Exhibit 10.18

 

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Published CUSIP Number:            

CREDIT AGREEMENT

Dated as of November 18, 2005

among

EPL FINANCE CORP.

(as the initial borrower to be merged with and into

EL POLLO LOCO, INC. concurrently with the Acquisition described herein)

EPL INTERMEDIATE, INC.

(as the Parent Guarantor)

MERRILL LYNCH CAPITAL CORPORATION,

as Administrative Agent and Swing Line Lender,

BANK OF AMERICA, N.A.,

as Syndication Agent and L/C Issuer,

and

The Other Lenders Party Hereto

MERRILL LYNCH & CO.,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

BANK OF AMERICA, N.A.,

as

Lead Arrangers and Book Managers,

and

CIT LENDING SERVICES CORPORATION,

as Documentation Agent

 

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TABLE OF CONTENTS

 

      Page ARTICLE I    DEFINITIONS AND ACCOUNTING TERMS   

1.01

   Defined Terms    2

1.02

   Other Interpretive Provisions    29

1.03

   Accounting Terms    29

1.04

   Rounding    30

1.05

   Times of Day    30

1.06

   Letter of Credit Amounts    30 ARTICLE II    THE COMMITMENTS AND CREDIT
EXTENSIONS   

2.01

   Term Loan    30

2.02

   Revolving Loans    30

2.03

  

Borrowings, Conversions and Continuations of Revolving Loans; Conversions and
Continuations of Segments of the Term Loan

   31

2.04

   Letters of Credit    33

2.05

   Swing Line Loans    40

2.06

   Prepayments    42

2.07

   Termination or Reduction of Commitments    45

2.08

   Repayment of Loans    45

2.09

   Interest    46

2.10

   Fees    46

2.11

   Computation of Interest and Fees    47

2.12

   Evidence of Debt    47

2.13

   Payments Generally; Administrative Agent’s Clawback    47

2.14

   Sharing of Payments by Lenders    49

2.15

   Collateral Security and Guaranties    49 ARTICLE III    TAXES, YIELD
PROTECTION AND ILLEGALITY   

3.01

   Taxes    50

3.02

   Illegality    51

3.03

   Inability To Determine Rates    52

3.04

   Increased Costs; Reserves on Eurodollar Rate Loans    52

3.05

   Compensation for Losses    53

3.06

   Mitigation Obligations; Replacement of Lenders    54

3.07

   Survival    54 ARTICLE IV    CONDITIONS PRECEDENT TO CREDIT EXTENSIONS   

4.01

   Conditions of Initial Credit Extension    54

4.02

   Conditions to all Credit Extensions    58

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          Page ARTICLE V    REPRESENTATIONS AND WARRANTIES   

5.01

   Existence, Qualification and Power; Compliance with Laws    59

5.02

   Authorization; No Contravention    59

5.03

   Governmental Authorization; Other Consents    60

5.04

   Binding Effect    60

5.05

   Financial Statements; No Material Adverse Effect    60

5.06

   Litigation    61

5.07

   No Default    61

5.08

   Title to Property; Liens    61

5.09

   Environmental Compliance    61

5.10

   Insurance    61

5.11

   Taxes    62

5.12

   ERISA Compliance    62

5.13

   Subsidiaries; Equity Interests    62

5.14

   Margin Regulations; Investment Company Act; Public Utility Holding Company
Act    62

5.15

   Disclosure    63

5.16

   Compliance with Laws    63

5.17

   Intellectual Property; Licenses, Etc.    63

5.18

   Use of Proceeds    63

5.19

   Solvency    63

5.20

   Perfection of Security Interest    64

5.21

   Absence of Financing Statements    64

5.22

   Restaurant Leases    64

5.23

   Bank Accounts    64

5.24

   Loans as Senior Indebtedness    64

5.25

   Compliance with OFAC Rules and Regulations    65

5.26

   Foreign Assets Control Regulations, Patriot Act    65 ARTICLE VI   
AFFIRMATIVE COVENANTS   

6.01

   Financial Statements    65

6.02

   Certificates; Other Information    66

6.03

   Notices    68

6.04

   Payment of Obligations    68

6.05

   Preservation of Existence, Etc.    69

6.06

   Maintenance of Properties    69

6.07

   Maintenance of Insurance    69

6.08

   Compliance with Laws and Agreements    69

6.09

   Books and Records    70

6.10

   Inspection Rights    70

6.11

   Use of Proceeds    71

6.12

   Pledge of Equity Interests    71

6.13

   Future Leases    71

6.14

   Compliance with Terms of Leaseholds    71

6.15

   Bank Accounts    71

6.16

   Additional Subsidiaries    72

 

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          Page

6.17

   Additional Mortgaged Property    72

6.18

   Interest Rate Protection    73

6.19

   Certificate of Merger    73

6.20

   Further Assurances    73

6.21

   Status as SEC Reporting Company    73

6.22

   Equity Interests    73

6.23

   Parent Guarantor    73

6.24

   Post-Closing Collateral Matters    73 ARTICLE VII    NEGATIVE COVENANTS   

7.01

   Liens    74

7.02

   Investments    75

7.03

   Indebtedness    77

7.04

   Fundamental Changes    79

7.05

   Dispositions    80

7.06

   Restricted Payments    81

7.07

   Change in Nature of Business    83

7.08

   Transactions with Affiliates    84

7.09

   Burdensome Agreements    84

7.10

   Use of Proceeds    84

7.11

   Specified Subordinated Debt    85

7.12

   Change in Terms of Organizational Documents    85

7.13

   Change in Accounting and Reporting Practices    85

7.14

   Cash Management    85

7.15

   Financial Covenants    85

7.16

   Capital Expenditures    87

7.17

   Borrower’s Right to Cure Financial Covenants    87 ARTICLE VIII    EVENTS OF
DEFAULT AND REMEDIES   

8.01

   Events of Default    88

8.02

   Remedies Upon Event of Default    90

8.03

   Application of Funds    90 ARTICLE IX    ADMINISTRATIVE AGENT   

9.01

   Appointment and Authority    92

9.02

   Rights as a Lender    92

9.03

   Exculpatory Provisions    92

9.04

   Reliance by Administrative Agent    93

9.05

   Delegation of Duties    93

9.06

   Resignation of Administrative Agent    93

9.07

   Non-Reliance on Administrative Agent and Other Lenders    94

9.08

   No Other Duties, Etc.    94

9.09

   Administrative Agent May File Proofs of Claim    94

9.10

   Collateral and Guaranty Matters    95

 

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          Page ARTICLE X    MISCELLANEOUS   

10.01

   Amendments, Etc.    95

10.02

   Notices; Effectiveness; Electronic Communication    98

10.03

   No Waiver; Cumulative Remedies    100

10.04

   Expenses; Indemnity; Damage Waiver    100

10.05

   Payments Set Aside    101

10.06

   Successors and Assigns    102

10.07

   Treatment of Certain Information; Confidentiality    106

10.08

   Right of Setoff    106

10.09

   Interest Rate Limitation    107

10.10

   Counterparts; Integration; Effectiveness    107

10.11

   Survival of Representations and Warranties    107

10.12

   Severability    107

10.13

   Replacement of Lenders    108

10.14

   Governing Law; Jurisdiction; Etc.    108

10.15

   Waiver of Jury Trial    109

10.16

   USA PATRIOT Act Notice    109

10.17

   Time of the Essence    109

10.18

   Assignment and Delegation to and Assumption by the Company    109

10.19

   Pari Passu Treatment    110

10.20

   Advertising Promotion and Marketing    110

Schedules & Exhibits

 

Schedule 1.01(b)    Mortgages Schedule 1.01(c)    Example of Net Restaurant
Operating Profit Methodology Schedule 2.02    Revolving Credit Commitment and
Applicable Percentages Schedule 4.01(a)    EBITDA Calculation Schedule 5.06   
Litigation Schedule 5.08    Certain Assets Schedule 5.09    Environmental
Matters Schedule 5.13    Subsidiaries; Equity Interests Schedule 5.17   
Intellectual Property Matters Schedule 5.22    Restaurant Leases Schedule 5.23
   Bank Accounts Schedule 7.01    Existing Liens Schedule 7.03    Existing
Indebtedness Schedule 10.02    Administrative Agent’s Office; Certain Addresses
for Notices Schedule 10.06    Processing and Recordation Fees Exhibit A-1   
Form of Deposit Account Control Agreement Exhibit A-2    Form of Securities
Account Control Agreement Exhibit B    Form of Loan Notice Exhibit C    Form of
Term Loan Interest Rate Selection Notice Exhibit D    Form of Swing Line Loan
Notice Exhibit E-1    Form of Term Loan Note Exhibit E-2    Form of Revolving
Loan Note

 

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Exhibit F    Form of Compliance Certificate Exhibit G    Form of Assignment and
Assumption Exhibit H    Form of Guaranty Exhibit I-1    Form of Opinion Exhibit
I-2    Form of Opinion Exhibit J    Form of Securities Pledge Agreement Exhibit
K    Form of Security Agreement Exhibit L    Form of Trademark Collateral
Security and Pledge Agreement Exhibit M    Form of Mortgage

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of November 18, 2005,
among EPL FINANCE CORP., a Delaware corporation (“Finance Co.”), which entity
shall be merged with and into, EL POLLO LOCO, INC., a Delaware corporation (the
“Company”), EPL INTERMEDIATE, INC., a Delaware corporation (“Parent Guarantor”),
as the parent, each lender from time to time party hereto, MERRILL LYNCH CAPITAL
CORPORATION, as Administrative Agent and Swing Line Lender and BANK OF AMERICA,
N.A., as Syndication Agent and L/C Issuer.

WHEREAS, on the Closing Date (with such term and each other capitalized term
used but not defined in these recitals having the meaning provided in
Section 1.01), Chicken Acquisition Corp., a Delaware corporation (“CAC”),
intends to acquire, indirectly through its direct ownership of Chicken
Subsidiary Corp., a Delaware corporation (“CSC”), from the current shareholders
of EPL Holdings, Inc., a Delaware corporation (“Holdings”) (which may include
the exchange of Equity Interests (including rollover options) in Holdings by
certain members of management and current shareholders of Holdings for Equity
Interests of CAC), all of the outstanding Equity Interests of Holdings (the
“Acquisition”); and

WHEREAS, on the Closing Date Holdings owns of record and beneficially all of the
capital stock of the Parent Guarantor, which in turns owns of record and
beneficially all of the capital stock of the Company; and

WHEREAS, to effect the Acquisition, (a) the Equity Investors (either directly or
indirectly) will contribute cash to the common equity of CAC, which will further
contribute such cash to CSC (the “Equity Contribution”), (b) Finance Co. will
issue Senior Notes (as defined below) in an aggregate principal amount of
$125,000,000 either in a public offering or pursuant to Rule 144A under the
Securities Act of 1933 and (c) EPL Intermediate Finance Corp., a Delaware
corporation (“Finance Co. II”), which entity shall be merged with and into
Parent Guarantor, will issue Senior Holdco Notes (as defined below) yielding
gross proceeds of $22,500,110 either in a public offering or pursuant to Rule
144A under the Securities Act of 1933; and

WHEREAS, concurrently with the consummation of the Acquisition, the Company will
repay all indebtedness outstanding prior to the closing and terminate all
commitments to make extensions of credit under their existing indebtedness other
than the Continuing Indebtedness (the “Refinancing”), up to $1.1 million
aggregate principal amount under a GE capital lease, which is expected to be
repaid promptly after the closing; and

WHEREAS, in connection with the foregoing, Finance Co. has requested that the
Lenders extend credit in the form of (a) a Term Loan on the Closing Date in an
aggregate principal amount of $104,500,000 and (b) Revolving Loans from time to
time prior to the Revolving Loan Maturity Date in an aggregate principal amount
not to exceed $25,000,000 at any one time outstanding; and

WHEREAS, concurrently with the consummation of the Acquisition, Finance Co. will
merge into the Company with the Company as the surviving corporation of such
merger and successor to Finance Co.’s obligations hereunder and the Company will
assume the obligations of Finance Co. hereunder.

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

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ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Acquisition” has the meaning specified in the recitals hereto.

“Acquisition Agreements” means (i) the Stock Purchase Agreement and (ii) the
Finance Co. Merger Agreement.

“Acquisition Documents” means collectively, the Acquisition Agreements and all
schedules, exhibits and annexes thereto and all other documents, agreements and
instruments entered into in connection therewith.

“Act” has the meaning specified in Section 10.16.

“Administrative Agent” means MLCC and its successors in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address at 250
Vesey Street, Floor 22, New York, New York 10080 and, as appropriate, account as
set forth on Schedule 10.02, or such other address or account as the
Administrative Agent may from time to time notify to the Borrower and the
Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Advisory Fee” means a fee payable to Trimaran Management or its designees in
their capacity as a financial advisor pursuant to the Management Agreement in
connection with any transaction relating to an acquisition, recapitalization,
initial public offering or other transaction by or involving Parent or any of
its Subsidiaries not to exceed an aggregate fee equal to 2% of the gross
transaction value of such transaction (or series of concurrent transactions)
payable as of the date of such transaction (or series of concurrent
transactions), plus an amount equal to the reasonable out-of-pocket expenses of
Trimaran Management incurred in connection with such transaction (or series of
concurrent transactions) and which such fees are subordinated to the Obligations
pursuant to the Trimaran Subordination Agreement.

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

“Aggregate Commitments” means, as at the date of determination thereof, the sum
of (a) the Aggregate Revolving Credit Commitments at such date and (b) the
Outstanding Amount with respect to the Term Loan at such date.

“Aggregate Revolving Credit Commitments” means the sum of the Revolving Credit
Commitments of all Revolving Lenders.

“Agreement” means this Credit Agreement, including all exhibits and schedules
attached hereto.

“Anti-Terrorism Order” means the Executive Order 13224 issued on September 24,
2001.

 

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“Applicable Percentage” means with respect to any Revolving Lender at any time,
the percentage (carried out to the ninth decimal place) of the Aggregate
Revolving Credit Commitments represented by such Lender’s Revolving Credit
Commitment at such time. If the commitment of each Lender to make Revolving
Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have
been terminated pursuant to Section 8.02 or if the Aggregate Revolving Credit
Commitments have expired, then the Applicable Percentage of each Revolving
Lender shall be determined based on the Applicable Percentage of such Revolving
Lender most recently in effect, giving effect to any subsequent assignments. The
initial Applicable Percentage of each Lender is set forth opposite the name of
such Lender on Schedule 2.02 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means (i) with respect to the Term Loan, 3.00% per annum in
the case of Eurodollar Rate Loans and 2.00% per annum in the case of Base Rate
Loans and (ii) with respect to Revolving Loans the following percentages per
annum, based upon the Consolidated Leverage Ratio as set forth in the most
recent Compliance Certificate received by the Administrative Agent pursuant to
Section 6.02(a), as set forth below:

Applicable Rate for Revolving Loans

 

Pricing

Level

   Consolidated
Leverage Ratio   

Eurodollar Rate

Letters of Credit

    Base Rate  

1

   > 5.00:1.00    2.75 %   1.75 %

2

   < 5.00:1.00 and
> 4.00:1.00    2.50 %   1.50 %

3

   < 4.00:1.00    2.25 %   1.25 %

Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(a); provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section for any Fiscal Quarter of the
Borrower, then Pricing Level 1 shall apply as of the first Business Day after
the date on which such Compliance Certificate was required to have been
delivered, until so delivered. The Applicable Rate in effect from the Closing
Date through the first Business Day immediately following the date a Compliance
Certificate is delivered pursuant to Section 6.02(a) for the first fiscal
quarter ending at least three months after the Closing Date shall be the
Applicable Rate set forth in Pricing Level 1. No decrease in the Applicable Rate
shall be made when any Event of Default exists.

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

“Arrangers” means Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Bank of America, in their capacities as lead arrangers and book
managers.

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

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)),

 

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and accepted by the Administrative Agent, in substantially the form of Exhibit G
or any other form approved by the Administrative Agent and the Borrower.

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

“Audited Financial Statements” means the audited consolidated balance sheet of
the Company for the year ended December 29, 2004 and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
period of the Company and its Subsidiaries, including the notes thereto.

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Revolving Loan Maturity Date, (b) the date of
termination of the Aggregate Revolving Credit Commitments pursuant to
Section 2.07, and (c) the date of termination of the commitment of each
Revolving Lender to make Revolving Loans and of the obligation of the L/C Issuer
to make L/C Credit Extensions pursuant to Section 8.02.

“Bank of America” means Bank of America, N.A. and its successors.

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as the “prime rate” of the Administrative Agent. The “prime
rate” means the rate of interest quoted in The Wall Street Journal, Money Rates
Section as the “prime rate” (currently defined as the base rate on corporate
loans posted by at least 75% of the nation’s thirty (30) largest banks), as in
effect from time to time. The “prime rate” is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any
customer. The Administrative Agent or any other Lender may make commercial loans
or other loans at rates of interest at, above or below the “prime rate.”

“Base Rate Loan” means a Loan (including a Segment) that bears interest based on
the Base Rate.

“Base Rate Revolving Loan” means a Revolving Loan that is a Base Rate Loan.

“Base Rate Segment” means a Segment bearing interest or to bear interest at the
Base Rate.

“Borrower Assumption” means, immediately after consummation of the Acquisition,
the assumption by the Company of, all the obligations of Finance Co. under this
Agreement pursuant to Section 10.18.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrower” means (a) prior to the effectiveness of the Finance Co. Merger and
the Borrower Assumption, Finance Co., and (b) at all times after the
effectiveness of the Finance Co. Merger and the Borrower Assumption, the
Company.

“Borrowing” means a Revolving Borrowing, a Swing Line Borrowing or the borrowing
of the Term Loan, as the context may require.

 

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“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.

“CAC” has the meaning specified in the introductory paragraph hereto.

“Capital Expenditures” means amounts paid or indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with the purchase or lease by
the Borrower or any of its Subsidiaries of capital assets that would be required
to be capitalized and shown on the balance sheet of such Person in accordance
with GAAP, including, without limitation, Consolidated Restaurant Pre-Opening
Costs whether or not required to be capitalized; provided that the term “Capital
Expenditures” shall not include (a) expenditures made in connection with the
replacement, substitution or restoration of assets (i) to the extent financed
from (A) insurance proceeds paid on account of the loss of or damage to the
assets being replaced or restored or (B) proceeds received from any Disposition
permitted under this Agreement so long as the Borrower is not required to make a
prepayment with such proceeds pursuant to Section 2.06(e)(i) or (ii) with awards
of compensation arising from the taking by eminent domain or condemnation of the
assets being replaced, (b) the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment to the extent that the
gross amount of such purchase price is reduced by the credit granted by the
seller of such equipment for the equipment being traded in at such time,
(c) expenditures made to the extent financed with Tenant Improvement Proceeds,
(d) expenditures financed with the proceeds received from the sale or issuance
of Equity Interests permitted under this Agreement so long as the Borrower is
not required to make a prepayment with such proceeds pursuant to
Section 2.06(e)(iii), (e) expenditures to (x) acquire franchised assets
subsequently re-franchised within one year of such franchise acquisition and
(y) acquire franchised assets with the proceeds of sales of franchised assets
sold within one year prior to such franchise acquisition and (f) Deferred and
Legacy Capital Expenditures incurred in fiscal 2005 and 2006. Capital
Expenditures for the fiscal quarters ended March 31, 2005, June 30, 2005 and
September 30, 2005 were $2,163,000, $3,101,000 and $3,600,000, respectively. To
the extent cash and cash equivalents of the Parent Guarantor as of the Closing
Date after giving effect to the Transactions exceeds $3,000,000, such excess may
be used for Capital Expenditures and will not be deemed Capital Expenditures for
purposes of this definition. For the avoidance of doubt, subject to clauses
(a) through (f) above, expenditures to acquire franchised assets from
franchisees shall be deemed Capital Expenditures rather than Permitted
Acquisitions.

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

“Cash Collateralize” has the meaning specified in Section 2.04(g).

“Casualty Event” means, with respect to any property (including any interest in
property) of the Borrower or any of its Subsidiaries, any loss of, damage to, or
condemnation or other taking of, such property for which the Borrower or such
Subsidiary receives insurance proceeds, proceeds of condemnation award or other
compensation.

“Certificate of Merger” means the Certificate of Merger, dated as of
November 18, 2005, acknowledged by the Secretary of State of the State of
Delaware as to the Finance Co. Merger.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule,

 

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regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any
request, guideline or directive (whether or not having the force of law) by any
Governmental Authority.

“Change of Control” means an event or series of events by which, (a) prior to an
IPO, Trimaran and its Controlled Investment Affiliates shall collectively cease
to own or control (through voting trusts or otherwise), directly or indirectly,
at least a majority of the voting power of the Equity Interests of the Parent
Guarantor, (b) prior to an IPO, Trimaran and its Controlled Investment
Affiliates shall cease to have the power, directly or indirectly, to elect and
control a majority of the board of directors of the Parent Guarantor; or prior
to or after an IPO, during any period of twelve consecutive calendar months,
individuals who were directors of the Parent Guarantor on the first day of such
period shall cease to constitute a majority of the board of directors of the
Parent Guarantor unless the replacements shall (i) have been approved by a vote
of at least a majority of the board of directors of such Person then still in
office who either were members of such board of directors at the beginning of
such period or whose election as a member of such board of directors was
previously so approved, or (ii) have been elected or nominated for election by
Trimaran and/or its Controlled Investment Affiliates, (c) following an IPO, any
Person or group (within the meaning of Rule 13d-5 of the Exchange Act) (other
than Trimaran and its Controlled Investment Affiliates) not previously approved
by the Administrative Agent, directly or indirectly owns 35% or more of the
voting power of the Equity Interests of Parent Guarantor and Trimaran and its
Controlled Investment Affiliates own directly or indirectly a smaller
percentage, or (d) Parent Guarantor at any time ceases to own, directly or
indirectly, 100% of the capital stock of the Company.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

“Code” means the Internal Revenue Code of 1986, as amended and in effect from
time to time.

“Collateral” means all of the property, rights and interests of the Borrower and
the Guarantors that are subject to the Liens created by the Security Documents.

“Company” has the meaning specified in the introductory paragraph hereto.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit F.

“Consolidated Cash Interest Expense” means, for any period, the aggregate amount
of interest (and other amounts that would constitute Consolidated Total Interest
Expense items) paid in cash by the Parent Guarantor and its Subsidiaries during
such period, on all Indebtedness of the Borrower and its Subsidiaries
outstanding during all or any part of such period, excluding all fees paid to
the Lenders, the Arranger or to the Administrative Agent in cash on the Closing
Date, and any amortization thereof. For periods ending prior to the one year
anniversary of the Closing Date, Consolidated Cash Interest Expense shall be
determined by annualizing the Consolidated Cash Interest Expense since the
Closing Date based on the actual number of days from the Closing Date to the
last day of such period.

“Consolidated EBITDA” means, for any period, the sum, without duplication, of
(i) the Consolidated Net Income for such period, plus (ii) income tax expense
charged against Consolidated Net Income for such period, plus (iii) to the
extent deducted in calculating Consolidated Net Income for such period,
Consolidated Total Interest Expense for such period, plus (iv) consolidated
depreciation and amortization charges made to Consolidated Net Income for such
period, plus (v) to the extent deducted in calculating Consolidated Net Income
for such period, any Management Fees and Advisory Fees, not to exceed $500,000
in the aggregate in any Fiscal Year for all such amounts attributable to
Advisory Fees, plus (vi) Consolidated Restaurant Pre-Opening Expenses deducted
in calculating Consolidated Net Income for

 

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such period, plus (vii) transaction costs and expenses incurred on or after the
Closing Date in connection with the Acquisition and the financing thereof and
the transactions contemplated herein including the payment of management or any
transaction fees to the Seller (including, without limitation, stock option
exercise-related expenses paid on the Closing Date and travel expenses incurred
in connection with the Transactions), plus (viii) non cash charges for such
period so long as such charges (other than charges relating to (A) the issuance
of stock options (or similar non-cash compensation expense) to officers,
directors and employees of the Borrower and its Subsidiaries and (B) Swap
Contracts) do not relate to items which will or may result in a cash payment
being made in a future period plus (ix) GAAP Rental Expense less Consolidated
Rental Expense, plus (x) customary fees and expenses payable in connection with
any incurrence of Indebtedness permitted by Section 7.03, plus (xi) amounts
actually incurred by the Borrower in connection with the implementation or
readiness for compliance with the Sarbanes-Oxley Act of 2002, not to exceed
$1,000,000 in the aggregate from October 1, 2005 through the Final Maturity
Date, plus (xii) litigation expenses and settlement payments associated with
(A) the Borrower’s two existing and ongoing disputes in California with current
and former employees regarding unpaid wages and overtime compensation and
(B) the Borrower’s existing and ongoing dispute with Jose Ochoa and EPL-Mexico ,
not to exceed $1,000,000 in the aggregate from October 1, 2005 through the Final
Maturity Date for all such amounts pursuant to this clause (xii), minus
(xiii) consolidated non-recurring items for such period to the extent such items
increased the calculation of Consolidated Net Income, all as determined in
accordance with GAAP. Consolidated EBITDA for the fiscal quarters ended June 30,
2005 and September 30, 2005 was $12,467,000 and $12,608,000, respectively.

“Consolidated EBITDAR” means, for any period, the sum of (i) the Consolidated
EBITDA of the Borrower and its Subsidiaries for such period, plus
(ii) Consolidated Rental Expense for such period, all as determined in
accordance with GAAP.

“Consolidated Financial Obligations” means, for any period, the sum of (a) all
scheduled payments of principal or mandatory redemption amounts and fees on
Indebtedness of the Borrower and its Subsidiaries, including Capitalized Leases
and Synthetic Leases (without duplication) during such period, plus
(b) Consolidated Cash Interest Expense for such period, plus (c) Consolidated
Rental Expense for such period, plus (d) all cash payments in respect of income
taxes made during such period (net of any cash refund in respect of income taxes
actually received during such period), plus (e) Capital Expenditures for such
period. Demand obligations shall be considered a scheduled payment within the
meaning of clause (a) above during any period during which such obligations are
outstanding to the extent not demanded in any prior Fiscal Quarter. For purposes
of the fiscal periods ending prior to the first anniversary of the Closing Date,
(a) cash payments in respect of income taxes shall be calculated on a pro forma
basis giving effect to the Transactions on the first day of the period for which
such calculation is made, (b) in calculating Capital Expenditures for purposes
of this definition, Capital Expenditures for each fiscal quarter of 2005 shall
be deemed to equal the aggregate combined Capital Expenditures for Fiscal Year
2005, divided by four, and (c) in calculating Capital Expenditures for purposes
of this definition, for each fiscal quarter of 2006, any amount in excess of 1/4
of the Borrower’s fiscal 2006 budgeted Capital Expenditures actually incurred
may be allocated to the next succeeding fiscal quarter; provided that such
Capital Expenditures may not exceed the maximum amount permitted in Section 7.16
for such Fiscal Year.

“Consolidated Fixed Charge Coverage Ratio” means, as of any date of
determination, the ratio of (a) Consolidated EBITDAR for the Reference Period
ending on such date to (b) Consolidated Financial Obligations for such Reference
Period.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) the sum of Consolidated Total Indebtedness outstanding as of such date to
(b) Consolidated EBITDA for such Reference Period.

 

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“Consolidated Net Income” means, for any period, the consolidated net income (or
net loss) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with GAAP minus
Extraordinary Net Gains (if any) plus Extraordinary Net Losses (if any).

“Consolidated Rental Expense” means, for any period, all cash rental expense of
the Borrower and its Subsidiaries during such period incurred under any rental
agreements or leases of real property, including space leases and ground leases,
other than obligations in respect of any Capitalized Leases and Synthetic Lease
Obligations.

“Consolidated Restaurant Pre-Opening Costs” means “Start-up costs” (such term
used herein as defined in SOP 98-5 published by the American Institute of
Certified Public Accountants) incurred by the Borrower or any of its
Subsidiaries related to the acquisition, opening and organizing of New Operating
Units, such costs including, without limitation, the cost of feasibility
studies, staff-training, recruiting and travel for employees engaged in such
start-up activities, and marketing and lease costs incurred prior to and in
connection with the opening of such New Operating Units.

“Consolidated Total Indebtedness” means, as of any date of determination, an
amount equal to the sum of all Indebtedness of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, other than
Indebtedness of the types referred to in clauses (b) and (c) (and (h) as it
relates to clauses (b) and (c)) of the definition of “Indebtedness.”

“Consolidated Total Interest Expense” means, for any period, the aggregate
amount of interest expense of the Borrower and its Subsidiaries charged against
the calculation of income during such period on all Indebtedness of the Borrower
and its Subsidiaries outstanding during all or any part of such period,
including payments consisting of interest in respect of Capitalized Leases and
Synthetic Lease Obligations and including commitment fees, agent’s fees,
periodic facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money to the extent the same is charged against
the calculation of income as interest expense for such period in accordance with
GAAP. For periods ending prior to the one year anniversary of the Closing Date,
Consolidated Total Interest Expense shall be determined by annualizing the
Consolidated Total Interest Expense since the Closing Date based on the actual
number of days from the Closing Date to the last day of such period.

“Continuing Indebtedness” means up to $7,000,000 of capital leases of the
Company and any of the Company’s existing 9 1/4% senior secured notes due 2009
and Parent Guarantor’s existing 12 1/2% senior discount notes due 2010 that are
not tendered into the Tender Offer and Consent Solicitation.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

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

“Control Agreements” means the several control agreement(s) and notice(s) of
security interest by and among the Borrower, certain financial institutions, and
the Administrative Agent, and any other agency account agreement and/or notice
of security interest from time to time entered into by and among the Borrower,
the Administrative Agent and other financial institutions, each granting the
Administrative Agent “control” (within the meaning of the Uniform Commercial
Code) over deposit accounts and securities accounts substantially in the form of
Exhibit A-1 hereto for deposit accounts and Exhibit A-2 for

 

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securities accounts or otherwise in form and substance reasonably satisfactory
to the Administrative Agent and the Borrower.

“Controlled Investment Affiliate” means, as to any Person, any other Person
which directly or indirectly is in Control of, is Controlled by, or is under
common Control with, such Person and is organized primarily for making equity or
debt investments in the Company and other portfolio companies.

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) in the
case of Base Rate Loans, the then Applicable Rate for such Base Rate Loan, or in
the case of all other Obligations, the then Applicable Rate applicable to Base
Rate Segments plus, in each case, (iii) 2% per annum; provided, however, that
with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest
rate equal to the interest rate (including any Applicable Rate) otherwise
applicable to such Loan plus 2% per annum, and (b) when used with respect to
Letter of Credit Fees, a rate equal to the Applicable Rate for Letters of Credit
plus 2% per annum.

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

“Deferred and Legacy Capital Expenditures” means (a) capital expenditures
incurred prior to the end of Fiscal Year 2005 in connection with store
remodeling, (b) capital expenditures incurred in connection with the development
or upgrading of store-level computer systems, including security systems,
(c) capital expenditures incurred in connection with the implementation of
Sarbanes Oxley Act of 2002 and (d) improvements required to be made by the
American’s with Disabilities Act during Fiscal Years 2005 and 2006.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“Disqualified Capital Stock” means any Equity Interest which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date which is six months after the Final Maturity Date, (b) is convertible into
or exchangeable for (i) debt securities or (ii)

 

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any Equity Interests referred to in (a) above, in each case at any time prior to
the date which is six months after the Final Maturity Date, (c) contains any
repurchase obligation which may come into effect prior to payment in full of all
Obligations (other than customary contingent indemnification claims and
mandatory repurchase obligations arising in favor of employees, directors or
officers of any Loan Party in the event of the termination of their employment
or other engagement) or (d) requires the payment of cash dividends or
distributions prior to the date which is six months after the Final Maturity
Date. The amount of Disqualified Capital Stock deemed to be outstanding at any
time for purposes of this Agreement will be the maximum amount that the Parent
Guarantor and its Subsidiaries may become obligated to pay upon the maturity of,
or pursuant to any mandatory redemption provisions of, such Disqualified Capital
Stock, exclusive of accrued dividends.

“Dollar” and “$” mean lawful money of the United States.

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

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws (including common law), regulations, ordinances, rules,
judgments, orders, decrees, permits, agreements or governmental restrictions
relating to pollution and the protection of the environment or the release of
any Hazardous Materials into the environment, including those related to
hazardous substances or hazardous wastes and control of or exposure to Hazardous
Materials, air emissions and discharges to waste or public systems.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly arising under any Environmental
Law resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

“Equity Contribution” has the meaning specified in the recitals hereto.

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

“Equity Investors” means Trimaran, its affiliates and any Controlled Investment
Affiliate of Trimaran and certain other investors reasonably acceptable to the
Administrative Agent; it being understood that (a) American Securities Capital
Partners, L.P. and/or its Affiliates and other indirect shareholders of

 

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the Company prior to the Acquisition and (b) management of the Company are
reasonably acceptable for this purpose.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

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

“Eurodollar Rate Loan” means a Loan (including a Segment) that bears interest at
a rate based on the Eurodollar Rate.

“Eurodollar Rate Revolving Loan” means a Revolving Loan that bears interest at a
rate based on the Eurodollar Rate.

“Eurodollar Rate Segment” means a Segment bearing interest or to bear interest
at the Eurodollar Rate.

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

“Excess Operating Cash Flow” means, for every Fiscal Year, an amount equal to
(i) Consolidated EBITDA for such Fiscal Year minus (ii) the sum of
(a) Consolidated Financial Obligations (other than those set forth in clause
(c) of the definition thereof) paid during such Fiscal Year, (b) voluntary
prepayments of the Term Loan made during such Fiscal Year, (c) as long as the
Aggregate Revolving Credit

 

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Commitment is reduced by the same amount, any voluntary prepayment of the
Revolving Loans, (d) Management Fees paid in cash during such Fiscal Year,
(e) Advisory Fees paid in cash during such Fiscal Year, not to exceed $500,000
in the aggregate in any Fiscal Year, (f) transaction costs and expenses incurred
on or about the Closing Date in connection with the Acquisition and the
financing thereof and the transactions contemplated herein, (g) Permitted Tax
Distributions made during such Fiscal Year in accordance with Section 7.06(e),
payments made in accordance with Sections 7.06(f) and (g) and payments made in
accordance with Section 7.08(e), and (h) payments to the Parent Guarantor made
in accordance with Section 7.06(n), plus (iii) non-recurring cash items during
such Fiscal Year to the extent such items increased the calculation of
Consolidated Net Income plus (iv) Extraordinary Net Cash Gains (if any) minus
(v) Extraordinary Net Cash Losses (if any).

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the L/C Issuer or any other recipient of any payment to be made pursuant to any
Loan Document, (a) taxes imposed on or measured by its overall net income or net
profits (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes), by a jurisdiction (or any political subdivision thereof) as a
result of the recipient being organized, conducting business (other than a
business deemed to arise by virtue of the transactions contemplated by the Loan
Documents) or having its principal office in or, in the case of any Lender,
having its applicable Lending Office in such jurisdiction, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 10.13), any U.S.
federal withholding tax that is imposed on amounts payable to such Foreign
Lender (i) at the time such Foreign Lender becomes a party hereto (or designates
a new Lending Office), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Loan Parties
pursuant to Section 3.01(a) and provided that a Lender that acquires a new
interest pursuant to Section 2.14 shall be treated for purposes of this clause
(i) as having acquired such new interest on the earlier date on which the Lender
acquired its existing interest in the Loan or (ii) that is attributable to such
Foreign Lender’s failure to comply with Section 3.01(e).

“Existing Credit Agreement” means that certain Credit Agreement, dated as of
December 29, 1999 among the Company, Parent Guarantor, SunTrust Bank, Atlanta,
as Agent and Issuing Bank, and the Lenders party thereto.

“Existing Senior Secured Notes Indenture” means the Indenture, dated as of
December 19, 2003, between the Company and The Bank of New York, as trustee,
governing the Company’s 9-1/4% senior secured notes due 2009.

“Extraordinary Net Cash Gains” means with respect to the Borrower and its
Subsidiaries in any period, the amount (if any) by which cash extraordinary
items of income exceeds the amount of cash extraordinary items of expense, all
determined in accordance with GAAP.

“Extraordinary Net Cash Losses” means with respect to the Borrower and its
Subsidiaries in any period, the amount (if any) by which cash extraordinary
items of expense exceeds the amount of cash extraordinary items of income, all
determined in accordance with GAAP.

“Extraordinary Net Gains” means with respect to the Borrower and its
Subsidiaries in any period, the amount (if any) by which extraordinary items of
income exceeds the amount of extraordinary items of expense, all determined in
accordance with GAAP.

 

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“Extraordinary Net Losses” means with respect to the Borrower and its
Subsidiaries in any period, the amount (if any) by which extraordinary items of
expense exceeds the amount of extraordinary items of income, all determined in
accordance with GAAP.

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

“Fee Letter” means the amended and restated letter agreement, dated
September 27, 2005, among CAC, MLCC, Banc of America Securities LLC, Bank of
America and Banc of America Bridge LLC.

“Final Maturity Date” means the later of the Revolving Loan Maturity Date and
the Term Loan Maturity Date.

“Finance Co.” has the meaning specified in the introductory paragraph hereto.

“Finance Co. II” has the meaning specified in the recitals hereto.

“Finance Co. II Merger” means the merger of Finance Co. II with and into the
Parent Guarantor pursuant to which the Parent Guarantor shall be the surviving
entity.

“Finance Co. Merger” means the merger of Finance Co. with and into the Company
pursuant to which the Company shall be the surviving entity, in accordance with
the Certificate of Merger.

“Fiscal Quarter” has the meaning specified in Section 5.22.

“Fiscal Year” has the meaning specified in Section 5.22.

“Foreign Lender” means any Lender that is not a “United States Person” within
the meaning of Section 7701(a)(30) of the Code.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

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

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

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“GAAP Rental Expense” means, for any period, all rental expense of the Borrower
and its Subsidiaries during such period, determined on a consolidated basis in
accordance with GAAP, incurred under any rental agreements or leases of real
property, including space leases and ground leases, other than obligations in
respect of any Capitalized Leases and Synthetic Lease Obligations.

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

“Granting Lender” has the meaning specified in Section 10.06(h).

“Guarantee” means, as to any Person, any (a) obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith (or, in the case of any Indebtedness or
obligation which is not assumed by such Person, the lesser of such amount or the
fair market value of the assets subject to the Lien referenced in such clause).
The term “Guarantee” as a verb has a corresponding meaning.

“Guarantors” means, collectively, the Parent Guarantor and any Subsidiary of the
Borrower.

“Guaranty” means collectively or individually as the context may indicate, the
Guaranty made by the Guarantors in favor of the Administrative Agent and the
Lenders, and each other Guaranty at any time delivered by a Subsidiary,
substantially in the form of Exhibit H.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, 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 Environmental Law.

“Holdings” has the meaning specified in the recitals hereto.

“Honor Date” has the meaning specified in Section 2.04(c)(i).

 

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“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable not overdue by more than
90 days incurred in the ordinary course of business);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse; provided that, in the case where such indebtedness is not assumed by
such Person, the amount of such indebtedness secured by any such Lien on
property owned or being purchased by such Person shall be deemed to be the
lesser of (i) an amount equal to the stated or determinable amount of such
indebtedness, or (ii) the fair market value of the assets subject to such Lien;

(f) obligations with respect to Capitalized Leases and Synthetic Lease
Obligations;

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Disqualified Capital Stock in such
Person or any other Person, valued, in the case of a redeemable preferred
interest, at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any Capitalized Lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date. Notwithstanding the foregoing,
up to $3,000,000 in the aggregate amount of obligations relating to the
financing of Prepaid Insurance outstanding at any time shall be excluded from
the definition of Indebtedness. In calculating “Indebtedness” for purposes of
Section 6.18, any letters of credit in respect of which a back-to-back letter of
credit has been issued under this Agreement shall not constitute Indebtedness.

“Indemnified Taxes” means Taxes imposed on the Administrative Agent or any
Lender or the L/C Issuer on or with respect to the Loans, the Notes or any
payment hereunder or under the Fee Letter other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

 

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“Information” has the meaning specified in Section 10.07.

“Intercompany Subordination Agreement” means the Intercompany Subordination
Agreement, dated as of the Closing Date, among the Administrative Agent and
certain Loan Parties, as amended and in effect from time to time.

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of
December 19, 2003, between The Bank of New York, as note collateral agent, and
SunTrust Bank, as administrative agent under the Existing Credit Agreement, as
amended and in effect from time to time.

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day
of each Interest Period applicable to such Loan and the Revolving Loan Maturity
Date in the case of an Interest Period applicable to Revolving Loans or the Term
Loan Maturity Date in the case of an Interest Period applicable to Term Loans;
provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan (including a Swing Line Loan), the last Business
Day of each March, June, September and December and the Revolving Loan Maturity
Date in the case of an Interest Period applicable to Revolving Loans or the Term
Loan Maturity Date in the case of an Interest Period applicable to Term Loans.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six months
thereafter (or nine or twelve months thereafter if consented to by all the
Lenders), as selected by the Borrower in a Revolving Loan Notice or a Term Loan
Interest Rate Selection Notice, as applicable; provided that:

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

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

(iii) no Interest Period shall extend beyond the Revolving Loan Maturity Date in
the case of an Interest Period applicable to Revolving Loans or the Term Loan
Maturity Date in the case of an Interest Period applicable to Term Loans.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a division or line of business of such Person.
For purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

“IP Rights” has the meaning specified in Section 5.17.

 

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“IPO” means the first underwritten public offering that is consummated by the
Parent Guarantor of its Equity Interests after the Closing Date pursuant to a
registration statement filed with the SEC in accordance with the Securities Act
of 1933, as amended.

“IRS” means the United States Internal Revenue Service.

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

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor the L/C
Issuer and relating to any such Letter of Credit.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, 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.

“L/C Advance” means, with respect to each Revolving Lender, such Revolving
Lender’s funding of its participation in any L/C Borrowing in accordance with
its Applicable Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

“L/C Issuer” means Bank of America, in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.

“Lender” means the Revolving Lenders from time to time party hereto, the Term
Loan Lenders from time to time party hereto and, as the context requires,
includes the Swing Line Lender.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

“Letter of Credit” means any standby or commercial letter of credit issued
hereunder.

 

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“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is seven days prior to the
Revolving Loan Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.04(i).

“Letter of Credit Sublimit” means an amount equal to $15,000,000 The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Revolving
Credit Commitments.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to the Borrower under Article II
in the form of a Revolving Loan, a Term Loan (including any Segment) or a Swing
Line Loan.

“Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee
Letter, the Guaranty, the Security Documents, the Subordination Documents and
any other document executed by a Loan Party and the Administrative Agent arising
out of or in connection with this Agreement.

“Loan Parties” means, collectively, the Borrower and each Guarantor.

“Management Agreement” means the Monitoring and Management Services Agreement,
dated as of November 18, 2005, among Trimaran Management, CAC and the Company.

“Management Fee” means a fee paid to Trimaran Management or its designees
pursuant to the Management Agreement in an amount not to exceed $500,000 per
annum, plus out-of-pocket costs, expenses of Trimaran actually incurred as
permitted pursuant to the Management Agreement in connection with the operation
of the Parent and its Subsidiaries in an amount not to exceed $250,000 per
annum, plus a one-time fee paid to Trimaran Management or its designees pursuant
to the termination of the Management Agreement in an amount not to exceed
$2,500,000; provided that such fees are subordinated to the Obligations pursuant
to the Trimaran Subordination Agreement.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent) or financial condition of the Borrower and its Subsidiaries taken
as a whole; (b) a material impairment of the ability of the Loan Parties to
perform their obligations under the Loan Documents; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against the
Loan Parties of the Loan Documents taken as a whole.

“MLCC” means Merrill Lynch Capital Corporation and its successors.

“Mortgaged Property” means any Real Estate which is subject to any Mortgage.

“Mortgages” means collectively (a) the several deeds of trust set forth on
Schedule 1.01(b), dated the Closing Date, each executed by a Loan Party with
respect to the fee simple interests of such Loan

 

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Party in the Real Estate on such Schedule, each in substantially the form of
Exhibit M hereto, and (b) any other mortgages, leasehold mortgages or deeds of
trust executed and delivered to the Administrative Agent after the Closing Date
pursuant to Section 6.17, in each case, in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“Net Cash Proceeds” means:

(a) with respect to any Disposition, the gross cash proceeds received by a
Person in respect of any Disposition, less the sum of (i) all reasonable
out-of-pocket fees, commissions and other reasonable and customary costs and
expenses (including Borrower’s good faith estimate of costs and expenses
incurred but not yet invoiced) actually incurred in connection with such
Disposition including outside attorneys’ fees, trustee’s fees or other
professional fees and costs payable to any counsel or advisor for the lender, or
Borrower or the holder of any other debt secured by the assets subject to
Disposition, including the amount of any transfer or documentary taxes in
connection with such Disposition or any other taxes which are reasonably
attributable to such Disposition as certified by a Responsible Officer of the
Borrower, (ii) the aggregate amount of cash so received by such Person which is
required to be used to retire (in whole or in part) any Indebtedness (other than
under the Loan Documents) of such Person permitted by this Agreement that was
secured by a Lien or security interest permitted by this Agreement having
priority over the Liens and security interests of the Administrative Agent (for
the benefit of the Administrative Agent and the Lenders) with respect to such
assets transferred and which is required to be repaid in whole or in part (which
repayment, in the case of any other revolving credit arrangement or multiple
advance arrangement, reduces the commitment thereunder) in connection with such
Disposition, (iii) the Borrower’s good faith estimate of payments required to be
made with respect to unassumed liabilities relating to the properties sold
within 90 days of such Disposition, as set forth in a written notice to the
Administrative Agent at the time of such Disposition (provided that to the
extent such cash proceeds are not used to make payments in respect of such
unassumed liabilities within 90 days of such Disposition, such cash proceeds
shall constitute Net Cash Proceeds); (iv) amounts provided as a reserve in
accordance with GAAP, as set forth in a written notice to the Administrative
Agent at the time of such Disposition, against (x) any liabilities under any
indemnification obligations associated with such Disposition or (y) any other
liabilities retained by such Person or any of its Subsidiaries associated with
the properties sold in such Disposition (provided that to the extent and at the
time any such amounts are released from such reserve, such amounts shall
constitute Net Cash Proceeds); (v) amounts required to be placed in escrow
pursuant to the terms of any agreement governing such Disposition (provided that
to the extent and at the time any such amounts are released from such escrow to
the Loan Parties, such amounts shall constitute Net Cash Proceeds) and
(vi) costs of repurchasing, and costs associated with litigation in connection
with the repurchase of, franchised Restaurants that are refranchised within
twenty-four (24) months of such repurchase; and

(b) with respect to any offering, issuance or sale of any Equity Interests by
any Loan Party or incurrence of indebtedness, the excess of the gross cash
proceeds received by such Person for such offering, sale or incurrence of
indebtedness after deduction of all reasonable and customary transaction
expenses (including, without limitation, underwriting discounts and commissions)
actually incurred in connection with such a sale or other issuance or such
incurrence of indebtedness.

 

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“Net Restaurant Operating Profit” means, for any particular Restaurant, for any
period, the amount which would be shown as operating profit of such Restaurant
before giving effect to extraordinary or unusual gains or losses, interest
expense, depreciation, amortization, and other non-recurring non-cash charges
and income and before allocation of corporate overhead charges, on a statement
of income for such Restaurant for such period, determined in accordance with
GAAP and the methodology customarily utilized by the Borrower and its
Subsidiaries as a demonstrative example of such methodology is reflected on
Schedule 1.01(c) hereto.

“New Construction” means construction by the Borrower or any of its Subsidiaries
related to the opening of a Restaurant owned or operated by the Borrower or any
of its Subsidiaries at a new location or the meaningful expansion of capacity at
existing facilities of a Restaurant owned or operated by the Borrower or any of
its Subsidiaries.

“New Operating Units” means restaurants owned or operated by the Borrower or any
of its Subsidiaries or franchisees whose ownership or operation by the Borrower
or any of its Subsidiaries or franchises started on a date after the Closing
Date or restaurants acquired by the Borrower or any of its Subsidiaries or
franchises pursuant to a Permitted Acquisition.

“Notes” means collectively, the Revolving Loan Notes and the Term Loan Notes.

“Obligations” means all advances to, and debts, liabilities and obligations, of,
any Loan Party, arising under any Loan Document, any Swap Contract of any Loan
Party, to which the Administrative Agent or any of its Affiliates is a party,
any other Lender or any Affiliate of a Lender is a party or any party was a
Lender at the time such Swap Contract was entered into, in respect of any cash
management services provided by a Lender, or otherwise with respect to any Loan
or Letter of Credit, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

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

“Operating Account” has the meaning specified in Section 5.23.

“Operating Leases” means leases under which the Borrower or any of its
Subsidiaries is the lessee or the obligor, other than Capitalized Leases.

“Operating Units” means all Restaurants operated by the Borrower or any of its
Subsidiaries, which for the avoidance of doubt, shall include the New Operating
Units.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

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

“Outstanding Amount” means (i) with respect to the Term Loan on any date, the
aggregate outstanding principal amount thereof after giving effect to the
Borrowing of the Term Loan and any prepayments or repayments of the Term Loan
(or any Segment) occurring on such date, (ii) with respect to the Revolving
Loans and Swing Line Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any borrowings and prepayments or
repayments of Revolving Loans and Swing Line Loans, as the case may be,
occurring on such date; and (iii) with respect to any L/C Obligations on any
date, the amount of such L/C Obligations on such date after giving effect to any
L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements by the Borrower of Unreimbursed Amounts.

“Parent” means any of EPL Holdings Inc., a Delaware corporation, CSC, CAC and
Trimaran Pollo Partners L.L.C., a Delaware limited liability company, or any
successor thereto including by way of merger, consolidation, liquidation,
dissolution or winding up; it being understood and agreed that Parent will be a
holding company whose only material assets will be the direct or indirect
ownership of the capital stock of the Parent Guarantor or another holding
company whose only material assets and liabilities (other than taxes and
expenses of the type permitted to be funded under Section 7.06) will be the
direct or indirect ownership of the capital stock of the Parent Guarantor and
only liabilities (other than taxes and expenses of the type permitted to be
funded under Section 7.06) will be intercompany Indebtedness between Parent and
any Loan Party or any such holding company otherwise permitted hereunder.

“Parent Guarantor” has the meaning (i) specified in the introductory paragraph
hereto or (ii) at any time after the consummation of a transaction pursuant to
which another Person becomes a direct parent of the Company and assumes the
Parent Guarantor’s obligation to guarantee the obligations under the Loan
Documents, such direct parent, in each case for so long as it guarantees the
obligations under the Loan Documents.

“Participant” has the meaning specified in Section 10.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

“Perfection Certificates” means the Perfection Certificate, dated as of the
Closing Date, executed by each of the Loan Parties.

“Permitted Cure Securities” means Equity Interests of Parent Guarantor
constituting Qualified Capital Stock issued to cure financial covenants in
accordance with Section 7.17.

“Permitted Acquisition” means any acquisition permitted under Section 7.02(g).

“Permitted Tax Distributions” has the meaning specified in Section 7.06(e).

 

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

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

“Platform” has the meaning specified in Section 6.02.

“Prepaid Insurance” means insurance coverage obtained by or on behalf of the
Borrower or its Subsidiaries pursuant to an arrangement whereby a lender prepays
(or finances the prepayment of) the applicable insurance premium for the
Borrower or such Subsidiary in full and the obligation of the Borrower or such
Subsidiary to repay such lender is secured solely by the Borrower’s or such
Subsidiary’s right under the policy of insurance to recover unearned premiums
upon early termination of the policy.

“Pro Rata Term Share” means, with respect to each Term Loan Lender, the
percentage (carried out to the ninth decimal place) of the principal amount of
the Term Loan funded by such Term Loan Lender as of the date of measurement
thereof, after giving effect to any assignments made pursuant to Section 10.06
on or prior to such date of measurement. The Pro Rata Term Share of each Term
Loan Lender as of the Closing Date is set forth opposite the name of such Lender
on Schedule 2.01 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable.

“Qualified Capital Stock” means Equity Interests other than Disqualified Capital
Stock.

“Real Estate” means all real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.

“Recipient” has the meaning specified in Section 7.06(e).

“Reference Period” means, as of any date of determination, the period of four
consecutive Fiscal Quarters ending on such date, or if such date is not a Fiscal
Quarter end date, the period of four consecutive Fiscal Quarters most recently
ended (in each case treated as a single accounting period).

“Refinancing” has the meaning specified in the recitals hereto.

“Register” has the meaning specified in Section 10.06(c).

“Registered Public Accounting Firm” means (a) prior to an IPO, an independent
certified public accounting firm of nationally recognized standing selected by
the Parent Guarantor and (b) after the occurrence of an IPO, has the meaning
specified in the securities laws and shall be independent of the Loan Parties as
prescribed by the securities laws.

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

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Revolving Loans, a Revolving Loan Notice, (b) with respect to
a conversion or continuation of

 

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any Segment, a Term Loan Interest Rate Selection Notice, (c) with respect to an
L/C Credit Extension, a Letter of Credit Application and (d) with respect to a
Swing Line Loan, a Swing Line Notice.

“Required Lenders” means, as of any date of determination any combination of
Lenders having at least a majority of the Aggregate Commitments or, if the
commitment of each Lender to make Revolving Loans and the obligation of the L/C
Issuer to make L/C Credit Extensions have been terminated pursuant to
Section 8.02, any combination of Lenders holding in the aggregate at least a
majority of the Total Outstandings (with the aggregate amount of each Revolving
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that the Revolving Credit Commitment of, and the portion
of the Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

“Required Revolving Lenders” means, as of any date of determination and (a) at
any time when there are not more than 3 Revolving Lenders, any 2 Revolving
Lenders; (b) at any time when there are more than 3 Revolving Lenders, Revolving
Lenders with Revolving Credit Commitments that total at least a majority of the
Aggregate Revolving Credit Commitments or, at any time after the Aggregate
Revolving Credit Commitments have been terminated, Revolving Lenders holding in
the aggregate at least a majority of the Outstanding Amount of the Revolving
Loans (with the aggregate amount of each Revolving Lender’s risk participation
and funded participation in L/C Obligations and Swing Line Loans being deemed
“held” by such Lender for purposes of this definition); provided that the
portion of the Aggregate Revolving Credit Commitments of, and the portion of the
Outstanding Amount of the Revolving Loans held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Revolving Lenders.

“Required Term Lenders” means, as of any date of determination Term Loan Lenders
having more than a majority of the Outstanding Amount of the Term Loan; provided
that the portion of the Outstanding Amount of the Term Loan held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Term Loan Lenders.

“Responsible Officer” means the chief executive officer, president, vice
president, chief financial officer, director of finance, treasurer or assistant
treasurer of a Loan Party (provided that for purposes of Sections 6.01 and 6.02,
“Responsible Officer” shall mean the chief executive officer, president, chief
financial officer, director of finance, treasurer or assistant treasurer of a
Loan Party). Any document delivered hereunder that is signed by a Responsible
Officer of a Loan Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively presumed to have
acted on behalf of such Loan Party.

“Restaurant” means a particular restaurant at a particular location that is
owned or operated by the Borrower or a Subsidiary of the Borrower.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to the Borrower’s stockholders, partners or members (or
the equivalent Person thereof) or any management fees or any other similar
payment to Trimaran, the Equity Investors, or employees of Trimaran or the
Equity Investors or Affiliates thereof or any holder of Equity Interests of the
Parent Guarantor, other than the payment of compensation in the ordinary course
of business to holders of Equity Interests who are employees of such Person.

 

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“Revolving Borrowing” means a borrowing consisting of simultaneous Revolving
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Lenders pursuant to Section 2.02.

“Revolving Credit Commitment” means, as to each Revolving Lender, its obligation
to (a) make Revolving Loans to the Borrower pursuant to Section 2.02,
(b) purchase participations in L/C Obligations and (c) purchase participations
in Swing Line Loans, in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such Revolving Lender’s
name on Schedule 2.02 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be adjusted
from time to time in accordance with this Agreement.

“Revolving Credit Facility” means the facility described in Section 2.02
providing for Revolving Loans to the Borrower by the Revolving Lenders in the
maximum aggregate principal amount at any time outstanding of $25,000,000, as
reduced from time to time pursuant to the terms of this Agreement.

“Revolving Lender” means each Lender that has a Revolving Credit Commitment or,
following termination of the Revolving Credit Commitments, has Revolving Loans
outstanding or participations in an outstanding Letter of Credit or Swing Line
Loan and any other Person who becomes an assignee of rights and obligations of a
Revolving Lender pursuant to Section 10.06.

“Revolving Loan” means a Base Rate Loan or a Eurodollar Rate Loan made by
Revolving Lenders to the Borrower in accordance with their Revolving Credit
Commitment pursuant to Section 2.02.

“Revolving Loan Maturity Date” means November 18, 2010.

“Revolving Loan Note” means a promissory note made by the Borrower in favor of a
Revolving Lender evidencing Revolving Loans made by such Revolving Lender,
substantially in the form of Exhibit E-2.

“Revolving Loan Notice” means a notice of (a) a Revolving Borrowing, (b) a
conversion of Revolving Loans from one Type to the other, or (c) a continuation
of Revolving Loans as Eurodollar Rate Loans, pursuant to Section 2.03(a), which,
if in writing, shall be substantially in the form of Exhibit B.

“Sanctioned Country” means a country that is listed on the List of Specifically
Designated Nationals and Blocked Persons (the “SDN List”) maintained by OFAC
(available at http://www.treas.gov/offices/enforcement/ofac/sdn/) or a country
that is on any other similar list maintained by OFAC pursuant to any authorizing
statute, Executive Order or regulation (collectively, “OFAC Laws and
Regulations”).

“Sanctioned Person” means (a) a Person named on the SDN List or (b)(i) an agency
of the government of a Sanctioned Country, (ii) an organization controlled by a
Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the
extent subject to a sanctions program administered by OFAC.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Securities Pledge Agreements” means that certain Securities Pledge Agreement,
executed and delivered on the Closing Date and as amended and in effect from
time to time by Finance Co., Parent

 

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Guarantor, the Company, Guarantors and the Administrative Agent and each other
Securities Pledge Agreement that may be entered into after the Closing Date with
respect to a Subsidiary of the Borrower formed or acquired after the Closing
Date, in each case, in substantially the form of Exhibit J hereto.

“Security Agreements” means that certain Security Agreement, executed and
delivered on the Closing Date and as amended and in effect from time to time,
between the Loan Parties and the Administrative Agent and any other Security
Agreement that may be entered into after the Closing Date with respect to a
Subsidiary of the Borrower formed or acquired after the Closing Date, in each
case, in substantially the form of Exhibit K hereto.

“Security Documents” means the Control Agreements, the Guaranty, the Mortgages,
the Securities Pledge Agreements the Security Agreements, the Trademark
Collateral Agreements and all other instruments and documents, including,
without limitation, Uniform Commercial Code financing statements, required to be
executed or delivered pursuant to any Security Document or this Agreement to
secure any Obligations, each in form and substance reasonably satisfactory to
the Administrative Agent.

“Segment” means a portion of the Term Loan (or all thereof) with respect to
which a particular interest rate is (or is proposed to be) applicable.

“Seller” means American Securities Capital Partners, L.P.

“Senior Holdco Notes” means the 14 1/2% Senior Discount Notes due 2014 due
issued by the Parent Guarantor on the Closing Date yielding gross proceeds of
$22,500,110.

“Senior Holdco Notes Documents” means the indenture dated as of November 18,
2005, among the Parent Guarantor and The Bank of New York, as trustee, in
respect of the Senior Holdco Notes and all other instruments, agreements and
other documents evidencing or governing the Senior Holdco Notes.

“Senior Notes” means the 11 3/4% Senior Notes due 2013 issued by the Borrower on
the Closing Date in the aggregate principal amount of $125,000,000.

“Senior Notes Documents” means the indenture dated as of November 18, 2005,
among the Borrower and The Bank of New York, as trustee, in respect of the
Senior Notes and all other instruments, agreements and other documents
evidencing or governing the Senior Notes.

“SPC” has the meaning specified in Section 10.06(h).

“Specified Subordinated Debt” means (a) intercompany Indebtedness among the Loan
Parties, and (b) Indebtedness constituting the Management Fee and Advisory Fees
and notes payable to management of Borrower issued in lieu of cash payments that
otherwise were required to be paid and are permitted hereunder, in each case so
long as such Indebtedness is expressly subordinated and made junior to the
payment and performance in full of the Obligations to the Lenders, and evidenced
as such by a written subordination agreement containing subordination and
standstill provisions in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.

“Specified Subordinated Debt Documents” means the Management Agreement and the
documents evidencing intercompany Indebtedness (if any) subject to the
Intercompany Subordination Agreement.

“Stock Purchase Agreement” means the Stock Purchase Agreement, dated as of
September 27, 2005, by and among CAC, the Company and the other parties thereto,
as amended.

 

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“Subordination Documents” means the Trimaran Subordination Agreement and the
Intercompany Subordination Agreement.

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

“Swap Contract” means (a) 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 or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) 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 (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

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

“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.05.

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.05.

“Swing Line Lender” means Merrill Lynch Capital Corporation in its capacity as
provider of Swing Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.05(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.05(b), which, if in writing, shall be substantially in the form of
Exhibit D.

“Swing Line Sublimit” means an amount equal to the lesser of (a) $15,000,000 and
(b) the Aggregate Revolving Credit Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Revolving Credit Commitments.

 

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“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that, in
each case, 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).

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

“Tender Offer and Consent Solicitation” means the tender offer and consent
solicitation pursuant to the Offer to Purchase dated October 12, 2005.

“Tenant Improvement Proceeds” means, in respect of any Operating Lease relating
to an Operating Unit or corporate office, training center, test kitchen or
auxiliary storage facility, amounts provided by the landlord for tenant
improvements, build outs and other capital expenditures in the form of direct
payments.

“Term Loan” means the term loan made pursuant to the Term Loan Facility.

“Term Loan Facility” means the facility described in Section 2.01 consisting of
the Term Loan advanced to the Borrower on the Closing Date in the original
principal amount of $104,500,000 pursuant to Section 2.01.

“Term Loan Installment” has the meaning specified in Section 2.08(e).

“Term Loan Installment Date” has the meaning specified in Section 2.08(e).

“Term Loan Interest Rate Selection Notice” means a notice delivered by a
Responsible Officer of the Borrower in connection with the election of a
subsequent Interest Period for any Eurodollar Rate Segment or the conversion of
any Eurodollar Rate Segment into a Base Rate Segment or the conversion of any
Base Rate Segment into a Eurodollar Rate Segment, which, if in writing, shall be
substantially in the form of Exhibit C.

“Term Loan Lender” means each Lender that has a portion of the Term Loan
outstanding under the Term Loan Facility and any other Person who becomes an
assignee of the rights and obligations of a Term Loan Lender pursuant to
Section 10.06.

“Term Loan Maturity Date” means November 18, 2011.

“Term Loan Note” means a promissory note made by the Borrower in favor of a Term
Loan Lender evidencing the portion of the Term Loan made by such Term Lender,
substantially in the form of Exhibit E-1.

“Threshold Amount” means $3,000,000.

“Title Insurance Company” means LandAmerica.

“Title Policy” means, in relation to each Mortgaged Property, an ALTA standard
form title insurance policy issued (or marked up title insurance commitment
having the effect of a policy of title insurance) by the Title Insurance Company
(with such reinsurance or co-insurance as the Administrative Agent

 

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may reasonably require, any such reinsurance to be with direct access
endorsements) in the case of owned Mortgaged Property, in an amount equal to
100% of the fair market value of such Mortgaged Property, insuring the priority
of the Mortgage of such Mortgaged Property and that a Borrower or one of its
Subsidiaries holds insurable fee simple to such Mortgaged Property subject only
to Liens of the type permitted by the Mortgages and Section 7.01(f) and which
shall not contain exceptions for mechanics’ liens or persons in occupancy or
matters which would be shown by a survey (in each case, except as may be a Lien
permitted by such Mortgages or by Section 7.01(f)), shall not insure over any
matter except to the extent that any such affirmative insurance is reasonably
acceptable to the Administrative Agent, and to the extent available in the
relevant jurisdiction shall contain such endorsements and affirmative insurance
as the Administrative Agent in its reasonable discretion may require, including
but not limited to (a) comprehensive endorsement, (b) variable rate of interest
endorsement, (c) usury endorsement, (d) revolving credit endorsement, (e) tie-in
endorsement, and (f) doing business endorsement.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

“Trademark Collateral Agreements” means the Trademark Collateral Security and
Pledge Agreement, executed and delivered on the Closing Date and as amended and
in effect from time to time, made by the Borrower in favor of the Administrative
Agent and each other Trademark Collateral Security and Pledge Agreement, that
may be entered into after the Closing Date with respect to any Loan Party that
acquires registered trademarks or trademark applications after the Closing Date,
in each case, in substantially the form of Exhibit L hereto.

“Transactions” means (a) the Acquisition and the other transactions contemplated
by the Acquisition Documents, (b) the Equity Contribution, (c) the entering into
of the Senior Notes Documents and the issuance of the Senior Notes, (d) the
entering into of the Senior Holdco Notes Documents and the issuance of the
Senior Holdco Notes, (e) the entering into and borrowings under this Agreement,
(f) the Refinancing and (g) the other transactions contemplated by this
Agreement entered into and consummated in connection with the Acquisition.

“Trimaran” means Trimaran Fund II, L.L.C.

“Trimaran Management” means Trimaran Fund Management L.L.C.

“Trimaran Subordination Agreement” means the Subordination Agreement, dated as
of the date hereof, among the Administrative Agent, Trimaran Management and the
Company, in form and substance satisfactory to the Administrative Agent,
relating to the Management Agreement.

“Type” means, with respect to a Revolving Loan, its character as a Base Rate
Revolving Loan or a Eurodollar Rate Revolving Loan, and with respect to a
Segment, its character as a Base Rate Segment or a Eurodollar Rate Segment.

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.04(c)(i).

 

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1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”; and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03 Accounting Terms.

(a) All accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP applied on a consistent
basis, as in effect from time to time, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio, covenant or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio, covenant or requirement to preserve the original
intent thereof in light of such change in GAAP (subject to the approval of the
Required Lenders); provided that, until so amended, (i) such ratio, covenant or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Administrative Agent
and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio, covenant or requirement made before and
after giving effect to such change in GAAP.

 

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1.04 Rounding. Any financial ratios required to be maintained by the Borrower
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 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).

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

1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of
a Letter of Credit at any time shall be deemed to be the stated amount of such
Letter of Credit in effect at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such Letter of Credit shall be deemed to be the
maximum stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Term Loan.

(a) Subject to the terms and conditions of this Agreement, each Term Loan Lender
severally (and not jointly) agrees to make an advance of its Pro Rata Term Share
of the Term Loan Facility to Finance Co. on the Closing Date. The principal
amount of each Segment of the Term Loan outstanding hereunder from time to time
shall bear interest and the Term Loan shall be repayable as herein provided. No
amount of the Term Loan repaid or prepaid by the Borrower may be reborrowed
hereunder, and no subsequent Borrowing under the Term Loan Facility shall be
allowed after the initial advance of the Term Loan on the Closing Date.

(b) On the Closing Date, each Term Loan Lender shall, pursuant to the terms and
subject to the conditions of this Agreement, make the amount of its Pro Rata
Term Share of the Term Loan Facility available by wire transfer to the
Administrative Agent. Such wire transfer shall be directed to the Administrative
Agent at the Administrative Agent’s Office and shall be in the form of same day
funds in Dollars. The amount so received by the Administrative Agent shall,
subject to the terms and conditions of this Agreement, including without
limitation the satisfaction of all applicable conditions in Sections 4.01 and
4.02, be made available to Finance Co. by delivery of the proceeds thereof as
shall be directed by the Responsible Officer of the Borrower and reasonably
acceptable to the Administrative Agent. The initial Borrowing of the Term Loan
shall be a single Base Rate Segment, subject to conversion after the Closing
Date in accordance with a Term Loan Interest Rate Selection Notice delivered in
accordance with Section 2.03.

2.02 Revolving Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make Revolving Loans to the Borrower from time to
time, on any Business Day during the Availability Period, in an aggregate amount
not to exceed at any time outstanding the amount of such Revolving Lender’s
Revolving Credit Commitment; provided, however, that after giving effect to any
Revolving Borrowing, (i) the aggregate Outstanding Amount of the Revolving
Loans, plus the aggregate Outstanding Amount of the Swing Line Loans, plus the
aggregate Outstanding Amount of the L/C Obligations shall not exceed the
Aggregate Revolving Credit Commitment, (ii) the aggregate Outstanding Amount of
the Revolving Loans of any Revolving Lender, plus such Revolving Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations plus such
Revolving Lender’s Applicable Percentage of the Outstanding Amount of all Swing
Line Loans shall not exceed such Revolving Lender’s

 

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Commitment and (iii) the aggregate Outstanding Amount of the Revolving Loans
advanced on the Closing Date, plus the aggregate Outstanding Amount of the Swing
Line Loans advanced on the Closing Date shall not exceed $3,500,000. Within the
limits of each Revolving Lender’s Revolving Credit Commitment, and subject to
the other terms and conditions hereof, the Borrower may borrow under this
Section 2.02, prepay under Section 2.06, and reborrow under this Section 2.02.
Revolving Loans may be Base Rate Revolving Loans or Eurodollar Rate Revolving
Loans, as further provided herein; provided that the initial Revolving Borrowing
on the Closing Date shall be a Base Rate Revolving Loan, subject to
Section 2.03.

2.03 Borrowings, Conversions and Continuations of Revolving Loans; Conversions
and Continuations of Segments of the Term Loan.

(a) Each Revolving Borrowing, each conversion of Revolving Loans or Segments of
the Term Loan from one Type to the other, and each continuation of Eurodollar
Rate Loans shall be made upon the Borrower’s irrevocable notice to the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Administrative Agent not later than 1:00 p.m. (i) three Business
Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of
Base Rate Loans; provided, however, that if the Borrower wishes to request
Eurodollar Rate Loans having an Interest Period of nine or twelve months in
duration as provided in the definition of “Interest Period”, the applicable
notice must be received by the Administrative Agent not later than 11:00 a.m.
four Business Days prior to the requested date of such Borrowing, conversion or
continuation, whereupon the Administrative Agent shall give prompt notice to the
Lenders of such request and determine whether the requested Interest Period is
acceptable to all of them (it being understood that in the event the Borrower
requests an Interest Period of twelve months, the Administrative Agent shall
also determine whether an Interest Period of nine months is acceptable to all
the Lenders in the event that twelve months is unacceptable to any Lender);
provided, further, that unless consented to by the Administrative Agent in its
sole discretion, no Eurodollar Rate Loans may be elected on the Closing Date or
prior to the date 30 days thereafter (unless the completion of the primary
syndication of this Agreement as determined by the Arrangers shall have
occurred), except that from and after the fifth Business Day after the Closing
Date Eurodollar Rate Loans bearing Interest Periods of 14 days may be elected
until the thirtieth day after the Closing Date. Not later than 1:00 p.m., three
Business Days before the requested date of such Borrowing, conversion or
continuation, the Administrative Agent shall notify the Borrower (which notice
may be by telephone) whether or not the requested Interest Period has been
consented to by all the Lenders or, in the event that the Borrower requested an
Interest Period of twelve months and such Interest Period was not consented to
by all the Lenders, whether or not an Interest Period of nine months has been
consented to by all the Lenders. Each telephonic notice by the Borrower pursuant
to this Section 2.03(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Revolving Loan Notice or Term Loan Interest
Rate Selection Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof. Except as provided in Sections 2.04(c)
and 2.05(c), each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Revolving Loan Notice (whether telephonic or written) and, when applicable,
each Term Loan Interest Rate Selection Notice (whether telephonic or written)
shall specify (i) whether the Borrower is requesting a Revolving Borrowing or a
conversion of Revolving Loans or Segments of the Term Loan, as the case may be,
from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Revolving Loans
to be borrowed and/or the principal amount of Revolving Loans or Segments of the
Term Loan, as the case may be, to be converted or continued, (iv) the Type of
Revolving Loans to be borrowed or to which existing Revolving Loans or Segments
of the Term Loan, as the case may be, are to be

 

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converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Borrower fails to specify a Type of Revolving Loan in a
Revolving Loan Notice or Type of Segment in a Term Loan Interest Rate Selection
Notice, or if the Borrower fails to give a timely notice requesting a conversion
or continuation, then the applicable Revolving Loans and Segments of the Term
Loan shall be made as, or converted to, Base Rate Revolving Loans or a Base Rate
Segment, as applicable. Any such automatic conversion to Base Rate Loans shall
be effective as of the last day of the Interest Period then in effect with
respect to the applicable Eurodollar Rate Loans. If the Borrower requests a
Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any
such Revolving Loan Notice or Term Loan Interest Rate Selection Notice, but
fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one month.

(b) Following receipt of a Revolving Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the
applicable Revolving Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in Section 2.03(a). In the case of a Revolving Borrowing, each Lender
shall make the amount of its Revolving Loan available to the Administrative
Agent in immediately available funds at the Administrative Agent’s Office not
later than 2:00 p.m. on the Business Day specified in the applicable Revolving
Loan Notice. Upon satisfaction of the applicable conditions set forth in
Section 4.02 (and, if such Borrowing is the initial Credit Extension,
Section 4.01), the Administrative Agent shall make all funds so received
available to the Borrower in like funds as received by the Administrative Agent
either by (i) crediting the account of the Borrower on the books of Merrill
Lynch Capital Corporation with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the date the Revolving Loan Notice with respect to such
Borrowing is given by the Borrower, there are L/C Borrowings outstanding,
subject to deadlines set forth in the second sentence of Section 2.03(c)(i),
then the proceeds of such Borrowing, first, shall be applied to the payment in
full of any such L/C Borrowings, and second, shall be made available to the
Borrower as provided above.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, (i) no Revolving Loans may be requested
as, converted to or continued as Eurodollar Revolving Rate Loans without the
consent of the Required Revolving Lenders and (ii) no Segment of the Term Loan
may be converted to or continued as a Eurodollar Rate Segment without the
consent of the Required Term Lenders.

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders
of the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrower and the Lenders
of any change in Merrill Lynch Capital Corporation’s prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

(e) After giving effect to all Revolving Borrowings, all conversions of
Revolving Loans from one Type to the other, and all continuations of Revolving
Loans as the same Type, the Borrowing under the Term Loan Facility on the
Closing Date, all conversions of Segments of the Term Loan from one Type to the
other, and all continuations of Segments of the Term Loan as the same Type,
there shall not be more than eight Interest Periods in effect with respect to
all of the Loans.

(f) The failure of any Lender to make any Loan to be made by it as part of any
Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on the date of such

 

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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 the date of any
Borrowing.

2.04 Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Revolving Lenders set forth in
this Section 2.04, (1) from time to time on any Business Day during the period
from the Closing Date until the Letter of Credit Expiration Date, to issue
Letters of Credit for the account of the Borrower or its Subsidiaries, and to
amend or extend Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drawings under the Letters of Credit; and
(B) the Revolving Lenders severally agree to participate in Letters of Credit
issued for the account of the Borrower or its Subsidiaries and any drawings
thereunder; provided that after giving effect to any L/C Credit Extension with
respect to any Letter of Credit, (x) the aggregate Outstanding Amount of all
Revolving Loans, plus the aggregate Outstanding Amount of all Swing Line Loans,
plus the aggregate Outstanding Amount of all L/C Obligations shall not exceed
the Aggregate Revolving Credit Commitments, (y) the aggregate Outstanding Amount
of the Revolving Loans of any Revolving Lender, plus such Revolving Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus
such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all
Swing Line Loans shall not exceed such Revolving Lender’s Revolving Credit
Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not
exceed the Letter of Credit Sublimit. Notwithstanding the foregoing, as a result
of any L/C Credit Extension, in the case of the Swing Line Lender, the Swing
Line Obligations plus, in the Swing Line Lender’s capacity as a Revolving
Lender, its Applicable Percentage of the Outstanding Amount of all L/C
Obligations, may exceed the amount of its Revolving Credit Commitment. Each
request by the Borrower for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by the Borrower that the L/C Credit
Extension so requested complies with the conditions set forth in the proviso to
the preceding sentence. Within the foregoing limits, and subject to the terms
and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall
be fully revolving, and accordingly the Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed.

(ii) The L/C Issuer shall not issue any Letter of Credit, if:

(A) subject to Section 2.04(b)(iii) the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of issuance or last
extension, unless the Required Revolving Lenders have approved such expiry date;
or

(B) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such
expiry date.

(iii) The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer (I) shall prohibit, or request
that the L/C Issuer refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or (II) shall impose upon the L/C Issuer
with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon the L/C Issuer any

 

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unreimbursed loss, cost or expense which was not applicable on the Closing Date
and, in the case of clause (II), which the L/C Issuer in good faith deems
material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer;

(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer,
such Letter of Credit is in an initial stated amount less than $500,000;

(D) such Letter of Credit is to be denominated in a currency other than Dollars;

(E) such Letter of Credit contains any provisions for automatic reinstatement of
the stated amount after any drawing thereunder; or

(F) a default of any Revolving Lender’s obligations to fund under
Section 2.04(c) exists or any Lender is at such time a Defaulting Lender
hereunder, unless the L/C Issuer has entered into satisfactory arrangements with
the Borrower or such Revolving Lender to eliminate the L/C Issuer’s risk with
respect to such Revolving Lender.

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would
not be permitted at such time to issue such Letter of Credit in its amended form
under the terms hereof.

(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

(vi) The L/C Issuer shall act on behalf of the Revolving Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article IX with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article IX
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower.
Such Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 1:00 p.m. at least two Business Days (or
such later date and time as the Administrative Agent and the L/C Issuer may
agree in a particular instance in their sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name
and address of the beneficiary thereof; (E) the documents to be presented by
such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may reasonably require.
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outstanding Letter of Credit, such Letter of Credit Application shall specify in
form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a Business
Day); (C) the nature of the proposed amendment; and (D) such other matters as
the L/C Issuer may reasonably require. Additionally, the Borrower shall furnish
to the L/C Issuer and the Administrative Agent such other documents and
information pertaining to such requested Letter of Credit issuance or amendment,
including any Issuer Documents, as the L/C Issuer or the Administrative Agent
may reasonably require.

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof. Unless the L/C Issuer has received written notice
from any Lender subject to Section 2.04(b)(iii), the Administrative Agent or any
Loan Party, at least one Business Day prior to the requested date of issuance or
amendment of the applicable Letter of Credit, that one or more applicable
conditions contained in Article IV shall not then be satisfied, then, subject to
the terms and conditions hereof, the L/C Issuer shall, on the requested date,
issue a Letter of Credit for the account of the Borrower (or the applicable
Subsidiary) or enter into the applicable amendment, as the case may be, in each
case in accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Issuer a risk participation in such Letter of Credit in an
amount equal to the product of such Revolving Lender’s Applicable Percentage
times the amount of such Letter of Credit.

(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its reasonable discretion, agree to issue a
Letter of Credit that has automatic extension provisions (each, an
“Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter
of Credit must permit the L/C Issuer to prevent any such extension at least once
in each twelve-month period (commencing with the date of issuance of such Letter
of Credit) by giving prior written notice to the beneficiary thereof not later
than a day (the “Non-Extension 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 L/C Issuer, the Borrower shall not be required to make a
specific request to the L/C Issuer for any such extension. Once an
Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to
have authorized (but may not require) the L/C Issuer to permit the extension of
such Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the L/C Issuer shall not permit
any such extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of
Credit in its revised form (as extended) under the terms hereof (by reason of
the provisions of clause (ii) or (iii) of Section 2.04(a) or otherwise), or
(B) it has received notice (which may be by telephone or in writing) on or
before the day that is five Business Days before the Non-Extension Notice Date
from the Administrative Agent, any Revolving Lender or the Borrower that one or
more of the applicable conditions specified in Section 4.02 is not then
satisfied, and in each such case directing the L/C Issuer not to permit such
extension.

(iv) 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 L/C Issuer will also deliver to the Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower
and the Administrative Agent thereof,

 

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including the amount and proposed Honor Date. Not later than 1:00 p.m. on the
first Business Day following the date of any payment by the L/C Issuer under a
Letter of Credit (each such date, an “Honor Date”), the Borrower shall reimburse
the L/C Issuer through the Administrative Agent in an amount equal to the amount
of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such
time, the Administrative Agent shall promptly notify each Revolving Lender of
the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed
Amount”), and the amount of such Revolving Lender’s Applicable Percentage
thereof. In such event, the Borrower shall be deemed to have requested a
Borrowing of a Base Rate Revolving Loan to be disbursed on the Honor Date in an
amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.03 for the principal amount of Base Rate Loans,
but subject to the amount of the unutilized portion of the Aggregate Revolving
Credit Commitments and the conditions set forth in Section 4.02 (other than the
delivery of a Revolving Loan Notice). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.04(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

(ii) Each Revolving Lender shall upon any notice pursuant to Section 2.04(c)(i)
make funds available to the Administrative Agent for the account of the L/C
Issuer at the Administrative Agent’s Office in an amount equal to its Applicable
Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business
Day specified in such notice by the Administrative Agent, whereupon, subject to
the provisions of Section 2.04(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Revolving Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so
received to the L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Revolving Loans because the conditions set forth in
Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be
deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of
the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be
due and payable on demand (together with interest) and shall bear interest at
the Default Rate. In such event, each Revolving Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.04(c)(ii) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.04.

(iv) Until a Revolving Lender funds its Revolving Loan or L/C Advance pursuant
to this Section 2.04(c) to reimburse the L/C Issuer for any amount drawn under
any Letter of Credit, interest in respect of such Revolving Lender’s Applicable
Percentage of such amount shall be solely for the account of the L/C Issuer.

(v) Each Revolving Lender’s obligation to make Revolving Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.04(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Lender may
have against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Revolving Lender’s obligation to make Revolving
Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Revolving Loan Notice).
No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrower to reimburse the L/C Issuer for the amount of any
payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.

 

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(vi) If any Revolving Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Revolving Lender pursuant to the foregoing provisions of this Section 2.04(c) by
the time specified in Section 2.04(c)(ii), the L/C Issuer shall be entitled to
recover from such Revolving Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds
Rate and a rate determined by the L/C Issuer in accordance with banking industry
rules on interbank compensation. A certificate of the L/C Issuer submitted to
any Revolving Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest error.

(d) Repayment of Participations.

(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Revolving Lender such Revolving Lender’s L/C
Advance in respect of such payment in accordance with Section 2.04(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from the Borrower or otherwise, including proceeds of Cash Collateral applied
thereto by the Administrative Agent), the Administrative Agent will distribute
to such Revolving Lender its Applicable Percentage thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Revolving Lender’s L/C Advance was outstanding) in the same funds as
those received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.04(c)(i) is required to be returned under any
of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Revolving
Lender shall pay to the Administrative Agent for the account of the L/C Issuer
its Applicable Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned by such Revolving Lender, at a rate per annum equal to the Federal
Funds Rate from time to time in effect. The obligations of the Revolving Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

(e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C
Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that the Borrower or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

 

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(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or any
Subsidiary.

The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid. Nothing herein shall
limit any rights or remedies that the Borrower may have to commence and
prosecute an action, suit or proceeding against the L/C Issuer for gross
negligence, willful misconduct or bad faith in connection with any drawing under
a Letter of Credit except that any damages for which the L/C Issuer may be
liable shall be limited to direct and not consequential damages.

(f) Role of L/C Issuer. Each Revolving Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Revolving Lender for (i) any action taken or omitted in connection herewith at
the request or with the approval of the Required Revolving Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct or breach in bad faith of its obligations hereunder; or
(iii) the due execution, effectiveness, validity or enforceability of any
document or instrument related to any Letter of Credit or Issuer Document. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, the
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
Section 2.04(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the L/C
Issuer’s willful misconduct or gross negligence or breach in bad faith of its
obligations hereunder or the L/C Issuer’s willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C
Issuer 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, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

 

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(g) Cash Collateral. Upon the written request of the Administrative Agent (i) if
the L/C Issuer has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of
the Letter of Credit Expiration Date, any L/C Obligation for any reason remains
outstanding, the Borrower shall, in each case, immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations. Sections 2.06 and 8.02(c)
set forth certain additional requirements to deliver Cash Collateral hereunder.
For purposes of this Section 2.04, Section 2.06 and Section 8.02(c), “Cash
Collateralize” means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the
L/C Obligations, cash or deposit account balances pursuant to documentation in
form and substance reasonably satisfactory to the Administrative Agent and the
L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives
of such term have corresponding meanings. The Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.

(h) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer
and the Borrower when a Letter of Credit is issued, the rules of the ISP shall
apply to each Letter of Credit.

(i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent
for the account of each Revolving Lender (other than any Defaulting Lender) in
accordance with its Applicable Percentage a Letter of Credit fee (the “Letter of
Credit Fee”) for each Letter of Credit equal to the Applicable Rate applicable
to Letters of Credit times the daily amount available to be drawn under such
Letter of Credit. For purposes of computing the daily amount available to be
drawn under any Letter of Credit, the amount of such Letter of Credit shall be
determined in accordance with Section 1.06. Letter of Credit Fees shall be
(i) computed on a quarterly basis in arrears and (ii) due and payable on the
last Business Day of each March, June, September and December, commencing with
the first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. If there is any
change in the Applicable Rate during any quarter, the daily amount available to
be drawn under each Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect. Notwithstanding anything to the contrary
contained herein, upon the request of any Revolving Lender, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(j) Fronting Fee and Processing Charges Payable to L/C Issuer. The Borrower
shall pay directly to the L/C Issuer for its own account a fronting fee with
respect to each Letter of Credit, in an amount equal to 0.25% per annum,
computed on the daily amount available to be drawn under such Letter of Credit
on a quarterly basis in arrears. Such fronting fee shall be due and payable on
the tenth Business Day after the end of each March, June, September and December
in respect of the most recently-ended quarterly period (or portion thereof, in
the case of the first payment), commencing with the first such date to occur
after the issuance of such Letter of Credit, on the Letter of Credit Expiration
Date and thereafter on demand. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06. In addition, the
Borrower shall pay directly to the L/C Issuer for its own account the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit as from time
to time in effect. Such customary fees and standard costs and charges are due
and payable on demand and are nonrefundable.

(k) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

 

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(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a Subsidiary, the Borrower shall be obligated to
reimburse the L/C Issuer hereunder for any and all drawings under such Letter of
Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit
for the account of Subsidiaries inures to the benefit of the Borrower, and that
the Borrower’s business derives substantial benefits from the businesses of such
Subsidiaries.

2.05 Swing Line Loans.

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Revolving
Lenders set forth in this Section 2.05, to make loans (each such loan, a “Swing
Line Loan”) to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Applicable Percentage of the Outstanding
Amount of Revolving Loans and L/C Obligations of the Revolving Lender acting as
Swing Line Lender, may exceed the amount of such Revolving Lender’s Commitment;
provided, however, that after giving effect to any Swing Line Loan, (i) the
aggregate Outstanding Amount of all Revolving Loans, plus the aggregate
Outstanding Amount of all Swing Line Loans, plus the aggregate Outstanding
Amount of all L/C Obligations shall not exceed the Aggregate Revolving Credit
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of
any Revolving Lender, plus such Revolving Lender’s Applicable Percentage of the
Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Revolving Lender’s Commitment, and provided, further, that the
Borrower shall not use the proceeds of any Swing Line Loan to refinance any
outstanding Swing Line Loan. Within the foregoing limits, and subject to the
other terms and conditions hereof, the Borrower may borrow under this
Section 2.05, prepay under Section 2.06, and reborrow under this Section 2.05.
Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a
Swing Line Loan, each Revolving Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Revolving Lender’s Applicable Percentage times the amount of such Swing
Line Loan.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 12:00 noon on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $50,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Unless the Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the request
of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line
Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan
as a result of the limitations set forth in the proviso to the first sentence of
Section 2.05(a), or (B) that one or more of the applicable conditions specified
in Section 4.02 is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Borrower at its office by crediting the account of the
Borrower on the books of the Swing Line Lender in immediately available funds.

 

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(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time in its sole and absolute discretion (but
no less frequently than on a weekly basis) may request, on behalf of the
Borrower (which hereby irrevocably authorizes the Swing Line Lender to so
request on its behalf), that each Revolving Lender make a Base Rate Revolving
Loan in an amount equal to such Revolving Lender’s Applicable Percentage of the
amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Revolving Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.03,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Revolving Loans, but subject to the unutilized portion of
the Aggregate Revolving Commitments and the conditions set forth in
Section 4.02. The Swing Line Lender shall furnish the Borrower with a copy of
the applicable Revolving Loan Notice promptly after delivering such notice to
the Administrative Agent. Each Revolving Lender shall make an amount equal to
its Applicable Percentage of the amount specified in such Revolving Loan Notice
available to the Administrative Agent in immediately available funds for the
account of the Swing Line Lender at the Administrative Agent’s Office not later
than 1:00 p.m. on the day specified in such Revolving Loan Notice, whereupon,
subject to Section 2.05(c)(ii), each Revolving Lender that so makes funds
available shall be deemed to have made a Base Rate Revolving Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so
received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Revolving Borrowing in accordance with Section 2.05(c)(i), the request for Base
Rate Revolving Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Revolving Lenders fund its risk participation in the relevant Swing Line Loan
and each Revolving Lender’s payment to the Administrative Agent for the account
of the Swing Line Lender pursuant to Section 2.05(c)(i) shall be deemed payment
in respect of such participation.

(iii) If any Revolving Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be paid by
such Revolving Lender pursuant to the foregoing provisions of this
Section 2.05(c) by the time specified in Section 2.05(c)(i), the Swing Line
Lender shall be entitled to recover from such Revolving Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by the Swing Line
Lender in accordance with banking industry rules on interbank compensation. A
certificate of the Swing Line Lender submitted to any Revolving Lender (through
the Administrative Agent) with respect to any amounts owing under this clause
(iii) shall be conclusive absent manifest error.

(iv) Each Revolving Lender’s obligation to make Revolving Loans or to purchase
and fund risk participations in Swing Line Loans pursuant to this
Section 2.05(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Revolving Lender may have against the Swing Line Lender,
the Borrower or any other Person for any reason whatsoever, (B) the occurrence
or continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Revolving Lender’s obligation to make Revolving Loans pursuant to this
Section 2.05(c) is subject to the conditions set forth in Section 4.02. No such
funding of risk participations shall relieve or otherwise impair the obligation
of the Borrower to repay Swing Line Loans, together with interest as provided
herein.

 

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(d) Repayment of Participations.

(i) At any time after any Revolving Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Revolving Lender its Applicable Percentage of such payment
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Revolving Lender’s risk participation was funded) in
the same funds as those received by the Swing Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Revolving Lender shall pay to the Swing Line Lender its
Applicable Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate. The
Administrative Agent will make such demand upon the request of the Swing Line
Lender. The obligations of the Revolving Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this Agreement.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Revolving Lender funds its Base Rate Revolving Loan or risk
participation pursuant to this Section 2.05 to refinance such Revolving Lender’s
Applicable Percentage of any Swing Line Loan, interest in respect of such
Applicable Percentage shall be solely for the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments
of principal and interest in respect of the Swing Line Loans directly to the
Swing Line Lender.

2.06 Prepayments.

(a) Optional Prepayment of Revolving Loans. The Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay the
Revolving Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Administrative Agent not later than 1:00
p.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate
Revolving Loans and (B) on the date of prepayment of Base Rate Revolving Loans;
(ii) any prepayment of Eurodollar Rate Revolving Loans shall be in a principal
amount of $500,000 or a whole multiple of $250,000 in excess thereof; and
(iii) any prepayment of Base Rate Revolving Loans shall be in a principal amount
of $250,000 or a whole multiple of $100,000 in excess thereof or, in each case,
if less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of
Revolving Loans to be prepaid. The Administrative Agent will promptly notify
each Revolving Lender of its receipt of each such notice, and of the amount of
such Revolving Lender’s Applicable Percentage of such prepayment. If such notice
is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Revolving Loan shall be
accompanied by all accrued interest on the amount prepaid, together with any
additional amounts required pursuant to Section 3.05. Each such prepayment shall
be applied to the Revolving Loans of the Lenders in accordance with their
respective Applicable Percentages.

(b) Optional Prepayment of Swing Line Loans. The Borrower may, upon notice to
the Swing Line Lender (with a copy to the Administrative Agent), at any time or
from time to time, voluntarily prepay Swing Line Loans in whole or in part
without premium or penalty; provided that (i) such notice

 

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must be received by the Swing Line Lender and the Administrative Agent not later
than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall
be in a minimum principal amount of $50,000. Each such notice shall specify the
date and amount of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.

(c) Optional Prepayment of the Term Loan. The Borrower may, upon irrevocable
notice to the Administrative Agent, at any time or from time to time on any
Business Day, voluntarily prepay the Term Loan in whole or in part, without
premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 1:00 p.m. (A) three Business Days prior to
any date of prepayment of a Eurodollar Rate Segment and (B) on the date of
prepayment of a Base Rate Segment; (ii) any prepayment of the Term Loan shall be
in a minimum principal amount of $500,000 or a whole multiple of $250,000 in
excess thereof (or in the entire remaining principal balance of the Term Loan),
and (iii) any such prepayment will be applied among the Term Loan Lenders in
accordance with their respective Pro Rata Term Shares. Each such notice shall
specify the date and amount of such prepayment and the Type(s) of Segment(s) to
be prepaid. The Administrative Agent will promptly notify each Term Loan Lender
of its receipt of each such notice, and such Term Loan Lender’s Pro Rata Term
Share of such prepayment (calculated in accordance with the first sentence of
this subsection (c)). If such notice is given by the Borrower, the Borrower
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein. Any prepayment of a Eurodollar
Rate Segment shall be accompanied by all accrued interest thereon, together with
any additional amounts required pursuant to Section 3.05. All prepayments of
principal under this Section 2.06(c) shall be applied ratably to the remaining
installments of principal of the Term Loan or, at the election of the Borrower,
first to the first four scheduled payments, then ratably to the remaining
payments.

(d) Mandatory Prepayment of Revolving Loans and Swing Line Loans. If for any
reason the Outstanding Amount of all Revolving Loans, plus the Outstanding
Amount of all Swing Line Loans, plus the Outstanding Amount of all L/C
Obligations at any time exceeds the Aggregate Revolving Credit Commitments then
in effect, the Borrower shall immediately prepay the Revolving Loans and/or the
Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate
amount equal to such excess; provided, however, that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.06(d) unless after the prepayment in full of the Revolving Loans and
Swing Line Loans, the Outstanding Amount of all L/C Obligations exceeds the
Aggregate Revolving Credit Commitments then in effect.

(e) Mandatory Prepayment of the Loans. The Borrower shall make the following
required prepayments of the Loans, each such payment to be made to the
Administrative Agent for the benefit of the Lenders within the time period
specified below:

(i) The Borrower agrees, no later than 2 Business Days after the date of receipt
of Net Cash Proceeds from any Disposition by the Parent Guarantor or any of its
Subsidiaries otherwise permitted under this Agreement and the other Loan
Documents (excluding Dispositions permitted under Sections 7.05(a)-(i)) to make
a prepayment in an aggregate amount equal to 100% of the amount all Net Cash
Proceeds from all Dispositions by the Loan Parties and any Subsidiaries in any
Fiscal Year exceeding $500,000; provided that, so long as no Event of Default
shall have occurred and be continuing, the Borrower shall not be required to
make any prepayment pursuant to this Section 2.06(e)(i) to the extent that the
proceeds received from such Dispositions are utilized to purchase other assets
useful in the business of the Loan Parties or the Subsidiaries within 270 days
of each such Disposition or if a Loan Party or a Subsidiary enters into a
written agreement within such 270-day period pursuant to which such purchase
shall be made; provided that if any Loan Party or any Subsidiary enters into a
written agreement pursuant to

 

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which such purchase shall be made, the Administrative Agent shall be promptly
provided a copy of such agreement.

(ii) The Borrower agrees, no later than 2 Business Days after receipt of
proceeds from the incurrence of any Indebtedness by the Parent Guarantor or any
of its Subsidiaries otherwise permitted under this Agreement and the other Loan
Documents (other than Indebtedness of Parent Guarantor or Indebtedness set forth
in Sections 7.03(a)-(n)) to make a prepayment in an aggregate amount equal to
100% of the amount of the Net Cash Proceeds from such incurrence of Indebtedness
received by any Loan Party or any Subsidiary.

(iii) The Borrower agrees, no later than 2 Business Days after receipt of
proceeds from any offering, issuance or sale of Equity Interests by CAC,
Holdings, Parent (other than Trimaran Pollo Partners L.L.C. or any successor
thereto), the Parent Guarantor or any of their Subsidiaries otherwise permitted
under this Agreement and the other Loan Documents, to make a prepayment in an
aggregate amount equal to (a) 50% of the amount of Net Cash Proceeds from such
offering, issuance or sale received by the Parent Guarantor if at the end of the
immediately preceding four Fiscal Quarter period the Consolidated Leverage Ratio
is greater than or equal to 5.0:1.0 and (b) 0% of the amount of Net Cash
Proceeds from such offering, issuance or sale received by the Parent Guarantor
if at the end of the preceding four Fiscal Quarter period the Consolidated
Leverage Ratio is less than 5.0:1.0; provided that the Borrower shall not be
required to make any prepayment under this Section 2.06(e)(iii) with respect to
(A) the sale or issuance of Equity Interests by CAC, Holdings, Parent or the
Parent Guarantor or any of their Subsidiaries to (1) Trimaran or Controlled
Investment Affiliates of Trimaran or (2) other existing shareholders of Parent
on a pro rata basis with Trimaran or Controlled Investment Affiliates of
Trimaran, (except that, in the case of this clause (2), so long as the
percentage ownership of Trimaran is not reduced such sales or issuances to other
existing shareholders need not be on a pro rata basis), in each case, so long as
such Equity Interests constitute Qualified Capital Stock, and, in each case,
other than in connection with a public offering of the Equity Interests of any
Loan Party, (B) the sale of Equity Interests to any employee or director of such
Loan Party pursuant to any stock option plan or compensatory arrangement
approved by the board of directors of such Person in the ordinary course of
business and consistent with past practices, (C) the portion of the Net Cash
Proceeds from an IPO that are used to repay Senior Holdco Notes and (D) unless
the Consolidated Leverage Ratio at the end of the immediately preceding four
Fiscal Quarter period is greater than or equal to 4.5:1.0 after any repayment
under this clause (D), the portion of the Net Cash Proceeds from an IPO that are
used to repay Senior Notes.

(iv) Upon the receipt by the Administrative Agent, the Lenders or the Parent
Guarantor or any of its Subsidiaries of proceeds in excess of $500,000 in any
Fiscal Year from insurance, condemnation award or other compensation in respect
of any Casualty Event affecting any property of the Loan Parties or any
Subsidiary, the Borrowers shall make a prepayment in an aggregate amount equal
to 100% of such proceeds (less any taxes which are reasonably attributable
thereto); provided that, so long as no Event of Default shall have occurred and
be continuing, the Borrowers shall not be required to make any prepayment
pursuant to this Section 2.06(e)(iv) to the extent that such proceeds are
utilized to purchase assets that are useful in the businesses or apply the
amounts to restore the property of the Loan Parties or a Subsidiary within 270
days of receipt of such proceeds or if a Loan Party or a Subsidiary enters into
a written agreement pursuant to which such purchase shall be made within such
270-day period pursuant to which such purchase shall be made; provided that if
any Loan Party or any Subsidiary enters into a written agreement pursuant to
which such purchase shall be made, the Administrative Agent shall be promptly
provided a copy of such agreement.

 

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(v) No later than 120 days after the end of each Fiscal Year commencing with the
Fiscal Year ending December 31, 2006, the Borrower shall make a prepayment in an
aggregate amount equal to (a) 75% of Excess Operating Cash Flow for such Fiscal
Year if at the end of such Fiscal Year, the Consolidated Leverage Ratio is
greater than or equal to 5.0:1.0 and (b) 50% of Excess Operating Cash Flow for
such Fiscal Year if at the end of such Fiscal Year, the Consolidated Leverage
Ratio is less than 5.0:1:0.

Prepayments made under this Section 2.06(e) shall be applied (a) first, to repay
the Outstanding Amount of the Term Loan with payment applied ratably against the
remaining scheduled installments of the Term Loan and among the Term Loan
Lenders in accordance with each Term Loan Lender’s Pro Rata Term Share until
payment in full of all Outstanding Amounts of the Term Loan, (b) then, to repay
the Outstanding Amount of Swing Line Loans until payment in full of all
Outstanding Amounts of the Swing Line Loan and (c) then, (i) first, to repay any
Unreimbursed Amount, (ii) second, to repay the Outstanding Amount of the
Revolving Loans in an aggregate amount equal to the excess of the outstanding
Amount of Revolving Loans over the Aggregate Revolving Credit Commitments and
(iii) third, to Cash Collateralize the L/C Obligations.

(f) Prepayment Fee. Upon any refinancing, repayment or prepayment of the Term
Loans (in whole or in part) either (i) through the incurrence of any
Indebtedness or (ii) through the issuance of preferred stock, at any time prior
to the first anniversary of the Closing Date, Borrower shall pay a premium equal
to 1.00% of the principal amount prepaid.

2.07 Termination or Reduction of Commitments. The Borrower may, upon notice to
the Administrative Agent, terminate the Aggregate Revolving Credit Commitments,
or from time to time permanently reduce the Aggregate Revolving Credit
Commitments; provided that (i) any such notice shall be received by the
Administrative Agent not later than 1:00 p.m. three Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $1,000,000 or any whole multiple of $500,000 in excess
thereof, (iii) the Borrower shall not terminate or reduce the Aggregate
Revolving Credit Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the then aggregate Outstanding Amount of the
Revolving Loans, Swing Line Loans and L/C Obligations would exceed the Aggregate
Revolving Credit Commitments, (iv) if, after giving effect to any reduction of
the Aggregate Revolving Credit Commitments, the Letter of Credit Sublimit or the
Swing Line Sublimit exceeds the amount of the Aggregate Revolving Credit
Commitments, such Sublimit shall be automatically reduced by the amount of such
excess. The Administrative Agent will promptly notify the Revolving Lenders of
any such notice of termination or reduction of the Aggregate Revolving Credit
Commitments. Any reduction of the Aggregate Revolving Credit Commitments shall
be applied to the Revolving Credit Commitment of each Revolving Lender according
to its Applicable Percentage. All fees accrued until the effective date of any
termination of the Aggregate Revolving Credit Commitments shall be paid on the
effective date of such termination.

2.08 Repayment of Loans.

(a) The Borrower shall repay to the Revolving Lenders on the Revolving Loan
Maturity Date the aggregate principal amount of Revolving Loans outstanding on
such date.

(b) The Borrower shall repay each Swing Line Loan on the earlier to occur of
(i) the date ten Business Days after such Loan is made and (ii) the Revolving
Loan Maturity Date.

(c) The Borrower shall repay to the Term Loan Lenders the principal amount of
the Term Loan in quarterly installments. Such quarterly installments (“Term Loan
Installments”) of principal shall be payable on the last Business Day of each
Fiscal Quarter, commencing with the Fiscal Quarter ending

 

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March 31, 2006 (each, a “Term Loan Installment Date”), and shall be in the
amount of $261,250 per Fiscal Quarter as adjusted in accordance with the terms
of this Agreement, with all remaining Outstanding Amounts of the Term Loan to be
repaid on the Term Loan Maturity Date.

2.09 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate
Revolving Loan shall bear interest on the outstanding principal amount thereof
for each Interest Period at a rate per annum equal to the Eurodollar Rate for
such Interest Period plus the Applicable Rate applicable to Revolving Loans
bearing interest at the Eurodollar Rate; (ii) each Base Rate Revolving Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate applicable to Revolving Loans bearing interest at the Base Rate;
(iii) each Eurodollar Rate Segment shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the Applicable Rate applicable
to the Term Loan Segments bearing interest at the Eurodollar Rate; (iv) each
Base Rate Segment shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Rate applicable to the Term Loan Segments bearing
interest at the Base Rate; and (v) each Swing Line Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate applicable to
Revolving Loans bearing interest at the Base Rate.

(b) (i) If any amount payable by the Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such overdue amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii) At the election of the Administrative Agent (or upon the written request of
any Lender), while any Event of Default exists, the Borrower shall pay interest
on the principal amount of all outstanding Obligations hereunder at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

(iii) Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.10 Fees. In addition to certain fees described in subsections (i) and (j) of
Section 2.04:

(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the
account of each Revolving Lender (other than Defaulting Lenders) in accordance
with its Applicable Percentage, a commitment fee equal to 0.50% per annum times
the actual daily amount by which the Aggregate Revolving Credit Commitments
exceed the sum of (i) the Outstanding Amount of Revolving Loans and (ii) the
Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all
times during the Availability Period, including at any time during which one or
more of the conditions in Article IV is not met, and shall 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 to occur after the Closing Date,
and on the Revolving Loan

 

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Maturity Date or any earlier date on which the Aggregate Revolving Credit
Commitments shall terminate. The commitment fee shall be calculated quarterly in
arrears.

(b) Other Fees. The Borrower shall pay to the Arrangers and the Administrative
Agent for their own respective accounts fees in the amounts and at the times
specified in the Fee Letter. Such fees shall be fully earned when paid and shall
not be refundable for any reason whatsoever.

2.11 Computation of Interest and Fees. All computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on
the basis of a 365-day year). Interest shall accrue on each Loan for the day on
which the Loan is made, and shall not accrue on a Loan, or any portion thereof,
for the day on which the Loan or such portion is paid; provided that any Loan
that is repaid on the same day on which it is made shall, subject to
Section 2.13(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.

2.12 Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Revolving Note and/or a Term Loan Note, as
applicable, each of which shall evidence such Lender’s applicable Loans in
addition to such accounts or records. Each Lender may attach schedules to its
Note(s) and endorse thereon the date, Type (if applicable), amount and maturity
of its Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in subsection (a), each
Revolving Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Revolving Lender of participations in Letters of Credit and Swing Line
Loans. In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.

2.13 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent’s
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute, as
the case may be, to (i) each Revolving Lender its Applicable Percentage (or
other applicable share as provided herein) and/or (ii) each Term Loan Lender its
Pro Rata Term Share of such payment, in each case, in like funds as received by
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Lender’s Lending Office. All payments received by the Administrative Agent after
2:00 p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment to be made
by the Borrower shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be. For the avoidance
of doubt, this Section 2.13(a) shall not apply to Taxes.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such 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 on such date in accordance with Sections
2.01 and 2.03 (or, in the case of a Borrowing of Base Rate Loans, that such
Lender has made such share available in accordance with and at the time required
by Sections 2.01 and 2.03) and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith within one Business Day after
receipt by the Borrower of written notice from the Administrative Agent such
corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(A) in the case of a payment to be made by such Lender, the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation and (B) in the
case of a payment to be made by the Borrower, the interest rate applicable to
Base Rate Revolving Loans or Base Rate Segments, as applicable. If the Borrower
and such Lender shall pay such interest to the Administrative Agent for the same
or an overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Loan included in
such Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

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

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

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrower by the Administrative Agent

 

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because the conditions to the applicable Credit Extension set forth in Article
IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans and to fund participations in Letters of Credit and Swing Line Loans
and to make payments pursuant to Section 10.04(c) are several and not joint. The
failure of any Lender to make any Loan, to fund any such participation or to
make any payment under Section 10.04(c) on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so
make its Loan, to purchase its participation or to make its payment under
Section 10.04(c).

(e) Funding Source. Subject to Section 3.06, nothing herein shall be deemed to
obligate any Lender to obtain the funds for any Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained or
will obtain the funds for any Loan in any particular place or manner.

2.14 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise after the occurrence and
continuance of an Event of Default, obtain payment in respect of any principal
of or interest on any of the Revolving Loans or portion of the Term Loan made by
it, or the participations in L/C Obligations or in Swing Line Loans held by it
resulting in such Lender’s receiving payment of a proportion of the aggregate
amount of such Revolving Loans, portion of the Term Loan or participations and
accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders (for
cash at face value) participations in the Revolving Loans and/or portion of the
Term Loan made by them and/or such subparticipations in the participations in
L/C Obligations and Swing Line Loans held by them, as the case may be, or make
such other adjustments as shall be equitable, as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Revolving
Loans, such portion of the Term Loan or such participations, as the case may be,
pro rata with the Revolving Lenders or Term Loan Lenders, as applicable;
provided that

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

(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Revolving Loans,
portion of the Term Loans or subparticipations in L/C Obligations or Swing Line
Loans to any assignee or participant, other than to the Borrower or any
Subsidiary thereof (as to which the provisions of this Section shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim, if an Event of Default has occurred
and is continuing, with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower in the amount of such participation.

2.15 Collateral Security and Guaranties.

(a) The Obligations shall be secured by a security interest in the Collateral of
the Borrower pursuant to the terms of the Security Documents to which the
Borrower is a party.

 

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(b) The Obligations shall also be guaranteed pursuant to the terms of the
Guaranties. The Obligations of the Parent Guarantor and each of the now existing
and future Subsidiaries of the Borrower (other than a Borrower) under its
respective Guaranty shall be in turn secured by a security interest pursuant to
the terms of the Security Documents to which such Person is a party.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

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

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

(c) Indemnification by the Borrower. The Borrower shall indemnify and hold
harmless the Administrative Agent, each Lender and the L/C Issuer, within 10
days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority; provided
that if the Borrower reasonably believe that such Taxes or Other Taxes were not
correctly or legally asserted, the Administrative Agent, the L/C Issuer or such
Lender, as the case may be, will use reasonable efforts to cooperate with the
Borrower (at the Borrower’s expense) to obtain a refund of such Taxes or Other
Taxes (in cash or as a credit against another existing tax liability), the
benefit of which refund shall be returned to Borrower to the extent provided in
Section 3.01(f). A certificate as to the amount of such payment delivered to the
Borrower by a Lender or the L/C Issuer (with a copy to the Administrative
Agent), or by the Administrative Agent on its own behalf or on behalf of a
Lender or the L/C Issuer, shall be conclusive absent manifest error.

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

(e) Status of Lenders. To the extent it is legally entitled to do so, each
Foreign Lender shall deliver to the Borrower and the Administrative Agent (in
such number of copies as shall be reasonably requested by the recipient) on or
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this Agreement (and from time to time thereafter upon the reasonable request of
the Borrower or the Administrative Agent), whichever of the following is
applicable:

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

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

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

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

(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or the
L/C Issuer determines, in its reasonable discretion, that it has received a
refund of any Indemnified Taxes or Other Taxes as to which it has been
indemnified by the Loan Parties or with respect to which the Loan Parties have
paid additional amounts pursuant to this Section, it shall pay to the applicable
Loan Parties the portion of such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Loan Parties under this
Section with respect to the Indemnified Taxes or Other Taxes giving rise to such
refund) that it determines in its reasonable discretion will leave it, after
such payment (taking into account all out-of-pocket expenses of the
Administrative Agent, such Lender or the L/C Issuer, as the case may be) in no
better or worse after-tax financial position than if the Indemnified Tax or
Other Tax giving rise to such refund had not been imposed in the first instance;
provided that the Loan Parties, upon the request of the Administrative Agent,
such Lender or the L/C Issuer, agree to repay the amount paid over to the Loan
Parties (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent, such Lender or the L/C
Issuer in the event the Administrative Agent, such Lender or the L/C Issuer is
required to repay such refund to such Governmental Authority. This subsection
shall not be construed to require the Administrative Agent, any Lender or the
L/C Issuer to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to the Borrower or any other Person.

(g) Survival. The agreements in this Section 3.01 shall survive the termination
of the Loan Documents and the payment of the Loans and all other amounts payable
thereunder.

3.02 Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Eurodollar Rate
Loans, or to determine or charge interest rates based upon the Eurodollar Rate,
or any Governmental Authority has imposed material restrictions on the authority
of such Lender to purchase or sell, or to take deposits of, Dollars in the
London interbank market, then, on notice thereof by such Lender to the Borrower
through the Administrative Agent, any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate
Loans shall be suspended until such Lender notifies the Administrative Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), convert all Eurodollar

 

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Rate Revolving Loans of such Lender to Base Rate Revolving Loans and all
Eurodollar Rate Segments to Base Rate Segments, either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
conversion, the Borrower shall also pay accrued interest on the amount so
converted.

3.03 Inability To Determine Rates. If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Lender. Thereafter, the obligation of the Lenders
to make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Revolving Loans or Base Rate Segments (as the case may
be) in the amount specified therein.

3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

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

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement contemplated by Section 3.04(e) or the L/C
Issuer;

(ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter
of Credit made by it (except for Excluded Taxes, Indemnified Taxes or Other
Taxes); or

(iii) impose on any Lender or the L/C Issuer or the London interbank market any
other condition, cost or expense (other than a Tax) affecting this Agreement or
Eurodollar Rate Loans made by such Lender or any Letter of Credit or
participation therein;

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

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

(c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the
L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrower shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within 20 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation; provided that the Borrower shall not be required to
compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more than
150 days prior to the date that such Lender or the L/C Issuer, as the case may
be, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 150-day period referred
to above shall be extended to include the period of retroactive effect thereof).

(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as
long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs
of such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan; provided
the Borrower shall have received at least 15 days’ prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender. If a
Lender fails to give notice 15 days prior to the relevant Interest Payment Date,
such additional interest shall be due and payable 15 days from receipt of such
notice.

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
(but excluding in any event (i) loss of anticipated profits and (ii) any Tax)
incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

(b) any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower; or

 

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(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Borrower pursuant
to Section 10.13;

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.

3.06 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agree to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, the Borrower may replace such Lender in accordance with
Section 10.13.

3.07 Survival. The Borrower’s obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations
hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions of Initial Credit Extension. Unless otherwise agreed to by the
Administrative Agent in writing, the obligation of the L/C Issuer and each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
or waiver of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance reasonably satisfactory to the Administrative Agent and each of
the Lenders:

(i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;

(ii) a Revolving Loan Note and Term Loan Note (as applicable) executed by the
Borrower in favor of each Lender requesting such Note prior to the Closing Date;

(iii) executed counterparts of each of the other Loan Documents;

 

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(iv) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to which such
Loan Party is a party and attaching certified copies of the constitutive
documents of each Loan Party;

(v) such documents and certifications as the Administrative Agent may reasonably
require to evidence that each Loan Party is duly organized or formed, and that
each Loan Party is validly existing, in good standing and qualified to engage in
business in each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, except to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;

(vi) favorable opinions of (A) Skadden, Arps, Slate, Meagher & Flom LLP, special
New York counsel to the Loan Parties, addressed to the Administrative Agent and
each Lender and in substantially the form of Exhibit I-1 hereto and (B) Andrews
Kurth LLP, special Texas counsel to the Loan Parties, addressed to the
Administrative Agent and each Lender and in substantially the form of Exhibit
I-2 hereto;

(vii) a certificate signed by a Responsible Officer of the Borrower attaching
true and complete copies of the Acquisition Documents and certifying that all
consents, licenses and approvals required in connection with the consummation of
the Acquisition have been obtained except where the failure to obtain such
consents and approvals in connection with the Acquisition could not be
reasonably expected to have a Material Adverse Effect;

(viii) a certificate signed by a Responsible Officer of the Borrower certifying
that the conditions specified in Sections 4.02(a) and (b) have been satisfied
and that there has been no event, change, effect, development or circumstance
since the date of the Audited Financial Statements that, individually or in the
aggregate, (A) directly or indirectly is materially adverse to the business,
assets, liabilities, financial condition or results of operation of the Borrower
and its Subsidiaries taken as a whole or (B) adversely effects in any material
respect the ability of a Loan Party to perform any of its obligations under the
Loan Documents, but in the case of clause (A) shall exclude any effect to the
extent resulting or arising from: (1) any change in law or interpretation
thereof; (2) any change in interest rates or general economic conditions in the
industries or markets in which the Loan Parties operate or affecting United
States or foreign economies in general; (3) any change that is generally
applicable to the industries or markets in which the Loan Parties operate;
(4) the entry into or announcement of the Stock Purchase Agreement, the escrow
agreements related thereto (the “Related Documents”) and/or the consummation of
the transactions contemplated by the Stock Purchase Agreement and the Related
Documents (including the effects of suspending the grant of new franchises based
on the announcement and consummation of the transactions contemplated by the
Stock Purchase Agreement and the Related Documents); (5) any action taken by CAC
or any of its affiliates; or (6) any national or international political or
social conditions, including the engagement by the United States in hostilities,
whether or not pursuant to the declaration of a national emergency or war, or
the occurrence of any military or terrorist attack upon the United States or any
of its territories, possessions or diplomatic or consular offices or upon any
military installation, equipment or personnel of the United States or any act of
God;

 

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(ix) a payoff letter evidencing that the Existing Credit Agreement has been or
concurrently with the Closing Date is being terminated and all Liens securing
obligations under the Existing Credit Agreement have been or concurrently with
the Closing Date are being released;

(x) an officer’s certificate signed by the chief financial officer of the
Borrower and its Subsidiaries dated as of the Closing Date as to the solvency of
the Borrower and its Subsidiaries taken as a whole following the consummation of
the Acquisition and the other transactions contemplated hereby;

(xi) completed and fully executed Perfection Certificates and the results of UCC
tax and judgment lien searches with respect to the Collateral, indicating no
Liens other than Liens permitted under Section 7.01 and otherwise in form and
substance reasonably satisfactory to the Administrative Agent;

(xii) evidence reasonably satisfactory to the Administrative Agent (including
satisfactory supporting schedules and other data) that the consolidated leverage
ratio, which ratio shall be calculated on a pro forma basis reflecting the
Acquisition and the other transactions contemplated hereby, for the trailing 12
calendar months ended at least 30 days prior to the Closing Date calculated in
accordance with Schedule 4.01(a), shall be no greater than 6.0:1.0;

(xiii) (A) a certificate of insurance from an independent insurance broker dated
as of the Closing Date naming the Administrative Agent as additional insured
under liability insurance and loss payee under property insurance, identifying
insurers, types of insurance, insurance limits, and policy terms, and otherwise
describing the insurance obtained in accordance with the provisions of
Section 6.07 of this Agreement and Section 10 of the Security Agreement, and
(B) in each case, certified copies of all policies evidencing such insurance (or
certificates therefore signed by the insurer or an agent authorized to bind the
insurer);

(xiv) a fully executed Control Agreement from each depository institution of the
Borrower and its Subsidiaries required on the Closing Date pursuant to
Section 6.15;

(xv) a certificate signed by a Responsible Officer of the Borrower that sets
forth information required by the Act including the identity of the Borrower,
the name and address of the Borrower and other information that will allow the
Administrative Agent or any Lender, as applicable, to identify the Borrower in
accordance with the Act; and

(xvi) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent reasonably may require.

(b) The Lenders shall be satisfied that CSC (whether directly or indirectly)
shall have received the Equity Contribution in an amount of not less than
$160,000,000 in common equity from the Equity Investors pursuant to
documentation reasonably satisfactory to the Arrangers, which shall include
rollover equity (including rollover options) from certain members of management
and existing shareholders of Holdings in an amount of approximately $4,000,000
on terms and conditions consistent with the terms and conditions of the exchange
agreement attached as an exhibit to the Stock Purchase Agreement. The Lenders
shall be satisfied that the Equity Investors shall beneficially own not less
than 100% of the voting and economic interests in Parent

 

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Guarantor, and Parent Guarantor shall own directly or indirectly not less than
100% of the capital stock of Borrower, in each case immediately after giving
effect to the Transactions.

(c) The Security Documents shall be effective to create in favor of the
Administrative Agent a legal, valid and enforceable first priority (subject to
Liens permitted by Section 7.01) security interest in and Lien upon the
Collateral. All filings, recordings, deliveries of instruments and other actions
necessary or desirable in the reasonable opinion of the Administrative Agent to
protect and preserve such security interests shall have been duly delivered.

(d) The Senior Notes shall have been issued in accordance with the Senior Notes
Documents resulting in gross proceeds of not less than $125,000,000 to Finance
Co.

(e) The Senior Holdco Notes shall have been issued in accordance with the Senior
Holdco Notes Documents resulting in gross proceeds of not less than $22,500,110
to Parent Guarantor.

(f) The Tender Offer and Consent Solicitation shall have expired, and,
immediately after the initial Borrowing under this Agreement, the Tender Offer
and Consent Solicitation shall have been consummated and the Company shall have
accepted and paid for all notes tendered pursuant to the Tender Offer and
Consent Solicitation.

(g) All conditions precedent to the Acquisition shall have been satisfied in all
material respects in accordance with the terms of the Acquisition Agreement
(without the waiver or amendment of any material condition in a manner adverse
to the Lenders unless consented to by the Arrangers, which consent shall not be
unreasonably withheld) and the Acquisition shall be consummated substantially
concurrently with the initial Borrowing under this Agreement.

(h) The Lenders shall have received (i) audited consolidated balance sheets and
related statements of income, stockholders’ equity and cash flows of the
Borrower for the three years ended December 29, 2004, and (ii) unaudited
consolidated balance sheets and related statements of income, stockholders’
equity and cash flows of the Borrower for (a) each fiscal quarter ended after
the most recently received audited financial statements and ended at least 45
days before the Closing Date and (b) each fiscal month after the most recent
fiscal quarter for which financial statements were received by the Lenders as
described above and ended at least 30 days before the Closing Date.

(i) Any fees required to be paid to the Agents and the Lenders on or before the
Closing Date shall have been paid.

(j) Unless waived by the Administrative Agent, the Borrower shall have paid all
reasonable fees, charges and disbursements of counsel to the Administrative
Agent and the Arrangers to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of such reasonable fees, charges and disbursements
as shall constitute its reasonable estimate of such reasonable fees, charges and
disbursements incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude a final settling of
accounts between the Borrower and the Administrative Agent and the Arrangers as
to the reasonable fees, charges and disbursements actually incurred).

(k) The Borrower shall have delivered to the Administrative Agent disbursement
instructions with respect to the disbursement of the proceeds of the Loans on
the Closing Date, in form and substance satisfactory to the Administrative
Agent.

 

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(l) The Administrative Agent shall have received written acknowledgement from
the Company, in form and substance reasonably satisfactory to the Administrative
Agent, that the Borrower Assumption shall become effective immediately after the
consummation of the Acquisition on the Closing Date.

(m) The Administrative Agent shall have received:

(i) a Mortgage encumbering each Mortgaged Property owned in fee simple by any
Loan Party on the Closing Date in favor of the Administrative Agent, for the
benefit of the Secured Parties, duly executed and acknowledged by each Loan
Party that is the owner of or holder of any interest in such Mortgaged Property,
and otherwise in form for recording in the recording office of each applicable
political subdivision where each such Mortgaged Property is situated, together
with such certificates, affidavits, questionnaires or returns as shall be
reasonably required in connection with the recording or filing thereof to create
a lien under applicable Law, and such financing statements and any other
instruments necessary to grant a mortgage lien under the laws of any applicable
jurisdiction, all of which shall be in form and substance reasonably
satisfactory to Administrative Agent;

(ii) with respect to each Mortgage, a Title Policy;

(iii) with respect to each Mortgaged Property, copies of all leases in which
Borrower or any Subsidiary holds the lessor’s interest or other agreements
relating to possessory interests, if any. To the extent any of the foregoing
affect any Mortgaged Property, such agreement shall be subordinate to the Lien
of the Mortgage to be recorded against such Mortgaged Property, either expressly
by its terms or at Lender’s request pursuant to a subordination, non-disturbance
and attornment agreement, and shall otherwise be acceptable to the
Administrative Agent;

(iv) a survey with respect to each Mortgaged Property sufficient for the Title
Company to remove all standard survey exceptions from the Title Policy relating
to such Mortgaged Property and issue the endorsements of the type reasonably
requested by the Administrative Agent; and

(v) a completed Federal Emergency Management Agency Standard Flood Hazard
Determination with respect to each Mortgaged Property.

Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension (other than a Revolving Loan Notice or a Term
Loan Interest Rate Selection Notice requesting only a conversion of Loans to the
other Type, or a continuation of Eurodollar Rate Loans) or to make an advance on
the Term Loan is subject to the following conditions precedent:

(a) The representations and warranties of the Borrower and each other Loan Party
contained in Article V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith,
that are subject to materiality or Material Adverse Effect qualifications shall
be true and correct on and as of the date of such

 

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Credit Extension and the representations and warranties that are not subject to
materiality or Material Adverse Effect qualifications shall be true and correct
in all material respects on and as of the date of such Credit Extension, except
in each case to the extent that such representations and warranties specifically
refer to an earlier date, in which case they shall be true and correct as of
such earlier date in all such respects, and except that for purposes of this
Section 4.02, the representations and warranties contained in subsections
(a) and (b) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01.

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

(c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing
Line Lender shall have received a Request for Credit Extension in accordance
with the requirements hereof.

Each Request for Credit Extension (other than a Revolving Loan Notice or a Term
Loan Interest Rate Selection Notice requesting only a conversion of Loans to the
other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower
and the Borrowing under the Term Loan Facility shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each of the Parent Guarantor and the Borrower represents and warrants to the
Administrative Agent and the Lenders that:

5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan Party,
(a) is duly organized or formed, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own or lease its assets and carry
on its business and (ii) execute, deliver and perform its obligations under the
Loan Documents to which it is a party (other than those Loan Documents which
require consent and approval to execute, deliver and perform its obligations
under the Security Documents pursuant to Sections 6.17 and 6.20) upon receipt of
such consent and approval, each Loan Party has all requisite power and authority
to enter into such Loan Document, and (c) is duly qualified and is licensed and
in good standing under the Laws of each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (b)(i) or
(c), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.

5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries, unless such conflict, breach, contravention or creation could not
reasonably be expected to have a Material Adverse Effect, or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject, in each case, unless such
conflict could

 

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not reasonably be expected to have a Material Adverse Effect; or (c) violate any
Law, unless such violation could not reasonably be expected to have a Material
Adverse Effect.

5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, except
(i) such as have been obtained or made, (ii) filings and recordings necessary to
perfect the Liens created by the Loan Documents and (iii) consents and approvals
(other than those Loan Documents which require consent and approval to execute,
deliver and perform its obligations under the Security Documents pursuant to
Sections 6.17 and 6.20) which if not obtained, could not reasonably be expected
to have a Material Adverse Effect.

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors’ rights generally and general equitable principals.

5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present, in all material respects, the
financial condition of the Company and its Subsidiaries as of the date thereof
and their results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show, to the extent required by
GAAP, all material indebtedness and other material liabilities, direct or
contingent, of the Company and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness required
to be set forth therein in accordance with GAAP.

(b) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect (it being understood
that this representation is not made in connection with the initial credit
extensions hereunder to occur on the Closing Date which initial extensions shall
be subject to Section 4.01(a)(viii)).

(c) The unaudited consolidated balance sheet of the Company and its Subsidiaries
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for the twelve month period ended September 30, 2005
giving pro forma effect to the Acquisition and the other transactions
contemplated thereby were prepared in accordance with GAAP (except for the
absence of full footnote disclosure and the final allocation of purchase
accounting) consistently applied throughout the period covered thereby, except
as otherwise expressly noted therein, and fairly present the financial condition
of the Company and its Subsidiaries.

(d) The consolidated and consolidating forecasted balance sheet and statements
of income and cash flows of the Borrower and its Subsidiaries for the 2005
through 2011 Fiscal Years were prepared in good faith based upon reasonable
assumptions believed to be reasonable at the time and such projections do not
constitute a warranty as to the future performance of the Borrower or its
Subsidiaries and actual results may vary from projected results.

 

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5.06 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Borrower threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, by or against
the Borrower or any of its Subsidiaries or against any of their properties or
revenues that (a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby, or (b) except as
specifically disclosed in Schedule 5.06, either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect, and there has been no adverse change in the status, or
financial effect on any Loan Party or any Subsidiary thereof, of the matters
described on Schedule 5.06 which could reasonably be determined to have a
Material Adverse Effect.

5.07 No Default. Neither the Borrower nor any Subsidiary is in default under or
with respect to any Contractual Obligation that could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. No
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Loan Document.

5.08 Title to Property; Liens. As of the Closing Date, after giving effect to
the Acquisition and the other transactions contemplated hereby, the Borrower and
each Subsidiary (a) to the best of Borrower’s knowledge, owns valid fee simple
or leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, free and clear of all Liens except for Liens permitted
by Section 7.01 and (b) except as indicated on Schedule 5.08, owns all of the
assets reflected in the Audited Financial Statements as at December 31, 2004
(except property and assets sold or otherwise disposed of in the ordinary course
of business since that date and immaterial property and assets) free and clear
of all Liens except for Liens permitted by Section 7.01. The property of the
Borrower and its Subsidiaries is subject to no Liens, other than Liens permitted
by Section 7.01.

5.09 Environmental Compliance. Except as set forth on Schedule 5.09 and as would
not reasonably be expected to have a Material Adverse Effect: (i) the Borrower
and each of its Subsidiaries is in compliance with all applicable Environmental
Laws; (ii) neither the Borrower nor any of its Subsidiaries has received any
claim, notice of violation, request for information or notice of potential
responsibility, or demand which is currently outstanding, alleging any violation
of or any liability under any Environmental Law on the part of any of them;
(iii) neither the Borrower nor any of its Subsidiaries has entered into or is
subject to any decree, order, judgment or agreement, imposing any obligations
which could reasonably be expected to result in liability under any
Environmental Law on the part of any of them; (iv) there are no underground
storage tanks or related piping at any property currently owned or leased by the
Borrower or its Subsidiaries; (v) there have been no Releases of Hazardous
Materials at, on, under or from any property currently owned or leased by the
Company, and neither the Borrower nor any of its Subsidiaries is conducting or
financing any investigation, response or corrective action at any location
pursuant to any Environmental Law. For purposes of this Section, the term
“Release” means any spill, emission, discharge, leaking, pumping, injection,
deposit, disposal, dispersal, leeching or migration of Hazardous Materials.

5.10 Insurance. The properties of the Borrower and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts (after giving effect to any self-insurance compatible
with the following standards), with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates. No Mortgage encumbers improved Real Estate that is located in an area
that has been identified by the Secretary of Housing and Urban Development as an
area having special flood hazards within the meaning of the National Flood
Insurance Act of 1968 unless flood insurance available under such Act has been
obtained in accordance with Section 6.07.

 

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5.11 Taxes. The Borrower and its Subsidiaries have filed all federal income,
state income and other material tax returns and reports required to be filed,
and have paid all federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except for filings or underpayments
of taxes, assessments, fees and other governmental charges that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. There is no proposed tax assessment against the Borrower or any
Subsidiary that would, if made, reasonably be expected to have a Material
Adverse Effect. None of Borrower or its Subsidiaries has ever “participated” in
a “listed transaction” within the meaning of Treasury Regulation
Section 1.6011-4, except is not reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect.

5.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws except where
noncompliance could not reasonably be expected to result in a Material Adverse
Effect. The Borrower and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

(b) There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur that
could reasonably be expected to have a Material Adverse Effect; (ii) no Pension
Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

5.13 Subsidiaries; Equity Interests. As of the Closing Date, after giving effect
to the Acquisition and the other transactions contemplated hereby, the Borrower
does not have any Subsidiaries. The Borrower does not have any equity
investments in any Subsidiary other than those specifically disclosed on
Schedule 5.13 (as such Schedule may be amended by delivery of an amended
Schedule to the Administrative Agent). All of the outstanding Equity Interests
in the Company have been validly issued, are fully paid and nonassessable and
are owned by Parent Guarantor in the amounts specified on Schedule 5.13 (as such
Schedule may be amended by delivery of an amended Schedule to the Administrative
Agent) free and clear of all Liens (except Liens permitted by Section 7.01).

5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company
Act.

(a) The Borrower is not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock.

 

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(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary
(i) is a “holding company,” or a “subsidiary company” of a “holding company,” or
an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company,” within the meaning of the Public Utility Holding Company Act of 1935,
or (ii) is or is required to be registered as an “investment company” under the
Investment Company Act of 1940.

5.15 Disclosure. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any Loan
Party to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) taken as a whole contained
(as of the date that such report, financial statement or information was so
furnished) any material misstatement of fact or omitted to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon reasonable assumptions
believed to be reasonable at the time and such projections do not constitute a
warranty as to the future performance of the Borrower or its Subsidiaries and
actual results may vary from projected results.

5.16 Compliance with Laws. The Borrower and each Subsidiary is in compliance in
all material respects with the requirements of all Laws (other than as set forth
in Sections 5.09, 5.12 and 5.24) and all orders, writs, injunctions and decrees
applicable to it or to its properties, including, without limitation, laws and
regulations relating to food, occupational health and safety, equal employment
opportunities, fair employment practices and sex, race, religion and age
discrimination, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

5.17 Intellectual Property; Licenses, Etc. Except as set forth on Schedule
5.17(a), 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 intellectual property rights
(collectively, “IP Rights”) that are reasonably necessary for the operation of
their respective businesses, without conflict with the rights of any other
Person, unless the failure of which to own, possess the right to use, or such
conflict with rights could not reasonably be expected to have a Material Adverse
Effect. To the knowledge of the Borrower, no slogan or other advertising device,
product, process, method, substance, part or other material now employed, by the
Borrower or any Subsidiary infringes upon any rights held by any other Person
other than any such infringement that could not reasonably be expected to have a
Material Adverse Effect. Except as specifically disclosed in Schedule 5.17(b),
no claim or litigation regarding any of the foregoing is pending or, to the
knowledge of the Borrower, threatened, which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

5.18 Use of Proceeds. The proceeds of Loans shall be used to (a) finance in part
the Acquisition, (b) pay fees and expenses incurred in connection with the
Acquisition and the other transactions contemplated hereby and (c) provide
ongoing working capital to fund Capital Expenditures and for other general
corporate purposes of the Borrower and its Subsidiaries.

5.19 Solvency. As of the Closing Date and after giving effect to Acquisition,
the initial Loans hereunder and the other transactions contemplated hereby:

(a) the aggregate value of all properties of the Borrower and its Subsidiaries,
taken as a whole, at their present fair saleable value exceed the amount of all
the debts and liabilities

 

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(including contingent, subordinated, unmatured and unliquidated liabilities) of
the Borrower and its Subsidiaries as they become absolute and mature;

(b) the present fair saleable value of the assets of the Borrower and its
Subsidiaries, on a consolidated basis is not less than the amount that will be
required to pay the probable liability on their debts as they become absolute
and mature;

(c) the Borrower and its Subsidiaries will not, on a consolidated basis, have
unreasonably small capital with which to conduct their business operations as
heretofore conducted; and

(d) the Borrower and its Subsidiaries will not, on a consolidated basis, incur
debts or liabilities beyond their ability to pay such debts and liabilities as
they mature.

5.20 Perfection of Security Interest. Except to the extent specifically
permitted by this Agreement or the Security Documents, all filings, assignments,
pledges and deposits of documents or instruments will have been made and all
other actions will have been taken that are necessary or advisable, under
applicable law, to establish and perfect the Administrative Agent’s security
interest in the Collateral, subject to the recording of the Trademark Collateral
Agreement(s) in the United States Patent and Trademark Office with respect to
the U.S. registrations and applications on the schedules thereto and any
after-acquired trademarks which are the subject of a U.S. registration or
application, and provided that no actions is being taken under any foreign law
with respect to perfection of the Agent’s security interest, to the extent
applicable. The Collateral and the Administrative Agent’s rights with respect to
the Collateral are not subject to any setoff, claims, withholdings or other
defenses (other than Liens permitted by Section 7.01 relating to such claims or
withholdings). Parent Guarantor, Borrower, or any Subsidiary of Borrower party
to one of the Security Agreements, is the owner of the Collateral free from any
Lien, except for Liens permitted by Section 7.01. No consents, approvals,
authorizations or permit is required in connection with the granting of the
Liens and security interests in the Collateral as contemplated herein and in the
other Loan Documents, or for the perfection or enforcement of any such Liens or
security interests, except as contemplated in Section 6.03.

5.21 Absence of Financing Statements. Except with respect to Liens permitted by
Section 7.01, to the knowledge of the Borrower, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry or other public office, that
purports to cover, affect or give notice of any present or possible future Lien
on any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.

5.22 Restaurant Leases. The Borrower has heretofore furnished to the
Administrative Agent true, complete and correct copies or abstracts of the
Restaurant leases listed on Schedule 5.22 hereto as in effect on the Closing
Date. Schedule 5.22 hereto is an accurate and complete list of all Restaurant
leases of the Borrower and its Subsidiaries as in effect on the Closing Date.

5.23 Bank Accounts. The account numbers, names of the applicable financial
institutions, and locations of all bank accounts, deposit accounts, and
investment accounts of the Borrower and/or any of its Subsidiaries as of the
Closing Date are set forth on Schedule 5.23 (as such Schedule may be amended by
delivery of an amended Schedule to the Administrative Agent) hereto (the
“Operating Accounts”), which schedule identifies all Operating Accounts (if any)
used as tax accounts or payroll accounts.

5.24 Loans as Senior Indebtedness. All Indebtedness of the Borrower to the
Lenders in respect of the principal of and interest on the Loans constitutes
“Superior Indebtedness”, “Senior Indebtedness”

 

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or “Senior Debt” (or the analogous term used therein) under the terms of any
instrument evidencing or pursuant to which there is issued indebtedness which
purports to be Specified Subordinated Debt of the Borrower.

5.25 Compliance with OFAC Rules and Regulations. Neither the Borrower nor any
Subsidiary or, to the Borrower’s knowledge, any Affiliate of the Borrower (i) is
a Sanctioned Person, (ii) has more than 15% of its assets in Sanctioned
Countries, or (iii) derives more than 15% of its operating income from
investments in, or transactions with Sanctioned Persons or Sanctioned Countries.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly to fund any operations in, finance any investments or activities in
or make any payments to, a Sanctioned Person or a Sanctioned Country

5.26 Foreign Assets Control Regulations, Patriot Act Neither the Borrower nor
any Subsidiary is an “enemy” or an “ally of the enemy” within the meaning of
Section 2 of the Trading with the Enemy Act of the United States of America (50
U.S.C. App. §§ 1 et seq.), as amended. Neither the Borrower nor any Subsidiary
is in violation of (a) the Trading with the Enemy Act, as amended, (b) any of
the OFAC Laws and Regulations or (c) any applicable provision of the Patriot Act
(as defined in Section 10.16). Neither the Borrower nor any Subsidiary (i) is a
blocked person described in Section 1 of the Anti-Terrorism Order or (ii) to the
best of its knowledge, engages in any dealings or transactions, or is otherwise
associated, with any such blocked person.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any portion of the Aggregate Commitments
hereunder, any Loan or other Obligation hereunder shall remain unpaid and
unsatisfied (other than any contingent indemnification obligation), or any
Letter of Credit shall remain outstanding and not Cash Collateralized in
accordance with the provisions set forth herein, the Parent Guarantor and the
Borrower shall, and shall (except in the case of the covenants set forth in
Sections 6.01, 6.02, 6.03 and 6.19) cause each Subsidiary to:

6.01 Financial Statements. Deliver to the Administrative Agent for delivery to
each Lender, in form and detail reasonably satisfactory to the Administrative
Agent and the Required Lenders:

(a) as soon as available, but in any event within 90 days after the end of each
Fiscal Year, (i) a consolidated balance sheet of the Parent Guarantor and its
Subsidiaries as at the end of such Fiscal Year, and the related consolidated
statement of income or operations, shareholders’ equity and consolidated
statement of cash flows for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, all in reasonable
detail and prepared in accordance with GAAP, such consolidated statements to be
audited and accompanied by a report and opinion of a Registered Public
Accounting Firm of nationally recognized standing, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit and (ii) an
unaudited consolidated balance sheet of the Parent Guarantor and its
Subsidiaries as at the end of such Fiscal Year, and the related consolidated
statement of income or operations, shareholders’ equity and consolidated
statement of cash flows for such Fiscal Year setting forth in each case in
comparative form the figures for the previous Fiscal Year, all in reasonable
detail and prepared in accordance with GAAP;

(b) as soon as available, but in any event within 45 days after the end of each
of the first three Fiscal Quarters of each Fiscal Year, a consolidated balance
sheet of the Parent Guarantor and its Subsidiaries as at the end of such Fiscal
Quarter, and the related consolidated statement

 

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of income or operations, shareholders’ equity and consolidated statement of cash
flows for such Fiscal Quarter and for the portion of the Fiscal Year then ended,
setting forth in each case in comparative form the figures for the corresponding
Fiscal Quarter of the previous Fiscal Year and the corresponding portion of the
previous Fiscal Year, all in reasonable detail, such consolidated statements to
be certified by a Responsible Officer of the Parent Guarantor as fairly
presenting, in all material respects, the financial condition, results of
operations, shareholders’ equity and cash flows of the Parent Guarantor and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; together with a detailed calculation
of Consolidated EBITDA for such Fiscal Quarter and for the period of four
consecutive Fiscal Quarters then ended;

(c) as soon as practicable, but in any event within 45 days after the end of
each fiscal month in each Fiscal Year, a consolidated balance sheet of the
Parent Guarantor and its Subsidiaries as at the end of such fiscal month, and
the related consolidated statement of income or operations, shareholders’ equity
and consolidated statement of cash flows for such fiscal month and for the
portion of the Fiscal Year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal month of the previous Fiscal Year
and the corresponding portion of the previous Fiscal Year, all in reasonable
detail, in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; together with a detailed calculation
of Consolidated EBITDA for such fiscal month then ended; and

(d) as soon as practicable, but in any event within 60 days following the
beginning of each Fiscal Year, the final annual consolidated budget, on a fiscal
month-to-month basis for the Parent Guarantor and its Subsidiaries for such
Fiscal Year, and containing projected consolidated income and cash flow and
capital expenditure budgets, in such form and such detail as the Administrative
Agent may reasonably request and an annual budget.

As to any information contained in materials furnished pursuant to
Section 6.02(c), the Borrowers shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of any Borrower to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.

6.02 Certificates; Other Information. Deliver to the Administrative Agent for
delivery to each Lender, in form and detail reasonably satisfactory to the
Administrative Agent and the Required Lenders:

(a) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Company;

(b) promptly after any request by the Administrative Agent or any Lender, copies
of any detailed audit reports, management letters or recommendations submitted
to the board of directors (or the audit committee of the board of directors) of
the Borrower by independent accountants in connection with the accounts or books
of the Borrower or any Subsidiary, or any audit of any of them;

(c) promptly after the same are available, copies of each annual report, proxy
or financial statement, and copies of all annual, regular, periodic and special
reports and registration statements which the Borrower may file or be required
to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of
1934, and not otherwise required to be delivered to the Administrative Agent
pursuant hereto;

 

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(d) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of any Loan Party or any Subsidiary
thereof pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
Section 6.01 or any other clause of this Section 6.02;

(e) promptly, and in any event within five Business Days after receipt thereof
by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
any Loan Party or any Subsidiary thereof; and

(f) promptly, such additional information regarding the business, financial or
corporate affairs of the Borrower or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Administrative Agent or any Lender may from
time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are received by the Administrative Agent for
posting on the Borrower’s behalf on an Internet or intranet website, if any, to
which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (i) the Borrower shall deliver paper copies of such
documents to the Administrative Agent upon any request by a Lender that the
Borrower deliver such paper copies until a written request to cease delivering
paper copies is given by the Administrative Agent or such Lender and (ii) the
Borrower shall notify the Administrative Agent (by telecopier or electronic
mail) of the posting of any such documents and provide to the Administrative
Agent by electronic mail electronic versions (i.e., soft copies) of such
documents. Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(a) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders and the L/C Issuer materials and/or
information provided by or on behalf of the Borrower hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that in the event that and so long
as the Borrower is the issuer of any outstanding debt or equity securities that
are registered or issued pursuant to a Rule 144A offering or is actively
contemplating issuing any such securities (w) all Borrower Materials that are to
be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC”, the Borrower shall be deemed to have authorized the Administrative
Agent, the Arrangers, the L/C Issuer and the Lenders to treat the Borrower
Materials as not containing any material non-public information with respect to
the Borrower or its securities for purposes of United States Federal and state
securities laws (provided, however, that to the extent the Borrower Materials
constitute Information, they shall be treated as set forth in Section 10.07);
(y) all Borrower Materials marked “PUBLIC” are permitted to be made available
through

 

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a portion of the Platform designated “Public Investor”; and (z) the
Administrative Agent and the Arrangers shall be entitled to treat the Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor”.

6.03 Notices. Promptly notify the Administrative Agent and each Lender after any
Responsible Officer of the Borrower obtains actual knowledge thereof:

(a) of the occurrence of any Default;

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrower or any Subsidiary;
(ii) any dispute, litigation, investigation, proceeding or suspension between
the Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;

(c) of the occurrence of any ERISA Event which might reasonably be expected to
have a Material Adverse Effect;

(d) of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary;

(e) of any setoff, claims (including, with respect to the Real Estate,
environmental claims), withholdings or other defenses to which any material
portion of the Collateral, or the Administrative Agent’s rights with respect to
any material portion of the Collateral, are subject; and

(f) with respect to each Loan Party, of any change in (i) such Loan Party’s
corporate or company name, (ii) such Loan Party’s jurisdiction of organization
and/or (ii) such Loan Party’s state organizational number (to the extent
applicable); provided that no Loan Party will effect or permit any change
referred to in (i)-(iii) unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Administrative
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

6.04 Payment of Obligations. Pay and discharge as the same shall become due and
payable, all its obligations and liabilities (subject to any applicable
subordination provisions, grace provisions and notice provisions), including
(a) all material federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, unless the same are being contested
in good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained by the Borrower or such
Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien
upon its property (other than a Lien permitted under the Loan Documents); and
(c) all Indebtedness in an aggregate amount in excess of the Threshold Amount,
as and when due and payable, but subject to any subordination

 

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provisions contained in any instrument or agreement evidencing such
Indebtedness, other than such Indebtedness which is being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Borrower or such Subsidiary .

6.05 Preservation of Existence, Etc.

(a) Subject to Section 6.22, preserve, renew and maintain in full force and
effect its legal existence and good standing under the Laws of the jurisdiction
of its organization except in a transaction permitted by Section 7.04 or 7.05;
(b) take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

6.06 Maintenance of Properties. Except to the extent that such obligations are
express obligations of any landlord under an Operating Lease (a) maintain and
preserve all of its properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted
(and other than with respect to Casualty Events subject to Section 2.06(e)(iv),
Casualty Events excepted), except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; (b) make all necessary
repairs thereto and renewals and replacements thereof, in each case, except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect; provided
that nothing in this Section 6.06(b) shall prevent (i) sales of property,
consolidations or mergers by or involving any Loan Party in accordance with
Section 7.04 or Section 7.05; (ii) the withdrawal by any Loan Party of its
qualification as a foreign corporation in any jurisdiction where such
withdrawal, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect; or (iii) the abandonment by any Loan
Party of any rights, franchises, licenses, trademarks, trade names, copyrights
or patents that such person reasonably determines are not useful to its business
as currently conducted or no longer commercially desirable.

6.07 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of the Borrower, insurance with respect to
its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar circumstances
by such other Persons and for all property and general liability policies
providing for not less than 30 days’ prior notice to the Administrative Agent of
termination, lapse or cancellation of such insurance; provided however that 10
days’ prior notice will be provided in the case of cancellation due to
non-payment of premiums. With respect to each Mortgaged Property, obtain flood
insurance in such total amount as the Administrative Agent may from time to time
reasonably require, if at any time the area in which any improvements located on
any Mortgaged Property is designated a “flood hazard area” in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), and otherwise comply with the National Flood Insurance
Program as set forth in the Flood Disaster Protection Act of 1973, as amended
from time to time.

6.08 Compliance with Laws and Agreements. Comply in all material respects with
the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property and all agreements and
instruments which it or any of its properties may be bound, except in such
instances in which (a) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted; or (b) the failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect.

 

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6.09 Books and Records. (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be; and
(b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over such Loan Parties, as the case may be.

6.10 Inspection Rights.

(a) Permit representatives and independent contractors of the Administrative
Agent and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and, subject to prior notice to the Borrower, independent public
accountants, all at the expense of the Borrower and at such reasonable times
during normal business hours and as often as may be reasonably requested, upon
reasonable advance notice to the Borrower; provided, however, that so long as no
Event of Default has occurred and is continuing (i) there shall be no more than
one such inspection in any calendar year and (ii) when an Event of Default
exists the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice. If any materials to be reviewed by the Administrative Agent or
any Lender in connection with any such inspection are protected by
attorney-client privilege, the Administrative Agent or such Lender will endeavor
to cooperate with the Borrower to review such information in a manner designed
to preserve such privilege to the extent practicable.

(b) If an Event of Default pursuant to (1) Sections 8.01(a), (f), (g) or 8.01(b)
(with respect to defaults under Article VII) shall have occurred and be
continuing or (2) Sections 8.01(c)-(e), (h)-(k) or any Event of Default pursuant
to Section 8.01(b) (other than with respect to defaults under Article VII) shall
have occurred and be continuing for at least 30 days, upon the request of the
Administrative Agent, obtain and deliver to the Administrative Agent appraisal
reports in form and substance and from appraisers satisfactory to the
Administrative Agent, stating (a) the then current fair market, orderly
liquidation and forced liquidation values of all or any portion of the equipment
or real estate owned by the Borrower or any of its Subsidiaries and (b) the then
current business value of the Borrower and its Subsidiaries. All such appraisals
shall be conducted and made at the expense of the Borrower; provided, however,
that so long as no Event of Default has occurred and is continuing, the Borrower
shall not be obligated to pay for any such appraisal.

(c) In the event that the Borrower or any Subsidiary acquires any Real Estate as
owner thereof, at such time as such Real Estate shall have been acquired and
subject to a Mortgage pursuant to Section 6.17 and if an Event of Default shall
have occurred and be continuing, the Administrative Agent may, in its discretion
for the purpose of assessing and ensuring the value of any Mortgaged Property,
obtain an environmental assessment of such Mortgaged Property prepared by a
qualified environmental consultant or expert approved by the Administrative
Agent and conducted as set forth below to evaluate or confirm (a) whether any
Hazardous Materials are present in the soil or water at such Mortgaged Property
and (b) whether the use and operation of such Mortgaged Property complies with
all Environmental Laws. Environmental assessments may include without limitation
detailed visual inspections of such Mortgaged Property including any and all
storage areas, storage tanks, drains, dry wells and leaching areas but shall not
include any intrusive actions, such as the taking of soil samples, surface water
samples and ground water samples unless reasonably requested by the
Administrative Agent based upon the results of a visual inspection. All such
environmental assessments shall be conducted and made at the expense of the
Borrower.

 

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(d) The Borrower authorizes the Administrative Agent and, if accompanied by the
Administrative Agent, the Lenders upon prior notice to the Borrower (and giving
the Borrower the opportunity to participate therein), to communicate directly
with the Borrower’s independent certified public accountants and authorize such
accountants to disclose to the Administrative Agent and the Lenders any and all
financial statements and other supporting financial documents and schedules
including copies of any management letter with respect to the business,
financial condition and other affairs of the Borrower or any of its
Subsidiaries, other than material which may not be disclosed without violation
of a confidentiality obligation binding upon the Borrower or any of its
Subsidiaries; provided that the Administrative Agent provides the Borrower with
reasonable prior notice of any such communication. At the request of the
Administrative Agent, the Borrower shall deliver a letter addressed to such
accountants requesting them to comply with the provisions of this Section 6.10.

6.11 Use of Proceeds. The Borrower will use the proceeds of the Loans solely for
the purposes set forth in Section 5.18. The Borrower will obtain Letters of
Credit solely for general corporate purposes.

6.12 Pledge of Equity Interests. The Parent Guarantor and the Borrower will
cause all Equity Interests (on a fully-diluted basis) of each of the Loan
Parties (other than the Parent Guarantor and any Subsidiary that has been merged
out of existence or sold as permitted by Sections 7.04 or 7.05(k) or (l)) to be
pledged and delivered to the Administrative Agent and the Lenders at all times
as security for the payment and performance in full of the Obligations pursuant
to the Securities Pledge Agreements.

6.13 Future Leases. Each of the Loan Parties will use its reasonable efforts in
negotiating any restaurant lease entered into after the date hereof to obtain
agreements from the applicable lessors such that each such restaurant lease
permits sales, transfers or assignments of the Equity Interests of the lessee,
or its parent entity, and any and all other direct Subsidiaries from time to
time of the Borrower, either as a matter of right without restriction or with
the consent of the lessor, with such consent not to be unreasonably withheld,
pursuant to standards of reasonableness set forth in such lease, it being
understood that such efforts will not require an expenditure of money by the
Loan Parties or that the Loan Parties accept terms less favorable to the Loan
Parties than those that could reasonably be otherwise obtained. The Loan Parties
shall deliver to the Administrative Agent promptly after execution thereof
copies of each of the restaurant leases which any of the Loan Parties may enter
into from time to time

6.14 Compliance with Terms of Leaseholds. The Borrower will, and will cause each
of its Subsidiaries to, make all payments and otherwise perform all obligations
in respect of all restaurant leases, keep such leases in full force and effect
and not allow such leases to lapse or be terminated (other than in connection
with a dissolution, liquidation, Disposal permitted pursuant to Sections 7.04
and 7.05 or termination of any such lease pursuant to the terms thereof) or any
rights to renew such leases to be forfeited or cancelled, notify the
Administrative Agent of any default by any party with respect to such leases and
cooperate with the Administrative Agent to cure any such default except where
any such failure would not result in a Material Adverse Effect.

6.15 Bank Accounts. The Loan Parties will, and will cause each of its
Subsidiaries to cause all cash, including cash proceeds of accounts receivable
to be deposited only into Operating Accounts with financial institutions which
have entered into Control Agreements, take all such other steps as shall be
necessary to grant to the Administrative Agent for the benefit of the Lenders a
first priority perfected security interest in all funds which may be in each
such Operating Account from time to time, other than (a) Operating Accounts
specially and exclusively used for payroll, payroll taxes and other employee
wage and benefit payments to or for the benefit of any Loan Party’s salaried
employees, (b) Operating Accounts with balances not in excess of $10,000 at any
time, and (c) Operating Accounts with balances not in excess of $200,000 at any
time for a period no longer than 60 days from the creation of such Operating

 

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Account or such longer period of time as may be agreed to by the Administrative
Agent in writing. The Administrative Agent’s rights with respect to each
Operating Account subject to an Control Agreement shall be governed by such
Control Agreement.

6.16 Additional Subsidiaries. In the event that, after the date hereof, the
Borrower or any of its Subsidiaries creates any new Subsidiary or acquires a new
Subsidiary (a) the Borrower shall cause such new Subsidiary to, concurrently
with such event or as soon as practicable thereafter (but in any event no later
than thirty (30) days after such creation or acquisition), to execute and
deliver to the Administrative Agent (i) a Guaranty as a guarantor and a Security
Agreement or (ii) an instrument of joinder and accession, in form and substance
reasonably satisfactory to the Administrative Agent, pursuant to which such new
Subsidiary shall join onto a Guaranty as a guarantor thereunder and the Security
Documents as a grantor of security thereunder as if such new Subsidiary was an
original signatory hereto and thereto, and (b) the Borrower and/or such new
Subsidiary (as the case may be) shall deliver such other instruments and
documents, in form and substance reasonably satisfactory to the Administrative
Agent, Perfection Certificates, Uniform Commercial Code financing statements and
stock or other certificates representing all of the issued and outstanding
Equity Interests of such new Subsidiary with accompanying stock powers or other
instruments of transfer duly executed in blank, in each case required to be
executed or delivered pursuant to such Security Documents in order to grant to
or maintain the Administrative Agent’s first priority perfected security
interest in and to the assets of and the Equity Interests issued by such new
Subsidiaries (subject to Liens permitted by Section 7.01). Further, within 30
days after receipt of a request from the Administrative Agent, the Borrower
and/or such new Subsidiary shall execute and/or deliver to the Administrative
Agent such other documentation as the Administrative Agent may reasonably
request in writing in furtherance of the intent of this Section 6.16, including
without limitation an updated Schedule 5.13 hereto and documentation of the type
required to be supplied by the Borrower and its Subsidiaries as a condition
precedent to the initial Loans made hereunder pursuant to Section 4.01(a), as
applicable to such new Subsidiary.

6.17 Additional Mortgaged Property. If, after the Closing Date, the Borrower or
any of its Subsidiaries (a) leases Real Estate which has annual leasehold
payments of at least $500,000, the Borrower or such Subsidiary shall use its
commercially reasonable efforts to cause such lease to permit the Administrative
Agent to take a mortgage or deed of trust over such Real Estate lease and, to
the extent permitted and if required by the Administrative Agent in its
reasonable discretion, to forthwith deliver to the Administrative Agent a fully
executed mortgage or deed of trust over such leased Real Estate, in form and
substance reasonably satisfactory to the Administrative Agent, together with
Title Policies, evidences of insurance with the Administrative Agent named as
loss payee and additional insured, legal opinions and other documents and
certificates with respect to such leased Real Estate as reasonably requested by
the Administrative Agent except for those leased properties to which the
Administrative Agent shall determine that the costs of obtaining such mortgage
is excessive in relation to the value of the security afforded thereby, and
(b) acquires owned Real Estate which has a fair market value of at least
$1,000,000, unless the Administrative Agent in its reasonable discretion shall
agree otherwise, the Borrower, shall or shall cause such Subsidiary to,
forthwith deliver to the Administrative Agent a fully executed mortgage or deed
of trust over such owned Real Estate, in form and substance reasonably
satisfactory to the Administrative Agent, together with title insurance
policies, surveys, evidences of insurance with the Administrative Agent named as
loss payee and additional insured, legal opinions and other documents and
certificates with respect to such owned Real Estate as reasonably requested by
the Administrative Agent except mortgages for those owned properties to which
the Administrative Agent shall determine that the costs of obtaining such
mortgage is excessive in relation to the value of the security afforded thereby.
The Borrower further agrees that, following the taking of such actions with
respect to such Real Estate, the Administrative Agent shall have for the benefit
of the Lenders and the Administrative Agent a valid and enforceable first
priority mortgage or deed of trust over such Real Estate, free and clear of all
Liens except for Liens permitted by Section 7.01.

 

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6.18 Interest Rate Protection. Maintain at all times during which the
Consolidated Leverage Ratio is greater than 4.0:1.0 that either (a) the amount
of Indebtedness of Parent Guarantor, the Borrower and its Subsidiaries on a
consolidated basis that is bearing interest at a fixed rate equals at least 50%
of the aggregate amount of all Indebtedness of Parent Guarantor, the Borrower
and its Subsidiaries on a consolidated basis or (b) the Borrower has in effect
protection against fluctuations in interest rates pursuant to, as of such time,
one or more interest rate Swap Contracts effective for at least three years
following the Closing Date with Persons reasonably acceptable to the
Administrative Agent and providing coverage the effect of which is that at least
50% of the aggregate amount of all Indebtedness of Parent Guarantor, the
Borrower and its Subsidiaries on a consolidated basis will during such period
bear interest at a fixed or capped rate or the interest cost in respect of which
will be fixed or capped; provided that for purposes of this Section 6.18,
“Indebtedness” shall not include any Revolving Loans or undrawn Letters of
Credit outstanding hereunder.

6.19 Certificate of Merger. On the Closing Date, the Borrower will deliver to
the Administrative Agent a Certificate of Merger acknowledged by the Secretary
of State of the State of Delaware evidencing the Finance Co. Merger.

6.20 Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Administrative Agent and execute such
further instruments and documents as the Administrative Agent shall reasonably
request to carry out to the Administrative Agent’s reasonable satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.

6.21 Status as SEC Reporting Company. After the occurrence of an IPO, the
Borrower shall (a) cause the financial statements required to be delivered
pursuant to Section 6.01(a) to be accompanied by an attestation of a Registered
Public Accounting Firm as to such Person’s internal controls pursuant to
Section 404 of the Sarbanes Oxley Act of 2002 expressing a conclusion to which
the Required Lenders do not object and (b) promptly notify the Administrative
Agent of the occurrence of a material weakness in or fraud with respect to such
Person’s internal controls over financial reporting.

6.22 Equity Interests. Except as permitted under Section 7.04 or 7.05, the
Parent Guarantor shall at all times own 100% of the Equity Interests of the
Company and be able to elect a majority of the board of directors of the
Company.

6.23 Parent Guarantor. The Borrower’s capital stock shall at all times be owned
by an entity which is a Guarantor hereunder and has pledged such capital stock
to the Administrative Agent for the benefit of the Lenders.

6.24 Post-Closing Collateral Matters. To the extent (a) such items have not been
delivered as of the Closing Date and (b) necessary to permit the Title Insurance
Company to remove the general survey exception from the applicable lender’s
Title Policy, within twenty (20) days after the Closing Date, unless waived or
extended by the Administrative Agent in its sole discretion, the applicable Loan
Parties shall deliver to the Administrative Agent, with respect to each Title
Policy, dated on or about the date hereof, insuring the Mortgages encumbering
the Mortgaged Property(ies), the following:

(i) a survey; and

(ii) endorsements thereto (1) eliminating the general or standard survey
exception, (2) providing the comprehensive and survey endorsements thereto as
well as any other endorsements reasonably requested by the Administrative Agent
which were omitted as a result of the applicable Loan Parties failure to obtain
a survey contemporaneously with said Title Policy and

 

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(3) otherwise amending the same so that the requirements of Section 4.01(m)(ii)
and Section 4.01(m)(iv) are met.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any portion of the Aggregate Commitments
hereunder, any Loan or other Obligation hereunder shall remain unpaid and
unsatisfied (other than any contingent indemnification Obligations), or any
Letter of Credit shall remain outstanding and not Cash Collateralized in
accordance with the provisions set forth herein, each of the Parent Guarantor
and the Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly:

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

(a) Liens pursuant to any Loan Document or any Swap Contract of the Borrower to
which a Lender or an Affiliate of a Lender is a party, which is secured by the
Security Documents;

(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased,
(iii) the direct or any contingent obligor with respect thereto is not changed
and (iv) any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.03(b);

(c) Liens for taxes, assessment or other governmental charges not yet due,
payable or delinquent, or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;

(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlord’s, lessor’s or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or which are
being contested in good faith and by appropriate proceedings diligently
conducted if adequate reserves with respect thereto are maintained on the books
of the applicable Person;

(e) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(f) easements, rights-of-way, restrictions, covenants, encroachments, statutory
liens in favor of any landlord and other similar encumbrances affecting real
property which, in the aggregate, do not materially detract from the value of
the property subject thereto or materially interfere with the ordinary conduct
of the business of the applicable Person;

(g) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h);

(h) Liens securing Indebtedness permitted under Section 7.03(e); provided that
(i) such Liens do not at any time encumber any property other than the property
financed by such

 

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Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost
or fair market value, whichever is lower, of the property being acquired on the
date of acquisition;

(i) deposits or pledges made in connection with, or to secure payment of
workers’ compensation, trade contracts, leases, statutory obligations and
insurance contracts in each case only if in the ordinary course of business;
employee benefit or welfare plans; unemployment or other insurance; old age
pensions or other social security obligations; and good faith deposits in
connection with tenders, contracts or leases to which it is a party or deposits
to secure, or in lieu of, surety, penalty, customs or appeal bonds, performance
bonds and other similar obligations;

(j) any interest or title of a licensee or sublicensee under any license
permitted to be granted by a Loan Party by this Credit Agreement;

(k) rights of setoff, bankers’ liens and other similar Liens existing with
respect to cash and cash equivalents to the extent arising in the ordinary
course of business;

(l) Liens constituting leasehold interests made by a Loan Party as lessor
entered into in the ordinary course of business;

(m) Liens securing Indebtedness permitted under Section 7.03(o);

(n) the filing of UCC financing statements solely as a precautionary measure in
connection with the consignment of goods;

(o) any right, title and interest of the landlord under any lease pursuant to
which a Loan Party has a leasehold interest in any property or assets and any
liens that have been placed by such landlord on property over which any Loan
Party has any real property interest;

(p) Liens to secure obligations in an aggregate amount of obligations not
exceeding $3,000,000 in respect of the financing of Prepaid Insurance, which
Liens cover only the right to recover prepaid insurance not yet earned;

(q) Liens on property of a Person or on an asset existing at the time such
Person or asset is acquired or merged with or into or consolidated with the
Borrower or any of its Subsidiaries to the extent permitted hereunder (and not
created in anticipation or completion thereof); provided that such Liens do not
extend to property not subject to such Liens at the time of acquisition (other
than improvements thereon) and are no more favorable to the lienholders than
such existing Lien; and

(r) second priority Liens securing the Company’s existing senior secured notes
due 2009 which constitute Continuing Indebtedness; provided that the Obligations
shall be Priority Lien Obligations (as defined in the Existing Senior Secured
Notes Indenture) and the Administrative Agent shall be designated the sole
Priority Lien Collateral Agent (as defined in the Existing Senior Secured Notes
Indenture) under the Intercreditor Agreement and the Administrative Agent and
Lenders shall have the benefit of the Intercreditor Agreement.

7.02 Investments. Make any Investments, except:

(a) Investments held by the Borrower or such Subsidiary in the form of cash
equivalents or short term marketable debt securities;

 

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(b) advances to officers, directors and employees of the Borrower and
Subsidiaries in an aggregate amount not to exceed $500,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;

(c) Investments of any Loan Party in any other Loan Party or any person that
shall become a Loan Party in connection with such Investment so long as in
connection therewith, the Loan Parties shall have complied with Section 6.16;
and the creation or acquisition of such Loan Party shall have otherwise been
permitted pursuant to clauses (g), (h) or (i) hereof;

(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

(e) Guarantees permitted by Section 7.03;

(f) Swap Contracts entered into pursuant to Section 7.03(d);

(g) the acquisition of substantially all stock or other securities of, or
substantially all assets of, any Person or a division or line of business of any
Person, in each case to the extent such acquisition would involve restaurant
related assets or businesses; provided that:

(i) no Default or Event of Default has occurred and is continuing or would
result from such acquisition;

(ii) to the extent that such acquisition consists of assets which will not be
converted into restaurant concepts currently operated by the Borrower and its
Subsidiaries within 2 years after such acquisition, not less than 5 Business
Days prior to the consummation of such proposed acquisition, the Borrower shall
have delivered to the Administrative Agent a duly executed certificate and such
financial projections as shall be necessary, in the reasonable judgment of the
Administrative Agent, to demonstrate that, after giving effect to such
acquisition, all covenants contained herein will be satisfied on a pro forma
basis (including without limitation as to Capital Expenditures);

(iii) all actions have been taken to the reasonable satisfaction of the
Administrative Agent to provide to the Administrative Agent, for the benefit of
the Lenders and the Administrative Agent, a first priority perfected security
interest to the extent required under Section 6.16 in all of the assets so
acquired pursuant to the Security Documents, free of all Liens other than Liens
permitted under Section 7.01;

(iv) in the event of a stock acquisition, the acquired Person shall become a
majority-owned Subsidiary of the Borrower and shall comply with the terms and
conditions set forth in Section 6.16;

(v) the board of directors and (if required by applicable law) the shareholders,
or the equivalent thereof, of the business to be acquired has approved such
acquisition;

(vi) all of the Borrower’s and/or such Subsidiary’s (as the case may be) rights
and interests in, to and under each purchase contract and agreement relating to
such acquisition to the extent permitted have been assigned to the
Administrative Agent as

 

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security for the irrevocable payment and performance in full of the Obligations,
pursuant to collateral assignments of contracts in form and substance reasonably
satisfactory to the Administrative Agent;

(vii) the Borrower shall have delivered to the Administrative Agent evidence
reasonably satisfactory to the Administrative Agent that all liens and
encumbrances with respect to the properties and assets so acquired, other than
Liens permitted under Section 7.01, have been discharged in full;

(viii) the Borrower shall have delivered to the Administrative Agent certified
copies of all such documents, opinions, certificates, letters and schedules or
instruments relating to such acquisition as the Administrative Agent shall
reasonably request; and

(ix) from the date hereof to the Final Maturity Date the consideration for such
acquisitions, including assumed Indebtedness, shall not exceed $25,000,000 in
the aggregate.

For the avoidance of doubt, expenditures to acquire franchised assets from
franchisees shall be subject to the provisions with respect to Capital
Expenditures rather than Permitted Acquisitions.

(h) other Investments not exceeding (A) $2,000,000 in the aggregate at any time
outstanding and (B) $1,000 in connection with the capitalization of new
Subsidiaries of the Borrower;

(i) Investments received as consideration in connection with Dispositions
permitted pursuant to Sections 7.05(j) and (k) so long as such Investments do
not represent more than 25% of the consideration received in connection with any
such Disposition;

(j) Investments consisting of Capital Expenditures permitted by Section 7.16;
and

(k) Investments consisting of leases or subleases of real estate by any Loan
Party permitted by Section 7.05(g).

Notwithstanding the foregoing and for purposes of clarification, no Loan Party
shall make any Investment in any entity that is organized under the laws of a
jurisdiction other than the United States or any state thereof or the District
of Columbia.

7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

(a) Indebtedness under the Loan Documents;

(b) the Senior Notes, the Senior Holdco Notes (in the case of the Parent
Guarantor), and Indebtedness outstanding on the date hereof and listed on
Schedule 7.03 and any refinancings, refundings, renewals or extensions thereof;
provided that (i) the amount of such Indebtedness is not increased at the time
of such refinancing, refunding, renewal or extension except by an amount equal
to a reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and (ii) the terms relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms, taken as a whole, of any such refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into
and of any instrument issued in connection therewith, are, as determined by the

 

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Board of Directors of the Borrower in its good faith judgment, no less favorable
in any material respect taken as a whole to the Loan Parties or the Lenders than
the terms of any agreement or instrument governing the Indebtedness being
refinanced, refunded, renewed or extended and the interest rate applicable to
any such refinancing, refunding, renewing or extending Indebtedness reflect then
current market conditions;

(c) Guarantees of the Borrower or any Guarantor in respect of Indebtedness
otherwise permitted hereunder of the Borrower or any Guarantor;

(d) obligations (contingent or otherwise) of the Borrower or any Subsidiary
existing or arising under any Swap Contract; provided that (i) such obligations
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person, and
not for purposes of speculation; and (ii) such Swap Contract does not contain
any provision permanently exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;

(e) Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets (including real
estate) within the limitations set forth in Section 7.01(h); provided, however,
that (i) the aggregate amount of all such Indebtedness at any one time
outstanding shall not exceed $15,000,000 and (ii) the aggregate amount of all
such Indebtedness incurred during any Fiscal Year shall not exceed $3,000,000;

(f) Specified Subordinated Debt;

(g) unsecured trade payables not more than 90 days past due and other current
liabilities of the Borrower or its Subsidiaries incurred in the ordinary course
of business not incurred through (i) the borrowing of money, or (ii) the
obtaining of credit except for credit on an open account basis customarily
extended and in fact extended in connection with normal purchases of goods and
services;

(h) Indebtedness in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies, and liabilities under
employee benefit plans, including pension plans, not yet due and payable or
delinquent or which are being contested in good faith and by appropriate
proceedings diligently conducted if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;

(i) Indebtedness in respect of judgments or awards not resulting in an Event of
Default under Section 8.01(h) hereof;

(j) endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of business;

(k) obligations on account of non-current accounts payable which the applicable
Loan Party is contesting in good faith and by appropriate proceedings diligently
conducted and with respect to which adequate reserves have been established and
are being maintained in accordance with generally accepted accounting
principles;

(l) Indebtedness constituting contingent liabilities pending litigation which
the applicable Loan Party is contesting in good faith and by appropriate
proceedings diligently

 

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conducted and with respect to which adequate reserves are being maintained in
accordance with generally accepted accounting principles;

(m) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed
in connection with assets purchased in a Permitted Acquisition pursuant to an
acquisition permitted by this Agreement not to exceed $5,000,000 in the
aggregate at any time outstanding;

(n) unsecured Indebtedness in an aggregate principal amount not to exceed
$5,000,000 at any time outstanding;

(o) Indebtedness in an aggregate principal amount not to exceed $2,000,000 at
any time outstanding secured by a Lien as set forth in Section 7.01(m);

(p) Indebtedness consisting of agreements of the Parent Guarantor or any
Subsidiary providing for indemnification, adjustment of purchase price, earn
outs or similar obligations, in each case, incurred or assumed in connection
with the disposition of any business, assets or a Subsidiary, other than
Guarantees of Indebtedness incurred by any Person acquiring all or any portion
of such business, assets or a Subsidiary for the purpose of financing such
acquisition; and

(q) so long as the Consolidated Leverage Ratio at the end of the immediately
preceding four Fiscal Quarter period is less than or equal to 4.5:1.0 after
giving effect thereto, Borrower may Guarantee the Senior Holdco Notes or assume
the Indebtedness thereunder.

7.04 Fundamental Changes. Merge, dissolve, liquidate, wind up, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Event of Default exists or would result therefrom:

(a) any Subsidiary may merge with (i) the Borrower; provided that the Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries; provided that when any wholly-owned Subsidiary is merging with
another Subsidiary, the wholly-owned Subsidiary shall be the continuing or
surviving Person and shall be a Guarantor hereunder;

(b) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Subsidiary;
provided that if the transferor in such a transaction is a wholly-owned
Subsidiary, then the transferee must either be a Borrower or a Guarantor;

(c) any Subsidiary that is not the Borrower may be dissolved or liquidated after
assets have been Disposed of in connection with Section 7.05(j) or in connection
with the closing of any underperforming restaurant, so long as such dissolution
or liquidation does not constitute an Event of Default under Sections 8.01(f) or
(g), and (ii) the Net Cash Proceeds received from such dissolution shall be
subject to Section 2.06(e)(i);

(d) (i) Finance Co. may merge with and into the Company pursuant to the Finance
Co. Merger and (ii) Finance Co. II may merge with and into the Parent Guarantor
pursuant to the Finance Co. II Merger;

(e) any direct or indirect parent of Parent Guarantor or any special purpose
vehicle may merge into the Parent Guarantor and the Parent Guarantor may merge
into any such entity; provided that at the time of such merger, such entity
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as contemplated by this Agreement or have any outstanding Indebtedness or other
material liabilities other than Indebtedness permitted pursuant to Section 7.03
as if the surviving entity had been subject to the limitations set forth in
Section 7.03 provided, further, in each case, that the surviving entity
provides, or continues to provide, a Guarantee, a pledge of 100% of the capital
stock of the Borrower and will agree to be subject to the Loan Documents as the
Parent Guarantor pursuant to documentation reasonably satisfactory to the
Administrative Agent;

(f) Parent Guarantor or any direct or indirect parent of Parent Guarantor or any
special purpose vehicle may merge with the Company; provided that (i) the
Company shall be the continuing or surviving Person, (ii) at the time of such
merger, such entity shall not be engaging in any business except as contemplated
by this Agreement or have any outstanding Indebtedness or other material
liabilities other than Indebtedness permitted pursuant to Section 7.03 as if
such entity had been subject to the limitations set forth in Section 7.03 and
(iii) at the time of such merger, the Consolidated Leverage Ratio for the
immediately preceding four Fiscal Quarter period shall be less than or equal to
4.5:1.0; provided further that immediately after giving effect thereto, the
parent company of the Borrower shall provide a Guarantee, a pledge of 100% of
the capital stock of the Borrower and will agree to be subject to the Loan
Documents as the Parent Guarantor pursuant to documentation reasonably
satisfactory to the Administrative Agent; and

(g) Dispositions permitted pursuant to Section 7.05.

7.05 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business and Dispositions
permitted by Section 6.06;

(b) Dispositions of inventory (including food and beverage) in the ordinary
course of business;

(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

(d) Dispositions of property by any Loan Party to another Loan Party;

(e) Dispositions permitted by Section 7.04;

(f) licenses or sublicenses of IP Rights in the ordinary course of business;

(g) leases or sub-leases of real estate by any Loan Party or among Loan Parties
in the ordinary course of business consistent with past practices;

(h) Liens permitted under Section 7.01 hereof, Investments permitted under
Section 7.02 and Restricted Payments permitted by Section 7.06 hereof to the
extent constituting Dispositions;

(i) Dispositions of surplus or unused property or equipment, whether now owned
or hereafter acquired, in the ordinary course of business consistent with past
practices;

 

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(j) so long as no Default or Event of Default is then existing or would result
therefrom, Dispositions by the Borrower or any of its Subsidiaries of assets of
underperforming (including Restaurants with Net Restaurant Operating Profit of
less than $100,000), inactive or closed Restaurants or of Restaurants in
connection with the franchising thereof, in each case, together with related
buildings, land and equipment; provided that the Net Cash Proceeds received from
such Dispositions shall be subject to Section 2.06(e)(i);

(k) Dispositions by the Borrower or any of its Subsidiaries of property pursuant
to sale-leaseback transactions; provided that the Net Cash Proceeds received
from such Dispositions shall be subject to Section 2.06(e)(i);

(l) Dispositions (without recourse) of accounts receivables in connection with
the good faith compromise or collections thereof in the ordinary course of
business; and

(m) the Borrower and its Subsidiaries may enter into agreements for their own
Disposition, so long as a condition of such agreement and Disposition is that
either (x) (i) the Aggregate Commitments shall have been terminated and (ii) the
Borrower shall have (A) paid the Obligations in full in cash, (B) cash
collateralized the Letters of Credit (or such Letters of Credit shall have
terminated or expired) and (C) cash collateralized all Swap Contracts (or
entered into other satisfactory arrangements) or (y) in the case of any
agreement, the Requisite Lenders shall have consented thereto and a condition to
consummation thereof is satisfaction of the conditions set forth in the
foregoing clause (x);

provided, however, that (a) any Disposition pursuant to clauses (i) through
(k) shall be for fair market value, (b) the aggregate, cumulative proceeds after
the Closing Date to any date of determination hereunder of all Dispositions
permitted pursuant to clauses (i) through (k) shall not exceed $20,000,000 (plus
the proceeds of Dispositions the proceeds of which are used to reinvest rather
than repay loans pursuant to Section 2.06(e)(i) and excluding Dispositions
pursuant to clause (j) above) at all times, (c) at least 75% of the
consideration received in connection with Dispositions permitted pursuant to
clauses (j) and (k) shall be in the form of cash, cash equivalents or short term
marketable securities and shall be received upon consummation of such
Dispositions, (d) with respect to any non-cash proceeds received with respect to
Disposition permitted pursuant to clauses (j) and (k), the Loan Parties shall
take all steps necessary to grant to the Administrative Agent, for the benefit
of the Lenders and the Administrative Agent, a valid first priority perfected
security interest (subject to Liens permitted by Section 7.01) in such proceeds
as Collateral for the Obligations, pursuant to the Security Documents and the
Administrative Agent shall release the assets being disposed in accordance with
Section 9.01(a), and (e) to the extent that any Disposition is of an Equity
Interest of a Subsidiary, such sale shall be of all of the Equity Interests of
such Subsidiary owned by the Borrower and its Subsidiaries.

7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Event of Default shall have occurred and be
continuing at the time of any action described below or would result therefrom:

(a) each Subsidiary may make Restricted Payments to the Borrower, the Subsidiary
Guarantors and any other Person that owns an Equity Interest in such Subsidiary,
ratably according to their respective holdings of the type of Equity Interest in
respect of which such Restricted Payment is being made;

 

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(b) the Borrower and each Subsidiary may declare and make dividend payments or
other distributions payable solely in the common stock or other common Equity
Interests of such Person;

(c) the Borrower and each Subsidiary may purchase, redeem or otherwise acquire
Equity Interests issued by it with the proceeds received from the substantially
concurrent issue of new shares of its common stock or other common Equity
Interests;

(d) the Borrower and any Subsidiary may make payments permitted by Section 7.08
(without duplication);

(e) for any period in which Borrower and/or its Subsidiaries are part of a group
or subgroup filing consolidated or combined federal, state or local tax returns
of which a direct or indirect parent of Borrower is the common parent, Borrower
and any Subsidiaries may make payments, directly or indirectly, to any of Parent
Guarantor, Holdings, CAC, CSC or, in each case, any Subsidiary or successor
thereof (each a “Recipient”) to pay the share of consolidated or combined
federal, state or local taxes (“Permitted Tax Distributions”) attributable to
the operations of the Borrower and its Subsidiaries to the extent not paid
directly by the Borrower or its Subsidiaries (“Tax Liability”); provided that:
(i) such payments are actually used by a Recipient to pay such Taxes, (ii) no
payment shall be made under this subsection more than 5 days prior to the date
that the applicable Tax Liability becomes due and payable or the relevant
Recipient determines to actually pay such Tax Liability and (iii) the Borrower
shall disclose each such distribution made pursuant to the provisions of this
subsection, providing calculations demonstrating satisfaction of the conditions
to such payment in detail satisfactory to the Administrative Agent;

(f) the Borrower and any Subsidiary may make, directly or indirectly, payments
to the Parent Guarantor or Parent, in amounts used by the Parent Guarantor or
Parent in connection with the repurchase of Equity Interests of the Parent
Guarantor or Parent from certain equity holders upon their termination of
employment, death, or disability or from directors, officers or employees of the
Loan Parties to enable the Parent Guarantor or Parent to pay cash distributions
in respect of such repurchases; provided that the aggregate amount of such cash
distributions in any Fiscal Year shall not exceed $2,500,000 (plus the amount of
net proceeds of any key-man life insurance policies during such Fiscal Year)
(and up to 50% of such amount not used in any Fiscal Year may be carried forward
to the next succeeding (but no other) Fiscal Year; provided that such unutilized
amount carried forward shall not exceed $1,000,000);

(g) to the extent actually used by any Recipient to pay such taxes, costs and
expenses, the Borrower and any Subsidiaries may make payments to, directly or
indirectly, or on behalf of any Recipient in an amount sufficient to pay
(without duplication) (i) any Taxes of any Recipient not described in clause
(e) that are attributable to (A) the direct or indirect ownership of Borrower
and its Subsidiaries or (B) any payments received, directly or indirectly, from
Borrower or its Subsidiaries, (ii) franchise taxes and other fees required to
maintain the legal existence of any Recipient and (iii) payments in an amount
sufficient to pay any out-of-pocket legal, accounting and filing costs and other
expenses in the nature of overhead expenses in the ordinary course of business
of any Recipient; provided that the aggregate amount of payments made pursuant
to this clause (g) shall not exceed $1,000,000 in any Fiscal Year or, upon the
occurrence of an IPO, $2,500,000 in any Fiscal Year;

(h) the Borrower and any Subsidiary may make payments, directly or indirectly,
to the Parent Guarantor, which payments are used by the Parent Guarantor to
repurchase the Parent

 

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Guarantor’s existing 12 1/2% senior discount notes due 2010 that are not
tendered into the Tender Offer and Consent Solicitation;

(i) the Borrower may make, directly or indirectly, non-cash repurchases of
Equity Interests deemed to occur in connection with the exercise of stock
options by directors, officers and management, including without limitation
deemed redemptions arising as a result of the payment of withholding taxes;
provided that such Equity Interests represent a portion of the consideration
delivered in connection with the payment of the exercise price of such options;

(j) the Borrower may make payments to fund working capital adjustments, if any,
in favor of the Seller pursuant to the terms of the Acquisition;

(k) the Borrower may use Loan Proceeds to fund the Acquisition;

(l) so long as no Default has occurred and is continuing, the Borrower may make
payments on Specified Subordinated Debt;

(m) the transactions permitted by Sections 7.04(f); provided that no cash
payments are made or other assets distributed to the stockholders of the Parent
Guarantor in connection therewith, unless any such payment or distribution shall
be permitted by another clause of this Section 7.06; and

(n) the Borrower and any Subsidiary may make payments, directly or indirectly,
to the Parent Guarantor, which payments are used by the Parent Guarantor to pay
cash interest and any mandatory redemptions of principal on the Senior Holdco
Notes pursuant to the Senior Holdco Notes Documents as in effect on the date
hereof; provided that the Borrower and any Subsidiary may not make payments
pursuant to this clause (n) either (i) at any time if the Consolidated Leverage
Ratio for the immediately preceding four Fiscal Quarter period is greater than
or equal to 4.5:1.0 after giving effect to a payment under this clause (n) or
(ii) before May 15, 2010, or any later date upon which the Parent Guarantor
begins to pay cash interest on the Senior Holdco Notes pursuant to the Senior
Holdco Notes Documents.

7.07 Change in Nature of Business.

(a) With respect to the Borrower and its Subsidiaries, engage in any line of
business substantially different from those lines of business conducted by the
Borrower on the date hereof or any business related, ancillary or incidental
thereto.

(b) With respect to the Parent Guarantor, not incur any Indebtedness nor grant
any Liens upon any of its properties or assets nor engage in any operations,
business or activity other than (i) the payment of interest and principal on and
the repurchase of Parent Guarantor’s existing 12 1/2% senior discount notes due
2010 that are not tendered into the Tender Offer and Consent Solicitation,
(ii) the payment of interest and principal on the Senior Holdco Notes,
(iii) holding 100% of the capital stock of the Company, (iv) the transactions
permitted by Section 7.04(d), (e) or (f) and (v) any administrative, management
or other activities incidental to such holdings, pledging its interests therein
to the Administrative Agent on behalf of the Lenders, executing the Security
Agreements and Securities Pledge Agreements in favor of the Administrative Agent
on behalf of the Lenders, complying with the terms of the Loan Documents and
guaranteeing the Obligations as provided herein.

 

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7.08 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate; provided that the foregoing restriction shall not apply
to (a) transactions between or among the Borrower and any Guarantor, (b) (i) so
long as no Event of Default shall have occurred and be continuing or would
result therefrom, payment of the Management Fee or the Advisory Fee to Trimaran
or its designee and (ii) following the cure of any Event of Default, the payment
of any Management Fee or Advisory Fee having accrued and remained unpaid during
the continuance of an Event of Default so long as the then payment thereof shall
not result in an Event of Default, (c) transactions permitted by Section 7.17,
(d) Investments permitted by Section 7.02(b) and (c), (e) reasonable and
customary director, officer and senior management compensation (including
bonuses) and other benefits (including retirement, health, stock option and
other benefit plans) and indemnification arrangements, in each case, in the
ordinary course of business and approved by the Board of Directors of the
Borrower, (f) any transactions with an Affiliate where the only consideration
paid by any Loan Party is Qualified Capital Stock of the Parent Guarantor,
(g) payments contemplated by the Management Agreement made on the Closing Date
or in connection with the Acquisition contemplated by the Acquisition Documents,
(h) any transactions with a franchisee in the ordinary course of business and
consistent with past practice, (i) transactions permitted by Section 7.03(q) and
(j) Restricted Payments permitted pursuant to Section 7.06 and transactions
permitted by Sections 7.04 and 7.05.

7.09 Burdensome Agreements. Become a general partner in a partnership without
the prior written consent of the Administrative Agent (other than where such
general partner is a Subsidiary which is a chapter C corporation) or enter into
any Contractual Obligation (other than this Agreement or any other Loan Document
or any document entered into in connection with the Senior Notes or Senior
Holdco Notes or refinancings, refundings, renewals or extensions thereof) that
(a) limits the ability (i) of any Subsidiary to make Restricted Payments to the
Borrower or any Guarantor or to otherwise transfer property to the Borrower or
any Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness of the
Borrower or (iii) of the Borrower or any Subsidiary to create, incur, assume or
suffer to exist Liens on property of such Person; provided, however, that this
clause (iii) shall not prohibit any encumbrances or restrictions existing under
or by reason of (A) applicable requirements of Laws, (B) this Agreement and the
other Loan Documents, (C) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of a Subsidiary;
(D) customary provisions restricting assignment of any agreement entered into by
a Subsidiary in the ordinary course of business, (E) any holder of a Lien
permitted by Section 7.01 restricting the transfer of the property subject
thereto, (F) customary restrictions and conditions contained in any agreement
relating to the sale of any property permitted under Section 7.05 pending the
consummation of such sale, (G) without affecting the Loan Parties obligations
under Section 6.16, customary provisions in partnership agreements, limited
liability company organizational governance documents, asset sale and stock sale
agreements and other similar agreements entered into in the ordinary course of
business that restrict the transfer of ownership interests in such partnership,
limited liability company or similar person, (H) deposits arrangements imposed
by supplier or landlord under contracts entered in the ordinary course of
business, and (I) negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 7.03(e) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation of
such Person if a Lien is granted to secure another obligation of such Person
other than a Lien securing the Obligations.

7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

 

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7.11 Specified Subordinated Debt. Amend, supplement or otherwise modify the
terms of any of the Specified Subordinated Debt or the Specified Subordinated
Debt Documents in a manner which would materially adversely affect the Lenders,
prepay (other than intercompany Indebtedness and Indebtedness owing to
management which was incurred in lieu of cash payments that would otherwise have
been required), redeem or repurchase any of the Specified Subordinated Debt or
prosecute any enforcement action in respect of any Specified Subordinated Debt.

7.12 Change in Terms of Organizational Documents. Other than as permitted
pursuant to Section 7.04, effect or permit any change in or amendment to the
Organizational Documents of the Borrower or any of its Subsidiaries which would
materially adversely affect the Lenders.

7.13 Change in Accounting and Reporting Practices. Change its Fiscal Year,
accounting policies (other than as set forth in Section 1.03 or in connection
with the implementation of the Sarbanes-Oxley Act of 2002) or financial
reporting practices.

7.14 Cash Management. (a) Establish any bank accounts other than those Operating
Accounts listed on Schedule 5.25 (other than accounts in respect of which
deposits comply with the requirements set forth in clauses (c) and (d) below),
without the Administrative Agent’s prior written consent, (b) deposit into any
of the payroll accounts listed on Schedule 5.25 amounts in excess of amounts
necessary to pay current payroll obligations from such accounts, (c) except as
permitted under clause (d) below, deposit into any account not subject to a
Control Agreement amounts in excess of $10,000 at any time or (d) deposit into
any account not subject to a Control Agreement for a period greater than 60 days
(or such longer period as the Administrative Agent may consent to in writing)
from the creation of such account in amounts in excess of $200,000 at any time.

7.15 Financial Covenants.

(a) Consolidated Fixed Charge Coverage Ratio. Commencing with the Borrower’s
Fiscal Quarter ending on or about March 31, 2006, permit the Consolidated Fixed
Charge Coverage Ratio as of the end of any Fiscal Quarter ending during any
period set forth in the table below to be less than the ratio set forth opposite
such period in such table.

 

Period

   Minimum Consolidated Fixed
Charge Coverage Ratio

January 1, 2006 to and including September 30, 2008

   1.00:1.00

October 1, 2008 to and including September 30, 2009

   1.05:1.00

October 1, 2009 to and including September 30, 2011

   1.10:1.00

October 1, 2011 and thereafter

   1.15:1.00

 

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(b) Consolidated Leverage Ratio. Commencing with the Borrower’s Fiscal Quarter
ending on or about March 31, 2006, permit the Consolidated Leverage Ratio as of
the end of any Fiscal Quarter ending during any period set forth in the table
below to be greater than the ratio set forth opposite such period in such table:

 

Period

   Maximum Consolidated
Leverage Ratio

January 1, 2006 to and including June 30, 2006

   6.00:1.00

July 1, 2006 to and including March 31, 2007

   5.85:1.00

April 1, 2007 to and including September 30, 2007

   5.75:1.00

October 1, 2007 to and including March 31, 2008

   5.25:1.00

April 1, 2008 to and including September 30, 2008

   5.00:1.00

October 1, 2008 to and including March 31, 2009

   4.50:1.00

April 1, 2009 to and including September 30, 2009

   4.25:1.00

October 1, 2009 to and including March 31, 2010

   3.75:1.00

April 1, 2010 to and including September 30, 2010

   3.50:1.00

October 1, 2010 to and including March 31, 2011

   3.00:1.00

April 1, 2011 to and including September 30, 2011

   2.75:1.00

October 1, 2011 and thereafter

   2.50:1.00

 

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7.16 Capital Expenditures. Make or become legally obligated to make any Capital
Expenditures, except for Capital Expenditures not exceeding, in the aggregate
for the Borrower and its Subsidiaries during each Fiscal Year (or portion
thereof) set forth below, the amount and number set forth opposite such Fiscal
Year:

 

Fiscal Year

   Amount of
Capital Expenditures

2006

   $ 15,000,000

2007

   $ 15,000,000

2008

   $ 15,000,000

2009

   $ 15,000,000

2010

   $ 15,000,000

2011

   $ 15,000,000

provided, however, that so long as no Event of Default has occurred and is
continuing or would result from such Capital Expenditure, (a) up to 100% of the
unused portion of Capital Expenditures from the immediately previous Fiscal Year
(calculated without reference to any amounts carried forward from prior years
pursuant to this provision and any amounts expended in any Fiscal Year shall be
deemed expended on a “first-dollar basis” from the amounts allocated to that
Fiscal Year as set forth above and only thereafter from such carryover amounts)
(“Permitted Carry Forward Capex”) may be carried over to the next following
Fiscal Year (but not to any subsequent Fiscal Year); and (b) not more than 100%
of Capital Expenditures permitted to be incurred in the immediately succeeding
future Fiscal Year may be utilized in any then current Fiscal Year with a
commensurate automatic reduction in the Capital Expenditures permitted to be
incurred in such future Fiscal Year (“Permitted Carry Back Capex”). In addition
to the foregoing, Borrower and its Subsidiaries may make additional Capital
Expenditures at anytime in an aggregate amount not to exceed $2,000,000 in
connection with establishing call centers for the Borrower’s and its
Subsidiaries’ drive-through and catering businesses; provided that at the time
of such expenditures the Borrower in good faith projects a “return on equity” in
excess of 20% therefrom. For any period during which the Consolidated Leverage
Ratio is (i) less than 4.0:1.0 or (ii) 0.5 or more below the then applicable
maximum Consolidated Leverage Ratio set forth in Section 7.15(b), the amount for
such period set forth in the table above shall be increased by 10%; provided
that such increase shall not be credited to any Permitted Carry Forward Capex or
Permitted Carry Back Capex.

7.17 Borrower’s Right to Cure Financial Covenants. Notwithstanding anything to
the contrary contained in Section 8.01, in the event that the Borrower fails to
comply with the covenants contained in Section 7.15 (the “Financial Covenants”),
until the expiration of the fifth Business Day subsequent to the date on which a
Compliance Certificate with respect to such Fiscal Quarter for which such
Financial Covenant is being measured is required to be delivered pursuant to
Section 6.02(a), the Parent Guarantor shall have the right to issue Permitted
Cure Securities in exchange for cash, the proceeds of which shall be contributed
in turn to the Company, in an aggregate amount not in excess of the amount
necessary to cure the relevant failure to comply with all the Financial
Covenants (the “Cure Right”), and upon the receipt by the Borrower of such cash
payment (the “Cure Amount”) pursuant to the exercise by the Borrower of such
Cure Right, such Financial Covenants shall be recalculated giving effect to the
following pro forma adjustments:

(a) Consolidated EBITDA of the Borrower shall be increased, solely for the
purpose of determining the existence of a Default or Event of Default under the
Financial Covenants with respect to any period of four consecutive Fiscal
Quarters that includes the Fiscal Quarter for which the Cure Right was exercised
and not for any other purpose under this Agreement, by an amount equal to the
Cure Amount; and

(b) if, after giving effect to the foregoing recalculations, the Borrower shall
then be in compliance with the requirements of all Financial Covenants
(including for purposes of Section 4.02), the Borrower shall be deemed to have
satisfied the requirements of the Financial Covenants as of the relevant date of
determination with the same effect as though there had been

 

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no failure to comply therewith at such date, and the applicable breach or
default of the Financial Covenants that had occurred shall be deemed cured for
this purposes of the Agreement.

Notwithstanding anything herein to the contrary, (i) the Cure Right for any four
consecutive Fiscal Quarter period shall not exceed $5,000,000 in the aggregate,
(ii) the Cure Right may be exercised by the Borrower, (A) for no more than two
consecutive Fiscal Quarters (it being understood that two Fiscal Quarters
separated by one Fiscal Quarter shall be treated as two consecutive Fiscal
Quarters for purposes hereof) and (B) no more than two times during the term
hereof, (iii) in each eight Fiscal Quarter period there shall be a period of at
least four consecutive Fiscal Quarters during which no Cure Right is made,
(iv) the Cure Amount shall be no greater than the amount required to cause the
Borrower to be in compliance with such Financial Covenant, (v) the Borrower
shall apply the Cure Amount to the prepayment of outstanding Revolving Loans, if
any; provided that any such prepayment shall not reduce any Lender’s Revolving
Commitment, and (vi) concurrently with the receipt of the Cure Amount, Borrower
shall redeliver a Compliance Certificate evidencing compliance with the
Financial Covenants after giving effect to receipt of the Cure Amount and the
adjustments to Consolidated EBITDA set forth in clause (a) above.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and
as required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, or (ii) within three days after the same becomes due, any interest
on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within
five days after the same becomes due, any other amount payable hereunder or
under any other Loan Document; or

(b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Sections 6.01, 6.02, 6.03, 6.05 (with
respect to the existing Loan Parties only and, for Section 6.01 only, within 15
days of the due date for delivery of each financial statement), 6.10, 6.11, 6.22
or Article VII; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days after notice of such failure is delivered by the
Administrative Agent or the Required Lenders; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or

(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) 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 the Threshold Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or

 

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holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which the Borrower or any Subsidiary
is the Defaulting Party (as defined in such Swap Contract) or (B) the Borrower
or any Subsidiary fails to pay any Swap Termination Value (as so defined) owing
by it and, in either event, the Swap Termination Value owed by the Borrower or
such Subsidiary as a result thereof is greater than the Threshold Amount; or

(f) Insolvency Proceedings, Etc. The Parent Guarantor or the Borrower (and, as
determined by the Administrative Agent, any Subsidiary of the Borrower (other
than a Subsidiary that is also a Borrower) institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any material part of its property is instituted without
the consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) The Parent Guarantor, the Borrower
or any Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 60 days after its issue or levy; or

(h) Judgments. There is entered against the Borrower or any Subsidiary (i) a
final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer is rated at least “A-” by A.M.
Best Company, has been notified of the potential claim and has not disputed
coverage in writing, excluding customary deductibles), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 30 consecutive days during which such
judgment remains undischarged, unvacated, unsatisfied or unbonded, by reason of
a pending appeal or otherwise; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

 

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(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or the Administrative
Agent’s security interests, mortgages or liens in all or a material portion of
the Collateral shall cease to be perfected, or shall cease to have the priority
contemplated by the Security Documents) except where such cessation is the
result of the Administrative Agent’s actions or inactions; or any Loan Party or
any other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or

(k) Change of Control. There occurs any Change of Control.

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of the Required
Lenders, or may take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower;

(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to 105% of the then Outstanding Amount thereof); and

(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;

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

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations (including, without limitation, with
respect to the realization upon any of the Collateral) shall be applied by the
Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such
(including, without limitation, the reimbursement of the Administrative Agent
for or in respect of all reasonable costs, expenses, disbursements and losses
which shall have been

 

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incurred or sustained by the Administrative Agent in connection with the
collection of such monies by the Administrative Agent, for the exercise,
protection or enforcement by the Administrative Agent of all or any of the
rights, remedies, powers and privileges of the Administrative Agent under this
Agreement or any of the other Loan Documents or in respect of the Collateral or
in support of any provision of adequate indemnity to the Administrative Agent
against any taxes or liens which by law shall have, or may have, priority over
the rights of the Administrative Agent to such monies);

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

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

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders and the L/C
Issuer in proportion to the respective amounts described in this clause Fourth
held by them;

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit;

Sixth, to the payment of any other Obligations (excluding Obligations arising
under Swap Contracts);

Seventh, to the payment of Swap Termination Values owing to any Lender or any
Affiliate of any Lender arising under Swap Contracts that shall have been
terminated and as to which the Administrative Agent shall have received notice
of such termination and the Swap Termination Value thereof from the applicable
Lender or Affiliate of a Lender or to cash collateralize Obligations under Swap
Contracts in amounts and subject to terms and conditions reasonably satisfactory
to the Lender party thereto or pursuant to other arrangements reasonably
satisfactory to the Lender party thereto;

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

Subject to Section 2.04(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

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ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority. Each of the Lenders and the L/C Issuer hereby
irrevocably appoints Merrill Lynch Capital Corporation to act on its behalf as
the Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto (including, without limitation, the authority, without the
necessity of any notice to or further consent of the Lenders, from time to time
to take any action with respect to any Collateral or the Security Documents
which may be necessary to perfect, maintain perfected or insure the priority of
the security interest in and liens upon the Collateral granted pursuant to the
Security Documents). The provisions of this Article are solely for the benefit
of the Administrative Agent, the Lenders and the L/C Issuer, and Borrower shall
not have rights as a third party beneficiary of any of such provisions.

9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

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

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

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct or breach in bad faith of its
obligations hereunder. The Administrative Agent shall be

 

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deemed not to have knowledge of any Default unless and until notice describing
such Default is given to the Administrative Agent by the Borrower, a Lender or
the L/C Issuer.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

9.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the L/C Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or the L/C Issuer prior to the making of
such Loan or the issuance of such Letter of Credit. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

9.05 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub agents appointed by the
Administrative Agent. The Administrative Agent and any such sub agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

9.06 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders, the L/C Issuer and the
Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, and unless an Event of Default has occurred and is
continuing, with the consent of the Borrower (which such consent shall not be
unreasonably withheld or delayed), to appoint a successor, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an
office in the United States. If no such successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may on behalf of the Lenders and the L/C
Issuer, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if the Administrative Agent shall notify the Borrower
and the Lenders that no qualifying Person has accepted such appointment, then
such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents (except that
in the case of any collateral security held by the Administrative Agent on
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any of the Loan Documents, the retiring Administrative Agent shall continue to
hold such collateral security until such time as a successor Administrative
Agent is appointed) and (2) all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender and the L/C Issuer directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this Section. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the provisions
of this Article and Section 10.04 shall continue in effect for the benefit of
such retiring Administrative Agent, its sub agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.

9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the
L/C Issuer acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the L/C Issuer also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.

9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none
of the Bookrunners, Arrangers, Syndication Agents or Documentation Agents listed
on the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.

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

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Sections 2.04(i) and (j), 2.10 and 10.04) allowed in such judicial
proceeding; and

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

 

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.10
and 10.04.

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

9.10 Collateral and Guaranty Matters. The Lenders and the L/C Issuer irrevocably
authorize the Administrative Agent, at its option and in its discretion,

(a) to release any Lien on the Collateral (i) upon termination of the Aggregate
Commitments and payment in full of all Obligations (other than contingent
indemnification obligations) and the expiration or termination or cash
collateralization of all Letters of Credit or cash collateralization or other
satisfactory arrangement as to Swap Contracts which constitute Obligations,
(ii) that is sold or to be sold as part of or in connection with any sale
permitted hereunder or under any other Loan Document, or (iii) subject to
Section 10.01, if approved, authorized or ratified in writing by the Required
Lenders;

(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01; and

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

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of the Collateral, or to
release any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.10.

ARTICLE X

MISCELLANEOUS

10.01 Amendments, Etc. (i) No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:

(a) extend or increase the Revolving Credit Commitment of any Lender (or
reinstate any Revolving Commitment terminated pursuant to Section 8.02) or
increase the amount of the Term Loan outstanding hereunder without the written
consent of such Lender;

 

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(b) postpone any date fixed by this Agreement or any other Loan Document for any
payment or mandatory prepayment of principal (other than prepayments required
pursuant to Section 2.06(e)), interest, fees or other amounts due to the Lenders
(or any of them) or any scheduled or mandatory reduction of the Aggregate
Revolving Credit Commitments (other than prepayments required pursuant to
Section 2.06(e)) or scheduled or mandatory repayment of the Term Loan (other
than prepayments required pursuant to Section 2.06(e)) hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby;

(c) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or (subject to clause (V) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (A) to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest or Letter of Credit Fees at the
Default Rate or (B) to amend any financial covenant hereunder (or any defined
term used therein) even if the effect of such amendment would be to reduce the
rate of interest on any Loan or L/C Borrowing or to reduce any fee payable
hereunder;

(d) change Section 2.14, Section 8.03 or Section 10.19 in a manner that would
alter the pro rata sharing of payments required thereby without the written
consent of each Lender;

(e) change any provision of this Section or the definition of “Required Lenders”
without the written consent of each Lender (it being understood that the
addition of one or more additional credit facilities hereunder, the allowance of
the credit extensions, interest and fees thereunder to share ratably or on a
subordinated basis with the Loans, Letters of Credit, interest and Fees in the
benefits of the Loan Documents and the inclusion of the holders of such
facilities in the determination of Required Lenders shall only require the
approval of the Required Lenders);

(f) release all or substantially all of the value of the Guaranties without the
written consent of each Lender (other than (A) as permitted pursuant to
Section 7.04 or 7.05 and (B) as to the Parent Guarantee which may only be
released with the written consent of Lenders holding at least 75% of the
Aggregate Commitments or, if the commitment of each Lender to make Revolving
Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have
been terminated pursuant to Section 8.02, any combination of Lenders holding in
the aggregate at least 75% of the Total Outstandings (with the aggregate amount
of each Revolving Lender’s risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed “held” by such Lender for purposes
of this definition); provided that the Revolving Credit Commitment of, and the
portion of the Total Outstandings held or deemed held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders);

(g) release all or substantially all of the Collateral in any transaction or
series of related transactions without the prior written consent of each Lender
(other than Collateral owned by the Parent Guarantor if released in connection
with the release of the Parent Guarantee in accordance with Section 10.01(f));
or

(h) change Section 7.05(m) without the written consent of each Lender;

and; provided further, that (I) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (II) no

 

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amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (III) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; and (IV)
Section 10.06(h) may not be amended, waived or otherwise modified without the
consent of each Granting Lender all or any part of whose Loans are being funded
by an SPC at the time of such amendment, waiver or other modification; (V) the
Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto; (VI) the definition of “Required
Revolving Lenders” contained in Section 1.01 may not be amended, waived or
otherwise modified without the consent of the Required Revolving Lenders (it
being understood that the addition of one or more additional credit facilities
hereunder, the allowance of the credit extensions, interest and fees thereunder
to share ratably or on a subordinated basis with the Loans, Letters of Credit,
interest and Fees in the benefits of the Loan Documents and the inclusion of the
holders of such facilities in the determination of the Required Revolving
Lenders shall only require the approval of the Required Lenders) and Sections
2.02, 2.03, 2.04, 2.07, 4.02 and this clause (VI) may not be amended, waived or
otherwise modified without the consent of the Required Revolving Lenders; and no
amendment, waiver, modification or consent with respect to any provision of this
Agreement that waives compliance with the conditions precedent set forth in
Section 4.02 to the making of any Revolving Loan or to the incurrence of any
Obligations shall be effective without the consent of the Administrative Agent
and the Required Revolving Lenders; (VII) Section 2.06(e) may not be amended,
waived or otherwise modified without the consent of the Required Term Lenders
and (VIII) the definition of “Required Term Lenders” contained in Section 1.01
may not be amended, waived or otherwise modified without the consent of the
Required Term Lenders (it being understood that the addition of one or more
tranches of Term Loans hereunder, interest and fees thereunder to share ratably
or on a subordinated basis with the Loans, Letters of Credit, interest and Fees
in the benefits of the Loan Documents and the inclusion of the holders of such
facilities in the determination of Required Term Lenders shall only require the
approval of the Required Lenders) and this clause (VIII) may not be amended,
waived or otherwise modified without the consent of the Required Term Lenders
and no amendment, waiver, modification or consent with respect to any provision
of this Agreement that waives compliance with the conditions precedent set forth
in Section 4.02 to the making of any Term Loan or to the incurrence of any
Obligations shall be effective without the consent of the Administrative Agent
and the Required Term Lenders. Notwithstanding anything to the contrary herein,
no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Revolving Credit
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

(ii) In addition, notwithstanding the foregoing clause (i), (a) this Agreement
may be amended with the written consent of the Administrative Agent, the
Borrower and the Lenders providing the relevant Replacement Term Loans (as
defined below) to permit the refinancing of all outstanding Term Loans
(“Refinanced Term Loans”) with a replacement term loan tranche hereunder which
shall constitute Term Loans hereunder (“Replacement Term Loans”); provided that
(I) the aggregate principal amount of Replacement Term Loans shall not exceed
the aggregate principal amount of Refinanced Term Loans, (II) the Applicable
Margin for Replacement Term Loans shall not be higher than the Applicable Margin
for Refinanced Term Loans, (III) the weighted average life to maturity of
Replacement Term Loans shall not be shorter than the weighted average life to
maturity of Refinanced Term Loans at the time of such refinancing, (IV) all
other terms applicable to Replacement Term Loans shall be substantially
identical to, or less favorable to the Lenders providing Replacement Term Loans
than, those applicable to Refinanced Term Loans, except to the extent necessary
to provide for covenants and other terms applicable to any period after the Term
Loan Maturity Date in effect immediately prior to such refinancing, and
(V) after giving effect to any refinancing request pursuant to
Section 10.01(ii)(b) below, the Borrower shall have Aggregate Revolving Credit
Commitments of not less than $10,000,000 and shall have no Outstanding Amount of
Revolving Loans;

 

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(b) any Lender with a Refinanced Term Loan not providing a Replacement Term Loan
who is also a Revolving Lender may, in such Lender’s discretion, request the
refinancing of such Lender’s Revolving Loans pursuant to which the Obligations
of such Lender shall be repaid in full in cash and such Lenders’ Revolving
Credit Commitment shall terminate and if such Lender is not replaced by a Lender
constituting an Eligible Assignee and otherwise pursuant to Section 10.06(b),
the Aggregate Revolving Credit Commitments shall be permanently reduced in the
amount of such Revolving Lenders’ Revolving Credit Commitment and Schedule 2.02
shall be deemed amendment to reflect the Applicable Percentages and Pro Rata
Term Shares of each Lender after giving effect to all such replacements.

(iii) Notwithstanding the foregoing clause (i), if, in connection with any
proposed change, waiver, discharge or termination of the provisions of this
Agreement as contemplated by Section 10.01, the consent of the Required Lenders
is obtained or, as applicable, Required Revolving Lenders or Required Term
Lenders, but the consent of one or more of such other Lenders whose consent is
required is not obtained (a “Non-Consenting Lender”), then, so long as the
Administrative Agent is not a Non-Consenting Lender, the Borrower shall have the
right to replace all, but not less than all, of such Non-Consenting Lender or
Lenders (so long as all Non-Consenting Lenders are so replaced) with one or more
persons pursuant to Section 10.13 so long as at the time of such replacement
each such new Lender consents to the proposed change, waiver, discharge or
termination.

10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower, the Administrative Agent, the L/C Issuer or the Swing
Line Lender, to the address, telecopier number, electronic mail address or
telephone number specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent; provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to Article
II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.

 

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Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrower, any Lender, the L/C Issuer
or any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of the Borrower’s or
the Administrative Agent’s transmission of Borrower Materials through the
Internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Agent Party; provided, however, that in no event shall any
Agent Party have any liability to the Borrower, any Lender, the L/C Issuer or
any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. The Borrower, the Administrative Agent, the L/C
Issuer and the Swing Line Lender may change its address, telecopier or telephone
number for notices and other communications hereunder by notice to the other
parties hereto. Each other Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In
addition, each Lender agrees to notify the Administrative Agent from time to
time to ensure that the Administrative Agent has on record (i) an effective
address, contact name, telephone number, telecopier number and electronic mail
address to which notices and other communications may be sent and (ii) accurate
wire instructions for such Lender.

(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Revolving Loan Notices, Term Loan Interest
Selection Rate Notices and Swing Line Loan Notices) purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of
each of them 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 telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

 

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

10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out of pocket
expenses incurred by the Administrative Agent, the Arrangers and their
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent and the Arrangers), in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out of pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder, (iii) all costs and expenses of lien and title searches and title
insurance, (iv) taxes, fees and other charges for recording Mortgages, filing
financing statements and continuations, and other actions to perfect, protect,
and continue the Administrative Agent’s Liens, (v) costs of appraisals,
inspections, and verifications, including, without limitation, travel, lodging,
and meals for inspections of the Collateral and the Borrower’s operations by the
Administrative Agent, subject to Section 6.10, (vi) costs and expenses of
preserving and protecting the Collateral, (vii) sums paid or incurred to pay any
amount or take any action required of the Borrower under the Loan Documents that
the Borrower fails to pay or take and (viii) all reasonable out of pocket
expenses incurred by the Administrative Agent, any Lender or the L/C Issuer
(including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or the L/C Issuer), and shall pay all fees and
time charges for attorneys who may be employees of the Administrative Agent, any
Lender or the L/C Issuer, in connection with the enforcement or protection of
its rights (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, (B) in connection with the Loans made
or Letters of Credit issued hereunder, including all such reasonable out of
pocket expenses incurred upon the sale or other realization upon the Collateral
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit or (C) in connection with the sale or other realization upon
the Collateral. Notwithstanding anything to the contrary, this Section 10.04(a)
shall not apply to Taxes.

(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender, the Arrangers and
the L/C Issuer, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees
and time charges and disbursements for attorneys who may be employees of any
Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any
third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Administrative Agent (and
any sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the
use or proposed use of the proceeds therefrom (including any refusal by the L/C
Issuer to honor a demand for payment under a Letter of Credit if the documents
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comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Borrower or any of its Subsidiaries, or any Environmental
Liability or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory, whether brought by a third party or by the Borrower or any
other Loan Party, and regardless of whether any Indemnitee is a party thereto,
in all cases, whether or not caused by or arising, in whole or in part, out of
the comparative, contributory or sole negligence of the Indemnitee; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the breach of contract, gross negligence, willful
misconduct or intentional malfeasance of such Indemnitee or (y) result from a
claim brought by the Borrower or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction. Notwithstanding anything to the contrary, this
Section 10.04(b) shall not apply to Taxes.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), the L/C Issuer or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such
unpaid amount based on such Lender’s pro rata share of the Aggregate Commitments
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought), provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent (or any such sub-agent) or the L/C
Issuer in its capacity as such, or against any Related Party of any of the
foregoing acting for the Administrative Agent (or any such sub-agent) or L/C
Issuer in connection with such capacity. The obligations of the Lenders under
this subsection (c) are subject to the provisions of Sections 2.13(d) and (e).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrower shall not assert, and the Borrower hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

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

(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent and the L/C Issuer, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

10.05 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or
the Administrative Agent, the L/C Issuer or any Lender exercises its right of
setoff after an Event of Default, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
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preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent, the L/C Issuer or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and
(b) each Lender and the L/C Issuer severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect. The obligations of
the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.

10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder (except
pursuant to Section 10.18 hereto) without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection
(d) of this Section, (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC
in accordance with the provisions of subsection (h) of this Section (and any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the L/C Issuer and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Revolving Credit Commitment and the
Revolving Loans (including for purposes of this subsection (b), participations
in L/C Obligations and in Swing Line Loans) at the time owing to it) or its Pro
Rata Term Share of the Term Loan at the time owing to it (such Lender’s portion
of the Loans and commitments with respect to each of the Revolving Credit
Facility and the Term Loan Facility (each, an “Applicable Facility”) being
referred to in this Section 10.06 as its “Applicable Share”); provided that

(i) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Applicable Share of the Applicable Facility or in the case of
an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Applicable Share with respect
to each Applicable Facility subject to each such assignment, determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if “Trade Date” is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than (A) with
respect to any Lender’s Applicable Share of the Term Loan Facility, $1,000,000
and (B) with respect to any Lender’s Applicable Share of the Revolving Credit
Facility, $5,000,000, unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consent
(each such consent not to be unreasonably withheld or delayed); provided,
however, that concurrent assignments to members of an Assignee Group and
concurrent assignments from members of an Assignee Group to a single Eligible
Assignee (or to an Eligible Assignee and

 

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members of its Assignee Group) will be treated as a single assignment for
purposes of determining whether such minimum amount has been met;

(ii) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement
with respect to the Applicable Facility, except that this clause (ii) shall not
apply to rights in respect of Swing Line Loans;

(iii) any assignment of a Revolving Credit Commitment must be approved by the
Administrative Agent, the L/C Issuer and the Swing Line Lender unless the Person
that is the proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and

(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount, if any, required as set forth in Schedule
10.06, and the Eligible Assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

Notwithstanding anything to the contrary in this Section 10.06(b), no Lender
shall assign, sell participations or syndicate all or a portion of such interest
to any Person who is (i) listed on the Specially Designated Nationals and
Blocked Persons List (the “SDN List”) maintained by OFAC and/or on any other
similar list maintained by the OFAC pursuant to any authorizing statute,
Executive Order or regulation; or (ii) either (A) included within the term
“designated national” as defined in the Cuban Assets Control Regulations, 31
C.F.R. Part 515, or (B) designated under Sections 1(a), 1(b), 1(c) or 1(d) of
Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or
similarly designated under any related enabling legislation or any other similar
Executive Orders.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and (in each case, as
applicable) the Revolving Credit Commitments of, and principal amounts of the
Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower and the L/C Issuer at any reasonable time and from time to time upon
reasonable prior notice. In addition, at any time that a request for a consent
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material or substantive change to the Loan Documents is pending, any Lender may
request and receive from the Administrative Agent a copy of the Register.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or any Affiliates or Subsidiaries of the
Borrower) (each, a “Participant”) in all or a portion of such Lender’s rights
and/or obligations under this Agreement (including all or a portion of its
Revolving Credit Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations and/or Swing Line Loans) owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were the
Lender that sold its participation to the Participant. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender; provided such Participant agrees to be subject to
Section 2.14 as though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. Subject to the
immediately preceding sentence, a Participant that would be a Foreign Lender if
it were a Lender shall be entitled to the benefits of Section 3.01 (subject to
the requirements and limitations of such sections) as if it were a Foreign
Lender; provided that a Participant shall not be entitled to the benefits of
Section 3.01 with respect to any Taxes that result from a Participant’s failure
to notify the Borrower or the Administrative Agent of such participations (for
this purpose, the receipt by the Borrower or the Administrative Agent of any
form described in Section 3.01(e) will constitute notice).

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

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

 

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(h) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the
option to provide all or any part of any Loan that such Granting Lender would
otherwise be obligated to make pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to fund any Loan,
and (ii) if an SPC elects not to exercise such option or otherwise fails to make
all or any part of such Loan, the Granting Lender shall be obligated to make
such Loan pursuant to the terms hereof or, if it fails to do so, to make such
payment to the Administrative Agent as is required under Section 2.12(b)(ii).
Each party hereto hereby agrees that (i) an SPC shall be entitled to the
benefits of Sections 3.01 and 3.04 (subject to the requirements and limitations
of such sections) as if it were a Foreign Lender; provided that neither the
grant to any SPC nor the exercise by any SPC of such option shall increase the
costs or expenses or otherwise increase or change the obligations of the
Borrower under this Agreement (including its obligations under Sections 3.01 and
3.04), (ii) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Lender would be liable, and
(iii) the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. The making of a Loan by an SPC hereunder
shall utilize the Revolving Credit Commitment of the Granting Lender to the same
extent, and as if, such Revolving Loan were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrower and the Administrative Agent and with the payment of a
processing fee in the amount of $3,500, assign all or any portion of its right
to receive payment with respect to any Loan to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to its
funding of Committed Loans to any rating agency, commercial paper dealer or
provider of any surety or Guarantee or credit or liquidity enhancement to such
SPC.

(i) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time
(i) Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, upon 30 days’ notice to the Borrower
and the Lenders, resign as L/C Issuer and/or (ii) MLCC assigns all of its
Commitment and Loans pursuant to subsection (b) above, MLCC may, upon 30 days’
notice to the Borrower, resign as Swing Line Lender. In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled
to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder; provided, however, that no failure by the Borrower to appoint any
such successor shall affect the resignation of Bank of America or MLCC as L/C
Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as
L/C Issuer, it shall retain all the rights, powers, privileges and duties of the
L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as L/C Issuer and all L/C Obligations with
respect thereto (including the right to require the Lenders to make Base Rate
Revolving Loans or fund risk participations in Unreimbursed Amounts pursuant to
Section 2.04(c)). If MLCC resigns as Swing Line Lender, it shall retain all the
rights of the Swing Line Lender provided for hereunder with respect to Swing
Line Loans made by it and outstanding as of the effective date of such
resignation, including the right to require the Lenders to make Base Rate
Revolving Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer
and/or Swing Line Lender, (a) such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring L/C Issuer
or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to Bank of America to effectively assume the obligations of Bank of
America with respect to such Letters of Credit.

 

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10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement (but only
if such assignee or Participant agrees to keep such Information confidential on
the same terms as this Agreement) or (ii) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the Borrower
and its obligations (but only if such counterparty agrees to keep such
Information confidential on the same terms of this Agreement), (g) with the
consent of the Borrower or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or
any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrower or any other Loan Party.

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

Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges
that (a) the Information may include material non-public information concerning
any Loan Party, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
Federal and state securities Laws.

10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time, after obtaining the
prior written consent of the Administrative Agent, to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement or any other Loan Document to such
Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C
Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower may be contingent or
unmatured or are owed to

 

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a branch or office of such Lender or the L/C Issuer different from the branch or
office holding such deposit or obligated on such indebtedness. ANY AND ALL
RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO
ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS
RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE
BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. The rights of
each Lender, the L/C Issuer and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff)
that such Lender, the L/C Issuer or their respective Affiliates may have. Each
Lender and the L/C Issuer agrees to notify the Borrower and the Administrative
Agent promptly after any such setoff and application, provided that the failure
to give such notice shall not affect the validity of such setoff and
application.

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

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

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

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

 

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invalid or unenforceable provisions. The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

10.13 Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender, then the Borrower may, at
their sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 10.06), all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that:

(a) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(d) such assignment does not conflict with applicable Laws.

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

10.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN THE COUNTY OF NEW YORK AND OF THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF SUCH STATE, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE

 

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ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

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

10.17 Time of the Essence. Time is of the essence of the Loan Documents.

10.18 Assignment and Delegation to and Assumption by the Company. Effective
immediately following the consummation of the Acquisition and the initial
borrowings hereunder, and without any further action by or on behalf of any of
the parties hereto or any other Person, the Company (it being understood that
the Company succeeds to all rights and obligations by operation of law) hereby
irrevocably and unconditionally (a) assumes and agrees punctually to pay,
perform and discharge when due each of the Obligations and each and every debt,
covenant and agreement incurred, made or to be paid, performed or discharged by
the Borrower under the Loan Documents, (b) agrees to be bound by all the terms,
provisions and conditions of the Loan Documents applicable to the Borrower (as
such term is used herein), and (c) agrees that it will be responsible for and
deemed to have made all the representations and

 

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warranties of the Borrower, whenever made or deemed to have been made, in the
case of each of the foregoing clauses, with the same force and effect as if the
Company were the original Borrower hereunder. Upon the effectiveness of the
assumptions provided for above, the Company will be the Borrower for all
purposes of this Agreement and the other Loan Documents and any instrument,
certificate, or other document delivered in connection with the Loan Documents
and it may exercise every right and power of the Borrower under this Agreement
and the other Loan Documents with the same force and effect as if it were the
original Borrower hereunder.

10.19 Pari Passu Treatment.

(a) Notwithstanding anything to the contrary set forth herein and subject to
Section 8.03, each payment or prepayment of principal and interest received
after the occurrence of an Event of Default hereunder shall be distributed pari
passu among the Lenders, in accordance with the aggregate outstanding principal
amount of the Obligations owing to each Lender divided by the aggregate
outstanding principal amount of all Obligations.

(b) Following the termination of the Aggregate Commitments, each Lender agrees
that if it shall obtain payment (voluntary or involuntary) in respect of the
Loans and L/C Obligations held by it as a result of which the unpaid amount of
Loans and L/C Obligations held by it as a percentage of such Lender’s Aggregate
Commitment (immediately prior to any termination thereof) shall be
proportionately less than the unpaid principal portion of the Loans and L/C
Obligations held by any other Lender, as a percentage of such other Lender’s
Aggregate Commitment (immediately prior to any termination thereof), it shall
purchase from such other Lender a participation in the Loans and L/C Obligations
held by such other Lender, so that the aggregate unpaid amount of the Loans and
L/C Obligations held by each Lender as a percentage of such Lender’s Aggregate
Commitment (immediately prior to any termination thereof) shall be in the same
proportion to the aggregate unpaid amount of the Loans and L/C Obligations held
by each other Lender as a percentage of such Lender’s Aggregate Commitment
(immediately prior to any termination thereof); provided, however, that if any
such purchase or purchases or adjustments shall be made pursuant to this
Section 10.19 and the payment giving rise thereto shall thereafter be recovered,
such purchase or purchases or adjustments shall be rescinded to the extent of
such recovery and the purchase price or prices or adjustments restored without
interest.

(c) The Borrower expressly consents to the foregoing arrangements.

10.20 Advertising Promotion and Marketing. The Administrative Agent and each
Lender may, and the Borrower hereby authorizes the Administrative Agent and each
Lender to, with the consent of the Borrower, which consent shall not be
unreasonably withheld or delayed, include references to the Borrower and its
Subsidiaries, and utilize any logo or other distinctive symbol associated with
the Borrower or any of its Subsidiaries, in connection with any advertising,
promotion or marketing undertaken by the Administrative Agent or such Lender for
the purpose of publicizing the transactions contemplated herein or identifying
the Borrower as a recipient of services provided by the Administrative Agent or
such Lender.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

EPL FINANCE CORP.

By:

 

/s/ Steven A. Flyer

 

Name: Steven A. Flyer

 

Title: President

EL POLLO LOCO, INC.

By:

 

/s/ Pamela R. Milner

 

Name: Pamela R. Milner

 

Title: Vice President

EPL INTERMEDIATE, INC.

By:

 

/s/ Stephen E. Carley

 

Name: Stephen E. Carley

 

Title: President

(Signature Page to Credit Agreement)

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MERRILL LYNCH CAPITAL CORPORATION, as Administrative Agent and Swing Line Lender

By:

 

/s/ Stephanie Vallillo

 

Name: Stephanie Vallillo

 

Title: Vice President

BANK OF AMERICA, N.A., as Syndication Agent and L/C Issuer

By:

 

/s/ Cristin M. O’Hara

 

Name: Cristin M. O’Hara

 

Title: Principal

(Signature Page to Credit Agreement)

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MERRILL LYNCH CAPITAL CORPORATION, as a Lender

By:

 

/s/ Stephanie Vallillo

 

Name: Stephanie Vallillo

 

Title: Vice President

(Signature Page to Credit Agreement)

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BANK OF AMERICA, N.A., as a Lender

By:

 

/s/ Cristin M. O’Hara

 

Name: Cristin M. O’Hara

 

Title: Principal

(Signature Page to Credit Agreement)

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Wells Fargo Bank, N.A., as a

        Lender

By:

 

/s/ James Kendrick Noble III

 

Name: James Kendrick Noble III

 

Title: Managing Director

By:

 

/s/ Brian J. Roach

 

Name: Brian J. Roach

 

Title: Managing Director

CIT Lending Services Corporation, as a Lender

By:

 

/s/ Barbara Habhab

 

Name: Barbara Habhab

 

Title: Vice President

(Signature Page to Credit Agreement)