EXECUTION COPY

 

Exhibit 10.1

 

$175,000,000 CREDIT AGREEMENT

 

dated as of February 27, 2004

 

among

 

KINGPIN INTERMEDIATE CORP.,

 

KINGPIN MERGER SUB, INC.

(to be merged with and into AMF BOWLING WORLDWIDE, INC.),

 

THE LENDERS FROM TIME TO TIME PARTY HERETO,

 

CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH,

as Administrative Agent

 

and

 

MERRILL LYNCH & CO.,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Syndication Agent and Documentation Agent

 

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MERRILL LYNCH & CO.,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

 

and

 

CREDIT SUISSE FIRST BOSTON LLC,

as Co-Lead Arrangers and Joint Bookrunners

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Table of Contents*

 

          Page

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     ARTICLE I           DEFINITIONS     

Section 1.01

   Defined Terms      1

Section 1.02

   Computation of Time Periods and Other Definitional Provisions    51

Section 1.03

   Accounting Terms and Determinations    51

Section 1.04

   Classes and Types of Borrowings    52

Section 1.05

   Exchange Rates    52

Section 1.06

   Redenomination of Certain Foreign Currencies into Euros    52

Section 1.07

   Currency Conversion    53      ARTICLE II           THE CREDIT FACILITIES   
 

Section 2.01

   Commitments to Lend    53

Section 2.02

   Notice of Borrowings    54

Section 2.03

   Notice to Lenders; Funding of Loans.    56

Section 2.04

   Evidence of Loans    57

Section 2.05

   Letters of Credit    58

Section 2.06

   Interest    68

Section 2.07

   Extension and Conversion    69

Section 2.08

   Maturity of Loans    71

Section 2.09

   Prepayments    72

Section 2.10

   Adjustment of Commitments.    76

Section 2.11

   Fees.    79

Section 2.12

   Pro-Rata Treatment    80

Section 2.13

   Sharing of Payments    81

Section 2.14

   Payments; Computation    81      ARTICLE III           TAXES, YIELD
PROTECTION AND ILLEGALITY     

Section 3.01

   Taxes.    83

Section 3.02

   Change in Law, Etc    85

Section 3.03

   Basis for Determining Interest Rate Inadequate or Unfair    86

Section 3.04

   Increased Costs and Reduced Return    86

Section 3.05

   Funding Losses    88

Section 3.06

   Base Rate Loans Substituted for Affected Eurocurrency Loans    88     
ARTICLE IV           CONDITIONS     

Section 4.01

   Conditions to Closing    89

Section 4.02

   Conditions to All Credit Extensions    98

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* The Table of Contents is not part of the Credit Agreement.

 

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Table of Contents* (cont,)

 

          Page

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     ARTICLE V           REPRESENTATIONS AND WARRANTIES     

Section 5.01

   Organization and Good Standing    98

Section 5.02

   Power; Authorization; Enforceable Obligations    99

Section 5.03

   No Conflicts    99

Section 5.04

   No Default    99

Section 5.05

   Financial Condition.    100

Section 5.06

   No Material Change    102

Section 5.07

   Title to Properties; Possession Under Leases    102

Section 5.08

   Litigation    102

Section 5.09

   Taxes    102

Section 5.10

   Compliance with Law    102

Section 5.11

   ERISA; Employee Benefit Arrangements.    103

Section 5.12

   Subsidiaries    104

Section 5.13

   Governmental Regulations, Etc.    105

Section 5.14

   Purpose of Loans and Letters of Credit    105

Section 5.15

   Labor Matters    105

Section 5.16

   Environmental Matters    106

Section 5.17

   Intellectual Property    106

Section 5.18

   Solvency    107

Section 5.19

   Disclosure    107

Section 5.20

   Collateral Documents.    107

Section 5.21

   Ownership.    108

Section 5.22

   Certain Transactions.    109      ARTICLE VI           AFFIRMATIVE COVENANTS
    

Section 6.01

   Information    110

Section 6.02

   Preservation of Existence and Franchises    112

Section 6.03

   Books and Records; Lender Meeting    113

Section 6.04

   Compliance with Law; Employee Benefit Arrangements    113

Section 6.05

   Payment of Taxes    113

Section 6.06

   Insurance; Certain Proceeds.    114

Section 6.07

   Maintenance of Property    115

Section 6.08

   Use of Proceeds    115

Section 6.09

   Audits/Inspections    115

Section 6.10

   Additional Credit Parties; Additional Security.    115

Section 6.11

   Interest Rate Protection Agreements    118

Section 6.12

   Contributions    119      ARTICLE VII           NEGATIVE COVENANTS     

Section 7.01

   Limitation on Debt    119

Section 7.02

   Restriction on Liens    122

Section 7.03

   Nature of Business    125

Section 7.04

   Consolidation, Merger and Dissolution    125

 

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Table of Contents* (cont,)

 

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Section 7.05

   Asset Dispositions    127

Section 7.06

   Investments.    129

Section 7.07

   Restricted Payments, etc    132

Section 7.08

   Prepayments of Debt, etc    134

Section 7.09

   Transactions with Affiliates    135

Section 7.10

   Fiscal Year; Organizational and Other Documents    136

Section 7.11

   Restrictions with Respect to Intercorporate Transfers    137

Section 7.12

   Ownership of Subsidiaries; Limitations on Holdings and the Parent Borrower   
138

Section 7.13

   Sale and Leaseback Transactions    139

Section 7.14

   Capital Expenditures    139

Section 7.15

   Additional Negative Pledges    140

Section 7.16

   Impairment of Security Interests    140

Section 7.17

   Financial Covenants.    140

Section 7.18

   No Other “Designated Senior Debt”    141

Section 7.19

   Independence of Covenants    141      ARTICLE VIII           DEFAULTS     

Section 8.01

   Events of Default    141

Section 8.02

   Acceleration; Remedies    145

Section 8.03

   Allocation of Payments After Event of Default.    146      ARTICLE IX       
   AGENCY PROVISIONS     

Section 9.01

   Appointment; Authorization.    149

Section 9.02

   Delegation of Duties    150

Section 9.03

   Exculpatory Provisions    150

Section 9.04

   Reliance on Communications    150

Section 9.05

   Notice of Default    151

Section 9.06

   Credit Decision; Disclosure of Information by Administrative Agent    151

Section 9.07

   No Reliance on Arranger’s or Agent’s Customer Identification Program    151

Section 9.08

   Indemnification    152

Section 9.09

   Agents in Their Individual Capacity    152

Section 9.10

   Successor Agents    153

Section 9.11

   Certain Other Agents    153

Section 9.12

   Agents’ Fees; Arranger Fee    153      ARTICLE X           MISCELLANEOUS     

Section 10.01

   Notices and Other Communications.    154

Section 10.02

   No Waiver; Cumulative Remedies    155

Section 10.03

   Amendments, Waivers and Consents    155

Section 10.04

   Expenses    157

Section 10.05

   Indemnification    158

Section 10.06

   Successors and Assigns.    159

Section 10.07

   Confidentiality and Disclosure    162

Section 10.08

   Set-off    163

Section 10.09

   Interest Rate Limitation    163

 

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Table of Contents* (cont,)

 

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Section 10.10

   Counterparts    164

Section 10.11

   Integration    164

Section 10.12

   Survival of Representations and Warranties    164

Section 10.13

   Severability    164

Section 10.14

   Headings    164

Section 10.15

   Defaulting Lenders    165

Section 10.16

   Governing Law; Submission to Jurisdiction.    165

Section 10.17

   Waiver of Jury Trial    165

Section 10.18

   Binding Effect    166

Section 10.19

   Judgment Currency.    166

Section 10.20

   Lenders’ U.S. Patriot Act Compliance Certification    167

Section 10.21

   U.S. Patriot Act Notice    167

 

Schedules:

 

Schedule 1.01A

  —    Lenders and Commitments

Schedule 1.01B

  —    Adjustments Relating to Consolidated EBITDA

Schedule 1.01C

  —    Refinanced Agreements

Schedule 1.01D

  —    Lender Addresses

Schedule 1.01E

  —    Mandatory Cost Formula

Schedule 1.01F

  —    Insignificant Subsidiaries

Schedule 1.01G

  —    Liquor License Subsidiaries

Schedule 1.01H

  —    Historical Financial Covenant Information

Schedule 4.01(m)(i)

  —    Mortgaged Properties

Schedule 5.02

  —    Required Consents, Authorizations, Notices and Filings

Schedule 5.04

  —    Defaults, Etc.

Schedule 5.05

  —    Financial Condition; Sarbanes – Oxley

Schedule 5.08

  —    Litigation

Schedule 5.09

  —    Taxes

Schedule 5.10

  —    Compliance with Law

Schedule 5.11

  —    Pension and Benefit Plans

Schedule 5.12

  —    Subsidiaries

Schedule 5.16

  —    Environmental Matters

Schedule 5.17

  —    Intellectual Property

Schedule 5.20(c)

  —    Mortgage Recordings

Schedule 5.21

  —    Ownership

Schedule 5.22

  —    Broker’s Fees

Schedule 6.10(b)

  —    Exceptions to Additional Security

Schedule 7.01

  —    Existing Debt

Schedule 7.02

  —    Existing Liens

Schedule 7.05

  —    Scheduled Asset Dispositions

Schedule 7.06

  —    Existing Investments

Schedule 7.09

  —    Transactions with Affiliates

 

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Table of Contents* (cont,)

 

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Exhibits:

                

Exhibit A-1

     —    Form of Notice of Borrowing     

Exhibit A-2

     —    Form of Notice of Extension/Conversion     

Exhibit A-3

     —    Form of Letter of Credit Request     

Exhibit B-1

     —    Form of Revolving Note     

Exhibit B-2

     —    Form of Term Note     

Exhibit C

     —    Form of Assignment and Acceptance     

Exhibit D-1

     —    Form of Opinion of Counsel for the Borrower and the Other Credit
Parties     

Exhibit D-2

     —    Form of Opinion of Special Local Counsel for the Borrower and the
Other Credit Parties (UCC Collateral)     

Exhibit D-3

     —    Form of Opinion of Special Local Counsel for the Borrower and the
Other Credit Parties (Real Property Collateral)     

Exhibit E

     —    Form of Guaranty     

Exhibit F-1

     —    Form of Perfection Certificate     

Exhibit F-2

     —    Form of Security Agreement     

Exhibit F-3

     —    Form of Pledge Agreement     

Exhibit F-4

     —    Form of Mortgage     

Exhibit G

     —    Form of Intercompany Note     

Exhibit H

     —    Form of Intercompany Note Subordination Provisions     

Exhibit I

     —    Form of Accession Agreement     

Exhibit J

     —    Form of Acknowledgement Agreement     

Exhibit K

     —    Form of OFAC/Anti-Terrorism Compliance Certificate     

Exhibit L

     —    Form of Solvency Certificate     

Exhibit M

     —    Form of Secretary’s Certificate     

 

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CREDIT AGREEMENT

 

This Credit Agreement is dated as of February 27, 2004 and is among KINGPIN
INTERMEDIATE CORP., a Delaware corporation (“Holdings”), KINGPIN MERGER SUB,
INC., a Delaware corporation (the “Borrower”) which is to be merged with and
into AMF BOWLING WORLDWIDE, INC., the banks and other financial institutions
from time to time party hereto (the “Lenders”), CREDIT SUISSE FIRST BOSTON,
CAYMAN ISLANDS BRANCH, as Administrative Agent, and MERRILL LYNCH & CO., MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Syndication Agent and
Documentation Agent.

 

Holdings and the Borrower have requested the Lenders to provide credit
facilities to the Borrower having an aggregate U.S. dollar equivalent principal
amount of up to $175,000,000 for the purposes described herein. The Lenders are
willing to make the requested credit facilities available on the terms and
conditions set forth herein. Accordingly, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01 Defined Terms. The following terms, as used herein, have the
following meanings:

 

“Accession Agreement” means a Credit Party Accession Agreement, substantially in
the form of Exhibit I hereto, executed and delivered by an Additional Subsidiary
Guarantor after the Closing Date in accordance with Section 6.10(a) or (d).

 

“Acknowledgment Agreement” means the Acknowledgment Agreement, substantially in
the form of Exhibit J hereto, dated as of the Closing Date, executed by the
Target immediately following the consummation of the Merger, as the same may be
amended, modified or supplemented from time to time.

 

“Acquisition” means the acquisition contemplated by the Acquisition Agreement.

 

“Acquisition Agreement” means the Agreement and Plan of Merger dated as of
November 26, 2003 among Kingpin Holdings, LLC, Kingpin Merger Sub, Inc. and the
Target, as the same may be amended, modified or supplemented from time to time
in accordance with the provisions thereof and of this Agreement.

 

“Acquisition Documents” means the Acquisition Agreement, including all exhibits
and schedules thereto, and all other agreements, documents and instruments
relating to the Acquisition, in each case as the same may be amended, modified
or supplemented from time to time in accordance with the provisions thereof and
of this Agreement.

 

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“Additional Collateral Documents” has the meaning set forth in Section 6.10.

 

“Additional Cost Rate” has the meaning set forth on Schedule 1.01E.

 

“Additional Subsidiary Guarantor” means each Person that becomes a Subsidiary
Guarantor after the Closing Date by execution of an Accession Agreement as
provided in Section 6.10.

 

“Adjusted Eurocurrency Rate” means, for the Interest Period for each
Eurocurrency Loan comprising part of the same Group, (i) in the case of
Eurocurrency Loans denominated in Dollars or an Available Foreign Currency other
than Sterling, the quotient obtained by dividing (A) the applicable Eurocurrency
Rate for such Interest Period by (B) 1.00 minus the applicable Eurocurrency
Reserve Percentage or (ii) in the case of Eurocurrency Loans denominated in
Sterling, the sum of (A) the applicable Eurocurrency Rate for such Interest
Period plus (B) if applicable with respect to Eurocurrency Loans to the
Borrower, Mandatory Cost, if any.

 

“Administrative Agent” means Credit Suisse First Boston, Cayman Islands Branch,
in its capacity as administrative agent for the Lenders hereunder and under the
other Senior Finance Documents, and its successor or successors in such
capacity.

 

“Administrative Office” means the Administrative Agent’s office located at
Eleven Madison Avenue, New York, New York 10010, or such other office in New
York City as may be designated by the Administrative Agent by written notice to
the Borrower and the Lenders.

 

“Affiliate” means, with respect to any Person, (i) any Person that directly, or
indirectly through one or more intermediaries, controls such Person (a
“Controlling Person”) or (ii) any other Person which is controlled by or is
under common control with a Controlling Person. As used herein, the term
“control” means (i) with respect to any Person having voting shares or their
equivalent and elected directors, managers or Persons performing similar
functions, the possession, directly or indirectly, of the power to vote 10% or
more of the Equity Interests having ordinary voting power of such Person or (ii)
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting shares or their equivalent, by contract or otherwise.

 

“Agent” means the Administrative Agent, the Syndication Agent, the Documentation
Agent or the Collateral Agent and any successors and assigns in such capacity,
and “Agents” means any two or more of them.

 

“Aggregate Revolving Commitment Percentage” means, for each Lender, the quotient
(expressed as a percentage) obtained by dividing (i) the aggregate amount of
such Lender’s Revolving Commitments (determined in the case of Multi-Currency
Revolving Commitments, by using the Dollar Equivalent thereof) by (ii) the
Aggregate Revolving Committed Amount, in each case as in effect on the relevant
date of determination.

 

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“Aggregate Revolving Committed Amount” means at any time the sum of the Domestic
Revolving Committed Amount in effect at such time plus the Multi-Currency
Revolving Committed Amount in effect at such time.

 

“Aggregate Revolving Outstandings” means on any date the sum of (i) the Domestic
Revolving Outstandings plus (ii) the Multi-Currency Revolving Outstandings, in
each case determined based upon the Exchange Rates as in effect on the most
recent Reset Date.

 

“Agreed Foreign Currency” means at any time any of the respective lawful
currencies of the United Kingdom and the European Economic Union, so long as at
such time (i) such currency is dealt in in the London interbank deposit market
or, in the case of Euros, the European interbank deposit market, (ii) such
currency is fully transferable and convertible into Dollars in the London
foreign exchange market or, in the case of Euros, the European foreign exchange
market and (iii) no central bank or other governmental authorization in the
country of issue of such currency is required to permit the use of such currency
by any Multi-Currency Revolving Lender for making or maintaining any Loan
hereunder and/or to permit the Borrower to borrow and repay the principal
thereof and to pay the interest thereon, unless such authorization has been
obtained and remains in full force and effect.

 

“Agreement” means this Credit Agreement, as amended, restated, modified or
supplemented from time to time.

 

“Anti-Terrorism Laws” means any Laws relating to terrorism or money-laundering,
including, without limitation, (i) Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001 and relating to Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism, (ii) the U.S. Patriot Act, (iii) the International Emergency Economic
Power Act, 50 U.S.C. §1701 et seq., (iv) the Bank Secrecy Act, (v) the Trading
with the Enemy Act, 50 U.S.C. App. 1 et seq. and (vi) any related rules and
regulations of the U.S. Treasury Department’s Office of Foreign Assets Control
or any other Governmental Authority, in each case as the same may be amended,
supplemented, modified, replaced or otherwise in effect from time to time.

 

“Applicable Lending Office” means (i) with respect to any Lender and for each
Type of Loan, the “Lending Office” of such Lender (or of an Affiliate of such
Lender) designated for such Type of Loan on Schedule 1.01D hereto or in any
applicable Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder or such other office of such Lender (or of an Affiliate of such
Lender) as such Lender may from time to time (so long as no additional cost to
the Borrower results) specify to the Administrative Agent and the Borrower as
the office by which its Loans of such Type are to be made and maintained;
provided that any Lender may from time to time by notice to the Borrower and the
Administrative Agent designate separate Lending Offices for Eurocurrency Loans
in different currencies, in which case all references herein to the Applicable
Lending Office of such Lender shall, with respect to its Eurocurrency Loans, be
deemed to refer to any or all of such offices, as the context may require, and
(ii) with respect to any Issuing Lender and for each Letter of Credit, the
“Lending Office” of such Issuing Lender (or of an Affiliate of such Issuing
Lender) designated on the signature pages hereto or such other office of such
Issuing Lender (or of an Affiliate of such Issuing Lender) as such Issuing
Lender may from time to time specify (so long as no additional cost to the
Borrower results) to the Administrative Agent and the Borrower as the office by
which its Letters of Credit are to be issued and maintained.

 

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“Applicable Margin” means (i) for purposes of calculating the applicable
interest rate for any day for any Term B Loan, (A) if the Leverage Ratio as of
the most recent Calculation Date is greater than or equal to 2.5 to 1.0, 3.00%
in the case of Eurocurrency Loans and 2.00% in the case of Base Rate Loans, and
(B) if the Leverage Ratio as of the most recent Calculation Date is less than
2.5 to 1.0, 2.75% in the case of Eurocurrency Loans and 1.75% in the case of
Base Rate Loans, and (ii) for purposes of calculating the applicable interest
rate for any day for any Revolving Loan or the applicable rate of the Letter of
Credit Fee for any day for purposes of Section 2.11(b)(i), the appropriate
applicable margin set forth below corresponding to the Leverage Ratio as of the
most recent Calculation Date:

 

        REVOLVING LOANS

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LETTER OF

CREDIT FEES

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

Pricing Level

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

 

Leverage

Ratio

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

  Applicable Margin For
Eurocurrency Loans

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

    Applicable Margin For Base
Rate Loans

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

 

Applicable

Margin For

Letter of Credit

Fees

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

I

  ³2.75 to 1.0   3.00%     2.00%   3.00%

II

  <2.75 to 1.0 but ³2.25 to 1.0   2.75%     1.75%   2.75%

III

  <2.25 to 1.0 but ³1.75 to 1.0   2.50%     1.50%   2.50%

IV

  <1.75 to 1.0   2.25%     1.25%   2.25%

 

Each Applicable Margin shall be determined and adjusted quarterly on the date
(each a “Calculation Date”) five Business Days after the date by which the
Borrower is required to provide the consolidated financial information required
by Section 6.01(a) or (b) and the officer’s certificate required by Section
6.01(c) for the fiscal quarter or year of the Borrower most recently ended prior
to the Calculation Date; provided, however, that: (i) the initial Applicable
Margin for Revolving Eurocurrency Loans and the Applicable Margin for Letter of
Credit Fees shall be 3.00%, (ii) the initial Applicable Margin for Revolving
Base Rate Loans shall be 2.00%; (iii) the initial Applicable Margins determined
in accordance with the immediately preceding clauses (i) and (ii) shall remain
in effect until the first Calculation Date occurring after the end of the first
full fiscal quarter of the Borrower ending at least three months after the
Closing Date and, thereafter, each Applicable Margin for Revolving Loans and
Letter of Credit Fees shall be based on the Pricing Level (as shown above)
corresponding to the Leverage Ratio as of the last day of the most recently
ended fiscal quarter or year of the Borrower preceding the applicable
Calculation Date; and (iv) if the Borrower fails to provide the consolidated
financial information required by Section 6.01(a) or (b) or the officer’s
certificate required by Section 6.01(c) for the most recently ended fiscal
quarter or year of the Borrower preceding any applicable Calculation Date, (A)
each such Applicable Margin for Revolving Loans and Letter of Credit Fees from
such Calculation Date shall be based on the Pricing Level (as shown above) one
level above that theretofore in effect (with Pricing Level I being one level
higher than Pricing Level II and so on) and (B) the Applicable Margin for Term B
Loans shall be 3.00%, in the case of Eurocurrency Loans, and 2.00%, in the case
of Base Rate Loans, in each case until such time as such consolidated financial
information and the officer’s certificate is provided, whereupon each such
Applicable Margin for Term B Loans, Revolving Loans and Letter of Credit Fees
shall be based on the Pricing Level (as shown or described above) corresponding
to the Leverage Ratio as of the last day of the most recently ended fiscal
quarter or year of the Borrower preceding such Calculation Date. Each Applicable
Margin for Term B Loans, Revolving Loans and Letter of Credit Fees shall be
effective from one Calculation Date until the next Calculation Date. Any
adjustment in the Applicable Margins for Term B Loans, Revolving Loans and
Letter of Credit Fees shall be applicable to all Term B Loans, Revolving Loans
and Letters of Credit then existing or subsequently made or issued.

 

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“Approved Fund” means (i) with respect to any Lender, an entity (whether a
corporation, partnership, limited liability company, trust or otherwise) that is
engaged in making, purchasing, holding or otherwise investing in bank loans and
similar extensions of credit in the ordinary course of its business and is
managed by such Lender, its parent holding company or any of their respective
Subsidiaries, (ii) with respect to any Lender that is a fund that invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by any parent company of such Lender or any of their
respective Subsidiaries and (iii) any special purpose funding vehicle described
in Section 10.06(h).

 

“Asset Disposition” means any sale (including any Sale/Leaseback Transaction,
whether or not involving a Capital Lease), lease (as lessor), transfer or other
disposition (including any such transaction effected by way of merger or
consolidation and including any sale or other disposition of Equity Interests of
a Subsidiary, but excluding any sale or other disposition by way of Casualty or
Condemnation) by any Group Company of any asset. For the avoidance of doubt, an
Equity Issuance by any Person shall not constitute an Asset Disposition by that
Person.

 

“Assignment and Acceptance” means an Assignment and Acceptance, substantially in
the form of Exhibit C hereto, under which an interest of a Lender hereunder is
transferred to an Eligible Assignee pursuant to Section 10.06(b).

 

“Attributable Debt” means, at any date (i) in respect of any Capital Lease of
any Person, the capitalized amount thereof that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP, (ii) in respect
of any Synthetic Lease Obligation of any Person, the capitalized or principal
amount of the remaining lease payments under the relevant lease that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP if such lease or other agreement were accounted for as a Capital Lease
and (iii) in respect of any Sale/Leaseback Transaction, the lesser of (A) the
present value, discounted in accordance with GAAP at the interest rate implicit
in the related lease, of the obligations of the lessee for net rental payments
over the remaining term of such lease (including any period for which such lease
has been extended or may, at the option of the lessor be extended) and (B) the
fair market value of the assets subject to such transaction.

 

“Availability Period” means the period from the Closing Date to the Revolving
Termination Date.

 

“Available Foreign Currency” means at any time (i) in the case of Multi-Currency
Revolving Loans, any Agreed Foreign Currency and any other currency (other than
Dollars) that the Borrower requests, by notice to the Multi-Currency Revolving
Lenders through the Administrative Agent, be included as an additional Available
Foreign Currency for purposes of this Agreement, so long as at such time (A)
such currency is dealt in in the London interbank deposit market, (B) such
currency is freely transferable and convertible into Dollars in the London
foreign exchange market or the European foreign exchange market, as applicable,
(C) no central bank or other governmental authorization in the country of issue
of such currency is required to permit the use of such currency by any
Multi-Currency Revolving Lender for making any Loan hereunder and/or to permit
the Borrower to borrow and repay the principal thereof and to pay interest
thereon, unless such authorization has been obtained and remains in full force
and effect, and (D) no Multi-Currency Revolving Lender shall have objected to
the inclusion of such currency as an Available Foreign Currency by notice to the
Borrower and the Administrative Agent

 

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given within five Business Days of such Multi-Currency Revolving Lender’s
receipt of the notice referred to above and (ii) in the case of Letters of
Credit issued or to be issued by any Issuing Lender in any currency other than
Dollars, any Agreed Foreign Currency, Australian Dollars or any other currency
approved by the Administrative Agent and such Issuing Lender.

 

“Bank Secrecy Act” means the Financial Recordkeeping and Reporting of Currency
and Foreign Transactions Act of 1970, 31 U.S.C. 1051, et seq., as the same may
be amended, supplemented, modified, replaced or otherwise in effect from time to
time.

 

“Base Rate” means, for any day, a rate per annum equal to the higher of (i) the
Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day. Any change in the Base Rate due to a change in the Prime Rate
or the Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate.

 

“Base Rate Loan” means at any date a Loan bearing interest at a rate determined
by reference to the Base Rate.

 

“Borrower” means (i) at any time prior to the consummation of the Merger,
Kingpin Merger Sub, Inc., a Delaware corporation and its successors, and (ii)
upon the consummation of the Merger, the Target as the surviving entity of the
Merger, and its successors.

 

“Borrowing” has the meaning set forth in Section 1.04.

 

“Bowling Equipment” means any of the following, whether now existing or
hereafter arising: all pin setting machines (pinsetters/pinspotters), ball
returns, settees, scoring systems (including front desk systems), lanes, lane
cleaning machines, bumpers, approaches, foul lights, gutters and masking units.

 

“Business Acquisition” means the acquisition by the Borrower or one or more of
its Wholly-Owned Subsidiaries of all of the Equity Interests of, or all (or any
division, line of business or substantial part for which financial statements or
other financial information reasonably satisfactory to the Administrative Agent
is available) of the assets or property of, another Person.

 

“Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in The City of New York are authorized or required to close,
except that:

 

(i) when used in Section 2.05 with respect to any action taken by or with
respect to any Issuing Lender, or to the issuance of, drawing under, or
reimbursement obligation arising in respect of, a Letter of Credit or a notice
by the Borrower with respect to any such issuance, drawing or reimbursement
obligation, the term “Business Day” shall not include any day on which
commercial banks are authorized by law to close in the jurisdiction where such
Issuing Lender’s Applicable Lending Office is located;

 

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(ii) if such day relates to a borrowing of, a payment or prepayment of principal
of or interest on, or the Interest Period for, a Eurocurrency Loan denominated
in Dollars, or a notice by the Borrower with respect to any such borrowing,
payment, prepayment or Interest Period, such day shall also be a day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London;

 

(iii) if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or the Interest Period for, a Multi-Currency
Revolving Loan denominated in Euros, or to the issuance of, drawing under, or
reimbursement of obligations in respect of a Letter of Credit denominated in
Euros, or a notice by the Borrower with respect to any such borrowing, payment,
prepayment, Interest Period, issuance, drawing or reimbursement obligation, such
day shall also be a day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer System (TARGET) (or, if such clearing system ceases
to be operative, such other clearing system (if any) determined by the
Administrative Agent to be a suitable replacement) is open for settlement of
payment in Euros; and

 

(iv) if such day relates to a borrowing of, a payment or prepayment of principal
of or interest on, or the Interest Period for, a Multi-Currency Revolving Loan
denominated in an Available Foreign Currency other than Euros, or to the
issuance of, drawing under or reimbursement of obligations in respect of a
Letter of Credit denominated in an Available Foreign Currency other than Euros,
or a notice by the Borrower with respect to any such borrowing, payment,
prepayment, Interest Period or issuance, drawing or reimbursement obligation,
such day shall also be a day on which commercial banks are open for
international business (including dealings in deposits in such Available Foreign
Currency) in both London and the Principal Financial Center for such Available
Foreign Currency.

 

“Capital Lease” of any Person means any lease of (or other arrangement conveying
the right to use) property (whether real, personal or mixed) by such Person as
lessee which would, in accordance with GAAP, be required to be accounted for as
a capital lease on the balance sheet of such Person.

 

“Capital Lease Obligations” means, with respect to any Person, all obligations
of such Person as lessee under Capital Leases, in each case taken at the amount
thereof accounted for as liabilities in accordance with GAAP.

 

“Capitalization Documents” has the meaning set forth in Section 4.01(f).

 

“Cash Collateralize” means to pledge and deposit with or deliver to the
Collateral Agent, for the benefit of the Issuing Lenders and the Domestic
Revolving Lenders, as collateral for the LC Obligations, cash or deposit
balances pursuant to documentation in form and substance reasonably satisfactory
to the Administrative Agent and the Issuing Lenders.

 

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“Cash Equivalents” means, at any date of determination:

 

(i) securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) or, with respect
to any Foreign Subsidiary, an equivalent obligation of the government of the
country in which such Foreign Subsidiary transacts business, in each case
maturing within one year after such date;

 

(ii) time deposits and certificates of deposit, including eurodollar time
deposits, and, with respect to any Foreign Subsidiary, time deposits in the
currency of any country in which such Foreign Subsidiary transacts business, of
any commercial bank organized in the United States having capital and surplus in
excess of $100,000,000 or, with respect to any Foreign Subsidiary, a commercial
bank organized under the laws of any other country in which such Foreign
Subsidiary transacts business having total assets in excess of $100,000,000 (or
its foreign currency equivalent) with a maturity date not more than one year
from the date of acquisition;

 

(iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above and
organized in the United States;

 

(iv) direct obligations issued by any state of the United States or any
political subdivision of any state or any public instrumentality thereof
maturing within 90 days after the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either S&P
or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such
obligations, then from such other nationally recognized rating service
reasonably acceptable to the Administrative Agent);

 

(v) commercial paper issued by the parent corporation of any commercial bank
organized in the United States having capital and surplus in excess of
$100,000,000 or, with respect to any Foreign Subsidiary, a commercial bank
organized under the laws of any other country in which such Foreign Subsidiary
transacts business having total assets in excess of $100,000,000 (or its foreign
currency equivalent), and commercial paper issued by others having one of the
two highest ratings obtainable from either S&P or Moody’s (or, if at any time
neither S&P nor Moody’s shall be rating such obligations, then from such other
nationally recognized rating services reasonably acceptable to the
Administrative Agent) and in each case maturing within one year after the date
of acquisition;

 

(vi) overnight bank deposits and bankers’ acceptances at any commercial bank
organized in the United States having capital and surplus in excess of
$100,000,000, or with respect to any Foreign Subsidiary, a commercial bank
organized under the laws of any other country in which such Foreign Subsidiary
transacts business having total assets in excess of $100,000,000 (or its foreign
currency equivalent);

 

(vii) deposits available for withdrawal on demand with commercial banks
organized in the United States having capital and surplus in excess of
$50,000,000 or, with respect to any Foreign Subsidiary, a commercial bank
organized under the laws of any other

 

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country in which such Foreign Subsidiary transacts business having total assets
in excess of $50,000,000 (or its foreign currency equivalent); and

 

(viii) investments in money market funds substantially all of whose assets
comprise securities of the types described in clauses (i) through (vii).

 

“Casualty” means any casualty, loss, damage, destruction or other similar loss
with respect to real or personal property or improvements.

 

“Casualty Insurance Policy” means any insurance policy maintained by any Group
Company covering losses with respect to Casualties.

 

“Change of Control” means the occurrence of any of the following events:

 

(i) (A) Holdings shall cease to own directly 100% of the Equity Interests of the
Borrower, on a fully-diluted basis assuming the conversion and exercise of all
outstanding Equity Equivalents (whether or not such securities are then
currently convertible or exercisable), (B) on or prior to the first anniversary
of the Closing Date, the Sponsor Group shall cease to own beneficially (as
defined in the Exchange Act), directly or indirectly, at least 45% of the Equity
Interests of Holdings, (C) at any time after the first anniversary of the
Closing Date the Sponsor Group shall cease to own beneficially (as defined in
the Exchange Act), directly or indirectly, at least 35% of the Equity Interests
of Holdings, (D) any “person” or “group” (as each such term is defined in the
Exchange Act), other than the Sponsor Group, is or becomes the “beneficial
owner” (as defined in the Exchange Act except that a Person will be deemed to
have beneficial ownership of all shares that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of a greater percentage of the voting Equity
Interests of Holdings than the percentage of the voting Equity Interests of
Holdings then owned beneficially, directly or indirectly, by the Sponsor Group
or (E) the failure at any time of the Investor Group to control, whether through
the ownership of voting securities or by contract, a majority of the seats on
the board of directors (or persons performing similar functions) of Holdings; or

 

(ii) during any period of two consecutive calendar years, individuals who at the
beginning of such period constituted the board of directors (or persons
performing similar functions) of Holdings together with any new members of such
board of directors (A) whose elections by such board of directors or whose
nominations for election by the equityholders of Holdings was approved by a vote
of a majority of the members of such board of directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved or by any new directors who
were nominated to serve on behalf of the Investor Group or (B) elected or
appointed by the Investor Group, cease for any reason to constitute a majority
of the directors of Holdings still in office; or

 

(iii) a “change of control” (as defined in the Senior Subordinated Note
Indenture) occurs.

 

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

 

“Class” has the meaning set forth in Section 1.04.

 

“Closing Date” means the date on or after the Effective Date when the first
Credit Extension occurs in accordance with Section 4.01.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any successor
statute thereto, as interpreted by the rules and regulations issued thereunder,
in each case as in effect from time to time.

 

“Collateral” means all of the property which is subject or is purported to be
subject to the Liens granted by the Collateral Documents.

 

“Collateral Agent” means Credit Suisse First Boston, Cayman Islands Branch, in
its capacity as collateral agent for the Finance Parties under the Collateral
Documents, and its successor or successors in such capacity.

 

“Collateral Documents” means, collectively, the Security Agreement, the Pledge
Agreement, each Mortgage, any Additional Collateral Documents, any additional
pledges, security agreements, patent, trademark or copyright filings or
mortgages required to be delivered pursuant to the Finance Documents and any
instruments of assignment, control agreements, lockbox letters or other
instruments or agreements executed pursuant to the foregoing.

 

“Commitment” means (i) with respect to each Lender, its Domestic Revolving
Commitment, Multi-Currency Revolving Commitment or Term B Commitment, as and to
the extent applicable, and (ii) with respect to each Issuing Lender, its LC
Commitment, in each case as set forth on Schedule 1.01A or in the applicable
Assignment and Acceptance as its Commitment of the applicable Class, as any such
amount may be increased or decreased from time to time pursuant to this
Agreement.

 

“Commitment Fee” has the meaning set forth in Section 2.11(a).

 

“Computer Hardware” means all computer and other electronic data processing
hardware of a Credit Party, whether now or hereafter owned, licensed or leased
by such Credit Party, including, without limitation, all integrated computer
systems, central processing units, memory units, display terminals, printers,
features, computer elements, card readers, tape drives, hard and soft disk
drives, cables, electrical supply hardware, generators, power equalizers,
accessories, peripheral devices and other related computer hardware, all
documentation, flowcharts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes associated with any of the foregoing and all
options,

 

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warranties, services contracts, program services, test rights, maintenance
rights, support rights, renewal rights and indemnifications relating to any of
the foregoing.

 

“Condemnation” means any taking by a Governmental Authority of property or
assets, or any part thereof or interest therein, for public or quasi-public use
under the power of eminent domain, by reason of any public improvement or
condemnation.

 

“Condemnation Award” means all proceeds of any Condemnation or transfer in lieu
thereof.

 

“Consolidated Adjusted Working Capital” means at any date the excess of (i)
Consolidated Current Assets (excluding cash and Cash Equivalents classified as
such in accordance with GAAP) over (ii) Consolidated Current Liabilities
(excluding (A) the current portion of any Consolidated Funded Debt, (B) the
aggregate principal amount of outstanding Revolving Loans, (C) accrued and
unpaid interest on any Consolidated Funded Debt and/or Revolving Loans and (D)
deferred taxes calculated in accordance with GAAP).

 

“Consolidated Capital Expenditures” means for any period the aggregate amount of
all expenditures (whether paid in cash or other consideration or accrued as a
liability) that would, in accordance with GAAP, be included as additions to
property, plant and equipment and other capital expenditures of Holdings and its
Consolidated Subsidiaries for such period, as the same are or would be set forth
in a consolidated statement of cash flows of Holdings and its Consolidated
Subsidiaries for such period (including the amount of assets leased under any
Capital Lease), but excluding (to the extent that they would otherwise be
included): (i) any such expenditures made for the replacement or restoration of
assets in amounts not exceeding the aggregate amount of Insurance Proceeds or
Condemnation Awards with respect to the asset or assets being replaced or
restored, (ii) for purposes of Section 7.14 only, capital expenditures for
Permitted Business Acquisitions, (iii) any such expenditures made with proceeds
of a Qualifying Equity Issuance, (iv) any such expenditures to the extent
Holdings or any of its Consolidated Subsidiaries has received reimbursement in
cash from a third party other than Holdings or one or more of its Consolidated
Subsidiaries and (v) capitalized interest; provided, however, that Consolidated
Capital Expenditures for any fiscal quarter shown on Schedule 1.01H hereto shall
be deemed to equal the applicable amount set forth opposite such fiscal quarter
on Schedule 1.01H.

 

“Consolidated Cash Interest Expense” means for any period Consolidated Interest
Expense that has been paid in cash for such period, other than (to the extent,
but only to the extent, included in the determination of Consolidated Interest
Expense for such period in accordance with GAAP and paid in cash for such
period): (i) amortization of debt discount and debt issuance fees, (ii) any fees
(including underwriting fees and expenses paid in connection with the
consummation of the Transaction or Permitted Business Acquisitions, (iii) any
payments made to obtain Derivatives Agreements, (iv) any agent or collateral
monitoring fees paid or required to be paid pursuant to any Senior Finance
Document, (v) the actual or implied interest component of any consulting
payments and (vi) annual agency fees, unused line fees and letter of credit fees
and expenses paid hereunder; provided, however, that Consolidated Cash Interest
Expense for any fiscal quarter shown on Schedule 1.01H hereto shall be deemed to
equal the applicable amount set forth opposite such fiscal quarter on Schedule
1.01H.

 

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“Consolidated Cash Tax Expense” means for any period the aggregate Federal,
state, local and foreign income, franchise, state single business unitary and
similar taxes that have been paid in cash by Holdings and its Consolidated
Subsidiaries for such period; provided, however, that Consolidated Cash Tax
Expense for any fiscal quarter shown on Schedule 1.01H hereto shall be deemed to
equal the applicable amount set forth opposite such fiscal quarter on Schedule
1.01H.

 

“Consolidated Current Assets” means at any date the consolidated current assets
of Holdings and its Consolidated Subsidiaries determined as of such date.

 

“Consolidated Current Liabilities” means at any date the consolidated current
liabilities of Holdings and its Consolidated Subsidiaries determined as of such
date.

 

“Consolidated Debt” means at any date the Debt of Holdings and its Consolidated
Subsidiaries, determined on a consolidated basis as of such date.

 

“Consolidated EBITDA” means for any period the sum of (i) Consolidated Net
Income for such period (excluding therefrom (x) any extraordinary, unusual or
non-recurring items of gain or loss, (y) any gain or loss from discontinued
operations and (z) any gain or loss attributable to Asset Dispositions made
other than in the ordinary course of business), plus (ii) to the extent not
otherwise included in the determination of Consolidated Net Income for such
period, all proceeds of business interruption insurance policies, if any,
received during such period plus (iii) (without duplication) an amount which, in
the determination of Consolidated Net Income for such period, has been deducted
for (A) Consolidated Interest Expense, (B) provisions for Federal, state, local
and foreign income, franchise, state single business unitary and similar taxes,
(C) depreciation, amortization (including, without limitation, amortization of
goodwill and other intangible assets), impairment of goodwill and other non-cash
charges or expenses (excluding any such non-cash charge to the extent that it
represents amortization of a prepaid cash expense that was paid in a prior
period), (D) non-cash compensation expense, or other non-cash expenses or
charges, arising from the sale of stock, the granting of stock options, the
granting of stock appreciation rights and similar arrangements (including any
repricing, amendment, modification, substitution or change of any such stock,
stock option, stock appreciation rights or similar arrangements), (E) non-cash
rent expense, (F) any financial advisory fees, accounting fees, legal fees and
other similar advisory and consulting fees and related out-of-pocket expenses of
the Borrower incurred as a result of the Transaction, all determined in
accordance with GAAP, eliminating any increase or decrease in income resulting
from non-cash accounting adjustments made in connection with the Acquisition,
(G) Transaction related expenditures (including cash charges in respect of
strategic market reviews, management bonuses, early retirement of Debt,
restructuring, consolidation, severance or discontinuance of any portion of
operations, employees and/or management) described on Schedule 1.01B, (H)
expenses incurred by Holdings or any Consolidated Subsidiary to the extent
reimbursed in cash by a third party other than Holdings or one or more of its
Consolidated Subsidiaries, (I) fees and expenses in connection with the exchange
of the Senior Subordinated Notes, (J) unrealized losses on Derivatives
Agreements, (K) losses from foreign currency adjustments, (L) losses in respect
of pension or other post-retirement benefits or pension assets, (M) write-offs
of deferred financing costs, (N) expenses in respect of earn-out obligations and
(O) any financial advisory fees, accounting fees, legal fees and similar
advisory and consulting fees and related out-of-pocket expenses of the Borrower
and its Consolidated Subsidiaries incurred as a result of Permitted Business
Acquisitions, Foreign Asset Dispositions and/or the sale or potential sale of
substantially all of the assets of the Borrower’s bowling products business, all
determined in accordance with GAAP and in each case eliminating any increase or
decrease in income

 

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resulting from non-cash accounting adjustments made in connection with the
related Permitted Business Acquisition, Foreign Asset Disposition or sale or
potential sale of the bowling products business, minus (iv) any amount which, in
the determination of Consolidated Net Income for such period, has been added for
any non-cash income or non-cash gains, all as determined in accordance with GAAP
minus (v) the aggregate amount of cash payments made during such period in
respect of any non-cash accrual, reserve or other non-cash charge or expense
accounted for in a prior period and not otherwise reducing Consolidated Net
Income for such period; provided, however, that Consolidated EBITDA for any
fiscal quarter shown on Schedule 1.01H hereto shall be deemed to equal the
applicable amount set forth opposite such fiscal quarter on Schedule 1.01H; and
provided, further, that Consolidated EBITDA for the fiscal quarter during which
the Closing Date occurs shall be calculated on a Pro-Forma Basis by reducing
Consolidated Net Income for such quarter by (i) the rental expense attributable
to the iStar Sale/Leaseback Transaction as if it had occurred on the first day
of such quarter and (ii) the aggregate amount of management fees payable to the
Sponsor in respect of such quarter or which would have been payable in respect
of such quarter if the Closing Date had occurred on the first day of such
quarter, each such pro-forma reduction to be in the applicable amount shown
therefor for such quarter on Schedule 1.01H.

 

For purposes of calculating Consolidated EBITDA for any period of four
consecutive fiscal quarters (each, a “Reference Period”) pursuant to any
determination of the Leverage Ratio, the Senior Leverage Ratio, the Interest
Coverage Ratio and the Fixed Charge Coverage Ratio, if during such Reference
Period (or in the case of pro-forma calculations, during the period from the
last day of such Reference Period to and including the date as of which such
calculation is made) any Group Company shall have made an Asset Disposition or a
series of Asset Dispositions involving assets comprising all or substantially
all of an operating unit of a business or constituting all or substantially all
of the common stock of a Subsidiary or made a Permitted Business Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after giving
effect thereto on a Pro-Forma Basis, giving effect to projected or anticipated
cost savings permitted or required by regulations S-X or S-K under the
Securities Act or otherwise agreed to by the Administrative Agent in its
reasonable discretion.

 

“Consolidated Fixed Charges” means, for any period, the sum of (i) Consolidated
Cash Interest Expense for such period plus (ii) Consolidated Scheduled Debt
Payments for such period plus (iii) Consolidated Cash Tax Expense for such
period.

 

“Consolidated Funded Debt” means at any date the Funded Debt of Holdings and its
Consolidated Subsidiaries as of such date, determined on a consolidated basis in
accordance with GAAP.

 

“Consolidated Interest Expense” means, for any period, the total interest
expense, whether paid or accrued and whether or not capitalized, (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments under Capital Leases
and the implied interest component of Synthetic Leases (regardless of whether
accounted for as interest expense under GAAP), all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptances and net costs in respect of Derivatives Obligations constituting
interest rate swaps, collars, caps or other arrangements requiring payments
contingent upon interest rates of Holdings and its Consolidated Subsidiaries),
net of interest income, in each case determined on a consolidated basis for such
period.

 

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“Consolidated Net Income” means, for any period, the net income (or net loss)
after taxes of Holdings and its Consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from the calculation of Consolidated Net Income for any period
(i) the income (or loss) of any Person in which any other Person (other than
Holdings or any of its Wholly-Owned Consolidated Subsidiaries) has an ownership
interest, except to the extent that any such income is actually received in cash
by Holdings or such Wholly-Owned Consolidated Subsidiary in the form of
Restricted Payments during such period, (ii) the income (or loss) of any Person
accrued prior to the date it becomes a Consolidated Subsidiary of Holdings or is
merged with or into or consolidated with Holdings or any of its Consolidated
Subsidiaries or that Person’s assets are acquired by Holdings or any of its
Consolidated Subsidiaries, except as provided in the definitions of Consolidated
EBITDA and “Pro-Forma Basis” herein and (iv) the income of any Subsidiary of
Holdings to the extent that the declaration or payment of Restricted Payments or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary.

 

“Consolidated Scheduled Debt Payments” means, for any period, the sum of all
scheduled payments of principal on the Loans and all other Consolidated Funded
Debt (including, without limitation, the principal component of Capital Lease
Obligations and Purchase Money Debt paid or payable during such period), but
excluding payments due on Domestic Revolving Loans and Multi-Currency Revolving
Loans during such period; provided that Consolidated Scheduled Debt Payments for
any period shall not include voluntary prepayments of Consolidated Funded Debt,
mandatory prepayments of the Term B Loans pursuant to Section 2.09(b) or other
mandatory prepayments (other than by virtue of scheduled amortization) of
Consolidated Funded Debt (but Consolidated Scheduled Debt Payments for a period
shall be adjusted to reflect the effect on scheduled payments of principal for
such period of the application of any prepayments of Consolidated Funded Debt
during or preceding such period); provided, however, that Consolidated Scheduled
Debt Payments for any fiscal quarter shown on Schedule 1.01H hereto shall be
deemed to equal the applicable amount set forth opposite such fiscal quarter on
Schedule 1.01H.

 

“Consolidated Subsidiary” means with respect to any Person at any date any
Subsidiary of such Person or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date in accordance with GAAP.

 

“Consolidated Total Assets” means at any date the total consolidated assets of
Holdings and its Consolidated Subsidiaries determined as of such date.

 

“Copyright” means any of the following, whether now existing or hereafter
arising, created or acquired: (i) all common law and/or statutory rights in all
copyrightable subject matter under the laws of the United States or any other
country (whether or not the underlying works of authorship have been published);
(ii) all registrations and applications for registration of any such copyright
in the United States or any other country, including registrations, recordings,
supplemental, derivative or collective work registrations and pending
applications for registrations in the United States Copyright Office or any
other country; (iii) all computer programs, web pages, computer data bases and
computer program flow diagrams, including all source codes and object codes
related to any or all of the foregoing; (iv) all tangible property embodying or
incorporating any or all of the foregoing, whether in completed form or in some
lesser state of completion, and all masters, duplicates, drafts, versions,
variations and

 

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copies thereof, in all formats; (v) all claims for, and rights to sue for, past,
present and future infringement of any of the foregoing; (vi) all income,
royalties, damages and payments now or hereafter due or payable with respect to
any of the foregoing, including, without limitation, damages and payments for
past, present or future infringements thereof and payments and damages under all
Copyright Licenses in connection therewith; (vii) all rights in any of the
foregoing, whether arising under the laws of the United States or any foreign
country or otherwise, to copy, record, synchronize, broadcast, transmit, perform
and/or display any of the foregoing or any matter which is the subject of any of
the foregoing in any manner and by any process now known or hereafter devised;
and (viii) the name and title of each Copyright item and all rights of any
Credit Party to the use thereof, including, without limitation, rights protected
pursuant to trademark, service mark, unfair competition, anti-cybersquatting
and/or the rules and principles of any other applicable statute, common law or
other rule or principle of law now existing or hereafter arising.

 

“Copyright License” means any agreement now or hereafter in existence granting
to any Credit Party any rights, whether exclusive or non-exclusive, to use
another Person’s copyrights or copyright applications, or pursuant to which any
Credit Party has granted to any other Person, any right, whether exclusive or
non-exclusive, with respect to any Copyright, whether or not registered.

 

“Credit Exposure” has the meaning set forth in the definition of “Required
Lenders” in this Section 1.01.

 

“Credit Extension” means a Borrowing or the issuance, renewal or extension of a
Letter of Credit.

 

“Credit Party” means each of Holdings, the Borrower and each Subsidiary
Guarantor, and “Credit Parties” means any combination of the foregoing.

 

“Currency Calculation Date” means (i) the last Business Day of each calendar
quarter (or such other day as may be selected by the Administrative Agent (each,
an “Optional Calculation Date”)), (ii) in respect of any Eurocurrency Borrowing
or Group of outstanding Eurocurrency Loans, (A) the date falling three Business
Days prior to the date of such Borrowing, (B) the date falling three Business
Days prior to the last day of the current Interest Period for such Group of
Loans and (C) any date on which such Group of Loans is automatically converted
to Loans in Dollars pursuant to the terms of this Agreement and (iii) in respect
of any Letter of Credit denominated in a currency other than Dollars, (A) the
date of issuance of such Letter of Credit, (B) the last Business Day of each
calendar quarter during any period that such Letter of Credit remains
outstanding (or such Optional Calculation Date as may be selected by the
Administrative Agent) and (C) any date on which the Borrower’s obligation to
repay LC Disbursements in respect of such Letter of Credit is automatically
converted into Dollars pursuant to the terms of this Agreement.

 

“Debt” of any Person means at any date, without duplication, (i) all obligations
of such Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person under conditional sale or other title retention agreements
relating to property purchased by such Person to the extent of the value of such
property (other than customary reservations or retentions of title under
agreements with suppliers entered into in

 

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the ordinary course of business), (iv) all obligations, other than intercompany
items, of such Person to pay the deferred purchase price of property or services
(other than trade accounts and accrued expenses arising in the ordinary course
of business), (v) the Attributable Debt of such Person in respect of Capital
Lease Obligations, (vi) all obligations of such Person to purchase securities or
other property which arise out of or in connection with the sale of the same or
substantially similar securities or property and which mature or otherwise
become non-contingent on or prior to the later of the Revolving Termination Date
and the Term Maturity Date, (vii) all non-contingent obligations (and, solely
for purposes of Section 7.01 and Section 8.01(e), all contingent obligations) of
such Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit, bankers’ acceptance or similar instrument, (viii) all
obligations of others secured by (or for which the holder of such obligations
has an existing right, contingent or otherwise, to be secured by) a Lien on, or
payable out of the proceeds of production from, any property or asset of such
Person, whether or not such obligation is assumed by such Person; provided that
the amount of any Debt of others that constitutes Debt of such Person solely by
reason of this clause (viii) shall not for purposes of this Agreement exceed the
greater of the book value or the fair market value of the properties or assets
subject to such Lien, (ix) all Guaranty Obligations of such Person in respect of
Debt of another Person, (x) all Debt Equivalents of such Person and (xi) the
Debt of any other Person (including any partnership in which such Person is a
general partner and any unincorporated joint venture in which such Person is a
joint venturer) to the extent such Person would be liable therefor under
applicable law or any agreement or instrument by virtue of such Person’s
ownership interest in or other relationship with such entity, except to the
extent the terms of such Debt provide that such person shall not be liable
therefor; provided that (i) Debt shall not include earn-out obligations until
matured or earned or employee consulting agreements and (ii) the amount of any
Limited Recourse Debt of any Person shall be equal to the lesser of (A) the
aggregate principal amount of such Limited Recourse Debt for which such Person
provides credit support of any kind (including any undertaking agreement or
instrument that would constitute Debt), is directly or indirectly liable as a
guarantor or otherwise or is the lender and (B) the fair market value of any
assets securing such Debt or to which such Debt is otherwise recourse.

 

“Debt Equivalents” of any Person means any Equity Interest of such Person which
by its terms (or by the terms of any security for which it is convertible or for
which it is exchangeable or exercisable), or upon the happening of any event or
otherwise (including an event which would constitute a Change of Control but
only to the extent such an event occurs), (A) matures or is mandatorily
redeemable or subject to any mandatory repurchase requirement, pursuant to a
sinking fund or otherwise, (B) is convertible into or exchangeable for Debt or
Debt Equivalents or (C) is redeemable or subject to any repurchase requirement
arising at the option of the holder thereof, in each case, in whole or in part,
on or prior to the first anniversary of the latest of the Revolving Termination
Date or the Term Maturity Date.

 

“Debt Issuance” means the issuance by any Group Company of any Debt.

 

“Default” means any condition or event which constitutes an Event of Default or
which with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.

 

“Defaulting Lender” means at any time any Lender that, within one Business Day
of when due, (i) has failed to make a Loan or purchase a Participation Interest
in an LC Obligation required pursuant to the terms of this Agreement, (ii) other
than as set forth in clause (i) above, has failed to pay to any Agent or any
Lender an amount owed by such Lender pursuant to the terms of the Agreement or
any

 

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other Senior Finance Document unless such amount is subject to a good faith
dispute or (iii) has been deemed insolvent or has become subject to a
receivership or insolvency event.

 

“Derivatives Agreement” means (i) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond 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 (ii) any and all transactions of any kind,
and the related confirmations, which are subject to the terms and conditions of,
or governed by, any form of master agreement published by the International
Swaps and Derivatives Association, Inc., any International Foreign Exchange
Master Agreement or any other master agreement.

 

“Derivatives Creditor” means any Lender or any Affiliate of any Lender from time
to time party to one or more Derivatives Agreements permitted hereunder with a
Credit Party (even if any such Lender for any reason ceases after the execution
of such agreement to be a Lender hereunder), and its successors and assigns, and
“Derivatives Creditors” means any two or more of them, collectively.

 

“Derivatives Obligations” of any Person means all obligations (including,
without limitation, any amounts which accrue after the commencement of any
bankruptcy or insolvency proceeding with respect to such Person, whether or not
allowed or allowable as a claim under any bankruptcy or insolvency proceeding)
of such Person in respect of any Derivatives Agreement, excluding any amounts
which such Person is entitled to set-off against its obligations under
applicable law.

 

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

 

“Dollar Amount” means on any date:

 

(i) with respect to Dollar-Denominated Loans, the aggregate outstanding
principal amount thereof after giving effect to any Borrowings, conversions,
continuations and prepayments or repayments of such Loans occurring on such
date;

 

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(ii) with respect to Multi-Currency Revolving Loans, the Dollar Equivalent of
the aggregate outstanding principal amount thereof after giving effect to any
Borrowings, continuations, prepayments or repayments of any such Loans occurring
on such date;

 

(iii) with respect to LC Obligations in respect of Letters of Credit denominated
in Dollars, the aggregate amount of such LC Obligations after giving effect to
any changes in the aggregate amount of such LC Obligations as of such date; and

 

(iv) with respect to LC Obligations in respect of Foreign Currency Letters of
Credit, the Dollar Equivalent of the aggregate amount of such LC Obligations
after giving effect to any changes in the aggregate amount of such LC
Obligations on such date.

 

“Dollar-Denominated Loan” means any Loan that is made in Dollars in accordance
with the applicable Notice of Borrowing.

 

“Dollar Equivalent” means, on any date of determination with respect to any
Loan, any LC Obligation, any Commitment or any other amount determined in a
currency other than Dollars, the equivalent of such amount in Dollars determined
by the Administrative Agent pursuant to Section 1.05 using the applicable
Exchange Rate.

 

“Dollars” and the sign “$” means lawful money of the United States of America.

 

“Domestic Revolving Borrowing” means a Borrowing comprised of Domestic Revolving
Loans and identified as such in the Notice of Borrowing with respect thereto.

 

“Domestic Revolving Commitment” means, with respect to any Lender, the
commitment of such Lender, in an aggregate principal amount at any time
outstanding of up to such Lender’s Domestic Revolving Commitment Percentage of
the Domestic Revolving Committed Amount, (i) to make Domestic Revolving Loans in
accordance with the provisions of Section 2.01(a)(i) and (ii) to purchase
Participation Interests in Letters of Credit in accordance with the provisions
of Section 2.05(d).

 

“Domestic Revolving Commitment Percentage” means, for each Lender, the
percentage identified as its Domestic Revolving Commitment Percentage on
Schedule 1.01A hereto, as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 10.06(b).

 

“Domestic Revolving Committed Amount” means at any time the difference of (i)
$40,000,000 less (ii) the Multi-Currency Revolving Committed Amount in effect at
such time, or such lesser amount to which the Domestic Revolving Committed
Amount may be reduced pursuant to Section 2.10.

 

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“Domestic Revolving Credit Exposure” has the meaning set forth in the definition
of “Required Domestic Revolving Lenders” contained in this Section 1.01.

 

“Domestic Revolving Lender” means each Lender identified in Schedule 1.01A as
having a Domestic Revolving Commitment and each Eligible Assignee which acquires
a Domestic Revolving Commitment and/or Domestic Revolving Loan pursuant to
Section 10.06(b) and their respective successors.

 

“Domestic Revolving Loan” means a Loan made under Section 2.01(a)(i).

 

“Domestic Revolving Outstandings” means at any date the aggregate outstanding
principal amount of all Domestic Revolving Loans plus the aggregate outstanding
amount of all LC Obligations.

 

“Domestic Subsidiary” means with respect to any Person each Subsidiary of such
Person which is incorporated under the laws of the United States or any state
thereof and the District of Columbia, and “Domestic Subsidiaries” means any two
or more of them.

 

“Effective Date” means the date this Agreement becomes effective in accordance
with Section 10.18.

 

“Eligible Assignee” means (i) any Lender, (ii) any Affiliate of a Lender, (iii)
any Approved Fund and (iv) any other commercial bank, finance company, insurance
company or other financial institution or fund (other than a natural Person)
approved by (A) the Administrative Agent, (B) in the case of any assignment of a
Domestic Revolving Commitment, the Issuing Lenders and (C) unless (y) the
assignment is being made to such person by an Agent on or prior to the
Syndication Date in consultation with the Borrower or (z) a Default or an Event
of Default has occurred and is continuing at the time any assignment is effected
pursuant to Section 10.06(b), the Borrower (each such approval not to be
unreasonably withheld, conditioned or delayed and any such approval required of
the Borrower to be deemed given by the Borrower if no objection from the
Borrower is received by the assigning Lender and the Administrative Agent within
five Business Days after notice of such proposed assignment has been provided by
the assigning Lender to the Borrower); provided, however, that (i) if Credit
Suisse First Boston, Cayman Islands Branch or one or more of its Affiliates is
an Issuing Lender, any assignment of a Domestic Revolving Commitment (including
any assignment to a Lender, an Affiliate of a lender or an Approved Fund) shall
require its consent, (ii) Holdings and its Affiliates shall not qualify as
Eligible Assignees, (iii) no assignment of Multi-Currency Revolving Loans or
Multi-Currency Revolving Commitments may be made to a Person that cannot make or
maintain Loans in each of the then applicable Available Foreign Currencies and
(iv) no Person shall be an Eligible Assignee if such Person appears on the list
of Specially Designated Nationals and Blocked Persons prepared by the U.S.
Treasury Department’s Office of Foreign Assets Control or the purchase by such
Person of an assignment or the performance by any Agent of its duties under the
Senior Finance Documents with respect to such Person violates or would violate
any Anti-Terrorism Law.

 

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“Employee Benefit Arrangements” means in any jurisdiction the benefit schemes or
arrangements in respect of any employees or past employees operated by any Group
Company or in which any Group Company participates and which provide benefits on
retirement, ill-health, injury, death or voluntary withdrawal from or
termination of employment, including termination indemnity payments and life
assurance and post-retirement medical benefits, other than Plans and Foreign
Pension Plans.

 

“EMU” means the Economic and Monetary Union as contemplated in the EU Treaty.

 

“EMU Legislation” means the legislative measures of the EMU for the introduction
of, changeover to, or operation of the Euro in one or more member states.

 

“Environmental Laws” means all Laws relating in any way to the environment, the
preservation or reclamation of natural resources, the management, release or
threatened release of any Hazardous Material or health and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of remediation, fines, penalties or
indemnities), of any Group Company directly or indirectly resulting from or
based on (i) violation of any Environmental Law, (ii) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Material, (iii) exposure to any Hazardous Material, (iv) the release or
threatened release of any Hazardous Material into the environment or (v) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

“Equity Equivalents” means with respect to any Person any rights, warrants,
options, convertible securities, exchangeable securities, indebtedness or other
rights, in each case exercisable for or convertible or exchangeable into,
directly or indirectly, Equity Interests of such Person or securities
exercisable for or convertible or exchangeable into Equity Interests of such
Person, whether at the time of issuance or upon the passage of time or the
occurrence of some future event.

 

“Equity Interests” means all shares of capital stock, partnership interests
(whether general or limited), limited liability company membership interests,
beneficial interests in a trust and any other interest or participation that
confers on a Person the right to receive a share of profits or losses, or
distributions of assets, of an issuing Person, but excluding any debt securities
convertible into such Equity Interests.

 

“Equity Issuance” means (i) any sale or issuance by any Group Company to any
Person other than Holdings or a Subsidiary of Holdings of any Equity Interests
or any Equity Equivalents (other than any such Equity Equivalents that
constitute Debt) and (ii) the receipt by any Group Company of any cash capital
contributions, whether or not paid in connection with any issuance of Equity
Interests of any Group Company, from any Person other than Holdings or a
Subsidiary of Holdings.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any rule or regulation issued thereunder.

 

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“ERISA Affiliate” means each business or entity which is a member of a
“controlled group of corporations”, under “common control” or an “affiliated
service group” with a Group Company within the meaning of Section 414(b), (c) or
(m) of the Code, or required to be aggregated with a Group Company under Section
414(o) of the Code or is under “common control” with a Group Company, within the
meaning of Section 4001(a)(14) of ERISA.

 

“ERISA Event” means:

 

(i) a reportable event as defined in Section 4043 of ERISA and the regulations
issued under such Section, with respect to a Plan, excluding, however, such
events as to which the PBGC by regulation has waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the occurrence of such
event;

 

(ii) the requirements of Section 4043(b) of ERISA apply with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of any Plan,
and an event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days;

 

(iii) (x) the failure to meet the minimum funding standard of Section 412 of the
Code with respect to any Plan (whether or not waived in accordance with Section
412(d) of the Code), the application for a minimum funding waiver under Section
303 of ERISA with respect to any Plan, or the failure to make by its due date a
required installment under Section 412(m) of the Code with respect to any Plan;
or (y) the failure to make any required contribution to a Multiemployer Plan;

 

(iv) the incurrence of any material liability by a Group Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined in Section
3 of ERISA), or the occurrence or existence of any event, transaction or
condition that could reasonably be expected to result in the incurrence of any
such material liability by a Group Company or any ERISA Affiliate, or in the
imposition of any lien on any of the rights, properties or assets of a Group
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions of the Code or to Section
401(a)(29) or 412 of the Code;

 

(v) the provision by the administrator of any Plan pursuant to Section
4041(a)(2) of ERISA of a notice (or the reasonable expectation of such provision
of notice) of intent to terminate such Plan in a distress termination described
in Section 4041(c) of ERISA, the institution by the PBGC of proceedings to
terminate any Plan or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment of a
trustee by the PBGC to administer, any Plan;

 

(vi) the withdrawal of a Group Company or ERISA Affiliate in a complete or
partial withdrawal (within the meaning of Section 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by a Group Company

 

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or ERISA Affiliate of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;

 

(vii) the imposition of liability (or the reasonable expectation thereof) on a
Group Company or ERISA Affiliate pursuant to Section 4062, 4063, 4064 or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA;

 

(viii) the assertion of a material claim (other than routine claims for
benefits) against any Plan other than a Multiemployer Plan or the assets
thereof, or against a Group Company in connection with any Plan;

 

(ix) the receipt from the United States Internal Revenue Service of notice of
the failure of any Plan (or any Employee Benefit Arrangement intended to be
qualified under Section 401(a) of the Code) to qualify under Section 401(a) of
the Code, or the failure of any trust forming part of any Plan to qualify for
exemption from taxation under Section 501(a) of the Code, and, with respect to
Multiemployer Plans, notice thereof to any Group Company; and

 

(x) the establishment or amendment by a Group Company of any Welfare Plan that
provides post-employment welfare benefits in a manner that would increase the
liability of a Group Company.

 

“EU Treaty” means the Treaty establishing the European Economic Community, being
the Treaty of Rome of March 25, 1957, as amended by the Single European Act of
1986 and the Maastricht Treaty (which was signed on February 7, 1992 and became
effective on November 1, 1993), as the same may be further amended, modified or
supplemented from time to time.

 

“Euro” means the single currency of the Participating Member States introduced
in accordance with the provisions of Article 109(i)4 of the EU Treaty.

 

“Eurocurrency Loan” means at any date a Loan which bears interest at a
Eurocurrency Rate.

 

“Eurocurrency Rate” means, for any Eurocurrency Loan for the Interest Period
applicable thereto:

 

(i) with respect to Eurocurrency Loans denominated in a currency other than
Euros:

 

(A) the rate per annum equal to the rate determined by the Administrative Agent
to be the average British Bankers Association Interest Settlement Rate for
deposits in the relevant currency (for delivery on the first day of such
Interest

 

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Period) for a period of time comparable to such Interest Period, determined as
of approximately 11:00 A.M. (London time) two Business Days prior to the first
day of such Interest Period; or

 

(B) if the rate referenced in the preceding clause (i)(A) is not available, the
rate per annum determined by the Administrative Agent as the rate of interest at
which deposits in the relevant currency for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurocurrency
Loan being made, continued or converted by Credit Suisse First Boston, Cayman
Islands Branch and with a term equivalent to such Interest Period as would be
offered by Credit Suisse First Boston’s London branch to major banks in the
offshore market for the relevant currency at their request at approximately
11:00 A.M. (London time) two Business Days prior to the first day of such
Interest Period; or

 

(ii) in the case of Eurocurrency Loans denominated in Euros:

 

(A) the rate per annum equal to the rate determined by the Administrative Agent
to be the average rate offered by the Banking Federation of the European Union
for deposits in Euros as of 11:00 A.M. (Brussels time) two Business Days prior
to the first day of such Interest Period and having a maturity approximately
equal to such Interest Period; or

 

(B) if the rate referenced in the preceding clause (ii)(A) is not available, the
rate per annum determined by the Administrative Agent as the rate at which the
Banking Federation of the European Union offers deposits in Euros for delivery
on the first day of such Interest Period in same day funds in the approximate
amount of the Eurocurrency Loan so denominated in Euros being made, continued or
converted by Credit Suisse First Boston, Cayman Islands and with a term
approximately equal to such Interest Period at approximately 11:00 A.M.
(Brussels time) two Business Days prior to the first day of such Interest
Period.

 

“Eurocurrency Reserve Percentage” means, with respect to any currency for any
day, any reserve, liquid asset or similar requirement (expressed as a decimal)
which is in effect on such day, as prescribed by any Governmental Authority of
the United States of America or of the jurisdiction of such currency or any
jurisdiction in which Loans in such currency are made to which banks in such
jurisdiction are subject in respect of “Eurocurrency liabilities” (or in respect
of any other category of deposits or liabilities customarily used to fund loans
in such currency by reference to which the interest rate on Eurocurrency Loans
is determined, whether or not a Lender has any such Eurocurrency liabilities or
other deposits or liabilities subject to such reserve, liquid asset or similar
requirement at that time. Eurocurrency Loans shall be deemed to constitute
Eurocurrency or other such liabilities and as such shall be deemed subject to
such reserve, liquid asset or similar requirements without benefits of credits
for prorations, exceptions or offsets that may be available from time to time to
a Lender. The Adjusted Eurocurrency Rate shall be adjusted automatically on and
as of the effective date of any change in the Eurocurrency Reserve Percentage.

 

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

 

“Evergreen Letter of Credit” has the meaning set forth in Section 2.05(b).

 

“Excess Cash Flow” means for any period an amount equal to (i) Consolidated
EBITDA for such period, plus (ii) all cash extraordinary, unusual or
non-recurring gains, if any, during such period (whether or not accrued in such
period), plus (iii) (x) the decrease, if any, in Consolidated Adjusted Working
Capital less (y) the decrease, if any, in the principal amount of Revolving
Loans from the first day to the last day of such period, plus (iv) the net
increase in deferred tax accounts from the first day to the last day of such
period, minus (v) the amount, if any, which, in the determination of
Consolidated Net Income for such period, has been included in respect of income
or gain from Asset Dispositions of Holdings and its Consolidated Subsidiaries to
the extent utilized or repay or prepay Loans pursuant to Section 2.09(b)(vi),
minus (vi) the aggregate amount (without duplication and in each case except to
the extent paid, directly or indirectly, with proceeds of any Equity Issuance or
Debt Issuance (other than Revolving Loans) by any Group Company) of (A) the sum
of (x) cash payments during such period in respect of Consolidated Capital
Expenditures allowed under Section 7.14 plus (y) to the extent amounts permitted
to be paid during such period in respect of Consolidated Capital Expenditures
are carried forward to the next succeeding period in accordance with Section
7.14(b), the aggregate amounts of all cash payments (not to exceed such
permitted carryforward amount) in respect of such Consolidated Capital
Expenditures made during the first 90 days of such next succeeding period (it
being understood and agreed that any cash payments in respect of Consolidated
Capital Expenditures deducted from Excess Cash Flow pursuant to this clause
(vi)(A)(z) shall not thereafter be deducted pursuant to clause (vi)(A)(y) above
in the determination of Excess Cash Flow for the period during which such
payments were actually paid), (B) cash payments during such period in respect of
(x) Permitted Business Acquisitions allowed under Section 7.06(a)(xii), (y)
Permitted Joint Ventures allowed under Section 7.06(a)(xvi) and (z) other
permitted Investments allowed under Section 7.06(a)(xx), (C) optional
prepayments of Debt (other than Subordinated Debt) during such period, (D) to
the extent not included in clause (v) above, repayments or prepayments of the
Revolving Loans to the extent the Revolving Commitments are permanently reduced
at the time of such payment, (E) earn-out payments paid in cash during such
period, (F) the aggregate amount of all Restricted Payments actually paid in
cash by Holdings during such period, (G) the aggregate amount of all financial
advisory fees, accounting fees, legal fees and other similar advisory and
consulting fees and related out-of-pocket expenses incurred as a result of the
Transaction or any Permitted Business Acquisition, Foreign Asset Disposition
and/or the sale or potential sale of substantially all of the Borrower’s bowling
products business and actually paid in cash by Holdings and its Consolidated
Subsidiaries during such period, in each case to the extent added to
Consolidated Net Income in the determination of Consolidated EBITDA for such
period, (H) Transaction related expenditures (including cash charges arising out
of strategic market reviews, early extinguishment of Debt, management bonuses,
restructuring, consolidation, severance or discontinuance of any portion of
operations, employees and/or management) described on Schedule 1.01B and
actually paid in cash by Holdings and its Consolidated Subsidiaries during such
period, in each case to the extent added to Consolidated Net Income in the
determination of Consolidated EBITDA for such period, (I) fees and expenses in
connection with the exchange of the Senior Subordinated Notes actually paid in
cash by Holdings and its Consolidated Subsidiaries during such period, (J)
Consolidated Cash Interest Expense and, without duplication and only to the
extent included in Consolidated Interest Expense for such period, any expenses
identified in clauses (i) through (vi) of the definition of Consolidated Cash
Interest Expense actually paid in cash by Holdings and its Consolidated
Subsidiaries during such period, (K) Consolidated Cash Tax Expense actually paid
by Holdings and its Consolidated Subsidiaries during such period, and (L)
Consolidated Scheduled Debt Payments actually paid by Holdings and its
Consolidated Subsidiaries during such period, minus (vii) all cash
extraordinary, unusual or non-recurring losses, if any, during such period

 

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(whether or not accrued in such period), minus (viii) (x) the increase, if any,
in Consolidated Adjusted Working Capital less (y) the increase, if any, in the
principal amount Revolving Loans from the first day to the last day of such
period, minus (ix) to the extent included in the determination of Consolidated
EBITDA for such period, amounts (whether positive or negative) derived from
changes in foreign currency exchange rates during such period, minus (x) the net
decrease in deferred tax accounts from the first day to the last day of such
period.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Exchange Rate” means on any day, with respect to any currency other than
Dollars, the rate at which such currency may be exchanged into Dollars, as set
forth at approximately 11:00 A.M. (London time) on such day on the Bloomberg Key
Cross Currency Rates Page. If any such rate does not appear on the Bloomberg Key
Cross Currency Rates Page, the Exchange Rate shall be determined by reference to
such other publicly available service for displaying exchange rates reasonably
selected by the Administrative Agent for such purpose or, at the reasonable
discretion of the Administrative Agent, such Exchange Rate shall instead be the
arithmetic average of the spot rates of exchange of the Administrative Agent in
the market where its foreign currency exchange operations in respect of such
currency are being conducted, at or about 11:00 A.M. (local time in such market)
on such day for the purchase of the applicable currency for delivery two
Business Days later; provided that, if at the time of any such determination,
for any reason, no such spot rate is being quoted, the Administrative Agent may
use any other reasonable method it deems appropriate to determine such rate, and
such determination shall be presumed correct absent manifest error.

 

“Excluded Asset Disposition” means an Asset Disposition permitted pursuant to
Section 7.05 other than Asset Dispositions pursuant to Sections 7.05(vii),
(xiii)(B), (xv), (xvi) and (xix).

 

“Excluded Equity Issuance” means (i) any issuance by any Subsidiary of the
Borrower of its Equity Interests to the Borrower or any other Subsidiary of the
Borrower, (ii) the receipt by any Subsidiary of the Borrower of a capital
contribution from the Borrower or a Subsidiary of the Borrower, (iii) any
Qualifying Equity Issuance and (iv) any issuance of Equity Interests to qualify
directors where required by applicable Law or to satisfy other requirements of
applicable Law with respect to the ownership of Equity Interests of Foreign
Subsidiaries or Liquor License Subsidiaries.

 

“Excluded Taxes” means with respect to any Agent, any Lender or any other
recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (i) income or franchise taxes imposed on (or measured by)
its net income by the United States or by the jurisdiction 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, (ii) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which the Borrower is located,
and (iii) in the case of any Borrowing, with respect to any Lender (other than
an Eligible Assignee pursuant to a request by the Borrower under Section
2.10(d)), any withholding tax imposed by the jurisdiction in which the Borrower
is located that is (A) imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement or (B) is attributable to such
Lender’s failure to comply (other than as a result of a Change in Law) with
Section 3.01(d), except to the extent that such Lender (or its assignor, if any)
was entitled, at the time of designation of a new lending office (or

 

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assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Sections 3.01(a).

 

“Existing 13% Notes” means the 13.00% Senior Subordinated Notes due 2008 of the
Target.

 

“Existing 13% Notes Indenture” means the Indenture dated as of March 8, 2002
between the Target and Wilmington Trust Company, as trustee, as amended,
supplemented, modified and otherwise in effect on the Closing Date.

 

“Failed Loan” has the meaning set forth in Section 2.03(e).

 

“Federal Funds Rate” means for any day the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (i) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (ii) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to Credit
Suisse First Boston, Cayman Islands Branch on such day on such transactions as
determined by the Administrative Agent.

 

“Finance Document” means each Senior Finance Document and each Derivatives
Agreement between one or more Credit Parties and a Derivatives Creditor
evidencing Derivatives Obligations permitted hereunder, and “Finance Documents”
means all of them, collectively.

 

“Finance Obligations” means, at any date, (i) all Senior Obligations and (ii)
all Derivatives Obligations of a Credit Party permitted hereunder owed or owing
to any Derivatives Creditor.

 

“Finance Party” means each Lender, each Issuing Lender, each Derivatives
Creditor, each Agent and each Indemnitee and their respective successors and
assigns, and “Finance Parties” means any two or more of them, collectively.

 

“Fixed Charge Coverage Ratio” means, for any period, the ratio of (i)
Consolidated EBITDA less the aggregate amount of Consolidated Capital
Expenditures for such period (exclusive of the portion thereof financed with (i)
Capital Leases, Purchase Money Debt or other Debt (exclusive of Loans) permitted
by Section 7.01 incurred during such period or any Qualifying Equity Issuance or
(ii) Net Cash Proceeds of Asset Dispositions received during such period and not
required to be applied to repay Loans or cash collateralize Letter of Credit
Liabilities pursuant to Section 2.09(b)(v)) to (ii) Consolidated Fixed Charges
for such period.

 

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“Foreign Asset Disposition” means an Asset Disposition where the relevant asset
is (i) the stock or assets of a Foreign Subsidiary or (ii) one or more assets of
the Borrower or a Domestic Subsidiary which are located outside the United
States or any territory thereof.

 

“Foreign Currency LC Committed Amount” has the meaning set forth in Section
2.05(a).

 

“Foreign Currency LC Exposure” means at any time, the sum of (i) the Dollar
Amount of the aggregate undrawn and unexpired amount of all outstanding Foreign
Currency Letters of Credit at such time plus (ii) the Dollar Amount of the
aggregate amount of LC Disbursements in respect of Foreign Currency Letters of
Credit that have not been reimbursed at such time.

 

“Foreign Currency Letter of Credit” means a Letter of Credit denominated in an
Available Foreign Currency other than Dollars.

 

“Foreign Pension Plan” means any plan, fund (including, without limitation, any
superannuation fund) or other similar program established or maintained outside
the United States by any Group Company primarily for the benefit of employees of
any Group Company residing outside the United States, which plan, fund or other
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.

 

“Foreign Subsidiary” means with respect to any Person any Subsidiary of such
Person that is not a Domestic Subsidiary of such Person.

 

“Funded Debt” means, with respect to any Person, all Debt of such Person
(including, in respect of the Credit Parties, the Senior Obligations) that by
its terms matures more than one year after the date of its creation or matures
within one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year after such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year after such date, including,
without limitation, all amounts of Funded Debt of such Person required to be
paid or prepaid within one year after the date of determination.

 

“GAAP” means at any time generally accepted accounting principles as then in
effect in the United States, applied on a basis consistent (except for changes
with which the Borrower’s independent public accountants have concurred) with
the most recent audited consolidated financial statements of Holdings and its
Consolidated Subsidiaries previously delivered to the Lenders.

 

“Government Acts” has the meaning set forth in Section 2.05(p)(i).

 

“Governmental Authority” means any federal, state, local, provincial or foreign
government, authority, agency, central bank, quasi-governmental or regulatory
authority, court or other body or entity, and any arbitrator with authority to
bind a party at law.

 

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“Group Company” means any of Holdings, the Borrower or their respective
Subsidiaries (regardless of whether or not consolidated with Holdings or the
Borrower for purposes of GAAP), and “Group Companies” means all of them,
collectively.

 

“Group of Loans” means at any time a group of Loans consisting of (i) all Loans
which are Base Rate Loans at such time (ii) all Loans which are Eurocurrency
Loans denominated in the same currency and having the same Interest Period at
such time; provided that, if a Loan of any particular Lender is converted to or
made as a Base Rate Loan pursuant to Article III, such Loan shall be included in
the same Group or Group of Loans from time to time as it would have been had it
not been so converted or made.

 

“Guaranty” means the Guaranty, substantially in the form of Exhibit E hereto, by
Holdings and the Subsidiary Guarantors in favor of the Administrative Agent, as
the same may be amended, modified or supplemented from time to time.

 

“Guaranty Obligation” means, with respect to any Person, without duplication,
any obligation (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) guarantying, intended to
guaranty, or having the economic effect of guarantying, any Debt or other
obligation of any other Person in any manner, whether direct or indirect, and
including, without limitation, any obligation, whether or not contingent, (i) to
purchase any such Debt or other obligation or any property constituting security
therefor, (ii) to advance or provide funds or other support for the payment or
purchase of such indebtedness or obligation or to maintain working capital,
solvency or other balance sheet condition of such other Person (including,
without limitation, maintenance agreements, comfort letters, take or pay
arrangements, put agreements or similar agreements or arrangements) for the
benefit of the holder of Debt or other obligation of such other Person, (iii) to
lease or purchase property, securities or services primarily for the purpose of
assuring the owner of such Debt or other obligation or (iv) to otherwise assure
or hold harmless the owner of such Debt or obligation against loss in respect
thereof, it being understood and agreed that indemnification and similar
reimbursement obligations entered into in the ordinary course of business in
favor of the obligor on any such Debt or other obligation which are not
enforceable by any holder of such Debt or other obligation and which do not
otherwise constitute Debt hereunder shall not be deemed to constitute Guaranty
Obligations for purposes of this Agreement and the other Senior Finance
Documents. The amount of any Guaranty Obligation hereunder shall (subject to any
limitations set forth therein) be deemed to be an amount equal to the lesser of
the outstanding principal amount or maximum principal amount of the Debt or
other obligation in respect of which such Guaranty Obligation is made.

 

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

 

“Holdings” means Kingpin Intermediate Corp., a Delaware corporation and its
successors.

 

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“Holdings Equity Issuance” has the meaning set forth in Section 4.01(f).

 

“Indemnified Liabilities” has the meaning set forth in Section 10.05.

 

“Indemnitee” has the meaning set forth in Section 10.05.

 

“Insignificant Subsidiaries” means (i) as of the Closing Date, the Subsidiaries
of the Borrower listed on Schedule 1.01F hereto and, thereafter, (ii) any
Subsidiary of Holdings which is formed or acquired after the Closing Date and
designated as such by the Borrower; provided, however, that no Subsidiary of
Holdings may remain, or be designated, as an Insignificant Subsidiary if the
assets of such Subsidiary, when taken together with the assets of the other
Insignificant Subsidiaries at such time exceed the lesser of (i) 3% Consolidated
Total Assets or (ii) $15,000,000 in asset value.

 

“Insurance Proceeds” means all insurance proceeds (other than business
interruption insurance proceeds), damages, awards, claims and rights of action
with respect to any Casualty.

 

“Intellectual Property” means all Patents, Trademarks, Copyrights, Software,
Licenses, rights in intellectual property, goodwill, trade names, service marks,
trade secrets, confidential or proprietary technical and business information,
know-how, show-how, domain names, mask works, customer lists, vendor lists,
subscription lists, data bases and related documentation, registrations,
franchises and all other intellectual or other similar property rights.

 

“Intercompany Note” means a promissory note contemplated by Section
7.06(a)(viii), substantially in the form of Exhibit G hereto, and “Intercompany
Notes” means any two or more of them.

 

“Interest Coverage Ratio” means for any period the ratio of (i) Consolidated
EBITDA to (ii) Consolidated Cash Interest Expense for such period.

 

“Interest Payment Date” means (i) as to Base Rate Loans, the last Business Day
of each March, June, September and December and the Maturity Date for Loans of
the applicable Class and (ii) as to Eurocurrency Loans, the last day of each
applicable Interest Period and the Maturity Date for Loans of the applicable
Class, and in addition where the applicable Interest Period for a Eurocurrency
Loan is greater than three months, then also the date three months from the
beginning of the Interest Period and each three months thereafter.

 

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“Interest Period” means with respect to each Eurocurrency Loan, a period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice of
Extension/Conversion and ending one, two, three, six or, if available to all of
the Lenders having Commitments or Loans of the applicable Class, nine or twelve
months thereafter, as the Borrower may elect in the applicable notice; provided
that:

 

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

 

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

 

(iii) no Interest Period in respect of Term Loans may be selected which extends
beyond a Principal Amortization Payment Date for Loans of the applicable Class
unless, after giving effect to the selection of such Interest Period, the
aggregate principal amount of Term Loans of the applicable Class which are
comprised of Base Rate Loans together with such Term Loans comprised of
Eurocurrency Loans with Interest Periods expiring on or prior to such Principal
Amortization Payment Date are at least equal to the aggregate principal amount
of Term Loans of the applicable Class due on such date;

 

(iv) no Interest Period in excess of one month may be elected at any time when a
Default or an Event of Default is then in existence; and

 

(v) no Interest Period shall be elected which would end after the Maturity Date
for Loans of the applicable Class.

 

“Investment” in any Person means (i) the acquisition (whether for cash,
property, services, assumption of Debt, securities or otherwise) of assets,
shares of Capital Stock, bonds, notes, debentures, time deposits or other
securities of such Person, (ii) any deposit with, or advance, loan or other
extension of credit to or for the benefit of such Person (other than deposits
made in connection with the purchase of equipment or inventory in the ordinary
course of business) or (iii) any other capital contribution to or investment in
such Person, including by way of Guaranty Obligations of any Debt or other
obligation of such Person, any support for a letter of credit issued on behalf
of such Person incurred for the benefit of such Person or any release,
cancellation, compromise or forgiveness in whole or in part of any Debt owing by
such Person. The outstanding amount of any Investment shall be deemed to equal
the difference of (i) the aggregate initial amount of such Investment less (ii)
all returns of principal thereof or capital with respect thereto and all
dividends and other distributions of income received in respect thereof and all
liabilities expressly assumed by another Person (and with respect to which
Holdings and its Subsidiaries, as applicable, shall have received a novation) in
connection with the sale of such Investment.

 

“Investor Group” means the Sponsor Group and certain other investors identified
to the Lead Arrangers prior to the Closing Date.

 

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“Issuing Lender” means (i) Credit Suisse First Boston, Cayman Islands Branch, in
its capacity as issuer of Letters of Credit under Section 2.05(a), and its
successor or successors in such capacity and (ii) any other Domestic Revolving
Lender which the Borrower shall have designated as an “Issuing Lender” by notice
to the Administrative Agent.

 

“iStar Sale/Leaseback” means the Sale/Leaseback Transaction effected pursuant to
the iStar Sale/Leaseback Documents.

 

“iStar Sale/Leaseback Documents” means (i) the Lease I Agreement dated as of
February 27, 2004 between iStar Bowling Centers I LLC, as landlord, and AMF
Bowling Centers, Inc., as tenant, (ii) the Lease II Agreement dated as of
February 27, 2004 between iStar Bowling Centers I LLC, as landlord, and AMF
Recreation Centers, Inc., as tenant, (iii) the Guaranty dated as of February 27,
2004 by Holdings in favor of iStar Bowling Centers I LLC and (iv) the Seller’s
Certificates dated as of February 27, 2004 by each of AMF Bowling Centers, Inc.
and AMF Recreation Centers, Inc., in each case as seller, in each case as the
same may be amended, modified or supplemented from time to time in accordance
with the provisions thereof and of this Agreement, and including all basic lease
information and all other agreements, documents and instruments relating to the
iStar Sale/Leaseback and all exhibits and schedules to any of the foregoing.

 

“Judgment Currency” has the meaning set forth in Section 10.19.

 

“Judgment Currency Conversion Rate” has the meaning set forth in Section 10.19.

 

“Landlord Consent and Estoppel” means with respect to any Leased Mortgaged
Property, a Landlord Consent and Estoppel with respect to such Leased Mortgaged
Property, or similar letter, certificate or other instrument in writing from the
lessor under the related lease, reasonably satisfactory in form and substance to
the Lead Arrangers.

 

“Law” means any international, foreign, Federal, state or local statute, treaty,
rule, guideline, regulation, ordinance, code, or administrative or judicial
precedent or authority, including the interpretation or administration thereof
by any Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority, in each case whether or not having the force of law.

 

“LC Cash Collateral Account” has the meaning set forth in the Security
Agreement.

 

“LC Commitment” means the commitment of one or more Issuing Lenders to issue
Letters of Credit in an aggregate face amount (calculated at the Dollar Amount
thereof) at any one time outstanding (together with the aggregate Dollar Amount
of any unreimbursed drawings thereon) of up to the LC Committed Amount.

 

“LC Committed Amount” has the meaning set forth in Section 2.05(a).

 

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“LC Disbursement” means a payment or disbursement made by an Issuing Lender
pursuant to a Letter of Credit.

 

“LC Documents” means, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefor and any agreements, instruments, guaranties or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (i) the rights and obligations of the parties
concerned or at risk or (ii) any collateral security for such obligations.

 

“LC Obligations” means at any time, the sum of (i) the maximum Dollar Amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus, without duplication,
(ii) the aggregate Dollar Amount of all LC Disbursements not yet reimbursed by
the Borrower as provided in Section 2.05(g) to the applicable Issuing Lenders in
respect of drawings under Letters of Credit, including any portion of any such
obligation to which a Lender has become subrogated pursuant to Section 2.05(h).

 

“Lead Arrangers” means Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Credit Suisse First Boston, Cayman Islands Branch, in
their capacities as co-lead arrangers and joint bookrunners.

 

“Leased Mortgaged Property” and “Leased Mortgaged Properties” have the
respective meanings set forth in Section 4.01(m).

 

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

 

“Lender” means each bank or other lending institution listed on Schedule 1.01A,
each Eligible Assignee that becomes a Lender pursuant to Section 10.06(b) and
their respective successors and shall include, as the context may require, each
Issuing Lender in such capacity.

 

“Letter of Credit” means a Standby Letter of Credit or a Trade Letter of Credit,
and “Letters of Credit” means any combination of the foregoing.

 

“Letter of Credit Fee” has the meaning set forth in Section 2.11(b).

 

“Letter of Credit Request” has the meaning set forth in Section 2.05(b).

 

“Leverage Ratio” means on any day the ratio of (i) Consolidated Funded Debt as
of such date (excluding the Existing 13% Notes, to the extent such Existing 13%
Notes have been covenant defeased or legally defeased as contemplated by Section
4.01(i) and excluding the aggregate principal

 

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amount of all Subordinated Seller Paper then outstanding) to (ii) Consolidated
EBITDA for the four consecutive fiscal quarters of the Borrower ended on, or
most recently preceding, such day.

 

“Lien” means, with respect to any asset, any mortgage, pledge, hypothecation,
assignment, deposit arrangement, lien (statutory or other) or other security
interest or preferential arrangement of any kind or nature whatsoever (including
any conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or
comparable Laws of any jurisdiction). Solely for the avoidance of doubt, neither
the filing of a Uniform Commercial Code financing statement that is a protective
lease filing in respect of an operating lease that does not constitute a
security interest in the leased property or otherwise give rise to a Lien nor
the filing of a Uniform Commercial Code financing statement in respect of
consigned goods that does not constitute a security interest in the consigned
goods or otherwise give rise to a Lien shall constitute a Lien solely on account
of being filed in a public office.

 

“Limited Recourse Debt” means with respect to any Persons, Debt to the extent:
(i) such Person (A) provides no credit support of any kind (including any
undertaking, agreement or instrument that would constitute Debt), (B) is not
directly or indirectly liable as a guarantor or otherwise or (C) does not
constitute the lender; and (ii) no default with respect thereto would permit
upon notice, lapse of time or both any holder of any other Debt (other than the
Loans or the Notes) of such Person to declare a default on such other Debt or
cause the payment thereof to be accelerated or payable prior to its stated
maturity.

 

“Liquor License Subsidiaries” means (i) as of the Closing Date, each of the
Subsidiaries listed on Schedule 1.01G hereto and, thereafter, (ii) any other
Subsidiary of the Borrower established solely for the purpose of satisfying
applicable requirements of local Law with respect to the ownership and use of
liquor licenses and which has entered into (A) a lease pursuant to which such
Subsidiary leases, as lessee, from the Borrower or one or more of its
Consolidated Subsidiaries (other than another Liquor License Subsidiary) snack
bar and related space at one or more bowling centers and (B) a management
services agreement with AMF Bowling Centers, Inc. pursuant to which AMF Bowling
Centers, Inc. provides employees, management and related services to such
Subsidiary.

 

“Loan” means a Revolving Loan or a Term Loan (or a portion of any Revolving
Loans or Term Loans), individually or collectively as appropriate; provided
that, if any such loan or loans (or portions thereof) are combined or subdivided
pursuant to a Notice of Extension/Conversion, the term “Loan” shall refer to the
combined principal amount resulting from such combination or to each of the
separate principal amounts resulting from such subdivision, as the case may be.

 

“Management Agreement” means the Management Agreement dated as of February 27,
2004 between the Borrower and CHS Management IV LP, a Delaware limited
partnership, as the same may be amended, supplemented or modified from time to
time in accordance with the terms thereof and of this Agreement.

 

“Mandatory Cost” means the percentage rate per annum calculated by the
Administrative Agent in accordance with Schedule 1.01E.

 

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“Margin Stock” means “margin stock” as such term is defined in Regulation U.

 

“Material Adverse Effect” means (i) any material adverse effect upon the
business, operations, assets, condition (financial or otherwise) liabilities
(contingent or otherwise) or prospects of Holdings and its Consolidated
Subsidiaries, taken as a whole, (ii) a material adverse effect on the ability of
a Credit Party to consummate the transactions contemplated hereby to occur on
the Closing Date or (iii) a material impairment of the rights and remedies of
the Lenders, in the aggregate, under any Senior Finance Document.

 

“Maturity Date” means (i) as to Revolving Loans, the Revolving Termination Date
and (ii) as to Term Loans and the Term Maturity Date.

 

“Merger” means the merger of Kingpin Merger Sub, Inc. with and into the Target
pursuant to, and in accordance with the terms of, the Acquisition Documents,
with the Target as the surviving entity of said merger.

 

“Moody’s” means Moody’s Investors Service, Inc., a Delaware corporation, and its
successors or, absent any such successor, such nationally recognized statistical
rating organization as the Borrower and the Administrative Agent may select.

 

“Mortgage” means (i) in the case of owned real property interests, a mortgage or
deed of trust, substantially in the form of, or otherwise substantially
identical in substance to the provisions of, Exhibit F-4 hereto, among any
Credit Party, the Collateral Agent and one or more trustees, as the same may be
amended, modified or supplemented from time to time, or (ii) in the case of a
Leasehold, a leasehold mortgage or leasehold deed of trust, substantially in the
form of, or otherwise substantially identical in substance to the provisions of,
Exhibit F-4 hereto, among any Credit Party, the Collateral Agent and one or more
trustees, as the same may be amended, modified or supplemented from time to
time.

 

“Mortgage Policies” has the meaning set forth in Section 4.01(m) hereto.

 

“Mortgaged Properties” means the real property interests of the Borrower and its
Subsidiaries described in Schedule 4.01(m) hereto.

 

“Multi-Currency Revolving Borrowing” means a Borrowing comprised of
Multi-Currency Revolving Loans and identified as such in the Notice of Borrowing
with respect thereto.

 

“Multi-Currency Revolving Commitment” means, with respect to any Lender, the
commitment of such Lender, to make Multi-Currency Revolving Loans in accordance
with the provisions of Section 2.01(a)(ii) in an aggregate principal amount at
any one time outstanding identified on Schedule 1.01A hereto, as such commitment
may be modified in connection with any assignment made in accordance with the
provisions of Section 10.06(b).

 

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“Multi-Currency Revolving Commitment Percentage” means, for each Lender at any
time, the percentage (rounded to the nearest five decimal places and rounded
upward to the next highest five decimal places in the event there is no nearest
five decimal places) obtained by dividing the Multi-Currency Revolving
Commitment of such Lender by the Multi-Currency Revolving Committed Amount in
effect at such time.

 

“Multi-Currency Revolving Committed Amount” means at any time the aggregate
amount of all Multi-Currency Revolving Commitments of the Lenders set forth on
Schedule 1.01A at such time or such lesser amount to which the Multi-Currency
Revolving Committed Amount may be reduced pursuant to Section 2.10.

 

“Multi-Currency Revolving Lender” means each Lender identified in Schedule 1.01A
as having a Multi-Currency Revolving Commitment and each Eligible Assignee which
acquires a Multi-Currency Revolving Commitment or Multi-Currency Revolving Loan
pursuant to Section 10.06(b) and their respective successors.

 

“Multi-Currency Revolving Loan” means a Loan made under Section 2.01(a)(ii).

 

“Multi-Currency Revolving Outstandings” means at any date the aggregate Dollar
Amount of all outstanding Multi-Currency Revolving Loans as of such date.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 3(37) or
4001(a)(3) of ERISA.

 

“Net Cash Proceeds” means:

 

(i) with respect to any Asset Disposition (other than an Asset Disposition
consisting of a lease where one or more Group Companies is acting as lessor
entered into in the ordinary course of business), Casualty or Condemnation, (A)
the gross Dollar Equivalent of all cash proceeds (including Insurance Proceeds
and Condemnation Awards in the case of any Casualty or Condemnation, except to
the extent and for so long as such Insurance Proceeds or Condemnation Awards
constitute Reinvestment Funds or unless such Insurance Proceeds or Condemnation
Awards are to be used for repair, restoration or replacement pursuant to plans
approved by the Required Lenders) actually paid to or actually received by any
Group Company in respect of such Asset Disposition, Casualty or Condemnation
(including any cash proceeds received as income or other proceeds of any noncash
proceeds of any Asset Disposition, Casualty or Condemnation as and when
received), less (B) the sum of (x) the Dollar Equivalent, if any, of all taxes
(other than income taxes) and all income taxes (as estimated in good faith by
the applicable financial or accounting officer of the Borrower giving effect to
the overall tax position of the Borrower and its Subsidiaries), and customary
fees, brokerage fees, commissions, costs and other expenses (other than those
payable to any Group Company or to Affiliates of any Group Company other than
pursuant to the Management Agreement as in effect on the Closing Date) that are
incurred in connection with such Asset Disposition, Casualty or Condemnation and
are payable by any Group Company, but only to the extent not already deducted in
arriving at the

 

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amount referred to in clause (i)(A) above, (B) the Dollar Equivalent of all
appropriate amounts that must be set aside as a reserve in accordance with GAAP
against any liabilities associated with such Asset Disposition, Casualty or
Condemnation, (C) if applicable, the Dollar Equivalent of the amount of any Debt
secured by a Permitted Lien that has been repaid or refinanced in accordance
with its terms with the proceeds of such Asset Disposition, Casualty or
Condemnation; and (D) the Dollar Equivalent of any payments to be made by any
Group Company as agreed between such Group Company and the purchaser of any
assets subject to an Asset Disposition, Casualty or Condemnation in connection
therewith; and

 

(ii) with respect to any Equity Issuance or Debt Issuance, the Dollar Equivalent
of the gross amount of cash proceeds paid to or received by any Group Company in
respect of such Equity Issuance or Debt Issuance as the case may be (including
cash proceeds subsequently as and when received at any time in respect of such
Equity Issuance or Debt Issuance from non-cash consideration initially received
or otherwise), net of underwriting discounts and commissions or placement fees,
investment banking fees, legal fees, consulting fees, accounting fees and other
customary fees and expenses incurred by any Group Company in connection
therewith (other than those payable to any Group Company or to any Affiliate of
any Group Company other than pursuant to the Management Agreement as in effect
on the Closing Date).

 

“Non-Renewal Notice Date” has the meaning set forth in Section 2.05(b).

 

“Note” means a Revolving Note or a Term Note or a Term Note, and “Notes” means
any combination of the foregoing.

 

“Notice of Borrowing” means a request by the Borrower for a Borrowing,
substantially in the form of Exhibit A-1 hereto.

 

“Notice of Extension/Conversion” has the meaning set forth in Section 2.07.

 

“Obligation Currency” has the meaning set forth in Section 10.19.

 

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

 

“Optional Calculation Date” has the meaning set forth in the definition of
“Currency Calculation Date” in this Section 1.01.

 

“Other Taxes” has the meaning set forth in Section 3.01.

 

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“Owned Mortgaged Property” and “Owned Mortgaged Properties” have the respective
meanings set forth in Section 4.01(m).

 

“Participating Member State” means each state as described in any EMU
Legislation.

 

“Participation Interest” means a Credit Extension by a Lender by way of a
purchase of a participation interest in Letters of Credit or LC Obligations as
provided in Section 2.05(d) or in any Loans as provided in Section 2.13.

 

“Patent” means any of the following: (i) all letters patent and design letters
patent of the United States or any other country; (ii) all applications filed or
in preparation for filing for letters patent and design letters patent of the
United States or any other country including, without limitation, applications
in the United States Patent and Trademark Office or in any similar office or
agency of the United States or any other country or political subdivision
thereof; (iii) all reissues, divisions, continuations, continuations-in-part,
revisions, renewals or extensions thereof; (iv) all claims for, and rights to
sue for, past, present or future infringement of any of the foregoing; (v) all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including, without limitation, damages and
payments for past, present or future infringements thereof and payments and
damages under all Patent Licenses in connection therewith; and (vi) all rights
corresponding to any of the foregoing whether arising under the laws of the
United States or any foreign country or otherwise.

 

“Patent License” means any agreement now or hereafter in existence granting to
any Credit Party any right, whether exclusive or non-exclusive, with respect to
any Person’s patent or any invention now or hereafter in existence, whether or
not patentable, or pursuant to which any Credit Party has granted to any other
Person, any right, whether exclusive or non-exclusive, with respect to any
Patent or any invention now or hereafter in existence, whether or not patentable
and whether or not a Patent or application for Patent is in or hereafter comes
into existence on such invention.

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any entity succeeding to any or all of its
functions under ERISA.

 

“Perfection Certificate” means with respect to any Credit Party a certificate,
substantially in the form of Exhibit F-1 to this Agreement, completed and
supplemented with the schedules and attachments contemplated thereby and duly
executed by a Responsible Officer of such Credit Party.

 

“Permit” means any license, permit, franchise, right or privilege, certificate
of authority or order, or any waiver of the foregoing, issued or issuable by any
Governmental Authority.

 

“Permitted Business Acquisition” means a Business Acquisition; provided that:

 

(i) the Equity Interests or property or assets acquired in such acquisition
relate to a line of business similar to the business of the Borrower or any of
its Subsidiaries engaged in on the Closing Date or reasonably related or
ancillary or complimentary thereto;

 

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(ii) the representations and warranties made by the Credit Parties in each
Senior Finance Document shall be true and correct in all material respects at
and as of the date of such acquisition (as if made on such date after giving
effect to such acquisition), except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects at and as of such earlier date);

 

(iii) the Administrative Agent or the Collateral Agent, as applicable, shall
have received all items in respect of the Equity Interests or property or assets
acquired in such acquisition (and/or the seller thereof) required to be
delivered by Section 6.10;

 

(iv) in the case of an acquisition of the Equity Interests of another Person,
(A) except in the case of the incorporation of a new Subsidiary, the board of
directors (or other comparable governing body) of such other Person shall have
duly approved such acquisition and (B) the Equity Interests so acquired shall
constitute at least 100% of the total Equity Interests of the issuer thereof (it
being understood that, subject to the limitations set forth in Section
7.06(a)(ix) and other provisions of this Agreement, the foregoing restriction
shall not prohibit the acquisition of a Person which itself has non-Wholly-Owned
Subsidiaries and/or Affiliates which will become Liquor License Subsidiaries of
the Borrower as a result of the proposed Permitted Business Acquisition);

 

(v) no Default or Event of Default shall have occurred and be continuing
immediately before or immediately after giving effect to such acquisition, and
the Borrower shall have delivered to the Administrative Agent a Pro-Forma
Compliance Certificate demonstrating that, upon giving effect to such
acquisition on a Pro-Forma Basis (with pro-forma adjustments reasonably
satisfactory to the Lead Arrangers), the Borrower shall be in compliance with
all of the financial covenants set forth in Section 7.17(a) and (b) hereof as of
the last day of the most recent period of four consecutive fiscal quarters of
the Borrower which precedes or ends on the date of such acquisition and with
respect to which the Administrative Agent has received the consolidated
financial information required under Section 6.01(a) and (b) and the certificate
required by Section 6.01(c);

 

(vi) after giving effect to such acquisition, the Aggregate Revolving Committed
Amount shall be at least $10,000,000 greater than the Aggregate Revolving
Outstandings; and

 

(vii) the Dollar Equivalent of the aggregate consideration (including cash,
earn-out payments, assumption of Debt and non-cash consideration but excluding
Subordinated Seller Paper) for all such acquisitions occurring after the Closing
Date, to the extent not funded with the Net Cash Proceeds of one or more
Qualifying Equity Issuances, shall not exceed $25,000,000.

 

“Permitted Encumbrances” means (i) those liens, encumbrances and other matters
affecting title to any Mortgaged Property listed in the Mortgage Policies in
respect thereof and found, on the date of delivery of such Mortgage Policies to
the Collateral Agent in accordance with the terms

 

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hereof, reasonably acceptable by the Collateral Agent, (ii) zoning, building
codes, land use and other similar laws and municipal ordinances which are not
violated in any material respect by the existing improvements and the present
use by the mortgagor of the Premises (as defined in the respective Mortgage),
(iii) such other items to which the Collateral Agent may consent (such consent
not to be unreasonably withheld) and (iv) encumbrances, rights of way and other
matters that would not have a Material Adverse Effect.

 

“Permitted Joint Venture” means a joint venture, in the form of a corporation,
limited liability company, business trust, joint venture, association, company
or partnership, entered into by the Borrower or any of its Subsidiaries which
(i) is engaged in a line of business related, ancillary or complementary to
those engaged in by the Borrower and its Subsidiaries and (ii) is formed or
organized in a manner that limits the exposure of the Borrower and its
Subsidiaries for the liabilities thereof to (A) the Investments of the Borrower
and its Subsidiaries therein permitted under Section 7.06(a)(xvi) and (B) any
Debt of any Permitted Joint Venture or any Guaranty Obligations by the Borrower
or any of its Subsidiaries in respect of such Debt, which Debt or Guaranty
Obligations are permitted at the time under Section 7.01.

 

“Permitted Liens” has the meaning set forth in Section 7.02.

 

“Person” means an individual, a corporation, a partnership, an association, a
limited liability company, a trust or an unincorporated association or any other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.

 

“Plan” means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
maintained by or contributed to by any Group Company or any ERISA Affiliate,
including a Multiemployer Plan.

 

“Pledge Agreement” means the Pledge Agreement, substantially in the form of
Exhibit F-3 hereto, dated as of the date hereof among Holdings, the Borrower,
the Subsidiary Guarantors and the Collateral Agent, as the same may be amended,
supplemented or modified from time to time.

 

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

 

“Pre-Commitment Information” means, taken as an entirety, (i) information with
respect to the Borrower and its Subsidiaries contained in the Confidential
Information Memorandum dated February 5, 2004 and (ii) any other written
information in respect of the Borrower, any Subsidiary of the Borrower or the
Acquisition provided to any Agent or Lender by or on behalf of the Sponsor or
the Borrower prior to the Closing Date.

 

“Preferred Stock” means, as applied to the Equity Interests of a Person, Equity
Interests of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over the Equity Interests of any other class of such Person.

 

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“Prepayment Account” has the meaning set forth in Section 2.09(b)(xi).

 

“Prime Rate” means for any day the rate of interest announced by Credit Suisse
First Boston in New York City (or such other principal office of the
Administrative Agent as communicated in writing to the Borrower and the Lenders)
from time to time as its Prime Rate for Dollars loaned in the United States. It
is a rate set by Credit Suisse First Boston based upon a variety of factors,
including Credit Suisse First Boston’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such announced rate.
Any change in the interest rate resulting from a change in the Prime Rate shall
take effect at the opening of business on the day specified in the announcement
of such change.

 

“Principal Amortization Payment” means a scheduled principal payment on the Term
B Loans pursuant to Section 2.08(b).

 

“Principal Amortization Payment Date” means (i) the last Business Day of each
calendar quarter, commencing with the first such date occurring at least three
months after the Closing Date and ending on the Term Maturity Date and (ii) the
Term Maturity Date.

 

“Principal Financial Center” means (i) in the case of each currency identified
in Section 1.4(a)(i)(A) of the 1991 ISDA Definitions (as amended and
supplemented by the 1998 Supplement to the 1991 ISDA Definitions and the 1998
ISDA Euro Definitions) published by the International Swaps and Derivatives
Association, Inc., the financial center identified in said Section opposite such
currency and (ii) in the case of any other currency, the principal financial
center of the country that issues such currency, as determined by the
Administrative Agent.

 

“Pro-Forma Basis” means, for purposes of calculating compliance of any
transaction with any provision hereof, that the transaction in question shall be
deemed to have occurred as of the first day of the most recent period of four
consecutive fiscal quarters of the Borrower which precedes or ends on the date
of such transaction and with respect to which the Administrative Agent has
received the financial information for Holdings and its Consolidated
Subsidiaries required under Section 6.01(a) and (b), as applicable, and the
certificate required by Section 6.01(c) for such period. As used in this
definition, “transaction” means (i) any incurrence or assumption by a Group
Company of Debt under Section 7.01(xxii) or Attributable Debt in respect of a
Sale/Leaseback Transaction (other than the iStar Sale/Leaseback) under Section
7.13, (ii) any Permitted Business Acquisition referred to in Section
7.06(a)(xii) or in clause (v) of the definition of “Permitted Business
Acquisition” set forth in Section 1.01, (iii) any Restricted Payment referred to
in clause (iii) of Section 7.07, (iv) any Asset Disposition referred to in
Section 7.05(xvii) or (v) any computation of Consolidated EBITDA under the
circumstances contemplated by the second sentence of the definition thereof. In
connection with any calculation of the financial covenants set forth in Section
7.17(a) and (b) upon giving effect to a transaction on a “Pro-Forma Basis”, (i)
any Debt incurred by the Borrower or any of its Subsidiaries in connection with
such transaction (or any other transaction which occurred during the relevant
four fiscal quarter period) shall be deemed to have been incurred as of the
first day of the relevant four fiscal-quarter period, (ii) if such Debt has a
floating or formula rate, then the rate of interest for such Debt for the
applicable period for purposes of the calculations contemplated by this
definition shall be determined by utilizing the rate which is or would be in
effect with respect to such Debt as at the relevant date of such calculations,
(iii) income statement items (whether positive or negative) attributable to all
property acquired in such

 

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transaction or to the Investment comprising such transaction, as applicable,
shall be included as if such transaction has occurred as of the first day of the
relevant four-fiscal-quarter period, (iv) such other pro-forma adjustments which
would be permitted or required by Regulation S-X or S-K under the Securities Act
shall be taken into account and (v) such other adjustments as may be reasonably
agreed between the Borrower and the Administrative Agent shall be taken into
account.

 

“Pro-Forma Compliance Certificate” means a certificate of the chief financial
officer or chief accounting officer of the Borrower delivered to the
Administrative Agent in connection with any “transaction” as defined in the
definition of “Pro-Forma Basis” above and containing reasonably detailed
calculations, upon giving effect to the applicable transaction on a Pro-Forma
Basis, of the Interest Coverage Ratio and the Leverage Ratio as of the last day
of the most recent period of four consecutive fiscal quarters of the Borrower
which precedes or ends on the date of the applicable transaction and with
respect to which the Administrative Agent shall have received the consolidated
financial information for Holdings and its Consolidated Subsidiaries required
under Section 6.01(a) or (b), as applicable, and the certificate required by
Section 6.01(c) for such period.

 

“Purchase Money Debt” means Debt of the Borrower or any of its Subsidiaries
incurred for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property used in the business of the
Borrower or such Subsidiary; provided that such Debt is incurred within 120 days
after such property is acquired or, in the case of improvements, constructed.

 

“Qualifying Equity Issuance” means (i) any Equity Issuance by Holdings to, or
any receipt by Holdings of a capital contribution from, the Investor Group and
any other Person holding Equity Interests, directly or indirectly, of Holdings
on the Closing Date and any subsequent holders of preemptive rights in respect
of Equity Interests of Holdings or its parent company, the Net Cash Proceeds of
which are contributed immediately to the common equity of the Borrower and (ii)
the issuance by Holdings for cash of its common Equity Interests to the Sponsor
Group or any other Person if: (A) 100% of the proceeds of such issuance shall be
immediately contributed by Holdings to the Borrower; (B) after giving effect
thereto, no Change of Control shall have occurred; (C) such stock shall be
issued in a private placement exempt from registration under the Securities Act;
(D) the proceeds thereof shall be used (without duplication) only (w) to make
Consolidated Capital Expenditures, (x) to make Permitted Business Acquisitions
pursuant to Section 7.06(a)(xii), Investments in Permitted Joint Ventures
pursuant to Section 7.06(a)(xvi) and other Investments pursuant to Section
7.06(a)(xx), (y) to repay Debt of the Borrower and its Subsidiaries or (z) to
make Restricted Payments pursuant to Section 7.07(vii), and in any event the
proceeds thereof shall not be used to repay any Subordinated Debt or to make any
Restricted Payment other than Restricted Payments expressly permitted pursuant
to Section 7.07(vii); (E) within five Business Days after such issuance, the
Borrower shall have delivered to the Administrative Agent a certificate of the
chief financial officer or chief accounting officer of the Borrower attesting to
the satisfaction of the foregoing conditions, describing the uses of the
proceeds of such issuance and attesting that such use shall not constitute a
Default or an Event of Default; and (F) such proceeds shall be used within 30
days after such issuance as described in such certificate.

 

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

 

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“Recorded Leasehold Interest” means a Leased Mortgaged Property with respect to
which a Recorded Document has been recorded in all places necessary or
desirable, in the reasonable judgment of the Lead Arrangers, to give
constructive notice of such Leased Mortgaged Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term “Recorded Document” means, with respect to any Leased
Mortgaged Property, (i) the lease evidencing such Leased Mortgaged Property or a
memorandum thereof, executed and acknowledged by the owner of the affected real
property, as lessor, or (ii) if such Leased Mortgaged Property was acquired or
subleased from the holder of a Recorded Leasehold Interest, the applicable
assignment or sublease document, executed and acknowledged by such holder, in
each case in form and sufficient to give such constructive notice upon
recordation and otherwise in form reasonably satisfactory to the Lead Arrangers.

 

“Refinanced Agreements” means those instruments, documents and agreements listed
on Schedule 1.01C.

 

“Register” has the meaning set forth in Section 10.06(d).

 

“Regulation D, T, U or X” means Regulation D, T, U or X, respectively, of the
Board of Governors of the Federal Reserve System as amended, or any successor
regulation.

 

“Regulation S-X” means Regulation S-X under the Securities Act, as amended, or
any successor regulation.

 

“Reinvestment Funds” means, with respect to any Insurance Proceeds or any
Condemnation Award, that portion of such funds as shall, according to a
certificate of a Responsible Officer of the Borrower delivered to the
Administrative Agent within 30 days after an executive officer of the Borrower
becoming aware of the occurrence of the Casualty or Condemnation giving rise
thereto, be reinvested or contractually committed to be reinvested within two
years after the date of receipt of such Insurance Proceeds or Condemnation Award
in the repair, restoration or replacement of the properties that were the
subject of such Casualty or Condemnation or in other tangible assets of a like
nature used or useful in the ordinary course of business of the Borrower and its
Subsidiaries; provided that (i) the aggregate amount of such proceeds with
respect to any such event or series of related events shall not exceed
$25,000,000 without the prior written consent of the Required Lenders, (ii) such
certificate shall be accompanied by evidence reasonably satisfactory to the
Administrative Agent that any property subject to such Casualty or Condemnation
has been or will be repaired, restored or replaced to, or better than, its
condition immediately prior to such Casualty or Condemnation or that such
Insurance Proceeds or Condemnation Awards have otherwise been or will be
reinvested in tangible assets of a like nature used or useful in the ordinary
course of business of the Borrower and its Subsidiaries, (iii) at the request of
the Collateral Agent or the Administrative Agent, pending such reinvestment in
the case of Insurance Proceeds or Condemnation Awards in excess of $10,000,000,
the entire amount of such proceeds shall be deposited in an account with respect
to which an Account Control Agreement (as defined in the Security Agreement) is
in full force and effect and (iv) from and after the date of delivery of such
certificate, the Borrower or one or more of its Subsidiaries shall diligently
proceed, in a commercially reasonable manner, to complete the repair,
restoration or replacement of the properties that were the subject of such
Casualty or Condemnation or otherwise reinvest such Insurance Proceeds or
Condemnation Awards as described in such certificate; and provided, further,
that, if any of the foregoing conditions shall cease to be satisfied at any
time, such funds shall no longer be deemed Reinvestment Funds and such funds
shall

 

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immediately be applied to prepayment of the Loans in accordance with Section
2.09(b); and provided, further, that any funds not so reinvested within such
two-year period shall immediately be applied to the payment of the Loans in
accordance with Section 2.09(b).

 

“Replacement Date” has the meaning set forth in Section 2.10(d).

 

“Required Domestic Revolving Lenders” means Lenders whose aggregate Domestic
Revolving Credit Exposure (as hereinafter defined) constitutes more than 50% of
the Domestic Revolving Credit Exposure of all Lenders at such time; provided,
however, that if any Lender shall be a Defaulting Lender at such time then there
shall be excluded from the determination of Required Domestic Revolving Lenders
such Lender and the aggregate principal amount of Domestic Revolving Credit
Exposure of such Lender at such time. For purposes of the preceding sentence,
the term “Domestic Revolving Credit Exposure” as applied to each Lender shall
mean (i) at any time prior to the termination of the Domestic Revolving
Commitments, the Domestic Revolving Commitment Percentage of such Lender
multiplied by the Domestic Revolving Committed Amount, and (ii) at any time
after the termination of the Domestic Revolving Commitments, the sum of (A) the
principal balance of the outstanding Domestic Revolving Loans of such Lender
plus (B) the Dollar Amount of such Lender’s Participation Interests in all LC
Obligations.

 

“Required Lenders” means Lenders whose aggregate Credit Exposure (as hereinafter
defined) constitutes more than 50% of the Credit Exposure of all Lenders at such
time; provided, however, that if any Lender shall be a Defaulting Lender at such
time then there shall be excluded from the determination of Required Lenders
such Lender and the aggregate principal amount of Credit Exposure of such Lender
at such time. For purposes of the preceding sentence, the term “Credit Exposure”
as applied to each Lender shall mean (i) at any time prior to the termination of
the Commitments, the sum of (A) the Domestic Revolving Commitment Percentage of
such Lender multiplied by the Domestic Revolving Committed Amount plus (B) the
Multi-Currency Revolving Commitment Percentage of such Lender multiplied by the
Multi-Currency Revolving Committed Amount plus (C) the Term B Commitment
Percentage of such Lender multiplied by the aggregate principal amount of the
Term B Loans outstanding at such time, and (ii) at any time after the
termination of the Commitments, the sum of (A) the aggregate Dollar Amount of
the outstanding Loans of such Lender plus (B) the Dollar Amount of such Lender’s
Participation Interests in all LC Obligations.

 

“Reset Date” has the meaning set forth in Section 1.05.

 

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

 

“Restricted Payment” means (i) any dividend or other distribution, direct or
indirect, on account of any class of Equity Interests or Equity Equivalents of
any Group Company, now or hereafter outstanding, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other

 

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acquisition for value, direct or indirect, of any class of Equity Interests or
Equity Equivalents of any Group Company, now or hereafter outstanding and (iii)
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any class of Equity Interests or
Equity Equivalents of any Group Company, now or hereafter outstanding.

 

“Revolving Borrowing” means a Domestic Revolving Borrowing or a Multi-Currency
Revolving Borrowing, and “Revolving Borrowings” means any combination of two or
more of them.

 

“Revolving Commitment” means a Domestic Revolving Commitment or a Multi-Currency
Revolving Commitment, and “Revolving Commitments” means any combination of two
or more of them.

 

“Revolving Loan” means a Domestic Revolving Loan or a Multi-Currency Revolving
Loan, and “Revolving Loans” means any two or more of them.

 

“Revolving Note” means a promissory note, substantially in the form of Exhibit
B-1 hereto, evidencing the obligation of the Borrower to repay outstanding
Revolving Loans, as such note may be amended, supplemented, extended, renewed or
replaced from time to time.

 

“Revolving Outstandings” means at any date the sum of the Domestic Revolving
Outstandings and the Multi-Currency Revolving Outstandings as of such date.

 

“Revolving Termination Date” means the fifth anniversary of the Closing Date
(or, if such day is not a Business Day for the relevant currency, the next
preceding Business Day for such currency) or such earlier date upon which the
Revolving Commitments shall have been terminated in their entirety in accordance
with this Agreement. Unless the context otherwise requires, references to the
Revolving Termination Date are to the Revolving Termination Date determined by
reference to the Domestic Revolving Loans.

 

“S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc., a
New York corporation, and its successors or, absent any such successor, such
nationally recognized statistical rating organization as the Borrower and the
Administrative Agent may select.

 

“Sale/Leaseback Transaction” means any direct or indirect arrangement with any
Person or to which any such Person is a party providing for the leasing to
Holdings or any of its Subsidiaries of any property, whether owned by Holdings
or any of its Subsidiaries as of the Closing Date or later acquired, which has
been or is to be sold or transferred by Holdings or any of its Subsidiaries to
such Person or to any other Person from whom funds have been, or are to be,
advanced by such Person on the security of such property.

 

“Sarbanes-Oxley Act” has the meaning set forth in Section 5.05(g).

 

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

 

“Security Agreement” means the Security Agreement, substantially in the form of
Exhibit F-2 hereto, dated as of the date hereof among Holdings, the Borrower,
the Subsidiary Guarantors and the Collateral Agent, as the same may be amended,
modified or supplemented from time to time.

 

“Senior Finance Documents” means this Agreement, the Notes, the Acknowledgement
Agreement, the Guaranty, the Collateral Documents, each Perfection Certificate,
the Intercompany Notes, each Accession Agreement and each LC Document,
collectively, and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto, in each case as the same
may be amended, modified or supplemented from time to time.

 

“Senior Leverage Ratio” means on any date the ratio of (i) Consolidated Funded
Debt (exclusive of Subordinated Debt and exclusive of the Existing 13% Notes, to
the extent such Existing 13% Notes have been covenant defeased or legally
defeased as contemplated by Section 4.01(i)) as of such date to (ii)
Consolidated EBITDA for the period of four consecutive fiscal quarters of the
Borrower ending on, or most recently preceding, such date.

 

“Senior Obligations” means with respect to each Credit Party, without
duplication:

 

(i) in the case of Borrower, all principal of and interest (including, without
limitation, any interest which accrues after the commencement of any bankruptcy
or insolvency proceeding with respect to the Borrower, whether or not allowed or
allowable as a claim under any bankruptcy or insolvency proceeding) on any Loan
made or LC Obligation issued under, or any Note issued pursuant to, this
Agreement or any other Senior Finance Document;

 

(ii) all fees, expenses, indemnification obligations, foreign currency exchange
obligations and other amounts of whatever nature now or hereafter payable by
such Credit Party (including, without limitation, any amounts which accrue after
the commencement of any bankruptcy or insolvency proceeding with respect to such
Credit Party, whether or not allowed or allowable as a claim under any
bankruptcy or insolvency proceeding) pursuant to this Agreement or any other
Senior Finance Document;

 

(iii) all expenses of the Agents as to which one or more of the Agents have a
right to reimbursement by such Credit Party under Section 10.04 of this
Agreement or under any other similar provision of any other Senior Finance
Document, including, without limitation, any and all sums advanced by the
Collateral Agent to preserve the Collateral or preserve its security interests
in the Collateral to the extent permitted hereunder or under any Senior Finance
Document;

 

(iv) all amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement by such Credit Party under Section 10.05 of this
Agreement or under any other similar provision of any other Senior Finance
Document; and

 

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(v) in the case of each Guarantor, all amounts now or hereafter payable by such
Guarantor and all other obligations or liabilities now existing or hereafter
arising or incurred (including, without limitation, any amounts which accrue
after the commencement of any bankruptcy or insolvency proceeding with respect
to the Borrower, Holdings or such Guarantor, whether or not allowed or allowable
as a claim under any bankruptcy or insolvency proceeding) on the part of such
Guarantor pursuant to this Agreement, the Guaranty or any other Senior Finance
Document;

 

together in each case with all renewals, modifications, consolidations or
extensions thereof.

 

“Senior Subordinated Note” means any one of the 10.00% Senior Subordinated Notes
due 2010 issued by the Borrower in favor of the Senior Subordinated Noteholders
pursuant to the Senior Subordinated Note Indenture, as such Senior Subordinated
Notes may be amended, modified or supplemented from time to time in accordance
with the limitations set forth herein, and “Senior Subordinated Notes” means any
two or more of them, collectively.

 

“Senior Subordinated Note Documents” means the Subordinated Note Indenture, the
Purchase Agreement among the Borrower and the initial Senior Subordinated
Noteholders, in each case including all exhibits and schedules thereto, and all
other agreements, documents and instruments relating to the Senior Subordinated
Notes, in each case as the same may be amended, modified or supplemented from
time to time in accordance with the provisions thereof and of this Agreement.

 

“Senior Subordinated Note Indenture” means Indenture dated as of the Closing
Date between the Borrower and Wilmington Trust Company, as trustee, as such
Senior Subordinated Note Indenture may be amended, modified or supplemented from
time to time.

 

“Senior Subordinated Noteholder” means any one of the holders from time to time
of the Senior Subordinated Notes.

 

“Software” means all “software” (as defined in the UCC), and also means and
includes all software programs, whether now or hereafter owned, licensed or
leased by a Credit Party, designed for use on Computer Hardware, including,
without limitation, all operating system software, utilities and application
programs in whatever form and whether or not embedded in goods, all source code
and object code in magnetic tape, disk or hard copy format or any other listings
whatsoever, all firmware associated with any of the foregoing all documentation,
flowcharts, logic diagrams, manuals, specifications, training materials, charts
and pseudo codes associated with any of the foregoing, and all options,
warranties, services contracts, program services, test rights, maintenance
rights, support rights, renewal rights and indemnifications relating to any of
the foregoing.

 

“Software License” means any agreement (including any agreement constituting a
Copyright License, Patent License and/or Trademark License) now or hereafter in
existence granting to any Credit Party any right, whether exclusive or
non-exclusive, to use another Person’s Software, or pursuant to which any Credit
Party has granted to any other Person, any right, whether exclusive or
non-exclusive, to use any Software, whether or not subject to any registration.

 

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“Solvent” means, with respect to any Person as of a particular date, that on
such date (i) such Person is able generally to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and does not
believe that it will, incur debts beyond such Person’s ability to pay as such
debts mature, (iii) such Person is not engaged in a business or a transaction,
and is not about to engage in a business or a transaction, for which such
Person’s assets would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person is
engaged or is to engage, (iv) the fair value (determined in accordance with the
United States Bankruptcy Code) of the assets of such Person is greater than the
total amount of liabilities, including, without limitation, probable
liabilities, of such Person and (v) the present fair value (i.e., the amount
that may be realized within a commercially reasonable time either through
collection or sale at the regular market value, conceiving the latter as the
amount that could be obtained for the assets in question within such period by a
capable and diligent businessman from a buyer who is willing to purchase under
ordinary selling conditions) of the assets of such Person will exceed the amount
that will be required to pay the probable liability on such Person’s existing
debts as they become absolute and matured. For purposes of this definition,
“debt” means any legal liability, whether matured, unmatured, liquidated or
unliquidated, absolute, fixed or contingent, or (ii) a right to an equitable
remedy for breach of performance if such breach gives rise to a payment, whether
or not such right is an equitable remedy, is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured.

 

“Sponsor” means Code Hennessy & Simmons LLC and Code Hennessy & Simmons IV, LP,
collectively, and their respective successors.

 

“Sponsor Group” means the Sponsor and any of its Subsidiaries or Affiliates.

 

“Standby Letter of Credit” has the meaning set forth in Section 2.05(a).

 

“Sterling” and “£” means the lawful currency of the United Kingdom.

 

“Subordinated Debt” of any Person means (i) the Senior Subordinated Notes and
(ii) all other Debt (A) the principal of which by its terms is not required to
be repaid, in whole or in part, before the first anniversary of the later of the
Revolving Termination Date and the Term Maturity Date, except to the extent
allowed by the proviso to the first sentence of Section 7.08(c), (B) is
subordinated in right of payment to such Person’s indebtedness, obligations and
liabilities to the Finance Parties under the Senior Finance Documents pursuant
to payment and subordination provisions reasonably satisfactory in form and
substance to the Lead Arrangers and (C) is issued pursuant to credit documents
having covenants, subordination provisions and events of default that are in no
event are less favorable, including with respect to rights of acceleration, to
such Person than the terms hereof or are otherwise reasonably satisfactory in
form and substance to the Lead Arrangers.

 

“Subordinated Seller Paper” of any Person means unsecured Subordinated Debt of
such Person which (i) is issued to a seller of assets or a Person the subject of
a Permitted Business Acquisition in a transaction permitted by this Agreement,
(ii) by its terms does not require the payment of interest in cash or Cash
Equivalents until a date on or after the first anniversary of the later of the
Revolving

 

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Termination Date and the Term Maturity Date and (iii) is issued on terms,
covenants and conditions satisfactory in all respects to the Lead Arrangers.

 

“Subsidiary” means with respect to any Person any corporation, partnership,
limited liability company, association or other business entity of which (i) if
a corporation, more than 50% of the total voting power of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership, limited
liability company, association or business entity other than a corporation, more
than 50% of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by that Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have more than 50% ownership interest in
a partnership, limited liability company, association or other business entity
if such Person or Persons shall be allocated more than 50% of partnership,
association or other business entity gains or losses or shall be or control the
managing director, manager or a general partner of such partnership, association
or other business entity.

 

“Subsidiary Guarantor” means each Subsidiary of Holdings existing on the Closing
Date (other than a Foreign Subsidiary, a non-Wholly-Owned Liquor License
Subsidiary and AMF Catering Services Pty. Ltd.) and each Subsidiary of Holdings
(other than a Foreign Subsidiary, except to the extent otherwise provided in
Section 6.10(d) or a non-Wholly-Owned Liquor License Subsidiary) that becomes a
party to the Guaranty after the Closing Date (by execution of an Accession
Agreement referring to the Guaranty or otherwise), and “Subsidiary Guarantors”
means any two or more of them.

 

“Syndication Date” means the earliest of (i) the date which is 30 days after the
Closing Date, (ii) the date on which the Lead Arrangers determine in their sole
discretion (and notify the Borrower) that the primary syndication (and the
resulting addition of Lenders pursuant to Section 10.06(b)) has been completed
and (iii) the date on which the Syndication Agent has received Term B
Commitments, or Term B Lenders other than the Lead Arrangers and their
respective Affiliates have acquired Term B Loans, in an aggregate amount equal
to the Term B Committed Amount.

 

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

 

“Target” means AMF Bowling Worldwide, Inc., a Delaware corporation.

 

“Taxes” has the meaning set forth in Section 3.01.

 

“Term B Borrowing” means a Borrowing comprised of Term B Loans and identified as
such in the Notice of Borrowing with respect thereto.

 

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“Term B Commitment” means, with respect to any Lender, the commitment of such
Lender to make a Term B Loan on the Closing Date in a principal amount equal to
such Lender’s Term B Commitment Percentage of the Term B Committed Amount.

 

“Term B Commitment Percentage” means, for each Lender, the percentage identified
as its Term B Commitment Percentage on Schedule 1.01A, as such percentage may be
(i) reduced pursuant to Section 2.10(c) and (ii) modified in connection with any
assignment made in accordance with the provisions of Section 10.06(b).

 

“Term B Committed Amount” means $135,000,000.

 

“Term B Lender” means each Lender identified on Schedule 1.01A as having a Term
B Commitment and each Eligible Assignee which acquires a Term B Loan pursuant to
Section 10.06(b) and their respective successors.

 

“Term B Loan” means a Loan made under Section 2.01(b).

 

“Term Maturity Date” means August 27, 2009 (or if such day is not a Business
Day, the next preceding Business Day).

 

“Term Note” means a promissory note, substantially in the form of Exhibit B-2
hereto, evidencing the obligation of the Borrower to repay outstanding Term B
Loans, as such note may be amended, modified or supplemented from time to time.

 

“Title Insurance Company” has the meaning set forth in Section 4.01(l).

 

“Trade Letter of Credit” has the meaning set forth in Section 2.05(a).

 

“Trademark” means any of the following: (i) all trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos, certification marks, collective marks, brand names
and trade dress which are or have been used in the United States or in any
state, territory or possession thereof, or in any other place, nation or
jurisdiction, along with all prints and labels on which any of the foregoing
have appeared or appear, package and other designs, and any other source or
business identifiers, and general intangibles of like nature, and the rights in
any of the foregoing which arise under applicable law; (ii) the goodwill of the
business symbolized thereby or associated with each of the foregoing; (iii) all
registrations and applications in connection therewith, including, without
limitation, registrations and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision thereof, (iv)
all reissues, extensions and renewals thereof; (v) all claims for, and rights to
sue for, past, present or future infringements of any of the foregoing; (vi) all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including, without limitation, damages and
payments for past, present or future infringements thereof and payments and
damages under all Trademark Licenses in connection therewith; and (vii) all

 

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rights corresponding to any of the foregoing whether arising under the laws of
the United States or any foreign country or otherwise.

 

“Trademark License” means any agreement now or hereafter in existence granting
to any Credit Party any right, whether exclusive or non-exclusive, to use
another Person’s trademarks or trademark applications, or pursuant to which any
Credit Party has granted to any other Person, any right, whether exclusive or
non-exclusive, to use any Trademark, whether or not registered, and the rights
to prepare for sale, sell and advertise for sale, all of the inventory now or
hereafter owned by any Credit Party and now or hereafter covered by such license
agreements.

 

“Transaction” means the events contemplated by the Transaction Documents to
occur on the Closing Date.

 

“Transaction Documents” means the Acquisition Documents, the Capitalization
Documents, the iStar Sale/Leaseback Documents, the Senior Subordinated Note
Documents and the Senior Finance Documents, collectively, and “Transaction
Document” means any one of them.

 

“Type” has the meaning set forth in Section 1.04.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York; provided that if by reason of mandatory provisions of law,
the perfection, the effect of perfection or non-perfection or the priority of
the security interests of the Collateral Agent in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than New York,
“UCC” means the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority.

 

“Unfunded Liabilities” means (i) with respect to each Plan other than a
Multiemployer Plan, the amount (if any) by which the present value of all
nonforfeitable benefits under each Plan exceeds the current value of such Plan’s
assets allocable to such benefits, all determined in accordance with the
respective most recent valuations for such Plan using applicable PBGC plan
termination actuarial assumptions (the terms “present value” and “current value”
shall have the same meanings specified in Section 3 of ERISA) and (ii) with
respect to each Foreign Pension Plan required to be funded under local law, the
amount (if any) by which the present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan exceeds the current
value of the assets of such Foreign Pension Plan’s assets allocable to such
benefits, all determined as of the end of the Borrower’s most recently ended
fiscal year on the basis of actuarial assumptions utilized by the Foreign
Pension Plan, each of which is reasonable.

 

“United States” means the United States of America, including each of the States
and the District of Columbia, but excluding its territories and possessions.

 

“Unused Revolving Commitment Amount” means, for any period, the amount by which
(i) the then applicable Aggregate Revolving Committed Amount of all
non-Defaulting Lenders exceeds

 

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(ii) the daily average sum for such period of (A) the aggregate Dollar Amount of
all outstanding Revolving Loans plus (B) the aggregate Dollar Amount of all
outstanding LC Obligations.

 

“U.S. Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as the same
may be amended, supplemented, modified, replaced or otherwise in effect from
time to time.

 

“Welfare Plan” means a “welfare plan” as such term is defined in Section 3(1) of
ERISA.

 

“Wholly-Owned Subsidiary” means, with respect to any Person at any date, any
Subsidiary of such Person all of the shares of capital stock or other ownership
interests of which (except directors’ qualifying shares and/or other nominal
shares required by applicable Law to be owned by another Person) are at the time
directly or indirectly owned by such Person.

 

Section 1.02 Computation of Time Periods and Other Definitional Provisions. For
purposes of computation of periods of time hereunder, the word “from” means
“from and including” and the words “to” and “until” each mean “to but
excluding”. All references to time herein shall be references to Eastern
Standard time or Eastern Daylight time, as the case may be, unless specified
otherwise. References in this Agreement to Articles, Sections, Schedules,
Appendices or Exhibits shall be to Articles, Sections, Schedules, Appendices or
Exhibits of or to this Agreement unless otherwise specifically provided. The
definitions in Section 1.01 shall apply equally to both the singular and plural
forms of the terms defined.

 

Section 1.03 Accounting Terms and Determinations. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Lenders hereunder shall be prepared, in
accordance with GAAP applied on a consistent basis. All financial statements
delivered to the Lenders hereunder shall be accompanied by a statement from the
Borrower that GAAP has not changed since the most recent financial statements
delivered by the Borrower to the Lenders or if GAAP has changed describing such
changes in detail and explaining how such changes affect the financial
statements. All calculations made for the purposes of determining compliance
with this Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 6.01 (or,
prior to the delivery of the first financial statements pursuant to Section
6.01, consistent with the financial statements described in Section 5.05(a) (but
without giving effect to any deviations from GAAP disclosed therein)); provided,
however, if (i) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (ii) either the
Administrative Agent or the Required Lenders shall so object in writing within
60 days after delivery of such financial statements (or after the Lenders have
been informed of the change in GAAP affecting such financial statements, if
later), then such calculations shall be made on a basis consistent with the most
recent financial statements delivered by the Borrower to the Lenders as to which
no such objection shall have been made. Any financial ratios required to be
maintained by any Group Company pursuant to this Agreement shall be calculated
by dividing the appropriate component by the other component, carrying the
result to one place more than the number of

 

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places by which such ratio is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).

 

Section 1.04 Classes and Types of Borrowings. The term “Borrowing” denotes the
aggregation of Loans of one or more Lenders made to the Borrower pursuant to
Article II on the same date, all of which Loans are of the same Class, Type and
currency (subject to Article III) and, except in the case of Base Rate Loans,
have the same initial Interest Period. Loans hereunder are distinguished by
“Class” and “Type”. The “Class” of a Loan (or of a Commitment to make such a
Loan or of a Borrowing comprised of such Loans) refers to whether such Loan is a
Domestic Revolving Loan, a Multi-Currency Revolving Loan or a Term B Loan. The
“Type” of a Loan refers to whether such Loan is a Eurocurrency Loan (whether a
Dollar-Denominated Loan or Loan denominated in an Available Foreign Currency) or
a Base Rate Loan. Identification of a Loan (or a Borrowing) by both Class and
Type (e.g., a “Term B Eurocurrency Loan”) indicates that such Loan is a Loan of
both such Class and such Type (e.g., both a Term B Loan and a Eurocurrency Loan)
or that such Borrowing is comprised of such Loans.

 

Section 1.05 Exchange Rates. On each Currency Calculation Date, the
Administrative Agent shall determine the applicable Exchange Rates as of such
Currency Calculation Date used for calculating relevant Dollar Equivalents. The
Exchange Rates so determined shall become effective on the relevant Currency
Calculation Date (a “Reset Date”), shall remain effective until the next
succeeding Reset Date and shall for all purposes of this Agreement (other than
provisions expressly requiring the use of a current Exchange Rate) be the
Exchange Rates employed in converting any amounts between Dollars and currencies
other than Dollars. Whenever in this Agreement in connection with a Borrowing,
conversion or continuation of a Loan, the issuance or extension of a Letter of
Credit, an amount, such as a required minimum or multiple amount, is expressed
in Dollars, but such Borrowing, Loan or Letter of Credit is denominated in a
currency other than Dollars, such amount shall be the relevant equivalent in
such currency of such Dollar Amount (rounded as determined by the Administrative
Agent in its sole discretion).

 

Section 1.06 Redenomination of Certain Foreign Currencies into Euros.

 

(a) Each obligation of the Borrower to make a payment denominated in the
national currency unit of any member state of the EMU that adopts the Euro as
its lawful currency after the date hereof shall be redenominated into Euros at
the time of such adoption (in accordance with the EMU Legislation). If, in
relation to the currency of any such member state, the basis of accrual of
interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the European interbank market
for the basis of accrual of interest in respect of the Euro, such expressed
basis shall be replaced by such convention or practice with effect from the date
on which such member state adopts the Euro as its lawful currency; provided that
if any Borrowing in the currency of such member state is outstanding immediately
prior to such date, such replacement shall take effect, with respect to such
Borrowing, at the end of the then current Interest Period.

 

(b) Without prejudice and in addition to any method of conversion or rounding
prescribed by any EMU Legislation and without limiting the liability of the
Borrower for any amount due under this Agreement or any other Senior Finance
Document, all references in this Agreement to minimum amounts (or integral
multiples thereof) denominated in the national currency unit of any member state
of the EMU that adopts the Euro as its lawful currency after the date hereof
shall,

 

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immediately upon such adoption, be replaced by references to such reasonably
comparable and convenient amounts (or integral multiples hereof) in the Euro as
the Administrative Agency may specify.

 

(c) Each provision of this Agreement shall be subject to such reasonable changes
of construction as the Administrative Agent may from time to time specify to be
appropriate to reflect the adoption of the Euro by any member state of the EMU
and any relevant market conventions or practices relating to the Euro.

 

Section 1.07 Currency Conversion.

 

(a) If more than one currency or currency unit are at the same time recognized
by the central bank of any country as the lawful currency of that country, then
(i) any reference in the Senior Finance Documents to, and any obligations
arising under the Senior Finance Documents in, the currency of that country
shall be translated into or paid in the currency or currency unit of that
country designated by the Administrative Agent and the Borrower and (ii) any
translation from one currency or currency unit to another shall be at the
official rate of exchange recognized by the central bank of the relevant country
for conversion of that currency or currency unit into the other, rounded up or
down by the Administrative Agent as it deems reasonably appropriate.

 

(b) If a change in any currency of a country occurs (other than as contemplated
in Section 1.06 above), this Agreement shall be amended (and each party hereto
agrees to enter into any supplemental agreement necessary to effect any such
amendment) to the extent that the Administrative Agent specifies to be necessary
to reflect the change in currency and to put the Lenders in the same position,
so far as possible, that they would have been in if no change in currency had
occurred.

 

ARTICLE II

THE CREDIT FACILITIES

 

Section 2.01 Commitments to Lend.

 

  (a) Revolving Loans.

 

(i) Domestic Revolving Loans. Each Domestic Revolving Lender severally agrees,
on the terms and conditions set forth in this Agreement, to make Revolving Loans
denominated in Dollars to the Borrower pursuant to this Section 2.01(a)(i) from
time to time during the Availability Period in amounts such that its Domestic
Revolving Outstandings shall not exceed (after giving effect to all Domestic
Revolving Loans repaid and all reimbursements of LC Disbursements made
concurrently with the making of any Domestic Revolving Loans) its Domestic
Revolving Commitment; provided that, immediately after giving effect to each
such Domestic Revolving Loan, (A) the aggregate Domestic Revolving Outstandings
shall not exceed the Domestic Revolving Committed Amount, (B) the Aggregate
Revolving Outstandings shall not exceed the Aggregate Revolving Committed Amount
and (C) with respect to each Domestic Revolving Lender individually, such
Lender’s outstanding Domestic Revolving Loans plus its

 

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Participation Interests in outstanding LC Obligations shall not exceed such
Lender’s Domestic Revolving Commitment Percentage of the Domestic Revolving
Committed Amount. Each Domestic Revolving Borrowing shall be in an aggregate
principal amount of $1,000,000 or any larger multiple of $100,000 (except that
any such Borrowing may be in the aggregate amount of the unused Domestic
Revolving Commitments) and shall be made from the several Domestic Revolving
Lenders ratably in proportion to their respective Domestic Revolving
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section 2.01(a)(i), repay, or, to the extent permitted by Section 2.09, prepay,
Domestic Revolving Loans and reborrow under this Section 2.01(a)(i).

 

(ii) Multi-Currency Revolving Loans. Each Multi-Currency Revolving Lender
severally agrees, on the terms and conditions set forth in this Agreement, to
make Multi-Currency Revolving Loans denominated in Dollars or any Available
Foreign Currency to the Borrower pursuant to this Section 2.01(a)(ii) from time
to time during the Availability Period in amounts such that the Dollar Amount of
its Multi-Currency Revolving Outstandings shall not exceed (after giving effect
to all Multi-Currency Revolving Loans repaid concurrently with the making of any
Multi-Currency Revolving Loans) its Multi-Currency Revolving Commitment;
provided that, immediately after giving effect to each such Revolving Loan, (A)
the aggregate Multi-Currency Revolving Outstandings shall not exceed the
Multi-Currency Revolving Committed Amount and (B) the Aggregate Revolving
Outstandings shall not exceed the Aggregate Revolving Committed Amount (it being
understood and agreed that the Administrative Agent shall calculate the Dollar
Amount of the then outstanding Multi-Currency Revolving Loans on the date on
which the Borrower has given the Administrative Agent a Notice of Borrowing with
respect to any Multi-Currency Revolving Loan for purposes of determining
compliance with this Section 2.01(a)(ii)). Each Multi-Currency Revolving
Borrowing shall be made from the several Multi-Currency Revolving Lenders
ratably in proportion to their respective Multi-Currency Revolving Commitments.
Within the foregoing limits, the Borrower may borrow under this Section
2.01(a)(ii), repay, or, to the extent permitted by Section 2.09, prepay,
Multi-Currency Revolving Loans and reborrow under this Section 2.01(a)(ii).

 

(b) Term B Loans. Each Term B Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make a Term B Loan to the Borrower on
the Closing Date in a principal amount not exceeding its Term B Commitment. The
Term B Borrowing shall be made from the several Term B Lenders ratably in
proportion to their respective Term B Commitments. The Term B Commitments are
not revolving in nature, and amounts repaid or prepaid prior to the Term
Maturity Date may not be reborrowed.

 

Section 2.02 Notice of Borrowings.

 

(a) Borrowings of Dollar-Denominated Loans. The Borrower shall give the
Administrative Agent a Notice of Borrowing (or telephone notice promptly
confirmed by a Notice of Borrowing) not later than 12:00 Noon on (i) the
Business Day of each Base Rate Borrowing and (ii) the third Business Day before
each Eurocurrency Borrowing. Each such Notice of Borrowing shall be irrevocable
and shall specify:

 

(A) the date of such Borrowing, which shall be a Business Day;

 

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(B) the aggregate principal amount of such Borrowing;

 

(C) the Class and initial Type of the Loans comprising such Borrowing;

 

(D) in the case of a Eurocurrency Borrowing, the duration of the initial
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period and to Section 2.06(a); and

 

(E) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.03.

 

If the duration of the initial Interest Period is not specified with respect to
any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have
selected an initial Interest Period of one month, subject to the provisions of
the definition of Interest Period and to Section 2.06(a).

 

(b) Borrowings of Multi-Currency Revolving Loans Other Than Dollar-Denominated
Loans. The Borrower shall give the Administrative Agent a Notice of Borrowing (a
telephone notice promptly confirmed by a Notice of Borrowing) not later than
12:00 Noon on the third Business Day before each Borrowing of Multi-Currency
Revolving Loans denominated in a currency other than Dollars. Each such Notice
of Borrowing shall be irrevocable and shall specify:

 

(i) the date of such Borrowing, which shall be a Business Day for the relevant
currency;

 

(ii) the currency and aggregate principal amount of such Borrowing;

 

(iii) the duration of the initial Interest Period applicable to such Borrowing,
subject to the provisions of the definition of Interest Period and to Section
2.06(a); and

 

(iv) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.03.

 

If the currency is not specified with respect to any requested Borrowing of
Multi-Currency Revolving Loans, then the Borrower shall be deemed to have
selected Euros. If the duration of the initial Interest Period is not specified
with respect to any requested Borrowing of Multi-Currency Revolving Loans, then
the Borrower shall be deemed to have selected an initial Interest Period of one
month, subject to the provisions of the definition of Interest Period and to
Section 2.06(a).

 

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Section 2.03 Notice to Lenders; Funding of Loans.

 

(a) Notice to Lenders. Upon receipt of a Notice of Borrowing, the Administrative
Agent shall promptly notify each Lender of such Lender’s ratable share (if any)
of the Borrowing referred to therein.

 

(b) Funding of Loans. On the date of each Borrowing, each Lender participating
therein shall: (i) if such Borrowing is to be made in Dollars, make available
its share of such Borrowing in Dollars no later than 3:00 P.M., in immediately
available funds, to the Administrative Agent at the Administrative Office or
(ii) if such Borrowing is to be made in an Available Foreign Currency, make
available its share of such Borrowing in such Available Foreign Currency (in
such funds as may then be customary for the settlement of international
transactions in such Available Foreign Currency) no later than 3:00 P.M. to the
account of the Administrative Agent. Unless the Administrative Agent determines
that any applicable condition specified in Article IV has not been satisfied,
the Administrative Agent shall promptly credit the amounts so received to the
general deposit account of the Borrower designated by the Borrower in the
applicable Notice of Borrowing, which account must be in the United States or,
if a Borrowing shall not occur on such date because any condition precedent
herein shall not have been met, promptly return the amounts received from the
Lenders in like funds.

 

(c) Funding by Administrative Agent in Anticipation of Amounts Due from the
Lenders. Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of this Section, and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such share available to the Administrative Agent such Lender and the
Borrower severally agree to repay to the Administrative Agent forthwith within
two Business Days of such corresponding amount, together with interest thereon
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent at (i) a rate per
annum equal to the higher of the Federal Funds Rate (if such Borrowing is in
Dollars) and the interest rate applicable thereto pursuant to Section 2.06, in
the case of the Borrower, and (ii) the Federal Funds Rate (if such Borrowing is
in Dollars) or the applicable Eurocurrency Rate (if such Borrowing is in an
Available Foreign Currency), in the case of such Lender. If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Lender’s Loan included in such Borrowing for
purposes of this Agreement.

 

(d) Obligations of Lenders Several. The failure of any Lender to make a Loan
required to be made by it as part of any Borrowing hereunder shall not relieve
any other Lender of its obligation, if any, hereunder to make any Loan on the
date of such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Loan to be made by such other Lender on such date
of Borrowing.

 

(e) Failed Loans. If any Lender shall fail to make any Loan (a “Failed Loan”)
which such Lender is otherwise obligated hereunder to make to the Borrower on
the date of Borrowing thereof, and the Administrative Agent shall not have
received notice from the Borrower or such Lender that any

 

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condition precedent to the making of the Failed Loan has not been satisfied,
then, until such Lender shall have made or be deemed to have made (pursuant to
the last sentence of this subsection (e)) the Failed Loan in full or the
Administrative Agent shall have received notice from the Borrower or such Lender
that any condition precedent to the making of the Failed Loan was not satisfied
at the time the Failed Loan was to have been made, whenever the Administrative
Agent shall receive any amount from the Borrower for the account of such Lender,
(i) the amount so received (up to the amount of such Failed Loan) will, upon
receipt by the Administrative Agent be deemed to have been paid to the Lender in
satisfaction of the obligation for which paid, without actual disbursement of
such amount to the Lender, (ii) the Lender will be deemed to have made the same
amount available to the Administrative Agent for disbursement as a Loan to the
Borrower (up to the amount of such Failed Loan) and (iii) the Administrative
Agent will disburse such amount (up to the amount of the Failed Loan) to the
Borrower or, if the Administrative Agent has previously made such amount
available to the Borrower on behalf of such Lender pursuant to the provisions
hereof, reimburse itself (up to the amount of the amount made available to the
Borrower); provided, however, that the Administrative Agent shall have no
obligation to disburse any such amount to the Borrower or otherwise apply it or
deem it applied as provided herein unless the Administrative Agent shall have
determined in its sole discretion that to so disburse such amount will not
violate any law, rule, regulation or requirement applicable to it. Upon any such
disbursement by the Administrative Agent such Lender shall be deemed to have
made a Base Rate Loan of the same Class as the Failed Loan (in the case of
Dollar-Denominated Loans), or a Eurocurrency Loan in the same currency as the
Failed Loan (in the case of Loans denominated in an Available Foreign Currency)
to the Borrower in satisfaction, to the extent thereof, of such Lender’s
obligation to make the Failed Loan.

 

Section 2.04 Evidence of Loans.

 

(a) Lender Accounts. Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.

 

(b) Administrative Agent Records. The Administrative Agent shall maintain
accounts in which it will record (i) the amount (in the applicable currency) of
each Loan made hereunder and the currency, Dollar Amount (if applicable), Class
and Type of each Loan made and the Interest Period, if any, applicable thereto,
(ii) the Dollar Amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder and (iii) the Dollar
Amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender’s share thereof.

 

(c) Evidence of Debt. The entries made in the accounts maintained pursuant to
subsections (a) and (b) of this Section 2.04 shall be prima facie evidence of
the existence and amounts of the obligations therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans made to it in accordance with
their terms.

 

(d) Notes. Notwithstanding any other provision of this Agreement, if any Lender
shall request and receive a Note or Notes as provided in Section 10.06 or
otherwise, then the Loans of such Lender shall be evidenced by one or more
Revolving Note or Term Notes, as applicable, in each

 

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case, substantially in the form of Exhibit B-1 or B-2, as applicable, payable to
the order of such Lender for the account of its Applicable Lending Office in an
amount equal to the aggregate unpaid principal amount of such Lender’s Domestic
Revolving, Multi-Currency Revolving or Term B Loans, as applicable.

 

(e) Note Endorsements. Each Lender having one or more Notes issued by the
Borrower shall record the date, amount (in the applicable currency), currency,
Dollar Amount (if applicable), Class and Type of each Loan made by it to the
Borrower evidenced by such Note and the date and amount of each payment of
principal made by the Borrower with respect thereto, and may, if such Lender so
elects in connection with any transfer or enforcement of any Note, endorse on
the reverse side or on the schedule, if any, forming a part thereof appropriate
notations to evidence the foregoing information with respect to each outstanding
Loan evidenced thereby; provided that the failure of any Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under any such Note. Each Lender is hereby irrevocably authorized
by the Borrower so to endorse each of its Notes and to attach to and make a part
of each of its Notes a continuation of any such schedule as and when required.

 

Section 2.05 Letters of Credit.

 

(a) Letters of Credit. Each Issuing Lender agrees, on the terms and conditions
set forth in this Agreement, to issue Letters of Credit denominated in Dollars
or an Available Foreign Currency from time to time before the 30th day prior to
the Revolving Termination Date for the account, and upon the request, of the
Borrower and in support of (i) trade obligations of the Borrower and/or its
Subsidiaries, which shall be payable at sight (each such letter of credit, a
“Trade Letter of Credit” and, collectively, the “Trade Letters of Credit”) and
(ii) such other obligations of the Borrower that are acceptable to the Domestic
Revolving Lenders (each such letter of credit, a “Standby Letter of Credit” and,
collectively, the “Standby Letters of Credit”); provided that, immediately after
each Letter of Credit is issued, (i) the aggregate LC Obligations shall not
exceed $25,000,000 (the “LC Committed Amount”), (ii) the aggregate Domestic
Revolving Outstandings shall not exceed the Domestic Revolving Committed Amount;
(iii) the Aggregate Revolving Outstandings shall not exceed the Aggregate
Revolving Committed Amount, (iv) with respect to each individual Domestic
Revolving Lender, the aggregate outstanding principal amount of the Domestic
Revolving Lender’s Domestic Revolving Loans plus the aggregate Dollar Amount of
its Participation Interests in outstanding LC Obligations shall not exceed such
Domestic Revolving Lender’s Domestic Revolving Commitment Percentage of the
Domestic Revolving Committed Amount; and (v) the Foreign Currency LC Exposure
shall not exceed $10,000,000 (the “Foreign Currency LC Committed Amount”).
Notwithstanding the foregoing, the account party for each Additional Letter of
Credit shall be the Borrower.

 

(b) Method of Issuance of Letters of Credit. The Borrower shall give the
applicable Issuing Lender notice (with a copy to the Administrative Agent)
substantially in the form of Exhibit A-3 hereto (a “Letter of Credit Request”)
of the requested issuance or amendment of a Letter of Credit prior to 1:00 P.M.
on the proposed date of the issuance or amendment of Trade Letters of Credit
(which shall be a Business Day) and at least three Business Days before the
proposed date of issuance or extension of Standby Letters of Credit (which shall
be a Business Day) (or such shorter period as may be agreed by the applicable
Issuing Lender in any particular instance). In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit Request shall
specify in form and detail reasonably satisfactory to the Issuing Lender: (i)
the name of the Borrower requesting the issuance of such Letter of Credit; (ii)
the

 

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proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (iii) the currency in which such Letter of Credit is to be
denominated (which shall be Dollars or an Available Foreign Currency); (iv) the
amount thereof (in the applicable currency); (v) the expiry date thereof; (vi)
the name and address of the beneficiary thereof; (vi) the documents to be
presented by such beneficiary in case of any drawing thereunder; (vii) the full
text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (viii) such other matters as the Issuing Lender may
require. In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Request shall specify in form and detail
reasonably satisfactory to the Issuing Lender: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment thereof (which shall be a Business
Day); (iii) the nature of the proposed amendment; and (iv) such other matters as
the Issuing Lender may require. If requested by the applicable Issuing Lender,
the Borrower shall also submit a letter of credit application or such Issuing
Lender’s standard form in connection with any request for a letter of credit.
The extension or renewal of any Letter of Credit shall be deemed to be an
issuance of such Letter of Credit. Subject to the provisions of the following
paragraph with respect to Evergreen Letters of Credit, no Letter of Credit shall
have a term of more than one year or shall have a term extending or be
extendible beyond the fifth Business Day before the Revolving Termination Date.

 

If the Borrower so requests in any applicable Letter of Credit Request, the
Issuing Lender may, in its sole and absolute discretion, agree to issue a Letter
of Credit that has automatic renewal provisions (each, an “Evergreen Letter of
Credit”); provided that any such Evergreen Letter of Credit must permit the
Issuing Lender to prevent any such renewal at least once in each twelve-month
period (commencing with the date of issuance of such Letter of Credit) by giving
prior notice to the beneficiary thereof not later than a day (the “Nonrenewal
Notice Date”) in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued. Unless otherwise directed by the Issuing
Lender, the Borrower shall not be required to make a specific request to the
Issuing Lender for any such renewal. Once an Evergreen Letter of Credit has been
issued, the Domestic Revolving Lenders shall be deemed to have authorized (but
may not require) the Issuing Lender to permit the renewal of such Letter of
Credit at any time to a date not later than the Domestic Revolving Termination
Date; provided, however, that the Issuing Lender shall not permit any such
renewal if (i) the Issuing Lender would have no obligation at such time to issue
such Letter of Credit in its renewed form under the terms hereof or (ii) it has
received notice (which may be by telephone or in writing) on or before the
Business Day immediately preceding the Nonrenewal Notice Date (A) from the
Administrative Agent that the Required Domestic Revolving Lenders have elected
not to permit such renewal or (B) from the Administrative Agent, any Domestic
Revolving Lender or the Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied. Notwithstanding anything to the
contrary contained herein, the Issuing Lender shall have no obligation to permit
the renewal of any Evergreen Letter of Credit at any time.

 

Promptly after receipt of any Letter of Credit Request, the Issuing Lender will
confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Request from
the Borrower and, if not, the Issuing Lender will provide the Administrative
Agent with a copy thereof. Upon receipt by the Issuing Lender of confirmation
from the Administrative Agent that the requested issuance or amendment is
permitted in accordance with the terms hereof, then, subject to the terms and
conditions thereof, the Issuing Lender shall, on the requested date, issue a
Letter of Credit for the account of the Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the Issuing
Lender’s usual and customary business practices.

 

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Promptly after its delivery of any Letter of Credit or any amendment to a Letter
of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the Issuing Lender will also deliver to the Borrower and the
Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

 

(c) Conditions to Issuance of Letters of Credit. The issuance by an Issuing
Lender of each Letter of Credit shall, in addition to the conditions precedent
set forth in Section 4.02, be subject to the conditions precedent that (i) such
Letter of Credit shall be reasonably satisfactory in form and substance to the
applicable Issuing Lender, (ii) the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letter of Credit as the
Issuing Lender shall have reasonably requested, (iii) the Issuing Lender shall
have confirmed with the Administrative Agent on the date of (and after giving
effect to) such issuance that (A) the aggregate amount of all LC Obligations
will not exceed the LC Committed Amount, (B) the Foreign Currency LC Exposure
will not exceed the Foreign Currency LC Committed Amount, (C) the aggregate
Domestic Revolving Outstandings will not exceed the Domestic Revolving Committed
Amount and (D) the Aggregate Revolving Outstandings will not exceed the
Aggregate Revolving Committed Amount and (iv) the Issuing Lender shall not have
been notified by the Administrative Agent that any condition specified in
Section 4.02(b) or (c) is not satisfied on the date such Letter of Credit is to
be issued. Notwithstanding any other provision of this Section 2.05, no Issuing
Lender shall be under any obligation to issue any Letter of Credit if: (i) any
order, judgment or decree of any Governmental Authority shall by its terms
purport to enjoin or restrain the Issuing Lender from issuing such Letter of
Credit, or any requirement of Law applicable to such Issuing Lender or any
request or directive (whether or not having a force of Law) from any
Governmental Authority with jurisdiction over such Issuing Lender shall
prohibit, or request that such Issuing Lender refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Lender with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which such Issuing Lender is
not otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon such Issuing Lender any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which such Issuing Lender in good faith
deems material to it; or (ii) the issuance of such Letter of Credit shall
violate any applicable general policies of such Issuing Lender.

 

(d) Purchase and Sale of Letter of Credit Participations. Upon the issuance by
an Issuing Lender of a Letter of Credit, such Issuing Lender shall be deemed,
without further action by any party hereto, to have sold to each Domestic
Revolving Lender, and each Domestic Revolving Lender shall be deemed, without
further action by any party hereto, to have purchased from such Issuing Lender,
without recourse or warranty, an undivided participation interest in such Letter
of Credit and the related LC Obligations in the proportion its Domestic
Revolving Commitment Percentage bears to the Domestic Revolving Committed Amount
(although any fronting fee payable under Section 2.11 shall be payable directly
to the Administrative Agent for the account of the applicable Issuing Lender,
and the Lenders (other than such Issuing Lender) shall have no right to receive
any portion of any such fronting fee) and any security therefor or guaranty
pertaining thereto. Upon any change in the Domestic Revolving Commitments
pursuant to Section 10.06, there shall be an automatic adjustment to the
Participation Interests in all outstanding Letters of Credit and all LC
Obligations to reflect the adjusted Domestic Revolving Commitments of the
assigning and assignee Lenders or of all Lenders having Domestic Revolving
Commitments, as the case may be.

 

(e) Drawings Under Letters of Credit. Upon receipt from the beneficiary of any
Letter of Credit of any notice of a drawing under such Letter of Credit, the
applicable Issuing Lender shall determine in accordance with the terms of such
Letter of Credit whether such drawing should be honored.

 

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If the Issuing Lender determines that any such drawing shall be honored, such
Issuing Lender shall make available to such beneficiary in accordance with the
terms of such Letter of Credit the amount of the drawing and shall notify the
Borrower and the Administrative Agent as to the amount to be paid as a result of
such drawing and the payment date.

 

(f) Duties of Issuing Lenders to Domestic Revolving Lenders; Reliance. In
determining whether to pay under any Letter of Credit, the relevant Issuing
Lender shall not have any obligation relative to the Domestic Revolving Lenders
participating in such Letter of Credit or the related LC Obligations other than
to determine that any document or documents required to be delivered under such
Letter of Credit have been delivered and that they substantially comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by an Issuing Lender under or in connection with any Letter of
Credit shall not create for the Issuing Lender any resulting liability if taken
or omitted in the absence of bad faith, gross negligence or willful misconduct.
Each Issuing Lender shall be entitled (but not obligated) to rely, and shall be
fully protected in relying, on the representation and warranty by the Borrower
set forth in the last sentence of Section 4.02 to establish whether the
conditions specified in paragraphs (b) and (c) of Section 4.02 are met in
connection with any issuance or extension of a Letter of Credit. Each Issuing
Lender shall be entitled to rely, and shall be fully protected in relying, upon
advice and statements of legal counsel, independent accountants and other
experts selected by such Issuing Lender and upon any Letter of Credit, draft,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopier, telex or teletype message, statement, order or other
document believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary unless
the beneficiary and the Borrower shall have notified such Issuing Lender that
such documents do not comply with the terms and conditions of the Letter of
Credit. Each Issuing Lender shall be fully justified in refusing to take any
action requested of it under this Section 2.05 in respect of any Letter of
Credit unless it shall first have received such advice or concurrence of the
Required Domestic Revolving Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Domestic
Revolving Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take, or omitting or
continuing to omit, any such action. Notwithstanding any other provision of this
Section 2.05, each Issuing Lender shall in all cases be fully protected in
acting, or in refraining from acting, under this Section in respect of any
Letter of Credit in accordance with a request of the Required Domestic Revolving
Lenders, and such request and any action taken or failure to act pursuant hereto
shall be binding upon all Domestic Revolving Lenders and all future holders of
participations in such Letter of Credit.

 

(g) Reimbursement Obligations. The Borrower shall be irrevocably and
unconditionally obligated forthwith to reimburse each Issuing Lender in Dollars
or, subject to this Section 2.05(g), the relevant Available Foreign Currency, as
applicable, for any amounts paid by such Issuing Lender upon any drawing under
any Letter of Credit, together with any and all reasonable charges and expenses
which the Issuing Lender may pay or incur relative to such drawing and interest
on the amount drawn at the rate applicable to Revolving Base Rate Loans for each
day from and including the date such amount is drawn to but excluding the date
such reimbursement payment is due and payable; provided that, in the case of an
LC Disbursement made under a Foreign Currency Letter of Credit, the amount of
interest due with respect thereto shall (i) in the case of any LC Disbursement
that is reimbursed on or before the third Business Day immediately succeeding
such LC Disbursement, (A) be payable in the applicable Available Foreign
Currency and (B) if not reimbursed on the date of such LC Disbursement, bear
interest at a rate equal to the rate reasonably determined by the applicable
Issuing Lender to be the cost to such Issuing Lender of funding such LC
Disbursement plus the Applicable Margin applicable to

 

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Revolving Eurocurrency Loans at such time and (ii) in the case of any LC
Disbursement that is reimbursed after the third Business Day immediately
succeeding such LC Disbursement (A) be payable in Dollars and (B) accrue
interest on the Dollar Amount thereof, calculated using the Exchange Rate in
effect on the date such LC Disbursement was made, at the rate per annum then
applicable to Revolving Base Rate Loans. Such reimbursement payment shall be due
and payable (i) at or before 2:00 P.M. (New York time or the relevant local
time, as applicable) on the third Business Day after the date the Issuing Lender
notifies the Borrower of such drawing; provided that no payment otherwise
required by this sentence to be made by the Borrower at or before 2:00 P.M. (New
York time or the relevant local time, as applicable) on any day shall be overdue
hereunder if arrangements for such payment satisfactory to the applicable
Issuing Lender, in its reasonable discretion, shall have been made by the
Borrower at or before 2:00 P.M. (New York time or the relevant local time, as
applicable) on such day and such payment is actually made at or before 3:00 P.M.
(New York time or the relevant local time, as applicable) on such day. If the
Borrower’s reimbursement of, or obligation to reimburse, any amounts in any
Available Foreign Currency would subject the Administrative Agent, the
applicable Issuing Lender or any Lender to any stamp duty, ad valorem charge or
similar tax that would not be payable if such reimbursement were made or
required to be made in Dollars, the Borrower shall, at its option, either (i)
pay the amount of such tax requested by the Administrative Agent, the relevant
Issuing Lender or the relevant Lender or (ii) reimburse each LC Disbursement
made in such Available Foreign Currency in Dollars, in an amount equal to the
Dollar Amount thereof, calculated using the applicable Exchange Rate in effect
on the date such LC Disbursement is made. If the Borrower fails to make any
reimbursement when due hereunder, then (i) if such payment relates to a Foreign
Currency Letter of Credit, automatically and with no further action required,
the Borrower’s obligation to reimburse the applicable Issuing Lender and each
other Domestic Revolving Lender for the applicable LC Disbursement shall be
permanently converted into an obligation to reimburse the Dollar Amount thereof,
calculated using the Exchange Rate in effect on the date when such payment was
due and (ii) the Administrative Agent shall promptly notify the applicable
Issuing Lender and each other Domestic Revolving Lender of the applicable LC
Disbursement, the Dollar Amount thereof (if such LC Disbursement relates to a
Foreign Currency Letter of Credit) and the payment then due from the Borrower in
respect thereof. In addition to the foregoing, the Borrower agrees to pay to the
Issuing Lender interest, payable on demand, on any and all amounts not paid by
the Borrower to the Issuing Lender when due under this subsection (g), for each
day from and including the date when such amount becomes due to but excluding
the date such amount is paid in full, whether before or after judgment, at a
rate per annum equal to the sum of 2.00% plus the rate applicable to Revolving
Base Rate Loans for such day. Subject to the satisfaction of all applicable
conditions set forth in Article IV, the Borrower may, at its option, utilize the
Revolving Commitments, or make other arrangements for payment satisfactory to
the Issuing Lender, for the reimbursement of all LC Disbursements as required by
this subsection (g). Each reimbursement payment to be made by the Borrower
pursuant to this subsection (g) shall be made to the Issuing Lender in Federal
or other funds immediately available to it at its address referred to in Section
10.01.

 

(h) Obligations of Domestic Revolving Lenders to Reimburse Issuing Lender for
Unpaid LC Disbursements. If the Borrower shall not have reimbursed an Issuing
Lender in full for any LC Disbursement as required pursuant to subsection (g) of
this Section 2.05, the Issuing Lender shall promptly notify the Administrative
Agent, and the Administrative Agent shall promptly notify each Domestic
Revolving Lender (other than the relevant Issuing Lender), and each such
Domestic Revolving Lender shall promptly and unconditionally pay to the
Administrative Agent, for the account of such Issuing Lender, such Domestic
Revolving Lender’s pro-rata share of (i) such unreimbursed LC Disbursement, in
the case of LC Disbursements made by an Issuing Lender in Dollars, or (ii) the
Dollar Amount of such LC Disbursement, calculated using the Exchange Rate in
effect on the date such payment is required, in the case of LC Disbursements
made by an Issuing Lender in an Available Foreign Currency (each such Lender’s
pro rata share of such LC Disbursement to be determined by the proportion its

 

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Domestic Revolving Commitment Percentage bears to the aggregate Domestic
Revolving Committed Amount) in Dollars in Federal or other immediately available
funds. Such payment from the Domestic Revolving Lenders shall be due (i) at or
before 1:00 P.M. on the date the Administrative Agent so notifies a Domestic
Revolving Lender, if such notice is given at or before 10:00 A.M. on such date
or (ii) at or before 10:00 A.M. on the next succeeding Business Day, together
with interest on such amount for each day from and including the date of such
drawing to but excluding the day such payment is due from such Domestic
Revolving Lender at the Federal Funds Rate for such day (which funds the
Administrative Agent shall promptly remit to the applicable Issuing Lender). The
failure of any Domestic Revolving Lender to make available to the Administrative
Agent for the account of an Issuing Lender its pro-rata share of any
unreimbursed LC Disbursement shall not relieve any other Domestic Revolving
Lender of its obligation hereunder to make available to the Administrative Agent
for the account of such Issuing Lender its pro-rata share of any payment made
under any Letter of Credit on the date required, as specified above, but no such
Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent for the account of the Issuing Lender such
other Lender’s pro-rata share of any such payment. Upon payment in full of all
amounts payable by a Lender under this subsection (h), such Lender shall be
subrogated to the rights of the Issuing Lender against the Borrower to the
extent of such Lender’s pro-rata share of the related LC Obligation so paid
(including interest accrued thereon). If any Domestic Revolving Lender fails to
pay any amount required to be paid by it pursuant to this subsection (h) on the
date on which such payment is due, interest shall accrue on such Lender’s
obligation to make such payment, for each day from and including the date such
payment became due to but excluding the date such Lender makes such payment,
whether before or after judgment, at a rate per annum equal to (i) for each day
from the date such payment is due to the third succeeding Business Day,
inclusive, the Federal Funds Rate for such day as determined by the relevant
Issuing Lender and (ii) for each day thereafter, the sum of 2% plus the rate
applicable to its Revolving Base Rate Loans for such day. Any payment made by
any Lender after 3:00 P.M. on any Business Day shall be deemed for purposes of
the preceding sentence to have been made on the next succeeding Business Day.

 

(i) Funds Received from the Borrower in Respect of Drawn Letters of Credit.
Whenever an Issuing Lender receives a payment of an LC Obligation as to which
the Administrative Agent has received for the account of such Issuing Lender any
payments from the Lenders pursuant to subsection (h) above, such Issuing Lender
shall pay the amount of such payment to the Administrative Agent, and the
Administrative Agent shall promptly pay to each Domestic Revolving Lender which
has paid its pro-rata share thereof, in Dollars in Federal or other immediately
available funds, an amount equal to such Lender’s pro-rata share of the
principal amount thereof and interest thereon for each day after relevant date
of payment at the Federal Funds Rate.

 

(j) Obligations in Respect of Letters of Credit Unconditional. The obligations
of the Borrower under Section 2.05(g) above shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, under all circumstances whatsoever, including, without
limitation, the following circumstances:

 

(i) any lack of validity or enforceability of this Agreement or any Letter of
Credit or any document related hereto or thereto;

 

(ii) any amendment or waiver of or any consent to departure from all or any of
the provisions of this Agreement or any Letter of Credit or any document related
hereto or thereto, in each case consented to by the Borrower;

 

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(iii) the use which may be made of the Letter of Credit by, or any acts or
omission of, a beneficiary of a Letter of Credit (or any Person for whom the
beneficiary may be acting);

 

(iv) the existence of any claim, set-off, defense or other rights that the
Borrower may have at any time against a beneficiary of a Letter of Credit (or
any Person for whom the beneficiary may be acting), any Issuing Lender or any
other Person, whether in connection with this Agreement or any Letter of Credit
or any document related hereto or thereto or any unrelated transaction;

 

(v) any statement or any other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever;

 

(vi) payment under a Letter of Credit against presentation to an Issuing Lender
of a draft or certificate that does not comply with the terms of such Letter of
Credit; provided that the relevant Issuing Lender’s determination that documents
presented under such Letter of Credit comply with the terms thereof shall not
have constituted gross negligence or willful misconduct of such Issuing Lender;
or

 

(vii) any other act or omission to act or delay of any kind by any Issuing
Lender or any other Person or any other event or circumstance whatsoever that
might, but for the provisions of this subsection (vii), constitute a legal or
equitable discharge of the Borrower’s obligations hereunder.

 

(k) Designation of Subsidiaries as Account Parties. Notwithstanding anything to
the contrary set forth in this Agreement, a Letter of Credit issued hereunder
may contain a statement to the effect that such Letter of Credit is issued for
the account of a Subsidiary of the Borrower; provided that notwithstanding such
statement, the Borrower shall be the actual account party for all purposes of
this Agreement for such Letter of Credit and such statement shall not affect the
Borrower’s reimbursement obligations hereunder with respect to such Letter of
Credit.

 

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

 

(m) Uniform Customs and Practices. Unless otherwise expressly agreed by the
Issuing Lender and the Borrower when a Letter of Credit is issued, (i) the rules
of the “International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the “ICC”)
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each Trade Letter of Credit.

 

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(n) Responsibility of Issuing Lenders. It is expressly understood and agreed
that the obligations of the Issuing Lenders hereunder to the Domestic Revolving
Lenders are only those expressly set forth in this Agreement and that each
Issuing Lender shall be entitled to assume that the conditions precedent set
forth in Section 4.02 have been satisfied unless it shall have acquired actual
knowledge that any such condition precedent has not been satisfied; provided,
however, that nothing set forth in this Section 2.05 shall be deemed to
prejudice the right of any Domestic Revolving Lender to recover from any Issuing
Lender any amounts made available by such Domestic Revolving Lender to such
Issuing Lender pursuant to this Section 2.05 in the event that it is determined
by a court of competent jurisdiction that the payment with respect to a Letter
of Credit constituted gross negligence or willful misconduct on the part of the
Issuing Lender.

 

(o) Conflict with LC Documents. In the event of any conflict between this
Agreement and any LC Document, this Agreement shall govern.

 

(p) Indemnification of Issuing Lenders.

 

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

 

(ii) As between the Borrower and each Issuing Lender, the Borrower shall assume
all risks of the acts or omissions of or the misuse of any Letter of Credit by
the beneficiary thereof. The Issuing Lender shall not be responsible for: (A)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) failure of the beneficiary of a
Letter of Credit to comply fully with conditions required in order to draw upon
a Letter of Credit; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or otherwise of any
documents required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (G) any consequences arising from causes beyond the
control of the Issuing Lender, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the vesting of the
Issuing Lender’s rights or powers hereunder.

 

(iii) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by an Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith,

 

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shall not put the Issuing Lender under any resulting liability to the Borrower
or any other Credit Party other than for gross negligence, bad faith or willful
misconduct. It is the intention of the parties that this Agreement shall be
construed and applied to protect and indemnify the Issuing Lenders against any
and all risks involved in the issuance of any Letter of Credit, all of which
risks are hereby assumed by the Credit Parties, including, without limitation,
any and all risks, whether rightful or wrongful, of any present or future
Government Acts. The Issuing Lenders shall not, in any way, be liable for any
failure by the Issuing Lenders or anyone else to pay any drawing under any
Letter of Credit as a result of any Government Acts or any other cause beyond
the control of the Issuing Lenders.

 

(iv) Nothing in this subsection (p) is intended to limit the reimbursement
obligation of the Borrower contained in this Section 2.05. The obligations of
the Borrower under this subsection (p) shall survive the termination of this
Agreement. No act or omission of any current or prior beneficiary of a Letter of
Credit shall in any way affect or impair the rights of any Issuing Lender to
enforce any right, power or benefit under this Agreement.

 

(v) Notwithstanding anything to the contrary contained in this subsection (p),
the Borrower shall not have any obligation to indemnify any Issuing Lender in
respect of any liability to the extent incurred by the Issuing Lender arising
out of the gross negligence, bad faith or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction. Nothing in this
Agreement shall relieve any Issuing Lender of any liability to the Borrower in
respect of any action taken by the Issuing Lender which action constitutes gross
negligence, bad faith or willful misconduct of the Issuing Lender or a violation
of the UCP or Uniform Commercial Code, as applicable, as determined by a court
of competent jurisdiction.

 

(q) Cash Collateral. If the Borrower is required pursuant to the terms of this
Agreement to Cash Collateralize any LC Obligations, the Borrower shall deposit
in an account (which may be an LC Cash Collateral Account under the Security
Agreement) with the Collateral Agent an amount in Dollars in cash equal to 100%
of such LC Obligations; provided that the portions of such amount attributable
to undrawn Foreign Currency Letters of Credit or LC Disbursements in an
Available Foreign Currency reimbursement for which is not yet overdue shall be
deposited in such Available Foreign Currency, as applicable, in the actual
amounts of such undrawn Letters of Credit and LC Disbursements. Such deposit
shall be held by the Collateral Agent as collateral for the payment and
performance of the LC Obligations. For purposes of this paragraph (q), the
Foreign Currency LC Exposure shall be calculated using the Exchange Rates in
effect on the date the Borrower is required to cash collateralize the relevant
Foreign Currency Letter of Credit pursuant to this Agreement. The Collateral
Agent shall have exclusive control, including the exclusive right of withdrawal,
over each collateral account referred to in this subsection (q). The Collateral
Agent will, at the request of the Borrower, invest amounts deposited in such
accounts in Cash Equivalents; provided, however, that (i) the Collateral Agent
shall not be required to make any investment that, in its sole judgment, would
require or cause the Collateral Agent to be in, or would result in any,
violation of any Law, (ii) such Cash Equivalents shall be subjected to a first
priority perfected security interest in favor of the Collateral Agent and (iii)
if an Event of Default shall have occurred and be continuing, the selection of
such Cash Equivalents shall be in the sole discretion of the Collateral Agent.
The Borrower shall indemnify the Collateral Agent for any losses relating to
such investments in Cash Equivalents. Other than any interest or profits earned
on such investments, such deposits shall not bear interest. Interest or profits,
if any, on such investments shall accumulate in such accounts. Moneys in such
accounts shall be applied by the Collateral Agent to reimburse the Issuing
Lenders immediately for drawings under the applicable Letters

 

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of Credit and, if the maturity of the Loans has been accelerated, to satisfy the
LC Obligations of the Borrower. If the Borrower is required to provide an amount
of cash collateral hereunder as a result of an Event of Default, such amount,
together with any interest or profits earned thereon (to the extent not applied
as aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived. If the Borrower is required to
provide an amount of cash collateral hereunder pursuant to Section 2.08(a) or
2.09(b)(i), such amount, together with any interest or profits earned thereon
(to the extent not applied as aforesaid) shall be returned to the Borrower upon
demand; provided that, after giving effect to the return, (i) the aggregate
Domestic Revolving Outstandings would not exceed the Domestic Revolving
Committed Amount, (ii) the Aggregate Revolving Outstandings would not exceed the
Aggregate Revolving Committed Amount and (iii) no Default or Event of Default
shall have occurred and be continuing. If the Borrower is required to provide an
amount of cash collateral hereunder pursuant to Section 2.09(b)(iii), such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower upon demand; provided that (i) the aggregate Foreign Currency LC
Exposure would not exceed the Foreign Currency LC Committed Amount and (ii) no
Default or Event of Default shall have occurred and be continuing. If the
Borrower is required to deposit an amount of cash collateral hereunder pursuant
to Section 2.09(b)(iv), (v), (vi), (vii) or (viii), interest or profits thereon
(to the extent not applied as aforesaid) shall be returned to the Borrower after
the full amount of such deposit has been applied by the Collateral Agent to
reimburse the Issuing Lender for drawings under Letters of Credit. The Borrower
hereby pledges and assigns to the Collateral Agent, for its benefit and the
benefit of the Finance Parties, each cash collateral account established by it
hereunder (and all monies and investments held therein) to secure its Finance
Obligations.

 

(r) Conversion. If the Loans become immediately due and payable on any date
pursuant to Article VIII, all amounts (i) that the Borrower is at the time or
thereafter becomes required to reimburse or otherwise pay to the Administrative
Agent in respect of LC Disbursements made under any Foreign Currency Letter of
Credit (other than amounts in respect of which the Borrower has deposited cash
collateral pursuant to Section 2.05(q), if such cash collateral was deposited in
the applicable Available Foreign Currency, to the extent so deposited or
applied), (ii) that the Domestic Revolving Lenders are at the time or thereafter
become required to pay to the Administrative Agent and the Administrative Agent
is at the time or thereafter becomes required to distribute to the applicable
Issuing Lender pursuant to Section 2.05(h) above in respect of unreimbursed LC
Disbursements made under any Foreign Currency Letter of Credit and (iii) of each
Domestic Revolving Lender’s Participation Interest in any Foreign Currency
Letter of Credit under which an LC Disbursement has been made shall, in each
case automatically and with no further action required, be converted into the
Dollar Amount thereof, calculated using the Exchange Rates in effect on such
date (or in the case of any LC Disbursements made after such date, on the date
such LC Disbursement is made). On and after such conversion, all amounts
accruing and owed to the Administrative Agent, the applicable Issuing Lender or
any Lender in respect of the Senior Obligations described in this paragraph
shall accrue and be payable in Dollars at the rates otherwise applicable
hereunder.

 

(s) Resignation or Removal of an Issuing Lender. An Issuing Lender may resign at
any time by giving 60 days’ notice to the Administrative Agent, the Domestic
Revolving Lenders and the Borrower; provided, however, that such resignation
shall not affect the status of any outstanding Letters of Credit issued by such
resigning Issuing Lender as set forth in subsection (t) below. Upon any such
resignation, the Borrower shall (within 60 days after such notice of
resignation) either appoint a successor, or terminate the unutilized LC
Commitment of such Issuing Lender; provided, however, that, if the Borrower
elects to terminate such unutilized LC Commitment, the Borrower may at any time
thereafter that the Domestic Revolving Commitments are in effect reinstate such
LC Commitment in connection with the appointment of another Issuing Lender.
Subject to subsection (t) below, upon the

 

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acceptance of any appointment as an Issuing Lender hereunder by a successor
Issuing Lender, such successor shall succeed to and become vested with all the
interests, rights and obligations of the retiring Issuing Lender and the
retiring Issuing Lender shall be discharged from its obligations to issue
Letters of Credit hereunder. The acceptance of any appointment as Issuing Lender
hereunder by a successor Issuing Lender shall be evidenced by an agreement
entered into by such successor, in a form reasonably satisfactory to the
Borrower and the Administrative Agent, and, from and after the effective date of
such agreement, (i) such successor shall be a party hereto and have all the
rights and obligations of an Issuing Lender under this Agreement and the other
Senior Finance Documents and (ii) references herein and in the other Senior
Finance Documents to the “Issuing Lender” shall be deemed to refer to such
successor or to any previous Issuing Lender, or to such successor and all
previous Issuing Lenders, as the context shall require.

 

(t) Rights with Respect to Outstanding Letters of Credit. After the resignation
of an Issuing Lender hereunder the retiring Issuing Lender shall remain a party
hereto and shall continue to have all the rights and obligations of an Issuing
Lender under this Agreement and the other Senior Finance Documents with respect
to Letters of Credit issued by it prior to such resignation, but shall not be
required to issue additional Letters of Credit.

 

(u) Reporting. Each Issuing Lender will report in writing to the Administrative
Agent (i) on the first Business Day of each week, the aggregate Dollar Amount of
the face amount of Letters of Credit issued by it and outstanding as of the last
Business Day of the preceding week, (ii) on or prior to each Business Day on
which such Issuing Lender expects to issue, amend, renew or extend any Letter of
Credit, the date of such issuance or amendment, and the aggregate Dollar Amount
of the face amount of Letters of Credit to be issued, amended, renewed or
extended by it and outstanding after giving effect to such issuance, amendment,
renewal or extension (and such Issuing Lender shall advise the Administrative
Agent on such Business Day whether such issuance, amendment, renewal or
extension occurred and whether the amount thereof changed), (iii) on each
Business Day on which such Issuing Lender makes any LC Disbursement, the date of
such LC Disbursement, the amount (in the applicable currency), the currency and
the Dollar Amount, if applicable, of such LC Disbursement and (iv) on any
Business Day on which the Borrower fails to reimburse an LC Disbursement
required to be reimbursed to such Issuing Lender on such day, the date of such
failure, the Borrower, amount (in the applicable currency), the currency and the
Dollar Amount, if applicable, of such LC Disbursement.

 

Section 2.06 Interest.

 

(a) Rate Options Applicable to Loans. Each Borrowing made prior to the
Syndication Date shall be comprised of (i) in the case of Domestic Revolving
Loans and Term B Loans, Base Rate Loans or a single group of Eurocurrency Loans
having an Interest Period of one month and (ii) in the case of Multi-Currency
Revolving Loans, Eurocurrency Loans with a one-month Interest Period (with no
more than one such Eurocurrency Loan to be outstanding at any time in any given
currency). Each Borrowing made on or after the Syndication Date shall be
comprised of (i) in the case of Domestic Revolving Loans and Term B Loans, Base
Rate Loans or Eurocurrency Loans and (ii) in the case of Multi-Currency
Revolving Loans, Eurocurrency Loans, in each case as the Borrower may request
pursuant to Section 2.02. Borrowings of more than one Type may be outstanding at
the same time; provided, however, that the Borrower may not request any
Borrowing that, if made, would result in an aggregate of more than 15 separate
Groups of Eurocurrency Loans being outstanding hereunder at any

 

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one time. For this purpose, Loans having different Interest Periods, regardless
of whether commencing on the same date, shall be considered separate Groups.

 

(b) Base Rate Loans. Each Loan of a Class which is made as, or converted into, a
Base Rate Loan shall bear interest on the outstanding principal amount thereof,
for each day from the date such Loan is made as, or converted into, a Base Rate
Loan until it becomes due or is converted into a Loan of any other Type, at a
rate per annum equal to the Base Rate for such day plus the then Applicable
Margin. Such interest shall be payable in arrears on each Interest Payment Date.

 

(c) Eurocurrency Loans. Each Eurocurrency Loan of a Class shall bear interest on
the outstanding principal amount thereof, for each day during the Interest
Period applicable thereto, at a rate per annum equal to the sum of the
applicable Adjusted Eurocurrency Rate for such Interest Period plus the then
Applicable Margin. Such interest shall be payable for each Interest Period on
each Interest Payment Date.

 

(d) Determination and Notice of Interest Rates. The Administrative Agent shall
determine each interest rate applicable to the Loans hereunder. The
Administrative Agent shall give prompt notice to the Borrower and the
participating Lenders of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error. Any
such notice shall, without the necessity of the Administrative Agent so stating
in such notice, be subject to the provisions of the definition of “Applicable
Margin” providing for adjustments in the Applicable Margin from time to time.
When during an Interest Period any event occurs that causes an adjustment in the
Applicable Margin applicable to Loans to which such Interest Period is
applicable, the Administrative Agent shall give prompt notice to the Borrower
and the Lenders of such event and the adjusted rate of interest so determined
for such Loans, and its determination thereof shall be conclusive in the absence
of manifest error.

 

(e) Default Interest. Upon the occurrence and during the continuance of a
payment or insolvency Event of Default, the overdue principal of and, to the
extent permitted by law, overdue interest on the Loans and any other overdue
amounts owing herein or under the other Senior Finance Documents shall bear
interest, payable on demand, at a per annum rate equal to (i) in the case of
principal of any Loan, the rate otherwise applicable to such Loan during such
period pursuant to this Section 2.06 plus 2.00%, (ii) in the case of interest on
any Loan, the Base Rate plus the Applicable Margin for Loans of such Class on
such day plus 2.00% and (iii) in the case of any other amount, if expressly
provided for herein, at the rate so provided and otherwise at the Base Rate plus
the Applicable Margin for Revolving Base Rate Loans plus 2.00%.

 

Section 2.07 Extension and Conversion.

 

(a) Continuation and Conversion Options. The Loans included in each Borrowing
shall bear interest initially at the type of rate allowed by Section 2.06 and as
specified by the Borrower in the applicable Notice of Borrowing. Thereafter, the
Borrower shall have the option to elect to change or continue the type of
interest rate borne by each Group of Loans (subject in each case to the
provisions of Article III and subsection 2.07(d)), as follows:

 

(i) if such Loans are Base Rate Loans, the Borrower may elect pursuant to a
Notice of Extension/Conversion to convert such Loans to Eurocurrency Loans as of
any Business Day;

 

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(ii) if such Loans are Eurocurrency Loans, the Borrower may elect to continue
such Loans as Eurocurrency Loans for an additional Interest Period, subject to
Section 3.05 in the case of any such continuation effective on any day other
than the last day of the then current Interest Period applicable to such Loans;
and

 

(iii) if such Loans are Eurocurrency Loans denominated in Dollars, the Borrower
may elect to convert such loans to Base Rate Loans, subject to Section 3.05 in
the case of any such conversion effective on any day other than the last day of
the then current Interest Period applicable to such Loans.

 

Each such election shall be made by delivering a notice, substantially in the
form of Exhibit A-2 hereto (a “Notice of Extension/Conversion”) (or telephone
notice promptly confirmed by a Notice of Extension/Conversion), which notice
shall not thereafter be revocable by the Borrower, to the Administrative Agent
not later than 12:00 Noon on the third Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of
Extension/Conversion may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group and (ii)
the portion to which such Notice applies, and the remaining portion to which it
does not apply, are each $1,000,000 or any larger multiple of $100,000.
Notwithstanding the foregoing, the Borrower may not (i) elect to convert the
currency in which any Loan is denominated or (ii) elect to convert any
Multi-Currency Revolving Loan from a Eurocurrency Loan to a Base Rate Loan.

 

(b) Contents of Notice of Extension/Conversion. Each Notice of
Extension/Conversion shall specify:

 

(i) the Group of Loans (or portion thereof) to which such notice applies;

 

(ii) the date on which the conversion or continuation selected in such notice is
to be effective, which shall comply with the applicable clause of subsection
2.07(a) above;

 

(iii) if the Loans comprising such Group are to be converted, the new Type of
Loans and, if the Loans being converted are to be Eurocurrency Loans, the
duration of the next succeeding Interest Period applicable thereto; and

 

(iv) if such Loans are to be continued as Eurocurrency Loans for an additional
Interest Period, the duration of such additional Interest Period.

 

Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definitions of the terms “Interest Period”. If
no Notice of Extension/Conversion is timely received prior

 

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to the end of an Interest Period for any Group of Eurocurrency Loans denominated
in Dollars, the Borrower shall be deemed to have elected that such Group be
converted to Base Rate Loans as of the last day of such Interest Period. If no
Notice of Extension/Conversion is received prior to the end of an Interest
Period for any Group of Eurocurrency Loans denominated in an Available Foreign
Currency, the Borrower shall be deemed to have elected that such Group be
continued for an additional Interest Period of one month.

 

(c) Notification to Lenders. Upon receipt of a Notice of Extension/Conversion
(written or telephonic as set forth above) from the Borrower pursuant to Section
2.07(a) above, the Administrative Agent shall promptly notify each relevant
Lender of the contents thereof.

 

(d) Limitation on Conversion/Continuation Options. The Borrower shall not be
entitled to elect to convert any Dollar-Denominated Loans to, or continue any
Dollar-Denominated Loans for an additional Interest Period as, Eurocurrency
Loans if the aggregate principal amount of any Group of Eurocurrency Loans
created or continued as a result of such election would be less than $1,000,000.
If an Event of Default shall have occurred and be continuing when the Borrower
delivers notice of such election to the Administrative Agent, the Borrower shall
not be entitled to elect to convert any Eurocurrency Loans to, or continue any
Eurocurrency Loans for an additional Interest Period as, Eurocurrency Loans
having an Interest Period in excess of one month.

 

(e) Certain Mandatory Conversions of Eurocurrency Loans. Upon the occurrence and
during the continuance of any Event of Default, (i) each Eurocurrency Loan
denominated in an Available Foreign Currency shall automatically, on the last
day of the then current Interest Period therefor, be redenominated into Dollars
in an amount equal to the then Dollar Equivalent thereof as of the date of
determination and (ii) the obligation of the Lenders to make, or to continue or
convert Loans into, Eurocurrency Loans denominated in an Available Foreign
Currency shall be suspended. The Administrative Agent shall promptly notify each
Lender of the aggregate Dollar Amount of any such Eurocurrency Loan which is
redenominated into Dollars and such Lender’s pro-rata share of such Loan.

 

(f) Accrued Interest. Accrued interest on a Loan (or portion thereof) being
extended or converted shall be paid by the Borrower (i) with respect to any Base
Rate Loan being converted to a Eurocurrency Loan on next Interest Payment Date
on or after the date of conversion and (ii) otherwise, on the date of extension
or conversion.

 

Section 2.08 Maturity of Loans.

 

(a) Maturity of Revolving Loans. The Revolving Loans shall mature on the
Revolving Termination Date, and any Revolving Loans and LC Obligations then
outstanding (together with accrued interest thereon and fees in respect thereof)
shall be due and payable on such date.

 

(b) Scheduled Amortization of Term Loans. The Borrower shall repay, and there
shall become due and payable (together with accrued interest thereon) on each
Principal Amortization Payment Date, (i) 1/4 of 1% of the aggregate initial
principal of the Term Loans, in the case of each of the first 21 Principal
Amortization Payment Dates and (ii) the remaining outstanding principal amount
of all

 

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Term Loans, in the case of the Term Maturity Date, and in each case the Term
Loans of each class of each Lender shall be ratably repaid.

 

Section 2.09 Prepayments.

 

(a) Voluntary Prepayments. The Borrower shall have the right voluntarily to
prepay Loans in whole or in part from time to time, subject to Section 3.05, in
the case of Eurocurrency Loans, but otherwise without premium or penalty;
provided, however, that (i) each partial prepayment of Loans shall be in a
minimum principal amount of $1,000,000 and integral multiples of $100,000 in
excess thereof, in the case of Domestic Revolving Loans and Term Loans, (ii) the
Borrower shall have given prior written or telecopy notice (or telephone notice
promptly confirmed by written or telecopy notice) to the Administrative Agent
(A) in the case of any Revolving Loan which is a Base Rate Loan, by 12:00 Noon,
on the date of prepayment, and (B) in the case of any other Loan, by 12:00 Noon
at least two Business Days prior to the date of prepayment and (iii) voluntary
prepayments of Term Loans under this Section 2.09(a) shall be applied ratably to
the Principal Amortization Payments thereof. Each notice of prepayment shall
specify the prepayment date, the principal amount remaining (in the relevant
currency) and Dollar Amount (if applicable) to be prepaid, whether the Loan to
be prepaid is a Domestic Revolving Loan, Multi-Currency Revolving Loan or Term B
Loan, the currency of the Loan to be prepaid, whether the Loan to be prepaid is
a Eurocurrency Loan or a Base Rate Loan and, in the case of a Eurocurrency Loan,
the Interest Period of such Loan. Each notice of prepayment shall be irrevocable
and shall commit the Borrower to prepay such Loan by the amount, and on the
date, stated therein. Subject to the foregoing, amounts prepaid under this
Section 2.09(a) shall be applied as the Borrower may elect; provided that if the
Borrower fails to specify the application of a voluntary prepayment, then such
prepayment shall be applied first to Domestic Revolving Loans to the full extent
thereof (without a permanent reduction in the Revolving Committed Amount), then
to the Multi-Currency Revolving Loans to the final extent thereof (without a
permanent reduction in the Multi-Currency Revolving Committed Amount), then to
Term B Loans (ratably to the remaining Principal Amortization Payments thereof),
in each case first to Base Rate Loans and then to Eurocurrency Loans of the
applicable Class in direct order of Interest Period maturity. All prepayments of
Eurocurrency Loans under this Section 2.09(a) shall be accompanied by accrued
interest on the principal amount being prepaid to the date of payment.

 

(b) Mandatory Prepayments.

 

(i) Domestic Revolving Committed Amount. If on any date the aggregate Domestic
Revolving Outstandings exceed the Domestic Revolving Committed Amount, the
Borrower shall repay, and there shall become due and payable (together with
accrued interest thereon), on such date an aggregate principal amount of
Domestic Revolving Loans equal to excess. If the outstanding Domestic Revolving
Loans have been repaid in full, the Borrower shall Cash Collateralize LC
Obligations so that, after giving effect to the repayment of Domestic Revolving
Loans and the Cash Collateralization of LC Obligations pursuant to this
subsection (i), the aggregate Domestic Revolving Outstandings do not exceed the
Domestic Revolving Committed Amount. In determining the aggregate Domestic
Revolving Outstandings for purposes of this subsection (i), LC Obligations shall
be reduced to the extent that they are Cash Collateralized as contemplated by
this subsection (i). Each prepayment of Domestic Revolving Loans required
pursuant to this subsection (i) shall be applied ratably among outstanding
Domestic Revolving Loans based on the respective amounts of principal then
outstanding. Each

 

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Cash Collateralization of LC Obligations required by this subsection (i) shall
be applied ratably among LC Obligations based on the respective amounts thereof
then outstanding.

 

(ii) Multi-Currency Revolving Committed Amount. If on any Currency Calculation
Date after giving effect to the determination of all relevant Dollar Amounts
hereunder, the aggregate Multi-Currency Revolving Outstandings exceed 105.0% of
the Multi-Currency Revolving Committed Amount, the Borrower shall repay, and
there shall become due and payable (together with accrued interest thereon), on
the second Business Day immediately succeeding such Currency Calculation Date an
aggregate Dollar Amount of Multi-Currency Revolving Loans equal to the excess of
the aggregate Multi-Currency Revolving Outstandings over 105.0% of the
Multi-Currency Revolving Committed Amount. Each prepayment of Multi-Currency
Revolving Loans required pursuant to this subsection (ii) shall be applied among
the outstanding Groups of Multi-Currency Revolving Loans as reasonably agreed
between the Borrower and the Administrative Agent (and, within each such Group,
ratably among the Multi-Currency Revolving Lenders).

 

(iii) Foreign Currency Letters of Credit. If on any Currency Calculation Date
after giving effect to the determination of all relevant Dollar Amounts
hereunder, the aggregate Foreign Currency LC Exposure exceeds 105.0% of the
Foreign Currency LC Committed Amount, the Borrower shall Cash Collateralize LC
Obligations in respect of Foreign Currency Letters of Credit so that, after
giving effect to the Cash Collateralization of LC Obligations pursuant to this
subsection (iii), the aggregate Foreign Currency LC Exposure does not exceed
105.0% of the Foreign Currency LC Committed Amount. In determining the aggregate
Foreign Currency LC Exposure for purposes of this subsection (iii), LC
Obligations shall be reduced to the extent that they are Cash Collateralized as
contemplated by this subsection (iii). Each Cash Collateralization of LC
Obligations required by this subsection (iii) shall be applied ratably among LC
Obligations in respect of Foreign Currency Letters of Credit based on the
respective amounts thereof then outstanding.

 

(iv) Excess Cash Flow. Within 150 days after the end of each fiscal year of the
Borrower (commencing with the fiscal year ending July 3, 2005), the Borrower
shall prepay the Loans and/or Cash Collateralize or pay the LC Obligations in an
aggregate Dollar Amount equal to (A) 75% of the Excess Cash Flow for such prior
fiscal year, if the Senior Leverage Ratio as of the last day of such prior
fiscal year was equal to or greater than 1.25 to 1.0, (B) 50% of the Excess Cash
Flow for such prior fiscal year, if the Senior Leverage Ratio as of the last day
of such prior fiscal year was less than 1.25 to 1.0 but equal to or greater than
0.75 to 1.0 or (C) 25% of the Excess Cash Flow for the prior fiscal year, if the
Senior Leverage Ratio as of the last day of such prior fiscal year was less than
0.75 to 1.0.

 

(v) Asset Dispositions, Casualties and Condemnations, etc. Within five Business
Days after receipt by any Group Company of proceeds from any Asset Disposition
(other than any Excluded Asset Disposition), Casualty or Condemnation, the
Borrower shall prepay the Loans and/or Cash Collateralize or pay the LC
Obligations in an aggregate Dollar Amount equal to (i) 65% of the Net Cash
Proceeds of any Foreign Asset Disposition and (ii) 100% of the Net Cash Proceeds
of any other Asset Disposition or any Casualty or Condemnation.

 

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(vi) Debt Issuances. Within five Business Days after receipt by any Group
Company of proceeds from any Debt Issuance (other than such Debt Issuance
permitted pursuant to Section 7.01 of this Agreement), the Borrower shall prepay
the Loans and/or Cash Collateralize the LC Obligations in an aggregate Dollar
Amount equal to 100% of the Net Cash Proceeds of such Debt Issuance.

 

(vii) Equity Issuances. Within five Business Days after receipt by any Group
Company of proceeds from any Equity Issuance (other than any Excluded Equity
Issuance), the Borrower shall prepay the Loans and/or Cash Collateralize the LC
Obligations in an aggregate Dollar Amount equal to (A) 50% of the Net Cash
Proceeds of such Equity Issuance, if the Senior Leverage Ratio as of the last
day of the fiscal year of the Borrower ended on or most recently preceding the
date of the receipt of such proceeds was equal to or greater than 0.75 to 1.0,
or (B) 25% of the Net Cash Proceeds of such Equity Issuance, if the Senior
Leverage Ratio as of the last day of the fiscal year of the Borrower ended on or
most recently preceding the date of the receipt of such proceeds was less than
0.75 to 1.0

 

(viii) Payments in Respect of Subordinated Debt. Immediately upon receipt by the
Administrative Agent or any Lender of any amount pursuant to the subordination
provision of any Debt of Holdings or any of its Subsidiaries that is subordinate
to the Senior Obligations, all proceeds thereof shall be applied as set forth in
subsection (ix)(B) below.

 

(ix) Application of Mandatory Prepayments. All amounts required to be paid
pursuant to this Section 2.09(b) shall be applied as follows:

 

(A) with respect to all amounts paid pursuant to Section 2.09(b)(i), (ii) or
(iii), in the order provided in such Section; and

 

(B) with respect to all amounts paid pursuant to Section 2.09(b)(iv), (v), (vi),
(vii) or (viii), (1) first, to the Term B Loans (ratably to the remaining
Principal Amortization Payments thereof) and (2) second, (x) to the Domestic
Revolving Loans (with a corresponding reduction in the Domestic Revolving
Committed Amount pursuant to Section 2.09(b)(i)), (y) then to Cash Collateralize
LC Obligations (z) then to the Multi-Currency Revolving Loans, ratably based
upon the remaining outstanding Dollar Amounts thereof (with a corresponding
reduction in the Multi-Currency Revolving Commitment).

 

(x) Order of Applications. All amounts allocated to Revolving Outstandings as
provided in this Section 2.09(b) shall be applied (A) in the case of Domestic
Revolving Outstandings, first, to Revolving Loans, and second, after all
Revolving Loans have been repaid, to Cash Collateralize or pay the LC
Obligations and (B) in the case of Multi-Currency Revolving Outstandings, to
Multi-Currency Revolving Loans; provided that any balance of such amounts
remaining after all Revolving Loans of the applicable Class have been repaid
and, if applicable, all LC Obligations have been Cash Collateralized shall be
applied pro-rata to the Term Loans and (in each case ratably to the remaining
Principal Amortization Payments thereof. Within the parameters of the
applications set forth above, prepayments of Domestic Revolving Loans and

 

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Term B Loans shall be applied first to Base Rate Loans and then, subject to
subsection (xi) below, to Eurocurrency Loans in direct order of Interest Period
maturities. All amounts allocated to Multi-Currency Revolving Outstandings as
provided in this subsection (x) shall be applied ratably to the outstanding
Multi-Currency Revolving Loans in direct order of Interest Period maturities.
All prepayments under this Section 2.09(b) shall be subject to Section 3.05. All
prepayments under this Section 2.09(b) shall be accompanied by accrued interest
on the principal amount being prepaid to the date of payment.

 

(xi) Prepayment Accounts. Amounts to be applied as provided in subsection (ix)
above to the prepayment of Domestic Revolving Loans or Term B Loans shall be
applied first to reduce outstanding Base Rate Loans of such Class. Any amounts
remaining after each such application, and any amount to be applied as provided
in subsection (ix) above to the prepayment of Multi-Currency Revolving Loans,
shall, at the option of the Borrower, be applied to prepay Eurocurrency Loans of
the relevant Class immediately and/or shall be deposited in a separate
Prepayment Account (as defined below) for the Loans of such Class. The
Administrative Agent shall apply any cash deposited in the Prepayment Account
for any Class of Loans, upon withdrawal by the Collateral Agent, to prepay
Eurocurrency Loans of such Class on the last day of their respective Interest
Periods (or, at the direction of the Borrower, on any earlier date) until all
outstanding Loans of such Class have been prepaid or until all the allocable
cash on deposit in the Prepayment Account for such Class has been exhausted.
Concurrently with such application, the aggregate amount of any interest or
profits earned on the amount so applied shall be withdrawn by the Collateral
Agent and paid to the order of the Borrower. For purposes of this Agreement, the
term “Prepayment Account” for any Class of Loans shall mean an account (which
may include the Prepayment Account established under the Security Agreement)
established by the Borrower with the Collateral Agent and over which the
Collateral Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal for application in accordance with this subsection
(xi). The Collateral Agent will, at the request of the Borrower, invest amounts
on deposit in the Prepayment Account for any Class of Loans in Cash Equivalents
that mature prior to the last day of the applicable Interest Periods of the
Eurocurrency Loans of such Class to be prepaid; provided, however, that (i) the
Collateral Agent shall not be required to make any investment that, in its sole
judgment, would require or cause the Collateral Agent to be in, or would result
in any, violation of any Law, (ii) such Cash Equivalents shall be subjected to a
first priority perfected security interest in favor of the Collateral Agent and
(iii) if any Event of Default shall have occurred and be continuing, the
selection of such Cash Equivalents shall be in the sole discretion of the
Collateral Agent. The Borrower shall indemnify the Collateral Agent for any
losses relating to such investments in Cash Equivalents so that the amount
available to prepay Eurocurrency Loans on the last day of the applicable
Interest Periods is not less than the amount that would have been available had
no investments been made pursuant thereto. Other than any interest or profits
earned on such investments, the Prepayment Accounts shall not bear interest.
Interest or profits, if any, on the investments in any Prepayment Account shall
accumulate in such Prepayment Account and be paid to the Borrower as provided
above. If the maturity of the Loans has been accelerated pursuant to Section
8.02, the Administrative Agent may, in its sole discretion, cause the Collateral
Agent to withdraw amounts on deposit in the Prepayment Account for any Class of
Loans and apply such funds to satisfy any of the Senior Obligations related to
such Class of Loans.

 

(xii) Payments Cumulative. Except as otherwise expressly provided in this
Section 2.09, payments required under any subsection or clause of this Section
2.09 are in addition to payments made or required under any other subsection or
clause of this Section 2.09.

 

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(xiii) Notice. The Borrower shall give to the Administrative Agent and the
Lenders at least five Business Days’ prior written or telecopy notice of each
and every event or occurrence requiring a prepayment under Section 2.09(b)(iv),
(v), (vi), (vii) or (viii), including the amount of Net Cash Proceeds expected
to be received therefrom and the expected schedule for receiving such proceeds;
provided, however, that in the case of any prepayment event consisting of a
Casualty or Condemnation, the Borrower shall give such notice within five
Business Days after the occurrence of such event.

 

Section 2.10 Adjustment of Commitments.

 

(a) Optional Termination or Reduction of Commitments (Pro-Rata). The Borrower
may from time to time permanently reduce or terminate the Domestic Revolving
Committed Amount and/or the Multi-Currency Revolving Committed Amount in whole
or in part (in minimum aggregate Dollar Amounts of $1,000,000 or in integral
multiples of $1,000,000 in excess thereof, (or, if less, the full remaining
amount of the then applicable Domestic Revolving Committed Amount and/or the
Multi-Currency Revolving Committed Amount) upon two Business Days’ prior written
or telecopy notice to the Administrative Agent; provided, however, that no such
termination or reduction shall be made which would cause (i) the Domestic
Revolving Outstandings to exceed the Domestic Revolving Committed Amount as so
reduced, (ii) the Multi-Currency Revolving Outstandings to exceed the
Multi-Currency Revolving Committed Amount as so reduced or (iii) the Aggregate
Revolving Outstandings to exceed the Aggregate Revolving Committed Amount, as so
reduced unless, concurrently with such termination or reduction, the Loans of
the applicable Class are repaid or, if no Loans of the applicable Class are
outstanding, LC Obligations are Cash Collateralized to the extent necessary to
eliminate such excess. The Administrative Agent shall promptly notify each
affected Lender of the receipt by the Administrative Agent of any notice from
the Borrower pursuant to this Section 2.10(a). Any partial reduction of the
Domestic Revolving Committed Amount, and/or the Multi-Currency Revolving
Committed Amount pursuant to this Section 2.10(a) shall be applied to the
Revolving Commitments of the Lenders of the applicable Class pro-rata based upon
their respective Domestic Revolving Commitment Percentages or Multi-Currency
Revolving Commitment Percentages, as applicable. The Borrower shall pay to the
Administrative Agent for the account of the Lenders in accordance with the terms
of Section 2.11, on the date of each termination or reduction of the Domestic
Revolving Committed Amount and/or the Multi-Currency Revolving Committed Amount,
any fees accrued through the date of such termination or reduction on the amount
of the Domestic Revolving Committed Amount, and/or the Multi-Currency Revolving
Committed Amount so terminated or reduced.

 

(b) Mandatory Reductions. On any date that any Revolving Loans are required to
be prepaid and/or LC Obligations are required to be Cash Collateralized pursuant
to the terms of Section 2.09(b)(iv), (v), (vi), (vii) or (viii) (or would be so
required if any Revolving Loans or LC Obligations were outstanding), the
Domestic Revolving Committed Amount and/or the Multi-Currency Revolving
Committed Amount, as applicable, shall be automatically and permanently reduced
by the total amount of such required prepayments and cash collateral (and, in
the event that the amount of any payment referred to in Section 2.09(b)(iv),
(v), (vi), (vii), or (viii) which is allocable to the Domestic Revolving
Outstandings or Multi-Currency Revolving Outstandings exceeds the aggregate
outstanding Dollar Amount thereof, the Domestic Revolving Committed Amount
and/or the Multi-Currency Revolving Committed Amount, as applicable, shall be
further reduced by 100% of such excess).

 

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(c) Termination. The Revolving Commitments of the Lenders and the LC Commitments
of the Issuing Lenders shall terminate automatically on the Revolving
Termination Date. The Term B Commitments of the Lenders shall terminate
automatically immediately after the making of the Term B Loans on the Closing
Date.

 

(d) Optional Termination of Commitments (Non-Pro-Rata). If (i) any Lender has
demanded compensation or indemnification pursuant to Section 3.01 or Section
3.04, (ii) the obligation of any Lender to make Eurocurrency Loans has been
suspended pursuant to Section 3.02, (iii) any Lender is a Defaulting Lender or
(iv) any Lender has failed to consent to a proposed amendment, waiver, discharge
or termination which pursuant to the terms of Section 10.03 or any other
provision of any Senior Finance Document requires the consent of more than the
Required Lenders and with respect to which the Required Lenders shall have
granted their consent, the Borrower shall have the right, if no Default or Event
of Default then exists, to (i) remove such Lender by terminating such Lender’s
Commitment in full or (ii) replace such Lender by causing such Lender to assign
its Commitment to one or more existing Lenders or Eligible Assignees pursuant to
Section 10.06; provided, however, that if the Borrower elects to exercise such
right with respect to any Lender pursuant to clause (i) or (ii) above, it shall
be obligated to remove or replace, as the case may be, all Lenders that have
similar requests then outstanding for compensation pursuant to Section 3.01 or
3.04 or whose obligation to make Eurocurrency Loans has been similarly
suspended. The replacement of a Lender pursuant to this Section 2.10(d) shall be
effective on the date of notice of such replacement to the Lenders through the
Administrative Agent (the “Replacement Date”), subject to the satisfaction of
the following conditions:

 

(i) each replacement Lender and/or Eligible Assignee, and the Administrative
Agent acting on behalf of each Lender subject to replacement, shall have
satisfied the conditions to an Assignment and Acceptance set forth in Section
10.06(b) and, in connection therewith, the replacement Lender(s) and/or Eligible
Assignee(s) shall pay:

 

(A) to each Lender subject to replacement an amount equal in the aggregate to
the sum of (x) the Dollar Amount of, and the Dollar Amount of all accrued but
unpaid interest on, its outstanding Loans, (y) the Dollar Amount of all LC
Disbursements that have been funded by (and not reimbursed to) it under Section
2.05, together with all accrued but unpaid interest with respect thereto and (z)
all accrued but unpaid fees owing to it pursuant to Section 2.11; and

 

(B) to the Issuing Lenders an amount equal to the aggregate Dollar Amount owing
by the replaced Lenders to the Issuing Lenders as reimbursement pursuant to
Section 2.05, to the extent such amount was not theretofore funded by such
replaced Lenders; and

 

(ii) the Borrower shall have paid to the Administrative Agent for the account of
each replaced Lender an amount equal to all obligations owing to such replaced
Lenders by the Borrower pursuant to this Agreement and the other Senior Finance
Documents (other than those obligations of the Borrower referred to in clause
(i)(A) above).

 

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In the case of the removal of a Lender pursuant to this Section 2.10(d), upon
(i) payment by the Borrower to the Administrative Agent for the account of the
Lender subject to such removal of an amount equal to the Dollar Amount of the
sum of (A) the aggregate principal amount of all Loans and LC Obligations held
by such Lender and (B) all accrued interest, fees and other amounts owing to
such Lender hereunder, including, without limitation, all amounts payable by the
Borrower to such Lender under Article III or Sections 10.04 and 10.05, and (ii)
provision by the Borrower to each Issuing Lender of appropriate assurances and
indemnities (which may include letters of credit) as each may reasonably require
with respect to any continuing obligation of such removed Lender to purchase
Participation Interests in any LC Obligations then outstanding, such Lender
shall, without any further consent or other action by it, cease to constitute a
Lender hereunder; provided that the provisions of this Agreement (including,
without limitation, the provisions of Article III and Sections 10.04 and 10.05)
shall continue to govern the rights and obligations of a removed Lender with
respect to any Loans made, any Letters of Credit issued or any other actions
taken by such removed Lender while it was a Lender.

 

(e) General. The Borrower shall pay to the Administrative Agent for the account
of the Lenders in accordance with the terms of Section 2.11, on the date of each
termination or reduction of the Revolving Committed Amount or the Multi-Currency
Revolving Committed Amount, as applicable, the Commitment Fee accrued through
the date of such termination or reduction on the Dollar Amount of the Aggregate
Revolving Committed Amount so terminated or reduced.

 

(f) Designation of Multi-Currency Revolving Commitments.

 

(i) The Borrower shall have the right at any time on or after the Closing Date
to increase the Multi-Currency Revolving Committed Amount hereunder by causing
one or more Eligible Assignees to become a Multi-Currency Revolving Lender under
this Agreement or by causing one or more existing Lenders to designate all or a
portion of its then current Domestic Revolving Commitment as a Multi-Currency
Revolving Commitment or to increase the amount of such Lender’s existing
Multi-Currency Revolving Commitment; provided that the Multi-Currency Revolving
Commitment of each Eligible Assignee or Lender and any increase in the amount of
the Multi-Currency Revolving Commitment of each existing Lender shall be in a
Dollar Amount equal to $5,000,000 or any larger multiple of $1,000,000; and
provided, further, that no Lender shall at any time be required to agree to a
request of the Borrower to designate any portion of its Domestic Revolving
Commitment as, or to increase, a Multi-Currency Revolving Commitment. On the
Multi-Currency Commitment Increase Date, the Multi-Currency Committed Amount
shall be increased and the Domestic Revolving Committed Amount shall be
decreased by the applicable amount referred to above, and, if one or more
Domestic Revolving Lenders shall have redesignated all or any portion of their
respective Domestic Revolving Commitments as Multi-Currency Revolving
Commitments, the Domestic Revolving Commitment Percentages of the Domestic
Revolving Lenders shall be adjusted appropriately to reflect such
redesignations.

 

(ii) Any increase in the aggregate Multi-Currency Revolving Committed Amount
pursuant to subsection (e)(i) shall be effective only upon the execution and
delivery by each Eligible Assignee or existing Lender, as the case may be, to
the Borrower and the Administrative Agent at least five Business Days before any
such increase is to become effective of an instrument satisfactory to the
Borrower and the Administrative Agent:

 

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(A) in the case of an Eligible Assignee, setting forth the amount of its
Multi-Currency Revolving Commitment and the date upon which it is to become
effective (the “Multi-Currency Commitment Increase Date”) and containing its
agreement to become, and to perform all the obligations of, a Lender hereunder;
and

 

(B) in the case of an existing Lender, setting forth the amount by which its
Domestic Revolving Commitment hereunder is to be designated as a Multi-Currency
Revolving Commitment or by which its existing Multi-Currency Revolving
Commitment is to be increased and the Multi-Currency Commitment Increase Date
applicable thereto.

 

Section 2.11 Fees.

 

(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the
account of each Revolving Lender a fee (the “Commitment Fee”) on such Lender’s
Aggregate Revolving Commitment Percentage of the daily Unused Revolving
Commitment Amount, computed at a per annum rate for each day equal to 0.50%. The
Commitment Fee shall commence to accrue on the Closing Date and shall be due and
payable in arrears on the last Business Day of each March, June, September and
December (and any date that the Aggregate Revolving Committed Amount is reduced
as provided in Section 2.10(a) or (b) and the Revolving Termination Date for the
applicable Class) for the quarter or portion thereof ending on each such date,
beginning with the first of such dates to occur after the Closing Date.

 

(b) Fees In Respect of Letters of Credit.

 

(i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent
for the account of each Domestic Revolving Lender a fee (the “Letter of Credit
Fee”) on such Lender’s Domestic Revolving Commitment Percentage of the average
daily maximum amount available to be drawn under each such Letter of Credit
computed at a per annum rate for each day from the date of issuance to the date
of expiration equal to the Applicable Margin for Letter of Credit Fees in effect
from time to time. The Letter of Credit Fee will be payable quarterly in arrears
on the last Business Day of each March, June, September and December for the
immediately preceding quarter (or portion thereof), beginning with the first of
such dates to occur after the date of issuance of such Letter of Credit, and on
the Revolving Termination Date for Domestic Revolving Loans.

 

(ii) Fronting Fees. The Borrower shall pay directly to each Issuing Lender for
its own account a fronting fee with respect to each Letter of Credit, in an
amount to be agreed between the Borrower and the relevant Issuing Lender, such
fronting fee to be due and payable quarterly in arrears on the last Business Day
of each March, June, September and December, commencing with the first such date
after the issuance of such Letter of Credit, and on the Revolving Termination
Date for Domestic Revolving Loans.

 

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(iii) Issuing Lender Fees. In addition to the Letter of Credit Fee payable
pursuant to clause (i) above and any fronting fees payable pursuant to clause
(ii) above, the Borrower promises to pay to the Issuing Lender for its own
account without sharing by the other Lenders the letter of credit fronting and
negotiation fees agreed to by the Borrower and the Issuing Lender from time to
time and the customary charges from time to time of the Issuing Lender with
respect to the issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, each Letter of Credit (collectively, the
“Issuing Lender Fees”).

 

(iv) Computation of Fees With Respect to Foreign Currency Letters of Credit. For
the purposes of calculating the average daily maximum amount available to be
drawn under any Foreign Currency Letter of Credit for any period under Section
2.12(b)(i) above, such average daily maximum amount shall be calculated by
multiplying (A) the average daily balance of such Foreign Currency Letter of
Credit (expressed in the currency in which such Foreign Currency Letter of
Credit is denominated) by (B) the Exchange Rate for each relevant Available
Foreign Currency in effect on the last Business Day of such period or by such
other reasonable method that the Administrative Agent deems appropriate.

 

(v) Computation of Certain Fees after Default. Upon the occurrence and during
the continuance of a payment or insolvency Event of Default under Section
8.01(a), any overdue Letter of Credit Fees payable under subsection (i) above
shall be computed at a rate per annum equal to the relevant “Applicable Margin
for Letter of Credit Fee” as set forth in the applicable table in the definition
of “Applicable Margin” in Section 1.01 hereof plus 2.00%.

 

Section 2.12 Pro-Rata Treatment. Except to the extent otherwise provided herein:

 

(a) Loans. Each Borrowing, each payment or prepayment of principal of or
interest on any Loan, each payment of fees (other than the Issuing Lender Fees
retained by an Issuing Lender for its own account and the administrative fees
retained by the Agents for their own account), each reduction of the Domestic
Revolving Committed Amount or Multi-Currency Revolving Committed Amount and each
conversion or continuation of any Loan, shall be allocated pro-rata among the
relevant Lenders in accordance with the respective Domestic Revolving Commitment
Percentages, Multi-Currency Revolving Commitment Percentages and Term B
Commitment Percentages, as applicable, of such Lenders (or, if the Commitments
of such Lenders have expired or been terminated, in accordance with the
respective principal amounts of the outstanding Loans of the applicable Class
and Participation Interests of such Lenders); provided that, in the event any
amount paid to any Lender pursuant to this subsection (a) is rescinded or must
otherwise be returned by the Administrative Agent, each Lender shall, upon the
request of the Administrative Agent, repay to the Administrative Agent the
amount so paid to such Lender, with interest for the period commencing on the
date such payment is returned by the Administrative until the date the
Administrative Agent receives such repayment at a rate per annum equal to,
during the period to but excluding the date two Business Days after such
request, the Federal Funds Rate (in the case of amounts denominated in Dollars)
or (in all other cases) the rate determined by the Administrative Agent as its
cost of funds for the relevant currency borrowed in the relevant interbank
market, and thereafter, the Base Rate or Eurocurrency Rate for one-day deposits
in the applicable currency, as applicable, plus 2.00% per annum.

 

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(b) Letters of Credit. Each payment of LC Obligations shall be allocated to each
Domestic Revolving Lender pro-rata in accordance with its Domestic Revolving
Commitment Percentage; provided that, if any Domestic Revolving Lender shall
have failed to pay its applicable pro-rata share of any LC Disbursement, then
any amount to which such Domestic Revolving Lender would otherwise be entitled
pursuant to this subsection (b) shall instead be payable to the Issuing Lender;
provided, further, that in the event any amount paid to any Domestic Revolving
Lender pursuant to this subsection (b) is rescinded or must otherwise be
returned by the Issuing Lender, each Domestic Revolving Lender shall, upon the
request of the Issuing Lender, repay to the Administrative Agent for the account
of the Issuing Lender the amount so paid to such Domestic Revolving Lender, with
interest for the period commencing on the date such payment is returned by the
Issuing Lender until the date the Issuing Lender receives such repayment at a
rate per annum equal to, during the period to but excluding the date two
Business Days after such request, the Federal Funds Rate, and thereafter, the
Base Rate plus 2.00% per annum.

 

Section 2.13 Sharing of Payments. The Lenders agree among themselves that,
except to the extent otherwise provided herein, if any Lender shall obtain
payment in respect of any Loan, unreimbursed LC Disbursements or any other
obligation owing to such Lender under this Agreement through the exercise of a
right of setoff, banker’s lien or counterclaim, or pursuant to a secured claim
under Section 506 of the Bankruptcy Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, in excess of its pro-rata share of such payment as provided for in
this Agreement, such Lender shall promptly pay in cash or purchase from the
other Lenders a participation in such Loans, unreimbursed LC Disbursements and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this
Agreement; provided that nothing in this Section 2.13 shall impair the right of
any Lender to exercise any right of set-off or counterclaim it may have for
payment of indebtedness of the Borrower other than its indebtedness hereunder.
The Lenders further agree among themselves that if payment to a Lender obtained
by such Lender through the exercise of a right of setoff, banker’s lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise be
restored, each Lender which shall have shared the benefit of such payment shall,
by payment in cash or a repurchase of a participation theretofore sold, return
its share of that benefit (together with its share of any accrued interest
payable with respect thereto) to each Lender whose payment shall have been
rescinded or otherwise restored. Holdings and the Borrower agree that any Lender
so purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker’s lien or counterclaim,
with respect to such participation as fully as if such Lender were a holder of
such Loan, LC Obligation or other obligation in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section 2.13 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders under this Section 2.13 to share in the benefits of any recovery
on such secured claim.

 

Section 2.14 Payments; Computation.

 

(a) Payments by the Borrower. Each payment of principal of and interest on
Loans, LC Obligations and fees hereunder (other than fees payable directly to
the Issuing Lenders) shall be paid not later than 2:00 P.M. on the date when
due, in the applicable currency and in funds immediately available to the
Administrative Agent at the account designated by it by notice to the Borrower.
Each such payment shall be made irrespective of any set-off, counterclaim or
defense to payment which might

 

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in the absence of this provision be asserted by the Borrower or any Affiliate
against any Agent or any Lender. Payments received after 2:00 P.M. shall be
deemed to have been received on the next Business Day. The Borrower shall, at
the time it makes any payments under this Agreement, specify to the
Administrative Agent the Loan, Letters of Credit, fees or other amounts payable
by the Borrower hereunder to which such payment is to be applied (and if any
such specified application would be inconsistent with the terms hereof, the
Administrative Agent shall, subject to Section 2.12, distribute such payment to
the Lenders in such manner as the Administrative Agent may deem reasonably
appropriate). The Administrative Agent will distribute such payments to the
applicable Lenders on the date of receipt thereof, if such payment is received
prior to 2:00 P.M.; otherwise, the Administrative Agent may, in its sole
discretion, distribute such payment to the applicable Lenders on the date of
receipt thereof or on the immediately succeeding Business Day. Whenever any
payment hereunder shall be due on a day which is not a Business Day, the date
for payment thereof shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case the date for
payment thereof shall be the next preceding Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time. The Borrower hereby authorizes
and directs each Agent to debit any account maintained by the Borrower for such
purpose with such Agent to pay when due any amounts required to be paid from
time to time under this Agreement as directed at such time(s) by the Borrower.
Unless converted to Dollars pursuant to the express terms of this Agreement, all
payments in respect of the principal of or interest on Loans denominated in any
Available Foreign Currency, and all reimbursement of amounts drawn under Letters
of Credit denominated in an Available Foreign Currency, shall be made by the
Borrower in such relevant currency.

 

(b) Distributions by the Administrative Agent. Unless the Administrative Agent
shall have received notice (written or telephonic) from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full, the Administrative Agent may assume that the
Borrower has made such payment in full to the Administrative Agent on such date,
and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent that the Borrower shall not have so made
such payment, each Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at (i) the
Federal Funds Rate (if such amount was distributed in Dollars) or (ii) the rate
per annum at which one day deposits in the relevant amount are offered to the
Administrative Agent in the appropriate interbank market for such day (if such
amount was distributed in an Available Foreign Currency).

 

(c) Computations. Except for interest on Base Rate Loans which shall be computed
on the basis of a 365 or 366 day year as the case may be (unless the Base Rate
is determined by reference to the Federal Funds Rate), all computations of
interest and fees hereunder shall be made on the basis of the actual number of
days elapsed over a year of 360 days. Interest shall accrue from and including
the date of borrowing (or continuation or conversion) but excluding the date of
payment.

 

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

Section 3.01 Taxes.

 

(a) Payments Net of Certain Taxes. Any and all payments by any Credit Party to
or for the account of any Lender or any Agent hereunder or under any other
Senior Finance Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding any
and all Excluded Taxes (all such non-Excluded Taxes being hereinafter referred
to as “Taxes”). If any Credit Party shall be required by law to deduct or
withhold any Taxes from or in respect of any sum payable under this Agreement or
any other Senior Finance Document to any Lender or any Agent, (i) the sum
payable shall be increased as necessary so that after making all required
deductions and withholdings (including deductions and withholdings applicable to
additional sums payable under this Section 3.01) such Lender or such Agent
receives an amount equal to the sum it would have received had no such
deductions or withholdings been made, (ii) such Credit Party shall make such
deductions and withholdings, (ii) such Credit Party shall pay the full amount
deducted or withheld to the relevant taxation authority or other authority in
accordance with applicable law and (iv) such Credit Party shall furnish to the
Administrative Agent, at the Administrative Office, the original or a certified
copy of a receipt, if any, evidencing payment thereof or other documentation
evidencing such payment.

 

(b) Other Taxes. In addition, the Borrower agrees to pay any and all present or
future stamp or documentary, excise or property taxes or similar charges or
levies (including mortgage recording taxes) which arise from any payment made by
it under this Agreement or any other Senior Finance Document or from the
execution, delivery, registration or enforcement of, or otherwise with respect
to, this Agreement or any other Senior Finance Document (hereinafter referred to
as “Other Taxes”).

 

(c) Additional Taxes. The Borrower agrees to indemnify each Lender and each
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.01), as applicable, whether or not
correctly or legally asserted, paid by such Lender or such Agent (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto; provided, however, that if the Borrower
reasonably believes that such Taxes or Other Taxes were not correctly or legally
asserted, the Administrative Agent or the Lender, as the case may be, will use
reasonable efforts to cooperate with the Borrower to obtain a refund of such
Taxes or other Taxes so long as such efforts would not, in the sole discretion
of the Administrative Agent or the Lender, as the case may be, result in any
additional costs, expenses or risks or be otherwise disadvantageous to it.

 

(d) U.S. Tax Forms and Certificates. Each Lender organized under the laws of a
jurisdiction outside the United States (a “Non-U.S. Lender”), on or prior to the
date of its execution and delivery of this Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter as required by law, shall provide the Borrower and the Administrative
Agent with (i) Internal Revenue Service Form W-8 BEN, W-8 IMY or W-8 ECI, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an

 

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income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, and/or (ii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Senior Finance
Documents. Should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required to be delivered hereunder, the Borrower shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.

 

(e) Obligations in Respect of Non-U.S. Lenders. The Borrower shall not be
required to indemnify any Non-U.S. Lender or to pay any additional amounts to
any Non-U.S. Lender, in respect of Taxes (other than Other Taxes) pursuant to
subsections (a) above to the extent that the obligation to withhold amounts with
respect to Taxes (other than Other Taxes) existed on the date such Non-U.S.
Lender became a party to this Agreement (or, in the case of a participant, on
the date such participant acquired its participation interest) or, with respect
to payments to a new Applicable Lending Office, the date such Non-U.S. Lender
designated such new Applicable Lending Office with respect to a Loan; provided,
however, that this subsection (e) shall not apply (i) to any participant or new
Applicable Lending Office that becomes a participant or new Applicable Lending
Office as a result of an assignment, participation, transfer or designation made
at the request of the Borrower and (ii) to the extent the indemnity payment or
additional amounts any participant, or any Lender acting through a new
Applicable Lending Office, would be entitled to receive (without regard to this
subsection (e)) do not exceed the indemnity payment or additional amounts that
the Person making the assignment, participation or transfer to such participant,
or Lender (or participant) making the designation of such new Applicable Lending
Office, would have been entitled to receive in the absence of such assignment,
participation, transfer or designation.

 

(f) Mitigation. If any Credit Party is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 3.01, then such Lender
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office or to file or deliver to the Borrower any certificate
or document so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, filing or delivery, in the judgment of such
Lender, is not otherwise disadvantageous to such Lender.

 

(g) Tax Receipts. Within thirty days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent the original or a certified
copy of a receipt evidencing such payment (to the extent the Borrower receives a
receipt for such payment).

 

(h) Refunds or Credits. If any Lender or Agent (i) receives a refund from a
taxation authority in respect of any tax for which it has been indemnified by a
Credit Party or with respect to which a Credit Party has paid additional amounts
pursuant to this Section 3.01 or (ii) claims any credit or other tax benefit
(such credit to include any increase in any foreign tax credit) with respect to
any tax for which it has been indemnified by a Credit Party or with respect to
which a Credit Party has paid additional amounts pursuant to this Section 3.01,
which refund, credit or other tax benefit in the sole judgment of such Lender or
Agent is directly attributable to any such indemnified tax or additional
amounts, such Lender or Agent shall (within 30 days from the date of such
receipt) pay over to such

 

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Credit Party the amount of such refund, credit or other tax benefit (but only to
the extent of indemnity payments made, or additional amounts paid, by such
Credit Party with respect to the tax giving rise to such refund or credit), net
of all out-of-pocket expenses (including any taxes on a refund or on interest
received or credited) which such Lender or Agent certifies that it has
reasonably determined to have been incurred in connection with obtaining such
refund, credit or other tax benefit; provided, however, that (i) each Credit
Party shall repay, upon the request of such Lender or Agent, the amount paid
over to such Credit Party (plus penalties, interest or other charges) to such
Lender or Agent in the event such Lender or Agent is required to repay such
refund or credit to such tax authority, (ii) such Lender or Agent, as the case
may be, shall have no obligation to cooperate with respect to any contest (or
continue to cooperate with respect to any contest), or to seek or claim any
refund, credit or other tax benefit if such Lender or Agent determines that its
interest would be adversely affected by so cooperating (or continuing to
cooperate) or by seeking or claiming any such refund, credit or other tax
benefit and (iii) no Credit Party shall have any right to examine the tax
returns or other records of any Lender or Agent or to obtain any information
with respect thereto by reason of the provisions of this Section 3.01 or any
judgment or determination made by any Lender or Agent pursuant to this Section
3.01.

 

Section 3.02 Change in Law, Etc. If, on or after the date of this Agreement, (i)
the adoption of any applicable Law, or any change in any applicable Law, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of Law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible (A) for any Lender (or its Applicable Lending Office) to make,
maintain or fund any of its Eurocurrency Loans or (B) for any Issuing Lender to
issue Letters of Credit denominated in an Available Foreign Currency or (ii)
there shall have occurred any change in national or international financial,
political or economic conditions (including the imposition of or any change in
exchange controls) or currency exchange rates that would make it impracticable
(A) for any Lender (or its Applicable Lending Office) to make, maintain or fund
any of its Eurocurrency Loans or (B) for any Issuing Lender to issue Letters of
Credit denominated in an Available Foreign Currency, and, in each such case, the
affected Lender shall so notify the Administrative Agent, the Administrative
Agent shall forthwith give notice thereof to the other Lenders and the Borrower,
whereupon, until each affected Lender notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, (i) the obligation of each affected Lender to make Eurocurrency
Loans in the affected currency or currencies, or to convert outstanding Loans
into Eurocurrency Loans in the affected currency or currencies, shall be
suspended and (ii) the obligation of the affected Issuing Lender to issue
Letters of Credit in the affected Agreed Foreign Currency or Currencies shall be
suspended. Before giving any notice to the Administrative Agent pursuant to this
Section 3.02, such Lender shall designate a different Applicable Lending Office
if such designation will avoid the need for giving such notice and will not, in
the judgment of such Lender, be otherwise disadvantageous to such Lender. If
such notice is given, each Eurocurrency Loan of such Lender in the affected
currency or currencies then outstanding shall be converted (at the Dollar
Equivalent on the date of conversion, in the case of a Loan denominated in
currency other than Dollars) to a Dollar-Denominated Base Rate Loan either (i)
on the last day of the then current Interest Period applicable to such
Eurocurrency Loan, if such Lender may lawfully continue to maintain and fund
such Loan to such day or (ii) immediately, if such Lender shall determine that
it may not lawfully continue to maintain and fund such Loan to such day.

 

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Section 3.03 Basis for Determining Interest Rate Inadequate or Unfair. If on or
prior to the first day of any Interest Period for any Eurocurrency Borrowing:

 

(i) the Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the applicable
Eurocurrency Rate for such Interest Period; or

 

(ii) Lenders having 50% or more of the aggregate amount of the Commitments of
the relevant Class advise the Administrative Agent that the Eurocurrency Rate as
determined by the Administrative Agent will not adequately and fairly reflect
the cost to such Lenders of funding their Eurocurrency Loans included in such
Borrowing for such Interest Period; or

 

(iii) the Administrative Agent reasonably determines (which determination shall
be conclusive) that deposits in the principal amounts of the Loans comprising
such Borrowing and in the currency in which such Loans are to be denominated are
not generally available in the relevant market;

 

the Administrative Agent shall forthwith give notice thereof to the Borrower and
the relevant Lenders, whereupon, until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
(i) the obligations of the Lenders to make Eurocurrency Loans of such Class or
in the affected currency, or to continue or convert outstanding Loans as or into
Eurocurrency Loans of such Class or in the affected currency, shall be suspended
and (ii) each outstanding Eurocurrency Loan shall be converted (in the case of a
Loan denominated in a currency other than Dollars, at the then current Dollar
Equivalent) into a Dollar-Denominated Base Rate Loan on the last day of the then
current Interest Period applicable thereto. Unless the Borrower notifies the
Administrative Agent at least two Business Days before the date of any
Eurocurrency Borrowing for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall instead be made
in Dollars in the same aggregate Dollar Amount as the requested Borrowing and
shall bear interest for each day from and including the first day to but
excluding the last day of the Interest Period applicable thereto at the rate
applicable to Revolving Base Rate Loans for such day.

 

Section 3.04 Increased Costs and Reduced Return.

 

(a) If on or after the date hereof, the adoption of or any change in any
applicable Law or in the interpretation or application thereof applicable to any
Lender (or its Applicable Lending Office), or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of Law) from any central bank or other Governmental Authority, in each
case made subsequent to the Effective Date (or, if later, the date on which such
Lender becomes a Lender):

 

(i) shall subject such Lender (or its Applicable Lending Office) to any tax of
any kind whatsoever with respect to any Letter of Credit, any Eurocurrency Loans
made by it or any of its Notes or its obligation to make Eurocurrency Loans or
to participate in Letters of Credit, or change the basis of taxation of payments
to such Lender (or its Applicable Lending Office) in respect thereof (except for
(A) Taxes and Other Taxes covered by Section 3.01

 

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(including Taxes imposed solely by reason of any failure of such Lender to
comply with its obligations under Section 3.01(d)) and (B) Excluded Taxes);

 

(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender (or
its Applicable Lending Office) which is not otherwise included in the
determination of the Eurocurrency Rate hereunder; or

 

(iii) shall impose on such Lender (or its Applicable Lending Office) any other
condition (excluding any tax of any kind whatsoever);

 

and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing or
maintaining any Eurocurrency Loans or issuing or participating in Letters of
Credit or to reduce any amount receivable hereunder in respect thereof, then, in
any such case, upon notice to the Borrower from such Lender, through the
Administrative Agent, in accordance herewith, the Borrower shall be obligated to
pay such Lender, within 10 Business Days of its demand, any additional amounts
necessary to compensate such Lender on an after-tax basis (after taking into
account applicable deductions and credits in respect of the amount indemnified)
for such increased cost or reduced amount receivable.

 

(b) If any Lender shall have determined that the adoption or the becoming
effective of, or any change in, or any change by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable Law regarding capital adequacy, or compliance by such Lender, or its
parent corporation, with any request or directive regarding capital adequacy
(whether or not having the force of Law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender’s (or parent corporation’s) capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender, or its parent corporation, could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender’s (or parent corporation’s) policies with respect to capital adequacy),
then, upon notice from such Lender to the Borrower, the Borrower shall be
obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for such
reduction; provided that the Borrower shall not be required to compensate any
Lender pursuant to subsection (a) above or this subsection (b) for any
additional costs or reductions suffered more than 180 days prior to the date
such Lender notifies the Borrower of the circumstances giving rise to such
additional costs or reductions and of such Lender’s intentions to claim
compensation therefor, and provided further that, if the Change in Law or in the
interpretation or administration thereof giving rise to such additional costs or
reductions is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof. Each determination
by any such Lender of amounts owing under this Section 3.04 shall, absent
manifest error, be conclusive and binding on the parties hereto.

 

(c) A certificate in reasonable detail of each Lender setting forth such amount
or amounts as shall be necessary to compensate such Lender or its holding
company as specified in subsection (a) or (b) above, as the case may be, shall
be delivered to the Borrower and shall be conclusive

 

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absent manifest error. The Borrower shall pay each Lender or the Issuing Lender
the amount shown as due on any such certificate delivered by it within 10
Business Days after receipt of the same.

 

(d) Promptly after any Lender becomes aware of any circumstance that will, in
its reasonable judgment, result in a request for increased compensation pursuant
to this Section 3.04, such Lender shall notify the Borrower thereof. Failure on
the part of any Lender so to notify the Borrower or to demand compensation for
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver of
such Lender’s right to demand compensation with respect to such period or any
other period, except as expressly otherwise provided above. The protection of
this Section 3.04 shall be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed.

 

Section 3.05 Funding Losses. The Borrower shall indemnify each Lender against
any loss or expense (but excluding in any event loss of anticipated profit)
which such Lender may sustain or incur as a consequence of (i) any failure by
the Borrower to fulfill on the date of any Borrowing hereunder the applicable
conditions set forth in Article IV, (ii) any failure by the Borrower to borrow
or to refinance, convert or continue any Loan hereunder after irrevocable notice
of such Borrowing, refinancing, conversion or continuation has been given
pursuant to Section 2.02 or 2.07, (iii) any payment, prepayment or conversion of
a Eurocurrency Loan, whether voluntary or involuntary, pursuant to any other
provision of this Agreement or otherwise made on a date other than the last day
of the Interest Period applicable thereto, or (iv) the assignment of any
Eurocurrency Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.10(d),
including, in each such case, any loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain such Loan or any part thereof
as a Eurocurrency Loan. Such loss or reasonable expense (other than loss of
anticipated profits) shall include an amount equal to the excess, if any, as
reasonably determined by such Lender, of (i) its cost of obtaining the funds for
the Loan being paid, prepaid, converted, not borrowed, redenominated or assigned
(based on the applicable Eurocurrency Rate), for the period from the date of
such payment, prepayment, conversion, failure to borrow, convert or continue to
the last day of the Interest Period for such Loan (or, in the case of a failure
to borrow, the Interest Period for such Loan which would have commenced on the
date of such failure to borrow, convert or continue), redenomination or
assignment over (ii) the amount of interest at the then current Eurocurrency
Rate (as reasonably determined by such Lender) that would be realized by such
Lender in reemploying the funds so paid, prepaid, converted, not borrowed,
converted or continued for such period or Interest Period, redenomination or
assignment, as the case may be. A certificate of any Lender setting forth any
amount or amounts which such Lender is entitled to receive pursuant to this
Section 3.05 shall be delivered to the Borrower and shall be conclusive absent
manifest error.

 

Section 3.06 Base Rate Loans Substituted for Affected Eurocurrency Loans. If (i)
the obligation of any Lender to make, or to continue or convert outstanding
Loans as or to, Eurocurrency Loans in one or more currencies has been suspended
pursuant to Section 3.02 or (ii) any Lender has demanded compensation under
Section 3.01 or 3.04 with respect to its Eurocurrency Loans denominated in any
currency, and in any such case the Borrower shall, by at least five Business
Days’ prior notice to such Lender through the Administrative Agent, have elected
that the provisions of this Section 3.06 shall apply to such Lender, then,
unless and until such Lender notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist, all Loans
which would otherwise be made by such Lender as (or continued as or converted
to) Eurocurrency Loans

 

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in the affected currency or currencies shall instead be Dollar-Denominated Loans
bearing interest at the Base Rate then in effect for Revolving Loans (in the
case of Loans denominated in a currency other than Dollars, in the same Dollar
Amount as the Eurocurrency Loan that such Lender would otherwise have made in
the applicable Available Foreign Currency) (on which interest and principal
shall be payable contemporaneously with the related Eurocurrency Loans of the
other Lenders). If such Lender notifies the Borrower that the circumstances
giving rise to such suspension or demand for compensation no longer exist, the
principal amount of each such Loan shall be converted into a Eurocurrency Loan
of the relevant Class on the first day of the next succeeding Interest Period
applicable to the related Eurocurrency Loans of the other Lenders. If such Loan
is converted into a Eurocurrency Loan denominated in an Available Foreign
Currency, such Lender, the Administrative Agent and the Borrower shall make such
arrangements as shall be required (including increasing or decreasing the amount
of such Eurocurrency Loan) so that such Eurocurrency Loan shall be in the same
amount as it would have been if the provisions of this Section 3.06 has never
been applied thereto.

 

ARTICLE IV

CONDITIONS

 

Section 4.01 Conditions to Closing. The obligation of each Lender to make a Loan
or issue a Letter of Credit on the Closing Date is subject to the satisfaction
of the following conditions:

 

(a) Executed Senior Finance Documents. Receipt by the Administrative Agent of
duly executed copies of: (i) this Agreement; (ii) the Notes; (iii) the Guaranty;
(iv) the Collateral Documents and (v) all other Senior Finance Documents, each
in form and substance satisfactory to the Lead Arrangers and the Required
Lenders in their sole discretion.

 

(b) Legal Matters. All legal matters incident to this Agreement and the
borrowings hereunder shall be reasonably satisfactory to the Lead Arrangers and
to Fried, Frank, Harris, Shriver & Jacobson LLP, counsel for the Lead Arrangers.

 

(c) Organizational Documents. After giving effect to the transactions
contemplated by the Transaction Documents, the ownership, capital, corporate,
organizational and legal structure of each Credit Party shall be reasonably
satisfactory to the Lead Arrangers, and the Administrative Agent shall have
received: (i) a copy of the certificate or articles of incorporation or other
organizational documents, as applicable, including all amendments thereto, of
each Credit Party, certified as of a recent date by the Secretary of State or
other applicable authority of its respective jurisdiction of organization; (ii)
a certificate as to the good standing of each Credit Party, as of a recent date,
from the Secretary of State or other applicable authority of its respective
jurisdiction of organization and, to the extent reasonably available, from each
other state in which such Credit Party is qualified or is required to be
qualified to do business, together in each case, to the extent generally
available, with a certificate or other evidence of good standing as to payment
of any applicable franchise or similar taxes from the appropriate taxing
authority of each such jurisdiction; (iii) a certificate of the Secretary or
Assistant Secretary of each Credit Party dated the Closing Date substantially in
the form of Exhibit M hereto; (iv) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (iii) above; and (v) such other
corporate or other constitutive or organizational documents as the Lead
Arrangers or Fried, Frank, Harris, Shriver & Jacobson LLP, counsel for the Lead
Arrangers, may reasonably request.

 

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(d) Officer’s Certificates. The Administrative Agent shall have received (i) a
certificate, dated the Closing Date and signed by a Responsible Officer of each
of Holdings and the Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of Section 4.02 and (ii) a
certificate, dated the Closing Date and signed by a Responsible Officer of each
other Credit Party, confirming compliance with the condition precedent set forth
in paragraph (b) of Section 4.02.

 

(e) Opinions of Counsel. On the Closing Date, the Administrative Agent shall
have received:

 

(i) a written opinion of Kirkland & Ellis LLP, special counsel to the Credit
Parties, addressed to the Agents and each Lender, dated the Closing Date,
substantially in the form of Exhibit D-1 hereto;

 

(ii) from Kirkland & Ellis LLP, special counsel to the Credit Parties, or
special local counsel to the Borrower and the other Credit Parties (which
counsel shall be reasonably satisfactory to the Lead Arrangers) for each State
in which any Credit Party is located (within the meaning of Section 9-301 of the
Uniform Commercial Code as in effect in the State of New York), an opinion
addressed to the Agents and each Lender, dated the Closing Date, substantially
in the form of Exhibit D-2 hereto and covering such additional matters incident
to the transactions contemplated hereby as the Lead Arrangers or the Required
Lenders may reasonably request;

 

(iii) from special local counsel to the Borrower and the other Credit Parties
(which counsel shall be reasonably satisfactory to the Lead Arrangers) for each
jurisdiction in which a Mortgaged Property is located, an opinion addressed to
the Agents and each Lender, dated the Closing Date, substantially in the form of
Exhibit D-3 hereto, with respect to the enforceability of the form of Mortgage
and sufficiency of the form of UCC-1 financing statements or similar notices to
be recorded or filed in such jurisdiction, if applicable, and such other matters
as the Lead Arrangers or the Required Lenders may reasonably request;

 

(iv) from special counsel to the Target in respect of the Acquisition, copies of
each opinion delivered by them in connection with the Acquisition, accompanied
in each case by a letter from such counsel stating that the Agents and the
Lenders are entitled to rely on such opinions as if they were addressed to the
Agents and the Lenders; and

 

(v) from Kirkland & Ellis LLP, special counsel to the Borrower, copies of the
opinions delivered by them under the purchase agreement for the Senior
Subordinated Notes, accompanied in each case by a letter from such special
counsel stating that the Agents and the Lenders are entitled to rely on such
opinions as if they were addressed to the Agents and the Lenders.

 

(f) Capitalization. On or prior to the Closing Date, (i) Holdings shall have
received gross cash proceeds of not less than $135,000,000 in connection with
the purchase by the Investor Group

 

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(directly or indirectly through one or more intermediate holding companies) of
common stock of Holdings (the “Holdings Equity Issuance”), at least a majority
of which shall have been provided by the Sponsor Group and which proceeds shall
have been contributed by Holdings to the capital of the Borrower in exchange for
common stock of, or as an additional common capital contribution to, the
Borrower, (ii) without the express written consent of the Lead Arrangers, no
common stock of the Borrower shall be subject to any redemption, put, call,
repurchase or similar provisions prior to the Maturity Date with respect to any
Loan, (iii) the proceeds of the Holdings Equity Issuance, when aggregated with
the Senior Subordinated Notes, the Term Loans and up to $10,000,000 of Revolving
Loans incurred by the Borrower and the face amount of all Letters of Credit
issued on the Closing Date, shall be used by the Borrower, and shall be
sufficient, to consummate the Acquisition and to pay all fees and expenses owing
in connection therewith and (iv) the Administrative Agent shall have received
true and correct copies, certified as such by an appropriate officer of
Holdings, of all subscription agreements, registration rights agreements,
shareholder agreements and other documents and instruments delivered in
connection therewith (collectively, the “Capitalization Documents”), each of
which shall be in full force and effect and shall be in form and substance
reasonably satisfactory to the Lead Arrangers.

 

(g) Issuance of Senior Subordinated Notes. On or prior to the Closing Date, the
Borrower shall have (i) entered into the Senior Subordinated Note Indenture on
terms that are reasonably satisfactory to the Lead Arrangers, (ii) executed and
delivered the Senior Subordinated Notes, (iii) delivered to the Administrative
Agent true and correct copies, certified as such by an appropriate officer of
the Borrower, of the Senior Subordinated Note Indenture, each of the Senior
Subordinated Notes as originally executed and delivered and each of the other
Senior Subordinated Note Documents, each of which shall be in full force and
effect, (iv) received gross cash proceeds of at least $150,000,000 from the
issuance of the Senior Subordinated Notes (it being understood that such gross
cash proceeds shall include all amounts directly applied to pay underwriting and
placement commissions and discounts and related fees) and (v) utilized the full
amount of such cash proceeds to make payments owing in connection with the
Transaction prior to or concurrently with the utilization of any proceeds of the
Loans for such purpose.

 

(h) Consummation of the Acquisition. On or prior to the Closing Date, there
shall have been delivered to the Administrative Agent true and correct copies of
all Acquisition Documents, certified as such by an appropriate officer of the
Borrower, and all terms and conditions of the Acquisition Documents shall be in
form and substance reasonably satisfactory to the Lead Arrangers. The
Acquisition, including all of the terms and conditions thereof and including,
without limitation, the Merger, shall have been duly approved by the board of
directors and (if required by applicable law) the shareholders of each of the
Borrower (prior to the consummation of the Merger), the Target and each other
Group Company party thereto, and all Acquisition Documents shall have been duly
executed and delivered by the parties thereto and shall be in full force and
effect. The representations and warranties set forth in the Acquisition
Documents shall be true and correct in all material respects as if made on and
as of the Closing Date (except to the extent such representations and warranties
expressly refer to a prior date, in which case such representations and
warranties shall have been true and consent as of such prior date), and each of
the parties to the Acquisition Documents shall have complied in all material
respects with all covenants set forth in the Acquisition Documents to be
complied with by it on or prior to the Closing Date (without giving effect to
any modification, amendment, supplement or waiver of any of the material terms
thereof unless consented to by the Lead Arrangers, which consent shall not be
unreasonably withheld or delayed). Each of the material conditions precedent to
the Group Companies’ obligations to consummate the Acquisition as set forth in
the Acquisition Documents shall have been satisfied to the reasonable
satisfaction of the Lead Arrangers or waived with the consent of the Lead
Arrangers, and, on the Closing Date substantially concurrently with the
borrowing of the initial Loans, the

 

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Acquisition shall have been consummated for aggregate consideration not in
excess of $635,000,000 (excluding related transaction fees and expenses not
exceeding $56,000,000) in accordance with all applicable laws and the
Acquisition Documents (without giving effect to any material amendment or
modification thereof or material waiver with respect thereto including, but not
limited to, any material modification, amendment, supplement or waiver relating
to any disclosure schedule or exhibit, unless such modification, amendment,
supplement or waiver could not reasonably be expected to be materially adverse
in any respect to the Lenders or unless consented to by the Lead Arrangers). On
the Closing Date, the certificate of merger with respect to the Merger shall
have been filed with the appropriate Governmental Authority having primary
jurisdiction over affairs of corporations in Delaware. Promptly after the
effectiveness of the Merger, (i) the Target, as the surviving corporation of the
Merger, shall execute and deliver the Acknowledgment Agreement and (ii) all
shares of capital stock of the Target, as the surviving corporation of the
Merger, shall be pledged pursuant to the Pledge Agreement, and all stock
certificates evidencing such shares of capital stock after giving effect to the
Merger shall have been delivered to the Collateral Agent.

 

(i) Repurchase or Defeasance of Existing 13% Notes. To the extent that any
Existing 13% Notes are outstanding on the Closing Date, the Target shall have
(i) commenced a tender offer for or otherwise taken action to redeem, repay or
repurchase all such Existing 13% Notes, (ii)(A) redeemed the Existing 13% Notes
and/or (B) effected a covenant defeasance under the Existing 13% Notes Indenture
in accordance with the terms of the Existing 13% Notes Indenture and (iii)
irrevocably deposited cash with the trustee under the Existing 13% Notes
Indenture sufficient to effect such covenant defeasance in accordance with the
terms of the Existing 13% Notes Indenture for those Existing 13% Notes not
redeemed.

 

(j) Consummation of the iStar Sale/Leaseback. On or prior to the Closing Date,
there shall have been delivered to the Administrative Agent true and correct
copies of all material iStar Sale/Leaseback Documents, certified as such by an
appropriate officer of the Borrower, and all terms and conditions of the iStar
Sale/Leaseback Documents shall be in form and substance reasonably satisfactory
to the Lead Arrangers. The iStar Sale/Leaseback, including all of the terms and
conditions thereof, shall have been duly approved by the board of directors and
(if required by applicable law) the shareholders of each of the Borrower and
each other Group Company party thereto, and all iStar Sale/Leaseback Documents
shall have been duly executed and delivered by the parties thereto and shall be
in full force and effect. The representations and warranties set forth in the
iStar Sale/Leaseback Documents shall be true and correct in all material
respects as if made on and as of the Closing Date (except to the extent such
representations and warranties expressly refer to a prior date, in which case
such representations and warranties shall have been true and correct as of such
prior date), and each of the parties to the iStar Sale/Leaseback Documents shall
have complied in all material respects with all covenants set forth in the iStar
Sale/Leaseback Documents to be complied with by it on or prior to the Closing
Date (without giving effect to any modification, amendment, supplement or waiver
of any of the material terms thereof unless consented to by the Lead Arrangers,
which consent shall not be unreasonably withheld or delayed). Each of the
material conditions precedent to the Group Companies’ obligations to consummate
the iStar Sale/Leaseback as set forth in the iStar Sale/Leaseback Documents
shall have been satisfied to the reasonable satisfaction of the Lead Arrangers
or waived with the consent of the Lead Arrangers, and, on the Closing Date
substantially concurrently with the borrowing of the initial Loans, the iStar
Sale/Leaseback shall have been consummated for an net cash consideration to the
Borrower and the other Group Companies party thereto of not less than
$250,000,000 and in accordance with all applicable laws and the iStar
Sale/Leaseback Documents (without giving effect to any material amendment or
modification thereof or material waiver with respect thereto including, but not
limited to, any material modification, amendment, supplement or waiver relating
to any disclosure schedule or exhibit, unless

 

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such modification, amendment, supplement or waiver could not reasonably be
expected to be materially adverse in any respect to the Lenders or unless
consented to by the Lead Arrangers).

 

(k) Refinancing of Other Existing Debt. On the Closing Date, the commitments
under all Refinanced Agreements shall have been terminated, all loans
outstanding thereunder shall have been repaid in full (other than contingent
indemnification obligations not due and payable), together with accrued interest
thereon (including, without limitation, any prepayment premium), all letters of
credit issued thereunder shall have been terminated or backstopped through the
issuance of Letters of Credit hereunder or shall have become Letters of Credit
hereunder and all other amounts owing pursuant to each Refinanced Agreement
shall have been repaid in full, and the Administrative Agent shall have received
evidence in form, scope and substance reasonably satisfactory to the Lead
Arrangers that the matters set forth in this subsection (k) have been satisfied
at such time. In addition, on the Closing Date, the creditors under each
Refinanced Agreement shall have terminated and released all applicable Liens on
the capital stock of and assets owned by the Borrower and its Subsidiaries
(including, without limitation, all capital stock and assets of the Target and
its Subsidiaries), and the Lead Arrangers shall have received all such releases
as may have been requested by the Lead Arrangers, which releases shall be in
form and substance satisfactory to the Lead Arrangers. After the consummation of
the transactions contemplated by the Acquisition Agreement on the Closing Date,
the Group Companies shall have no material liabilities (actual or contingent)
required to be disclosed in its financial statements or Preferred Stock, except
(i) as disclosed in the most recent interim balance sheet included in the
financial statements delivered pursuant to subsection (r) below or the footnotes
thereto, (ii) for accounts payable incurred in the ordinary course of business
consistent with past practice since the date of the most recent interim balance
sheet included in the financial statements delivered pursuant to subsection (r)
below and not in violation of the Acquisition Agreement, (iii) Debt under the
Senior Finance Documents and the Senior Subordinated Notes, (iv) Debt under the
Existing 13% Notes, which Debt shall have been defeased in accordance with
subsection (i) above, and (v) contingent indemnification obligations as not due
and payable.

 

(l) Perfection of Personal Property Security Interests and Pledges; Search
Reports. On or prior to the Closing Date, the Collateral Agent shall have
received or have completed or arrangements satisfactory to the Collateral Agent
shall have been provided for:

 

(i) a Perfection Certificate from each Credit Party;

 

(ii) appropriate financing statements (Form UCC-1 or such other financing
statements or similar notices as shall be required by local law) authenticated
and authorized for filing under the Uniform Commercial Code or other applicable
local law of each jurisdiction in which the filing of a financing statement or
giving of notice may be required, or reasonably requested by the Collateral
Agent, to perfect the security interests created by the Collateral Documents;

 

(iii) copies of reports from CT Corporation or another independent search
service reasonably satisfactory to the Collateral Agent listing all effective
financing statements, notices of tax, PBGC or judgment liens or similar notices
that name the Borrower or any other Credit Party, as such (under its present
name and any previous name and, if requested by the Collateral Agent, under any
trade names), as debtor or seller that are filed in the jurisdictions

 

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referred to in clause (ii) above or in any other jurisdiction having files which
must be searched in order to determine fully the existence of Uniform Commercial
Code security interests, notices of the filing of federal tax Liens (filed
pursuant to Section 6323 of the Code), Liens of the PBGC (filed pursuant to
Section 4068 of ERISA) or judgment Liens on any Collateral, together with copies
of such financing statements, notices of tax, PBGC or judgment Liens or similar
notices (none of which shall cover the Collateral except to the extent
evidencing Permitted Liens or for which the Collateral Agent shall have received
termination statements (Form UCC-3 or such other termination statements as shall
be required by local law) authenticated and authorized for filing);

 

(iv) searches of ownership of intellectual property in the appropriate
governmental offices and such patent, trademark and/or copyright filings as may
be requested by the Collateral Agent to the extent necessary or reasonably
advisable to perfect the Collateral Agent’s security interest in intellectual
property Collateral.

 

(v) all of the Pledged Collateral, which Pledged Collateral shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately
guaranteed, accompanied in each case by any required transfer tax stamps, all in
form and substance reasonably satisfactory to the Collateral Agent; and

 

(vi) evidence of the completion of all other filings and recordings of or with
respect to the Collateral Documents and of all other actions as may be necessary
or, in the opinion of the Collateral Agent, desirable to perfect the security
interests intended to be created by the Collateral Documents.

 

(m) Real Property Collateral. The Collateral Agent shall have received (in form
and substance satisfactory to the Lead Arrangers):

 

(i) fully executed and notarized mortgages, deeds of trust or deeds to secure
debt (each a “Mortgage” and, collectively, the “Mortgages”) encumbering the fee
interest of the Credit Parties in each real property asset owned by a Credit
Party set forth on Schedule 4.01(m)(i) (each an “Owned Mortgaged Property” and,
collectively, the “Owned Mortgaged Properties”) and the leasehold interest of
the Credit Parties in each real property asset leased by a Credit Party set
forth on Schedule 4.01(m)(i) (each a “Leased Mortgaged Property” and,
collectively, the “Leased Mortgaged Properties” and, together with the Owned
Mortgaged Properties, each a “Mortgaged Property” and, collectively, the
“Mortgaged Properties”), together with such UCC-1 financing statements or
similar notices as the Collateral Agent shall reasonably deem appropriate with
respect to each such Mortgaged Property;

 

(ii) the Borrower shall have used commercially reasonable efforts to obtain a
fully executed Landlord Consent and Estoppel with respect to each Leased
Mortgaged Property, together with evidence that such Leased Mortgaged Property
is a Recorded Leasehold Interest;

 

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(iii) ALTA or other appropriate form mortgagee title insurance policies (the
“Mortgage Policies”) issued by Chicago Title Insurance Company (the “Title
Insurance Company”), in an amount reasonably satisfactory to the Lead Arrangers
with respect to each Mortgaged Property other than those Mortgage Properties
designated by an asterisk on Schedule 4.01(m) hereto (with respect to which the
related Mortgage shall be deemed held in escrow pending recording or return to
the Borrower pursuant to Section 6.10(e)), which amount shall not exceed the
fair market value for each such Mortgaged Property, assuring the Lead Arrangers
that the applicable Mortgages create valid and enforceable first priority
mortgage liens on the respective Mortgaged Property, free and clear of all
defects and encumbrances except Permitted Encumbrances, which Mortgage Policies
shall contain such endorsements as shall be reasonably satisfactory to the Lead
Arrangers and for any other matters that the Lead Arrangers may request, and
providing affirmative insurance and such reinsurance as the Lead Arrangers may
request, all of the foregoing in form and substance reasonably satisfactory to
the Lead Arrangers;

 

(iv) if requested by the Lead Arrangers, copies of all recorded documents listed
as exceptions to title or otherwise referred to in the Mortgage Policies; and

 

(v) such evidence satisfactory to the Lead Arrangers as the Lead Arrangers
reasonably may request to the effect that each of the Mortgaged Properties, and
the uses of the Mortgaged Properties, are in compliance in all material respects
with all applicable Laws.

 

(n) Evidence of Insurance. Receipt by the Collateral Agent of copies of
insurance policies or certificates of insurance of the Credit Parties and their
Subsidiaries evidencing liability and casualty insurance meeting the
requirements set forth in the Senior Finance Documents, including, but not
limited to, naming the Collateral Agent as additional insured and loss payee on
behalf of the Lenders.

 

(o) Consents and Approvals. On the Closing Date, all governmental (domestic or
foreign), regulatory and third party approvals (including, without limitation,
with respect to real property leases and license agreements relating to
intellectual property) required and material in connection with the transactions
contemplated by the Acquisition Agreement and the other Transaction Documents
and otherwise referred to herein or therein shall have been obtained and remain
in full force and effect, and all applicable waiting periods (including any
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976) and appeal periods shall have expired, in each case without any action
being taken or threatened by any competent authority which has or could have a
reasonable likelihood of restraining, preventing or imposing materially
burdensome conditions on such transactions or impose, in the sole judgment of
the Lead Arrangers, materially burdensome conditions or qualifications upon the
consummation of such transactions; provided, however, that with respect to
receipt of licenses to sell or serve alcoholic beverages or to engage in gaming,
lottery or gambling activities (or the necessary consents or approvals with
respect thereto), the condition set forth in this paragraph (o) shall be
satisfied if the Lead Arrangers are reasonably satisfied that licenses have been
obtained or that other appropriate mechanisms which will not result in denial or
loss of a license or penalties (other than immaterial civil penalties) or put
the Borrower or any of its Subsidiaries at risk of an enforcement action for a
violation are in place and, in each case, are expected to remain in place for
the foreseeable future without material risk or expectation of losing such
ability in the future (other than the risk that any holder of a liquor license
or gaming, lottery or gambling license that complies with the terms and
requirements of such license and the relevant law generally bears of nonrenewal)
so that after the Closing Date, alcoholic beverages can continue to be sold or
served and gaming activities can continue to be conducted in

 

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essentially the same manner and on essentially the same terms (and without any
additional material restrictions) as before the Closing Date and in compliance
in all material respects with all applicable Laws relating to the sale or
service of alcoholic beverages or engaging in gaming, lottery and gambling
activities at bowling centers (or related premises) which would reasonably be
expected to enable the Borrower and its Subsidiaries to derive during the
12-month period beginning on the Closing Date, at least 90% of the total
revenues from the sale or service of alcoholic beverages and, other than in the
State of Washington, gambling lottery and gambling activities (and from any
related management service agreements and leases).

 

(p) Litigation; Judgments. On the Closing Date, there shall be no actions,
suits, proceedings, counterclaims or investigations pending or overtly
threatened (i) challenging the consummation of any portion of the Transaction or
which in the judgment of the Required Lenders could restrain, prevent or impose
burdensome conditions on the Transaction, in the aggregate, or any other
transaction contemplated hereunder, (ii) seeking to prohibit the ownership or
operation by the Borrower, the Target or any of their respective Subsidiaries of
all or any material portion of any of their respective businesses or assets or
(iii) seeking to obtain, or which could result or has resulted in the entry of,
any judgment, order or injunction that (A) would restrain, prohibit or impose
adverse or burdensome conditions on the ability of the Lenders to make the
Loans, (B) in the judgment of the Required Lenders could reasonably be expected
to result in a Material Adverse Effect with respect to the Borrower and its
Subsidiaries taken as a whole (after giving effect to the Transaction) or (C)
could purport to affect the legality, validity or enforceability of any Senior
Finance Document or could have a material adverse effect on the ability of any
Credit Party to fully and timely perform their payment and security obligations
under the Senior Finance Documents or the rights and remedies of the Lenders.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the transactions contemplated by the
Transaction Documents and otherwise referred to herein or therein.

 

(q) Solvency Certificate. On or prior to the Closing Date, the Borrower shall
have delivered or caused to be delivered to the Administrative Agent a solvency
certificate from the chief financial or chief accounting officer of the
Borrower, substantially in the form of Exhibit L hereto and otherwise in form
and substance reasonably satisfactory to the Lead Arrangers, setting forth the
conclusions that, after giving effect to the Acquisition and the consummation of
all financings contemplated herein, Holdings and its Subsidiaries (on a
consolidated basis) and the Borrower and its Subsidiaries (on a consolidated
basis) are solvent.

 

(r) Financial Information. The Administrative Agent and the Lead Arrangers shall
each be reasonably satisfied that the financial statements referred to in
Section 5.05, including the pro-forma balance sheet referenced to in Section
5.05(d), are not materially inconsistent with the information, projections,
sources and uses of funds or financial model delivered to the Lead Arrangers
prior to the Closing Date.

 

(s) Material Adverse Effect. There shall not have occurred or become known any
condition, fact, event or development that has resulted or could reasonably be
expected to result in a material adverse change in the business, assets,
operations, condition (financial or otherwise), liabilities (contingent or
otherwise) or prospects of the Borrower and its Subsidiaries (including the
Target and its

 

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Subsidiaries), taken as a whole (both before and after giving effect to the
Transaction) since June 29, 2003.

 

(t) OFAC/Anti-Terrorism Compliance Certificate. The Administrative Agent shall
have received a certificate substantially in the form of Exhibit K hereto, dated
the Closing Date and signed by a Responsible Officer of the Borrower, certifying
as to the matters set forth in Exhibit K.

 

(u) Payment of Fees. All costs, fees and expenses due to the Lead Arrangers, the
Agents and the Lenders on or before the Closing Date shall have been paid to the
extent invoiced to the Borrower (together with reasonable detail therefor).

 

(v) Counsel Fees. The Lead Arrangers shall have received full payment from the
Borrower of the fees and expenses of Fried, Frank, Harris, Shriver & Jacobson
LLP described in Section 10.04 which are billed through the Closing Date.

 

All corporate and legal proceedings and instruments and agreements relating to
the transactions contemplated by this Agreement and the other Transaction
Documents or in any other document delivered in connection herewith or therewith
shall be reasonably satisfactory in form and substance to the Lead Arrangers and
their counsel, and the Lead Arrangers shall have received all information and
copies of all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down facsimiles, if
any, which the Lead Arrangers reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate or Governmental Authorities. The documents referred to in this Section
4.01 shall be delivered to the Administrative Agent or Lead Arrangers, as
applicable, no later than the Closing Date. The certificates and opinions
referred to in this Section 4.01 shall be dated the Closing Date.

 

The requirement that any document, agreement, certificate or other writing be
reasonably satisfactory to the Required Lenders shall be deemed to be satisfied
if (i) such document, agreement, certificate or other writing was delivered to
the Lenders not less than two Business Days prior to the Closing Date, (ii) such
document, agreement, certificate or other writing is satisfactory to the Lead
Arrangers and (iii) Lenders holding at least 50% of the Commitments have not
objected in writing to such document, agreement, certificate or other writing to
the Lead Arrangers prior to the Closing Date.

 

Promptly after the Closing Date occurs, the Administrative Agent shall notify
the Borrower and the Lenders of the Closing Date, and such notice shall be
conclusive and binding on all parties hereto. If the Closing Date does not occur
before 5:00 P.M. on March 15, 2004, the Commitments shall terminate at the close
of business on such date and all unpaid fees accrued to such date shall be due
and payable on such date.

 

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Section 4.02 Conditions to All Credit Extensions. The obligation of any Lender
to make a Loan on the occasion of any Borrowing and the obligation of any
Issuing Lender to issue (or renew or extend the term of) any Letter of Credit is
subject to the satisfaction of the following conditions:

 

(a) Notice. The Borrower shall have delivered (i) in the case of any Revolving
Loan, to the Administrative Agent, an appropriate Notice of Borrowing, duly
executed and completed, by the time specified in, and otherwise as permitted by,
Section 2.02 and (ii) in the case of any Letter of Credit, to the Issuing
Lender, an appropriate Letter of Credit Request duly executed and completed in
accordance with the provisions of Section 2.05.

 

(b) Representations and Warranties. The representations and warranties made by
the Credit Parties in any Senior Finance Document are true and correct in all
material respects at and as if made as of such date except to the extent they
expressly relate to an earlier date.

 

(c) No Default. No Default or Event of Default shall exist or be continuing
either prior to or after giving effect thereto.

 

(d) Availability. Immediately after giving effect to the making of a Loan (and
the application of the proceeds thereof) or to the issuance of a Letter of
Credit, as the case may be, (i) the sum of the Revolving Loans outstanding plus
the Multi-Currency Revolving Outstandings plus the amount of all LC Obligations
outstanding shall not exceed the Revolving Committed Amount, (ii) the amount of
all LC Obligations outstanding shall not exceed the LC Committed Amount, (iii)
the Foreign Currency LC Exposure shall not exceed the Foreign Currency LC
Committed Amount and (iv) the aggregate Multi-Currency Revolving Outstandings
shall not exceed the Multi-Currency Revolving Committed Amount.

 

(e) Term Borrowings. In the case of the initial Revolving Borrowing or
Multi-Currency Revolving Borrowings, as applicable, the fact that prior to, or
concurrently with, such Revolving Borrowing or Multi-Currency Revolving
Borrowing, as applicable, the Borrower has made a Term B Borrowing in the full
amount of the Term B Commitments.

 

The delivery of each Notice of Borrowing and each request for a Letter of Credit
shall constitute a representation and warranty by the Credit Parties of the
correctness of the matters specified in subsections (b), (c) and (d) above.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

Each of Holdings and the Borrower represents and warrants that:

 

Section 5.01 Organization and Good Standing. Each of the Group Companies is a
corporation, partnership or limited liability company duly organized or formed,
validly existing and in good standing under the laws of the jurisdiction of its
formation, has all corporate, partnership or limited liability company powers
and all material governmental licenses, franchises, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals required to own its property and carry on
its business as now conducted and is duly qualified as a foreign corporation,
licensed and in good standing in each jurisdiction where qualification or
licensing is required by the nature of its business or the character and
location of its property, business or

 

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customers, except to the extent the failure to so qualify or be licensed, as the
case may be, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

 

Section 5.02 Power; Authorization; Enforceable Obligations. Each of the Credit
Parties has the corporate, partnership, limited liability company or other
necessary power and authority, and the legal right, to execute, deliver and
perform the Transaction Documents to which it is a party and, in the case of the
Borrower, to obtain extensions of credit hereunder, and has taken all necessary
corporate, partnership or limited liability action to authorize the borrowings
and other extensions of credit on the terms and conditions of this Agreement and
to authorize the execution, delivery and performance of the Transaction
Documents to which it is a party. No consent or authorization of, filing with,
notice to or other similar act by or in respect of, any Governmental Authority
or any other Person is required to be obtained or made by or on behalf of any
Credit Party in connection with the borrowings or other extensions of credit
hereunder or with the execution, delivery, performance, validity or
enforceability of the Transaction Documents, except for (i) consents,
authorizations, notices and filings disclosed in Schedule 5.02, all of which
have been obtained or made, and (ii) filings to perfect the Liens created by the
Collateral Documents. This Agreement has been, and each other Transaction
Document to which Holdings or any of its Subsidiaries is a party will be, duly
executed and delivered on behalf of such Person. This Agreement constitutes, and
each other Transaction Document to which any Credit Party or the Target is a
party when executed and delivered will constitute, a legal, valid and binding
obligation of each Credit Party thereto and, to the knowledge of Holdings and
the Borrower, of the Target, enforceable against each such Person in accordance
with its terms, except (i) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and (ii) that rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether enforcement is sought
by proceedings in equity or at law).

 

Section 5.03 No Conflicts. Neither the execution and delivery by any Credit
Party of the Transaction Documents to which it is a party, nor the consummation
of the transactions contemplated therein, nor performance of and compliance with
the terms and provisions thereof by such Person, nor the exercise of remedies by
the Agents and the Lenders under the Senior Finance Documents, will (i) violate
or conflict with any provision of the articles or certificate of incorporation,
bylaws, partnership agreement, operating agreement or other organizational or
governing documents of such Person, (ii) violate, contravene or conflict with
any Law applicable to it or its properties, (iii) violate, contravene or
conflict with contractual provisions of, cause an event of default under, or
give rise to material increased, additional, accelerated or guaranteed, rights
of any Person under, any indenture, loan agreement, mortgage, deed of trust or
other instrument, material contract or material lease to which it is a party or
by which it may be bound or (iv) result in or require the creation of any Lien
(other than the Lien of the Collateral Documents) upon or with respect to its
properties, except in the case of clause (iii) for such violations as could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

 

Section 5.04 No Default. Except as disclosed on Schedule 5.04, none of the Group
Companies is in default in any respect under (i) any loan agreement, indenture,
mortgage, security agreement or other agreement relating to Debt or any other
contract, lease, agreement or obligation to which it is a party or by which any
of its properties is bound which default could reasonably be expected to have a
Material Adverse Effect or (ii) the Senior Subordinated Note Indenture. No
Default or Event of Default has occurred or exists.

 

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Section 5.05 Financial Condition.

 

(a) Audited Financial Statements. The consolidated balance sheets of the Target
and its Consolidated Subsidiaries as of December 31, 2001, February 28, 2002,
June 30, 2002 and June 29, 2003 and the related consolidated and consolidating
statements of income and cash flows for the respective fiscal years then ended,
reported on by Arthur Andersen LLP, in the case of the December 31, 2001
financial statements, and KPMG LLP, in the case of all such other financial
statements, copies of each of which have been delivered to each of the Lenders,
fairly present in all material respects, in accordance with GAAP (except as
disclosed therein), the consolidated financial position of the Target and its
Consolidated Subsidiaries as of each such date and their consolidated results of
operations and cash flows for the fiscal years ended December 31, 2001 and June
29, 2003, the two months ended February 28, 2002 and the four months ended June
30, 2002.

 

(b) Interim Quarterly Financial Statements. The unaudited consolidated balance
sheet of the Target and its Consolidated Subsidiaries as of December 28, 2003
and the related unaudited consolidated and consolidating statements of income
and cash flows for the year-to-date period then ended, copies of which have been
delivered to each of the Lenders, fairly present in all material respects, in
accordance with GAAP (except as disclosed therein) applied on a basis consistent
with the financial statements referred to in subsection (a) of this Section
(except for the absence of footnotes and normal year-end audit adjustments), the
consolidated financial position of the Target and its Consolidated Subsidiaries
as of each such date and their consolidated results of operations and cash flows
for such year-to-date period (subject to normal year-end audit adjustments).

 

(c) Pro-Forma Financial Statements. The consolidated balance sheet of Holdings
and its Consolidated Subsidiaries as of the end of the most recent fiscal
quarter prior to the Closing Date for which financial information is available,
prepared on a pro-forma basis in accordance with Regulation S-X giving effect to
the consummation of the Transactions, has heretofore been furnished to each
Lender as part of the Pre-Commitment Information. Such pro-forma balance sheet
has been prepared in good faith by the Borrower, based on the assumptions used
to prepare the pro-forma financial information contained in the Pre-Commitment
Information (which assumptions are believed by the Borrower on the date hereof
and on the Closing Date to be reasonable and fair in light of current conditions
and facts known to the Borrower), is based on the best information available to
the Borrower as of the date of delivery thereof, accurately reflects all
material adjustments required to be made to give effect to the Transactions and
presents fairly on a pro-forma basis the estimated consolidated financial
position of Holdings and its Consolidated Subsidiaries as of December 28, 2003,
assuming that the Transactions had actually occurred on that date. None of
Holdings or any of its Subsidiaries has any reason to believe that such
pro-forma balance sheet is misleading in any material respect in light of the
circumstances existing at the time of the preparation thereof.

 

(d) Projections. The projections prepared as part of, and included in, the
Pre-Commitment Information (which include projected balance sheets, income and
cash flow statements on a monthly basis for the period from the Closing Date
through June 30, 2006 and on an annual basis for each of the following four
fiscal years) have been prepared on a basis consistent with the financial
statements referred to in subsection (a) above and are based on good faith
estimates and assumptions believed by management of the Borrower to be
reasonable and fair in light of current conditions and facts known to the
Borrower at the time delivered. On the Closing Date, such management believes
that such projections are reasonable and attainable, it being recognized by the
Lenders, however, that projections as to future

 

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events are not to be viewed as facts or guaranties of future performance, that
actual results during the period or periods covered by such projections may
differ from the projected results and that such differences may be material and
that the Credit Parties make no representation that such projections will be in
fact be realized. There is no fact known to Holdings or the Borrower or any of
its Subsidiaries which could reasonably be expected to have a Material Adverse
Effect which has not been disclosed herein or in the Pre-Commitment Information.

 

(e) Post-Closing Financial Statements. The financial statements delivered to the
Lenders pursuant to Section 6.01(a) and (b), if any, (i) have been prepared in
accordance with GAAP (except as may otherwise be permitted under Section 6.01(a)
and (b)) and (ii) present fairly in all material respects (on the basis
disclosed in the footnotes to such financial statements, if any) the
consolidated and consolidating financial condition, results of operations and
cash flows of Holdings and its Consolidated Subsidiaries as of the respective
dates thereof and for the respective periods covered thereby.

 

(f) No Undisclosed Liabilities. Except as disclosed on Schedule 5.05 hereto or
as fully reflected in the financial statements described in subsection (a) and
(b) above and the Debt incurred under this Agreement and the Senior Subordinated
Note Indenture, (i) there were as of the Closing Date (and after giving effect
to any Loans made and Letters of Credit issued on such date), no liabilities or
obligations (excluding current obligations incurred in the ordinary course of
business) with respect to any Group Company of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due and including
obligations or liabilities for taxes, long-term leases and unusual forward or
other long-term commitments), and (ii) neither Holdings nor the Borrower knows
of any basis for the assertion against any Group Company of any such liability
or obligation, in each case which, either individually or in the aggregate, are
or could reasonably be expected to have, a Material Adverse Effect.

 

(g) Sarbanes-Oxley Act Compliance. To the extent applicable to “voluntary
filers,” each required form, report and document containing financial statements
that has been filed with or submitted to the United States Securities and
Exchange Commission since July 31, 2002, was accompanied by the certifications
required to be filed or submitted by the chief executive officer and chief
financial officer of any Group Company pursuant to the Sarbanes-Oxley Act of
2002 (the “Sarbanes-Oxley Act”), and at the time of filing or submission of each
such certification, such certification was true and accurate and complied in all
material respects with the Sarbanes-Oxley Act and the rules and regulations
promulgated thereunder, except to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect. No Group Company nor,
to the knowledge of Holdings or the Borrower, any director, senior officer,
employee, auditor, accountant or authorized representative of any Group Company
has received or otherwise had or obtained knowledge of any complaint,
allegation, assertion or claim, whether written or oral, regarding the
accounting or auditing practices, procedures, methodologies or methods of any
Group Company or their respective internal accounting controls, including any
complaint, allegation, assertion or claim that any Group Company has engaged in
questionable accounting or auditing practices, in each case which if determined
to be valid could reasonably be expected to have a Material Adverse Effect.
Except as set forth on Schedule 5.05, to the knowledge of Holdings and the
Borrower, no attorney representing any Group Company, whether or not employed by
any Group Company, has reported evidence of a material violation of securities
laws, breach of fiduciary duty or similar violation by any Group Company or any
of its officers, directors, employees or agents to the board of directors of any
Group Company or any committee thereof or to any director or officer of any
Group Company, in each case which if determined to have occurred could
reasonably be expected to have a Material Adverse Effect.

 

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Section 5.06 No Material Change. Since June 29, 2003 there has been no Material
Adverse Effect, and no event or development has occurred which could reasonably
be expected to result in a Material Adverse Effect.

 

Section 5.07 Title to Properties; Possession Under Leases. Each Group Company
has good insurable and legal fee title to (in the case of owned Real Property),
or valid leasehold interests in (in the case of Leaseholds), all its material
properties and assets, except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted. All such
material properties and assets are free and clear of Liens other than Permitted
Liens. Each Group Company has complied with all obligations under all leases to
which it is a party, other than leases that, individually or in the aggregate,
are not material to the Group Companies, taken as a whole, and the violation of
which will not result in a Material Adverse Effect, and all such leases are in
full force and effect, other than leases that, individually or in the aggregate,
are not material to the Group Companies, taken as a whole, and in respect of
which the failure to be in full force and effect will not result in a Material
Adverse Effect. Each Group Company enjoys peaceful and undisturbed possession
under all such leases with respect to which it is the lessee, other than leases
that, individually or in the aggregate, are not material to the Group Companies,
taken as a whole, and in respect of which the failure to enjoy peaceful and
undisturbed possession will not result in a Material Adverse Effect.

 

Section 5.08 Litigation. Except as disclosed in Schedule 5.08, there are no
actions, suits, investigations or legal, equitable, arbitration or
administrative proceedings pending or, to the knowledge of any Credit Party,
threatened against or affecting any Group Company in which there is a reasonable
possibility of an adverse decision that (i) involve any Senior Finance Document
or any of the Transactions or (ii) if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.

 

Section 5.09 Taxes. Except as disclosed in Schedule 5.09 or otherwise permitted
by Section 6.05, each Group Company has filed, or caused to be filed, all
federal and all material state, local and foreign tax returns required to be
filed and paid (i) all amounts of taxes shown thereon to be due (including
interest and penalties) and (ii) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangible taxes) owing by it. No Credit Party knows of any pending
investigation of such party by any taxing authority or proposed tax assessments
against any Group Company.

 

Section 5.10 Compliance with Law. Each Group Company is in compliance with all
requirements of Law (including Environmental Laws) applicable to it or to its
properties, except for any such failure to comply which could not reasonably be
expected to cause a Material Adverse Effect. To the knowledge of the Credit
Parties, none of the Group Companies or any of their respective material
properties or assets is subject to or in default with respect to any judgment,
writ, injunction, decree or order of any court or other Governmental Authority
which, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. Except as disclosed in Schedule 5.10, none of the
Group Companies has received any written communication from any Governmental
Authority that alleges that any of the Group Companies is not in compliance in
any material respect with any Law, except for allegations that have been
satisfactorily resolved and are no longer outstanding or which, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

 

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Section 5.11 ERISA; Employee Benefit Arrangements.

 

(a) ERISA. Except as disclosed in Schedule 5.11:

 

(i) There are no Unfunded Liabilities (A) with respect to any member of the
Group Companies and (B) with respect to any ERISA Affiliate; provided that for
purposes of this Section 5.11(a)(i)(B) only, Unfunded Liabilities shall mean the
amount (if any) by which the projected benefit obligation exceeds the value of
the plan’s assets as of its last valuation date.

 

(ii) Each Plan, other than a Multiemployer Plan, complies in all respects with
the applicable requirements of ERISA and the Code, and each Group Company
complies in all respects with the applicable requirements of ERISA and the Code
with respect to all Multiemployer Plans to which it contributes, except to the
extent that the failure to comply therewith would not reasonably be expected to
have a Material Adverse Effect.

 

(iii) No ERISA Event has occurred or, subject to the passage of time, is
reasonably expected to occur with respect to any Plan maintained by any member
of the Group Companies and, except to the extent that such ERISA Event would not
reasonably be expected to have a Material Adverse Effect, no ERISA Event has
occurred or, subject to the passage of time, is reasonably expected to occur
with respect to any Plan maintained by an ERISA Affiliate.

 

(iv) No Group Company: (A) is or has been within the last six years a party to
any Multiemployer Plan; or (B) has completely or partially withdrawn from any
Multiemployer Plan.

 

(v) If any Group Company or any ERISA Affiliate were to incur a complete
withdrawal (as described in Section 4203 of ERISA) from any Multiemployer Plan
as of the Closing Date, the aggregate withdrawal liability, as determined under
Section 4201 of ERISA, with respect to all such Multiemployer Plans would not
exceed $5,000,000 unless the full amount of the entire withdrawal liability is
paid within 30 days of the date incurred.

 

(vi) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereunder will not involve any transaction that is
subject to the prohibitions of Section 406 of ERISA or in connection with which
taxes could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code, for
which an exemption under ERISA does not apply.

 

(vii) No Group Company or, to the knowledge of any Group Company, any ERISA
Affiliate has any contingent liability with respect to any post-retirement
benefit under a Welfare Plan, other than liability for continuation coverage
described in Part 6 of Title I of ERISA.

 

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(b) Foreign Pension Plans. Each Foreign Pension Plan has been maintained in
material compliance with its terms and with the requirements of any and all
applicable Laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities except to the extent that the failure to comply therewith would not
reasonably be expected to have a Material Adverse Effect. No Group Company has
incurred any material obligation in connection with the termination of or
withdrawal from any Foreign Pension Plan. There are no Unfunded Liabilities with
respect to any Foreign Pension Plan except to the extent that such Unfunded
Liabilities would not reasonably be expected to have a Material Adverse Effect.

 

(c) Employee Benefit Arrangements.

 

(i) All liabilities under the Employee Benefit Arrangements are (A) funded to at
least the minimum level required by law or, if higher, to the level required by
the terms governing the Employee Benefit Arrangements, (B) insured with a
reputable insurance company, (C) provided for or recognized in the financial
statements most recently delivered to the Administrative Agent pursuant to
Section 6.01(c) hereof or (D) estimated in the formal notes to the financial
statements most recently delivered to the Administrative Agent pursuant to
Section 6.01(a) hereof, where such failure to fund, insure, provide for,
recognize or estimate the liabilities arising under such arrangements could
reasonably be expected to have a Material Adverse Effect.

 

(ii) There are no circumstances which may give rise to a liability in relation
to the Employee Benefit Arrangements which are not funded, insured, provided
for, recognized or estimated in the manner described in clause (i) above and
which could reasonably be expected to have a Material Adverse Effect.

 

(iii) Each Group Company is in material compliance with all applicable Laws,
trust documentation and contracts relating to the Employee Benefit Arrangements.

 

Section 5.12 Subsidiaries. Schedule 5.12 sets forth a complete and accurate list
as of the Closing Date of all Subsidiaries of Holdings. Schedule 5.12 sets forth
as of the Closing Date the jurisdiction of formation of each such Subsidiary,
whether each such Subsidiary is a Subsidiary Guarantor, the number of authorized
shares of each class of Equity Interests of each such Subsidiary, the number of
outstanding shares of each class of Equity Interests, the number and percentage
of outstanding shares of each class of Equity Interests of each such Subsidiary
owned (directly or indirectly) by any Person and the number and effect, if
exercised, of all Equity Equivalents with respect to Capital Stock of each such
Subsidiary. All the outstanding Equity Interests of each Subsidiary of Holdings
are validly issued, fully paid and non-assessable and were not issued in
violation of the preemptive rights of any shareholder and, as of the Closing
Date, are owned by Holdings, directly or indirectly, free and clear of all Liens
(other than those arising under the Collateral Documents). Other than as set
forth on Schedule 5.12, as of the Closing Date, no such Subsidiary has
outstanding any Equity Equivalents nor does any such Person have outstanding any
rights to subscribe for or to purchase or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its Equity Interests.
Holdings has no Subsidiaries, other than the Borrower and its Subsidiaries.

 

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Section 5.13 Governmental Regulations, Etc.

 

(a) None of Holdings and its Subsidiaries is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying “margin stock” within the meaning of Regulation U. No
part of the Letters of Credit or proceeds of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any “margin stock” within
the meaning of Regulation U. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in Regulation U. No indebtedness being reduced or retired out of
the proceeds of the Loans was or will be incurred for the purpose of purchasing
or carrying any margin stock within the meaning of Regulation U or any “margin
security” within the meaning of Regulation T. “Margin stock” within the meaning
of Regulation U does not constitute more than 25% of the value of the
consolidated assets of Holdings and its Consolidated Subsidiaries. None of the
transactions contemplated by this Agreement (including the direct or indirect
use of the proceeds of the Loans) will violate or result in a violation of the
Securities Act, the Exchange Act, or Regulation T, U or X.

 

(b) None of the Group Companies is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the Investment
Company Act of 1940, each as amended. In addition, none of the Group Companies
is (i) an “investment company” registered or required to be registered under the
Investment Company Act of 1940, as amended, (ii) controlled by such a company,
or (iii) a “holding company”, a “subsidiary company” of a “holding company”, or
an “affiliate” of a “holding company” or of a “subsidiary” of a “holding
company”, within the meaning of the Public Utility Holding Company Act of 1934,
as amended.

 

Section 5.14 Purpose of Loans and Letters of Credit. The proceeds of the Term B
Loans, the Multi-Currency Term B Loans and any Revolving Loans made on the
Closing Date will be used solely to fund a portion of the consideration paid
pursuant to the Acquisition Agreement, to refinance existing Debt of the
Borrower and its Subsidiaries, to pay fees and expenses incurred in connection
with the transactions contemplated by the Acquisition Agreement and to fund cash
on hand of the Borrower and its Subsidiaries. The proceeds of the Revolving
Loans made on and after the Closing Date will be used solely to provide for the
working capital requirements of the Borrower and its Subsidiaries and for the
general corporate purposes of the Borrower and its Subsidiaries. The Letters of
Credit shall be used only for or in connection with appeal bonds, reimbursement
obligations arising in connection with surety and reclamation bonds,
reinsurance, domestic or international trade transactions and other obligations
relating to transactions entered into by the Borrower and its Subsidiaries in
the ordinary course of business and for the general corporate purposes of the
Borrower and its Subsidiaries.

 

Section 5.15 Labor Matters. There are no strikes against Holdings or any of its
Subsidiaries, other than any strikes that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. The
hours worked and payments made to employees of Holdings and its Subsidiaries
have not been in violation in any material respect of the Fair Labor Standards
Act or any other applicable Law dealing with such matters, except to the extent
any such violation or violations, could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. All payments due
from Holdings or any of its Subsidiaries, or for which any claim may be made
against Holdings or any of its Subsidiaries, on account of wages and employee
health and welfare insurance and other benefits have been paid or accrued as a
liability on the books of the

 

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Borrower and its Subsidiaries, as applicable. The consummation of the
Transactions will not give rise to a right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which Holdings or any of its Subsidiaries is a party or by which Holdings or
any of its Subsidiaries (or any predecessor) is bound, other than collective
bargaining agreements which, individually or in the aggregate, are not material
to Holdings and its Subsidiaries taken as a whole.

 

Section 5.16 Environmental Matters. Except as disclosed on Schedule 5.16, no
Group Company has failed to comply with any Environmental Law or to obtain,
maintain, or comply with any permit, license or other approval required under
any Environmental Law or is subject to any Environmental Liability which, in any
of the foregoing cases, individually or collectively, could reasonably be
expected to result in a Material Adverse Effect, or has received notice of any
claim with respect to any Environmental Liability, or knows of any basis for any
Environmental Liability against any Group Company, in either case which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

Section 5.17 Intellectual Property. (a) Part A of Schedule 5.17 (as such
schedule may be amended or supplemented from time to time) sets forth a true and
complete list of (i) all United States and foreign registrations of and
applications for Patents, Trademarks, and Copyrights owned by the Borrower and
its Domestic Subsidiaries and (ii) all Licenses material to the business of the
Borrower and its Subsidiaries.

 

(b) The Borrower and its Subsidiaries own, or possess the right to use, all of
the Trademarks, service marks, trade names, Copyrights, Patents, Patent rights,
franchises, Licenses and other rights that are reasonably necessary for the
operation of their respective businesses, without conflict with the rights of
any other Person, except to the extent the failure to own or possess the right
to use any such Intellectual Property could not reasonably be expected to have a
Material Adverse Effect.

 

(c) To the best knowledge of the Borrower, no Trademark, slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Borrower or any
Subsidiary infringes upon any rights held by any other Person, except to the
extent any such infringement, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

 

(d) The Borrower and its Subsidiaries have taken all action to maintain and
preserve their rights in the Intellectual Property owned by the Borrower and its
Domestic Subsidiaries, including without limitation paying all renewal,
maintenance, and other fees and taxes required to maintain each and every
registration and application of Intellectual Property in full force and effect,
except to the extent such action or proceeding would not have a Material Adverse
Effect.

 

(e) The Intellectual Property material to the business of the Borrower and its
Subsidiaries is valid and enforceable in all material respects, and no holding,
decision, or judgment has been rendered in any action or proceeding before any
court or administrative authority challenging the validity of the Borrower’s or
its Subsidiaries’ right to register, or the Borrower’s or its Subsidiaries’
rights to own or use any Intellectual Property, and no such action or proceeding
is pending or, to the Borrower’s

 

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and its Subsidiaries’ knowledge, threatened, except as disclosed in Part E of
Schedule 5.17 or except to the extent the failure to do so would not have a
Material Adverse Effect.

 

(f) All registrations and applications for Copyrights, Patents and Trademarks
are standing in the name of the Borrower or one of its Subsidiaries, and no
material Intellectual Property has been licensed by the Borrower or its
Subsidiaries to any third party, except in the ordinary course of business (such
licenses in effect on the Closing Date being as disclosed in Part F of Schedule
5.17).

 

Section 5.18 Solvency. Each of Holdings and its Consolidated Subsidiaries (on a
consolidated basis) and the Borrower and its Consolidated Subsidiaries (on a
consolidated basis) is and, after consummation of the Transactions, will be
Solvent.

 

Section 5.19 Disclosure. No information or data (excluding financial
projections, budgets, estimates and general market data) made by any Credit
Party in any Senior Finance Document or furnished to the Administrative Agent or
any Lender by or on behalf of any Credit Party in connection with any Senior
Finance Document, when taken as a whole as of the date furnished contains any
untrue statement of a material fact or omits any material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not materially misleading in light of the circumstances under which such
statements were made; provided that (i) to the extent any such statement,
information or report therein was based upon or constitutes a forecast or
projection, the Borrower represents only that it acted in good faith and
utilized assumptions believed by it to be reasonable at the time made (it being
understood and agreed that projections as to future events are not to be viewed
as facts or guaranties of future performance, that actual results during the
period or periods covered by such projections may differ from the projects
results and that such differences may be material and that the Credit Parties
make no representation that such representations will in fact be realized) and
(ii) as to statements, information and reports specified as having been supplied
by third parties, other than Affiliates of the Borrower or any of its
Subsidiaries, the Borrower represents only that it is not aware of any material
misstatement or omission therein.

 

Section 5.20 Collateral Documents.

 

(a) Article 9 Collateral. Each of the Security Agreement and the Pledge
Agreement is effective to create in favor of the Collateral Agent, for the
ratable benefit of the Finance Parties, a valid and enforceable security
interest in the Collateral described therein and, when financing statements in
appropriate form are filed in the offices specified on Schedule 4.01 to the
Security Agreement and the Pledged Collateral is delivered to the Collateral
Agent, each of the Security Agreement and the Pledge Agreement shall constitute
a fully perfected Lien on, and security interest in, all right, title and
interest of the grantors thereunder in such of the Collateral in which a
security interest can be perfected under Article 9 of the Uniform Commercial
Code, in each case prior in right to any other Person, other than with respect
to Permitted Liens.

 

(b) Intellectual Property. When financing statements in appropriate form are
filed in the offices specified on Schedule 4.01 to the Security Agreement, the
Assignment of Patents and Trademarks, substantially in the form of Exhibit A to
the Security Agreement, is filed in the United States Patent and Trademark
Office and the Assignment of Copyrights, substantially in the form of Exhibit B
to

 

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the Security Agreement, is filed in the United States Copyright Office, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in the
United States trademarks, copyrights, patents, licenses and other intellectual
property rights covered in such Assignments, in each case prior in right to any
other Person (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the Credit Parties after the Closing Date).

 

(c) Real Property Mortgages. The Mortgages are effective to create in favor of
the Collateral Agent, for the ratable benefit of the Finance Parties, a legal,
valid and enforceable Lien on all of the right, title and interest of the Credit
Parties in and to the Mortgaged Properties thereunder and the proceeds thereof,
and when the Mortgages are filed in the offices specified on Schedule 5.20(c),
the Mortgages shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the Credit Parties in such Mortgaged
Properties and the proceeds thereof, in each case prior in right to any other
Person, other than with respect to Permitted Liens.

 

(d) Status of Liens. The Collateral Agent, for the ratable benefit of the
Finance Parties, will at all times have the Liens provided for in the Collateral
Documents and, subject to the filing by the Collateral Agent of continuation
statements to the extent required by the Uniform Commercial Code, the Collateral
Documents will at all times constitute valid and continuing liens of record and
first priority perfected security interests in all the Collateral referred to
therein, except as priority may be affected by Permitted Liens. As of the
Closing Date, no filings or recordings are required in order to perfect the
security interests created under the Collateral Documents, except for filings or
recordings listed on Schedule 4.01 to the Security Agreement.

 

Section 5.21 Ownership.

 

(a) Securities of the Borrower. Holdings owns good, valid and insurable legal
title to all the outstanding common stock of the Borrower, free and clear of all
Liens of every kind, whether absolute, matured, contingent or otherwise, other
than those arising under the Collateral Documents. Except as set forth on
Schedule 5.21, there are no shareholder agreements or other agreements
pertaining to Holdings’ beneficial ownership of the common stock of the
Borrower, including any agreement that would restrict Holdings’ right to dispose
of such common stock and/or its right to vote such common stock.

 

(b) Holdings Equity Interests. As of the Closing Date, Kingpin Holdings, LLC
owns good, valid and insurable legal title to all the outstanding common stock
of Holdings. Except as set forth on Schedule 5.21, as of the Closing Date, there
are no shareholder agreements or other agreements pertaining to Kingpin
Holdings, LLC’s beneficial ownership of the common stock of Holdings, including
any agreement that would restrict Kingpin Holdings, LLC’s right to dispose of
such common stock and/or its right to vote such common stock.

 

(c) Kingpin Holdings, LLC Equity Interests. Schedule 5.21 sets forth a true and
accurate list as of the Closing Date of each holder of any Equity Interest or
Equity Equivalent of Kingpin Holdings, LLC, indicating the name of each such
holder and the Equity Interest or Equity Equivalent held

 

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by each such Person. Except as set forth on Schedule 5.21, as of the Closing
Date, there are no shareholders agreements or other agreements pertaining to the
Investor Group’s beneficial ownership of the common Equity Interests of Kingpin
Holdings, LLC, including any agreement that would restrict the Investor Group’s
right to dispose of such common Equity Interests and/or its right to vote such
common Equity Interests.

 

Section 5.22 Certain Transactions.

 

(a) Acquisition Agreement. On the Closing Date, (i) the Acquisition Agreement
has not been amended or modified, nor has any material condition thereof been
waived by Holdings or the Borrower, (ii) all conditions to the obligations of
Holdings and the Borrower to consummate the transactions contemplated by the
Acquisition Agreement have been satisfied, (iii) all funds advanced on the
Closing Date by the Lenders have been used in accordance with Section 5.14 and
(iv) the transactions contemplated by the Acquisition Agreement have been
consummated in accordance with the Acquisition Agreement in all material
respects and all applicable requirements of Law.

 

(b) Senior Subordinated Notes. On the Closing Date, (i) the Senior Subordinated
Note Indenture, has not been amended or modified, nor has any condition thereof
been waived by the Borrower in a manner adverse in any material respect to the
rights or interests of the Lenders and (ii) all funds advanced by the Senior
Subordinated Noteholders have been used to consummate the transactions
contemplated by the Acquisition Agreement.

 

(c) iStar Sale/Leaseback. On the Closing Date, (i) the iStar Sale/Leaseback
Documents have not been amended or modified, nor has any condition thereof been
waived by Holdings or the Borrower, (ii) all conditions to the obligations of
Holdings and the Borrower to consummate the transactions contemplated by the
iStar Sale/Leaseback have been satisfied and (iii) the transactions contemplated
by the iStar Sale/Leaseback Documents have been consummated in accordance with
the iStar Sale/Leaseback Documents in all material respects and all applicable
requirements of law. The obligations of the Borrower and the other Group
Companies party to the iStar Sale/Leaseback Documents will be treated as an
Operating Lease under GAAP.

 

(d) No Broker’s Fees. Except as disclosed on Schedule 5.22, no broker’s or
finder’s fee or commission will be payable with respect to this Agreement or any
of the transactions contemplated hereby as a result of any action by or on
behalf of the Borrower or their Affiliates, and each of Holdings and the
Borrower hereby indemnifies each Agent and each Lender against, and agrees that
it will hold each Agent and each Lender harmless from, any claim, demand or
liability for any such broker’s or finder’s fees alleged to have been incurred
in connection herewith or therewith and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.

 

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ARTICLE VI

AFFIRMATIVE COVENANTS

 

Each of Holdings and the Borrower agrees that so long as any Lender has any
Commitment hereunder, any Senior Obligation or other amount payable hereunder or
under any Note or other Senior Finance Document or any LC Obligation (in each
case other than contingent indemnification obligations) remains unpaid or any
Letter of Credit remains in effect:

 

Section 6.01 Information. The Borrower will furnish, or cause to be furnished,
to the Administrative Agent for delivery to each of the Lenders:

 

(a) Annual Financial Statements. As soon as available, and in any event within
110 days after the end of each fiscal year of the Borrower, a consolidated
balance sheet and income statement of Holdings and its Consolidated
Subsidiaries, as of the end of such fiscal year, and the related consolidated
statement of operations and retained earnings and consolidated statement of cash
flows for such fiscal year, setting forth in comparative form consolidated
figures for the preceding fiscal year, all such financial statements to be in
reasonable form and detail and (in the case of such consolidated financial
statements) audited by independent certified public accountants of recognized
national standing reasonably acceptable to the Lead Arrangers and accompanied by
an opinion of such accountants (which shall not be qualified or limited in any
material respect) to the effect that such consolidated financial statements have
been prepared in accordance with GAAP and present fairly in all material
respects the consolidated financial position and consolidated results of
operations and cash flows of Holdings and its Consolidated Subsidiaries in
accordance with GAAP consistently applied (except for changes with which such
accountants concur) and accompanied by a written statement by the accountants
reporting on compliance with this Agreement to the effect that in the course of
the audit upon which their opinion on such financial statements was based (but
without any special or additional audit procedures for the purpose), they
obtained knowledge of no condition or event relating to financial matters which
constitutes a Default or an Event of Default or, if such accountants shall have
obtained in the course of such audit knowledge of any such Default or Event of
Default, disclosing in such written statement the nature and period of existence
thereof, it being understood that such accountants shall be under no liability,
directly or indirectly, to the Lenders for failure to obtain knowledge of any
such condition or event.

 

(b) Quarterly Financial Statements. As soon as available, and in any event
within 45 days after the end of each of the first three fiscal quarters in each
fiscal year of the Borrower, a consolidated balance sheet of Holdings and its
Consolidated Subsidiaries as of the end of such fiscal quarter, together with
related consolidated statement of operations and retained earnings and
consolidated statement of cash flows for such fiscal quarter and the then
elapsed portion of such fiscal year, setting forth in comparative form
consolidated figures for the corresponding periods of the preceding fiscal year,
all such financial statements to be in form and detail and reasonably acceptable
to the Administrative Agent, and accompanied by a certificate of the chief
financial officer of the Borrower to the effect that such quarterly financial
statements have been prepared in accordance with GAAP and present fairly in all
material respects the consolidated financial position and consolidated results
of operations and cash flows of Holdings and its Consolidated Subsidiaries in
accordance with GAAP consistently applied, subject to changes resulting from
normal year-end audit adjustments and the absence of footnotes required by GAAP.

 

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(c) Officer’s Certificate. At the time of delivery of the financial statements
provided for in Sections 6.01(a) and 6.01(b) above, a certificate of the chief
financial officer or other appropriate Responsible Officer of the Borrower (i)
demonstrating compliance with the financial covenants contained in Section 7.17
by calculation thereof as of the end of the fiscal period covered by such
financial statements, (ii) stating that no Default or Event of Default exists,
or if any Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Borrower and the other Credit Parties propose
to take with respect thereto and (iii) stating whether, since the date of the
most recent financial statements delivered hereunder, there has been any
material change in the GAAP applied in the preparation of the financial
statements of Holdings and its Consolidated Subsidiaries, and, if so, describing
such change. At the time such certificate is required to be delivered, the
Borrower shall promptly deliver to the Administrative Agent, at the
Administrative Office, information regarding any change in the Leverage Ratio
that would change the then existing Applicable Margin.

 

(d) Annual Business Plan and Budgets. Not more than 90 days after the end of
each fiscal year of the Borrower, beginning with the fiscal year ending July 3,
2005, an annual business plan and budget of Holdings and its Consolidated
Subsidiaries containing, among other things, projected financial statements for
the then-current fiscal year.

 

(e) Excess Cash Flow. Within 150 days after the end of each fiscal year of the
Borrower, commencing with the fiscal year ending July 3, 2005, a certificate of
the chief financial officer of the Borrower containing information regarding the
calculation of Excess Cash Flow for such fiscal year.

 

(f) Auditor’s Reports. Within five Business Days of receipt thereof, a copy of
any other final report or “management letter” submitted by independent
accountants to Holdings, the Borrower or any of their respective Subsidiaries in
connection with any annual, interim or special audit of the books of Holdings,
the Borrower or any of their respective Subsidiaries.

 

(g) Reports. Promptly upon transmission or receipt thereof, copies of all
filings and registrations with, and reports to or from, the Securities and
Exchange Commission, or any successor agency, and copies of all financial
statements, proxy statements, notices and reports any Group Company shall send
to its shareholders or to a holder of any Debt owed by any Group Company in its
capacity as such a holder.

 

(h) Notices. Prompt notice of: (i) the occurrence of any Default or Event of
Default; (ii) any matter that has resulted or may result in a Material Adverse
Effect, including (A) breach or non-performance of, or any default under, any
material agreement of Holdings or any of its Subsidiaries; (B) any dispute,
litigation, investigation, proceeding or suspension between Holdings or any of
its Subsidiaries and any Governmental Authority; (C) the commencement of, or any
material adverse development in, any litigation or proceeding affecting Holdings
or any of its Subsidiaries, including pursuant to any applicable Environmental
Law; (D) any litigation, investigation or proceeding affecting any Credit Party
in which the amount involved exceeds $15,000,000, or in which injunctive relief
or similar relief is sought, which relief, if granted, could be reasonably
expected to have a Material Adverse Effect; and (E) any material change in
accounting policies or financial reporting practice by Holdings or any of its
Subsidiaries. Each notice pursuant to this Section 6.01(h) shall (i) be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to

 

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therein and stating what action the Borrower or any other Credit Party has taken
and proposes to take with respect thereto and (ii) describe with particularity
any and all provisions of this Agreement or the other Senior Finance Documents
that have been breached.

 

(i) Employee Benefits Arrangements. (i) The Borrower will give written notice to
the Administrative Agent promptly (and in any event within five Business Days
after any officer of any Group Company obtains knowledge thereof) of: (A) any
event or condition that constitutes, or is reasonably likely to lead to, an
ERISA Event; (B) any change in the funding status of any Plan or Foreign Pension
Plan that could have a Material Adverse Effect, together with a description of
any such event or condition or a copy of any such notice and a statement by the
chief financial officer of the Borrower briefly setting forth the details
regarding such event, condition or notice and the action, if any, which has been
or is being taken or is proposed to be taken by the Borrower and the other
Credit Parties with respect thereto; or (C) any event or condition that
constitutes, or is reasonably likely to lead to, an event described in Section
8.01(h)(iii)-(viii). Promptly upon request, the Borrower shall furnish the
Administrative Agent and the Lenders with such additional information concerning
any Plan or Foreign Pension Plan or Employee Benefit Arrangement as may be
reasonably requested, including, but not limited to, with respect to any Plans,
copies of each annual report/return (Form 5500 series), as well as all schedules
and attachments thereto required to be filed with the Department of Labor and/or
the Internal Revenue Service pursuant to ERISA and the Code, respectively, for
each “plan year” (within the meaning of Section 3(39) of ERISA) of each Plan;
and (ii) the Borrower will promptly deliver to the Administrative Agent the most
recently prepared actuarial reports in relation to the Employee Benefit
Arrangements for the time being operated by Group Companies which are prepared
in order to comply with the then current statutory or auditing requirements
within the relevant jurisdiction.

 

(j) Domestication in Other Jurisdiction. Not less than 20 days prior to any
change in the jurisdiction of organization of any Credit Party, a copy of all
documents and certificates intended to be filed or otherwise executed to effect
such change.

 

(k) Other Information. With reasonable promptness upon request therefor, such
other information regarding the business, properties or financial condition of
any Group Company as the Administrative Agent or any other Senior Finance Party
may reasonably request, which may include such information as any Senior Finance
Party may reasonably determine is necessary or advisable to enable it either (i)
to comply with the policies and procedures adopted by it and its Affiliates to
comply with the Bank Secrecy Act, the U.S. Patriot Act and all applicable
regulations thereunder or (ii) to respond to requests for information concerning
Holdings and its Subsidiaries from any government, self-regulatory organization
or financial institution in connection with its anti-money laundering and
anti-terrorism regulatory requirements or its compliance procedures under the
U.S. Patriot Act, including in each case information concerning the Borrower’s
direct and indirect shareholders and its use of the proceeds of the Credit
Extensions hereunder.

 

Section 6.02 Preservation of Existence and Franchises. Except as a result of or
in connection with a dissolution, merger or disposition of a Subsidiary of the
Borrower permitted under Section 7.04 or Section 7.05, each Group Company will
do all things necessary to preserve and keep in full force and effect its legal
existence and do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business and to maintain and operate such
business in substantially the manner in which it is presently conducted and
operated;

 

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provided, however, that neither Holdings nor any of its Subsidiaries shall be
required to preserve any such rights, licenses, permits, franchises,
authorizations or Intellectual Property if the preservation thereof is no longer
desirable in the conduct of the business of the Borrower and its Subsidiaries or
the loss thereof could not reasonably be expected to result in a Material
Adverse Effect.

 

Section 6.03 Books and Records; Lender Meeting. Each of the Group Companies will
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves). At the request of the Administrative
Agent, within 110 days after the end of each fiscal year of the Borrower, the
Borrower will conduct a meeting (which may be by telephone) of the Lenders to
discuss such fiscal year’s results and the financial condition of Holdings and
its Consolidated Subsidiaries. Such meetings shall be held at times and places
convenient to the Lenders and to the Borrower.

 

Section 6.04 Compliance with Law; Employee Benefit Arrangements. Each of the
Group Companies will comply with all requirements of Law applicable to it and
its properties to the extent that noncompliance with any such requirement of Law
could reasonably be expected to have a Material Adverse Effect. Without limiting
the generality of the foregoing, each of the Group Companies will do each of the
following as it relates to any Plan maintained by, or Multiemployer Plan
contributed to by, each of the Group Companies, Foreign Pension Plan or Employee
benefit Arrangement: (i) maintain each Plan (other than a Multiemployer Plan),
Foreign Pension Plan and Employee Benefit Arrangement in compliance in all
material respects with the applicable provisions of ERISA, the Code or other
Federal, state or foreign law; (ii) cause each Plan (other than a Multiemployer
Plan) which is qualified under Section 401(a) of the Code to maintain such
qualifications; (iii) make all required contributions to any Plan subject to
Section 412 of the Code and make all required contributions to Multiemployer
Plans; (iv) ensure that there are no Unfunded Liabilities in excess of
$5,000,000 unless the aggregate amount of such Unfunded Liabilities is reduced
below $5,000,000 within a 30-day period; (v) except for the obligations set
forth on Schedule 5.11, not become a party to any Multiemployer Plan; (vi) make
all contributions (including any special payments to amortize any Unfunded
Liabilities) required to be made in accordance with all applicable laws and the
terms of each Foreign Pension Plan in a timely manner; (vii) ensure that all
liabilities under the Employee Benefit Arrangements are either (A) funded to at
least the minimum level required by Law or, if higher, to the level required by
the terms governing the Employee Benefit Arrangements; (B) insured with a
reputable insurance company; (C) provided for or recognized in the accounts most
recently delivered to the Administrative Agent under Section 6.01(c); or (D)
estimated in the formal notes to the accounts most recently delivered to the
Administrative Agent under Section 6.01(a); (viii) ensure that the contributions
or premium payments to or in respect of all Employee Benefit Arrangements are
and continue to be promptly paid at no less than the rates required under the
rules of such arrangements and in accordance with the most recent actuarial
advice received in relation to the Employee Benefit Arrangement and generally in
accordance with applicable law; and (ix) shall use its reasonable efforts to
cause each of its ERISA Affiliates to do each of the items listed in clauses (i)
through (iv) above as it relates to Plans and Multiemployer Plans maintained by
or contributed to by its ERISA Affiliates such that there shall be no liability
to a Group Company by virtue of such ERISA Affiliate’s acts or failure to act.

 

Section 6.05 Payment of Taxes. Each of the Group Companies will pay and
discharge (i) all taxes, assessments and other governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent and (ii) all lawful claims (including claims
for labor, materials and supplies) which, if unpaid, might give rise to a Lien
(other than a Permitted Lien) upon any of its properties; provided, however,
that no Group Company shall be required to pay any such tax, assessment, charge,
levy or claim (i) which is being contested in good faith

 

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by appropriate proceedings diligently pursued and as to which adequate reserves
have been established in accordance with GAAP, (ii) in respect of immaterial
state, local or foreign taxes, (iii) which represent taxes not discharged in the
Borrower’s prior Chapter 11 bankruptcy proceeding and which are being paid in
accordance with the payment plan applicable thereto established pursuant to such
bankruptcy proceeding or (iv) unless the failure to make any such payment (A)
could give rise to an immediate right to foreclose on a Lien securing such
amounts (unless proceedings thereto conclusively operate to stay such
foreclosure) or (B) could reasonably be expected to have a Material Adverse
Effect.

 

Section 6.06 Insurance; Certain Proceeds.

 

(a) Insurance Policies. Each of the Group Companies will at all times maintain
in full force and effect insurance (including worker’s compensation insurance,
liability insurance or casualty insurance) in such amounts, covering such risk
and liabilities and with such deductibles or self-insurance retentions as are in
accordance with normal industry practice or otherwise consistent with past
practice of the Group Companies or prudent in the reasonable business judgment
of the senior management of the Borrower. The Collateral Agent shall be named as
loss payee or mortgagee, as its interest may appear, with respect to all such
property and casualty policies and additional insured with respect to all such
other policies (other than workers’ compensation, employee health and directors
and officers policies), and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Collateral Agent, that if the insurance carrier
shall have received written notice from the Collateral Agent of the occurrence
and continuance of an Event of Default, the insurance carrier shall pay all
proceeds otherwise payable to Holdings or one or more of its Subsidiaries under
such policies directly to the Collateral Agent (which agreement shall be
evidenced by a “standard” or “New York” lender’s loss payable endorsement in the
name of the Collateral Agent on Accord Form 27) and that it will give the
Collateral Agent 30 days’ prior written notice before any such policy or
policies shall be altered or canceled, and that no act or default of any Group
Company or any other Person shall affect the rights of the Collateral Agent or
the Lenders under such policy or policies.

 

(b) Loss Events. In case of any Casualty or Condemnation with respect to any
property of any Group Company or any part thereof in excess of $1,000,000, the
Borrower shall promptly give written notice thereof to the Administrative Agent
generally describing the nature and extent of such damage, destruction or
taking. The Borrower shall, or shall cause such Group Company to, repair,
restore or replace the property of such Person (or part thereof) which was
subject to such Casualty or Condemnation, at such Person’s cost and expense,
whether or not the Insurance Proceeds or Condemnation Award, if any, received on
account of such event shall be sufficient for that purpose; provided, however,
that such property need not be repaired, restored or replaced to the extent the
failure to make such repair, restoration or replacement (i) is desirable to the
proper conduct of the business of such Person in the ordinary course and
otherwise in the best interest of such Person or (ii) the failure to repair,
restore or replace the property is attributable to the contemplated application
of the Insurance Proceeds from such Casualty or the Condemnation Award from such
Condemnation to the acquisition of other tangible assets used or useful in the
business of the Borrower and its Subsidiaries as contemplated in the definition
of “Reinvestment Funds” in Section 1.01 or to payment of the Senior Obligations
in accordance with the provisions of Section 2.09(b)(v).

 

(c) Certain Rights of the Lenders. In connection with the covenants set forth in
this Section 6.06, it is understood and agreed that none of the Agents, the
Lenders or their respective agents or employees shall be liable for any loss or
damage insured by the insurance policies required to be

 

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maintained under this Section 6.06, it being understood that the Group Companies
shall look solely to their insurance companies or any other parties other than
the aforesaid parties for the recovery of such loss or damage.

 

Section 6.07 Maintenance of Property. Each of the Group Companies will maintain
and preserve its properties and equipment material to the conduct of its
business in good working order and condition, normal wear and tear and Casualty
and Condemnation excepted, and will make, or cause to be made, as to such
properties and equipment from time to time all repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto as may be needed or
proper in the reasonable good faith business judgment of the Responsible
Officers of such Group Companies.

 

Section 6.08 Use of Proceeds. The Borrower will use the proceeds of the Loans
and will use the Letters of Credit solely for the purposes set forth in Section
5.14.

 

Section 6.09 Audits/Inspections. Upon reasonable notice and during normal
business hours, each of the Group Companies will permit representatives
appointed by the Agents or the Required Lenders to visit and inspect its
executive offices and/or manufacturing facilities and, following the occurrence
and during the continuance of any Event of Default, any of its properties, and
to review and inspect its books and records, accounts receivable and inventory,
and to make photocopies or photographs thereof and to write down and record any
information such representatives obtain and shall permit the Agents or such
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees,
independent accountants and representatives of the Group Companies, in each case
so long as a Responsible Officer has been given the opportunity to be present;
provided, however, that prior to the occurrence and continuance of an Event of
Default, such visits shall be limited to one per year per location, and the
Group Companies shall not be obligated to reimburse the expenses of more than
two representatives of the Administrative Agent and the Lenders in the
aggregate.

 

Section 6.10 Additional Credit Parties; Additional Security.

 

(a) Additional Subsidiary Guarantors. Each of Holdings and the Borrower will
take, and will cause each of its Subsidiaries (other than Foreign Subsidiaries,
except to the extent provided in subsection (d) below, and other than
non-Wholly-Owned Liquor License Subsidiaries) to take, such actions from time to
time as shall be necessary to ensure that all Subsidiaries of Holdings (other
than Foreign Subsidiaries, except to the extent provided in subsection (d)
below, and other than non-Wholly-Owned Liquor License Subsidiaries) are
Subsidiary Guarantors. Without limiting the generality of the foregoing, if any
Group Company shall form or acquire any new Subsidiary, the Borrower, as soon as
practicable and in any event within 30 days after such formation or acquisition,
will provide the Collateral Agent with notice of such formation or acquisition
setting forth in reasonable detail a description of all of the assets of such
new Subsidiary and will cause such new Subsidiary (other than a Foreign
Subsidiary, except to the extent provided in subsection (d) below, and other
than non-Wholly-Owned Liquor License Subsidiaries) to:

 

(i) within 30 days after such formation or acquisition, execute an Accession
Agreement pursuant to which such new Subsidiary shall agree to become a
“Guarantor” under the

 

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Guaranty, an “Obligor” under the Security Agreement, an “Obligor” under the
Pledge Agreement and/or an obligor under such other Collateral Documents as may
be applicable to such new Subsidiary; and

 

(ii) deliver such proof of organizational authority, incumbency of officers,
opinions of counsel and other documents as is consistent with those delivered by
each Credit Party pursuant to Section 4.01 on the Closing Date or as the
Administrative Agent, the Collateral Agent or the Required Lenders reasonably
shall have requested.

 

(b) Additional Security. Each of Holdings and the Borrower will cause, and will
cause each of its Subsidiaries (other than a Foreign Subsidiary, except to the
extent provided in subsection (d) below, and other than non-Wholly-Owned Liquor
License Subsidiaries) to cause, (i) all of its owned Real Properties and
personal property located in the United States, other than those owned Real
Properties set forth on Schedule 6.10(b) and other than owned Real Properties
which are subject to a Permitted Lien the terms of which prohibit the granting
of a Lien thereon in favor of the Finance Parties and (ii) to the extent deemed
to be material by the Administrative Agent or the Required Lenders in its or
their sole reasonable discretion, (A) all of its personal property located in
the United States (except to the extent expressly excluded from the Collateral
Documents), (B) all of its leased Real Properties located in the United States
(other than leased Real Properties subject to a Sale/Leaseback Transaction
permitted hereunder or other leaseholds the terms of which prohibit the granting
of a lien thereon in favor of the Finance Parties) and (C) all other assets and
properties of Holdings and its Domestic Subsidiaries located in the United
States as are not covered by the original Collateral Documents (or specifically
excluded therefrom) and as may be requested by the Collateral Agent or the
Required Lenders in their sole reasonable discretion to be subject at all times
to first priority (subject only to Permitted Liens), perfected and, in the case
of Real Property (whether leased or owned), title insured Liens in favor of the
Collateral Agent pursuant to the Collateral Documents or such other security
agreements, pledge agreements, mortgages or similar collateral documents as the
Collateral Agent shall request in its sole and reasonable discretion
(collectively, the “Additional Collateral Documents”). With respect to any Real
Property (whether leased or owned) located in the United States acquired or
leased by any Credit Party subsequent to the Closing Date for which the
Collateral Agent is entitled to a Lien pursuant to the preceding sentence, such
Person will cause to be delivered to the Collateral Agent with respect to such
Real Property (other than immaterial leased properties or except for properties
with respect to which landlord consent for such Mortgage cannot be obtained
after commercially reasonable efforts by the Borrower to do so or as otherwise
approved by the Administrative Agent) documents, instruments and other items of
the types required to be delivered pursuant to Section 4.01(l), all in form,
content and scope reasonably satisfactory to the Collateral Agent. In
furtherance of the foregoing terms of this Section 6.10, the Borrower agrees to
promptly provide the Administrative Agent with written notice of the acquisition
by Holdings or any of its Subsidiaries of any Real Property located in the
United States having a market value greater than $500,000 or the entering into a
lease by Holdings or any of its Subsidiaries of any Real Property located in the
United States for annual rent of $150,000 or more, setting forth in each case in
reasonable detail the location and a description of the asset(s) so acquired or
leased. Without limiting the generality of the foregoing, Holdings and the
Borrower will cause, and will cause each of their respective Subsidiaries to
cause, 100% of the Equity Interests of each of their respective direct and
indirect Subsidiaries (or 65% of such Equity Interests, if such Subsidiary is a
direct Foreign Subsidiary, except as provided in subsection (d) below), other
than non-Wholly-Owned Liquor License Subsidiaries to be subject at all times to
a first priority, perfected Lien in favor of the Collateral Agent pursuant to
the terms and conditions of the Collateral Documents, subject only to Permitted
Liens described in paragraph (ii) and/or (iv) of Section 7.02.

 

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If, subsequent to the Closing Date, a Credit Party shall acquire any
Intellectual Property, securities, instruments, chattel paper or other personal
property required to be delivered to the Collateral Agent as Collateral under
any of the Collateral Documents, the Borrower shall promptly (and in any event
within 10 Business Days after any Responsible Officer of any Credit Party
acquires knowledge of the same) notify the Collateral Agent of the same. Each of
the Credit Parties shall adhere to the covenants regarding the location of
personal property as set forth in the Collateral Documents.

 

All such security interests and mortgages shall be granted pursuant to
documentation consistent with the Collateral Documents executed at Closing and
otherwise reasonably satisfactory in form and substance to the Collateral Agent
and shall constitute valid and enforceable perfected security interests and
mortgages prior to the rights of all third Persons and subject to no other Liens
except for Permitted Liens. The Additional Collateral Documents or instruments
related thereto shall have been duly recorded or filed in such manner and in
such places as are required by law to establish, perfect, preserve and protect
the Liens in favor of the Collateral Agent required to be granted pursuant to
the Additional Collateral Documents, and all taxes, fees and other charges
payable in connection therewith shall have been paid in full. The Borrower shall
cause to be delivered to the Collateral Agent such opinions of counsel, title
insurance and other related documents as may be reasonably requested by the
Collateral Agent to assure itself that this Section 6.10(b) has been complied
with.

 

(c) Real Property Appraisals. If the Collateral Agent or the Required Lenders
determine that they are required by law or regulation to have appraisals
prepared in respect of the Real Property of any Group Company constituting
Collateral, the Borrower shall provide to the Collateral Agent appraisals which
satisfy the applicable requirements set forth in 12 C.F.R., Part 34—Subpart C or
any successor or similar statute, rule, regulation, guideline or order, and
which shall be in scope, form and substance, and from appraisers, reasonably
satisfactory to the Required Lenders and shall be accompanied by a certification
of the appraisal firm providing such appraisals that the appraisals comply with
such requirements.

 

(d) Foreign Subsidiaries Security. If, following a change that is reasonably
determined to be relevant by the Administrative Agent in the relevant sections
of the Code or the regulations, rules, rulings, notices or other official
pronouncements issued or promulgated thereunder, counsel for the Borrower
reasonably acceptable to the Collateral Agent and the Required Lenders fails
within 90 days after a reasonable request from the Collateral Agent and the
Required Lenders to deliver evidence, in form and substance mutually
satisfactory to the Collateral Agent and the Borrower, with respect to any
Foreign Subsidiary of Holdings which has not already had all of the Equity
Interests issued by it pledged pursuant to the Pledge Agreement that (i) a
pledge (A) of two-thirds or more of the total combined voting power of all
classes of capital stock of such Foreign Subsidiary entitled to vote, and (B) of
any promissory note issued by such Foreign Subsidiary to the Borrower or any of
its Domestic Subsidiaries, (ii) the entering into by such Foreign Subsidiary of
a guaranty in form and substance substantially similar to the Guaranty, (iii)
the entering into by such Foreign Subsidiary of a security agreement in form and
substance substantially similar to the Security Agreement, and (iv) the entering
into by such Foreign Subsidiary of a pledge agreement substantially similar to
the Pledge Agreement, in any such case would reasonably be expected to be
restricted by applicable Law of the jurisdiction of organization of such Foreign
Subsidiary or would reasonably be expected to cause the undistributed earnings
or future earnings, if any, of such Foreign Subsidiary as determined for United
States federal income tax purposes to be included as gross income of such
Foreign Subsidiary’s United States parent (or other domestic Affiliate) for
United States federal income tax purposes, then, (A) in the case of a failure to
deliver the evidence described in clause (i) above, that portion of such Foreign
Subsidiary’s

 

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outstanding capital stock or any promissory notes so issued by such Foreign
Subsidiary, in each case not theretofore pledged pursuant to the Pledge
Agreement, shall be pledged to the Collateral Agent for the benefit of the
Finance Parties pursuant to the Pledge Agreement (or another pledge agreement in
substantially similar form, if needed), in each case only to the extent that
such pledge would not reasonably be expected to cause the undistributed earnings
or future earnings, if any, of such Foreign Subsidiary as determined for United
States federal income tax purposes to be included in gross income of such
Foreign Subsidiary’s United States parent (or other domestic Affiliate) for
United States federal income tax purposes or would not reasonably be expected to
be restricted by Applicable Law of the jurisdiction of organization of such
Foreign Subsidiary; (B) in the case of a failure to deliver the evidence
described in clause (ii) above, such Foreign Subsidiary shall execute and
deliver the Guaranty (or another guaranty in substantially similar form, if
needed), guaranteeing the Finance Obligations; (C) in the case of a failure to
deliver the evidence described in clause (iii) above, such Foreign Subsidiary
shall execute and deliver the Security Agreement (or another security agreement
in substantially similar form, if needed), granting to the Collateral Agent, for
the benefit of the Finance Parties, a security interest in all of such Foreign
Subsidiary’s assets and securing the Finance Obligations; and (D) in the case of
a failure to deliver the evidence described in clause (iv) above, such Foreign
Subsidiary shall execute and deliver the Pledge Agreement (or another pledge
agreement in substantially similar form, if needed), pledging to the Collateral
Agent, for the benefit of the Finance Parties, all of the capital stock and
promissory notes owned by such Foreign Subsidiary, in each case to the extent
that entering into the Guaranty, Security Agreement or Pledge Agreement is
permitted by the Laws of the respective foreign jurisdiction and with all
documents delivered pursuant to this Section 6.10(d) to be in form, scope and
substance reasonably satisfactory to the Collateral Agent and the Required
Lenders.

 

(e) Landlord Consents; Leasehold Mortgages. To the extent not delivered on the
Closing Date and except as otherwise reasonably agreed by the Collateral Agent,
the Borrower will use commercially reasonable efforts for a period of 90 days
after the Closing Date to obtain a fully executed Landlord Consent and Estoppel
with respect to each Leased Mortgaged Property, together with evidence that such
Leased Mortgaged Property is a Recorded Leasehold Interest, it being agreed that
the Collateral Agent shall promptly thereafter return to the Borrower the
Mortgage with respect to any Leased Real Property with respect to which the
Borrower has failed to receive a Landlord Consent and Estoppel as contemplated
by this Section 6.10(e). The Borrower hereby irrevocably authorizes the
Collateral Agent, upon receipt of each Leasehold Consent and Estoppel referred
to in this Section 6.10(e), to cause the Mortgage with respect to the relevant
Leased Mortgage Property to be recorded in all applicable filing offices.
Concurrently with such recordation, the Borrower shall deliver or cause to be
delivered to the Collateral Agent a Mortgage Policy with respect to each such
Leased Mortgage Property comparable to those delivered on the Closing Date
pursuant to Section 4.01(m)(iii) and otherwise in form, substance and amount
reasonably satisfactory to the Lead Arrangers.

 

(f) Each of Holdings and the Borrower agrees that, except as otherwise provided
in this Section 6.10, each action required by this Section 6.10 shall be
completed as soon as possible, but in no event later than 90 days after such
action is either requested to be taken by the Collateral Agent or the Required
Lenders or required to be taken by Holdings or any of its Subsidiaries pursuant
to the terms of this Section 6.10.

 

Section 6.11 Interest Rate Protection Agreements. Within 90 days after the
Closing Date, the Borrower will enter into and thereafter maintain in full force
and effect interest rate swaps, rate caps, collars or other similar agreements
or arrangements designed to hedge the position of the Borrower with respect to
interest rates at rates and on terms reasonably satisfactory to the Lead
Arrangers, taking

 

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into account current market conditions, the effect of which is that at least 50%
of the Consolidated Debt of Holdings and its Consolidated Subsidiaries will bear
interest at a fixed or capped rate or the interest cost in respect of which will
be fixed or capped for a period expiring no earlier than 24 months after the
Closing Date. The Borrower will promptly deliver evidence of the execution and
delivery of such agreements to the Administrative Agent.

 

Section 6.12 Contributions. Within three Business Days following its receipt
thereof, Holdings will contribute as a common equity contribution to the capital
of the Borrower any cash proceeds received by Holdings after the Closing Date
from any Asset Disposition, Casualty, Condemnation, Debt Issuance or Equity
Issuance or any cash capital contributions received by Holdings after the
Closing Date.

 

ARTICLE VII

NEGATIVE COVENANTS

 

Each of Holdings and the Borrower agrees that so long as any Lender has any
Commitment hereunder, any Senior Obligations or other amount payable hereunder
or under any Note or other Senior Finance Document or any LC Obligation (in each
case other than contingent indemnification obligations) remains unpaid or any
Letter of Credit remains unexpired:

 

Section 7.01 Limitation on Debt. None of the Group Companies will incur, create,
assume or permit to exist any Debt, Derivatives Obligations or Synthetic Lease
Obligations except:

 

(i) Debt of the Credit Parties under this Agreement and the other Senior Finance
Documents;

 

(ii) Debt arising under the Senior Subordinated Indenture and the Senior
Subordinated Notes (but not including any renewal, refinancing or extension
thereof);

 

(iii) Capital Lease Obligations and Purchase Money Debt of the Borrower and its
Subsidiaries incurred after the Closing Date to finance Capital Expenditures
permitted by Section 7.14; provided that (A) the aggregate amount of all such
Debt (together with refinancings thereof permitted by clause (v) below) does not
exceed $20,000,000 at any time outstanding, (B) the aggregate amount of all such
Debt consisting of Capital Lease Obligations (together with refinancings thereof
permitted by clause (v) below) does not exceed $15,000,000 at any time
outstanding, (C) the Debt when incurred shall not be less than 80% or more than
100% of the lesser of the cost or fair market value as of the time of
acquisition of the asset financed, (D) such Debt is issued and any Liens
securing such Debt are created concurrently with, or within 120 days after, the
acquisition of the asset financed and (E) no Lien securing such Debt shall
extend to or cover any property or asset of any Group Company other than the
asset so financed;

 

(iv) Debt of Borrower or its Subsidiaries secured by Liens permitted by clauses
(xi), (xii) and (xiii) of Section 7.02 or any other Debt acquired or assumed in
a Permitted

 

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Business Acquisition or in connection with the acquisition of assets; provided
that (A) the aggregate principal amount of all Debt incurred or assumed pursuant
to this clause (iv) (together with refinancings thereof permitted by clause (v)
below) shall not exceed $15,000,000 at any time outstanding and (B) such Debt
was not incurred in connection with, or in anticipation of, the events described
in such clauses;

 

(v) Debt (A) of the Borrower representing a refinancing, replacement or
refunding of Debt permitted by clause (ii) above or (B) of the Borrower or its
Subsidiaries representing a refinancing, replacement or refunding of Debt
permitted by clause (iii) or (iv) above or clause (xiii) below; provided in each
case that (A) such Debt (the “Refinancing Debt”) is an original aggregate
principal amount not greater than the aggregate principal amount of, and unpaid
interest on, the Debt being refinanced, replaced or refunded plus the amount of
any premiums required to be paid thereon and fees and expense associated
therewith, (B) such Refinancing Debt has a later or equal final maturity and a
larger or equal weighted average life than the Debt being refinanced, replaced
or refunded, (C) if the Debt being refinanced, replaced or refunded is
subordinated to the Senior Obligations, such Refinancing Debt is subordinated to
the Senior Obligations on terms no less favorable to the Lenders than the terms
of the Debt being refinanced, replaced or refunded, (D) the covenants, events of
default and any Guaranty Obligations in respect thereof shall be no less
favorable to the Lenders than those contained in the Debt being refinanced,
replaced or refunded and (E) at the time of, and after giving effect to, such
refinancing, replacement or refunding, no Default or Event of Default shall have
occurred and be continuing;

 

(vi) Derivatives Obligations of the Borrower or any Subsidiary under Derivatives
Agreements to the extent entered into after the Closing Date in compliance with
Section 6.11 or to manage interest rate or foreign currency exchange rate risks
and not for speculative purposes;

 

(vii) Debt owed to any Person providing property, casualty, liability or other
insurance to the Borrower or any Subsidiary of the Borrower, so long as such
Debt shall not be in excess of the amount of the unpaid cost of, and shall be
incurred only to defer the cost of, such insurance for the year in which such
Debt is incurred and such Debt shall be outstanding only during such year;

 

(viii) Debt consisting of Guaranty Obligations (A) by Holdings in respect of
Debt incurred by the Borrower under the Senior Subordinated Notes or the iStar
Sale/Leaseback Documents or otherwise permitted to be incurred by the Borrower
or any of its subsidiaries, provided, however, that all such Guaranty
Obligations by Holdings shall be unsecured, (B) by the Borrower in respect of
Debt permitted to be incurred by Subsidiaries of the Borrower and (C) by
Subsidiaries of the Borrower of Debt permitted to be incurred by the Borrower or
Subsidiaries of the Borrower;

 

(ix) Debt owing to the Borrower or a Subsidiary of the Borrower to the extent
permitted by Section 7.06(a)(viii), (ix), (xiv) or (xx);

 

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(x) contingent liabilities in respect of any indemnification, adjustment of
purchase price, earn-out, incentive, non-compete, consulting, deferred
compensation and similar obligations of the Borrower and its Subsidiaries
incurred in connection with the Acquisition and Permitted Business Acquisitions;

 

(xi) unsecured Subordinated Debt of the Borrower or any of its Subsidiaries that
is issued to a seller of assets or a Person the subject of a Permitted Business
Acquisition in a transaction permitted by this Agreement in an aggregate
principal amount at any one time outstanding not exceeding $20,000,000;

 

(xii) unsecured Debt of the Borrower or any of its Subsidiaries that is
denominated in Australian Dollars and incurred to finance working capital
requirements in Australia in an aggregate principal Dollar Amount at any one
time outstanding not exceeding $5,000,000;

 

(xiii) Debt of the Borrower and its Subsidiaries outstanding on the Closing Date
and disclosed on Part A of Schedule 7.01, without giving effect to any
subsequent extension, renewal or refinancing thereof;

 

(xiv) Debt of Foreign Subsidiaries of the Borrower (A) outstanding on the
Closing Date and disclosed on Part B of Schedule 7.01 (without giving effect to
any subsequent extension, renewal or refinancing thereof) or (B) incurred on or
after the Closing Date to finance working capital requirements in an aggregate
principal Dollar Amount which, when taken together with the then outstanding
principal amount of all Debt referred to in clause (A) of this subparagraph
(xiv) does not exceed the sum of (y) the aggregate principal Dollar Amount of
the Debt disclosed on Part B of Schedule 7.01 outstanding on the Closing Date
plus (z) $10,000,000;

 

(xv) unsecured Debt of Holdings representing the obligation of Holdings to make
payments with respect to the cancellation or repurchase of certain Equity
Interests of officers, employees or directors (or their estates) of Holdings and
its Subsidiaries, to the extent permitted by Section 7.07(iv);

 

(xvi) contingent liabilities in respect of any indemnification, adjustment of
purchase price, earn-out, incentive, non-compete, consulting, deferred
compensation and similar obligations of the Borrower and its Subsidiaries
incurred or assumed in connection with the disposition of any business, assets
or a Subsidiary, other than Guaranty Obligations in respect of Debt of any
Person acquiring all or any portion of such business, assets or Subsidiary for
the purpose of financing such acquisition;

 

(xvii) Debt in respect of performance bonds, bid bonds, appeal bonds, surety
bonds and completion guarantees and similar obligations, in each case provided
in the ordinary course of business, including those incurred to secure health,
safety and environmental obligations in the ordinary course of business;

 

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(xviii) Debt arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the
ordinary course of business; provided that (A) such Debt (other than credit or
purchase cards) is extinguished within three Business Days of its incurrence and
(B) such Debt in respect of credit or purchase cards in extinguished within 60
days from its incurrence;

 

(xix) Subordinated Seller Paper of Holdings, the Borrower or one or more of its
Subsidiaries;

 

(xx) accrual of interest on Debt otherwise permitted under this Section 7.01,
accretion or amortization of original issue discount with respect to Debt
otherwise permitted under this Section 7.01 and/or Debt incurred as a result of
payment of interest in kind on Debt otherwise permitted under this Section 7.01;

 

(xxi) Guaranty Obligations incurred in the ordinary course of business under
repurchase agreements in connection with the financing of bowling equipment
sales; and

 

(xxii) Debt or Synthetic Lease Obligations of the Borrower and its Subsidiaries
not otherwise permitted by this Section 7.01 incurred after the Closing Date in
an aggregate principal amount not to exceed $20,000,000 at any time outstanding;
provided that no Default or Event of Default shall have occurred and be
continuing immediately before and immediately after giving effect to such
incurrence.

 

Section 7.02 Restriction on Liens. None of the Group Companies will create,
incur, assume or permit to exist any Lien on any property or assets (including
Equity Interests or other securities of any Person, including any Subsidiary of
Holdings) now owned or hereafter acquired by it or on any income or rights in
respect of any thereof, except Liens described in any of the following clauses
(collectively, “Permitted Liens”):

 

(i) Liens created by the Collateral Documents;

 

(ii) Liens (other than any Liens imposed by ERISA or pursuant to any
Environmental Law) for taxes (including outstanding Chapter 11 taxes),
assessments or governmental charges or levies not more than 30 days overdue or
not required to be paid pursuant to Section 6.05;

 

(iii) Liens securing the charges, claims, demands or levies of landlords (but in
all cases excluding any Lien on any Collateral arising under the iStar
Sale/Leaseback Documents), carriers, warehousemen, mechanics, sellers of goods,
carriers and other like persons which were incurred in the ordinary course of
business and which (A) secure charges, claims, demands or levies which are not
more than 30 days overdue or not required to be paid pursuant to Section 6.05 or
(B) do not, individually or in the aggregate, materially detract from the value
of the property or assets which are the subject of such Lien or materially
impair the use thereof in the operation of the business of the Borrower or any
of its Subsidiaries;

 

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(iv) Liens arising from judgments, decrees or attachments (or securing of appeal
bonds with respect thereto) in circumstances not constituting an Event of
Default under Section 8.01; provided that no cash or other property (other than
proceeds of insurance payable by reason of such judgments, decrees or
attachments) the fair value of which exceeds $10,000,000 is deposited or
delivered to secure any such judgment, decree or award, or any appeal bond in
respect thereof;

 

(v) Liens (other than any Liens imposed by ERISA or pursuant to any
Environmental Law) not securing Debt or Derivatives Obligations incurred or
deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security and
other similar obligations incurred in the ordinary course of business;

 

(vi) Liens (including pledges or deposits) securing obligations in respect of
surety bonds (other than appeal bonds), bids, trade contracts, public or
statutory obligations, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the ordinary
course of business;

 

(vii) pledges or deposits of cash and Cash Equivalents securing deductibles,
self-insurance, co-payment, co-insurance, retentions and similar obligations to
providers of insurance on the ordinary cause of business;

 

(viii) zoning restrictions, building codes, easements, rights of way, licenses,
reservations, covenants, conditions, waivers, restrictions on the use of
property or other minor encumbrances or irregularities of title not securing
Debt or Derivatives Obligations which do not, individually or in the aggregate,
materially impair the use of any property in the operation or business of
Holdings or any of its Subsidiaries or the value of such property for the
purpose of such business;

 

(ix) Permitted Encumbrances;

 

(x) Liens securing Capital Lease Obligations and Purchase Money Debt permitted
to be incurred under Section 7.01(iii);

 

(xi) any Lien existing on any asset of any Person at the time such Person
becomes a Subsidiary of the Borrower and not created in contemplation of such
event;

 

(xii) any Lien on any asset of any Person existing at the time such Person is
merged or consolidated with or into the Borrower or a Subsidiary of the Borrower
and not created in contemplation of such event;

 

(xiii) any Lien existing on any asset prior to the acquisition thereof by the
Borrower or a Subsidiary of the Borrower and not created in contemplation of
such acquisition;

 

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(xiv) any Lien securing Refinancing Debt in respect of any Debt of the Borrower
or any Subsidiary of the Borrower secured by any Lien permitted by clauses (xi),
(xii), (xiii) or (xxi) of this Section 7.02; provided, that such Debt is not
secured by any additional assets;

 

(xv) Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of set-off or similar rights, in each case
incurred in the ordinary course of business;

 

(xvi) licenses, sublicenses, leases or subleases granted by a Group Company as
lessor to third Persons in the ordinary course of business not interfering in
any material respect with the business of any Group Company;

 

(xvii) Liens on (A) incurred premiums, dividends and rebates which may become
payable under insurance policies and loss payments which reduce the incurred
premiums on such insurance policies and (B) rights which may arise under State
insurance guarantee funds relating to any such insurance policy, in each case
securing Debt permitted to be incurred pursuant to Section 7.01(vii);

 

(xviii) any (A) Lien not securing any Debt, Derivatives Obligations or Synthetic
Lease Obligations constituting an interest or title of a licensor, lessor or
sublicensor or sublessor under any Operating Lease or License entered into by
the Borrower or any of its Subsidiaries in compliance with this Agreement or (B)
Lien resulting from the subordination by any such lessor or sublessor of its
interest or title under such Operating Lease to any Lien described in
subparagraph (viii) above; provided that the holder of such Lien or restriction
agrees in writing to recognize the rights of such lessee or sublessee under such
Operating Lease;

 

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

 

(xx) Liens securing obligations (other than Debt or Derivatives Obligations)
under operating, reciprocal easement or similar agreements entered into in the
ordinary course of business of the Borrower any its Subsidiaries;

 

(xxi) Liens existing on the Closing Date and listed on Schedule 7.02 hereto;
provided that such Liens shall secure only those obligations which they secure
on the date hereof (and permitted extensions, renewals and refinancings of such
obligations) and shall not subsequently apply to any other property or assets of
the Borrower and its Subsidiaries (other than accessions to and the proceeds of
the property or assets subject to such Liens to the extent provided by the terms
thereof on the date hereof);

 

(xxii) Liens solely on any cash earnest money deposits made by the Borrower or
any of its Subsidiaries in connection with any letter of intent or purchase
agreement with respect to a Permitted Business Acquisition;

 

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(xxiii) Liens upon specific items or inventory or other goods and proceeds of
the Borrower or any of its Subsidiaries securing such Person’s obligations in
respect of bankers’ acceptances or documentary letters of credit issued or
created for the account of such Person to facilitate the shipment or storage of
such inventory or other goods;

 

(xxiv) Liens on any assets or Equity Interests of a Foreign Subsidiary of the
Borrower securing Debt of such Foreign Subsidiary incurred pursuant to Section
7.01(xiv);

 

(xxv) Liens deemed to exist in connection with repurchase obligations permitted
to be incurred pursuant to Section 7.01(xxi) or in connection with Cash
Equivalents;

 

(xxvi) Liens arising under the iStar Sale/Leaseback Documents consisting of
options, whether or not then exercisable, to purchase Bowling Equipment of the
Borrower and/or one or more of its Subsidiaries; and

 

(xxvii) other Liens incurred by the Borrower and its Subsidiaries if the
aggregate amount of the obligations secured thereby do not exceed $10,000,000.

 

Section 7.03 Nature of Business. None of the Group Companies will alter in any
material respect the character of the business conducted by such Person as of
the Closing Date, except that the Borrower and its Subsidiaries may engage in
reasonable extensions thereof and in business reasonably related, ancillary or
complementary thereto.

 

Section 7.04 Consolidation, Merger and Dissolution. Except in connection with an
Asset Disposition permitted by the terms of Section 7.05, none of the Group
Companies will enter into any transaction of merger or consolidation or
liquidate, wind up or dissolve itself or its affairs (or suffer any liquidations
or dissolutions); provided that:

 

(i) the Merger shall be permitted;

 

(ii) any Domestic Subsidiary of the Borrower may merge with and into, or be
voluntarily dissolved or liquidated into, the Borrower, so long as (A) the
Borrower is the surviving corporation of such merger, dissolution or
liquidation, (B) the security interests granted to the Collateral Agent for the
benefit of the Finance Parties pursuant to the Collateral Documents in the
assets of the Borrower and such Domestic Subsidiary so merged, dissolved or
liquidated shall remain in full force and effect and perfected (to at least the
same extent as in effect immediately prior to such merger, dissolution or
liquidation), (C) no Default or Event of Default shall have occurred and be
continuing immediately before or immediately after giving effect to such
transaction and (D) no Person other than the Borrower or a Subsidiary Guarantor
receives any consideration in respect or as a result of such transaction;

 

(iii) any Domestic Subsidiary of the Borrower may merge with and into, or be
voluntarily dissolved or liquidated into, any other Domestic Subsidiary of the
Borrower, so

 

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long as (A) in the case of any such merger, dissolution or liquidation involving
one or more Subsidiary Guarantors, (y) a Subsidiary Guarantor is the surviving
corporation of such merger, dissolution or liquidation, (z) no Person other than
the Borrower or a Subsidiary Guarantor receives any consideration in respect of
or as a result of such transaction, (B) the security interests granted to the
Collateral Agent for the benefit of the Finance Parties pursuant to the
Collateral Documents in the assets of each Domestic Subsidiary so merged,
dissolved or liquidated and in the Equity Interests of the surviving entity of
such merger, dissolution or liquidation shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately prior to
such merger, dissolution or liquidation) and (C) no Default or Event of Default
shall have occurred and be continuing immediately before or immediately after
giving effect to such transaction;

 

(iv) any Foreign Subsidiary of the Borrower may be merged with and into, or be
voluntarily dissolved or liquidated into, the Borrower or any Subsidiary of the
Borrower, so long as (A) in the case of any such merger, dissolution or
liquidation involving one or more Subsidiary Guarantors, (y) the Borrower or
such Subsidiary Guarantor, as the case may be, is the surviving corporation of
any such merger, dissolution or liquidation and (z) no Person other than the
Borrower or a Subsidiary Guarantor receives any consideration in respect of or
as a result of such transaction, (B) the security interests granted to the
Collateral Agent for the benefit of the Finance Parties pursuant to the
Collateral Documents in the assets of such Foreign Subsidiary, if any, and the
Borrower or such other Wholly-Owned Subsidiary, as the case may be, and in the
Equity Interests of the surviving entity of such merger, dissolution or
liquidation shall remain in full force and effect and perfected (to at least the
same extent as in effect immediately prior to such merger, dissolution or
liquidation) and (C) no Default or Event of Default shall have occurred and be
continuing immediately before or immediately after giving effect to such
transaction;

 

(v) the Borrower or any Subsidiary of the Borrower may merge with any Person
(other than Holdings) in connection with a Permitted Business Acquisition if (A)
in the case of any such merger involving the Borrower, the Borrower shall be the
continuing or surviving corporation in such merger, (B) in the case of any such
merger involving a Subsidiary Guarantor, such Subsidiary Guarantor, as the case
may be, shall be the continuing or surviving corporation in such merger of the
continuing or surviving corporation in such merger shall, simultaneously with
the consummation of such merger, become a Subsidiary Guarantor having all the
responsibilities and obligations of the Subsidiary Guarantor so merged and (C)
the Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Lead Arrangers may reasonably request so as
to cause the Credit Parties to be in compliance with the terms of Section 6.10
after giving effect to such transactions.

 

In the case of any merger or consolidation permitted by this Section 7.04 of any
Subsidiary of Holdings which is not a Credit Party into a Credit Party, the
Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Administrative Agent may reasonably request
so as to cause the Credit Parties to be in compliance with the terms of Section
6.10 after giving effect to such transaction. Notwithstanding anything to the
contrary contained above in this Section 7.04, no action shall be permitted
which results in a Change of Control.

 

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Section 7.05 Asset Dispositions. None of the Group Companies will make any Asset
Disposition; provided that:

 

(i) any Group Company may sell inventory in the ordinary course of business on
an arms’-length basis;

 

(ii) the Borrower may make any Asset Disposition to any of the Subsidiary
Guarantors if (A) the Credit Parties shall cause to be executed and delivered
such documents, instruments and certificates as the Administrative Agent or the
Collateral Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 6.10 after giving effect to such Asset
Disposition and (B) after giving effect to such Asset Disposition, no Default or
Event of Default exists;

 

(iii) the Borrower and its Subsidiaries may liquidate or sell Cash Equivalents;

 

(iv) the Borrower or any of its Subsidiaries may sell, lease, transfer, assign
or otherwise dispose of assets (other than in connection with any Casualty or
Condemnation) to any other Person; provided that the aggregate fair market value
of all property disposed of pursuant to this clause (iv) does not exceed
$10,000,000 in the aggregate in any fiscal year of the Borrower or $30,000,000
in the aggregate from and after the Closing Date;

 

(v) the Borrower or any of its Subsidiaries may dispose of machinery or
equipment which will be replaced or upgraded with machinery or equipment put to
a similar use and owned, or otherwise used or useful in the ordinary course of
business of and owned, by such Person; provided that (A) such replacement or
upgraded machinery and equipment is acquired within 120 days after such
disposition, and (B) upon their acquisition, such replacement assets become
subject to the Lien of the Collateral Agent under the Collateral Documents (to
the extent in effect immediately prior to such disposition);

 

(vi) the Borrower or any of its Subsidiaries may, in the ordinary course of
business and in a commercially reasonable manner, dispose of obsolete, worn-out
or surplus tangible assets and other excess property no longer used or useful in
the ordinary course of business;

 

(vii) any Group Company may enter into any Sale/Leaseback Transaction (other
than the iStar Sale/Leaseback Transaction) not prohibited by Section 7.13;

 

(viii) any Subsidiary of the Borrower may sell, lease or otherwise transfer any
or all or substantially all of its assets (including any such transaction
effected by way of merger or consolidation) to the Borrower or any Wholly-Owned
Domestic Subsidiary of the Borrower, so long as (A) the security interests
granted to the Collateral Agent for the benefit of the Finance Parties pursuant
to the Collateral Documents in such assets shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately prior to
such sale, lease or other

 

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transfer) and (B) after giving effect to such Asset Disposition, no Default or
Event of Default exists;

 

(ix) any non-Wholly-Owned Domestic Subsidiary or Foreign Subsidiary of the
Borrower may sell, lease or otherwise transfer any or all or substantially all
of its assets (including any such transaction effected by way of merger or
consolidation) to any other non-Wholly-Owned Domestic Subsidiary or Foreign
Subsidiary of the Borrower, so long as the security interests granted to the
Collateral Agent for the benefit of the Finance Parties pursuant to the
Collateral Documents in such assets shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior to such
sale, lease or other transfer);

 

(x) any Group Company may sell or dispose of Equity Interests in its
Subsidiaries to qualify directors where required by applicable Law or to satisfy
other requirements of applicable Law with respect to the ownership of Equity
Interests of Foreign Subsidiaries or Liquor License Subsidiaries;

 

(xi) any Group Company may (A) lease, as lessor or sublessor, or license, as
licensor or sublicensor, real or personal property (including Intellectual
Property) in the ordinary course of business and consistent with past practices
and (B) grant options to purchase, lease or acquire real or personal property in
the ordinary course of business, so long as the Asset Disposition resulting from
the exercise of such option would otherwise be permitted under this Section
7.05;

 

(xii) any Group Company may dispose of defaulted receivables and similar
obligations in the ordinary course of business and not as part of an accounts
receivable financing transaction;

 

(xiii) each of AMF Bowling Centers, Inc. and AMF Bowling Recreation Centers,
Inc. may make (A) Asset Dispositions on the Closing Date under the iStar
Sale/Leaseback Documents and (B) Asset Dispositions after the Closing Date under
the iStar Sale/Leaseback Documents (including, without limitation, sales of
Bowling Equipment required thereunder and/or transfers of additional Real
Property as provided therein);

 

(xiv) any Group Company may dispose of non-core assets acquired in connection
with Permitted Business Acquisitions;

 

(xv) any Group Company may make one or more Asset Dispositions involving any or
all of the assets described in Schedule 7.05;

 

(xvi) any Group Company may make one or more Foreign Asset Dispositions if the
Net Cash Proceeds thereof are applied as required under Section 2.09(b)(v);

 

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(xvii) an Group Company may make one or more Asset Dispositions in connection
with a like-kind exchange pursuant to Section 1031 of the Code; provided that
the Borrower shall have delivered to the Administrative Agent a Pro-Forma
Compliance Certificate demonstrating that upon giving effect on a Pro-Forma
Basis to such transaction, the Credit Parties will be in compliance with all of
the financial covenants set forth in Section 7.17(a) and (b) as of the last day
of the most recent period of four consecutive fiscal quarters of Holdings which
precedes or ends on the date of such transaction and with respect to which the
Administrative Agent has received the consolidated financial information
required under Section 6.01(a) or (b) and the officer’s certificate required
under Section 6.01(c);

 

(xviii) the Borrower or any of its Domestic Subsidiaries may make one or more
Asset Dispositions described in Section 7.09(ix); and

 

(xix) any Group Company may make any other Asset Disposition; provided that (A)
at least 75% of the consideration therefor is cash or Cash Equivalents; (B) if
such transaction is a Sale/Leaseback Transaction, such transaction is permitted
by Section 7.01 and Section 7.13; (C) such transaction does not involve the sale
or other disposition of a minority Equity Interest in any Group Company; (D) the
aggregate fair market value of all assets sold or otherwise disposed of by the
Group Companies in all such transactions in reliance on this clause (xix) shall
not exceed $20,000,000 in the aggregate from and after the Closing Date; and (E)
no Default or Event of Default shall have occurred and be continuing immediately
before or immediately after giving effect to such transaction.

 

Upon consummation of an Asset Disposition permitted under this Section 7.05, the
Lien therein created (but not the Lien on any proceeds thereof) under the
Collateral Documents shall be automatically released and the Administrative
Agent shall (or shall cause the Collateral Agent to) (to the extent applicable)
deliver to the Borrower, upon the Borrower’s request and at the Borrower’s
expense, such documentation as is reasonably necessary to evidence the release
of the Collateral Agent’s security interests, if any, in the assets being
disposed of, including amendments or terminations of Uniform Commercial Code
Financing Statements, if any, the return of stock certificates, if any, and the
release of any Subsidiary being disposed of in its entirety from all of its
obligations, if any, under the Senior Finance Documents.

 

Section 7.06 Investments.

 

(a) Investments. None of the Group Companies will hold, make or acquire, any
Investment in any Person, except the following:

 

(i) Investments existing on the date hereof in Persons which are Subsidiaries on
the date hereof;

 

(ii) Holdings, the Borrower or any Subsidiary of the Borrower may invest in cash
and Cash Equivalents;

 

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(iii) Holdings may acquire and hold obligations of one or more officers or other
employees of Holdings or any of its Subsidiaries in connection with such
officers’ or employees’ acquisition of Equity Interests of Kingpin Holdings,
LLC, so long as no cash is paid by Holdings or any of its Subsidiaries to such
officers or employees in connection with the acquisition of any such
obligations;

 

(iv) the Borrower and any Subsidiary of the Borrower may acquire and hold
receivables not constituting Debt owing to them, if created or acquired in the
ordinary course of business;

 

(v) the Borrower and each Subsidiary of the Borrower may acquire and own
Investments (including Debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;

 

(vi) deposits by the Borrower or any Subsidiary of the Borrower made in the
ordinary course of business consistent with past practices to secure the
performance of leases shall be permitted;

 

(vii) Holdings may make equity contributions to the capital of the Borrower and
may incur Guaranty Obligations permitted under Section 7.01(viii);

 

(viii) the Borrower may make Investments in any of its Wholly-Owned Domestic
Subsidiaries and any Subsidiary of the Borrower may make Investments in the
Borrower or any Wholly-Owned Domestic Subsidiary of the Borrower; provided that
(A) each item of intercompany Debt evidencing intercompany loans and advances
made by a Foreign Subsidiary or a non-Wholly-Owned Domestic Subsidiary to the
Borrower or a Wholly-Owned Domestic Subsidiary of the Borrower shall be
evidenced by a promissory note in the form of Exhibit G hereto containing the
subordination provisions set forth in Exhibit H hereto and (B) each promissory
note evidencing intercompany loans and advances payable to a Credit Party shall
be pledged to the Collateral Agent pursuant to the Collateral Documents;

 

(ix) the Borrower and its Subsidiaries may make Investments in any Foreign
Subsidiary or any non-Wholly-Owned Domestic Subsidiary of the Borrower (A) in
the case of Investments by the Borrower or any Wholly-Owned Domestic Subsidiary
of the Borrower, in an aggregate amount (determined without regard to any
write-downs or write-offs of any such Investments constituting Debt) at any one
time outstanding not exceeding $10,000,000, and (B) to the extent such
Investments arise from the sale of inventory in the ordinary course of business
by the Borrower or such Subsidiary to such Foreign Subsidiary or
non-Wholly-Owned Domestic Subsidiary for resale by such Foreign Subsidiary or
non-Wholly-Owned Domestic Subsidiary (including any such Investments resulting
from the extension of the payment terms with respect to such sales); provided
that each promissory note evidencing intercompany loans and advances (other than
promissory notes (A) issued by Foreign Subsidiaries of the Borrower to the
Borrower or any of its Domestic Subsidiaries or (B) held by Foreign Subsidiaries
of the Borrower, in each case except to the extent provided in Section 6.10(d)
or non-Wholly-Owned Subsidiaries of the

 

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Borrower who are not and are not required to be Credit Parties shall be pledged
to the Collateral Agent pursuant to the Collateral Documents;

 

(x) the Borrower and its Subsidiaries may make transfers of assets to the
Borrower and its Subsidiaries in accordance with Section 7.05(viii), (ix) and
(xviii) and in connection with mergers and consolidations permitted under
Section 7.04;

 

(xi) the Borrower and its Subsidiaries may purchase inventory, machinery,
equipment and other assets in the ordinary course of business;

 

(xii) the Borrower and its Subsidiaries may make expenditures in respect of
Permitted Business Acquisitions;

 

(xiii) the Borrower or any of its Subsidiaries may make loans and advances to
employees of Holdings and its Subsidiaries for moving and travel and other
similar expenses, in each case in the ordinary course of business, in an
aggregate principal amount not to exceed $250,000 at any one time outstanding
(determined without regard to any write-downs or write-offs of such loans and
advances);

 

(xiv) the Borrower or any of its Subsidiaries may make loans and advances to
Holdings for the purposes and in the amounts necessary to pay the fees, expenses
and taxes described in Section 7.07(vi);

 

(xv) Holdings may repurchase stock to the extent permitted by Section 7.07;

 

(xvi) the Borrower and its Subsidiaries may make Investments in Permitted Joint
Ventures in an aggregate amount (determined without regard to any write-downs or
write-offs of any such Investments constituting Debt) at any one time
outstanding not exceeding $15,000,000;

 

(xvii) Investments existing on the date hereof and identified on Schedule 7.06;

 

(xviii) Investments arising out of the receipt by the Borrower or any of its
Subsidiaries of noncash consideration for the sale of assets permitted under
Section 7.05;

 

(xix) Investments resulting from pledges and deposits specifically referred to
in Section 7.02; and

 

(xx) other Investments not otherwise permitted by this Section 7.06 in an
aggregate amount (determined without regard to any write-downs or write-offs of
any such Investments constituting Debt but excluding any portion thereof funded
with proceeds of a Qualifying Equity Issuance) at any time outstanding not
exceeding the sum of (A) $10,000,000

 

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plus (B) an amount which, when taken together with the aggregate amount of all
payments in respect of the redemption, purchase, prepayment, retirement,
defeasance or other acquisition of Senior Subordinated Notes pursuant to the
second sentence of Section 7.08(c) and the aggregate amount of all Restricted
Payments paid pursuant to Section 7.07(iii), does not exceed 35% of the Net Cash
Proceeds from all Foreign Asset Dispositions effected after the Closing Date
plus (C) an amount, not exceeding $10,000,000 in the aggregate, equal to that
portion of Excess Cash Flow for the fiscal years ended after the Closing Date,
if any, not required to be used to prepay the Loans or Cash Collateralize LC
Obligations in accordance with Section 2.09; provided, however, that the
aggregate amount of all Investments by the Borrower and its Wholly-Owned
Domestic Subsidiaries in Foreign Subsidiaries and non-Wholly-Owned Subsidiaries
of the Borrower shall not exceed $5,000,000 (determined without regard to any
write-downs or write-offs of any such Investments constituting Debt but
excluding any portion thereof funded with proceeds of a Qualifying Equity
Issuance) at any time outstanding;

 

provided that no Group Company may make or own any Investment in Margin Stock.

 

(b) Limitation on the Creation of Subsidiaries. No Group Company will establish,
create or acquire after the Closing Date any Subsidiary; provided that the
Borrower and its Subsidiaries shall be permitted to establish, create or acquire
Subsidiaries so long as (i) at least 5 days’ prior written notice thereof is
given to the Administrative Agent, (ii) the Investment resulting from such
establishment, creation or acquisitions is permitted pursuant to Section 7.06(a)
above, (iii) the capital stock or other equity interests of such new Subsidiary
(other than a Foreign Subsidiary, except to the extent otherwise required
pursuant to Section 6.10(d) or a non-Wholly-Owned Liquor License Subsidiary) is
pledged pursuant to, and to the extent required by, the Pledge Agreement and the
certificates representing such interests, together with transfer powers duly
executed in blank, are delivered to the Collateral Agent, (iv) such new
Subsidiary (other than a Foreign Subsidiary, except to the extent otherwise
required pursuant to Section 6.10(d) or a non-Wholly-Owned Liquor License
Subsidiary) executes a counterpart of the Accession Agreement, the Guaranty, the
Security Agreement and the Pledge Agreement to the extent required by Section
6.10(b), and (v) such new Subsidiary, to the extent requested by the
Administrative Agent, takes all other actions required pursuant to Section 6.10.

 

Section 7.07 Restricted Payments, etc. None of the Group Companies will declare
or pay any Restricted Payments (other than Restricted Payments payable solely in
Equity Interests (exclusive of Debt Equivalents) of such Person), except that:

 

(i) any Wholly-Owned Subsidiary of the Borrower may make Restricted Payments to
the Borrower or to any Wholly-Owned Subsidiary of the Borrower;

 

(ii) any non-Wholly-Owned Subsidiary of the Borrower may make Restricted
Payments to the Borrower or to any Wholly-Owned Subsidiary of the Borrower or
ratably to all holders of its outstanding Equity Interests;

 

(iii) the Borrower may make to Holdings and Holdings may further make one or
more Restricted Payments in an amount that, when taken together with the
aggregate amount of Investments made pursuant to Section 7.06(a)(xx)(B) and the
aggregate amount of all

 

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payments in respect of the redemption, purchase, prepayment, retirement,
defeasance or other acquisition of any Senior Subordinated Notes pursuant to the
second sentence of Section 7.08(c), does not exceed 35% of the Net Cash Proceeds
from all Foreign Asset Dispositions effected after the Closing Date; provided
that (A) no Default or Event of Default shall have occurred and be continuing
immediately before or after giving effect thereto, (B) as a result of or in
contemplation of or following the announcement of the consummation of the most
recent Foreign Asset Disposition, no downgrading shall have occurred in the
rating or negative change made to the outlook accorded the Senior Subordinated
Notes or any of the Borrower’s and its Subsidiaries’ other Debt by either
Moody’s or S&P, and neither such organization shall have announced that it has
under surveillance or review its ratings of any of the Borrower’s or its
Subsidiaries’ rated Debt, (C) the Administrative Agent shall have received a
Pro-Forma Compliance Certificate as contemplated by the definition thereof and
(D) after giving effect thereto, the Aggregate Revolving Committed Amount shall
be at least $10,000,000 greater than the Aggregate Revolving Outstandings;

 

(iv) Holdings may redeem or repurchase Equity Interests (or Equity Equivalents),
or make cash distributions to Kingpin Holdings, LLC to enable Kingpin Holdings,
LLC to redeem or repurchase Equity Interests (or Equity Equivalents), or in
either case to make payments on any notes issued in connection with the prior
redemption or purchase of any such Equity Interests, from (A) current or former
officers, employees and directors of any Group Company (or their estates,
spouses or former spouses) upon the death, permanent disability, retirement or
termination of employment of any such Person or otherwise or (B) other holders
of Equity Interests or Equity Equivalents in Holdings, so long as the purpose of
such purchase is to acquire common stock for reissuance to new officers,
employees and directors (or their estates) of any Group Company, to the extent
so reissued within 12 months of any such purchase; provided that in all such
cases (A) no Default or Event of Default is then in existence or would otherwise
arise therefrom, (B) the aggregate amount of all cash distributed by the
Borrower to Holdings in respect of all such shares so redeemed or repurchased
(including cash distributed to make payments on any notes issued in connection
with the prior redemptions or purchases) does not exceed $2,000,000 in any
fiscal year of Holdings (with unused amounts being carried forward to succeeding
fiscal years) or $5,000,000 in the aggregate from and after the Closing Date,
and provided further that Holdings may purchase, redeem or otherwise acquire
Equity Interests and Equity Equivalents of Holdings pursuant to this clause (iv)
without regard to the restrictions set forth in the first proviso above for
consideration consisting of the proceeds of key man life insurance obtained for
the purposes described in this clause (iv);

 

(v) so long as no Default or Event of Default is then in existence or would
otherwise arise therefrom, the Borrower may make cash Restricted Payments to
Holdings, if Holdings promptly uses such proceeds for the purposes described in
clause (iv) above;

 

(vi) the Borrower may make cash Restricted Payments to Holdings for the purpose
of paying, and in amounts not to exceed the amount necessary to pay, (A) the
then currently due fees and expenses of Holdings’ counsel, accountants and other
advisors and consultants, and other operating and administrative expenses of
Holdings (including employee and compensation expenditures and other similar
costs and expenses) incurred in the ordinary course of business that are for the
benefit of, or are attributable to, or are related to, including the financing
or refinancing of, Holdings’ Investment in the Borrower and its Subsidiaries,
(B) the then currently due fees and expenses of Holdings’ independent directors
and (C) the then

 

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currently due taxes payable by Holdings solely on account of the income of
Holdings related to its Investment in the Borrower and its Subsidiaries and the
reasonable expenses of preparing returns reflecting such taxes; provided that
Holdings agrees to be obligated to contribute to the Borrower any refund
Holdings receives relating to any such taxes;

 

(vii) Restricted Payments made with Net Cash Proceeds of one or more Qualifying
Equity Issuances within three Business Days following the receipt thereof;
provided that, after giving effect to such Restricted Payment, no Change of
Control shall have occurred;

 

(viii) noncash repurchases of Equity Interests by Holdings deemed to occur upon
exercise of stock options if such Equity Interests represent a portion of the
exercise price of such options; and

 

(ix) cash payments by Holdings in lieu of the issuance of fractional shares upon
exercise or conversion of Equity Equivalents.

 

Section 7.08 Prepayments of Debt, etc.

 

(a) Amendments of Agreements. None of the Group Companies will, or will permit
any of their respective Subsidiaries to, after the issuance thereof, amend,
waive or modify (or permit the amendment, waiver or modification of) any of the
terms, agreements, covenants or conditions of or applicable to (i) the Senior
Subordinated Notes or (ii) any other Subordinated Debt issued by such Group
Company if such amendment, waiver or modification would add or change any terms,
agreements, covenants or conditions in any manner adverse to any Group Company,
or shorten the final maturity or average life to maturity or require any payment
to be made sooner than originally scheduled or increase the interest rate
applicable thereto or change any subordination provision thereof.

 

(b) Prohibition Against Certain Payments of Principal and Interest of Other
Debt. Except as provided in subsection (c), none of the Group Companies will (i)
directly or indirectly, redeem, purchase, prepay, retire, defease or otherwise
acquire for value, prior to scheduled maturity, scheduled repayment or scheduled
sinking fund payment, any Subordinated Debt, or set aside any funds for such
purpose, whether such redemption, purchase, prepayment, retirement or
acquisition is made at the option of the maker or at the option of the holder
thereof, and whether or not any such redemption, purchase, prepayment,
retirement or acquisition is required under the terms and conditions applicable
to such Debt or (ii) make any interest payment in respect of the Senior
Subordinated Notes or any other Subordinated Debt.

 

(c) Certain Allowed Payments in Respect of Subordinated Debt. The Borrower may
(i) make regularly scheduled interest payments as and when due in respect of the
Senior Subordinated Notes and any other Subordinated Debt entered into in
compliance with Section 7.01, (ii) exchange the Senior Subordinated Notes for
registered Debt securities of the Borrower on substantially identical terms
pursuant to the Senior Subordinated Note Documents, (iii) exchange Subordinated
Debt of the Borrower or any of its Subsidiaries for Equity Interests issued by
Holdings or its parent companies; (iv) permit the cancellation or forgiveness of
Subordinated Debt of the Borrower or any of its Subsidiaries, (v) make

 

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regularly scheduled principal payments as and when due in respect of
Subordinated Debt of the Borrower and its Subsidiaries (other than Subordinated
Seller Paper) and (vi) refinance Subordinated Debt to the extent expressly
permitted under Section 7.01, in each case other than any such payments
prohibited by the subordination provisions thereof and provided that the
aggregate amount of all principal payments in respect of Subordinated Debt of
the Borrower and its Subsidiaries shall not exceed $2,000,000 in any fiscal year
of the Borrower or $10,000,000 in the aggregate from and after the Closing Date.
In addition, the Borrower may redeem, purchase, prepay, retire, defease or
otherwise acquire for value any Senior Subordinated Notes in an amount that,
when taken together with the aggregate amount of Investments made pursuant to
Section 7.06(xx)(B) and the aggregate amount of all Restricted Payments
theretofore paid pursuant to Section 7.07(iii), does not exceed 35% of the Net
Cash Proceeds from all Foreign Asset Dispositions effected after the Closing
Date; provided that (A) no Default or Event of Default shall have occurred and
be continuing immediately before or after giving effect thereto, (B) as a result
of or in contemplation of or following the announcement of the consummation of
the most recent Foreign Asset Disposition, no downgrading shall have occurred in
the rating or negative change made to the outlook accorded the Senior
Subordinated Notes or any of the Borrower’s and its Subsidiaries’ other rated
Debt by either Moody’s or S&P, and neither such organization shall have
announced that it has under surveillance or review its ratings of any of the
Borrower’s or its Subsidiaries’ Debt, (C) the Administrative Agent shall have
received a Pro-Forma Compliance Certificate as contemplated by the definition
thereof, (D) after giving effect thereto, the Aggregate Revolving Committed
Amount shall be at least $10,000,000 greater than the Aggregate Revolving
Outstandings and (E) such payment shall not be prohibited by the subordination
provisions of the Senior Subordinated Notes.

 

Section 7.09 Transactions with Affiliates. None of the Group Companies will
engage in any transaction or series of transactions with any Affiliate of
Holdings other than:

 

(i) commencing with the fiscal quarter of the Borrower ended in March, 2004, the
payment to the Sponsor of management and other fees pursuant to the Management
Agreement when due; provided that no such payment may be made if the
Administrative Agent shall have notified the Borrower (which notice may be
provided by electronic mail) that an Default or Event of Default shall have
occurred and be continuing immediately before or immediately after giving effect
to such payment (it being understood and agreed that any payment which cannot be
made when due as a result of a Default or an Event of Default shall continue to
accrue and may be made upon the cure or waiver of such Default or Event of
Default or otherwise with the consent of the Required Lenders);

 

(ii) reimbursement of reasonable out-of-pocket expenses and indemnities of the
Sponsor Group pursuant to the Management Agreement;

 

(iii) transfers of assets to any Credit Party other than Holdings permitted by
Section 7.05;

 

(iv) transactions expressly permitted by Section 7.01, Section 7.04, Section
7.05, Section 7.06 or Section 7.07;

 

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(v) normal compensation, indemnities and reimbursement of reasonable expenses of
officers and directors;

 

(vi) other transactions with the Sponsor and its Affiliates in existence on the
Closing Date to the extent disclosed in Schedule 7.09;

 

(vii) any transaction entered into among the Borrower and its Wholly-Owned
Domestic Subsidiaries or among such Wholly-Owned Domestic Subsidiaries;

 

(viii) any transaction entered into among the Borrower and any of its
Subsidiaries and any non-Wholly-Owned Liquor License Subsidiary or Foreign
Subsidiary; provided that if the Borrower or any of its Wholly-Owned Domestic
Subsidiaries is party to such transaction, such transaction shall be on terms
and conditions at least as favorable to the Borrower or such Wholly-Owned
Subsidiary, as applicable, as would be obtainable by such Person in a comparable
arms’-length transaction with an independent, unrelated third party;

 

(ix) (A) sales by the Borrower or any of its Domestic Subsidiaries of Bowling
Equipment, bowling products and other equipment used in the operation or
maintenance of bowling centers and related accessories to Foreign Subsidiaries
of the Borrower for use in bowling centers operated by such Foreign
Subsidiaries, and (B) sales by the Borrower or any of its Domestic Subsidiaries
of bowling products to Foreign Subsidiaries of the Borrower for resale by such
Foreign Subsidiaries, in each case for a price at least equal to the cost to the
Borrower and its Domestic Subsidiaries of such Bowling Equipment, bowling
products, equipment used in the operation or maintenance of bowling centers or
related accessories; and

 

(x) so long as no Default or Event of Default has occurred and is continuing,
other transactions which are engaged in by the Borrower or any of its
Subsidiaries in the ordinary course of its business on terms and conditions as
favorable to such Person as would be obtainable by it in a comparable
arms’-length transaction with an independent, unrelated third party.

 

Notwithstanding the foregoing, none of Holdings or any of its Subsidiaries will
enter into any management, consulting or similar agreement or arrangement (other
than the Management Agreement) with, or otherwise pay any professional,
consulting, management or similar fees to or for the benefit of, the Sponsor
Group or its successors or transferees, except for payments pursuant to the
Management Agreement permitted under clause (i), (ii), (vi) or (x) above.

 

Section 7.10 Fiscal Year; Organizational and Other Documents. None of the Group
Companies will (i) change its fiscal year or (ii) consent to any amendment,
modification or supplement (A) that is adverse in any respect to the Lenders to
its articles or certificate of incorporation, bylaws (or analogous
organizational documents), the Acquisition Documents, the Management Agreement
or any agreement entered into by it with respect to its Equity Interests
(including the Capitalization Documents and the Shareholders’ Agreement) or (B)
relating the purchase of, or any option to purchase, Bowling Equipment under the
iStar Sale/Leaseback Documents or that is otherwise materially adverse to the
Lenders with respect to the iStar Sale/Leaseback Documents, in each case as in
effect on the Closing Date. The Borrower will cause the Group Companies to
promptly provide the Lenders with copies of all amendments to the foregoing
documents and instruments as in effect as of the Closing Date.

 

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Section 7.11 Restrictions with Respect to Intercorporate Transfers. None of the
Group Companies will create or otherwise cause or permit to exist any consensual
encumbrance or restriction which prohibits or otherwise restricts (i) the
ability of any such Subsidiary to (A) make Restricted Payments or pay any Debt
owed to the Borrower or any Subsidiary of the Borrower, (B) pay Debt or other
obligations owed to any Credit Party, (C) make loans or advances to the Borrower
or any Subsidiary of the Borrower, (D) transfer any of its properties or assets
to the Borrower or any Subsidiary of the Borrower or (E) act as a Subsidiary
Guarantor and pledge its assets pursuant to the Senior Finance Documents or any
renewals, refinancings, exchanges, refundings or extensions thereof or (ii) the
ability of Holdings or any Subsidiary of Holdings to create, incur, assume or
permit to exist any Lien upon its property or assets whether now owned or
hereafter acquired to secure the Senior Obligations, except in each case for
prohibitions or restrictions existing under or by reason of:

 

(i) this Agreement and the other Senior Finance Documents;

 

(ii) restrictions in effect on the date of this Agreement contained in the
Senior Subordinated Note Documents, all as in effect on the date of this
Agreement, and, if such Debt is renewed, extended or refinanced, restrictions in
the agreements governing the renewed, extended or refinancing Debt (and
successive renewals, extensions and refinancings thereof) if such restrictions
are no more restrictive than those contained in the agreements governing the
Debt being renewed, extended or refinanced;

 

(iii) customary non-assignment provisions with respect to contracts, leases or
licensing agreements entered into by the Borrower or any of its Subsidiaries, in
each case entered into in the ordinary course of business and consistent with
past practices;

 

(iv) any restriction or encumbrance with respect to any asset of the Borrower or
any of its Subsidiaries or a Subsidiary of the Borrower imposed pursuant to an
agreement which has been entered into for the sale or disposition of such assets
or all or substantially all of the capital stock or assets of such Subsidiary,
so long as such sale or disposition is permitted under this Agreement;

 

(v) restrictions in effect on the date of this Agreement contained in the iStar
Sale/Leaseback Documents as in effect on the date of this Agreement, and, if the
iStar Sale/Leaseback Transaction is renewed, extended or refinanced,
restrictions in the agreements governing the renewed, extended or refinancing
Sale/Leaseback Transaction (and successive renewals, extensions and refinancings
thereof) if such restrictions are no more restrictive than those contained in
the agreements governing the Sale/Leaseback Transaction being renewed, extended
or refinanced;

 

(vi) customary provisions in joint venture agreements and other similar
agreements entered into in the ordinary course of business in connection with
Permitted Joint Ventures;

 

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(vii) restrictions on cash and other deposits or net worth imposed by customers
or suppliers in the ordinary course of business and consistent with past
practice;

 

(viii) any restriction applicable to an acquired Subsidiary of the Borrower
pursuant to agreements in effect on the date such Subsidiary became a Subsidiary
of the Borrower and otherwise permitted to remain in effect hereunder; provided
that such restrictions apply only to such Subsidiary;

 

(ix) any restriction applicable to a Foreign Subsidiary of the Borrower pursuant
to agreements governing Debt of such Foreign Subsidiary Borrower permitted to be
incurred pursuant to Section 7.01(xiv); and

 

(x) Liens permitted under Section 7.02 and any documents or instruments
governing the terms of any Debt or other obligations secured by any such Liens;
provided that such prohibitions or restrictions apply only to the assets subject
to such Liens.

 

Section 7.12 Ownership of Subsidiaries; Limitations on Holdings and the Parent
Borrower.

 

(a) Holdings and the Borrower will not (i) permit any Subsidiary of the Borrower
to issue Equity Interests to any Person, except (A) the Borrower or any
Wholly-Owned Subsidiary of the Borrower, (B) to qualify directors where required
by applicable Law or to satisfy other requirements of applicable Law with
respect to the ownership of Equity Interests of Foreign Subsidiaries or Liquor
License Subsidiaries or (C) in the case of non-Wholly-Owned Subsidiaries of the
Borrower, ratably to all holders of its outstanding Equity Interests or (iii)
permit any non-Wholly-Owned Subsidiary of the Borrower to issue any shares of
Preferred Stock (other than to Persons in connection with obtaining liquor
licenses or otherwise to the extent required by Law).

 

(b) Holdings will not (i) hold any material assets other than the Equity
Interests of the Borrower and cash or Cash Equivalents expressly permitted to be
received and held by it from time to time in accordance with this Agreement,
(ii) have any material liabilities other than (A) liabilities under the Senior
Finance Documents, the Senior Subordinated Notes, its Guaranty Obligations in
respect of the iStar Sale/Leaseback Transaction and other obligations expressly
permitted to be incurred by it pursuant to Section 7.01 and (B) tax and accrued
liabilities and expenses in the ordinary course of business or (iii) engage in
any business activity other than (A) owning the common stock of the Borrower
(including purchasing additional shares of common stock after the Closing Date)
and activities incidental or related thereto or to the maintenance of the
corporate existence of Holdings or compliance with applicable law, (B) acting as
a Guarantor under its Guaranty and pledging its assets to the Collateral Agent,
for the benefit of the Lenders, pursuant to the Collateral Documents to which it
is a party, (C) acting as a guarantor in respect of the Debt arising under the
Senior Subordinated Note Indenture and the Senior Subordinated Notes, the iStar
Sale/Leaseback Documents and other Guaranty Obligations expressly permitted to
be incurred by it pursuant to Section 7.01 and (D) issuing its own Capital Stock
(other than Debt Equivalents).

 

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(c) Holdings and the Borrower will not permit any Person other than Holdings to
hold any Equity Interests or Equity Equivalents of the Borrower.

 

Section 7.13 Sale and Leaseback Transactions. None of the Group Companies will
directly or indirectly become or remain liable as lessee or as guarantor or
other surety with respect to any lease (whether an Operating Lease or a Capital
Lease) of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which such Group Company has sold or transferred or is
to sell or transfer to any other Person which is not a Group Company or (ii)
which such Group Company intends to use for substantially the same purpose as
any other property which has been sold or is to be sold or transferred by such
Group Company to another Person which is not a Group Company in connection with
such lease; provided, however, that the Group Companies may enter into (x) the
iStar Sale/Leaseback and (y) any other Sale/Leaseback Transaction (i) (A) if
after giving effect on a Pro-Forma Basis to such Sale/Leaseback Transaction, the
aggregate outstanding Attributable Debt in respect of all Sale/Leaseback
Transactions does not exceed $50,000,000 and/or (B) with respect to one or more
Real Properties located in Australia, in each case if (ii) (A) the Borrower
shall be in compliance with all other provisions of this Agreement, including
Section 7.01 and Section 7.02, (B) the gross cash proceeds of any such
Sale/Leaseback Transaction are at least equal to the fair market value of such
property (as determined by the Board of Directors, whose determination shall be
conclusive if made in good faith) and (C) the Net Cash Proceeds are applied as
set forth in Section 2.09(b)(v) to the extent required therein.

 

Section 7.14 Capital Expenditures.

 

(a) None of the Group Companies will make any Consolidated Capital Expenditures,
except that during any of the fiscal years set forth below, the Borrower and its
Subsidiaries may make Consolidated Capital Expenditures so long as the aggregate
amount of such Consolidated Capital Expenditures (other than Consolidated
Capital Expenditures made with the Net Cash Proceeds of one or more Qualified
Equity Issuances) does not exceed the amount indicated opposite such period;
provided that the reference below to the 2004 fiscal year shall be to the year
from the Closing Date to the last day of such fiscal year:

 

Period

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

   Amount

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

2004

   $ 55,000,000

2005

     60,000,000

2006

     65,000,000

2007

     65,000,000

2008

     55,000,000

2009

     55,000,000

2010

     55,000,000

 

(b) To the extent that Consolidated Capital Expenditures permitted under
subsection (a) above for any period set forth above are less than the applicable
amount specified in the table in subsection (a) above, the difference may be
carried forward and utilized to make Consolidated Capital Expenditures during
succeeding fiscal years so long as the aggregate amount of Consolidated Capital
Expenditures made during any fiscal year does not exceed 120% of the applicable
amount set forth for such year in the table above.

 

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(c) Notwithstanding the foregoing, the Borrower and its Subsidiaries may make
Consolidated Capital Expenditures (which Consolidated Capital Expenditures will
not be included in any determination under subsection (a) above) with the Net
Cash Proceeds of Asset Dispositions, to the extent such Net Cash Proceeds are
not required to be applied to repay Loans or cash collateralize Letter of Credit
Liabilities pursuant to Section 2.09(b)(v).

 

Section 7.15 Additional Negative Pledges. None of the Group Companies will enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for an obligation if security is given for some other obligation,
except (i) pursuant to this Agreement and the other Senior Finance Documents,
the Senior Subordinated Note Indenture and any Debt consisting of Refinancing
Debt issued to refinance all or any portion of the foregoing, (ii) pursuant to
any document or instrument governing Capital Lease Obligations or Purchase Money
Debt incurred pursuant to Section 7.01 if any such restriction contained therein
relates only to the asset or assets acquired in connection therewith, (iii)
pursuant to the iStar Sale/Leaseback Documents, (iv) pursuant to any document on
instrument governing Debt incurred pursuant to Section 7.01(xiv) if any such
restriction contained therein relates only to the assets of the Foreign
Subsidiary of the Borrower party thereto, (v) pursuant to any document on
instrument governing Debt incurred pursuant to Section 7.01(xiii) and any Debt
consisting of Refinancing Debt issued to refinance all or any portion of the
foregoing, (vi) pursuant to any Derivatives Agreement entered into pursuant to
Section 7.01(vi), (vii) pursuant to any documents or agreements creating any
Lien referred to in Section 7.02(xvii) if such restriction contained therein
relates only to the incurred premiums, dividends, rebates and other rights
permitted to be subject to such Lien in accordance with Section 7.02(xvii),
(viii) any documents or agreements creating any Lien referred to in Section
7.02(vi) if such restriction contained therein relates only to the property of
assets subject to the surety bond or similar obligation permitted to be secured
thereby pursuant to Section 7.02(vi), (ix) pursuant to an agreement which has
been entered into by the Borrower or any of its Subsidiaries for the sale or
disposition of any assets of the Borrower or such Subsidiary or of any
Subsidiary of the Borrower if such restriction contained therein relates only to
the Subsidiary or its assets which is the subject of the sale provided for
therein and (x) pursuant to a joint venture or other similar agreement entered
into in the ordinary course of business in connection with Permitted Joint
Ventures so long as any such restriction contained therein relates only to the
assets of, or the interest of the Borrower and its Subsidiaries in, such
Permitted Joint Venture.

 

Section 7.16 Impairment of Security Interests. None of the Group Companies will
(i) take or omit to take any action which action or omission could reasonably be
expected to materially impair the security interests in favor of the Collateral
Agent with respect to the Collateral or (ii) grant to any Person (other than the
Collateral Agent pursuant to the Collateral Documents) any interest whatsoever
in the Collateral, except for Permitted Liens.

 

Section 7.17 Financial Covenants.

 

(a) Leverage Ratio. The Leverage Ratio as of the last day of the most recently
ended fiscal quarter of the Borrower ending on or about the last day of any
calendar quarter ending during any period described below will not be greater
than the ratio set forth below opposite the period during which such calendar
quarter ends:

 

Calendar Quarters Ended

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

   Ratio

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

Closing Date through 6/30/04

   3.80 to 1.0

7/01/04 through 9/30/04

   3.90 to 1.0

10/1/04 through 9/30/05

   3.80 to 1.0

10/01/05 through 12/31/05

   3.70 to 1.0

1/01/06 through 3/31/06

   3.60 to 1.0

4/01/06 through 12/31/06

   3.40 to 1.0

1/01/07 through 6/30/07

   3.20 to 1.0

7/01/07 and thereafter

   2.80 to 1.0

 

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(b) Interest Coverage Ratio. The Interest Coverage Ratio as of the last day of
any fiscal quarter of the Borrower, in each case for the period of four
consecutive fiscal quarters of the Borrower then ended, taken as a single
accounting period, will not be less than 3.40 to 1.0.

 

(c) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio as of the last
day of the most recently ended fiscal quarter of the Borrower ending on or about
the last day of any calendar quarter ending during any period described below,
in each case for the period of four consecutive fiscal quarters of the Borrower
then ended, taken as a single accounting period, will not be less than the ratio
set forth below opposite the period during which such calendar quarter ends:

 

Calendar Quarter Ended

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

   Ratio

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

Closing Date through 6/30/04

   1.20 to 1.0

7/01/04 through 6/30/05

   1.00 to 1.0

7/01/05 through 3/31/06

   0.80 to 1.0

4/01/06 through 3/31/07

   0.70 to 1.0

4/01/07 through 6/30/07

   0.80 to 1.0

7/01/07 through 12/31/07

   1.00 to 1.0

1/01/08 and thereafter

   1.25 to 1.0

 

Section 7.18 No Other “Designated Senior Debt”. None of Holdings or the Borrower
shall designate, or permit the designation of, any Debt (other than under this
Agreement and the other Finance Documents) as “Designated Senior Debt” or any
other similar term for the purpose of the definition of the same or the
subordination provisions contained in the Senior Subordinated Note Indenture or
any indenture governing any Subordinated Debt permitted under Section 7.01.

 

Section 7.19 Independence of Covenants. All covenants contained herein shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that such action or condition would
be permitted by an exception to, or otherwise be within the limitations of,
another covenant shall not avoid the occurrence of a Default if such action is
taken or condition exists.

 

ARTICLE VIII

DEFAULTS

 

Section 8.01 Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events or conditions (each an
“Event of Default”):

 

(a) Payment. Any Credit Party shall:

 

(i) default in the payment when due (whether by scheduled maturity, acceleration
or otherwise) of any principal of any of the Loans or any LC Disbursement; or

 

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(ii) default, and such default shall continue for five or more Business Days, in
the payment when due of any interest on the Loans, or of any fees or other
amounts owing hereunder, under any of the other Senior Finance Documents or in
connection herewith.

 

(b) Representations. Any representation, warranty or statement made or deemed to
be made by any Credit Party herein, in any of the other Senior Finance
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material respect
on the date as of which it was made or deemed to have been made.

 

(c) Covenants. Any Credit Party shall:

 

(i) default in the due performance or observance of any term, covenant or
agreement contained in Sections 6.01(a), or (e), or (j), 6.08, 6.11 or Article
VII;

 

(ii) default in the due performance or observance of any term, covenant or
agreement contained in Sections 6.01(b) or (c) and such default shall continue
unremedied for a period of five Business Days after the earlier of an executive
officer of a Credit Party becoming aware of such default or notice thereof given
by the Administrative Agent; or

 

(iii) default in the due performance or observance by it of any term, covenant
or agreement contained in Section 6.01(d), (f), (g), (h) or (i) and such default
shall continue unremedied for a period of ten Business Days after the earlier of
an executive officer of a Credit Party becoming aware of such default or notice
thereof given by the Administrative Agent; or

 

(iv) default in the due performance or observance by it of any term, covenant or
agreement (other than those referred to in subsections (a), (b), (c)(i), (c)(ii)
or (c)(iii) of this Section 8.01) contained in this Agreement and such default
shall continue unremedied for a period of 30 days after the earlier of an
executive officer of a Credit Party becoming aware of such default or notice
thereof given by the Administrative Agent.

 

(d) Other Senior Finance Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of the
other Senior Finance Documents and such default shall continue unremedied for a
period of 30 days after the earlier of an executive officer of a Credit Party
becoming aware of such default or notice thereof given by the Administrative
Agent or (ii) except pursuant to the terms thereof, any Senior Finance Document
shall fail to be in full force and effect or any Credit Party shall so assert.

 

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(e) Cross-Default.

 

(i) any Group Company (A) fails to make payment of rent when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise but
after giving effect to all applicable grace periods), regardless of amount,
under the iStar Sale/Leaseback Documents, (B) fails to perform or observe any
other condition or covenant, or any other event shall occur or condition shall
exist, under any agreement or instrument relating to the iStar Sale/Leaseback
Transaction, if the effect of such failure, event or condition is to cause, or
to permit the applicable landlord thereunder to cause (x) any obligations of the
tenant under the iStar Sale/Leaseback Transaction to be declared to be due and
payable prior to its stated maturity, (y) the iStar Sale/Leaseback Transaction
or any iStar Leaseback Document to be terminated in whole or in part prior to
the scheduled termination date thereof or (z) any Bowling Equipment Acquisition
Period (as defined in the iStar Sale/Leaseback Documents) to occur or any
purchase option thereunder to be exercised or (C) shall be required by the terms
of such the iStar Sale/Leaseback Documents to offer to prepay or terminate the
iStar Sale/Leaseback Transaction prior to the stated termination date thereof or
repurchase any property subject thereto; or

 

(ii) any Group Company (A) fails to make payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise but after
giving effect to all applicable grace periods), regardless of amount, in respect
of any Debt, Guaranty Obligation or Synthetic Lease Obligations (other than in
respect of (x) Debt outstanding under the Senior Finance Documents and (y)
Derivatives 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 $5,000,000,
(B) fails to perform or observe any other condition or covenant, or any other
event shall occur or condition shall exist, under any agreement or instrument
relating to any such Debt, Guaranty Obligation or Synthetic Lease Obligations,
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders or beneficiary or beneficiaries of such Debt, Guaranty
Obligation or Synthetic Lease Obligations (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, such Debt or
Synthetic Lease Obligations to be declared to be due and payable prior to its
stated maturity or such Guaranty Obligation to become payable, or cash
collateral in respect thereof to be demanded or (C) shall be required by the
terms of such Debt, Guaranty Obligation or Synthetic Lease Obligation to offer
to prepay or repurchase such Debt or Synthetic Lease Obligation or the primary
Debt underlying such Guaranty Obligation (or any portion thereof) prior to the
stated maturity thereof; or

 

(iii) there occurs under any Derivatives Agreement or Derivatives Obligation an
Early Termination Date (as defined in such Derivatives Agreement) resulting from
(A) any event of default under such Derivatives Agreement as to which any Group
Company is the Defaulting Party (as defined in such Derivatives Agreement) or
(B) any Termination Event (as so defined) as to which any Group Company is an
Affected Party (as so defined), and, in either event, the Derivatives
Termination Value owed and not paid within 10 Business Days of when due by a
Group Company as a result thereof is greater than $5,000,000.

 

(f) Insolvency Events. (i) Any Group Company (other than an Insignificant
Subsidiary) shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding

 

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commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing or (ii) an
involuntary case or other proceeding shall be commenced against any Group
Company (other than an Insignificant Subsidiary) seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days, or any order for relief shall be entered against any Group
Company (other than an Insignificant Subsidiary) under the federal bankruptcy
laws as now or hereafter in effect.

 

(g) Judgments. One or more judgments, orders, decrees or arbitration awards is
entered against any Group Company involving in the aggregate a liability (to the
extent not covered by independent third-party insurance or on indemnity from a
creditworthy third party as to which the insurer or indemnitor, as applicable,
does not dispute coverage), as to any single or related series of transactions,
incidents or conditions, of $5,000,000 or more, and the same shall not have been
discharged, vacated or stayed pending appeal within 30 days after the entry
thereof.

 

(h) Employee Benefit Plans. (i) An ERISA Event occurs which has resulted or
could reasonably be expected to result in liability of any Group Company (x) in
aggregate amount in excess of $5,000,000 or (y) in an aggregate amount in excess
of $5,000,000 by virtue of an ERISA Affiliate having a liability, and, in each
case, such liability shall not have been discharged, paid or otherwise satisfied
within 30 days after the incurrence thereof, (ii) any Plan or Foreign Pension
Plan has any amount of Unfunded Liabilities which has resulted or could
reasonably be expected to result in liability of any Group Company (x) in an
aggregate amount in excess of $5,000,000 or (y) in an aggregate amount in excess
of $5,000,000 by virtue of an ERISA Affiliate having a liability, and, in each
case, such liability shall not have been discharged, paid or otherwise satisfied
within 30 days after the incurrence thereof, (iii) any Foreign Pension Plan is
not in substantial compliance with all applicable pension benefits and tax laws,
(iv) any contribution required to be made in accordance with any applicable law
or the terms of any Foreign Pension Plan has not been made; (v) any event has
occurred or condition exists with respect to any Foreign Pension Plan that has
resulted or could result in any Foreign Pension Plan being ordered or required
to be wound up in whole or in part pursuant to any applicable laws or having any
applicable registration revoked or refused for the purposes of any applicable
pension benefits or tax laws or being placed under the administration of the
relevant pension benefits regulatory authority or being required to pay any
taxes or penalties under applicable pension benefits and tax laws; (vi) an order
has been made or notice has been given pursuant to any applicable pension
benefits and tax laws in respect of any Foreign Pension Plan requiring any
person to take or refrain from taking any action in respect thereof or that
there has been a contravention of any such applicable laws; (vii) an event has
occurred or a condition exists that has resulted or could result in Holdings or
any Subsidiary of Holdings being required to pay, repay or refund any amount
other than contributions required to be made or expenses required to be paid in
the ordinary course) to or on account of any Foreign Pension Plan or a current
or former member thereof; or (viii) an event has occurred or a condition exists
that has resulted or could result in a payment being made out of a guarantee
fund established under the applicable pension benefits laws in respect of a
Foreign Pension Plan; and which, with respect to all the events and obligations
described in the preceding clauses (iii) through (viii) of this Section 8.01(h),
in the opinion of the Required Lenders could reasonably be expected to have a
Material Adverse Effect.

 

(i) Guaranties. Any Guaranty given by any Credit Parties or any provision
thereof shall, except pursuant to the terms thereof, cease to be in full force
and effect, or any Guarantor

 

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thereunder or any Person acting by or on behalf of such guarantor shall deny or
disaffirm such Guarantor’s obligations under such Guaranty.

 

(j) Impairment of Collateral. Any security interest purported to be created by
any Collateral Document shall cease to be, or shall be asserted by any Group
Company not to be, a valid, perfected, first-priority (except as otherwise
expressly provided in such Collateral Document) security interest in the
securities, assets or properties covered thereby, other than in respect of
assets and properties which, individually and in the aggregate, are not material
to the Group Companies taken as a whole;

 

(k) Ownership. A Change of Control shall occur.

 

(l) Subordinated Debt. (i) Any Governmental Authority with applicable
jurisdiction determines that the Lenders are not holders of Senior Indebtedness
(as defined in the Senior Subordinated Note Indenture) or (ii) the subordination
provisions creating the Subordinated Debt shall, in whole or in part terminate,
cease to be effective or cease to be legally valid, binding and enforceable as
to any holder of the Subordinated Debt.

 

Section 8.02 Acceleration; Remedies. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived in writing by the Required Lenders (or the Lenders as may be required
pursuant to Section 10.03), the Administrative Agent (or the Collateral Agent,
as applicable) shall, upon the request and direction of the Required Lenders, by
written notice to the Borrower, take any of the following actions without
prejudice to the rights of the Agents or any Lender to enforce its claims
against the Credit Parties except as otherwise specifically provided for herein:

 

(a) Termination of Commitments. Declare the Commitments terminated whereupon the
Commitments shall be immediately terminated.

 

(b) Acceleration of Loans. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising from
drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by a Credit Party to any of the Lenders
hereunder to be due whereupon the same shall be immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Credit Parties.

 

(c) Cash Collateral. Direct the Borrower to pay (and the Borrower agrees that
upon receipt of such notice, or upon the occurrence of an Event of Default under
Section 8.01(f), it will immediately pay) to the Collateral Agent additional
cash, to be held by the Collateral Agent, for the benefit of the Lenders, in a
cash collateral account as additional security for the LC Obligations in respect
of subsequent drawings under all then outstanding Letters of Credit in an amount
equal to 100% of the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.

 

(d) Enforcement of Rights. Enforce any and all rights and interests created and
existing under the Senior Finance Documents, including, without limitation, all
rights and remedies

 

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existing under the Collateral Documents, all rights and remedies against a
Guarantor and all rights of set-off.

 

Notwithstanding the foregoing, if an Event of Default specified in Section
8.01(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof and all accrued and unpaid fees and other
indebtedness or obligations owing to the Lenders hereunder and under the other
Senior Finance Documents shall immediately become due and payable without the
giving of any notice or other action by the Administrative Agent or the Lenders,
which notice or other action is expressly waived by the Credit Parties.

 

Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate “creditor” holding
a separate “claim” within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.

 

In case any one or more of the covenants and/or agreements set forth in this
Agreement or any other Senior Finance Document shall have been breached by any
Credit Party, then the Administrative Agent may proceed to protect and enforce
the Lenders’ rights either by suit in equity and/or by action at law, including
an action for damages as a result of any such breach and/or an action for
specific performance of any such covenant or agreement contained in this
Agreement or such other Senior Finance Document. Without limitation of the
foregoing, the Borrower agrees that failure to comply with any of the covenants
contained herein will cause irreparable harm and that specific performance shall
be available in the event of any breach thereof. The Administrative Agent acting
pursuant to this paragraph shall be indemnified by the Borrower against all
liability, loss or damage, together with all reasonable costs and expenses
related thereto (including reasonable legal and accounting fees and expenses) in
accordance with Section 10.05.

 

Section 8.03 Allocation of Payments After Event of Default.

 

(a) Priority of Distributions. The Borrower hereby irrevocably waives the right
to direct the application of any and all payments in respect of its Finance
Obligations and any proceeds of Collateral after the occurrence and during the
continuance of an Event of Default and agrees that, notwithstanding the
provisions of Sections 2.09(b) and 2.14, after the occurrence and during the
continuance of an Event of Default, all amounts collected or received by the
Administrative Agent, the Collateral Agent or any Finance Party on account of
amounts then due and outstanding under any of the Senior Finance Documents or
any Derivative Agreement or in respect of the Collateral shall be paid over or
delivered in respect of its Finance Obligations as follows:

 

FIRST, to pay interest on and then principal of any portion of the Revolving
Loans that the Administrative Agent may have advanced on behalf of any Lender
for which the Administrative Agent has not then been reimbursed by such Lender
or the Borrower;

 

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SECOND, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of the Administrative Agent or the
Collateral Agent in connection with enforcing the rights of the Finance Parties
under the Finance Documents, including all expenses of sale or other realization
of or in respect of the Collateral, including reasonable compensation to the
agents and counsel for the Collateral Agent, and all expenses, liabilities and
advances incurred or made by the Collateral Agent in connection therewith, and
any other obligations owing to the Collateral Agent in respect of sums advanced
by the Collateral Agent to preserve the Collateral or to preserve its security
interest in the Collateral;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of (i) each of the Lenders (including any
Issuing Lender in its capacity as such) in connection with enforcing its rights
under the Senior Finance Documents or otherwise with respect to the Senior
Obligations owing to such Lender and (ii) each Derivatives Creditor in
connection with enforcing any of its rights under the Derivatives Agreements or
otherwise with respect to the Derivatives Obligations owing to such Derivatives
Creditor;

 

FOURTH, to the payment of all of the Senior Obligations consisting of accrued
fees and interest;

 

FIFTH, except as set forth in clauses “FIRST” through “FOURTH” above, to the
payment of the outstanding Senior Obligations and Derivatives Obligations owing
to any Finance Party, Pro-Rata, as set forth below, with (i) an amount equal to
the Senior Obligations being paid to the Collateral Agent (in the case of Senior
Obligations owing to the Collateral Agent) or to the Administrative Agent (in
the case of all other Senior Obligations) for the account of the Lenders or any
Agent, with the Collateral Agent, each Lender and the Agents receiving an amount
equal to its outstanding Senior Obligations, or, if the proceeds are
insufficient to pay in full all Senior Obligations, its Pro-Rata Share of the
amount remaining to be distributed, and (ii) an amount equal to the Derivatives
Obligations being paid to the trustee, paying agent or other similar
representative (each a “Representative”) for the Derivatives Creditors, with
each Derivatives Creditor receiving an amount equal to the outstanding
Derivatives Obligations owed to it by the Credit Parties or, if the proceeds are
insufficient to pay in full all such Derivatives Obligations, its Pro-Rata Share
of the amount remaining to be distributed; and

 

SIXTH, to the payment of the surplus, if any, to whomever may be lawfully
entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Finance Parties shall receive an amount
equal to its Pro-Rata Share of amounts available to be applied pursuant to
clauses “FOURTH” and “FIFTH” above; and (iii) to the extent that any amounts
available for distribution pursuant to clause “FIFTH” above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Collateral Agent in a cash collateral account and applied
(x) first, to reimburse the Issuing Lender from time to time for any drawings
under such Letters of Credit and (y) then, following the expiration of all
Letters of Credit, to all other obligations of the types described in clause
“SIXTH” above in the manner provided in this Section 8.03.

 

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(b) Pro-Rata Treatment. For purposes of this Section, “Pro-Rata Share” means,
when calculating a Finance Party’s portion of any distribution or amount, that
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then unpaid amount of such Finance Party’s Senior Obligations or Derivatives
Obligations, as the case may be, and the denominator of which is the then
outstanding amount of all Senior Obligations or Derivatives Obligations, as the
case may be. When payments to the Finance Parties are based upon their
respective Pro-Rata Shares, the amounts received by such Finance Parties
hereunder shall be applied (for purposes of making determinations under this
Section 8.03 only) (i) first, to their Senior Obligations and (ii) second, to
their Derivatives Obligations. If any payment to any Finance Party of its
Pro-Rata Share of any distribution would result in overpayment to such Finance
Party, such excess amount shall instead be distributed in respect of the unpaid
Senior Obligations or Derivatives Obligations, as the case may be, of the other
Finance Parties, with each Finance Party whose Senior Obligations or Derivatives
Obligations, as the case may be, have not been paid in full to receive an amount
equal to such excess amount multiplied by a fraction the numerator of which is
the unpaid Senior Obligations or Derivatives Obligations, as the case may be, of
such Finance Party and the denominator of which is the unpaid Senior Obligations
or Derivatives Obligations, as the case may be, of all Finance Parties entitled
to such distribution.

 

(c) Distributions with Respect to Letters of Credit. Each of the Finance Parties
agrees and acknowledges that if (after all outstanding Loans and Reimbursement
Obligations with respect to Letters of Credit have been paid in full) the
Lenders are to receive a distribution on account of undrawn amounts with respect
to Letters of Credit issued (or deemed issued) under the Credit Agreement, such
amounts shall be deposited in the LC Cash Collateral Account as cash security
for the repayment of Senior Obligations owing to the Lenders as such. Upon
termination of all outstanding Letters of Credit, all of such cash security
shall be applied to the remaining Senior Obligations of the Lenders. If there
remains any excess cash security, such excess cash shall be withdrawn by the
Collateral Agent from the LC Cash Collateral Account and distributed in
accordance with Section 8.03(a) hereof.

 

(d) Distributions of Funds on Deposit in a Prepayment Account. Notwithstanding
the foregoing provisions of this Section 8.03, amounts on deposit in a
Prepayment Account for any Class of Loans shall be applied upon the occurrence
of any Event of Default, first, to pay Loans of such Class and, second, after
all the Loans of such Class have been paid in full, to the other Senior
Obligations in the manner provided in this Section 8.03.

 

(e) Reliance by Collateral Agent. For purposes of applying payments received in
accordance with this Section 8.03, the Collateral Agent shall be entitled to
rely upon (i) the Administrative Agent under the Credit Agreement and (ii) the
Representative, if any, for the Derivatives Creditors for a determination (which
the Administrative Agent, each Representative for any Derivatives Creditor and
the Finance Parties agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Senior Obligations or Derivatives
Obligations owed to the Agents, the Lenders or the Derivatives Creditors, as the
case may be. Unless it has actual knowledge (including by way of written notice
from a Derivatives Creditor or any Representatives thereof) to the contrary, the
Collateral Agent, in acting hereunder, shall be entitled to assume that no
Derivatives Agreements are in existence.

 

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ARTICLE IX

AGENCY PROVISIONS

 

Section 9.01 Appointment; Authorization.

 

(a) Appointment. Each Lender hereby designates and appoints Credit Suisse First
Boston, Cayman Islands Branch as Administrative Agent and Collateral Agent and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated as
Syndication Agent and Documentation Agent for such Lender to act as specified
herein and in the other Senior Finance Documents, and each such Lender hereby
authorizes the Agents, as the agents for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Senior Finance
Documents and to exercise such powers and perform such duties as are expressly
delegated by the terms hereof and of the other Senior Finance Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere herein and in the other
Senior Finance Documents, the Agents shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any of the other Senior Finance Documents, or shall otherwise exist
against the Agents. In performing its functions and duties under this Agreement
and the other Senior Finance Documents, each Agent shall act solely as an agent
of the Lenders and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for any Credit Party.
Without limiting the generality of the foregoing two sentences, the use of the
term “agent” herein and in the other Senior Finance Documents with reference to
any Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties. The provisions of this Article IX (other than Section 9.10) are solely
for the benefit of the Agents and the Lenders, and none of the Credit Parties
shall have any rights as a third party beneficiary of the provisions hereof
(other than Section 9.10).

 

(b) Release of Collateral. The Lenders irrevocably authorize the Collateral
Agent, at the Collateral Agent’s option and in its discretion, to release any
security interest in or Lien on any Collateral granted to or held by the
Collateral Agent (i) upon termination of this Agreement and the other Senior
Finance Documents, termination of the Commitments and all Letters of Credit and
payment in full of all Senior Obligations, including all fees and indemnified
costs and expenses that are payable pursuant to the terms of the Senior Finance
Documents, (ii) if such Collateral constitutes property sold or to be sold or
disposed of as part of or in connection with any disposition permitted pursuant
to the terms of this Agreement or (iii) if approved by the Required Lenders or
Lenders, as applicable, pursuant to the terms of Section 10.03. Upon the request
of the Collateral Agent, the Lenders will confirm in writing the Collateral
Agent’s authority to release particular types or items of Collateral pursuant to
this Section 9.01(b).

 

(c) Release of Guarantors. The Lenders irrevocably authorize the Administrative
Agent, at the Administrative Agent’s option and in its discretion, to release
any Guarantor from its obligations hereunder if (i) such Guarantor is no longer
required to be a Guarantor pursuant to the terms of this Agreement or (ii) if
approved by the Required Lenders or Lenders, as applicable, pursuant to the
terms of Section 10.03. Upon the request of the Administrative Agent, the
Lenders will confirm in

 

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writing the Administrative Agent’s authority to release a particular Guarantor
pursuant to this Section 9.01(c).

 

(d) HLT Classification. Each Lender recognizes that applicable Laws may require
the Administrative Agent to determine whether the transactions contemplated
hereby should be classified as “highly leveraged” or assigned any similar or
successor classification, and that such determination may be binding upon the
other Lenders. Each Lender understands that any such determination shall be made
solely by the Administrative Agent based upon such factors (which may include
the Administrative Agent’s internal policies and prevailing market practices) as
the Administrative Agent shall deem relevant and agrees that the Administrative
Agent shall have no liability for the consequences of any such determination.

 

Section 9.02 Delegation of Duties. An Agent may execute any of its duties
hereunder or under the other Senior Finance Documents by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
An Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it in the absence of bad faith, gross
negligence or willful misconduct.

 

Section 9.03 Exculpatory Provisions. No Agent or any of its or their directors,
officers, employees or agents shall be (i) liable for any action lawfully taken
or omitted to be taken by any of them under or in connection herewith or in
connection with any of the other Senior Finance Documents or the transactions
contemplated hereby or thereby (except for its own bad faith, gross negligence
or willful misconduct in connection with its duties expressly set forth herein)
or (ii) responsible in any manner to any of the Lenders or participants for any
recitals, statements, representations or warranties made by any of the Credit
Parties contained herein or in any of the other Senior Finance Documents or in
any certificate, report, document, financial statement or other written or oral
statement referred to or provided for in, or received by an Agent under or in
connection herewith or in connection with the other Senior Finance Documents, or
enforceability or sufficiency therefor of any of the other Senior Finance
Documents, or for any failure of any Credit Party to perform its obligations
hereunder or thereunder or be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained herein or therein or as to the use of the proceeds of
the Loans or the use of the Letters of Credit or of the existence or possible
existence of any Default or Event of Default or to inspect the properties, books
or records of the Credit Parties.

 

Section 9.04 Reliance on Communications. The Agents shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex, teletype or e-mail message, statement, order or other document or
conversation 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 (including, without limitation, counsel to any of the Credit
Parties, independent accountants and other experts selected by the Agents). The
Agents may deem and treat each Lender as the owner of its interests hereunder
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent in accordance with
Section 10.06(b). The Agents shall be fully justified in failing or refusing to
take any action under this Agreement or under any of the other Senior Finance
Documents unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The

 

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Agents shall in all cases be fully protected in acting, or in refraining from
acting, hereunder or under any of the other Senior Finance Documents in
accordance with a request of the Required Lenders (or to the extent specifically
provided in Section 10.03, all the Lenders) and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns). Where this Agreement expressly permits
or prohibits an action unless the Required Lenders otherwise determine, any
Agent shall, and in all other instances an Agent may, but shall not be required
to, initiate any solicitation for the consent or vote of the Lenders.

 

Section 9.05 Notice of Default. An Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to such Agent for the accounts of the Lenders, unless such Agent has
received notice from a Lender or a Borrower referring to the Agreement,
describing such Default or Event of Default and stating that such notice is a
“notice of default”. If an Agent receives such a notice, such Agent shall give
prompt notice thereof to each other Agent and the Lenders. The Administrative
Agent and the Collateral Agent shall take such actions with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided, however, that unless and until the Administrative Agent has
received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default or it shall deem advisable or in the best
interest of the Lenders.

 

Section 9.06 Credit Decision; Disclosure of Information by Administrative Agent.
Each Lender expressly acknowledges that no Agent has made any representations or
warranties to it and that no act by any Agent hereinafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any
Credit Party or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Agent to any Lender as to any matter,
including whether any Agent has disclosed material information in its
possession. Each Lender represents to the Agents that it has, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other condition, prospects and creditworthiness of the Credit Parties, and all
requirements of Law pertaining to the Transaction, and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon any Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Senior Finance Documents, and to make such investigation as it deems necessary
to inform itself as to the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrowers and the other
Credit Parties. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Agents shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations, assets,
property, financial or other conditions, prospects or creditworthiness of any
Credit Party or their respective Affiliates which may come into the possession
of any Agent.

 

Section 9.07 No Reliance on Arranger’s or Agent’s Customer Identification
Program. Each Lender acknowledges and agrees that neither such Lender nor any of
its Affiliates, participants or assignees may rely on either Lead Arranger or
any Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s
customer identification program, or other obligations required or imposed under
or pursuant to the U.S. Patriot Act or the regulations thereunder, including the
regulations contained in 31 C.F.R. 103.121 (as hereafter amended or replaced,
the “CIP Regulations”), or any other

 

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Anti-Terrorism Law, including any programs involving any of the following items
relating to or in connection with any of the Credit Parties, their Affiliates or
agents, the Senior Finance Documents or the transactions hereunder or
contemplated hereby: (i) any identification procedures; (ii) and recordkeeping;
(iii) comparisons with government lists, (iv) customer notices; or (v) other
procedures required under the CIP regulations or such other Laws.

 

Section 9.08 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders agree to indemnify each Agent (to the extent
not reimbursed by the Borrower or any other Credit Party and without limiting
the obligation of the Borrower or any other Credit Party to do so), ratably
according to their respective Commitments (or if the Commitments have expired or
been terminated, in accordance with the respective principal amounts of
outstanding Loans and Participation Interests of the Lenders), from and against
any and all Indemnified Liabilities which may at any time (including, without
limitation, at any time following payment in full of the Senior Obligations) be
imposed on, incurred by or asserted against an Agent in its capacity as such in
any way relating to or arising out of this Agreement or the other Senior Finance
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by an Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment to any Agent of any portion of such
Indemnified Liabilities resulting from such Person’s gross negligence or willful
misconduct; provided, however, that no action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 9.08. If any
indemnity furnished to an Agent for any purpose shall, in the opinion of such
Agent, be insufficient or become impaired, such Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including fees and disbursements
of counsel) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Senior Finance Document, or any document contemplated by or referred
to herein, to the extent that the Administrative Agent is not reimbursed for
such expenses by or on behalf of the Borrower or any other Credit Party. The
agreements in this Section 9.08 shall survive the payment of the Senior
Obligations and all other obligations and amounts payable hereunder and under
the other Senior Finance Documents.

 

Section 9.09 Agents in Their Individual Capacity. Each Agent and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire Equity Interests in, and generally engage in any kind of banking,
trust, financial advisory, underwriting and other business with the Borrower or
any other Credit Party as though such Agent were not an Agent hereunder or under
another Senior Finance Document. The Lenders acknowledge that, pursuant to any
such activities, an Agent or its Affiliates may receive information regarding
any Credit Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Credit Party or such Affiliate) and
acknowledge that no Agent shall be under any obligation to provide such
information to them. With respect to the Loans made by, Letters of Credit issued
by and all obligations owing to it, an Agent shall have the same rights and
powers under this Agreement as any Lender and may exercise the same as though it
was not an Agent, and the terms “Lender” and “Lenders” shall include each Agent
in its individual capacity.

 

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Section 9.10 Successor Agents. Any Agent may, at any time, resign upon 30 days’
written notice to the Lenders. If an Agent resigns under a Senior Finance
Document, the Required Lenders shall appoint from among the Lenders a successor
Agent, which successor Agent shall be consented to by the Borrower at all times
other than during the existence of an Event of Default (which consent of the
Borrower shall not be unreasonably withheld or delayed). If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment prior to the effective date of the resignation of the resigning
Agent, then the resigning Agent shall have the right, after consulting with the
Lenders and the Borrower, to appoint a successor Agent; provided such successor
is a Lender hereunder or an Eligible Assignee. If no successor Agent is
appointed prior to the effective date of the resignation of the resigning Agent,
the Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor Agent from among the Lenders. Upon the acceptance of any
appointment as an Agent hereunder by a successor, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations as an Agent, as appropriate, under this
Agreement and the other Senior Finance Documents and the provisions of this
Section 9.10 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement. If no successor
Administrative Agent has accepted appointment as Administrative Agent within 60
days after the retiring Administrative Agent’s giving notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless become effective
and the Lenders shall perform all duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for above. Likewise, if no successor Collateral
Agent has accepted appointment as Collateral Agent within 60 days after the
retiring Collateral Agent’s giving notice of resignation, the retiring
Collateral Agent’s resignation shall nevertheless become effective and the
Lenders shall perform all duties of the Collateral Agent under the Collateral
Documents until such time, if any, as the Required Lenders appoint a successor
Collateral Agent as provided for above.

 

Section 9.11 Certain Other Agents. None of the Lenders identified on the facing
page or signature pages of this Agreement as a “syndication agent”,
“documentation agent”, “co-agent”, “bookrunner”, “lead manager” or “arranger”
shall have any right, power, obligation, liability, responsibility or duty under
the Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders or any such Person so identified
shall have or be deemed to have any fiduciary relationship to any Lender or
Credit Party. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other Persons so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.

 

Section 9.12 Agents’ Fees; Arranger Fee. The Borrower shall pay to the
Administrative Agent for its own account, to the Collateral Agent for its own
account and to the Lead Arrangers, in their capacity as Lead Arrangers, for
their own account, fees in the amounts and at the times previously agreed upon
between the Borrower and the Administrative Agent and the Lead Arrangers,
respectively, in each case with respect to this Agreement, the other Senior
Finance Documents and the transactions contemplated hereby and thereby.

 

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ARTICLE X

MISCELLANEOUS

 

Section 10.01 Notices and Other Communications.

 

(a) General. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including by
facsimile transmission) and mailed, faxed or delivered, to the address,
facsimile number or (subject to subsection (c) below) electronic mail address
specified for notices: (i) in the case of Holdings, the Borrower or the
Administrative Agent, as set forth on the signature pages hereof; (ii) in the
case of any Issuing Lender, as set forth on the signature pages hereto or in any
applicable agreement pursuant to which such Issuing Lender was designated as an
Issuing Lender hereunder; (iii) in the case of any Lender, as set forth in
Schedule 1.01D hereto or in any applicable Assignment and Acceptance pursuant to
which such Lender became a Lender hereunder; and (iv) in the case of any party,
at such other address as shall be designated by such party in a notice to the
Borrower, the Administrative Agent and any Issuing Lender. All such notices and
other communications shall be deemed to be given or made upon the earlier to
occur of (i) actual receipt by the intended recipient and (ii) (A) if delivered
by hand or by courier, when signed for by the intended recipient; (B) if
delivered by mail, four Business Days after deposit in the mails, postage
prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed
by telephone; and (D) if delivered by electronic mail (which form of delivery is
subject to the provisions of subsection (c) below), when delivered; provided,
however, that notices and other communications to the Administrative Agent and
any Issuing Lender pursuant to Article II shall not be effective until actually
received by such Person. Any notice or other communication permitted to be
given, made or confirmed by telephone hereunder shall be given, made or
confirmed by means of a telephone call to the intended recipient at the number
specified pursuant to this Section 10.01, it being understood and agreed that a
voicemail message shall in no event be effective as a notice, communication or
confirmation hereunder.

 

(b) Effectiveness of Facsimile Documents and Signatures. Senior Finance
Documents may be transmitted and/or signed by facsimile or signed and delivered
by electronic mail in an Adobe PDF document. The effectiveness of any such
documents and signatures shall, subject to requirements of Law, have the same
force and effect as manually-signed originals and shall be binding on all Credit
Parties, the Agents and the Lenders. The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document, Adobe PDF
document or signature.

 

(c) Limited Use of Electronic Mail. Except as expressly provided herein or as
may be agreed by the Administrative Agent in its sole discretion, electronic
mail and internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information, and to
distribute Senior Finance Documents for execution by the parties thereto, to
distribute executed Senior Finance Documents in Adobe PDF format and may not be
used for any other purpose.

 

(d) Reliance by Agents and Lenders. The Agents and the Lenders shall be entitled
to rely and act upon any notices purportedly given by or on behalf of the
Borrower or any other Credit Party even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein or (ii) the terms thereof, as understood

 

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by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify each Agent and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

Section 10.02 No Waiver; Cumulative Remedies. No failure or delay on the part of
an Agent or any Lender in exercising any right, power or privilege hereunder or
under any other Senior Finance Document and no course of dealing between the
Agents or any Lender and any of the Credit Parties shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Senior Finance Document preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which the Agents or any
Lender would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle the Credit Parties to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Agents or the Lenders to any other or further action in any circumstances
without notice or demand.

 

Section 10.03 Amendments, Waivers and Consents. Neither this Agreement nor any
other Senior Finance Document nor any of the terms hereof or thereof may be
amended, changed, waived, discharged or terminated except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
Holdings, the Borrower and the Required Lenders or, in the case of any other
Senior Finance Document, pursuant to an agreement or agreements in writing
entered into by Holdings, the Borrower and/or any other Credit Parties party
thereto and the Administrative Agent and/or the Collateral Agent, as applicable,
party thereto; provided that (i) the foregoing shall not restrict the ability of
the Required Lenders to waive any Event of Default prior to the time the
Administrative Agent shall have declared, or the Required Lenders shall have
requested the Administrative Agent to declare, the Loans immediately due and
payable pursuant to Article VIII and (ii) the Administrative Agent and the
Borrower may, with the consent of the other and upon notice to each Lender,
amend, modify or supplement this Agreement and any other Senior Finance Document
to cure any ambiguity, typographical error, defect or inconsistency if such
amendment, modification or supplement does not adversely affect the rights of
any Agent, any Lender or any Issuing Lender; provided, however, that:

 

(i) no such amendment, change, waiver, discharge or termination shall, without
the consent of each Lender directly affected thereby:

 

(A) extend the final maturity of any Loan or the time of payment of any
reimbursement obligation, or any portion thereof, arising from drawings under
Letters of Credit or extend or waive any Principal Amortization Payment or any
portion thereof; provided that this clause (A) shall not restrict the ability of
the Required Lenders to waive any Event of Default (other than an Event of
Default the waiver of which would effectively result in any such extension or
waiver), prior to the time the Administrative Agent shall have declared, or the
Required Lenders shall have requested the Administrative Agent to declare, the
Loans immediately due and payable pursuant to Article VIII;

 

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(B) reduce the rate, or extend the time of payment, of interest on any Loan
(other than as a result of waiving the applicability of any post-default
increase in interest rates) thereon or fees hereunder;

 

(C) reduce or waive the principal amount of any Loan or any LC Disbursement;

 

(D) increase the Commitment of a Lender over the amount thereof in effect (it
being understood and agreed that a waiver of any Default or Event of Default or
a mandatory reduction in the Commitments shall not constitute a change in the
terms of any Commitment of any Lender);

 

(E) release all or substantially all of the Collateral securing the Senior
Obligations hereunder (provided that the Collateral Agent may, without consent
from any other Lender, release any Collateral that is sold or transferred by a
Credit Party in compliance with Section 7.05 or released in compliance with
Section 9.01(b));

 

(F) release the Borrower or any material Guarantor from its obligations under
the Senior Finance Documents (provided that the Administrative Agent may,
without the consent of any other Lender, release any Guarantor that is sold or
transferred in compliance with Section 7.05);

 

(G) amend, modify or waive any provision of this Section 10.03, reduce any
percentage specified in, or otherwise modify, the definition of Required
Lenders;

 

(H) consent to the assignment or transfer by the Borrower or all or
substantially all of the other Credit Parties of any of its or their rights and
obligations under (or in respect of) the Senior Finance Documents, except as
permitted thereby;

 

(I) if and so long as the collective Domestic Revolving Credit Exposure of the
Lead Arrangers or one or more Subsidiaries of their respective parent holding
companies constitute more than 50% of the Domestic Revolving Credit Exposures of
all Lenders, effect any waiver of the conditions to funding any Revolving Loan
or to issuing any Letter of Credit in each case after the Closing Date, without
the prior written consent of Lenders having in the aggregate at least a majority
of the outstanding principal amount of Revolving Loans, LC Obligations and
unused Revolving Credit Commitments; or

 

(J) if and so long as the Lead Arrangers or one or more Subsidiaries of their
respective parent holding companies collectively have at least a majority of the
Multi-Currency Revolving Outstandings and unused Multi-Currency Revolving
Commitments, effect any waiver of the conditions to funding any Multi-Currency
Revolving Loan after the Closing Date, without the prior written consent of
Lenders

 

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having in the aggregate at least a majority of the Multi-Currency Revolving
Outstandings and unused Multi-Currency Revolving Commitments; and

 

(ii) no provision of Article IX may be amended without the consent of the
Administrative Agent and the Collateral Agent and no provision of Section 2.05
may be amended without the consent of each Issuing Lender.

 

Notwithstanding the above, the right to deliver a Payment Blockage Notice (as
defined in the Senior Subordinated Note Indenture), shall reside solely with the
Administrative Agent, and the Administrative Agent shall deliver such Payment
Blockage Notice, only upon the direction of the Required Lenders.

 

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

 

The various requirements of this Section 10.03 are cumulative. Each Lender and
each holder of a Note shall be bound by any waiver, amendment or modification
authorized by this Section 10.03 regardless of whether its Note shall have been
marked to make reference therein, and any consent by any Lender or holder of a
Note pursuant to this Section 10.03 shall bind any Person subsequently acquiring
a Note from it, whether or not such Note shall have been so marked.

 

Section 10.04 Expenses. Holdings and the Borrower, jointly and severally, agree
(i) to pay or reimburse the Administrative Agent for all reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation and execution of this Agreement and the other Senior Finance
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation of the transactions
contemplated hereby and thereby, including all reasonable fees, disbursements
and other charges of Fried, Frank, Harris, Shriver & Jacobson LLP, counsel for
the Lead Arrangers and the Administrative Agent, and (ii) to pay or reimburse
(without duplication of any amount paid pursuant to Section 10.05) each Agent
and each Lender for all reasonable costs and expenses incurred in connection
with the enforcement, attempted enforcement or preservation of any rights or
remedies under this Agreement or the other Senior Finance Documents (including
all such costs and expenses incurred during any “workout” or restructuring in
respect of the Senior Obligations and during any legal proceeding, including any
proceeding under any bankruptcy or insolvency proceeding), including all
reasonable fees and disbursements of counsel (including the allocated charges of
internal counsel); provided that the Borrower shall not be required to reimburse
the legal fees and expenses of more than one outside counsel (in addition to up
to one local counsel in each applicable local jurisdiction) for all Persons
indemnified under this clause (ii) unless, in the written opinion of outside
counsel reasonably satisfactory to the Borrower and the Administrative Agent,
representation of all such indemnified persons would be inappropriate due to the
existence of an actual or potential conflict of interest. The foregoing costs
and expenses shall include all search, filing, recording, title insurance and
appraisal charges and fees and taxes related thereto, and other out-of-pocket
expenses incurred by any

 

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Agent and the cost of independent public accountants and other outside experts
retained by or behalf of the Agents and the Lenders. The agreements in this
Section 10.04 shall survive the termination of the Commitments and repayment of
all Senior Obligations.

 

Section 10.05 Indemnification. Whether or not the transactions contemplated
hereby are consummated, Holdings and the Borrower, jointly and severally, agree
to indemnify, save and hold harmless each Agent, each Lender and their
respective Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact and their respective successors and assigns (collectively, the
“Indemnitees”) from and against: (i) any and all claims, demands, actions or
causes of action that are asserted against any Indemnitee by any Person (other
than the Administrative Agent or any Lender) relating directly or indirectly to
a claim, demand, action or cause of action that such Person asserts or may
assert against any Credit Party, any Affiliate of any Credit Party or any of
their respective officers or directors; (ii) any and all claims, demands,
actions or causes of action that may at any time (including at any time
following repayment of the Senior Obligations and the resignation or removal of
any Agent or the replacement of any Lender) be asserted or imposed against any
Indemnitee, arising out of or relating to, the Senior Finance Documents, any
predecessor Senior Finance Documents, the Commitments, the use of or
contemplated use of the proceeds of any Credit Extension, or the relationship of
any Credit Party, any Agent and the Lenders under this Agreement or any other
Senior Finance Document or from any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Group
Company, or any Environmental Liability related in any way to any Group Company;
(iii) any administrative or investigative proceeding by any Governmental
Authority arising out of or related to a claim, demand, action or cause of
action described in clause (i) or (ii) above; and (iv) any and all liabilities
(including liabilities under indemnities), losses, costs or expenses (including
fees and disbursements of counsel) that any Indemnitee suffers or incurs as a
result of the assertion of any foregoing claim, demand, action, cause of action
or proceeding, or as a result of the preparation of any defense in connection
with any foregoing claim, demand, action, cause of action or proceeding, in all
cases, and whether or not an Indemnitee is a party to such claim, demand,
action, cause of action, or proceeding (all the foregoing, collectively, the
“Indemnified Liabilities”); provided that no Indemnitee shall be entitled to
indemnification for any claim to the extent such claim is determined by a court
of competent jurisdiction is a final and nonappealable judgment to have been
caused by its own gross negligence, bad faith or willful misconduct; and
provided further that the Borrower shall not be required to reimburse the legal
fees and expenses of more than one outside counsel (in addition to up to one
local counsel in each applicable local jurisdiction) for all Indemnities unless,
in the written opinion of outside counsel reasonably satisfactory to the
Borrower and the Administrative Agent, representation of all such Indemnitees
would be inappropriate due to the existence of an actual or potential conflict
of interest. In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 10.05 applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by any Credit Party, its directors, shareholders or creditors or an Indemnitee
or any other Person or any Indemnitee is otherwise a party thereto and whether
or not the transactions contemplated hereby are consummated. Each of Holdings
and the Borrower agrees not to assert or permit any of their respective
Subsidiaries to assert any claim against any Agent, any Lender, any of their
Affiliates or any of their respective directors, officers, employees, attorneys,
agents and advisers, and each of the Agents, and the Lenders agrees not to
assert or permit any of their respective Subsidiaries to assert any claim
against Holdings, the Borrower or any of their respective Subsidiaries or any of
their respective directors, officers, employees, attorneys, agents or advisors,
on any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Senior Finance Documents,
any of the transactions contemplated herein or therein or the actual or proposed
use of the proceeds of the Loans or the Letters of Credit. Without prejudice to
the survival of any other agreement of the Credit Parties hereunder and under
the other Senior Finance Documents, the agreements and obligations of the Credit
Parties contained in this Section 10.05 shall survive the repayment of the
Loans, LC Obligations

 

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and other obligations under the Senior Finance Documents and the termination of
the Commitments hereunder.

 

Section 10.06 Successors and Assigns.

 

(a) Generally. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto; provided that none of the Credit Parties may assign or transfer any of
its interests and obligations without the prior written consent of either the
Required Lenders or the Lenders, as the terms set forth in Section 10.03 may
require;

 

(b) Assignments. Any Lender may assign all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Loans, its Notes, its Commitments and any Participation Interest
in Letters of Credit held by it); provided, however, that

 

(i) each such assignment shall be to an Eligible Assignee;

 

(ii) except in the case of an assignment to another Lender, an Affiliate of an
existing Lender or any Approved Fund (A) the aggregate amount of the Revolving
Commitment, Multi-Currency Revolving Commitment, Term B Loans or Multi-Currency
Term B Loans of an assigning Lender subject to each such assignments (determined
as of the date the Assignment and Acceptance with respect to such assignment is
recorded by the Administrative Agent) shall not, without the consent of the Lead
Arrangers and, if no Default or Event of Default has occurred and is continuing,
the Borrower, be less (with respect to any such Class) than $1,000,000, and an
integral multiple of $1,000,000 (or such lesser amount as shall equal the
assigning Lender’s entire Commitment or Term Loans of the applicable Class) and
(B) after giving effect to such assignment, unless otherwise consented to by the
Borrower if no Default or Event of Default has occurred and is continuing, the
aggregate amount of the Revolving Commitment and/or Multi-Currency Revolving
Commitment of, and Term B Loans at the time owing to, the assigning Lender shall
not be less than $1,000,000 (unless the assigning Lender shall have assigned its
entire Revolving Commitment and Term B Loans at the time owing it pursuant to
such assignment or assignments otherwise complying with this Section 10.06
executed substantially simultaneously with such assignment);

 

(iii) each such assignment by a Lender shall be of a constant, and not varying,
percentage of all rights and obligations in respect of a particular Class of
Commitments under this Agreement and the other Senior Finance Documents;

 

(iv) the parties to such assignment shall either (A) electronically execute and
deliver to the Administrative Agent an Assignment and Acceptance via an
electronic settlement system acceptable to the Administrative Agent (which
initially shall be ClearPar, LLC) or (B) execute and deliver to the
Administrative Agent and, only with respect to any assignment of all or a
portion of the Revolving Committed Amount, the Issuing Lenders for their
acceptance an Assignment and Acceptance, together with any Note subject to such
assignment and a processing

 

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fee of $3,500, payable or agreed between the assigning Lender and the assignee
(and which shall not be required to be paid by the Borrower).

 

(c) Assignment and Acceptance. By executing and delivering an Assignment and
Acceptance in accordance with this Section 10.06, the assigning Lender
thereunder and the assignee thereunder shall be deemed to confirm to and agree
with each other and the other parties hereto as follows: (i) such assigning
Lender warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and the assignee warrants
that it is an Eligible Assignee; (ii) except as set forth in clause (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, any of the other Senior Finance
Documents or any other instrument or document furnished pursuant hereto or
thereto, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any of the other Senior Finance
Documents or any other instrument or document furnished pursuant hereto or
thereto or the financial condition of the Credit Parties or the performance or
observance by any Credit Party of any of its obligations under this Agreement,
any of the other Senior Finance Documents or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee represents and
warrants that it is legally authorized to enter into such assignment agreement;
(iv) such assignee confirms that it has received a copy of this Agreement, the
other Senior Finance Documents, together with copies of the most recent
financial statements delivered pursuant to Section 6.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Administrative Agent, any Issuing
Lender, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and the
other Senior Finance Documents; (vi) such assignee appoints and authorizes each
of the Administrative Agent and the Collateral Agent to take such action on its
behalf and to exercise such powers under this Agreement or any other Senior
Finance Document as are delegated to such Persons by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement and the other Senior
Finance Documents are required to be performed by it as a Lender. Upon
execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section 10.06(c), the assignor,
the Administrative Agent and the Credit Parties shall make appropriate
arrangements so that, if required, new Notes are issued to the assignor and the
assignee. If the assignee is not a United States person under Section
7701(a)(30) of the Code, it shall deliver to the Credit Parties and the
Administrative Agent certification as to exemption from deduction or withholding
of Taxes in accordance with Section 3.01. In addition, if applicable, the
assignee shall deliver to the Administrative Agent the information referred to
in Section 10.20.

 

(d) Register. The Borrower hereby designates the Administrative Agent to serve
as its agent, solely for purposes of this subsection 10.06(d), to (i) maintain a
register (the “Register”) on which the Administrative Agent will record the
Commitments from time to time of each Lender, the Loans made by each Lender and
each repayment in respect of the principal amount of the Loans of each Lender
and to (ii) retain a copy of each Assignment and Acceptance delivered to the
Administrative Agent pursuant to this Section 10.06. Failure to make any such
recordation, or any error in such recordation, shall not affect the Borrower’s
obligation in respect of such Loans. The entries in the

 

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Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent, the Issuing Lenders and the Lenders shall
treat each Person in whose name a Loan and the Note evidencing the same is
registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary. With respect to
any Lender, the assignment or other transfer of the Commitments of such Lender
and the rights to the principal of, and interest on, any Loan made and any Note
issued pursuant to this Agreement shall not be effective until such assignment
or other transfer is recorded on the Register and, except to the extent provided
in this subsection 10.06(d), otherwise complies with Section 10.06, and prior to
such recordation all amounts owing to the transferring Lender with respect to
such Commitments, Loans and Notes shall remain owing to the transferring Lender.
The registration of assignment or other transfer of all or part of any
Commitments, Loans and Notes for a Lender shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Acceptance and payment of the administrative fee referred to in Section
10.06(b)(iv). The Register shall be available at the offices where kept by the
Administrative Agent for inspection by the Borrower and any Lender at any
reasonable time upon reasonable prior notice to the Administrative Agent. The
Borrower may not replace any Lender pursuant to Section 2.11(d), unless, with
respect to any Notes held by such Lender, the requirements of subsection
10.06(b) and this subsection 10.06(d) have been satisfied.

 

(e) Participations. Each Lender may, without the consent of the Borrower, the
Issuing Lenders or any Agent, sell participations to one or more Persons in all
or a portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Loans, its Notes, its Commitments
and any Participation Interest in Letters of Credit held by it); provided,
however, 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, (iii) the participant shall be
entitled to the benefit of the right of setoff contained in Section 10.08 and
the yield protection provisions contained in Sections 3.01, 3.04 and 3.05 to the
same extent that the Lender from which such participant acquired its
participation would be entitled to the benefits of such yield protection
provisions; provided that Borrower shall not be required to reimburse any
participant pursuant to Sections 3.01, 3.04 or 3.05 in an amount which exceeds
the amount that would have been payable thereunder to such Lender had such
Lender not sold such participation and (iv) the Credit Parties, the Agents, the
Issuing Lenders and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Credit Parties relating to the Senior Obligations owing to
such Lender and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
decreasing the amount of principal of or the rate at which interest is payable
on such Loans or Notes, extending any scheduled principal payment date or date
fixed for the payment of interest on such Loans or Notes or extending its
Commitment).

 

(f) Other Assignments. Any Lender may at any time (i) assign all or any portion
of its rights under this Agreement and any Notes to a Federal Reserve Bank, (ii)
pledge or assign a security interest in all or any portion of its interest and
rights under this Agreement (including all or any portion of its Notes, if any)
to secure obligations of such Lender and (iii) grant to an SPC referred to in
subsection (h) below identified as such in writing from time to time by such
Lender to the Administrative Agent and the Borrower the option to provide to the
Borrower all or any part of any Loans that such Lender would otherwise be
obligated to make to the Borrower pursuant to this Agreement; provided that no
such assignment, option, pledge or security interest shall release a Lender from
any of its obligations hereunder or substitute any such Federal Reserve Bank or
other Person to which such option, pledge or assignment has been made for such
Lender as a party hereto.

 

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(g) Information. Any Lender may furnish any information concerning any Credit
Party or any of their respective Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective assignees
and participants), subject, however, to the provisions of Section 10.07.

 

(h) Other Funding Vehicles. Notwithstanding anything to the contrary contained
herein, any Lender (a “Granting Lender”) may grant to a special purpose funding
vehicle (an “SPC”) the option to fund all or any part of any Loan that such
Granting Lender would otherwise be obligated to fund pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
fund any Loan, (ii) if an SPC elects not to exercise such option or otherwise
fails to fund all or any part of such Loan, the Granting Lender shall be
obligated to fund such Loan pursuant to the terms hereof, (iii) no SPC shall
have any voting rights pursuant to Section 10.01 and (iv) with respect to
notices, payments and other matters hereunder, the Borrower, the Administrative
Agent and the Lenders shall not be obligated to deal with an SPC, but may limit
their communications and other dealings relevant to such SPC to the applicable
Granting Lender. The funding of a Loan by an SPC hereunder shall utilize the
Revolving Commitment or Multi-Currency Revolving Commitment, as applicable, of
the Granting Lender to the same extent that, and as if, such Loan were funded by
such Granting Lender. Each party hereto hereby agrees that no SPC shall be
liable for any indemnity or payment under this Agreement for which a Lender
would otherwise be liable for so long as, and to the extent, the Granting Lender
provides such indemnity or makes such payment. Notwithstanding anything to the
contrary contained in this Agreement, any SPC may disclose on a confidential
basis any non-public information relating to its funding of Loans to any rating
agency, commercial paper dealer or provider of any surety or guarantee to such
SPC. This subsection (h) may not be amended without the prior written consent of
each Granting Lender, all or any part of whose Loan is being funded by an SPC at
the time of such amendment.

 

Section 10.07 Confidentiality and Disclosure. (a) Each of the Administrative
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (i) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (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); (ii) to the
extent requested by any regulatory authority (in which case the Administrative
Agent or such Lender, as applicable, shall use reasonable efforts to notify the
Borrower prior to such disclosure); (iii) to the extent required by applicable
Laws or regulations or by any subpoena or similar legal process; (iv) to any
other party to this Agreement; (v) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder; (vi) subject to an agreement containing
provisions substantially the same as those of this Section 10.07, to (A) any
Eligible Assignee of or participant in, or any prospective Eligible Assignee of
or participant in, any of its rights or obligations under this Agreement or (B)
any direct or indirect contractual counterparty or prospective counterparty (or
such contractual counterparty’s or prospective counterparty’s professional
advisor) to any credit derivative transaction relating to obligations of the
Borrower; (vii) with the consent of the Borrower; (viii) to the extent such
information (A) becomes publicly available other than as a result of a breach of
this Section or (B) becomes available to an Agent or any Lender on a
nonconfidential basis from a source other than the Borrower; or (ix) to the
National Association of Insurance Commissioners or any other similar
organization or any nationally recognized rating agency that requires access to
information about a Lender’s or its Affiliates’ investment portfolio in
connection with ratings issued with respect to such Lender or its Affiliates.
For the purposes of this Section 10.07, “Information” means all information
received from the Borrower relating to the Borrower or its business, other than
any such information that is available to the Administrative Agent or any Lender
on a nonconfidential basis prior to disclosure by the Borrower; provided that,
in the case of

 

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information received from the Borrower after the date hereof, such information
is clearly identified in writing at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section 10.07 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. Notwithstanding the foregoing, any Agent and any
Lender may place advertisements in financial and other newspapers and
periodicals or on a home page or similar place for dissemination of information
on the Internet or worldwide web as it may choose, and circulate similar
promotional materials, after the closing of the transactions contemplated by
this Agreement in the form of a “tombstone” or otherwise describing the names of
the Credit Parties, or any of them, and the amount, type and closing date of
such transactions, all at their sole expense.

 

(b) Notwithstanding the foregoing or any other contrary provision in this
Agreement or any other Senior Finance Documents, the parties hereto hereby agree
that, from the commencement of discussions with respect to the Transactions and
the Senior Finance Documents, each of the parties hereto and each of their
respective employees, representatives and other agents may disclose to any and
all Persons, without limitation of any kind, the tax treatment and tax structure
(as such terms are used in Sections 6011, 6111 and 6112 of the Code and the
Treasury Regulations promulgated thereunder) of the Senior Finance Documents and
the Transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to any of the parties hereto relating to such tax
treatment and tax structure, other than any information for which nondisclosure
is reasonably necessary in order to comply with applicable securities laws;
provided, however, that for this purpose the U.S. federal income tax treatment
and U.S. federal income tax structure shall not include (i) the identity of any
existing or future party (or affiliate of such party) to this Agreement or (ii)
any specific market pricing information, including the amount of any fees,
expenses, rates or payments, arising in connection with this Agreement or the
transactions contemplated hereby.

 

Section 10.08 Set-off. In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights,
upon the occurrence and during the continuance of a payment Event of Default,
each Lender (and each of its Affiliates) is authorized at any time and from time
to time, without presentment, demand, protest or other notice of any kind (all
of such rights being hereby expressly waived), to set-off and to appropriate and
apply any and all deposits (general or specific, but excluding Exempt Deposit
Accounts as defined in the Security Agreement) and any other indebtedness at any
time held or owing by such Lender (including, without limitation, branches,
agencies or Affiliates of such Lender wherever located) to or for the credit or
the account of any Credit Party against obligations and liabilities of such
Credit Party then due to the Lenders hereunder, under the Notes, under the other
Senior Finance Documents or otherwise, and any such set-off shall be deemed to
have been made immediately upon the occurrence of an Event of Default even
though such charge is made or entered on the books of such Lender subsequent
thereto. The Credit Parties hereby agree that to the extent permitted by law any
Person purchasing a participation in the Loans, Commitments and LC Obligations
hereunder pursuant to Section 2.01(d), 2.05(a) or (e), 2.14 or 10.06(e) may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder and any such set-off shall
reduce the amount owed by such Credit Party to the Lender.

 

Section 10.09 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts that are treated as interest on such Loan
under applicable law (collectively, the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) that may be charged or contracted for, charged

 

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or otherwise received by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section 10.09, shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such Lender shall have received
such cumulated amount, together with interest thereon at the Federal Funds Rate
to the date of payment.

 

Section 10.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.

 

Section 10.11 Integration. This Agreement, together with the other Senior
Finance Documents, comprises the complete and integrated agreement of the
parties on the subject matter hereof and thereof and supersedes all prior
agreements, written or oral, on such subject matter. In the event of any
conflict between the provisions of this Agreement and those of any other Senior
Finance Document, the provisions of this Agreement shall control; provided that
the inclusion of supplemental rights or remedies in favor of the Administrative
Agent or the Lenders in any other Senior Finance Document shall not be deemed a
conflict with this Agreement. Each Senior Finance Document was drafted with the
joint participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.

 

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

 

Section 10.13 Severability. Any provision of this Agreement and the other Senior
Finance Documents to which any Credit Party is a party that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

 

Section 10.14 Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.

 

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Section 10.15 Defaulting Lenders. Each Lender understands and agrees that if
such Lender is a Defaulting Lender then, notwithstanding the provisions of
Section 10.03, it shall not be entitled to vote on any matter requiring the
consent of the Required Lenders or to object to any matter requiring the consent
of all the Lenders adversely affected thereby; provided, however, that all other
benefits and obligations under the Senior Finance Documents shall apply to such
Defaulting Lender, except as provided in Section 2.03(e).

 

Section 10.16 Governing Law; Submission to Jurisdiction.

 

(a) THIS AGREEMENT AND THE OTHER SENIOR FINANCE DOCUMENTS (OTHER THAN LETTERS OF
CREDIT AND OTHER THAN AS EXPRESSLY SET FORTH IN SUCH OTHER SENIOR FINANCE
DOCUMENTS) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES. EACH LETTER OF CREDIT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN
SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM
CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL
CHAMBER OF COMMERCE, PUBLICATION NO. 500 AND, AS TO MATTERS NOT GOVERNED BY SUCH
UNIFORM CUSTOMS, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Any legal action or
proceeding with respect to this Agreement or any other Senior Finance Document
may be brought in the courts of the State of New York in New York County, or of
the United States for the Southern District of New York, and, by execution and
delivery of this Agreement, each of Holdings and the Borrower hereby irrevocably
accepts for itself and in respect of its property, generally and unconditional,
the nonexclusive jurisdiction of such courts. Each of Holdings and the Borrower
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such court and any claim that any such proceeding brought in any such
court has been brought in an inconvenient forum.

 

(b) Each of Holdings and the Borrower hereby irrevocably consents and agrees
that any and all process which may be served in any suit, action or proceeding
of the nature referred to in this Section 10.16 may be served the mailing of a
copy thereof by registered or certified mail, postage prepaid, return receipt
requested, to Holdings’ or the Borrower’s address referred to in Section 10.03,
as the case may be. Each of Holdings and the Borrower agrees that such service
(i) shall be deemed in every respect effective service of process upon it in any
such suit, action or proceeding and (ii) shall, to the fullest extent permitted
by law, be taken and held to be valid personal service upon and personal
delivery to it. Nothing in this Section 10.16 shall affect the right of any
Lender to serve process in any manner permitted by law or limit the right of any
Lender to bring proceedings against Holdings or the Borrower in the courts of
any jurisdiction or jurisdictions.

 

Section 10.17 Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY SENIOR FINANCE DOCUMENT OR IN

 

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ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY SENIOR FINANCE DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.17
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY HERETO CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.17.

 

Section 10.18 Binding Effect. This Agreement shall become effective at such time
when it shall have been executed by Holdings, the Borrower and the
Administrative Agent shall have received copies hereof (telefaxed or otherwise)
which, when taken together, bear the signatures of each Lender, and thereafter
this Agreement shall be binding upon and inure to the benefit of Holdings, the
Borrower, each Agent and each Lender and their respective successors and
assigns; provided, however, unless the conditions set forth in Section 4.01 have
been satisfied by the Credit Parties or waived by the Lenders on or before March
15, 2004, none of Holdings, the Borrower, the Agents or the Lenders shall have
any obligations under this Agreement.

 

Section 10.19 Judgment Currency.

 

(a) The obligations of the Credit Parties hereunder and under the other Senior
Finance Documents to make payments in a specified currency (the “Obligation
Currency”) shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any currency other than
the Obligation Currency, except to the extent that such tender or recovery
results in the effective receipt by a Senior Finance Party of the full amount of
the Obligation Currency expressed to be payable to it under this Agreement or
another Senior Finance Document. If, for the purpose of obtaining or enforcing
judgment against any Credit Party in any court or in any jurisdiction, it
becomes necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the “Judgment
Currency”) an amount due in the Obligation Currency, the conversion shall be
made at the Exchange Rate determined as of the Business Day immediately
preceding the date on which the judgment is given (such Business Day being
hereinafter referred to as the “Judgment Currency Conversion Date”).

 

(b) If there is a change in the Exchange Rate prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due
pursuant to the applicable judgment, the Borrower covenants and agrees to pay,
or cause to be paid, or remit, or cause to be remitted, such additional amounts,
if any, as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the Exchange Rate prevailing on the date of payment,
will produce the amount of the Obligation Currency which could have been
purchased with the amount of

 

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Judgment Currency stipulated in the judgment or judicial award at the Exchange
Rate prevailing on the Judgment Currency Conversion Date.

 

(c) For purposes of determining any Exchange Rate or currency equivalent for
this Section, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.

 

Section 10.20 Lenders’ U.S. Patriot Act Compliance Certification. Each Lender or
assignee or participant of a Lender that is not incorporated under the Laws of
the United States or a State thereof (and is not excepted from the certification
requirement contained in Section 313 of the U.S. Patriot Act and the applicable
regulations because it is both (i) an Affiliate of a depository institution or
foreign bank that maintains a physical presence in the United States or foreign
country and (ii) subject to supervision by a banking regulatory authority
regulating such affiliated depository institution or foreign bank) shall deliver
to the Administrative Agent the certification or, if applicable,
recertification, certifying that such Lender is not a “shell” and certifying to
other matters as required by Section 313 of the U.S. Patriot Act and the
applicable regulations thereunder: (i) within 10 days after the Closing Date or,
if later, the date such Lender, assignee or participant of a Lender becomes a
Lender, assignee or participant of a Lender hereunder and (ii) at such other
times as are required under the U.S. Patriot Act.

 

Section 10.21 U.S. Patriot Act Notice. Each Senior Finance Party (for itself and
not on behalf of any other Senior Finance Party) hereby notifies each of
Holdings and the Borrower that, pursuant to the requirements of the U.S. Patriot
Act, such Senior Finance Party is required to obtain, verify and record
information that identifies each of Holdings and each other Credit Party, which
information includes the name and address of each such Credit Party and other
information that will allow such Senior Finance Party to identify each such
Credit Party in accordance with the U.S. Patriot Act.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

KINGPIN INTERMEDIATE CORP.

By:  

/s/    Christopher F. Caesar

   

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

   

Name: Christopher F. Caesar

   

Title:    Chief Financial Officer

            Assistant Secretary

 

 

c/o Code Hennessy & Simmons

10 S. Wacker Drive

Suite 3175

Chicago, IL 60606

Facsimile:

 

KINGPIN MERGER SUB, INC.

By:  

/s/    Christopher F. Caesar

   

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

   

Name: Christopher F. Caesar

   

Title:    Chief Financial Officer

            Assistant Secretary

 

 

c/o Code Hennessy & Simmons

10 S. Wacker Drive

Suite 3175

Chicago, IL 60606

Facsimile:

 

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

CREDIT SUISSE FIRST BOSTON,

acting through its Cayman Islands branch, as Administrative Agent, Issuing
Lender and a Lender

By:  

/s/    Robert Hetu

   

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

   

Name: Robert Hetu

   

Title: Director

 

By:  

/s/    Cassandra Droogan

   

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

   

Name: Cassandra Droogan

   

Title: Associate

 

 

Eleven Madison Avenue

New York, NY 10010

Facsimile:

 

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

MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as
Syndication Agent and Documentation Agent

By:  

/s/ Stephen B. Paras

   

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

   

Name: Stephen B. Paras

   

Title: Managing Director

 

 

4 World Financial Center

250 Vesey Street

New York, NY 10080

Facsimile:

 

MERRILL LYNCH CAPITAL CORPORATION

By:  

/s/ Michael E. O’Brien

   

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

   

Name: Michael E. O’Brien

   

Title: Vice President

 

 

4 World Financial Center

250 Vesey Street

New York, NY 10080

Facsimile:

 

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

GENERAL ELECTRIC CAPITAL CORPORATION

By:  

/s/    W. Jerome McDermott

   

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

   

Name: W. Jerome McDermott

   

Title: Duly Authorized Signatory

 

 

General Electric Capital Corporation

Corporate Financial Services

201 Merritt 7, P.O. Box 5201

Norwalk, CT 06856-4193

Facsimile: