Exhibit 10.14

 

CREDIT AGREEMENT

 

dated as of

 

January 31, 2008

 

among

 

STAR BUFFET, INC. and its

 

SUBSIDIARIES PARTY HERETO, as Borrowers,

 

THE LENDERS PARTY HERETO,

 

WELLS FARGO BANK, N.A., as Administrative Agent,

 

WELLS FARGO BANK, N.A., as Syndication Agent

 

and

 

WELLS FARGO BANK, N.A., as Lead Arranger

 

Loan Nos. 93-0908116 and 93-0908117

 

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SECTION I DEFINITIONS

1

1.1 Definitions

1

1.2 Rules of Interpretation

23

SECTION II DESCRIPTION OF CREDIT

24

2.1 Loans

24

2.2 The Notes

28

2.3 Notice and Manner of Borrowing or Conversion of Loans

28

2.4 Funding of Loans

29

2.5 Interest Rates and Payments of Interest

30

2.6 Fees

31

2.7 Repayment of Loans

32

2.8 Prepayments

32

2.9 Method and Allocation of Payments

34

2.10 LIBOR Indemnity

36

2.11 Computation of Interest and Fees

37

2.12 Changed Circumstances; Illegality

37

2.13 Increased Costs

38

2.14 Capital Requirements

38

2.15 Taxes

39

2.16 Parent as Agent for Borrowers; Contribution

41

SECTION III LETTERS OF CREDIT

42

3.1 Issuance

42

3.2 Reimbursement Obligation of the Borrowers

42

3.3 Letter of Credit Payments

43

3.4 Obligations Absolute

43

3.5 Reliance by the LC Issuer and the Administrative Agent

44

SECTION IV CONDITIONS OF LOANS AND LETTERS OF CREDIT

44

4.1 Conditions Precedent to Initial Loans and Letters of Credit

44

4.2 Conditions Precedent to all Revolving Credit Loans and Letters of Credit
after the Closing Date

49

SECTION V REPRESENTATIONS AND WARRANTIES

51

5.1 Existence, Qualification and Power

51

5.2 Authorization; No Contravention

51

5.3 Governmental Authorization; Other Consents

51

5.4 Binding Effect

51

5.5 Financial Statements; No Material Adverse Effect

52

5.6 Litigation

53

5.7 No Default

53

5.8 Ownership of Property; Encumbrances; Investments

53

5.9 Environmental Compliance

54

5.10 Insurance

54

5.11 Taxes

54

5.12 ERISA Compliance

55

5.13 Subsidiaries; Equity Interests; Loan Parties

55

5.14 Margin Regulations; Investment Company Act

56

5.15 Disclosure

56

 

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5.16 Compliance with Laws

56

5.17 Intellectual Property; Licenses, Etc

56

5.18 Solvency

56

5.19 Casualty, Etc

57

5.20 Labor Matters

57

5.21 Security Documents

57

5.22 Intentionally Deleted

57

5.23 Compliance with OFAC Rules and Regulations

57

5.24 Foreign Assets Control Regulations, Etc

57

5.25 Parent Public Filings

57

SECTION VI AFFIRMATIVE COVENANTS

58

6.1 Financial Statements

58

6.2 Conduct of Business

59

6.3 Maintenance and Insurance

59

6.4 Taxes

60

6.5 Inspection Rights; Lender Meeting

60

6.6 Maintenance of Books and Records

61

6.7 Use of Proceeds

61

6.8 Further Assurances

61

6.9 Notification Requirements

61

6.10 ERISA Reports

62

6.11 Environmental Compliance

62

6.12 Covenant to Guarantee Obligations and Give Security

63

6.13 Interest Rate Protection

65

6.14 Cash Accounts

65

6.15 Post-Closing Deliveries

65

SECTION VII FINANCIAL COVENANTS

66

7.1 Total Lease Adjusted Leverage Ratio

66

7.2 Consolidated Pre-Distribution Fixed Charge Coverage Ratio

66

7.3 Consolidated Post-Distribution Fixed Charge Coverage Ratio

66

7.4 Consolidated EBITDA

67

7.5 Growth Capital Expenditures

67

SECTION VIII NEGATIVE COVENANTS

67

8.1 Indebtedness

67

8.2 Contingent Liabilities

68

8.3 Encumbrances

68

8.4 Merger; Dispositions; Liquidation

69

8.5 Subsidiaries

69

8.6 Restricted Payments

70

8.7 Investments; Purchases of Assets

70

8.8 ERISA Compliance

71

8.9 Transactions with Affiliates

71

8.10 Fiscal Year

71

8.11 Payments on Junior Subordinated Debt

71

SECTION IX DEFAULTS

71

9.1 Events of Default

71

 

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9.2 Remedies upon Event of Default

74

9.3 Application of Funds

74

9.4 Remedies Cumulative

75

SECTION X ASSIGNMENT AND PARTICIPATION

76

10.1 Successors and Assigns

76

10.2 Replacement of Lenders

79

SECTION XI THE ADMINISTRATIVE AGENT

80

11.1 Appointment of Administrative Agent

80

11.2 Exculpatory Provisions

81

11.3 Rights as a Lender

82

11.4 Actions by Administrative Agent

82

11.5 Reliance by Administrative Agent

82

11.6 Delegation of Duties

82

11.7 Indemnification

83

11.8 Reimbursement

83

11.9 Non-Reliance on Administrative Agent and New Lenders

83

11.10 Resignation of Administrative Agent

84

11.11 No Other Duties, etc

84

SECTION XII GENERAL

84

12.1 Notices; Effectiveness of Signatures

84

12.2 Expenses

86

12.3 Indemnification

86

12.4 Survival of Covenants, Etc

87

12.5 Set-Off

87

12.6 No Waivers

88

12.7 Amendments, Waivers, etc.

88

12.8 Treatment of Certain Information; Confidentiality

90

12.9 Lost Note, Etc

91

12.10 Captions; Counterparts

91

12.11 Entire Agreement, Etc

91

12.12 Waiver of Jury Trial

91

12.13 Governing Law

92

12.14 Jurisdiction; Consent to Service of Process

92

12.15 USA PATRIOT Act Notice

93

12.16 Severability

93

 

EXHIBITS

 

Form of

 

A-1

 

Revolving Credit Note

A-2

 

Term Note

B

 

Notice of Borrowing or Conversion

C

 

Commitment Increase Supplement

D

 

Additional Lender Supplement

 

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E

 

Assignment and Assumption

F

 

Compliance Certificate

G-1

 

Security Agreement

G-2

 

Collateral Assignment of Contracts

G-3

 

Fee Property Security Documents

G-4

 

Form of Mortgage/Deed of Trust

G-5

 

Form of Collateral Assignment of Leases and Rents

G-6

 

Intellectual Property Security Agreement

H

 

Pledge Agreement by Parent

I

 

Opinion Matters – Counsel to Loan Parties

J-1

 

Term Loan Payment Request

J-2

 

Revolving Loan Payment Request

 

SCHEDULES

 

1

 

Commitments and Applicable Percentages

4.1(e)

 

Sources and Uses

5.3

 

Consents

5.5

 

Material Liabilities and Indebtedness

5.8(b)

 

Encumbrances

5.8(c)

 

Owned Real Property

5.8(d)(i)

 

Leased Real Property (Lessee)

5.8(d)(ii)

 

Leased Real Property (Lessor)

5.8(e)

 

Existing Investments

5.13

 

Subsidiaries and Other Equity Investments; Loan Parties

5.17

 

Intellectual Property Matters

6.15

 

Post-Closing Deliveries

8.1(e)

 

Existing Indebtedness

8.3(h)

 

Existing Encumbrances

12.1

 

Administrative Agent’s Office, Certain Addresses for Notices

 

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CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT is made as of January 31, 2008, by and among STAR BUFFET,
INC., STAR BUFFET MANAGEMENT, INC., SUMMIT FAMILY RESTAURANTS, INC., HTB
RESTAURANTS, INC. and NORTHSTAR BUFFET, INC., each a Delaware corporation (each
individually, a “Borrower”, and collectively, the “Borrowers”), WELLS FARGO
BANK, N.A., a national banking association (“Wells Fargo”), and the other
financial institutions from time to time parties hereto as Lenders (together
with Wells Fargo, each individually, a “Lender”, and collectively, the
“Lenders”), WELLS FARGO BANK, N.A., as administrative agent for the Lenders (in
such capacity, the “Administrative Agent”) and in its capacity as LC Issuer (as
hereinafter defined), WELLS FARGO BANK, N.A., as Syndication Agent (in such
capacity, the “Syndication Agent”), and WELLS FARGO BANK, N.A., as Lead Arranger
(in such capacity, the “Lead Arranger”).

 

WHEREAS, the Borrowers, other than Parent, are direct or indirect wholly owned
Subsidiaries of the Parent;

 

WHEREAS, the relationship of the other Borrowers to the Parent provides numerous
benefits, including shared purchasing strength and other economies of scale,
which benefits will be increased by the Acquisition;

 

WHEREAS, the Borrowers have requested that the Lenders provide a term loan
facility and a revolving credit facility, and the Lenders have indicated their
willingness to lend and the LC Issuer has indicated its willingness to issue
Letters of Credit, in each case, on the terms and subject to the conditions set
forth herein;

 

WHEREAS, each Borrower is jointly and severally liable for the Obligations
arising hereunder and under the other Loan Documents; and

 

WHEREAS, by virtue of the foregoing and after giving effect to the probable
liability of each Borrower hereunder and under the Loan Documents, each Borrower
considers that it is receiving at least fair consideration and reasonably
equivalent value from the Lenders for the Obligations.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

 

SECTION I

 

DEFINITIONS

 

1.1           DEFINITIONS.

 

All capitalized terms used in this Agreement or in the Notes or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:

 

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Acquisition.  The transactions contemplated by the Asset Purchase Agreement.

 

Additional Lender.  See Section 2.1(a)(iii).

 

Additional Lender Supplement.  See Section 2.1(a)(iii).

 

Administrative Agent.  See Preamble.

 

Administrative Questionnaire.  An administrative questionnaire in a form
supplied by the Administrative Agent to any Lender.

 

Affected Loans.  See Section 2.12(a).

 

Affiliate.  With reference to any Person (i) any director or officer of that
Person, (ii) any other Person controlling, controlled by or under direct or
indirect common control of that Person, (iii) any other Person directly or
indirectly holding 5% or more of any class of the capital stock or other equity
interests (including options, warrants, convertible securities and similar
rights) of that Person and (iv) any other Person 5% or more of any class of
whose capital stock or other equity interests (including options, warrants,
convertible securities and similar rights) is held directly or indirectly by
that Person.

 

Agreement.  This Credit Agreement, including the Exhibits and Schedules hereto,
as the same may be supplemented or amended or restated from time to time.

 

Alternate Base Rate.  The greater of (i) the rate of interest announced from
time to time by the Administrative Agent at its head office as its “Base Rate”
or “Prime Rate”, and (ii) the Federal Funds Effective Rate plus 1/2 of 1% per
annum (rounded upwards, if necessary, to the next 1/8 of 1%).  The Base Rate is
a reference rate and does not necessarily represent the lowest or best rate
being charged to any customer.  Any change in the Base Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change.

 

Anti-Terrorism Order.  The Executive Order 13224 issued on September 24, 2001.

 

Applicable Percentage.   With respect to (a) any Term Lender at any time, the
percentage (carried out to the ninth decimal place) of the Total Term Loan
Commitment represented by such Term Lender’s Term Commitment at such time, and
(b) any Revolving Credit Lender at any time, the percentage (carried out to the
ninth decimal place) of the Total Revolving Credit Commitment represented by
such Revolving Credit Lender’s Revolving Credit Commitment at such time.  If the
commitment of each Revolving Credit Lender to make Revolving Credit Loans and
the obligation of the LC Issuer to issue Letters of Credit have been terminated
pursuant to Section 9.2, or if the Revolving Credit Commitments have expired,
then the Applicable Percentage of each Revolving Credit Lender shall be
determined based on the Applicable Percentage of such Revolving Credit Lender
most recently in effect, giving effect to any subsequent assignments.  The
initial Applicable Percentage of each Lender in respect of each credit facility
hereunder is set forth opposite the name of such Lender on Schedule 1 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable.

 

2

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

 

Asset Purchase Agreement.  The Asset Purchase Agreement, dated as of December 2,
2007, between the Parent and Barnhill’s Buffet, Inc., as amended on January 21,
2008.

 

Assignee Group.  Two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

 

Assignment and Assumption.  An assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.1(b)(iii)), and accepted by the Administrative Agent, in
substantially the form of Exhibit E or any other form approved by the
Administrative Agent.

 

Attributable Indebtedness.  On any date, (a) in respect of any Capitalized Lease
of any Person, the capitalized amount thereof that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP, (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease or similar payments under the relevant lease or other applicable
agreement or instrument that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP if such lease or other
agreement or instrument were accounted for as a Capitalized Lease and (c) all
Synthetic Debt of such Person.

 

Bankruptcy Court.  The United States Bankruptcy Court for the Middle District of
Tennessee, Nashville Division.

 

Base Rate Loan.  Any Loan bearing interest determined with reference to the
Alternate Base Rate.

 

Borrowers.  See Preamble.

 

Borrowers’ Accountants.  Mayer Hoffman McCann P.C., or such other independent
certified public accountants as are selected by the Borrowers and are reasonably
acceptable to the Administrative Agent.

 

Business Day. (i) For all purposes other than as covered by clause (ii) below,
any day other than a Saturday, Sunday or legal holiday on which banks in Boston,
Massachusetts and  Los Angeles, California are open for the conduct of a
substantial part of their commercial banking business; and (ii) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, LIBOR Loans, any day that is a Business Day described in clause
(i) and that is also a day on which dealings in U.S. dollar deposits are also
carried on in the London interbank market and banks are open for business in
London.

 

Capital Expenditures.  With respect to any Person for any period, any
expenditure in respect of the purchase or other acquisition of any fixed or
capital asset (excluding normal replacements and maintenance which are properly
charged to current operations).

 

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Capitalized Leases.  All leases that have been or should be, in accordance with
GAAP, recorded as capitalized leases.

 

Cash Collateralize.   To pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the LC Issuer and the Lenders, as
collateral for the Maximum Drawing Amount, cash or deposit account balances
pursuant to documentation in form and substance reasonably satisfactory to the
Administrative Agent and the LC Issuer.

 

Cash Management Agreement.   Any agreement to provide cash management services,
including treasury, depository, overdraft, credit or debit card, electronic
funds transfer and other cash management arrangements.

 

Cash Management Bank.  Any Person that, at the time it enters into a Cash
Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity
as a party to such Cash Management Agreement.

 

CFC.  A Person that is a controlled foreign corporation under Section 957 of the
Code.

 

Change of Control.   An event or series of events by which:  (a) Robert E.
Wheaton shall have ceased to hold the office, and engage in the duties and have
the responsibilities thereof, in the Parent that he holds as of the Closing Date
and a successor reasonably satisfactory to the Majority Lenders shall not have
been appointed within 30 days thereafter; (b) Robert E. Wheaton shall have
ceased to hold beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of at least 40% of the fully diluted equity interests of the
Parent; or (c) any Person or two or more Persons acting in concert (other than
Robert E. Wheaton (or Persons of which Robert E. Wheaton would be deemed to have
beneficial ownership)) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of more than 10% of the fully
diluted equity interests of the Parent outstanding on the date hereof.

 

Closing Date.  The first date on which the conditions set forth in Sections 4.1
have been satisfied and the initial Loans are to be made hereunder.

 

Code.  The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.

 

Collateral.  All of the property, rights and interests of the Borrowers, their
Subsidiaries and any other Person that are or are intended to be subject to the
security interests and liens created by the Security Documents.

 

Communications.  See Section 12.1.

 

Commitment Fee.  See Section 2.6(a).

 

Commitment Increase Supplement.  See Section 2.1(a)(iii).

 

Commitments.  In relation to any particular Lender, the Revolving Credit
Commitment and/or the Term Loan Commitment of such Lender.

 

4

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Consolidated EBITDA.  At any date of determination for any fiscal period, an
amount equal to Consolidated Net Income of the Borrowers and their Subsidiaries
for such fiscal period plus (a) the following to the extent excluded or deducted
in calculating such Consolidated Net Income:  (i) Consolidated Interest Charges,
(ii) the provision for Federal, state, local and foreign income taxes paid or
payable, (iii) depreciation (including, without limitation, depreciation of
leasehold improvements) and amortization expense, (iv) other non-recurring
expenses reducing such Consolidated Net Income which do not represent a cash
item in such period or any future period (in each case of or by the Borrowers
and their Subsidiaries for such fiscal period), (v) Consolidated Restaurant
Pre-Opening Expenses and (vi) fees and expenses incurred by the Borrowers in
connection with the transactions contemplated by this Agreement and the Asset
Purchase Agreement, including, without limitation, attorneys’ fees, minus
(b) the following to the extent included in calculating such Consolidated Net
Income:  (i) Federal, state, local and foreign income tax credits and (ii) all
non-recurring items increasing Consolidated Net Income (in each case of or by
the Borrowers and their Subsidiaries for such fiscal period).

 

Consolidated EBITDAR.  For any fiscal period, the sum of (i) the Consolidated
EBITDA for such fiscal period, plus (ii) the Consolidated Rent Expense for such
fiscal period, but only to the extent such Consolidated Rent Expense was
excluded or deducted in computing such Consolidated EBITDA.

 

Consolidated Funded Indebtedness.  As of any date of determination, for the
Borrowers and their Subsidiaries on a consolidated basis and without
duplication, the sum of (a) the outstanding principal amount of all obligations,
whether current or long-term, for borrowed money (including Obligations
hereunder) and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments, (b) all purchase money Indebtedness,
(c) all direct obligations arising under letters of credit, bankers’
acceptances, bank guaranties, surety bonds and similar instruments, (d) all
monetary obligations secured by any mortgage, pledge, security interest or other
Encumbrance on property owned or acquired by the Borrowers or any Subsidiary,
whether or not the obligations secured thereby shall have been assumed, (e) all
obligations in respect of the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business), (f) all
Attributable Indebtedness, (g) without duplication, all Guarantees with respect
to outstanding Indebtedness of the types specified in clauses (a) through
(f) above of Persons other than the Borrowers or any Subsidiary, and (h) all
Indebtedness of the types referred to in clauses (a) through (g) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Borrowers or a Subsidiary
is a general partner or joint venturer, unless such Indebtedness is expressly
made non-recourse to such Borrower or such Subsidiary.

 

Consolidated Interest Charges.   For any fiscal period, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related expenses in
connection with borrowed money (including capitalized interest) or in connection
with the deferred purchase price of assets, in each case to the extent treated
as interest in accordance with GAAP, (b) all interest paid or payable with
respect to discontinued operations and (c) the portion of rent expense under
Capitalized Leases that is treated as interest in accordance with GAAP, in each
case, of or by the Borrowers and their Subsidiaries on a Consolidated basis for
such fiscal period.

 

5

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Consolidated Net Income.  At any date of determination for any fiscal period,
the net income (or loss) of the Borrowers and their Subsidiaries on a
Consolidated basis for such fiscal period; provided that Consolidated Net Income
shall exclude, without duplication: (a) extraordinary gains and extraordinary
losses for such fiscal period; (b) the net income of any Subsidiary during such
fiscal period to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of such income is not permitted by
operation of the terms of its organization documents or any agreement,
instrument or law applicable to such Subsidiary during such fiscal period,
except that the Borrowers’ equity in any net loss of any such Subsidiary for
such fiscal period shall be included in determining Consolidated Net Income;
(c) any income (or loss) for such Period of any Person if such Person is not a
Subsidiary, except that the Borrowers’ equity in the net income of any such
Person for such fiscal period shall be included in Consolidated Net Income up to
the aggregate amount of cash actually distributed by such Person during such
Period to the Borrowers or a Subsidiary as a dividend or other distribution (and
in the case of a dividend or other distribution to a Subsidiary, such Subsidiary
is not precluded from further distributing such amount to the Borrowers as
described in clause (b) of this proviso); (d) any gain or loss arising from any
write-up of assets, except to the extent inclusion thereof shall be approved in
writing by the Administrative Agent; (e) earnings of any Subsidiary accrued
prior to the date it became a Subsidiary; (f) any non-cash stock based
compensation income or expense related to restricted stock or stock options;
(g) any deferred or other credit representing any excess of the equity of any
Subsidiary at the date of acquisition thereof over the amount invested in such
Subsidiary; and (h) the proceeds of any life insurance policy.

 

Consolidated Pre-Distribution Fixed Charge Coverage Ratio.   At any date of
determination for any fiscal period, the ratio of (a) the total of
(i) Consolidated EBITDAR for such fiscal period, less (ii) the aggregate amount
of Federal, state, local and foreign income taxes paid in cash, in each case, of
or by the Borrowers and their Subsidiaries for such fiscal period, and less
(iii) the aggregate amount of all Maintenance Capital Expenditures made during
such fiscal period to (b) the sum of (i) Consolidated Interest Charges for such
fiscal period, plus (ii) the aggregate principal amount of all regularly
scheduled principal payments or redemptions or similar acquisitions for value of
outstanding debt for borrowed money during such fiscal period (excluding,
however, the repayment of the Indebtedness under the Existing Credit Agreement
on the Closing Date), plus (iii) the Consolidated Rent Expense for such fiscal
period.

 

Consolidated Post-Distribution Fixed Charge Coverage Ratio.   At any date of
determination for any fiscal period, the ratio of (a) the total of
(i) Consolidated EBITDAR for such fiscal period, less (ii) the aggregate amount
of Federal, state, local and foreign income taxes paid in cash, in each case, of
or by the Borrowers and their Subsidiaries for such fiscal period, and less
(iii) the aggregate amount of all Maintenance Capital Expenditures made during
such fiscal period to (b) the sum of (i) Consolidated Interest Charges for such
fiscal period, plus (ii) the aggregate principal amount of all regularly
scheduled principal payments or redemptions or similar acquisitions for value of
outstanding debt for borrowed money during such fiscal period (excluding,
however, the repayment of the Indebtedness under the Existing Credit Agreement
on the Closing Date), plus (iii) the Consolidated Rent Expense for such fiscal
period, and plus (iv) any dividend, distribution, loan, advance, guaranty,
extension of credit or other payment, whether in cash or property, made by any
Borrower to or for the benefit of any Person (other

 

6

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than another Borrower) who holds an Equity Interest in any Borrower or any of
their Subsidiaries, whether or not such interest is evidenced by a security, and
any purchase, redemption, retirement or other acquisition for value of any
Equity Interest of the Borrower or any of its Subsidiaries, whether now or
hereafter outstanding, or of any options, warrants or similar rights to purchase
such Equity Interest or any security convertible into or exchangeable for such
Equity Interest.

 

Consolidated Rent Expense.   For any fiscal period, the sum of all rental
obligations (payable in cash) incurred by the Borrowers or any Subsidiary during
such fiscal period with respect to all operating leases (not Capitalized Leases)
of real and personal property, calculated in accordance with GAAP on a
Consolidated basis.

 

Consolidated Restaurant Pre-Opening  Expenses.  “Start-up Costs” (as defined in
SOP 98-5 published by the American Institute of Certified Public Accountants) of
the Borrowers related to the acquisition, opening and organizing of New
Operating Units, such costs including, without limitation, the cost of
feasibility studies, initial marketing costs, construction period rents, staff
training, and recruiting and travel costs for employees engaged in such start-up
activities.

 

Default.  An Event of Default or event or condition that, but for the
requirement that time elapse or notice be given, or both, would constitute an
Event of Default.

 

Defaulting Lender.  Any Lender that (a) has failed to fund any portion of the
Term Loans, Revolving Credit Loans, participations in LC Disbursements required
to be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute, or (c) has been deemed insolvent or become the subject of
a bankruptcy or insolvency proceeding.

 

Disposition or Dispose.  The sale, transfer, license, lease or other disposition
(including any sale and leaseback transaction) of any property by any Person (or
the granting of any option or other right to do any of the foregoing), including
any sale, assignment, transfer or other disposal, with or without recourse, of
any notes or accounts receivable or any rights and claims associated therewith.

 

Drawdown Date.  The Business Day on which any Loan is made or is to be made.

 

Eligible Assignee.   Any Person that meets the requirements to be an assignee
under Section 10.1(b)(iii), (v) and (vi) (subject to such consents, if any, as
may be required under Section 10.1(b)(iii)).

 

Eligible Swap Agreements.  Swap Agreements purchased by the Borrowers from a
Lender.

 

Encumbrances.  See Section 8.3.

 

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Environmental Laws.  Any and all applicable federal, state and local
environmental, health or safety statutes, laws, regulations, rules and
ordinances (whether now existing or hereafter enacted or promulgated), and all
applicable judicial, administrative and regulatory decrees, judgments, orders
and interpretations, including common law rulings and determinations, relating
to injury to, or the protection of, human health or the environment, including,
without limitation, all requirements pertaining to reporting, licensing,
permitting, investigation, remediation and removal of emissions, discharges,
releases or threatened releases of Hazardous Materials into the environment or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of such Hazardous Materials.

 

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

 

ERISA.  The Employee Retirement Income Security Act of 1974 and the rules and
regulations thereunder, collectively, as the same may from time to time be
supplemented or amended and remain in effect.

 

ERISA Affiliate.  Any trade or business, whether or not incorporated, that is
treated as a single employer with the Borrowers under Section 414(b), (c),
(m) or (o) of the Code and Section 4001(a)(14) of ERISA.

 

ERISA Event.  (a) Any “reportable event,” as defined in Section 4043 of ERISA or
the regulations issued thereunder, with respect to a Plan unless the 30-day
notice requirement with respect to such event has been waived by the PBGC;
(b) the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA;
(c) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (e) the incurrence of any liability under
Title IV of ERISA with respect to the termination of any Plan or the withdrawal
or partial withdrawal of the Borrowers or any ERISA Affiliate from any Plan or
Multiemployer Plan; (f) the receipt by the Borrowers or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(g) the receipt by the Borrowers or any ERISA Affiliate of any notice concerning
the imposition of Withdrawal Liability (as defined in Part I of Subtitle E of
Title IV of ERISA) with respect to any Multiemployer Plan or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (h) the occurrence of a
Prohibited Acquisition with respect to which the Borrowers or any of their
Subsidiaries is a “disqualified person” (within the meaning of Section 

 

8

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4975 of the Code) or with respect to which the Borrowers or any such Subsidiary
could otherwise be liable; and (i) any other event or condition with respect to
a Plan or Multiemployer Plan that could reasonably be expected to result in
material liability of the Borrowers.

 

Event of Default.  Any event described in Section 9.1.

 

Excess Cash Flow.  For any Fiscal Year of the Borrowers, the excess (if any) of
(a) the sum of Consolidated EBITDA for such Fiscal Year, over (b) the sum (for
such Fiscal Year) of (i) Consolidated Interest Charges actually paid in cash by
the Borrowers and their Subsidiaries, (ii) the aggregate principal amount of all
principal payments, redemptions and acquisitions for value of Consolidated
Funded Indebtedness actually made during such Fiscal Year to the extent
permitted by this Agreement, including principal payments of Term Loans, but
excluding principal payments of Revolving Loans except to the extent that the
Total Revolving Credit Commitment is permanently reduced in connection with any
such payment of Revolving Loans, (iii) all income taxes actually paid in cash by
the Borrowers and their Subsidiaries, and (iv) Capital Expenditures (including
Growth Capital Expenditures) actually made by the Borrowers and their
Subsidiaries in such Fiscal Year to the extent permitted by this Agreement (net
of the proceeds of Indebtedness other than Loans permitted by this Agreement or
of contributions to the capital of the Borrowers, to the extent such proceeds
are applied to fund such Capital Expenditures).

 

Exchange Act.  The Securities Exchange Act of 1934, as amended.

 

Excluded Taxes.  With respect to the Administrative Agent, any Lender, the LC
Issuer or any other recipient of any payment to be made by or on account of any
obligation of the Borrowers hereunder, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Borrowers are located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrowers under Section 10.2), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new lending
office) or is attributable to such Foreign Lender’s failure or inability (other
than as a result of a change in law) to comply with Section 2.15(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrowers with respect to such withholding tax
pursuant to Section 2.15(a).

 

Existing Credit Agreement.  The Credit Agreement dated as of October 28, 2003,
as amended, between the Parent and M&I Marshall & Ilsley Bank.

 

Extraordinary Receipt.  Any cash received by or paid to or for the account of
any Person not in the ordinary course of business, including tax refunds,
pension plan reversions, proceeds of insurance (other than proceeds of business
interruption insurance), condemnation and eminent domain awards (and payments in
lieu thereof), and indemnity payments.

 

9

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Facility.  The Term Facility or the Revolving Credit Facility, as the context
may require.

 

Federal Funds Effective Rate.  For any day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.

 

Fee Letter.  See Section 12.11.

 

Fee Property.  The properties listed on Schedule 5.8(c) hereto and such other
real property assets in which Borrower or a Subsidiary may acquire fee simple
title from and after the date hereof .

 

Fee Property Security Documents.  The documents listed on Exhibit G-3 hereto.

 

Financial Statements.  See Section 5.5(b)

 

Fiscal Month.  Any of the thirteen periods of time, having approximately the
same number of days, which comprise the Fiscal Year of the Borrowers.

 

Fiscal Quarter.  Any of the four periods of time, three of which consist of
three Fiscal Months and one of which consists of four Fiscal Months, which
comprise the Fiscal Year of the Borrowers.

 

Fiscal Year.  The 52-53 week fiscal period of the Borrowers ending on the last
Monday in January of each calendar year.

 

Fixed Rate Election.  The Interest Period selected for a particular LIBOR Loan
pursuant to Section 2.3.

 

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

 

FRB.  See Section 2.5(d).

 

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

 

GAAP.  Generally accepted accounting principles, consistently applied.

 

Governmental Authority.  The government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority,

 

10

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instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supra-national bodies
such as the European Union or the European Central Bank).

 

Growth Capital Expenditures.  Capital Expenditures for growth, including, but
not limited to, expenditures for remodeling or re-imaging any Operating Unit
that is not a New Operating Unit, New Construction and the acquisition of
restaurants.

 

Guarantees.  As applied to the Borrowers and their Subsidiaries, all guarantees,
endorsements or other contingent or surety obligations with respect to
obligations of others whether or not reflected on the consolidated balance sheet
of the Borrowers and their Subsidiaries, including any obligation to furnish
funds, directly or indirectly (whether by virtue of partnership arrangements, by
agreement to keep-well or otherwise), through the purchase of goods, supplies or
services, or by way of stock purchase, capital contribution, advance or loan, or
to enter into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person.

 

Hazardous Material.  Any substance (i) the presence of which requires or then
requires notification, investigation, a removal or remediation under any
Environmental Law; (ii) which is or becomes defined as a “hazardous waste”,
“hazardous material” or “hazardous substance” or “pollutant” or “contaminant”
under any present or future Environmental Law or amendments thereto including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.) and any applicable local statutes
and the regulations promulgated thereunder; (iii) which is toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and which is or becomes regulated pursuant to any
Environmental Law by any Governmental Authority, agency, department, commission,
board, agency or instrumentality of the United States, any state of the United
States, or any political subdivision thereof; or (iv) without limitation, which
contains gasoline, diesel fuel or other petroleum products, asbestos or
polychlorinated biphenyls (“PCB’s”).

 

Hazardous Materials Indemnity Agreement.  The Hazardous Materials Indemnity
Agreement, dated as of the date hereof, made by the Borrowers in favor of the
Administrative Agent, as amended and in effect from time to time.

 

Increasing Lender.  See Section 2.1(a)(iii).

 

Indebtedness.  As to any Person at a particular time, without duplication, all
of the following, whether or not included as indebtedness or liabilities in
accordance with GAAP: (a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments; (b) the maximum amount of all direct or
contingent obligations of such Person arising under letters of credit (including
standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and
similar instruments; (c) net obligations of such Person under any Swap
Agreement; (d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business and not past due for more than 60 days

 

11

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after the date on which such trade account was created); (e) indebtedness
(excluding prepaid interest thereon) secured by an Encumbrance on property owned
or being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;
(f) all Attributable Indebtedness in respect of Capitalized Leases and Synthetic
Lease Obligations of such Person and all Synthetic Debt of such Person; (g) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other
Person or any warrant, right or option to acquire such Equity Interest, valued,
in the case of a redeemable preferred interest, at the greater of its voluntary
or involuntary liquidation preference plus accrued and unpaid dividends; and
(h) all Guarantees of such Person in respect of any of the foregoing. For all
purposes hereof, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.  The amount of any net obligation under any Swap
Agreement on any date shall be deemed to be the Swap Termination Value thereof
as of such date.

 

Indemnified Taxes.  All Taxes other than Excluded Taxes.

 

Interest Period.  With respect to each LIBOR Loan, the period commencing on the
date of the making or continuation of or conversion to such LIBOR Loan and
ending one (1) month, two (2) months or three (3) months thereafter, as the
Borrowers may elect in the applicable Notice of Borrowing or Conversion;
provided that:

 

(i)  any Interest Period (other than an Interest Period determined pursuant to
clause (ii) below) that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day;

 

(ii)  any Interest Period that would otherwise end after the Maturity Date,
shall end on the Maturity Date;

 

(iii)  notwithstanding clause (ii) above, no Interest Period shall have a
duration of less than one (1) month, and if any Interest Period applicable to a
Loan would be for a shorter period, such Interest Period shall not be available
hereunder; and

 

(iv)  the Borrowers may not select any Interest Period for a Term Loan, if,
after giving effect to such selection, the aggregate principal amount of all
Term Loans having Interest Periods ending after any date on which an installment
of the Term Loans is scheduled to be repaid would exceed the aggregate principal
amount of the Term Loans scheduled to be outstanding after giving effect to such
repayment.

 

Investment.  As applied to the Borrowers and their Subsidiaries, the purchase or
acquisition of any share of capital stock, partnership interest, evidence of
indebtedness or other equity security of any other Person (including any
Subsidiary), any loan, advance or extension of credit (excluding accounts
receivable arising in the ordinary course of business) to, or contribution to
the capital of, any other Person (including any Subsidiary), any real estate
held

 

12

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for sale or investment, any securities or commodities futures contracts held,
any other investment in any other Person (including any other Subsidiary of the
Borrowers), and the making of any commitment or acquisition of any option to
make an Investment.

 

IP Rights.  See Section 5.17.

 

Junior Subordinated Debt.  All Indebtedness and other obligations of the Parent
under or in respect of the Junior Subordinated Note and the Junior Subordinated
Debt Documents.

 

Junior Subordinated Debt Documents.  The Junior Subordinated Note, the Loan
Agreement dated June 15, 2007 between the Parent and the Junior Subordinated
Lender, as amended as of the date hereof, and any other agreements evidencing,
securing or otherwise made pursuant to or in connection with the Junior
Subordinated Note, in each case as in effect on the Closing Date without any
amendment to or modification thereof, except as permitted by the Subordination
Agreement.

 

Junior Subordinated Lender.  Collectively, Robert E. Wheaton and Suzanne H.
Wheaton.

 

Junior Subordinated Note.  That certain Note, dated as of June 15, 2007, in the
original principal amount of $1,400,000 made by the Parent payable to the Junior
Subordinated Lender.

 

LC Disbursement.  A payment made by the LC Issuer pursuant to a Letter of
Credit.

 

LC Exposure.   At any time, the sum of (a) the Maximum Drawing Amount at such
time, and (b) the aggregate LC Disbursements that at such time have not been
reimbursed by or on behalf of the Borrowers to the LC Issuer.  The LC Exposure
of any Revolving Credit Lender at any time shall be its Applicable Percentage of
the total LC Exposure at such time.

 

LC Issuer.  Wells Fargo.

 

Landlord Waivers.  Landlord’s consent and estoppel certificates (in form
reasonably acceptable to the Administrative Agent) in favor of the
Administrative Agent specified therein and covering those leased real properties
as specified on Schedule 5.8(d)(i) and any leased real properties that are
acquired by the Borrowers or any Subsidiary after the date hereof.

 

Lead Arranger.  See Preamble.

 

Lenders.  Wells Fargo, the other financial institutions parties hereto and
listed on Schedule 1 attached hereto and each other Person that may after the
date hereof become an assignee of a Lender pursuant to Section 10.1 and, thereby
a party to this Agreement as a “Lender” hereunder, but from and after the
effective date that any Person shall have assigned its entire Commitment
pursuant to Section 10.1, “Lenders” shall no longer include such Person.

 

Letter of Credit Applications.  Applications for Letters of Credit in such form
as may be required by the LC Issuer from time to time which are executed and
delivered by the Borrowers to the LC Issuer pursuant to Section 3.1, as the same
may be amended or supplemented from time to time.

 

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Letter of Credit Fee.  See Section 2.6(b).

 

Letter of Credit Participation.  See Section 3.1(b).

 

Letter of Credit Sublimit.  $500,000.

 

Letters of Credit.  See Section 3.1(a).

 

LIBOR Loan.  Any Loan bearing interest at a rate determined with reference to
the LIBOR Rate.

 

LIBOR Rate.  With respect to any LIBOR Loan for any Interest Period, the rate
per annum as determined by the Administrative Agent on the basis of the offered
rates for deposits in U.S. dollars, for a period of time comparable to such
Interest Period, which appears on Reuters page LIBOR01 (formerly Telerate
page 3750) as of 11:00 a.m. London time on the day that is two Business Days
preceding the Drawdown Date of such LIBOR Loan (or, if for any reason such rate
is unavailable from Reuters, from any other similar company or service that
provides rate quotations comparable to those currently provided by Reuters);
provided, however, that if the rate described above is not provided by Reuters
or such other similar company or service on any applicable interest
determination date, the LIBOR Rate shall be the rate (rounded upward, if
necessary, to the nearest one hundred-thousandth of a percentage point)
determined on the basis of the offered rates for deposits in U.S. dollars for a
period of time comparable to such Interest Period which are offered by four
major banks in the London interbank market at approximately 11:00 a.m. London
time, on the day that is two (2) Business Days preceding the first day of such
Interest Period as selected by the Administrative Agent.  The principal London
office of each of the four major London banks will be requested to provide a
quotation of its U.S. dollar deposit offered rate.  If at least two such
quotations are provided, the LIBOR Rate for that date will be the arithmetic
mean of the quotations.  If fewer than two quotations are provided as requested,
the rate for that date will be determined on the basis of the rates quoted for
loans in U.S. dollars to leading European banks for a period of time comparable
to such Interest Period offered by major banks in New York City at approximately
11:00 a.m. New York City time, on the day that is two Business Days preceding
the first day of such Interest Period.

 

Loan Documents.  This Agreement, the Notes, the Letter of Credit Applications,
any Subsidiary Guaranty, the Eligible Swap Agreements, Secured Cash Management
Agreements, the Fee Letter and the Security Documents, together with any
agreements, instruments or documents executed and delivered pursuant to or in
connection with any of the foregoing; provided that for purposes of the
definition of “Material Adverse Effect” and Sections V through IX, “Loan
Documents” shall not include Eligible Swap Agreements or Secured Cash Management
Agreements.

 

Loan Parties.  Collectively, the Borrowers and each Subsidiary Guarantor.

 

Loans.  The loans made or to be made by the Lenders to the Borrowers pursuant to
this Agreement, including Revolving Credit Loans and Term Loans.

 

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Maintenance Capital Expenditures.  Any Capital Expenditure that is not a Growth
Capital Expenditure.

 

Majority Lenders.  As of any date, one (1) or more Lenders (that are not
Defaulting Lenders) holding more than fifty percent (50%) of the Total
Commitments, or if the Total Revolving Credit Commitments shall have terminated,
one (1) or more Lenders (that are not Defaulting Lenders) holding more than
fifty percent (50%) of the outstanding principal amount of the Loans and Letter
of Credit Participations; provided that the portion of the Total Commitments, or
the outstanding principal amount of the Loans and Letter of Credit
Participations, as the case may be, that are held or deemed held by, any
Defaulting Lender will be excluded for purposes of making a determination of
Majority Lenders.

 

Majority Revolving Credit Lenders.  As of any date of determination, one (1) or
more Lenders holding more than fifty percent (50%) of the Total Revolving Credit
Outstandings; provided that the portion of the Total Revolving Credit
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Majority Revolving Credit Lenders.

 

Majority Term Lenders.  As of any date of determination, one (1) or more Lenders
holding more than fifty percent (50%) of the outstanding principal amount of
Term Loans on such date; provided that the portion of the outstanding principal
amount of Term Loans held by any Defaulting Lender shall be excluded for
purposes of making a determination of the Majority Term Lenders.

 

Material Adverse Effect.  Any of (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), condition (financial or otherwise) of the Borrowers and their
Subsidiaries taken as a whole; (b) a material impairment of the rights and
remedies of the Administrative Agent or any Lender under any Loan Document or of
the ability of any Loan Party to perform its obligations under any Loan Document
to which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document (including with respect to the lien priority of any Security Document),
to which it is a party.

 

Maturity Date.  January 31, 2012.

 

Maximum Drawing Amount.  At any time, the aggregate undrawn amount of all then
outstanding Letters of Credit.

 

Measurement Period.  At any date of determination, the most recently completed
four Fiscal Quarters of the Borrower.

 

Multiemployer Plan.  Any Plan which is a Multiemployer Plan as defined in
Section 4001(a)(3) of ERISA.

 

Net Cash Proceeds.  With respect to:

 

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(a)           any Disposition by the Borrowers or any of their Subsidiaries, or
any Extraordinary Receipt received or paid to the account of the Borrowers or
any of their Subsidiaries, the excess, if any, of (i) the sum of cash and cash
equivalents received in connection with such transaction (including any cash or
cash equivalents received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) over (ii) the sum of (A) the amount of any Indebtedness that is
secured by the applicable asset and that is required to be repaid in connection
with such transaction (other than Indebtedness under the Loan Documents),
(B) the reasonable and customary out-of-pocket expenses incurred by the
Borrowers or a Subsidiary in connection with such transaction and (C) income
taxes reasonably estimated to be actually payable within two years of the date
of the relevant transaction as a result of any gain recognized in connection
therewith; provided that, if the amount of any estimated taxes pursuant to
subclause (C) exceeds the amount of taxes actually required to be paid in cash
in respect of such Disposition, the aggregate amount of such excess shall
constitute Net Cash Proceeds; and

 

(b)           the sale or issuance of any Equity Interest by the Borrowers or
any of their Subsidiaries, or the incurrence or issuance of any Indebtedness by
the Borrower or any of their Subsidiaries, the excess of (i) the sum of the cash
and cash equivalents received in connection with such transaction over (ii) the
underwriting discounts and commissions, and other reasonable and customary
out-of-pocket expenses, incurred by the Borrowers or such Subsidiaries in
connection therewith.

 

New Construction. Construction by the Borrowers or any of their Subsidiaries
related to the opening of a New Operating Unit or the meaningful expansion of
capacity at an Operating Unit which is not a New Operating Unit.

 

New Lender.  See Section 2.1(a)(ii).

 

New Operating Unit.  A restaurant owned or operated by the Borrowers or any of
their Subsidiaries whose ownership or operation by the Borrowers or any of their
Subsidiaries starts on a date after the Closing Date.

 

Note Record.  Any internal record, including a computer record, maintained by
any Lender with respect to any Loan.

 

Notes.  Collectively, the Revolving Credit Notes and the Term Notes.

 

Notice of Borrowing or Conversion.  The notice, substantially in the form of
Exhibit B hereto, to be given by the Borrowers to the Administrative Agent to
request a Loan or to convert an outstanding Loan of one Type into a Loan of
another Type, in accordance with Section 2.3.

 

Obligations.  The following:

 

(a)           the due and punctual payment by the Borrowers of (i) the principal
of and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration,

 

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upon one or more dates set for prepayment or otherwise, (ii) each payment
required to be made by the Borrowers in respect of any Letter of Credit, when
and as due, including the unreimbursed amount of any LC Disbursement, interest
thereon (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) and obligations to provide cash
collateral, and (iii) all other monetary obligations of the Borrowers under this
Agreement and under the other Loan Documents (including, without limitation,
under each Eligible Swap Agreement and Secured Cash Management Agreement),
including obligations to pay fees, expense reimbursement obligations and
indemnification obligations, whether primary, secondary, direct, contingent,
fixed or otherwise, arising under the Loan Documents (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), and

 

(b)           the due and punctual payment of all the monetary obligations of
each other Loan Party under or pursuant to this Agreement and each of the other
Loan Documents.

 

OFAC.  The U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

Operating Units.   All restaurants operated by the Borrowers or any of their
Subsidiaries, which for avoidance of doubt, shall include all New Operating
Units.

 

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

 

Overpaying Borrower.  See Section 2.16(b).

 

Parent.  Star Buffet, Inc., a Delaware corporation.

 

Parent Financial Statements.  See Section 5.25.

 

Parent SEC Documents.  The Parent’s (a) Annual Report on Form 10-K for its most
recent fiscal year for which such a report has been filed, (b) Quarterly Report
on Form 10-Q for its most recent fiscal quarter for which such a report has been
filed, (c) most recent Proxy Statement on Schedule 14A, and (d) all Current
Reports on Form 8-K filed since the end of the most recent fiscal year for which
it has filed its Annual Report on Form 10-K.

 

Participant.  See Section 10.1(d).

 

Patriot Act.  See Section 12.15.

 

Payment Date.  The first Business Day of each calendar quarter.

 

PBGC.  The Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA.

 

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Pension Plan.  Any Plan which is an “employee pension benefit plan” (as defined
in ERISA).

 

Permitted Encumbrances.  See Section 8.3.

 

Person.  Any individual, corporation, partnership, trust, unincorporated
association, business or other legal entity, and any government or governmental
agency or political subdivision thereof.

 

Plan.  Any “employee pension benefit plan” or “employee welfare benefit plan”
(each as defined in ERISA) maintained by the Borrowers or any Subsidiary of the
Borrowers.

 

Platform.  An electronic delivery system (which may be provided by the
Administrative Agent, an Affiliate of the Administrative Agent or any Person
that is not an Affiliate of the Administrative Agent), such as IntraLinks or a
substantially similar electronic system.

 

Pledge Agreement.  See Section 4.1(a)(iii).

 

Pro Forma Financial Statements.  See Section 4.1(h).

 

Prohibited Acquisition.  Any “prohibited transaction” within the meaning of
Section 406 of ERISA or Section 4975 of the Code.

 

Qualified Investments.  As applied to the Borrowers and their Subsidiaries,
investments in (i) notes, bonds or other obligations of the United States of
America or any agency thereof that as to principal and interest constitute
direct obligations of or are guaranteed by the United States of America and that
have maturity dates not more than one year from the date of acquisition,
(ii) certificates of deposit, demand deposit accounts or other deposit
instruments or accounts maintained in the ordinary course of business with banks
or trust companies organized under the laws of the United States or any state
thereof that have capital and surplus of at least $500,000,000 which
certificates of deposit and other deposit instruments, if not payable on demand,
have maturities of not more than one year from the date of acquisition,
(iii) commercial paper that is rated not less than prime-one or A-1 or their
equivalents by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation,
respectively, or their successors, and in each case maturing not more than one
year from the date of acquisition, (iv) any repurchase agreement secured by any
one or more of the foregoing.

 

Register.  See Section 10.1(c).

 

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

 

Reserve Percentage.  For any Interest Period, the aggregate of the maximum
reserve percentages (including all basic, marginal, special, emergency and
supplemental reserves), expressed as a decimal, established by the Board of
Governors of the Federal Reserve System and any other banking authority,
domestic or foreign, to which any Lender is subject with respect to
“Eurocurrency Liabilities” (as defined in regulations issued from time to time
by such Board

 

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of Governors).  The Reserve Percentage shall be adjusted automatically on and as
of the effective date of any change in any such reserve percentage.

 

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

 

Restricted Payment.  Any of the following: (a) any dividend, distribution, loan,
advance, guaranty, extension of credit or other payment, whether in cash or
property to or for the benefit of any Person who holds an Equity Interest in the
Borrowers or any of their Subsidiaries, whether or not such interest is
evidenced by a security, and any purchase, redemption, retirement or other
acquisition for value of any Equity Interest of the Borrowers or any of their
Subsidiaries, whether now or hereafter outstanding, or of any options, warrants
or similar rights to purchase such Equity Interest or any security convertible
into or exchangeable for such Equity Interest and (b) any payment or prepayment
of any kind, whether in cash or property, to or for the benefit of any Person
that is an Affiliate of (i) the Borrowers or any of their Subsidiaries or
(ii) any holder of an Equity Interest in or any beneficiary of the Parent.

 

Revolving Credit Commitment.  In relation to any particular Revolving Credit
Lender, the maximum dollar amount which such Lender has agreed to loan to the
Borrowers as Revolving Credit Loans or to make available to the Borrowers
pursuant to Letter of Credit Participations upon the terms and subject to the
conditions of this Agreement, initially as set forth on Schedule 1 attached
hereto, as such Lender’s Revolving Credit Commitment may be modified pursuant
hereto and in effect from time to time.  Schedule 1 shall be amended from time
to time to reflect any changes in the Revolving Credit Commitments of the
Revolving Credit Lenders, and the Administrative Agent shall promptly provide
copies of revised Schedule 1 to the Lenders.

 

Revolving Credit Facility.  The credit facility provided under Section 2.1(a).

 

Revolving Credit Lender.  Each Lender having a Revolving Credit Commitment.

 

Revolving Credit Loans.  See Section 2.1(a)(i).

 

Revolving Credit Note.  See Section 2.2(a).

 

Sanctioned Country.  A country subject to a sanctions program identified on the
list maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/ index.html, or as otherwise
published from time to time.

 

Sanctioned Person.  Any of the following:  (i) a Person named on the list of
“Specially Designated Nationals and Blocked Persons” maintained by OFAC
available at http://www.treas.gov/offices/ eotffc/ofac/sdn/index.html, or as
otherwise published from time to time, or (ii) (A) an agency of the government
of a Sanctioned Country, (B) an organization

 

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controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned
Country, to the extent subject to a sanctions program administered by OFAC.

 

SEC.  United States Securities and Exchange Commission.

 

Secured Cash Management Agreement.  Any Cash Management Agreement entered into
between or among any Borrower and any Cash Management Bank.

 

Secured Parties.  Collectively, the Administrative Agent, the Lenders, the LC
Issuer, the Swap Banks, the Cash Management Banks, and the other Persons the
Obligations owing to which are or are purported to be secured by the Collateral
under the terms of the Security Documents.

 

Securities Act.  The Securities Act of 1933, as amended.

 

Security Agreement.  See Section 4.1(a)(iii).

 

Security Documents.  The Security Agreement, the Hazardous Materials Indemnity
Agreement, the Fee Property Security Documents, the Landlord Waivers, and the
deposit account control agreements referenced in Section 4.1(a)(iii)(E), each in
favor of the Administrative Agent to secure Obligations, in each case as amended
and/or restated and in effect from time to time, and any additional documents
evidencing or perfecting the Administrative Agent’s lien on the Collateral.

 

Solvent and Solvency.  With respect to any Person on any date of determination,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities pursuant
to GAAP, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature, (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital, and
(e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business.  The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

Subordinated Debt.  Indebtedness of the Borrowers or any of their Subsidiaries,
including, without limitation, the Junior Subordinated Debt, which is expressly
subordinated and made junior to the payment and performance in full of the
Obligations on terms and conditions reasonably satisfactory to the Majority
Lenders.

 

Subordination Agreement.  The Subordination Agreement, dated the Closing Date,
by and among the Administrative Agent, the Junior Subordinated Lender and the
Parent, as amended, restated, supplemented or modified from time to time.

 

Subordination Provisions.  See Section 9.1(m).

 

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Subsidiary.  With respect to any Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person.  Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Borrower.

 

Subsidiary Guarantor.  Each Subsidiary of any Borrower required to execute and
deliver a Subsidiary Guaranty pursuant to Section 6.12.

 

Subsidiary Guaranty.  See Section 6.12.

 

Summary of Sources and Uses.  The summary of sources and uses of funds set forth
on Schedule 4.1(e) attached hereto.

 

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

 

Swap Bank.  Any Person that at the time it entered into a Swap Agreement was a
Lender, an Affiliate of a Lender, or a bank or trust company organized under the
laws of the United States or any state thereof that has capital and surplus of
at least $1,000,000,000.

 

Swap Termination Value.   In respect of any one or more Swap Agreements, after
taking into account the effect of any legally enforceable netting agreement
relating to such Swap Agreements, (a) for any date on or after the date such
Swap Agreements 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 Agreements, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Agreements (which may include a Lender or any
Affiliate of a Lender).

 

Syndication Agent.  See Preamble.

 

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Synthetic Debt.  With respect to any Person as of any date of determination
thereof, all obligations of such Person in respect of transactions entered into
by such Person that are intended to function primarily as a borrowing of funds
(including any minority interest transactions that function primarily as a
borrowing) but are not otherwise included in the definition of “Indebtedness” or
as a liability on the consolidated balance sheet of such Person and its
Subsidiaries in accordance with GAAP.

 

Synthetic Lease Obligation.   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 (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any bankruptcy
or similar law to such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).

 

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

 

Term Lender.  Each Lender having a Term Loan Commitment.

 

Term Loans.  See Section 2.1(b).

 

Term Loan Commitment.  With respect to any Lender, the maximum dollar amount
which such Lender has agreed to loan to the Borrower as a Term Loan upon the
terms and subject to the conditions of this Agreement, initially as set forth on
Schedule 1 attached hereto and as such Lender’s Term Loan Commitment may be
modified pursuant hereto from time to time.  Schedule 1 shall be amended from
time to time to reflect any changes in the Term Loan Commitments of the Term
Lenders, and the Administrative Agent shall promptly provide copies of revised
Schedule 1 to the Lenders.

 

Term Facility.  The credit facility provided under Section 2.1(b).

 

Term Notes.  See Section 2.2(b).

 

Title Company.  LandAmerica Title Insurance Company.

 

Title Policy.  For each Fee Property, an ALTA 1992 loan policy of title
insurance providing coverage for each such property at least in the amount set
forth on Schedule 5.8(c) hereto, issued by the Title Company to Administrative
Agent and its successors and assigns, insuring the Fee Property Security
Documents for such Fee Property in accordance with the requirements of
Section 4.1(a)(v).

 

Total Commitment.  The sum of the Total Revolving Credit Commitment and the
Total Term Loan Commitment.

 

Total Lease Adjusted Leverage Ratio.  As of the end of any fiscal period, the
ratio of (a) the sum of (i) Consolidated Funded Indebtedness as of the end of
such fiscal period, plus (ii) the

 

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product of eight (8) times the Consolidated Rent Expense for such fiscal period,
to (b) Consolidated EBITDAR for such fiscal period.

 

Total Revolving Credit Commitment.  The sum of the Revolving Credit Commitments
of the Revolving Credit Lenders as in effect from time to time, which as of the
Closing Date shall be $2,000,000.

 

Total Revolving Credit Outstandings.  At any time, the sum of (i) the aggregate
outstanding principal balance of the Revolving Credit Loans at the time and
(ii) the LC Exposure at the time.

 

Total Term Loan Commitment.  The sum of the Term Loan Commitments of the Term
Lenders as in effect from time to time, which as of the Closing Date shall be
$7,000,000.

 

Type.  A LIBOR Loan or a Base Rate Loan.

 

Wells Fargo.  See Preamble.

 

Working Capital.  As of any date of determination, the excess of consolidated
current assets over consolidated current liabilities of the Borrowers and their
Subsidiaries.

 

1.2           RULES OF INTERPRETATION.

 

(A)           ALL TERMS OF AN ACCOUNTING CHARACTER USED HEREIN BUT NOT DEFINED
HEREIN SHALL HAVE THE MEANINGS ASSIGNED THERETO BY GAAP.  ALL CALCULATIONS FOR
THE PURPOSES OF SECTION VII HEREOF SHALL BE MADE IN ACCORDANCE WITH GAAP.

 

(B)           A REFERENCE TO ANY DOCUMENT OR AGREEMENT SHALL INCLUDE SUCH
DOCUMENT OR AGREEMENT AS AMENDED, MODIFIED OR SUPPLEMENTED AND IN EFFECT FROM
TIME TO TIME IN ACCORDANCE WITH ITS TERMS AND THE TERMS OF THIS AGREEMENT.

 

(C)           THE SINGULAR INCLUDES THE PLURAL AND THE PLURAL INCLUDES THE
SINGULAR.  A REFERENCE TO “BORROWERS” SHALL INCLUDE ANY SINGLE BORROWER. 
WHENEVER THE CONTEXT MAY REQUIRE, ANY PRONOUN SHALL INCLUDE THE CORRESPONDING
MASCULINE, FEMININE AND NEUTER FORMS.

 

(D)           A REFERENCE TO ANY PERSON INCLUDES ITS PERMITTED SUCCESSORS AND
PERMITTED ASSIGNS.

 

(E)           THE WORDS “INCLUDE”, “INCLUDES” AND “INCLUDING” ARE NOT LIMITING.

 

(F)            THE WORDS “HEREIN”, “HEREOF”, “HEREUNDER” AND WORDS OF LIKE
IMPORT SHALL REFER TO THIS AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR
SECTION OR SUBDIVISION OF THIS AGREEMENT.

 

(G)           ALL TERMS NOT SPECIFICALLY DEFINED HEREIN OR BY GAAP, WHICH TERMS
ARE DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN THE STATE OF NEW
YORK, SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN SUCH UNIFORM COMMERCIAL CODE.

 

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SECTION II

 

DESCRIPTION OF CREDIT

 

2.1           LOANS.

 

(A)           REVOLVING CREDIT LOANS.

 

(I)            UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THIS AGREEMENT,
AND IN RELIANCE UPON THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
BORROWERS HEREIN, EACH OF THE LENDERS AGREES, SEVERALLY AND NOT JOINTLY, TO MAKE
REVOLVING CREDIT LOANS (THE “REVOLVING CREDIT LOANS”) TO THE BORROWERS AND TO
ACQUIRE LETTER OF CREDIT PARTICIPATIONS AT THE BORROWERS’ REQUEST FROM TIME TO
TIME FROM AND AFTER THE CLOSING DATE AND PRIOR TO THE MATURITY DATE, PROVIDED
THAT THE TOTAL REVOLVING CREDIT OUTSTANDINGS (AFTER GIVING EFFECT TO ALL
REQUESTED REVOLVING CREDIT LOANS AND LETTERS OF CREDIT) SHALL NOT EXCEED
$250,000 ON THE CLOSING DATE AND SHALL NOT AT ANY TIME EXCEED THE TOTAL
REVOLVING CREDIT COMMITMENT, AND PROVIDED, FURTHER THAT THE SUM OF THE AGGREGATE
PRINCIPAL AMOUNT OF OUTSTANDING REVOLVING CREDIT LOANS MADE BY EACH LENDER AND
ALL OUTSTANDING LETTER OF CREDIT PARTICIPATIONS OF SUCH LENDER SHALL NOT AT ANY
TIME (AFTER GIVING EFFECT TO ALL REQUESTED REVOLVING CREDIT LOANS) EXCEED SUCH
LENDER’S REVOLVING CREDIT COMMITMENT.  SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, THE BORROWERS MAY BORROW, REPAY, PREPAY AND REBORROW AMOUNTS, UP
TO THE LIMITS IMPOSED BY THIS SECTION 2.1, FROM TIME TO TIME BETWEEN THE CLOSING
DATE AND THE MATURITY DATE UPON REQUEST GIVEN TO THE ADMINISTRATIVE AGENT
PURSUANT TO SECTION 2.3.  EACH REQUEST FOR A REVOLVING CREDIT LOAN OR A LETTER
OF CREDIT HEREUNDER SHALL CONSTITUTE A REPRESENTATION AND WARRANTY BY THE
BORROWERS THAT THE CONDITIONS SET FORTH IN SECTIONS 4.1 OR 4.2 (AS THE CASE MAY
BE) HAVE BEEN SATISFIED AS OF THE DATE OF SUCH REQUEST.

 

(II)           THE BORROWERS MAY (A) REQUEST ANY OF ONE OR MORE OF THE REVOLVING
CREDIT LENDERS TO INCREASE THE AMOUNT OF ITS REVOLVING CREDIT COMMITMENT (WHICH
REQUEST SHALL BE IN WRITING AND SENT TO THE ADMINISTRATIVE AGENT TO FORWARD TO
SUCH LENDER) AND/OR (B) REQUEST THE ADMINISTRATIVE AGENT TO ARRANGE FOR ANY OF
ONE OR MORE BANKS OR FINANCIAL INSTITUTIONS NOT A PARTY HERETO (A “NEW LENDER”)
TO BECOME A PARTY TO AND A LENDER UNDER THIS AGREEMENT, PROVIDED THAT THE
IDENTIFICATION AND ARRANGEMENT OF SUCH NEW LENDER TO BECOME A PARTY HERETO AND A
LENDER UNDER THIS AGREEMENT SHALL BE REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE
AGENT AND WILL BE MADE BY THE ADMINISTRATIVE AGENT IN CONSULTATION WITH THE
BORROWERS, AND PROVIDED FURTHER THAT SUCH NEW LENDER IS AN ELIGIBLE ASSIGNEE,
AND PROVIDED FURTHER THAT IN NO EVENT SHALL THE AMOUNT OF THE TOTAL REVOLVING
CREDIT COMMITMENT AS INCREASED PURSUANT TO THIS SECTION 2.1(A) EXCEED
$3,000,000.  IN NO EVENT MAY ANY LENDER’S REVOLVING CREDIT COMMITMENT BE
INCREASED WITHOUT THE PRIOR WRITTEN CONSENT OF SUCH LENDER, AND THE FAILURE OF
ANY LENDER TO RESPOND TO THE BORROWERS’ REQUEST FOR AN INCREASE SHALL BE DEEMED
A REJECTION BY SUCH LENDER OF THE BORROWERS’ REQUEST.  THE TOTAL REVOLVING
CREDIT COMMITMENT MAY NOT BE INCREASED IF, AT THE TIME OF ANY PROPOSED INCREASE
HEREUNDER, A DEFAULT HAS OCCURRED AND IS CONTINUING.  UPON ANY REQUEST BY THE
BORROWERS TO INCREASE THE TOTAL REVOLVING CREDIT COMMITMENT, THE BORROWERS SHALL
BE DEEMED TO HAVE REPRESENTED AND WARRANTED ON AND AS OF THE DATE OF SUCH
REQUEST THAT NO DEFAULT HAS OCCURRED AND IS

 

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CONTINUING, GIVING EFFECT TO SUCH INCREASE.  NOTWITHSTANDING ANYTHING CONTAINED
IN THIS AGREEMENT TO THE CONTRARY, NO LENDER SHALL HAVE ANY OBLIGATION
WHATSOEVER TO INCREASE THE AMOUNT OF ITS REVOLVING CREDIT COMMITMENT, AND EACH
LENDER MAY AT ITS OPTION, UNCONDITIONALLY AND WITHOUT CAUSE, DECLINE TO INCREASE
ITS REVOLVING CREDIT COMMITMENT.

 

(III)          IF ANY LENDER IS WILLING, IN ITS SOLE AND ABSOLUTE DISCRETION, TO
INCREASE THE AMOUNT OF ITS REVOLVING CREDIT COMMITMENT HEREUNDER (SUCH A LENDER
HEREINAFTER REFERRED TO AS AN “INCREASING LENDER”), IT SHALL ENTER INTO A
WRITTEN AGREEMENT TO THAT EFFECT WITH THE BORROWERS AND THE ADMINISTRATIVE
AGENT, SUBSTANTIALLY IN THE FORM OF EXHIBIT C (A “COMMITMENT INCREASE
SUPPLEMENT”), WHICH AGREEMENT SHALL SPECIFY, AMONG OTHER THINGS, THE AMOUNT OF
THE INCREASED REVOLVING CREDIT COMMITMENT OF SUCH INCREASING LENDER.  UPON THE
EFFECTIVENESS OF SUCH INCREASING LENDER’S INCREASE IN ITS REVOLVING CREDIT
COMMITMENT, SCHEDULE 1 SHALL, WITHOUT FURTHER ACTION, BE DEEMED TO HAVE BEEN
AMENDED APPROPRIATELY TO REFLECT THE INCREASED REVOLVING CREDIT COMMITMENT AND
OF SUCH INCREASING LENDER.  ANY NEW LENDER WHICH IS WILLING TO BECOME A PARTY
HERETO AND A LENDER HEREUNDER SHALL ENTER INTO A WRITTEN AGREEMENT WITH THE
BORROWERS AND THE ADMINISTRATIVE AGENT, SUBSTANTIALLY IN THE FORM OF EXHIBIT D
(AN “ADDITIONAL LENDER SUPPLEMENT”), WHICH AGREEMENT SHALL SPECIFY, AMONG OTHER
THINGS, ITS REVOLVING CREDIT COMMITMENT HEREUNDER.  WHEN SUCH NEW LENDER BECOMES
A LENDER HEREUNDER AS SET FORTH IN THE ADDITIONAL LENDER SUPPLEMENT, SCHEDULE 1
SHALL, WITHOUT FURTHER ACTION, BE DEEMED TO HAVE BEEN AMENDED AS APPROPRIATE TO
REFLECT THE REVOLVING CREDIT COMMITMENT OF SUCH NEW LENDER.  UPON THE EXECUTION
BY THE ADMINISTRATIVE AGENT, THE BORROWERS AND SUCH NEW LENDER OF SUCH
ADDITIONAL LENDER SUPPLEMENT, SUCH NEW LENDER SHALL BECOME AND BE DEEMED A PARTY
HERETO AND A “LENDER” HEREUNDER FOR ALL PURPOSES HEREOF AND SHALL ENJOY ALL
RIGHTS AND ASSUME ALL OBLIGATIONS ON THE PART OF THE LENDERS SET FORTH IN THIS
AGREEMENT, AND ITS REVOLVING CREDIT COMMITMENT SHALL BE THE AMOUNT SPECIFIED IN
ITS ADDITIONAL LENDER SUPPLEMENT.  EACH NEW LENDER WHICH EXECUTES AND DELIVERS
AN ADDITIONAL LENDER SUPPLEMENT AND BECOMES A PARTY HERETO AND A “LENDER”
HEREUNDER PURSUANT TO SUCH ADDITIONAL LENDER SUPPLEMENT IS HEREINAFTER REFERRED
TO AS AN “ADDITIONAL LENDER.”

 

(IV)          IN NO EVENT SHALL AN INCREASE IN A LENDER’S REVOLVING CREDIT
COMMITMENT OR THE REVOLVING CREDIT COMMITMENT OF A NEW LENDER WHICH RESULTS IN
THE TOTAL REVOLVING CREDIT COMMITMENT EXCEEDING THE AMOUNT WHICH IS AUTHORIZED
AT SUCH TIME IN RESOLUTIONS PREVIOUSLY DELIVERED TO THE ADMINISTRATIVE AGENT
BECOME EFFECTIVE UNTIL THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A COPY OF
THE RESOLUTIONS, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT, OF THE BOARDS OF DIRECTORS OF THE BORROWERS AUTHORIZING
THE BORROWINGS CONTEMPLATED PURSUANT TO SUCH INCREASE, CERTIFIED BY THE
SECRETARY OR AN ASSISTANT SECRETARY OF SUCH BORROWER.  UPON THE EFFECTIVENESS OF
THE INCREASE IN A LENDER’S REVOLVING CREDIT COMMITMENT OR THE REVOLVING CREDIT
COMMITMENT OF A NEW LENDER PURSUANT TO THE PRECEDING SENTENCE AND EXECUTION BY
AN INCREASING LENDER OF A COMMITMENT INCREASE SUPPLEMENT OR BY AN ADDITIONAL
LENDER OF AN ADDITIONAL LENDER SUPPLEMENT, THE BORROWERS SHALL MAKE SUCH
BORROWING FROM SUCH INCREASING LENDER OR ADDITIONAL LENDER, AND/OR SHALL MAKE
SUCH PREPAYMENT OF OUTSTANDING REVOLVING CREDIT LOANS, AS APPLICABLE, AS SHALL
BE REQUIRED TO CAUSE THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF SUCH LOANS
OWING TO EACH LENDER (INCLUDING

 

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EACH SUCH INCREASING LENDER AND ADDITIONAL LENDER) TO BE PROPORTIONAL TO SUCH
LENDER’S SHARE OF THE RELEVANT TOTAL REVOLVING CREDIT COMMITMENT AFTER GIVING
EFFECT TO ANY INCREASE THEREOF.

 

(V)           NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT MAY
THE TOTAL REVOLVING CREDIT COMMITMENT BE INCREASED HEREUNDER UNLESS (A) AFTER
GIVING EFFECT TO SUCH INCREASE (AND ASSUMING THE TOTAL REVOLVING CREDIT
COMMITMENT, AS SO INCREASED, IS FULLY UTILIZED BY THE BORROWERS), NO DEFAULT
WILL HAVE OCCURRED AND BE CONTINUING AND THE BORROWERS WILL BE IN COMPLIANCE ON
A PRO FORMA BASIS WITH ALL FINANCIAL COVENANTS UNDER SECTION VII AND (B) THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE OF A RESPONSIBLE OFFICER
OF EACH BORROWER CERTIFYING THAT THE CONDITION IN CLAUSE (A) HAS BEEN SATISFIED
(WITH CALCULATIONS DEMONSTRATING COMPLIANCE WITH SUCH FINANCIAL COVENANTS ON A
PRO FORMA BASIS, IN REASONABLE DETAIL).

 

(VI)          NO NEW LENDER MAY BECOME AN ADDITIONAL LENDER UNLESS AN ADDITIONAL
LENDER SUPPLEMENT (OR COUNTERPARTS THEREOF) HAS BEEN SIGNED BY SUCH BANK OR
FINANCIAL INSTITUTION AND WHICH ADDITIONAL LENDER SUPPLEMENT HAS BEEN AGREED TO
AND ACKNOWLEDGED BY THE BORROWERS AND ACKNOWLEDGED BY THE ADMINISTRATIVE AGENT. 
NO CONSENT OF ANY LENDER OR ACKNOWLEDGMENT OF ANY OF THE OTHER LENDERS HEREUNDER
SHALL BE REQUIRED THEREFOR.  IN NO EVENT SHALL THE REVOLVING CREDIT COMMITMENT
OF ANY LENDER BE INCREASED BY REASON OF ANY BANK OR FINANCIAL INSTITUTION
BECOMING AN ADDITIONAL LENDER, OR OTHERWISE, BUT THE TOTAL REVOLVING CREDIT
COMMITMENT SHALL BE INCREASED BY THE AMOUNT OF EACH ADDITIONAL LENDER’S
REVOLVING CREDIT COMMITMENT.  UPON ANY LENDER ENTERING INTO A COMMITMENT
INCREASE SUPPLEMENT OR ANY ADDITIONAL LENDER BECOMING A PARTY HERETO, THE
ADMINISTRATIVE AGENT SHALL NOTIFY EACH OTHER LENDER THEREOF AND SHALL DELIVER TO
EACH LENDER A COPY OF THE ADDITIONAL LENDER SUPPLEMENT EXECUTED BY SUCH
ADDITIONAL LENDER, AGREED TO AND ACKNOWLEDGED BY THE BORROWERS AND ACKNOWLEDGED
BY THE ADMINISTRATIVE AGENT, AND THE COMMITMENT INCREASE SUPPLEMENT EXECUTED BY
SUCH INCREASING LENDER, AGREED TO AND ACKNOWLEDGED BY THE BORROWERS AND
ACKNOWLEDGED BY THE ADMINISTRATIVE AGENT.

 

(B)           TERM LOANS.  UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THIS
AGREEMENT, AND IN RELIANCE UPON THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE BORROWERS HEREIN, EACH OF THE LENDERS HAVING A TERM LOAN COMMITMENT AGREES,
SEVERALLY AND NOT JOINTLY, TO MAKE A TERM LOAN (INDIVIDUALLY, A “TERM LOAN”, AND
COLLECTIVELY, THE “TERM LOANS”) TO THE BORROWERS ON THE CLOSING DATE IN THE
PRINCIPAL AMOUNT EQUAL TO SUCH LENDER’S TERM LOAN COMMITMENT, PROVIDED THAT THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF THE TERM LOANS SHALL NOT AT ANY TIME
EXCEED THE TOTAL TERM LOAN COMMITMENT.

 

(C)           LIMITATIONS.  EACH LIBOR LOAN SHALL BE IN A MINIMUM PRINCIPAL
AMOUNT OF $100,000 OR IN INTEGRAL MULTIPLES OF $25,000 IN EXCESS OF SUCH MINIMUM
AMOUNT, AND EACH BASE RATE LOAN SHALL BE IN A MINIMUM PRINCIPAL AMOUNT OF
$100,000 OR IN INTEGRAL MULTIPLES OF $25,000 IN EXCESS OF SUCH MINIMUM AMOUNT. 
NO MORE THAN FIVE (5) LIBOR LOANS MAY BE OUTSTANDING AT ANY TIME.

 

(D)           CONVERSIONS OF LOANS.  UPON THE TERMS AND SUBJECT TO THE
CONDITIONS AND LIMITATIONS OF THIS AGREEMENT, THE BORROWERS MAY CONVERT ALL OR
ANY PART OF ANY OUTSTANDING LOAN

 

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INTO A LOAN OF ANOTHER TYPE ON ANY BUSINESS DAY (WHICH, IN THE CASE OF A
CONVERSION OF AN OUTSTANDING LIBOR LOAN SHALL BE THE LAST DAY OF THE INTEREST
PERIOD APPLICABLE TO SUCH LIBOR LOAN).  THE BORROWERS SHALL GIVE THE
ADMINISTRATIVE AGENT PRIOR NOTICE OF EACH SUCH CONVERSION (WHICH NOTICE SHALL BE
EFFECTIVE UPON RECEIPT) IN ACCORDANCE WITH SECTION 2.3.  NOTWITHSTANDING THE
FOREGOING, THE BORROWERS MAY NOT CONVERT ANY LOAN INTO A LIBOR LOAN OR CONTINUE
A LIBOR LOAN IF THERE IS A CONTINUING DEFAULT.

 

(E)           TERMINATION OR REDUCTION OF COMMITMENTS.

 

(I)            THE TOTAL REVOLVING CREDIT COMMITMENT SHALL TERMINATE ON THE
MATURITY DATE.

 

(II)           THE TOTAL TERM LOAN COMMITMENT SHALL BE REDUCED UPON AND BY THE
AMOUNT OF EACH MANDATORY OR OPTIONAL PAYMENT OR PREPAYMENT OF THE TERM LOAN.

 

(III)          THE BORROWERS SHALL HAVE THE RIGHT AT ANY TIME AND FROM TIME TO
TIME UPON FIVE (5) BUSINESS DAYS’ PRIOR WRITTEN NOTICE TO THE ADMINISTRATIVE
AGENT TO REDUCE BY $100,000, AND IN INTEGRAL MULTIPLES OF $50,000 IF IN EXCESS
THEREOF, THE TOTAL REVOLVING CREDIT COMMITMENT OR TO TERMINATE ENTIRELY THE
LENDERS’ COMMITMENTS TO MAKE REVOLVING CREDIT LOANS HEREUNDER, WHEREUPON THE
REVOLVING CREDIT COMMITMENTS OF THE LENDERS SHALL BE REDUCED PRO RATA IN
ACCORDANCE WITH THEIR RESPECTIVE APPLICABLE PERCENTAGES BY THE AGGREGATE AMOUNT
SPECIFIED IN SUCH NOTICE OR SHALL, AS THE CASE MAY BE, BE TERMINATED ENTIRELY.

 

(IV)          ANY MANDATORY PAYMENT OF REVOLVING CREDIT LOANS MADE PURSUANT TO
THE PROVISIONS OF SECTION 2.8(B) SHALL PERMANENTLY REDUCE THE TOTAL REVOLVING
CREDIT COMMITMENT (ALLOCATED RATABLY TO EACH LENDER BASED ON EACH LENDER’S
REVOLVING CREDIT COMMITMENT) BY THE AMOUNT OF SUCH PAYMENT.

 

(V)           IF, AS A RESULT OF ANY SUCH REDUCTION OF THE TOTAL REVOLVING
CREDIT COMMITMENT, THE LC EXPOSURE AT THE TIME WOULD EXCEED THE TOTAL REVOLVING
CREDIT COMMITMENT OR THE AMOUNT OF LETTERS OF CREDIT PERMITTED TO BE OUTSTANDING
UNDER SECTIONS 2.1(A) AND 3.1(A), THE BORROWERS SHALL, IN CONNECTION WITH ANY
SUCH REDUCTION, DEPOSIT WITH AND PLEDGE TO THE ADMINISTRATIVE AGENT FOR THE
BENEFIT OF THE LENDERS AND THE LC ISSUER CASH IN AN AMOUNT EQUAL TO 105% OF SUCH
EXCESS.  IF ANY LETTERS OF CREDIT WOULD REMAIN OUTSTANDING AFTER THE EFFECTIVE
DATE OF ANY SUCH TERMINATION OF THE TOTAL REVOLVING CREDIT COMMITMENT, IN
ADDITION TO SATISFACTION OF ALL OTHER APPLICABLE TERMS AND CONDITIONS OF THIS
AGREEMENT, THE BORROWERS SHALL DEPOSIT WITH AND PLEDGE TO THE ADMINISTRATIVE
AGENT FOR THE BENEFIT OF THE LENDERS AND THE LC ISSUER CASH IN AN AMOUNT EQUAL
TO 105% OF THE MAXIMUM DRAWING AMOUNT OF UNDER ALL LETTERS OF CREDIT AT THE
EFFECTIVE DATE OF SUCH TERMINATION.

 

(VI)          NO SUCH REDUCTION OR TERMINATION OF ANY COMMITMENT MAY BE
REINSTATED.

 

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2.2           THE NOTES.

 

(A)           THE REVOLVING CREDIT LOANS SHALL BE EVIDENCED BY A SEPARATE
PROMISSORY NOTE FOR EACH REVOLVING CREDIT LENDER, EACH SUCH NOTE TO BE IN
SUBSTANTIALLY THE FORM OF EXHIBIT A-1 HERETO, DATED AS OF THE CLOSING DATE AND
COMPLETED WITH APPROPRIATE INSERTIONS (EACH SUCH NOTE BEING REFERRED TO HEREIN
AS A “REVOLVING CREDIT NOTE” AND COLLECTIVELY AS THE “REVOLVING CREDIT NOTES”). 
ONE REVOLVING CREDIT NOTE SHALL BE PAYABLE TO THE ORDER OF EACH REVOLVING CREDIT
LENDER IN A PRINCIPAL AMOUNT EQUAL TO SUCH LENDER’S REVOLVING CREDIT COMMITMENT.

 

(B)           THE TERM LOANS SHALL BE EVIDENCED BY A SEPARATE PROMISSORY NOTE
FOR EACH TERM LENDER IN THE PRINCIPAL AMOUNT EQUAL TO SUCH LENDER’S TERM LOAN
COMMITMENT, EACH SUCH NOTE TO BE IN SUBSTANTIALLY THE FORM OF EXHIBIT A-2
HERETO, DATED AS OF THE CLOSING DATE AND COMPLETED WITH APPROPRIATE INSERTIONS
(EACH SUCH NOTE BEING REFERRED TO AS A “TERM NOTE” AND COLLECTIVELY AS THE “TERM
NOTES”).

 

(C)           THE BORROWERS IRREVOCABLY AUTHORIZE EACH OF THE LENDERS TO MAKE OR
CAUSE TO BE MADE, AT OR ABOUT THE TIME OF THE DRAWDOWN DATE OF ANY LOAN OR AT
THE TIME OF RECEIPT OF ANY PAYMENT OF PRINCIPAL ON ANY NOTE, AN APPROPRIATE
NOTATION ON ITS NOTE RECORD REFLECTING (AS THE CASE MAY BE) THE MAKING OF SUCH
LOAN OR THE RECEIPT OF SUCH PAYMENT.  THE OUTSTANDING AMOUNT OF THE LOANS SET
FORTH ON THE NOTE RECORDS SHALL BE PRIMA FACIE EVIDENCE OF THE PRINCIPAL AMOUNT
THEREOF OWING AND UNPAID TO SUCH LENDERS, ABSENT MANIFEST ERROR, BUT THE FAILURE
TO RECORD, OR ANY ERROR IN SO RECORDING, ANY SUCH AMOUNT ON ANY LENDER’S NOTE
RECORD SHALL NOT LIMIT OR OTHERWISE AFFECT THE OBLIGATIONS OF THE BORROWERS
HEREUNDER OR UNDER ANY NOTE TO MAKE PAYMENTS OF PRINCIPAL OF OR INTEREST ON ANY
NOTE WHEN DUE.

 

2.3           NOTICE AND MANNER OF BORROWING OR CONVERSION OF LOANS.

 

(A)           WHENEVER THE BORROWERS DESIRE TO OBTAIN OR CONTINUE A LOAN
HEREUNDER OR CONVERT AN OUTSTANDING LOAN INTO A LOAN OF ANOTHER TYPE, THE
BORROWERS SHALL GIVE THE ADMINISTRATIVE AGENT A TELEPHONIC NOTICE PROMPTLY
CONFIRMED BY A WRITTEN NOTICE OF BORROWING OR CONVERSION, WHICH TELEPHONIC
NOTICE SHALL BE IRREVOCABLE AND WHICH MUST BE RECEIVED NO LATER THAN 11:00 A.M.
PACIFIC TIME ON THE DATE (I) ONE BUSINESS DAY BEFORE THE DAY ON WHICH THE
REQUESTED LOAN IS TO BE MADE AS OR CONVERTED TO A BASE RATE LOAN, AND (II) THREE
BUSINESS DAYS BEFORE THE DAY ON WHICH THE REQUESTED LOAN IS TO BE MADE OR
CONTINUED AS OR CONVERTED TO A LIBOR LOAN.  SUCH NOTICE OF BORROWING OR
CONVERSION SHALL SPECIFY (I) THE EFFECTIVE DATE AND AMOUNT OF EACH LOAN OR
PORTION THEREOF REQUESTED TO BE MADE, CONTINUED OR CONVERTED, SUBJECT TO THE
LIMITATIONS SET FORTH IN SECTION 2.1, (II) THE INTEREST RATE OPTION REQUESTED TO
BE APPLICABLE THERETO, AND (III) THE DURATION OF THE APPLICABLE INTEREST PERIOD,
IF ANY (SUBJECT TO THE PROVISIONS OF THE DEFINITION OF THE TERM “INTEREST
PERIOD”).  IF SUCH NOTICE FAILS TO SPECIFY THE INTEREST RATE OPTION TO BE
APPLICABLE TO THE REQUESTED LOAN, THEN THE BORROWERS SHALL BE DEEMED TO HAVE
REQUESTED A BASE RATE LOAN.  IF THE WRITTEN CONFIRMATION OF ANY TELEPHONIC
NOTIFICATION DIFFERS IN ANY MATERIAL RESPECT FROM THE ACTION TAKEN BY THE
ADMINISTRATIVE AGENT, THE RECORDS OF THE ADMINISTRATIVE AGENT SHALL BE PRIMA
FACIE EVIDENCE OF TERMS OF THE LOAN REQUESTED ABSENT MANIFEST ERROR.

 

(B)           SUBJECT TO THE PROVISIONS OF THE DEFINITION OF THE TERM “INTEREST
PERIOD” HEREIN, THE DURATION OF EACH INTEREST PERIOD FOR A LIBOR LOAN SHALL BE
AS SPECIFIED IN THE APPLICABLE NOTICE OF BORROWING OR CONVERSION.  IF NO
INTEREST PERIOD IS SPECIFIED IN A NOTICE OF BORROWING OR CONVERSION WITH RESPECT
TO A REQUESTED LIBOR LOAN, THEN THE BORROWERS SHALL BE

 

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DEEMED TO HAVE SELECTED AN INTEREST PERIOD OF ONE MONTH’S DURATION.  IF THE
ADMINISTRATIVE AGENT RECEIVES A NOTICE OF BORROWING OR CONVERSION AFTER THE TIME
SPECIFIED IN SUBSECTION (A) ABOVE, SUCH NOTICE SHALL NOT BE EFFECTIVE.  IF THE
ADMINISTRATIVE AGENT DOES NOT RECEIVE AN EFFECTIVE NOTICE OF BORROWING OR
CONVERSION WITH RESPECT TO AN OUTSTANDING LIBOR LOAN, OR IF, WHEN SUCH NOTICE
MUST BE GIVEN PRIOR TO THE END OF THE INTEREST PERIOD APPLICABLE TO SUCH
OUTSTANDING LOAN, THE BORROWERS SHALL HAVE FAILED TO SATISFY ANY OF THE
CONDITIONS HEREOF, THE BORROWERS SHALL BE DEEMED TO HAVE ELECTED TO CONVERT SUCH
OUTSTANDING LOAN IN WHOLE INTO A BASE RATE LOAN ON THE LAST DAY OF THE THEN
CURRENT INTEREST PERIOD WITH RESPECT THERETO.

 

2.4           FUNDING OF LOANS.

 

(A)           LOANS SHALL BE MADE BY THE LENDERS PRO RATA IN ACCORDANCE WITH
THEIR RESPECTIVE APPLICABLE PERCENTAGES FOR SUCH LOANS, PROVIDED, HOWEVER THAT
THE FAILURE OF ANY LENDER TO MAKE ANY LOAN REQUIRED TO BE MADE BY IT HEREUNDER
SHALL NOT RELIEVE ANY OTHER LENDER OF ITS OBLIGATION TO LEND HEREUNDER (IT BEING
UNDERSTOOD, HOWEVER, THAT NO LENDER SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY
OTHER LENDER TO MAKE ANY LOAN REQUIRED TO BE MADE BY SUCH OTHER LENDER).

 

(B)           THE ADMINISTRATIVE AGENT SHALL NOTIFY THE TERM LENDERS OR
REVOLVING CREDIT LENDERS, AS THE CASE MAY BE, OF EACH REQUESTED LOAN AND OF THE
DRAWDOWN DATE THEREOF AND THE AMOUNT OF EACH TERM LENDER’S OR REVOLVING CREDIT
LENDER’S PRO RATA SHARE OF SUCH LOAN.  IF SUCH NOTICE IS GIVEN BY THE CLOSE OF
THE ADMINISTRATIVE AGENT’S BUSINESS ON THE BUSINESS DAY ON WHICH THE
ADMINISTRATIVE AGENT RECEIVES AN EFFECTIVE NOTICE OF BORROWING OR CONVERSION AS
PROVIDED IN SECTION 2.3, EACH LENDER WILL, NOT LATER THAN 1:00 P.M. PACIFIC TIME
ON THE PROPOSED DRAWDOWN DATE OF SUCH LOAN, MAKE AVAILABLE TO THE ADMINISTRATIVE
AGENT, AT ITS HEAD OFFICE, IN IMMEDIATELY AVAILABLE FUNDS, THE AMOUNT OF SUCH
LENDER’S PRO RATA SHARE OF THE AMOUNT OF SUCH REQUESTED LOAN.  UPON RECEIPT BY
THE ADMINISTRATIVE AGENT OF SUCH AMOUNT, AND UPON THE SATISFACTION OF THE
CONDITIONS SET FORTH IN SECTION 4.1 OR 4.2 (TO THE EXTENT APPLICABLE), THE
ADMINISTRATIVE AGENT WILL MAKE AVAILABLE TO THE BORROWERS THE AGGREGATE AMOUNT
OF SUCH LOAN.

 

(C)           THE ADMINISTRATIVE AGENT MAY, UNLESS NOTIFIED TO THE CONTRARY BY
ANY TERM LENDER OR REVOLVING CREDIT LENDER, AS THE CASE MAY BE, PRIOR TO A
DRAWDOWN DATE, ASSUME THAT EACH TERM LENDER OR REVOLVING CREDIT LENDER, AS THE
CASE MAY BE, HAS MADE AVAILABLE TO THE ADMINISTRATIVE AGENT ON SUCH DRAWDOWN
DATE THE AMOUNT OF SUCH LENDER’S APPLICABLE PERCENTAGE OF THE LOANS TO BE MADE
ON SUCH DRAWDOWN DATE, AND THE ADMINISTRATIVE AGENT MAY (BUT IT SHALL NOT BE
REQUIRED TO), IN RELIANCE UPON SUCH ASSUMPTION, MAKE AVAILABLE TO THE BORROWERS
A CORRESPONDING AMOUNT.  IF ANY SUCH LENDER MAKES AVAILABLE TO THE
ADMINISTRATIVE AGENT SUCH AMOUNT ON A DATE AFTER SUCH DRAWDOWN DATE, SUCH LENDER
SHALL PAY TO THE ADMINISTRATIVE AGENT ON DEMAND AN AMOUNT EQUAL TO THE PRODUCT
OF (I) THE AVERAGE, COMPUTED FOR THE PERIOD REFERRED TO IN CLAUSE (III) BELOW,
OF THE WEIGHTED AVERAGE INTEREST RATE PAID BY THE ADMINISTRATIVE AGENT FOR
FEDERAL FUNDS ACQUIRED BY THE ADMINISTRATIVE AGENT DURING EACH DAY INCLUDED IN
SUCH PERIOD, TIMES (II) THE AMOUNT OF SUCH LENDER’S APPLICABLE PERCENTAGE OF ANY
SUCH LOANS TIMES (III) A FRACTION, THE NUMERATOR OF WHICH IS THE NUMBER OF DAYS
THAT ELAPSE FROM AND INCLUDING SUCH DRAWDOWN DATE TO THE DATE ON WHICH THE
AMOUNT OF SUCH LENDER’S APPLICABLE PERCENTAGE OF SUCH REVOLVING CREDIT LOANS
SHALL BECOME IMMEDIATELY AVAILABLE TO THE ADMINISTRATIVE AGENT, AND THE
DENOMINATOR OF WHICH IS 365.  A STATEMENT OF THE

 

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ADMINISTRATIVE AGENT SUBMITTED TO SUCH LENDER WITH RESPECT TO ANY AMOUNTS OWING
UNDER THIS PARAGRAPH SHALL BE PRIMA FACIE EVIDENCE OF THE AMOUNT DUE AND OWING
TO THE ADMINISTRATIVE AGENT BY SUCH LENDER ABSENT MANIFEST ERROR.  IF THE AMOUNT
OF SUCH LENDER’S APPLICABLE PERCENTAGE OF SUCH LOANS IS NOT MADE AVAILABLE TO
THE ADMINISTRATIVE AGENT BY SUCH LENDER WITHIN THREE (3) BUSINESS DAYS FOLLOWING
SUCH DRAWDOWN DATE, THE ADMINISTRATIVE AGENT SHALL BE ENTITLED TO RECOVER SUCH
AMOUNT FROM THE BORROWERS ON DEMAND, WITH INTEREST THEREON AT THE RATE PER ANNUM
APPLICABLE TO THE LOANS MADE ON SUCH DRAWDOWN DATE.

 

2.5           INTEREST RATES AND PAYMENTS OF INTEREST.

 

(A)           EACH LOAN WHICH IS A BASE RATE LOAN SHALL BEAR INTEREST ON THE
OUTSTANDING PRINCIPAL AMOUNT THEREOF AT A RATE PER ANNUM EQUAL TO THE ALTERNATE
BASE RATE PLUS 0.25%, WHICH RATE SHALL CHANGE CONTEMPORANEOUSLY WITH ANY CHANGE
IN THE ALTERNATE BASE RATE.  SUCH INTEREST SHALL BE PAYABLE MONTHLY IN ARREARS
ON THE FIRST BUSINESS DAY OF EACH CALENDAR MONTH FOLLOWING THE CLOSING DATE.

 

(B)           EACH LOAN WHICH IS A LIBOR LOAN SHALL BEAR INTEREST ON THE
OUTSTANDING PRINCIPAL AMOUNT THEREOF, FOR EACH INTEREST PERIOD APPLICABLE
THERETO, AT A RATE PER ANNUM EQUAL TO THE LIBOR RATE PLUS 2.00%.  SUCH INTEREST
SHALL BE PAYABLE FOR SUCH INTEREST PERIOD ON THE LAST DAY THEREOF.

 

(C)           (I)            IF AN EVENT OF DEFAULT SHALL OCCUR, THEN (X) THE
UNPAID BALANCE OF LOANS SHALL BEAR INTEREST, TO THE EXTENT PERMITTED BY LAW,
COMPOUNDED DAILY AT AN INTEREST RATE EQUAL TO 2% PER ANNUM ABOVE THE INTEREST
RATE APPLICABLE TO SUCH LOANS (DETERMINED PURSUANT TO SUBSECTIONS (A) AND
(B) ABOVE) IN EFFECT ON THE DAY SUCH EVENT OF DEFAULT OCCURS, UNTIL SUCH EVENT
OF DEFAULT IS CURED OR WAIVED, AND (Y) THE LETTER OF CREDIT FEES SHALL BE
INCREASED BY 2.00% PER ANNUM UNTIL SUCH EVENT OF DEFAULT IS CURED OR WAIVED, AND
SUCH INTEREST SHALL BE PAYABLE UPON THE DEMAND OF THE ADMINISTRATIVE AGENT.

 

(D)           SO LONG AS ANY LENDER SHALL BE REQUIRED UNDER REGULATIONS OF THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (“FRB”) (OR ANY OTHER BANKING
AUTHORITY, DOMESTIC OR FOREIGN, TO WHICH SUCH LENDER IS SUBJECT) TO MAINTAIN
RESERVES WITH RESPECT TO LIABILITIES OR ASSETS CONSISTING OF OR INCLUDING
“EUROCURRENCY LIABILITIES” (AS DEFINED IN REGULATIONS ISSUED FROM TIME TO TIME
BY SUCH BOARD OF GOVERNORS), THE BORROWERS SHALL PAY TO THE ADMINISTRATIVE AGENT
FOR THE ACCOUNT OF EACH SUCH LENDER ADDITIONAL INTEREST ON THE UNPAID PRINCIPAL
AMOUNT OF EACH LIBOR LOAN MADE BY SUCH LENDER FROM THE DATE OF SUCH LOAN UNTIL
SUCH PRINCIPAL AMOUNT IS PAID IN FULL, AT AN INTEREST RATE PER ANNUM EQUAL AT
ALL TIMES TO THE REMAINDER (ROUNDED UPWARDS, IF NECESSARY, TO THE NEXT HIGHER
1/100 OF 1%) OBTAINED BY SUBTRACTING (I) THE LIBOR RATE FOR THE INTEREST PERIOD
FOR SUCH LIBOR LOAN FROM (II) THE RATE OBTAINED BY DIVIDING SUCH LIBOR RATE BY A
PERCENTAGE EQUAL TO 100% MINUS THE RESERVE PERCENTAGE OF SUCH LENDER FOR SUCH
INTEREST PERIOD.  SUCH ADDITIONAL INTEREST SHALL BE DETERMINED BY SUCH LENDER
AND NOTIFIED TO THE BORROWERS THROUGH THE ADMINISTRATIVE AGENT, AND SHALL BE
PAYABLE ON EACH DATE ON WHICH INTEREST IS PAYABLE ON SUCH LIBOR LOAN.

 

(E)           ALL AGREEMENTS BETWEEN OR AMONG THE BORROWERS AND THE LENDERS ARE
HEREBY EXPRESSLY LIMITED SO THAT IN NO CONTINGENCY OR EVENT WHATSOEVER, WHETHER
BY REASON OF ACCELERATION OF MATURITY OF THE OBLIGATIONS OR OTHERWISE, SHALL THE
AMOUNT PAID OR AGREED TO BE

 

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PAID TO THE LENDERS FOR THE USE OR THE FORBEARANCE OF THE OBLIGATIONS EXCEED THE
MAXIMUM PERMISSIBLE UNDER APPLICABLE LAW.  AS USED HEREIN, THE TERM “APPLICABLE
LAW” SHALL MEAN THE LAW IN EFFECT AS OF THE DATE HEREOF PROVIDED, HOWEVER, THAT
IN THE EVENT THERE IS A CHANGE IN THE LAW WHICH RESULTS IN A HIGHER PERMISSIBLE
RATE OF INTEREST, THEN THE LOAN DOCUMENTS SHALL BE GOVERNED BY SUCH NEW LAW AS
OF ITS EFFECTIVE DATE.  IN THIS REGARD, IT IS EXPRESSLY AGREED THAT IT IS THE
INTENT OF THE BORROWERS AND THE LENDERS IN THE EXECUTION, DELIVERY AND
ACCEPTANCE OF THE LOAN DOCUMENTS TO CONTRACT IN STRICT COMPLIANCE WITH THE LAWS
OF THE STATE OF NEW YORK FROM TIME TO TIME IN EFFECT.  IF, UNDER OR FROM ANY
CIRCUMSTANCES WHATSOEVER, FULFILLMENT OF ANY PROVISION OF ANY OF THE LOAN
DOCUMENTS AT THE TIME OF PERFORMANCE OF SUCH PROVISION SHALL BE DUE, SHALL
INVOLVE TRANSCENDING THE LIMIT OF SUCH VALIDITY PRESCRIBED BY APPLICABLE LAW,
THEN THE OBLIGATION TO BE FULFILLED SHALL AUTOMATICALLY BE REDUCED TO THE LIMITS
OF SUCH VALIDITY, AND IF UNDER OR FROM CIRCUMSTANCES WHATSOEVER THE LENDERS
SHOULD EVER RECEIVE AS INTEREST AN AMOUNT WHICH WOULD EXCEED THE HIGHEST LAWFUL
RATE, SUCH AMOUNT WHICH WOULD BE EXCESSIVE INTEREST SHALL BE APPLIED TO THE
REDUCTION OF THE PRINCIPAL BALANCE OF THE OBLIGATIONS AND NOT TO THE PAYMENT OF
INTEREST.  THIS PROVISION SHALL CONTROL EVERY OTHER PROVISION OF ALL LOAN
DOCUMENTS.

 

2.6           FEES.

 

(A)           THE BORROWERS SHALL PAY TO THE ADMINISTRATIVE AGENT FOR THE
BENEFIT OF THE LENDERS A COMMITMENT FEE (THE “COMMITMENT FEE”), COMPUTED ON THE
BASIS OF A 360-DAY YEAR AND PAYABLE QUARTERLY IN ARREARS ON EACH PAYMENT DATE
FOLLOWING THE CLOSING DATE AND ON THE MATURITY DATE, AT A RATE PER ANNUM EQUAL
TO 0.50% MULTIPLIED BY THE AVERAGE OBTAINED BY DIVIDING (I) THE EXCESS OF
(A) THE TOTAL REVOLVING CREDIT COMMITMENT FOR EACH DAY IN THE CALENDAR QUARTER
IMMEDIATELY PRECEDING SUCH PAYMENT DATE OVER (B) THE TOTAL REVOLVING CREDIT
OUTSTANDINGS FOR EACH DAY IN THE CALENDAR QUARTER IMMEDIATELY PRECEDING SUCH
PAYMENT DATE, BY (II) THE NUMBER OF DAYS IN SUCH PERIOD.

 

(B)           THE BORROWERS SHALL PAY TO THE ADMINISTRATIVE AGENT FOR THE
BENEFIT OF THE LENDERS A FEE (THE “LETTER OF CREDIT FEE”) AT A RATE PER ANNUM
EQUAL TO (I) THE MAXIMUM DRAWING AMOUNT UNDER EACH LETTER OF CREDIT MULTIPLIED
BY (II) 2.00%.  THE LETTER OF CREDIT FEE SHALL BE PAID QUARTERLY IN ARREARS ON
EACH PAYMENT DATE FOLLOWING THE CLOSING DATE.

 

(C)           WITHOUT LIMITING ANY OF THE LENDERS’ OTHER RIGHTS HEREUNDER OR BY
LAW, IF ANY LOAN OR ANY PORTION THEREOF OR ANY INTEREST THEREON OR ANY OTHER
AMOUNT PAYABLE HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT IS NOT PAID WITHIN TEN
(10) DAYS AFTER ITS DUE DATE, THE BORROWERS SHALL PAY TO THE ADMINISTRATIVE
AGENT FOR THE BENEFIT OF THE LENDERS ON DEMAND A LATE PAYMENT CHARGE EQUAL TO 5%
OF THE AMOUNT OF THE PAYMENT DUE.

 

(D)           THE BORROWERS SHALL PAY TO THE ADMINISTRATIVE AGENT, SUCH OTHER
FEES AS THE BORROWERS AND THE ADMINISTRATIVE AGENT SHALL AGREE IN WRITING.

 

(E)           THE BORROWERS AUTHORIZE THE ADMINISTRATIVE AGENT AND THE LENDERS
TO CHARGE TO THEIR NOTE RECORDS OR TO ANY DEPOSIT ACCOUNT WHICH THE BORROWERS
MAY MAINTAIN WITH ANY OF THEM THE INTEREST, FEES, CHARGES, TAXES AND EXPENSES
PROVIDED FOR IN THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OTHER DOCUMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH.  THE ADMINISTRATIVE
AGENT OR THE LENDERS (WITH RESPECT TO ANY DEPOSIT ACCOUNT HELD BY

 

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ANY LENDER) SHALL PROVIDE TO THE BORROWERS WRITTEN NOTICE OF ANY SUCH CHARGE
PROMPTLY FOLLOWING SUCH CHARGE.

 

2.7           REPAYMENT OF LOANS.

 

(A)           TERM LOANS.  THE BORROWERS SHALL REPAY THE PRINCIPAL AMOUNT OF THE
TERM LOANS IN EQUAL QUARTERLY INSTALLMENTS OF $150,000 FOR THE FIRST SIX FULL
CALENDAR QUARTERS AFTER THE CLOSING DATE AND EQUAL QUARTERLY INSTALLMENTS OF
$200,000 FOR THE NEXT NINE FULL CALENDAR QUARTERS, PAYABLE ON EACH PAYMENT DATE
COMMENCING APRIL 1, 2008, AND THE AGGREGATE PRINCIPAL AMOUNT OF ALL TERM LOANS
OUTSTANDING ON THE MATURITY DATE SHALL BE PAID ON SUCH DATE.

 

(B)           REVOLVING CREDIT LOANS.  THE BORROWERS SHALL REPAY TO THE
REVOLVING CREDIT LENDERS ON THE MATURITY DATE THE AGGREGATE PRINCIPAL AMOUNT OF
ALL REVOLVING CREDIT LOANS OUTSTANDING ON SUCH DATE.

 

2.8           PREPAYMENTS.

 

(A)           OPTIONAL.  THE BORROWERS MAY, UPON NOTICE TO THE ADMINISTRATIVE
AGENT IN SUBSTANTIALLY THE FORM OF EXHIBITS J-1 OR J-2, AS THE CASE MAY BE, AT
ANY TIME OR FROM TIME TO TIME VOLUNTARILY PREPAY TERM LOANS AND REVOLVING CREDIT
LOANS IN WHOLE OR IN PART WITHOUT PREMIUM OR PENALTY (EXCEPT AS PROVIDED IN
SECTION 2.10); PROVIDED THAT (A) SUCH NOTICE MUST BE RECEIVED BY THE
ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M. PACIFIC TIME (1) THREE BUSINESS
DAYS PRIOR TO ANY DATE OF PREPAYMENT OF LIBOR LOANS AND (2) ON THE DATE OF
PREPAYMENT OF BASE RATE LOANS; (B) ANY PREPAYMENT OF LIBOR LOANS SHALL BE IN A
PRINCIPAL AMOUNT OF $500,000 OR A WHOLE MULTIPLE OF $500,000 IN EXCESS THEREOF;
AND (C) ANY PREPAYMENT OF BASE RATE LOANS SHALL BE IN A PRINCIPAL AMOUNT OF
$100,000 OR A WHOLE MULTIPLE OF $25,000 IN EXCESS THEREOF OR, IN EACH CASE, IF
LESS, THE ENTIRE PRINCIPAL AMOUNT THEREOF THEN OUTSTANDING.  EACH SUCH NOTICE
SHALL SPECIFY THE DATE AND AMOUNT OF SUCH PREPAYMENT AND THE TYPE(S) OF LOANS TO
BE PREPAID AND, IF LIBOR LOANS ARE TO BE PREPAID, THE INTEREST PERIOD(S) OF SUCH
LOANS.  THE ADMINISTRATIVE AGENT WILL PROMPTLY NOTIFY EACH LENDER OF ITS RECEIPT
OF EACH SUCH NOTICE, AND OF THE AMOUNT OF SUCH LENDER’S RATABLE PORTION OF SUCH
PREPAYMENT (BASED ON SUCH LENDER’S APPLICABLE PERCENTAGE IN RESPECT OF THE
RELEVANT FACILITY).  IF SUCH NOTICE IS GIVEN BY THE BORROWERS, THE BORROWERS
SHALL MAKE SUCH PREPAYMENT AND THE PAYMENT AMOUNT SPECIFIED IN SUCH NOTICE SHALL
BE DUE AND PAYABLE ON THE DATE SPECIFIED THEREIN.  ANY PREPAYMENT OF A LOAN
SHALL BE ACCOMPANIED BY ALL ACCRUED INTEREST ON THE AMOUNT PREPAID, AND IF SUCH
LOAN IS A LIBOR LOAN, ANY ADDITIONAL AMOUNTS REQUIRED PURSUANT TO SECTION 2.10. 
EACH PREPAYMENT OF TERM LOANS PURSUANT TO THIS SECTION 2.8(A) SHALL BE APPLIED
TO THE PRINCIPAL REPAYMENT INSTALLMENTS OF THE TERM LOANS (INCLUDING, WITHOUT
LIMITATION, THE INSTALLMENT DUE ON THE MATURITY DATE) IN INVERSE ORDER OF
MATURITY.

 

(B)           MANDATORY.

 

(I)            WITHIN THE EARLIER OF (X) 95 DAYS AFTER THE END OF EACH FISCAL
YEAR (COMMENCING WITH THE FISCAL YEAR ENDING ON JANUARY 26, 2009), OR (Y) FIVE
BUSINESS DAYS AFTER FINANCIAL STATEMENTS HAVE BEEN DELIVERED PURSUANT TO
SECTION 6.1(A) AND THE RELATED CERTIFICATE HAS BEEN DELIVERED PURSUANT TO
SECTION 6.1(D) FOR SUCH FISCAL YEAR, THE BORROWERS SHALL PREPAY AN AGGREGATE
PRINCIPAL AMOUNT OF LOANS EQUAL TO FIFTY PERCENT

 

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(50%) OF EXCESS CASH FLOW FOR THE FISCAL YEAR COVERED BY SUCH FINANCIAL
STATEMENTS (SUCH PREPAYMENTS TO BE APPLIED AS SET FORTH IN CLAUSES (VI) AND
(VIII) BELOW).

 

(II)           IF THE BORROWERS OR ANY OF THEIR SUBSIDIARIES DISPOSE OF ANY
PROPERTY (OTHER THAN ANY DISPOSITION OF ANY PROPERTY PERMITTED BY
SECTION 8.4(B)) WHICH RESULTS IN THE REALIZATION BY SUCH PERSON OF NET CASH
PROCEEDS, THE BORROWERS SHALL PREPAY AN AGGREGATE PRINCIPAL AMOUNT OF LOANS
EQUAL TO 100% OF SUCH NET CASH PROCEEDS ON THE FIFTH BUSINESS DAY FOLLOWING THE
RECEIPT THEREOF BY SUCH PERSON (SUCH PREPAYMENTS TO BE APPLIED AS SET FORTH IN
CLAUSES (VI) AND VIII) BELOW).

 

(III)          UPON THE SALE OR ISSUANCE BY THE BORROWERS OF ANY OF THEIR EQUITY
INTERESTS, UNLESS OTHERWISE AGREED IN WRITING BY THE MAJORITY LENDERS, THE
BORROWERS SHALL PREPAY AN AGGREGATE PRINCIPAL AMOUNT OF LOANS EQUAL TO 100% OF
ALL NET CASH PROCEEDS RECEIVED THEREFROM PROMPTLY UPON RECEIPT THEREOF BY THE
BORROWERS (SUCH PREPAYMENTS TO BE APPLIED AS SET FORTH IN CLAUSES (VI) AND
(VIII) BELOW).

 

(IV)          UPON THE INCURRENCE OR ISSUANCE BY THE BORROWERS OR ANY OF THEIR
SUBSIDIARIES OF ANY INDEBTEDNESS (OTHER THAN INDEBTEDNESS EXPRESSLY PERMITTED TO
BE INCURRED OR ISSUED PURSUANT TO CLAUSES (A) THROUGH (F) AND (I) OF
SECTION 8.1), THE BORROWERS SHALL PREPAY AN AGGREGATE PRINCIPAL AMOUNT OF LOANS
EQUAL TO 100% OF ALL NET CASH PROCEEDS RECEIVED THEREFROM PROMPTLY UPON RECEIPT
THEREOF BY THE BORROWERS OR SUCH SUBSIDIARIES (SUCH PREPAYMENTS TO BE APPLIED AS
SET FORTH IN CLAUSES (VI) AND (VIII) BELOW).

 

(V)           UPON ANY EXTRAORDINARY RECEIPT RECEIVED BY OR PAID TO OR FOR THE
ACCOUNT OF THE BORROWERS OR ANY OF THEIR SUBSIDIARIES, AND NOT OTHERWISE
INCLUDED IN CLAUSE (II), (III) OR (IV) OF THIS SECTION 2.8(B), THE BORROWERS
SHALL PREPAY AN AGGREGATE PRINCIPAL AMOUNT OF LOANS EQUAL TO 100% OF ALL NET
CASH PROCEEDS RECEIVED THEREFROM PROMPTLY UPON RECEIPT THEREOF BY THE BORROWERS
OR SUCH SUBSIDIARIES (SUCH PREPAYMENTS TO BE APPLIED AS SET FORTH IN CLAUSES
(VI) AND (VIII) BELOW); PROVIDED, HOWEVER, THAT WITH RESPECT TO ANY PROCEEDS OF
CASUALTY INSURANCE OR CONDEMNATION OR EMINENT DOMAIN AWARDS (OR PAYMENTS IN LIEU
THEREOF), AT THE ELECTION OF THE BORROWERS (AS NOTIFIED BY THE BORROWERS TO THE
ADMINISTRATIVE AGENT ON OR PRIOR TO THE DATE OF RECEIPT OF SUCH INSURANCE
PROCEEDS, CONDEMNATION AWARDS OR INDEMNITY PAYMENTS), AND SO LONG AS NO DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING, THE BORROWERS OR SUCH SUBSIDIARIES MAY
APPLY SUCH CASH PROCEEDS WITHIN ONE YEAR AFTER THE RECEIPT THEREOF TO REPLACE OR
REPAIR THE EQUIPMENT, FIXED ASSETS OR REAL PROPERTY IN RESPECT OF WHICH SUCH NET
CASH PROCEEDS WERE RECEIVED; AND PROVIDED, FURTHER, HOWEVER, THAT ANY NET CASH
PROCEEDS NOT SO APPLIED SHALL BE PROMPTLY APPLIED TO THE PREPAYMENT OF THE LOANS
AS SET FORTH ABOVE IN THIS SECTION 2.8(B)(V).

 

(VI)          EACH PREPAYMENT OF LOANS PURSUANT TO THE FOREGOING PROVISIONS OF
THIS SECTION 2.8(B) SHALL BE APPLIED, FIRST, TO PAYMENT OF THE UNPAID
INSTALLMENTS OF PRINCIPAL OF THE TERM LOANS IN INVERSE ORDER OF MATURITY, UNTIL
THE TERM LOANS ARE PAID IN FULL; AND SECOND, TO THE REVOLVING CREDIT FACILITY IN
THE MANNER SET FORTH IN CLAUSE (VIII) OF THIS SECTION 2.8(B).

 

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(VII)         IF FOR ANY REASON THE TOTAL REVOLVING CREDIT OUTSTANDINGS AT ANY
TIME EXCEED THE TOTAL REVOLVING CREDIT COMMITMENT AT SUCH TIME, THE BORROWERS
SHALL IMMEDIATELY PREPAY REVOLVING CREDIT LOANS AND LC DISBURSEMENTS AND/OR CASH
COLLATERALIZE THE MAXIMUM DRAWING AMOUNT, IN AN AGGREGATE AMOUNT EQUAL TO SUCH
EXCESS.

 

(VIII)        PREPAYMENTS OF THE REVOLVING CREDIT FACILITY MADE PURSUANT TO THIS
SECTION 2.8(B), FIRST, SHALL BE APPLIED RATABLY TO ANY UNPAID LC DISBURSEMENTS,
SECOND, SHALL BE APPLIED RATABLY TO THE OUTSTANDING REVOLVING CREDIT LOANS, AND,
THIRD, SHALL BE USED TO CASH COLLATERALIZE THE REMAINING MAXIMUM DRAWING AMOUNT;
AND, IN THE CASE OF PREPAYMENTS OF THE REVOLVING CREDIT FACILITY REQUIRED
PURSUANT TO CLAUSES (I), (II), (III), (III) AND (IV) OF THIS SECTION 2.8(B), THE
AMOUNT REMAINING, IF ANY, AFTER THE PREPAYMENT IN FULL OF ALL LC DISBURSEMENTS
AND REVOLVING CREDIT LOANS OUTSTANDING AT SUCH TIME AND THE CASH
COLLATERALIZATION OF THE REMAINING MAXIMUM DRAWING AMOUNT IN FULL MAY BE
RETAINED BY THE BORROWERS FOR USE IN THE ORDINARY COURSE OF ITS BUSINESS.  UPON
A DRAWING UNDER ANY LETTER OF CREDIT THAT HAS BEEN CASH COLLATERALIZED, THE
FUNDS HELD AS CASH COLLATERAL SHALL BE APPLIED (WITHOUT ANY FURTHER ACTION BY OR
NOTICE TO OR FROM THE BORROWERS OR ANY OTHER LOAN PARTY) TO REIMBURSE THE LC
ISSUER OR THE REVOLVING CREDIT LENDERS, AS APPLICABLE.

 

2.9           METHOD AND ALLOCATION OF PAYMENTS.

 

(A)           ALL PAYMENTS BY THE BORROWERS HEREUNDER AND UNDER ANY OF THE OTHER
LOAN DOCUMENTS SHALL BE MADE IN LAWFUL MONEY OF THE UNITED STATES IN IMMEDIATELY
AVAILABLE FUNDS, AND SHALL BE DEEMED TO HAVE BEEN MADE ONLY WHEN MADE IN
COMPLIANCE WITH THIS SECTION 2.9.  ALL SUCH PAYMENTS SHALL BE MADE WITHOUT
SET-OFF OR COUNTERCLAIM AND FREE AND CLEAR OF AND WITHOUT DEDUCTION FOR ANY
TAXES, LEVIES, IMPOSTS, DUTIES, CHARGES, FEES, DEDUCTIONS, WITHHOLDINGS,
COMPULSORY LOANS, RESTRICTIONS OR CONDITIONS OF ANY NATURE (OTHER THAN EXCLUDED
TAXES) NOW OR HEREAFTER IMPOSED OR LEVIED BY ANY JURISDICTION OR ANY POLITICAL
SUBDIVISION THEREOF OR TAXING OR OTHER AUTHORITY THEREIN UNLESS THE BORROWERS
ARE COMPELLED BY LAW TO MAKE SUCH DEDUCTION OR WITHHOLDING.  IF ANY SUCH
OBLIGATION IS IMPOSED UPON THE BORROWERS WITH RESPECT TO ANY AMOUNT PAYABLE BY
IT HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS, THE BORROWERS WILL PAY TO
EACH LENDER SUCH ADDITIONAL AMOUNT IN U.S. DOLLARS AS SHALL BE NECESSARY TO
ENABLE SUCH LENDER TO RECEIVE THE SAME NET AMOUNT WHICH SUCH LENDER WOULD HAVE
RECEIVED ON SUCH DUE DATE HAD NO SUCH OBLIGATION BEEN IMPOSED UPON THE
BORROWERS.  THE BORROWERS WILL DELIVER PROMPTLY TO EACH LENDER CERTIFICATES OR
OTHER VALID VOUCHERS OR OTHER EVIDENCE OF PAYMENT REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT FOR ALL TAXES OR OTHER CHARGES DEDUCTED FROM OR PAID WITH
RESPECT TO PAYMENTS MADE BY THE BORROWERS HEREUNDER OR UNDER SUCH OTHER LOAN
DOCUMENT.  THE LENDERS MAY, AND THE BORROWERS HEREBY AUTHORIZE THE LENDERS TO,
DEBIT THE AMOUNT OF ANY PAYMENT NOT MADE BY SUCH TIME TO THE DEMAND DEPOSIT
ACCOUNTS OF THE BORROWERS WITH THE LENDERS OR TO THEIR NOTE RECORDS.

 

(B)           SUBJECT TO THE PROVISIONS OF SECTION 2.9(C), ALL PAYMENTS
HEREUNDER SHALL BE MADE AND ALLOCATED AS FOLLOWS:

 

(I)            ALL PAYMENTS OF PRINCIPAL OF AND INTEREST IN RESPECT OF REVOLVING
CREDIT LOANS SHALL BE MADE TO THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE
REVOLVING CREDIT

 

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LENDERS, PRO RATA IN ACCORDANCE WITH THE OUTSTANDING PRINCIPAL BALANCE OF
REVOLVING CREDIT LOANS MADE BY EACH;

 

(II)           ALL PAYMENTS OF PRINCIPAL OF AND INTEREST IN RESPECT OF TERM
LOANS SHALL BE MADE TO THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE TERM
LENDERS, PRO RATA IN ACCORDANCE WITH THE OUTSTANDING PRINCIPAL BALANCE OF TERM
LOANS MADE BY EACH SUCH TERM LENDER;

 

(III)          ALL PAYMENTS OF COMMITMENT FEES AND LETTER OF CREDIT FEES SHALL
BE MADE TO THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE REVOLVING CREDIT
LENDERS, PRO RATA IN ACCORDANCE WITH THEIR REVOLVING CREDIT COMMITMENTS; AND

 

(IV)          PAYMENTS OF ANY OTHER AMOUNTS DUE HEREUNDER SHALL BE MADE TO THE
ADMINISTRATIVE AGENT TO BE ALLOCATED AMONG THE ADMINISTRATIVE AGENT, THE LENDERS
AND THE LC ISSUER AS THEIR RESPECTIVE INTERESTS APPEAR.

 

All such payments shall be made at the Administrative Agent’s head office or at
such other location that the Administrative Agent may from time to time
designate, in each case in immediately available funds.

 

(C)           IF THE COMMITMENTS SHALL HAVE BEEN TERMINATED OR THE OBLIGATIONS
SHALL HAVE BEEN DECLARED IMMEDIATELY DUE AND PAYABLE PURSUANT TO SECTION 9.2,
PROCEEDS OF COLLATERAL AND ALL OTHER FUNDS RECEIVED FROM OR ON BEHALF OF THE
BORROWERS BY ANY LENDER OR THE LC ISSUER IN RESPECT OF OBLIGATIONS (EXCEPT FUNDS
RECEIVED BY ANY LENDER AS A RESULT OF A PURCHASE OF A PARTICIPANT INTEREST
PURSUANT TO SECTION 2.9(D) BELOW) SHALL BE REMITTED TO THE ADMINISTRATIVE AGENT,
AND ALL SUCH FUNDS, TOGETHER WITH ALL OTHER FUNDS RECEIVED BY THE ADMINISTRATIVE
AGENT FROM OR ON BEHALF OF THE BORROWERS (INCLUDING PROCEEDS OF COLLATERAL) IN
RESPECT OF OBLIGATIONS, SHALL BE APPLIED BY THE ADMINISTRATIVE AGENT IN THE
FOLLOWING MANNER AND ORDER:  (I) FIRST, TO REIMBURSE THE ADMINISTRATIVE AGENT,
THE LC ISSUER AND THE LENDERS, IN THAT ORDER, FOR ANY AMOUNTS PAYABLE PURSUANT
TO SECTIONS 12.2 AND 12.3 HEREOF; (II) SECOND, TO THE PAYMENT OF COMMITMENT
FEES, LETTER OF CREDIT FEES, AND ANY OTHER FEES PAYABLE TO THE ADMINISTRATIVE
AGENT OR THE LENDERS HEREUNDER; (III) THIRD, TO THE PAYMENT OF INTEREST DUE ON
THE LOANS AND THE LC DISBURSEMENTS; (IV) FOURTH, TO THE PAYMENT OF THE
OUTSTANDING PRINCIPAL BALANCE OF THE LOANS; (V) FIFTH, TO THE PAYMENT OF ANY
OTHER OBLIGATIONS PAYABLE BY THE BORROWERS, PRO RATA TO THE OUTSTANDING
PRINCIPAL BALANCE OF EACH; AND (VI) ANY REMAINING FUNDS SHALL BE PAID TO WHOEVER
SHALL BE ENTITLED THERETO OR AS A COURT OF COMPETENT JURISDICTION SHALL DIRECT.

 

(D)           EACH OF THE LENDERS HEREBY AGREES THAT IF IT SHOULD RECEIVE ANY
AMOUNT (WHETHER BY VOLUNTARY PAYMENT, BY REALIZATION UPON SECURITY, BY THE
EXERCISE OF THE RIGHT OF SET-OFF OR BANKER’S LIEN, BY COUNTERCLAIM OR CROSS
ACTION, BY THE ENFORCEMENT OF ANY RIGHT UNDER THE LOAN DOCUMENTS, OR OTHERWISE)
IN RESPECT OF PRINCIPAL OF, OR INTEREST ON, THE LOANS OR ANY FEES WHICH ARE TO
BE SHARED PRO RATA AMONG THE LENDERS, WHICH, AS COMPARED TO THE AMOUNTS
THERETOFORE RECEIVED BY THE OTHER LENDERS WITH RESPECT TO SUCH PRINCIPAL,
INTEREST OR FEES, IS IN EXCESS OF SUCH LENDER’S APPLICABLE PERCENTAGE OF SUCH
PRINCIPAL, INTEREST OR FEES, SUCH LENDER SHALL SHARE SUCH EXCESS, LESS THE COSTS
AND EXPENSES (INCLUDING, REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS) INCURRED
BY SUCH LENDER IN CONNECTION WITH SUCH REALIZATION, EXERCISE, CLAIM OR ACTION,
PRO RATA WITH ALL OTHER LENDERS IN PROPORTION TO THEIR RESPECTIVE APPLICABLE
PERCENTAGE FOR

 

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SUCH LOANS, AND SUCH SHARING SHALL BE DEEMED A PURCHASE (WITHOUT RECOURSE) BY
SUCH SHARING PARTY OF PARTICIPANT INTERESTS IN SUCH LOANS OR SUCH FEES, AS THE
CASE MAY BE, OWED TO THE RECIPIENTS OF SUCH SHARED PAYMENTS TO THE EXTENT OF
SUCH SHARED PAYMENTS; PROVIDED, HOWEVER, THAT (I) IF ALL OR ANY PORTION OF SUCH
EXCESS AMOUNT IS THEREAFTER RECOVERED FROM SUCH LENDER, SUCH PURCHASE SHALL BE
RESCINDED AND THE PURCHASE PRICE RESTORED TO THE EXTENT OF SUCH RECOVERY, BUT
WITHOUT INTEREST AND (II) THE PROVISIONS OF THIS PARAGRAPH SHALL NOT BE
CONSTRUED TO APPLY TO (X) ANY PAYMENT MADE BY THE BORROWERS PURSUANT TO AND IN
ACCORDANCE WITH THE EXPRESS TERMS OF THIS AGREEMENT OR (Y) ANY PAYMENT OBTAINED
BY A LENDER AS CONSIDERATION FOR THE ASSIGNMENT OF OR SALE OF A PARTICIPATION IN
ANY OF ITS LOANS OR LETTER OF CREDIT PARTICIPATIONS TO ANY ASSIGNEE OR
PARTICIPANT, OTHER THAN TO THE BORROWERS OR ANY SUBSIDIARY THEREOF (AS TO WHICH
THE PROVISIONS OF THIS PARAGRAPH SHALL APPLY).  THE BORROWERS CONSENT TO THE
FOREGOING AND AGREE, TO THE EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE
LAW, THAT ANY LENDER ACQUIRING A PARTICIPATION PURSUANT TO THE FOREGOING
ARRANGEMENTS MAY EXERCISE AGAINST THE BORROWERS RIGHTS OF SETOFF AND
COUNTERCLAIM WITH RESPECT TO SUCH PARTICIPATION AS FULLY AS IF SUCH LENDER WERE
A DIRECT CREDITOR OF THE BORROWERS IN THE AMOUNT OF SUCH PARTICIPATION.

 

2.10         LIBOR INDEMNITY.  IF THE BORROWERS FOR ANY REASON MAKE ANY PAYMENT
OF PRINCIPAL WITH RESPECT TO ANY LIBOR LOAN ON ANY DAY OTHER THAN THE LAST DAY
OF AN INTEREST PERIOD APPLICABLE TO SUCH LIBOR LOAN, OR FAIL TO BORROW OR
CONTINUE OR CONVERT TO A LIBOR LOAN AFTER GIVING A NOTICE OF BORROWING OR
CONVERSION THEREOF PURSUANT TO SECTION 2.3, OR FAIL TO PREPAY A LIBOR LOAN AFTER
HAVING GIVEN NOTICE THEREOF, THE BORROWERS SHALL PAY TO THE ADMINISTRATIVE AGENT
FOR THE BENEFIT OF THE LENDERS ANY AMOUNT REQUIRED TO COMPENSATE THE LENDERS FOR
ANY ADDITIONAL LOSSES, COSTS OR EXPENSES WHICH THEY MAY REASONABLY INCUR AS A
RESULT OF SUCH PAYMENT OR FAILURE, INCLUDING, WITHOUT LIMITATION, ANY LOSS
(INCLUDING LOSS OF ANTICIPATED PROFITS), COSTS OR EXPENSE INCURRED BY REASON OF
THE LIQUIDATION OR RE-EMPLOYMENT OF DEPOSITS OR OTHER FUNDS REQUIRED BY THE
LENDERS TO FUND OR MAINTAIN SUCH LIBOR LOAN.  WITHOUT LIMITING THE FOREGOING,
THE BORROWERS SHALL PAY TO THE ADMINISTRATIVE AGENT A “YIELD MAINTENANCE FEE”
FOR THE BENEFIT OF THE LENDERS IN AN AMOUNT COMPUTED AS FOLLOWS:  THE CURRENT
RATE FOR UNITED STATES TREASURY SECURITIES (BILLS ON A DISCOUNTED BASIS SHALL BE
CONVERTED TO A BOND EQUIVALENT) WITH A MATURITY DATE CLOSEST TO THE TERM CHOSEN
PURSUANT TO THE FIXED RATE ELECTION AS TO WHICH THE PREPAYMENT IS MADE, SHALL BE
SUBTRACTED FROM THE INTEREST RATE APPLICABLE (PURSUANT TO SECTION 2.5(B)) TO
EACH LIBOR LOAN IN EFFECT AT THE TIME OF PREPAYMENT.  IF THE RESULT IS ZERO OR A
NEGATIVE NUMBER, THERE SHALL BE NO YIELD MAINTENANCE FEE.  IF THE RESULT IS A
POSITIVE NUMBER, THEN THE RESULTING PERCENTAGE SHALL BE MULTIPLIED BY THE AMOUNT
OF THE PRINCIPAL BALANCE BEING PREPAID.  THE RESULTING AMOUNT SHALL BE DIVIDED
BY 360 AND MULTIPLIED BY THE NUMBER OF DAYS REMAINING IN THE TERM CHOSEN
PURSUANT TO THE FIXED RATE ELECTION AS TO WHICH THE PREPAYMENT IS MADE.  SAID
AMOUNT SHALL BE REDUCED TO PRESENT VALUE CALCULATED BY USING THE ABOVE
REFERENCED UNITED STATES TREASURY SECURITIES RATE AND THE NUMBER OF DAYS
REMAINING IN THE TERM CHOSEN PURSUANT TO THE FIXED RATE ELECTION AS TO WHICH
PREPAYMENT IS MADE.  THE RESULTING AMOUNT SHALL BE THE YIELD MAINTENANCE FEE DUE
TO THE LENDERS UPON THE PAYMENT OF A LIBOR LOAN UNDER THE CIRCUMSTANCES
DESCRIBED IN THE FIRST SENTENCE OF THIS SECTION.  THE BORROWERS SHALL PAY SUCH
AMOUNT UPON PRESENTATION BY THE ADMINISTRATIVE AGENT OF A STATEMENT SETTING
FORTH THE AMOUNT AND THE ADMINISTRATIVE AGENT’S (OR THE AFFECTED LENDERS’)
CALCULATION THEREOF PURSUANT HERETO, WHICH STATEMENT SHALL BE PRIMA FACIE
EVIDENCE OF THE AMOUNTS OWED HEREUNDER ABSENT MANIFEST ERROR.  IF THE
OBLIGATIONS ARE DECLARED IMMEDIATELY DUE AND PAYABLE PURSUANT TO SECTION 8.2,
THEN ANY

 

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AMOUNT PROVIDED FOR IN THIS SECTION SHALL BE DUE AND PAYABLE IN THE SAME MANNER
AS THOUGH THE BORROWERS HAD MADE A PREPAYMENT OF THE LIBOR LOANS.

 

2.11         COMPUTATION OF INTEREST AND FEES.  ALL COMPUTATIONS OF INTEREST FOR
BASE RATE LOANS WHEN THE ALTERNATE BASE RATE IS DETERMINED BY WELLS FARGO’S
“BASE RATE” SHALL BE MADE ON THE BASIS OF A YEAR OF 365 OR 366 DAYS, AS THE CASE
MAY BE, AND ACTUAL DAYS ELAPSED.  ALL OTHER COMPUTATIONS OF FEES AND INTEREST
SHALL BE MADE ON THE BASIS OF A 360-DAY YEAR AND ACTUAL DAYS ELAPSED (WHICH
RESULTS IN MORE FEES OR INTEREST, AS APPLICABLE, BEING PAID THAN IF COMPUTED ON
THE BASIS OF A 365-DAY YEAR).  IF THE DUE DATE FOR ANY PAYMENT OF PRINCIPAL IS
EXTENDED BY OPERATION OF LAW, INTEREST SHALL BE PAYABLE FOR SUCH EXTENDED TIME. 
IF ANY PAYMENT REQUIRED BY THIS AGREEMENT BECOMES DUE ON A DAY THAT IS NOT A
BUSINESS DAY SUCH PAYMENT MAY BE MADE ON THE NEXT SUCCEEDING BUSINESS DAY
(SUBJECT TO THE DEFINITION OF THE TERM “INTEREST PERIOD”), AND SUCH EXTENSION
SHALL BE INCLUDED IN COMPUTING INTEREST IN CONNECTION WITH SUCH PAYMENT.

 

2.12         CHANGED CIRCUMSTANCES; ILLEGALITY.

 

(A)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IN THE
EVENT THAT:

 

(I)            ON ANY DATE ON WHICH THE LIBOR RATE WOULD OTHERWISE BE SET THE
ADMINISTRATIVE AGENT SHALL HAVE DETERMINED IN GOOD FAITH (WHICH DETERMINATION
SHALL BE FINAL AND CONCLUSIVE) THAT ADEQUATE AND FAIR MEANS DO NOT EXIST FOR
ASCERTAINING THE LIBOR RATE, OR

 

(II)           AT ANY TIME THE ADMINISTRATIVE AGENT OR ANY LENDER SHALL HAVE
DETERMINED IN GOOD FAITH (WHICH DETERMINATION SHALL BE FINAL AND CONCLUSIVE AND,
IF MADE BY ANY LENDER, SHALL HAVE BEEN COMMUNICATED TO THE ADMINISTRATIVE AGENT
IN WRITING) THAT:

 

(A)          THE MAKING OR CONTINUATION OF OR CONVERSION OF ANY LOAN TO A LIBOR
LOAN HAS BEEN MADE IMPRACTICABLE OR UNLAWFUL BY (1) THE OCCURRENCE OF A
CONTINGENCY THAT MATERIALLY AND ADVERSELY AFFECTS THE INTERBANK LIBOR MARKET OR
(2) COMPLIANCE BY THE ADMINISTRATIVE AGENT OR SUCH LENDER IN GOOD FAITH WITH ANY
APPLICABLE LAW OR GOVERNMENTAL REGULATION, GUIDELINE OR ORDER OR INTERPRETATION
OR CHANGE THEREOF BY ANY GOVERNMENTAL AUTHORITY CHARGED WITH THE INTERPRETATION
OR ADMINISTRATION THEREOF OR WITH ANY REQUEST OR DIRECTIVE OF ANY SUCH
GOVERNMENTAL AUTHORITY (WHETHER OR NOT HAVING THE FORCE OF LAW); OR

 

(B)           THE LIBOR RATE SHALL NO LONGER REPRESENT THE EFFECTIVE COST TO THE
ADMINISTRATIVE AGENT OR SUCH LENDER FOR U.S. DOLLAR DEPOSITS IN THE INTERBANK
MARKET FOR DEPOSITS IN WHICH IT REGULARLY PARTICIPATES;

 

then, and in any such event, the Administrative Agent shall forthwith so notify
the Borrowers thereof.  Until the Administrative Agent notifies the Borrowers
that the circumstances giving rise to such notice no longer apply, the
obligation of the Lenders to allow selection by the Borrowers of the Type of
Loan affected by the contingencies described in this Section (herein called
“Affected Loans”) shall be suspended.  If at the time the Administrative Agent
so notifies the Borrowers, the Borrowers have previously given the
Administrative Agent a Notice of

 

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Borrowing or Conversion with respect to one or more Affected Loans but such
Loans have not yet gone into effect, such notification shall be deemed to be a
request for Base Rate Loans.

 

(B)           IN THE EVENT OF A DETERMINATION OF ILLEGALITY PURSUANT TO
SECTION 2.12(A)(II)(A) ABOVE, THE BORROWERS SHALL, WITH RESPECT TO THE
OUTSTANDING AFFECTED LOANS, PREPAY THE SAME, TOGETHER WITH INTEREST THEREON AND
ANY AMOUNTS REQUIRED TO BE PAID PURSUANT TO SECTION 2.9, ON SUCH DATE AS SHALL
BE SPECIFIED IN SUCH NOTICE (WHICH SHALL NOT BE EARLIER THAN THE DATE SUCH
NOTICE IS GIVEN) AND MAY, SUBJECT TO THE CONDITIONS OF THIS AGREEMENT, BORROW A
LOAN OF ANOTHER TYPE IN ACCORDANCE WITH SECTION 2.1 BY GIVING A NOTICE OF
BORROWING OR CONVERSION PURSUANT TO SECTION 2.3.

 

2.13         INCREASED COSTS.  IN CASE ANY CHANGE MADE AFTER THE CLOSING DATE IN
ANY LAW, REGULATION, TREATY OR OFFICIAL DIRECTIVE OR THE INTERPRETATION OR
APPLICATION THEREOF BY ANY COURT OR BY ANY GOVERNMENTAL AUTHORITY CHARGED WITH
THE ADMINISTRATION THEREOF OR THE COMPLIANCE WITH ANY GUIDELINE OR REQUEST OF
ANY CENTRAL BANK OR OTHER GOVERNMENTAL AUTHORITY (WHETHER OR NOT HAVING THE
FORCE OF LAW):

 

(i)  subjects any Lender or the LC Issuer to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by the Borrowers or
otherwise with respect to the transactions contemplated hereby (except for
Indemnified Taxes or Other Taxes covered by Section 2.15 and the imposition of,
or any change in the rate of, and Excluded Tax payable by such Lender or the LC
Issuer), or

 

(ii)  imposes, modifies or deems applicable any deposit insurance, reserve,
special deposit or similar requirement against assets held by, or deposits in or
for the account of, or credit extended or participated in by, any Lender (other
than such requirements as are already included in the determination of the LIBOR
Rate) or the LC Issuer, or

 

(iii)  imposes upon any Lender or the LC Issuer any other condition with respect
to its obligations or performance under this Agreement or in respect of any
Letter of Credit,

 

and the result of any of the foregoing is to increase the cost to such Lender or
the LC Issuer, reduce the income receivable by such Lender or the LC Issuer or
impose any expense upon such Lender or the LC Issuer with respect to any Loans
or its obligations under this Agreement or in respect of any Letter of Credit,
such Lender or the LC Issuer shall notify the Borrowers and the Administrative
Agent thereof.  The Borrowers agree to pay to such Lender or the LC Issuer the
amount of such increase in cost, reduction in income or additional expense as
and when such cost, reduction or expense is incurred or determined, upon
presentation by such Lender or the LC Issuer of a statement in the amount and
setting forth in reasonable detail such Lender’s or the LC Issuer’s calculation
thereof and the assumptions upon which such calculation was based, which
statement shall be prima facie evidence of the amounts owing hereunder absent
manifest error.

 

2.14         CAPITAL REQUIREMENTS.  IF AFTER THE DATE HEREOF ANY LENDER
REASONABLY DETERMINES THAT (I) THE ADOPTION OF OR CHANGE IN ANY LAW, RULE,
REGULATION OR GUIDELINE REGARDING CAPITAL REQUIREMENTS FOR BANKS OR BANK HOLDING
COMPANIES, OR ANY CHANGE IN THE INTERPRETATION OR APPLICATION THEREOF BY ANY
GOVERNMENTAL AUTHORITY CHARGED WITH THE ADMINISTRATION THEREOF, OR

 

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(II) COMPLIANCE BY SUCH LENDER OR ITS PARENT BANK HOLDING COMPANY WITH ANY
GUIDELINE, REQUEST OR DIRECTIVE OF ANY SUCH ENTITY REGARDING CAPITAL ADEQUACY
(WHETHER OR NOT HAVING THE FORCE OF LAW), HAS THE EFFECT OF REDUCING THE RETURN
ON SUCH LENDER’S OR SUCH HOLDING COMPANY’S CAPITAL AS A CONSEQUENCE OF SUCH
LENDER’S COMMITMENT TO MAKE LOANS HEREUNDER OR ITS OBLIGATIONS IN RESPECT OF ANY
LETTER OF CREDIT TO A LEVEL BELOW THAT WHICH SUCH LENDER OR SUCH HOLDING COMPANY
COULD HAVE ACHIEVED BUT FOR SUCH ADOPTION, CHANGE OR COMPLIANCE (TAKING INTO
CONSIDERATION SUCH LENDER’S OR SUCH HOLDING COMPANY’S THEN EXISTING POLICIES
WITH RESPECT TO CAPITAL ADEQUACY AND ASSUMING THE FULL UTILIZATION OF SUCH
ENTITY’S CAPITAL) BY ANY AMOUNT DEEMED BY SUCH LENDER TO BE MATERIAL, THEN SUCH
LENDER SHALL NOTIFY THE BORROWERS AND THE ADMINISTRATIVE AGENT THEREOF.  THE
BORROWERS AGREE TO PAY TO SUCH LENDER THE AMOUNT OF SUCH REDUCTION OF RETURN ON
CAPITAL AS AND WHEN SUCH REDUCTION IS DETERMINED, PAYABLE WITHIN 90 DAYS AFTER
PRESENTATION BY SUCH LENDER OF A STATEMENT IN THE AMOUNT AND SETTING FORTH IN
REASONABLE DETAIL SUCH LENDER’S CALCULATION THEREOF AND THE ASSUMPTIONS UPON
WHICH SUCH CALCULATION WAS BASED (WHICH STATEMENT SHALL BE PRIMA FACIE EVIDENCE
OF AMOUNTS PAYABLE HEREUNDER ABSENT MANIFEST ERROR) UNLESS WITHIN SUCH 90 DAY
PERIOD THE BORROWERS SHALL HAVE PREPAID IN FULL ALL OBLIGATIONS TO SUCH LENDER,
IN WHICH EVENT NO AMOUNT SHALL BE PAYABLE TO SUCH LENDER UNDER THIS SECTION.  IN
DETERMINING SUCH AMOUNT, SUCH LENDER MAY USE ANY REASONABLE AVERAGING AND
ATTRIBUTION METHODS.

 

2.15         TAXES.  (A)  PAYMENTS FREE OF TAXES.  ANY AND ALL PAYMENTS BY OR ON
ACCOUNT OF ANY OBLIGATION OF THE BORROWERS HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT SHALL BE MADE FREE AND CLEAR OF AND WITHOUT REDUCTION OR WITHHOLDING
FOR ANY INDEMNIFIED TAXES OR OTHER TAXES, PROVIDED THAT IF THE BORROWERS SHALL
BE REQUIRED BY APPLICABLE LAW TO DEDUCT ANY INDEMNIFIED TAXES (INCLUDING ANY
OTHER TAXES) FROM SUCH PAYMENTS, THEN (I) THE SUM PAYABLE SHALL BE INCREASED AS
NECESSARY SO THAT AFTER MAKING ALL REQUIRED DEDUCTIONS (INCLUDING DEDUCTIONS
APPLICABLE TO ADDITIONAL SUMS PAYABLE UNDER THIS SECTION) THE ADMINISTRATIVE
AGENT, ANY LENDER OR THE LC ISSUER, AS THE CASE MAY BE, RECEIVES AN AMOUNT EQUAL
TO THE SUM IT WOULD HAVE RECEIVED HAD NO SUCH DEDUCTIONS BEEN MADE, (II) THE
BORROWERS SHALL MAKE SUCH DEDUCTIONS AND (III) THE BORROWERS SHALL TIMELY PAY
THE FULL AMOUNT DEDUCTED TO THE RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE
WITH APPLICABLE LAW.

 

(B)           PAYMENT OF OTHER TAXES BY THE BORROWERS.  WITHOUT LIMITING THE
PROVISIONS OF SUBSECTION (A) ABOVE, THE BORROWERS SHALL TIMELY PAY ANY OTHER
TAXES TO THE RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(C)           INDEMNIFICATION BY THE BORROWERS.  THE BORROWERS SHALL INDEMNIFY
THE ADMINISTRATIVE AGENT, EACH LENDER AND THE LC ISSUER, WITHIN 10 DAYS AFTER
DEMAND THEREFOR, FOR THE FULL AMOUNT OF ANY INDEMNIFIED TAXES OR OTHER TAXES
(INCLUDING INDEMNIFIED TAXES OR OTHER TAXES IMPOSED OR ASSERTED ON OR
ATTRIBUTABLE TO AMOUNTS PAYABLE UNDER THIS SECTION) PAID BY THE ADMINISTRATIVE
AGENT, SUCH LENDER OR THE LC ISSUER, AS THE CASE MAY BE, AND ANY PENALTIES,
INTEREST AND REASONABLE EXPENSES ARISING THEREFROM OR WITH RESPECT THERETO,
WHETHER OR NOT SUCH INDEMNIFIED TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY
IMPOSED OR ASSERTED BY THE RELEVANT GOVERNMENTAL AUTHORITY.  A CERTIFICATE AS TO
THE AMOUNT OF SUCH PAYMENT OR LIABILITY DELIVERED TO THE BORROWERS BY A LENDER
OR THE LC ISSUER (WITH A COPY TO THE ADMINISTRATIVE AGENT), OR BY THE
ADMINISTRATIVE AGENT ON ITS OWN BEHALF OR ON BEHALF OF A LENDER OR THE LC
ISSUER, SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.

 

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(D)           EVIDENCE OF PAYMENTS.  UPON REQUEST OF THE ADMINISTRATIVE AGENT,
AS SOON AS REASONABLY PRACTICABLE AFTER ANY PAYMENT OF INDEMNIFIED TAXES OR
OTHER TAXES BY THE BORROWERS TO A GOVERNMENTAL AUTHORITY, THE BORROWERS SHALL
DELIVER TO THE ADMINISTRATIVE AGENT THE ORIGINAL OR A CERTIFIED COPY OF A
RECEIPT ISSUED BY SUCH GOVERNMENTAL AUTHORITY EVIDENCING SUCH PAYMENT, A COPY OF
THE RETURN REPORTING SUCH PAYMENT OR OTHER EVIDENCE OF SUCH PAYMENT REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(E)           STATUS OF LENDERS.  ANY FOREIGN LENDER THAT IS ENTITLED TO AN
EXEMPTION FROM OR REDUCTION OF WITHHOLDING TAX UNDER THE LAW OF THE JURISDICTION
IN WHICH THE BORROWERS ARE RESIDENT FOR TAX PURPOSES, OR ANY TREATY TO WHICH
SUCH JURISDICTION IS A PARTY, WITH RESPECT TO PAYMENTS HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT SHALL DELIVER TO THE BORROWERS (WITH A COPY TO THE
ADMINISTRATIVE AGENT), AT THE TIME OR TIMES PRESCRIBED BY APPLICABLE LAW OR
REASONABLY REQUESTED BY THE BORROWERS OR THE ADMINISTRATIVE AGENT, SUCH PROPERLY
COMPLETED AND EXECUTED DOCUMENTATION PRESCRIBED BY APPLICABLE LAW AS WILL PERMIT
SUCH PAYMENTS TO BE MADE WITHOUT WITHHOLDING OR AT A REDUCED RATE OF
WITHHOLDING.  IN ADDITION, ANY LENDER, IF REQUESTED BY THE BORROWERS OR THE
ADMINISTRATIVE AGENT, SHALL DELIVER SUCH OTHER DOCUMENTATION PRESCRIBED BY
APPLICABLE LAW OR REASONABLY REQUESTED BY THE BORROWERS OR THE ADMINISTRATIVE
AGENT AS WILL ENABLE THE BORROWERS OR THE ADMINISTRATIVE AGENT TO DETERMINE
WHETHER OR NOT SUCH LENDER IS SUBJECT TO BACKUP WITHHOLDING OR INFORMATION
REPORTING REQUIREMENTS.

 

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

 

(I)            DULY COMPLETED COPIES OF INTERNAL REVENUE SERVICE FORM W-8BEN
CLAIMING ELIGIBILITY FOR BENEFITS OF AN INCOME TAX TREATY TO WHICH THE UNITED
STATES IS A PARTY,

 

(II)           DULY COMPLETED COPIES OF INTERNAL REVENUE SERVICE FORM W-8ECI,

 

(III)          IN THE CASE OF A FOREIGN LENDER CLAIMING THE BENEFITS OF THE
EXEMPTION FOR PORTFOLIO INTEREST UNDER SECTION 881(C) OF THE CODE, (A) A
CERTIFICATE TO THE EFFECT THAT SUCH FOREIGN LENDER IS NOT (1) A “BANK” WITHIN
THE MEANING OF SECTION 881(C)(3)(A) OF THE CODE, (2) A “10 PERCENT SHAREHOLDER”
OF ANY BORROWER WITHIN THE MEANING OF SECTION 881(C)(3)(B) OF THE CODE, OR (3) A
“CONTROLLED FOREIGN CORPORATION” DESCRIBED IN SECTION 881(C)(3)(C) OF THE CODE
AND (B) DULY COMPLETED COPIES OF  INTERNAL REVENUE SERVICE FORM W-8BEN, OR

 

(IV)          ANY OTHER FORM PRESCRIBED BY APPLICABLE LAW AS A BASIS FOR
CLAIMING EXEMPTION FROM OR A REDUCTION IN UNITED STATES FEDERAL WITHHOLDING TAX
DULY COMPLETED TOGETHER WITH SUCH SUPPLEMENTARY DOCUMENTATION AS MAY BE
PRESCRIBED BY APPLICABLE LAW TO PERMIT THE BORROWERS TO DETERMINE THE
WITHHOLDING OR DEDUCTION REQUIRED TO BE MADE.

 

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(F)            TREATMENT OF CERTAIN REFUNDS.  IF THE ADMINISTRATIVE AGENT, ANY
LENDER OR THE LC ISSUER DETERMINES, IN ITS SOLE DISCRETION, THAT IT HAS RECEIVED
A REFUND OF ANY TAXES OR OTHER TAXES AS TO WHICH IT HAS BEEN INDEMNIFIED BY THE
BORROWERS OR WITH RESPECT TO WHICH THE BORROWERS HAVE PAID ADDITIONAL AMOUNTS
PURSUANT TO THIS SECTION, IT SHALL PAY TO THE BORROWERS AN AMOUNT EQUAL TO SUCH
REFUND (BUT ONLY TO THE EXTENT OF INDEMNITY PAYMENTS MADE, OR ADDITIONAL AMOUNTS
PAID, BY THE BORROWERS UNDER THIS SECTION WITH RESPECT TO THE TAXES OR OTHER
TAXES GIVING RISE TO SUCH REFUND), NET OF ALL OUT-OF-POCKET EXPENSES OF THE
ADMINISTRATIVE AGENT, SUCH LENDER OR THE LC ISSUER, AS THE CASE MAY BE, AND
WITHOUT INTEREST (OTHER THAN ANY INTEREST PAID BY THE RELEVANT GOVERNMENTAL
AUTHORITY WITH RESPECT TO SUCH REFUND), PROVIDED THAT THE BORROWERS UPON THE
REQUEST OF THE ADMINISTRATIVE AGENT, SUCH LENDER OR THE LC ISSUER, SHALL REPAY
THE AMOUNT PAID OVER TO THE BORROWERS (PLUS ANY PENALTIES, INTEREST OR OTHER
CHARGES IMPOSED BY THE RELEVANT GOVERNMENTAL AUTHORITY) TO THE ADMINISTRATIVE
AGENT, SUCH LENDER OR THE LC ISSUER IF THE ADMINISTRATIVE AGENT, SUCH LENDER OR
THE LC ISSUER IS REQUIRED TO REPAY SUCH REFUND TO SUCH GOVERNMENTAL AUTHORITY. 
THIS SUBSECTION SHALL NOT BE CONSTRUED TO REQUIRE THE ADMINISTRATIVE AGENT, ANY
LENDER OR THE LC ISSUER TO MAKE AVAILABLE ITS TAX RETURNS (OR ANY OTHER
INFORMATION RELATING TO ITS TAXES THAT IT DEEMS CONFIDENTIAL) TO THE BORROWERS
OR ANY OTHER PERSON.

 

2.16         PARENT AS AGENT FOR BORROWERS; CONTRIBUTION.

 

(A)           EACH BORROWER (OTHER THAN PARENT) HEREBY APPOINTS PARENT AS ITS
AGENT WITH RESPECT TO THE RECEIVING AND GIVING OF ANY NOTICES, REQUESTS,
INSTRUCTIONS, REPORTS, SCHEDULES, REVISIONS, FINANCIAL STATEMENTS OR ANY OTHER
WRITTEN OR ORAL COMMUNICATIONS HEREUNDER.  PARENT SHALL KEEP COMPLETE, CORRECT
AND ACCURATE RECORDS OF ALL LOANS AND THE APPLICATION OF PROCEEDS THEREOF, AND
ALL PAYMENTS IN RESPECT OF LOANS AND OTHER AMOUNTS DUE HEREUNDER.  THE LENDERS
ARE HEREBY ENTITLED TO RELY ON ANY COMMUNICATIONS GIVEN OR TRANSMITTED BY PARENT
AS IF SUCH COMMUNICATION WERE GIVEN OR TRANSMITTED BY EACH AND EVERY BORROWER;
PROVIDED, HOWEVER, THAT ANY COMMUNICATION GIVEN OR TRANSMITTED BY ANY BORROWER
OTHER THAN PARENT SHALL BE BINDING WITH RESPECT TO SUCH BORROWER.  ANY
COMMUNICATION GIVEN OR TRANSMITTED BY THE ADMINISTRATIVE AGENT OR ANY LENDER TO
PARENT SHALL BE DEEMED GIVEN AND TRANSMITTED TO EACH AND EVERY BORROWER.

 

(B)           THE BORROWERS HEREBY AGREE THAT, AS AMONG THEMSELVES, THE ULTIMATE
RESPONSIBILITY FOR REPAYMENT OF THE OBLIGATIONS IN THE EVENT OF A DEFAULT BY ANY
OR ALL OF THE BORROWERS ON THEIR RESPECTIVE OBLIGATIONS SHALL BE EQUITABLY
APPORTIONED AMONG THE BORROWERS IN THE PROPORTION THAT EACH HAS BENEFITED FROM
THE MAKING BY THE LENDERS OF THE LOANS, OR IF SUCH EQUITABLE APPORTIONMENT
CANNOT REASONABLY BE DETERMINED, THEN IN PROPORTION TO THEIR RESPECTIVE NET
WORTHS, DETERMINED IN A MANNER SUCH THAT NONE OF THE OBLIGATIONS OF ANY BORROWER
WOULD BE SUBJECT TO AVOIDANCE AS A FRAUDULENT TRANSFER OR CONVEYANCE UNDER
SECTION 548 OF TITLE 11 OF THE UNITED STATES CODE OR ANY COMPARABLE PROVISIONS
OF APPLICABLE STATE LAW.  IF ANY BORROWER SHALL PAY AN AMOUNT WITH RESPECT TO
THE OBLIGATIONS IN EXCESS OF ITS PROPORTIONATE SHARE, DETERMINED AS SET FORTH IN
THIS SUBPARAGRAPH (B) (AN “OVERPAYING BORROWER”), EACH OTHER BORROWER SHALL MAKE
A PAYMENT TO SUCH OVERPAYING BORROWER IN AN AMOUNT SUCH THAT THE AGGREGATE
AMOUNT OF EACH BORROWER’S PAYMENTS HEREUNDER AND IN RESPECT OF THE OBLIGATIONS
REFLECTS ITS PROPORTIONATE SHARE OF THE OBLIGATIONS, AS SO DETERMINED.  THE
FOREGOING AGREEMENT IS INTENDED TO SET FORTH ONLY THE RIGHTS AND OBLIGATIONS OF
THE BORROWERS AMONG THEMSELVES AND SHALL IN NO WAY AFFECT THE OBLIGATIONS OF ANY
BORROWER TO THE LENDERS IN RESPECT OF THE OBLIGATIONS.  UNTIL THE OBLIGATIONS
HAVE BEEN INDEFEASIBLY PAID IN FULL (EXCEPT FOR CONTINGENT INDEMNIFICATION AND
EXPENSE

 

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REIMBURSEMENT OBLIGATIONS FOR WHICH A CLAIM HAS NOT YET BEEN MADE) AND THE
COMMITMENTS SHALL HAVE TERMINATED AND ALL LETTERS OF CREDIT SHALL HAVE EXPIRED
OR BEEN CANCELED, EACH BORROWER SHALL WITHHOLD EXERCISE OF ANY RIGHT OF
CONTRIBUTION HEREUNDER AGAINST ANY OTHER BORROWER.

 

SECTION III

 

LETTERS OF CREDIT

 

3.1           ISSUANCE.

 

(A)           UPON THE TERMS AND SUBJECT TO THE CONDITIONS HEREOF, THE LC ISSUER
IN RELIANCE UPON THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWERS
CONTAINED HEREIN, AGREES TO ISSUE LETTERS OF CREDIT (THE “LETTERS OF CREDIT”)
FOR THE ACCOUNT OF THE BORROWERS IN SUCH FORM AS MAY BE REQUESTED FROM TIME TO
TIME BY THE BORROWERS AND AGREED TO BY THE LC ISSUER, PROVIDED THAT THE MAXIMUM
DRAWING AMOUNT (AFTER GIVING EFFECT TO ALL REQUESTED LETTERS OF CREDIT) SHALL
NOT AT ANY TIME EXCEED THE LETTER OF CREDIT SUBLIMIT, PROVIDED, FURTHER THAT THE
TOTAL REVOLVING CREDIT OUTSTANDINGS (AFTER GIVING EFFECT TO ALL REQUESTED
REVOLVING CREDIT LOANS AND LETTERS OF CREDIT) SHALL NOT AT ANY TIME EXCEED THE
TOTAL REVOLVING CREDIT COMMITMENT, AND PROVIDED FURTHER THAT NO LETTER OF CREDIT
SHALL HAVE AN EXPIRATION DATE LATER THAN FIVE (5) BUSINESS DAYS PRIOR TO THE
MATURITY DATE.  AT LEAST THREE (3) BUSINESS DAYS PRIOR TO THE PROPOSED ISSUANCE
DATE OF ANY LETTER OF CREDIT, THE BORROWERS SHALL DELIVER TO THE LC ISSUER A
LETTER OF CREDIT APPLICATION SETTING FORTH THE MAXIMUM DRAWING AMOUNT OF ALL
LETTERS OF CREDIT (INCLUDING THE REQUESTED LETTER OF CREDIT), THE REQUESTED
LANGUAGE OF THE REQUESTED LETTER OF CREDIT AND SUCH OTHER INFORMATION AS THE LC
ISSUER SHALL REQUIRE.  EACH REQUEST FOR THE ISSUANCE OF A LETTER OF CREDIT
HEREUNDER SHALL CONSTITUTE A REPRESENTATION AND WARRANTY BY THE BORROWERS THAT
THE CONDITIONS SET FORTH IN SECTIONS 4.1 OR 4.2 (AS THE CASE MAY BE) HAVE BEEN
SATISFIED AS OF THE DATE OF SUCH REQUEST.

 

(B)           EFFECTIVE UPON THE ISSUANCE OF EACH LETTER OF CREDIT AND WITHOUT
ANY FURTHER ACTION ON THE PART OF THE LC ISSUER OR THE LENDERS IN RESPECT
THEREOF, THE LC ISSUER HEREBY GRANTS TO EACH LENDER, AND EACH LENDER HEREBY
ACQUIRES FROM THE LC ISSUER, A PARTICIPATING INTEREST IN SUCH LETTER OF CREDIT
IN AN AMOUNT EQUAL TO THE PRODUCT OF (I) THE AMOUNT OF SUCH LETTER OF CREDIT,
TIMES (II) THE QUOTIENT OF (A) SUCH LENDER’S REVOLVING CREDIT COMMITMENT,
DIVIDED BY (B) THE TOTAL REVOLVING CREDIT COMMITMENT (THE AMOUNT SO CALCULATED,
THE “LETTER OF CREDIT PARTICIPATION”), AND EACH LENDER SEVERALLY AGREES THAT IT
SHALL BE ABSOLUTELY LIABLE, WITHOUT REGARD TO THE OCCURRENCE OF ANY DEFAULT OR
EVENT OF DEFAULT, TO THE EXTENT OF SUCH LENDER’S PRO RATA SHARE THEREOF, TO
REIMBURSE THE LC ISSUER ON DEMAND FOR THE AMOUNT OF EACH DRAFT PAID BY THE LC
ISSUER UNDER EACH LETTER OF CREDIT TO THE EXTENT THAT SUCH AMOUNT IS NOT
REIMBURSED BY THE BORROWERS.

 

3.2           REIMBURSEMENT OBLIGATION OF THE BORROWERS.  IN ORDER TO INDUCE THE
LC ISSUER TO ISSUE, EXTEND AND RENEW EACH LETTER OF CREDIT, THE BORROWERS SHALL
REIMBURSE OR PAY TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE LC ISSUER
OR (AS THE CASE MAY BE) THE LENDERS, WITH RESPECT TO EACH LETTER OF CREDIT
ISSUED, EXTENDED OR RENEWED BY THE LC ISSUER HEREUNDER AS FOLLOWS:

 

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(A)           ON EACH DATE THAT ANY DRAFT PRESENTED UNDER ANY LETTER OF CREDIT
IS HONORED BY THE LC ISSUER OR THE LC ISSUER OTHERWISE MAKES PAYMENT WITH
RESPECT THERETO, (I) THE AMOUNT PAID BY THE LC ISSUER UNDER OR WITH RESPECT TO
SUCH LETTER OF CREDIT, AND (II) THE AMOUNT OF ANY TAXES, FEES, CHARGES OR OTHER
COSTS AND EXPENSES WHATSOEVER INCURRED BY THE LC ISSUER OR ANY LENDER IN
CONNECTION WITH ANY PAYMENT MADE BY THE LC ISSUER UNDER, OR WITH RESPECT TO,
SUCH LETTER OF CREDIT; AND

 

(B)           UPON THE MATURITY DATE OR THE ACCELERATION OF THE MAXIMUM DRAWING
AMOUNT PURSUANT TO SECTION 9.2, AN AMOUNT EQUAL TO 105% OF THE THEN MAXIMUM
DRAWING AMOUNT OF ALL LETTERS OF CREDIT, WHICH AMOUNT SHALL BE HELD BY THE LC
ISSUER AS CASH COLLATERAL FOR ALL LC DISBURSEMENTS.

 

Each such payment shall be made to the Administrative Agent at its head office
in immediately available funds.  Interest on any and all amounts remaining
unpaid by the Borrowers under this Section 3.2 at any time from the date such
amounts become due and payable (whether as stated in this Section 3.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Administrative Agent, for the account of LC
Issuer or (as the case may be) the Lenders, on demand at a rate per annum equal
to 2% above the Alternate Base Rate.

 

3.3           LETTER OF CREDIT PAYMENTS.  IF ANY DRAFT SHALL BE PRESENTED OR
OTHER DEMAND FOR PAYMENT SHALL BE MADE UNDER ANY LETTER OF CREDIT, THE LC ISSUER
SHALL NOTIFY THE BORROWERS OF THE DATE AND AMOUNT OF THE DRAFT PRESENTED OR
DEMAND FOR PAYMENT AND OF THE DATE AND TIME WHEN IT EXPECTS TO PAY SUCH DRAFT OR
HONOR SUCH DEMAND FOR PAYMENT.  THE RESPONSIBILITY OF THE LC ISSUER TO THE
BORROWERS SHALL BE ONLY TO DETERMINE THAT THE DOCUMENTS (INCLUDING EACH DRAFT)
DELIVERED UNDER EACH LETTER OF CREDIT IN CONNECTION WITH SUCH PRESENTMENT SHALL
BE IN CONFORMITY IN ALL MATERIAL RESPECTS WITH SUCH LETTER OF CREDIT.  ON THE
DATE THAT SUCH DRAFT IS PAID OR OTHER PAYMENT IS MADE BY THE LC ISSUER, THE LC
ISSUER SHALL PROMPTLY NOTIFY THE LENDERS OF THE AMOUNT OF ANY UNPAID LC
DISBURSEMENT.  ALL SUCH UNPAID LC DISBURSEMENTS WITH RESPECT TO LETTERS OF
CREDIT SHALL BE DEEMED TO BE REVOLVING CREDIT LOANS.  NO LATER THAN 1:00 P.M.
PACIFIC TIME ON THE BUSINESS DAY NEXT FOLLOWING THE RECEIPT OF SUCH NOTICE, EACH
LENDER SHALL MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT, AT THE ADMINISTRATIVE
AGENT’S HEAD OFFICE, IN IMMEDIATELY AVAILABLE FUNDS, SUCH LENDER’S PRO RATA
SHARE OF SUCH UNPAID LC DISBURSEMENTS, TOGETHER WITH AN AMOUNT EQUAL TO THE
PRODUCT OF (I) THE AVERAGE, COMPUTED FOR THE PERIOD REFERRED TO IN CLAUSE
(III) BELOW, OF THE WEIGHTED AVERAGE INTEREST RATE PAID BY THE ADMINISTRATIVE
AGENT FOR FEDERAL FUNDS ACQUIRED BY THE ADMINISTRATIVE AGENT DURING EACH DAY
INCLUDED IN SUCH PERIOD, TIMES (II) THE AMOUNT EQUAL TO SUCH LENDER’S PRO RATA
SHARE OF SUCH UNPAID LC DISBURSEMENT, TIMES (III) A FRACTION, THE NUMERATOR OF
WHICH IS THE NUMBER OF DAYS THAT HAVE ELAPSED FROM AND INCLUDING THE DATE THE LC
ISSUER PAID THE DRAFT PRESENTED FOR HONOR OR OTHERWISE MADE PAYMENT UNTIL THE
DATE ON WHICH SUCH LENDER’S PRO RATA SHARE OF SUCH UNPAID LC DISBURSEMENT SHALL
BECOME IMMEDIATELY AVAILABLE TO THE ADMINISTRATIVE AGENT, AND THE DENOMINATOR OF
WHICH IS 365.

 

3.4           OBLIGATIONS ABSOLUTE.

 

(A)           THE BORROWERS’ OBLIGATIONS TO REIMBURSE THE LC ISSUER FOR ALL LC
DISBURSEMENTS SHALL BE ABSOLUTE AND UNCONDITIONAL UNDER ANY AND ALL
CIRCUMSTANCES AND IRRESPECTIVE OF THE OCCURRENCE OF ANY DEFAULT OR EVENT OF
DEFAULT OR ANY CONDITION PRECEDENT

 

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WHATSOEVER OR ANY SET OFF, COUNTERCLAIM OR DEFENSE TO PAYMENT WHICH THE
BORROWERS MAY HAVE OR HAVE HAD AGAINST THE LC ISSUER, THE ADMINISTRATIVE AGENT,
THE LENDERS OR ANY BENEFICIARY OF A LETTER OF CREDIT.  THE BORROWERS FURTHER
AGREE THAT THE LC ISSUER, THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL NOT BE
RESPONSIBLE FOR, AND THE BORROWERS’ OBLIGATIONS IN RESPECT OF THE LC
DISBURSEMENTS SHALL NOT BE AFFECTED BY, AMONG OTHER THINGS, THE VALIDITY OR
GENUINENESS OF DOCUMENTS OR OF ANY ENDORSEMENTS THEREON, EVEN IF SUCH DOCUMENTS
SHOULD IN FACT PROVE TO BE IN ANY OR ALL RESPECTS INVALID, FRAUDULENT OR FORGED,
OR ANY DISPUTE BETWEEN OR AMONG THE BORROWERS, THE BENEFICIARY OF ANY LETTER OF
CREDIT OR ANY FINANCING INSTITUTION OR OTHER PARTY TO WHICH ANY LETTER OF CREDIT
MAY BE TRANSFERRED OR ANY CLAIMS OR DEFENSES WHATSOEVER OF THE BORROWERS,
AGAINST THE BENEFICIARY OF ANY LETTER OF CREDIT OR ANY SUCH TRANSFEREE.

 

(B)           THE LC ISSUER, THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL NOT
BE LIABLE FOR ANY ERROR, OMISSION, INTERRUPTION OR DELAY IN TRANSMISSION,
DISPATCH OR DELIVERY OF ANY MESSAGE OR ADVICE, HOWEVER TRANSMITTED, IN
CONNECTION WITH ANY LETTER OF CREDIT.  THE BORROWERS AGREE THAT ANY ACTION TAKEN
OR OMITTED BY THE LC ISSUER, THE ADMINISTRATIVE AGENT OR THE LENDERS UNDER OR IN
CONNECTION WITH EACH LETTER OF CREDIT AND THE RELATED DRAFTS AND DOCUMENTS, IF
DONE IN GOOD FAITH, SHALL BE BINDING UPON THE BORROWERS AND SHALL NOT RESULT IN
ANY LIABILITY ON THE PART OF THE LC ISSUER, THE ADMINISTRATIVE AGENT OR THE
LENDERS TO THE BORROWERS.

 

(C)           NOTWITHSTANDING THE FOREGOING, THIS SECTION 3.4 SHALL NOT BE
CONSTRUED TO EXCUSE THE LC ISSUER FROM LIABILITY TO THE BORROWERS TO THE EXTENT
OF ANY DIRECT DAMAGES (AS OPPOSED TO CONSEQUENTIAL DAMAGES, CLAIMS IN RESPECT OF
WHICH ARE HEREBY WAIVED BY THE BORROWERS TO THE EXTENT PERMITTED BY APPLICABLE
LAW) SUFFERED BY THE BORROWERS THAT ARE CAUSED BY THE LC ISSUER’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.

 

3.5           RELIANCE BY THE LC ISSUER AND THE ADMINISTRATIVE AGENT.  TO THE
EXTENT NOT INCONSISTENT WITH SECTION 3.4, THE LC ISSUER AND THE ADMINISTRATIVE
AGENT SHALL BE ENTITLED TO RELY, AND SHALL BE FULLY PROTECTED IN RELYING UPON,
ANY LETTER OF CREDIT, DRAFT WRITING, RESOLUTION, NOTICE, CONSENT, CERTIFICATE,
AFFIDAVIT, LETTER, CABLEGRAM, TELEGRAM, TELECOPY, TELEX OR TELETYPE MESSAGE,
STATEMENT, ORDER OR OTHER DOCUMENT BELIEVED BY IT TO BE GENUINE AND CORRECT AND
TO HAVE BEEN SIGNED, SENT OR MADE BY THE PROPER PERSON OR PERSONS AND UPON
ADVICE AND STATEMENTS OF LEGAL COUNSEL, INDEPENDENT ACCOUNTANTS AND OTHER
EXPERTS SELECTED BY THE LC ISSUER OR THE ADMINISTRATIVE AGENT.

 

SECTION IV

 

CONDITIONS OF LOANS AND LETTERS OF CREDIT

 

4.1           CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTERS OF CREDIT.  THE
OBLIGATION OF THE LENDERS TO MAKE THE INITIAL LOANS AND OF THE LC ISSUER TO
ISSUE THE INITIAL LETTER OF CREDIT IS SUBJECT TO THE SATISFACTION OF THE
FOLLOWING CONDITIONS PRECEDENT ON OR PRIOR TO THE CLOSING DATE:

 

(A)           THE ADMINISTRATIVE AGENT’S RECEIPT OF THE FOLLOWING, EACH OF WHICH
SHALL BE ORIGINALS, ‘PDF’ FORMAT OR TELECOPIES (FOLLOWED PROMPTLY BY ORIGINALS),
EACH PROPERLY EXECUTED BY A RESPONSIBLE OFFICER OF THE SIGNING LOAN PARTY UNLESS
OTHERWISE SPECIFIED, EACH DATED THE CLOSING DATE (OR, IN THE CASE OF
CERTIFICATES OF GOVERNMENTAL OFFICIALS, A RECENT DATE

 

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BEFORE THE CLOSING DATE) AND EACH IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT:

 

(I)            EXECUTED COUNTERPARTS OF THIS AGREEMENT, SUFFICIENT IN NUMBER FOR
DISTRIBUTION TO THE ADMINISTRATIVE AGENT, EACH LENDER AND THE BORROWERS;

 

(II)           NOTES EXECUTED BY THE BORROWERS IN FAVOR OF EACH LENDER
REQUESTING NOTES;

 

(III)          A SECURITY AGREEMENT IN SUBSTANTIALLY THE FORM OF EXHIBIT G-1, A
COLLATERAL ASSIGNMENT OF CONTRACTS IN THE FORM OF EXHIBIT G-2 AND AN
INTELLECTUAL PROPERTY SECURITY AGREEMENT IN THE FORM OF EXHIBIT G-6 (TOGETHER
WITH EACH OTHER SECURITY AGREEMENT AND SECURITY AGREEMENT SUPPLEMENT DELIVERED
PURSUANT TO SECTION 6.12, IN EACH CASE AS AMENDED, COLLECTIVELY, THE “SECURITY
AGREEMENT”), DULY EXECUTED BY EACH LOAN PARTY, AND A PLEDGE AGREEMENT (THE
“PLEDGE AGREEMENT”) DULY EXECUTED BY THE PARENT IN SUBSTANTIALLY THE FORM OF
EXHIBIT H, TOGETHER WITH (SUBJECT TO THE PROVISIONS OF SECTION 4.1(M)):

 

(A)          CERTIFICATES REPRESENTING THE PLEDGED EQUITY INTERESTS REFERRED TO
IN THE PLEDGE AGREEMENT (IF CERTIFICATED) ACCOMPANIED BY UNDATED STOCK POWERS
EXECUTED IN BLANK,

 

(B)           STAMPED RECEIPT COPIES OF PROPER FINANCING STATEMENTS, DULY FILED
ON OR BEFORE THE CLOSING DATE UNDER THE UNIFORM COMMERCIAL CODE OF ALL
JURISDICTIONS THAT THE ADMINISTRATIVE AGENT MAY DEEM REASONABLY NECESSARY OR
DESIRABLE IN ORDER TO PERFECT THE ENCUMBRANCES CREATED UNDER THE SECURITY
AGREEMENT AND THE PLEDGE AGREEMENT, COVERING THE COLLATERAL DESCRIBED IN THE
SECURITY AGREEMENT, AND THE PLEDGE AGREEMENT,

 

(C)           COMPLETED REQUESTS FOR INFORMATION, DATED ON OR BEFORE THE DATE OF
THE INITIAL CREDIT EXTENSION, LISTING THE FINANCING STATEMENTS REFERRED TO IN
CLAUSE (B) ABOVE AND ALL OTHER EFFECTIVE FINANCING STATEMENTS FILED IN THE
JURISDICTIONS REFERRED TO IN CLAUSE (B) ABOVE THAT NAME ANY LOAN PARTY AS
DEBTOR, TOGETHER WITH COPIES OF SUCH OTHER FINANCING STATEMENTS,

 

(D)          EVIDENCE OF THE COMPLETION OF ALL OTHER ACTIONS, RECORDINGS AND
FILINGS OF OR WITH RESPECT TO THE SECURITY AGREEMENT THAT THE ADMINISTRATIVE
AGENT MAY DEEM REASONABLY NECESSARY OR DESIRABLE IN ORDER TO PERFECT THE
ENCUMBRANCES CREATED THEREBY,

 

(E)           ACCOUNT CONTROL AGREEMENTS, DULY EXECUTED BY THE APPROPRIATE
PARTIES, WITH RESPECT TO ALL BANK ACCOUNTS OF THE LOAN PARTIES, OTHER THAN BANK
ACCOUNTS WITH WELLS FARGO,

 

(F)           COPIES OF THE ASSIGNED AGREEMENTS SUBJECT TO THE COLLATERAL
ASSIGNMENT OF CONTRACTS REFERRED TO ABOVE, TOGETHER WITH ANY REASONABLY
NECESSARY

 

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CONSENTS TO SUCH ASSIGNMENT, DULY EXECUTED BY EACH PARTY TO SUCH ASSIGNED
AGREEMENTS OTHER THAN THE LOAN PARTIES, AND

 

(G)           EVIDENCE THAT ALL OTHER ACTION THAT THE ADMINISTRATIVE AGENT MAY
DEEM REASONABLY NECESSARY OR DESIRABLE IN ORDER TO PERFECT THE ENCUMBRANCES
CREATED UNDER THE SECURITY AGREEMENT HAS BEEN TAKEN (INCLUDING RECEIPT OF DULY
EXECUTED PAYOFF LETTERS AND UCC-3 TERMINATION STATEMENTS);

 

(IV)          THE FEE PROPERTY SECURITY DOCUMENTS;

 

(V)           TITLE POLICIES, ISSUED BY THE TITLE COMPANY, INSURING THE LIENS OF
THE FEE PROPERTY SECURITY DOCUMENTS AS A VALID FIRST LIENS UPON THE FEE
INTERESTS OF EACH OF THE FEE PROPERTIES, SUBJECT ONLY TO THE PERMITTED
ENCUMBRANCES.  EACH TITLE POLICY WHEN ISSUED SHALL BE REASONABLY ACCEPTABLE TO
ADMINISTRATIVE AGENT FOLLOWING A REVIEW OF ALL TITLE EXCEPTION DOCUMENTS CITED
IN THEREIN AND SHALL SPECIFICALLY INCLUDE BY ENDORSEMENT OR AFFIRMATIVE COVERAGE
(IF PERMITTED BY ADMINISTRATIVE AGENT IN ITS DISCRETION), AN ALTA 9
COMPREHENSIVE ENDORSEMENT, A DELETION OF CREDITORS’ RIGHTS EXCEPTION (IF
AVAILABLE), AND SUCH OTHER ENDORSEMENTS AND COVERAGES AS ADMINISTRATIVE AGENT
MAY REASONABLY REQUIRE, PROVIDED SUCH ENDORSEMENTS AND COVERAGES ARE AVAILABLE;

 

(VI)          THE SUBORDINATION AGREEMENT;

 

(VII)         LANDLORD WAIVERS AS REQUIRED BY AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT, EXECUTED BY EACH OF THE BORROWERS’
LESSORS, UNLESS WAIVED BY THE ADMINISTRATIVE AGENT;

 

(VIII)        SUCH CERTIFICATES OF RESOLUTIONS OR OTHER ACTION, INCUMBENCY
CERTIFICATES AND/OR OTHER CERTIFICATES OF RESPONSIBLE OFFICERS OF EACH LOAN
PARTY AS THE ADMINISTRATIVE AGENT MAY REQUIRE EVIDENCING THE AUTHORITY OF EACH
LOAN PARTY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY AND THE IDENTITY,
AUTHORITY AND CAPACITY OF EACH RESPONSIBLE OFFICER THEREOF AUTHORIZED TO ACT AS
A RESPONSIBLE OFFICER IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH SUCH LOAN PARTY IS A PARTY OR IS TO BE A PARTY;

 

(IX)           SUCH DOCUMENTS AND CERTIFICATIONS AS THE ADMINISTRATIVE AGENT MAY
REASONABLY REQUIRE TO EVIDENCE THAT EACH LOAN PARTY IS DULY ORGANIZED OR FORMED,
IS VALIDLY EXISTING, IN GOOD STANDING AND QUALIFIED TO ENGAGE IN BUSINESS IN
EACH JURISDICTION WHERE ITS OWNERSHIP, LEASE OR OPERATION OF PROPERTIES OR THE
CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION, EXCEPT TO THE EXTENT THAT
FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT;

 

(X)            AN OPINION OF KILPATRICK STOCKTON LLP COUNSEL TO THE LOAN PARTIES
ADDRESSED TO THE ADMINISTRATIVE AGENT AND EACH LENDER, AS TO THE MATTERS SET
FORTH IN EXHIBIT I AND SUCH OTHER MATTERS CONCERNING THE LOAN PARTIES AND THE
LOAN DOCUMENTS AS THE MAJORITY LENDERS MAY REASONABLY REQUEST;

 

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(XI)           OPINION(S) OF LOCAL COUNSEL TO THE LOAN PARTIES (AS APPLICABLE)
WITH RESPECT TO THE ENFORCEABILITY OF THE FEE PROPERTY SECURITY DOCUMENTS IN
THEIR LOCAL JURISDICTIONS AND SUCH OTHER MATTERS AS THE ADMINISTRATIVE AGENT MAY
REASONABLY REQUIRE;

 

(XII)          A CERTIFICATE OF A RESPONSIBLE OFFICER OF EACH LOAN PARTY EITHER
(A) ATTACHING COPIES OF ALL CONSENTS, LICENSES AND APPROVALS REQUIRED IN
CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE BY SUCH LOAN PARTY AND
THE VALIDITY AGAINST SUCH LOAN PARTY OF THE LOAN DOCUMENTS TO WHICH IT IS A
PARTY, AND SUCH CONSENTS, LICENSES AND APPROVALS SHALL BE IN FULL FORCE AND
EFFECT, OR (B) STATING THAT NO SUCH CONSENTS, LICENSES OR APPROVALS ARE SO
REQUIRED;

 

(XIII)         A CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF EACH BORROWER
CERTIFYING THAT THE CONDITIONS SPECIFIED IN PARAGRAPHS (D), (E), (F), (G), (I),
(K), (L), (M) AND (N) AND CLAUSE (A) OF PARAGRAPH (H) OF THIS SECTION 4.1 HAVE
BEEN SATISFIED;

 

(XIV)        CERTIFICATES ATTESTING TO THE SOLVENCY OF EACH LOAN PARTY BEFORE
AND AFTER GIVING EFFECT TO THE ACQUISITION, FROM ITS CHIEF FINANCIAL OFFICER;

 

(XV)         EVIDENCE THAT ALL INSURANCE REQUIRED TO BE MAINTAINED PURSUANT TO
THE LOAN DOCUMENTS HAS BEEN OBTAINED AND IS IN EFFECT, TOGETHER WITH THE
CERTIFICATES OF INSURANCE, NAMING THE ADMINISTRATIVE AGENT, ON BEHALF OF THE
LENDERS, AS AN ADDITIONAL INSURED OR LOSS PAYEE, AS THE CASE MAY BE, UNDER ALL
INSURANCE POLICIES MAINTAINED WITH RESPECT TO THE ASSETS AND PROPERTIES OF THE
LOAN PARTIES THAT CONSTITUTE COLLATERAL;

 

(XVI)        EVIDENCE THAT THE EXISTING CREDIT AGREEMENT AND ALL OUTSTANDING
INDEBTEDNESS FOR MONEY BORROWED OF THE BORROWERS, OTHER THAN THE INDEBTEDNESS
SET FORTH ON SCHEDULE 8.1(E) ATTACHED HERETO, HAS BEEN, OR CONCURRENTLY WITH THE
TRANSACTIONS CONTEMPLATED HEREBY IS BEING, PAID AND ALL ENCUMBRANCES SECURING
SUCH INDEBTEDNESS HAVE BEEN, OR CONCURRENTLY WITH THE TRANSACTIONS CONTEMPLATED
HEREBY ARE BEING, RELEASED OR ASSIGNED TO THE ADMINISTRATIVE AGENT, WHICH
REQUIREMENT MAY BE SATISFIED BY DELIVERY OF PAYOFF LETTERS IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT;

 

(XVII)       A CERTIFICATE OF A RESPONSIBLE OFFICER OF THE PARENT CERTIFYING
THAT THE PARENT HAS PREVIOUSLY DELIVERED TO THE ADMINISTRATIVE AGENT TRUE AND
CORRECT COPIES OF THE ASSET PURCHASE AGREEMENT AND ALL SCHEDULES, DOCUMENTS AND
AGREEMENTS ANCILLARY THERETO AS IN EFFECT ON THE CLOSING DATE;

 

(XVIII)      WITH RESPECT TO ANY FEE PROPERTY, SUCH OTHER, PAPERS, INSTRUCTIONS,
DOCUMENTS, INSTRUMENTS OR CERTIFICATES AS THE TITLE COMPANY MAY REASONABLY
REQUIRE FOR THE ISSUANCE OF TITLE POLICIES;

 

(XIX)         SUCH OTHER ASSURANCES, CERTIFICATES, DOCUMENTS, CONSENTS OR
OPINIONS AS THE ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER REASONABLY MAY
REQUIRE;

 

(XX)          A CERTIFICATE REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT, FOR
BENEFIT OF ITSELF AND THE LENDERS, PROVIDED BY THE BORROWERS THAT SETS FORTH
INFORMATION REQUIRED BY

 

47

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THE PATRIOT ACT INCLUDING THE IDENTITY OF EACH BORROWER, THE NAME AND ADDRESS OF
EACH BORROWER AND OTHER INFORMATION THAT WILL ALLOW THE ADMINISTRATIVE AGENT OR
ANY LENDER, AS APPLICABLE, TO IDENTIFY EACH BORROWER IN ACCORDANCE WITH THE
PATRIOT ACT; AND

 

(XXI)         ALL AMENDMENTS TO THE JUNIOR SUBORDINATED DEBT DOCUMENTS NECESSARY
TO REPLACE REFERENCES TO M&I MARSHALL & ILSLEY BANK WITH REFERENCES TO THE
ADMINISTRATIVE AGENT, AND ANY OTHER AMENDMENTS REASONABLY REQUESTED BY THE
ADMINISTRATIVE AGENT.

 

(B)           ALL FEES REQUIRED TO BE PAID TO THE ADMINISTRATIVE AGENT, THE LEAD
ARRANGER AND THE LENDERS ON OR BEFORE THE CLOSING DATE SHALL HAVE BEEN PAID OR
WILL BE PAID ON THE CLOSING DATE FROM THE PROCEEDS OF THE LOANS PURSUANT TO A
CLOSING STATEMENT DIRECTIVE FROM THE BORROWERS TO THE ADMINISTRATIVE AGENT.

 

(C)           THE BORROWERS SHALL HAVE PAID ALL FEES, CHARGES AND DISBURSEMENTS
OF COUNSEL TO THE ADMINISTRATIVE AGENT (DIRECTLY TO SUCH COUNSEL IF REQUESTED BY
THE ADMINISTRATIVE AGENT) TO THE EXTENT INVOICED PRIOR TO OR ON THE CLOSING
DATE, PLUS SUCH ADDITIONAL AMOUNTS OF SUCH FEES, CHARGES AND DISBURSEMENTS AS
SHALL CONSTITUTE ITS REASONABLE ESTIMATE OF SUCH FEES, CHARGES AND DISBURSEMENTS
INCURRED OR TO BE INCURRED BY IT THROUGH THE CLOSING PROCEEDINGS (PROVIDED THAT
SUCH ESTIMATE SHALL NOT THEREAFTER PRECLUDE A FINAL SETTLING OF ACCOUNTS BETWEEN
THE BORROWERS AND THE ADMINISTRATIVE AGENT) OR WILL BE PAID ON THE CLOSING DATE
FROM THE PROCEEDS OF THE LOANS PURSUANT TO A CLOSING STATEMENT DIRECTIVE FROM
THE BORROWERS TO THE ADMINISTRATIVE AGENT.

 

(D)           THERE SHALL NOT HAVE OCCURRED, SINCE DECEMBER 2, 2007, ANY CHANGE,
EFFECT OR CIRCUMSTANCE THAT WOULD CONSTITUTE A “MATERIAL ADVERSE EFFECT” AS THAT
TERM IS DEFINED IN THE ASSET PURCHASE AGREEMENT.

 

(E)           THE BORROWERS SHALL HAVE DELIVERED TO THE ADMINISTRATIVE AGENT
(I) A CERTIFIED COPY OF THE FINAL ORDER BY THE BANKRUPTCY COURT APPROVING THE
ACQUISITION ON THE CLOSING DATE, IN FORM REASONABLY SATISFACTORY TO COUNSEL TO
THE ADMINISTRATIVE AGENT, AND (II) A CERTIFICATE OF NO APPEAL ISSUED BY THE
CLERK OF SUCH COURT.

 

(F)            THE ACQUISITION SHALL HAVE BEEN CONSUMMATED (OR SUBSTANTIALLY
SIMULTANEOUSLY WITH THE BORROWING OF THE INITIAL LOANS ON THE CLOSING DATE SHALL
BE CONSUMMATED) (I) SUBSTANTIALLY IN ACCORDANCE WITH THE SUMMARY OF SOURCES AND
USES AND (II) IN ACCORDANCE WITH THE TERMS OF THE ASSET PURCHASE AGREEMENT
WITHOUT GIVING EFFECT TO (X) ANY AMENDMENTS OR WAIVERS TO THE ASSET PURCHASE
AGREEMENT OR (Y) THE DELIVERY OF ANY UPDATED DISCLOSURE SCHEDULES TO THE ASSET
PURCHASE AGREEMENT, IN ANY CASE TO THE EXTENT THAT SUCH AMENDMENTS, WAIVERS OR
UPDATED DISCLOSURE SCHEDULES (TAKEN AS A WHOLE) ARE MATERIAL AND ADVERSE TO THE
INTERESTS OF THE LENDERS AND NOT CONSENTED TO IN WRITING BY THE ADMINISTRATIVE
AGENT.

 

(G)           AFTER GIVING EFFECT TO THE ACQUISITION, THE BORROWERS WILL HAVE
OUTSTANDING NO INDEBTEDNESS FOR MONEY BORROWED OTHER THAN THE LOANS, THE JUNIOR
SUBORDINATED DEBT AND THE INDEBTEDNESS SET FORTH ON SCHEDULE 8.1(E).

 

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(H)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE BORROWERS’
PROJECTIONS FOR EACH OF THE FIVE FISCAL YEARS FOLLOWING THE CLOSING DATE,
INCLUDING CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF INCOME, RETAINED
EARNINGS AND CASH FLOWS IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE
AGENT.

 

(I)            AFTER GIVING EFFECT TO THE CONSUMMATION OF THE ACQUISITION, THE
MAKING OF ANY LOANS, THE ISSUANCE OF ANY LETTERS OF CREDIT, AND THE APPLICATION
OF PROCEEDS OF THE FOREGOING (INCLUDING THE PAYMENT OF ALL FEES AND EXPENSES IN
CONNECTION THEREWITH) ON THE CLOSING DATE, SUBSTANTIALLY IN ACCORDANCE WITH THE
SUMMARY OF SOURCES AND USES, THE SUM OF (X) THE BORROWERS’ UNRESTRICTED CASH AND
QUALIFIED INVESTMENTS, PLUS (Y) THE EXCESS OF THE TOTAL REVOLVING CREDIT
COMMITMENT OVER TOTAL REVOLVING CREDIT OUTSTANDINGS SHALL BE AT LEAST
$2,000,000.

 

(J)            THE ADMINISTRATIVE AGENT SHALL NOT HAVE BECOME AWARE, AFTER
NOVEMBER 30, 2007, OF ANY NEW OR INCONSISTENT INFORMATION OR OTHER MATTER NOT
PREVIOUSLY DISCLOSED TO IT RELATING TO THE BORROWERS OR THE TRANSACTIONS
CONTEMPLATED BY THE COMMITMENT LETTER DATED AS OF JANUARY 3, 2008 ADDRESSED TO
THE PARENT THAT THE ADMINISTRATIVE AGENT, IN ITS REASONABLE BUSINESS JUDGMENT,
DEEMS MATERIAL AND ADVERSE RELATIVE TO THE INFORMATION OR OTHER MATTERS
DISCLOSED TO IT PRIOR TO SUCH DATE, INCLUDING MATTERS COVERED BY ANY THIRD-PARTY
DILIGENCE REPORTS, BACKGROUND CHECKS OR OTHER FINANCIAL, ACCOUNTING, INSURANCE
OR LEGAL REVIEW.

 

(K)           THE REPRESENTATIONS MADE BY THE BARNHILL’S BUFFET, INC. IN THE
ASSET PURCHASE AGREEMENT SHALL BE TRUE AND ACCURATE ON AND AS OF THE CLOSING
DATE (BUT WITHOUT GIVING EFFECT TO THE DELIVERY OF ANY AMENDMENTS, WAIVERS OR
UPDATED DISCLOSURE SCHEDULES PURSUANT TO THE ASSET PURCHASE AGREEMENT TO THE
EXTENT THAT SUCH AMENDMENTS, WAIVERS OR UPDATED SCHEDULES ARE NOT CONSENTED TO
IN WRITING BY THE ADMINISTRATIVE AGENT).

 

(L)            THE REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION IV AND
ALL OTHER REPRESENTATIONS AND WARRANTIES MADE BY THE BORROWERS UNDER ANY OTHER
LOAN DOCUMENT SHALL BE TRUE AND ACCURATE ON AND AS OF THE CLOSING DATE AS THOUGH
MADE AT AND AS OF THE CLOSING DATE.

 

(M)          ALL DOCUMENTS AND INSTRUMENTS REQUIRED TO PERFECT THE
ADMINISTRATIVE AGENT’S SECURITY INTEREST IN THE COLLATERAL SHALL HAVE BEEN
EXECUTED AND DELIVERED AND, IF APPLICABLE, BE IN PROPER FORM FOR FILING, IN EACH
CASE AS CONTEMPLATED BY THE FOREGOING PROVISIONS OF THIS SECTION 4.1, AND NONE
OF THE COLLATERAL WILL BE SUBJECT TO ANY OTHER PLEDGES, SECURITY INTERESTS OR
LIENS EXCEPT FOR PERMITTED ENCUMBRANCES.

 

(N)           NO LITIGATION, ARBITRATION, PROCEEDING OR INVESTIGATION SHALL BE
PENDING OR, TO THE BORROWERS’ KNOWLEDGE, THREATENED WHICH QUESTIONS THE VALIDITY
OR LEGALITY OF THE TRANSACTIONS CONTEMPLATED BY ANY LOAN DOCUMENT OR THE ASSET
PURCHASE AGREEMENT OR SEEKS A RESTRAINING ORDER, INJUNCTION OR DAMAGES IN
CONNECTION THEREWITH, OR WHICH, IN THE REASONABLE JUDGMENT OF THE ADMINISTRATIVE
AGENT, MIGHT ADVERSELY AFFECT THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR
MIGHT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

4.2           CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT LOANS AND LETTERS OF
CREDIT AFTER THE CLOSING DATE.  THE OBLIGATION OF THE LENDERS TO MAKE ANY
REVOLVING CREDIT LOAN, TO CONTINUE LIBOR LOANS OR TO CONVERT LOANS OF ONE TYPE
TO LOANS OF ANOTHER TYPE, AND OF THE LC ISSUER TO

 

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ISSUE ANY LETTER OF CREDIT, IN EACH CASE AFTER THE CLOSING DATE, IS FURTHER
SUBJECT TO THE FOLLOWING CONDITIONS:

 

(A)           TIMELY RECEIPT BY THE ADMINISTRATIVE AGENT OF THE NOTICE OF
BORROWING OR CONVERSION WITH RESPECT TO ANY REVOLVING CREDIT LOAN, OR BY THE LC
ISSUER OF THE LETTER OF CREDIT APPLICATION WITH RESPECT TO ANY LETTER OF CREDIT;

 

(B)           THE OUTSTANDING LOANS AND LETTERS OF CREDIT DO NOT AND, AFTER
GIVING EFFECT TO ANY REQUESTED REVOLVING LOAN, WILL NOT EXCEED THE LIMITATIONS
SET FORTH IN SECTIONS 2.1 AND 3.1 HEREOF;

 

(C)           THE REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION V HEREOF
AND ALL REPRESENTATIONS AND WARRANTIES MADE BY THE BORROWERS AND EACH OTHER LOAN
PARTY UNDER ANY OTHER LOAN DOCUMENT SHALL BE TRUE AND ACCURATE IN ALL MATERIAL
RESPECTS ON AND AS OF THE DATE OF SUCH NOTICE OF BORROWING OR CONVERSION OR
LETTER OF CREDIT APPLICATION AND ON THE EFFECTIVE DATE OF THE MAKING,
CONTINUATION OR CONVERSION OF EACH REVOLVING CREDIT LOAN OR ISSUANCE OF EACH
LETTER OF CREDIT AS THOUGH MADE AT AND AS OF EACH SUCH DATE (EXCEPT TO THE
EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES EXPRESSLY RELATE TO AN EARLIER
DATE IN WHICH CASE SUCH REPRESENTATIONS AND WARRANTIES SHALL BE TRUE AND CORRECT
AS OF SUCH EARLIER DATE);

 

(D)           NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING AT THE TIME OF, AND IMMEDIATELY AFTER, THE MAKING OF SUCH REQUESTED
REVOLVING CREDIT LOAN OR THE ISSUANCE OF SUCH REQUESTED LETTER OF CREDIT;

 

(E)           NO LITIGATION, ARBITRATION, PROCEEDING OR INVESTIGATION SHALL BE
PENDING OR THREATENED WHICH QUESTIONS THE VALIDITY OR LEGALITY OF THE
TRANSACTIONS CONTEMPLATED BY ANY LOAN DOCUMENT OR SEEKS A RESTRAINING ORDER,
INJUNCTION OR DAMAGES IN CONNECTION THEREWITH, OR WHICH, IN THE JUDGMENT OF THE
ADMINISTRATIVE AGENT, MIGHT ADVERSELY AFFECT THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY OR MIGHT HAVE A MATERIAL ADVERSE AFFECT ON THE BORROWERS; AND

 

(F)            NO CHANGE SHALL HAVE OCCURRED IN ANY LAW OR REGULATION OR
INTERPRETATION THEREOF THAT, IN THE OPINION OF COUNSEL FOR ANY LENDER, WOULD
MAKE IT ILLEGAL OR AGAINST THE POLICY OF ANY GOVERNMENTAL AGENCY OR AUTHORITY
FOR SUCH LENDER TO MAKE LOANS HEREUNDER OR, IN THE OPINION OF COUNSEL FOR THE LC
ISSUER, FOR THE LC ISSUER TO ISSUE LETTERS OF CREDIT HEREUNDER (AS THE CASE MAY
BE).

 

The making, continuation or conversion of each Loan and the issuance of each
Letter of Credit shall be deemed to be a representation and warranty by the
Borrowers on the date of the making, continuation or conversion of such Loan as
to the accuracy of the facts referred to in subsection (c) of this Section 4.2
and of the satisfaction of all of the conditions set forth in this Section 4.2.

 

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SECTION V

 

REPRESENTATIONS AND WARRANTIES

 

The Borrowers, jointly and severally, represent and warrant to the
Administrative Agent and the Lenders that:

 

5.1           EXISTENCE, QUALIFICATION AND POWER.  EACH LOAN PARTY AND EACH OF
ITS SUBSIDIARIES (A) IS DULY ORGANIZED OR FORMED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION, ORGANIZATION
OR FORMATION, (B) HAS ALL REQUISITE POWER AND AUTHORITY AND ALL REQUISITE
GOVERNMENTAL LICENSES, AUTHORIZATIONS, CONSENTS AND APPROVALS TO (I) OWN OR
LEASE ITS ASSETS AND CARRY ON ITS BUSINESS AND (II) EXECUTE, DELIVER AND PERFORM
ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS AND THE SENIOR DEBT DOCUMENTS TO WHICH
IT IS A PARTY, AND (C) IS DULY QUALIFIED AND IS LICENSED AND IN GOOD STANDING
UNDER THE LAWS OF EACH JURISDICTION WHERE ITS OWNERSHIP, LEASE OR OPERATION OF
PROPERTIES OR THE CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION OR
LICENSE; EXCEPT IN EACH CASE REFERRED TO IN CLAUSE (B)(I) OR (C), TO THE EXTENT
THAT FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.

 

5.2           AUTHORIZATION; NO CONTRAVENTION.  THE EXECUTION, DELIVERY AND
PERFORMANCE BY EACH LOAN PARTY OF EACH LOAN DOCUMENT TO WHICH SUCH PERSON IS OR
IS TO BE A PARTY HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE OR OTHER
ORGANIZATIONAL ACTION, AND DO NOT AND WILL NOT (A) CONTRAVENE THE TERMS OF ANY
OF SUCH PERSON’S ORGANIZATION DOCUMENTS; (B) CONFLICT WITH OR RESULT IN ANY
BREACH OR CONTRAVENTION OF, OR THE CREATION OF ANY ENCUMBRANCE UNDER, OR REQUIRE
ANY PAYMENT TO BE MADE UNDER (I) ANY CONTRACTUAL OBLIGATION TO WHICH SUCH PERSON
IS A PARTY OR AFFECTING SUCH PERSON OR THE PROPERTIES OF SUCH PERSON OR ANY OF
ITS SUBSIDIARIES OR (II) ANY ORDER, INJUNCTION, WRIT OR DECREE OF ANY
GOVERNMENTAL AUTHORITY OR ANY ARBITRAL AWARD TO WHICH SUCH PERSON OR ITS
PROPERTY IS SUBJECT; OR (C) VIOLATE ANY LAW, RULE OR REGULATION.

 

5.3           GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS.  EXCEPT AS SET FORTH
ON SCHEDULE 5.3, NO APPROVAL, CONSENT, EXEMPTION, AUTHORIZATION, OR OTHER ACTION
BY, OR NOTICE TO, OR FILING WITH, ANY GOVERNMENTAL AUTHORITY OR ANY OTHER PERSON
IS NECESSARY OR REQUIRED IN CONNECTION WITH (A) THE EXECUTION, DELIVERY OR
PERFORMANCE BY, OR ENFORCEMENT AGAINST, ANY LOAN PARTY OF THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR FOR THE CONSUMMATION OF THE ACQUISITION, (B) THE GRANT
BY ANY LOAN PARTY OF THE ENCUMBRANCES GRANTED BY IT PURSUANT TO THE SECURITY
DOCUMENTS, (C) THE PERFECTION OR MAINTENANCE OF THE ENCUMBRANCES CREATED UNDER
THE SECURITY DOCUMENTS (INCLUDING WITH RESPECT TO THE LIEN PRIORITY THEREOF) OR
(D) THE EXERCISE BY THE ADMINISTRATIVE AGENT OR ANY LENDER OF ITS RIGHTS UNDER
THE LOAN DOCUMENTS OR THE REMEDIES IN RESPECT OF THE COLLATERAL PURSUANT TO THE
SECURITY DOCUMENTS.  ALL APPLICABLE WAITING PERIODS IN CONNECTION WITH THE
ACQUISITION HAVE EXPIRED WITHOUT ANY ACTION HAVING BEEN TAKEN BY ANY
GOVERNMENTAL AUTHORITY RESTRAINING, PREVENTING OR IMPOSING MATERIALLY ADVERSE
CONDITIONS UPON THE ACQUISITION OR THE RIGHTS OF THE LOAN PARTIES OR ITS
SUBSIDIARIES FREELY TO TRANSFER OR OTHERWISE DISPOSE OF, OR TO CREATE ANY
ENCUMBRANCE ON, ANY PROPERTIES NOW OWNED OR HEREAFTER ACQUIRED BY ANY OF THEM.

 

5.4           BINDING EFFECT.  THIS AGREEMENT HAS BEEN, AND EACH OTHER LOAN
DOCUMENT, WHEN DELIVERED HEREUNDER, WILL HAVE BEEN, DULY EXECUTED AND DELIVERED
BY EACH LOAN PARTY THAT IS PARTY THERETO.  THIS AGREEMENT CONSTITUTES, AND EACH
OTHER LOAN DOCUMENT WHEN SO DELIVERED WILL CONSTITUTE, A LEGAL, VALID AND
BINDING OBLIGATION OF SUCH LOAN PARTY, ENFORCEABLE AGAINST EACH

 

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LOAN PARTY THAT IS PARTY THERETO IN ACCORDANCE WITH ITS TERMS EXCEPT AS LIMITED
BY BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS AFFECTING
THE ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY, AND EXCEPT AS THE REMEDY OF
SPECIFIC PERFORMANCE OR OF INJUNCTIVE RELIEF IS SUBJECT TO THE DISCRETION OF THE
COURT BEFORE WHICH ANY PROCEEDING THEREFOR MAY BE BROUGHT.

 

5.5           FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.  (A)  THE
AUDITED CONSOLIDATED BALANCE SHEET OF THE BORROWERS AS OF THE END OF, AND THE
RELATED CONSOLIDATED STATEMENTS OF OPERATIONS, RETAINED EARNINGS AND CASH FLOWS
FOR, THE FISCAL YEAR ENDED JANUARY 29, 2007 (I) WERE PREPARED IN ACCORDANCE WITH
GAAP CONSISTENTLY APPLIED THROUGHOUT THE PERIOD COVERED THEREBY; (II) FAIRLY
PRESENT THE FINANCIAL CONDITION OF THE BORROWERS AND THEIR SUBSIDIARIES AS OF
THE DATE THEREOF AND THEIR RESULTS OF OPERATIONS FOR THE PERIOD COVERED THEREBY
IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED THROUGHOUT THE PERIOD COVERED
THEREBY, IN EACH CASE EXCEPT AS OTHERWISE EXPRESSLY NOTED THEREIN; (III) SHOW
ALL MATERIAL INDEBTEDNESS AND OTHER LIABILITIES, DIRECT OR CONTINGENT, OF THE
BORROWERS AND THEIR SUBSIDIARIES AS OF THE DATE THEREOF, INCLUDING LIABILITIES
FOR TAXES, MATERIAL COMMITMENTS AND INDEBTEDNESS; AND (IV) HAVE BEEN DELIVERED
TO THE ADMINISTRATIVE AGENT.

 

(B)           THE UNAUDITED CONSOLIDATED BALANCE SHEET OF THE BORROWERS AND
THEIR SUBSIDIARIES AS OF THE END OF, AND THE RELATED CONSOLIDATED STATEMENTS OF
OPERATIONS, RETAINED EARNINGS AND CASH FLOWS FOR, THE FISCAL MONTH ENDED 
NOVEMBER 5, 2007 AND FOR THE 13 FISCAL MONTHS THEN ENDED (THE “FINANCIAL
STATEMENTS”) (I) WERE PREPARED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED
THROUGHOUT THE PERIOD COVERED THEREBY; (II) FAIRLY PRESENT THE FINANCIAL
CONDITION OF THE BORROWERS AND THEIR SUBSIDIARIES AS OF THE DATE THEREOF AND
THEIR RESULTS OF OPERATIONS FOR THE PERIOD COVERED THEREBY IN ACCORDANCE WITH
GAAP CONSISTENTLY APPLIED THROUGHOUT THE PERIOD COVERED THEREBY, IN EACH CASE
EXCEPT AS OTHERWISE EXPRESSLY NOTED THEREIN AND SUBJECT TO NORMAL, RECURRING
YEAR-END ADJUSTMENTS THAT SHALL NOT IN THE AGGREGATE BE MATERIAL IN AMOUNT AND
THE ABSENCE OF NOTES THERETO; AND (III) HAVE BEEN DELIVERED TO THE
ADMINISTRATIVE AGENT.  SCHEDULE 5.5 SETS FORTH ALL MATERIAL INDEBTEDNESS AND
OTHER LIABILITIES, DIRECT OR CONTINGENT, OF THE BORROWERS AND THEIR CONSOLIDATED
SUBSIDIARIES AS OF THE DATE OF SUCH FINANCIAL STATEMENTS, INCLUDING LIABILITIES
FOR TAXES, MATERIAL COMMITMENTS AND INDEBTEDNESS, NOT SET FORTH IN SUCH
FINANCIAL STATEMENTS.

 

(C)           SINCE THE DATE OF THE FINANCIAL STATEMENTS, THERE HAS BEEN NO
EVENT OR CIRCUMSTANCE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, THAT HAS HAD OR
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(D)           THE PRO FORMA FINANCIAL STATEMENTS, COPIES OF WHICH HAVE BEEN
FURNISHED TO THE ADMINISTRATIVE AGENT, FAIRLY PRESENT THE CONSOLIDATED PRO FORMA
FINANCIAL CONDITION OF THE BORROWERS AND THEIR SUBSIDIARIES AS AT THE DATE
THEREOF AND THE CONSOLIDATED PRO FORMA RESULTS OF OPERATIONS OF THE BORROWERS
AND THEIR SUBSIDIARIES FOR THE PERIOD ENDED ON SUCH DATE, IN EACH CASE GIVING
EFFECT TO THE ACQUISITION, ALL IN ACCORDANCE WITH GAAP.

 

(E)           THE PROJECTED FINANCIAL INFORMATION OF THE BORROWERS AND THEIR
SUBSIDIARIES THAT HAS BEEN PROVIDED BY THE BORROWERS TO THE LENDERS PRIOR TO THE
DATE HEREOF WAS PREPARED IN GOOD FAITH ON THE BASIS OF THE ASSUMPTIONS STATED
THEREIN, WHICH ASSUMPTIONS WERE REASONABLE IN LIGHT OF THE CONDITIONS KNOWN TO
THE BORROWERS AT THE TIME OF DELIVERY OF SUCH FORECASTS, AND REPRESENTED, AT THE
TIME OF DELIVERY, THE REASONABLE ESTIMATE BY THE BORROWERS OF

 

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THE BORROWERS’ FUTURE FINANCIAL CONDITION AND PERFORMANCE WITH RESPECT TO THE
TIME PERIODS STATED THEREIN.

 

5.6           LITIGATION.  THERE ARE NO ACTIONS, SUITS, PROCEEDINGS, CLAIMS OR
DISPUTES PENDING OR, TO THE KNOWLEDGE OF THE BORROWERS, OVERTLY THREATENED OR
CONTEMPLATED, AT LAW, IN EQUITY, IN ARBITRATION OR BEFORE ANY GOVERNMENTAL
AUTHORITY, BY OR AGAINST THE BORROWERS OR ANY OF THEIR SUBSIDIARIES OR AGAINST
ANY OF THEIR PROPERTIES OR REVENUES THAT (A) PURPORT TO AFFECT OR PERTAIN TO
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE CONSUMMATION OF THE ACQUISITION,
OR (B) EITHER INDIVIDUALLY OR IN THE AGGREGATE, IF DETERMINED ADVERSELY, COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

5.7           NO DEFAULT.  NO LOAN PARTY OR ANY SUBSIDIARY THEREOF IS IN DEFAULT
UNDER OR WITH RESPECT TO, OR A PARTY TO, ANY CONTRACTUAL OBLIGATION THAT COULD,
EITHER INDIVIDUALLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.  NO DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD
RESULT FROM THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
ANY OTHER LOAN DOCUMENT OR THE JUNIOR SUBORDINATED DEBT DOCUMENTS.

 

5.8           OWNERSHIP OF PROPERTY; ENCUMBRANCES; INVESTMENTS.  (A)  EACH LOAN
PARTY AND EACH OF ITS SUBSIDIARIES HAS GOOD RECORD AND MARKETABLE TITLE IN FEE
SIMPLE TO, OR VALID LEASEHOLD INTERESTS IN ALL REAL PROPERTY NECESSARY OR USED
IN THE ORDINARY CONDUCT OF ITS BUSINESS, EXCEPT FOR PERMITTED ENCUMBRANCES AND
SUCH DEFECTS IN TITLE AS COULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(B)           SCHEDULE 5.8(B) SETS FORTH A COMPLETE AND ACCURATE LIST OF ALL
ENCUMBRANCES ON THE PROPERTY OR ASSETS OF EACH LOAN PARTY AND EACH OF ITS
SUBSIDIARIES, SHOWING AS OF THE DATE HEREOF THE LIENHOLDER THEREOF, THE
PRINCIPAL AMOUNT OF THE OBLIGATIONS SECURED THEREBY AND THE PROPERTY OR ASSETS
OF SUCH LOAN PARTY OR SUCH SUBSIDIARY SUBJECT THERETO.  THE PROPERTY OF EACH
LOAN PARTY AND EACH OF ITS SUBSIDIARIES IS SUBJECT TO NO ENCUMBRANCES, OTHER
THAN PERMITTED ENCUMBRANCES AND ENCUMBRANCES SET FORTH ON SCHEDULE 5.8(B).

 

(C)           SCHEDULE 5.8(C) SETS FORTH A COMPLETE AND ACCURATE LIST OF ALL
REAL PROPERTY OWNED IN FEE BY EACH LOAN PARTY AND EACH OF ITS SUBSIDIARIES (EACH
A “FEE PROPERTY”), SHOWING AS OF THE DATE HEREOF THE STREET ADDRESS, COUNTY OR
OTHER RELEVANT JURISDICTION, STATE, RECORD OWNER AND BOOK AND ESTIMATED FAIR
VALUE THEREOF AND NOTING ANY CONTRACTUAL OBLIGATIONS, WHETHER CONTINGENT OR
OTHERWISE, TO SELL SUCH FEE PROPERTY.  EACH LOAN PARTY AND EACH OF ITS
SUBSIDIARIES HAS GOOD, MARKETABLE AND INSURABLE FEE SIMPLE TITLE TO EACH FEE
PROPERTY OWNED BY SUCH LOAN PARTY OR SUCH SUBSIDIARY, FREE AND CLEAR OF ALL
ENCUMBRANCES, OTHER THAN ENCUMBRANCES CREATED OR PERMITTED BY THE LOAN DOCUMENTS
OR SET FORTH ON SUCH SCHEDULE.

 

(D)           (I) SCHEDULE 5.8(D)(I) SETS FORTH A COMPLETE AND ACCURATE LIST OF
ALL LEASES OF REAL PROPERTY UNDER WHICH ANY LOAN PARTY OR ANY SUBSIDIARY OF A
LOAN PARTY IS THE LESSEE, SHOWING AS OF THE DATE HEREOF THE STREET ADDRESS,
COUNTY OR OTHER RELEVANT JURISDICTION, STATE, LESSOR, LESSEE AND EXPIRATION DATE
THEREOF.  EACH SUCH LEASE IS THE LEGAL, VALID AND BINDING OBLIGATION OF THE
LESSOR THEREOF, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS, EXCEPT AS LIMITED BY
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS AFFECTING THE
ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY, AND EXCEPT AS THE REMEDY OF SPECIFIC
PERFORMANCE OR OF INJUNCTIVE

 

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RELIEF IS SUBJECT TO THE DISCRETION OF THE COURT BEFORE WHICH ANY PROCEEDING
THEREFOR MAY BE BROUGHT.

 

(ii)  Schedule 5.8(d)(ii) sets forth a complete and accurate list of all leases
of real property under which any Loan Party or any Subsidiary of a Loan Party is
the lessor, showing as of the date hereof the street address, county or other
relevant jurisdiction, state, lessor, lessee and expiration date thereof.  Each
such lease is the legal, valid and binding obligation of the lessee thereof,
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors’ rights generally, and except as the remedy of specific performance
of injunctive relief is subject to the discretion of the court before which any
proceeding therefore may be brought.

 

(E)           SCHEDULE 5.8(E) SETS FORTH A COMPLETE AND ACCURATE LIST OF ALL
INVESTMENTS HELD BY ANY LOAN PARTY OR ANY SUBSIDIARY OF A LOAN PARTY ON THE DATE
HEREOF, SHOWING AS OF THE DATE HEREOF THE AMOUNT, OBLIGOR OR ISSUER AND
MATURITY, IF ANY, THEREOF.

 

5.9           ENVIRONMENTAL COMPLIANCE.  THE BORROWERS AND ITS SUBSIDIARIES HAVE
OBTAINED ALL PERMITS, LICENSES AND OTHER AUTHORIZATIONS AND HAVE MADE ALL
FILINGS, REGISTRATIONS AND OTHER SUBMITTALS WHICH ARE REQUIRED UNDER ALL
ENVIRONMENTAL LAWS, EXCEPT TO THE EXTENT FAILURE TO HAVE ANY SUCH PERMIT,
LICENSE OR AUTHORIZATION WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.  THE
BORROWERS AND ITS SUBSIDIARIES ARE IN COMPLIANCE WITH THE TERMS AND CONDITIONS
OF ALL SUCH PERMITS, LICENSES AND AUTHORIZATIONS, AND ARE ALSO IN COMPLIANCE
WITH ALL APPLICABLE ORDERS, DECREES, JUDGMENTS AND INJUNCTIONS ISSUED, ENTERED,
PROMULGATED OR APPROVED UNDER ANY ENVIRONMENTAL LAW, EXCEPT TO THE EXTENT
FAILURE TO COMPLY WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.  THE LOAN PARTIES
AND THEIR RESPECTIVE SUBSIDIARIES CONDUCT IN THE ORDINARY COURSE OF BUSINESS A
REVIEW OF CLAIMS THEY RECEIVE ALLEGING POTENTIAL LIABILITY OR RESPONSIBILITY FOR
VIOLATION OF ANY ENVIRONMENTAL LAW ON THEIR RESPECTIVE BUSINESSES, OPERATIONS
AND PROPERTIES, AND AS A RESULT THEREOF THE BORROWERS HAVE REASONABLY CONCLUDED
THAT SUCH ENVIRONMENTAL LAWS AND CLAIMS COULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  THE
BORROWERS AND THEIR SUBSIDIARIES HAVE MADE AVAILABLE TO ADMINISTRATIVE AGENT
COPIES OF ALL EXISTING ENVIRONMENTAL REPORTS, REVIEWS AND AUDITS AND ALL
DOCUMENTS PERTAINING TO ACTUAL OR POTENTIAL ENVIRONMENTAL LIABILITIES, IN EACH
CASE TO THE EXTENT SUCH REPORTS, REVIEWS, AUDITS AND DOCUMENTS ARE IN THEIR
POSSESSION, CUSTODY OR CONTROL.

 

5.10         INSURANCE.  THE PROPERTIES OF THE BORROWERS AND THEIR SUBSIDIARIES
ARE INSURED WITH FINANCIALLY SOUND AND REPUTABLE INSURANCE COMPANIES NOT
AFFILIATES OF THE BORROWERS, IN SUCH AMOUNTS, WITH SUCH DEDUCTIBLES AND COVERING
SUCH RISKS AS ARE CUSTOMARILY CARRIED BY COMPANIES ENGAGED IN SIMILAR BUSINESSES
AND OWNING SIMILAR PROPERTIES IN LOCALITIES WHERE THE APPLICABLE BORROWER OR
SUBSIDIARY OPERATES.

 

5.11         TAXES.  THE BORROWERS AND THEIR SUBSIDIARIES HAVE FILED ALL
FEDERAL, STATE AND OTHER MATERIAL TAX RETURNS AND REPORTS REQUIRED TO BE FILED,
AND HAVE PAID ALL FEDERAL, STATE AND OTHER MATERIAL TAXES, ASSESSMENTS, FEES AND
OTHER GOVERNMENTAL CHARGES LEVIED OR IMPOSED UPON THEM OR THEIR PROPERTIES,
INCOME OR ASSETS OTHERWISE DUE AND PAYABLE, EXCEPT THOSE WHICH ARE BEING
CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED AND FOR
WHICH ADEQUATE RESERVES HAVE BEEN PROVIDED IN ACCORDANCE WITH GAAP.  THERE IS NO
PROPOSED TAX

 

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ASSESSMENT AGAINST THE BORROWERS OR ANY SUBSIDIARY THAT WOULD, IF MADE, HAVE A
MATERIAL ADVERSE EFFECT.  NO LOAN PARTY OR ANY SUBSIDIARY THEREOF IS PARTY TO
ANY TAX SHARING AGREEMENT.

 

5.12         ERISA COMPLIANCE.  (A)  EACH PLAN IS IN COMPLIANCE IN ALL MATERIAL
RESPECTS WITH THE APPLICABLE PROVISIONS OF ERISA, THE CODE AND OTHER FEDERAL OR
STATE LAWS.  EACH PLAN THAT IS INTENDED TO QUALIFY UNDER SECTION 401(A) OF THE
CODE HAS RECEIVED A FAVORABLE DETERMINATION LETTER FROM THE IRS OR AN
APPLICATION FOR SUCH A LETTER IS CURRENTLY BEING PROCESSED BY THE IRS
WITH RESPECT THERETO AND, TO THE BEST KNOWLEDGE OF THE BORROWERS, NOTHING HAS
OCCURRED WHICH WOULD PREVENT, OR CAUSE THE LOSS OF, SUCH QUALIFICATION.  THE
BORROWERS AND EACH ERISA AFFILIATE HAVE MADE ALL REQUIRED CONTRIBUTIONS TO EACH
PLAN SUBJECT TO SECTION 412 OF THE CODE, AND NO APPLICATION FOR A FUNDING WAIVER
OR AN EXTENSION OF ANY AMORTIZATION PERIOD PURSUANT TO SECTION 412 OF THE CODE
HAS BEEN MADE WITH RESPECT TO ANY PLAN.

 

(B)           THERE ARE NO PENDING OR, TO THE BEST KNOWLEDGE OF THE BORROWERS,
OVERTLY THREATENED CLAIMS, ACTIONS OR LAWSUITS, OR ACTION BY ANY GOVERNMENTAL
AUTHORITY, WITH RESPECT TO ANY PLAN THAT COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.  THERE HAS BEEN NO PROHIBITED TRANSACTION OR VIOLATION
OF THE FIDUCIARY RESPONSIBILITY RULES WITH RESPECT TO ANY PLAN THAT HAS RESULTED
OR COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(C)           (I) NO ERISA EVENT HAS OCCURRED OR IS REASONABLY EXPECTED TO
OCCUR; (II) NO PENSION PLAN HAS ANY UNFUNDED PENSION LIABILITY; (III) NEITHER
THE BORROWERS NOR ANY ERISA AFFILIATE HAS INCURRED, OR REASONABLY EXPECTS TO
INCUR, ANY LIABILITY UNDER TITLE IV OF ERISA WITH RESPECT TO ANY PENSION PLAN
(OTHER THAN PREMIUMS DUE AND NOT DELINQUENT UNDER SECTION 4007 OF ERISA);
(IV) NEITHER THE BORROWERS NOR ANY ERISA AFFILIATE HAS INCURRED, OR REASONABLY
EXPECTS TO INCUR, ANY LIABILITY (AND NO EVENT HAS OCCURRED WHICH, WITH THE
GIVING OF NOTICE UNDER SECTION 4219 OF ERISA, WOULD RESULT IN SUCH LIABILITY)
UNDER SECTION 4201 OR 4243 OF ERISA WITH RESPECT TO A MULTIEMPLOYER PLAN; AND
(V) NEITHER THE BORROWERS NOR ANY ERISA AFFILIATE HAS ENGAGED IN A TRANSACTION
THAT COULD BE SUBJECT TO SECTION 4069 OR 4212(C) OF ERISA.

 

5.13         SUBSIDIARIES; EQUITY INTERESTS; LOAN PARTIES.  THE BORROWERS HAVE
NO SUBSIDIARIES OTHER THAN THOSE SPECIFICALLY DISCLOSED IN PART (A) OF SCHEDULE
5.13.  ALL OF THE OUTSTANDING EQUITY INTERESTS IN SUCH SUBSIDIARIES HAVE BEEN
VALIDLY ISSUED, ARE FULLY PAID AND NON-ASSESSABLE AND ARE OWNED BY A LOAN PARTY
IN THE AMOUNTS SPECIFIED ON PART (A) OF SCHEDULE 5.13 FREE AND CLEAR OF ALL
ENCUMBRANCES EXCEPT THOSE CREATED UNDER THE SECURITY DOCUMENTS.  THE BORROWERS
HAVE NO EQUITY INVESTMENTS IN ANY OTHER CORPORATION OR ENTITY OTHER THAN THOSE
SPECIFICALLY DISCLOSED IN PART (B) OF SCHEDULE 5.13.  ALL OF THE OUTSTANDING
EQUITY INTERESTS IN THE BORROWERS HAVE BEEN VALIDLY ISSUED, ARE FULLY PAID AND
NON-ASSESSABLE AND, EXCEPT WITH RESPECT TO THE PARENT’S EQUITY INTERESTS, ARE
OWNED BY THE PERSONS IN THE AMOUNTS SPECIFIED ON PART (C) OF THE SCHEDULE 5.13
FREE AND CLEAR OF ALL ENCUMBRANCES EXCEPT THOSE CREATED UNDER THE SECURITY
DOCUMENTS.  SCHEDULE 5.13 IS A COMPLETE AND ACCURATE LIST OF ALL LOAN PARTIES,
SHOWING AS OF THE CLOSING DATE (AS TO EACH LOAN PARTY) THE JURISDICTION OF ITS
INCORPORATION OR FORMATION, THE ADDRESS OF ITS PRINCIPAL PLACE OF BUSINESS AND
ITS U.S. TAXPAYER IDENTIFICATION NUMBER OR, IN THE CASE OF ANY NON-U.S. LOAN
PARTY THAT DOES NOT HAVE A U.S. TAXPAYER IDENTIFICATION NUMBER, ITS UNIQUE
IDENTIFICATION NUMBER ISSUED TO IT BY THE JURISDICTION OF ITS INCORPORATION. 
THE COPY OF THE CHARTER OR OTHER ORGANIZATIONAL DOCUMENT OF EACH LOAN PARTY AND
EACH AMENDMENT THERETO PROVIDED PURSUANT TO SECTION 4.1(A)(IX) IS A TRUE AND
CORRECT COPY OF EACH SUCH DOCUMENT, EACH OF WHICH IS VALID AND IN FULL FORCE AND
EFFECT.

 

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5.14         MARGIN REGULATIONS; INVESTMENT COMPANY ACT.  (A)  THE BORROWERS ARE
NOT ENGAGED AND WILL NOT ENGAGE, PRINCIPALLY OR AS ONE OF ITS IMPORTANT
ACTIVITIES, IN THE BUSINESS OF PURCHASING OR CARRYING MARGIN STOCK (WITHIN THE
MEANING OF REGULATION U ISSUED BY THE FRB), OR EXTENDING CREDIT FOR THE PURPOSE
OF PURCHASING OR CARRYING MARGIN STOCK.

 

(B)           NONE OF THE BORROWERS, ANY PERSON CONTROLLING OF THE BORROWERS, OR
ANY SUBSIDIARY IS OR IS REQUIRED TO BE REGISTERED AS AN “INVESTMENT COMPANY”
UNDER THE INVESTMENT COMPANY ACT OF 1940.

 

5.15         DISCLOSURE.  THE BORROWERS HAVE DISCLOSED TO THE ADMINISTRATIVE
AGENT AND THE LENDERS ALL AGREEMENTS, INSTRUMENTS AND CORPORATE OR OTHER
RESTRICTIONS TO WHICH THEY OR ANY OF THEIR SUBSIDIARIES IS SUBJECT, AND ALL
OTHER MATTERS KNOWN TO IT, THAT, INDIVIDUALLY OR IN THE AGGREGATE, COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.  NO REPORT,
FINANCIAL STATEMENT, CERTIFICATE OR OTHER INFORMATION FURNISHED (WHETHER IN
WRITING OR ORALLY) BY OR ON BEHALF OF ANY LOAN PARTY TO THE ADMINISTRATIVE AGENT
OR ANY LENDER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY AND THE
NEGOTIATION OF THIS AGREEMENT OR DELIVERED HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT (IN EACH CASE AS MODIFIED OR SUPPLEMENTED BY OTHER INFORMATION SO
FURNISHED) CONTAINS ANY MATERIAL MISSTATEMENT OF FACT OR OMITS TO STATE ANY
MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING; PROVIDED THAT, WITH
RESPECT TO PROJECTED FINANCIAL INFORMATION, THE BORROWERS REPRESENT ONLY THAT
SUCH INFORMATION WAS PREPARED IN GOOD FAITH BASED UPON ASSUMPTIONS BELIEVED TO
BE REASONABLE AT THE TIME.

 

5.16         COMPLIANCE WITH LAWS.  EACH LOAN PARTY AND EACH SUBSIDIARY THEREOF
IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF ALL LAWS,
RULES AND REGULATIONS AND ALL ORDERS, WRITS, INJUNCTIONS AND DECREES APPLICABLE
TO IT OR TO ITS PROPERTIES, EXCEPT IN SUCH INSTANCES IN WHICH (A) SUCH
REQUIREMENT OF LAW OR ORDER, WRIT, INJUNCTION OR DECREE IS BEING CONTESTED IN
GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED OR (B) THE FAILURE TO
COMPLY THEREWITH, EITHER INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

5.17         INTELLECTUAL PROPERTY; LICENSES, ETC.  EACH LOAN PARTY AND EACH OF
ITS SUBSIDIARIES OWNS, OR POSSESSES THE RIGHT TO USE, ALL OF THE TRADEMARKS,
SERVICE MARKS, TRADE NAMES, COPYRIGHTS, PATENTS, PATENT RIGHTS, FRANCHISES,
LICENSES AND OTHER INTELLECTUAL PROPERTY RIGHTS (COLLECTIVELY, “IP RIGHTS”) THAT
ARE REASONABLY NECESSARY FOR THE OPERATION OF THEIR RESPECTIVE BUSINESSES,
WITHOUT CONFLICT WITH THE RIGHTS OF ANY OTHER PERSON, AND SCHEDULE 5.17 SETS
FORTH A COMPLETE AND ACCURATE LIST OF ALL SUCH IP RIGHTS OWNED, LICENSED TO OR
USED BY EACH LOAN PARTY AND EACH OF ITS SUBSIDIARIES (OTHER THAN “OFF THE SHELF”
SOFTWARE PRODUCTS USED IN THE ORDINARY COURSE OF BUSINESS).  TO THE KNOWLEDGE OF
THE BORROWERS, NO SLOGAN OR OTHER ADVERTISING DEVICE, PRODUCT, PROCESS, METHOD,
SUBSTANCE, PART OR OTHER MATERIAL NOW EMPLOYED, OR NOW CONTEMPLATED TO BE
EMPLOYED, BY ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES INFRINGES UPON ANY RIGHTS
HELD BY ANY OTHER PERSON.  NO CLAIM OR LITIGATION REGARDING ANY OF THE FOREGOING
IS PENDING OR, TO THE KNOWLEDGE OF THE BORROWERS, THREATENED, WHICH, EITHER
INDIVIDUALLY OR IN THE AGGREGATE, COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

5.18         SOLVENCY.  EACH LOAN PARTY IS, INDIVIDUALLY AND TOGETHER WITH ITS
SUBSIDIARIES ON A CONSOLIDATED BASIS, SOLVENT.

 

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5.19         CASUALTY, ETC.  NEITHER THE BUSINESSES NOR THE PROPERTIES OF ANY
LOAN PARTY OR ANY OF ITS SUBSIDIARIES ARE AFFECTED BY ANY FIRE, EXPLOSION,
ACCIDENT, STRIKE, LOCKOUT OR OTHER LABOR DISPUTE, DROUGHT, STORM, HAIL,
EARTHQUAKE, EMBARGO, ACT OF GOD OR OF THE PUBLIC ENEMY OR OTHER CASUALTY
(WHETHER OR NOT COVERED BY INSURANCE) THAT, EITHER INDIVIDUALLY OR IN THE
AGGREGATE, COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

5.20         LABOR MATTERS.  THERE ARE NO COLLECTIVE BARGAINING AGREEMENTS OR
MULTIEMPLOYER PLANS COVERING THE EMPLOYEES OF THE BORROWERS OR ANY OF THEIR
SUBSIDIARIES AS OF THE CLOSING DATE AND NEITHER THE BORROWERS NOR ANY OF THEIR
SUBSIDIARIES HAS SUFFERED ANY STRIKES, WALKOUTS, WORK STOPPAGES OR OTHER
MATERIAL LABOR DIFFICULTY WITHIN THE LAST FIVE YEARS.

 

5.21         SECURITY DOCUMENTS.  THE PROVISIONS OF THE SECURITY DOCUMENTS ARE
EFFECTIVE TO CREATE IN FAVOR OF THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE
SECURED PARTIES A LEGAL, VALID AND ENFORCEABLE FIRST PRIORITY ENCUMBRANCE
(SUBJECT TO PERMITTED ENCUMBRANCES) ON ALL RIGHT, TITLE AND INTEREST OF THE
RESPECTIVE LOAN PARTIES IN THE COLLATERAL DESCRIBED THEREIN.  EXCEPT FOR FILINGS
COMPLETED PRIOR TO THE CLOSING DATE AS CONTEMPLATED HEREBY AND BY THE SECURITY
DOCUMENTS OR ADDRESSED IN SECTION 4.1(M), NO FILING WILL BE NECESSARY TO PERFECT
OR PROTECT SUCH ENCUMBRANCES.

 

5.22         INTENTIONALLY DELETED.

 

5.23         COMPLIANCE WITH OFAC RULES AND REGULATIONS.  NEITHER THE BORROWERS,
NOR ANY SUBSIDIARY NOR ANY AFFILIATE OF THE BORROWERS (I) IS A SANCTIONED
PERSON, (II) HAS ANY ASSETS IN SANCTIONED COUNTRIES, OR (III) DERIVES ANY OF ITS
OPERATING INCOME FROM INVESTMENTS IN, OR TRANSACTIONS WITH SANCTIONED PERSONS OR
SANCTIONED COUNTRIES.  NO PART OF THE PROCEEDS OF ANY LOAN HEREUNDER WILL BE
USED DIRECTLY OR INDIRECTLY TO FUND ANY OPERATIONS IN, FINANCE ANY INVESTMENTS
OR ACTIVITIES IN OR MAKE ANY PAYMENTS TO, A SANCTIONED PERSON OR A SANCTIONED
COUNTRY.

 

5.24         FOREIGN ASSETS CONTROL REGULATIONS, ETC.  NEITHER THE BORROWERS NOR
ANY OF THEIR SUBSIDIARIES IS AN “ENEMY” OR AN “ALLY OF THE ENEMY” WITHIN THE
MEANING OF SECTION 2 OF THE TRADING WITH THE ENEMY ACT OF THE UNITED STATES OF
AMERICA (50 U.S.C. APP. §§ 1 ET SEQ.), AS AMENDED.  NEITHER THE BORROWERS NOR
ANY OF THEIR SUBSIDIARIES IS IN VIOLATION OF (A) THE TRADING WITH THE ENEMY ACT,
AS AMENDED, (B) ANY OF THE FOREIGN ASSETS CONTROL REGULATIONS OF THE UNITED
STATES TREASURY DEPARTMENT (31 CFR, SUBTITLE B, CHAPTER V, AS AMENDED) OR ANY
ENABLING LEGISLATION OR EXECUTIVE ORDER RELATING THERETO OR (C) THE PATRIOT
ACT.  NEITHER THE BORROWERS NOR ANY OF THEIR SUBSIDIARIES (I) IS A BLOCKED
PERSON DESCRIBED IN SECTION 1 OF THE ANTI-TERRORISM ORDER OR (II) TO THE BEST OF
THE BORROWERS’ KNOWLEDGE, ENGAGES IN ANY DEALINGS OR TRANSACTIONS, OR IS
OTHERWISE ASSOCIATED, WITH ANY SUCH BLOCKED PERSON.

 

5.25         PARENT PUBLIC FILINGS.  AS OF THE RESPECTIVE DATES THEREOF, THE
PARENT SEC DOCUMENTS WERE PREPARED IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH
THE EXCHANGE ACT AND DID NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR
OMIT TO STATE ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO
MAKE THE STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING.  PARENT HAS TIMELY FILED ALL FORMS, REPORTS AND DOCUMENTS
WITH THE SEC REQUIRED TO BE FILED BY IT PURSUANT TO THE SECURITIES ACT AND THE
EXCHANGE ACT.  THE PARENT SEC DOCUMENTS COMPLIED AS TO FORM, AT THE TIME SUCH
FORM, DOCUMENT OR REPORT WAS FILED, IN ALL MATERIAL RESPECTS WITH THE APPLICABLE
REQUIREMENTS OF THE SECURITIES ACT AND THE

 

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EXCHANGE ACT.  THE CONSOLIDATED FINANCIAL STATEMENTS OF PARENT INCLUDED IN THE
PARENT SEC DOCUMENTS (THE “PARENT FINANCIAL STATEMENTS”), INCLUDING IN EACH CASE
THE NOTES THERETO, HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP APPLIED ON A
CONSISTENT BASIS THROUGHOUT THE PERIODS COVERED THEREBY, EXCEPT AS OTHERWISE
NOTED THEREIN, ARE TRUE, ACCURATE AND COMPLETE IN ALL MATERIAL RESPECTS, AND
FAIRLY PRESENT THE CONSOLIDATED FINANCIAL CONDITION AND THE CONSOLIDATED RESULTS
OF OPERATIONS AND CASH FLOW OF PARENT, ON THE BASES THEREIN STATED, AS OF THE
RESPECTIVE DATES THEREOF, AND FOR THE RESPECTIVE PERIODS COVERED THEREBY
SUBJECT, IN THE CASE OF UNAUDITED FINANCIAL STATEMENTS, TO NORMAL NONMATERIAL
YEAR-END AUDIT ADJUSTMENTS AND ACCRUALS.

 

SECTION VI

 

AFFIRMATIVE COVENANTS

 

The Borrowers covenant that so long as any Loan, Letter of Credit or other
Obligation, remains outstanding or the Lenders or the LC Issuer have any
obligation to lend or to issue any Letter of Credit hereunder:

 

6.1           FINANCIAL STATEMENTS.  THE BORROWERS SHALL FURNISH TO THE
ADMINISTRATIVE AGENT AND EACH LENDER:

 

(A)           AS SOON AS AVAILABLE TO THE BORROWERS, BUT IN ANY EVENT WITHIN 90
DAYS AFTER THE END OF EACH FISCAL YEAR, THE CONSOLIDATED BALANCE SHEET OF THE
BORROWERS AND ALL OF THEIR SUBSIDIARIES AS OF THE END OF SUCH YEAR AND RELATED
CONSOLIDATED STATEMENTS OF INCOME, RETAINED EARNINGS AND CASH FLOW OF THE
BORROWERS AND ALL OF THEIR SUBSIDIARIES FOR SUCH YEAR, PREPARED IN ACCORDANCE
WITH GAAP AND AUDITED AND CERTIFIED WITHOUT QUALIFICATION BY THE BORROWERS’
ACCOUNTANTS; AND CONCURRENTLY WITH SUCH FINANCIAL STATEMENTS, A COPY OF THE
BORROWERS’ ACCOUNTANTS MANAGEMENT REPORT AND A WRITTEN STATEMENT BY THE
BORROWERS’ ACCOUNTANTS THAT, IN THE MAKING OF THE AUDIT NECESSARY FOR THEIR
REPORT AND OPINION UPON SUCH FINANCIAL STATEMENTS THEY HAVE OBTAINED NO
KNOWLEDGE OF ANY DEFAULT OR, IF IN THE OPINION OF SUCH ACCOUNTANTS ANY SUCH
DEFAULT EXISTS, THEY SHALL DISCLOSE IN SUCH WRITTEN STATEMENT THE NATURE AND
STATUS THEREOF;

 

(B)           AS SOON AS AVAILABLE TO THE BORROWERS, BUT IN ANY EVENT WITHIN 45
DAYS AFTER THE END OF EACH FISCAL QUARTER OF EACH FISCAL YEAR, A CONSOLIDATED
BALANCE SHEET OF THE BORROWERS AND ALL THEIR SUBSIDIARIES AS OF THE END OF, AND
RELATED CONSOLIDATED STATEMENTS OF INCOME, RETAINED EARNINGS AND CASH FLOW OF
THE BORROWERS AND ALL OF THEIR SUBSIDIARIES FOR, THE FISCAL QUARTER THEN ENDED
AND PORTION OF THE FISCAL YEAR THEN ENDED, PREPARED IN ACCORDANCE WITH GAAP AND
CERTIFIED ON BEHALF OF THE BORROWERS BY THE CHIEF FINANCIAL OFFICER OF THE
PARENT, SUBJECT TO NORMAL, RECURRING YEAR-END ADJUSTMENTS THAT SHALL NOT IN THE
AGGREGATE BE MATERIAL IN AMOUNT;

 

(C)           AS SOON AS AVAILABLE TO THE BORROWERS, BUT IN ANY EVENT WITHIN 30
DAYS FOLLOWING THE END OF EACH FISCAL MONTH, A RESTAURANT BY RESTAURANT
STATEMENT OF REVENUE, CASH FLOW AND CONSOLIDATED EBITDA, FOR SUCH FISCAL MONTH,
FOR ALL RESTAURANTS OWNED OR OPERATED BY THE BORROWERS OR THEIR SUBSIDIARIES
(INCLUDING A STATEMENT OF REVENUE, CASH FLOW AND CONSOLIDATED EBITDA COMPARING
YEAR OVER YEAR PERFORMANCE FOR ALL RESTAURANTS OPERATED FOR MORE THAN ONE YEAR),
PREPARED IN ACCORDANCE WITH GAAP AND CERTIFIED ON BEHALF OF THE BORROWERS BY THE
CHIEF FINANCIAL OFFICER OF THE PARENT;

 

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(D)           CONCURRENTLY WITH THE DELIVERY OF EACH FINANCIAL STATEMENT
PURSUANT TO SUBSECTIONS (A) AND (B) OF THIS SECTION 6.1, A REPORT IN
SUBSTANTIALLY THE FORM OF EXHIBIT F HERETO SIGNED ON BEHALF OF THE BORROWERS BY
THE CHIEF FINANCIAL OFFICER OF THE PARENT;

 

(E)           AT LEAST FIFTEEN (15) DAYS PRIOR TO THE FIRST DAY OF EACH FISCAL
YEAR, THE BORROWERS’ PROJECTIONS FOR SUCH FISCAL YEAR, PREPARED ON A FISCAL
MONTH BASIS AND INCLUDING CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF INCOME,
RETAINED EARNINGS AND CASH FLOWS;

 

(F)            CONCURRENTLY WITH THEIR FILING, TRUE AND CORRECT COPIES OF THE
BORROWERS’ FEDERAL AND MATERIAL STATE INCOME TAX RETURNS AND EACH AMENDMENT
THERETO;

 

(G)           PROMPTLY AFTER THE RECEIPT THEREOF BY THE BORROWERS, COPIES OF ANY
REPORTS (INCLUDING ANY SO-CALLED MANAGEMENT LETTERS) SUBMITTED TO THE BORROWERS
BY INDEPENDENT PUBLIC ACCOUNTANTS IN CONNECTION WITH ANY ANNUAL OR INTERIM AUDIT
OR REVIEW OF THE ACCOUNTS OF THE BORROWERS AND/OR THEIR SUBSIDIARIES MADE BY
SUCH ACCOUNTANTS;

 

(H)           PROMPTLY AFTER THE SAME ARE DELIVERED TO ITS EQUITY HOLDERS OR THE
SEC, COPIES OF ALL PROXY STATEMENTS, FINANCIAL STATEMENTS AND REPORTS AS THE
BORROWERS SHALL SEND TO THEIR EQUITY HOLDERS, OR AS THE BORROWERS MAY FILE WITH
THE SEC OR ANY GOVERNMENTAL AUTHORITY AT ANY TIME HAVING JURISDICTION OVER THE
BORROWERS OR THEIR SUBSIDIARIES, OR, IN LIEU OF SUCH DELIVERY, PROMPT NOTICE
AFTER THE SAME ARE MADE PUBLICLY AVAILABLE ON THE INTERNET; AND

 

(I)            FROM TIME TO TIME, SUCH OTHER FINANCIAL DATA AND INFORMATION
ABOUT THE BORROWERS, THEIR SUBSIDIARIES AND THEIR BUSINESSES AND PROPERTIES AS
THE ADMINISTRATIVE AGENT OR THE LENDERS MAY REASONABLY REQUEST, INCLUDING,
WITHOUT LIMITATION, PERIODIC SALES REPORTS RELATING TO RESTAURANTS AND ANY
ACCOUNTS RECEIVABLES INFORMATION (INCLUDING AGING).

 

6.2           CONDUCT OF BUSINESS.  (A)  THE BORROWERS AND THEIR SUBSIDIARIES
SHALL DULY OBSERVE AND COMPLY IN ALL MATERIAL RESPECTS WITH ALL MATERIAL
CONTRACTS AND WITH ALL APPLICABLE LAWS, REGULATIONS, DECREES, ORDERS, JUDGMENTS
AND VALID REQUIREMENTS OF ANY GOVERNMENTAL AUTHORITIES APPLICABLE TO THEIR
CORPORATE EXISTENCE, RIGHTS AND FRANCHISES, TO THE CONDUCT OF THEIR BUSINESS AND
TO THEIR PROPERTY AND ASSETS (INCLUDING WITHOUT LIMITATION ALL ENVIRONMENTAL
LAWS AND ERISA), EXCEPT IN ANY CASE WHERE THE FAILURE TO OBSERVE AND COMPLY
WOULD NOT HAVE A MATERIAL ADVERSE EFFECT, AND SHALL MAINTAIN AND KEEP IN FULL
FORCE AND EFFECT AND COMPLY IN ALL MATERIAL RESPECTS WITH ALL LICENSES AND
PERMITS REASONABLY NECESSARY TO THE PROPER CONDUCT OF THEIR BUSINESS.

 

(B)           THE BORROWERS AND THEIR SUBSIDIARIES SHALL, EXCEPT AS OTHERWISE
PERMITTED BY THIS AGREEMENT, MAINTAIN THEIR CORPORATE OR OTHER ENTITY TYPE
EXISTENCE, COMPLY WITH THEIR RESPECTIVE CHARTERS, BY-LAWS, OPERATING AGREEMENTS
AND OTHER ORGANIZATIONAL DOCUMENTS, AND REMAIN OR ENGAGE SUBSTANTIALLY IN THE
SAME BUSINESS AS THAT IN WHICH THEY ARE NOW ENGAGED AND IN NO UNRELATED
BUSINESS.

 

6.3           MAINTENANCE AND INSURANCE.

 

(A)           THE BORROWERS AND EACH OF THEIR SUBSIDIARIES SHALL MAINTAIN
(I) THEIR PROPERTIES AND THE COLLATERAL IN GOOD REPAIR, WORKING ORDER AND
CONDITION AS REQUIRED FOR THE

 

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NORMAL CONDUCT OF THEIR BUSINESS, AND (II) ALL MATERIAL RIGHTS, PERMITS,
LICENSES, APPROVALS AND PRIVILEGES NECESSARY IN THE CONDUCT OF ITS BUSINESS,
WHETHER BECAUSE OF ITS OWNERSHIP, LEASE, SUBLEASE OR OTHER OPERATION OR
OCCUPATION OF A PROPERTY OR OTHER CONDUCT OF ITS BUSINESS, AND SHALL MAKE ALL
REASONABLY NECESSARY OR APPROPRIATE FILINGS WITH, AND GIVE ALL REQUIRED NOTICES
TO, GOVERNMENTAL AUTHORITIES.

 

(B)           THE BORROWERS AND EACH OF THEIR SUBSIDIARIES SHALL AT ALL TIMES
MAINTAIN LIABILITY, CASUALTY AND BUSINESS INTERRUPTION INSURANCE ON THEIR
PROPERTIES (INCLUDING ALL COLLATERAL) WITH FINANCIALLY SOUND AND REPUTABLE
INSURERS IN SUCH AMOUNTS AND WITH SUCH COVERAGES, ENDORSEMENTS, DEDUCTIBLES AND
EXPIRATION DATES AS THE OFFICERS OF THE BORROWERS, IN THE EXERCISE OF THEIR
REASONABLE JUDGMENT DEEM TO BE ADEQUATE, AS ARE CUSTOMARY IN THE INDUSTRY FOR
COMPANIES OF ESTABLISHED REPUTATION ENGAGED IN THE SAME OR SIMILAR BUSINESS AND
OWNING OR OPERATING SIMILAR PROPERTIES AND AS SHALL BE REASONABLY SATISFACTORY
TO THE ADMINISTRATIVE AGENT.  THE ADMINISTRATIVE AGENT SHALL BE NAMED AS LOSS
PAYEE, ADDITIONAL INSURED AND/OR MORTGAGEE UNDER SUCH INSURANCE AS THE
ADMINISTRATIVE AGENT SHALL REASONABLY REQUIRE FROM TIME TO TIME, AND THE
BORROWERS SHALL PROVIDE TO THE ADMINISTRATIVE AGENT LENDER’S LOSS PAYABLE
ENDORSEMENTS IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE
AGENT.  IN ADDITION, THE ADMINISTRATIVE AGENT SHALL BE GIVEN THIRTY (30) DAYS
ADVANCE NOTICE OF ANY CANCELLATION OF INSURANCE.  IN THE EVENT OF FAILURE TO
PROVIDE AND MAINTAIN INSURANCE AS HEREIN PROVIDED, THE ADMINISTRATIVE AGENT MAY,
AT ITS OPTION, OBTAIN SUCH INSURANCE AND CHARGE THE AMOUNT THEREOF TO THE
BORROWERS AS A REVOLVING CREDIT LOAN.  THE BORROWERS SHALL FURNISH TO THE
ADMINISTRATIVE AGENT CERTIFICATES OR OTHER EVIDENCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT OF COMPLIANCE WITH THE FOREGOING INSURANCE PROVISIONS.  THE
ADMINISTRATIVE AGENT SHALL NOT, BY THE FACT OF APPROVING, DISAPPROVING OR
ACCEPTING ANY SUCH INSURANCE, INCUR ANY LIABILITY FOR THE FORM OR LEGAL
SUFFICIENCY OF INSURANCE CONTRACTS, SOLVENCY OF INSURANCE COMPANIES OR PAYMENT
OF LAW SUITS, AND THE BORROWERS HEREBY EXPRESSLY ASSUMES FULL RESPONSIBILITY
THEREFOR AND LIABILITY, IF ANY, THEREUNDER.

 

6.4           TAXES.  EACH BORROWER SHALL PAY OR CAUSE TO BE PAID ALL TAXES,
ASSESSMENTS OR GOVERNMENTAL CHARGES ON OR AGAINST IT OR ANY OF ITS SUBSIDIARIES
OR THEIR PROPERTIES ON OR PRIOR TO THE TIME WHEN THEY BECOME DELINQUENT; EXCEPT
FOR ANY TAX, ASSESSMENT OR CHARGE THAT IS BEING CONTESTED IN GOOD FAITH BY
APPROPRIATE PROCEEDINGS AND WITH RESPECT TO WHICH ADEQUATE RESERVES HAVE BEEN
ESTABLISHED AND ARE BEING MAINTAINED IN ACCORDANCE WITH GAAP IF NO ENCUMBRANCE
SHALL HAVE BEEN FILED (THE ENFORCEMENT OF WHICH SHALL NOT HAVE BEEN STAYED) TO
SECURE SUCH TAX, ASSESSMENT OR CHARGE.

 

6.5           INSPECTION RIGHTS; LENDER MEETING.

 

(A)           EACH BORROWER SHALL, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO,
PERMIT ANY AUTHORIZED REPRESENTATIVES DESIGNATED BY ANY LENDER TO VISIT AND
INSPECT ANY OF THE PROPERTIES OF SUCH BORROWER OR OF ANY OF ITS SUBSIDIARIES
(I) TO INSPECT, COPY AND TAKE EXTRACTS FROM THEIR BOOKS AND RECORDS, AND TO
DISCUSS THEIR AFFAIRS, FINANCES AND ACCOUNTS WITH THEIR OFFICERS AND INDEPENDENT
PUBLIC ACCOUNTANTS, AND (II) TO INSPECT, REVIEW, EVALUATE AND MAKE PHYSICAL
VERIFICATIONS AND APPRAISALS OF ANY IMPROVEMENTS, INVENTORY AND OTHER COLLATERAL
IN ANY MANNER THAT SUCH LENDER CONSIDERS REASONABLY ADVISABLE, ALL AT THE
EXPENSE OF THE BORROWERS AND ALL UPON REASONABLE NOTICE AND AT SUCH REASONABLE
TIMES DURING NORMAL BUSINESS HOURS AND AS OFTEN AS MAY

 

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REASONABLY BE REQUESTED, BUT AT ANY TIME OR FROM TIME TO TIME FOLLOWING THE
OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT.

 

(B)           THE BORROWERS WILL, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT
OR MAJORITY LENDERS, PARTICIPATE IN A MEETING OF THE ADMINISTRATIVE AGENT AND
LENDERS ONCE DURING EACH FISCAL YEAR TO BE HELD AT THE BORROWERS’ PRINCIPAL
OFFICES (OR AT SUCH OTHER LOCATION AS MAY BE AGREED TO BY THE BORROWERS AND
ADMINISTRATIVE AGENT) AT SUCH TIME AS MAY BE AGREED TO BY THE BORROWERS AND THE
ADMINISTRATIVE AGENT.

 

6.6           MAINTENANCE OF BOOKS AND RECORDS.  THE BORROWERS AND EACH OF THEIR
SUBSIDIARIES SHALL KEEP ADEQUATE BOOKS AND RECORDS OF ACCOUNT, IN WHICH TRUE AND
COMPLETE ENTRIES WILL BE MADE REFLECTING ALL OF THEIR BUSINESS AND FINANCIAL
TRANSACTIONS, AND SUCH ENTRIES WILL BE MADE IN ACCORDANCE WITH GAAP CONSISTENTLY
APPLIED AND APPLICABLE LAW.

 

6.7           USE OF PROCEEDS.

 

(A)           THE BORROWERS WILL USE THE PROCEEDS OF THE TERM LOANS TO FINANCE
THE ACQUISITION, TO REPAY ALL OUTSTANDING INDEBTEDNESS UNDER THE EXISTING CREDIT
AGREEMENT AND TO PAY FEES AND EXPENSES ASSOCIATED WITH THE ACQUISITION AND THE
OTHER TRANSACTIONS CONTEMPLATED HEREBY.  THEREAFTER, THE REMAINDER OF THE TERM
LOANS AND THE REVOLVING CREDIT LOANS SHALL BE AVAILABLE, SUBJECT TO THE TERMS OF
THE LOAN DOCUMENTS, FOR WORKING CAPITAL, TO FINANCE CAPITAL EXPENDITURES AND FOR
OTHER GENERAL CORPORATE OR LIMITED LIABILITY COMPANY PURPOSES.

 

(B)           NO PORTION OF ANY LOAN SHALL BE USED FOR THE “PURPOSE OF
PURCHASING OR CARRYING” ANY “MARGIN STOCK” OR “MARGIN SECURITY” AS SUCH TERMS
ARE USED IN REGULATIONS T, U AND X OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM, OR OTHERWISE IN VIOLATION OF SUCH REGULATIONS.

 

6.8           FURTHER ASSURANCES.  AT ANY TIME AND FROM TIME TO TIME, PROMPTLY
FOLLOWING THE WRITTEN REQUEST OF THE ADMINISTRATIVE AGENT, THE BORROWERS SHALL,
AND SHALL CAUSE EACH OF THEIR SUBSIDIARIES TO, EXECUTE AND DELIVER SUCH FURTHER
DOCUMENTS AND TAKE SUCH FURTHER ACTION AS MAY REASONABLY BE REQUESTED BY THE
ADMINISTRATIVE AGENT (A) TO OBTAIN THE FULL BENEFITS OF THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS, (B) TO PROTECT, PRESERVE, MAINTAIN AND ENFORCE THE
LENDERS’ RIGHTS IN (AND THE PRIORITY OF THE LENDERS’ LIEN ON) ANY COLLATERAL OR
(C) TO ENABLE THE ADMINISTRATIVE AGENT AND EACH LENDER TO EXERCISE ALL OR ANY OF
THE RIGHTS, REMEDIES AND POWERS GRANTED HEREIN OR IN ANY OTHER LOAN DOCUMENT.

 

6.9           NOTIFICATION REQUIREMENTS.  THE BORROWERS SHALL FURNISH TO THE
ADMINISTRATIVE AGENT:

 

(A)           PROMPTLY UPON BECOMING AWARE OF THE EXISTENCE OF ANY CONDITION OR
EVENT THAT CONSTITUTES A DEFAULT, WRITTEN NOTICE THEREOF SPECIFYING THE NATURE
AND DURATION THEREOF AND THE ACTION BEING OR PROPOSED TO BE TAKEN WITH RESPECT
THERETO;

 

(B)           PROMPTLY UPON BECOMING AWARE OF (I) ANY LITIGATION OR (II) OF ANY
INVESTIGATIVE PROCEEDINGS BY A GOVERNMENTAL AUTHORITY COMMENCED OR THREATENED
AGAINST THE BORROWERS OR ANY OF THEIR SUBSIDIARIES OR ANY OF THE COLLATERAL OF
WHICH EITHER HAS NOTICE, THE

 

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OUTCOME OF WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIALLY ADVERSE
EFFECT, WRITTEN NOTICE THEREOF AND THE ACTION BEING OR PROPOSED TO BE TAKEN WITH
RESPECT THERETO; AND

 

(C)           PROMPTLY AFTER BECOMING AWARE OF ANY OCCURRENCE OR ANY CONDITION
AFFECTING THE BORROWERS OR ANY OF THEIR SUBSIDIARIES OR ANY OF THE COLLATERAL
WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, WRITTEN
NOTICE THEREOF.

 

6.10         ERISA REPORTS.

 

(A)           EACH PLAN SHALL COMPLY IN ALL MATERIAL RESPECTS WITH ERISA AND THE
CODE, EXCEPT TO THE EXTENT FAILURE TO COMPLY IN ANY INSTANCE WOULD NOT HAVE A
MATERIAL ADVERSE EFFECT ON BORROWERS AND THEIR SUBSIDIARIES.

 

(B)           WITH RESPECT TO ANY PLAN, THE BORROWERS SHALL, OR SHALL CAUSE
THEIR AFFILIATES TO, FURNISH TO THE ADMINISTRATIVE AGENT PROMPTLY (I) AS SOON AS
POSSIBLE AND IN ANY EVENT WITHIN 10 DAYS AFTER THE BORROWERS OR ANY OF THEIR
ERISA AFFILIATES KNOW THAT ANY ERISA EVENT HAS OCCURRED OR IS EXPECTED TO OCCUR,
A STATEMENT OF A RESPONSIBLE OFFICER OF THE BORROWERS, DESCRIBING SUCH ERISA
EVENT, INCLUDING COPIES OF ANY NOTICE CONCERNING AN ERISA EVENT RECEIVED FROM
PBGC, A PLAN ADMINISTRATOR, OR FROM A MULTIEMPLOYER PLAN SPONSOR, AND THE
ACTION, IF ANY, THE BORROWERS OR SUCH ERISA AFFILIATE PROPOSES TO TAKE WITH
RESPECT THERETO; AND (II) PROMPTLY AFTER FILING THEREOF, A COPY OF THE ANNUAL
REPORT OF EACH PENSION PLAN (FORM 5500 OR COMPARABLE FORM) REQUIRED TO BE FILED
WITH THE IRS AND/OR THE DEPARTMENT OF LABOR.  PROMPTLY AFTER THE ADOPTION OF ANY
PENSION PLAN, THE BORROWERS SHALL NOTIFY THE ADMINISTRATIVE AGENT OF SUCH
ADOPTION.

 

6.11         ENVIRONMENTAL COMPLIANCE.

 

(A)           EACH BORROWER AND ITS SUBSIDIARIES SHALL COMPLY IN ALL MATERIAL
RESPECTS WITH ALL APPLICABLE ENVIRONMENTAL LAWS IN ALL JURISDICTIONS IN WHICH
ANY OF THEM OPERATES NOW OR IN THE FUTURE, AND EACH BORROWER AND ITS
SUBSIDIARIES SHALL COMPLY IN ALL MATERIAL RESPECTS WITH ALL SUCH ENVIRONMENTAL
LAWS THAT MAY IN THE FUTURE BE APPLICABLE TO SUCH BORROWER’S OR ANY OF ITS
SUBSIDIARIES’ BUSINESS, PROPERTIES AND ASSETS.

 

(B)           IF ANY BORROWER OR ANY SUBSIDIARY SHALL (I) RECEIVE NOTICE THAT
ANY MATERIAL VIOLATION OF ANY ENVIRONMENTAL LAW MAY HAVE BEEN COMMITTED OR IS
ABOUT TO BE COMMITTED BY A BORROWER OR ANY SUBSIDIARY, (II) RECEIVE NOTICE THAT
ANY ADMINISTRATIVE OR JUDICIAL COMPLAINT OR ORDER HAS BEEN FILED OR IS ABOUT TO
BE FILED AGAINST A BORROWER OR ANY SUBSIDIARY ALLEGING A MATERIAL VIOLATION OF
ANY ENVIRONMENTAL LAW REQUIRING A BORROWER OR ANY SUBSIDIARY TO TAKE ANY ACTION
IN CONNECTION WITH THE RELEASE OF HAZARDOUS MATERIALS INTO THE ENVIRONMENT,
(III) RECEIVE ANY NOTICE FROM A FEDERAL, STATE OR LOCAL GOVERNMENT AGENCY OR
PRIVATE PARTY ALLEGING THAT A BORROWER OR ANY SUBSIDIARY MAY BE LIABLE OR
RESPONSIBLE FOR ANY MATERIAL AMOUNT OF COSTS ASSOCIATED WITH A RESPONSE TO OR
CLEANUP OF A RELEASE OF HAZARDOUS MATERIALS INTO THE ENVIRONMENT OR ANY DAMAGES
CAUSED THEREBY, (IV) BECOME AWARE OF ANY INVESTIGATIVE PROCEEDINGS BY A
GOVERNMENTAL AGENCY OR AUTHORITY COMMENCED OR THREATENED AGAINST A BORROWER OR
ANY SUBSIDIARY REGARDING ANY POTENTIAL MATERIAL VIOLATION OF ENVIRONMENTAL LAWS
OR ANY SPILL, RELEASE, DISCHARGE OR DISPOSAL OF ANY HAZARDOUS MATERIAL OR
(V) NOTIFY ANY GOVERNMENTAL AUTHORITY REGARDING ANY POTENTIAL MATERIAL VIOLATION
OF ENVIRONMENTAL LAWS OR ANY SPILL, RELEASE,

 

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DISCHARGE OR DISPOSAL OF ANY HAZARDOUS MATERIAL BY A BORROWER OR A SUBSIDIARY,
THE BORROWER SHALL PROMPTLY NOTIFY THE ADMINISTRATIVE AGENT THEREOF (TOGETHER
WITH A COPY OF ANY SUCH NOTICE) AND OF ANY ACTION BEING OR PROPOSED TO BE TAKEN
WITH RESPECT THERETO AND THEREAFTER SHALL CONTINUE TO FURNISH TO THE
ADMINISTRATIVE AGENT ALL FURTHER NOTICES, DEMANDS, REPORTS AND OTHER INFORMATION
REGARDING THE FOREGOING.

 

6.12         COVENANT TO GUARANTEE OBLIGATIONS AND GIVE SECURITY.  (A) UPON THE
FORMATION OR ACQUISITION OF ANY NEW DIRECT OR INDIRECT SUBSIDIARY BY ANY LOAN
PARTY, THE BORROWERS SHALL, AT THE BORROWERS’ EXPENSE:

 

(I)            WITHIN 10 DAYS AFTER SUCH FORMATION OR ACQUISITION, CAUSE SUCH
SUBSIDIARY (OTHER THAN ANY CFC OR A SUBSIDIARY THAT IS HELD DIRECTLY OR
INDIRECTLY BY A CFC), AND CAUSE EACH DIRECT AND INDIRECT PARENT OF SUCH
SUBSIDIARY (IF IT HAS NOT ALREADY DONE SO), TO DULY EXECUTE AND DELIVER TO THE
ADMINISTRATIVE AGENT A GUARANTY OR GUARANTY SUPPLEMENT, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT, GUARANTEEING THE OTHER LOAN
PARTIES’ OBLIGATIONS UNDER THE LOAN DOCUMENTS (EACH SUCH GUARANTY OR GUARANTY
SUPPLEMENT, A “SUBSIDIARY GUARANTY”);

 

(II)           WITHIN 10 DAYS AFTER SUCH FORMATION OR ACQUISITION, FURNISH TO
THE ADMINISTRATIVE AGENT A DESCRIPTION OF THE REAL AND PERSONAL PROPERTIES OF
SUCH SUBSIDIARY, IN DETAIL REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT;

 

(III)          WITHIN 15 DAYS AFTER SUCH FORMATION OR ACQUISITION, CAUSE SUCH
SUBSIDIARY (OTHER THAN ANY CFC OR A SUBSIDIARY THAT IS HELD DIRECTLY OR
INDIRECTLY BY A CFC) AND EACH DIRECT AND INDIRECT PARENT OF SUCH SUBSIDIARY (IF
IT HAS NOT ALREADY DONE SO) TO EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT A
JOINDER TO THE SECURITY AGREEMENT AND THE OTHER SECURITY AGREEMENTS AND PLEDGE
AGREEMENTS, AS SPECIFIED BY AND IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ADMINISTRATIVE AGENT (INCLUDING DELIVERY OF ALL PLEDGED COLLATERAL (AS
DEFINED IN THE PLEDGE AGREEMENT) IN AND OF SUCH SUBSIDIARY (EXCEPT THAT THE
PLEDGED COLLATERAL SHALL BE LIMITED TO 65% OF THE EQUITY OF SUCH SUBSIDIARY IN
THE CASE OF A CFC OR A SUBSIDIARY THAT IS HELD DIRECTLY OR INDIRECTLY BY A CFC),
AND OTHER INSTRUMENTS OF THE TYPE SPECIFIED IN SECTION 4.1(A)(III)), SECURING
PAYMENT OF ALL THE OBLIGATIONS OF SUCH SUBSIDIARY OR SUCH PARENT, AS THE CASE
MAY BE, UNDER THE LOAN DOCUMENTS AND CONSTITUTING ENCUMBRANCES ON ALL SUCH
PERSONAL PROPERTIES;

 

(IV)          DELIVER TO THE ADMINISTRATIVE AGENT, WITHIN 15 DAYS AFTER SUCH
FORMATION OR ACQUISITION, LANDLORD WAIVERS, EXECUTED BY EACH OF THE LESSORS OF
ANY OF THE LEASED REAL PROPERTIES OF SUCH SUBSIDIARY (OTHER THAN ANY CFC OR A
SUBSIDIARY THAT IS HELD DIRECTLY OR INDIRECTLY BY A CFC), UNLESS WAIVED BY THE
ADMINISTRATIVE AGENT;

 

(V)           WITHIN 30 DAYS AFTER SUCH FORMATION OR ACQUISITION, CAUSE SUCH
SUBSIDIARY (OTHER THAN ANY CFC OR A SUBSIDIARY THAT IS HELD DIRECTLY OR
INDIRECTLY BY A CFC) AND EACH DIRECT AND INDIRECT PARENT OF SUCH SUBSIDIARY (IF
IT HAS NOT ALREADY DONE SO) TO TAKE WHATEVER ADDITIONAL ACTION (INCLUDING THE
FILING OF UNIFORM COMMERCIAL CODE FINANCING STATEMENTS AND THE GIVING OF
NOTICES) AS MAY BE REASONABLY NECESSARY OR ADVISABLE IN THE REASONABLE OPINION
OF THE ADMINISTRATIVE AGENT TO VEST IN THE ADMINISTRATIVE AGENT (OR IN ANY
REPRESENTATIVE OF THE ADMINISTRATIVE AGENT DESIGNATED BY IT) VALID AND
SUBSISTING

 

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ENCUMBRANCES ON THE PROPERTIES PURPORTED TO BE SUBJECT TO THE SECURITY AGREEMENT
AND THE OTHER SECURITY AGREEMENTS AND PLEDGE AGREEMENTS DELIVERED PURSUANT TO
THIS SECTION 6.12(A), ENFORCEABLE AGAINST ALL THIRD PARTIES IN ACCORDANCE WITH
THEIR TERMS;

 

(VI)          WITHIN 45 DAYS AFTER SUCH FORMATION OR ACQUISITION, CAUSE SUCH
SUBSIDIARY (OTHER THAN ANY CFC OR A SUBSIDIARY THAT IS HELD DIRECTLY OR
INDIRECTLY BY A CFC) TO COMPLY WITH THE REQUIREMENTS OF SECTIONS 4.1(A)(IV),
(V), (XI) AND (XVIII) WITH RESPECT TO ANY FEE PROPERTY HELD THEREBY; AND

 

(VII)         WITHIN 60 DAYS AFTER SUCH FORMATION OR ACQUISITION, DELIVER TO THE
ADMINISTRATIVE AGENT, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT IN ITS SOLE
DISCRETION, A SIGNED COPY OF ONE OR MORE OPINIONS, IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT, ADDRESSED TO THE
ADMINISTRATIVE AGENT AND THE OTHER SECURED PARTIES, OF COUNSEL FOR THE LOAN
PARTIES ACCEPTABLE TO THE ADMINISTRATIVE AGENT AS TO THE MATTERS CONTAINED IN
CLAUSES (I), (II) AND (V) ABOVE, AND AS TO SUCH OTHER MATTERS SET FORTH ON
EXHIBIT I ATTACHED HERETO AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUEST.

 

(B)           UPON THE ACQUISITION OF ANY PROPERTY BY ANY BORROWER OR ANY
SUBSIDIARY, IF SUCH PROPERTY, IN THE REASONABLE JUDGMENT OF THE ADMINISTRATIVE
AGENT, SHALL NOT ALREADY BE SUBJECT TO A PERFECTED FIRST PRIORITY SECURITY
INTEREST IN FAVOR OF THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE SECURED
PARTIES, THEN SUCH BORROWER SHALL, AT THE BORROWERS’ EXPENSE:

 

(I)            WITHIN 10 DAYS AFTER SUCH ACQUISITION, FURNISH TO THE
ADMINISTRATIVE AGENT A DESCRIPTION OF THE PROPERTY SO ACQUIRED IN DETAIL
SATISFACTORY TO THE ADMINISTRATIVE AGENT,

 

(II)           WITHIN 15 DAYS AFTER SUCH ACQUISITION, DELIVER TO THE
ADMINISTRATIVE AGENT LANDLORD WAIVERS, EXECUTED BY EACH OF THE LESSORS OF ANY
NEWLY ACQUIRED LEASED REAL PROPERTIES, UNLESS WAIVED BY THE ADMINISTRATIVE
AGENT,

 

(III)          WITHIN 15 DAYS AFTER SUCH ACQUISITION, CAUSE THE APPLICABLE LOAN
PARTY TO DULY EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT, A JOINDER TO THE
SECURITY AGREEMENT AND THE OTHER SECURITY AGREEMENTS AND PLEDGE AGREEMENTS, AS
SPECIFIED BY AND IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT,
SECURING PAYMENT OF ALL THE OBLIGATIONS OF THE APPLICABLE LOAN PARTY UNDER THE
LOAN DOCUMENTS AND CONSTITUTING ENCUMBRANCES ON ALL SUCH PROPERTIES,

 

(IV)          WITHIN 30 DAYS AFTER SUCH ACQUISITION, CAUSE THE APPLICABLE LOAN
PARTY TO TAKE WHATEVER ACTION (INCLUDING THE FILING OF UNIFORM COMMERCIAL CODE
FINANCING STATEMENTS AND THE GIVING OF NOTICES) MAY BE REASONABLY NECESSARY OR
ADVISABLE IN THE REASONABLE OPINION OF THE ADMINISTRATIVE AGENT TO VEST IN THE
ADMINISTRATIVE AGENT (OR IN ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT
DESIGNATED BY IT) VALID AND SUBSISTING ENCUMBRANCES ON THE PROPERTIES PURPORTED
TO BE SUBJECT TO THE SECURITY AGREEMENT AND THE OTHER SECURITY AGREEMENTS AND
PLEDGE AGREEMENTS DELIVERED PURSUANT TO THIS SECTION 6.12(B), ENFORCEABLE
AGAINST ALL THIRD PARTIES IN ACCORDANCE WITH THEIR TERMS, AND

 

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(V)           IF THE ACQUIRED PROPERTY IS A FEE PROPERTY, WITHIN 45 DAYS AFTER
SUCH ACQUISITION, CAUSE THE APPLICABLE LOAN PARTY TO COMPLY WITH THE
REQUIREMENTS OF SECTIONS 4.1(A)(IV), (V), (XI) AND (XVIII) WITH RESPECT THERETO;
AND

 

(VI)          WITHIN 60 DAYS AFTER SUCH ACQUISITION, DELIVER TO THE
ADMINISTRATIVE AGENT, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT IN ITS SOLE
DISCRETION, A SIGNED COPY OF ONE OR MORE OPINIONS, IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT, ADDRESSED TO THE
ADMINISTRATIVE AGENT AND THE OTHER SECURED PARTIES, OF COUNSEL FOR THE LOAN
PARTIES REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AS TO THE MATTERS
CONTAINED IN CLAUSES (III) AND (IV) ABOVE AND AS TO SUCH OTHER MATTERS SET FORTH
ON EXHIBIT I ATTACHED HERETO AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUEST.

 

(C)           AT ANY TIME UPON REQUEST OF THE ADMINISTRATIVE AGENT, THE
BORROWERS SHALL PROMPTLY EXECUTE AND DELIVER ANY AND ALL FURTHER INSTRUMENTS AND
DOCUMENTS AND TAKE ALL SUCH OTHER ACTION AS THE ADMINISTRATIVE AGENT MAY
REASONABLY DEEM NECESSARY OR DESIRABLE IN OBTAINING THE FULL BENEFITS OF, OR (AS
APPLICABLE) IN PERFECTING AND PRESERVING THE ENCUMBRANCES OF, THE SECURITY
DOCUMENTS.

 

6.13         INTEREST RATE PROTECTION.  THE BORROWERS SHALL OBTAIN ON OR BEFORE
THE TENTH (10) BUSINESS DAY AFTER THE CLOSING DATE, AND MAINTAIN IN EFFECT AT
ALL TIMES UNTIL THE THIRD ANNIVERSARY OF THE CLOSING DATE, SWAP AGREEMENTS
BETWEEN THEMSELVES AND A SWAP BANK WITH RESPECT TO NOT LESS THAN FIFTY PERCENT
(50.00%) OF THE TERM LOANS OUTSTANDING UNDER THE TERM FACILITY.

 

6.14         CASH ACCOUNTS.  AS PROMPTLY AS REASONABLY PRACTICABLE AFTER THE
CLOSING DATE THE BORROWERS WILL ESTABLISH AND MAINTAIN, AND CAUSE EACH OF THE
OTHER LOAN PARTIES TO MAINTAIN, THEIR PRIMARY DEPOSITORY AND DISBURSEMENT
ACCOUNTS AND THEIR TREASURY MANAGEMENT RELATIONSHIPS WITH WELLS FARGO PURSUANT
TO A SECURED CASH MANAGEMENT AGREEMENT, EXCEPT FOR SECONDARY DEPOSITORY ACCOUNTS
WITH ANOTHER COMMERCIAL BANK LOCATED IN THE UNITED STATES THAT HAS ENTERED INTO
A DEPOSIT ACCOUNT CONTROL AGREEMENT IN FORM REASONABLY ACCEPTABLE TO THE
ADMINISTRATIVE AGENT.

 

6.15         POST-CLOSING DELIVERIES.  BECAUSE OF THE SHORT PERIOD OF TIME
BETWEEN THE ISSUANCE OF THE FINAL ORDER OF THE BANKRUPTCY COURT APPROVING THE
ACQUISITION AND THE DATE MANDATED BY THE BANKRUPTCY COURT THAT THE ACQUISITION
SHALL CLOSE, THE BORROWERS REPRESENT, AND THE ADMINISTRATIVE AGENT ACKNOWLEDGES,
THAT THE BORROWERS CANNOT DELIVER BY THE CLOSING DATE (A) THE FEE PROPERTY
SECURITY DOCUMENTS AND THE RELATED TITLE POLICIES, OPINIONS OF LOCAL COUNSEL AND
OTHER DOCUMENTS REFERRED TO IN CLAUSES (V), (XI) AND (XVIII) OF
SECTION 4.1(A) HEREOF WITH RESPECT TO THE FEE PROPERTIES LISTED ON SCHEDULE 6.15
ATTACHED HERETO, (B) THE OTHER ITEMS LISTED ON SCHEDULE 6.15 ATTACHED HERETO AND
(C) ANY OTHER DOCUMENTS, INSTRUMENTS OR DELIVERIES REASONABLY REQUESTED BY THE
ADMINISTRATIVE AGENT IN CONNECTION WITH THE FOREGOING.  ACCORDINGLY, THE
BORROWERS COVENANT AND AGREE THAT THEY SHALL DELIVER SUCH FEE PROPERTY SECURITY
DOCUMENTS AND RELATED TITLE POLICIES, LEGAL OPINIONS AND OTHER DOCUMENTS AND
OTHER ITEMS ON OR BEFORE THE DATE SPECIFIED ON SCHEDULE 6.15.

 

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SECTION VII

 

FINANCIAL COVENANTS

 

The Borrowers covenant that so long as any Loan, Letter of Credit or other
Obligation (other than contingent indemnification obligations) remains
outstanding or the Lenders or the LC Issuer have any obligation to make any Loan
or issue any Letter of Credit hereunder:

 

7.1           TOTAL LEASE ADJUSTED LEVERAGE RATIO.  THE BORROWERS WILL NOT
PERMIT THE TOTAL LEASE ADJUSTED LEVERAGE RATIO (A) AS OF THE END OF FISCAL YEAR
2009 (TAKEN AS A SINGLE FISCAL PERIOD) TO BE GREATER THAN 5.00:1.00, AND (B) AS
OF THE END OF EACH MEASUREMENT PERIOD ENDING AT THE END OF EACH FISCAL QUARTER
ENDING THEREAFTER TO BE GREATER THAN 5.00:1.00.

 

7.2           CONSOLIDATED PRE-DISTRIBUTION FIXED CHARGE COVERAGE RATIO.

 

(A)           THE BORROWERS WILL NOT PERMIT THE CONSOLIDATED PRE-DISTRIBUTION
FIXED CHARGE COVERAGE RATIO AS OF THE END OF ANY PERIOD SPECIFIED BELOW TO BE
LESS THAN THE RATIO SET FORTH BELOW OPPOSITE EACH SUCH PERIOD:

 

Period

 

Minimum Consolidated
Fixed Pre-Distribution
Charge Coverage Ratio

 

 

 

1st Fiscal Quarter 2009

 

1.20:1.00

1st and 2nd Fiscal Quarters 2009 (taken as a single period)

 

1.20:1.00

1st, 2nd and 3rd Fiscal Quarters 2009 (taken as a single period)

 

1.20:1.00

Fiscal Year 2009 (taken as a single period)

 

1.20:1.00

 

(B)           THE BORROWERS WILL NOT PERMIT THE CONSOLIDATED PRE-DISTRIBUTION
FIXED CHARGE COVERAGE RATIO TO BE LESS THAN 1.20:1.00 FOR EACH MEASUREMENT
PERIOD ENDING AT THE END OF EACH FISCAL QUARTER IN THE FISCAL YEAR 2010 AND IN
EACH FISCAL YEAR THEREAFTER.

 

7.3           CONSOLIDATED POST-DISTRIBUTION FIXED CHARGE COVERAGE RATIO.

 

(A)           THE BORROWERS WILL NOT PERMIT THE CONSOLIDATED POST-DISTRIBUTION
FIXED CHARGE COVERAGE RATIO AS OF THE END OF ANY PERIOD SPECIFIED BELOW TO BE
LESS THAN THE RATIO SET FORTH BELOW OPPOSITE EACH SUCH PERIOD:

 

Period

 

Minimum Consolidated
Fixed Post-Distribution
Charge Coverage Ratio

 

 

 

1st Fiscal Quarter 2009

 

1.05:1.00

1st and 2nd Fiscal Quarters 2009 (taken as a single period)

 

0.90:1.00

1st, 2nd and 3rd Fiscal Quarters 2009 (taken as a single period)

 

0.95:1.00

Fiscal Year 2009 (taken as a single period)

 

1.00:1.00

 

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(B)           THE BORROWERS WILL NOT PERMIT THE CONSOLIDATED POST-DISTRIBUTION
FIXED CHARGE COVERAGE RATIO TO BE LESS THAN 1.05:1.00 FOR EACH MEASUREMENT
PERIOD ENDING AT THE END OF EACH FISCAL QUARTER IN FISCAL YEAR 2010 AND IN EACH
FISCAL YEAR THEREAFTER.

 

7.4           CONSOLIDATED EBITDA.  THE BORROWERS WILL NOT PERMIT THE
CONSOLIDATED EBITDA FOR EACH FISCAL QUARTER (TAKEN AS A SEPARATE FISCAL PERIOD)
ENDING DURING FISCAL YEAR 2009 TO BE LESS THAN THE AMOUNT SET FORTH BELOW
OPPOSITE EACH SUCH FISCAL QUARTER:

 

Fiscal Quarter

 

Minimum Consolidated
EBITDA

 

 

 

 

 

Q1 2009

 

$

2,300,000

 

Q2 2009

 

$

1,750,000

 

Q3 2009

 

$

1,300,000

 

Q4 2009

 

$

1,400,000

 

 

7.5           GROWTH CAPITAL EXPENDITURES.  THE BORROWERS AND THEIR SUBSIDIARIES
WILL NOT MAKE OR COMMIT TO MAKE (BY ENTERING INTO A LEASE OR OTHER AGREEMENT)
ANY GROWTH CAPITAL EXPENDITURES DURING ANY FISCAL YEAR IN EXCESS OF $2,000,000
IN THE AGGREGATE.

 

SECTION VIII

 

NEGATIVE COVENANTS

 

The Borrowers covenant that so long as any Loan, Letter of Credit or other
Obligation, remains outstanding or the Lenders or the LC Issuer have any
obligation to make any Loan or to issue any Letter of Credit hereunder:

 

8.1           INDEBTEDNESS.  NEITHER OF THE BORROWERS NOR ANY OF THEIR
SUBSIDIARIES SHALL CREATE, INCUR, ASSUME, GUARANTEE OR BE OR REMAIN LIABLE WITH
RESPECT TO ANY INDEBTEDNESS OTHER THAN THE FOLLOWING:

 

(A)           OBLIGATIONS;

 

(B)           INDEBTEDNESS FOR TAXES, ASSESSMENTS OR GOVERNMENTAL CHARGES TO THE
EXTENT THAT PAYMENT THEREFOR SHALL AT THE TIME NOT BE REQUIRED TO BE MADE IN
ACCORDANCE WITH SECTION 6.4;

 

(C)           CURRENT LIABILITIES ON OPEN ACCOUNT FOR THE PURCHASE PRICE OF
SERVICES, MATERIALS AND SUPPLIES INCURRED BY THE BORROWERS IN THE ORDINARY
COURSE OF BUSINESS (NOT AS A RESULT OF BORROWING), SO LONG AS ALL OF SUCH OPEN
ACCOUNT CURRENT LIABILITIES SHALL BE PROMPTLY PAID AND DISCHARGED WHEN DUE OR IN
CONFORMITY WITH CUSTOMARY TRADE TERMS AND PRACTICES, EXCEPT FOR

 

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ANY SUCH OPEN ACCOUNT INDEBTEDNESS WHICH IS BEING CONTESTED IN GOOD FAITH BY THE
BORROWERS, AS TO WHICH ADEQUATE RESERVES REQUIRED BY GAAP HAVE BEEN ESTABLISHED
AND ARE BEING MAINTAINED AND AS TO WHICH NO ENCUMBRANCE HAS BEEN PLACED ON ANY
PROPERTY OF THE BORROWERS OR ANY OF THEIR SUBSIDIARIES (OTHER THAN PERMITTED
ENCUMBRANCES);

 

(D)           GUARANTEES PERMITTED UNDER SECTION 8.1(H) HEREOF;

 

(E)           INDEBTEDNESS OF THE BORROWERS EXISTING ON THE DATE OF THIS
AGREEMENT AND SET FORTH ON SCHEDULE 8.1(E);

 

(F)            INDEBTEDNESS OF ANY BORROWER OR SUBSIDIARY TO ANOTHER BORROWER OR
SUBSIDIARY;

 

(G)           SUBORDINATED DEBT;

 

(H)           INDEBTEDNESS (OF A TYPE OF DESCRIBED IN SUBCLAUSES (A), (D), (E),
(F) OR (H) OF THE TERM INDEBTEDNESS BUT NOT OTHERWISE INCLUDED IN CLAUSES
(A) THROUGH (G) OF THIS SECTION 8.1) INCURRED HEREAFTER IN THE ORDINARY COURSE
OF BUSINESS; PROVIDED THAT SUCH INDEBTEDNESS DOES NOT EXCEED $250,000 IN THE
AGGREGATE AT ANY TIME OUTSTANDING; AND

 

(I)            INDEBTEDNESS OF PARENT CONSISTING OF DECLARED, BUT UNPAID,
DIVIDENDS ON ITS COMMON STOCK, OR AUTHORIZED REPURCHASES OF ITS COMMON STOCK, TO
THE EXTENT PERMITTED UNDER SECTION 8.6(D).

 

8.2           CONTINGENT LIABILITIES.  NEITHER OF THE BORROWERS NOR ANY OF THEIR
SUBSIDIARIES SHALL CREATE, INCUR, ASSUME, GUARANTEE OR BE OR REMAIN LIABLE WITH
RESPECT TO ANY GUARANTEES OTHER THAN (I) SUBSIDIARY GUARANTEES AND
(II) GUARANTEES RESULTING FROM THE ENDORSEMENT OF NEGOTIABLE INSTRUMENTS FOR
DEPOSIT OR COLLECTION IN THE ORDINARY COURSE OF BUSINESS.

 

8.3           ENCUMBRANCES.  NEITHER OF THE BORROWERS NOR ANY OF THEIR
SUBSIDIARIES SHALL CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY MORTGAGE,
PLEDGE, SECURITY INTEREST, LIEN OR OTHER CHARGE OR ENCUMBRANCE OF ANY KIND,
INCLUDING THE LIEN OR RETAINED SECURITY TITLE OF A CONDITIONAL VENDOR UPON OR
WITH RESPECT TO ANY OF ITS PROPERTY OR ASSETS (“ENCUMBRANCES”), OR ASSIGN OR
OTHERWISE CONVEY ANY RIGHT TO RECEIVE INCOME, INCLUDING THE SALE OR DISCOUNT OF
ACCOUNTS RECEIVABLE WITH OR WITHOUT RECOURSE, EXCEPT THE FOLLOWING (“PERMITTED
ENCUMBRANCES”):

 

(A)           ENCUMBRANCES CREATED UNDER THE SECURITY DOCUMENTS;

 

(B)           LIENS FOR TAXES, FEES, ASSESSMENTS AND OTHER GOVERNMENTAL CHARGES
TO THE EXTENT THAT PAYMENT OF THE SAME MAY BE POSTPONED OR IS NOT REQUIRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.4;

 

(C)           LANDLORDS’ AND LESSORS’ LIENS IN RESPECT OF RENT NOT IN DEFAULT;
LIENS IN RESPECT OF PLEDGES OR DEPOSITS MADE IN THE ORDINARY COURSE OF BUSINESS
IN COMPLIANCE WITH WORKMEN’S COMPENSATION, UNEMPLOYMENT INSURANCE, SOCIAL
SECURITY LAWS, OR SIMILAR LEGISLATION (OTHER THAN ERISA) OR IN CONNECTION WITH
APPEAL AND SIMILAR BONDS INCIDENTAL TO LITIGATION; MECHANICS’, WAREHOUSEMAN’S,
LABORERS’ AND MATERIALMEN’S AND SIMILAR LIENS, IF THE OBLIGATIONS SECURED BY
SUCH LIENS ARE NOT THEN DELINQUENT FOR MORE THAN 30 DAYS OR ARE BEING CONTESTED
IN

 

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GOOD FAITH BY APPROPRIATE PROCEEDINGS AND WITH RESPECT TO WHICH ADEQUATE
RESERVES HAVE BEEN ESTABLISHED AND ARE BEING MAINTAINED IN ACCORDANCE WITH GAAP;
LIENS SECURING THE PERFORMANCE OF BIDS, TENDERS, CONTRACTS (OTHER THAN FOR THE
PAYMENT OF MONEY); AND LIENS SECURING STATUTORY OBLIGATIONS OR SURETY,
INDEMNITY, PERFORMANCE, OR OTHER SIMILAR BONDS INCIDENTAL TO THE CONDUCT OF THE
BORROWERS’ OR ANY OF THEIR SUBSIDIARIES’ BUSINESS IN THE ORDINARY COURSE AND
THAT DO NOT IN THE AGGREGATE MATERIALLY DETRACT FROM THE VALUE OF THEIR PROPERTY
OR MATERIALLY IMPAIR THE USE THEREOF IN THE OPERATION OF THEIR BUSINESS;

 

(D)           JUDGMENT LIENS SECURING JUDGMENTS THAT (I) ARE FULLY COVERED BY
INSURANCE, AND (II) SHALL NOT HAVE BEEN IN EXISTENCE FOR A PERIOD LONGER THAN 45
DAYS AFTER THE CREATION THEREOF OR, IF A STAY OF EXECUTION SHALL HAVE BEEN
OBTAINED, FOR A PERIOD LONGER THAN 10 DAYS AFTER THE EXPIRATION OF SUCH STAY;

 

(E)           RIGHTS OF LESSORS UNDER CAPITALIZED LEASES, TO THE EXTENT SUCH
CAPITALIZED LEASES ARE PERMITTED HEREUNDER;

 

(F)            EASEMENTS, RIGHTS OF WAY, RESTRICTIONS AND OTHER SIMILAR CHARGES
OR ENCUMBRANCES RELATING TO REAL PROPERTY AND NOT INTERFERING IN A MATERIAL WAY
WITH THE ORDINARY CONDUCT OF THE BORROWERS’ BUSINESS;

 

(G)           ENCUMBRANCES CONSTITUTING A RENEWAL, EXTENSION OR REPLACEMENT OF
ANY PERMITTED ENCUMBRANCE IF OTHERWISE PERMITTED HEREBY AND NOT IN CONFLICT WITH
THE TERMS HEREOF; AND

 

(H)           ENCUMBRANCES EXISTING ON THE DATE OF THIS AGREEMENT AND SET FORTH
ON SCHEDULE 8.3(H).

 

8.4           MERGER; DISPOSITIONS; LIQUIDATION.

 

(A)           THE BORROWERS SHALL NOT, AND SHALL NOT PERMIT ANY SUBSIDIARY TO,
MERGE OR CONSOLIDATE INTO OR WITH ANY OTHER PERSON OR ENTITY OR LIQUIDATE OR
DISSOLVE, OTHER THAN A MERGER OF A SUBSIDIARY INTO ANOTHER SUBSIDIARY OR INTO A
BORROWER (OR A LIQUIDATION OF A SUBSIDIARY INTO ANOTHER SUBSIDIARY OR INTO A
BORROWER UNDER SECTION 332 OF THE CODE), PROVIDED THAT BOTH IMMEDIATELY BEFORE
AND IMMEDIATELY AFTER ANY SUCH MERGER, NO DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING.

 

(B)           THE BORROWERS SHALL NOT, AND SHALL NOT PERMIT ANY SUBSIDIARY TO,
DISPOSE OF ANY ASSETS OR PROPERTIES, EXCEPT FOR SALES OF QUALIFIED INVESTMENTS,
INVENTORY AND OBSOLETE OR WORN OUT FURNITURE, FIXTURES AND EQUIPMENT, IN EACH
CASE IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH PAST PRACTICES.

 

8.5           SUBSIDIARIES.  THE BORROWERS SHALL NOT PERMIT ANY OF THEIR
SUBSIDIARIES TO ISSUE ANY ADDITIONAL SHARES OF THEIR CAPITAL STOCK OR OTHER
EQUITY SECURITIES, ANY OPTIONS THEREFOR OR ANY SECURITIES CONVERTIBLE THERETO
OTHER THAN TO BORROWERS OR ANY OF THEIR SUBSIDIARIES.  NEITHER OF THE BORROWERS
NOR ANY OF THEIR SUBSIDIARIES SHALL SELL, TRANSFER OR OTHERWISE DISPOSE OF ANY
OF THE CAPITAL STOCK OR OTHER EQUITY SECURITIES OF A SUBSIDIARY, EXCEPT TO
BORROWERS OR ANY OF THEIR SUBSIDIARIES.  THE BORROWERS SHALL NOT, AND SHALL NOT
PERMIT ANY OF THEIR SUBSIDIARIES TO, CREATE OR

 

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SUFFER TO EXIST ANY CONSENSUAL ENCUMBRANCES OR RESTRICTIONS ON THE ABILITY OF
ANY SUBSIDIARY TO PAY DIVIDENDS OR MAKE ANY OTHER DISTRIBUTIONS ON ITS EQUITY
INTERESTS HELD BY THE BORROWERS OR PAY ANY INDEBTEDNESS OWED TO THE BORROWERS OR
ANY SUBSIDIARY OF THE BORROWERS OR TO MAKE LOANS OR ADVANCES OR TRANSFER ANY OF
ITS ASSETS TO THE BORROWERS OR ANY OTHER SUBSIDIARY OF THE BORROWERS.

 

8.6           RESTRICTED PAYMENTS.  THE BORROWERS WILL NOT, AND WILL NOT PERMIT
ANY OF THEIR SUBSIDIARIES TO, DECLARE OR MAKE, OR AGREE TO PAY OR MAKE, DIRECTLY
OR INDIRECTLY, ANY RESTRICTED PAYMENT, EXCEPT

 

(A)           PARENT MAY DECLARE AND PAY DIVIDENDS IN COMMON STOCK TO ITS EQUITY
HOLDERS;

 

(B)           PARENT MAY DECLARE AND PAY DIVIDENDS ON THE PARENT’S COMMON STOCK
IN CASH TO ITS EQUITY HOLDERS OR PURCHASE ITS COMMON STOCK FROM ITS EQUITY
HOLDERS, PROVIDED THAT THE TOTAL AMOUNT OF SUCH DIVIDENDS AND THE AMOUNT PAID IN
CONNECTION WITH SUCH PURCHASES SHALL NOT EXCEED $1,900,000 IN ANY FISCAL YEAR,
PROVIDED, FURTHER, THAT (I) BOTH AT THE TIME ANY SUCH CASH DIVIDEND IS DECLARED
AND PAID AND ANY SUCH PURCHASE IS AUTHORIZED AND MADE, AND AFTER GIVING EFFECT
TO THE PAYMENT IN CONNECTION THEREWITH, NO DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING AND (II) TEN BUSINESS DAYS PRIOR TO ANY SUCH PAYMENT THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE OF A RESPONSIBLE OFFICER
OF PARENT CERTIFYING ON A PRO FORMA BASIS THAT THE CONDITIONS SET FORTH IN
CLAUSE (I) HAVE BEEN SATISFIED WITH RESPECT TO SUCH PAYMENT;

 

(C)           SUBSIDIARIES OF THE BORROWERS MAY DECLARE AND PAY DIVIDENDS TO THE
BORROWERS;

 

(D)           COMPENSATION, EXPENSE REIMBURSEMENTS AND PERQUISITES PAID TO
EMPLOYEES, OFFICERS AND DIRECTORS IN THE ORDINARY COURSE OF BUSINESS AND
CONSISTENT WITH PAST PRACTICES; AND

 

(E)           PAYMENTS WITH RESPECT TO JUNIOR SUBORDINATED DEBT TO THE EXTENT
PERMITTED UNDER SECTION 8.11 BELOW.

 

8.7           INVESTMENTS; PURCHASES OF ASSETS.  NEITHER OF THE BORROWERS NOR
ANY OF THEIR SUBSIDIARIES SHALL MAKE OR MAINTAIN ANY INVESTMENTS OR PURCHASE OR
OTHERWISE ACQUIRE ANY MATERIAL AMOUNT OF ASSETS OTHER THAN:

 

(A)           INVESTMENTS EXISTING ON THE DATE HEREOF IN SUBSIDIARIES AS
DESCRIBED ON SCHEDULE 5.8(E);

 

(B)           QUALIFIED INVESTMENTS;

 

(C)           PURCHASES OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS;

 

(D)           NORMAL TRADE CREDIT EXTENDED IN THE ORDINARY COURSE OF BUSINESS
AND CONSISTENT WITH PAST PRACTICE; AND

 

(E)           INDEBTEDNESS PERMITTED BY SECTION 8.1(F).

 

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8.8           ERISA COMPLIANCE.  NEITHER OF THE BORROWERSS NOR ANY OF THEIR
ERISA AFFILIATES NOR ANY PLAN SHALL (I) ENGAGE IN ANY PROHIBITED ACQUISITION
WHICH WOULD HAVE A MATERIAL ADVERSE EFFECT ON THE BORROWERS AND THEIR
SUBSIDIARIES, (II) INCUR ANY “ACCUMULATED FUNDING DEFICIENCY” (WITHIN THE
MEANING OF SECTION 412(A) OF THE CODE AND SECTION 302 OF ERISA) WHETHER OR NOT
WAIVED, (III) PERMIT TO EXIST ANY MATERIAL AMOUNT OF “UNFUNDED BENEFIT
LIABILITIES” (WITHIN THE MEANING OF SECTION 4001(A)(18) OF ERISA, (IV) TERMINATE
ANY PENSION PLAN IN A MANNER WHICH COULD RESULT IN THE IMPOSITION OF A LIEN ON
ANY PROPERTY OF THE BORROWERS OR ANY OF ITS SUBSIDIARIES, (V) FAIL TO MAKE ANY
REQUIRED CONTRIBUTION TO ANY MULTIEMPLOYER PLAN OR (VI) COMPLETELY OR PARTIALLY
WITHDRAW FROM A MULTIEMPLOYER PLAN IF SUCH COMPLETE OR PARTIAL WITHDRAWAL WILL
RESULT IN ANY MATERIAL WITHDRAWAL LIABILITY UNDER TITLE IV OF ERISA.

 

8.9           TRANSACTIONS WITH AFFILIATES.  THE BORROWERS WILL NOT, AND WILL
NOT PERMIT ANY OF THEIR SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY, ENTER INTO ANY
PURCHASE, SALE, LEASE OR OTHER TRANSACTION WITH ANY AFFILIATE EXCEPT
(I) TRANSACTIONS IN THE ORDINARY COURSE OF BUSINESS ON TERMS THAT ARE NO LESS
FAVORABLE TO THE BORROWERS OR THEIR SUBSIDIARIES THAN THOSE WHICH MIGHT BE
OBTAINED AT THE TIME IN A COMPARABLE ARM’S-LENGTH TRANSACTION WITH ANY PERSON
WHO IS NOT AN AFFILIATE, (II) TRANSACTIONS BETWEEN OR AMONG THE BORROWERS AND
THEIR SUBSIDIARIES OR BETWEEN SUBSIDIARIES, AND (III) EMPLOYMENT CONTRACTS WITH
SENIOR MANAGEMENT OF THE BORROWERS ENTERED INTO IN THE ORDINARY COURSE OF
BUSINESS AND CONSISTENT WITH PAST PRACTICES.  NOTWITHSTANDING THE FOREGOING, THE
BORROWERS WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO, DIRECTLY OR
INDIRECTLY, PAY ANY MANAGEMENT, CONSULTING, OVERHEAD, INDEMNITY, GUARANTEE OR
OTHER SIMILAR FEE OR CHARGE TO ANY AFFILIATE (OTHER THAN A BORROWER).

 

8.10         FISCAL YEAR.  THE BORROWERS AND THEIR SUBSIDIARIES SHALL NOT CHANGE
THEIR FISCAL YEAR WITHOUT THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT,
WHICH WILL NOT BE UNREASONABLY WITHHELD.

 

8.11         PAYMENTS ON JUNIOR SUBORDINATED DEBT.  THE BORROWERS SHALL NOT MAKE
ANY PAYMENT OR PREPAYMENT OF PRINCIPAL OF OR INTEREST ON, OR ANY OTHER PAYMENT
IN RESPECT OF, THE JUNIOR SUBORDINATED DEBT, EXCEPT TO THE EXTENT PERMITTED BY
THE SUBORDINATION AGREEMENT.

 

SECTION IX

 

DEFAULTS

 

9.1           EVENTS OF DEFAULT.  ANY OF THE FOLLOWING SHALL CONSTITUTE AN EVENT
OF DEFAULT:

 

(A)           NON-PAYMENT.  ANY BORROWER OR ANY OTHER LOAN PARTY FAILS TO
(I) PAY WHEN AND AS REQUIRED TO BE PAID HEREIN, ANY AMOUNT OF PRINCIPAL OF ANY
LOAN OR ANY LC DISBURSEMENT OR DEPOSIT ANY FUNDS AS CASH COLLATERAL IN RESPECT
OF THE MAXIMUM DRAWING AMOUNT, OR (II) PAY WITHIN THREE (3) BUSINESS DAYS AFTER
THE SAME BECOMES DUE, ANY INTEREST ON ANY LOAN OR ON ANY LC DISBURSEMENT, ANY
FEE DUE HEREUNDER OR ANY OTHER AMOUNT PAYABLE HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT; OR

 

(B)           SPECIFIC COVENANTS.  (I) THE BORROWERS FAIL TO PERFORM OR OBSERVE
ANY TERM, COVENANT OR AGREEMENT CONTAINED IN ANY OF SECTIONS 6.1(A), (B), (C),
(D), (H) OR (I), SECTIONS 6.2(B), 6.3, 6.5, 6.6, 6.7, 6.8, 6.9, 6.12, 6.13 OR
6.14 OR SECTION VII OR VIII, (II) ANY OF THE

 

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SUBSIDIARY GUARANTORS FAILS TO PERFORM OR OBSERVE ANY TERM, COVENANT OR
AGREEMENT CONTAINED IN ANY SUBSIDIARY GUARANTY, (III) ANY OF THE LOAN PARTIES
WHICH IS A PARTY TO THE SECURITY AGREEMENT FAILS TO PERFORM OR OBSERVE ANY TERM,
COVENANT OR AGREEMENT CONTAINED IN SECTIONS 3 OR 4 OF THE SECURITY AGREEMENT,
(IV) ANY OF THE LOAN PARTIES WHICH IS A PARTY TO THE PLEDGE AGREEMENT FAILS TO
PERFORM OR OBSERVE ANY TERM, COVENANT OR AGREEMENT CONTAINED IN SECTIONS 4, 6 OR
7 OF THE PLEDGE AGREEMENT OR (V) ANY OF THE LOAN PARTIES WHICH IS A PARTY TO A
FEE PROPERTY SECURITY AGREEMENT THAT IS A MORTGAGE OR DEED OF TRUST FAILS TO
OBSERVE ANY PROHIBITION ON ASSIGNMENTS OF RENTS (AS DEFINED THEREIN) CONTAINED
THEREIN; OR

 

(C)           OTHER DEFAULTS.  ANY LOAN PARTY FAILS TO PERFORM OR OBSERVE ANY
OTHER COVENANT OR AGREEMENT (NOT SPECIFIED IN SECTION 9.1(A) OR 9.1(B) ABOVE)
CONTAINED IN ANY LOAN DOCUMENT ON ITS PART TO BE PERFORMED OR OBSERVED AND SUCH
FAILURE CONTINUES FOR 30 DAYS; OR

 

(D)           REPRESENTATIONS AND WARRANTIES.  ANY REPRESENTATION, WARRANTY,
CERTIFICATION OR STATEMENT OF FACT MADE OR DEEMED MADE BY OR ON BEHALF OF THE
BORROWERS OR ANY OTHER LOAN PARTY HEREIN, IN ANY OTHER LOAN DOCUMENT OR IN ANY
DOCUMENT DELIVERED IN CONNECTION HEREWITH OR THEREWITH SHALL BE MATERIALLY
INCORRECT OR MISLEADING WHEN MADE OR DEEMED MADE; OR

 

(E)           CROSS-DEFAULT.  (I) ANY LOAN PARTY OR ANY SUBSIDIARY THEREOF
(A) FAILS TO MAKE ANY PAYMENT WHEN DUE (WHETHER BY SCHEDULED MATURITY, REQUIRED
PREPAYMENT, ACCELERATION, DEMAND, OR OTHERWISE) IN RESPECT OF ANY INDEBTEDNESS
OR GUARANTEE (OTHER THAN INDEBTEDNESS HEREUNDER AND INDEBTEDNESS UNDER SWAP
AGREEMENTS) HAVING AN AGGREGATE PRINCIPAL AMOUNT (INCLUDING UNDRAWN COMMITTED OR
AVAILABLE AMOUNTS AND INCLUDING AMOUNTS OWING TO ALL CREDITORS UNDER ANY
COMBINED OR SYNDICATED CREDIT ARRANGEMENT) OF MORE THAN $500,000, OR (B) FAILS
TO OBSERVE OR PERFORM ANY OTHER AGREEMENT OR CONDITION RELATING TO ANY SUCH
INDEBTEDNESS OR GUARANTEE OF MORE THAN $500,000 OR CONTAINED IN ANY INSTRUMENT
OR AGREEMENT EVIDENCING, SECURING OR RELATING THERETO, OR ANY OTHER EVENT
OCCURS, THE EFFECT OF WHICH DEFAULT OR OTHER EVENT IS TO CAUSE, OR TO PERMIT THE
HOLDER OR HOLDERS OF SUCH INDEBTEDNESS OR THE BENEFICIARY OR BENEFICIARIES OF
SUCH GUARANTEE (OR A TRUSTEE OR AGENT ON BEHALF OF SUCH HOLDER OR HOLDERS OR
BENEFICIARY OR BENEFICIARIES) TO CAUSE, WITH THE GIVING OF NOTICE IF REQUIRED,
SUCH INDEBTEDNESS TO BE DEMANDED OR TO BECOME DUE OR TO BE REPURCHASED, PREPAID,
DEFEASED OR REDEEMED (AUTOMATICALLY OR OTHERWISE), OR AN OFFER TO REPURCHASE,
PREPAY, DEFEASE OR REDEEM SUCH INDEBTEDNESS TO BE MADE, PRIOR TO ITS STATED
MATURITY, OR SUCH GUARANTEE TO BECOME PAYABLE OR CASH COLLATERAL IN RESPECT
THEREOF TO BE DEMANDED; (II) THE BORROWERS OR ANY LOAN PARTY SHALL FAIL TO PAY
WHEN DUE (AFTER ANY APPLICABLE PERIOD OF GRACE) ANY AMOUNT PAYABLE UNDER ONE OR
MORE AGREEMENTS FOR THE USE OF REAL OR PERSONAL PROPERTY REQUIRING AGGREGATE
PAYMENTS IN EXCESS OF $25,000 IN ANY TWELVE MONTH PERIOD, OR FAIL TO OBSERVE OR
PERFORM ANY TERM, COVENANT OR AGREEMENT OR RELATING TO SUCH AGREEMENT(S) FOR THE
USE OF REAL OR PERSONAL PROPERTY, AND THE RESULT OF ANY SUCH FAILURE IS TO
PERMIT ANY OTHER PARTY TO SUCH AGREEMENT(S) TO EXERCISE REMEDIES UNDER OR
TERMINATE SUCH AGREEMENT(S) PRIOR TO THE EXPIRATION DATE THEREOF; OR (III) THERE
OCCURS UNDER ANY SWAP AGREEMENT AN EARLY TERMINATION DATE (AS DEFINED IN SUCH
SWAP AGREEMENT) RESULTING FROM (A) ANY EVENT OF DEFAULT UNDER SUCH SWAP
AGREEMENT AS TO WHICH A LOAN PARTY OR ANY SUBSIDIARY THEREOF IS THE DEFAULTING
PARTY (AS DEFINED IN SUCH SWAP AGREEMENT) OR (B) ANY TERMINATION EVENT (AS SO
DEFINED) UNDER SUCH SWAP AGREEMENT AS TO WHICH A LOAN PARTY OR ANY SUBSIDIARY
THEREOF IS AN AFFECTED PARTY (AS SO DEFINED).

 

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(F)            INSOLVENCY PROCEEDINGS, ETC.  ANY LOAN PARTY OR ANY SUBSIDIARY
THEREOF INSTITUTES OR CONSENTS TO THE INSTITUTION OF ANY PROCEEDING UNDER ANY
BANKRUPTCY, INSOLVENCY, REORGANIZATION, RECEIVERSHIP OR OTHER DEBTOR RELIEF LAW,
OR MAKES AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS; OR APPLIES FOR OR CONSENTS
TO THE APPOINTMENT OF ANY RECEIVER, TRUSTEE, CUSTODIAN, CONSERVATOR, LIQUIDATOR,
REHABILITATOR OR SIMILAR OFFICER FOR IT OR FOR ALL OR ANY MATERIAL PART OF ITS
PROPERTY; OR ANY RECEIVER, TRUSTEE, CUSTODIAN, CONSERVATOR, LIQUIDATOR,
REHABILITATOR OR SIMILAR OFFICER IS APPOINTED WITHOUT THE APPLICATION OR CONSENT
OF SUCH PERSON AND THE APPOINTMENT CONTINUES UNDISCHARGED OR UNSTAYED FOR 45
CALENDAR DAYS; OR ANY PROCEEDING UNDER ANY BANKRUPTCY, INSOLVENCY,
REORGANIZATION, RECEIVERSHIP OR OTHER DEBTOR RELIEF LAW RELATING TO ANY SUCH
PERSON OR TO ALL OR ANY MATERIAL PART OF ITS PROPERTY IS INSTITUTED WITHOUT THE
CONSENT OF SUCH PERSON AND CONTINUES UNDISMISSED OR UNSTAYED FOR 45 CALENDAR
DAYS, OR AN ORDER FOR RELIEF IS ENTERED IN ANY SUCH PROCEEDING; OR

 

(G)           INABILITY TO PAY DEBTS; ATTACHMENT.  (I) ANY LOAN PARTY OR ANY
SUBSIDIARY THEREOF BECOMES UNABLE OR ADMITS IN WRITING ITS INABILITY OR FAILS
GENERALLY TO PAY ITS DEBTS AS THEY BECOME DUE, OR (II) ANY WRIT OR WARRANT OF
ATTACHMENT OR EXECUTION OR SIMILAR PROCESS IS ISSUED OR LEVIED AGAINST ALL OR
ANY MATERIAL PART OF THE PROPERTY OF ANY SUCH PERSON AND IS NOT RELEASED,
VACATED OR FULLY BONDED WITHIN 30 DAYS AFTER ITS ISSUE OR LEVY; OR

 

(H)           JUDGMENTS.  THERE IS ENTERED AGAINST ANY LOAN PARTY OR ANY
SUBSIDIARY THEREOF (I) ONE OR MORE FINAL JUDGMENTS OR ORDERS FOR THE PAYMENT OF
MONEY IN AN AGGREGATE AMOUNT (AS TO ALL SUCH JUDGMENTS AND ORDERS) EXCEEDING
$250,000 (TO THE EXTENT NOT COVERED BY INDEPENDENT THIRD-PARTY INSURANCE AS TO
WHICH THE INSURER IS RATED AT LEAST “A” BY A.M. BEST COMPANY, HAS BEEN NOTIFIED
OF THE POTENTIAL CLAIM AND DOES NOT DISPUTE COVERAGE), OR (II) ANY ONE OR MORE
NON-MONETARY FINAL JUDGMENTS THAT HAVE, OR COULD REASONABLY BE EXPECTED TO HAVE,
INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT AND, IN EITHER CASE,
(A) ENFORCEMENT PROCEEDINGS ARE COMMENCED BY ANY CREDITOR UPON SUCH JUDGMENT OR
ORDER, OR (B) THERE IS A PERIOD OF 10 CONSECUTIVE DAYS WHILE SUCH JUDGMENT SHALL
NOT HAVE BEEN DISCHARGED DURING WHICH A STAY OF ENFORCEMENT OF SUCH JUDGMENT, BY
REASON OF A PENDING APPEAL OR OTHERWISE, IS NOT IN EFFECT; OR

 

(I)            ERISA.  (I) AN ERISA EVENT OCCURS WITH RESPECT TO A PENSION PLAN
OR MULTIEMPLOYER PLAN WHICH HAS RESULTED OR COULD REASONABLY BE EXPECTED TO
RESULT IN LIABILITY OF THE BORROWERS UNDER TITLE IV OF ERISA TO THE PENSION
PLAN, MULTIEMPLOYER PLAN OR THE PBGC; OR (II) ANY BORROWER OR ANY ERISA
AFFILIATE FAILS TO PAY WHEN DUE, AFTER THE EXPIRATION OF ANY APPLICABLE GRACE
PERIOD, ANY INSTALLMENT PAYMENT WITH RESPECT TO ITS WITHDRAWAL LIABILITY UNDER
SECTION 4201 OF ERISA UNDER A MULTIEMPLOYER PLAN; OR

 

(J)            INVALIDITY OF LOAN DOCUMENTS.  ANY MATERIAL PROVISION OF ANY LOAN
DOCUMENT, AT ANY TIME AFTER ITS EXECUTION AND DELIVERY AND FOR ANY REASON OTHER
THAN AS EXPRESSLY PERMITTED HEREUNDER OR THEREUNDER OR SATISFACTION IN FULL OF
ALL THE OBLIGATIONS, CEASES TO BE IN FULL FORCE AND EFFECT; OR ANY LOAN PARTY
CONTESTS IN ANY MANNER THE VALIDITY OR ENFORCEABILITY OF ANY PROVISION OF ANY
LOAN DOCUMENT; OR ANY LOAN PARTY DENIES THAT IT HAS ANY OR FURTHER LIABILITY OR
OBLIGATION UNDER ANY PROVISION OF ANY LOAN DOCUMENT, OR PURPORTS TO REVOKE,
TERMINATE OR RESCIND ANY PROVISION OF ANY LOAN DOCUMENT; OR

 

(K)           CHANGE OF CONTROL.  THERE OCCURS ANY CHANGE OF CONTROL; OR

 

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(L)            SECURITY DOCUMENTS.  ANY SECURITY DOCUMENT AFTER DELIVERY THEREOF
PURSUANT TO SECTION 4.1 OR 6.12 SHALL FOR ANY REASON (OTHER THAN PURSUANT TO THE
TERMS THEREOF OR SOLELY AS A RESULT OF ACTION OR INACTION OF THE SECURED PARTY
THEREUNDER) CEASE TO CREATE A VALID AND PERFECTED FIRST PRIORITY ENCUMBRANCE
(SUBJECT TO PERMITTED ENCUMBRANCES) ON THE COLLATERAL PURPORTED TO BE COVERED
THEREBY; OR

 

(M)          SUBORDINATION.  (I) THE SUBORDINATION PROVISIONS OF THE
SUBORDINATION AGREEMENT (THE “SUBORDINATION PROVISIONS”) SHALL, IN WHOLE OR IN
PART, TERMINATE, CEASE TO BE EFFECTIVE OR CEASE TO BE LEGALLY VALID, BINDING AND
ENFORCEABLE AGAINST ANY HOLDER OF THE SUBORDINATED DEBT; OR (II) THE BORROWERS
OR ANY OTHER LOAN PARTY SHALL, DIRECTLY OR INDIRECTLY, DISAVOW OR CONTEST IN ANY
MANNER (A) THE EFFECTIVENESS, VALIDITY OR ENFORCEABILITY OF ANY OF THE
SUBORDINATION PROVISIONS, (B) THAT THE SUBORDINATION PROVISIONS EXIST FOR THE
BENEFIT OF THE ADMINISTRATIVE AGENT, THE LENDERS AND THE L/C ISSUER OR (C) THAT
ALL PAYMENTS OF PRINCIPAL OF OR PREMIUM AND INTEREST ON THE SUBORDINATED DEBT,
OR REALIZED FROM THE LIQUIDATION OF ANY PROPERTY OF ANY LOAN PARTY, SHALL BE
SUBJECT TO ANY OF THE SUBORDINATION PROVISIONS.

 

9.2           REMEDIES UPON EVENT OF DEFAULT.  IF ANY EVENT OF DEFAULT OCCURS
AND IS CONTINUING, THE ADMINISTRATIVE AGENT MAY, OR AT THE REQUEST OF THE
MAJORITY LENDERS SHALL, TAKE ANY OR ALL OF THE FOLLOWING ACTIONS:

 

(A)           DECLARE THE COMMITMENT OF EACH LENDER TO MAKE LOANS AND ANY
OBLIGATION OF THE LC ISSUER TO ISSUE OR EXTEND ANY LETTER OF CREDIT TO BE
TERMINATED, WHEREUPON SUCH COMMITMENTS AND OBLIGATION SHALL BE TERMINATED;

 

(B)           DECLARE THE UNPAID PRINCIPAL AMOUNT OF ALL OUTSTANDING LOANS, ALL
INTEREST ACCRUED AND UNPAID THEREON, AND ALL OTHER AMOUNTS OWING OR PAYABLE
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT TO BE IMMEDIATELY DUE AND PAYABLE,
WITHOUT PRESENTMENT, DEMAND, PROTEST OR OTHER NOTICE OF ANY KIND, ALL OF WHICH
ARE HEREBY EXPRESSLY WAIVED BY THE BORROWERS;

 

(C)           REQUIRE THAT THE BORROWERS CASH COLLATERALIZE THE MAXIMUM DRAWING
AMOUNT; AND

 

(D)           EXERCISE ON BEHALF OF ITSELF, THE LENDERS AND THE LC ISSUER ALL
RIGHTS AND REMEDIES AVAILABLE TO IT, THE LENDERS AND THE LC ISSUER UNDER ANY OF
THE LOAN DOCUMENTS AND AT LAW;

 

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrowers under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the LC Issuer to issue or extend any Letter of Credit shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, and
the obligation of the Borrowers to Cash Collateralize the Maximum Drawing Amount
as aforesaid shall automatically become effective, in each case without further
act of the Administrative Agent or any Lender.

 

9.3           APPLICATION OF FUNDS.  AFTER THE EXERCISE OF REMEDIES PROVIDED FOR
IN SECTION 9.2 (OR AFTER THE LOANS HAVE AUTOMATICALLY BECOME IMMEDIATELY DUE AND
PAYABLE AND THE MAXIMUM

 

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DRAWING AMOUNT HAS AUTOMATICALLY BEEN REQUIRED TO BE CASH COLLATERALIZED AS SET
FORTH IN THE PROVISO TO SECTION 9.2), ANY AMOUNTS RECEIVED ON ACCOUNT OF THE
OBLIGATIONS SHALL BE APPLIED BY THE ADMINISTRATIVE AGENT IN THE FOLLOWING ORDER:

 

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

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the LC Issuer (including fees, charges
and disbursements of counsel to the respective Lenders and the LC Issuer,
including fees and time charges for attorneys who may be employees of any Lender
or the LC Issuer) and amounts payable under Sections 2.10, 2.12, 2.13, 2.14 and
2.15, ratably among them in proportion to the respective amounts described in
this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans, LC Disbursements and
other Obligations, ratably among the Lenders and the LC Issuer in proportion to
the respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, LC Disbursements and amounts owing under Eligible Swap
Agreements, ratably among the Lenders, the LC Issuer and the Swap Banks in
proportion to the respective amounts described in this clause Fourth held by
them;

 

Fifth, to the Administrative Agent for the account of the LC Issuer, to Cash
Collateralize the Maximum Drawing Amount;

 

Sixth , to payment of that portion of the Obligations constituting unpaid
amounts owing under Secured Cash Management Agreements, ratably among the Cash
Management Banks in proportion to the respective amounts described in this
clause Sixth held by them; and

 

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

 

Subject to Section 3.2, amounts used to Cash Collateralize the Maximum Drawing
Amount pursuant to clause Fifth above shall be applied to satisfy drawings under
the then outstanding Letters of Credit as they occur.  If any amount remains on
deposit as cash collateral after all Letters of Credit have either been fully
drawn or expired, such remaining amount shall be applied to the other
Obligations, if any, in the order set forth above.

 

9.4           REMEDIES CUMULATIVE.  NO REMEDY CONFERRED UPON THE ADMINISTRATIVE
AGENT, THE LC ISSUER AND THE LENDERS IN THE LOAN DOCUMENTS IS INTENDED TO BE
EXCLUSIVE OF ANY OTHER REMEDY, AND EACH AND EVERY REMEDY SHALL BE CUMULATIVE AND
SHALL BE AN ADDITION TO EVERY OTHER REMEDY GIVEN HEREUNDER OR NOW OR HEREAFTER
EXISTING AT LAW OR IN EQUITY OR BY STATUTE OR BY ANY

 

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OTHER PROVISION OF LAW.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING OR OF
ANY OF THE TERMS AND PROVISIONS OF ANY OF THE SECURITY DOCUMENTS, IF AND WHEN
THE ADMINISTRATIVE AGENT EXERCISES REMEDIES UNDER THE SECURITY DOCUMENTS WITH
RESPECT TO COLLATERAL, THE ADMINISTRATIVE AGENT MAY, IN ITS SOLE DISCRETION,
DETERMINE WHICH ITEMS AND TYPES OF COLLATERAL TO DISPOSE OF AND IN WHAT ORDER
AND MAY DISPOSE OF COLLATERAL IN ANY ORDER THE ADMINISTRATIVE AGENT SHALL SELECT
IN ITS SOLE DISCRETION, AND THE BORROWERS CONSENT TO THE FOREGOING AND WAIVE ALL
RIGHTS OF MARSHALLING WITH RESPECT TO ALL COLLATERAL.

 

SECTION X

 

ASSIGNMENT AND PARTICIPATION

 

10.1         SUCCESSORS AND ASSIGNS.

 

(A)           SUCCESSORS AND ASSIGNS GENERALLY.  THE PROVISIONS OF THIS
AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO
AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED HEREBY, EXCEPT THAT
NEITHER THE BORROWERS NOR ANY OTHER LOAN PARTY MAY ASSIGN OR OTHERWISE TRANSFER
ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF
THE ADMINISTRATIVE AGENT AND EACH LENDER AND NO LENDER MAY ASSIGN OR OTHERWISE
TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT (I) TO AN ASSIGNEE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 10.1(B), (II) BY WAY OF PARTICIPATION
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 10.1(D), OR (III) BY WAY OF PLEDGE
OR ASSIGNMENT OF A SECURITY INTEREST SUBJECT TO THE RESTRICTIONS OF
SECTION 10.1(F) (AND ANY OTHER ATTEMPTED ASSIGNMENT OR TRANSFER BY ANY PARTY
HERETO SHALL BE NULL AND VOID).  NOTHING IN THIS AGREEMENT, EXPRESSED OR
IMPLIED, SHALL BE CONSTRUED TO CONFER UPON ANY PERSON (OTHER THAN THE PARTIES
HERETO, THEIR RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED HEREBY, PARTICIPANTS
TO THE EXTENT PROVIDED IN SUBSECTION (D) OF THIS SECTION AND, TO THE EXTENT
EXPRESSLY CONTEMPLATED HEREBY, THE RELATED PARTIES OF EACH OF THE ADMINISTRATIVE
AGENT, THE LC ISSUER AND THE LENDERS) ANY LEGAL OR EQUITABLE RIGHT, REMEDY OR
CLAIM UNDER OR BY REASON OF THIS AGREEMENT.

 

(B)           ASSIGNMENTS BY LENDERS.  ANY LENDER MAY AT ANY TIME ASSIGN TO ONE
OR MORE ASSIGNEES ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT (INCLUDING ALL OR A PORTION OF ITS COMMITMENT(S) AND THE LOANS
(INCLUDING FOR PURPOSES OF THIS SECTION 10.1(B), PARTICIPATIONS IN THE MAXIMUM
DRAWING AMOUNT) AT THE TIME OWING TO IT); PROVIDED THAT ANY SUCH ASSIGNMENT
SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS:

 

(I)            MINIMUM AMOUNTS.

 

(A)          IN THE CASE OF AN ASSIGNMENT OF THE ENTIRE REMAINING AMOUNT OF THE
ASSIGNING LENDER’S COMMITMENT UNDER ANY FACILITY AND THE LOANS AT THE TIME OWING
TO IT UNDER SUCH FACILITY OR IN THE CASE OF AN ASSIGNMENT TO A LENDER, AN
AFFILIATE OF A LENDER OR AN APPROVED FUND, NO MINIMUM AMOUNT NEED BE ASSIGNED;
AND

 

(B)           IN ANY CASE NOT DESCRIBED IN SECTION 10.1(B)(I)(A), THE AGGREGATE
AMOUNT OF THE COMMITMENT (WHICH FOR THIS PURPOSE INCLUDES LOANS OUTSTANDING
THEREUNDER) OR, IF THE COMMITMENT IS NOT THEN IN EFFECT, THE PRINCIPAL
OUTSTANDING

 

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BALANCE OF THE LOANS OF THE ASSIGNING LENDER SUBJECT TO EACH SUCH ASSIGNMENT,
DETERMINED AS OF THE DATE THE ASSIGNMENT AND ASSUMPTION WITH RESPECT TO SUCH
ASSIGNMENT IS DELIVERED TO THE ADMINISTRATIVE AGENT OR, IF “TRADE DATE” IS
SPECIFIED IN THE ASSIGNMENT AND ASSUMPTION, AS OF THE TRADE DATE, SHALL NOT BE
LESS THAN $2,000,000, IN THE CASE OF ANY ASSIGNMENT IN RESPECT OF THE REVOLVING
CREDIT FACILITY, OR $2,000,000, IN THE CASE OF ANY ASSIGNMENT IN RESPECT OF THE
TERM FACILITY, 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); PROVIDED, HOWEVER,
THAT CONCURRENT ASSIGNMENTS TO MEMBERS OF AN ASSIGNEE GROUP AND CONCURRENT
ASSIGNMENTS FROM MEMBERS OF AN ASSIGNEE GROUP TO A SINGLE ELIGIBLE ASSIGNEE (OR
TO AN ELIGIBLE ASSIGNEE AND MEMBERS OF ITS ASSIGNEE GROUP) WILL BE TREATED AS A
SINGLE ASSIGNMENT FOR PURPOSES OF DETERMINING WHETHER SUCH MINIMUM AMOUNT HAS
BEEN MET;

 

(II)           PROPORTIONATE AMOUNTS.  EACH PARTIAL ASSIGNMENT SHALL BE MADE AS
AN ASSIGNMENT OF A PROPORTIONATE PART OF ALL THE ASSIGNING LENDER’S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT WITH RESPECT TO THE LOANS OR THE COMMITMENT
ASSIGNED, EXCEPT THAT THIS CLAUSE (II) SHALL NOT PROHIBIT ANY LENDER FROM
ASSIGNING ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS AMONG SEPARATE
FACILITIES ON A NON-PRO RATA BASIS;

 

(III)          REQUIRED CONSENTS.  NO CONSENT SHALL BE REQUIRED FOR ANY
ASSIGNMENT EXCEPT TO THE EXTENT REQUIRED BY SECTION 10.1(B)(I)(B) AND, IN
ADDITION:

 

(A)          THE CONSENT OF THE BORROWERS (SUCH CONSENT NOT TO BE UNREASONABLY
WITHHELD OR DELAYED UNLESS THE ASSIGNMENT IS TO AN ENTITY IN THE SAME BUSINESS
AS A BORROWER THAT IS A DIRECT COMPETITOR OF SUCH BORROWER, IN WHICH EVENT THE
CONSENT MAY BE WITHHELD IN THE SOLE DISCRETION OF BORROWERS) SHALL BE REQUIRED
UNLESS (1) AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AT THE TIME OF
SUCH ASSIGNMENT OR (2) SUCH ASSIGNMENT IS TO A LENDER, AN AFFILIATE OF A LENDER
OR AN APPROVED FUND;

 

(B)           THE CONSENT OF THE ADMINISTRATIVE AGENT (SUCH CONSENT NOT TO BE
UNREASONABLY WITHHELD OR DELAYED) SHALL BE REQUIRED FOR ASSIGNMENTS IN RESPECT
OF (I) ANY TERM COMMITMENT OR REVOLVING CREDIT COMMITMENT IF SUCH ASSIGNMENT IS
TO A PERSON THAT IS NOT A LENDER WITH A COMMITMENT IN RESPECT OF THE APPLICABLE
FACILITY, AN AFFILIATE OF SUCH LENDER OR AN APPROVED FUND WITH RESPECT TO SUCH
LENDER OR (II) ANY TERM LOAN TO A PERSON THAT IS NOT A LENDER, AN AFFILIATE OF A
LENDER OR AN APPROVED FUND; AND

 

(C)           THE CONSENT OF THE LC ISSUER (SUCH CONSENT NOT TO BE UNREASONABLY
WITHHELD OR DELAYED) SHALL BE REQUIRED FOR ANY ASSIGNMENT THAT INCREASES THE
OBLIGATION OF THE ASSIGNEE TO PARTICIPATE IN EXPOSURE UNDER ONE OR MORE LETTERS
OF CREDIT (WHETHER OR NOT THEN OUTSTANDING).

 

(IV)          ASSIGNMENT AND ASSUMPTION.  THE PARTIES TO EACH ASSIGNMENT SHALL
EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT AN ASSIGNMENT AND ASSUMPTION,
AND THE

 

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ASSIGNEE, IF IT SHALL NOT BE A LENDER, SHALL DELIVER TO THE ADMINISTRATIVE AGENT
AN ADMINISTRATIVE QUESTIONNAIRE.

 

(V)           NO ASSIGNMENT TO BORROWERS.  NO SUCH ASSIGNMENT SHALL BE MADE TO
ANY BORROWER OR ANY OF THE BORROWERS’ AFFILIATES OR SUBSIDIARIES.

 

(VI)          NO ASSIGNMENT TO NATURAL PERSONS.  NO SUCH ASSIGNMENT SHALL BE
MADE TO A NATURAL PERSON.

 

(VII)         ASSIGNMENT FEES.  AN ASSIGNMENT FEE OF $3,500 SHALL BE CHARGED TO
THE ASSIGNING LENDER WITH RESPECT TO EACH ASSIGNMENT, EXCEPT WITH RESPECT TO AN
ASSIGNMENT TO AN AFFILIATE OF THE ASSIGNING LENDER.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 10.1(c), from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.10, 2.12, 2.13, 2.15 and 12.2 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 Notes 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 Section 10.1(d).

 

Notwithstanding anything to the contrary in this Section 10.1(b), each Lender
will also have the right, without consent of the Borrowers or the Administrative
Agent, to assign as security all or part of its rights under the Loan Documents
to any Federal Reserve Bank.

 

(C)           REGISTER.  THE ADMINISTRATIVE AGENT, ACTING SOLELY FOR THIS
PURPOSE AS AN AGENT OF THE BORROWERS, SHALL MAINTAIN AT THE ADMINISTRATIVE
AGENT’S OFFICE A COPY OF EACH ASSIGNMENT AND ASSUMPTION DELIVERED TO IT AND A
REGISTER FOR THE RECORDATION OF THE NAMES AND ADDRESSES OF THE LENDERS, AND THE
COMMITMENTS OF, AND PRINCIPAL AMOUNTS OF THE LOANS AND LETTER OF CREDIT
PARTICIPATIONS OWING TO, EACH LENDER PURSUANT TO THE TERMS HEREOF FROM TIME TO
TIME (THE “REGISTER”).  THE ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE ABSENT
MANIFEST ERROR, AND THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS MAY
TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE REGISTER PURSUANT TO THE TERMS
HEREOF AS A LENDER HEREUNDER FOR ALL PURPOSES OF THIS AGREEMENT, NOTWITHSTANDING
NOTICE TO THE CONTRARY.  THE REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE
BORROWERS AND ANY LENDER, AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON
REASONABLE PRIOR NOTICE.

 

(D)           PARTICIPATIONS.  ANY LENDER MAY AT ANY TIME, WITHOUT THE CONSENT
OF, OR NOTICE TO, THE BORROWERS OR THE ADMINISTRATIVE AGENT, SELL PARTICIPATIONS
TO ANY PERSON (OTHER THAN A NATURAL PERSON OR ANY BORROWER OR ANY OF THE
BORROWERS’ AFFILIATES OR SUBSIDIARIES) (EACH,

 

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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 LETTER OF CREDIT PARTICIPATIONS) 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 LENDERS AND THE LC ISSUER SHALL CONTINUE TO DEAL
SOLELY AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT.  ANY AGREEMENT OR INSTRUMENT PURSUANT TO WHICH
A LENDER SELLS SUCH A PARTICIPATION SHALL PROVIDE THAT SUCH LENDER SHALL RETAIN
THE SOLE RIGHT TO ENFORCE THIS AGREEMENT AND TO APPROVE ANY AMENDMENT,
MODIFICATION OR WAIVER OF ANY PROVISION OF THIS AGREEMENT; PROVIDED THAT SUCH
AGREEMENT OR INSTRUMENT MAY PROVIDE THAT SUCH LENDER WILL NOT, WITHOUT THE
CONSENT OF THE PARTICIPANT, AGREE TO ANY AMENDMENT, WAIVER OR OTHER MODIFICATION
DESCRIBED IN THE FIRST PROVISO TO SECTION 12.7(B) THAT AFFECTS SUCH
PARTICIPANT.  SUBJECT TO SECTION 10.1(E), THE BORROWERS AGREE THAT EACH
PARTICIPANT SHALL BE ENTITLED TO THE BENEFITS OF SECTIONS 2.10, 2.12, 2.13, 2.15
AND 12.2 TO THE SAME EXTENT AS IF IT WERE A LENDER AND HAD ACQUIRED ITS INTEREST
BY ASSIGNMENT PURSUANT TO SECTION 10.1(B).  TO THE EXTENT PERMITTED BY LAW, EACH
PARTICIPANT ALSO SHALL BE ENTITLED TO THE BENEFITS OF SECTION 12.5 AS THOUGH IT
WERE A LENDER, PROVIDED SUCH PARTICIPANT AGREES TO BE SUBJECT TO
SECTION 2.9(D) AS THOUGH IT WERE A LENDER.

 

(E)           LIMITATIONS UPON PARTICIPANT RIGHTS.  A PARTICIPANT SHALL NOT BE
ENTITLED TO RECEIVE ANY GREATER PAYMENT UNDER SECTION 2.13 OR 2.15 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 FOREIGN LENDER IF IT WERE A LENDER SHALL NOT BE
ENTITLED TO THE BENEFITS OF SECTION 2.15 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 2.15(E) AS THOUGH IT WERE A
LENDER.

 

(F)            CERTAIN PLEDGES.  ANY LENDER MAY AT ANY TIME PLEDGE OR ASSIGN A
SECURITY INTEREST IN ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT
(INCLUDING UNDER ITS NOTES, IF ANY) TO SECURE OBLIGATIONS OF SUCH LENDER,
INCLUDING ANY PLEDGE OR ASSIGNMENT TO SECURE OBLIGATIONS TO A FEDERAL RESERVE
BANK; PROVIDED THAT NO SUCH PLEDGE OR ASSIGNMENT SHALL RELEASE SUCH LENDER FROM
ANY OF ITS OBLIGATIONS HEREUNDER OR SUBSTITUTE ANY SUCH PLEDGEE OR ASSIGNEE FOR
SUCH LENDER AS A PARTY HERETO.

 

(G)           ELECTRONIC EXECUTION OF ASSIGNMENTS.  THE WORDS “EXECUTION,”
“SIGNED,” “SIGNATURE,” AND WORDS OF LIKE IMPORT IN ANY ASSIGNMENT AND ASSUMPTION
SHALL BE DEEMED TO INCLUDE ELECTRONIC SIGNATURES OR THE KEEPING OF RECORDS IN
ELECTRONIC FORM, EACH OF WHICH SHALL BE OF THE SAME LEGAL EFFECT, VALIDITY OR
ENFORCEABILITY AS A MANUALLY EXECUTED SIGNATURE OR THE USE OF A PAPER-BASED
RECORDKEEPING SYSTEM, AS THE CASE MAY BE, TO THE EXTENT AND AS PROVIDED FOR IN
ANY APPLICABLE LAW, INCLUDING THE FEDERAL ELECTRONIC SIGNATURES IN GLOBAL AND
NATIONAL COMMERCE ACT, THE NEW YORK STATE ELECTRONIC SIGNATURES AND RECORDS ACT,
OR ANY OTHER SIMILAR STATE LAWS BASED ON THE UNIFORM ELECTRONIC TRANSACTIONS
ACT.

 

10.2         REPLACEMENT OF LENDERS.  IF ANY LENDER REQUESTS COMPENSATION UNDER
SECTION 2.13, OR IF THE BORROWERS ARE REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO
ANY LENDER OR ANY GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT
TO SECTION 2.15, OR IF ANY OTHER

 

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CIRCUMSTANCE EXISTS HEREUNDER THAT GIVES THE BORROWERS THE RIGHT TO REPLACE A
LENDER AS A PARTY HERETO, THEN THE BORROWERS MAY, AT THEIR SOLE EXPENSE AND
EFFORT, UPON NOTICE TO SUCH LENDER AND THE ADMINISTRATIVE AGENT, REQUIRE SUCH
LENDER TO ASSIGN AND DELEGATE, WITHOUT RECOURSE (IN ACCORDANCE WITH AND SUBJECT
TO THE RESTRICTIONS CONTAINED IN, AND CONSENTS REQUIRED BY, SECTION 10.1), ALL
OF ITS INTERESTS, RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND THE RELATED
LOAN DOCUMENTS TO AN ASSIGNEE THAT SHALL ASSUME SUCH OBLIGATIONS (WHICH ASSIGNEE
MAY BE ANOTHER LENDER, IF A LENDER ACCEPTS SUCH ASSIGNMENT), PROVIDED THAT:

 

(A)           THE BORROWERS SHALL HAVE PAID TO THE ADMINISTRATIVE AGENT THE
ASSIGNMENT FEE SPECIFIED IN SECTION 10.1(B);

 

(B)           SUCH LENDER SHALL HAVE RECEIVED PAYMENT OF AN AMOUNT EQUAL TO THE
OUTSTANDING PRINCIPAL OF ITS LOANS AND ITS APPLICABLE PERCENTAGE OF ALL UNPAID
LC DISBURSEMENTS, ACCRUED INTEREST THEREON, ACCRUED FEES AND ALL OTHER AMOUNTS
PAYABLE TO IT HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS (INCLUDING ANY
AMOUNTS UNDER SECTION 2.10) FROM THE ASSIGNEE (TO THE EXTENT OF SUCH OUTSTANDING
PRINCIPAL AND ACCRUED INTEREST AND FEES) OR THE BORROWERS (IN THE CASE OF ALL
OTHER AMOUNTS);

 

(C)           IN THE CASE OF ANY SUCH ASSIGNMENT RESULTING FROM A CLAIM FOR
COMPENSATION UNDER SECTION 2.13 OR PAYMENTS REQUIRED TO BE MADE PURSUANT TO
SECTION 2.15, SUCH ASSIGNMENT WILL RESULT IN A REDUCTION IN SUCH COMPENSATION OR
PAYMENTS THEREAFTER;

 

(D)           IN THE CASE OF ANY SUCH ASSIGNMENT REQUIRED BY THE BORROWERS
PURSUANT TO THE PENULTIMATE SENTENCE OF SECTION 12.7, THE ASSIGNEE SHALL HAVE
AGREED IN WRITING TO CONSENT TO THE PROPOSED AMENDMENT, WAIVER, CONSENT OR
RELEASE, AS THE CASE MAY BE, THAT THE ASSIGNING LENDER HAS NOT CONSENTED TO; AND

 

(E)           SUCH ASSIGNMENT DOES NOT CONFLICT WITH APPLICABLE LAWS.

 

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

 

SECTION XI

 

THE ADMINISTRATIVE AGENT

 

11.1         APPOINTMENT OF ADMINISTRATIVE AGENT.  EACH LENDER AND THE LC ISSUER
HEREBY IRREVOCABLY APPOINTS AND AUTHORIZES THE ADMINISTRATIVE AGENT TO ACT AS
ITS AGENT HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS AND TO EXECUTE THE LOAN
DOCUMENTS (OTHER THAN THIS AGREEMENT) AND ALL OTHER INSTRUMENTS RELATING
THERETO.  EACH LENDER AND THE LC ISSUER IRREVOCABLY AUTHORIZES THE
ADMINISTRATIVE AGENT TO TAKE SUCH ACTION ON BEHALF OF EACH OF THE LENDERS AND
THE LC ISSUER AND TO EXERCISE ALL SUCH POWERS AS ARE EXPRESSLY DELEGATED TO THE
ADMINISTRATIVE AGENT HEREUNDER AND IN THE OTHER LOAN DOCUMENTS AND ALL RELATED
DOCUMENTS, TOGETHER WITH SUCH OTHER POWERS AS ARE REASONABLY INCIDENTAL
THERETO.  THE ADMINISTRATIVE AGENT SHALL ALSO ACT AS THE “AGENT” OR
“ADMINISTRATIVE AGENT” UNDER THE SECURITY DOCUMENTS, AND EACH OF THE LENDERS (IN
ITS CAPACITIES AS A LENDER, SWAP BANK AND POTENTIAL CASH MANAGEMENT BANK)

 

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AND THE LC ISSUER HEREBY IRREVOCABLY APPOINTS AND AUTHORIZES THE ADMINISTRATIVE
AGENT TO ACT AS THE AGENT OF SUCH LENDER AND THE LC ISSUER FOR PURPOSES OF
ACQUIRING, HOLDING AND ENFORCING ANY AND ALL ENCUMBRANCES ON COLLATERAL GRANTED
BY ANY OF THE LOAN PARTIES TO SECURE ANY OF THE OBLIGATIONS, TOGETHER WITH SUCH
POWERS AND DISCRETION AS ARE REASONABLY INCIDENTAL THERETO.  IN THIS CONNECTION,
THE ADMINISTRATIVE AGENT, AS “AGENT” OR “ADMINISTRATIVE AGENT” UNDER THE
SECURITY DOCUMENTS, AND ANY SUB-AGENT APPOINTED BY IT, SHALL BE ENTITLED TO THE
BENEFITS OF ALL PROVISIONS OF THIS SECTION XI AS IF SET FORTH IN FULL HEREIN
WITH RESPECT THERETO.  THE ADMINISTRATIVE AGENT MAY, AND THE BORROWERS HEREBY
AUTHORIZES THE ADMINISTRATIVE AGENT TO, INCLUDE REFERENCES TO THE BORROWERS AND
THEIR SUBSIDIARIES, AND UTILIZE ANY LOGO OR OTHER DISTINCTIVE SYMBOL ASSOCIATED
WITH THE BORROWERS OR ANY OF ITS SUBSIDIARIES, IN CONNECTION WITH ANY
ADVERTISING, PROMOTION OR MARKETING UNDERTAKEN BY THE ADMINISTRATIVE AGENT.

 

11.2         EXCULPATORY PROVISIONS.  THE ADMINISTRATIVE AGENT SHALL NOT HAVE
ANY DUTIES OR OBLIGATIONS EXCEPT THOSE EXPRESSLY SET FORTH HEREIN.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, (I) THE ADMINISTRATIVE AGENT SHALL NOT
BE SUBJECT TO ANY FIDUCIARY OR OTHER IMPLIED DUTIES, REGARDLESS OF WHETHER A
DEFAULT HAS OCCURRED AND IS CONTINUING, (II) THE ADMINISTRATIVE AGENT SHALL NOT
HAVE ANY DUTY TO TAKE ANY DISCRETIONARY ACTION OR EXERCISE ANY DISCRETIONARY
POWERS, EXCEPT DISCRETIONARY RIGHTS AND POWERS EXPRESSLY CONTEMPLATED HEREBY
THAT THE ADMINISTRATIVE AGENT IS REQUIRED TO EXERCISE IN WRITING AS DIRECTED BY
THE MAJORITY LENDERS (OR SUCH OTHER NUMBER OR PERCENTAGE OF THE LENDERS AS SHALL
BE NECESSARY UNDER THE CIRCUMSTANCES AS PROVIDED IN SECTION 12.7)), PROVIDED
THAT THE ADMINISTRATIVE AGENT SHALL NOT BE REQUIRED TO TAKE ANY ACTION THAT, IN
ITS OPINION OR THE OPINION OF ITS COUNSEL, MAY EXPOSE THE ADMINISTRATIVE AGENT
TO LIABILITY OR THAT IS CONTRARY TO ANY LOAN DOCUMENT OR APPLICABLE LAW, AND
(III) EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE ADMINISTRATIVE AGENT SHALL NOT
HAVE ANY DUTY TO DISCLOSE, AND SHALL NOT BE LIABLE FOR THE FAILURE TO DISCLOSE,
ANY INFORMATION RELATING TO ANY LOAN PARTY OR ANY SUBSIDIARY THEREOF THAT IS
COMMUNICATED TO OR OBTAINED BY THE BANK SERVING AS ADMINISTRATIVE AGENT OR ANY
OF ITS AFFILIATES IN ANY CAPACITY.  THE ADMINISTRATIVE AGENT SHALL NOT BE LIABLE
FOR ANY ACTION TAKEN OR NOT TAKEN BY IT WITH THE CONSENT OR AT THE REQUEST OF
THE MAJORITY LENDERS (OR SUCH OTHER NUMBER OR PERCENTAGE OF THE LENDERS AS SHALL
BE NECESSARY UNDER THE CIRCUMSTANCES AS PROVIDED IN SECTION 12.7) OR IN THE
ABSENCE OF ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  THE ADMINISTRATIVE
AGENT SHALL BE DEEMED NOT TO HAVE KNOWLEDGE OF ANY DEFAULT UNLESS AND UNTIL
WRITTEN NOTICE THEREOF IS GIVEN TO THE ADMINISTRATIVE AGENT BY THE BORROWERS OR
A LENDER.  THE ADMINISTRATIVE AGENT SHALL NOT BE RESPONSIBLE FOR OR HAVE ANY
DUTY TO ASCERTAIN OR INQUIRE INTO (A) ANY STATEMENT, WARRANTY OR REPRESENTATION
MADE IN OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, (B) THE
CONTENTS OF ANY CERTIFICATE, REPORT OR OTHER DOCUMENT DELIVERED HEREUNDER OR IN
CONNECTION HEREWITH, (C) THE PERFORMANCE OR OBSERVANCE OF ANY OF THE COVENANTS,
AGREEMENTS OR OTHER TERMS OR CONDITIONS SET FORTH HEREIN, (D) THE VALIDITY,
ENFORCEABILITY, EFFECTIVENESS OR GENUINENESS OF THIS AGREEMENT OR ANY OTHER
AGREEMENT, INSTRUMENT OR DOCUMENT, (E) THE SATISFACTION OF ANY CONDITION SET
FORTH IN SECTION IV OR ELSEWHERE HEREIN, OTHER THAN TO CONFIRM RECEIPT OF ITEMS
EXPRESSLY REQUIRED TO BE DELIVERED TO THE ADMINISTRATIVE AGENT, (F) THE
EXISTENCE, VALUE, COLLECTIBILITY OR ADEQUACY OF THE COLLATERAL OR ANY PART
THEREOF OR THE VALIDITY, EFFECTIVENESS, PERFECTION OR RELATIVE PRIORITY OF THE
LIENS AND SECURITY INTERESTS OF THE LENDERS AND THE LC ISSUER THEREIN, OR
(G) THE FILING, RECORDING, REFILING, CONTINUING OR RE-RECORDING OF ANY FINANCING
STATEMENT OR OTHER DOCUMENT OR INSTRUMENT EVIDENCING OR RELATING TO THE SECURITY
INTERESTS OR LIENS OF THE LENDERS AND THE LC ISSUER IN THE COLLATERAL.

 

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11.3         RIGHTS AS A LENDER.  THE PERSON SERVING AS THE ADMINISTRATIVE AGENT
HEREUNDER SHALL HAVE THE SAME RIGHTS AND POWERS IN ITS CAPACITY AS A LENDER AS
ANY OTHER LENDER AND MAY EXERCISE THE SAME AS THOUGH IT WERE NOT THE
ADMINISTRATIVE AGENT AND THE TERM “LENDER” OR “LENDERS” SHALL, UNLESS OTHERWISE
EXPRESSLY INDICATED OR UNLESS THE CONTEXT OTHERWISE REQUIRES, INCLUDE THE PERSON
SERVING AS THE ADMINISTRATIVE AGENT HEREUNDER IN ITS INDIVIDUAL CAPACITY.  SUCH
PERSON AND ITS AFFILIATES MAY ACCEPT DEPOSITS FROM, LEND MONEY TO, ACT AS THE
FINANCIAL ADVISOR OR IN ANY OTHER ADVISORY CAPACITY FOR AND GENERALLY ENGAGE IN
ANY KIND OF BUSINESS WITH ANY LOAN PARTY OR ANY SUBSIDIARY OR OTHER AFFILIATE
THEREOF AS IF SUCH PERSON WERE NOT THE ADMINISTRATIVE AGENT HEREUNDER AND
WITHOUT ANY DUTY TO ACCOUNT THEREFOR TO THE LENDERS.

 

11.4         ACTIONS BY ADMINISTRATIVE AGENT.

 

(A)           THE ADMINISTRATIVE AGENT SHALL BE FULLY JUSTIFIED IN FAILING OR
REFUSING TO TAKE ANY ACTION UNDER THIS AGREEMENT AS IT REASONABLY DEEMS
APPROPRIATE UNLESS IT SHALL FIRST HAVE RECEIVED SUCH ADVICE OR CONCURRENCE OF
THE LENDERS AND SHALL BE INDEMNIFIED TO ITS REASONABLE SATISFACTION BY THE
LENDERS AGAINST ANY AND ALL LIABILITY AND EXPENSE WHICH MAY BE INCURRED BY IT BY
REASON OF TAKING OR CONTINUING TO TAKE ANY SUCH ACTION.  THE ADMINISTRATIVE
AGENT SHALL IN ALL CASES BE FULLY PROTECTED IN ACTING, OR IN REFRAINING FROM
ACTING, UNDER THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS IN ACCORDANCE WITH A
REQUEST OF THE LENDERS, AND SUCH REQUEST AND ANY ACTION TAKEN OR FAILURE TO ACT
PURSUANT THERETO SHALL BE BINDING UPON THE LENDERS AND ALL FUTURE HOLDERS OF THE
NOTES.

 

(B)           WHETHER OR NOT AN EVENT OF DEFAULT SHALL HAVE OCCURRED, THE
ADMINISTRATIVE AGENT MAY FROM TIME TO TIME EXERCISE SUCH RIGHTS OF THE
ADMINISTRATIVE AGENT, THE LC ISSUER AND THE LENDERS UNDER THE LOAN DOCUMENTS AS
IT DETERMINES MAY BE NECESSARY OR DESIRABLE TO PROTECT THE COLLATERAL AND THE
INTERESTS OF THE ADMINISTRATIVE AGENT, THE LC ISSUER AND THE LENDERS THEREIN AND
UNDER THE LOAN DOCUMENTS.

 

11.5         RELIANCE BY ADMINISTRATIVE AGENT.   THE ADMINISTRATIVE AGENT SHALL
BE ENTITLED TO RELY UPON, AND SHALL NOT INCUR ANY LIABILITY FOR RELYING UPON,
ANY NOTICE, REQUEST, CERTIFICATE, CONSENT, STATEMENT, INSTRUMENT, DOCUMENT OR
OTHER WRITING (INCLUDING ANY ELECTRONIC MESSAGE, INTERNET OR INTRANET WEBSITE
POSTING OR OTHER DISTRIBUTION) BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN
SIGNED, SENT OR OTHERWISE AUTHENTICATED BY THE PROPER PERSON.  THE
ADMINISTRATIVE AGENT ALSO MAY RELY UPON ANY STATEMENT MADE TO IT ORALLY OR BY
TELEPHONE AND BELIEVED BY IT TO HAVE BEEN MADE BY THE PROPER PERSON, AND SHALL
NOT INCUR ANY LIABILITY FOR RELYING THEREON.  IN DETERMINING COMPLIANCE WITH ANY
CONDITION HEREUNDER TO THE MAKING OF A LOAN, OR THE ISSUANCE OF A LETTER OF
CREDIT, THAT BY ITS TERMS MUST BE FULFILLED TO THE SATISFACTION OF A LENDER OR
THE LC ISSUER, THE ADMINISTRATIVE AGENT MAY PRESUME THAT SUCH CONDITION IS
SATISFACTORY TO SUCH LENDER OR THE LC ISSUER UNLESS THE ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED NOTICE TO THE CONTRARY FROM SUCH LENDER OR THE LC ISSUER
PRIOR TO THE MAKING OF SUCH LOAN OR THE ISSUANCE OF SUCH LETTER OF CREDIT.  THE
ADMINISTRATIVE AGENT MAY CONSULT WITH LEGAL COUNSEL (WHO MAY BE COUNSEL FOR THE
BORROWERS), INDEPENDENT ACCOUNTANTS AND OTHER EXPERTS SELECTED BY IT, AND SHALL
NOT BE LIABLE FOR ANY ACTION TAKEN OR NOT TAKEN BY IT IN ACCORDANCE WITH THE
ADVICE OF ANY SUCH COUNSEL, ACCOUNTANTS OR EXPERTS.

 

11.6         DELEGATION OF DUTIES.  THE ADMINISTRATIVE AGENT MAY PERFORM ANY AND
ALL OF ITS DUTIES AND EXERCISE ITS RIGHTS AND POWERS HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT BY OR

 

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THROUGH ANY ONE OR MORE SUB-AGENTS APPOINTED BY THE ADMINISTRATIVE AGENT.  THE
ADMINISTRATIVE AGENT AND ANY SUCH SUB-AGENT MAY PERFORM ANY AND ALL OF ITS
DUTIES AND EXERCISE ITS RIGHTS AND POWERS BY OR THROUGH THEIR RESPECTIVE RELATED
PARTIES.  THE EXCULPATORY PROVISIONS OF THIS SECTION SHALL APPLY TO ANY SUCH
SUB-AGENT AND TO THE RELATED PARTIES OF THE ADMINISTRATIVE AGENT AND ANY SUCH
SUB-AGENT, AND SHALL APPLY TO THEIR RESPECTIVE ACTIVITIES IN CONNECTION WITH THE
SYNDICATION OF THE CREDIT FACILITIES PROVIDED FOR HEREIN AS WELL AS ACTIVITIES
AS ADMINISTRATIVE AGENT.

 

11.7         INDEMNIFICATION.  WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWERS
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, THE LENDERS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT AND THE LC ISSUER, RATABLY IN ACCORDANCE WITH THEIR
COMMITMENTS, FOR ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER WHICH MAY AT ANY TIME BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST THE ADMINISTRATIVE AGENT OR THE LC ISSUER IN ANY WAY RELATING
TO OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY DOCUMENTS
CONTEMPLATED BY OR REFERRED TO HEREIN OR THEREIN OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY OR THE ENFORCEMENT OF ANY OF THE TERMS HEREOF OR
THEREOF OR OF ANY SUCH OTHER DOCUMENTS; PROVIDED, THAT NO LENDER SHALL BE LIABLE
FOR ANY OF THE FOREGOING TO THE EXTENT IT RESULTS FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE ADMINISTRATIVE AGENT OR THE LC ISSUER, AS THE CASE MAY
BE.

 

11.8         REIMBURSEMENT.  WITHOUT LIMITING THE PROVISIONS OF SECTION 11.7,
THE LENDERS, THE LC ISSUER AND THE ADMINISTRATIVE AGENT HEREBY AGREE THAT THE
ADMINISTRATIVE AGENT SHALL NOT BE OBLIGED TO MAKE AVAILABLE TO ANY PERSON ANY
SUM WHICH THE ADMINISTRATIVE AGENT IS EXPECTING TO RECEIVE FOR THE ACCOUNT OF
THAT PERSON UNTIL THE ADMINISTRATIVE AGENT HAS DETERMINED THAT IT HAS RECEIVED
THAT SUM.  THE ADMINISTRATIVE AGENT MAY, HOWEVER, DISBURSE FUNDS PRIOR TO
DETERMINING THAT THE SUMS WHICH THE ADMINISTRATIVE AGENT EXPECTS TO RECEIVE HAVE
BEEN FINALLY AND UNCONDITIONALLY PAID TO THE ADMINISTRATIVE AGENT IF THE
ADMINISTRATIVE AGENT WISHES TO DO SO.  IF AND TO THE EXTENT THAT THE
ADMINISTRATIVE AGENT DOES DISBURSE FUNDS AND IT LATER BECOMES APPARENT THAT THE
ADMINISTRATIVE AGENT DID NOT THEN RECEIVE A PAYMENT IN AN AMOUNT EQUAL TO THE
SUM PAID OUT, THEN ANY PERSON TO WHOM THE ADMINISTRATIVE AGENT MADE THE FUNDS
AVAILABLE SHALL, ON DEMAND FROM THE ADMINISTRATIVE AGENT, REFUND TO THE
ADMINISTRATIVE AGENT THE SUM PAID TO THAT PERSON.  IF THE ADMINISTRATIVE AGENT
IN GOOD FAITH REASONABLY CONCLUDES THAT THE DISTRIBUTION OF ANY AMOUNT RECEIVED
BY IT IN SUCH CAPACITY HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS MIGHT INVOLVE
IT IN LIABILITY, IT MAY REFRAIN FROM MAKING DISTRIBUTION UNTIL ITS RIGHT TO MAKE
DISTRIBUTION SHALL HAVE BEEN ADJUDICATED BY A COURT OF COMPETENT JURISDICTION. 
IF A COURT OF COMPETENT JURISDICTION SHALL ADJUDGE THAT ANY AMOUNT RECEIVED AND
DISTRIBUTED BY THE ADMINISTRATIVE AGENT IS TO BE REPAID, EACH PERSON TO WHOM ANY
SUCH DISTRIBUTION SHALL HAVE BEEN MADE SHALL EITHER REPAY TO THE ADMINISTRATIVE
AGENT ITS PROPORTIONATE SHARE OF THE AMOUNT SO ADJUDGED TO BE REPAID OR SHALL
PAY OVER THE SAME IN SUCH MANNER AND TO SUCH PERSONS AS SHALL BE DETERMINED BY
SUCH COURT.

 

11.9         NON-RELIANCE ON ADMINISTRATIVE AGENT AND NEW LENDERS.  EACH LENDER
REPRESENTS THAT IT HAS, INDEPENDENTLY AND WITHOUT RELIANCE ON THE ADMINISTRATIVE
AGENT OR ANY OTHER LENDER, AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT HAS
DEEMED APPROPRIATE, MADE ITS OWN APPRAISAL OF THE FINANCIAL CONDITION AND
AFFAIRS OF THE BORROWERS AND DECISION TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS AND AGREES THAT IT WILL, INDEPENDENTLY AND WITHOUT

 

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RELIANCE UPON THE ADMINISTRATIVE AGENT OR ANY OTHER LENDER, AND BASED ON SUCH
DOCUMENTS AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE TIME, CONTINUE TO
MAKE ITS OWN APPRAISALS AND DECISION IN TAKING OR NOT TAKING ACTION UNDER THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.    UNLESS ANY LENDER SHALL PROMPTLY OBJECT
TO ANY ACTION TAKEN BY THE ADMINISTRATIVE AGENT HEREUNDER (OTHER THAN ACTIONS TO
WHICH THE PROVISIONS OF SECTION 12.7(B) ARE APPLICABLE AND OTHER THAN ACTIONS
WHICH CONSTITUTE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY THE ADMINISTRATIVE
AGENT), SUCH LENDER SHALL CONCLUSIVELY BE PRESUMED TO HAVE APPROVED THE SAME.

 

11.10       RESIGNATION OF ADMINISTRATIVE AGENT.  THE ADMINISTRATIVE AGENT MAY
RESIGN AT ANY TIME BY GIVING 30 DAYS PRIOR WRITTEN NOTICE THEREOF TO THE LENDERS
AND THE BORROWERS.  UPON ANY SUCH RESIGNATION, THE LENDERS SHALL HAVE THE RIGHT
TO APPOINT A SUCCESSOR ADMINISTRATIVE AGENT WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE BORROWERS (WHOSE CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED)
AND SHALL BE A FINANCIAL INSTITUTION HAVING A COMBINED CAPITAL AND SURPLUS IN
EXCESS OF $150,000,000.  IF NO SUCCESSOR ADMINISTRATIVE AGENT SHALL HAVE BEEN SO
APPOINTED BY THE LENDERS AND SHALL HAVE ACCEPTED SUCH APPOINTMENT WITHIN 30 DAYS
AFTER THE RETIRING ADMINISTRATIVE AGENT’S GIVING OF NOTICE OF RESIGNATION, THEN
THE RETIRING ADMINISTRATIVE AGENT MAY, ON BEHALF OF THE LENDERS, APPOINT A
SUCCESSOR ADMINISTRATIVE AGENT WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
BORROWERS (WHOSE CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED) AND
SHALL BE A LENDER OR OTHER FINANCIAL INSTITUTION HAVING A COMBINED CAPITAL AND
SURPLUS IN EXCESS OF $150,000,000.  UPON THE ACCEPTANCE OF ANY APPOINTMENT AS
ADMINISTRATIVE AGENT HEREUNDER BY A SUCCESSOR ADMINISTRATIVE AGENT, SUCH
SUCCESSOR ADMINISTRATIVE AGENT SHALL THEREUPON SUCCEED TO AND BECOME VESTED WITH
ALL THE RIGHTS, POWERS, PRIVILEGES AND DUTIES OF THE RETIRING ADMINISTRATIVE
AGENT, AND THE RETIRING ADMINISTRATIVE AGENT SHALL BE DISCHARGED FROM ITS DUTIES
AND OBLIGATIONS HEREUNDER.  AFTER ANY RETIRING ADMINISTRATIVE AGENT’S
RESIGNATION, THE PROVISIONS OF THIS AGREEMENT SHALL CONTINUE IN EFFECT FOR ITS
BENEFIT IN RESPECT OF ANY ACTIONS TAKEN OR OMITTED TO BE TAKEN BY IT WHILE IT
WAS ACTING AS ADMINISTRATIVE AGENT.

 

11.11       NO OTHER DUTIES, ETC.  ANYTHING HEREIN TO THE CONTRARY
NOTWITHSTANDING, NEITHER THE LEAD ARRANGER NOR THE SYNDICATION AGENT LISTED ON
THE COVER PAGE HEREOF SHALL HAVE ANY POWERS, DUTIES OR RESPONSIBILITIES UNDER
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, EXCEPT IN ITS CAPACITY, AS
APPLICABLE, AS THE ADMINISTRATIVE AGENT, A LENDER OR THE LC ISSUER HEREUNDER.

 

SECTION XII

GENERAL

 

12.1         NOTICES; EFFECTIVENESS OF SIGNATURES.

 

Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile in complete and legible form, or
three Business Days after depositing it in the United States mail to be sent by
certified or registered mail with postage prepaid and properly addressed;
provided that notices to the Administrative Agent and the LC Issuer shall not be
effective until received.  For the purposes hereof, the address of each party
hereto shall be as set forth on Schedule 12.1 hereof or

 

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(subject to said Schedule) in its Administrative Questionnaire or (i) as to the
Borrowers and the Administrative Agent, such other address as shall be
designated by such Person in a written notice delivered to the other parties
hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to the Administrative
Agent.  The Administrative Agent or the Borrowers may, in their discretion,
agree to accept notices and other communications to such parties hereunder by
electronic communications pursuant to procedures approved by such parties,
provided that approval of such procedures may be limited to particular notices
or communications.

 

Loan Documents and notices under the Loan Documents may be transmitted and/or
signed by telefacsimile and by signatures delivered in ‘PDF’ format by
electronic mail.  The effectiveness of any such documents and signatures shall,
subject to applicable law, have the same force and effect as an original copy
with manual signatures and shall be binding on all Loan Parties, the
Administrative Agent and the Lenders.  The Administrative Agent may also require
that any such documents and signature be confirmed by a manually-signed copy
thereof; provided, however, that the failure to request or deliver any such
manually-signed copy shall not affect the effectiveness of any facsimile
document or signature.

 

Notwithstanding the foregoing, the Borrowers agree that the Administrative Agent
may make any material delivered by the Borrowers to the Administrative Agent, as
well as any amendments, waivers, consents and other written information,
documents, instruments and other materials relating to the Borrowers, any of
their Subsidiaries, or any other materials or matters relating to the Loan
Documents or any of the transactions contemplated hereby that the Administrative
Agent is required or authorized pursuant to the terms hereof or of any Loan
Document to provide to the Lenders (collectively, the “Communications”)
available to the Lenders by posting such notices on a Platform.  THE BORROWERS
ACKNOWLEDGE THAT (A) THE DISTRIBUTION OF MATERIAL THROUGH AN ELECTRONIC MEDIUM
IS NOT NECESSARILY SECURE AND THAT THERE ARE CONFIDENTIALITY AND OTHER RISKS
ASSOCIATED WITH SUCH DISTRIBUTION, (B) A PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE” AND (C) NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES
WARRANTS THE ACCURACY, COMPLETENESS, TIMELINESS, SUFFICIENCY, OR SEQUENCING OF
THE COMMUNICATIONS POSTED ON A PLATFORM.  THE ADMINISTRATIVE AGENT AND ITS
AFFILIATES EXPRESSLY DISCLAIM WITH RESPECT TO A PLATFORM ANY LIABILITY FOR
ERRORS IN TRANSMISSION, INCORRECT OR INCOMPLETE DOWNLOADING, DELAYS IN POSTING
OR DELIVERY, OR PROBLEMS ACCESSING THE COMMUNICATIONS POSTED ON SUCH
PLATFORM AND ANY LIABILITY FOR ANY LOSSES, COSTS, EXPENSES OR LIABILITIES THAT
MAY BE SUFFERED OR INCURRED IN CONNECTION WITH SUCH PLATFORM.  NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY
THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES IN CONNECTION WITH ANY
PLATFORM.

 

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Each Lender agrees that notice to it (as provided in the next sentence)
specifying that any Communication has been posted to a Platform shall for
purposes of this Agreement constitute effective delivery to such Lender of such
information, documents or other materials comprising such Communication.  Each
Lender agrees (1) to notify, on or before the date such Lender becomes a party
to this Agreement, the Administrative Agent in writing of such Lender’s e-mail
address to which a notice may be sent (and from time to time thereafter to
ensure that the Administrative Agent has on record an effective e-mail address
for such Lender) and (2) that any notice may be sent to such e-mail address.

 

12.2         EXPENSES.  WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREIN
SHALL BE CONSUMMATED, THE BORROWERS, JOINTLY AND SEVERALLY, PROMISE TO REIMBURSE
THE ADMINISTRATIVE AGENT, THE LC ISSUER AND THE LENDERS FOR ALL REASONABLE
OUT-OF-POCKET FEES AND DISBURSEMENTS (INCLUDING ALL REASONABLE ATTORNEYS’ FEES
AND COLLATERAL EVALUATION COSTS) INCURRED OR EXPENDED IN CONNECTION WITH THE
PREPARATION, FILING OR RECORDING, OR INTERPRETATION OF THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS, OR ANY AMENDMENT, MODIFICATION, APPROVAL, CONSENT OR
WAIVER HEREOF OR THEREOF, OR IN CONNECTION WITH THE ENFORCEMENT OF ANY
OBLIGATIONS OR THE SATISFACTION OF ANY INDEBTEDNESS OF THE BORROWERS HEREUNDER
OR THEREUNDER, OR IN CONNECTION WITH ANY LITIGATION, PROCEEDING OR DISPUTE IN
ANY WAY RELATED TO THE CREDIT HEREUNDER, THE OBLIGATIONS, THE LOAN DOCUMENTS OR
THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, REASONABLE FEES AND DISBURSEMENTS
OF THE OUTSIDE COUNSEL AND THE ALLOCATED COSTS OF IN-HOUSE LEGAL COUNSEL OF THE
ADMINISTRATIVE AGENT; ACCOUNTING, CONSULTING, APPRAISAL, BROKERAGE OR OTHER
SIMILAR PROFESSIONAL FEES OR EXPENSES; ANY FEES OR EXPENSES (INCLUDING THE
ADMINISTRATIVE AGENT’S PER DIEM CHARGES) RELATING TO ANY INSPECTIONS, APPRAISALS
OR EXAMINATIONS CONDUCTED IN CONNECTION WITH THE LOANS OR ANY COLLATERAL; AND
ALL COSTS AND EXPENSES RELATING TO ANY ATTEMPT TO INSPECT, VERIFY, PROTECT,
PRESERVE, RESTORE, COLLECT, SELL, LIQUIDATE OR OTHERWISE DISPOSE OF OR REALIZE
UPON ANY COLLATERAL.  THE AMOUNT OF ALL SUCH COSTS, CHARGES AND EXPENSES SHALL,
UNTIL PAID, BEAR INTEREST AT THE RATE APPLICABLE TO BASE RATE LOANS AND SHALL BE
AN OBLIGATION SECURED BY THE COLLATERAL.  THE BORROWERS WILL PAY ANY TAXES
(INCLUDING ANY INTEREST AND PENALTIES IN RESPECT THEREOF), OTHER THAN THE
LENDERS’ FEDERAL AND STATE INCOME TAXES AND OTHER EXCLUDED TAXES, PAYABLE ON OR
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS (THE
BORROWERS, JOINTLY AND SEVERALLY, HEREBY AGREEING, TO INDEMNIFY THE
ADMINISTRATIVE AGENT, THE LC ISSUER AND THE LENDERS WITH RESPECT THERETO).

 

12.3         INDEMNIFICATION.  THE BORROWERS, JOINTLY AND SEVERALLY, AGREE TO
INDEMNIFY AND HOLD HARMLESS THE ADMINISTRATIVE AGENT, THE LC ISSUER AND THE
LENDERS, AS WELL AS THEIR RESPECTIVE SHAREHOLDERS, DIRECTORS, OFFICES, AGENTS,
ATTORNEYS, SUBSIDIARIES AND AFFILIATES, FROM AND AGAINST ALL DAMAGES, LOSSES,
SETTLEMENT PAYMENTS, OBLIGATIONS, LIABILITIES, CLAIMS, SUITS, PENALTIES,
ASSESSMENTS, CITATIONS, DIRECTIVES, DEMANDS, JUDGMENTS, ACTIONS OR CAUSES OF
ACTION, WHETHER STATUTORILY CREATED OR UNDER THE COMMON LAW, ALL REASONABLE
COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE FEES AND
DISBURSEMENTS OF ATTORNEYS, ENGINEERS AND CONSULTANTS) AND ALL OTHER LIABILITIES
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, LIABILITIES UNDER ENVIRONMENTAL LAWS)
WHICH SHALL AT ANY TIME OR TIMES BE INCURRED, SUFFERED, SUSTAINED OR REQUIRED TO
BE PAID BY ANY SUCH INDEMNIFIED PERSON (EXCEPT ANY OF THE FOREGOING WHICH RESULT
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PERSON) ON
ACCOUNT OF OR IN RELATION TO OR ANY WAY IN CONNECTION WITH ANY OF THE
ARRANGEMENTS OR TRANSACTIONS CONTEMPLATED BY, ASSOCIATED WITH OR ANCILLARY TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OTHER DOCUMENTS EXECUTED OR

 

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DELIVERED IN CONNECTION HEREWITH OR THEREWITH, ALL AS THE SAME MAY BE AMENDED
FROM TIME TO TIME, OR WITH RESPECT TO ANY LETTERS OF CREDIT, WHETHER OR NOT ALL
OR PART OF THE TRANSACTIONS CONTEMPLATED BY, ASSOCIATED WITH OR ANCILLARY TO
THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS OR ANY SUCH OTHER DOCUMENTS ARE
ULTIMATELY CONSUMMATED.  IN ANY INVESTIGATION, PROCEEDING OR LITIGATION, OR THE
PREPARATION THEREFOR, THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL SELECT
THEIR OWN COUNSEL AND, IN ADDITION TO THE FOREGOING INDEMNITY, THE BORROWERS
SHALL PAY PROMPTLY THE REASONABLE FEES AND EXPENSES OF SUCH COUNSEL.  IN THE
EVENT OF THE COMMENCEMENT OF ANY SUCH PROCEEDING OR LITIGATION, THE BORROWERS
SHALL BE ENTITLED TO PARTICIPATE IN SUCH PROCEEDING OR LITIGATION WITH COUNSEL
OF THEIR CHOICE AT THEIR OWN EXPENSE, PROVIDED THAT SUCH COUNSEL SHALL BE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT.  THE BORROWERS AUTHORIZE
THE ADMINISTRATIVE AGENT, THE LC ISSUER AND THE LENDERS TO CHARGE ANY DEPOSIT
ACCOUNT OR NOTE RECORD WHICH IT MAY MAINTAIN WITH ANY OF THEM FOR ANY OF THE
FOREGOING.  THE COVENANTS OF THIS SECTION 12.3 SHALL SURVIVE PAYMENT OR
SATISFACTION OF PAYMENT OF ALL AMOUNTS OWING WITH RESPECT TO THE NOTES, ANY
OTHER LOAN DOCUMENT OR ANY OTHER OBLIGATION.

 

12.4         SURVIVAL OF COVENANTS, ETC.  ALL COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES MADE HEREIN, IN THE OTHER LOAN DOCUMENTS OR IN
ANY DOCUMENTS OR OTHER PAPERS DELIVERED BY OR ON BEHALF OF THE BORROWERS
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN RELIED UPON BY THE ADMINISTRATIVE
AGENT, THE LC ISSUER AND THE LENDERS, NOTWITHSTANDING ANY INVESTIGATION
HERETOFORE OR HEREAFTER MADE BY ANY OF THEM, AND SHALL SURVIVE THE MAKING BY THE
LENDERS OF THE LOANS AS HEREIN CONTEMPLATED, AND SHALL CONTINUE IN FULL FORCE
AND EFFECT SO LONG AS ANY OBLIGATION REMAINS OUTSTANDING AND UNPAID OR ANY
LENDER HAS ANY OBLIGATION TO MAKE ANY LOANS HEREUNDER OR THE LC ISSUER HAS ANY
OBLIGATION TO ISSUE ANY LETTER OF CREDIT.  ALL STATEMENTS CONTAINED IN ANY
CERTIFICATE OR OTHER WRITING DELIVERED BY OR ON BEHALF OF THE BORROWERS PURSUANT
HERETO OR IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY SHALL
CONSTITUTE JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES BY THE BORROWERS
HEREUNDER.

 

12.5         SET-OFF.  IF A DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, EACH
LENDER, THE LC ISSUER AND EACH OF THEIR RESPECTIVE AFFILIATES IS HEREBY
AUTHORIZED AT ANY TIME AND FROM TIME TO TIME, AFTER OBTAINING THE PRIOR WRITTEN
CONSENT OF THE ADMINISTRATIVE AGENT, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW AND REGARDLESS OF THE ADEQUACY OF ANY COLLATERAL OR OTHER MEANS
OF OBTAINING REPAYMENT OF THE OBLIGATIONS, TO SET OFF AND APPLY ANY AND ALL
DEPOSITS (GENERAL OR SPECIAL, TIME OR DEMAND, PROVISIONAL OR FINAL, IN WHATEVER
CURRENCY) AT ANY TIME HELD AND OTHER OBLIGATIONS (IN WHATEVER CURRENCY) AT ANY
TIME OWING BY SUCH LENDER, THE LC ISSUER OR ANY SUCH AFFILIATE TO OR FOR THE
CREDIT OR THE ACCOUNT OF THE BORROWERS OR ANY OTHER LOAN PARTY AGAINST ANY AND
ALL OF THE OBLIGATIONS OF THE BORROWERS OR SUCH LOAN PARTY NOW OR HEREAFTER
EXISTING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT TO SUCH LENDER OR THE
LC ISSUER, IRRESPECTIVE OF WHETHER OR NOT SUCH LENDER OR THE LC ISSUER SHALL
HAVE MADE ANY DEMAND UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
ALTHOUGH SUCH OBLIGATIONS OF THE BORROWERS OR SUCH LOAN PARTY MAY BE CONTINGENT
OR UNMATURED OR ARE OWED TO A BRANCH OR OFFICE OF SUCH LENDER OR THE LC ISSUER
DIFFERENT FROM THE BRANCH OR OFFICE HOLDING SUCH DEPOSIT OR OBLIGATED ON SUCH
INDEBTEDNESS.  THE RIGHTS OF EACH LENDER, THE LC ISSUER AND THEIR RESPECTIVE
AFFILIATES UNDER THIS SECTION ARE IN ADDITION TO OTHER RIGHTS AND REMEDIES
(INCLUDING OTHER RIGHTS OF SETOFF) THAT SUCH LENDER, THE LC ISSUER OR THEIR
RESPECTIVE AFFILIATES MAY HAVE.  EACH LENDER AND THE LC ISSUER AGREES TO NOTIFY
THE BORROWERS AND THE ADMINISTRATIVE AGENT PROMPTLY AFTER ANY SUCH SETOFF AND
APPLICATION,

 

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PROVIDED THAT THE FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE VALIDITY OF
SUCH SETOFF AND APPLICATION.

 

12.6         NO WAIVERS.  NO FAILURE OR DELAY BY THE ADMINISTRATIVE AGENT, THE
LC ISSUER OR ANY LENDER IN EXERCISING ANY RIGHT, POWER OR PRIVILEGE HEREUNDER,
UNDER THE NOTES OR UNDER ANY OTHER LOAN DOCUMENT SHALL OPERATE AS A WAIVER
THEREOF; NOR SHALL ANY SINGLE OR PARTIAL EXERCISE THEREOF PRECLUDE ANY OTHER OR
FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT, POWER OR
PRIVILEGE.  NO WAIVER SHALL EXTEND TO OR AFFECT ANY OBLIGATION NOT EXPRESSLY
WAIVED OR IMPAIR ANY RIGHT CONSEQUENT THEREON.  NO COURSE OF DEALING OR OMISSION
ON THE PART OF THE ADMINISTRATIVE AGENT, THE LC ISSUER OR THE LENDERS IN
EXERCISING ANY RIGHT SHALL OPERATE AS A WAIVER THEREOF OR OTHERWISE BE
PREJUDICIAL THERETO.  NO NOTICE TO OR DEMAND UPON THE BORROWERS SHALL ENTITLE
THE BORROWERS TO OTHER OR FURTHER NOTICE OR DEMAND IN SIMILAR OR OTHER
CIRCUMSTANCES, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE LOAN DOCUMENTS. 
THE RIGHTS AND REMEDIES HEREIN AND IN THE NOTES AND THE OTHER LOAN DOCUMENTS ARE
CUMULATIVE AND NOT EXCLUSIVE OF ANY RIGHTS OR REMEDIES OTHERWISE PROVIDED BY
AGREEMENT OR LAW.

 

12.7         AMENDMENTS, WAIVERS, ETC.

 

(A)           NEITHER THIS AGREEMENT NOR THE NOTES NOR ANY OTHER LOAN DOCUMENT
NOR ANY PROVISION HEREOF OR THEREOF MAY BE AMENDED, WAIVED, DISCHARGED OR
TERMINATED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE ADMINISTRATIVE AGENT ON
BEHALF OF THE LENDERS AND, WITH RESPECT TO LETTERS OF CREDIT, THE LC ISSUER OR,
AS THE CASE MAY BE, BY THE LENDERS AND, WITH RESPECT TO LETTERS OF CREDIT, THE
LC ISSUER AND ALSO, IN THE CASE OF AMENDMENTS, BY THE BORROWERS.

 

(B)           EXCEPT WHERE THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
AUTHORIZES OR PERMITS THE ADMINISTRATIVE AGENT TO ACT ALONE AND EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 12.7(B), ANY ACTION TO BE TAKEN
(INCLUDING THE GIVING OF NOTICE) BY THE LENDERS MAY BE TAKEN, AND ANY CONSENT OR
APPROVAL REQUIRED OR PERMITTED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT TO
BE GIVEN BY THE LENDERS MAY BE GIVEN, AND ANY TERM OF THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT RELATED TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR MENTIONED THEREIN MAY BE AMENDED, AND
THE PERFORMANCE OR OBSERVANCE BY THE BORROWERS OR ANY OTHER PERSON OF ANY OF THE
TERMS THEREOF AND ANY DEFAULT OR EVENT OF DEFAULT (AS DEFINED IN ANY OF THE
ABOVE-REFERENCED DOCUMENTS OR INSTRUMENTS) MAY BE WAIVED (EITHER GENERALLY OR IN
A PARTICULAR INSTANCE AND EITHER RETROACTIVELY OR PROSPECTIVELY), IN EACH CASE
ONLY WITH THE WRITTEN CONSENT OF THE MAJORITY LENDERS; PROVIDED, HOWEVER, THAT
NO SUCH AMENDMENT, CONSENT OR WAIVER SHALL

 

(I)            EXTEND OR INCREASE THE COMMITMENT OF ANY LENDER (OR REINSTATE ANY
COMMITMENT TERMINATED PURSUANT TO SECTION 9.2) WITHOUT THE WRITTEN CONSENT OF
SUCH LENDER;

 

(II)           POSTPONE ANY DATE FIXED BY THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT FOR ANY PAYMENT (EXCLUDING MANDATORY PREPAYMENTS UNDER SUBPARAGRAPHS
(II) THROUGH (V) OF SECTION 2.8(B)) OF PRINCIPAL, INTEREST, FEES OR OTHER
AMOUNTS DUE TO THE LENDERS (OR ANY OF THEM) HEREUNDER OR UNDER SUCH OTHER LOAN
DOCUMENT WITHOUT THE WRITTEN CONSENT OF EACH LENDER ENTITLED TO SUCH PAYMENT;

 

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(III)          REDUCE THE PRINCIPAL OF, OR THE RATE OF INTEREST SPECIFIED HEREIN
ON, ANY LOAN OR (SUBJECT TO CLAUSE (III) OF THE SECOND PROVISO TO THIS
SECTION 12.7(B)) ANY FEES OR OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER ANY OTHER
LOAN DOCUMENT WITHOUT THE WRITTEN CONSENT OF EACH LENDER ENTITLED TO SUCH
AMOUNT; PROVIDED, HOWEVER, THAT ONLY THE CONSENT OF THE MAJORITY LENDERS SHALL
BE NECESSARY (X) TO AMEND THE PROVISIONS OF SECTION 2.5(C) OR TO WAIVE ANY
OBLIGATION OF THE BORROWERS TO PAY INTEREST OR FEES IN RESPECT OF LETTERS OF
CREDIT AT THE RATE PROVIDED IN SAID SECTION THEREIN FOLLOWING THE OCCURRENCE OF
AN EVENT OF DEFAULT OR (Y) TO AMEND SECTION VII HEREOF (OR ANY DEFINED TERM USED
THEREIN) EVEN IF THE EFFECT OF SUCH AMENDMENT WOULD BE TO REDUCE THE RATE OF
INTEREST ON ANY LOAN OR TO REDUCE ANY FEE PAYABLE HEREUNDER;

 

(IV)          CHANGE (X) SECTION 2.9(D) OR 9.3 IN A MANNER THAT WOULD ALTER THE
PRO RATA SHARING OF PAYMENTS REQUIRED THEREBY WITHOUT THE WRITTEN CONSENT OF
EACH LENDER OR (Y) THE ORDER OF APPLICATION OF ANY REDUCTION IN THE COMMITMENTS
OR ANY PREPAYMENT OF LOANS AMONG THE FACILITIES FROM THE APPLICATION THEREOF SET
FORTH IN THE APPLICABLE PROVISIONS OF SECTION 2.1(E) AND 2.9(B), RESPECTIVELY,
IN ANY MANNER THAT MATERIALLY AND ADVERSELY AFFECTS THE LENDERS UNDER A FACILITY
WITHOUT THE WRITTEN CONSENT OF (A) IF SUCH FACILITY IS THE TERM FACILITY, THE
MAJORITY TERM LENDERS AND (B) IF SUCH FACILITY IS THE REVOLVING CREDIT FACILITY,
THE MAJORITY REVOLVING CREDIT LENDERS;

 

(V)           CHANGE (X) ANY PROVISION OF THIS SECTION 12.7 OR THE DEFINITION OF
“MAJORITY LENDERS” OR ANY OTHER PROVISION HEREOF SPECIFYING THE NUMBER OR
PERCENTAGE OF LENDERS REQUIRED TO AMEND, WAIVE OR OTHERWISE MODIFY ANY RIGHTS
HEREUNDER OR MAKE ANY DETERMINATION OR GRANT ANY CONSENT HEREUNDER (OTHER THAN
THE DEFINITIONS SPECIFIED IN CLAUSE (Y) OF THIS SUBPARAGRAPH (V)), WITHOUT THE
WRITTEN CONSENT OF EACH LENDER OR (Y) THE DEFINITION OF “MAJORITY REVOLVING
CREDIT LENDERS,” OR “MAJORITY TERM LENDERS,” WITHOUT THE WRITTEN CONSENT OF EACH
LENDER UNDER THE APPLICABLE FACILITY;

 

(VI)          RELEASE ANY SUBSIDIARY GUARANTY OR ANY PORTION OF THE VALUE OF ANY
SUBSIDIARY GUARANTY, WITHOUT THE WRITTEN CONSENT OF EACH LENDER;

 

(VII)         IMPOSE ANY GREATER RESTRICTION ON THE ABILITY OF ANY LENDER UNDER
A FACILITY TO ASSIGN ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT THE
WRITTEN CONSENT OF (X) IF SUCH FACILITY IS THE TERM FACILITY, THE MAJORITY TERM
LENDERS, AND (Y) IF SUCH FACILITY IS THE REVOLVING CREDIT FACILITY, THE MAJORITY
REVOLVING CREDIT LENDERS; OR

 

(VIII)        FORECLOSE ON ANY REAL PROPERTY COLLATERAL WITHOUT FIRST OBTAINING
REASONABLE AND CUSTOMARY ENVIRONMENTAL STUDIES AND REPORTS REGARDING SUCH
COLLATERAL, WITHOUT THE CONSENT OF EACH LENDER;

 

and provided, further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the LC Issuer in addition to the Lenders required above,
affect the rights or duties of the LC Issuer under this Agreement or any
Application relating to any Letter of Credit issued or to be issued by it;
(ii) no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iii) the Fee Letter

 

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may be amended, or rights or privileges thereunder waived, in a writing executed
only by the parties thereto.

 

If any Lender does not consent to a proposed amendment, waiver, consent or
release with respect to any Loan Document that requires the consent of each
Lender and that has been approved by the Majority Lenders, the Borrowers may
replace such non-consenting Lender in accordance with Section 10.2; provided
that such amendment, waiver, consent or release can be effected as a result of
the assignment contemplated by such Section (together with all other such
assignments required by the Borrowers to be made pursuant to this paragraph). 
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.

 

12.8         TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.  EACH OF THE
ADMINISTRATIVE AGENT, THE LENDERS AND THE LC ISSUER AGREES TO MAINTAIN THE
CONFIDENTIALITY OF THE INFORMATION (AS DEFINED BELOW), EXCEPT THAT INFORMATION
MAY BE DISCLOSED (A) TO ITS AFFILIATES AND TO ITS AND ITS AFFILIATES’ RESPECTIVE
PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ADVISORS AND REPRESENTATIVES
(IT BEING UNDERSTOOD THAT THE PERSONS TO WHOM SUCH DISCLOSURE IS MADE WILL BE
INFORMED OF THE CONFIDENTIAL NATURE OF SUCH INFORMATION AND INSTRUCTED TO KEEP
SUCH INFORMATION CONFIDENTIAL), (B) TO THE EXTENT REQUESTED BY ANY REGULATORY
AUTHORITY PURPORTING TO HAVE JURISDICTION OVER IT (INCLUDING ANY SELF-REGULATORY
AUTHORITY, SUCH AS THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS), (C) TO
THE EXTENT REQUIRED BY APPLICABLE LAWS OR REGULATIONS OR BY ANY SUBPOENA OR
SIMILAR LEGAL PROCESS, (D) TO ANY OTHER PARTY HERETO, (E) IN CONNECTION WITH THE
EXERCISE OF ANY REMEDIES HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT OR ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
THE ENFORCEMENT OF RIGHTS HEREUNDER OR THEREUNDER, (F) SUBJECT TO AN AGREEMENT
CONTAINING PROVISIONS SUBSTANTIALLY THE SAME AS THOSE OF THIS SECTION, TO
(I) ANY ASSIGNEE OF OR PARTICIPANT IN, OR ANY PROSPECTIVE ASSIGNEE OF OR
PARTICIPANT IN, ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR
(II) ANY ACTUAL OR PROSPECTIVE COUNTERPARTY (OR ITS ADVISORS) TO ANY SWAP OR
DERIVATIVE TRANSACTION RELATING TO THE BORROWERS AND ITS OBLIGATIONS, (G) WITH
THE CONSENT OF THE BORROWERS OR (H) TO THE EXTENT SUCH INFORMATION (I) BECOMES
PUBLICLY AVAILABLE OTHER THAN AS A RESULT OF A BREACH OF THIS SECTION OR
(II) BECOMES AVAILABLE TO THE ADMINISTRATIVE AGENT, ANY LENDER, THE LC ISSUER OR
ANY OF THEIR RESPECTIVE AFFILIATES ON A NONCONFIDENTIAL BASIS FROM A SOURCE
OTHER THAN THE BORROWERS.

 

For purposes of this Section, “Information” means all information received from
any Loan Party or any Subsidiary thereof relating to any Loan Party or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the LC
Issuer on a nonconfidential basis prior to disclosure by any Loan Party or any
Subsidiary thereof, provided that, in the case of information received from a
Loan Party or any such Subsidiary after the date hereof, such information is
clearly identified at the time of delivery as confidential.  Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

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Each of the Administrative Agent, the Lenders and the LC Issuer acknowledges
that (a) the Information may include material non-public information concerning
the Borrowers or a Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non-public information and
(c) it will handle such material non-public information in accordance with
applicable law, including Federal and state securities laws.

 

12.9         LOST NOTE, ETC.  UPON RECEIPT OF AN AFFIDAVIT OF AN OFFICER OF ANY
LENDER AS TO THE LOSS, THEFT, DESTRUCTION OR MUTILATION OF ANY NOTE OR ANY
SECURITY DOCUMENT WHICH IS NOT A PUBLIC RECORD AND, IN THE CASE OF ANY SUCH
LOSS, THEFT, DESTRUCTION OR MUTILATION, UPON CANCELLATION OF SUCH NOTE OR
SECURITY DOCUMENT, IF AVAILABLE, THE BORROWERS WILL ISSUE, IN LIEU THEREOF, A
REPLACEMENT NOTE OR OTHER SECURITY DOCUMENT IN THE SAME PRINCIPAL AMOUNT THEREOF
AND OTHERWISE OF LIKE TENOR.

 

12.10       CAPTIONS; COUNTERPARTS.  THE CAPTIONS IN THIS AGREEMENT ARE FOR
CONVENIENCE OF REFERENCE ONLY AND SHALL NOT DEFINE OR LIMIT THE PROVISIONS
HEREOF.  THIS AGREEMENT AND ANY AMENDMENT HEREOF MAY BE EXECUTED IN SEVERAL
COUNTERPARTS AND BY EACH PARTY ON A SEPARATE COUNTERPART, EACH OF WHICH WHEN SO
EXECUTED AND DELIVERED SHALL BE AN ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL
CONSTITUTE ONE INSTRUMENT.  IN PROVING THIS AGREEMENT IT SHALL NOT BE NECESSARY
TO PRODUCE OR ACCOUNT FOR MORE THAN ONE SUCH COUNTERPART SIGNED BY THE PARTY
AGAINST WHOM ENFORCEMENT IS SOUGHT.  EXCEPT AS PROVIDED IN SECTION 4.1, THIS
AGREEMENT SHALL BECOME EFFECTIVE WHEN IT SHALL HAVE BEEN EXECUTED BY THE
ADMINISTRATIVE AGENT AND WHEN THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
COUNTERPARTS HEREOF THAT, WHEN TAKEN TOGETHER, BEAR THE SIGNATURES OF EACH OF
THE OTHER PARTIES HERETO.

 

12.11       ENTIRE AGREEMENT, ETC.  THE LOAN DOCUMENTS AND ANY OTHER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH OR THEREWITH EXPRESS THE ENTIRE UNDERSTANDING OF
THE PARTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND SUPERSEDE
ALL PRIOR AGREEMENTS WITH RESPECT TO THE SUBJECT MATTER HEREOF, EXCEPT FOR THE
LETTER AGREEMENT DATED JANUARY 3, 2008 BETWEEN THE PARENT AND THE ADMINISTRATIVE
AGENT WITH RESPECT TO CERTAIN FEES PAYABLE TO THE ADMINISTRATIVE AGENT AND OTHER
PARTIES IDENTIFIED THEREIN (AS AMENDED FROM TIME TO TIME, THE “FEE LETTER”),
WHICH FEE LETTER SHALL CONTINUE IN FULL FORCE AND EFFECT AND SHALL NOT BE
SUPERSEDED BY ANY OF THE LOAN DOCUMENTS.

 

12.12       WAIVER OF JURY TRIAL.  THE BORROWERS AND EACH OF THE LENDERS HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THEIR RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER, THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY INCLUDING, WITHOUT LIMITATION, ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE
ADMINISTRATION AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OR ENFORCEMENT
OF THE LOANS AND THE LOAN DOCUMENTS, AND AGREE THAT THEY WILL NOT SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED.

 

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EXCEPT AS PROHIBITED BY LAW, THE BORROWERS AND EACH OF THE LENDERS HEREBY WAIVE
ANY RIGHT THEY MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE
PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.

 

THE BORROWERS (a) CERTIFY THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDERS WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
(b) ACKNOWLEDGE THAT THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS TO WHICH EACH IS A PARTY BECAUSE OF, AMONG OTHER
THINGS, THE BORROWERS’ WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

 

12.13       GOVERNING LAW.  THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).

 

12.14       JURISDICTION; CONSENT TO SERVICE OF PROCESS.  (A) THE BORROWERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR ITSELF AND ITS PROPERTY, TO
THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR,
TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES
HERETO AGREES THAT A FINAL, NON-APPEALED JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE BORROWERS,
THE ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY OTHER PARTY HERETO OR THEIR PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(B)           THE BORROWERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (A) OF THIS SECTION.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT.

 

(C)           EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 12.1.  NOTHING IN THIS
AGREEMENT OR ANY OTHER LOAN

 

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DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.

 

12.15       USA PATRIOT ACT NOTICE.  EACH LENDER THAT IS SUBJECT TO THE PATRIOT
ACT (AS DEFINED BELOW) AND THE ADMINISTRATIVE AGENT (FOR ITSELF AND NOT ON
BEHALF OF ANY LENDER) HEREBY NOTIFIES THE BORROWERS THAT PURSUANT TO THE
REQUIREMENTS OF THE USA PATRIOT ACT (TITLE III OF PUB. L. 107-56 (SIGNED INTO
LAW OCTOBER 26, 2001)) (THE “PATRIOT ACT”), IT IS REQUIRED TO OBTAIN, VERIFY AND
RECORD INFORMATION THAT IDENTIFIES EACH LOAN PARTY, WHICH INFORMATION INCLUDES
THE NAME AND ADDRESS OF EACH LOAN PARTY AND OTHER INFORMATION THAT WILL ALLOW
SUCH LENDER OR THE ADMINISTRATIVE AGENT, AS APPLICABLE, TO IDENTIFY EACH LOAN
PARTY IN ACCORDANCE WITH THE PATRIOT ACT.

 

12.16       SEVERABILITY.  THE PROVISIONS OF THIS AGREEMENT ARE SEVERABLE AND IF
ANY ONE CLAUSE OR PROVISION HEREOF SHALL BE HELD INVALID OR UNENFORCEABLE IN
WHOLE OR IN PART IN ANY JURISDICTION, THEN SUCH INVALIDITY OR UNENFORCEABILITY
SHALL AFFECT ONLY SUCH CLAUSE OR PROVISION, OR PART THEREOF, IN SUCH
JURISDICTION, AND SHALL NOT IN ANY MANNER AFFECT SUCH CLAUSE OR PROVISION IN ANY
OTHER JURISDICTION, OR ANY OTHER CLAUSE OR PROVISION OF THIS AGREEMENT IN ANY
JURISDICTION.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Credit Agreement
under seal as of the date first above written.

 

 

STAR BUFFET, INC.

 

 

 

 

 

By:

/s/ Ron Dowdy

 

          Name: Ron Dowdy

 

          Title: Secretary

 

 

 

 

 

STAR BUFFET MANAGEMENT, INC.

 

 

 

 

 

By:

/s/ Ron Dowdy

 

         Name: Ron Dowdy

 

         Title: Secretary

 

 

 

SUMMIT FAMILY RESTAURANTS, INC.

 

 

 

 

 

By:

/s/ Ron Dowdy

 

         Name: Ron Dowdy

 

         Title: Secretary

 

 

 

 

 

HTB RESTAURANTS, INC.

 

 

 

 

 

By:

/s/ Ron Dowdy

 

         Name: Ron Dowdy

 

         Title: Secretary

 

 

 

 

 

NORTHSTAR BUFFET, INC.

 

 

 

 

 

By:

/s/ Ron Dowdy

 

          Name: Ron Dowdy

 

          Title:Secretary

 

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

 

 

WELLS FARGO BANK, N.A., individually and as
Administrative Agent, LC Issuer, Lead Arranger and
Syndication Agent

 

 

 

 

 

By:

/s/ J. Nicholas Cole

 

       Name:  J. Nicholas Cole

 

       Title: Managing Director

 

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

 

Schedule 1

Commitments and Applicable Percentages

 

Lender

 

Revolving
Credit
Commitment

 

Applicable
Percentage

 

Term
Commitment

 

Applicable
Percentage

 

Total
Commitment

 

Total
Percentage

 

Wells Fargo Bank, N.A.

 

$

2,000,000

 

100

%

$

7,000,000

 

100

%

$

9,000,000

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

$

2,000,000

 

100

%

$

7,000,000

 

100

%

$

9,000,000

 

100

%

 

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

 

AGREEMENT AND

 

AMENDMENT NO. 1 TO CREDIT AGREEMENT

 

THIS AGREEMENT AND AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”) is
entered into as of February 29, 2008, by and among STAR BUFFET, INC., STAR
BUFFET MANAGEMENT, INC., SUMMIT FAMILY RESTAURANTS, INC., HTB RESTAURANTS, INC.,
NORTHSTAR BUFFET, INC. and STARLITE HOLDINGS, INC. (“Starlite”), each a Delaware
corporation (each individually, a “Borrower”, and collectively, the
“Borrowers”), and WELLS FARGO BANK, N.A., a national banking association (“Wells
Fargo”).

 

WITNESSETH:

 

WHEREAS, the Borrowers (other than Starlite) and Wells Fargo are parties to a
certain Credit Agreement, dated as of January 31, 2008 (as amended, restated or
otherwise modified from time to time, the “Credit Agreement”; terms defined in
the Credit Agreement are used herein with the same meanings); and

 

WHEREAS, Starlite wishes to become a party to the Credit Agreement as a
“Borrower”, and the Borrowers and the Administrative Agent wish to amend the
Credit Agreement;

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

 

SECTION 1.               STARLITE HOLDINGS, INC.  STARLITE AND THE OTHER PARTIES
HERETO AGREE THAT STARLITE AS OF THE DATE HEREOF SHALL BECOME A PARTY TO THE
CREDIT AGREEMENT AS A “BORROWER”, AND THAT ACCORDINGLY THE DEFINITIONS OF
“BORROWER” AND “BORROWERS” ARE HEREBY AMENDED TO INCLUDE STARLITE.

 

SECTION 2.               AMENDMENTS.  EFFECTIVE AS OF THE DATE HEREOF, THE
CREDIT AGREEMENT IS HEREBY AMENDED AS FOLLOWS:

 

(A)          THE DEFINITION OF “TOTAL TERM LOAN COMMITMENT” IN SECTION 1.1 OF
THE CREDIT AGREEMENT IS AMENDED IN FULL TO READ AS FOLLOWS:

 

“Total Term Loan Commitment.  The sum of the Term Loan Commitments of the Term
Lenders as in effect from time to time, which as of February 29, 2008 shall be
$8,000,000.”

 

(B)         SECTION 2.7(A) OF THE CREDIT AGREEMENT IS AMENDED IN FULL TO READ AS
FOLLOWS:

 

“Term Loans.  The Borrowers shall repay the principal amount of the Term Loans
in equal quarterly installments of $175,000 for the first six full calendar
quarters after the Closing Date and in equal quarterly installments of $225,000
for the next nine full

 

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

 

calendar quarters, payable on each Payment Date commencing April 1, 2008, and
the aggregate principal amount of all Term Loans outstanding on the Maturity
Date shall be paid on such date.”

 

(C)          SECTION 6.13 OF THE CREDIT AGREEMENT IS AMENDED IN FULL TO READ AS
FOLLOWS:

 

“INTEREST RATE PROTECTION.  THE BORROWERS SHALL OBTAIN ON OR BEFORE MARCH 13,
2008, AND MAINTAIN IN EFFECT AT ALL TIMES UNTIL THE THIRD ANNIVERSARY OF THE
CLOSING DATE, SWAP AGREEMENTS BETWEEN THEMSELVES AND A SWAP BANK WITH RESPECT TO
NOT LESS THAN FIFTY PERCENT (50.00%) OF THE TERM LOANS OUTSTANDING UNDER THE
TERM FACILITY.”

 

(D)         THE SCHEDULES TO THE CREDIT AGREEMENT AND, TO THE EXTENT APPLICABLE,
THE OTHER LOAN DOCUMENTS ARE HEREBY AMENDED AND RESTATED IN THE FORMS ATTACHED
HERETO AS EXHIBIT A.

 

SECTION 3.               LOAN DOCUMENTS.  IN ADDITION TO STARLITE BECOMING A
BORROWER UNDER THE CREDIT AGREEMENT PURSUANT TO SECTION 1 ABOVE, BY ITS
EXECUTION HEREOF, STARLITE AGREES TO BECOME A PARTY TO AND BOUND BY, AND EACH OF
THE OTHER PARTIES HERETO HEREBY AGREES THAT STARLITE SHALL BECOME A PARTY TO, AS
OF THE DATE HEREOF, THE FOLLOWING LOAN DOCUMENTS IN THE SAME MANNER AS THE OTHER
BORROWERS:

 

(I)            REVOLVING CREDIT NOTE;

 

(II)           TERM NOTE;

 

(III)          SECURITY AGREEMENT;

 

(IV)          COLLATERAL ASSIGNMENT OF CONTRACTS;

 

(V)           TRADEMARK SECURITY AGREEMENT;

 

(VI)          PLEDGE AGREEMENT (AS A BORROWER, NOT A PLEDGOR);

 

(VII)         INDEMNITY AGREEMENT REGARDING HAZARDOUS MATERIALS; AND

 

(VIII)        COLLATERAL ASSIGNMENT OF LICENSES AND PERMITS.

 

SECTION 4.               CONSENT TO ASSET PURCHASE AGREEMENT.  THE LENDER
HEREBY CONSENTS TO THE TRANSACTIONS CONTEMPLATED BY THAT CERTAIN ASSET PURCHASE
AGREEMENT, DATED AS OF FEBRUARY 5, 2008 BETWEEN STARLITE AND BARNHILL’S
BUFFET, INC. (THE “PURCHASE AGREEMENT”) AND THE GUARANTY BY STAR BUFFET, INC. IN
FAVOR OF SPIRIT MASTER FUNDING, LLC (THE “GUARANTY”).

 

SECTION 5.               REPRESENTATIONS AND WARRANTIES.  THE BORROWERS
REPRESENT AND WARRANT AS FOLLOWS:

 

(A)          EXCEPT AS SET FORTH ON THE UPDATED SCHEDULES TO THE CREDIT
AGREEMENT ATTACHED HERETO AS EXHIBIT A, THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN SECTION V OF THE CREDIT AGREEMENT, AFTER GIVING EFFECT TO THIS
AMENDMENT, ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF THE DATE
HEREOF, AS THOUGH MADE ON AND AS OF SUCH DATE, EXCEPT TO THE EXTENT THAT SUCH

 

2

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

 

REPRESENTATIONS AND WARRANTIES EXPRESSLY RELATE SOLELY TO AN EARLIER DATE (IN
WHICH CASE SUCH REPRESENTATIONS AND WARRANTIES WERE TRUE AND ACCURATE ON AND AS
OF SUCH EARLIER DATE).

 

(B)         NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED OR IS CONTINUING ON THE
DATE HEREOF AND NO DEFAULT OR EVENT OF DEFAULT WILL OCCUR OR BE CONTINUING
IMMEDIATELY AFTER THE DATE HEREOF.

 

SECTION 6.               CONDITIONS TO EFFECTIVENESS.  THIS AMENDMENT SHALL
BECOME EFFECTIVE ONLY WHEN THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED:

 

(A)          COUNTERPARTS OF THIS AMENDMENT DULY EXECUTED BY THE BORROWERS;

 

(B)         A DULY EXECUTED CERTIFICATE OF A RESPONSIBLE OFFICER OF THE
BORROWERS CONFIRMING (I) THAT THE BORROWERS HAVE DELIVERED TO THE ADMINISTRATIVE
AGENT TRUE AND CORRECT COPIES OF THE PURCHASE AGREEMENT AND THE GUARANTY AND ALL
SCHEDULES, DOCUMENTS AND AGREEMENTS ANCILLARY THERETO AS IN EFFECT ON THE DATE
HEREOF, (II) THAT ALL CONDITIONS TO THE EFFECTIVENESS OF THE TRANSACTIONS
CONTEMPLATED BY THE PURCHASE AGREEMENT HAVE BEEN SATISFIED, (III) THAT THE
TRANSACTIONS CONTEMPLATED BY THE PURCHASE AGREEMENT HAVE BEEN CONSUMMATED,
(IV) THAT THE CONDITIONS IN SECTION 5 ABOVE AND SECTION 4.2 OF THE CREDIT
AGREEMENT HAVE BEEN SATISFIED, (V) DELIVERY TO THE ADMINISTRATIVE AGENT OF A
CERTIFIED COPY OF THE FINAL ORDER BY THE BANKRUPTCY COURT APPROVING THE
TRANSACTIONS CONTEMPLATED BY THE PURCHASE AGREEMENT, INCLUDING WITHOUT
LIMITATION THE GUARANTY, IN FORM REASONABLY SATISFACTORY TO THE ADMINISTRATIVE
AGENT AND (VI) SUCH OTHER MATTERS AS THE ADMINISTRATIVE AGENT SHALL REQUIRE, IN
FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT;

 

(C)          ALLONGES TO THE NOTES IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT,

 

(D)         ORIGINAL CERTIFICATES REPRESENTING THE PLEDGED EQUITY INTERESTS
REFERRED TO IN THE PLEDGE AGREEMENT, INCLUDING OF STARLITE, ACCOMPANIED BY
UNDATED STOCK POWERS EXECUTED IN BLANK TO THE EXTENT NOT PREVIOUSLY DELIVERED TO
THE ADMINISTRATIVE AGENT;

 

(E)          STAMPED RECEIPT COPIES OF A PROPER FINANCING STATEMENT, DULY FILED
ON OR BEFORE THE DATE HEREOF UNDER THE UNIFORM COMMERCIAL CODE OF DELAWARE WITH
RESPECT TO ALL ASSETS OF STARLITE;

 

(F)          A DULY EXECUTED CERTIFICATE OF THE SECRETARY OF STARLITE AS TO
AUTHORIZING RESOLUTIONS OF ITS BOARD OF DIRECTORS, ITS CERTIFICATE OF
INCORPORATION, BYLAWS, AND INCUMBENCY AND SIGNATURES OF ITS AUTHORIZED OFFICERS,
IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT;

 

(G)         A CERTIFICATE OF GOOD STANDING OF STARLITE ISSUED BY THE SECRETARY
OF STATE OF THE STATE OF DELAWARE;

 

(H)         AN OPINION OF KILPATRICK STOCKTON LLP COUNSEL TO THE BORROWERS
ADDRESSED TO THE ADMINISTRATIVE AGENT AND EACH LENDER IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT; AND

 

(I)           SUCH OTHER CERTIFICATES, INSTRUMENTS AND DOCUMENTS AS THE
ADMINISTRATIVE AGENT SHALL REASONABLY REQUIRE.

 

3

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

 

SECTION 7.               GENERAL.  THE FOREGOING AMENDMENTS TO THE CREDIT
AGREEMENT AND CONSENT ARE LIMITED AS PROVIDED HEREIN AND DO NOT EXTEND TO ANY
OTHER PROVISIONS OF THE CREDIT AGREEMENT NOT SPECIFIED HEREIN OR TO ANY OTHER
MATTER.  THE CREDIT AGREEMENT IS HEREBY RATIFIED AND CONFIRMED AND SHALL
CONTINUE IN FULL FORCE AND EFFECT AS AMENDED HEREBY.  THIS AMENDMENT MAY BE
EXECUTED IN ANY NUMBER OF COUNTERPARTS WITH THE SAME EFFECT AS IF THE SIGNATURES
HERETO WERE UPON THE SAME INSTRUMENT.  TELECOPIED SIGNATURES HERETO SHALL BE OF
THE SAME FORCE AND EFFECT AS AN ORIGINAL OF A MANUALLY SIGNED COPY.

 

SECTION 8.               GOVERNING LAW.  THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE CONSTRUCTION OF THIS AMENDMENT AND THE RIGHTS AND DUTIES OF THE
PARTIES HERETO.

 

SECTION 9.               HEADINGS. THE DESCRIPTIVE HEADINGS OF THE VARIOUS
PROVISIONS OF THIS AMENDMENT ARE FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT
BE DEEMED TO AFFECT THE MEANING OR CONSTRUCTION OF ANY OF THE PROVISIONS HEREOF.

 

[Signature page follows.]

 

4

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

 

IN WITNESS WHEREOF, this Agreement and Amendment No. 1 to Credit Agreement has
been executed as an instrument under seal as of the date first set forth above.

 

WELLS FARGO BANK, N.A., individually and as Administrative Agent, LC Issuer,
Lead Arranger and Syndication Agent

STAR BUFFET, INC.

 

 

 

By:

          /s/ Ron Dowdy

 

          Name: Ron Dowdy

 

          Title: Secretary

By:

          /s/ Darcy McLaren

 

 

          Name: Darcy McLaren

STAR BUFFET MANAGEMENT, INC.

          Title:  Vice President

 

 

 

 

By:

         /s/ Ron Dowdy

 

         Name: Ron Dowdy

 

         Title: Secretary

 

 

 

SUMMIT FAMILY RESTAURANTS, INC.

 

 

 

 

 

By:

         /s/ Ron Dowdy

 

         Name: Ron Dowdy

 

         Title: Secretary

 

 

 

HTB RESTAURANTS, INC.

 

 

 

 

 

By:

         /s/ Ron Dowdy

 

         Name: Ron Dowdy

 

         Title: Secretary

 

 

 

NORTHSTAR BUFFET, INC.

 

 

 

 

 

By:

          /s/ Ron Dowdy

 

          Name: Ron Dowdy

 

          Title: Secretary

 

 

 

STARLITE HOLDINGS, INC.

 

 

 

 

 

By:

          /s/ Ron Dowdy

 

          Name: Ron Dowdy

 

          Title:Secretary

 

[Signature Page to Amendment No. 1 to Credit Agreement]

 

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