Exhibit 10.1

 

EXECUTION COPY

 

 

$95,000,000

 

FIRST LIEN CREDIT AGREEMENT

 

among

 

NEW WORLD RESTAURANT GROUP, INC.,
as Borrower,

 

The Several Lenders
from Time to Time Parties Hereto,

 

and

 

WELLS FARGO FOOTHILL, INC.,
as Administrative Agent

 

Dated as of January 26, 2006

 

 

 

BEAR, STEARNS & CO. INC., as Sole Lead Arranger and Sole Bookrunner

 

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TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

 

 

Section 1.

 

DEFINITIONS

 

1

 

 

 

 

 

1.1.

 

Defined Terms

 

1

1.2.

 

Other Definitional Provisions

 

24

 

 

 

 

 

Section 2.

 

AMOUNT AND TERMS OF TERM COMMITMENTS

 

25

 

 

 

 

 

2.1.

 

Term Commitments

 

25

2.2.

 

Procedure for Term Loan Borrowing

 

25

2.3.

 

Repayment of Term Loans

 

26

 

 

 

 

 

Section 3.

 

AMOUNT AND TERMS OF REVOLVING COMMITMENTS

 

27

 

 

 

 

 

3.1.

 

Revolving Commitments

 

27

3.2.

 

Procedure for Revolving Loan Borrowing

 

27

3.3.

 

Swingline Commitment

 

28

3.4.

 

Procedure for Swingline Borrowing; Refunding of Swingline Loans

 

29

3.5.

 

Commitment Fees, etc

 

30

3.6.

 

Termination or Reduction of Revolving Commitments

 

30

3.7.

 

L/C Commitment

 

31

3.8.

 

Procedure for Issuance of Letter of Credit

 

31

3.9.

 

Fees and Other Charges

 

32

3.10.

 

L/C Participations

 

32

3.11.

 

Reimbursement Obligation of the Borrower

 

33

3.12.

 

Obligations Absolute

 

33

3.13.

 

Letter of Credit Payments

 

34

3.14.

 

Applications

 

34

 

 

 

 

 

Section 4.

 

GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

 

34

 

 

 

 

 

4.1.

 

Optional Prepayments

 

34

4.2.

 

Mandatory Prepayments and Commitment Reductions

 

35

4.3.

 

Conversion and Continuation Options

 

36

4.4.

 

Limitations on Eurodollar Tranches

 

37

4.5.

 

Interest Rates and Payment Dates

 

37

4.6.

 

Computation of Interest and Fees

 

38

4.7.

 

Inability to Determine Interest Rate

 

38

4.8.

 

Pro Rata Treatment and Payments

 

39

4.9.

 

Requirements of Law

 

40

4.10.

 

Taxes

 

41

4.11.

 

Indemnity

 

43

4.12.

 

Change of Lending Office

 

43

4.13.

 

Replacement of Lenders

 

44

 

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Page

 

 

 

 

 

4.14.

 

Evidence of Debt

 

44

4.15.

 

Illegality

 

45

 

 

 

 

 

Section 5.

 

REPRESENTATIONS AND WARRANTIES

 

45

 

 

 

 

 

5.1.

 

Financial Condition

 

45

5.2.

 

No Change

 

46

5.3.

 

Corporate Existence; Compliance with Law

 

46

5.4.

 

Power; Authorization; Enforceable Obligations

 

46

5.5.

 

No Legal Bar

 

47

5.6.

 

Litigation

 

47

5.7.

 

No Default

 

47

5.8.

 

Ownership of Property; Liens

 

47

5.9.

 

Intellectual Property

 

47

5.10.

 

Taxes

 

47

5.11.

 

Federal Regulations

 

48

5.12.

 

Labor Matters

 

48

5.13.

 

ERISA

 

48

5.14.

 

Investment Company Act; Other Regulations

 

48

5.15.

 

Subsidiaries

 

48

5.16.

 

Use of Proceeds

 

48

5.17.

 

Environmental Matters

 

49

5.18.

 

Accuracy of Information, etc.

 

50

5.19.

 

Security Documents

 

50

5.20.

 

Solvency

 

50

5.21.

 

First Lien Obligations; Senior Indebtedness.

 

50

5.22.

 

Inactive Subsidiaries

 

51

5.23.

 

Material Contracts

 

51

5.24.

 

Bank Accounts

 

51

5.25.

 

Insurance

 

51

 

 

 

 

 

Section 6.

 

CONDITIONS PRECEDENT

 

51

 

 

 

 

 

6.1.

 

Conditions to the Closing Date

 

51

6.2.

 

Conditions to the Initial Borrowing Date

 

53

6.3.

 

Conditions to Each Extension of Credit

 

55

 

 

 

 

 

Section 7.

 

AFFIRMATIVE COVENANTS

 

55

 

 

 

 

 

7.1.

 

Financial Statements

 

56

7.2.

 

Certificates; Other Information

 

57

7.3.

 

Payment of Obligations

 

58

7.4.

 

Maintenance of Existence; Compliance

 

58

7.5.

 

Maintenance of Property; Insurance

 

58

7.6.

 

Inspection of Property; Books and Records; Discussions

 

58

7.7.

 

Notices

 

59

7.8.

 

Environmental Laws

 

59

 

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Page

 

 

 

 

 

7.9.

 

Interest Rate Protection

 

59

7.10.

 

Additional Collateral, etc.

 

60

7.11.

 

Further Assurances

 

61

 

 

 

 

 

Section 8.

 

NEGATIVE COVENANTS

 

62

 

 

 

 

 

8.1.

 

Financial Condition Covenants

 

62

8.2.

 

Indebtedness

 

64

8.3.

 

Liens

 

65

8.4.

 

Fundamental Changes

 

67

8.5.

 

Disposition of Property

 

67

8.6.

 

Restricted Payments

 

68

8.7.

 

Capital Expenditures

 

68

8.8.

 

Investments

 

69

8.9.

 

Certain Payments and Modifications of Certain Debt Instruments

 

70

8.10.

 

Transactions with Affiliates

 

71

8.11.

 

Sales and Leasebacks

 

71

8.12.

 

Hedge Agreements

 

71

8.13.

 

Changes in Fiscal Periods

 

71

8.14.

 

Negative Pledge Clauses

 

71

8.15.

 

Clauses Restricting Subsidiary Distributions

 

72

8.16.

 

Lines of Business

 

72

8.17.

 

Inactive Subsidiaries

 

72

 

 

 

 

 

Section 9.

 

EVENTS OF DEFAULT

 

72

 

 

 

 

 

Section 10.

 

THE AGENTS

 

76

 

 

 

 

 

10.1.

 

Appointment and Authorization of Administrative Agent

 

76

10.2.

 

Delegation of Duties

 

77

10.3.

 

Liability of the Administrative Agent

 

77

10.4.

 

Reliance by Administrative Agent

 

78

10.5.

 

Notice of Default or Event of Default

 

78

10.6.

 

Credit Decision

 

78

10.7.

 

Costs and Expenses; Indemnification

 

79

10.8.

 

Agent in Its Individual Capacity

 

79

10.9.

 

Successor Administrative Agent

 

80

10.10.

 

Lenders in Individual Capacity

 

80

10.11.

 

Agents Generally

 

80

10.12.

 

The Lead Arranger

 

80

10.13.

 

The Issuing Lender; the L/C Arranger; Other Agents

 

80

10.14.

 

Agency for Perfection.

 

81

10.15.

 

Payments by Agent to the Lenders.

 

81

10.16.

 

Concerning the Collateral and Related Loan Documents.

 

81

10.17.

 

Several Obligations; No Liability

 

81

 

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Page

 

 

 

 

 

Section 11.

 

MISCELLANEOUS

 

82

 

 

 

 

 

11.1.

 

Amendments and Waivers

 

82

11.2.

 

Notices

 

84

11.3.

 

No Waiver; Cumulative Remedies

 

85

11.4.

 

Survival of Representations and Warranties

 

85

11.5.

 

Payment of Expenses and Taxes

 

85

11.6.

 

Successors and Assigns; Participations and Assignments

 

86

11.7.

 

Adjustments; Set-off

 

90

11.8.

 

Counterparts; Electronic Execution

 

91

11.9.

 

Severability

 

91

11.10.

 

Integration; Intercreditor and Subordination Agreements

 

91

11.11.

 

GOVERNING LAW

 

91

11.12.

 

Submission To Jurisdiction; Waivers

 

91

11.13.

 

Acknowledgments

 

92

11.14.

 

Releases of Guarantees and Liens

 

92

11.15.

 

Confidentiality

 

93

11.16.

 

Revival and Reinstatement of Obligations

 

94

11.17.

 

WAIVERS OF JURY TRIAL

 

94

11.18.

 

Delivery of Addenda

 

94

 

iv

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Annex A: Pricing Grid

 

 

 

SCHEDULES:

 

 

 

5.4

 

Consents, Authorizations, Filings and Notices

5.15

 

Subsidiaries

5.19(a)

 

UCC Filing Jurisdictions

5.22

 

Inactive Subsidiaries

5.24

 

Bank Accounts

5.25

 

Insurance

8.2(f)

 

Existing Indebtedness

8.3(g)

 

Existing Liens

 

 

 

EXHIBITS:

 

 

 

A

 

Form of Addendum

B

 

Form of Assignment and Assumption

C

 

Form of Compliance Certificate

D

 

Form of Guarantee and Collateral Agreement

E

 

[Reserved]

F

 

Form of Exemption Certificate

G-1

 

Form of Term Note

G-2

 

Form of Revolving Note

G-3

 

Form of Swingline Note

H

 

Form of Closing Certificate

I-1

 

Form of Legal Opinion of Holme Roberts & Owen LLP

I-2

 

Form of Legal Opinion of Holme Roberts & Owen LLP (Perfection Opinion)

J

 

Form of Intercreditor Agreement

K

 

Form of Subordinated Loan Agreement

L

 

Form of Subordination Agreement

M

 

Form of Solvency Certificate

 

v

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FIRST LIEN CREDIT AGREEMENT, dated as of January 26, 2006, among NEW WORLD
RESTAURANT GROUP, INC., a Delaware corporation (the “Borrower”), the several
banks and other financial institutions or entities from time to time parties to
this Agreement (the “Lenders”), BEAR, STEARNS & CO. INC., as sole lead arranger
and sole bookrunner (in such capacity, the “Lead Arranger”), and WELLS FARGO
FOOTHILL, INC., as administrative agent for the Lenders (“WFF” and, in such
capacity, together with its successors and assigns, the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower wishes to refinance (the “Refinancing”) (a) its 13% Senior
Notes due 2008 (the “Senior Notes”) in an aggregate outstanding principal amount
of approximately $160,000,000 and (b) its credit facilities available under the
Loan and Security Agreement, dated as of July 8, 2003, among the Borrower,
Manhattan Bagel Company, Inc., Chesapeake Bagel Franchise Corp., Willoughby’s
Incorporated, Einstein and Noah Corp., Einstein/Noah Bagel Partners, Inc. and
I. & J. Bagel, Inc., as borrowers, the financial institutions party thereto and
AmSouth Capital Corp., as administrative agent (as amended, the “Existing Credit
Facility”);

 

WHEREAS, the Borrower has requested that the Lenders make available the credit
facilities described in this Agreement in order to finance the Refinancing and
to pay fees and expenses related to the Refinancing, and to provide for the
ongoing working capital and general corporate needs of the Borrower and its
Subsidiaries; and

 

WHEREAS, the Lenders are willing to make such credit facilities available upon
and subject to the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter
set forth, the parties hereto hereby agree as follows:

 

SECTION 1.   DEFINITIONS

 

1.1.                              Defined Terms.  As used in this Agreement, the
terms listed in this Section 1.1 shall have the respective meanings set forth in
this Section 1.1.

 

“Acquisition”: as to any Person, (a) the acquisition of all of the Capital Stock
of another Person, (b) the acquisition of all or substantially all of the assets
of any other Person or (c) the acquisition of all or substantially all of the
assets constituting a business line or division of any other Person.

 

“Addendum”:  an instrument, substantially in the form of Exhibit A, by which a
Lender becomes a party to this Agreement as of the Closing Date.

 

“Adjustment Date”:  as defined in the Pricing Grid.

 

“Administrative Agent”:  as defined in the preamble to this Agreement.

 

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

 

“Affiliate”:  as to any Person, any other Person that, directly or indirectly,
is in control of, is controlled by, or is under common control with, such
Person.  For purposes of this definition, “control” of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors (or persons performing
similar functions) of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.

 

“Agents”:  the collective reference to the Lead Arranger and the Administrative
Agent, which term shall include, for the purposes of Section 10 and Section 11.5
only, the L/C Arranger, the Issuing Lender and the Swingline Lender.

 

“Aggregate Exposure”:  with respect to any Lender at any time, an amount equal
to (a) until the Initial Borrowing Date, the aggregate amount of such Lender’s
Commitments at such time and (b) thereafter, the sum of (i) the aggregate then
unpaid principal amount of such Lender’s Term Loans and (ii) the amount of such
Lender’s Revolving Commitment then in effect or, if the Revolving Commitments
have been terminated, the amount of such Lender’s Revolving Extensions of Credit
then outstanding.

 

“Aggregate Exposure Percentage”:  with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the Aggregate Exposure of all Lenders at such time.

 

“Agreement”:  this First Lien Credit Agreement.

 

“Applicable Margin”:  for each Type of Loan, the rate per annum set forth under
the relevant column heading below:

 

 

 

Eurodollar Loans

 

Base Rate Loans

 

Revolving Loans

 

3.00

%

2.00

%

Swingline Loans

 

N/A

 

2.00

%

Term Loans

 

3.00

%

2.00

%

 

; provided, that, on and after the first Adjustment Date (as defined in the
Pricing Grid) occurring after the date which is twelve months after the Initial
Borrowing Date, the Applicable Margin will be determined pursuant to the Pricing
Grid.

 

“Application”:  an application, in such form as the L/C Arranger or the Issuing
Lender may specify from time to time, requesting the L/C Arranger to cause a
Letter of Credit to be issued (which application shall be subject to
Section 3.14).

 

“Approved Fund”:  as defined in Section 11.6(c).

 

“Asset Sale”:  any Disposition of Property or series of related Dispositions of
Property (excluding any such Disposition permitted by clause (a), (b), (c), (d),
(e) and (h) of Section 8.5) that yields gross proceeds to any Group Member
(valued at the initial principal amount thereof in the case of non-cash proceeds
consisting of notes or other debt securities and valued at fair market value in
the case of other non-cash proceeds) in excess of $500,000.

 

2

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“Assignee”:  as defined in Section 11.6(b).

 

“Assignment and Assumption”:  an Assignment and Assumption, substantially in the
form of Exhibit B.

 

“Authorized Person”: the president, chief executive officer or chief financial
officer and any other officer or employee designated as such by the president,
chief executive officer or chief financial officer of the Borrower.

 

“Available Revolving Commitment”:  as to any Revolving Lender at any time, an
amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment
then in effect over (b) such Lender’s Revolving Extensions of Credit then
outstanding, provided that, in calculating any Lender’s (other than the
Swingline Lender) Revolving Extensions of Credit for purposes of determining
such Lender’s Available Revolving Commitment pursuant to Section 3.5, the
aggregate principal amount of Swingline Loans then outstanding shall be zero.

 

“Base Rate”:  for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus
0.50%.  For purposes hereof:  “Prime Rate” shall mean the rate of interest per
annum publicly announced from time to time by the Reference Bank as its prime
rate in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the Reference Bank
in connection with extensions of credit to debtors).  Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively.

 

“Base Rate Loans”:  Loans the rate of interest applicable to which is based upon
the Base Rate.

 

“Board”:  the Board of Governors of the Federal Reserve System of the United
States (or any successor).

 

“Borrower”:  as defined in the preamble to this Agreement.

 

“Borrowing Date”:  any Business Day specified by the Borrower as a date on which
the Borrower requests the relevant Lenders to make Loans hereunder.

 

“Business”:  as defined in Section 5.17(b).

 

“Business Day”:  a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close,
provided, that with respect to notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, such day is also a
day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.

 

“Capital Expenditures”:  for any period, with respect to any Person, without
duplication, (i) the aggregate of all expenditures by such Person and its
Subsidiaries for the

 

3

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

 

acquisition of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements) during such period, in each
case, that should be capitalized under GAAP on a consolidated balance sheet of
such Person and its Subsidiaries, and (ii) Capital Lease Obligations incurred by
such Person and its Subsidiaries during such period, provided that (a) the cost
of any Investment permitted under Sections 8.8(k) or 8.8(l) shall not constitute
a Capital Expenditure by the Borrower or any of its Subsidiaries and (b) Capital
Expenditures funded with Reinvestment Deferred Amounts shall not be deemed to be
Capital Expenditures.

 

“Capital Lease Obligations”:  as to any Person, the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP.

 

“Capital Stock”:  any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

 

“Cash Collateralized Surety Bonds”: Indebtedness of the Borrower and its
Subsidiaries in respect of surety bonds permitted under Section 8.2(k)(A) to the
extent such Indebtedness is cash collateralized with cash or Cash Equivalents
subject to a Lien in favor of the holders of such Indebtedness.

 

“Cash Equivalents”:  (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one calendar year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor’s Ratings Services (“S&P”) or P-1 by Moody’s
Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of
clause (b) of this definition, having a term of not more than 30 days, with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody’s; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial

 

4

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

 

bank satisfying the requirements of clause (b) of this definition; or (g) shares
of money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition or
money market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, as
amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $5,000,000,000.

 

“Closing Date”:  the date on which the conditions precedent set forth in
Section 6.1 shall have been satisfied, which date is January 26, 2006.

 

“Code”:  the Internal Revenue Code of 1986, as amended from time to time.

 

“Coke Beverage Marketing Agreement”:  the Beverage Marketing Agreement, dated as
of December 30, 2004, among the Borrower, The Coca-Cola Company and Odwalla
Inc., as amended from time to time.

 

“Collateral”:  all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.

 

“Commitment”:  as to any Lender, the sum of the Term Commitment and the
Revolving Commitment of such Lender.

 

“Commitment Fee Rate”:  0.50% per annum.

 

“Commonly Controlled Entity”:  an entity, whether or not incorporated, that is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under Section 414(b) or (c) of the Code (and, solely for
purposes of Section 412 of the Code, under Section 414(m), (n), and (o) of the
Code).

 

“Compliance Certificate”:  a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit C.

 

“Conduit Lender”:  any special purpose entity organized and administered by any
Lender for the purpose of making Loans otherwise required to be made by such
Lender and designated by such Lender in a written instrument, subject to the
consent of the Administrative Agent and the Borrower (which consent shall not be
unreasonably withheld); provided, that the designation by any Lender of a
Conduit Lender shall not relieve the designating Lender of any of its
obligations to fund a Loan under this Agreement if, for any reason, its Conduit
Lender fails to fund any such Loan, and the designating Lender (and not the
Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be
entitled to receive any greater amount pursuant to Section 4.9, 4.10, 4.11 or
11.5 than the designating Lender would have been entitled to receive in respect
of the extensions of credit made by such Conduit Lender or (b) be deemed to have
any Commitment.

 

“Consolidated Current Assets”:  at any date, all amounts (other than cash and
Cash Equivalents but including any “restricted cash” under GAAP) that would, in
conformity

 

5

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

 

with GAAP, be set forth opposite the caption “total current assets” (or any like
caption) on a consolidated balance sheet of the Borrower and its Subsidiaries at
such date.

 

“Consolidated Current Liabilities”:  at any date, all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Long-Term Debt of the Borrower and its Subsidiaries and
(b) without duplication of clause (a) above, all Indebtedness consisting of
Revolving Loans or Swingline Loans to the extent otherwise included therein.

 

“Consolidated EBITDA”:  for any period, Consolidated Net Income for such period
plus, without duplication and to the extent deducted in determining Consolidated
Net Income for such period, the sum of (a) income tax expense, (b) interest
expense, amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with Indebtedness
(including the Loans, the Second Lien Term Loans and the Subordinated Loans),
(c) depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any
extraordinary charges or extraordinary losses determined in accordance with
GAAP, (f) non-cash compensation expenses arising from the issuance of stock,
options to purchase stock and stock appreciation rights to the employees of the
Borrower, (g) reasonable legal, accounting, financing, consulting, advisory and
out-of-pocket fees and expenses incurred in connection with the initial
consummation of permitted incurrences of Indebtedness by the Borrower or any of
its Subsidiaries after the date hereof under Section 8.2(a), 8.2(b), 8.2(c),
8.2(g), 8.2(l) or 8.2(m), issuances of Capital Stock of the Borrower, permitted
Dispositions under Sections 8.5(f), 8.5(g) or 8.5(i) and permitted Investments
under Sections 8.8(k) or 8.8(l), (h) fees and expenses related to store closures
incurred during the first three fiscal years ending after the Initial Borrowing
Date and not exceeding $1,000,000 per fiscal year, (i) non-cash charges related
to changes in the exposure of the Borrower and its Subsidiaries under Hedge
Agreements, (j) reorganization costs, expenses or charges recorded during the
fiscal year ended December 31, 2005 not exceeding $1,600,000 in the aggregate
(with such amounts to be added back in the quarter (and any four quarter period
which includes such quarter) during which the cost, expense or charge was
recorded and only the amount recorded during such quarter), (k)cash expenses
related to the “Ruskin Moscou Faltischek, P.C. v. New World Restaurant
Group, Inc.” litigation in an aggregate amount not to exceed $500,000 (with such
expenses to be added back in the quarter (and any four quarter period which
includes such quarter) during which such expense is recorded and only the amount
recorded during such quarter)and (l) any other non-cash charges, non-cash
expenses or non-cash losses of the Borrower or any of its Subsidiaries for such
period (excluding any such charge, expense or loss incurred in the ordinary
course of business that constitutes an accrual of or a reserve for cash charges
for any future period), provided, however, that cash payments made in such
period or in any future period in respect of such non-cash charges, expenses or
losses (excluding any such charge, expense or loss incurred in the ordinary
course of business that constitutes an accrual of or a reserve for cash charges
for any future period) shall be subtracted from Consolidated Net Income in
calculating Consolidated EBITDA in the period when such payments are made, and
minus, to the extent included in determining such Consolidated Net Income for
such period, the sum of (a) interest income, (b) any extraordinary income or
gains determined in accordance with GAAP and (c) any other non-cash income
(excluding any items that represent the reversal of any accrual of, or cash
reserve for, anticipated cash charges in any

 

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prior period that are described in the parenthetical to clause (l) above), all
as determined on a consolidated basis.  For the purposes of calculating
Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a
“Reference Period”) pursuant to any determination of the Consolidated Leverage
Ratio, (i) if at any time during such Reference Period the Borrower or any
Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for
such Reference Period shall be reduced by an amount equal to the Consolidated
EBITDA (if positive) attributable to the property that is the subject of such
Material Disposition for such Reference Period or increased by an amount equal
to the Consolidated EBITDA (if negative) attributable thereto for such Reference
Period and (ii) if during such Reference Period the Borrower or any Subsidiary
shall have made a Material Acquisition, Consolidated EBITDA for such Reference
Period shall be calculated after giving pro forma effect thereto as if such
Material Acquisition occurred on the first day of such Reference Period.  As
used in this definition, “Material Acquisition” means any Acquisition
that involves the payment of consideration by the Borrower and its Subsidiaries
in excess of $2,500,000; and “Material Disposition” means any Disposition of
property or series of related Dispositions of property that yields gross
proceeds to the Borrower or any of its Subsidiaries in excess of $2,500,000.

 

“Consolidated First Lien Debt”: on any date of determination, Consolidated Total
Debt as of such date minus the sum of (a) the aggregate outstanding principal
amount of Second Lien Term Loans and Subordinated Loans on such date and (b) the
aggregate amount of unsecured Indebtedness on such date.

 

“Consolidated First Lien Leverage Ratio”: at any time, the ratio of
(a) Consolidated First Lien Debt at such time to (b) Consolidated EBITDA for the
most recent period of four consecutive fiscal quarters for which financial
statements have been delivered.

 

“Consolidated Fixed Charge Coverage Ratio”:  for any period, the ratio of
(a) Consolidated EBITDA for such period plus Consolidated Lease Expense for such
period to (b) Consolidated Fixed Charges for such period.

 

“Consolidated Fixed Charges”:  for any period, the sum (without duplication) of
(a) Consolidated Interest Expense for such period and (b) Consolidated Lease
Expense for such period.

 

“Consolidated Interest Expense”:  for any period, total cash interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness
(other than the Excluded Items) of the Borrower and its Subsidiaries (including
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers’ acceptance financing and net costs under Hedge
Agreements in respect of interest rates to the extent such net costs are
allocable to such period in accordance with GAAP); provided that (a) for the
purposes of determining Consolidated Interest Expense for the fiscal quarters
ending March 31, 2006, June 30, 2006 and September 30, 2006, Consolidated
Interest Expense for the relevant period shall be deemed to equal Consolidated
Interest Expense for such fiscal quarter (and, in the case of the latter two
such determinations, each previous fiscal quarter commencing after December 31,
2005) multiplied by 4, 2 and 4/3, respectively and (b) the amount of any
interest income during such

 

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period in respect of “restricted cash” under GAAP shall be deducted in
calculating Consolidated Interest Expense for such period.

 

“Consolidated Lease Expense”:  for any period, the excess of (a) the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries for such period with respect to leases of real and personal
property, determined on a consolidated basis in accordance with GAAP, provided
that payments in respect of Capital Lease Obligations shall not be included in
this clause (a), over (b) the aggregate amount of rentals paid to the Borrower
and its Subsidiaries during such period with respect to leases of real and
personal property by the Borrower and its Subsidiaries, and provided further,
that Consolidated Lease Expense shall not include any fixed or contingent
rentals payable by Persons (other than the Borrower and its Subsidiaries) with
respect to leases of real or personal property solely because such rentals are
subject to a Guarantee Obligation issued by the Borrower or any of its
Subsidiaries unless such Persons shall be in default of their obligations under
any such leases or such rentals shall actually be paid by the Borrower and its
Subsidiaries.

 

“Consolidated Leverage Ratio”:  at any time, the ratio of (a) Consolidated Total
Debt at such time to (b) Consolidated EBITDA for the most recent period of four
consecutive fiscal quarters for which financial statements have been delivered.

 

“Consolidated Net Income”:  for any period, the consolidated net income (or
loss) of the Borrower and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income
(or deficit) of any Person (other than a Subsidiary of the Borrower) in which
the Borrower or any of its Subsidiaries has an ownership interest, except to the
extent that any such income is actually received by the Borrower or such
Subsidiary in the form of dividends or similar distributions and (b) the
undistributed earnings of any Subsidiary of the Borrower (other than a
Subsidiary Guarantor) to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary is not at the time permitted by the
terms of any Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary, provided, that this clause
(b) shall not apply to customary surplus requirements under applicable law
related to the payment of dividends.

 

“Consolidated Total Debt”:  at any date, the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries as set forth on a consolidated
balance sheet of the Borrower at such date in accordance with GAAP, determined
on a consolidated basis in accordance with GAAP, excluding (i) the Excluded
Items and (ii) items that appear solely in the footnotes thereto.

 

“Consolidated Working Capital”:  at any date, the excess of Consolidated Current
Assets on such date over Consolidated Current Liabilities on such date.

 

“Continuing Directors”:  the directors of the Borrower on the Closing Date,
after giving effect to the transactions contemplated hereby, and each other
director, if such other director’s nomination for election to the board of
directors of the Borrower is recommended by at least 51% of the then Continuing
Directors or such other director receives the vote of the Permitted Investors in
his or her election by the shareholders of the Borrower.

 

8

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

 

“Control Agreement”: a control agreement in favor of the Administrative Agent
and the Second Lien Administrative Agent having terms and conditions reasonably
satisfactory to the Administrative Agent and executed and delivered by the
financial institution with whom the relevant account is maintained and the
applicable Loan Parties.

 

“Control Investment Affiliate”:  as to any Person, any other Person that
(a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies. 
For purposes of this definition, “control” of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.

 

“Default”:  any of the events specified in Section 9, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

 

“Defaulting Lender”:  as defined in Section 4.13.

 

“Disposition”:  with respect to any Property, any sale, lease, license, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof.  The
terms “Dispose” and “Disposed of” shall have correlative meanings.

 

“Dollars” and “$”:  dollars in lawful currency of the United States.

 

“Domestic Subsidiary”:  any Subsidiary of the Borrower organized under the laws
of any jurisdiction within the United States.

 

“ECF Percentage”:  75%, provided that, to the extent that the Consolidated
Leverage Ratio is equal to or less than 2.75 to 1.00 as of the last day of any
fiscal year, the ECF Percentage with respect to such fiscal year shall be 50%.

 

“Environmental Laws”:  any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

 

“ERISA”:  the Employee Retirement Income Security Act of 1974, as amended from
time to time.

 

“Eurocurrency Reserve Requirements”:  for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
basic, supplemental, marginal and emergency reserves under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements prescribed for

 

9

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eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.

 

“Eurodollar Base Rate”:  with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum determined on the basis of
the rate for deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on Page 3750 of
the Telerate screen as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period.  In the event that such rate does not
appear on Page 3750 of the Telerate screen (or otherwise on such screen), the
“Eurodollar Base Rate” shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as may be selected by
the Administrative Agent or, in the absence of such availability, by reference
to the rate at which the Administrative Agent (or its designee) is offered
Dollar deposits at or about 11:00 A.M., New York City time, two Business Days
prior to the beginning of such Interest Period in the interbank eurodollar
market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.

 

“Eurodollar Loans”:  Loans the rate of interest applicable to which is based
upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):

 

Eurodollar Base Rate

1.00 - Eurocurrency Reserve Requirements

 

“Eurodollar Tranche”:  the collective reference to Eurodollar Loans under a
particular Facility the then current Interest Periods with respect to all of
which begin on the same date and end on the same later date (whether or not such
Loans shall originally have been made on the same day).

 

“Event of Default”:  any of the events specified in Section 9, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

 

“Excess Cash Flow”:  for any fiscal year of the Borrower, the excess, if any, of
(a) the sum, without duplication, of (i) Consolidated Net Income for such fiscal
year (other than Consolidated Net Income arising out of any Asset Sale during
such fiscal year), (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) decreases in Consolidated Working Capital for such fiscal year,
(iv) the aggregate net amount of non-cash loss on the Disposition of Property by
the Borrower and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent deducted in
arriving at such Consolidated Net Income, and (v) cash payments in respect of
the net decrease (if any) during such period of outstanding Investments under
Sections 8.8 (d), (f) and (g), over (b) the sum, without duplication, of (i) the
amount of all non-cash gains or credits included in arriving at such
Consolidated Net Income, (ii) the aggregate amount of Capital Expenditures of
the Borrower and its Subsidiaries during such fiscal year

 

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(excluding the principal amount of Indebtedness incurred to finance such
expenditures (but including repayments of any such Indebtedness incurring during
such period or any prior period)), (iii) the aggregate amount of all prepayments
of Revolving Loans and Swingline Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Commitments and all
optional prepayments of the Term Loans and the Second Lien Term Loans during
such fiscal year together with any prepayment premium paid in connection
therewith, (iv) the aggregate amount of all regularly scheduled principal
payments of Long-Term Debt (including the Term Loans, the Second Lien Term Loans
and the Subordinated Loans) of the Borrower and its Subsidiaries made during
such fiscal year (other than in respect of any revolving credit facility to the
extent there is not an equivalent permanent reduction in commitments
thereunder), (v) increases in Consolidated Working Capital for such fiscal year,
(vi) the aggregate net amount of non-cash gain on the Disposition of Property by
the Borrower and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income, (vii) cash payments in respect of the
net increase (if any) during such period of outstanding Investments under
Sections 8.8(d), (f) and (g) and (viii) cash contributions required by law to be
made to, and made to, any Plan during such period.

 

“Excess Cash Flow Application Date”:  as defined in Section 4.2.

 

“Excluded Indebtedness”:  all Indebtedness permitted by Section 8.2.

 

“Excluded Items”: collectively, (i) the Series Z Preferred, (ii) the NJEDA Debt,
(iii) the Indebtedness under the Coke Beverage Marketing Agreement and (iv) Cash
Collateralized Surety Bonds, provided, that (x) the NJEDA Debt shall constitute
an Excluded Item only to the extent cash reserves are maintained exclusively for
the purpose of repaying the NJEDA Debt at its maturity and (y) the Coke Beverage
Marketing Agreement shall only constitute an Excluded Item to the extent a
default shall not have occurred and be continuing thereunder which permits The
Coca-Cola Company to terminate such agreement (after giving effect to any
applicable cure periods) and to cause the “Advance” or similar advances
thereunder to become due and payable unless the parties to the Coke Beverage
Marketing Agreement are negotiating in good faith to resolve such default in
accordance with the dispute resolution provisions in such agreement (in which
case the Coke Beverage Marketing Agreement shall remain an Excluded Item until
the parties are no longer engaged in such negotiations in accordance with such
provisions).

 

“Existing Credit Facility”:  as defined in the recitals to this Agreement.

 

“Facility”:  each of (a) the Term Commitments and the Term Loans made thereunder
(the “Term Facility”) and (b) the Revolving Commitments and the extensions of
credit made thereunder (the “Revolving Facility”).

 

“Federal Funds Effective Rate”:  for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the

 

11

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average of the quotations for the day of such transactions received by the
Reference Bank from three federal funds brokers of recognized standing selected
by it.

 

“First Lien Loans”: collectively, the Term Loans and the Revolving Loans.

 

“First Lien Obligations”: as defined in the Intercreditor Agreement.

 

“First Lien Qualified Counterparty”: as defined in the Intercreditor Agreement.

 

“Foreign Subsidiary”:  any Subsidiary of the Borrower that is not a Domestic
Subsidiary.

 

“Funding Office”:  the office of the Administrative Agent specified in
Section 11.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.

 

“GAAP”:  generally accepted accounting principles in the United States as in
effect from time to time.

 

“Governmental Authority”:  any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

 

“Group Members”:  the collective reference to the Borrower and its respective
Subsidiaries.

 

“Guarantee and Collateral Agreement”:  the Guarantee and Collateral Agreement to
be executed and delivered by the Borrower and each Subsidiary Guarantor,
substantially in the form of Exhibit D.

 

“Guarantee Obligation”:  as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including any
bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee

 

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Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.

 

“Hedge Agreements”:  as defined in the Intercreditor Agreement.

 

“Inactive Subsidiaries”: the Subsidiaries listed on Part A of Schedule 5.22.

 

“Indebtedness”:  of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables incurred in the ordinary course of such Person’s business that are not
outstanding after the later of (i) 60 days after the invoice date or (ii) 30
days after payment is due), (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party or applicant under or in respect of acceptances,
letters of credit, surety bonds or similar arrangements, (g) for the purpose of
Section 8.2 and the definition of Replacement Equity only, the liquidation value
of all mandatorily redeemable preferred Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above, (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by (or for which the holder
of such obligation has an existing right, contingent or otherwise, to be secured
by) any Lien on property (including accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such obligation, (j) for the purposes of Section 8.2 and Section 9(e) only,
all obligations of such Person in respect of Hedge Agreements and (k) other than
with respect to Section 9(e), all obligations under the Coke Beverage Marketing
Agreement or other similar agreements to the extent such obligations constitute
“take-or-pay” arrangements, provided, that for the purposes of this definition,
the “principal amount” of the obligations of such Person in respect of any Hedge
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that such Person would be required to pay if such Hedge
Agreement were terminated at such time.  The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person’s ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness expressly
provide that such Person is not liable therefor.

 

“Initial Borrowing Date”:  the first date occurring on or after February 28,
2006 on which all the conditions precedent set forth in Sections 6.1 and 6.2
shall have been satisfied, provided, that such date shall occur no later than 40
days after the Closing Date.

 

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“Insolvency”:  with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

“Intellectual Property”:  the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under
United States, multinational or foreign laws or otherwise, including copyrights,
copyright licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.

 

“Intercreditor Agreement”:  the Intercreditor Agreement to be executed and
delivered by the Borrower, each Subsidiary Guarantor, the Administrative Agent
and the Second Lien Administrative Agent, substantially in the form of
Exhibit J.

 

“Interest Payment Date”:  (a) as to any Base Rate Loan (other than any Swingline
Loans), the last day of each March, June, September and December to occur while
such Loan is outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last day
of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day that is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of such
Interest Period, (d) as to any Loan (other than any Revolving Loan that is a
Base Rate Loan and any Swingline Loan), the date of any repayment or prepayment
made in respect thereof and (e) with respect to any Swingline Loan, the date of
any repayment thereof.

 

“Interest Period”:  as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent no
later than 11:00 A.M., New York City time, on the date that is three Business
Days prior to the last day of the then current Interest Period with respect
thereto; provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:

 

(I)                                     IF ANY INTEREST PERIOD WOULD OTHERWISE
END ON A DAY THAT IS NOT A BUSINESS DAY, SUCH INTEREST PERIOD SHALL BE EXTENDED
TO THE NEXT SUCCEEDING BUSINESS DAY UNLESS THE RESULT OF SUCH EXTENSION WOULD BE
TO CARRY SUCH INTEREST PERIOD INTO ANOTHER CALENDAR MONTH IN WHICH EVENT SUCH
INTEREST PERIOD SHALL END ON THE IMMEDIATELY PRECEDING BUSINESS DAY;

 

(II)                                  THE BORROWER MAY NOT SELECT AN INTEREST
PERIOD UNDER A PARTICULAR FACILITY THAT WOULD EXTEND BEYOND THE REVOLVING
TERMINATION DATE OR BEYOND THE DATE FINAL PAYMENT IS DUE ON THE TERM LOANS, AS
THE CASE MAY BE; AND

 

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(III)                               ANY INTEREST PERIOD THAT BEGINS ON THE LAST
BUSINESS DAY OF A CALENDAR MONTH (OR ON A DAY FOR WHICH THERE IS NO NUMERICALLY
CORRESPONDING DAY IN THE CALENDAR MONTH AT THE END OF SUCH INTEREST PERIOD)
SHALL END ON THE LAST BUSINESS DAY OF A CALENDAR MONTH.

 

“Investments”:  as defined in Section 8.8.

 

“Issuing Lender”:  any financial institution designated by the L/C Arranger as
an Issuing Lender hereunder.  To the extent that there is more than one Issuing
Lender, each reference to “Issuing Lender” herein shall be deemed, where
appropriate, to be a reference to the relevant Issuing Lender with respect to
the relevant Letter of Credit.

 

“L/C Arranger”: Wells Fargo Foothill, Inc., in its capacity as the party
responsible for causing the issuance of Letters of Credit hereunder.

 

“L/C Commitment”:  $15,000,000.

 

“L/C Fee Payment Date”:  the last day of each March, June, September and
December and the last day of the Revolving Commitment Period.

 

“L/C Obligations”:  at any time, an amount equal to the sum, without
duplication, of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit, (b) except to the extent the Letter of Credit
will, immediately upon issuance thereof, replace another outstanding Letter of
Credit, the Stated Amount of any Letter of Credit for which an Application has
been submitted and is pending and has not been withdrawn or revoked, but that
has not yet been issued, and (c) the aggregate amount of drawings under Letters
of Credit that have not then been reimbursed pursuant to Section 3.11.

 

“L/C Participants”:  the collective reference to all the Revolving Lenders other
than the Issuing Lender.

 

“Lead Arranger”:  as defined in the preamble to this Agreement.

 

“Lenders”:  as defined in the preamble hereto; provided, that unless the context
otherwise requires, each reference herein to the Lenders shall be deemed to
include any Conduit Lender.

 

“Letters of Credit”:  as defined in Section 3.7(a).

 

“Lien”:  any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having substantially the same economic
effect as any of the foregoing).

 

“Loan”:  any loan made by any Lender pursuant to this Agreement.

 

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“Loan Documents”:  this Agreement, the Applications, the Security Documents and
the Notes.

 

“Loan Parties”:  each Group Member that is a party to a Loan Document.

 

“Long-Term Debt”:  as to any Person, all Indebtedness of such Person that
matures more than one fiscal year from the date of its creation or matures
within one fiscal year from such date but is renewable or extendible, at the
option of such Person, to a date more than one fiscal year from such date or
arises under a revolving credit or similar agreement that obligates the lender
or lenders to extend credit during a period of more than one fiscal year from
such date, including all current maturities and current sinking fund payments in
respect of such Indebtedness whether or not required to be paid within one
fiscal year from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans, the Second Lien Term Loans and the
Subordinated Loans.

 

“Majority Facility Lenders”:  with respect to any Facility, the holders of more
than 50% of the aggregate unpaid principal amount of the Term Loans or the Total
Revolving Extensions of Credit, as the case may be, outstanding under such
Facility (or, in the case of the Revolving Facility, prior to any termination of
the Revolving Commitments, the holders of more than 50% of the Total Revolving
Commitments).

 

“Material Acquisition”: as defined in the definition of Consolidated EBITDA.

 

“Material Adverse Effect”:  a material adverse effect on (a) as of the Initial
Borrowing Date, the Refinancing, (b) the business, assets, property, condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries taken as a whole or (c) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights or remedies of the
Agents or the Lenders hereunder or thereunder.

 

“Materials of Environmental Concern”:  any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or
toxic substances, materials or wastes, defined or regulated as such in or under
any Environmental Law, including asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.

 

“Mortgage”: each of the mortgages and deeds of trust made by any Loan Party in
favor of, or for the benefit of, the Administrative Agent for the benefit of the
Secured Parties.

 

“Multiemployer Plan”:  a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

 

“Net Cash Proceeds”:  (a) in connection with any Asset Sale or any Recovery
Event, the proceeds thereof received by any Group Member in the form of cash and
Cash Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or by the Disposition of any non-cash consideration
received in connection therewith or otherwise, but only as and when received) of
such Asset Sale or Recovery Event, net of attorneys’ fees, accountants’ fees,
other consultants’ fees, investment banking or brokerage fees, amounts required
to be applied to the repayment of Indebtedness secured by a Lien expressly
permitted

 

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hereunder on any asset that is the subject of such Asset Sale or Recovery Event
(other than any Lien pursuant to a Security Document) and other customary fees
and expenses actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements) and net of reserve amounts established by the Borrower or any
Subsidiary for liabilities reasonably anticipated in connection with such Asset
Sale or Recovery Event so long as such reserve amounts are comprised of
segregated cash or Cash Equivalents and will constitute Net Cash Proceeds to the
extent such reserve amounts are no longer required to be maintained and (b) in
connection with any issuance or sale of Capital Stock, any capital contribution
or any incurrence of Indebtedness, the cash proceeds received by any Group
Member from such issuance, contribution or incurrence, net of attorneys’ fees,
other consultants’ fees, investment banking or brokerage fees, accountants’
fees, underwriting discounts and commissions and other customary fees and
expenses actually incurred in connection therewith.

 

“NJEDA Debt”:  the New Jersey Economic Development Authority Notes in a
principal amount (including accrued interest) not to exceed $1,268,000.

 

“Non-Excluded Taxes”:  as defined in Section 4.10(a).

 

“Non-U.S. Lender”:  as defined in Section 4.10(d).

 

“Notes”:  the collective reference to any promissory note evidencing Loans.

 

“Obligations”:  as defined in the Intercreditor Agreement.

 

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

 

“Participant”:  as defined in Section 11.6(c).

 

“PBGC”:  the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

 

“Permitted Investors”:  the collective reference to the Sponsor and its Control
Investment Affiliates.

 

“Permitted Refinancing Indebtedness”:   Indebtedness of any Group Member which
satisfies each of the following conditions:  (i) (A) to the extent that the Net
Cash Proceeds of such Indebtedness are used to prepay the Second Lien Term Loans
(or any other Indebtedness which is secured by a Lien pursuant to this clause
(i)(A)) and such Indebtedness is to be secured by a Lien on any assets (to the
extent such Indebtedness is not secured by a Lien, this clause (i)(A) shall not
apply), the terms of such Indebtedness (including the Liens which secure such
Indebtedness) shall be similar to the terms and conditions as those applicable
to the Second Lien Term Loans (other than changes which extend the maturity
thereof, decrease the interest rate applicable thereto, release a portion of the
assets subject to such Liens or otherwise amend the terms in a manner not
materially adverse to the Group Members) and (B) to the extent that the

 

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Net Cash Proceeds of such Indebtedness are used to prepay the Subordinated Loans
(or any other subordinated Indebtedness incurred pursuant to this clause
(i)(B)), such Indebtedness shall be subordinated to the Obligations under the
Loan Documents on substantially the same terms and conditions as are applicable
to the Subordinated Loans or on such other terms as may be approved by the
Administrative Agent and the Required Lenders; (ii) the Consolidated Leverage
Ratio at such time and after giving effect thereto is equal to or less than
(A) 2.50 to 1.00 with respect to any prepayment of Second Lien Term Loans or any
Permitted Refinancing Indebtedness incurred pursuant to Section 8.2(b) or
(B) 3.25 to 1.00 with respect to any prepayment of Subordinated Loans or any
Permitted Refinancing Indebtedness incurred to refinance Subordinated Loans or
any other Indebtedness incurred pursuant to Section 8.2(c); (iii) no Default or
Event of Default shall have occurred and be continuing or would result from the
incurrence of such Indebtedness; (iv) the Administrative Agent shall have
received a copy of all the documents relating to such Indebtedness at least five
days prior to the funding of any such Indebtedness; (v) the terms and conditions
of any such Indebtedness shall not be materially more restrictive taken as a
whole to the Borrower and its Subsidiaries than the terms of the Indebtedness
being refinanced as determined in good faith by the Borrower; (vi) such
Indebtedness shall not have a stated final maturity before the maturity date of
the Indebtedness being refinanced thereby and shall not be subject to any
amortization or required repurchase or redemption obligations (other than as
contemplated by clause (i) above) on or prior to such date; (vii) the Net Cash
Proceeds of such Indebtedness are concurrently applied to the prepayment of the
Indebtedness to be refinanced with such Net Cash Proceeds; and (viii) the
Administrative Agent shall have received a certificate of a Responsible Officer
certifying compliance with the conditions set forth in this definition (and
attaching reasonable detailed supporting calculations and other information
reasonably required by the Administrative Agent).

 

“Person”:  an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

 

“Plan”:  at a particular time, any employee benefit plan that is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pre-Funding Date”:  as defined in Section 2.2.

 

“Pricing Grid”: the pricing grid attached hereto as Annex A.

 

“Pro Forma Balance Sheet”:  as defined in Section 5.1(a).

 

“Projections”:  as defined in Section 7.2(b).

 

“Properties”:  as defined in Section 5.17(a).

 

“Property”:  as to any Person, any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock of any Subsidiary of
such Person but excluding any Capital Stock of such Person.

 

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“Public Filings”:  the Borrower’s most recent filings on forms 10-K and 10-Q
with the SEC since the Closing Date.

 

“Recovery Event”:  any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any asset of
any Group Member that yields gross proceeds to any Group Member in excess of
$500,000.

 

“Reference Bank”:  Wells Fargo Bank.

 

“Refinancing”: as defined in the recitals to this Agreement.

 

“Refunded Swingline Loan”: as defined in Section 3.4.

 

“Refunding Date”: as defined in Section 3.4.

 

“Register”:  as defined in Section 11.6(b).

 

“Regulation U”:  Regulation U of the Board as in effect from time to time.

 

“Reimbursement Obligation”:  the obligation of the Borrower to reimburse the
Issuing Lender pursuant to Section 3.11 for amounts drawn under Letters of
Credit.

 

“Reinvestment Deferred Amount”: with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by any Group Member in connection therewith
that are not applied to prepay the Term Loans or reduce the Revolving
Commitments pursuant to Section 4.2(c) as a result of the delivery of a
Reinvestment Notice.

 

“Reinvestment Event”: any Asset Sale or Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.

 

“Reinvestment Notice”: a written notice executed by a Responsible Officer
stating that no Event of Default has occurred and is continuing and that the
Borrower (directly or through a Subsidiary) intends and expects to use all or a
specified portion of the Net Proceeds of an Asset Sale or Recovery Event to
acquire or repair fixed or capital assets useful in its business.

 

“Reinvestment Prepayment Amount”:  with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to
the relevant Reinvestment Prepayment Date to acquire or repair fixed or capital
assets useful in the Borrower’s business.

 

“Reinvestment Prepayment Date”: with respect to any Reinvestment Event, the
earlier of (a) the date occurring six months after such Reinvestment Event and
(b) the date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, acquire or repair fixed or capital assets useful in the
Borrower’s business with all or any portion of the relevant Reinvestment
Deferred Amount, provided that to the extent the Borrower or any of its
Subsidiaries has entered a binding agreement within six months after such
Reinvestment Event to acquire or repair fixed or capital assets useful in the
Borrower’s business, the six month period

 

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in clause (a) shall be extended for an additional period of six months (or, if
earlier, the expiration or termination of such binding agreement).

 

“Reorganization”:  with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

“Replacement Equity”:  the collective reference to any Capital Stock issued by
the Borrower after the Closing Date, the Net Cash Proceeds of which are used
substantially concurrently, after giving effect to any required notice of
redemption, to redeem all or a portion of the outstanding Series Z Preferred so
long as such Capital Stock consists of either:  (a) preferred stock of the
Borrower (not constituting Indebtedness), the terms of which are (i) no less
favorable to the Lenders, taken as a whole, than the Series Z Preferred and, in
any event, the terms of which do not require cash payment of dividends or
mandatory redemption or repurchase thereof prior to the date that is six years
and six months after the Closing Date, or (ii) otherwise reasonably satisfactory
to the Administrative Agent or (b) common stock of the Borrower.

 

“Reportable Event”:  any of the events set forth in Section 4043(b) of ERISA,
other than those events as to which the thirty day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

 

“Required Lenders”:  at any time, the holders of more than 50% of (a) until the
Initial Borrowing Date, the Commitments then in effect and (b) thereafter, the
sum of (i) the aggregate unpaid principal amount of the Term Loans then
outstanding and (ii) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.

 

“Requirement of Law”:  as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

 

“Responsible Officer”:  the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer of the Borrower.

 

“Restricted Payments”:  as defined in Section 8.6.

 

“Revolving Commitment”:  as to any Lender, the obligation of such Lender, if
any, to make Revolving Loans and Swingline Loans and participate in Letters of
Credit in an aggregate principal and/or face amount not to exceed the amount set
forth under the heading “Revolving Commitment” under such Lender’s name on such
Lender’s Addendum or in the Assignment and Assumption pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof.  The original amount of the Total Revolving
Commitments is $15,000,000.

 

“Revolving Commitment Period”:  the period from and including the Initial
Borrowing Date to the Revolving Termination Date.

 

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“Revolving Extensions of Credit”:  as to any Revolving Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Revolving
Loans held by such Lender then outstanding, (b) such Lender’s Revolving
Percentage of the L/C Obligations then outstanding and (c) such Lender’s
Revolving Percentage of the aggregate principal amount of the Swingline then
outstanding.

 

“Revolving Facility”:  as defined in the definition of “Facility.”

 

“Revolving Lender”:  each Lender that has a Revolving Commitment or that holds
Revolving Extensions of Credit.

 

“Revolving Loans”:  as defined in Section 3.1(a).

 

“Revolving Percentage”:  as to any Revolving Lender at any time, the percentage
which such Lender’s Revolving Commitment then constitutes of the Total Revolving
Commitments (or, at any time after the Revolving Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of such
Lender’s Revolving Extensions of Credit then outstanding constitutes of the
aggregate principal amount of the Total Revolving Extensions of Credit then
outstanding).

 

“Revolving Termination Date”:  the earlier of (a) the date on which the
Revolving Commitments are terminated pursuant to Section 9 and (b) March 31,
2011, provided that, if the Borrower has not, on or prior to December 30, 2008,
either (i) extended the mandatory redemption date of the Series Z Preferred to a
date that is on or after the date that is six years and six months after the
Initial Borrowing Date or (ii) redeemed all the outstanding Series Z Preferred
with the proceeds of an issuance of Replacement Equity, the Revolving
Termination Date shall be December 30, 2008, provided, that in the event that
the mandatory redemption date of the Series Z Preferred is extended after the
date hereof, then the reference to December 30, 2008 shall be deemed to be a
reference to the date which is two fiscal quarters prior to the then effective
mandatory redemption date of the Series Z Preferred (it being understood, for
the avoidance of doubt, that, for purposes of this proviso, any extension of the
scheduled redemption date of the Series Z Preferred must be effective and not
subject to any conditions (which have not been satisfied) or acceleration
provisions).

 

“SEC”:  the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

 

“Second Lien Administrative Agent”:  Bear Stearns Corporate Lending Inc.,
together with any of its successors.

 

“Second Lien Credit Agreement”:  the Second Lien Credit Agreement, dated as of
January 26, 2006, among the Borrower, the several banks and other financial
institutions from time to time parties thereto and Bear Stearns Corporate
Lending, Inc., as administrative agent.

 

“Second Lien Documents”:  as defined in the Second Lien Credit Agreement.

 

“Second Lien Secured Parties”:  as defined in the Second Lien Credit Agreement.

 

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“Second Lien Term Loans”:  the term loans made under the Second Lien Credit
Agreement.

 

“Secured Parties”:  as defined in the Guarantee and Collateral Agreement.

 

“Security Documents”:  the collective reference to the Guarantee and Collateral
Agreement, the Mortgages, if any, the Intercreditor Agreement, the Subordination
Agreement, and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of any Loan Party to any Lender under any Loan
Document.

 

“Senior Notes”:  as defined in the recitals hereto.

 

“Series Z Preferred”:  the 57,000 shares of Series Z Preferred Stock issued by
the Borrower, par value $0.001 per share.

 

“Single Employer Plan”:  any Plan that is covered by Title IV of ERISA, but that
is not a Multiemployer Plan.

 

“Solvent”:  when used with respect to any Person, means that, as of any date of
determination, (a) the fair value of the assets of such Person will, as of such
date, exceed the amount of all debts of such Person, contingent or otherwise, as
of such date, (b) the fair value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay its
debts as they mature.  For purposes of this definition, (i) ”debt” means
liability on a “claim”, and (ii) ”claim” means any (x) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.

 

“Specified Cash Management Agreement”: as defined in the Intercreditor
Agreement.

 

“Specified Change of Control”:  the occurrence of a “Merger” or “Change of
Control” (or any other defined term having a similar purpose) as defined in the
Certificate of Designation for the Series Z Preferred (and any Replacement
Equity), provided that a “Specified Change of Control” shall only occur in
respect of the Series Z Preferred (and any Replacement Equity) to the extent
that (a) any shares of Series Z Preferred (and any Replacement Equity) remain
outstanding and (b) the occurrence of a “Merger” or “Change of Control” (or any
other defined term having a similar purpose) gives the holder of such shares of
Series Z Preferred (and any Replacement Equity) the right to cause such shares
to be redeemed or repurchased at the option of such holder.

 

“Specified Hedge Agreement”:  as defined in the Intercreditor Agreement.

 

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“Sponsor”:  Greenlight Capital, Inc. and its Control Investment Affiliates.

 

“Stated Amount”:  as to any Letter of Credit, at any time, the maximum amount
that then is or may become available to be drawn thereunder, determined without
regard to whether any conditions to drawing could then be met.

 

“Subordinated Loans”:  the loans made on the Initial Borrowing Date pursuant to
the Subordinated Loan Agreement.

 

“Subordinated Loan Agreement”:  the Subordinated Loan Agreement to be entered
into on the Closing Date, substantially in the form of Exhibit K.

 

“Subordination Agreement”: the Subordination Agreement entered into on the
Closing Date, substantially in the form of Exhibit L.

 

“Subsidiary”:  as to any Person, a corporation, partnership, limited liability
company or other entity (a) of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, by such Person,
or (b) the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person, but only if, in the
case of this clause (b), such entity is treated as a consolidated subsidiary
under GAAP.  Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower.  Inactive Subsidiaries shall not be “Subsidiaries” of the Borrower
for purposes of Section 5 (other than Section 5.22), Section 7 or Section 8
(other than Section 8.17).

 

“Subsidiary Guarantor”:  each Subsidiary of the Borrower other than any Foreign
Subsidiary or any Inactive Subsidiary.

“Swingline Commitment”: the obligations of the Swingline Lender to make
Swingline Loans pursuant to Section 3.3 in an aggregate amount at any one time
outstanding not to exceed $3,000,000.

 

“Swingline Lender”: WFF, in its capacity as the lender of the Swingline Loans.

 

“Swingline Loans”: as defined in Section 3.3.

 

“Swingline Participation Amount”: as defined in Section 3.4.

 

“Term Lender”:  each Lender that has a Term Commitment or that holds a Term
Loan.

 

“Term Loan”:  as defined in Section 2.1.

 

“Term Loan Commitment”: as to any Lender, the obligation of such Lender, if any,
to make a Term Loan to the Borrower hereunder in a principal amount not to
exceed the

 

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amount set forth under the heading “Term Commitment” under such Lender’s name on
such Lender’s Addendum.  The original aggregate amount of the Term Loan
Commitments is $80,000,000.

 

“Term Loan Commitment Period”:  the period from and including the Closing Date
to and including the Initial Borrowing Date.

 

“Total Revolving Commitments”:  at any time, the aggregate amount of the
Revolving Commitments then in effect.

 

“Total Revolving Extensions of Credit”:  at any time, the aggregate amount of
the Revolving Extensions of Credit of the Revolving Lenders outstanding at such
time.

 

“Transferee”:  any Assignee or Participant.

 

“Type”:  as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

 

“United States”:  the United States of America.

 

“Updated Projections”:  the updated projections delivered by the Borrower to the
Lenders in November 2005 in connection with this Agreement.

 

“Voidable Transfer”: as defined in Section 11.16.

 

“Wells Fargo Bank”: Wells Fargo Bank, National Association, a national banking
association.

 

“WFF”:  as defined in the preamble to this Agreement.

 

“Wholly Owned Subsidiary”:  as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by law
or shares held by nominees as required by law) is owned by such Person directly
and/or through other Wholly Owned Subsidiaries.

 

“Wholly Owned Subsidiary Guarantor”:  any Subsidiary Guarantor that is a Wholly
Owned Subsidiary of the Borrower.

 

1.2.          Other Definitional Provisions.  (a)  Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.

 

(B)           AS USED HEREIN AND IN THE OTHER LOAN DOCUMENTS, AND ANY
CERTIFICATE OR OTHER DOCUMENT MADE OR DELIVERED PURSUANT HERETO OR THERETO,
(I) ACCOUNTING TERMS RELATING TO ANY GROUP MEMBER NOT DEFINED IN SECTION 1.1 AND
ACCOUNTING TERMS PARTLY DEFINED IN SECTION 1.1, TO THE EXTENT NOT DEFINED, SHALL
HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM UNDER GAAP, (II) THE WORDS “INCLUDE,”
“INCLUDES” AND “INCLUDING” SHALL BE DEEMED TO BE FOLLOWED BY THE PHRASE “WITHOUT
LIMITATION”, (III) THE WORD “INCUR” SHALL BE CONSTRUED TO MEAN INCUR, CREATE,
ISSUE, ASSUME, BECOME LIABLE IN RESPECT OF OR SUFFER TO EXIST (AND THE WORDS
“INCURRED” AND “INCURRENCE”

 

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SHALL HAVE CORRELATIVE MEANINGS), (IV) THE WORDS “ASSET” AND “PROPERTY” (WHEN
USED IN THE LOWER CASE) SHALL BE CONSTRUED TO HAVE THE SAME MEANING AND EFFECT
AND TO REFER TO ANY AND ALL TANGIBLE AND INTANGIBLE ASSETS AND PROPERTIES,
INCLUDING CASH, CAPITAL STOCK, SECURITIES, REVENUES, ACCOUNTS, LEASEHOLD
INTERESTS AND CONTRACT RIGHTS, AND (V) REFERENCES TO AGREEMENTS OR OTHER
CONTRACTUAL OBLIGATIONS SHALL, UNLESS OTHERWISE SPECIFIED, BE DEEMED TO REFER TO
SUCH AGREEMENTS OR CONTRACTUAL OBLIGATIONS AS AMENDED, SUPPLEMENTED, RESTATED OR
OTHERWISE MODIFIED FROM TIME TO TIME (SUBJECT TO ANY APPLICABLE RESTRICTIONS
HEREUNDER).

 

(C)           THE WORDS “HEREOF,” “HEREIN” AND “HEREUNDER” AND WORDS OF SIMILAR
IMPORT WHEN USED IN THIS AGREEMENT SHALL REFER TO THIS AGREEMENT AS A WHOLE AND
NOT TO ANY PARTICULAR PROVISION OF THIS AGREEMENT, AND SECTION, SCHEDULE AND
EXHIBIT REFERENCES ARE TO THIS AGREEMENT UNLESS OTHERWISE SPECIFIED.

 

(D)           THE MEANINGS GIVEN TO TERMS DEFINED HEREIN SHALL BE EQUALLY
APPLICABLE TO BOTH THE SINGULAR AND PLURAL FORMS OF SUCH TERMS.

 

(E)           EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, ALL TERMS OF AN
ACCOUNTING OR FINANCIAL NATURE SHALL BE CONSTRUED IN ACCORDANCE WITH GAAP;
PROVIDED THAT, IF THE BORROWER NOTIFIES THE ADMINISTRATIVE AGENT THAT SUCH
BORROWER REQUESTS AN AMENDMENT TO ANY PROVISION HEREOF TO ELIMINATE THE EFFECT
OF ANY CHANGE OCCURRING AFTER THE DATE HEREOF IN GAAP OR IN THE APPLICATION
THEREOF ON THE OPERATION OF SUCH PROVISION (OR IF THE ADMINISTRATIVE AGENT
NOTIFIES THE BORROWER THAT THE REQUIRED LENDERS REQUEST AN AMENDMENT TO ANY
PROVISION HEREOF FOR SUCH PURPOSE), REGARDLESS OF WHETHER ANY SUCH NOTICE IS
GIVEN BEFORE OR AFTER SUCH CHANGE IN GAAP OR IN THE APPLICATION THEREOF, THEN
SUCH PROVISION SHALL BE INTERPRETED ON THE BASIS OF GAAP AS IN EFFECT AND
APPLIED IMMEDIATELY BEFORE SUCH CHANGE SHALL HAVE BECOME EFFECTIVE UNTIL SUCH
NOTICE SHALL HAVE BEEN WITHDRAWN OR SUCH PROVISION AMENDED IN ACCORDANCE
HEREWITH.

 

(F)            REFERENCES HEREIN TO FISCAL PERIODS ENDING ON MARCH 31, JUNE 30,
SEPTEMBER 30 OR DECEMBER 31 DURING ANY FISCAL YEAR OF THE BORROWER, SHALL MEAN
THE APPLICABLE FISCAL PERIOD OF THE BORROWER ENDING ON OR ABOUT SUCH DATE.

 

SECTION 2.   AMOUNT AND TERMS OF TERM COMMITMENTS

 

2.1.                          Term Commitments.  Subject to the terms and
conditions hereof, each Term Lender severally agrees to make a term loan (a
“Term Loan”) to the Borrower on the Initial Borrowing Date in an amount equal to
the amount of the Term Commitment of such Lender, provided that at the end of
the last day of the Term Loan Commitment Period, the Term Commitment of each
Term Lender, if any, shall automatically be reduced to zero.  The Term Loans
shall be made in a single drawing and shall be made on the Initial Borrowing
Date.  The Term Loans may from time to time be Eurodollar Loans or Base Rate
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 4.3.

 

2.2.                          Procedure for Term Loan Borrowing.  The Borrower
has informed the Administrative Agent, the Lead Arranger and the Lenders that,
in the connection with the consummation of the Refinancing, it will require that
the Term Loans be made available to it prior to 10 A.M., New York City time, on
the Initial Borrowing Date.  In that connection, the Borrower has requested that
each Lender make available to the Lead Arranger on the Business

 

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Day preceding the anticipated Initial Borrowing Date (such preceding date, the
“Pre-Funding Date”) an amount in immediately available funds equal to the Term
Loan or Term Loans to be made by such Lender on the Initial Borrowing Date (it
being understood that the Lenders in making available such funds to the Lead
Arranger shall not be deemed to have made the Term Loans and the Term Loans
shall only be made on the Initial Borrowing Date following receipt of the notice
referred to in the immediately following sentence, and the satisfaction of the
conditions set forth in Section 6.2).  The Borrower shall notify the Lead
Arranger and the Administrative Agent of the anticipated Initial Borrowing Date
at least two Business Days prior to the occurrence thereof and shall give them a
notice specifying (i) the amount and Type of Term Loans to be borrowed, (ii) the
anticipated date of the Initial Borrowing Date, and (iii) the respective amounts
of each such Type of Loan and the respective lengths of the initial Interest
Period therefor.  In the event that, on the Business Day following the
Pre-Funding Date, the Refinancing is not effected, the Lead Arranger shall
return the funds to the Lenders.  In the event that, on the Business Day
following the Pre-Funding Date, the conditions set forth in Section 6.2 are
satisfied, the Lead Arranger shall make available to the Borrower the aggregate
amounts made available to the Lead Arranger by the Term Lenders in immediately
available funds in accordance with the irrevocable instructions provided by the
Borrower in connection with its notice of borrowing.  As consideration for the
Lenders making available their funds on the Pre-Funding Date as contemplated by
this Section, the Borrower agrees to pay to the Administrative Agent for the
account of the Lenders an amount equal to the amount that would have accrued on
such amounts had such amounts been used to make Term Loans that are Base Rate
Loans under this Agreement on the Pre-Funding Date (assuming such Term Loans
were repaid on the Initial Borrowing Date or, if such funds are repaid to the
Lenders, on the Business Day on which such funds are repaid to the Lenders). 
Interest pursuant to the immediately preceding sentence shall be paid (a) in the
event funds are returned to the Lenders as contemplated by this Section on the
date such funds are returned and (b) in the event the Refinancing is effected on
the Business Day following the Pre-Funding Date, on March 31, 2006.

 

2.3.          Repayment of Term Loans.  The Term Loan of each Term Lender shall
mature in 20 consecutive quarterly installments on the dates set forth below,
commencing on March 31, 2006, each of which shall be in an amount equal to such
Lender’s Term Percentage multiplied by the amount set forth below opposite such
installment due date:

 

Installment Due Date

 

Amount

 

 

 

 

 

June 30, 2006

 

$

475,000

 

September 30, 2006

 

$

475,000

 

December 31, 2006

 

$

475,000

 

March 31, 2007

 

$

475,000

 

June 30, 2007

 

$

950,000

 

September 30, 2007

 

$

950,000

 

December 31, 2007

 

$

950,000

 

March 31, 2008

 

$

950,000

 

June 30, 2008

 

$

2,500,000

 

September 30, 2008

 

$

2,500,000

 

December 31, 2008

 

$

2,500,000

 

March 31, 2009

 

$

2,500,000

 

 

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Installment Due Date

 

Amount

 

 

 

 

 

June 30, 2009

 

$

3,125,000

 

September 30, 2009

 

$

3,125,000

 

December 31, 2009

 

$

3,125,000

 

March 31, 2010

 

$

3,125,000

 

June 30, 2010

 

$

12,950,000

 

September 30, 2010

 

$

12,950,000

 

December 31, 2010

 

$

12,950,000

 

March 31, 2011

 

$

12,950,000

 

 

, provided that, if the Borrower has not, on or prior to December 30, 2008,
either (i) extended the mandatory redemption date of the Series Z Preferred to a
date that is on or after the date that is six years and six months after the
Closing Date or (ii) redeemed all the outstanding Series Z Preferred with the
proceeds of an issuance of Replacement Equity, the Borrower shall repay the
remaining outstanding balance of the Term Loans on December 30, 2008, provided,
that in the event that the mandatory redemption date of the Series Z Preferred
is extended after the date hereof, then the reference to December 30, 2008 shall
be deemed to be a reference to the date which is two fiscal quarters prior to
the then effective mandatory redemption date of the Series Z Preferred (it being
understood, for the avoidance of doubt, that, for purposes of this proviso, any
extension of the scheduled redemption date of the Series Z Preferred must be
effective and not subject to any conditions (which have not been satisfied) or
acceleration provisions).

 

SECTION 3.   AMOUNT AND TERMS OF REVOLVING COMMITMENTS

 

3.1.          Revolving Commitments.  (a)  Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make revolving credit loans
(“Revolving Loans”) to the Borrower from time to time during the Revolving
Commitment Period in an aggregate principal amount at any time outstanding
which, when added to such Lender’s Revolving Percentage of the L/C Obligations
then outstanding, does not exceed the amount of such Lender’s Revolving
Commitment.  During the Revolving Commitment Period the Borrower may use the
Revolving Commitments by borrowing, prepaying and reborrowing the Revolving
Loans in whole or in part, all in accordance with the terms and conditions
hereof.  The Revolving Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 3.2 and 4.3.

 

(B)           THE BORROWER SHALL REPAY ALL OUTSTANDING REVOLVING LOANS ON THE
REVOLVING TERMINATION DATE.

 

3.2.          Procedure for Revolving Loan Borrowing.  The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable written notice (it being understood that the Administrative Agent
may accept a telephonic notice given by an Authorized Person and to be followed
by a written confirmation by the next day, provided, that failure to deliver
such written notice shall not affect the validity of any such request) (which
notice must be received by the Administrative Agent prior to 12:00 Noon,
New York City time,

 

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(a) three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date,
in the case of Base Rate Loans) (provided that any such notice of a borrowing of
Base Rate Loans to finance payments required to be made pursuant to Section 3.5
may be given not later than 10:00 A.M., New York City time, on the date of the
proposed borrowing), specifying (i) the amount and Type of Revolving Loans to be
borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar
Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Period therefor; provided, that, at the
Administrative Agent’s option, any such borrowing request relating to Base Rate
Loans can, subject to Section 3.3, be funded as Swingline Loans by notice to the
Borrower.  Each borrowing under the Revolving Commitments shall be in an amount
equal to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple of
$250,000 in excess thereof (or, if the then aggregate Available Revolving
Commitments are less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $1,000,000 or a whole multiple of $250,000 in excess thereof;
provided, that (x) the Swingline Lender may request, on behalf of the Borrower,
borrowings under the Revolving Commitments that are Base Rate Loans in other
amounts pursuant to Section 3.6 and (y) borrowings of Base Rate Loans pursuant
to Section 3.11 shall not be subject to the foregoing minimum amounts.  Upon
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Revolving Lender thereof.  Each Revolving Lender will make
the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 Noon, New York City time (provided, that in the case of a borrowing of
a Base Rate Loan under Section 3.11 each Revolving Lender will make the amount
of its pro rata share available to the Administrative Agent for the account of
the Borrower at the Funding Office by 11:00 A.M, New York City time), on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent.  Such borrowing will then be made available to the
Borrower by the Administrative Agent crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made available to the
Administrative Agent by the Revolving Lenders and in like funds as received by
the Administrative Agent.

 

3.3.          Swingline Commitment.  (a)  Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans (“Swingline
Loans”) to the Borrower; provided that (i) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender’s other outstanding
Revolving Loans hereunder, may exceed the Swingline Commitment then in effect)
and (ii) the Borrower shall not request, and the Swingline Lender shall not
make, any Swingline Loan if, after giving effect to the making of such Swingline
Loan, the aggregate amount of the Available Revolving Commitments would be less
than zero.  During the Revolving Commitment Period, the Borrower may use the
Swingline Commitment by borrowing, repaying and reborrowing, all in accordance
with the terms and conditions hereof.  Swingline Loans shall be Base Rate Loans
only.

 

(B)           THE BORROWER SHALL REPAY ALL OUTSTANDING SWINGLINE LOANS ON THE
REVOLVING TERMINATION DATE.

 

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3.4.          Procedure for Swingline Borrowing; Refunding of Swingline Loans. 
(a)  Whenever the Borrower desires that the Swingline Lender make Swingline
Loans it shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swingline
Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date (which shall be a Business Day during the Revolving Commitment Period). 
Each borrowing under the Swingline Commitment shall be in an amount equal to
$500,000 or a whole multiple of $100,000 in excess thereof.  Not later than
3:00 P.M., New York City time, on the Borrowing Date specified in a notice in
respect of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender.  The Administrative Agent shall make the proceeds of such Swingline Loan
available to the Borrower on such Borrowing Date by depositing such proceeds in
the account of the Borrower with the Administrative Agent on such Borrowing Date
in immediately available funds.

 

(B)           THE SWINGLINE LENDER, AT ANY TIME AND FROM TIME TO TIME IN ITS
SOLE AND ABSOLUTE DISCRETION MAY (AND SHALL AT LEAST ONCE DURING EACH WEEK IN
WHICH THE ADMINISTRATIVE AGENT SHALL HAVE EXERCISED ITS OPTION TO CAUSE
REQUESTED REVOLVING LOANS TO BE FUNDED AS SWINGLINE LOANS), ON BEHALF OF THE
BORROWER (WHICH HEREBY IRREVOCABLY DIRECTS THE SWINGLINE LENDER TO ACT ON ITS
BEHALF), ON ONE BUSINESS DAY’S NOTICE GIVEN BY THE SWINGLINE LENDER NO LATER
THAN 12:00 NOON, NEW YORK CITY TIME, REQUEST EACH REVOLVING LENDER TO MAKE, AND
EACH REVOLVING LENDER HEREBY AGREES TO MAKE, A REVOLVING LOAN, IN AN AMOUNT
EQUAL TO SUCH REVOLVING LENDER’S REVOLVING PERCENTAGE OF THE AGGREGATE AMOUNT OF
THE SWINGLINE LOANS (THE “REFUNDED SWINGLINE LOANS”) OUTSTANDING ON THE DATE OF
SUCH NOTICE, TO REPAY THE SWINGLINE LENDER.  EACH REVOLVING LENDER SHALL MAKE
THE AMOUNT OF SUCH REVOLVING LOAN AVAILABLE TO THE ADMINISTRATIVE AGENT AT THE
FUNDING OFFICE IN IMMEDIATELY AVAILABLE FUNDS, NOT LATER THAN 10:00 A.M.,
NEW YORK CITY TIME, ONE BUSINESS DAY AFTER THE DATE OF SUCH NOTICE.  THE
PROCEEDS OF SUCH REVOLVING LOANS SHALL BE IMMEDIATELY MADE AVAILABLE BY THE
ADMINISTRATIVE AGENT TO THE SWINGLINE LENDER FOR APPLICATION BY THE SWINGLINE
LENDER TO THE REPAYMENT OF THE REFUNDED SWINGLINE LOANS.

 

(C)           THE ADMINISTRATIVE AGENT SHALL GIVE THE REVOLVING LENDERS NOTICE
ONE BUSINESS DAY’S NOTICE, TO MAKE, AND EACH REVOLVING LENDER HEREBY AGREES TO
MAKE, A REVOLVING LOAN, IN AN AMOUNT EQUAL TO SUCH REVOLVING LENDER’S REVOLVING
PERCENTAGE OF THE AGGREGATE AMOUNT OF THE BORROWING REQUEST MADE AS SWINGLINE
LOANS PURSUANT TO SECTION 3.2.  EACH REVOLVING LENDER SHALL MAKE THE AMOUNT OF
SUCH REVOLVING LOAN AVAILABLE TO THE ADMINISTRATIVE AGENT AT THE FUNDING OFFICE
IN IMMEDIATELY AVAILABLE FUNDS, NOT LATER THAN 10:00 A.M., NEW YORK CITY TIME,
ONE BUSINESS DAY AFTER THE DATE OF SUCH NOTICE.  THE PROCEEDS OF SUCH REVOLVING
LOANS SHALL BE IMMEDIATELY MADE AVAILABLE BY THE ADMINISTRATIVE AGENT TO THE
BORROWER FOR APPLICATION BY THE BORROWER TO THE REPAYMENT OF THE SWINGLINE LOANS
MADE PURSUANT TO SECTION 3.2.

 

(D)           IF PRIOR TO THE TIME A REVOLVING LOAN WOULD HAVE OTHERWISE BEEN
MADE PURSUANT TO SECTION 3.4(B), ONE OF THE EVENTS DESCRIBED IN
SECTION 9(F) SHALL HAVE OCCURRED AND BE CONTINUING WITH RESPECT TO THE BORROWER
OR IF FOR ANY OTHER REASON, AS DETERMINED BY THE SWINGLINE LENDER IN ITS SOLE
DISCRETION, REVOLVING LOANS MAY NOT BE MADE AS CONTEMPLATED BY

 

29

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SECTION 3.4(B), EACH REVOLVING LENDER SHALL, ON THE DATE SUCH REVOLVING LOAN WAS
TO HAVE BEEN MADE PURSUANT TO THE NOTICE REFERRED TO IN SECTION 3.4(B) (THE
“REFUNDING DATE”), PURCHASE FOR CASH AN UNDIVIDED PARTICIPATING INTEREST IN THE
THEN OUTSTANDING SWINGLINE LOANS BY PAYING TO THE SWINGLINE LENDER AN AMOUNT
(THE “SWINGLINE PARTICIPATION AMOUNT”) EQUAL TO (I) SUCH REVOLVING LENDER’S
REVOLVING PERCENTAGE TIMES (II) THE SUM OF THE AGGREGATE PRINCIPAL AMOUNT OF
SWINGLINE LOANS THEN OUTSTANDING THAT WERE TO HAVE BEEN REPAID WITH SUCH
REVOLVING LOANS.

 

(E)           WHENEVER, AT ANY TIME AFTER THE SWINGLINE LENDER HAS RECEIVED FROM
ANY REVOLVING LENDER SUCH LENDER’S SWINGLINE PARTICIPATION AMOUNT, THE SWINGLINE
LENDER RECEIVES ANY PAYMENT ON ACCOUNT OF THE SWINGLINE LOANS, THE SWINGLINE
LENDER WILL DISTRIBUTE TO SUCH LENDER ITS SWINGLINE PARTICIPATION AMOUNT
(APPROPRIATELY ADJUSTED, IN THE CASE OF INTEREST PAYMENTS, TO REFLECT THE PERIOD
OF TIME DURING WHICH SUCH LENDER’S PARTICIPATING INTEREST WAS OUTSTANDING AND
FUNDED AND, IN THE CASE OF PRINCIPAL AND INTEREST PAYMENTS, TO REFLECT SUCH
LENDER’S PRO RATA PORTION OF SUCH PAYMENT IF SUCH PAYMENT IS NOT SUFFICIENT TO
PAY THE PRINCIPAL OF AND INTEREST ON ALL SWINGLINE LOANS THEN DUE); PROVIDED,
HOWEVER, THAT IN THE EVENT THAT SUCH PAYMENT RECEIVED BY THE SWINGLINE LENDER IS
REQUIRED TO BE RETURNED, SUCH REVOLVING LENDER WILL RETURN TO THE SWINGLINE
LENDER ANY PORTION THEREOF PREVIOUSLY DISTRIBUTED TO IT BY THE SWINGLINE LENDER.

 

(F)            EACH REVOLVING LENDER’S OBLIGATION TO MAKE THE LOANS REFERRED TO
IN SECTION 3.4(B) AND TO PURCHASE PARTICIPATING INTERESTS PURSUANT TO
SECTIONS 3.4(C) AND (D) SHALL BE ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE
AFFECTED BY ANY CIRCUMSTANCE, INCLUDING (I) ANY SETOFF, COUNTERCLAIM,
RECOUPMENT, DEFENSE OR OTHER RIGHT THAT SUCH REVOLVING LENDER OR THE BORROWER
MAY HAVE AGAINST THE SWINGLINE LENDER OR THE ADMINISTRATIVE AGENT, AS THE CASE
MAY BE, THE BORROWER OR ANY OTHER PERSON FOR ANY REASON WHATSOEVER; (II) THE
OCCURRENCE OR CONTINUANCE OF A DEFAULT OR AN EVENT OF DEFAULT OR THE FAILURE TO
SATISFY ANY OF THE OTHER CONDITIONS SPECIFIED IN SECTION 6; (III) ANY ADVERSE
CHANGE IN THE CONDITION (FINANCIAL OR OTHERWISE) OF THE BORROWER; (IV) ANY
BREACH OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY THE BORROWER, ANY OTHER
LOAN PARTY OR ANY OTHER REVOLVING LENDER; OR (V) ANY OTHER CIRCUMSTANCE,
HAPPENING OR EVENT WHATSOEVER, WHETHER OR NOT SIMILAR TO ANY OF THE FOREGOING.

 

3.5.          Commitment Fees, etc.  (a)  The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the Closing Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Revolving Termination
Date, commencing on March 31, 2006.

 

(B)           THE BORROWER AGREES TO PAY TO THE ADMINISTRATIVE AGENT THE FEES IN
THE AMOUNTS AND ON THE DATES PREVIOUSLY AGREED TO IN WRITING BY THE BORROWER AND
THE ADMINISTRATIVE AGENT.

 

3.6.          Termination or Reduction of Revolving Commitments.  The Borrower
shall have the right, upon not less than three Business Days’ notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving

 

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Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Loans and Swingline Loans made on the effective
date thereof, the Total Revolving Extensions of Credit would exceed the Total
Revolving Commitments.  Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Commitments then in effect.

 

3.7.          L/C Commitment.  (a)  Subject to the terms and conditions hereof,
the L/C Arranger agrees to cause the Issuing Lender designated by it, in
reliance on the agreements of the other Revolving Lenders set forth in
Section 3.10(a), to issue letters of credit (“Letters of Credit”) for the
account of the Borrower on any Business Day during the Revolving Commitment
Period in such form as may be approved from time to time by the L/C Arranger and
the Issuing Lender; provided that, the L/C Arranger shall have no obligation to
cause any Letter of Credit to be issued if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
aggregate amount of the Available Revolving Commitments would be less than
zero.  Each Letter of Credit shall (i) be denominated in Dollars, (ii) have a
face amount of at least $250,000 (unless otherwise agreed by the L/C Arranger
and the Issuing Lender) and (iii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date that is five Business
Days prior to the Revolving Termination Date, provided that any Letter of Credit
with a one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in
clause (y) above).

 

(B)           THE L/C ARRANGER SHALL NOT AT ANY TIME BE OBLIGATED TO CAUSE ANY
LETTER OF CREDIT TO BE ISSUED HEREUNDER IF SUCH ISSUANCE WOULD CONFLICT WITH, OR
CAUSE THE L/C ARRANGER, THE ISSUING LENDER OR ANY L/C PARTICIPANT TO EXCEED ANY
LIMITS IMPOSED BY, ANY APPLICABLE REQUIREMENT OF LAW.

 

3.8.          Procedure for Issuance of Letter of Credit.  The Borrower may from
time to time request that the L/C Arranger cause a Letter of Credit to be issued
by an Issuing Lender by delivering to the L/C Arranger, with a copy to the
Administrative Agent, at their addresses for notices specified herein, an
Application therefor, completed to the satisfaction of the L/C Arranger, and
such other certificates, documents and other papers and information as the L/C
Arranger may request.  Upon receipt of any Application, the L/C Arranger will,
and will cause such Issuing Lender to, process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with their respective customary procedures,
and the L/C Arranger will promptly cause such Issuing Lender to issue the Letter
of Credit requested thereby by causing the original of such Letter of Credit to
be issued to the beneficiary thereof or as otherwise may be agreed to by the L/C
Arranger, such Issuing Lender and the Borrower (but in no event shall any
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after the L/C Arranger’s receipt of the Application therefor and
all such other certificates, documents and other papers and information relating
thereto).  Promptly after issuance by an Issuing Lender of a Letter of Credit,
the L/C Arranger shall furnish a copy of such Letter of Credit to the Borrower
and the Administrative Agent.  The L/C Arranger shall promptly give notice to
the Administrative Agent of the issuance of each Letter of Credit issued by such
Issuing Lender (including the amount thereof).

 

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3.9.          Fees and Other Charges.  (a)  The Borrower will pay a fee on the
daily aggregate Stated Amount of all outstanding Letters of Credit at a per
annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Facility, shared ratably among the
Revolving Lenders and payable quarterly in arrears on each L/C Fee Payment Date
after the issuance date.  In addition, the Borrower shall pay to the L/C
Arranger for the account of the L/C Arranger a fronting fee on the aggregated
Stated Amount of all Letters of Credit issued by such Issuing Lender calculated
at a rate per annum equal to 0.50%, payable quarterly in arrears on each L/C Fee
Payment Date after the issuance.

 

(B)           IN ADDITION TO THE FOREGOING FEES, THE BORROWER SHALL PAY OR
REIMBURSE THE L/C ARRANGER AND EACH ISSUING LENDER, WITHOUT DUPLICATION, FOR
SUCH NORMAL AND CUSTOMARY COMMISSIONS, COSTS, FEES AND EXPENSES AS ARE INCURRED
OR CHARGED BY THE ISSUING LENDER IN ISSUING, NEGOTIATING, EFFECTING PAYMENT
UNDER, AMENDING, EXTENDING OR OTHERWISE ADMINISTERING ANY LETTER OF CREDIT.

 

3.10.        L/C Participations.  (a)  The L/C Arranger, for itself and the
Issuing Lender designated by it, irrevocably agrees to grant and hereby grants
to each L/C Participant, and, to induce the L/C Arranger to cause the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the L/C
Arranger, on the terms and conditions set forth below, for such L/C
Participant’s own account and risk an undivided interest equal to such L/C
Participant’s Revolving Percentage in the L/C Arranger’s obligations and rights
under and in respect of each Letter of Credit issued by the L/C Arranger’s
designated Issuing Lender and the amount of each draft paid by the Issuing
Lender thereunder (which shall include the L/C Arranger’s obligations to
reimburse its designated Issuing Lender for the amount of such drawing).  Each
L/C Participant unconditionally and irrevocably agrees with the L/C Arranger
that, if a draft is paid under any Letter of Credit for which the L/C Arranger
is not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative Agent (for the
account of the L/C Arranger), regardless of the occurrence or continuance of a
Default or Event of Default or the failure to satisfy any of the other
conditions specified in Section 6, upon demand of the L/C Arranger, an amount
equal to such L/C Participant’s Revolving Percentage of the amount of such
draft, or any part thereof, that is not so reimbursed; provided that if the L/C
Arranger makes any such demand after 1:00 PM New York City time, payment will be
due on the immediately succeeding business day.  The Administrative Agent shall
promptly forward such amounts to the L/C Arranger.

 

(B)           IF ANY AMOUNT REQUIRED TO BE PAID BY ANY L/C PARTICIPANT TO THE
L/C ARRANGER PURSUANT TO SECTION 3.10(A) IS PAID TO THE ADMINISTRATIVE AGENT
(AND THE ADMINISTRATIVE AGENT SHALL PROMPTLY DISTRIBUTE SUCH AMOUNT TO THE L/C
ARRANGER) WITHIN THREE BUSINESS DAYS AFTER THE DATE SUCH PAYMENT IS DUE, SUCH
L/C PARTICIPANT SHALL PAY TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE L/C
ARRANGER ON DEMAND (AND THEREAFTER THE ADMINISTRATIVE AGENT SHALL PROMPTLY PAY
TO THE L/C ARRANGER) AN AMOUNT EQUAL TO THE PRODUCT OF (I) SUCH AMOUNT, TIMES
(II) THE DAILY AVERAGE FEDERAL FUNDS EFFECTIVE RATE DURING THE PERIOD FROM AND
INCLUDING THE DATE SUCH PAYMENT IS REQUIRED TO THE DATE ON WHICH SUCH PAYMENT IS
IMMEDIATELY AVAILABLE TO THE L/C ARRANGER TIMES (III) A FRACTION THE NUMERATOR
OF WHICH IS THE NUMBER OF DAYS THAT ELAPSE DURING SUCH PERIOD AND THE
DENOMINATOR OF WHICH IS 360.  IF ANY SUCH AMOUNT REQUIRED TO BE PAID BY ANY L/C
PARTICIPANT PURSUANT TO SECTION 3.10(A) IS NOT MADE AVAILABLE TO THE
ADMINISTRATIVE AGENT FOR

 

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THE ACCOUNT OF THE L/C ARRANGER BY SUCH L/C PARTICIPANT WITHIN THREE BUSINESS
DAYS AFTER THE DATE SUCH PAYMENT IS DUE, THE L/C ARRANGER SHALL BE ENTITLED TO
RECOVER FROM SUCH L/C PARTICIPANT, ON DEMAND, SUCH AMOUNT WITH INTEREST THEREON
CALCULATED FROM SUCH DUE DATE AT THE RATE PER ANNUM APPLICABLE TO BASE RATE
LOANS UNDER THE REVOLVING FACILITY.  A CERTIFICATE OF THE L/C ARRANGER SUBMITTED
TO ANY L/C PARTICIPANT WITH RESPECT TO ANY AMOUNTS OWING UNDER THIS
SECTION SHALL BE CONCLUSIVE IN THE ABSENCE OF MANIFEST ERROR.

 

(C)           WHENEVER, AT ANY TIME AFTER THE L/C ARRANGER OR THE ISSUING LENDER
DESIGNATED BY IT HAS MADE PAYMENT UNDER ANY LETTER OF CREDIT AND HAS RECEIVED
FROM ANY L/C PARTICIPANT ITS PRO RATA SHARE OF SUCH PAYMENT IN ACCORDANCE WITH
SECTION 3.10(A), THE L/C ARRANGER RECEIVES ANY PAYMENT RELATED TO SUCH LETTER OF
CREDIT (WHETHER DIRECTLY FROM THE BORROWER OR OTHERWISE, INCLUDING PROCEEDS OF
COLLATERAL APPLIED THERETO BY THE ISSUING LENDER), OR ANY PAYMENT OF INTEREST ON
ACCOUNT THEREOF, THE L/C ARRANGER WILL DISTRIBUTE TO THE ADMINISTRATIVE AGENT
FOR THE ACCOUNT OF SUCH L/C PARTICIPANT ITS PRO RATA SHARE THEREOF; PROVIDED,
HOWEVER, THAT IN THE EVENT THAT ANY SUCH PAYMENT RECEIVED BY THE L/C ARRANGER
SHALL BE REQUIRED TO BE RETURNED BY THE L/C ARRANGER, SUCH L/C PARTICIPANT SHALL
RETURN TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE L/C ARRANGER THE
PORTION THEREOF PREVIOUSLY DISTRIBUTED BY THE ADMINISTRATIVE AGENT TO IT.

 

3.11.        Reimbursement Obligation of the Borrower.  The Borrower agrees to
reimburse the L/C Arranger on the date on which the L/C Arranger notifies the
Borrower of the date and amount of a draft presented and paid under any Letter
of Credit for the amount of (a) such draft so paid and (b) any taxes, fees,
charges or other costs or expenses incurred by the L/C Arranger or the Issuing
Lender (without duplication) in connection with such payment, other than taxes
based upon net income and other than taxes payable pursuant to Section 4.10. 
Each such payment to be made by the Borrower shall be made to the Administrative
Agent at its address for notices referred to herein in Dollars and in
immediately available funds and the Administrative Agent shall promptly
distribute such payment to the L/C Arranger.  Interest shall be payable on any
and all such amounts remaining unpaid by the Borrower from the date on which the
relevant draft is paid until payment in full or conversion as set forth below,
at the rate set forth in (i) until the Business Day next succeeding the date of
the relevant notice, Section 4.5(b) and (ii) thereafter, Section 4.5(c).  Each
drawing under any Letter of Credit shall (unless an event of the type described
in clause (i) or (ii) of Section 9(f) shall have occurred and be continuing with
respect to the Borrower, in which case the procedures specified in Section 3.10
for funding by L/C Participants shall apply) constitute a request by the
Borrower to the Administrative Agent for a borrowing pursuant to Section 3.2 of
Base Rate Loans (or, at the option of the Administrative Agent, a borrowing of
Swingline Loans pursuant to Section 3.4) in the amount of such drawing.  The
Borrowing Date with respect to such borrowing shall be the first date on which a
borrowing of Revolving Loans (or, if applicable, Swingline Loans) could be made,
pursuant to Section 3.2 (or, if applicable, Section 3.4), if the Administrative
Agent had received a notice of such borrowing at the time the Administrative
Agent receives notice from the Issuing Lender of such drawing under such Letter
of Credit.

 

3.12.        Obligations Absolute.  The Borrower’s obligations under
Section 3.11 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the L/C Arranger, the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person.  The

 

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Borrower also agrees with the L/C Arranger and each Issuing Lender that the L/C
Arranger and the Issuing Lenders shall not be responsible for, and the
Borrower’s Reimbursement Obligations under Section 3.11 shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee.  Neither the
L/C Arranger nor any Issuing Lender shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advise, however transmitted, in connection with any Letter of Credit, except
that the L/C Arranger shall be liable to the extent provided by law for errors
and omissions found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its gross negligence or willful
misconduct.  The Borrower agrees that any action taken or omitted by the L/C
Arranger or an Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the L/C Arranger or any
Issuing Lender to the Borrower. The Issuing Lender shall not have any liability
to the Borrower, the Administrative Agent or the Lenders in respect of any
Letters of Credit issued by it or any Letters of Credit requested to be issued
by it, nor shall the Issuing Lender owe any duty to any Person, or be deemed to
have agreed, to issue any Letters of Credit (it being understood that the
Issuing Lender shall issue Letters of Credit, if at all, pursuant to separate
contractual arrangements with, and solely for the benefit of, the L/C Arranger
and any duties, obligations or liabilities of the Issuing Lender shall be only
those set forth in such separate contractual arrangements).

 

3.13.        Letter of Credit Payments.  If any draft shall be presented for
payment under any Letter of Credit, the L/C Arranger shall promptly notify the
Administrative Agent and Borrower of the date and amount thereof.  The
responsibility of the L/C Arranger and any Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are substantially in conformity with such Letter of Credit.

 

3.14.        Applications.  To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, or Sections 5, 6, 7, 8 or 9, as applicable, the provisions of this
Section 3 shall apply.

 

SECTION 4.   GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

 

4.1.          Optional Prepayments.  The Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent no later than
11:00 A.M., New York City time, three Business Days prior thereto, in the case
of Eurodollar Loans, and no later than 11:00 A.M., New York City time, one
Business Day prior thereto, in the case of Base Rate Loans, which

 

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notice shall specify the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans or Base Rate Loans; provided that, if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 4.11.  Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.  If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein, together with (except in the case of Revolving Loans that are
Base Rate Loans or Swingline Loans) accrued interest to such date on the amount
prepaid.  Partial prepayments of Term Loans, Revolving Loans and Swingline Loans
shall be in an aggregate principal amount of $1,000,000 or a whole multiple
thereof.

 

4.2.          Mandatory Prepayments and Commitment Reductions.  (a)  If any
Capital Stock shall be issued by any Group Member (other than (i) any Capital
Stock issued to any Group Member or the Permitted Investors, (ii) any
Replacement Equity, or (iii) so long as (A) the Consolidated Leverage Ratio at
such time and after giving effect thereto is equal to or less than 3.25 to 1.00
and (B) no Default or Event of Default shall have occurred and be continuing or
would result therefrom, any issuance of common stock of the Borrower to the
extent the Net Cash Proceeds thereof are used to concurrently permanently prepay
(x) the Second Lien Term Loans or any Permitted Refinancing Indebtedness
incurred pursuant to Section 8.2(b) (with the amount of any mandatory prepayment
of the Term Loans or reduction of Revolving Commitments that would otherwise
have been required pursuant to this Section 4.2(a) as a result of the receipt of
such Net Cash Proceeds to be reduced by the amount of any prepayment of Second
Lien Term Loans) or (y) the Subordinated Loans or any Permitted Refinancing
Indebtedness incurred pursuant to Section 8.2(c)), or any capital contribution
is made to any Group Member (other than a capital contribution by any Group
Member or the Permitted Investors), an amount equal to 50% of the Net Cash
Proceeds thereof shall be applied on the date of receipt of such Net Cash
Proceeds toward the prepayment of the Term Loans and the reduction of the
Revolving Commitments as set forth in Section 4.2(e); provided, that, if a
Default exists at the time Net Cash Proceeds are received by the Borrower, but
such Default is cured before it becomes an Event of Default, such Default shall
not operate to prohibit the application of such Net Cash Proceeds as specified
in clause (iii) above once such Default has been cured; provided, further, that
during the continuance of such Default prior to the time such Default becomes an
Event of Default, such Net Cash Proceeds shall be deposited and maintained in a
segregated account with the Administrative Agent and shall not be required to be
used for the repayment of the Term Loans or the reduction of the Revolving
Commitments during such time notwithstanding any provision of this
Section 4.2(a) to the contrary.

 

(B)           IF ANY INDEBTEDNESS SHALL BE INCURRED BY ANY GROUP MEMBER (OTHER
THAN EXCLUDED INDEBTEDNESS), AN AMOUNT EQUAL TO 100% OF THE NET CASH PROCEEDS
THEREOF SHALL BE APPLIED ON THE DATE OF SUCH INCURRENCE TOWARD THE PREPAYMENT OF
THE TERM LOANS AND THE REDUCTION OF THE REVOLVING COMMITMENTS AS SET FORTH IN
SECTION 4.2(E).

 

(C)           IF ON ANY DATE ANY GROUP MEMBER SHALL RECEIVE NET CASH PROCEEDS
FROM ANY ASSET SALE OR RECOVERY EVENT THEN, UNLESS A REINVESTMENT NOTICE SHALL
BE DELIVERED IN RESPECT THEREOF, SUCH NET CASH PROCEEDS SHALL BE APPLIED ON SUCH
DATE TOWARD THE PREPAYMENT OF THE TERM LOANS AND THE REDUCTION OF THE REVOLVING
COMMITMENTS AS SET FORTH IN SECTION 4.2(E); PROVIDED, THAT, NOTWITHSTANDING THE
FOREGOING, ON EACH REINVESTMENT PREPAYMENT DATE, AN

 

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AMOUNT EQUAL TO THE REINVESTMENT PREPAYMENT AMOUNT WITH RESPECT TO THE RELEVANT
REINVESTMENT EVENT SHALL BE APPLIED TOWARD THE PREPAYMENT OF THE TERM LOANS AND
THE REDUCTION OF THE REVOLVING COMMITMENTS AS SET FORTH IN SECTION 4.2(E).

 

(D)           IF, FOR ANY FISCAL YEAR OF THE BORROWER COMMENCING WITH THE FISCAL
YEAR ENDING DECEMBER 31, 2006, THERE SHALL BE EXCESS CASH FLOW, THE BORROWER
SHALL, ON THE RELEVANT EXCESS CASH FLOW APPLICATION DATE, APPLY THE ECF
PERCENTAGE OF SUCH EXCESS CASH FLOW TOWARD THE PREPAYMENT OF THE TERM LOANS AND
THE REDUCTION OF THE REVOLVING COMMITMENTS AS SET FORTH IN SECTION 4.2(E);
PROVIDED THAT ANY REQUIRED PREPAYMENT PURSUANT TO THIS SECTION 4.2(D) WILL BE
REDUCED TO THE EXTENT NECESSARY SO THAT, AFTER GIVING EFFECT TO THE PREPAYMENT
(IF ANY) REQUIRED UNDER THIS SECTION 4.2(D), THE AGGREGATE AMOUNT OF CASH AND
CASH EQUIVALENTS OF THE BORROWER AND ITS SUBSIDIARIES (OTHER THAN ANY SUCH CASH
OR CASH EQUIVALENTS WHICH ARE SUBJECT TO A LIEN PERMITTED UNDER SECTION 8.3
(OTHER THAN SECTION 8.3(B)) OR CONSTITUTE “RESTRICTED CASH” IN ACCORDANCE WITH
GAAP) AS OF THE LAST DAY OF THE RELEVANT FISCAL YEAR WILL NOT BE LESS THAN
$5,000,000.  EACH SUCH PREPAYMENT AND COMMITMENT REDUCTION SHALL BE MADE ON A
DATE (AN “EXCESS CASH FLOW APPLICATION DATE”) NO LATER THAN FIVE DAYS AFTER THE
EARLIER OF (I) THE DATE ON WHICH THE FINANCIAL STATEMENTS OF THE BORROWER
REFERRED TO IN SECTION 7.1(A), FOR THE FISCAL YEAR WITH RESPECT TO WHICH SUCH
PREPAYMENT IS MADE, ARE REQUIRED TO BE DELIVERED TO THE LENDERS AND (II) THE
DATE SUCH FINANCIAL STATEMENTS ARE ACTUALLY DELIVERED.

 

(E)           AMOUNTS TO BE APPLIED IN CONNECTION WITH PREPAYMENTS AND
COMMITMENT REDUCTIONS MADE PURSUANT TO SECTION 4.2 SHALL BE APPLIED, FIRST, TO
THE PREPAYMENT OF THE TERM LOANS, AND SECOND, UNLESS THE MAJORITY FACILITY
LENDERS WITH RESPECT TO THE REVOLVING FACILITY SHALL AGREE OTHERWISE, TO REDUCE
PERMANENTLY THE REVOLVING COMMITMENTS.  ANY SUCH REDUCTION OF THE REVOLVING
COMMITMENTS SHALL BE ACCOMPANIED BY PREPAYMENT OF THE REVOLVING LOANS AND
SWINGLINE LOANS TO THE EXTENT, IF ANY, THAT THE TOTAL REVOLVING EXTENSIONS OF
CREDIT EXCEED THE AMOUNT OF THE TOTAL REVOLVING COMMITMENTS AS SO REDUCED,
PROVIDED THAT IF THE AGGREGATE PRINCIPAL AMOUNT OF REVOLVING LOANS AND SWINGLINE
LOANS THEN OUTSTANDING IS LESS THAN THE AMOUNT OF SUCH EXCESS (BECAUSE L/C
OBLIGATIONS CONSTITUTE A PORTION THEREOF), THE BORROWER SHALL, TO THE EXTENT OF
THE BALANCE OF SUCH EXCESS, REPLACE OUTSTANDING LETTERS OF CREDIT AND/OR DEPOSIT
AN AMOUNT EQUAL TO 105% OF THE STATED AMOUNT OF THE LETTERS OF CREDIT IN CASH IN
A CASH COLLATERAL ACCOUNT ESTABLISHED WITH THE ADMINISTRATIVE AGENT FOR THE
BENEFIT OF THE LENDERS ON TERMS AND CONDITIONS SATISFACTORY TO THE
ADMINISTRATIVE AGENT.  THE APPLICATION OF ANY PREPAYMENT PURSUANT TO SECTION 4.2
SHALL BE MADE, FIRST, TO BASE RATE LOANS AND, SECOND, TO EURODOLLAR LOANS.  EACH
PREPAYMENT OF THE LOANS UNDER SECTION 4.2 (EXCEPT IN THE CASE OF REVOLVING LOANS
THAT ARE BASE RATE LOANS AND SWINGLINE LOANS) SHALL BE ACCOMPANIED BY ACCRUED
INTEREST TO THE DATE OF SUCH PREPAYMENT ON THE AMOUNT PREPAID.

 

4.3.          Conversion and Continuation Options.  (a)  The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., New York City time, on the Business Day preceding the proposed
conversion date, provided that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto.  The
Borrower may elect from time to time to convert Base Rate Loans to Eurodollar
Loans by giving the Administrative Agent prior irrevocable notice of such
election no later than 11:00 A.M., New York City time, on the third Business Day
preceding the proposed conversion date (which notice shall specify the length of
the initial Interest Period therefor), provided that no

 

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Base Rate Loan under a particular Facility may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
conversions.  Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.

 

(B)           ANY EURODOLLAR LOAN MAY BE CONTINUED AS SUCH UPON THE EXPIRATION
OF THE THEN CURRENT INTEREST PERIOD WITH RESPECT THERETO BY THE BORROWER GIVING
IRREVOCABLE NOTICE TO THE ADMINISTRATIVE AGENT, IN ACCORDANCE WITH THE
APPLICABLE PROVISIONS OF THE TERM “INTEREST PERIOD” SET FORTH IN SECTION 1.1, OF
THE LENGTH OF THE NEXT INTEREST PERIOD TO BE APPLICABLE TO SUCH LOANS, PROVIDED
THAT NO EURODOLLAR LOAN UNDER A PARTICULAR FACILITY MAY BE CONTINUED AS SUCH
WHEN ANY EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND THE ADMINISTRATIVE
AGENT HAS OR THE MAJORITY FACILITY LENDERS IN RESPECT OF SUCH FACILITY HAVE
DETERMINED IN ITS OR THEIR SOLE DISCRETION NOT TO PERMIT SUCH CONTINUATIONS, AND
PROVIDED, FURTHER, THAT IF THE BORROWER SHALL FAIL TO GIVE ANY REQUIRED NOTICE
AS DESCRIBED ABOVE IN THIS PARAGRAPH OR IF SUCH CONTINUATION IS NOT PERMITTED
PURSUANT TO THE PRECEDING PROVISO SUCH LOANS SHALL BE AUTOMATICALLY CONVERTED TO
BASE RATE LOANS ON THE LAST DAY OF SUCH THEN EXPIRING INTEREST PERIOD.  UPON
RECEIPT OF ANY SUCH NOTICE THE ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY EACH
RELEVANT LENDER THEREOF.

 

4.4.          Limitations on Eurodollar Tranches.  Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that,
(a) after giving effect thereto, the aggregate principal amount of the
Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000
or a whole multiple of $250,000 in excess thereof and (b) no more than eight
Eurodollar Tranches shall be outstanding at any one time.

 

4.5.          Interest Rates and Payment Dates.  (a)  Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.

 

(B)           EACH BASE RATE LOAN SHALL BEAR INTEREST AT A RATE PER ANNUM EQUAL
TO THE BASE RATE PLUS THE APPLICABLE MARGIN.

 

(C)           (I)  IF ALL OR A PORTION OF THE PRINCIPAL AMOUNT OF ANY LOAN OR
REIMBURSEMENT OBLIGATION SHALL NOT BE PAID WHEN DUE (WHETHER AT THE STATED
MATURITY, BY ACCELERATION OR OTHERWISE), SUCH OVERDUE AMOUNT SHALL BEAR INTEREST
AT A RATE PER ANNUM EQUAL TO (X) IN THE CASE OF THE LOANS, THE RATE THAT WOULD
OTHERWISE BE APPLICABLE THERETO PURSUANT TO THE FOREGOING PROVISIONS OF THIS
SECTION PLUS 2% OR (Y) IN THE CASE OF REIMBURSEMENT OBLIGATIONS, THE RATE
APPLICABLE TO BASE RATE LOANS UNDER THE REVOLVING FACILITY PLUS 2%, AND (II) IF
ALL OR A PORTION OF ANY INTEREST PAYABLE ON ANY LOAN OR REIMBURSEMENT OBLIGATION
OR ANY COMMITMENT FEE OR OTHER AMOUNT PAYABLE HEREUNDER SHALL NOT BE PAID WHEN
DUE (WHETHER AT THE STATED MATURITY, BY ACCELERATION OR OTHERWISE), SUCH OVERDUE
AMOUNT SHALL BEAR INTEREST AT A RATE PER ANNUM EQUAL TO THE RATE THEN APPLICABLE
TO BASE RATE LOANS UNDER THE RELEVANT FACILITY PLUS 2% (OR, IN THE CASE OF ANY
SUCH OTHER AMOUNTS THAT DO NOT RELATE TO A PARTICULAR FACILITY, THE RATE THEN
APPLICABLE TO BASE RATE LOANS UNDER THE REVOLVING FACILITY PLUS 2%), IN EACH
CASE, WITH RESPECT

 

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TO CLAUSES (I) AND (II) ABOVE, FROM THE DATE OF SUCH NON-PAYMENT UNTIL SUCH
AMOUNT IS PAID IN FULL (AS WELL AFTER AS BEFORE JUDGMENT).

 

(D)           INTEREST SHALL BE PAYABLE IN ARREARS ON EACH INTEREST PAYMENT
DATE, PROVIDED THAT INTEREST ACCRUING PURSUANT TO PARAGRAPH (C) OF THIS
SECTION SHALL BE PAYABLE FROM TIME TO TIME ON DEMAND.

 

(E)           REIMBURSEMENT OBLIGATIONS SHALL BEAR INTEREST PURSUANT TO
SECTION 3.11.

 

4.6.          Computation of Interest and Fees.  (a)  Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed.  The Administrative Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of each determination of a
Eurodollar Rate.  Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective.  The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.

 

(B)           EACH DETERMINATION OF AN INTEREST RATE BY THE ADMINISTRATIVE AGENT
PURSUANT TO ANY PROVISION OF THIS AGREEMENT SHALL BE CONCLUSIVE AND BINDING ON
THE BORROWER AND THE LENDERS IN THE ABSENCE OF MANIFEST ERROR.  THE
ADMINISTRATIVE AGENT SHALL, AT THE REQUEST OF THE BORROWER, DELIVER TO THE
BORROWER A STATEMENT SHOWING THE QUOTATIONS USED BY THE ADMINISTRATIVE AGENT IN
DETERMINING ANY INTEREST RATE PURSUANT TO SECTION 4.5(A).

 

4.7.          Inability to Determine Interest Rate.  If prior to the first day
of any Interest Period:

 

(A)           THE ADMINISTRATIVE AGENT SHALL HAVE DETERMINED (WHICH
DETERMINATION SHALL BE CONCLUSIVE AND BINDING UPON THE BORROWER) THAT, BY REASON
OF CIRCUMSTANCES AFFECTING THE RELEVANT MARKET, ADEQUATE AND REASONABLE MEANS DO
NOT EXIST FOR ASCERTAINING THE EURODOLLAR RATE FOR SUCH INTEREST PERIOD, OR

 

(B)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM THE
MAJORITY FACILITY LENDERS IN RESPECT OF THE RELEVANT FACILITY THAT THE
EURODOLLAR RATE DETERMINED OR TO BE DETERMINED FOR SUCH INTEREST PERIOD WILL NOT
ADEQUATELY AND FAIRLY REFLECT THE COST TO SUCH LENDERS (AS CONCLUSIVELY
CERTIFIED BY SUCH LENDERS) OF MAKING OR MAINTAINING THEIR AFFECTED LOANS DURING
SUCH INTEREST PERIOD,

 

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter.  If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then-current
Interest Period, to Base Rate Loans.  Until such notice has been withdrawn by
the Administrative Agent, no further Eurodollar Loans under the relevant
Facility shall be made or continued as such, nor shall the Borrower have the
right to convert Loans under the relevant Facility to Eurodollar Loans.

 

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4.8.          Pro Rata Treatment and Payments.  (a)  Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Percentages or Revolving
Percentages, as the case may be, of the relevant Lenders.

 

(B)           EACH PAYMENT (INCLUDING EACH PREPAYMENT) BY THE BORROWER ON
ACCOUNT OF PRINCIPAL OF AND INTEREST ON THE TERM LOANS SHALL BE MADE PRO RATA
ACCORDING TO THE RESPECTIVE OUTSTANDING PRINCIPAL AMOUNTS OF THE TERM LOANS THEN
HELD BY THE TERM LENDERS.  THE AMOUNT OF EACH PRINCIPAL PREPAYMENT OF THE TERM
LOANS SHALL BE APPLIED TO REDUCE THE THEN REMAINING INSTALLMENTS OF THE TERM
LOANS, PRO RATA BASED UPON THE THEN REMAINING PRINCIPAL AMOUNT THEREOF;
PROVIDED, THAT IF NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, ANY
PREPAYMENTS MADE TO THE TERM LOANS PURSUANT TO SECTION 4.1 MAY BE APPLIED, AT
THE BORROWER’S OPTION, TO THE NEXT SUCCEEDING INSTALLMENT OR INSTALLMENTS OF THE
TERM LOANS DUE WITHIN TWELVE MONTHS AFTER SUCH PREPAYMENT IS MADE.  AMOUNTS
PREPAID ON ACCOUNT OF THE TERM LOANS MAY NOT BE REBORROWED.

 

(C)           EACH PAYMENT (INCLUDING EACH PREPAYMENT) BY THE BORROWER ON
ACCOUNT OF PRINCIPAL OF AND INTEREST ON THE REVOLVING LOANS SHALL BE MADE PRO
RATA ACCORDING TO THE RESPECTIVE OUTSTANDING PRINCIPAL AMOUNTS OF THE REVOLVING
LOANS THEN HELD BY THE REVOLVING LENDERS.

 

(D)           ALL PAYMENTS (INCLUDING PREPAYMENTS) TO BE MADE BY THE BORROWER
HEREUNDER, WHETHER ON ACCOUNT OF PRINCIPAL, INTEREST, FEES OR OTHERWISE, SHALL
BE MADE WITHOUT SETOFF OR COUNTERCLAIM AND SHALL BE MADE PRIOR TO 12:00 NOON,
NEW YORK CITY TIME, ON THE DUE DATE THEREOF TO THE ADMINISTRATIVE AGENT, FOR THE
ACCOUNT OF THE LENDERS, AT THE FUNDING OFFICE, IN DOLLARS AND IN IMMEDIATELY
AVAILABLE FUNDS.  THE ADMINISTRATIVE AGENT SHALL DISTRIBUTE SUCH PAYMENTS TO THE
LENDERS PROMPTLY UPON RECEIPT IN LIKE FUNDS AS RECEIVED.  IF ANY PAYMENT
HEREUNDER (OTHER THAN PAYMENTS ON THE EURODOLLAR LOANS) BECOMES DUE AND PAYABLE
ON A DAY OTHER THAN A BUSINESS DAY, SUCH PAYMENT SHALL BE EXTENDED TO THE NEXT
SUCCEEDING BUSINESS DAY.  IF ANY PAYMENT ON A EURODOLLAR LOAN BECOMES DUE AND
PAYABLE ON A DAY OTHER THAN A BUSINESS DAY, THE MATURITY THEREOF SHALL BE
EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY UNLESS THE RESULT OF SUCH EXTENSION
WOULD BE TO EXTEND SUCH PAYMENT INTO ANOTHER CALENDAR MONTH, IN WHICH EVENT SUCH
PAYMENT SHALL BE MADE ON THE IMMEDIATELY PRECEDING BUSINESS DAY.  IN THE CASE OF
ANY EXTENSION OF ANY PAYMENT OF PRINCIPAL PURSUANT TO THE PRECEDING TWO
SENTENCES, INTEREST THEREON SHALL BE PAYABLE AT THE THEN APPLICABLE RATE DURING
SUCH EXTENSION.

 

(E)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED IN
WRITING BY ANY LENDER PRIOR TO A BORROWING THAT SUCH LENDER WILL NOT MAKE THE
AMOUNT THAT WOULD CONSTITUTE ITS SHARE OF SUCH BORROWING AVAILABLE TO THE
ADMINISTRATIVE AGENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH LENDER IS
MAKING SUCH AMOUNT AVAILABLE TO THE ADMINISTRATIVE AGENT, AND THE ADMINISTRATIVE
AGENT MAY, IN RELIANCE UPON SUCH ASSUMPTION, MAKE AVAILABLE TO THE BORROWER A
CORRESPONDING AMOUNT.  IF SUCH AMOUNT IS NOT MADE AVAILABLE TO THE
ADMINISTRATIVE AGENT BY THE REQUIRED TIME ON THE BORROWING DATE THEREFOR, SUCH
LENDER SHALL PAY TO THE ADMINISTRATIVE AGENT, ON DEMAND, SUCH AMOUNT WITH
INTEREST THEREON AT A RATE EQUAL TO THE GREATER OF (I) THE FEDERAL FUNDS
EFFECTIVE RATE AND (II) A RATE DETERMINED BY THE ADMINISTRATIVE AGENT IN
ACCORDANCE WITH BANKING INDUSTRY RULES ON INTERBANK COMPENSATION FOR THE PERIOD
UNTIL SUCH LENDER MAKES SUCH AMOUNT IMMEDIATELY AVAILABLE TO THE ADMINISTRATIVE
AGENT.  A CERTIFICATE OF

 

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THE ADMINISTRATIVE AGENT SUBMITTED TO ANY LENDER WITH RESPECT TO ANY AMOUNTS
OWING UNDER THIS PARAGRAPH SHALL BE CONCLUSIVE IN THE ABSENCE OF MANIFEST
ERROR.  IF SUCH LENDER’S SHARE OF SUCH BORROWING IS NOT MADE AVAILABLE TO THE
ADMINISTRATIVE AGENT BY SUCH LENDER WITHIN THREE BUSINESS DAYS OF SUCH BORROWING
DATE, THE ADMINISTRATIVE AGENT SHALL ALSO BE ENTITLED TO RECOVER SUCH AMOUNT
WITH INTEREST THEREON AT THE RATE PER ANNUM APPLICABLE TO BASE RATE LOANS UNDER
THE RELEVANT FACILITY, ON DEMAND, FROM THE BORROWER.

 

(F)            IF AT ANY TIME THE BORROWER SHALL BE REQUIRED TO MAKE ANY PAYMENT
UNDER ANY LOAN DOCUMENT TO OR FOR THE ACCOUNT OF A DEFAULTING LENDER, THEN THE
BORROWER, SO LONG AS IT IS THEN PERMITTED TO BORROW REVOLVING LOANS HEREUNDER,
MAY SET OFF AND OTHERWISE APPLY ITS OBLIGATION TO MAKE SUCH PAYMENT AGAINST THE
OBLIGATION OF SUCH DEFAULTING LENDER TO MAKE SUCH DEFAULTED REVOLVING LOAN.  IN
SUCH EVENT, THE AMOUNT SO SET OFF AND OTHERWISE APPLIED SHALL BE DEEMED TO
CONSTITUTE A REVOLVING LOAN OR TERM LOAN BY SUCH DEFAULTING LENDER MADE ON THE
DATE OF SUCH SET-OFF AND INCLUDED WITHIN ANY BORROWING OF REVOLVING LOANS OR
TERM LOANS, AS APPLICABLE, AS THE ADMINISTRATIVE AGENT MAY REASONABLY DETERMINE.

 

(G)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED IN
WRITING BY THE BORROWER PRIOR TO THE DATE OF ANY PAYMENT DUE TO BE MADE BY THE
BORROWER HEREUNDER THAT THE BORROWER WILL NOT MAKE SUCH PAYMENT TO THE
ADMINISTRATIVE AGENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT THE BORROWER IS
MAKING SUCH PAYMENT, AND THE ADMINISTRATIVE AGENT MAY, BUT SHALL NOT BE REQUIRED
TO, IN RELIANCE UPON SUCH ASSUMPTION, MAKE AVAILABLE TO THE LENDERS THEIR
RESPECTIVE PRO RATA SHARES OF A CORRESPONDING AMOUNT.  IF SUCH PAYMENT IS NOT
MADE TO THE ADMINISTRATIVE AGENT BY THE BORROWER WITHIN THREE BUSINESS DAYS
AFTER SUCH DUE DATE, THE ADMINISTRATIVE AGENT SHALL BE ENTITLED TO RECOVER, ON
DEMAND, FROM EACH LENDER TO WHICH ANY AMOUNT WHICH WAS MADE AVAILABLE PURSUANT
TO THE PRECEDING SENTENCE, SUCH AMOUNT WITH INTEREST THEREON AT THE RATE PER
ANNUM EQUAL TO THE DAILY AVERAGE FEDERAL FUNDS EFFECTIVE RATE.  NOTHING HEREIN
SHALL BE DEEMED TO LIMIT THE RIGHTS OF THE ADMINISTRATIVE AGENT OR ANY LENDER
AGAINST THE BORROWER.

 

4.9.          Requirements of Law.  (a)  If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:

 

(i)            shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Non-Excluded Taxes covered by Section 4.10
and except for any tax on the overall net income of such Lender);

 

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

 

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(iii)          shall impose on such Lender any other condition (except for
Non-Excluded Taxes covered by Section 4.10 and changes in the rate of tax on the
overall net income of such Lender);

 

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing, causing the issuance of,
or participating in Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable.  If
any Lender becomes entitled to claim any additional amounts pursuant to this
paragraph, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.

 

(B)           IF ANY LENDER SHALL HAVE DETERMINED THAT THE ADOPTION OF OR ANY
CHANGE IN ANY REQUIREMENT OF LAW REGARDING CAPITAL ADEQUACY OR IN THE
INTERPRETATION OR APPLICATION THEREOF OR COMPLIANCE BY SUCH LENDER OR ANY
CORPORATION CONTROLLING SUCH LENDER WITH ANY REQUEST OR DIRECTIVE REGARDING
CAPITAL ADEQUACY (WHETHER OR NOT HAVING THE FORCE OF LAW) FROM ANY GOVERNMENTAL
AUTHORITY MADE SUBSEQUENT TO THE DATE HEREOF SHALL HAVE THE EFFECT OF REDUCING
THE RATE OF RETURN ON SUCH LENDER’S OR SUCH CORPORATION’S CAPITAL AS A
CONSEQUENCE OF ITS OBLIGATIONS HEREUNDER OR UNDER OR IN RESPECT OF ANY LETTER OF
CREDIT TO A LEVEL BELOW THAT WHICH SUCH LENDER OR SUCH CORPORATION COULD HAVE
ACHIEVED BUT FOR SUCH ADOPTION, CHANGE OR COMPLIANCE (TAKING INTO CONSIDERATION
SUCH LENDER’S OR SUCH CORPORATION’S POLICIES WITH RESPECT TO CAPITAL ADEQUACY)
BY AN AMOUNT DEEMED BY SUCH LENDER TO BE MATERIAL, THEN FROM TIME TO TIME, AFTER
SUBMISSION BY SUCH LENDER TO THE BORROWER (WITH A COPY TO THE ADMINISTRATIVE
AGENT) OF A WRITTEN REQUEST THEREFOR, THE BORROWER SHALL PAY TO SUCH LENDER SUCH
ADDITIONAL AMOUNT OR AMOUNTS AS WILL COMPENSATE SUCH LENDER OR SUCH CORPORATION
FOR SUCH REDUCTION.

 

(C)           A LENDER SHALL BE REQUIRED TO SUBMIT A CERTIFICATE AS TO ANY
ADDITIONAL AMOUNTS PAYABLE PURSUANT TO THIS SECTION, AND ANY SUCH CERTIFICATE
SUBMITTED BY ANY LENDER TO THE BORROWER (WITH A COPY TO THE ADMINISTRATIVE
AGENT) SHALL BE CONCLUSIVE IN THE ABSENCE OF MANIFEST ERROR.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS SECTION, THE BORROWER SHALL NOT BE REQUIRED TO
COMPENSATE A LENDER PURSUANT TO THIS SECTION FOR ANY AMOUNTS INCURRED MORE THAN
SIX MONTHS PRIOR TO THE DATE THAT SUCH LENDER NOTIFIES THE BORROWER OF SUCH
LENDER’S INTENTION TO CLAIM COMPENSATION THEREFOR; PROVIDED THAT, IF THE
CIRCUMSTANCES GIVING RISE TO SUCH CLAIM HAVE A RETROACTIVE EFFECT, THEN SUCH
SIX-MONTH PERIOD SHALL BE EXTENDED TO INCLUDE THE PERIOD OF SUCH RETROACTIVE
EFFECT.  THE OBLIGATIONS OF THE BORROWER PURSUANT TO THIS SECTION SHALL SURVIVE
THE TERMINATION OF THIS AGREEMENT AND THE PAYMENT OF THE LOANS AND ALL OTHER
AMOUNTS PAYABLE HEREUNDER.

 

4.10.        Taxes.  (a)  All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on any Agent or any Lender as a result of a present or former connection
between such Agent or such Lender and the jurisdiction of the Governmental
Authority imposing

 

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such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from such Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document).  If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld
from any amounts payable to any Agent or any Lender hereunder, the amounts so
payable to such Agent or such Lender shall be increased to the extent necessary
to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes
and Other Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender’s failure to comply with the requirements of paragraph (d) or (e) of this
Section or (ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.

 

(B)           IN ADDITION, THE BORROWER SHALL PAY ANY OTHER TAXES TO THE
RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(C)           WHENEVER ANY NON-EXCLUDED TAXES OR OTHER TAXES ARE PAYABLE BY THE
BORROWER, AS PROMPTLY AS POSSIBLE THEREAFTER THE BORROWER SHALL SEND TO THE
ADMINISTRATIVE AGENT FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF THE RELEVANT
AGENT OR LENDER, AS THE CASE MAY BE, A CERTIFIED COPY OF AN ORIGINAL OFFICIAL
RECEIPT RECEIVED BY THE BORROWER SHOWING PAYMENT THEREOF.  IF THE BORROWER FAILS
TO PAY ANY NON-EXCLUDED TAXES OR OTHER TAXES WHEN DUE TO THE APPROPRIATE TAXING
AUTHORITY OR FAILS TO REMIT TO THE ADMINISTRATIVE AGENT THE REQUIRED RECEIPTS OR
OTHER REQUIRED DOCUMENTARY EVIDENCE, THE BORROWER SHALL INDEMNIFY THE AGENTS AND
THE LENDERS FOR ANY INCREMENTAL TAXES, INTEREST OR PENALTIES THAT MAY BECOME
PAYABLE BY ANY AGENT OR ANY LENDER AS A RESULT OF ANY SUCH FAILURE.

 

(D)           EACH LENDER (OR TRANSFEREE) THAT IS NOT A “U.S. PERSON” AS DEFINED
IN SECTION 7701(A)(30) OF THE CODE (A “NON-U.S. LENDER”) SHALL DELIVER TO THE
BORROWER AND THE ADMINISTRATIVE AGENT (OR, IN THE CASE OF A PARTICIPANT, TO THE
LENDER FROM WHICH THE RELATED PARTICIPATION SHALL HAVE BEEN PURCHASED) TWO
COPIES OF EITHER U.S. INTERNAL REVENUE SERVICE FORM W-8BEN OR FORM W-8ECI, OR,
IN THE CASE OF A NON-U.S. LENDER CLAIMING EXEMPTION FROM U.S. FEDERAL
WITHHOLDING TAX UNDER SECTION 871(H) OR 881(C) OF THE CODE WITH RESPECT TO
PAYMENTS OF “PORTFOLIO INTEREST”, A STATEMENT SUBSTANTIALLY IN THE FORM OF
EXHIBIT F AND A FORM W-8BEN, OR ANY SUBSEQUENT VERSIONS THEREOF OR SUCCESSORS
THERETO, PROPERLY COMPLETED AND DULY EXECUTED BY SUCH NON-U.S. LENDER CLAIMING
COMPLETE EXEMPTION FROM, OR A REDUCED RATE OF, U.S. FEDERAL WITHHOLDING TAX ON
ALL PAYMENTS BY THE BORROWER UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. 
SUCH FORMS SHALL BE DELIVERED BY EACH NON-U.S. LENDER ON OR BEFORE THE DATE IT
BECOMES A PARTY TO THIS AGREEMENT (OR, IN THE CASE OF ANY PARTICIPANT, ON OR
BEFORE THE DATE SUCH PARTICIPANT PURCHASES THE RELATED PARTICIPATION).  IN
ADDITION, EACH NON-U.S. LENDER SHALL DELIVER SUCH FORMS PROMPTLY UPON THE
OBSOLESCENCE OR INVALIDITY OF ANY FORM PREVIOUSLY DELIVERED BY SUCH NON-U.S.
LENDER.  EACH NON-U.S. LENDER SHALL PROMPTLY NOTIFY THE BORROWER AT ANY TIME IT
DETERMINES THAT IT IS NO LONGER IN A POSITION TO PROVIDE ANY PREVIOUSLY
DELIVERED CERTIFICATE TO THE BORROWER (OR ANY OTHER FORM OF CERTIFICATION
ADOPTED BY THE U.S. TAXING

 

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AUTHORITIES FOR SUCH PURPOSE).  NOTWITHSTANDING ANY OTHER PROVISION OF THIS
PARAGRAPH, A NON-U.S. LENDER SHALL NOT BE REQUIRED TO DELIVER ANY FORM PURSUANT
TO THIS PARAGRAPH THAT SUCH NON-U.S. LENDER IS NOT LEGALLY ABLE TO DELIVER.

 

(E)           A LENDER THAT IS ENTITLED TO AN EXEMPTION FROM OR REDUCTION OF
NON-U.S. WITHHOLDING TAX UNDER THE LAW OF THE JURISDICTION IN WHICH THE BORROWER
IS LOCATED, OR ANY TREATY TO WHICH SUCH JURISDICTION IS A PARTY, WITH RESPECT TO
PAYMENTS UNDER THIS AGREEMENT SHALL DELIVER TO THE BORROWER (WITH A COPY TO THE
ADMINISTRATIVE AGENT), AT THE TIME OR TIMES PRESCRIBED BY APPLICABLE LAW OR
REASONABLY REQUESTED BY THE BORROWER, SUCH PROPERLY COMPLETED AND EXECUTED
DOCUMENTATION PRESCRIBED BY APPLICABLE LAW AS WILL PERMIT SUCH PAYMENTS TO BE
MADE WITHOUT WITHHOLDING OR AT A REDUCED RATE, PROVIDED THAT SUCH LENDER IS
LEGALLY ENTITLED TO COMPLETE, EXECUTE AND DELIVER SUCH DOCUMENTATION AND IN SUCH
LENDER’S JUDGMENT SUCH COMPLETION, EXECUTION OR SUBMISSION WOULD NOT MATERIALLY
PREJUDICE THE LEGAL POSITION OF SUCH LENDER.

 

(F)            THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE TERMINATION OF
THIS AGREEMENT AND THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE
HEREUNDER.

 

4.11.        Indemnity.  The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto.  Such indemnification may include an amount equal
to the excess, if any, of (i) the amount of interest that would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market.  A Lender must provide a certificate as to any
amounts payable pursuant to this Section, and any such certificate submitted to
the Borrower by any Lender shall be conclusive in the absence of manifest
error.  This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.

 

4.12.        Change of Lending Office.  Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 4.9 or
4.10(a) with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that no such
designation shall be required unless such designation can be made on terms that,
in the sole judgment of such Lender, cause such Lender and its lending office(s)
to suffer no economic, legal or regulatory disadvantage, and provided, further,
that nothing in this Section shall affect or

 

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postpone any of the obligations of the Borrower or the rights of any Lender
pursuant to Section 4.9 or 4.10(a).

 

4.13.        Replacement of Lenders.  The Borrower shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 4.9 or 4.10(a) or (b) defaults in its obligation to make Loans hereunder
(a “Defaulting Lender”), with a replacement financial institution; provided that
(i) such replacement does not conflict with any Requirement of Law, (ii) no
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Lender shall have failed
to take the actions required to be taken by such Lender under Section 4.12 so as
to eliminate the continued need for payment of amounts owing pursuant to
Section 4.9 or 4.10(a), (iv) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced Lender on
or prior to the date of replacement, (v) the Borrower shall be liable to such
replaced Lender under Section 4.11 if any Eurodollar Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (vii) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 11.6 (provided that the Borrower shall be obligated to
pay the registration and processing fee referred to therein), (viii) until such
time as such replacement shall be consummated, the Borrower shall pay all
additional amounts (if any) required pursuant to Section 4.9 or 4.10(a), as the
case may be, and (ix) any such replacement shall not be deemed to be a waiver of
any rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.

 

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

 

(B)           THE ADMINISTRATIVE AGENT, ON BEHALF OF THE BORROWER, SHALL
MAINTAIN THE REGISTER PURSUANT TO SECTION 11.6(B), AND A SUBACCOUNT THEREIN FOR
EACH LENDER, IN WHICH SHALL BE RECORDED (I) THE AMOUNT OF EACH LOAN MADE
HEREUNDER AND ANY NOTE EVIDENCING SUCH LOAN, THE TYPE OF SUCH LOAN AND EACH
INTEREST PERIOD APPLICABLE THERETO, (II) THE AMOUNT OF ANY PRINCIPAL OR INTEREST
DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM THE BORROWER TO EACH LENDER
HEREUNDER AND (III) BOTH THE AMOUNT OF ANY SUM RECEIVED BY THE ADMINISTRATIVE
AGENT HEREUNDER FROM THE BORROWER AND EACH LENDER’S SHARE THEREOF.

 

(C)           THE ENTRIES MADE IN THE REGISTER AND THE ACCOUNTS OF EACH LENDER
MAINTAINED PURSUANT TO SECTION 4.14(A) SHALL, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BE PRIMA FACIE EVIDENCE OF THE EXISTENCE AND AMOUNTS OF THE
OBLIGATIONS OF THE BORROWER THEREIN RECORDED; PROVIDED, HOWEVER, THAT THE
FAILURE OF ANY LENDER OR THE ADMINISTRATIVE AGENT TO MAINTAIN THE REGISTER OR
ANY SUCH ACCOUNT, OR ANY ERROR THEREIN, SHALL NOT IN ANY MANNER AFFECT THE
OBLIGATION OF THE BORROWER TO REPAY (WITH APPLICABLE INTEREST) THE LOANS MADE TO
THE BORROWER BY SUCH LENDER IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

 

(D)           THE BORROWER AGREES THAT, UPON THE REQUEST TO THE ADMINISTRATIVE
AGENT BY ANY LENDER, THE BORROWER WILL EXECUTE AND DELIVER TO SUCH LENDER A
PROMISSORY NOTE OF THE

 

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BORROWER EVIDENCING ANY TERM LOANS, REVOLVING LOANS OR SWINGLINE LOANS, AS THE
CASE MAY BE, OF SUCH LENDER, SUBSTANTIALLY IN THE FORMS OF EXHIBIT G-1, G-2 OR
G-3, RESPECTIVELY, WITH APPROPRIATE INSERTIONS AS TO DATE AND PRINCIPAL AMOUNT.

 

4.15.        Illegality.  Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and
(b) such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law.  If any such conversion of a Eurodollar Loan occurs
on a day which is not the last day of the then current Interest Period with
respect thereto, the Borrower shall pay to such Lender such amounts, if any, as
may be required pursuant to Section 4.11.

 

SECTION 5.   REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, the Borrower hereby
represents and warrants to each Agent and each Lender that:

 

5.1.          Financial Condition.  (a)  The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at
September 30, 2005 (including the notes thereto) (the “Pro Forma Balance
Sheet”), copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to (i) the
consummation of the Refinancing, (ii) the loans to be made on the Initial
Borrowing Date and the use of proceeds thereof and (iii) the payment of fees and
expenses in connection with the foregoing.  The Pro Forma Balance Sheet has been
prepared in good faith and was based upon assumptions which, in light of the
circumstances under which they were made, were believed by the Borrower in good
faith to be reasonable (it being understood that projections by their nature are
inherently uncertain, actual results may differ from projections and such
differences may be material) and presents fairly on a pro forma basis the
estimated financial position of the Borrower and its consolidated Subsidiaries
as at its fiscal quarter ending September 30, 2005, assuming that the events
specified in the preceding sentence had actually occurred at such date.

 

(B)           THE AUDITED CONSOLIDATED BALANCE SHEETS OF THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES AS AT DECEMBER 31, 2003 AND DECEMBER 31, 2004, AND THE
RELATED CONSOLIDATED STATEMENTS OF OPERATIONS, CHANGES IN STOCKHOLDERS’ EQUITY
AND OF CASH FLOWS FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31,
2004, REPORTED ON BY AND ACCOMPANIED BY THE REPORT FROM GRANT THORNTON LLP,
PRESENT FAIRLY THE CONSOLIDATED FINANCIAL CONDITION OF THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES AS AT SUCH DATE, AND THE CONSOLIDATED RESULTS OF ITS
OPERATIONS AND ITS CONSOLIDATED CASH FLOWS FOR THE RESPECTIVE FISCAL YEARS THEN
ENDED.  THE UNAUDITED CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES AS AT ITS FISCAL QUARTER ENDING SEPTEMBER 30, 2005,
AND THE RELATED UNAUDITED CONSOLIDATED (I) STATEMENTS OF OPERATIONS AND CASH
FLOWS FOR THE THREE-MONTH AND YEAR-TO-DATE PERIODS ENDED ON SUCH DATE AND
(II) THE STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE YEAR-TO-DATE PERIOD ENDED ON
SUCH DATE, PRESENT

 

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FAIRLY THE CONSOLIDATED FINANCIAL CONDITION OF THE BORROWER AND ITS CONSOLIDATED
SUBSIDIARIES AS AT SUCH DATE, AND THE CONSOLIDATED RESULTS OF ITS OPERATIONS AND
ITS CONSOLIDATED CASH FLOWS FOR THE THREE-MONTH PERIOD THEN ENDED (SUBJECT TO
NORMAL YEAR-END AUDIT ADJUSTMENTS AND THE ABSENCE OF FOOTNOTES).  ALL SUCH
FINANCIAL STATEMENTS, INCLUDING THE RELATED SCHEDULES AND NOTES THERETO, HAVE
BEEN PREPARED IN ACCORDANCE WITH GAAP APPLIED CONSISTENTLY THROUGHOUT THE
PERIODS INVOLVED (EXCEPT AS APPROVED BY THE AFOREMENTIONED FIRM OF ACCOUNTANTS
AND DISCLOSED THEREIN).  NO GROUP MEMBER HAS ANY MATERIAL GUARANTEE OBLIGATIONS,
CONTINGENT LIABILITIES AND LIABILITIES FOR TAXES, OR ANY LONG-TERM LEASES OR
UNUSUAL FORWARD OR LONG-TERM COMMITMENTS, INCLUDING ANY INTEREST RATE OR FOREIGN
CURRENCY SWAP OR EXCHANGE TRANSACTION OR OTHER OBLIGATION IN RESPECT OF
DERIVATIVES, THAT ARE NOT REFLECTED IN THE MOST RECENT FINANCIAL STATEMENTS
REFERRED TO IN THIS PARAGRAPH.  DURING THE PERIOD FROM DECEMBER 31, 2004 TO AND
INCLUDING THE DATE HEREOF THERE HAS BEEN NO DISPOSITION BY THE BORROWER AND ITS
SUBSIDIARIES OF ANY MATERIAL PART OF ITS BUSINESS OR PROPERTY.

 

5.2.          No Change.  Since December 31, 2004, there has been no development
or event that has had or would reasonably be expected to have a Material Adverse
Effect.

 

5.3.          Corporate Existence; Compliance with Law.  Each Group Member
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (b) has the power and authority, and the
legal right, to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged, (c) is
duly qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except, individually or in
the aggregate, where the failure to be so qualified or in good standing could
reasonably not be expected to have, a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

5.4.          Power; Authorization; Enforceable Obligations.  Each Loan Party
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and, in the case of the Borrower, to
obtain extensions of credit hereunder.  Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement.  No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the Refinancing and the extensions of credit hereunder or
with the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except (i) consents, authorizations,
filings and notices described in Schedule 5.4, which consents, authorizations,
filings and notices have been obtained or made and are in full force and effect
and (ii) the filings referred to in Section 5.19.  Each Loan Document has been
(or on the Initial Borrowing Date will be) duly executed and delivered on behalf
of each Loan Party party thereto.  This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’

 

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rights generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law).

 

5.5.          No Legal Bar.  The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof, in each case in
accordance with the terms hereof, will not violate any Requirement of Law or any
Contractual Obligation of any Group Member and will not result in, or require,
the creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents).

 

5.6.          Litigation.  No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against any Group Member or against any of
their respective properties or revenues (a) with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby, or (b) that
could reasonably be expected to have a Material Adverse Effect.

 

5.7.          No Default.  No Group Member is in default under or with respect
to any of its Contractual Obligations in any respect that could reasonably be
expected to have a Material Adverse Effect.  No Default or Event of Default has
occurred and is continuing.

 

5.8.          Ownership of Property; Liens.  Each Group Member has title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other property, except to
the extent failure to have such title in fee simple to, or valid leasehold
interest in, such property could not reasonably be expected to have a Material
Adverse Effect and none of such property is subject to any Lien except as
permitted by Section 8.3.

 

5.9.          Intellectual Property.  Each Group Member owns, is licensed to use
or is otherwise lawfully permitted to use, all material Intellectual Property
necessary for the conduct of its business as currently conducted; no material
claim has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim; and to the knowledge of the Borrower, the use of such Intellectual
Property by each Group Member does not infringe on the rights of any Person in
any material respect.

 

5.10.        Taxes.  Each Group Member has filed or caused to be filed all
Federal, state and other material tax returns that are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of that are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be or to the extent the failure to file or pay
could not reasonably be expected to have a Material Adverse Effect); no tax Lien
has been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.

 

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5.11.        Federal Regulations.  No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used for “buying” or “carrying”
any “margin stock” within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board.  If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.

 

5.12.        Labor Matters.  Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect:  (a) there are no strikes or
other labor disputes against any Group Member pending or, to the knowledge of
the Borrower, threatened; (b) hours worked by and payment made to employees of
each Group Member have not been in violation of the Fair Labor Standards Act or
any other applicable Requirement of Law dealing with such matters; and (c) all
payments due from any Group Member on account of employee health and welfare
insurance have been paid or accrued as a liability on the books of the relevant
Group Member.

 

5.13.        ERISA.  Neither a Reportable Event nor an “accumulated funding
deficiency” (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code.  No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period. 
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount.  Neither the Borrower nor any Commonly Controlled
Entity has incurred any withdrawal liability under Title IV of ERISA which
remains unsatisfied that would reasonably be expected to have a Material Adverse
Effect and neither the Borrower nor any Commonly Controlled Entity would become
subject to any withdrawal liability under ERISA that would reasonably be
expected to have a Material Adverse Effect if the Borrower or any such Commonly
Controlled Entity were to engage in a complete withdrawal (as defined in
Section 4203 of ERISA) or partial withdrawal (as defined in Section 4205 of
ERISA) from any Multiemployer Plan as of the valuation date most closely
preceding the date on which this representation is made or deemed made.  No such
Multiemployer Plan is in Reorganization or Insolvent.

 

5.14.        Investment Company Act; Other Regulations.  No Loan Party is an
“investment company”, or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.  No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.

 

5.15.        Subsidiaries.  Except as disclosed to the Administrative Agent by
the Borrower in writing from time to time after the Closing Date,
(a) Schedule 5.15 sets forth the name and jurisdiction of incorporation of each
Subsidiary and, as to each such Subsidiary, the

 

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percentage of each class of Capital Stock owned by any Loan Party and (b) there
are no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock options granted to employees or
directors and directors’ qualifying shares) of any nature relating to any
Capital Stock of any Subsidiary, except as created by the Loan Documents.

 

5.16.        Use of Proceeds.  The proceeds of the Term Loans shall be used to
finance the Refinancing and to pay related fees and expenses.  The proceeds of
the Revolving Loans and Swingline Loans shall be used, together with the Letters
of Credit, for general corporate purposes.

 

5.17.        Environmental Matters.  Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:

 

(A)           THE FACILITIES AND PROPERTIES OWNED, LEASED OR OPERATED BY ANY
GROUP MEMBER (THE “PROPERTIES”) DO NOT CONTAIN, AND HAVE NOT PREVIOUSLY
CONTAINED, ANY MATERIALS OF ENVIRONMENTAL CONCERN IN AMOUNTS OR CONCENTRATIONS
OR UNDER CIRCUMSTANCES THAT CONSTITUTE OR CONSTITUTED A VIOLATION OF, OR COULD
GIVE RISE TO LIABILITY UNDER, ANY ENVIRONMENTAL LAW;

 

(B)           NO GROUP MEMBER HAS RECEIVED OR IS AWARE OF ANY NOTICE OF
VIOLATION, ALLEGED VIOLATION, NON-COMPLIANCE, LIABILITY OR POTENTIAL LIABILITY
REGARDING ENVIRONMENTAL MATTERS OR COMPLIANCE WITH ENVIRONMENTAL LAWS WITH
REGARD TO ANY OF THE PROPERTIES OR THE BUSINESS OPERATED BY ANY GROUP MEMBER
(THE “BUSINESS”), NOR DOES THE BORROWER HAVE KNOWLEDGE OR REASON TO BELIEVE THAT
ANY SUCH NOTICE WILL BE RECEIVED OR IS BEING THREATENED;

 

(C)           MATERIALS OF ENVIRONMENTAL CONCERN HAVE NOT BEEN TRANSPORTED OR
DISPOSED OF FROM THE PROPERTIES IN VIOLATION OF, OR IN A MANNER OR TO A LOCATION
THAT COULD GIVE RISE TO LIABILITY UNDER, ANY ENVIRONMENTAL LAW, NOR HAVE ANY
MATERIALS OF ENVIRONMENTAL CONCERN BEEN GENERATED, TREATED, STORED OR DISPOSED
OF AT, ON OR UNDER ANY OF THE PROPERTIES IN VIOLATION OF, OR IN A MANNER THAT
COULD GIVE RISE TO LIABILITY UNDER, ANY APPLICABLE ENVIRONMENTAL LAW;

 

(D)           NO JUDICIAL PROCEEDING OR GOVERNMENTAL OR ADMINISTRATIVE ACTION IS
PENDING OR, TO THE KNOWLEDGE OF THE BORROWER, THREATENED, UNDER ANY
ENVIRONMENTAL LAW TO WHICH ANY GROUP MEMBER IS OR WILL BE NAMED AS A PARTY WITH
RESPECT TO THE PROPERTIES OR THE BUSINESS, NOR ARE THERE ANY CONSENT DECREES OR
OTHER DECREES, CONSENT ORDERS, ADMINISTRATIVE ORDERS OR OTHER ORDERS, OR OTHER
ADMINISTRATIVE OR JUDICIAL REQUIREMENTS OUTSTANDING UNDER ANY ENVIRONMENTAL LAW
WITH RESPECT TO THE PROPERTIES OR THE BUSINESS;

 

(E)           THERE HAS BEEN NO RELEASE OR THREAT OF RELEASE OF MATERIALS OF
ENVIRONMENTAL CONCERN AT OR FROM THE PROPERTIES, OR ARISING FROM OR RELATED TO
THE OPERATIONS OF ANY GROUP MEMBER IN CONNECTION WITH THE PROPERTIES OR
OTHERWISE IN CONNECTION WITH THE BUSINESS, IN VIOLATION OF OR IN AMOUNTS OR IN A
MANNER THAT COULD GIVE RISE TO LIABILITY UNDER ENVIRONMENTAL LAWS;

 

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(F)            THE PROPERTIES AND ALL OPERATIONS AT THE PROPERTIES ARE IN
COMPLIANCE, AND HAVE IN THE LAST FIVE YEARS BEEN IN COMPLIANCE, WITH ALL
APPLICABLE ENVIRONMENTAL LAWS, AND THERE IS NO CONTAMINATION AT, UNDER OR ABOUT
THE PROPERTIES OR VIOLATION OF ANY ENVIRONMENTAL LAW WITH RESPECT TO THE
PROPERTIES OR THE BUSINESS; AND

 

(G)           NO GROUP MEMBER HAS ASSUMED ANY LIABILITY OF ANY OTHER PERSON
UNDER ENVIRONMENTAL LAWS.

 

5.18.        Accuracy of Information, etc.  No statement or information
contained in this Agreement, any other Loan Document or any other document,
certificate or statement (other than projections) furnished by or on behalf of
any Loan Party to the Administrative Agent or the Lenders, or any of them, for
use in connection with the transactions contemplated by this Agreement or the
other Loan Documents, when taken as a whole in light of the circumstances under
which it was provided, contained as of the date such statement, information,
document or certificate was so furnished, any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
contained herein or therein not misleading.  The Updated Projections were
prepared based upon good faith estimates and assumptions that, in light of the
circumstances under which they were made, were believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount.

 

5.19.        Security Documents.  Commencing on the Initial Borrowing Date and
at all times thereafter, (a) the Guarantee and Collateral Agreement is effective
to create in favor of the Administrative Agent, for the benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof.  In the case of the Pledged Stock and
Pledged Notes as described in the Guarantee and Collateral Agreement, when stock
certificates and promissory notes representing such Pledged Stock and Pledged
Notes, respectively, are delivered to the Administrative Agent, and in the case
of the other Collateral described in the Guarantee and Collateral Agreement,
when financing statements and other filings specified on Schedule 5.19(a) in
appropriate form are filed in the offices specified on Schedule 5.19(a), the
Guarantee and Collateral Agreement shall constitute a fully perfected first
priority Lien on, and security interest in, all right, title and interest of the
Loan Parties in such Collateral and the proceeds thereof, as security for the
First Lien Obligations, in each case prior and superior in right to any other
Person (except, in the case of Collateral other than Pledged Stock and Pledged
Notes, Liens permitted by Section 8.3 (other than Section 8.3(b)).

 

(B)           AS OF THE CLOSING DATE AND AS OF THE INITIAL BORROWING DATE,
NEITHER THE BORROWER NOR ANY OF ITS SUBSIDIARIES OWNS ANY REAL PROPERTY.

 

5.20.        Solvency.  Each Loan Party is, and after giving effect to the
Refinancing and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith and on each Borrowing Date
thereafter, will be Solvent.

 

5.21.        First Lien Obligations; Senior Indebtedness.  The Obligations of
the Loan Parties under the Loan Documents constitute First Lien Obligations (as
defined in the

 

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Intercreditor Agreement) and “Designated Senior Indebtedness” of the Borrower
under and as defined in the Subordination Agreement.  The obligations of each
Subsidiary Guarantor under the Guarantee and Collateral Agreement constitute
“Designated Senior Indebtedness” of such Subsidiary Guarantor under and as
defined in the Subordination Agreement.

 

5.22.        Inactive Subsidiaries.  No Inactive Subsidiary is (a) engaged in
any active business or (b) except as disclosed on Part B of Schedule 5.22, owns
any property or assets or has incurred, directly or indirectly, liabilities or
obligations in excess of $100,000 in the aggregate.

 

5.23.        Material Contracts.  All material contracts required to be filed in
connection with the Public Filings under applicable Requirements of Law have
been filed.

 

5.24.        Bank Accounts.  Except as set forth on Schedule 5.24, as of the
Closing Date neither the Borrower nor any Subsidiary Guarantor maintains any
account (except for accounts the aggregate amount of cash and Cash Equivalents
in which do not exceed $1,000,000 in the aggregate and cash and Cash Equivalents
subject to Liens permitted under Section 8.3 (other than Section 8.3(b))).

 

5.25.        Insurance.  Schedule 5.25 lists the insurance maintained by the
Borrower and the Subsidiary Guarantors as of the Closing Date.

 

SECTION 6.   CONDITIONS PRECEDENT

 

6.1.          Conditions to the Closing Date.  The occurrence of the Closing
Date and the effectiveness of this Agreement are subject to the satisfaction of
the following conditions precedent:

 

(A)           CREDIT AGREEMENT.  THE ADMINISTRATIVE AGENT AND THE LEAD ARRANGER
SHALL HAVE RECEIVED THIS AGREEMENT, OR, IN THE CASE OF THE LENDERS, AN ADDENDUM,
EXECUTED AND DELIVERED BY EACH AGENT, THE BORROWER AND EACH PERSON THAT IS A
LENDER AS OF THE CLOSING DATE.

 

(B)           SECOND LIEN CREDIT AGREEMENT, SUBORDINATED LOAN AGREEMENT AND
INTERCREDITOR AGREEMENT. THE ADMINISTRATIVE AGENT AND THE LEAD ARRANGER SHALL
HAVE RECEIVED SATISFACTORY EVIDENCE THAT (I) THE SECOND LIEN CREDIT AGREEMENT
SHALL HAVE BEEN DULY EXECUTED AND DELIVERED BY ALL PARTIES THERETO AND THAT THE
CLOSING DATE HAS OCCURRED THEREUNDER, (II) THE SUBORDINATED LOAN AGREEMENT SHALL
HAVE BEEN DULY EXECUTED AND DELIVERED BY ALL PARTIES THERETO AND SHALL HAVE
BECOME EFFECTIVE IN ACCORDANCE WITH ITS TERMS, (III) THE INTERCREDITOR AGREEMENT
SHALL HAVE BEEN DULY EXECUTED AND DELIVERED BY ALL PARTIES THERETO AND SHALL BE
IN FULL FORCE AND EFFECT AND (IV) THE SUBORDINATION AGREEMENT SHALL HAVE BEEN
DULY EXECUTED AND DELIVERED BY ALL PARTIES THERETO AND SHALL BE IN FULL FORCE
AND EFFECT (SUCH SATISFACTION IN EACH CASE EVIDENCED BY THE ADMINISTRATIVE
AGENT’S AND THE LEAD ARRANGER’S EXECUTION OF THIS AGREEMENT).

 

(C)           THE SENIOR NOTES.  THE ADMINISTRATIVE AGENT AND THE LEAD ARRANGER
SHALL HAVE RECEIVED SATISFACTORY EVIDENCE THAT THE BORROWER SHALL HAVE ISSUED ON
OR PRIOR TO THE CLOSING DATE AN IRREVOCABLE INSTRUCTION TO THE TRUSTEE FOR THE
SENIOR NOTES DIRECTING THE

 

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TRUSTEE TO ISSUE AN IRREVOCABLE NOTICE TO THE HOLDERS OF THE SENIOR NOTES
REDEEMING THE OUTSTANDING PRINCIPAL AMOUNT OF SUCH SENIOR NOTES.

 

(D)           CAPITAL STRUCTURE.  THE CAPITAL AND OWNERSHIP STRUCTURE OF THE
BORROWER AND ITS SUBSIDIARIES SHALL BE REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT AND THE LEAD ARRANGER AFTER GIVING EFFECT TO THE
REFINANCING (SUCH SATISFACTION TO BE EVIDENCED BY THE ADMINISTRATIVE AGENT’S AND
THE LEAD ARRANGER’S EXECUTION OF THIS AGREEMENT).

 

(E)           PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS.  THE LENDERS SHALL
HAVE RECEIVED THE FINANCIAL STATEMENTS DESCRIBED IN SECTION 5.1, AND SUCH
FINANCIAL STATEMENTS SHALL NOT, IN THE REASONABLE JUDGMENT OF THE LENDERS,
REFLECT ANY MATERIAL ADVERSE CHANGE IN THE CONSOLIDATED FINANCIAL CONDITION OF
THE BORROWER AND ITS SUBSIDIARIES, AS REFLECTED IN THE FINANCIAL STATEMENTS OR
PROJECTIONS MOST RECENTLY DELIVERED BY THE BORROWER TO THE ADMINISTRATIVE AGENT
AND THE LEAD ARRANGER (SUCH RECEIPT AND JUDGMENT TO BE EVIDENCED BY EACH
LENDER’S EXECUTION OF THIS AGREEMENT).

 

(F)            APPROVALS.  ALL MATERIAL GOVERNMENTAL AND THIRD PARTY APPROVALS
NECESSARY IN CONNECTION WITH THE REFINANCING, THE CONTINUING OPERATIONS OF THE
GROUP MEMBERS AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL HAVE BEEN OBTAINED
AND BE IN FULL FORCE AND EFFECT.

 

(G)           LIEN SEARCHES.  THE ADMINISTRATIVE AGENT AND THE LEAD ARRANGER
SHALL HAVE RECEIVED THE RESULTS OF A RECENT LIEN SEARCH IN EACH OF THE
JURISDICTIONS WHERE THE LOAN PARTIES ARE ORGANIZED, AND SUCH SEARCH SHALL REVEAL
NO LIENS ON ANY OF THE ASSETS OF THE LOAN PARTIES EXCEPT FOR LIENS PERMITTED BY
SECTION 8.3 OR TO BE DISCHARGED ON OR PRIOR TO THE INITIAL BORROWING DATE
PURSUANT TO DOCUMENTATION SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE LEAD
ARRANGER (SUCH SATISFACTION TO BE EVIDENCED BY THE ADMINISTRATIVE AGENT’S AND
THE LEAD ARRANGER’S EXECUTION OF THIS AGREEMENT).

 

(H)           FEES.  THE LENDERS AND THE AGENTS SHALL HAVE RECEIVED ALL FEES
THAT ARE THEN REQUIRED TO BE PAID BY THE BORROWER HEREUNDER OR PREVIOUSLY AGREED
TO IN WRITING BY THE BORROWER AND THE AGENTS.

 

(I)            CLOSING CERTIFICATES.  THE ADMINISTRATIVE AGENT AND THE LEAD
ARRANGER SHALL HAVE RECEIVED (I) A CERTIFICATE OF EACH LOAN PARTY, DATED THE
CLOSING DATE, SUBSTANTIALLY IN THE FORM OF EXHIBIT H, WITH APPROPRIATE
INSERTIONS AND ATTACHMENTS INCLUDING THE CERTIFICATE OF INCORPORATION OF EACH
LOAN PARTY (WHICH WILL INCLUDE, WHERE APPLICABLE, THE CERTIFICATE OF DESIGNATION
FOR THE SERIES Z PREFERRED) THAT IS A CORPORATION CERTIFIED BY THE RELEVANT
AUTHORITY OF THE JURISDICTION OF ORGANIZATION OF SUCH LOAN PARTY, AND (II) A
LONG FORM GOOD STANDING CERTIFICATE FOR EACH LOAN PARTY FROM ITS JURISDICTION OF
ORGANIZATION.

 

(J)            PATRIOT ACT.  THE LENDERS SHALL HAVE RECEIVED, SUFFICIENTLY IN
ADVANCE OF THE CLOSING DATE, ALL DOCUMENTATION AND OTHER INFORMATION REQUIRED BY
BANK REGULATORY AUTHORITIES UNDER APPLICABLE “KNOW YOUR CUSTOMER” AND ANTI-MONEY
LAUNDERING RULES AND REGULATIONS, INCLUDING WITHOUT LIMITATION THE UNITED STATES
PATRIOT ACT (TITLE III OF

 

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PUB. L. 107-56 (SIGNED INTO LAW OCTOBER 26, 2001)), IN EACH CASE IF REQUESTED BY
SUCH LENDER (SUCH SATISFACTION TO BE EVIDENCED BY EACH LENDER’S EXECUTION OF
THIS AGREEMENT).

 

(K)           COKE CONTRACT.  THE ADMINISTRATIVE AGENT AND THE LEAD ARRANGER
SHALL HAVE RECEIVED COPIES OF THE COKE BEVERAGE MARKETING AGREEMENT, TOGETHER
WITH A CERTIFICATE OF A RESPONSIBLE OFFICER OF THE BORROWER CERTIFYING SUCH
DOCUMENT AS BEING A TRUE, CORRECT, AND COMPLETE COPY THEREOF.

 

(L)            LEGAL OPINIONS.  THE ADMINISTRATIVE AGENT AND THE LEAD ARRANGER
SHALL HAVE RECEIVED THE FOLLOWING EXECUTED LEGAL OPINIONS:

 

(i)            the legal opinion of Holme Roberts & Owen LLP, counsel to the
Borrower and its Subsidiaries, substantially in the form of Exhibit I-1; and

 

(ii)           the legal opinion of local counsel in New Jersey and of such
other special and local counsel as may be reasonably required by the
Administrative Agent.

 

Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.

 

6.2.          Conditions to the Initial Borrowing Date.  The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior or concurrently with the making of such
extension of credit on the Initial Borrowing Date, of the following conditions
precedent:

 

(A)           GUARANTEE AND COLLATERAL AGREEMENTS.  THE ADMINISTRATIVE AGENT AND
THE LEAD ARRANGER SHALL HAVE RECEIVED (I) THE GUARANTEE AND COLLATERAL
AGREEMENT, EXECUTED AND DELIVERED BY THE BORROWER AND EACH SUBSIDIARY GUARANTOR,
(II) AN ACKNOWLEDGMENT AND CONSENT IN THE FORM ATTACHED TO THE GUARANTEE AND
COLLATERAL AGREEMENTS, EXECUTED AND DELIVERED BY EACH ISSUER (AS DEFINED
THEREIN), IF ANY, THAT IS NOT A LOAN PARTY AND (III) THE SECOND LIEN CREDIT
DOCUMENTS (EXCEPT TO THE EXTENT PREVIOUSLY DELIVERED PURSUANT TO
SECTION 6.1(B) ABOVE).

 

(B)           SECOND LIEN TERM LOANS.  THE BORROWER SHALL HAVE RECEIVED
$65,000,000 IN GROSS CASH PROCEEDS FROM BORROWINGS OF THE SECOND LIEN TERM LOANS
UNDER THE SECOND LIEN CREDIT AGREEMENT.

 

(C)           SUBORDINATED LOANS.  THE BORROWER SHALL HAVE RECEIVED $24,375,000
IN GROSS PROCEEDS FROM THE SUBORDINATED LOANS UNDER THE SUBORDINATED LOAN
AGREEMENT.

 

(D)           EXISTING CREDIT FACILITY.  (I) THE ADMINISTRATIVE AGENT AND THE
LEAD ARRANGER SHALL HAVE RECEIVED OR SHALL CONCURRENTLY RECEIVE SATISFACTORY
EVIDENCE THAT THE EXISTING CREDIT FACILITY SHALL HAVE BEEN TERMINATED AND ALL
AMOUNTS THEREUNDER SHALL HAVE BEEN PAID IN FULL AND (II) SATISFACTORY
ARRANGEMENTS SHALL HAVE BEEN MADE FOR THE TERMINATION OF ALL LIENS GRANTED IN
CONNECTION THEREWITH.

 

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(E)           THE SENIOR NOTES.  (I) THE ADMINISTRATIVE AGENT AND THE LEAD
ARRANGER SHALL HAVE RECEIVED OR SHALL CONCURRENTLY RECEIVE SATISFACTORY EVIDENCE
THAT THE REDEMPTION PRICE FOR ALL SENIOR NOTES OUTSTANDING ON THE INITIAL
BORROWING DATE HAS BEEN IRREVOCABLY DEPOSITED WITH THE TRUSTEE FOR THE SENIOR
NOTES AND THE BORROWER SHALL HAVE DISCHARGED ITS OBLIGATIONS UNDER THE RELATED
INDENTURE (EXCEPT FOR OBLIGATIONS THAT BY THE TERMS THEREOF SURVIVE) AND ALL
AMOUNTS OTHERWISE DUE AND PAYABLE THEREUNDER SHALL HAVE BEEN PAID IN FULL AND
(II) SATISFACTORY ARRANGEMENTS SHALL HAVE BEEN MADE FOR THE TERMINATION OF ALL
LIENS GRANTED IN CONNECTION THEREWITH.

 

(F)            LEGAL OPINIONS.  THE ADMINISTRATIVE AGENT AND THE LEAD ARRANGER
SHALL HAVE RECEIVED THE FOLLOWING EXECUTED LEGAL OPINIONS:

 

(i)            the legal opinion of Holme Roberts & Owen LLP, counsel to the
Borrower and its Subsidiaries, substantially in the form of Exhibit I-2; and

 

(ii)           the legal opinion of local counsel in each of Delaware and New
Jersey and of such other special and local counsel as may be reasonably required
by the Administrative Agent.

 

Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.

 

(G)           PLEDGED STOCK; STOCK POWERS; PLEDGED NOTES.  THE ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED (I) THE CERTIFICATES REPRESENTING THE SHARES OF
CAPITAL STOCK PLEDGED PURSUANT TO THE GUARANTEE AND COLLATERAL AGREEMENT,
TOGETHER WITH AN UNDATED STOCK POWER FOR EACH SUCH CERTIFICATE EXECUTED IN BLANK
BY A DULY AUTHORIZED OFFICER OF THE PLEDGOR THEREOF AND (II) IF REASONABLY
REQUESTED BY THE ADMINISTRATIVE AGENT, EACH PROMISSORY NOTE (IF ANY) PLEDGED TO
THE ADMINISTRATIVE AGENT PURSUANT TO THE GUARANTEE AND COLLATERAL AGREEMENT
ENDORSED (WITHOUT RECOURSE) IN BLANK (OR ACCOMPANIED BY AN EXECUTED TRANSFER
FORM IN BLANK) BY THE PLEDGOR THEREOF.

 

(H)           FILINGS, REGISTRATIONS AND RECORDINGS.  EACH DOCUMENT (INCLUDING
ANY UNIFORM COMMERCIAL CODE FINANCING STATEMENT) REQUIRED BY THE SECURITY
DOCUMENTS OR UNDER LAW OR REASONABLY REQUESTED BY THE ADMINISTRATIVE AGENT AND
THE LEAD ARRANGER TO BE FILED, REGISTERED OR RECORDED IN ORDER TO CREATE IN
FAVOR OF THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE LENDERS, A PERFECTED
LIEN ON THE COLLATERAL DESCRIBED THEREIN, PRIOR AND SUPERIOR IN RIGHT TO ANY
OTHER PERSON (OTHER THAN WITH RESPECT TO LIENS EXPRESSLY PERMITTED BY
SECTION 8.3 (OTHER THAN SECTION 8.3(B)), SHALL BE IN PROPER FORM FOR FILING,
REGISTRATION OR RECORDATION.

 

(I)            SOLVENCY CERTIFICATE.  THE ADMINISTRATIVE AGENT AND THE LEAD
ARRANGER SHALL HAVE RECEIVED A SOLVENCY CERTIFICATE FROM THE CHIEF FINANCIAL
OFFICER OF THE BORROWER IN THE FORM OF EXHIBIT M.

 

(J)            INSURANCE.  THE ADMINISTRATIVE AGENT AND THE LEAD ARRANGER SHALL
HAVE RECEIVED INSURANCE CERTIFICATES SATISFYING THE REQUIREMENTS OF
SECTION 5.3(B) OF THE GUARANTEE AND COLLATERAL AGREEMENTS.

 

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(K)           FEES.  THE LENDERS AND THE AGENTS SHALL HAVE RECEIVED ALL FEES
THAT ARE THEN REQUIRED TO BE PAID BY THE BORROWER HEREUNDER OR PREVIOUSLY AGREED
TO IN WRITING BY THE BORROWER AND THE AGENTS, AND ALL EXPENSES WHICH ARE
REQUIRED TO BE PAID BY THE BORROWER HEREUNDER FOR WHICH INVOICES HAVE BEEN
PRESENTED (INCLUDING THE REASONABLE FEES AND EXPENSES OF LEGAL COUNSEL), ON OR
BEFORE THE INITIAL BORROWING DATE.  ALL SUCH AMOUNTS WILL BE PAID OUT OF
PROCEEDS OF LOANS MADE ON THE INITIAL BORROWING DATE AND WILL BE REFLECTED IN
THE FUNDING INSTRUCTIONS GIVEN BY THE BORROWER TO THE ADMINISTRATIVE AGENT ON OR
BEFORE THE INITIAL BORROWING DATE.

 

(L)            REQUIRED LIQUIDITY.  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
A CERTIFICATE FROM THE CHIEF FINANCIAL OFFICER CERTIFYING THAT THE SUM OF
(I) THE AVAILABLE REVOLVING COMMITMENTS ON THE INITIAL BORROWING DATE (AFTER
GIVING EFFECT TO THE REFINANCING) AND (II) THE AGGREGATE UNRESTRICTED AND
UNENCUMBERED CASH AND CASH EQUIVALENTS OF THE BORROWER AND ITS SUBSIDIARIES IS
NOT LESS THAN THE SUM OF (X) $6,000,000 LESS (Y) ALL FEES AND EXPENSES PAID TO
ANY AGENT OR LENDER (OR ANY AGENT OR LENDER IN CONNECTION WITH THE SECOND LIEN
CREDIT AGREEMENT) PRIOR TO THE INITIAL BORROWING DATE.

 

6.3.          Conditions to Each Extension of Credit.  The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:

 

(A)           REPRESENTATIONS AND WARRANTIES.  EACH OF THE REPRESENTATIONS AND
WARRANTIES MADE BY ANY LOAN PARTY IN OR PURSUANT TO THE LOAN DOCUMENTS SHALL BE
TRUE AND CORRECT IN ALL MATERIAL ASPECTS (EXCEPT THAT SUCH MATERIALITY QUALIFIER
SHALL NOT BE APPLICABLE TO ANY REPRESENTATIONS AND WARRANTIES THAT ARE ALREADY
QUALIFIED OR MODIFIED BY MATERIALITY IN THE TEXT THEREOF) ON AND AS OF SUCH DATE
AS IF MADE ON AND AS OF SUCH DATE, EXCEPT TO THE EXTENT SUCH REPRESENTATIONS AND
WARRANTIES RELATED SOLELY TO AN EARLIER DATE, IN WHICH CASE SUCH REPRESENTATIONS
AND WARRANTIES SHALL HAVE BEEN TRUE AND CORRECT IN ALL MATERIAL ASPECTS (EXCEPT
THAT SUCH MATERIALITY QUALIFIER SHALL NOT BE APPLICABLE TO ANY REPRESENTATIONS
AND WARRANTIES THAT ARE ALREADY QUALIFIED OR MODIFIED BY MATERIALITY IN THE TEXT
THEREOF) ON AND AS OF SUCH EARLIER DATE.

 

(B)           NO DEFAULT.  NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED
AND BE CONTINUING ON SUCH DATE OR AFTER GIVING EFFECT TO THE EXTENSIONS OF
CREDIT REQUESTED TO BE MADE ON SUCH DATE.

 

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 6.3 have been satisfied.

 

SECTION 7.   AFFIRMATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit remains outstanding or any Loan or other amount is owing to
any Lender or Agent hereunder, the Borrower shall and shall cause each of its
Subsidiaries to:

 

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7.1.          Financial Statements.  Furnish to the Administrative Agent and
each Lender:

 

(A)           AS SOON AS AVAILABLE, BUT IN ANY EVENT WITHIN 90 DAYS (OR SUCH
EARLIER DATE SPECIFIED FOR THE FILING OF ANNUAL REPORTS ON FORM 10-K UNDER
SECTION 13 OF THE EXCHANGE ACT) AFTER THE END OF EACH FISCAL YEAR OF THE
BORROWER, A COPY OF THE AUDITED CONSOLIDATED BALANCE SHEET OF THE BORROWER AND
ITS CONSOLIDATED SUBSIDIARIES AS AT THE END OF SUCH FISCAL YEAR AND THE RELATED
AUDITED CONSOLIDATED STATEMENTS OF INCOME AND OF CASH FLOWS FOR SUCH FISCAL
YEAR, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM THE FIGURES FOR THE
PREVIOUS FISCAL YEAR, REPORTED ON WITHOUT A “GOING CONCERN” OR LIKE
QUALIFICATION OR EXCEPTION, OR QUALIFICATION ARISING OUT OF THE SCOPE OF THE
AUDIT, BY GRANT THORNTON LLP OR OTHER INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
OF NATIONALLY RECOGNIZED STANDING;

 

(B)           AS SOON AS AVAILABLE, BUT IN ANY EVENT NOT LATER THAN 45 DAYS (OR
SUCH EARLIER DATE SPECIFIED FOR THE FILING OF QUARTERLY REPORTS ON FORM 10-Q
UNDER SECTION 13 OF THE EXCHANGE ACT) AFTER THE END OF EACH OF THE FIRST THREE
QUARTERLY PERIODS OF EACH FISCAL YEAR OF THE BORROWER, THE UNAUDITED
CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES AS
AT THE END OF SUCH QUARTER AND THE RELATED UNAUDITED CONSOLIDATED STATEMENTS OF
INCOME AND OF CASH FLOWS FOR SUCH QUARTER AND THE PORTION OF THE FISCAL YEAR
THROUGH THE END OF SUCH QUARTER, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM
THE FIGURES FOR THE PREVIOUS FISCAL YEAR, CERTIFIED BY A RESPONSIBLE OFFICER AS
BEING FAIRLY STATED IN ALL MATERIAL RESPECTS (SUBJECT TO NORMAL YEAR-END AUDIT
ADJUSTMENTS AND THE ABSENCE OF FOOTNOTES); AND

 

(C)           AS SOON AS AVAILABLE, BUT IN ANY EVENT NOT LATER THAN 30 DAYS
AFTER THE END OF EACH MONTH OCCURRING DURING EACH FISCAL YEAR OF THE BORROWER
(OTHER THAN THE THIRD, SIXTH, NINTH AND TWELFTH SUCH MONTH), THE UNAUDITED
CONSOLIDATED BALANCE SHEETS OF THE BORROWER AND ITS SUBSIDIARIES AS AT THE END
OF SUCH MONTH AND THE RELATED UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND OF
CASH FLOWS FOR SUCH MONTH AND THE PORTION OF THE FISCAL YEAR THROUGH THE END OF
SUCH MONTH, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM THE FIGURES FOR THE
PREVIOUS FISCAL YEAR, CERTIFIED BY A RESPONSIBLE OFFICER AS BEING FAIRLY STATED
IN ALL MATERIAL RESPECTS (SUBJECT TO NORMAL YEAR-END AUDIT ADJUSTMENTS AND THE
ABSENCE OF FOOTNOTES).

 

All such financial statements shall be complete and correct in all material
respects (subject to normal year-end audit adjustments and the absence of
footnotes, in each case if applicable), and shall be prepared in reasonable
detail and in accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by such accountants
or officer, as the case may be, and disclosed therein).

 

Information required to be delivered pursuant to this Section 7.1 shall be
deemed to have been delivered to the Lenders on the date on which the Borrower
provides written notice to the Lenders that such information has been posted on
the Borrower’s website on the Internet at http://www. nwrgi.com or is available
on the website of the SEC at http://www.sec.gov (to the extent such information
has been posted or is available as described in such notice).  Information
required to be delivered pursuant to this Section 7.1 may also be delivered by
electronic

 

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communication pursuant to procedures approved by the Administrative Agent
pursuant to Section 11.2.

 

7.2.          Certificates; Other Information.  Furnish to the Administrative
Agent and each Lender (or, in the case of clause (f), to the relevant Lender):

 

(A)           CONCURRENTLY WITH THE DELIVERY OF ANY FINANCIAL STATEMENTS
PURSUANT TO SECTION 7.1, (I) A CERTIFICATE OF A RESPONSIBLE OFFICER STATING
THAT, TO THE BEST OF EACH SUCH RESPONSIBLE OFFICER’S KNOWLEDGE, EACH LOAN PARTY
DURING SUCH PERIOD HAS OBSERVED OR PERFORMED ALL OF ITS COVENANTS AND OTHER
AGREEMENTS, AND SATISFIED EVERY CONDITION, CONTAINED IN THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY TO BE OBSERVED, PERFORMED OR
SATISFIED BY IT, AND THAT SUCH RESPONSIBLE OFFICER HAS OBTAINED NO KNOWLEDGE OF
ANY DEFAULT OR EVENT OF DEFAULT EXCEPT AS SPECIFIED IN SUCH CERTIFICATE AND
(II) IN THE CASE OF QUARTERLY OR ANNUAL FINANCIAL STATEMENTS, (X) A COMPLIANCE
CERTIFICATE CONTAINING ALL INFORMATION AND CALCULATIONS NECESSARY FOR
DETERMINING COMPLIANCE BY EACH GROUP MEMBER WITH THE PROVISIONS OF THIS
AGREEMENT REFERRED TO THEREIN AS OF THE LAST DAY OF THE FISCAL QUARTER OR FISCAL
YEAR OF THE BORROWER, AS THE CASE MAY BE, AND (Y) TO THE EXTENT NOT PREVIOUSLY
DISCLOSED TO THE ADMINISTRATIVE AGENT, A LISTING OF ANY INTELLECTUAL PROPERTY
REGISTERED IN THE UNITED STATES ACQUIRED BY ANY LOAN PARTY SINCE THE DATE OF THE
MOST RECENT LIST DELIVERED PURSUANT TO THIS CLAUSE (Y) (OR, IN THE CASE OF THE
FIRST SUCH LIST SO DELIVERED, SINCE THE CLOSING DATE);

 

(B)           AS SOON AS AVAILABLE, AND IN ANY EVENT NO LATER THAN 45 DAYS AFTER
THE END OF EACH FISCAL YEAR OF THE BORROWER, A DETAILED CONSOLIDATED BUDGET FOR
THE FOLLOWING FISCAL YEAR (INCLUDING A PROJECTED CONSOLIDATED BALANCE SHEET OF
THE BORROWER AND ITS SUBSIDIARIES AS OF THE END OF THE FOLLOWING FISCAL YEAR,
THE RELATED CONSOLIDATED STATEMENTS OF PROJECTED CASH FLOW, PROJECTED CHANGES IN
FINANCIAL POSITION AND PROJECTED INCOME AND A DESCRIPTION OF THE UNDERLYING
ASSUMPTIONS APPLICABLE THERETO), AND, AS SOON AS AVAILABLE, SIGNIFICANT
REVISIONS, IF ANY, OF SUCH BUDGET AND PROJECTIONS WITH RESPECT TO SUCH FISCAL
YEAR (COLLECTIVELY, THE “PROJECTIONS”), WHICH PROJECTIONS SHALL IN EACH CASE BE
ACCOMPANIED BY A CERTIFICATE OF A RESPONSIBLE OFFICER STATING THAT SUCH
PROJECTIONS WERE PREPARED IN GOOD FAITH AND WERE BASED UPON ASSUMPTIONS WHICH,
IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, WERE BELIEVED BY THE
BORROWER IN GOOD FAITH TO BE REASONABLE AT THE TIME MADE (IT BEING UNDERSTOOD
THAT PROJECTIONS BY THEIR NATURE ARE INHERENTLY UNCERTAIN, ACTUAL RESULTS MAY
DIFFER FROM PROJECTIONS AND SUCH DIFFERENCES MAY BE MATERIAL);

 

(C)           IF THE BORROWER IS NOT THEN A REPORTING COMPANY UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, WITHIN 45 DAYS AFTER THE END OF
EACH FISCAL QUARTER OF THE BORROWER (OR 90 DAYS, IN THE CASE OF THE LAST FISCAL
QUARTER OF ANY FISCAL YEAR), A NARRATIVE DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE BORROWER AND ITS
SUBSIDIARIES FOR SUCH FISCAL QUARTER AND FOR THE PERIOD FROM THE BEGINNING OF
THE THEN CURRENT FISCAL YEAR TO THE END OF SUCH FISCAL QUARTER, AS COMPARED TO
THE PORTION OF THE PROJECTIONS COVERING SUCH PERIODS AND TO THE COMPARABLE
PERIODS OF THE PREVIOUS FISCAL YEAR;

 

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(D)           NO LATER THAN TEN BUSINESS DAYS PRIOR TO THE EFFECTIVENESS
THEREOF, COPIES OF SUBSTANTIALLY FINAL DRAFTS OF ANY PROPOSED AMENDMENT,
SUPPLEMENT, WAIVER OR OTHER MODIFICATION WITH RESPECT TO THE SERIES Z PREFERRED;

 

(E)           WITHIN FIVE DAYS AFTER THE SAME ARE SENT, COPIES OF ALL FINANCIAL
STATEMENTS AND REPORTS THAT THE BORROWER SENDS TO THE HOLDERS OF ANY CLASS OF
ITS DEBT SECURITIES OR PUBLIC EQUITY SECURITIES AND, WITHIN FIVE DAYS AFTER THE
SAME ARE FILED, COPIES OF ALL FINANCIAL STATEMENTS AND REPORTS THAT THE BORROWER
MAY MAKE TO, OR FILE WITH, THE SEC; AND

 

(F)            PROMPTLY, SUCH ADDITIONAL FINANCIAL AND OTHER INFORMATION AS ANY
LENDER MAY FROM TIME TO TIME REASONABLY REQUEST.

 

7.3.          Payment of Obligations.  Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the relevant Group Member or to the extent failure to pay,
discharge or satisfy such obligations could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

7.4.          Maintenance of Existence; Compliance.  (a)  (i)  Preserve, renew
and keep in full force and effect its organizational existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 8.4 and except, in the case of clause (ii) above,
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

7.5.          Maintenance of Property; Insurance.  (a)  Keep all property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted and (b) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.

 

7.6.          Inspection of Property; Books and Records; Discussions.  (a)  Keep
proper books of records and accounts in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender (coordinated through the Administrative Agent) to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be desired and to discuss the business, operations, properties and financial and
other condition of the Group Members with officers and employees of the Group
Members and with their independent certified public accountants.

 

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7.7.          Notices.  Promptly give notice to the Administrative Agent and
each Lender of:

 

(A)           THE OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT;

 

(B)           ANY (I) DEFAULT OR EVENT OF DEFAULT UNDER ANY CONTRACTUAL
OBLIGATION OF ANY GROUP MEMBER OR (II) LITIGATION, INVESTIGATION OR PROCEEDING
THAT MAY EXIST AT ANY TIME BETWEEN ANY GROUP MEMBER AND ANY GOVERNMENTAL
AUTHORITY, THAT IN EITHER CASE, HAS A REASONABLE LIKELIHOOD OF BEING ADVERSELY
DETERMINED AND, IF NOT CURED OR IF ADVERSELY DETERMINED, AS THE CASE MAY BE,
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

 

(C)           ANY LITIGATION OR PROCEEDING AFFECTING ANY GROUP MEMBER (I) IN
WHICH THE AMOUNT INVOLVED IS $2,500,000 OR MORE AND NOT COVERED BY INSURANCE,
(II) IN WHICH INJUNCTIVE OR SIMILAR RELIEF IS SOUGHT THAT, IF ADVERSELY
DETERMINED, COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT OR
(III) WHICH RELATES TO ANY LOAN DOCUMENT;

 

(D)           THE FOLLOWING EVENTS, AS SOON AS POSSIBLE AND IN ANY EVENT WITHIN
30 DAYS AFTER THE BORROWER KNOWS OR HAS REASON TO KNOW THEREOF:  (I) THE
OCCURRENCE OF ANY REPORTABLE EVENT WITH RESPECT TO ANY PLAN, A FAILURE TO MAKE
ANY REQUIRED CONTRIBUTION TO A PLAN, THE CREATION OF ANY LIEN IN FAVOR OF THE
PBGC OR A PLAN OR ANY WITHDRAWAL FROM, OR THE TERMINATION, REORGANIZATION OR
INSOLVENCY OF, ANY MULTIEMPLOYER PLAN OR (II) THE INSTITUTION OF PROCEEDINGS OR
THE TAKING OF ANY OTHER ACTION BY THE PBGC OR THE BORROWER OR ANY COMMONLY
CONTROLLED ENTITY OR ANY MULTIEMPLOYER PLAN WITH RESPECT TO THE WITHDRAWAL FROM,
OR THE TERMINATION, REORGANIZATION OR INSOLVENCY OF, ANY PLAN; AND

 

(E)           ANY DEVELOPMENT OR EVENT THAT HAS HAD OR COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

Each notice pursuant to this Section 7.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.

 

7.8.          Environmental Laws.  (a)  Comply in all material respects with,
and take all commercially reasonable efforts to ensure compliance in all
material respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply in all material respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.

 

(B)           CONDUCT AND COMPLETE ALL INVESTIGATIONS, STUDIES, SAMPLING AND
TESTING, AND ALL REMEDIAL, REMOVAL AND OTHER ACTIONS REQUIRED UNDER
ENVIRONMENTAL LAWS AND PROMPTLY COMPLY IN ALL MATERIAL RESPECTS WITH ALL LAWFUL
ORDERS AND DIRECTIVES OF ALL GOVERNMENTAL AUTHORITIES REGARDING ENVIRONMENTAL
LAWS.

 

7.9.          Interest Rate Protection.  In the case of the Borrower, within
90 days after the Initial Borrowing Date, enter into, and thereafter maintain,
Hedge Agreements to the extent necessary to provide that at least 50% of the
aggregate principal amount of the Term Loans and

 

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the Subordinated Loans is subject to either a fixed interest rate or interest
rate protection for a period of not less than two years, which Hedge Agreements
shall have terms and conditions reasonably satisfactory to the Administrative
Agent.

 

7.10.        Additional Collateral, etc.  (a)  With respect to any property
acquired after the Initial Borrowing Date by any Group Member (other than
(x) any property described in paragraph (c) or (d) below and any interest in
real property, (y) any property subject to a Lien expressly permitted by
Section 8.3(g) and (z) property acquired by, or the excess of 65% of stock in,
any Foreign Subsidiary) as to which the Administrative Agent, for the benefit of
the Secured Parties, does not have a perfected Lien, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a first priority security interest in such property (subject to
Liens permitted by Section 8.3 (other than Section 8.3(b)) and (ii) take all
actions necessary to grant to the Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in such property (subject
to Liens permitted by Section 8.3 (other than Section 8.3(b)), including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent.

 

(B)           WITH RESPECT TO ANY FEE INTEREST IN ANY REAL PROPERTY HAVING A
VALUE (TOGETHER WITH IMPROVEMENTS THEREOF) OF AT LEAST $500,000 ACQUIRED AFTER
THE INITIAL BORROWING DATE BY ANY GROUP MEMBER (OTHER THAN (X) ANY SUCH REAL
PROPERTY SUBJECT TO A LIEN EXPRESSLY PERMITTED BY SECTION 8.3(H) AND (Y) REAL
PROPERTY ACQUIRED BY ANY FOREIGN SUBSIDIARY), PROMPTLY (I) EXECUTE AND DELIVER A
MORTGAGE, COVERING SUCH REAL PROPERTY, WHICH SHALL GRANT TO THE ADMINISTRATIVE
AGENT FOR THE BENEFIT OF THE SECURED PARTIES A FIRST PRIORITY SECURITY INTEREST
IN SUCH PROPERTY (SUBJECT, IN EACH CASE, TO LIENS PERMITTED BY SECTION 8.3
(OTHER THAN SECTION 8.3(B)), (II) IF REQUESTED BY THE ADMINISTRATIVE AGENT,
PROVIDE THE RELEVANT LENDERS WITH (X) TITLE AND EXTENDED COVERAGE INSURANCE
COVERING SUCH REAL PROPERTY IN AN AMOUNT AT LEAST EQUAL TO THE PURCHASE PRICE OF
SUCH REAL PROPERTY (OR SUCH OTHER AMOUNT AS SHALL BE REASONABLY SPECIFIED BY THE
ADMINISTRATIVE AGENT) AS WELL AS A CURRENT ALTA SURVEY THEREOF, TOGETHER WITH A
SURVEYOR’S CERTIFICATE AND (Y) ANY CONSENTS OR ESTOPPELS REASONABLY DEEMED
NECESSARY OR ADVISABLE BY THE ADMINISTRATIVE AGENT IN CONNECTION WITH SUCH
MORTGAGE, EACH OF THE FOREGOING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ADMINISTRATIVE AGENT AND (III) IF REQUESTED BY THE ADMINISTRATIVE AGENT,
DELIVER TO THE ADMINISTRATIVE AGENT LEGAL OPINIONS RELATING TO THE MATTERS
DESCRIBED ABOVE, WHICH OPINIONS SHALL BE IN FORM AND SUBSTANCE, AND FROM
COUNSEL, REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(C)           WITH RESPECT TO ANY NEW SUBSIDIARY (OTHER THAN A FOREIGN
SUBSIDIARY) CREATED OR ACQUIRED AFTER THE INITIAL BORROWING DATE BY ANY GROUP
MEMBER (WHICH, FOR THE PURPOSES OF THIS PARAGRAPH (C), SHALL INCLUDE ANY
EXISTING SUBSIDIARY THAT CEASES TO BE A FOREIGN SUBSIDIARY), PROMPTLY
(I) EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT SUCH AMENDMENTS TO THE
GUARANTEE AND COLLATERAL AGREEMENT AS THE ADMINISTRATIVE AGENT DEEMS NECESSARY
TO GRANT TO THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, A
PERFECTED FIRST PRIORITY SECURITY INTEREST IN THE CAPITAL STOCK OF SUCH NEW
SUBSIDIARY, (II) DELIVER TO THE ADMINISTRATIVE AGENT THE CERTIFICATES
REPRESENTING SUCH CAPITAL STOCK, IF ANY, TOGETHER WITH UNDATED STOCK POWERS, IN
BLANK, EXECUTED AND DELIVERED BY A DULY AUTHORIZED OFFICER OF THE RELEVANT GROUP
MEMBER, (III) CAUSE

 

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SUCH NEW SUBSIDIARY (A) TO BECOME A PARTY TO THE GUARANTEE AND COLLATERAL
AGREEMENT, (B) TO TAKE SUCH ACTIONS NECESSARY TO GRANT TO THE ADMINISTRATIVE
AGENT FOR THE BENEFIT OF THE LENDERS A PERFECTED FIRST PRIORITY SECURITY
INTEREST IN THE COLLATERAL DESCRIBED IN THE GUARANTEE AND COLLATERAL AGREEMENT
WITH RESPECT TO SUCH NEW SUBSIDIARY, IN THE CASE OF THE SECURED PARTIES,
INCLUDING THE FILING OF UNIFORM COMMERCIAL CODE FINANCING STATEMENTS IN SUCH
JURISDICTIONS AS MAY BE REQUIRED BY THE GUARANTEE AND COLLATERAL AGREEMENT OR BY
LAW OR AS MAY BE REQUESTED BY THE ADMINISTRATIVE AGENT AND (C) TO DELIVER TO THE
ADMINISTRATIVE AGENT A CERTIFICATE OF SUCH SUBSIDIARY, SUBSTANTIALLY IN THE FORM
OF EXHIBIT H, WITH APPROPRIATE INSERTIONS AND ATTACHMENTS, AND (IV) IF REQUESTED
BY THE ADMINISTRATIVE AGENT, DELIVER TO THE ADMINISTRATIVE AGENT LEGAL OPINIONS
RELATING TO THE MATTERS DESCRIBED ABOVE, WHICH OPINIONS SHALL BE IN FORM AND
SUBSTANCE, AND FROM COUNSEL, REASONABLY SATISFACTORY TO THE ADMINISTRATIVE
AGENT.

 

(D)           WITH RESPECT TO ANY NEW FOREIGN SUBSIDIARY CREATED OR ACQUIRED
AFTER THE INITIAL BORROWING DATE BY ANY GROUP MEMBER (OTHER THAN BY ANY GROUP
MEMBER THAT IS A FOREIGN SUBSIDIARY), PROMPTLY (I) EXECUTE AND DELIVER TO THE
ADMINISTRATIVE AGENT SUCH AMENDMENTS TO THE GUARANTEE AND COLLATERAL AGREEMENT
AS THE ADMINISTRATIVE AGENT DEEMS NECESSARY OR ADVISABLE TO GRANT THE
ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, A PERFECTED FIRST
PRIORITY SECURITY INTEREST IN THE CAPITAL STOCK OF SUCH NEW SUBSIDIARY (PROVIDED
THAT IN NO EVENT SHALL MORE THAN 65% OF THE TOTAL VOTING POWER OF THE
OUTSTANDING CAPITAL STOCK OF ANY SUCH NEW SUBSIDIARY BE REQUIRED TO BE SO
PLEDGED), (II) DELIVER TO THE ADMINISTRATIVE AGENT THE CERTIFICATES REPRESENTING
SUCH PLEDGED CAPITAL STOCK, TOGETHER WITH UNDATED STOCK POWERS, IN BLANK,
EXECUTED AND DELIVERED BY A DULY AUTHORIZED OFFICER OF THE RELEVANT GROUP MEMBER
AND TAKE SUCH OTHER ACTION AS MAY BE NECESSARY OR, IN THE OPINION OF THE
ADMINISTRATIVE, DESIRABLE TO PERFECT SUCH ADMINISTRATIVE AGENT SECURITY INTEREST
THEREIN, AND (III) IF REQUESTED BY THE ADMINISTRATIVE, DELIVER TO THE
ADMINISTRATIVE LEGAL OPINIONS RELATING TO THE MATTERS DESCRIBED ABOVE, WHICH
OPINIONS SHALL BE IN FORM AND SUBSTANCE, AND FROM COUNSEL, REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE.

 

(E)           WITHIN 60 DAYS FOLLOWING THE INITIAL BORROWING DATE, CAUSE ALL
CASH AND CASH EQUIVALENTS OF THE BORROWER AND THE SUBSIDIARY GUARANTORS TO BE
DEPOSITED OR MAINTAINED IN ACCOUNTS WHICH ARE SUBJECT TO CONTROL AGREEMENTS
(EXCEPT FOR ACCOUNTS THE AGGREGATE AMOUNT OF CASH AND CASH EQUIVALENTS IN WHICH
DO NOT EXCEED $1,000,000 IN THE AGGREGATE AND CASH AND CASH EQUIVALENTS SUBJECT
TO LIENS PERMITTED UNDER SECTION 8.3 OTHER THAN 8.3(B)).

 

7.11.        Further Assurances.  From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement relating to the Collateral, the Security Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Secured
Parties with respect to the Collateral (or with respect to any additions thereto
or replacements or proceeds thereof or with respect to any other property or
assets hereafter acquired by the borrower or any Subsidiary which may be deemed
to be part of the Collateral) pursuant hereto or thereto.  Upon the exercise by
the Administrative Agent or any Lender of any power, right, privilege or remedy
expressly provided pursuant to this Agreement or the other Loan Documents which
requires any consent, approval, recording qualification or authorization of any
Governmental Authority, the Borrower will execute and deliver, or will cause the
execution and delivery of, all applications, certifications, instruments and
other documents and papers that the

 

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Administrative Agent or such Secured Parties may be required to obtain from the
Borrower or any of its Subsidiaries for such governmental consent, approval,
recording, qualification or authorization.

 

SECTION 8.   NEGATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit remains outstanding or any Loan or other amount is owing to
any Lender or Agent hereunder, the Borrower shall not, and shall not permit any
of its Subsidiaries (or in the case of Section 8.17, Inactive Subsidiaries) to,
directly or indirectly:

 

8.1.          Financial Condition Covenants.  (a)  Consolidated Leverage Ratio. 
Permit the Consolidated Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of the Borrower ending with any fiscal quarter set
forth below to exceed the ratio set forth below opposite such fiscal quarter:

 

Fiscal Quarter

 

Consolidated
Leverage Ratio

 

March 31, 2006

 

5.25 to 1:00

 

June 30, 2006

 

5.25 to 1:00

 

September 30, 2006

 

5.25 to 1:00

 

December 31, 2006

 

5.00 to 1:00

 

March 31, 2007

 

4.75 to 1:00

 

June 30, 2007

 

4.75 to 1:00

 

September 30, 2007

 

4.50 to 1:00

 

December 31, 2007

 

4.25 to 1:00

 

March 31, 2008

 

4.00 to 1:00

 

June 30, 2008

 

4.00 to 1:00

 

September 30, 2008

 

3.75 to 1:00

 

December 31, 2008

 

3.75 to 1:00

 

March 31, 2009

 

3.50 to 1:00

 

June 30, 2009

 

3.50 to 1:00

 

September 30, 2009

 

3.25 to 1:00

 

December 31, 2009

 

3.25 to 1:00

 

March 31, 2010

 

3.25 to 1:00

 

June 30, 2010

 

3.00 to 1:00

 

September 30, 2010

 

3.00 to 1:00

 

December 31, 2010

 

3.00 to 1:00

 

March 30, 2011

 

3.00 to 1:00

 

 

(B)           CONSOLIDATED FIRST LIEN LEVERAGE RATIO.  PERMIT THE CONSOLIDATED
FIRST LIEN LEVERAGE RATIO AS AT THE LAST DAY OF ANY PERIOD OF FOUR CONSECUTIVE
FISCAL QUARTERS OF THE BORROWER ENDING WITH ANY FISCAL QUARTER SET FORTH BELOW
TO EXCEED THE RATIO SET FORTH BELOW OPPOSITE SUCH FISCAL QUARTER:

 

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Fiscal Quarter

 

Consolidated First Lien
Leverage Ratio

 

March 31, 2006

 

2.50 to 1:00

 

June 30, 2006

 

2.50 to 1:00

 

September 30, 2006

 

2.50 to 1:00

 

December 31, 2006

 

2.25 to 1:00

 

March 31, 2007

 

2.25 to 1:00

 

June 30, 2007

 

2.25 to 1:00

 

September 30, 2007

 

2.00 to 1:00

 

December 31, 2007

 

2.00 to 1:00

 

March 31, 2008

 

2.00 to 1:00

 

June 30, 2008

 

2.00 to 1:00

 

September 30, 2008

 

2.00 to 1:00

 

December 31, 2008

 

2.00 to 1:00

 

March 31, 2009

 

2.00 to 1:00

 

June 30, 2009

 

2.00 to 1:00

 

September 30, 2009

 

2.00 to 1:00

 

December 31, 2009

 

2.00 to 1:00

 

March 31, 2010

 

2.00 to 1:00

 

June 30, 2010

 

2.00 to 1:00

 

September 30, 2010

 

2.00 to 1:00

 

December 31, 2010

 

2.00 to 1:00

 

March 30, 2011

 

2.00 to 1:00

 

 

(C)           CONSOLIDATED FIXED CHARGE COVERAGE RATIO.  PERMIT THE CONSOLIDATED
FIXED CHARGE COVERAGE RATIO FOR ANY PERIOD OF FOUR CONSECUTIVE FISCAL QUARTERS
OF THE BORROWER ENDING WITH ANY FISCAL QUARTER SET FORTH BELOW TO BE LESS THAN
THE RATIO SET FORTH BELOW OPPOSITE SUCH FISCAL QUARTER:

 

Fiscal Quarter

 

Consolidated Fixed Charge
Coverage Ratio

 

March 31, 2006

 

1.35 to 1:00

 

June 30, 2006

 

1.35 to 1:00

 

September 30, 2006

 

1.40 to 1:00

 

December 31, 2006

 

1.40 to 1:00

 

March 31, 2007

 

1.45 to 1:00

 

June 30, 2007

 

1.45 to 1:00

 

September 30, 2007

 

1.50 to 1:00

 

December 31, 2007

 

1.50 to 1:00

 

March 31, 2008

 

1.50 to 1:00

 

June 30, 2008

 

1.60 to 1:00

 

September 30, 2008

 

1.60 to 1:00

 

December 31, 2008

 

1.60 to 1:00

 

March 31, 2009

 

1.60 to 1:00

 

June 30, 2009

 

1.75 to 1:00

 

September 30, 2009

 

1.75 to 1:00

 

December 31, 2009

 

1.75 to 1:00

 

 

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Fiscal Quarter

 

Consolidated Fixed Charge
Coverage Ratio

 

March 31, 2010

 

1.75 to 1:00

 

June 30, 2010

 

1.75 to 1:00

 

September 30, 2010

 

1.75 to 1:00

 

December 31, 2010

 

1.75 to 1:00

 

March 30, 2011

 

1.75 to 1:00

 

 

8.2.          Indebtedness.  Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:

(A)           INDEBTEDNESS OF ANY LOAN PARTY PURSUANT TO ANY LOAN DOCUMENT;

 

(B)           INDEBTEDNESS OF ANY LOAN PARTY UNDER THE SECOND LIEN CREDIT
AGREEMENT OR ANY PERMITTED REFINANCING INDEBTEDNESS, PROVIDED THAT THE AGGREGATE
PRINCIPAL AMOUNT OF SUCH INDEBTEDNESS MAY NOT EXCEED $65,000,000 AT ANY TIME
OUTSTANDING AND MAY NOT BE REBORROWED AFTER REPAYMENT THEREOF;

 

(C)           INDEBTEDNESS OF THE BORROWER AND THE SUBSIDIARY GUARANTORS UNDER
THE SUBORDINATED LOAN AGREEMENT OR ANY PERMITTED REFINANCING INDEBTEDNESS;
PROVIDED THAT THE AGGREGATE PRINCIPAL AMOUNT OF SUCH INDEBTEDNESS MAY NOT EXCEED
$25,000,000 (PLUS THE AMOUNT OF ANY ACCRUED OR CAPITALIZED PAYMENT IN KIND
INTEREST) AT ANY TIME OUTSTANDING AND MAY NOT BE REBORROWED AFTER REPAYMENT
THEREOF;

 

(D)           INDEBTEDNESS (I) OF THE BORROWER TO ANY SUBSIDIARY, (II) OF ANY
SUBSIDIARY GUARANTOR TO THE BORROWER OR ANY OTHER SUBSIDIARY, (III) OF ANY
FOREIGN SUBSIDIARY TO ANY OTHER FOREIGN SUBSIDIARY AND (IV) TO THE EXTENT
PERMITTED BY SECTION 8.8(K), OF ANY FOREIGN SUBSIDIARY TO THE BORROWER OR ANY
SUBSIDIARY GUARANTOR;

 

(E)           GUARANTEE OBLIGATIONS INCURRED IN THE ORDINARY COURSE OF BUSINESS
BY THE BORROWER OR ANY OF ITS SUBSIDIARIES OF (I) OBLIGATIONS OF THE BORROWER,
ANY SUBSIDIARY GUARANTOR AND, TO THE EXTENT PERMITTED BY SECTION 8.8(K), OF ANY
FOREIGN SUBSIDIARY AND (II) OPERATING LEASE OBLIGATIONS OF THE BORROWER OR ANY
SUCH SUBSIDIARY ASSUMED BY A THIRD PARTY IN CONNECTION WITH A STORE CLOSURE OR
CONVERSION, IN EACH CASE CONSISTENT WITH PAST PRACTICE;

 

(F)            INDEBTEDNESS AND GUARANTEE OBLIGATIONS OUTSTANDING ON THE DATE
HEREOF AND LISTED ON SCHEDULE 8.2(F) AND ANY REFINANCINGS, REFUNDINGS, RENEWALS
OR EXTENSIONS THEREOF (WITHOUT INCREASING, OR SHORTENING THE MATURITY OF, THE
PRINCIPAL AMOUNT THEREOF);

 

(G)           INDEBTEDNESS (INCLUDING, WITHOUT LIMITATION, CAPITAL LEASE
OBLIGATIONS) SECURED BY LIENS PERMITTED BY SECTION 8.3(H) IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $3,000,000 AT ANY ONE TIME OUTSTANDING;

 

(H)           INDEBTEDNESS OF THE BORROWER IN RESPECT OF THE SERIES Z PREFERRED
AND ANY REPLACEMENT EQUITY CONSISTING OF PREFERRED STOCK OF THE BORROWER;

 

(I)            HEDGE AGREEMENTS PERMITTED UNDER SECTION 8.12;

 

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(J)            UNTIL THE INITIAL BORROWING DATE, (I) INDEBTEDNESS OF THE
BORROWER IN RESPECT OF THE EXISTING CREDIT FACILITY AND THE SENIOR NOTES AND
(II) GUARANTEE OBLIGATIONS OF ANY SUBSIDIARY IN RESPECT OF SUCH INDEBTEDNESS;

 

(K)           INDEBTEDNESS RESULTING FROM (A) SURETY AND APPEAL BONDS INCURRED
IN THE ORDINARY COURSE OF BUSINESS AND (B) THE HONORING OF A CHECK, DRAFT OR
SIMILAR INSTRUMENT DRAWN AGAINST INSUFFICIENT FUNDS IN THE ORDINARY COURSE OF
BUSINESS SO LONG AS, IN THE CASE OF THIS CLAUSE (B), SUCH INDEBTEDNESS IS REPAID
WITHIN THREE BUSINESS DAYS;

 

(L)            INDEBTEDNESS IN RESPECT OF THE “ADVANCE” OR SIMILAR ADVANCES
(INCLUDING ADVANCES MADE SUBSEQUENT TO THE CLOSING DATE) UNDER THE COKE BEVERAGE
MARKETING AGREEMENT (AS IN EFFECT ON THE DATE HEREOF) AND UP TO $1,000,000 IN
ADDITIONAL OUTSTANDING ADVANCES UNDER THE COKE BEVERAGE MARKETING AGREEMENT; AND

 

(M)          ADDITIONAL INDEBTEDNESS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES
(NOT OTHERWISE PERMITTED UNDER THIS SECTION 8.2) IN AN AGGREGATE PRINCIPAL
AMOUNT (FOR THE BORROWER AND ALL SUBSIDIARIES) NOT TO EXCEED $5,000,000 AT ANY
ONE TIME OUTSTANDING.

 

8.3.          Liens.  Create, incur, assume or suffer to exist any Lien upon any
of its property, whether now owned or hereafter acquired, except for:

 

(A)           LIENS FOR TAXES NOT YET DUE OR THAT ARE BEING CONTESTED OR
DISPUTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS, PROVIDED THAT ADEQUATE
RESERVES WITH RESPECT THERETO ARE MAINTAINED ON THE BOOKS OF THE BORROWER OR ITS
SUBSIDIARIES, AS THE CASE MAY BE, IN CONFORMITY WITH GAAP;

 

(B)           LIENS ON THE COLLATERAL SECURING INDEBTEDNESS OF BORROWER AND ITS
SUBSIDIARIES PERMITTED BY SECTION 8.2(B) AS LONG AS SUCH LIENS ARE SUBORDINATE
TO THE LIENS SECURING THE FIRST LIEN OBLIGATIONS PURSUANT TO THE PROVISIONS OF
THE INTERCREDITOR AGREEMENT (OTHER THAN AS A RESULT OF ANY AMENDMENT OR WAIVER
PURSUANT TO SECTION 8.3 OF THE INTERCREDITOR AGREEMENT WITH RESPECT TO WHICH THE
BORROWER HAS NOT CONSENTED OR APPROVED);

 

(C)           CARRIERS’, WAREHOUSEMEN’S, MECHANICS’, MATERIALMEN’S, REPAIRMEN’S,
LANDLORDS’ OR OTHER LIKE LIENS ARISING IN THE ORDINARY COURSE OF BUSINESS THAT
ARE NOT OVERDUE FOR A PERIOD OF MORE THAN 45 DAYS OR THAT ARE BEING CONTESTED IN
GOOD FAITH BY APPROPRIATE PROCEEDINGS;

 

(D)           PLEDGES OR DEPOSITS IN CONNECTION WITH WORKERS’ COMPENSATION,
UNEMPLOYMENT INSURANCE AND OTHER SOCIAL SECURITY LEGISLATION;

 

(E)           DEPOSITS TO SECURE THE PERFORMANCE OF BIDS, TRADE CONTRACTS (OTHER
THAN FOR BORROWED MONEY), OBLIGATIONS FOR UTILITIES, LEASES, STATUTORY
OBLIGATIONS, SURETY AND APPEAL BONDS, REPLEVIN BONDS, PERFORMANCE BONDS AND
OTHER OBLIGATIONS OF A LIKE NATURE INCURRED IN THE ORDINARY COURSE OF BUSINESS;

 

(F)            ZONING RESTRICTIONS, EASEMENTS, RIGHTS-OF-WAY, RESTRICTIONS AND
OTHER SIMILAR ENCUMBRANCES INCURRED IN THE ORDINARY COURSE OF BUSINESS AND MINOR
IRREGULARITIES OF TITLE

 

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THAT, IN THE AGGREGATE, ARE NOT SUBSTANTIAL IN AMOUNT AND THAT DO NOT IN ANY
CASE MATERIALLY DETRACT FROM THE VALUE OF THE PROPERTY SUBJECT THERETO OR
MATERIALLY INTERFERE WITH THE ORDINARY CONDUCT OF THE BUSINESS UTILIZING THE
PROPERTY SUBJECT TO SUCH ENCUMBRANCES AND RESTRICTIONS;

 

(G)           LIENS IN EXISTENCE ON THE DATE HEREOF LISTED ON SCHEDULE 8.3(G),
SECURING INDEBTEDNESS PERMITTED BY SECTION 8.2(F), PROVIDED THAT NO SUCH LIEN IS
SPREAD TO COVER ANY ADDITIONAL PROPERTY AFTER THE CLOSING DATE AND THAT THE
AMOUNT OF INDEBTEDNESS SECURED THEREBY IS NOT INCREASED (OTHER THAN ACCRUAL OF
INTEREST, FEES AND COSTS IN ACCORDANCE WITH THE TERMS THEREOF);

 

(H)           LIENS SECURING INDEBTEDNESS OF THE BORROWER OR ANY OTHER
SUBSIDIARY INCURRED PURSUANT TO SECTION 8.2(G) TO FINANCE THE ACQUISITION OF
FIXED OR CAPITAL ASSETS, PROVIDED THAT (I) SUCH LIENS SHALL BE CREATED
SUBSTANTIALLY SIMULTANEOUSLY WITH THE ACQUISITION OF SUCH FIXED OR CAPITAL
ASSETS, (II) SUCH LIENS DO NOT AT ANY TIME ENCUMBER ANY PROPERTY OTHER THAN THE
PROPERTY FINANCED BY SUCH INDEBTEDNESS AND (III) THE AMOUNT OF INDEBTEDNESS
SECURED THEREBY IS NOT INCREASED (OTHER THAN ACCRUAL OF INTEREST, FEES AND COSTS
IN ACCORDANCE WITH THE TERMS THEREOF);

 

(I)            JUDGMENT LIENS IN RESPECT OF JUDGMENTS NOT CONSTITUTING EVENTS OF
DEFAULT UNDER SECTION 9(H) SO LONG AS (A) SUCH JUDGMENT LIENS ARE RELEASED
WITHIN 90 DAYS AFTER THE ENTRY THEREOF OR (B) THE AGGREGATE AMOUNT COVERED BY
ALL SUCH JUDGMENTS LIENS DOES NOT EXCEED $2,500,000 AT ANY TIME;

 

(J)            LIENS CREATED PURSUANT TO THE SECURITY DOCUMENTS;

 

(K)           ANY INTEREST OR TITLE OF A LESSOR OR ANY LESSOR’S LENDER UNDER ANY
LEASE ENTERED INTO BY THE BORROWER OR ANY OTHER SUBSIDIARY IN THE ORDINARY
COURSE OF ITS BUSINESS AND COVERING ONLY THE ASSETS SO LEASED;

 

(L)            LIENS NOT OTHERWISE PERMITTED BY THIS SECTION SO LONG AS (I) THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF THE OBLIGATIONS SECURED THEREBY DOES
NOT EXCEED $1,000,000 AT ANY TIME AND (II) THE AGGREGATE FAIR MARKET VALUE
(DETERMINED AS OF THE DATE SUCH LIEN IS INCURRED) OF THE ASSETS ENCUMBERED
THEREBY DOES NOT EXCEED (AS TO THE BORROWER AND ALL SUBSIDIARIES) $1,500,000 AT
ANY ONE TIME;

 

(M)          LIENS EXISTING ON FIXED OR CAPITAL ASSETS AT THE TIME OF THE
ACQUISITION THEREOF BY THE BORROWER OR ANY SUBSIDIARY, PROVIDED, THAT (X)
NEITHER (I) THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF THE OBLIGATIONS
SECURED THEREBY NOR (II) THE AGGREGATE FAIR MARKET VALUE (DETERMINED AS OF THE
DATE SUCH LIEN IS INCURRED) OF THE ASSETS THERETO EXCEEDS (AS TO THE BORROWER
AND ALL SUBSIDIARIES) $1,000,000 AT ANY ONE TIME, (Y) SUCH LIENS WERE NOT
CREATED IN CONNECTION WITH OR IN CONTEMPLATION OF SUCH ACQUISITION AND (Z) SUCH
LIENS DO NOT COVER ANY ADDITIONAL PROPERTY AND THE OBLIGATIONS SECURED THEREBY
ARE NOT INCREASED;

 

(N)           LIENS RESULTING FROM THE GRANTING OF LICENSES IN THE ORDINARY
COURSE OF BUSINESS TO ANY PERSON TO USE ANY INTELLECTUAL PROPERTY; AND

 

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(O)           UNTIL THE INITIAL BORROWING DATE, LIENS SECURING INDEBTEDNESS OF
THE BORROWER OR ANY OF THE SUBSIDIARY GUARANTORS IN RESPECT OF THE EXISTING
CREDIT FACILITY, THE SENIOR NOTES AND ANY GUARANTEE OBLIGATIONS OF ANY
SUBSIDIARY IN RESPECT OF SUCH INDEBTEDNESS.

 

8.4.          Fundamental Changes.  Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:

 

(A)           ANY SUBSIDIARY OF THE BORROWER MAY BE MERGED OR CONSOLIDATED WITH
OR INTO THE BORROWER (PROVIDED THAT THE BORROWER SHALL BE THE CONTINUING OR
SURVIVING CORPORATION) OR WITH OR INTO ANY SUBSIDIARY GUARANTOR (PROVIDED THAT
THE SUBSIDIARY GUARANTOR SHALL BE THE CONTINUING OR SURVIVING CORPORATION) OR,
SUBJECT TO SECTION 8.8(K), WITH OR INTO ANY FOREIGN SUBSIDIARY;

 

(B)           (I) ANY SUBSIDIARY OF THE BORROWER MAY DISPOSE OF ANY OR ALL OF
ITS ASSETS (UPON VOLUNTARY LIQUIDATION OR OTHERWISE) TO THE BORROWER OR ANY
SUBSIDIARY GUARANTOR OR, TO THE EXTENT PERMITTED BY SECTION 8.8(K), ANY FOREIGN
SUBSIDIARY AND (II) FOLLOWING THE DISPOSITION OF ALL OF ITS ASSETS IN ACCORDANCE
WITH CLAUSE (I) ABOVE, SUCH SUBSIDIARY MAY LIQUIDATE, WIND UP OR DISSOLVE;

 

(C)           ANY SUBSIDIARY MAY MERGE WITH ANOTHER PERSON TO EFFECT A
TRANSACTION PERMITTED UNDER SECTIONS 8.8(K) AND (L); AND

 

(D)           TRANSACTIONS PERMITTED UNDER SECTION 8.5 SHALL BE PERMITTED.

 

8.5.          Disposition of Property.  Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary’s Capital Stock to any Person, except:

 

(A)           THE DISPOSITION (INCLUDING ABANDONMENT OF INTELLECTUAL PROPERTY)
OF OBSOLETE OR WORN OUT PROPERTY OR OF PROPERTY NO LONGER USEFUL OR USED IN THE
BORROWER’S OR ANY OF THE SUBSIDIARIES’ BUSINESS, IN EACH CASE, IN THE ORDINARY
COURSE OF BUSINESS, WHETHER NOW OWNED OR HEREAFTER ACQUIRED;

 

(B)           THE SALE OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS;

 

(C)           DISPOSITIONS PERMITTED BY SECTION 8.4(B);

 

(D)           THE SALE OR ISSUANCE OF ANY SUBSIDIARY’S CAPITAL STOCK TO THE
BORROWER OR ANY WHOLLY OWNED SUBSIDIARY GUARANTOR;

 

(E)           THE SALE OR DISCOUNT WITHOUT RECOURSE OF ACCOUNTS RECEIVABLE OR
NOTES RECEIVABLE ARISING IN THE ORDINARY COURSE OF BUSINESS, OR THE CONVERSION
OR EXCHANGE OF ACCOUNTS RECEIVABLE INTO OR FOR NOTES RECEIVABLE, IN CONNECTION
WITH THE COMPROMISE OR COLLECTION THEREOF;

 

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(F)            THE DISPOSITION OF THE CAPITAL STOCK OR THE ASSETS OF MANHATTAN
BAGELS COMPANY, INC., PROVIDED THAT, (I) THE CONSIDERATION RECEIVED IN ANY SUCH
DISPOSITION SHALL BE IN AN AMOUNT AT LEAST EQUAL TO THE FAIR MARKET VALUE OF
SUCH PROPERTY AND (II) AT LEAST 50% OF THE CONSIDERATION RECEIVED IN ANY SUCH
DISPOSITION SHALL BE IN CASH;

 

(G)           THE DISPOSITION OF ASSETS OF THE NEW WORLD COFFEE BUSINESS AND THE
CAPITAL STOCK OR ASSETS OF CHESAPEAKE BAGEL FRANCHISE CORP.;

 

(H)           SUBLEASES, LICENSES, FRANCHISES AND DISPOSITIONS OR CANCELLATIONS
OF LEASES, LICENSES OR FRANCHISE AGREEMENTS IN THE ORDINARY COURSE OF BUSINESS;
AND

 

(I)            THE DISPOSITION OF OTHER PROPERTY FOR CONSIDERATION NOT TO EXCEED
$5,000,000 IN THE AGGREGATE FOR ANY CALENDAR YEAR OF THE BORROWER.

 

8.6.          Restricted Payments.  Declare or pay any dividend (other than
dividends payable solely in common stock, or options, warrants or other rights
to purchase common stock, of the Person making such dividend) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any Capital Stock of any Group Member, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any Subsidiary
(collectively, “Restricted Payments”), except that:

 

(A)           ANY SUBSIDIARY MAY MAKE RESTRICTED PAYMENTS TO THE BORROWER OR ANY
WHOLLY OWNED SUBSIDIARY GUARANTOR; AND

 

(B)           SO LONG AS NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND
BE CONTINUING OR WOULD RESULT THEREFROM, THE BORROWER MAY PURCHASE THE
BORROWER’S COMMON STOCK OR COMMON STOCK OPTIONS FROM PRESENT OR FORMER OFFICERS,
CONSULTANTS OR EMPLOYEES OF ANY GROUP MEMBER UPON THE DEATH, DISABILITY OR
TERMINATION OF EMPLOYMENT OF SUCH OFFICER, CONSULTANT OR EMPLOYEE, PROVIDED,
THAT THE AGGREGATE AMOUNT OF PAYMENTS HEREUNDER AFTER THE DATE HEREOF (NET OF
ANY PROCEEDS RECEIVED BY THE BORROWER AFTER THE DATE HEREOF IN CONNECTION WITH
RESALES OF ANY COMMON STOCK OR COMMON STOCK OPTIONS SO PURCHASED) SHALL NOT
EXCEED $1,000,000.

 

8.7.          Capital Expenditures.  Make or commit to make any Capital
Expenditures, other than Capital Expenditures indicated in any fiscal year
below, in an aggregate amount not to exceed the corresponding amount indicated
below:

 

Fiscal Year

 

Capital Expenditures

 

2006

 

$

20,000,000

 

2007

 

$

20,000,000

 

2008

 

$

25,000,000

 

2009

 

$

20,000,000

 

2010

 

$

20,000,000

 

2011

 

$

20,000,000

 

 

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8.8.          Investments.  Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any other
Person (all of the foregoing, “Investments”), except:

 

(A)           EXTENSIONS OF TRADE CREDIT IN THE ORDINARY COURSE OF BUSINESS;

 

(B)           INVESTMENTS IN CASH AND CASH EQUIVALENTS;

 

(C)           GUARANTEE OBLIGATIONS PERMITTED BY SECTION 8.2;

 

(D)           LOANS AND ADVANCES TO OFFICERS, DIRECTORS, CONSULTANTS, EMPLOYEES
OF ANY GROUP MEMBER OF THE BORROWER IN THE ORDINARY COURSE OF BUSINESS
(INCLUDING FOR INDEMNIFICATION, TRAVEL, ENTERTAINMENT AND RELOCATION EXPENSES)
IN AN AGGREGATE AMOUNT FOR ALL GROUP MEMBERS NOT TO EXCEED $500,000 AT ANY ONE
TIME OUTSTANDING;

 

(E)           INVESTMENTS IN NOTES RECEIVABLE AND OTHER INSTRUMENTS AND
SECURITIES OBTAINED IN CONNECTION WITH TRANSACTIONS PERMITTED BY SECTION 8.5(E);

 

(F)            INTERCOMPANY INVESTMENTS BY (I) ANY GROUP MEMBER IN THE BORROWER
OR ANY PERSON THAT, PRIOR TO SUCH INVESTMENT, IS A SUBSIDIARY GUARANTOR OR
(II) ANY FOREIGN SUBSIDIARY IN ANY FOREIGN SUBSIDIARY;

 

(G)           INVESTMENTS RESULTING FROM PAYMENTS REQUIRED UNDER HEDGE
AGREEMENTS PERMITTED UNDER SECTION 8.12;

 

(H)           INVESTMENTS RESULTING FROM NON-CASH CONSIDERATION RECEIVED IN
CONNECTION WITH ASSET SALES SO LONG AS THE AGGREGATE OUTSTANDING AMOUNT OF SUCH
INVESTMENTS DOES NOT EXCEED $7,500,000 AT ANY TIME;

 

(I)            CAPITAL EXPENDITURES PERMITTED UNDER SECTION 8.7;

 

(J)            (I) LOANS TO FRANCHISEES AND AREA DEVELOPERS IN AN AMOUNT NOT TO
EXCEED $250,000 IN ANY FISCAL YEAR AND (II) EXISTING LOANS TO FRANCHISEES NOT TO
EXCEED $250,000 IN THE AGGREGATE;

 

(K)           IN ADDITION TO INVESTMENTS OTHERWISE EXPRESSLY PERMITTED BY THIS
SECTION, INVESTMENTS (INCLUDING ACQUISITIONS) BY THE BORROWER OR ANY OF ITS
SUBSIDIARIES IN AN AGGREGATE AMOUNT OUTSTANDING (VALUED AT COST) NOT TO EXCEED
AT ANY ONE TIME THE SUM OF (I) $1,000,000 PLUS (II) THE PRODUCT OF (X)
$1,000,000 AND (Y) THE NUMBER OF CALENDAR YEARS ENDED AFTER THE CLOSING DATE
MINUS (III) THE OUTSTANDING AMOUNT OF ANY INVESTMENTS MADE IN RELIANCE ON
SECTION 8.8(L)(IV)(Y);

 

(L)            ACQUISITIONS, PROVIDED THAT (I) NO DEFAULT OR EVENT OF DEFAULT
SHALL HAVE THEN OCCURRED AND BE CONTINUING OR WOULD RESULT THEREFROM, (II) SUCH
ACQUISITION IS INITIATED AND COMPLETED ON A “FRIENDLY” BASIS, (III) IF SUCH
ACQUISITION IS A MATERIAL ACQUISITION, AFTER GIVING EFFECT THERETO ON A PRO
FORMA BASIS AS IF SUCH ACQUISITION WERE COMPLETED ON THE FIRST DAY OF THE MOST
RECENT PERIOD OF FOUR CONSECUTIVE FISCAL QUARTERS FOR

 

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WHICH FINANCIAL STATEMENTS HAVE BEEN DELIVERED, THE BORROWER WOULD HAVE BEEN IN
COMPLIANCE WITH SECTIONS 8.1(A) AND 8.1(B) (ASSUMING THE REQUIRED RATIO WAS 0.25
TO 1.00 LOWER THAN THE THEN APPLICABLE RATIO), (IV) THE CONSIDERATION FOR ANY
SUCH ACQUISITION SHALL CONSIST EXCLUSIVELY OF A COMBINATION OF (X) COMMON STOCK
OF THE BORROWER AND (Y) OTHER CONSIDERATION IN CONNECTION WITH SUCH ACQUISITION
IN AN AGGREGATE AMOUNT OUTSTANDING (VALUED AT COST) NOT TO EXCEED AT ANY ONE
TIME THE SUM OF (I) $1,000,000 PLUS (II) THE PRODUCT OF (A) $1,000,000 AND
(B) THE NUMBER OF CALENDAR YEARS ENDED AFTER THE CLOSING DATE MINUS (III) THE
OUTSTANDING AMOUNT OF ANY INVESTMENTS MADE IN RELIANCE ON SECTION 8.8(K) AND
(V) THE BORROWER SHALL HAVE DELIVERED A CERTIFICATE OF A RESPONSIBLE OFFICER
CERTIFYING COMPLIANCE WITH THE FOREGOING CONDITIONS (AND ATTACHING REASONABLY
DETAILED CALCULATIONS) AT LEAST FIVE BUSINESS DAYS PRIOR TO THE CONSUMMATION
THEREOF; AND

 

(M)          DEPOSITS PERMITTED BY SECTION 8.3(E).

 

8.9.          Certain Payments and Modifications of Certain Debt Instruments. 
(a)  Make or offer to make any optional or voluntary payment, optional or
voluntary prepayment, optional or voluntary repurchase or optional or voluntary
redemption of or otherwise optionally or voluntarily defease or segregate funds
with respect to (i) the Series Z Preferred or any Replacement Equity (other than
with the Net Cash Proceeds of any Replacement Equity), (ii) the Subordinated
Loans, any Permitted Refinancing Indebtedness incurred pursuant to
Section 8.2(c), the Second Lien Term Loans or any Permitted Refinancing
Indebtedness incurred pursuant to Section 8.2(b) (in each case, other than with
the Net Cash Proceeds of (x) any Capital Stock issued to any Group Member or the
Permitted Investors, (y) so long as (A) the Consolidated Leverage Ratio at such
time and after giving effect thereto is equal to or less than 3.25 to 1.00 and
(B) no Default or Event of Default shall have occurred and be continuing or
would result therefrom, any issuance of common stock of the Borrower, or (z) so
long as no Default or Event of Default shall have occurred and be continuing or
would result therefrom, Permitted Refinancing Indebtedness), (b) amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of (i) the Series Z Preferred or any
Replacement Equity consisting of preferred stock (other than any such amendment,
modification, waiver or other change that (A) would extend or eliminate the
scheduled redemption date or reduce the amount of any scheduled redemption
payment or reduce the rate or extend any date for payment of dividends thereon
and (B) does not involve the payment of a consent fee other than any consent
fees paid in connection with the extension of the scheduled redemption date in
an aggregate amount not exceeding $250,000), (ii) the Subordinated Loan
Agreement (other than any such amendment, modification, waiver or other change
that (A) would extend or eliminate the maturity or reduce the amount of any
payment of principal thereof or reduce the rate or extend any date for payment
of interest thereon and (B) does not involve the payment of a consent fee) or
(iii) the Second Lien Credit Agreement (other than any such amendment,
modification, waiver or other change that is permitted under the Intercreditor
Agreement), (c) designate any Indebtedness (other than obligations of the Loan
Parties pursuant to the Loan Documents or the Second Lien Loan Documents (as
defined in the Intercreditor Agreement) or any Permitted Refinancing
Indebtedness in respect thereof) as “Designated Senior Indebtedness” (or any
other defined term having a similar purpose) for the purposes of the
Subordination Agreement or (d) make any payment in respect of any Indebtedness
under the Coke Beverage Marketing Agreement or any other Indebtedness of the

 

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type described in clause (k) of the definition thereof, to the extent that,
after giving effect thereto, the Available Revolving Commitment would be less
than $2,000,000.

 

8.10.        Transactions with Affiliates.  Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrower or any Wholly Owned Subsidiary Guarantor)
unless such transaction is (a) otherwise not prohibited under this Agreement and
(b) upon fair and reasonable terms no less favorable to the relevant Group
Member, than it would obtain in a comparable arm’s length transaction with a
Person that is not an Affiliate; it being understood that the Subordinated Loan
Agreement and the Subordination Agreement shall be permitted and the
Subordinated Loans may be repaid in accordance with the terms thereof to the
extent permitted hereunder.

 

8.11.        Sales and Leasebacks.  Enter into any arrangement with any Person
providing for the leasing by any Group Member of real or personal property that
has been or is to be sold or transferred by such Group Member to such Person or
to any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of such Group Member.

 

8.12.        Hedge Agreements.  Enter into any Hedge Agreement, except Hedge
Agreements entered into in order to effectively cap, collar or exchange interest
rates from floating to fixed rates with respect to any interest-bearing
liability or investment of the Borrower or any Subsidiary.

 

8.13.        Changes in Fiscal Periods .  Permit the fiscal year of the Borrower
to end on a day other than December 31 (subject to Section 1.2(f)) or change the
Borrower’s method of determining fiscal quarters; provided, that, with the prior
written consent of the Administrative Agent and the Lead Arranger (such consent
not to be unreasonably withheld), the Borrower may change its fiscal year,
provided, that, in connection with such change, no fiscal year may include more
than five fiscal quarters without the prior written consent of the
Administrative Agent and the Lead Arranger and the amounts permitted under
Section 8.7 shall be pro rata with respect to any fiscal year which does not
consist of four fiscal quarters.

 

8.14.        Negative Pledge Clauses.  Enter into or suffer to exist or become
effective any agreement that prohibits, limits or imposes any condition upon the
ability of any Group Member to create, incur, assume or suffer to exist any Lien
upon any of its property or revenues, whether now owned or hereafter acquired,
to secure its obligations under the Loan Documents or any refinancing thereof
other than (a) this Agreement and the other Loan Documents, (b) the Second Lien
Credit Agreement and the Subordinated Loan Agreement and any provisions in any
Permitted Refinancing Indebtedness so long as such provisions are no more
restrictive than the provisions in the Second Lien Credit Agreement or the
Subordinated Loan Agreement, as applicable, (c) any agreements governing any
utility bonds, industrial revenue or development bonds, purchase money Liens or
Capital Lease Obligations otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective against the assets financed
thereby), (d) until the Initial Borrowing Date, the Existing Credit Facility and
the Senior Notes, (e) restrictions on assets subject to agreements for permitted
Dispositions under Section 8.5 (such restrictions to be limited to the assets
subject to such Dispositions) and (f) restrictions in lease agreements

 

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restricting the Group Members from assigning or pledging their rights under such
lease agreements.

 

8.15.        Clauses Restricting Subsidiary Distributions.  Enter into or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) the Second Lien Credit Agreement and the Subordinated Loan
Agreement and any provisions in any Permitted Refinancing Indebtedness so long
as such provisions are no more restrictive than the provisions in the Second
Lien Credit Agreement or the Subordinated Loan Agreement, as applicable,
(iii) any restrictions with respect to a Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary and
(iv) until the Initial Borrowing Date, the Existing Credit Facility and the
Senior Notes.

 

8.16.        Lines of Business.  Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or that are
reasonably related thereto.

 

8.17.        Inactive Subsidiaries.  With respect to Inactive Subsidiaries,
(a) engage in an active business or (b) except as disclosed on Part B of
Schedule 5.22, own any property or assets or incur, directly or indirectly,
liabilities or obligations in excess of $100,000 in the aggregate.

 

SECTION 9.   EVENTS OF DEFAULT

 

If any of the following events shall occur and be continuing:

 

(A)           THE BORROWER SHALL FAIL TO PAY ANY PRINCIPAL OF ANY LOAN OR
REIMBURSEMENT OBLIGATION WHEN DUE IN ACCORDANCE WITH THE TERMS HEREOF; OR THE
BORROWER SHALL FAIL TO PAY ANY INTEREST ON ANY LOAN OR REIMBURSEMENT OBLIGATION,
OR ANY OTHER AMOUNT PAYABLE HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, WITHIN
FIVE DAYS AFTER ANY SUCH INTEREST OR OTHER AMOUNT BECOMES DUE IN ACCORDANCE WITH
THE TERMS HEREOF; OR

 

(B)           ANY REPRESENTATION OR WARRANTY MADE OR DEEMED MADE BY ANY LOAN
PARTY HEREIN OR IN ANY OTHER LOAN DOCUMENT OR THAT IS CONTAINED IN ANY
CERTIFICATE, DOCUMENT OR FINANCIAL OR OTHER STATEMENT FURNISHED BY IT AT ANY
TIME UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY SUCH OTHER LOAN DOCUMENT
SHALL PROVE TO HAVE BEEN INACCURATE IN ANY MATERIAL RESPECT (EXCEPT THAT SUCH
MATERIALITY QUALIFIER SHALL NOT BE APPLICABLE TO ANY REPRESENTATIONS AND
WARRANTIES THAT ARE ALREADY QUALIFIED OR MODIFIED BY MATERIALITY IN THE TEXT
THEREOF) ON OR AS OF THE DATE MADE OR DEEMED MADE; OR

 

(C)           (I)  ANY LOAN PARTY SHALL DEFAULT IN THE OBSERVANCE OR PERFORMANCE
OF ANY AGREEMENT CONTAINED IN CLAUSE (I) OR (II) OF SECTION 7.4(A) (WITH RESPECT
TO THE BORROWER

 

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ONLY), SECTION 7.5(B), SECTION 7.7(A) OR SECTION 8 OF THIS AGREEMENT OR
SECTIONS 5.5(A) AND 5.7(B) OF EITHER GUARANTEE AND COLLATERAL AGREEMENT OR
(II) AN “EVENT OF DEFAULT” UNDER AND AS DEFINED IN ANY MORTGAGE SHALL HAVE
OCCURRED AND BE CONTINUING; OR

 

(D)           ANY LOAN PARTY SHALL DEFAULT IN THE OBSERVANCE OR PERFORMANCE OF
ANY OTHER AGREEMENT CONTAINED IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
(OTHER THAN AS PROVIDED IN PARAGRAPHS (A) THROUGH (C) OF THIS SECTION), AND SUCH
DEFAULT SHALL CONTINUE UNREMEDIED FOR A PERIOD OF 30 DAYS AFTER NOTICE TO THE
BORROWER FROM THE ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS; OR

 

(E)           ANY GROUP MEMBER (OTHER THAN AN INACTIVE SUBSIDIARY) (I) DEFAULTS
IN MAKING ANY PAYMENT OF ANY PRINCIPAL OF ANY INDEBTEDNESS (INCLUDING THE SECOND
LIEN TERM LOANS, THE SUBORDINATED LOANS AND ANY GUARANTEE OBLIGATION, BUT
EXCLUDING THE LOANS) ON THE SCHEDULED OR ORIGINAL DUE DATE WITH RESPECT THERETO;
OR (II) DEFAULTS IN MAKING ANY PAYMENT OF ANY INTEREST ON ANY SUCH INDEBTEDNESS
BEYOND THE PERIOD OF GRACE, IF ANY, PROVIDED IN THE INSTRUMENT OR AGREEMENT
UNDER WHICH SUCH INDEBTEDNESS WAS CREATED; OR (III) DEFAULTS IN THE OBSERVANCE
OR PERFORMANCE OF ANY OTHER AGREEMENT OR CONDITION RELATING TO ANY SUCH
INDEBTEDNESS OR CONTAINED IN ANY INSTRUMENT OR AGREEMENT (INCLUDING THE SECOND
LIEN CREDIT AGREEMENT AND THE SUBORDINATED LOAN AGREEMENT) EVIDENCING, SECURING
OR RELATING THERETO, OR ANY OTHER EVENT SHALL OCCUR OR CONDITION EXIST, THE
EFFECT OF WHICH DEFAULT OR OTHER EVENT OR CONDITION IS TO CAUSE, OR TO PERMIT
THE HOLDER OR BENEFICIARY OF SUCH INDEBTEDNESS (OR A TRUSTEE OR AGENT ON BEHALF
OF SUCH HOLDER OR BENEFICIARY) TO CAUSE, WITH THE GIVING OF NOTICE IF REQUIRED,
SUCH INDEBTEDNESS TO BECOME DUE PRIOR TO ITS STATED MATURITY OR TO BECOME
SUBJECT TO A MANDATORY OFFER TO PURCHASE BY THE OBLIGOR THEREUNDER OR (IN THE
CASE OF ANY SUCH INDEBTEDNESS CONSTITUTING A GUARANTEE OBLIGATION) TO BECOME
PAYABLE; PROVIDED, THAT A DEFAULT, EVENT OR CONDITION DESCRIBED IN CLAUSE (I),
(II) OR (III) OF THIS PARAGRAPH (E) SHALL NOT AT ANY TIME CONSTITUTE AN EVENT OF
DEFAULT UNLESS, AT SUCH TIME, ONE OR MORE DEFAULTS, EVENTS OR CONDITIONS OF THE
TYPE DESCRIBED IN CLAUSES (I), (II) AND (III) OF THIS PARAGRAPH (E) SHALL HAVE
OCCURRED AND BE CONTINUING WITH RESPECT TO INDEBTEDNESS THE OUTSTANDING
PRINCIPAL AMOUNT OF WHICH EXCEEDS IN THE AGGREGATE $2,500,000; OR

 

(F)            (I) ANY GROUP MEMBER (OTHER THAN AN INACTIVE SUBSIDIARY) SHALL
COMMENCE ANY CASE, PROCEEDING OR OTHER ACTION (A) UNDER ANY EXISTING OR FUTURE
LAW OF ANY JURISDICTION, DOMESTIC OR FOREIGN, RELATING TO BANKRUPTCY,
INSOLVENCY, REORGANIZATION OR RELIEF OF DEBTORS, SEEKING TO HAVE AN ORDER FOR
RELIEF ENTERED WITH RESPECT TO IT, OR SEEKING TO ADJUDICATE IT A BANKRUPT OR
INSOLVENT, OR SEEKING REORGANIZATION, ARRANGEMENT, ADJUSTMENT, WINDING-UP,
LIQUIDATION, DISSOLUTION, COMPOSITION OR OTHER RELIEF WITH RESPECT TO IT OR ITS
DEBTS, OR (B) SEEKING APPOINTMENT OF A RECEIVER, TRUSTEE, CUSTODIAN, CONSERVATOR
OR OTHER SIMILAR OFFICIAL FOR IT OR FOR ALL OR ANY SUBSTANTIAL PART OF ITS
ASSETS, OR ANY GROUP MEMBER SHALL MAKE A GENERAL ASSIGNMENT FOR THE BENEFIT OF
ITS CREDITORS; OR (II) THERE SHALL BE COMMENCED AGAINST ANY GROUP MEMBER (OTHER
THAN AN INACTIVE SUBSIDIARY) ANY CASE, PROCEEDING OR OTHER ACTION OF A NATURE
REFERRED TO IN CLAUSE (I) ABOVE THAT (A) RESULTS IN THE ENTRY OF AN ORDER FOR
RELIEF OR ANY SUCH ADJUDICATION OR APPOINTMENT OR (B) REMAINS UNDISMISSED,
UNDISCHARGED OR UNBONDED FOR A PERIOD OF 60 DAYS; OR (III) THERE SHALL BE
COMMENCED AGAINST ANY GROUP MEMBER (OTHER THAN AN INACTIVE SUBSIDIARY) ANY CASE,
PROCEEDING OR OTHER ACTION SEEKING ISSUANCE OF A WARRANT OF ATTACHMENT,
EXECUTION,

 

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DISTRAINT OR SIMILAR PROCESS AGAINST ALL OR ANY SUBSTANTIAL PART OF ITS ASSETS
THAT RESULTS IN THE ENTRY OF AN ORDER FOR ANY SUCH RELIEF THAT SHALL NOT HAVE
BEEN VACATED, DISCHARGED, OR STAYED OR BONDED PENDING APPEAL WITHIN 60 DAYS FROM
THE ENTRY THEREOF; OR (IV) ANY GROUP MEMBER (OTHER THAN AN INACTIVE SUBSIDIARY)
SHALL TAKE ANY ACTION IN FURTHERANCE OF, OR INDICATING ITS CONSENT TO, APPROVAL
OF, OR ACQUIESCENCE IN, ANY OF THE ACTS SET FORTH IN CLAUSE (I), (II), OR
(III) ABOVE; OR (V) ANY GROUP MEMBER (OTHER THAN AN INACTIVE SUBSIDIARY) SHALL
GENERALLY NOT, OR SHALL BE UNABLE TO, OR SHALL ADMIT IN WRITING ITS INABILITY
TO, PAY ITS DEBTS AS THEY BECOME DUE; OR

 

(G)           (I)  ANY PERSON SHALL ENGAGE IN ANY “PROHIBITED TRANSACTION” (AS
DEFINED IN SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) INVOLVING ANY PLAN,
(II) ANY “ACCUMULATED FUNDING DEFICIENCY” (AS DEFINED IN SECTION 302 OF ERISA),
WHETHER OR NOT WAIVED, SHALL EXIST WITH RESPECT TO ANY PLAN OR ANY LIEN IN FAVOR
OF THE PBGC OR A PLAN SHALL ARISE ON THE ASSETS OF ANY GROUP MEMBER OR ANY
COMMONLY CONTROLLED ENTITY, (III) A REPORTABLE EVENT SHALL OCCUR WITH RESPECT
TO, OR PROCEEDINGS SHALL COMMENCE TO HAVE A TRUSTEE APPOINTED, OR A TRUSTEE
SHALL BE APPOINTED, TO ADMINISTER OR TO TERMINATE, ANY SINGLE EMPLOYER PLAN,
WHICH REPORTABLE EVENT OR COMMENCEMENT OF PROCEEDINGS OR APPOINTMENT OF A
TRUSTEE IS, IN THE REASONABLE OPINION OF THE REQUIRED LENDERS, LIKELY TO RESULT
IN THE TERMINATION OF SUCH PLAN FOR PURPOSES OF TITLE IV OF ERISA, (IV) ANY
SINGLE EMPLOYER PLAN SHALL TERMINATE FOR PURPOSES OF TITLE IV OF ERISA, (V) ANY
GROUP MEMBER OR ANY COMMONLY CONTROLLED ENTITY SHALL, OR IN THE REASONABLE
OPINION OF THE REQUIRED LENDERS IS LIKELY TO, INCUR ANY LIABILITY IN CONNECTION
WITH A WITHDRAWAL FROM, OR THE INSOLVENCY OR REORGANIZATION OF, A MULTIEMPLOYER
PLAN OR (VI) ANY OTHER EVENT OR CONDITION SHALL OCCUR OR EXIST WITH RESPECT TO A
PLAN; AND IN EACH CASE IN CLAUSES (I) THROUGH (VI) ABOVE, SUCH EVENT OR
CONDITION, TOGETHER WITH ALL OTHER SUCH EVENTS OR CONDITIONS, IF ANY, COULD, IN
THE SOLE JUDGMENT OF THE REQUIRED LENDERS, REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT; OR

 

(H)           ONE OR MORE JUDGMENTS OR DECREES SHALL BE ENTERED AGAINST ANY
GROUP MEMBER INVOLVING IN THE AGGREGATE A LIABILITY (NOT PAID OR FULLY COVERED
BY INSURANCE AS TO WHICH THE RELEVANT INSURANCE COMPANY HAS ACKNOWLEDGED
COVERAGE) OF $2,500,000 OR MORE, WHICH SUCH JUDGMENTS OR DECREES SHALL NOT HAVE
BEEN VACATED, DISCHARGED, STAYED OR BONDED PENDING APPEAL WITHIN 30 DAYS FROM
THE ENTRY THEREOF; OR

 

(I)            ANY OF THE SECURITY DOCUMENTS SHALL CEASE, FOR ANY REASON, TO BE
IN FULL FORCE AND EFFECT, OR ANY LOAN PARTY OR ANY AFFILIATE OF ANY LOAN PARTY
SHALL SO ASSERT, OR ANY LIEN CREATED BY ANY OF THE SECURITY DOCUMENTS SHALL
CEASE TO BE ENFORCEABLE AND OF THE SAME EFFECT AND PRIORITY PURPORTED TO BE
CREATED THEREBY; OR

 

(J)            THE GUARANTEE CONTAINED IN SECTION 2 OF THE GUARANTEE AND
COLLATERAL AGREEMENT SHALL CEASE, FOR ANY REASON, TO BE IN FULL FORCE AND EFFECT
OR ANY LOAN PARTY OR ANY AFFILIATE OF ANY LOAN PARTY SHALL SO ASSERT; OR

 

(K)           (I) (A) THE PERMITTED INVESTORS SHALL CEASE TO OWN OF RECORD AND
BENEFICIALLY AT LEAST A MAJORITY OF THE OUTSTANDING COMMON STOCK OF THE BORROWER
AND (B) ANY “PERSON” OR “GROUP” (AS SUCH TERMS ARE USED IN SECTIONS 13(D) AND
14(D) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”)),
EXCLUDING THE

 

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PERMITTED INVESTORS, SHALL BECOME, OR OBTAIN RIGHT (WHETHER BY MEANS OF
WARRANTS, OPTIONS OR OTHERWISE) TO BECOME, THE “BENEFICIAL OWNER” (AS DEFINED IN
RULES 13(D)-3 AND 13(D)-5 UNDER THE EXCHANGE ACT), DIRECTLY OR INDIRECTLY, OF
MORE THAN 25% OF THE OUTSTANDING COMMON STOCK OF THE BORROWER; (II) THE
PERMITTED INVESTORS SHALL CEASE TO OWN OF RECORD AND BENEFICIALLY AT LEAST 40%
OF THE OUTSTANDING AMOUNT OF COMMON STOCK OF THE BORROWER; (III) CONTINUING
DIRECTORS SHALL CEASE TO CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS OF THE
BORROWER SHALL CEASE TO CONSIST OF A MAJORITY OF CONTINUING DIRECTORS; OR (IV) A
SPECIFIED CHANGE OF CONTROL SHALL OCCUR;

 

(L)            THE SUBORDINATED LOANS OR THE GUARANTEES THEREOF SHALL CEASE, FOR
ANY REASON (OTHER THAN AS A RESULT OF ANY AMENDMENT OR WAIVER PURSUANT TO
SECTION 11.1 OR ANY AMENDMENT OR WAIVER PURSUANT TO SECTION 20 OF THE
SUBORDINATION AGREEMENT), TO BE VALIDLY SUBORDINATED TO THE OBLIGATIONS UNDER
THE LOAN DOCUMENTS AS PROVIDED IN THE SUBORDINATION AGREEMENT, OR ANY LOAN
PARTY, ANY AFFILIATE OF ANY LOAN PARTY OR ANY HOLDER OF SUBORDINATED LOANS SHALL
SO ASSERT; OR

 

(m)          the Second Lien Loans or the guarantees thereof shall cease, for
any reason (other than as a result of any amendment or waiver pursuant to
Section 11.1 of this Agreement or any amendment or waiver pursuant to
Section 8.3 of the Intercreditor Agreement with respect to which the Borrower
has not consented or approved), to be validly subordinated to the obligations
under the Loan Documents as provided in the Intercreditor Agreement or any Loan
Party, any Affiliate of any Loan Party or any holder of such Second Lien Loans
shall so assert;

 

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken:  (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.  With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to 105% of the Stated Amount of such Letters of Credit.  Amounts held in such
cash collateral account shall be applied by the Administrative Agent to the
payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have

 

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expired or been fully drawn upon, if any, shall be applied in accordance with
the Intercreditor Agreement.  Subject to the Intercreditor Agreement, after all
such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto). 
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.

 

SECTION 10.   THE AGENTS

 

10.1.        Appointment and Authorization of Administrative Agent.  Each Lender
hereby designates and appoints the Administrative Agent as its representative
under this Agreement and the other Loan Documents and each Lender hereby
irrevocably authorizes the Administrative Agent to execute and deliver each of
the other Loan Documents on its behalf and to take such other action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
Agent by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto.  The Administrative Agent
agrees to act as such on the express conditions contained in this Section 10. 
The provisions of this Section 10 are solely for the benefit of the
Administrative Agent, and the Lenders, and the Borrower and its Subsidiaries
shall have no rights as a third party beneficiary of any of the provisions
contained herein.  Any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document notwithstanding, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent; it being
expressly understood and agreed that the use of the word “Administrative Agent”
is for convenience only, that Wells Fargo Foothill, Inc. is merely the
representative of the Lenders, and only has the contractual duties set forth
herein.  Except as expressly otherwise provided in this Agreement, the
Administrative Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions that the Administrative Agent expressly is
entitled to take or assert under or pursuant to this Agreement and the other
Loan Documents.  Without limiting the generality of the foregoing, or of any
other provision of the Loan Documents that provides rights or powers to the
Administrative Agent, Lenders agree that the Administrative Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect:  (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations under the Loan
Documents, the Collateral, and related matters, (b) execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to the Loan Documents, (c) make Loans, for itself or on behalf of
Lenders as provided in the Loan Documents, (d) open and maintain such bank
accounts and cash management arrangements as the Administrative Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral, (f) perform, exercise, and
enforce any and all other rights and remedies of the Lenders with respect to the
Borrower, the Obligations under the Loan Documents, the Collateral,

 

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or otherwise related to any of same as provided in the Loan Documents, and
(g) incur and pay such expenses as the Administrative Agent may deem necessary
or appropriate for the performance and fulfillment of its functions and powers
pursuant to the Loan Documents.

 

10.2.        Delegation of Duties.  The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys in fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  The Administrative Agent
shall not be responsible for the negligence or misconduct of any agent or
attorney in fact that it selects as long as such selection was made without
gross negligence or willful misconduct.

 

10.3.        Liability of the Administrative Agent.  Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates shall (a) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (b) be responsible in any manner to any of
the Lenders for any recital, statement, representation or warranty made by the
Borrower or any Subsidiary or Affiliate of the Borrower, or any officer or
director thereof, contained in this Agreement or in any other Loan Document, or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder.  Neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the books and records or properties of the Borrower or
the books or records or properties of any of the Borrower’s Subsidiaries or
Affiliates.

 

10.4.        Reliance by Administrative Agent.  The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
telefacsimile or other electronic method of transmission, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent, or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower or counsel to any Lender), independent accountants and other
experts selected by the Administrative Agent.  The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless the Administrative Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, the Administrative Agent shall act, or refrain from
acting, as it deems advisable.  If the Administrative Agent so requests, it
shall first be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense that may be incurred by it by reason of taking
or continuing to take any such action.  The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the requisite

 

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Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.

 

10.5.        NOTICE OF DEFAULT OR EVENT OF DEFAULT.  THE ADMINISTRATIVE AGENT
SHALL NOT BE DEEMED TO HAVE KNOWLEDGE OR NOTICE OF THE OCCURRENCE OF ANY DEFAULT
OR EVENT OF DEFAULT, EXCEPT WITH RESPECT TO DEFAULTS IN THE PAYMENT OF
PRINCIPAL, INTEREST, FEES, AND EXPENSES REQUIRED TO BE PAID TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE LENDERS AND, EXCEPT WITH RESPECT TO
EVENTS OF DEFAULT OF WHICH THE ADMINISTRATIVE AGENT HAS ACTUAL KNOWLEDGE, UNLESS
THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED WRITTEN NOTICE FROM A LENDER OR THE
BORROWER REFERRING TO THIS AGREEMENT, DESCRIBING SUCH DEFAULT OR EVENT OF
DEFAULT, AND STATING THAT SUCH NOTICE IS A “NOTICE OF DEFAULT.”  THE
ADMINISTRATIVE AGENT PROMPTLY WILL NOTIFY THE LENDERS OF ITS RECEIPT OF ANY SUCH
NOTICE OR OF ANY EVENT OF DEFAULT OF WHICH THE ADMINISTRATIVE AGENT HAS ACTUAL
KNOWLEDGE.  IF ANY LENDER OBTAINS ACTUAL KNOWLEDGE OF ANY EVENT OF DEFAULT, SUCH
LENDER PROMPTLY SHALL NOTIFY THE OTHER LENDERS AND THE ADMINISTRATIVE AGENT OF
SUCH EVENT OF DEFAULT.  EACH LENDER SHALL BE SOLELY RESPONSIBLE FOR GIVING ANY
NOTICES TO ITS PARTICIPANTS, IF ANY.  SUBJECT TO SECTION 10.4, THE
ADMINISTRATIVE AGENT SHALL TAKE SUCH ACTION WITH RESPECT TO SUCH DEFAULT OR
EVENT OF DEFAULT AS MAY BE REQUESTED BY THE REQUIRED LENDERS IN ACCORDANCE WITH
SECTION 9; PROVIDED, HOWEVER, THAT UNLESS AND UNTIL THE ADMINISTRATIVE AGENT HAS
RECEIVED ANY SUCH REQUEST, THE ADMINISTRATIVE AGENT MAY (BUT SHALL NOT BE
OBLIGATED TO) TAKE SUCH ACTION, OR REFRAIN FROM TAKING SUCH ACTION, WITH RESPECT
TO SUCH DEFAULT OR EVENT OF DEFAULT AS IT SHALL DEEM ADVISABLE.

 

10.6.        Credit Decision.  Each Lender acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representation or warranty to it,
and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower and its Subsidiaries or Affiliates, shall
be deemed to constitute any representation or warranty by the Administrative
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates to any Lender.  Each Lender represents to the Administrative Agent
that it has, independently and without reliance upon either the Administrative
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower.  Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and any other Person party to a Loan Document. 
Except for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by the Administrative Agent, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower and any other
Person party to a

 

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Loan Document that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

 

10.7.        Costs and Expenses; Indemnification.  The Administrative Agent may
incur and pay expenses to the extent the Administrative Agent reasonably deems
necessary or appropriate for the performance and fulfillment of its functions,
powers, and obligations pursuant to the Loan Documents, including court costs,
attorneys fees and expenses, fees and expenses of financial accountants,
advisors, consultants, and appraisers, costs of collection by outside collection
agencies, auctioneer fees and expenses, and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not the Borrower
is obligated to reimburse the Administrative Agent or the Lenders for such
expenses pursuant to this Agreement or otherwise.  Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Administrative Agent’s officers, directors, employees, agents,
attorneys-in-fact or affiliates (to the extent not reimbursed by or on behalf of
the Borrower and without limiting the obligation of the Borrower to do so),
according to their pro rata shares, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to any officers, directors, employees, agents, attorneys-in-fact or affiliates
of the Administrative Agent of any portion of such Indemnified Liabilities
resulting solely from such Person’s gross negligence or willful misconduct nor
shall any Lender be liable for the obligations of any Lender in failing to make
a Loan or other extension of credit hereunder.  Without limitation of the
foregoing, each Lender shall reimburse the Administrative Agent upon demand for
such Lender’s pro rata share of any costs or out of pocket expenses (including
attorneys, accountants, advisors, and consultants fees and expenses) incurred by
the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment, or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower.  The undertaking in this Section shall survive the
payment of all Obligations under the Loan Documents and the resignation or
replacement of the Administrative Agent.

 

10.8.        Agent in Its Individual Capacity.  Each Agent and its affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in, and generally engage in any kind of banking,
trust, financial advisory, underwriting, or other business with the Borrower and
its Subsidiaries and Affiliates and any other Person party to any Loan Documents
as though Wells Fargo Foothill, Inc. were not the Administrative Agent
hereunder, and, in each case, without notice to or consent of the Lenders.  The
other Lenders acknowledge that, pursuant to such activities, the Administrative
Agent or its Affiliates may receive information regarding the Borrower or its
Affiliates and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of the Borrower or such other Person and
that prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver the Administrative Agent will use its
reasonable best efforts to obtain), the Administrative Agent shall not be under
any obligation to provide such information to them.  The terms “Lender” and
“Lenders” include WFF in its individual capacity.

 

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10.9.        Successor Administrative Agent.  The Administrative Agent may
resign as Administrative Agent upon 10 days notice to the Lenders.  If the
Administrative Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Administrative Agent for the Lenders.  If no successor
Administrative Agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders, a successor Administrative Agent.  If the
Administrative Agent has materially breached or failed to perform any material
provision of this Agreement or of applicable law, the Required Lenders may agree
in writing to remove and replace the Administrative Agent with a successor
Administrative Agent from among the Lenders.  In any such event, upon the
acceptance of its appointment as successor Administrative Agent hereunder, such
successor Administrative Agent shall succeed to all the rights, powers, and
duties of the retiring Agent and the term “Administrative Agent” shall mean such
successor Administrative Agent and the retiring Administrative Agent’s
appointment, powers, and duties as Administrative Agent shall be terminated. 
After any retiring Agent’s resignation hereunder as Agent, the provisions of
this Section 10.9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.  If no
successor Administrative Agent has accepted appointment as Administrative Agent
by the date which is 45 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Lenders appoint a successor Administrative Agent as provided for above.

 

10.10.      Lenders in Individual Capacity.  Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting, or other business with the
Borrower and its Subsidiaries and Affiliates and any other Person party to any
Loan Documents as though such Lender were not a Lender hereunder without notice
to or consent of the other Lenders.  The other Lenders acknowledge that,
pursuant to such activities, such Lender and its respective Affiliates may
receive information regarding the Borrower or its Affiliates and any other
Person party to any Loan Documents that is subject to confidentiality
obligations in favor of the Borrower or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them.

 

10.11.      Agents Generally.  Except as expressly set forth herein, no Agent
shall have any duties or responsibilities hereunder in its capacity as such.

 

10.12.      The Lead Arranger.  The Lead Arranger, in its capacity as such,
shall have no duties or responsibilities, and shall incur no liability, under
this Agreement and the other Loan Documents.

 

10.13.      The Issuing Lender; the L/C Arranger; Other Agents.  Without
limiting any rights otherwise granted herein to the L/C Arranger, any Issuing
Lender or any other Agent, it is understood and agreed that the L/C Arranger,
any Issuing Lender and the other Agents (i) shall have all of the benefits and
immunities (x) provided to the Administrative Agent in this

 

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Section 10, with respect to their rights and obligations under this Agreement
and with respect to acts taken or omissions suffered by the L/C Arranger or any
Issuing Lender in connection with Letters of Credit issued or made under this
Agreement and the documents associated therewith as fully as if the term
“Administrative Agent”, as used in this Section 10, included the L/C Arranger or
such Agent as the case may be, with respect to such acts or omissions and (y) as
additionally provided in this Agreement and (ii) shall have all of the benefits
of the provisions of Section 10.7 as fully as if the term “Administrative
Agent”, as used in Section 10.7 included the L/C Arranger, any Issuing Lender or
such other Agent; provided that, any resignation by the L/C Arranger shall apply
to its agreement to cause the issuance of Letters of Credit and, provided
further that, if the L/C Arranger shall resign (which may occur at any time for
any reason) and no successor L/C Arranger shall be appointed, no additional
Letters of Credit shall be issued under this Agreement.

 

10.14.      Agency for Perfection.  The Administrative Agent hereby appoints
each other Lender as its agent (and each Lender hereby accepts such appointment)
for the purpose of perfecting the Administrative Agent’s Liens in assets which,
in accordance with Article 8 or Article 9, as applicable, of the Code can be
perfected only by possession or control.  Should any Lender obtain possession or
control of any such Collateral, such Lender shall notify the Administrative
Agent thereof, and, promptly upon the Administrative Agent’s request therefor
shall deliver possession or control of such Collateral to the Administrative
Agent or in accordance with the Administrative Agent’s instructions.

 

10.15.      Payments by Agent to the Lenders.  All payments to be made by the
Administrative Agent to the Lenders shall be made by bank wire transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent.  Concurrently with
each such payment, the Administrative Agent shall identify whether such payment
(or any portion thereof) represents principal, premium, fees, or interest of the
Obligations under the Loan Documents.

 

10.16.      Concerning the Collateral and Related Loan Documents.  Each Lender
authorizes and directs the Administrative Agent to enter into this Agreement and
the other Loan Documents (including, without limitation, the Intercreditor
Agreement).  Each Lender agrees that any action taken by the Administrative
Agent in accordance with the terms of this Agreement or the other Loan Documents
relating to the Collateral and the exercise by the Administrative Agent of its
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.

 

10.17.      Several Obligations; No Liability.  Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or
in favor of the Administrative Agent in its capacity as such, and not by or in
favor of the Lenders, the Administrative Agent shall not have any obligation to
make any credit available hereunder.  Nothing contained herein shall confer upon
any Lender any interest in, or subject any Lender to any liability for, or in
respect of, the business, assets, profits, losses, or liabilities of any other
Lender.  Each Lender shall be solely responsible for notifying its Participants
of any matters relating to the Loan Documents to the extent any such notice may
be required, and no Lender shall have any obligation, duty, or liability to any
Participant of any other Lender.  Except as provided in Section 10.7, no Lender
shall have any liability for the acts of any Lender.  No

 

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Lender shall be responsible to the Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.

 

SECTION 11.  MISCELLANEOUS

 

11.1.        Amendments and Waivers.  Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1.  The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:

 

(I)            FORGIVE THE PRINCIPAL AMOUNT OR EXTEND THE FINAL SCHEDULED DATE
OF MATURITY OF ANY LOAN, EXTEND THE SCHEDULED DATE OF ANY AMORTIZATION PAYMENT
IN RESPECT OF ANY TERM LOAN, REDUCE THE STATED RATE OF ANY INTEREST OR FEE
PAYABLE HEREUNDER (EXCEPT (X) IN CONNECTION WITH THE WAIVER OF APPLICABILITY OF
ANY POST-DEFAULT INCREASE IN INTEREST RATES, WHICH WAIVER SHALL BE EFFECTIVE
WITH THE CONSENT OF THE MAJORITY FACILITY LENDERS OF EACH ADVERSELY AFFECTED
FACILITY) AND (Y) THAT ANY AMENDMENT OR MODIFICATION OF DEFINED TERMS USED IN
THE FINANCIAL COVENANTS IN THIS AGREEMENT SHALL NOT CONSTITUTE A REDUCTION IN
THE RATE OF INTEREST OR FEES FOR PURPOSES OF THIS CLAUSE (I)) OR EXTEND THE
SCHEDULED DATE OF ANY PAYMENT THEREOF, OR INCREASE THE AMOUNT OR EXTEND THE
EXPIRATION DATE OF ANY LENDER’S REVOLVING COMMITMENT, IN EACH CASE WITHOUT THE
WRITTEN CONSENT OF EACH LENDER DIRECTLY AFFECTED THEREBY;

 

(II)           RELEASE ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL UNDER THE
SECURITY DOCUMENTS OR RELEASE ALL OR SUBSTANTIALLY ALL OF THE SUBSIDIARY
GUARANTORS FROM THEIR OBLIGATIONS IN RESPECT OF THE FACILITIES, IN EACH CASE
WITHOUT THE WRITTEN CONSENT OF ALL THE LENDERS;

 

(III)          ELIMINATE OR REDUCE THE VOTING RIGHTS OF ANY LENDER UNDER THIS
SECTION 11.1 WITHOUT THE WRITTEN CONSENT OF SUCH LENDER;

 

(IV)          REDUCE ANY PERCENTAGE SPECIFIED IN THE DEFINITION OF REQUIRED
LENDERS OR CONSENT TO THE ASSIGNMENT OR TRANSFER BY THE BORROWER OF ANY OF ITS
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, IN
EACH CASE WITHOUT THE WRITTEN CONSENT OF ALL LENDERS;

 

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(V)           AMEND, MODIFY OR WAIVE ANY CONDITION PRECEDENT TO ANY EXTENSION OF
CREDIT UNDER THE REVOLVING FACILITY SET FORTH IN SECTION 6.3 (INCLUDING IN
CONNECTION WITH ANY WAIVER OF AN EXISTING DEFAULT OR EVENT OF DEFAULT) WITHOUT
THE WRITTEN CONSENT OF THE MAJORITY FACILITY LENDERS WITH RESPECT TO THE
REVOLVING FACILITY;

 

(VI)          SUBJECT TO THE FOLLOWING TWO PARAGRAPHS OF THIS SECTION 11.1,
AMEND, MODIFY OR WAIVE ANY PROVISION OF SECTION 4.8 WITHOUT THE WRITTEN CONSENT
OF THE MAJORITY FACILITY LENDERS IN RESPECT OF EACH FACILITY ADVERSELY AFFECTED
THEREBY, PROVIDED, THAT ANY AMENDMENT, MODIFICATION OR WAIVER OF SECTION 4.8
WHICH CHANGES THE PRO RATA PROVISION THEREIN SHALL REQUIRE THE WRITTEN CONSENT
OF EACH LENDER ADVERSELY AFFECTED THEREBY;

 

(VII)         REDUCE THE AMOUNT OF NET CASH PROCEEDS OR EXCESS CASH FLOW
REQUIRED TO BE APPLIED TO PREPAY LOANS UNDER THIS AGREEMENT WITHOUT THE WRITTEN
CONSENT OF THE MAJORITY FACILITY LENDERS WITH RESPECT TO EACH FACILITY;

 

(VIII)        REDUCE THE PERCENTAGE SPECIFIED IN THE DEFINITION OF MAJORITY
FACILITY LENDERS WITH RESPECT TO ANY FACILITY WITHOUT THE WRITTEN CONSENT OF ALL
LENDERS UNDER SUCH FACILITY;

 

(IX)           AMEND, MODIFY OR WAIVE ANY PROVISION OF SECTION 10 WITHOUT THE
WRITTEN CONSENT OF EACH AGENT ADVERSELY AFFECTED THEREBY;

 

(X)            AMEND, MODIFY OR WAIVE ANY PROVISION OF SECTION 3.3 OR 3.4
WITHOUT THE WRITTEN CONSENT OF THE SWINGLINE LENDER;

 

(XI)           AMEND, MODIFY OR WAIVE SECTION 6.5 OF THE GUARANTEE AND
COLLATERAL AGREEMENT SO AS TO ALTER THE RATABLE TREATMENT OF THE FIRST LIEN
OBLIGATIONS WITH RESPECT TO THE LOAN DOCUMENTS, THE SPECIFIED HEDGE AGREEMENTS
AND THE SPECIFIED CASH MANAGEMENT AGREEMENTS IN A MANNER ADVERSE TO ANY FIRST
LIEN QUALIFIED COUNTERPARTY WITH FIRST LIEN OBLIGATIONS THEN OUTSTANDING WITHOUT
THE WRITTEN CONSENT OF ANY SUCH FIRST LIEN QUALIFIED COUNTERPARTY; OR

 

(XII)          AMEND, MODIFY OR WAIVE ANY PROVISION OF SECTIONS 3.7 TO 3.14
WITHOUT THE WRITTEN CONSENT OF THE L/C ARRANGER.

 

Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans.  In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.

 

Notwithstanding the foregoing, this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent and the

 

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Borrower (a) to add one or more additional credit facilities to this Agreement
and to permit the extensions of credit from time to time outstanding thereunder
and the accrued interest and fees in respect thereof (collectively, the
“Additional Extensions of Credit”) to share ratably in the benefits of this
Agreement and the other Loan Documents with the Term Loans and Revolving
Extensions of Credit and the accrued interest and fees in respect thereof and
(b) to include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders and Majority Facility Lenders.

 

In addition, notwithstanding the foregoing, this Agreement may be amended with
the written consent of the Administrative Agent, the Borrower and the Lenders
providing the relevant Replacement Term Loans (as defined below) to permit the
refinancing of all outstanding Term Loans (“Refinanced Term Loans”) with a
replacement term loan tranche hereunder (“Replacement Term Loans”), provided
that (a) the aggregate principal amount of such Replacement Term Loans shall not
exceed the aggregate principal amount of such Refinanced Term Loans, (b) the
Applicable Margin for such Replacement Term Loans shall not be higher than the
Applicable Margin for such Refinanced Term Loans, (c) the weighted average life
to maturity of such Replacement Term Loans shall not be shorter than the
weighted average life to maturity of such Refinanced Term Loans at the time of
such refinancing and (d) all other terms applicable to such Replacement Term
Loans shall be substantially identical to, or less favorable to the Lenders
providing such Replacement Term Loans than, those applicable to such Refinanced
Term Loans, except to the extent necessary to provide for covenants and other
terms applicable to any period after the latest final maturity of the Term Loans
in effect immediately prior to such refinancing.

 

Notwithstanding the foregoing, any provision of this Agreement may be amended by
an agreement in writing entered into by the Borrower, the Required Lenders and
the Administrative Agent (and, if their rights or obligations are affected
thereby, the Issuing Bank and the Swingline Lender) if (i) by the terms of such
agreement the Commitments of each Lender not consenting to the amendment
provided for therein shall terminate upon the effectiveness of such amendment
and (ii) at the time such amendment becomes effective, each Lender not
consenting thereto receives payment in full of the principal of and interest
accrued on each Loan made by it and all other amounts owing to it or accrued for
its account under this Agreement.

 

11.2.        Notices.  All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the Agents, and
as set forth in an administrative questionnaire delivered to the Administrative
Agent in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto:

 

The Borrower:

 

New World Restaurant Group, Inc.
1687 Cole Boulevard
Golden, CO 80401
Attention: Richard P. Dutkiewicz, Chief

 

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 Financial Officer

 

 

Telecopy: (303) 568-8402
Telephone: (303) 568-8004

 

 

 

The Administrative Agent:

 

Wells Fargo Foothill, Inc.
2450 Colorado Avenue
Suite 3000 West
Santa Monica, CA  90404
Attention: Specialty Finance Manager
Telecopy: (310) 453-7300
Telephone: (310) 453-7442

 

provided that any notice, request or demand to or upon any Agent, the Issuing
Lender or the Lenders shall not be effective until received.

 

Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Section 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender.  The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

 

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

 

11.4.        Survival of Representations and Warranties.  All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

 

11.5.        Payment of Expenses and Taxes.  The Borrower agrees (a) to pay or
reimburse each Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to each
Agent and filing and recording fees and expenses, with statements with respect
to the foregoing initially expected (assuming the Closing Date occurs) to be
submitted to the Borrower prior to the Initial Borrowing Date (in the case of
amounts to be paid on the Initial Borrowing Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as such Agent shall
deem appropriate, (b) to pay or reimburse each Lender and each Agent

 

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for all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Lender
and of counsel to such Agent, (c) to pay, indemnify, and hold each Lender and
each Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and
(d) to pay, indemnify, and hold each Lender and each Agent and their respective
officers, directors, employees, affiliates, agents and controlling persons
(each, an “Indemnitee”) harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents (regardless of whether any Loan Party is or
is not a party to any such actions or suits) and any such other documents,
including any of the foregoing relating to the use of proceeds of the Loans or
the issuance of Letters of Credit or the causing of the issuance of Letters of
Credit or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Group Member or any of the
Properties and the reasonable fees and expenses of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against any Loan Party
under any Loan Document (all the foregoing in this clause (d), collectively, the
“Indemnified Liabilities”), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee.  Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee.  All amounts due under this
Section 11.5 shall be payable not later than ten days after written demand
therefor.  Statements payable by the Borrower pursuant to this Section 11.5
shall be submitted to Chief Financial Officer (Telephone No. (303) 568-8004)
(Telecopy No. (303) 568-8402), at the address of the Borrower set forth in
Section 11.2, or to such other Person or address as may be hereafter designated
by the Borrower in a written notice to the Administrative Agent.  The agreements
in this Section 11.5 shall survive repayment of the Loans and all other amounts
payable hereunder.

 

11.6.        Successors and Assigns; Participations and Assignments.  (a)  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any affiliate of the L/C Arranger that issues any Letter of Credit or
that causes any Letter of Credit to be issued), except that (i) the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may

 

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assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section.

 

(B)           (I)  SUBJECT TO THE CONDITIONS SET FORTH IN
PARAGRAPH (B)(II) BELOW, ANY LENDER MAY ASSIGN TO ONE OR MORE ASSIGNEES (EACH,
AN “ASSIGNEE”) ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT (INCLUDING ALL OR A PORTION OF ITS COMMITMENTS AND THE LOANS AT THE
TIME OWING TO IT) WITH THE PRIOR WRITTEN CONSENT (ANY SUCH CONSENT NOT TO BE
UNREASONABLY WITHHELD) OF:

 

(A)          THE BORROWER, PROVIDED THAT NO CONSENT OF THE BORROWER SHALL BE
REQUIRED FOR AN (X) ASSIGNMENT TO A LENDER, AN AFFILIATE OF A LENDER, AN
APPROVED FUND (AS DEFINED BELOW) OR, IF AN EVENT OF DEFAULT UNDER
SECTION 9(A) OR (F) HAS OCCURRED AND IS CONTINUING, ANY OTHER PERSON, (Y) ANY
ASSIGNMENT BY THE ADMINISTRATIVE AGENT OR THE LEAD ARRANGER (OR THEIR
AFFILIATES), PROVIDED THAT ANY SUCH ASSIGNMENT OF A TERM LOAN COMMITMENT
PURSUANT TO THIS CLAUSE (Y) SHALL REQUIRE THE CONSENT OF THE BORROWER (SUCH
CONSENT NOT TO BE UNREASONABLY WITHHELD) UNLESS SUCH ASSIGNMENT IS MADE IN
CONNECTION WITH THE PRIMARY SYNDICATION OF THE FACILITIES TO A PERSON DISCLOSED
TO THE BORROWER PRIOR TO THE CLOSING DATE OR (Z) ANY ASSIGNMENT OF TERM LOANS;
AND

 

(B)           THE ADMINISTRATIVE AGENT, PROVIDED THAT NO CONSENT OF THE
ADMINISTRATIVE AGENT SHALL BE REQUIRED FOR (X) AN ASSIGNMENT TO AN ASSIGNEE THAT
IS A LENDER IMMEDIATELY PRIOR TO GIVING EFFECT TO SUCH ASSIGNMENT, EXCEPT IN THE
CASE OF AN ASSIGNMENT OF A REVOLVING COMMITMENT TO AN ASSIGNEE THAT DOES NOT
ALREADY HAVE A REVOLVING COMMITMENT, (Y) ANY ASSIGNMENT BY THE ADMINISTRATIVE
AGENT (OR ITS AFFILIATES) OR (Z) ANY ASSIGNMENT OF TERM LOANS; AND

 

(C)           IN THE CASE OF ANY ASSIGNMENT OF A REVOLVING COMMITMENT, THE L/C
ARRANGER.

 

(II)           ASSIGNMENTS SHALL BE SUBJECT TO THE FOLLOWING ADDITIONAL
CONDITIONS:

 

(A)          EXCEPT IN THE CASE OF AN ASSIGNMENT TO A LENDER, AN AFFILIATE OF A
LENDER OR AN APPROVED FUND OR AN ASSIGNMENT OF THE ENTIRE REMAINING AMOUNT OF
THE ASSIGNING LENDER’S COMMITMENTS OR LOANS UNDER ANY FACILITY, THE AMOUNT OF
THE COMMITMENTS OR LOANS OF THE ASSIGNING LENDER SUBJECT TO EACH SUCH ASSIGNMENT
(DETERMINED AS OF THE DATE THE ASSIGNMENT AND ASSUMPTION WITH RESPECT TO SUCH
ASSIGNMENT IS DELIVERED TO THE ADMINISTRATIVE AGENT) SHALL NOT BE LESS THAN
$1,000,000 AND, AFTER GIVING EFFECT THERETO, THE ASSIGNING LENDER (IF IT SHALL
RETAIN ANY REVOLVING COMMITMENT OR LOANS) SHALL HAVE COMMITMENTS AND LOANS
AGGREGATING AT LEAST $1,000,000, UNLESS EACH OF THE BORROWER AND THE
ADMINISTRATIVE AGENT OTHERWISE CONSENT, PROVIDED THAT (1) NO SUCH CONSENT OF THE
BORROWER SHALL BE REQUIRED IF AN EVENT OF DEFAULT UNDER SECTION 9(A) OR (F)

 

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HAS OCCURRED AND IS CONTINUING AND (2) SUCH AMOUNTS SHALL BE AGGREGATED IN
RESPECT OF EACH LENDER AND ITS AFFILIATES OR APPROVED FUNDS, IF ANY;

 

(B)           THE PARTIES TO EACH ASSIGNMENT SHALL EXECUTE AND DELIVER TO THE
ADMINISTRATIVE AGENT AN ASSIGNMENT AND ASSUMPTION, AND, SUBJECT TO SECTION 4.13,
THE ASSIGNING LENDER OR THE ASSIGNEE LENDER SHALL PAY A PROCESSING AND
RECORDATION FEE OF $3,500 (EXCEPT FOR THE ADMINISTRATIVE AGENT, THE LEAD
ARRANGER AND ANY OF THEIR AFFILIATES AND THE BORROWER AND EXCEPT FOR ASSIGNMENTS
BY A LENDER TO ANY OF ITS AFFILIATES OR APPROVED FUNDS);

 

(C)           THE ASSIGNEE, IF IT SHALL NOT BE A LENDER, SHALL DELIVER TO THE
ADMINISTRATIVE AGENT AN ADMINISTRATIVE QUESTIONNAIRE; AND

 

(D)          IN THE CASE OF AN ASSIGNMENT BY A LENDER TO A CLO RELATED TO SUCH
LENDER (AS DEFINED BELOW), THE ASSIGNING LENDER SHALL RETAIN THE SOLE RIGHT TO
APPROVE ANY AMENDMENT, MODIFICATION OR WAIVER OF ANY PROVISION OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, PROVIDED THAT THE ASSIGNMENT AND ASSUMPTION
BETWEEN SUCH LENDER AND SUCH CLO MAY PROVIDE THAT SUCH LENDER WILL NOT, WITHOUT
THE CONSENT OF SUCH CLO, AGREE TO ANY AMENDMENT, MODIFICATION OR WAIVER THAT
(1) REQUIRES THE CONSENT OF EACH LENDER DIRECTLY AFFECTED THEREBY PURSUANT TO
THE PROVISO TO THE SECOND SENTENCE OF SECTION 11.1 AND (2) DIRECTLY AFFECTS SUCH
CLO.

 

For the purposes of this Section 11.6, the terms “Approved Fund” and “CLO” have
the following meanings:

 

“Approved Fund” means (a) a CLO and (b) with respect to any Lender that is a
fund which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans and similar extensions of credit and is managed
by the same investment advisor as such Lender or by an affiliate of such
investment advisor.

 

“CLO” means any entity (whether a corporation, partnership, trust or otherwise)
that is engaged in making, purchasing, holding or otherwise investing in bank
loans and similar extensions of credit in the ordinary course of its business
and is administered or managed by a Lender or an affiliate of such Lender.

 

(III)          SUBJECT TO ACCEPTANCE AND RECORDING THEREOF PURSUANT TO
PARAGRAPH (B)(IV) BELOW, FROM AND AFTER THE EFFECTIVE DATE SPECIFIED IN EACH
ASSIGNMENT AND ASSUMPTION THE ASSIGNEE THEREUNDER SHALL BE A PARTY HERETO AND,
TO THE EXTENT OF THE INTEREST ASSIGNED BY SUCH ASSIGNMENT AND ASSUMPTION, HAVE
THE RIGHTS AND OBLIGATIONS OF A LENDER UNDER THIS AGREEMENT, AND THE ASSIGNING
LENDER THEREUNDER SHALL, TO THE EXTENT OF THE INTEREST ASSIGNED BY SUCH
ASSIGNMENT AND ASSUMPTION, BE RELEASED FROM ITS OBLIGATIONS UNDER THIS AGREEMENT
(AND, IN THE CASE OF AN ASSIGNMENT AND ASSUMPTION COVERING ALL OF THE ASSIGNING
LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, SUCH LENDER SHALL CEASE TO
BE A PARTY HERETO BUT SHALL CONTINUE TO BE ENTITLED TO THE BENEFITS OF
SECTIONS 4.9, 4.10, 4.11

 

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AND 10.5).  ANY ASSIGNMENT OR TRANSFER BY A LENDER OF RIGHTS OR OBLIGATIONS
UNDER THIS AGREEMENT THAT DOES NOT COMPLY WITH THIS SECTION 11.6 SHALL BE
TREATED FOR PURPOSES OF THIS AGREEMENT AS A SALE BY SUCH LENDER OF A
PARTICIPATION IN SUCH RIGHTS AND OBLIGATIONS IN ACCORDANCE WITH PARAGRAPH (C) OF
THIS SECTION.

 

(IV)          THE ADMINISTRATIVE AGENT, ACTING FOR THIS PURPOSE AS AN AGENT OF
THE BORROWER, SHALL MAINTAIN AT ONE OF ITS OFFICES A COPY OF EACH ASSIGNMENT AND
ASSUMPTION DELIVERED TO IT AND A REGISTER FOR THE RECORDATION OF THE NAMES AND
ADDRESSES OF THE LENDERS, AND THE COMMITMENTS OF, AND PRINCIPAL AMOUNT OF THE
LOANS AND L/C OBLIGATIONS OWING TO, EACH LENDER PURSUANT TO THE TERMS HEREOF
FROM TIME TO TIME (THE “REGISTER”).  THE ENTRIES IN THE REGISTER SHALL BE
CONCLUSIVE, AND THE BORROWER, THE ADMINISTRATIVE AGENT, THE L/C ARRANGER AND THE
LENDERS MAY TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE REGISTER PURSUANT TO
THE TERMS HEREOF AS A LENDER HEREUNDER FOR ALL PURPOSES OF THIS AGREEMENT,
NOTWITHSTANDING NOTICE TO THE CONTRARY.  THE REGISTER SHALL BE AVAILABLE FOR
INSPECTION BY THE BORROWER, THE L/C ARRANGER AND ANY LENDER, AT ANY REASONABLE
TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.

 

(V)           UPON ITS RECEIPT OF A DULY COMPLETED ASSIGNMENT AND ASSUMPTION
EXECUTED BY AN ASSIGNING LENDER AND AN ASSIGNEE, THE ASSIGNEE’S COMPLETED
ADMINISTRATIVE QUESTIONNAIRE (UNLESS THE ASSIGNEE SHALL ALREADY BE A LENDER
HEREUNDER) AND ANY WRITTEN CONSENT TO SUCH ASSIGNMENT REQUIRED BY
PARAGRAPH (B) OF THIS SECTION, THE ADMINISTRATIVE AGENT SHALL ACCEPT SUCH
ASSIGNMENT AND ASSUMPTION AND RECORD THE INFORMATION CONTAINED THEREIN IN THE
REGISTER.  NO ASSIGNMENT SHALL BE EFFECTIVE FOR PURPOSES OF THIS AGREEMENT
UNLESS IT HAS BEEN RECORDED IN THE REGISTER AS PROVIDED IN THIS PARAGRAPH.

 

(C)           (I)  ANY LENDER MAY, WITHOUT THE CONSENT OF THE BORROWER OR THE
ADMINISTRATIVE AGENT, SELL PARTICIPATIONS TO ONE OR MORE BANKS OR OTHER ENTITIES
(A “PARTICIPANT”) IN ALL OR A PORTION OF SUCH LENDER’S RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF ITS COMMITMENTS AND THE
LOANS OWING TO IT); PROVIDED THAT (A) SUCH LENDER’S OBLIGATIONS UNDER THIS
AGREEMENT SHALL REMAIN UNCHANGED, (B) SUCH LENDER SHALL REMAIN SOLELY
RESPONSIBLE TO THE OTHER PARTIES HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS
AND (C) THE BORROWER, THE ADMINISTRATIVE AGENT, THE L/C ARRANGER AND THE OTHER
LENDERS SHALL CONTINUE TO DEAL SOLELY AND DIRECTLY WITH SUCH LENDER IN
CONNECTION WITH SUCH LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT.  ANY
AGREEMENT PURSUANT TO WHICH A LENDER SELLS SUCH A PARTICIPATION SHALL PROVIDE
THAT SUCH LENDER SHALL RETAIN THE SOLE RIGHT TO ENFORCE THIS AGREEMENT AND TO
APPROVE ANY AMENDMENT, MODIFICATION OR WAIVER OF ANY PROVISION OF THIS
AGREEMENT; PROVIDED THAT SUCH AGREEMENT MAY PROVIDE THAT SUCH LENDER WILL NOT,
WITHOUT THE CONSENT OF THE PARTICIPANT, AGREE TO ANY AMENDMENT, MODIFICATION OR
WAIVER THAT (1) REQUIRES THE CONSENT OF EACH LENDER DIRECTLY AFFECTED THEREBY
PURSUANT TO THE PROVISO TO THE SECOND SENTENCE OF SECTION 11.1 AND (2) DIRECTLY
AFFECTS SUCH PARTICIPANT.  SUBJECT TO PARAGRAPH (C)(II) OF THIS SECTION, THE
BORROWER AGREES THAT EACH PARTICIPANT SHALL BE ENTITLED TO THE BENEFITS OF
SECTIONS 4.9, 4.10 AND 4.11 TO THE SAME EXTENT AS IF IT WERE A LENDER AND HAD
ACQUIRED ITS INTEREST BY ASSIGNMENT PURSUANT TO PARAGRAPH (B) OF THIS SECTION. 
TO THE EXTENT PERMITTED BY LAW, EACH PARTICIPANT ALSO SHALL BE ENTITLED TO THE
BENEFITS OF SECTION 10.14(B) AS THOUGH IT WERE A LENDER, PROVIDED SUCH
PARTICIPANT SHALL BE SUBJECT TO SECTION 10.14(B) AS THOUGH IT WERE A LENDER.

 

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(II)           A PARTICIPANT SHALL NOT BE ENTITLED TO RECEIVE ANY GREATER
PAYMENT UNDER SECTION 4.9 OR 4.10 THAN THE APPLICABLE LENDER WOULD HAVE BEEN
ENTITLED TO RECEIVE WITH RESPECT TO THE PARTICIPATION SOLD TO SUCH PARTICIPANT,
UNLESS THE SALE OF THE PARTICIPATION TO SUCH PARTICIPANT IS MADE WITH THE
BORROWER’S PRIOR WRITTEN CONSENT.  ANY PARTICIPANT THAT IS A NON-U.S. LENDER
SHALL NOT BE ENTITLED TO THE BENEFITS OF SECTION 4.10 UNLESS SUCH PARTICIPANT
COMPLIES WITH SECTIONS 4.10(D) AND 4.10(E).

 

(D)           ANY LENDER MAY AT ANY TIME PLEDGE OR ASSIGN A SECURITY INTEREST IN
ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT TO SECURE OBLIGATIONS OF
SUCH LENDER, INCLUDING ANY PLEDGE OR ASSIGNMENT TO SECURE OBLIGATIONS TO A
FEDERAL RESERVE BANK, AND THIS SECTION SHALL NOT APPLY TO ANY SUCH PLEDGE OR
ASSIGNMENT OF A SECURITY INTEREST; PROVIDED THAT NO SUCH PLEDGE OR ASSIGNMENT OF
A SECURITY INTEREST SHALL RELEASE A LENDER FROM ANY OF ITS OBLIGATIONS HEREUNDER
OR SUBSTITUTE ANY SUCH PLEDGEE OR ASSIGNEE FOR SUCH LENDER AS A PARTY HERETO.

 

(E)           THE BORROWER, UPON RECEIPT OF WRITTEN NOTICE FROM THE RELEVANT
LENDER, AGREES TO ISSUE NOTES TO ANY LENDER REQUIRING NOTES TO FACILITATE
TRANSACTIONS OF THE TYPE DESCRIBED IN PARAGRAPH (D) ABOVE.

 

(F)            NOTWITHSTANDING THE FOREGOING, ANY CONDUIT LENDER MAY ASSIGN ANY
OR ALL OF THE LOANS IT MAY HAVE FUNDED HEREUNDER TO ITS DESIGNATING LENDER
WITHOUT THE CONSENT OF THE BORROWER OR THE ADMINISTRATIVE AGENT AND WITHOUT
REGARD TO THE LIMITATIONS SET FORTH IN SECTION 11.6(B).  EACH OF THE BORROWER,
EACH LENDER AND THE ADMINISTRATIVE AGENT HEREBY CONFIRMS THAT IT WILL NOT
INSTITUTE AGAINST A CONDUIT LENDER OR JOIN ANY OTHER PERSON IN INSTITUTING
AGAINST A CONDUIT LENDER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY
OR LIQUIDATION PROCEEDING UNDER ANY STATE BANKRUPTCY OR SIMILAR LAW, FOR ONE
YEAR AND ONE DAY AFTER THE PAYMENT IN FULL OF THE LATEST MATURING COMMERCIAL
PAPER NOTE ISSUED BY SUCH CONDUIT LENDER; PROVIDED, HOWEVER, THAT EACH LENDER
DESIGNATING ANY CONDUIT LENDER HEREBY AGREES TO INDEMNIFY, SAVE AND HOLD
HARMLESS EACH OTHER PARTY HERETO FOR ANY LOSS, COST, DAMAGE OR EXPENSE ARISING
OUT OF ITS INABILITY TO INSTITUTE SUCH A PROCEEDING AGAINST SUCH CONDUIT LENDER
DURING SUCH PERIOD OF FORBEARANCE.

 

11.7.        Adjustments; Set-off.  (a)  Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a “Benefitted
Lender”) shall receive any payment of all or part of the Obligations owing to it
under the Loan Documents, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 9(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations under the Loan Documents owing to such other Lender,
such Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of the Obligations under the Loan
Documents owing to each such other Lender, or shall provide such other Lenders
with the benefits of any such collateral, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral
ratably with each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.

 

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(B)           IN ADDITION TO ANY RIGHTS AND REMEDIES OF THE LENDERS PROVIDED BY
LAW, EACH LENDER SHALL HAVE THE RIGHT, WITHOUT PRIOR NOTICE TO THE BORROWER, ANY
SUCH NOTICE BEING EXPRESSLY WAIVED BY THE BORROWER TO THE EXTENT PERMITTED BY
APPLICABLE LAW, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT UNDER SECTION 9(A) HEREOF, TO SET OFF AND APPROPRIATE AND APPLY AGAINST
SUCH AMOUNT ANY AND ALL DEPOSITS (GENERAL OR SPECIAL, TIME OR DEMAND,
PROVISIONAL OR FINAL), IN ANY CURRENCY, AND ANY OTHER CREDITS, INDEBTEDNESS OR
CLAIMS, IN ANY CURRENCY, IN EACH CASE WHETHER DIRECT OR INDIRECT, ABSOLUTE OR
CONTINGENT, MATURED OR UNMATURED, AT ANY TIME HELD OR OWING BY SUCH LENDER OR
ANY BRANCH OR AGENCY THEREOF TO OR FOR THE CREDIT OR THE ACCOUNT OF THE
BORROWER, AS THE CASE MAY BE.  EACH LENDER AGREES PROMPTLY TO NOTIFY THE
BORROWER AND THE ADMINISTRATIVE AGENT AFTER ANY SUCH SETOFF AND APPLICATION MADE
BY SUCH LENDER, PROVIDED THAT THE FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT
THE VALIDITY OF SUCH SETOFF AND APPLICATION.

 

11.8.        Counterparts; Electronic Execution.  This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement.  Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. 
Any party delivering an executed counterpart of this Agreement by telefacsimile
or other electronic method of transmission also shall deliver an original
executed counterpart of this Agreement but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding
effect of this Agreement.  The foregoing shall apply to each other Loan Document
mutatis mutandis.

 

11.9.        Severability.  Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the
legal enforceability of any specific provision.

 

11.10.      Integration; Intercreditor and Subordination Agreements.  This
Agreement, together with the other Loan Documents, reflects the entire
understanding of the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, before the date hereof.  Each Lender hereby authorizes and directs
the Administrative Agent to enter into the Intercreditor Agreement and
Subordination Agreement on its behalf and hereby approves and agrees to be bound
by the terms of the Intercreditor Agreement and the Subordination Agreement. 
Notwithstanding anything to the contrary herein, in the case of any
inconsistency between this Agreement and the Intercreditor Agreement, the
Intercreditor Agreement shall govern.

 

11.11.      GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

11.12.      Submission To Jurisdiction; Waivers.  The Borrower hereby
irrevocably and unconditionally:

 

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(A)           SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT
IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK LOCATED IN THE CITY OR COUNTY OF NEW YORK, THE COURTS OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM
ANY THEREOF;

 

(B)           CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;

 

(C)           AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 11.2 OR AT SUCH OTHER ADDRESS OF WHICH THE
ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;

 

(D)           AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION; AND

 

(E)           WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN
THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

 

11.13.      Acknowledgments.  The Borrower hereby acknowledges that:

 

(A)           IT HAS BEEN ADVISED BY COUNSEL IN THE NEGOTIATION, EXECUTION AND
DELIVERY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS;

 

(B)           NO AGENT OR LENDER HAS ANY FIDUCIARY RELATIONSHIP WITH OR DUTY TO
THE BORROWER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS, AND THE RELATIONSHIP BETWEEN THE AGENTS AND LENDERS, ON
ONE HAND, AND THE BORROWER, ON THE OTHER HAND, IN CONNECTION HEREWITH OR
THEREWITH IS SOLELY THAT OF DEBTOR AND CREDITOR; AND

 

(C)           NO JOINT VENTURE IS CREATED HEREBY OR BY THE OTHER LOAN DOCUMENTS
OR OTHERWISE EXISTS BY VIRTUE OF THE TRANSACTIONS CONTEMPLATED HEREBY AMONG THE
LENDERS OR AMONG THE BORROWER AND THE LENDERS.

 

11.14.      Releases of Guarantees and Liens.  (a)  Notwithstanding anything to
the contrary contained herein or in any other Loan Document, the Administrative
Agent is hereby irrevocably authorized by each Lender (without requirement of
notice to or consent of any Lender except as expressly required by Section 11.1)
to take any action requested by the Borrower having the effect of releasing any
Collateral or guarantee obligations (i) to the extent necessary to permit
consummation of any transaction not prohibited by any Loan Document or

 

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that has been consented to in accordance with Section 11.1 or (ii) under the
circumstances described in paragraph (b) below.

 

(B)           AT SUCH TIME AS THE LOANS, THE REIMBURSEMENT OBLIGATIONS AND THE
OTHER FIRST LIEN OBLIGATIONS UNDER THE LOAN DOCUMENTS (OTHER THAN FIRST LIEN
OBLIGATIONS UNDER OR IN RESPECT OF SPECIFIED HEDGE AGREEMENTS OR SPECIFIED CASH
MANAGEMENT AGREEMENTS AND UNASSERTED CONTINGENT INDEMNIFICATION OBLIGATIONS)
SHALL HAVE BEEN PAID IN FULL, THE COMMITMENTS HAVE BEEN TERMINATED AND NO
LETTERS OF CREDIT SHALL BE OUTSTANDING, THE COLLATERAL SHALL BE RELEASED FROM
THE LIENS CREATED BY THE SECURITY DOCUMENTS, AND THE SECURITY DOCUMENTS AND ALL
OBLIGATIONS (OTHER THAN THOSE EXPRESSLY STATED TO SURVIVE SUCH TERMINATION) OF
THE ADMINISTRATIVE AGENT AND EACH LOAN PARTY UNDER THE SECURITY DOCUMENTS SHALL
TERMINATE, ALL WITHOUT DELIVERY OF ANY INSTRUMENT OR PERFORMANCE OF ANY ACT BY
ANY PERSON, PROVIDED THAT, THE ADMINISTRATIVE AGENT AGREES UPON SUCH TERMINATION
TO PROMPTLY DELIVER TO THE BORROWER UCC-3 TERMINATION STATEMENTS, DISCHARGES OF
EXISTING MORTGAGES, AND OTHER RELEASE AND TERMINATION DOCUMENTS AS ARE
REASONABLY REQUESTED BY THE BORROWER TO DISCHARGE THE LIENS AS A MATTER OF
PUBLIC RECORD.

 

11.15.      Confidentiality.  The Administrative Agent and Lenders each
individually (and not jointly or jointly and severally) agree that all material
non-public information regarding Borrower and its Subsidiaries, their
operations, assets, and existing and contemplated business plans shall be
treated by the Administrative Agent and the Lenders in a confidential manner,
and shall not be disclosed by the Administrative Agent and the Lenders to
Persons who are not parties to this Agreement, except:  (a) to attorneys for and
other advisors, accountants, auditors, and consultants to any Lender (it being
understood that the persons to whom such disclosure is made will be informed of
the confidential nature of such information and the Administrative Agent or such
Lender, as the case may be, shall be responsible for the compliance of such
person with this Section), (b) to Subsidiaries and Affiliates of any Lenders,
provided that any such Subsidiary or Affiliate shall have agreed to receive such
information hereunder subject to the terms of this Section 11.15, (c) as may be
required by statute, decision, or judicial or administrative order, rule, or
regulation, (d) as may be agreed to in writing in advance by Borrower or its
Subsidiaries or as requested or required by any Governmental Authority pursuant
to any subpoena or other legal process, (e) as to any such information that is
or becomes generally available to the public (other than as a result of
prohibited disclosure by the Administrative Agent or the Lenders), (f) in
connection with any assignment, prospective assignment, sale, prospective sale,
participation or prospective participations, or pledge or prospective pledge of
any Lender’s interest under this Agreement, provided that any such assignee,
prospective assignee, purchaser, prospective purchaser, participant, prospective
participant, pledgee, or prospective pledgee shall have agreed in writing to
receive such information hereunder subject to the terms of this Section, and
(g) in connection with any litigation or other adversary proceeding involving
parties hereto which such litigation or adversary proceeding involves claims
related to the rights or duties of such parties under this Agreement or the
other Loan Documents.  The Administrative Agent and each Lender agrees that in
the event the Administrative Agent or such Lender, as the case may be, is
requested or required to disclose such information pursuant to clause (c) or
(d) above, the Administrative Agent or such Lender, as the case may be, shall,
to the extent practicable, provide the Borrower with notice of any such request
or requirement.  The provisions of this Section 11.15 shall survive for two
calendar years after the payment in full of the Obligations under the Loan
Documents.

 

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11.16.      Revival and Reinstatement of Obligations.  If the incurrence or
payment of the Obligations by the Borrower under the Loan Documents or the
transfer to the Lenders of any property should for any reason subsequently be
declared to be void or voidable under any sate or federal law relating to
creditors’ rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments
of money or transfers of property (collectively, a “Voidable Transfer”), and if
the Lenders are required to repay or restore, in whole or in part, any such
Voidable Transfer, or elects to do so upon the reasonable advice of their
respective counsel, then, as to any Voidable Transfer, or the amount thereof
that the Lenders are required or elect to repay or restore, and as to all
reasonable costs, expenses and attorneys fees of the lenders related thereto,
the liability of the Borrower automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.

 

11.17.      WAIVERS OF JURY TRIAL.  THE BORROWER, THE AGENTS AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

 

11.18.      Delivery of Addenda.  Each initial Lender shall become a party to
this Agreement by delivering to the Administrative Agent an Addendum duly
executed by such Lender.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

 

NEW WORLD RESTAURANT GROUP, INC.

 

 

 

 

 

 

 

By:

 /s/ Paul J.B. Murphy, III

 

 

 

Name:

Paul J.B. Murphy, III

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

BEAR, STEARNS & CO. INC., as Sole Lead
Arranger and Sole Bookrunner

 

 

 

 

 

 

 

By:

 /s/ Bram Smith

 

 

 

Name:

Bram Smith

 

 

Title:

Senior Managing Director

 

 

 

 

 

 

 

WELLS FARGO FOOTHILL, INC., as
Administrative Agent and as L/C Arranger

 

 

 

 

 

 

 

By:

 /s/ Kevin S. Fong

 

 

 

Name:

Kevin S. Fong

 

 

Title:

Vice President

 

 

[Signature Page to First Lien Credit Agreement]

 

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Annex A

 

PRICING GRID

 

Pricing Level

 

Applicable Margin
for Eurodollar
Loans

 

Applicable Margin for
Base Rate Loans

 

I

 

3.25

%

2.25

%

II

 

3.00

%

2.00

%

III

 

2.75

%

1.75

%

 

The Applicable Margin shall be adjusted, on and after the first Adjustment Date
(as defined below) occurring after the date which is twelve months after the
Initial Borrowing Date, based on changes in the Consolidated Leverage Ratio,
with such adjustments to become effective on the date (the “Adjustment Date”)
that is three Business Days after the date on which the relevant financial
statements are delivered to the Lenders pursuant to Section 7.1 and to remain in
effect until the next adjustment to be effected pursuant to this paragraph.  If
any financial statements referred to above are not delivered within the time
periods specified in Section 7.1, then, until the date that is three Business
Days after the date on which such financial statements are delivered, the
highest rate set forth in each column of the Pricing Grid shall apply.  On each
Adjustment Date occurring after the date that is twelve months after the Initial
Borrowing Date, the Applicable Margin shall be adjusted to be equal to the
Applicable Margins opposite the Pricing Level determined to exist on such
Adjustment Date from the financial statements relating to such Adjustment Date.

 

As used herein, the following rules shall govern the determination of Pricing
Levels on each Adjustment Date:

 

“Pricing Level I”  shall exist on an Adjustment Date if the Consolidated
Leverage Ratio for the relevant period is greater than or equal to 4.50 to 1.00.

 

“Pricing Level II”  shall exist on an Adjustment Date if the Consolidated
Leverage Ratio for the relevant period is less than 4.50 to 1.00 but greater
than or equal to 3.5 to 1.00.

 

“Pricing Level III”  shall exist on an Adjustment Date if the Consolidated
Leverage Ratio for the relevant period is less than 3.50 to 1.00.

 

Annex A

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