$50,000,000.00

CREDIT AGREEMENT

dated as of

October 12, 2006

between

OSI RESTAURANT PARTNERS, INC.

and

WACHOVIA BANK, NATIONAL ASSOCIATION

 
 
 
 
 
 
 
 
 

 

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CREDIT AGREEMENT

AGREEMENT dated as of October 12, 2006 among OSI RESTAURANT PARTNERS, INC. and
WACHOVIA BANK, NATIONAL ASSOCIATION.
 
The parties hereto agree as follows:
 
     ARTICLE I  

DEFINITIONS
 
SECTION 1.01.   Definitions. The terms as defined in this Section 1.01 shall,
for all purposes of this Agreement and any amendment hereto (except as herein
otherwise expressly provided or unless the context otherwise requires), have the
meanings set forth herein:
 
“Advance” shall mean an advance made by the Bank to the Borrower under this
Agreement pursuant to Article II. An Advance is a “Base Rate Advance” if such
Advance is a Base Rate Loan or a “Euro-Dollar Advance” if such Advance is a
Euro-Dollar Loan.
 
“Agreement” means this Credit Agreement, together with all amendments and
supplements hereto.
 
“Applicable Margin” means 0.55%.
 
“Authority” has the meaning set forth in Section 7.02.
 
“Bank” means Wachovia Bank, National Association, and its successors and
assigns.
 
“Base Rate” means for any Base Rate Loan for any day, the rate per annum equal
to the higher as of such day of (i) the Prime Rate, or (ii) one-half of one
percent above the Federal Funds Rate for such day. For purposes of determining
the Base Rate for any day, changes in the Prime Rate and the Federal Funds Rate
shall be effective on the date of each such change.
 
“Base Rate Loan” means the Loan on any day when the Loan bears or is to bear
interest at a rate based upon the Base Rate.
 
“Borrower” means OSI Restaurant Partners, Inc. (formerly known as Outback
Steakhouse, Inc.), a Delaware corporation, and its successors and permitted
assigns.
 
“Change of Law” shall have the meaning set forth in Section 7.02.
 
“Closing Date” means October 12, 2006.
 
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“Commitment” means $50,000,000.00 as such amount may be reduced from time to
time pursuant to this Agreement.
 
“Compliance Certificate” has the meaning set forth in Section 5.01(c).
 
“Consolidated Subsidiary” means at any date any Subsidiary or other entity the
accounts of which, in accordance with GAAP, would be consolidated with those of
the Borrower in its consolidated financial statements as of such date.
 
“Default” means any condition or event which constitutes an Event of Default or
which with the giving of notice or lapse of time or both would, unless cured or
waived in writing, become an Event of Default.
 
“Default Rate” means, with respect to the Loan, on any day, the sum of 2% plus
the Base Rate applicable for such day.
 
“Dollars” or “$” means dollars in lawful currency of the United States of
America.
 
“Domestic Business Day” means any day except a Saturday, Sunday or other day on
which commercial banks in North Carolina are authorized or required by law to
close.
 
“Euro-Dollar Loan” means the Loan on any day when the Loan bears or is to bear
interest at a rate based upon the LIBOR Market Index Rate.
 
“Event of Default” has the meaning set forth in Section 6.01.
 
“Existing Credit Agreement” means that certain Amended and Restated Credit
Agreement dated March 10, 2006 by and among the Borrower, the Banks party
thereto, Wachovia Bank, National Association, as Agent, Wachovia Capital
Markets, LLC, as Sole Arranger, SunTrust Bank, as Syndication Agent, and Bank of
America, N.A. and Wells Fargo Bank, National Association, as Co-Documentation
Agents, as in effect on the date hereof without regard and without giving effect
to any waivers given by the Banks (as defined in the Existing Credit Agreement)
or amendments agreed to by the Borrower and the Banks (as defined in the
Existing Credit Agreement). Any definitions, terms, covenants, representations
or other provisions of the Existing Credit Agreement that are incorporated
herein will continue to be effective for purposes of this Agreement and the
other Loan Documents, notwithstanding that the indebtedness under the Existing
Credit Agreement has been or hereafter may be partially or fully repaid or the
fact that the Existing Credit Agreement otherwise might be terminated.
 
“Federal Funds Rate” means, for any day, the rate per annum (rounded upward, if
necessary, to the next higher 1/100th of 1%) 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 Domestic Business Day next
succeeding such day, provided that (i) if the day for which such rate is to be
determined is not a Domestic Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day, and (ii) if
such rate is not so published
 
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for any day, the Federal Funds Rate for such day shall be the average rate
charged to the Bank on such day on such transactions as determined by the Bank.
 
“Fiscal Quarter” means any fiscal quarter of the Borrower.
 
“Fiscal Year” means any fiscal year of the Borrower.
 
“FMA Agreement” means any financial management account agreement now or
hereafter entered into between the Bank and Borrower and all amendments and
modifications thereto.
 
“GAAP” means generally accepted accounting principles applied on a basis
consistent with those which, in accordance with Section 1.02, are to be used in
making the calculations for purposes of determining compliance with the terms of
this Agreement.
 
“Guarantors” shall mean collectively: (a) the Initial Guarantors; and (b) all
Material Domestic Subsidiaries acquired, formed or otherwise in existence after
the Closing Date.
 
“Guaranty” means the Guaranty Agreement executed by each of the Guarantors
substantially in the form of Exhibit B hereto, either as originally executed or
as it may be from time to time supplemented, modified, amended, renewed,
extended or restated from time to time.
 
“Initial Guarantors” shall mean Outback Steakhouse of Florida, Inc.; Carrabba’s
Italian Grill, Inc.; Outback Steakhouse International, Inc.; OS Capital, Inc.;
OS Pacific, Inc.; OS Prime, Inc.; OS Tropical, Inc.; and Bonefish Grill, Inc.
 
“Interest Payment Date” means December 29, 2006 and March 30, 2007.
 
“Lending Office” means, as to the Bank, its office located at its address set
forth on the signature page hereof (or identified on the signature page hereof
as its Lending Office) or such other office as the Bank may hereafter designate
as its Lending Office by notice to the Borrower.
 
“LIBOR Market Index Rate” means for any Euro-Dollar Loan, for any day, the rate
for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of
11:00 a.m., London time, on such day, or if such day is not a London Business
Day, then the immediately preceding London Business Day (or if not so reported,
then as determined by the Bank from another recognized source or interbank
quotation). For purposes of determining the LIBOR Market Index Rate for any day,
changes in the LIBOR Market Index Rate shall be effective on the date of each
such change.
 
“Loan” means the aggregate outstanding Advances made by the Bank to the Borrower
under this Agreement. The Loan shall at all times be a Euro-Dollar Loan, unless
such Loan is to be a Base Rate Loan pursuant to Article VII herein.
 
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“Loan Documents” means this Agreement, the Note, the Guaranty, any other
document evidencing, relating to or securing the Loan and any other document or
instrument delivered from time to time in connection with this Agreement, the
Note, the Guaranty or the Loan, as such documents and instruments may be amended
or supplemented from time to time.
 
“Loan Parties” means collectively the Borrower and each Subsidiary of the
Borrower that is now or hereafter a party to any of the Loan Documents.
 
“London Business Day” means any Domestic Business Day on which dealings in
Dollar deposits are carried out in the London interbank market.
 
“Material Adverse Effect” means, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (a) the financial
condition, operations, business, properties or prospects of the Borrower and its
Consolidated Subsidiaries taken as a whole, (b) the rights and remedies of the
Bank under the Loan Documents, or the ability of the Borrower to perform its
obligations under the Loan Documents to which it is a party, as applicable, or
(c) the legality, validity or enforceability of any Loan Document.
 
“Material Domestic Subsidiaries” means each Domestic Subsidiary with total
assets of $40,000,000 or more; provided that in the event that, at any time, the
total assets of all Domestic Subsidiaries which are not then Guarantors (the
“Non-Guarantor Domestic Subsidiaries”), in the aggregate, is equal to or greater
than $120,000,000, the Borrower shall so notify the Bank and promptly thereafter
(but in any event within 30 days after the date thereof) shall cause any such
Non-Guarantor Domestic Subsidiary which has total assets equal to or greater
than $24,000,000 to take the actions and deliver the documents required by
Section 5.02 and thereafter such Subsidiaries shall be “Guarantors.”
 
“Note” means a promissory note of the Borrower, substantially in the form of
Exhibit A hereto, evidencing the obligation of the Borrower to repay the Loan,
together with all amendments, consolidations, modifications, renewals and
supplements thereto.
 
“Obligations” means the collective reference to all indebtedness, obligations
and liabilities to the Bank, existing on the date of this Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, of the Loan Parties under this
Agreement or any other Loan Document.
 
“Officer’s Certificate” has the meaning set forth in Section 3.01(c).
 
“Prime Rate” refers to that interest rate so denominated and set by the Lender
from time to time as an interest rate basis for borrowings. The Prime Rate is
but one of several
 
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interest rate bases used by the Lender. The Lender lends at interest rates above
and below the Prime Rate.
 
“Subsidiary” means any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the time
directly or indirectly owned by the Borrower.
 
“Termination Date” means March 30, 2007.
 
SECTION 1.02.   Accounting Terms and Determinations. Unless otherwise specified
herein, all terms of an accounting character used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with GAAP, applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants or otherwise required by a change in
GAAP) with the most recent audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries delivered to the Bank, unless with
respect to any such change concurred in by the Borrower’s independent public
accountants or required by GAAP, in determining compliance with any of the
provisions of this Agreement or any of the other Loan Documents: (i) the
Borrower shall have objected to determining such compliance on such basis at the
time of delivery of such financial statements, or (ii) the Bank shall so object
in writing within 30 days after the delivery of such financial statements, in
either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under Section 5.01 hereof,
shall mean the financial statements for the Fiscal Year ending December 31,
[2005]).
 
SECTION 1.03.   Use of Defined Terms. All terms defined in this Agreement shall
have the same meanings when used in any of the other Loan Documents, unless
otherwise defined therein or unless the context shall otherwise require.
 
SECTION 1.04.   Terminology. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural and the plural shall
include the singular. Titles of Articles and Sections in this Agreement are for
convenience only, and neither limit nor amplify the provisions of this
Agreement.
 
SECTION 1.05.   References. Unless otherwise indicated, references in this
Agreement to “Articles”, “Exhibits”, “Schedules”, and “Sections” are references
to articles, exhibits, schedules and sections hereof.
 
SECTION 1.06.   Definitions in Existing Credit Agreement. The following terms
when used in this Agreement or any of the other Loan Documents shall, unless
otherwise defined herein, have the same meanings as set forth in the Existing
Credit Agreement: “Affiliate”, “Capital Stock”, “CERCLA”, “CERCLIS”, “Code”,
“Company Owned Restaurants”, “Consolidated Interest Expense”, “Consolidated Net
Income”, “Consolidated Net Worth”,
 
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“Consolidated Total Assets”, “Consolidated Total Debt”, “Control”, “Controlled
Group”, “Debt”, “Depreciation and Amortization”, “Development Joint Venture”,
“Domestic Subsidiary”, “EBITDAR”, “Environmental Authority”, “Environmental
Authorizations”, “Environmental Judgments and Orders”, “Environmental Laws”,
“Environmental Liabilities”, “Environmental Notices”, “Environmental
Proceedings”, “Environmental Releases”, “Environmental Requirements”, “ERISA”,
“Foreign Subsidiary”, “Guarantee”, “Hazardous Materials”, “Investment”, “Lien”,
“Margin Stock”, “Multiemployer Plan”, “Net Income”, “Participating Subsidiary”,
“PBGC”, “Permitted Acquisition”, “Permitted Consolidations, Mergers and Sales of
Assets”, “Permitted Liens”, “Permitted Loans and Advances”, “Permitted
Securitization”, “Person”, “Plan”, “Priority Debt”, “Properties”, “Purchase
Money Note”, “Receivables Subsidiary”, “Redeemable Preferred Stock”,
“Securitization Assets”, “Securitization Documents”, “Securitization Facility
Attributed Debt”, “Standard Securitization Undertakings”, “Stockholders Equity”,
“Synthetic Lease Indebtedness”, “Synthetic Lease Transaction”, “Taxes” and
“Third Parties”.
 
                                                                                                                        

 
 ARTICLE II
 

  

THE CREDITS
 
SECTION 2.01.   Commitment to Make Advances. The Bank agrees, on the terms and
conditions set forth herein, to make Advances to the Borrower from time to time
before the Termination Date; provided that, immediately after each such Advance
is made, the aggregate outstanding principal amount of all Advances by the Bank
shall not exceed the amount of its Commitment. Within the foregoing limits, the
Borrower may borrow under this Section, repay or, to the extent permitted by
Section 2.08, prepay all or any portion of the Loan and reborrow under this
Section at any time before the Termination Date.
 
SECTION 2.02.   Method of Borrowing Advances.
 
(a)  The Bank is hereby authorized to make Advances under this Credit Agreement
upon telephonic or written communication of a request from any Person
representing himself or herself to be a duly authorized officer or
representative of the Borrower; provided that, except as otherwise provided in a
FMA Agreement, the Borrower shall make any such request for an Advance not later
than 2:00 p.m. (Charlotte, North Carolina time) on the Domestic Business Day
such Advance is to be disbursed.
 
(b)  Unless the Bank determines that any applicable condition specified in
Article III has not been satisfied, the Bank will make the funds corresponding
to such Advance available to the Borrower at the Bank’s aforesaid address.
 
(c)  Notwithstanding anything to the contrary contained in this Agreement, no
Advance may be requested if there shall have occurred an Event of Default, which
Event of Default shall not have been cured or waived in writing.
 
SECTION 2.03.   [Intentionally Omitted]
 
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SECTION 2.04.   Note.
 
(a)  The Loan of the Bank shall be evidenced by a single Note payable to the
order of the Bank for the account of its Lending Office in an amount equal to
the original principal amount of the Bank’s Commitment.
 
(b)  The Bank shall record, and prior to any transfer of its Note shall endorse
on the schedule forming a part thereof appropriate notations to evidence, the
date, amount and maturity of, and effective interest rate for, each Advance made
by it, the date and amount of each payment of principal made by the Borrower
with respect thereto, and such schedule shall constitute rebuttable presumptive
evidence of the principal amount owing and unpaid on such Bank’s Note; provided
that the failure of any Bank to make, or any error in making, any such
recordation or endorsement shall not affect the obligation of the Borrower
hereunder or under the Note or the ability of the Bank to assign its Note. The
Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and
to attach to and make a part of the Note a continuation of any such schedule as
and when required.
 
SECTION 2.05.   Maturity of Loan. The Loan shall mature, and the entire
outstanding principal amount thereof shall be due and payable, on the
Termination Date.
 
SECTION 2.06.   Interest Rates.
 
(a)  On each day on which the Loan is a Euro-Dollar Loan, such Euro-Dollar Loan
shall bear interest on the outstanding principal amount thereof, at a rate per
annum equal to the sum of: (1) the Applicable Margin, plus (2) the Libor Market
Index Rate for such day, as that rate may change from day to day. Any overdue
principal of and, to the extent permitted by applicable law, overdue interest on
any Euro-Dollar Loan shall bear interest, payable on demand, for each day until
paid in full at a rate per annum equal to the Default Rate.
 
(b)  On each day on which the Loan is a Base Rate Loan, such Base Rate Loan
shall bear interest on the outstanding principal amount thereof, at a rate per
annum equal to the Base Rate for such day plus the Applicable Margin. Any
overdue principal of and, to the extent permitted by applicable law, overdue
interest on any Base Rate Loan shall bear interest, payable on demand, for each
day until paid in full at a rate per annum equal to the Default Rate.
 
(c)  The Loan shall at all times be a Euro-Dollar Loan unless the Loan is to be
a Base Rate Loan pursuant to Article VII herein. Interest shall be payable on
each Interest Payment Date; provided that: (1) all accrued unpaid interest on
the Loan shall be paid in full on the Termination Date; and (2) should the
Commitment be terminated at any time prior to the Termination Date for any
reason, any and all accrued unpaid interest shall be paid on the date of such
termination.
 
(d)  The Bank shall determine each interest rate applicable to the Loan
hereunder.
 
(e)  After the occurrence and during the continuance of a Default, the principal
amount of the Loan (and, to the extent permitted by applicable law, all accrued
interest thereon)
 
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may, at the election of the Bank, bear interest at the Default Rate; provided,
however, that automatically whether or not the Bank elects to do so, any overdue
principal of and, to the extent permitted by law, overdue interest on the Loan
shall bear interest payable on demand, for each day until paid at a rate per
annum equal to the Default Rate.
 
SECTION 2.07.   Mandatory Reduction and Termination of Commitment. The
Commitment shall terminate on the Termination Date and the entire outstanding
principal amount of the Loan then outstanding (together with accrued interest
thereon) shall be due and payable on such date.
 
SECTION 2.08.   Optional Prepayments.
 
(a)  The Borrower may prepay all or any portion of the principal of the Loan at
any time, or from time to time by paying the principal amount to be prepaid
together with all accrued interest hereunder and any other sums then due from
the Borrower to the Bank under this Agreement.
 
(b)  Upon receipt of a notice of prepayment pursuant to this Section, such
notice shall not thereafter be revocable by the Borrower.
 
SECTION 2.09.   Mandatory Prepayments. On each date on which the Commitment is
reduced or terminated pursuant to Section 2.07, the Borrower shall repay or
prepay such principal amount of the outstanding Loan, if any (together with
interest accrued thereon), as may be necessary so that after such payment the
entire unpaid principal amount of the Loan does not exceed the aggregate amount
of the Commitment as then reduced.
 
SECTION 2.10.   General Provisions as to Payments.
 
(a)  Unless otherwise provided in a FMA Agreement, the Borrower shall make each
payment of principal of, and interest on, the Loan and any fees payable
hereunder, not later than 11:00 A.M. (Charlotte, North Carolina time) on the
date when due, in Federal or other funds immediately available in Charlotte,
North Carolina, to the Bank at its address referred to in Section 8.01.
 
(b)  Unless otherwise provided in a FMA Agreement, whenever any payment of
principal of, or interest on, the Loan or of any fees payable hereunder shall be
due on a day which is not a Domestic Business Day, the date for payment thereof
shall be extended to the next succeeding Domestic Business Day. If the date for
any payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
 
(c)  All payments of principal, interest and fees and all other amounts to be
made by the Borrower pursuant to this Agreement with respect to the Loan or fees
relating thereto shall be paid without deduction for, and free from, any tax,
imposts, levies, duties, deductions, or withholdings of any nature now or at
anytime hereafter imposed by any governmental authority or by any taxing
authority thereof or therein excluding in the case of the Bank, taxes imposed on
or measured by its net income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which the Bank is organized or any political
subdivision thereof
 
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and, in the case of the Bank, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction of the Bank’s applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, imposts, levies,
duties, deductions or withholdings of any nature being “Taxes”). In the event
that the Borrower is required by applicable law to make any such withholding or
deduction of Taxes with respect to the Loan, or fee or other amount, the
Borrower shall pay such deduction or withholding to the applicable taxing
authority, shall promptly furnish to the Bank in respect of which such deduction
or withholding is made all receipts and other documents evidencing such payment
and shall pay to the Bank additional amounts as may be necessary in order that
the amount received by the Bank after the required withholding or other payment
shall equal the amount the Bank would have received had no such withholding or
other payment been made. If no withholding or deduction of Taxes are payable in
respect of the Loan or fees relating thereto, the Borrower shall furnish the
Bank, at the Bank’s request, a certificate from each applicable taxing authority
or an opinion of counsel acceptable to the Bank, in either case stating that
such payments are exempt from or not subject to withholding or deduction of
Taxes. If the Borrower fails to provide such original or certified copy of a
receipt evidencing payment of Taxes or certificate(s) or opinion of counsel of
exemption, the Borrower hereby agrees to compensate the Bank for, and indemnify
them with respect to, the tax consequences of the Borrower’s failure to provide
evidence of tax payments or tax exemption.
 
In the event the Bank receives a refund of any Taxes paid by the Borrower
pursuant to this Section 2.10, it will pay to the Borrower the amount of such
refund promptly upon receipt thereof; provided, however, if at any time
thereafter it is required to return such refund, the Borrower shall promptly
repay to it the amount of such refund.
 
Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.10 shall be applicable with respect to any participant, assignee or
other Transferee, and any calculations required by such provisions (i) shall be
made based upon the circumstances of such participant, assignee or other
Transferee, and (ii) constitute a continuing agreement and shall survive the
termination of this Agreement and the payment in full or cancellation of the
Note.
 
SECTION 2.11.   Computation of Interest. Interest on the Loan shall be computed
on the basis of a year of 360 days and paid for the actual number of days
elapsed.
 
ARTICLE III  
 
CONDITIONS TO BORROWINGS
 
SECTION 3.01.   Conditions to Closing. The Borrower shall satisfy the following
conditions on the Closing Date:
 
(a)  receipt by the Bank from the Borrower of a duly executed counterpart of
this Agreement signed by the Borrower;
 
(b)  receipt by the Bank of a duly executed Note for the account of the Bank
complying with the provisions of Section 2.04;
 
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(c)  receipt by the Bank of all documents which the Bank may reasonably request
relating to the existence of each Loan Party, the corporate authority for and
the validity of each Loan Document to which it is a party, and any other matters
relevant hereto, all in form and substance satisfactory to the Bank, including
without limitation a certificate of incumbency of such Loan Party (the
“Officer’s Certificate”), signed by the Secretary or an Assistant Secretary of
such Loan Party, substantially in the form of Exhibit C hereto, certifying as to
the names, true signatures and incumbency of the officer or officers of such
Loan Party authorized to execute and deliver the Loan Documents to which it is a
party, and certified copies of the following items: (i) such Loan Party’s
Certificate of Incorporation, (ii) such Loan Party’s Bylaws, (iii) a certificate
of the Secretary of State of the State of such Loan Party’s organization as to
the good standing of such Loan Party as a corporation, and (iv) the action taken
by the Board of Directors of such Loan Party authorizing such Loan Party’s
execution, delivery and performance of this Agreement, the Note and the other
Loan Documents to which such Loan Party is a party;
 
(d)  receipt by the Bank of the Guaranty, duly executed by each Guarantor; and
 
(e)  such other documents or items as the Bank or its counsel may reasonably
request.
 
SECTION 3.02.   Conditions to All Advances. The obligation of each Bank to make
an Advance on the occasion of each Advance is subject to the satisfaction of the
following conditions:
 
(a)  receipt by the Bank of notice from the Borrower requesting such Advance;
 
(b)  the fact that, immediately before and after such Advance, no Event of
Default shall have occurred and be continuing;
 
(c)  the fact that the representations and warranties of the Borrower contained
in Article IV of this Agreement shall be true on and as of the date of such
Advance; and
 
(d)  the fact that the representations and warranties of the Loan Parties
contained in the Guaranty shall be true on and as of the date of such Advance;
and
 
(e)  the fact that, immediately after such Advance the entire outstanding
principal amount of the Loan will not exceed the amount of the Commitment as of
such date.
 
Each request by the Borrower for an Advance hereunder shall be deemed to be a
representation and warranty by the Borrower on the date such Advance is
disbursed by the Bank to the Borrower as to the truth and accuracy of the facts
specified in clauses (b), (c) and (d) of this Section.
 
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ARTICLE IV  
 
REPRESENTATIONS AND WARRANTIES
 
The Borrower represents and warrants that (a) the representations and warranties
contained in the Existing Credit Agreement are true and correct in all material
respects; and (b) no Default (as defined in the Existing Credit Agreement) or
Event of Default (as defined in the Existing Credit Agreement), nor any act,
event, condition or circumstance, which with the passage of time or the giving
of notice, or both, would constitute an Event of Default (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement or any other Loan
Document (as defined in the Existing Credit Agreement) has occurred and is
continuing unwaived on the date hereof.
 
       ARTICLE V  
 
COVENANTS
 
The Borrower agrees that, so long as the Bank has any Commitment hereunder, or
any amount payable under the Note remains unpaid:
 
SECTION 5.01.   Information. The Borrower will deliver to the Bank:
 
(a)  as soon as available and in any event within 90 days after the end of each
Fiscal Year, a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such Fiscal Year and the related consolidated
statements of income, shareholders’ equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
Fiscal Year, all certified by PricewaterhouseCoopers, LLP or other independent
public accountants of nationally recognized standing, with such certification to
be free of exceptions and qualifications not acceptable to the Bank;
 
(b)  as soon as available and in any event within 45 days after the end of each
of the first 3 Fiscal Quarters of each Fiscal Year, a consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of such Fiscal
Quarter and the related statement of income and statement of cash flows for such
Fiscal Quarter and for the portion of the Fiscal Year ended at the end of such
Fiscal Quarter, setting forth in each case in comparative form the figures for
the corresponding Fiscal Quarter and the corresponding portion of the previous
Fiscal Year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP and consistency by the chief financial officer or
the chief accounting officer of the Borrower;
 
(c)  simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate, substantially in the
form of Exhibit D (a “Compliance Certificate”), of the chief financial officer
or the chief accounting officer of the Borrower (i) setting forth in reasonable
detail the calculations required to establish whether the Borrower was in
compliance on the date of such financial statements, with the requirements of
Sections 5.03 through 5.08, inclusive, 5.11 and 5.26 of the Existing Credit
Agreement, (ii) identifying the complete name and jurisdiction of incorporation
of each Subsidiary of the
 
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Borrower created, formed or acquired during the time period covered by such
financial statements; (iii) identifying the Domestic Subsidiaries; and (iv)
stating whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
 
(d)  simultaneously with the delivery of each set of annual financial statements
referred to in clause (a) above, a statement of the firm of independent public
accountants which reported on such statements to the effect that nothing has
come to their attention to cause them to believe that any Default existed on the
date of such financial statements;
 
(e)  within 5 Domestic Business Days after the Borrower becomes aware of the
occurrence of any Default, a certificate of the chief financial officer or the
chief accounting officer of the Borrower setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto;
 
(f)  promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;
 
(g)  promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and annual, quarterly or monthly reports which the Borrower
shall have filed with the Securities and Exchange Commission;
 
(h)  if and when the Borrower or any member of the Controlled Group (i) gives or
is required to give notice to the PBGC of any “reportable event” (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice; or
(iii) receives notice from the PBGC under Title IV of ERISA of an intent to
terminate or appoint a trustee to administer any Plan, a copy of such notice;
 
(i)  promptly after the Borrower knows of the commencement thereof, notice of
any litigation, dispute or proceeding involving a claim against the Borrower
and/or any Subsidiary for $1,000,000 or more in excess of amounts covered in
full by applicable insurance; and
 
(j)  from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Bank may
reasonably request.
 
SECTION 5.02.   Subsidiaries.
 
(a)  The Borrower shall cause any Person which becomes a Material Domestic
Subsidiary after the Closing Date to become a party to, and agree to be bound by
the terms of, the Guaranty pursuant to an instrument in form and substance
satisfactory to the Bank executed and delivered to the Bank within ten (10)
Domestic Business Days after the day on which such
 
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Person became a Material Domestic Subsidiary. The Borrower shall also cause the
items specified in Section 3.01(c) to be delivered to the Bank concurrently with
the instrument referred to above, modified appropriately to refer to such
instrument and such Material Domestic Subsidiary.
 
(b)  Once any Subsidiary becomes a Material Domestic Subsidiary and therefore
becomes a party to the Guaranty in accordance with Section 3.01(d) or Section
5.02(a), such Material Domestic Subsidiary (including, without limitation, all
initial Material Domestic Subsidiaries) thereafter shall remain a party to the
Guaranty, even if such Subsidiary thereafter ceases to be a Material Domestic
Subsidiary; provided that if a Material Domestic Subsidiary ceases to be a
Subsidiary of the Borrower as a result of the Borrower’s transfer or sale of one
hundred percent (100%) of the capital stock of such Subsidiary in accordance
with and to the extent permitted by the terms of Section 5.11 of the Existing
Credit Agreement, the Bank agrees to release such Subsidiary from the Guaranty.
 
SECTION 5.03.   Existing Credit Agreement. The Borrower covenants and agrees
that from the date hereof and until payment in full of the Loan, and the payment
in full of all other amounts owing under this Agreement and the other Loan
Documents, the Borrower shall observe, perform and fulfill, for the benefit of
the Bank, all of those covenants and agreements, as the same are in effect on
the date hereof, contained in the Existing Credit Agreement, as in effect on the
date hereof, the provisions of which (including, where pertinent, the defined
terms used in other Sections of the Existing Credit Agreement referenced, in
such Sections) are incorporated herein by reference, without regard and without
giving effect to any waivers given by the Banks (as defined in the Existing
Credit Agreement) with respect to, or amendments agreed to by the Borrower and
the Banks (as defined in the Existing Credit Agreement) of any of such covenants
and agreements, which covenants and agreements the Borrower will continue to
observe, perform and fulfill for the benefit of the Bank notwithstanding that
the indebtedness under the Existing Credit Agreement has been or hereafter may
be partially or fully repaid or the fact that the Existing Credit Agreement
otherwise might be terminated.
 
      ARTICLE VI  
 
DEFAULTS
 
SECTION 6.01.   Events of Default. If one or more of the following events
(“Events of Default”) shall have occurred and be continuing:
 
(a)  the Borrower shall fail to pay when due any principal of the Loan or shall
fail to pay any interest on the Loan within five Domestic Business Days after
such interest shall become due, or shall fail to pay any fee or other amount
payable hereunder within five Domestic Business Days after such fee or other
amount becomes due; or
 
(b)  the Borrower or any Subsidiary shall fail to observe or perform any
covenant contained in Sections 5.02(ii), 5.03 to 5.12, inclusive of the Existing
Credit Agreement, or Section 5.15 or 5.20 to 5.26, inclusive of the Existing
Credit Agreement; or
 
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(c)  any Loan Party shall fail to observe or perform any covenant or agreement
contained or incorporated by reference in any Loan Document (other than those
covered by clause (a) or (b) above) for thirty days after the earlier of (i) the
first day on which such Loan Party has knowledge of such failure or (ii) written
notice thereof has been given to the Borrower by the Bank; or
 
(d)  any representation, warranty, certification or statement made or deemed
made by any Loan Party in any Loan Document or in any certificate, financial
statement or other document delivered pursuant to any Loan Document shall prove
to have been incorrect or misleading in any material respect when made (or
deemed made); or
 
(e)  the Borrower or any Subsidiary shall fail to make any payment in respect of
Debt outstanding (other than the Note) in an aggregate principal amount in
excess of $10,000,000 when due or within any applicable grace period; or
 
(f)  any event or condition shall occur which results in the acceleration of the
maturity of Debt outstanding of the Borrower or any Subsidiary in an aggregate
principal amount in excess of $10,000,000 or the mandatory prepayment or
purchase of such Debt by the Borrower (or its designee) or such Subsidiary (or
its designee) prior to the scheduled maturity thereof, or enables (or, with the
giving of notice or lapse of time or both, would enable) the holders of such
Debt or any Person acting on such holders’ behalf to accelerate the maturity
thereof or require the mandatory prepayment or purchase thereof prior to the
scheduled maturity thereof, without regard to whether such holders or other
Person shall have exercised or waived their right to do so; or
 
(g)  the Borrower, any Loan Party or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally, or shall admit in writing its
inability, to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or
 
(h)  an involuntary case or other proceeding shall be commenced against the
Borrower, any Loan Party or any Subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower, any other Loan Party or any
Subsidiary under the federal bankruptcy laws as now or hereafter in effect; or
 
(i)  the Borrower or any member of the Controlled Group shall fail to pay when
due any material amount which it shall have become liable to pay to the PBGC or
to a Plan
 
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 under Title IV of ERISA; or notice of intent to terminate a Plan or Plans shall
be filed under Title IV of ERISA by the Borrower, any member of the Controlled
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any such Plan or Plans or a proceeding
shall be instituted by a fiduciary of any such Plan or Plans to enforce
Section 515 or 4219(c)(5) of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any such
Plan or Plans must be terminated; or
 
(j)  one or more judgments or orders for the payment of money in an aggregate
amount in excess of $500,000 shall be rendered against the Borrower or any
Subsidiary and such judgment or order shall continue unsatisfied and unstayed
for a period of 30 days; or
 
(k)  a federal tax lien shall be filed against the Borrower or any Subsidiary
under Section 6323 of the Code or a lien of the PBGC shall be filed against the
Borrower or any Subsidiary under Section 4068 of ERISA and in either case such
lien shall remain undischarged for a period of 25 days after the date of filing;
or
 
(l)  (i) any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of 30% or more of
the outstanding shares of the voting stock of the Borrower; or (ii) as of any
date a majority of the Board of Directors of the Borrower consists of
individuals who were not either (A) directors of the Borrower as of the
corresponding date of the previous year, (B) selected or nominated to become
directors by the Board of Directors of the Borrower of which a majority
consisted of individuals described in clause (A), or (C) selected or nominated
to become directors by the Board of Directors of the Borrower of which a
majority consisted of individuals described in clause (A) and individuals
described in clause (B); or
 
(m)  if any provision of this Agreement, the Note or the Guaranty, shall for any
reason cease to be valid and binding on any Loan Party, or any Loan Party shall
deny or disaffirm its obligations thereunder; or
 
(n)  the occurrence of a Default (as defined in the Existing Credit Agreement)
or an Event of Default (as defined in the Existing Credit Agreement) under the
Existing Credit Agreement; or
 
(o)  any event of default shall occur and be continuing under the Guaranty and
such event of default continues beyond any applicable cure or grace period
provided therein.
 
then, and in every such event, the Bank may (i) by notice to the Borrower
terminate the Commitment and it shall thereupon terminate, and (ii) by notice to
the Borrower declare the Notes (together with accrued interest thereon) and all
other amounts payable hereunder and under the other Loan Documents to be, and
the Note (together with all accrued interest thereon) and all other amounts
payable hereunder and under the other Loan Documents shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind,
 
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all of which are hereby waived by the Borrower; provided that if any Event of
Default specified in clause (g) or (h) above occurs with respect to the
Borrower, without any notice to the Borrower, any Guarantor or any other act by
the Bank, the Commitment shall thereupon automatically terminate and the Note
(together with accrued interest thereon) and all other amounts payable hereunder
and under the other Loan Documents shall automatically become immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower. Notwithstanding the foregoing,
the Bank shall have available to it all other remedies at law or equity, and
shall exercise any one or all of them at the request of the Bank.
 
ARTICLE VII  
 
CHANGE IN CIRCUMSTANCES; COMPENSATION
 
SECTION 7.01.   Basis for Determining Interest Rate Inadequate or Unfair. If:
 
(a)  the Bank determines that deposits in Dollars (in the applicable amounts)
are not being offered in the relevant market for a 1 month period; or
 
(b)  the Bank determines that the LIBOR Market Index Rate will not adequately
and fairly reflect the cost to the Bank of funding a Euro-Dollar Loan, the Bank
shall forthwith give notice thereof to the Borrower, whereupon until the Bank
notifies the Borrower that the circumstances giving rise to such suspension no
longer exist, the obligation of the Bank to make a Euro-Dollar Loan shall be
suspended. Unless the Borrower notifies the Bank before a Euro-Dollar Advance is
disbursed that it elects not to borrow such Euro-Dollar Advance, such borrowing
shall instead be made as a Base Rate Advance.
 
SECTION 7.02.   Illegality. If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change in any existing or future law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof (any such authority, bank or
agency being referred to as an “Authority” and any such event being referred to
as a “Change of Law”), or compliance by the Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority shall make it unlawful or impossible for the Bank (or its Lending
Office) to make, maintain or fund its Euro-Dollar Loan, the Bank shall forthwith
give notice thereof to the Borrower, whereupon until the Bank notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligation of the Bank to make the Euro-Dollar Loan shall be suspended.
Before giving any notice pursuant to this Section, the Bank shall designate a
different Lending Office if such designation will avoid the need for giving such
notice and will not, in the judgment of the Bank, be otherwise disadvantageous
to the Bank. If the Bank shall determine that it may not lawfully continue to
maintain and fund any of its outstanding Euro-Dollar Loans to maturity and shall
so specify in such notice, the Borrower shall immediately prepay in full the
then outstanding principal amount of each Euro-Dollar Loan of the Bank, together
with accrued interest thereon. Concurrently with prepaying each such Euro-Dollar
Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount
from the Bank, and the Bank shall make such a Base Rate Loan.
 
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SECTION 7.03.   Increased Cost and Reduced Return.
 
              (a)  If after the date hereof, a Change of Law or compliance by
the Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority:
 
(i)  shall subject the Bank (or its Lending Office) to any tax, duty or other
charge with respect to its Euro-Dollar Loan, its Note or its obligation to make
a Euro-Dollar Loan, or shall change the basis of taxation of payments to the
Bank (or its Lending Office) of the principal of or interest on its Euro-Dollar
Loan or any other amounts due under this Agreement in respect of its Euro-Dollar
Loan or its obligation to make the Euro-Dollar Loan (except for changes in the
rate of tax on the overall net income of the Bank or its Lending Office imposed
by the jurisdiction in which the Bank’s principal executive office or Lending
Office is located); or
 
(ii)  shall impose, modify or deem applicable any reserve, special deposit or
similar requirement (including, without limitation, any such requirement imposed
by the Board of Governors of the Federal Reserve System) against assets of,
deposits with or for the account of, or credit extended by, any Bank (or its
Lending Office); or
 
(iii)  shall impose on the Bank (or its Lending Office) or on the London
interbank market any other condition affecting the Euro-Dollar Loan, its Note or
its obligation to make Euro-Dollar Loans;
 
and the result of any of the foregoing is to increase the cost to the Bank (or
its Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum received or receivable by the Bank (or its Lending Office)
under this Agreement or under the Note with respect thereto, by an amount deemed
by the Bank to be material, then, within 15 days after demand by the Bank, the
Borrower shall pay to the Bank such additional amount or amounts as will
compensate the Bank for such increased cost or reduction.
 
               (b)  If the Bank shall have determined that after the date hereof
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any existing or future law, rule or regulation, or
any change in the interpretation or administration thereof, or compliance by the
Bank (or its Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any Authority, has or would
have the effect of reducing the rate of return on the Bank’s capital as a
consequence of its obligations hereunder to a level below that which the Bank
could have achieved but for such adoption, change or compliance (taking into
consideration the Bank’s policies with respect to capital adequacy) by an amount
deemed by the Bank to be material, then from time to time, within 15 days after
demand by the Bank, the Borrower shall pay to the Bank such additional amount or
amounts as will compensate the Bank for such reduction.
 
             (c)  The Bank will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which will entitle the
Bank to compensation pursuant to this Section and will designate a different
Lending Office if such designation will avoid the
 
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need for, or reduce the amount of, such compensation and will not, in the
judgment of the Bank, be otherwise disadvantageous to the Bank. A certificate of
the Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, the Bank may use any
reasonable averaging and attribution methods.
 
(d)  The provisions of this Section 7.03 shall be applicable with respect to any
participant, assignee or other Transferee, and any calculations required by such
provisions shall be made based upon the circumstances of such participant,
assignee or other Transferee.
 
SECTION 7.04. Base Rate Loan Substituted for Euro-Dollar Loan. If (i) the
obligation of the Bank to make or maintain a Euro-Dollar Loan has been suspended
pursuant to Section 7.02 or (ii) the Bank has demanded compensation under
Section 7.03, and the Borrower shall, by at least 5 Euro-Dollar Business Days’
prior notice to the Bank, have elected that the provisions of this Section shall
apply to the Bank, then, unless and until the Bank notifies the Borrower that
the circumstances giving rise to such suspension or demand for compensation no
longer apply the Loan which would otherwise be a Euro-Dollar Loan shall be
instead a Base Rate Loan. In the event that the Borrower shall elect that the
provisions of this Section shall apply, the Borrower shall remain liable for,
and shall pay to the Bank as provided herein, all amounts due the Bank under
Section 7.03 in respect of the period preceding the date of conversion of the
Bank’s Loan resulting from the Borrower’s election.
 
     ARTICLE VIII  
 
MISCELLANEOUS
 
SECTION 8.01.   Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission or similar
writing) and shall be given to such party at its address or telecopy number set
forth on the signature pages hereof or such other address or telecopy number as
such party may hereafter specify for the purpose by notice to each other party.
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopy number
specified in this Section and the telecopy machine used by the sender provides a
written confirmation that such telecopy has been so transmitted or receipt of
such telecopy transmission is otherwise confirmed, (ii) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, and (iii) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Bank under Article II or Article VIII shall not be effective until
received.
 
SECTION 8.02.   No Waivers. No failure or delay by the Bank in exercising any
right, power or privilege hereunder or under the Note or other Loan Document
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
 
SECTION 8.03.   Expenses; Documentary Taxes; Indemnification.
 
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(a)  The Borrower shall pay (i) all out-of-pocket expenses of the Bank,
including fees and disbursements of special counsel for the Bank, in connection
with the preparation of this Agreement and the other Loan Documents, any waiver
or consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if a Default occurs,
all out-of-pocket expenses incurred by the Bank, including fees and
disbursements of counsel, in connection with such Default and collection and
other enforcement proceedings resulting therefrom, including out-of-pocket
expenses incurred in enforcing this Agreement and the other Loan Documents.
 
(b)  The Borrower shall indemnify the Bank against any transfer taxes,
documentary taxes, assessments or charges made by any Authority by reason of the
execution and delivery of this Agreement or the other Loan Documents.
 
(c)  The Borrower shall indemnify the Bank and each Affiliate thereof and their
respective directors, officers, employees and agents from, and hold each of them
harmless against, any and all losses, liabilities, claims or damages to which
any of them may become subject, insofar as such losses, liabilities, claims or
damages arise out of or result from any actual or proposed use by the Borrower
of the proceeds of any extension of credit by the Bank hereunder or breach by
the Borrower of this Agreement or any other Loan Document or from investigation,
litigation (including, without limitation, any actions taken by the Bank to
enforce this Agreement or any of the other Loan Documents) or other proceeding
(including, without limitation, any threatened investigation or proceeding)
relating to the foregoing, and the Borrower shall reimburse the Bank, and each
Affiliate thereof and their respective directors, officers, employees and
agents, upon demand for any expenses (including, without limitation, legal fees)
incurred in connection with any such investigation or proceeding; but excluding
any such losses, liabilities, claims, damages or expenses incurred by reason of
the gross negligence or willful misconduct of the Person to be indemnified.
 
SECTION 8.04.   Setoffs. The Borrower hereby grants to the Bank, as security for
the full and punctual payment and performance of the obligations of the Borrower
under this Agreement, a continuing lien on and security interest in all deposits
and other sums credited by or due from the Bank to the Borrower or subject to
withdrawal by the Borrower; and regardless of the adequacy of any collateral or
other means of obtaining repayment of such obligations, the Bank may at any time
upon or after the occurrence of any Event of Default, and without notice to the
Borrower, set off the whole or any portion or portions of any or all such
deposits and other sums against such obligations, whether or not any other
Person or Persons could also withdraw money therefrom.
 
SECTION 8.05.   Amendments and Waivers. Any provision of this Agreement, the
Note or any other Loan Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Bank.
 
SECTION 8.06.   Successors and Assigns.
 
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(a)  The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided that the Borrower may not assign or otherwise transfer any of its
rights under this Agreement.
 
(b)  Subject to the provisions of Section 8.07, the Borrower authorizes each
Bank to disclose to any participant, assignee or other transferee (each a
“Transferee”) and any prospective Transferee any and all financial and other
information in such Bank’s possession concerning the Borrower which has been
delivered to the Bank by the Borrower pursuant to this Agreement or which has
been delivered to such Bank by the Borrower in connection with such Bank’s
credit evaluation prior to entering into this Agreement.
 
(c)  No Transferee shall be entitled to receive any greater payment under
Section 7.03 than the transferor Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with the
Borrower’s prior written consent or by reason of the provisions of Section 7.02
or 7.03 requiring such Bank to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
 
SECTION 8.07.   Confidentiality. The Bank agrees to exercise its best efforts to
keep any information delivered or made available by the Borrower to it which is
clearly indicated to be confidential information, confidential from anyone other
than persons employed or retained by the Bank who are or are expected to become
engaged in evaluating, approving, structuring or administering the Loan;
provided, however, that nothing herein shall prevent the Bank from disclosing
such information (i) upon the order of any court or administrative agency, (ii)
upon the request or demand of any regulatory agency or authority having
jurisdiction over the Bank, (iii) which has been publicly disclosed, (iv) to the
extent reasonably required in connection with any litigation to which the Bank
or its Affiliates may be a party, (v) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (vi) to the Bank’s legal
counsel, Affiliates and independent auditors and (vii) to any actual or proposed
participant, assignee or other Transferee of all or part of its rights hereunder
which has agreed in writing to be bound by the provisions of this Section 8.07.
 
SECTION 8.08.   Survival of Certain Obligations. Sections 7.03(a), 7.03(b) and
8.03, and the obligations of the Borrower thereunder, shall survive, and shall
continue to be enforceable notwithstanding, the termination of this Agreement
and the Commitment and the payment in full of the principal of and interest on
the Loan.
 
SECTION 8.09.   North Carolina Law. This Agreement and the Note shall be
construed in accordance with and governed by the law of the State of North
Carolina.
 
SECTION 8.10.   Severability. In case any one or more of the provisions
contained in this Agreement, the Note or any of the other Loan Documents should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby and shall be enforced to the
greatest extent permitted by law.
 
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SECTION 8.11.   Interest. In no event shall the amount of interest due or
payable hereunder or under the Note exceed the maximum rate of interest allowed
by applicable law, and in the event any such payment is inadvertently made to
the Bank by the Borrower or inadvertently received by the Bank, then such excess
sum shall be credited as a payment of principal, unless the Borrower shall
notify the Bank in writing that it elects to have such excess sum returned
forthwith. It is the express intent hereof that the Borrower not pay and the
Bank not receive, directly or indirectly in any manner whatsoever, interest in
excess of that which may legally be paid by the Borrower under applicable law.
 
SECTION 8.12.   Interpretation. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
 
SECTION 8.13.   Consent to Jurisdiction. The Borrower (a) and the Bank
irrevocably waive, to the fullest extent permitted by law, any and all right to
trial by jury in any legal proceeding arising out of this Agreement, any of the
other Loan Documents, or any of the transactions contemplated hereby or thereby,
(b) submits to personal jurisdiction in the State of North Carolina, the courts
thereof and the United States District Courts sitting therein, for the
enforcement of this Agreement, the Note and the other Loan Documents, (c) waives
any and all personal rights under the law of any jurisdiction to object on any
basis (including, without limitation, inconvenience of forum) to jurisdiction or
venue within the State of North Carolina for the purpose of litigation to
enforce this Agreement, the Note or the other Loan Documents, and (d) agrees
that service of process may be made upon it in the manner prescribed in Section
8.01 for the giving of notice to the Borrower. Nothing herein contained,
however, shall: (i) prevent the Bank from bringing any action or exercising any
rights against any security and against the Borrower personally, and against any
assets of the Borrower, within any other state or jurisdiction; or (ii) affect
the right to serve legal process in any other manner permitted by law.
 
SECTION 8.14.   Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
 
SECTION 8.15.   Florida Taxes. In connection with this transaction there may or
may not be due certain documentary stamp taxes and/or intangible taxes imposed
by the State of Florida (the “Florida Taxes”). In addition to (and not in
limitation of) the indemnification with respect to tax liabilities set forth
herein, the Borrower agrees to indemnify the Bank, its directors, officers,
agents and employees from and against any and all liability, damage, loss, cost,
expense or reasonable attorney fees which may accrue to or be sustained by the
Bank or its directors, officers, agents or employees on account of or arising
from any claim or action raised by, filed or brought by or in the name of any
Florida governmental or administrative department with respect to non-payment of
the Florida Taxes against the Bank, or any of its directors, officers, agents or
employees.
 
WCSR 3448952v3

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SECTION 8.16.   Arbitration; Preservation and Limitation of Remedies.
 
(a)  Upon demand of any party hereto, whether made before or after institution
of any judicial proceeding, any dispute, claim or controversy arising out of,
connected with or relating to this Agreement or any other Loan Document
(“Disputes”) between or among the Borrower, its Subsidiaries, the Bank, or any
of them, shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
documents executed in the future, disputes as to whether a matter is subject to
arbitration, or claims arising out of or connected with the transactions
contemplated by this Agreement and the other Loan Documents. Arbitration shall
be conducted under and governed by the Commercial Financial Disputes Arbitration
Rules (the “Arbitration Rules”) of the American Arbitration Association (the
“AAA”), as in effect from time to time, and the Federal Arbitration Act, Title 9
of the U.S. Code, as amended. All arbitration hearings shall be conducted in the
city in which the principal office of the Bank is located. A hearing shall begin
within ninety (90) days of demand for arbitration and all hearings shall be
concluded within 120 days of demand for arbitration. These time limitations may
not be extended unless a party shows cause for extension and then for no more
than a total of sixty (60) days. The expedited procedures set forth in Rule 51
et seq. of the Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any Dispute. A
judgment upon the award may be entered in any court having jurisdiction. The
panel from which all arbitrators are selected shall be comprised of licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel of
the AAA. The single arbitrator selected for expedited procedure shall be a
retired judge from the highest court of general jurisdiction, state or federal,
of the state where the hearing will be conducted. The parties do not waive
applicable federal or state substantive law except as provided herein.
 
(b)  Notwithstanding the preceding binding arbitration provisions, the parties
hereto agree to preserve, without diminution, certain remedies that any party
hereto may employ or exercise freely, either alone, in conjunction with or
during a Dispute. Any party hereto shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) obtaining provisional or ancillary remedies,
including injunctive relief, sequestration, garnishment, attachment, appointment
of a receiver and filing an involuntary bankruptcy proceeding; and (ii) when
applicable, a judgment by confession of judgment. Any claim or controversy with
regard to any party’s entitlement to such remedies is a Dispute. Preservation of
these remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute. The parties hereto agree
that no party shall have a remedy of punitive or exemplary damages against any
other party in any Dispute, and each party hereby waives any right or claim to
punitive or exemplary damages that it has now or that may arise in the future in
connection with any Dispute, whether such Dispute is resolved by arbitration or
judicially. The parties acknowledge that by agreeing to binding arbitration they
have irrevocably waived any right they may have to a jury trial with regard to a
Dispute. The Borrower agrees to pay the reasonable fees and expenses of counsel
to the Bank in connection with any Dispute subject to arbitration as provided
herein.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, under seal, by their respective authorized officers as of the day and
year first above written.
 
OSI RESTAURANT PARTNERS, INC.

By:  /s/ Dirk A. Montgomery_______________(SEAL)
Dirk A. Montgomery, Senior Vice          
President and Chief Financial Officer

OSI Restaurant Partners, Inc.
2202 North Westshore Blvd., 5th Floor
Tampa, Florida 33607
Attention: Dirk A. Montgomery
Senior Vice President and Chief Financial Officer
Telecopy number: (813) 286-2247
Telephone number: (813) 282-1225

with a copy to:

OSI Restaurant Partners, Inc.
2202 North Westshore Blvd., 5th Floor
Tampa, Florida 33607
Attention: Joseph J. Kadow
Senior Vice President, Chief Officer-Legal and Corporate Affairs and Secretary
Telecopy number: (813) 281-2114
Telephone number: (813) 282-1225

[The remainder of this page intentionally left blank.]

 
WCSR 3448952v3

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WACHOVIA BANK, NATIONAL ASSOCIATION

BY: /s/ Lynn E. Culbreath_________________(SEAL)
Lynn E. Culbreath, Senior Vice President                    

Lending Office

Wachovia Bank, National Association
10 South Jefferson Street, VA7391
Roanoke, VA 24011

with a copy to:

Wachovia Bank, National Association
100 South Ashley Drive, FL4050
Suite 1000
Tampa, Florida 33602
Attention: Lynn E. Culbreath
Senior Vice President
Telecopy number: (813) 276-6454
Telephone number: (813) 276-6517
 
 
 
 
 
WCSR 3448952v3                                                 
  24

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NOTE
 
 $50,000,000.00
 Charlotte, North Carolina
 
 October 12, 2006

    
For value received, OSI RESTAURANT PARTNERS, INC., a Delaware corporation (the
“Borrower”), promises to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION
(the “Bank”), for the account of its Lending Office, the principal sum of FIFTY
MILLION and No/100 Dollars ($50,000,000.00), or such lesser amount as shall
equal the unpaid principal amount of each Advance made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below, on the dates and in
the amounts provided in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of this Note on the dates and at the
rate or rates provided for in the Credit Agreement. Interest on any overdue
principal of and, to the extent permitted by law, overdue interest on the
principal amount hereof shall bear interest at the Default Rate, as provided for
in the Credit Agreement. All such payments of principal and interest shall be
made in lawful money of the United States in Federal or other immediately
available funds at the office of Wachovia Bank, National Association, 10 South
Jefferson Street, VA7391, Roanoke, Virginia 24011, or such other address as may
be specified from time to time pursuant to the Credit Agreement.

All Advances made by the Bank, the respective maturities thereof, the interest
rates from time to time applicable thereto and all repayments of the principal
thereof shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on a continuation of
such schedule attached to and made a part hereof; provided that the failure of
the Bank to make, or any error of the Bank in making, any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.

This Note is the Note referred to in the Credit Agreement dated as of October
12, 2006 between the Borrower and Wachovia Bank, National Association (as the
same may be amended or modified from time to time, the “Credit Agreement”).
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment and
the repayment hereof and the acceleration of the maturity hereof.

The Borrower hereby waives presentment, demand, protest, notice of demand,
protest and nonpayment and any other notice required by law relative hereto,
except to the extent as otherwise may be expressly provided for in the Credit
Agreement.

The Borrower agrees, in the event that this Note or any portion hereof is
collected by law or through an attorney at law, to pay all reasonable costs of
collection, including, without limitation, reasonable attorneys’ fees.

WCSR 3452301v1
1

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IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed under
seal, by its duly authorized officer as of the day and year first above written.

OSI RESTAURANT PARTNERS, INC.

By: /s/ Dirk A. Montgomery________(SEAL)
Dirk A. Montgomery,
Chief Financial Officer

Documentary stamp tax in the maximum
amount required by Florida Statutes, Section
201.08(2)(a) has been paid.

STATE OF FLORIDA  )
COUNTY OF  Hillsborough_  )

THE FOREGOING INSTRUMENT was acknowledged before me this 12th day of October,
2006, by DIRK A. MONTGOMERY, as Chief Financial Officer of OSI RESTAURANT
PARTNERS, INC., a Delaware corporation, on behalf of the corporation. He is
personally known to me.

_______________________________________
Print Name:______________________________
Notary Public - State of Florida
My Commission Expires:___________________
My Commission No.:______________________
 
 
 
 
 
WCSR 3452301v1
    2

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GUARANTY AGREEMENT

 
THIS GUARANTY AGREEMENT (this “Guaranty”) is made as of the 12th day of October,
2006, by the undersigned (hereinafter collectively referred to as the
“Guarantors” and individually as a “Guarantor”), to and for the benefit of
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (the
“Bank”).

WHEREAS, the Guarantors have requested the Bank to extend credit to OSI
Restaurant Partners, Inc. (the “Borrower”) under the Credit Agreement dated as
of October 12, 2006 (as amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”) between the Borrower and the Bank, and the Bank
has agreed to extend such credit by reason of such request and in reliance upon
this Guaranty; and

WHEREAS, capitalized terms used but not defined herein shall have the respective
meanings ascribed thereto in the Credit Agreement; and

WHEREAS, the Bank requires additional assurances and guarantees by the
Guarantors as one of the conditions for making the Advances to the Borrower and
entering into the Credit Agreement and the other Loan Documents; and

WHEREAS, each Guarantor is a Subsidiary of the Borrower; and

WHEREAS, each Guarantor acknowledges the receipt of substantial direct benefits
by the making of the Advances to the Borrower;

NOW THEREFORE, in consideration of the Advances extended and/or to be extended
by the Bank to the Borrower under the Credit Agreement to be issued by the Bank
under the Credit Agreement, and for other consideration, the receipt and
sufficiency of which are hereby acknowledged, each Guarantor agrees as follows:

1. Guaranty. Each Guarantor hereby unconditionally, absolutely, jointly and
severally, guarantees to the Bank and its successors, endorsees and assigns that
(a) the Borrower will duly and punctually pay and perform, at the place
specified therefor in the Credit Agreement, all indebtedness, obligations and
liabilities, direct or indirect, matured or unmatured, primary or secondary,
certain or contingent, of the Borrower to the Bank now or hereafter owing or
incurred pursuant to the Credit Agreement, the Note and the other Loan Documents
(including without limitation: (i) the principal of and interest on the Note,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise and any renewals, modifications or extensions
thereof, in whole or in part; (ii) all other monetary obligations of the
Borrower to the Bank under the Credit Agreement and the other Loan Documents to
which the Borrower is to be a party and any renewals, modifications or
extensions thereof, in whole or in part; and (iii) reasonable attorneys’ fees
and other costs and expenses incurred by the Bank in attempting to collect or
enforce any of the foregoing after an Event of Default) accrued in each case to
the date of payment hereunder (collectively, the “Obligations” and individually,
an “Obligation”); and (b) the Borrower will perform in all other respects its
obligations under the Credit Agreement, the Note and the other Loan Documents in
accordance with the respective terms of the Credit Agreement, the Note and the
other Loan Documents.

2. Guaranty Absolute. This Guaranty is an absolute, unconditional, continuing
and unlimited guaranty of the full and punctual payment and performance by the
Borrower of the Obligations and not of their collectibility only and is in no
way conditioned upon any requirement that the Bank first
 
WCSR 3452315v1

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attempt to collect any of the Obligations from the Borrower, any other
Guarantor, or any other person, or resort to any security for the Obligations or
this Guaranty or to other means of obtaining payment of any of the Obligations
which the Bank now has or may acquire after the date hereof, or upon any other
contingency whatsoever, and the Bank may proceed hereunder against any Guarantor
in the first instance to collect the Obligations when due, without first
proceeding against the Borrower or any other Person and without first resorting
to any security or other means of obtaining payment. The obligations of each
Guarantor hereunder are irrevocable, absolute and unconditional, irrespective of
genuineness, validity, regularity or enforceability of the Obligations or any
security given therefor or in connection therewith or any other circumstance
(except payment to, or express, written waiver, release or consent by, the Bank)
which might otherwise constitute a legal or equitable discharge of a surety or
guarantor. This Guaranty shall be in addition to any other guaranty or other
security for the Obligations, and it shall not be prejudiced or rendered
unenforceable by the invalidity of any such other guaranty or security. The
liability of each Guarantor hereunder shall in no way be affected or impaired by
any acceptance by the Bank of any direct or indirect security for, or other
guaranties of, the Obligations or any other indebtedness, liability or
obligations of the Borrower, any Guarantor or other Person to the Bank or by any
failure, delay, neglect or omission of the Bank to realize upon or protect any
Obligations or any such other indebtedness, liability or obligation or any notes
or other instruments evidencing the same or any direct or indirect security
therefor, or by any approval, consent, waiver or other action taken or omitted
to be taken by the Bank. Upon any default by the Borrower in the payment and
performance of the Obligations (and after the expiration of any applicable grace
period provided in the Credit Agreement), the liabilities and obligations of the
Guarantors hereunder shall, at the option of the Bank, become forthwith due and
payable to the Bank without demand or notice of any nature, all of which are
expressly waived by each Guarantor; provided that if any Event of Default
specified in clause (g) or (h) of Section 6.01 of the Credit Agreement occurs,
without any notice to any Guarantor or any other act by the Bank, the
liabilities and obligations of the Guarantors hereunder shall automatically
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Guarantors. Payments
by the Guarantors, or any of them, hereunder may be required by the Bank on any
number of occasions.

3. No Impairment. Each Guarantor agrees that its obligations hereunder shall not
be impaired, modified, changed, released or limited in any manner whatsoever by
any impairment, modification, change, release or limitation of liability of the
Borrower or its estate by reason of the commencement of any case, proceeding or
other action seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of the Borrower or its property under any law
relating to bankruptcy, insolvency, reorganization, relief of debtors or seeking
appointment of a receiver, trustee, custodian or similar official for the
Borrower or for all or part of its property.

4. Guarantors’ Further Agreement to Pay. Each Guarantor further agrees to pay to
the Bank forthwith upon demand, in funds immediately available to the Bank, all
costs and expenses (including court costs and reasonable attorneys’ fees)
incurred or expended by the Bank in connection with the enforcement of this
Guaranty.

5. Termination of Guaranty. It is the intention hereof that the Guarantors shall
remain liable under this Guaranty until all of the Obligations have been fully
paid and performed notwithstanding any act, omission or thing (except payment
to, or express, written waiver, release or consent by, the Bank) which might
otherwise operate as a legal or equitable discharge of the Guarantors.
Notwithstanding anything contained herein to the contrary, each Guarantor agrees
that to the extent all or any part of any payment of any of the Obligations
previously received by the Bank pursuant to the Credit Agreement or any Loan
Document or otherwise is subsequently invalidated, voided, declared to be
fraudulent or preferential, set aside, recovered, rescinded or is required to be
retained by or repaid to a trustee, receiver, or any other person under any
bankruptcy code, common law, or equitable cause, or
 
WCSR 3452315v1

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otherwise required to be returned by the Bank for any reason, whether by court
order, administrative order or settlement, this Guaranty and the obligation or
part thereof intended to be satisfied shall be revived and reinstated and
continued in full force and effect as to each Guarantor’s obligations hereunder,
and each Guarantor agrees that it shall immediately pay to the Bank the amount
of such payment, notwithstanding any termination of this Guaranty or any
cancellation of the Credit Agreement or the Note.

6. Security; Setoff. Each Guarantor hereby grants to the Bank, as security for
the full and punctual payment and performance of such Guarantor’s obligations
hereunder, a continuing lien on and security interest in all deposits and other
sums credited by or due from the Bank to the Guarantor or subject to withdrawal
by the Guarantor. Regardless of the adequacy of any collateral or other means of
obtaining repayment of the Obligations, the Bank may at any time upon or after
the occurrence of any Event of Default, and without notice to any Guarantor, set
off the whole or any portion or portions of any or all such deposits and other
sums credited by or due from the Bank to a Guarantor or subject to withdrawal by
a Guarantor against amounts payable under this Guaranty, whether or not any
other person or persons could also withdraw money therefrom. Each Guarantor
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Note, whether or not acquired pursuant
to the terms of the Credit Agreement, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Guarantor in the
amount of such participation.

7. Bank’s Freedom to Deal with Borrower and Other Parties. The Bank shall be at
liberty, without giving notice to or obtaining the assent of the Guarantors, or
any of them, and without relieving any Guarantor of any liability hereunder, to
deal with the Borrower and with each other party who is now, or after the date
hereof becomes, liable in any manner for any of the Obligations (including,
without limitation, any co-guarantor), in such manner as the Bank in its sole
discretion deems fit and to this end each Guarantor hereby gives to the Bank
full authority in its sole discretion to do any or all of the following things:
(a) extend credit, make loans and afford other financial accommodations to the
Borrower or to any such other party at such times, in such amounts and on such
terms as the Bank may approve, (b) vary the terms and grant extensions or
renewals of any present or future indebtedness or obligation of the Borrower or
of any such other party to the Bank, (c) grant extensions of time, waivers and
other indulgences in respect thereof, (d) vary, exchange, release or discharge,
wholly or partially, or delay in or abstain from perfecting and enforcing any
security or guaranty or other means of obtaining payment of any of the
Obligations or any liability under this Guaranty, which security or guaranty the
Bank now has or acquires after the date hereof, (e) accept partial payments from
the Borrower or such other party, (f) release or discharge, wholly or partially,
any endorser or guarantor, and (g) compromise or make any settlement or other
arrangement with the Borrower or any such other party.

8. Representations and Warranties of Guarantors. To induce the Bank to extend
credit to the Borrower, each Guarantor represents and warrants to the Bank that
all representations and warranties relating to it contained in the Credit
Agreement are true and correct.

9. Covenants. Each Guarantor covenants and agrees that, from the date hereof and
until payment in full of the Obligations, such Guarantor shall, unless the Bank
otherwise consents in writing, comply with all of the covenants contained in the
Credit Agreement (as it may be amended from time to time) as applicable to such
Guarantors and shall deliver to the Bank:

(i) within five Business Days after such Guarantor becomes aware of the
occurrence of any Default or Event of Default, a certificate of a principal
financial officer or a principal accounting officer of such Guarantor setting
forth the details thereof and the action which the Guarantor is taking or
proposes to take with respect thereto; and

WCSR 3452315v1

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(ii) from time to time, such additional information regarding the financial
position or business of such Guarantor as the Bank may reasonably request.

10. Events of Default. Each of the following shall constitute an “Event of
Default” hereunder:

(a) Failure of any Guarantor to pay on demand by the Bank any principal of,
premium, if any, or interest on the Obligations after the same shall become due,
whether by acceleration or otherwise;

(b) Failure of any Guarantor to observe or perform any of its covenants,
conditions or agreements under this Guaranty (other than set forth in paragraph
(a) above) for a period of thirty (30) days after notice specifying such failure
and requesting that it be remedied is given by the Bank to such Guarantor;

(c) Any representation, warranty, certification or statement made by any
Guarantor in any certificate, financial statement or other document delivered
pursuant to this Guaranty shall prove to have been incorrect in any material
respect when made; or

(d) The Borrower shall at any time fail to own, directly or indirectly, 100% or
more of the issued and outstanding shares of voting stock of any Guarantor;
provided, that an Event of Default shall not occur if the Borrower ceases to own
100% of the issued and outstanding shares of voting stock of a Guarantor as a
result of the Borrower’s sale of one hundred percent (100%) of the capital stock
of such Guarantor in accordance with and to the extent permitted by the terms of
Section 5.03 of the Credit Agreement.

Whenever any Default or Event of Default shall have occurred, the Bank may
declare the entire unpaid principal of, premium, if any, and interest on the
Obligations to be immediately due and payable without presentation, demand,
protest and notice of any kind, all of which are hereby expressly waived;
provided that if any Event of Default specified in clause (g) or (h) of Section
6.01 of the Credit Agreement occurs, without any notice to any Guarantor or any
other act by the Bank, the liabilities and obligations of the Guarantors
hereunder shall automatically become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Guarantors. As used herein, the term “Default” means any
condition or event which constitutes an Event of Default or which with the
giving of notices or lapse of time or both would, unless cured or waived, become
an Event of Default.

No failure or delay by the Bank to exercise any right, power or privilege
hereunder shall operate as a waiver of any such right, power or privilege nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise thereof. The rights and remedies herein provided
are cumulative and not exclusive of any rights or remedies provided by law.

11. Waivers by Guarantors. Each Guarantor hereby waives: (a) acceptance or
notice of acceptance of this Guaranty by the Bank; (b) notice of any action
taken or omitted by the Bank in reliance hereon; (c) any duty on the part of the
Bank to disclose to the Guarantors, or any of them, any facts it may now or
hereafter know regarding the Borrower or any other Guarantor; (d) notice of
presentment and demand for payment or performance of any of the Obligations; (e)
protest and notice of dishonor or of default to the Guarantors, or any of them,
or to any other party with respect to the payment or performance of the
Obligations hereby guaranteed; (f) any and all other notices whatsoever from the
Bank to which the Guarantors, or any of them, might otherwise be entitled; and
(g) any requirement that the Bank be diligent or prompt in making demands
hereunder, giving notice of any default by the
 
WCSR 3452315v1

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Borrower or asserting any other right of the Bank hereunder. Each Guarantor also
irrevocably waives, to the fullest extent permitted by law, and agrees not to
assert or take advantage of any and all defenses which at any time may be
available in respect of such Guarantor’s obligations to the Bank hereunder by
virtue of: (i) the statute of limitations in any action hereunder or for the
collection or the performance of any of the Obligations; (ii) the incapacity,
lack of authority, death or disability of any Guarantor or any other person or
entity, or the failure of the Bank to file or enforce a claim against the estate
(either in administration, bankruptcy, or any other proceeding) of the Borrower,
any Guarantor or any other person or entity; (iii) the failure of the Bank to
give notice of any action or non-action on the part of any other person
whomsoever, in connection with any of the Obligations; (iv) an election of
remedies by the Bank which destroys or otherwise impairs any subrogation rights
of the Guarantors, or any of them, the right of a Guarantor to proceed against
the Borrower for reimbursement, or the right of a Guarantor to seek contribution
from any co-guarantor, or all or any combination of such rights; (v) the failure
of the Bank to commence an action against the Borrower, any Guarantor, or any
other Person; (vi) any homestead exemption, valuation, stay, moratorium law or
other similar law now or hereafter in effect; (vii) any defense based on lack of
due diligence by the Bank in collection, protection or realization upon any
collateral securing the Obligations; (viii) any and all rights the Guarantors,
or any of them, may now or hereafter have arising under North Carolina General
Statutes §26-7; (ix) the amendment of, supplement to or waiver of any provision
of the Credit Agreement, the Note or any other Loan Documents, (x) the failure
of any Guarantor to receive any benefit from or as a result of its execution,
delivery and performance of this Guaranty; and (xi) any other legal or equitable
defenses whatsoever to which the Guarantors, or any of them, might otherwise be
entitled.

12. No Contest with Bank. So long as any Obligation remains unpaid or
undischarged, no Guarantor will, by paying any sum recoverable hereunder
(whether or not demanded by the Bank) or by any means or on any other ground,
claim any right of subrogation with respect to any of the Obligations guaranteed
hereby or to any collateral now or hereafter granted to secure the Obligations
or claim any setoff or counterclaim against the Borrower in respect of any
liability of the Guarantors, or any of them, to the Borrower or of the Borrower
to the Guarantors, or any of them, or, in proceedings under any federal or state
bankruptcy code or insolvency proceedings of any nature, proceed in competition
with the Bank in respect of payment hereunder or be entitled to have the benefit
of any counterclaim or proof of claim or dividend or payment by or on behalf of
the Borrower or the benefit of any other security for any Obligation which, now
or hereafter, the Bank may hold or in which it may have any share.

13. Remedies Cumulative. Each right, privilege, power and remedy of the Bank
under this Guaranty, the Credit Agreement, the Note or any other Loan Document,
or under any other instrument of any other party securing or guaranteeing any of
the Obligations or under applicable laws shall be cumulative and concurrent and
the exercise of any one or more of them shall not preclude the simultaneous or
later exercise by the Bank of any or all such other rights, privileges, powers
and remedies.

14. Demands and Notices. All notices, requests and other communications to the
parties hereunder shall be in writing and shall be given (i) to a Guarantor in
care of the Borrower at the address for the Borrower set forth in the Credit
Agreement, and (ii) to the Bank at its address set forth in the Credit
Agreement. All notices shall be given in the manner specified in the Credit
Agreement

15. Amendments, Waiver, Etc. No provision of this Guaranty can be changed,
waived or discharged or terminated except by an instrument in writing signed by
the Bank and each Guarantor. No course of dealing or delay or omission on the
part of either party in exercising any right shall operate as a waiver thereof
or otherwise be prejudicial thereto.
 
WCSR 3452315v1

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16. Counterparts. This Guaranty may be executed in any number of counterparts.
Each of the counterparts will be considered an original, and all counterparts
constitute but one and the same instrument.

17. Pari Passu Obligations. Each Guarantor warrants and represents that payment
obligations and liabilities of such Guarantor under this Guaranty shall at all
times rank pari passu with all other unsecured and unsubordinated payment
obligations and liabilities (including contingent obligations and liabilities)
of such Guarantor (other than those which are mandatorily preferred by laws or
regulations of general application). Each Guarantor shall assure that the
representation set forth herein is true and correct at all times.

18. Indemnity. Each Guarantor agrees to indemnify the Bank against, and hold the
Bank harmless from, any loss, cost, charge, expense (including reasonable
attorneys’ fees), claims, demands, suits, damages, penalties, taxes, fines,
levies and assessments which may be asserted or imposed against, or suffered or
incurred by, the Bank as a direct or indirect result of any representation or
warranty of the Borrower in the Credit Agreement or of the Guarantors herein
being untrue or inaccurate in any respect or as a direct or indirect result of
the failure by the Borrower or any Guarantor to observe, perform or comply with
any of its respective covenants, undertakings or obligations set forth in the
Credit Agreement, this Guaranty or any other Loan Document.

19. Financial Information. The liability of each Guarantor under this Guaranty
shall be reflected in the consolidated financial statements (or the notes
thereto) of the Borrower and its Subsidiaries in accordance with GAAP.

20. Miscellaneous Provisions. This Guaranty is intended to take effect as a
sealed instrument to be governed by and construed in accordance with the laws of
the State of North Carolina (but not including the choice of law rules thereof).
This Guaranty shall bind the successors and assigns of each Guarantor and shall
inure to the benefit of the Bank, its successors and assigns. All words herein
shall be deemed to refer to the singular, plural, masculine, feminine or neuter
as the identity of the person or entity may require. The descriptive headings of
the several paragraphs of this Guaranty are inserted for convenience only and do
not constitute a part of this Guaranty.

21. Additional Guarantors. Pursuant to Section 5.02 of the Credit Agreement,
certain Subsidiaries acquired or organized after the Closing Date are required
to enter into this Guaranty as a Guarantor upon becoming a Subsidiary. Upon
execution and delivery, after the date hereof, by the Bank and such Subsidiary
of an instrument in form and substance satisfactory to the Bank, such Subsidiary
shall become a Guarantor hereunder with the same force and effect as if
originally named as a Guarantor herein. The execution and delivery of any
instrument adding an additional Guarantor as a party to this Guaranty shall not
require the consent of any other Guarantor hereunder. The rights and obligations
of each Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor as a party to this Guaranty.

22. Waiver of Jury Trial; Consent to Jurisdiction. The Guarantors (a) and the
Bank irrevocably waives, to the fullest extent permitted by law, any and all
right to trial by jury in any legal proceeding arising out of this Guaranty, any
of the other Loan Documents, or any of the transactions contemplated hereby or
thereby, (b) submits to personal jurisdiction in the State of North Carolina,
the courts thereof and the United States District Courts sitting therein, for
the enforcement of this Guaranty and the other Loan Documents, (c) waives any
and all personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of North Carolina for the purpose of litigation to enforce this
Guaranty or the other Loan Documents, and (d) agrees that service of process may
be made upon it in the manner prescribed in
 
WCSR 3452315v1

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 Section 8.01 of the Credit Agreement for the giving of notice to the Borrower.
Nothing herein contained, however, shall: (i) prevent the Bank from bringing any
action or exercising any rights against any security and against any Guarantor
personally, and against any assets of any Guarantor, within any other state or
jurisdiction; or (ii) affect the right to serve legal process in any other
manner permitted by law.

23. Arbitration; Preservation and Limitation of Remedies. (a) Upon demand of any
party hereto, whether made before or after institution of any judicial
proceeding, any dispute, claim or controversy arising out of, connected with or
relating to this Guaranty or any other Loan Document (“Disputes”) between or
among the Borrower, its Subsidiaries, any Guarantor and the Bank, or any of
them, shall be resolved by binding arbitration as provided herein. Institution
of a judicial proceeding by a party does not waive the right of that party to
demand arbitration hereunder. Disputes may include, without limitation, tort
claims, counterclaims, claims brought as class actions, claims arising from
documents executed in the future, disputes as to whether a matter is subject to
arbitration, or claims arising out of or connected with the transactions
contemplated by this Guaranty and the other Loan Documents. Arbitration shall be
conducted under and governed by the Commercial Financial Disputes Arbitration
Rules (the “Arbitration Rules”) of the American Arbitration Association (the
“AAA”), as in effect from time to time, and the Federal Arbitration Act, Title 9
of the U.S. Code, as amended. All arbitration hearings shall be conducted in the
city in which the principal office of the Bank is located. A hearing shall begin
within ninety (90) days of demand for arbitration and all hearings shall be
concluded within 120 days of demand for arbitration. These time limitations may
not be extended unless a party shows cause for extension and then for no more
than a total of sixty (60) days. The expedited procedures set forth in Rule 51
et seq. of the Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any Dispute. A
judgment upon the award may be entered in any court having jurisdiction. The
panel from which all arbitrators are selected shall be comprised of licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel of
the AAA. The single arbitrator selected for expedited procedure shall be a
retired judge from the highest court of general jurisdiction, state or federal,
of the state where the hearing will be conducted. The parties do not waive
applicable federal or state substantive law except as provided herein.

(b) Notwithstanding the preceding binding arbitration provisions, the parties
hereto agree to preserve, without diminution, certain remedies that any party
hereto may employ or exercise freely, either alone, in conjunction with or
during a Dispute. Any party hereto shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) obtaining provisional or ancillary remedies,
including injunctive relief, sequestration, garnishment, attachment, appointment
of a receiver and filing an involuntary bankruptcy proceeding; and (ii) when
applicable, a judgment by confession of judgment. Any claim or controversy with
regard to any party’s entitlement to such remedies is a Dispute. Preservation of
these remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute. The parties hereto agree
that no party shall have a remedy of punitive or exemplary damages against any
other party in any Dispute, and each party hereby waives any right or claim to
punitive or exemplary damages that it has now or that may arise in the future in
connection with any Dispute, whether such Dispute is resolved by arbitration or
judicially. The parties acknowledge that by agreeing to binding arbitration they
have irrevocably waived any right they may have to a jury trial with regard to a
Dispute. The Guarantors agree to pay the reasonable fees and expenses of counsel
to the Bank in connection with any Dispute subject to arbitration as provided
herein.

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WCSR 3452315v1

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IN WITNESS WHEREOF, each Guarantor has executed this Guaranty as of the day and
year first above written.

GUARANTORS:

OUTBACK STEAKHOUSE OF FLORIDA, INC.,
a Florida corporation

By: /s/ Dirk A. Montgomery                               (SEAL)

Dirk A. Montgomery,
Chief Financial Officer

CARRABBA’S ITALIAN GRILL, INC., a Florida corporation

By: /s/ Dirk A. Montgomery                               (SEAL)
Dirk A. Montgomery,
Chief Financial Officer

OUTBACK STEAKHOUSE INTERNATIONAL, INC., a Florida corporation

By: /s/ Dirk A. Montgomery                               (SEAL)
Dirk A. Montgomery,
Chief Financial Officer

OS CAPITAL, INC., a Delaware corporation

By: /s/ Dirk A. Montgomery                               (SEAL)
Dirk A. Montgomery,
Chief Financial Officer

OS PACIFIC, INC., a Florida corporation

By: /s/ Dirk A. Montgomery                               (SEAL)
Dirk A. Montgomery,
Chief Financial Officer

WCSR 3452315v1

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OS PRIME, INC., a Florida corporation

By: /s/ Dirk A. Montgomery                               (SEAL)
Dirk A. Montgomery,
Chief Financial Officer

OS TROPICAL, INC., a Florida corporation

By: /s/ Dirk A. Montgomery                               (SEAL)
Dirk A. Montgomery,
Chief Financial Officer

BONEFISH GRILL, INC., a Florida corporation

By: /s/ Dirk A. Montgomery                               (SEAL)
Dirk A. Montgomery,
Chief Financial Officer

 
 
 
 WCSR 3452315v1

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