LLC

 

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

Entity

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

  

Ownership Of Equity Outstanding

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

Star City Memorial Sales Subsidiary, Inc.

   100% - Star City Memorial Sales LLC

Stitham Subsidiary, Incorporated

   100% - Stitham LLC

Sunset Memorial Gardens Subsidiary, Inc.

   100% - Sunset Memorial Gardens LLC

Temple Hill Subsidiary Corporation

   100% - Temple Hill LLC

Virginia Memorial Service Subsidiary Corporation

   100% - Virginia Memorial Service LLC

 

WEST VIRGINIA

 

Entity

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

  

Ownership Of Equity Outstanding

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

Cornerstone Family Services of West Virginia LLC

   100% - StoneMor Operating LLC

Cornerstone Family Services of West Virginia Subsidiary, Inc.

   100% - Cornerstone Family Services of West Virginia LLC

 

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

SCHEDULE VIII

 

INSURANCE

 

Directors, Officers and Private Company Liability Insurance Policy – American
International Companies (National Union Fire Insurance Company of Pitts., Pa) -
$25,000,000 Limit.

 

Directors, Officers and Private Company Liability Insurance Policy (to become
effective upon date of initial public offering and continue in effect for one
year):

 

Ace (Illinois National Insurance) - $10,000,000 Limit

Hartford - $10,000,000 Limit

Liberty International - $5,000,000 Limit

 

See attached summaries of insurance.

 

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

 

2004—2005

 

Schedule of Insurance

 

LOGO [g45788img157_i.jpg]

 

LOGO [g45788img157_ii.jpg]    Aon Risk Services     

One Liberty Place

1650 Market Street

Suite 1000

Philadelphia, PA 19103

(215) 255-2000

(800) 545-4301

 

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Table of Contents

 

     Page

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

Property

   1

Boiler & Machinery

   3

General Liability

   4

Automobile

   5

Workers’ Compensation

   7

Umbrella

   8

Crime

   10

Fiduciary Liability

   11

Kidnap & Ransom

   12

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Property Limits and Coverages

 

Carrier:    Crum & Forster    Policy Number:        2441869497 Term:    1
Year                    Expiration Date:        03/31/05      Premium:   
$187,933      Limits:    $25,000,000    Blanket Real & Personal Property
(Including EDP) Business Income/Extra Expense Sub-Limits:    $10,000,000   
Flood—Per Occurrence/Aggregate      1,000,000    Flood—Per
Occurrence/Aggregate-FEMA Zones A & V      10,000,000    Earthquake—Per
Occurrence/Aggregate      1,000,000    Newly Acquired Property (90 days)     
100,000    Miscellaneous Unscheduled or Unnamed Locations      Blanket Limit   
Personal Property of Employees      Blanket Limit    Demolition and Increased
Cost of Construction      Blanket Limit    Outdoor Property (Excluding Growing
Crops & Standing Timber))      Blanket Limit    Accounts Receivable      Blanket
Limit    Fine Arts      Blanket Limit    Transit      Blanket Limit    Valuable
Papers      Blanket Limit    Service Interruption (Property Damage)      Blanket
Limit    Service Interruption (Business Income)      Blanket Limit    Debris
Removal      30 Days    Civil Authority/Ingress Egress      250,000    Pollution
Clean-Up and Removal—Per Occurrence/Aggregate Deductibles:    $15,000    All
Property Coverages Combined      50,000    Vandalism, Theft or Burglary      2%
   Named Windstorm—Tier 1 Counties & Florida. The deductible is Per Building
Involved Subject to a $100,000 Minimum      25,000    Flood & Earthquake     
100,000    Flood - FEMA Zones A & V Coverages:   

•      All Risk Property Form, (Subject to Policy Exclusions) Including Flood &
Earthquake

    

•      EDP Mechanical Breakdown

    

•      Back-Up of Sewers & Drains Included as an Insured Peril

    

•      Underground Water Seepage Included as an Insured Peril

 

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

   

•      Insured Property Defined to Include Foundations Below the Lowest Basement
Floor or Below Ground Level if There is no Basement, Underground Pipes & Flues
and Cost of Excavation, Grading or Filling.

   

•      Control of Damaged Merchandise

   

•      Consequential Loss

   

•      Joint Loss Agreement with Boiler & Machinery Policy

   

•      Real, Personal Property & EDP—Values Reported at 100%

   

•      Replacement Cost

   

•      Cost to Recreate Data/ Media & Valuable Papers

   

•      Finished Stock/Merchandise For Sale—Selling Price

   

•      Agreed Amount—Property Damage

   

•      Business Income/Extra Expense—Values Reported at 100%

   

•      Actual Loss Sustained—Business Income/Extra Expense

   

•      Agreed Amount—Business Income/Extra Expense

   

•      Expediting Expense

   

•      Excludes Electronic Vandalism

   

•      Excludes Losses Related to Y2K

   

•      Excludes Terrorism, Except Fire Following in Certain States

   

•      Excludes Mold

   

•      90 Day Notice of Cancellation or Non-Renewal Except 10 Days for
Non-Payment of Premium

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Boiler & Machinery Limits and Coverages

 

Carrier:   

Continental Casualty (CNA)

 

Policy Number:           BM1098741473

Term:   

1 Year

   Expiration Date:         03/31/05              Premium:    $8,000     
Limits:    $20,000,000    Property Damage & Business Income/Extra Expense
Sub-Limits:    Blanket Limit    Newly Acquired Property (365 Days)      250,000
   Computer Controlled Equipment      $500,000    Demolition & Increased Cost of
Construction      Blanket Limit    Water Damage      500,000    Expediting
Expense      Blanket Limit    Service Interruption      Blanket Limit    Ammonia
Contamination      500,000    Hazardous Substance Deductible:    $5,000    All
Coverages Combined Coverages:   

•      Comprehensive

    

•      In Use or Connected & Ready for Use

    

•      Joint Loss Agreement With Property Policy

    

•      Replacement Cost

    

•      Debris Removal

    

•      Excludes Losses Related to Y2K

    

•      60 Day Notice of Cancellation or Non-Renewal Except 15 Days for
Non-Payment of Premium

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Commercial General Liability Limits and Coverages

 

Carrier:   

Twin City (Hartford)

 

Policy Number:          39ECSMF4273

Term:   

1 Year

   Expiration Date:        03/31/05            Premium:    $290,000      Limits:
   $1,000,000    Per Occurrence—Bodily Injury & Property Damage      4,000,000
   General Aggregate Limit (Other Than Products & Completed Operations)     
2,000,000    Products & Completed Operations Aggregate      1,000,000   
Personal Injury Liability      1,000,000    Advertising Injury Liability     
1,000,000    Fire Damage Legal Liability      10,000    Medical Expense
Limit—Any One Person      1,000,000    Employee Benefits Liability—Per
Occurrence      1,000,000    Employee Benefits Liability—Aggregate     
1,000,000    Errors & Omissions—Per Occurrence      1,000,000    Errors &
Omissions—Aggregate      1,000,000    Mortician’s or Cemetery
Liability-Aggregate Retentions:    $25,000    All Coverages Indicated Above     
10,000    Per Claim—Employee Benefits Liability (3/31/00 Retroactive Date)
Coverages:   

•      Automatic Coverage for Newly Acquired Organizations (180 Days)

    

•      Broad From Named Insured

    

•      Definition of Bodily Injury to Include Mental Anguish

    

•      Extended Bodily Injury

    

•      Contractual Liability (Oral or Written)

    

•      Broad Form Property Damage

    

•      Host Liquor Liability

    

•      Non-Owned Watercraft (Under 51 feet)

    

•      Vendors Endorsement

    

•      Per Location Aggregate (Premises Operations Only)

    

•      Blanket Additional Insured Where Required by Contract or Agreement

    

•      Waiver of Subrogation, Where Required by Contract or Agreement

    

•      Knowledge of Occurrence

    

•      Notice of Occurrence

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

    

•      Unintentional Errors & Omissions

    

•      Limited Worldwide Coverage

    

•      Excludes Employment Related Practices

    

•      Excludes Losses Related to Y2K

    

•      60 Day Notice of Cancellation or Non-Renewal Except 10 Days for
Non-Payment of Premium

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Automobile Limits and Coverages

 

Carrier:    Hartford Insurance    Policy Number:      39 UEN MF4275 Term:   

1 Year

   Expiration Date:    03/31/05 Premium:   

$184,646

         

 

               Covered Auto Symbols Limits:    $1,000,000    Combined Single
Limit
Bodily Injury & Property Damage    1      Statutory    Personal Injury
Protection    5      1,000,000    Non-Owned & Hired Car Coverage    8, 9     
1,000,000    Uninsured Motorist-Non-Stacked    2      1,000,000    Underinsured
Motorist-Non-Stacked    2      10,000    Medical Payments    5 Sub-Limits:   
$30    Per Day—Rental Reimbursement
($900 Maximum)    3      50,000    Hired Car Physical Damage    8 Deductibles:
   $2,500    Deductible—Comprehensive & Collision
(Trucks—Per Schedule on File)    2, 8      1,000    Deductible—Comprehensive &
Collision
(Private Passenger— Per Schedule on File)    2, 8 Coverages:   

•      Broad Form Named Insured

    

•      Employees as Insureds

    

•      Fellow Employee Exclusion Deleted

    

•      Drive Other Car Coverage

    

•      Pollution Coverage—ISO Wording (Vehicle Collision or Overturn)

    

•      Lessors as Additional Insured/Loss Payee Where Required by Contract or
Agreement

    

•      Waiver of Subrogation Where Required by Contract or Agreement

    

•      Knowledge of Occurrence

    

•      Notice of Occurrence

    

•      Unintentional Errors & Omissions

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

    

•      Composite Rate Endorsement

    

•      60 Day Notice of Cancellation or Non-Renewal Except 10 Days for
Non-Payment of Premium

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Definition of Covered Automobile Symbols

 

#

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

  

Definition

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

1

   Any Automobile

2

   All Owned Automobiles

3

   Owned Private Passenger Automobiles

4

   Owned Automobiles Other Than Private Passenger

5

   All Owned Automobile Which Require No-Fault Coverage

6

   Owned Automobiles Subject to Compulsory Uninsured Law

7

   Automobiles Specified on Schedule

8

   Hired Automobiles

9

   Non-Owned Automobiles

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Workers Compensation and Employers Liability Limits & Coverages

 

Carrier:   

PMA

   Policy Number:      200300-12-36-43-9 Term:   

1 Year

   Expiration Date:    03/31/05 Premium:    $807,205           Assessments:   
Included           Limits:    Statutory    Coverage A—Workers’ Compensation     
          Coverage B—Employers Liability           $1,000,000    Each Accident
          1,000,000    Disease—Policy Limit           1,000,000    Disease—Each
Employee           1,000,000    Stop Gap Bodily Injury by Accident          
1,000,000    Stop Gap Liability—Aggregate Limit           1,000,000    Stop Gap
Injury by Disease—Each Employee           25,000    Repatriation Expanse     
Coverages:   

•      Statutory Coverage

         

•      Employers Liability

         

•      Broad Form All States Endorsement

         

•      Endemic Disease

         

•      Foreign Coverage

         

•      Stop Gap Coverage For Monopolistic States

         

•      USL&H Endorsement on an If Any Basis

         

•      Voluntary Compensation

         

•      Knowledge of Occurrence

         

•      Notice of Occurrence

         

•      60 Day Notice of Cancellation or Non-Renewal Except 10 Days for
Non-Payment of Premium

    

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Umbrella Limits and Coverages

 

Carrier:    American Guarantee (Zurich)    Policy Number:         AUC 9373284 01
Term:    1 Year    Expiration Date:        03/31/05 Premium:    $155,944        
            Limits:    $25,000,000    Per Occurrence      25,000,000   
Aggregate Retentions:    None    For Claims Not Covered by Underlying Policies  
   $1,000,000    Pollution Coverage—Named Peril Basis                    

COVERAGE IS EXCESS OF THE FOLLOWING

UNDERLYING POLICIES

                         General Liability      Insurance Company:    Twin City
(Hartford)           Policy Number    : 39ECSMF4273           Policy Period:   
3/31/03–3/31/04           $1,000,000    Per Occurrence—Bodily Injury & Property
Damage      4,000,000    General Aggregate Limit
(Other Than Products & Completed Operations)      2,000,000    Products &
Completed Operations Aggregate      1,000,000    Personal Injury Liability     
1,000,000    Advertising Injury Liability      1,000,000    Employee Benefits
Liability—Per Occurrence      1,000,000    Employee Benefits Liability—Aggregate
     1,000,000    Errors & Omissions—Per Occurrence      1,000,000    Errors &
Omissions—Aggregate                          Automobile Liability     
Insurance Company:    Hartford           Policy Number:    39UENMF4275          
Policy Period:    3/31/03–3/31/04           $1,000,000    Combined Single
Limit—Bodily Injury & Property Damage                          Employers
Liability

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

         Insurance Company:    PMA               Policy Number   
200300-12-36-43-9               Policy Period:    3/31/03–3/31/04              
$1,000,000    Each Accident          1,000,000    Disease—Policy Limit         
1,000,000    Disease—Each Employee

Coverages:    •      Pay on Behalf      •      Defense in Addition to Limits  
   •      Excludes Real & Personal Property in Your Care, Custody or Control  
   •      Pollution Coverage—Named Peril Basis      •      Asbestos, Lead &
Nuclear Exclusions (Coverage A & B)      •      Absolute Pollution
Exclusion—Except Hostile Fire (Coverage A & B)      •      Excludes Employment
Related Practices      •      Excludes Losses Related to Y2K      •      60 Day
Notice of Cancellation or Non-Renewal Except 10 Days for Non-Payment of Premium

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Crime Limits and Coverages

 

Carrier:    Zurich    Policy Number:         FID 361050402 Term:    1 Year   
Expiration Date:        03/31/05 Premium:    $5,500                     Limits:
   $1,000,000    Employee Theft      1,000,000    Money & Securities (On/Off
Premises)      1,000,000    Forgery & Alteration      1,000,000    Robbery &
Safe Burglary      1,000,000    Computer Fraud      1,000,000    Money Orders &
Counterfeit Currency      1,000,000    Credit Card Forgery Deductibles:   
$25,000    All Coverages Indicated Above      1,000    Money orders &
Counterfeit Currency & Credit Card Forgery

Coverages:    •      ERISA Compliance      •      Broad Definition of Employee  
   •      Territory—Anywhere in the World      •      60 Day Notice of
Cancellation or Non-Renewal Except 10 Days for Non-Payment of Premium

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Employee Benefit Plan Fiduciary Liability Limits and Coverages

 

Carrier:    National Union Fire Insurance Co. of Pittsburgh, PA (AIG)    Policy
Number:    363-11-27 Term:    1 Year    Expiration Date:    03/31/05

Premium:    $12,500                Limits:    $5,000,000    Per Occurrence     
          5,000,000    Aggregate           Retention:    $10,000    Per Claim   
      

Coverages:   

•      Claims Made Policy Covering Wrongful Acts Committed by the Insured
Relating to the Administration of Benefit Programs

    

•      Imprudent Investment or Lack of Investment Diversity

    

•      Imprudent Choice of Third-Party Providers

    

•      Worldwide Territory

    

•      Bilateral Extended Reporting Period available in the event of
cancellation by either party

    

•      Extended Reporting Period—75% of Annual Premium for One Year

    

•      Continuity Date—3/17/99

    

•      60 Day Notice of Cancellation or Non-Renewal Except 15 Days for
Non-Payment of Premium

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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LOGO [g45788imgpgi.jpg]    2004–2005 Schedule of Insurance

 

Kidnap & Ransom Limits and Coverages

 

Carrier:    Liberty Mutual    Policy Number:    182757014 Term:    1 Year   
Expiration Date:    03/31/05

Premium:    $3,250                Limit:    $1,000,000    Per Occurrence        
  Sub-Limits:    $100,000    Accidental Death & Dismemberment—Per Person        
       500,000    Accidental Death & Dismemberment—Aggregate          
Deductible:    None    All Coverages Insured          

Coverages:    •      Coverage Triggered by Date of Ransom Demand     
•      Kidnap & Ransom      •      Extortion Bodily Injury      •      Detention
     •      Extortion Property Damage      •      Coverage Provision for
Directors, Officers and Employees      •      Include Guests of the “Insured” in
Automobiles, Aircraft, Railroad Car, or Watercraft of the “Insured”     
•      Legal/Medical Expenses Related to Kidnap      •      Reward Monies Paid
by Insured      •      Reasonable Fees & Expenses Including Travel Expenses     
•      Salaries of Insured While Being Held For Ransom      •      Fees For
Public Relations & Communications      •      60 Day Notice of Cancellation or
Non-Renewal Except 10 Days for Non-Payment of Premium

 

LOGO [g45788imgpgii.jpg]    Aon Risk Services

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SCHEDULE IX

 

EXISTING LIENS

 

Judgments and Tax Liens

 

1. Against Bedford County Memorial Park, filed in Bucks County, Prothy on
10/20/01 in the amount of $37,084.

 

2. Against Rockbridge Memorial Gardens Company, filed in Rockbridge County on
7/14/92 in favor of J. Morton for wages in the amount of $705.37.

 

3. Against Crestview Memorial Park (n/k/a Bedford County Memorial Park), filed
in Bucks County, Prothy on 9/28/01 in favor of Pa. Department of Revenue in the
amount of $22,742.

 

UCC filings in respect of capitalized leases of specific equipment from the
following entities: Canon Financial Services, Inc.; New Holland Credit Company;
US Bancorp; Security Ford New Holland, Inc.; Deere & Co.; Downingtown National
Bank; and First Commonwealth Bank.

 

UCC filings covering specific pre-assembled mausoleums supplied by Cold Spring
Granite Company.

 

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SCHEDULE X

 

CAPITALIZATION

 

1. Partnership Common Units issuable pursuant to Article V of the Partnership
Agreement, including without limitation upon exercise of the over-allotment
option by the underwriters, upon conversion of Partnership Subordinated Units,
pursuant to the limited preemptive rights of the General Partner and its
Affiliates and pursuant to employee benefit plans of any Credit Party.

 

2. The limited call right of the General Partner pursuant to Article XV of the
Partnership Agreement.

 

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SCHEDULE XI

 

LITIGATION*

 

Connecticut

 

Willowbrook Management Corp. Investigatory subpoena from Connecticut Attorney
General’s office requesting information regarding the relationship between
Willowbrook Management Corp. and Willowbrook Cemetery.

 

Georgia

 

1. George L. Parsly. Petition seeking disinterment.

 

2. Nicholson v. Lakewood Memory Gardens. Claim arising out of disinterment,
autopsy and burial of plaintiff’s son.

 

Maryland

 

Melissa Adolphson v. Glen Haven Memorial Park. Claim for damages for personal
injuries as a result of sitting and falling on a defective bench.

 

New Jersey

 

1. Schimberg v. Beth Israel. Claim arising out of wrongful burial of decedent.

 

2. Mary Young v. Beth Israel. Claim arising out of slip and fall.

 

Ohio

 

Charles Garcia v. Butler County Memorial Park and James Conrad. Plaintiff filed
workers’ compensation claim with Ohio Bureau of Workers Compensation which was
ultimately denied. He has now filed suit in Court of Common Pleas of Butler
County against cemetery/employer and Administrator of Ohio Bureau of Workers’
Compensation requesting right to continue to participate in the Ohio Workers’
Compensation Fund for his lower back injury sustained on July 31, 2001.

 

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Pennsylvania

 

1. Edith Miller v. Prospect Cemetery. Letter from attorney for Edith Miller
demanding $5,000.00 for the allegedly insensitive and negligent handling of the
burial of Mrs. Miller’s husband. Mrs. Miller filed suit in June 1999, but there
has been no activity on this matter since October 2002.

 

Pennsylvania Funeral Board v. Cornerstone Family Services, Inc. Investigative
subpoena requesting statements of Funeral Goods and Services, Cremation
authorizations, pre-need burial contact and record of institutions holding any
pre-need funds.

 

Michelle Garnon v. Cornerstone Family Services. Claim for emotional distress
arising out of work related injury.

 

Mary A. Seifert v. Jeffrey Kuntz, Cornerstone Family Services, Inc. and Pinewood
Memorial Park, Inc. Alleged damages arising out of an automobile accident.

 

Maria Caiaccia v. Mount Royal Cemetery. Notice of Charge of Age Discrimination
filed with the Pittsburgh Area EEOC on March 7, 2003. This matter had been
dismissed at the administrative level. Plaintiff has initiated suit.

 

McCauley v. Bedford County Memorial Park. Complaint alleging breach of contract
and negligence in the construction of a monument.

 

Virginia V. Pardee v. Cornerstone Family Services, d/b/a Roselawn Memorial Park
et al. Litigation arising out of burial in incorrect graves. Matter is related
to Battersby below.

 

Jack N. Battersby v. Cornerstone Family Services, d/b/a Roselawn Memorial Park
et al. Litigation arising out of burial in incorrect graves. Matter is related
to Pardee matter above.

 

Loewen State Tax Claim. Alderwoods Group (formerly The Loewen Group) has advised
Cornerstone that it has settled certain Federal tax claims related to the Loewen
consolidated group. These claims pertain to periods during which Loewen owned
certain Cornerstone subsidiaries. The effect of this settlement may be to
require that Cornerstone on behalf of the relevant subsidiaries file amended
state tax returns. Cornerstone is without sufficient information to evaluate
this potential state tax exposure and has requested further information and
clarification from Loewen. Cornerstone believes that, in negotiating the Federal
tax settlement, Alderwoods either exceeded its authority or violated duties with
regard to the Cornerstone subsidiaries. It is therefore Cornerstone’s position
that Alderwoods is liable for any amounts determined to be owed to state taxing
authorities as a result of the Loewen’s Federal tax settlement. Cornerstone is
attempting through legal counsel to amicably resolve this matter.

 

Anthony and Janet Trapuzzano, Jr. v. South Side Cemetery, et al., Complaint
alleging breach of contract pertaining to representations made by agent when
selling plots, property damage and emotional/personal injury.

 

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Ebersole v. CMS West. Ebersole was an employee of Forest Hills Cemetery
Association. In 1986, Ebersole entered into an agreement which provided for
certain payments to him for life. CMS West is alleged to have guaranteed the
agreement. Ebersole seeks to enforce the guaranty.

 

Virginia

 

1. Leona Sue Dillman v. Rosewood Memorial Gardens. Complaint alleging that
Kermit Madison Dillman (former husband to the Petitioner) was buried in an
incorrect grave site. Petitioner is prepared to pay reasonable costs for
exhumation of the body, to pay all costs related to DNA tests, and to ask the
Court for assessment of the costs and other relief that the Court may deem
appropriate. Plaintiff seeks an order permitting the exhumation of her husband’s
remains and thereby confirm that he has been buried in the family plot.

 

2. Downs v. Oak Lawn. Claim arises out of the reopening and disinterest of the
grave of plaintiff’s son. During the reopening, the vault was crushed when the
backhoe being used to remove it, fell on the vault as a result of a cable sling
snapping. Plaintiff has demanded $1.5M. Matter has been dismissed as of February
2004 with opportunity to re-file through August 2004.

 

3. Delores A. Toombs and Mark B. Toombs v. Cornerstone Family Services, et al.
Claim involving a breach of contract related to funeral and burial services for
minor child.

 

West Virginia

 

1. Kimberly A. Harris, et al. v. Cornerstone Family Services, Inc. Claim by
current employees for commissions that they allege have been wrongfully
withheld.

 

2. Gloria J. Moon v. Cornerstone Family Services. Notice of Discrimination with
State of West Virginia Human Rights and EEOC for age discrimination and wrongful
termination, filed January 16, 2002. Marsh, USA notified by facsimile 2/4/02.

 

The West Virginia Human Rights Commission found no probable cause and a closing
order was entered in August 2002. Complainant has up to two years to bring
litigation.

 

3. Hanson v. Cornerstone Family Services. Summons and Complaint filed in the
Circuit Court of Kanawha County, West Virginia for alleged negligent practices
in connection with the disinternment and reinternment of Paulina Hanson, wife
and mother of the Plaintiffs, filed October 10, 2002.

 

4. Patricia Courtney v. Cornerstone Family Services of West Virginia, Inc., et
al. Amended Complaint alleges breach of contract and false, misleading and
deceptive business practices with regard to quality of the casket, pre-need
protections and incomplete Retail Installment and Security Agreement.

 

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5. Johnnie Mounts Ferritto v. Cornerstone Family Services (Highland Memory
Gardens).

 

Summons and Complaint dated August 29, 2003 and filed in Circuit Court of Logan
County, West Virginia for alleged negligent actions in upkeep of the premises
and duty of care.

 

6. Edna Napier v. Bernie Ellis and The West Virginia Department of
Transportation and Cornerstone Family Services of West Virginia d/b/a Highland
Memory Gardens, Inc. and Guyan Memorial Gardens, Inc. Complaint (Amended) filed
in Circuit Court of Logan County, West Virginia. Real estate dispute involving
implied right of way.

 

* These matters are listed for disclosure purposes only. The Credit Parties
represent and warrant that none of these matters if adversely determined could,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.”

 

SCHEDULE XII

 

APPRAISED PROPERTIES

 

Roosevelt Memorial Park   Washington National Cemetery Chesapeake, Virginia  
Suitland, Maryland Cumberland Valley   Lincoln Memorial Carlisle, Pennsylvania  
Suitland, Maryland Mt. Lebanon Cemetery   Crown Hill Cemetery Pittsburgh,
Pennsylvania   Twinsburg, Ohio Sunset Memorial Park   Allegheny County Memorial
Fredericksburg, Virginia   Allison Park, Pennsylvania Cedar Hill Cemetery   Beth
Israel Cemetery Suitland, Maryland   Woodbridge, New Jersey