Exhibit 10.1

CREDIT AND GUARANTY AGREEMENT

dated as of December 9, 2010

among

MORTON’S OF CHICAGO, INC.

MORTON’S RESTAURANT GROUP, INC.

CERTAIN SUBSIDIARIES OF MORTON’S RESTAURANT GROUP, INC.

as Guarantors,

VARIOUS LENDERS,

GOLDMAN SACHS BANK USA

as Administrative Agent, Collateral Agent, and Lead Arranger

 

 

$70,000,000 Senior Secured Credit Facilities

 

 

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TABLE OF CONTENTS

 

        

Page

SECTION 1. DEFINITIONS AND INTERPRETATION    1

1.1

  Definitions    1

1.2

  Accounting Terms   

34

1.3

  Interpretation, etc.   

35

1.4

  Certain Calculations   

35

SECTION 2. LOANS

  

37

2.1

  Term Loans   

37

2.2

  Revolving Loans   

37

2.3

  [Reserved.]   

39

2.4

  Pro Rata Shares; Availability of Funds   

39

2.5

  Use of Proceeds   

39

2.6

  Evidence of Debt; Register; Lenders’ Books and Records; Notes   

40

2.7

  Interest on Loans   

40

2.8

  Conversion/Continuation   

42

2.9

  Default Interest   

42

2.10

  Fees   

43

2.11

  Scheduled Payments/Commitment Reductions   

44

2.12

  Voluntary Prepayments/Commitment Reductions   

45

2.13

  Mandatory Prepayments/Commitment Reductions   

46

2.14

  Application of Prepayments/Reductions   

48

2.15

  General Provisions Regarding Payments   

49

2.16

  Ratable Sharing   

51

2.17

  Making or Maintaining LIBOR Rate Loans   

52

2.18

  Increased-Costs; Capital Adequacy; etc.   

53

2.19

  Taxes; Withholding, etc.   

55

2.20

  Obligation to Mitigate   

57

2.21

  Defaulting Lenders   

57

2.22

  Removal or Replacement of a Lender   

58

SECTION 3. CONDITIONS PRECEDENT

  

59

3.1

  Closing Date   

59

3.2

  Conditions to Each Credit Extension   

63

3.3

  Conditions Subsequent to the Closing Date   

63

SECTION 4. REPRESENTATIONS AND WARRANTIES

  

64

4.1

  Organization; Requisite Power and Authority; Qualification   

64

4.2

  Capital Stock and Ownership   

64

4.3

  Due Authorization   

64

4.4

  No Conflict   

64

4.5

  Governmental Consents   

65

4.6

  Binding Obligation   

65

 

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4.7

  Historical Financial Statements    65

4.8

  Projections    65

4.9

  No Material Adverse Effect    66

4.10

  No Restricted Junior Payments    66

4.11

  Adverse Proceedings, etc.    66

4.12

  Payment of Taxes    66

4.13

  Properties    66

4.14

  Environmental Matters    67

4.15

  No Defaults    67

4.16

  Material Contracts    68

4.17

  Governmental Regulation    68

4.18

  Margin Stock    68

4.19

  Employee Matters    68

4.20

  Employee Benefit Plans    68

4.21

  Certain Fees    69

4.22

  Solvency    69

4.23

  Subordinated Indebtedness Documents    69

4.24

  Compliance with Statutes, etc.    69

4.25

  Disclosure    69

4.26

  Patriot Act    70

4.27

  Inactive Subsidiaries    70

SECTION 5. AFFIRMATIVE COVENANTS

   70

5.1

  Financial Statements and Other Reports    70

5.2

  Existence    73

5.3

  Payment of Taxes and Claims    74

5.4

  Maintenance of Properties    74

5.5

  Insurance    74

5.6

  Inspections    75

5.7

  Lenders Meetings    75

5.8

  Compliance with Laws    75

5.9

  Environmental    75

5.10

  Subsidiaries    77

5.11

  Additional Material Real Estate Assets    77

5.12

  [Reserved]    78

5.13

  Further Assurances    78

5.14

  Miscellaneous Business Covenants    78

5.15

  Post Closing Matters    79

5.16

  Material Contracts    79

SECTION 6. NEGATIVE COVENANTS

   79

6.1

  Indebtedness    79

6.2

  Liens    81

6.3

  Equitable Lien    83

6.4

  No Further Negative Pledges    84

6.5

  Restricted Junior Payments    84

 

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6.6

  Restrictions on Subsidiary Distributions    85

6.7

  Investments   

85

6.8

  Financial Covenants   

86

6.9

  Fundamental Changes; Disposition of Assets; Acquisitions   

89

6.10

  Disposal of Subsidiary Interests   

89

6.11

  Sales and Lease-Backs   

90

6.12

  Transactions with Shareholders and Affiliates   

90

6.13

  Conduct of Business; Foreign Subsidiaries   

90

6.14

  Permitted Activities of Holdings and Intermediate Holdings   

90

6.15

  [Reserved.]   

91

6.16

  Amendments or Waivers with Respect to Subordinated Indebtedness   

91

6.17

  Fiscal Year   

91

6.18

  Deposit Accounts   

91

6.19

  Amendments to Organizational Agreements and Material Contracts   

91

6.20

  Prepayments of Certain Indebtedness   

92

SECTION 7. GUARANTY

  

92

7.1

  Guaranty of the Obligations   

92

7.2

  Contribution by Guarantors   

92

7.3

  Payment by Guarantors   

93

7.4

  Liability of Guarantors Absolute   

93

7.5

  Waivers by Guarantors   

95

7.6

  Guarantors’ Rights of Subrogation, Contribution, etc.   

96

7.7

  Subordination of Other Obligations   

96

7.8

  Continuing Guaranty   

97

7.9

  Authority of Guarantors or Company   

97

7.10

  Financial Condition of Company   

97

7.11

  Bankruptcy, etc.   

97

7.12

  Discharge of Guaranty Upon Sale of Guarantor   

98

SECTION 8. EVENTS OF DEFAULT

  

98

8.1

  Events of Default   

98

SECTION 9. AGENTS

  

101

9.1

  Appointment of Agents   

101

9.2

  Powers and Duties   

101

9.3

  General Immunity   

102

9.4

  Agents Entitled to Act as Lender   

103

9.5

  Lenders’ Representations, Warranties and Acknowledgment   

103

9.6

  Right to Indemnity   

103

9.7

  Successor Administrative Agent and Collateral Agent   

104

9.8

  Collateral Documents and Guaranty   

105

SECTION 10. MISCELLANEOUS

  

106

10.1

  Notices   

106

10.2

  Expenses   

106

 

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10.3

  Indemnity    107

10.4

  Set-Off   

107

10.5

  Amendments and Waivers   

108

10.6

  Successors and Assigns; Participations   

110

10.7

  Independence of Covenants   

113

10.8

  Survival of Representations, Warranties and Agreements   

113

10.9

  No Waiver; Remedies Cumulative   

113

10.10

  Marshalling; Payments Set Aside   

113

10.11

  Severability   

114

10.12

  Obligations Several; Actions in Concert   

114

10.13

  Headings   

114

10.14

  APPLICABLE LAW   

114

10.15

  CONSENT TO JURISDICTION   

114

10.16

  WAIVER OF JURY TRIAL   

115

10.17

  Confidentiality   

116

10.18

  Usury Savings Clause   

116

10.19

  Counterparts   

117

10.20

  Effectiveness   

117

10.21

  Patriot Act   

117

10.22

  No Advisory or Fiduciary Relationship   

118

 

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APPENDICES:

   A-1    Term Loan Commitments    A-2    Revolving Commitments    B    Notice
Addresses

SCHEDULES:

   1.1    Historical EBITDA    3.1(h)    Mortgaged Properties    4.1   
Jurisdictions of Organization and Qualification    4.2    Capital Stock and
Ownership    4.13    Real Estate Assets    4.16    Material Contracts    4.24   
Licenses and Permits    4.27    Inactive Subsidiaries    5.15    Certain Post
Closing Matters    6.1    Certain Indebtedness    6.2    Certain Liens    6.7   
Certain Investments    6.12    Certain Affiliate Transactions

EXHIBITS:

   A-1    Funding Notice    A-2    Conversion/Continuation Notice    B-1    Term
Loan Note    B-2    Revolving Loan Note    C    Compliance Certificate    D   
[Reserved]    E    Assignment Agreement    F    Certificate Regarding Non-bank
Status    G-1    Closing Date Certificate    G-2    Solvency Certificate    H   
Counterpart Agreement    I    Pledge and Security Agreement    J    Mortgage

 

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CREDIT AND GUARANTY AGREEMENT

This CREDIT AND GUARANTY AGREEMENT, dated as of December 9, 2010, is entered
into by and among MORTON’S OF CHICAGO, INC., an Illinois corporation
(“Company”), MORTON’S RESTAURANT GROUP, INC., a Delaware corporation
(“Holdings”), and CERTAIN SUBSIDIARIES OF HOLDINGS, as Guarantors, the Lenders
party hereto from time to time, GOLDMAN SACHS BANK USA (“GS Bank”), as
Administrative Agent (together with its successors and assigns in such capacity,
“Administrative Agent”), Collateral Agent (together with its successors and
assigns in such capacity, “Collateral Agent”) and Lead Arranger.

RECITALS:

WHEREAS, capitalized terms used in these Recitals shall have the respective
meanings set forth for such terms in Section 1.1 hereof;

WHEREAS, Lenders have agreed to extend certain credit facilities to Company, in
an aggregate amount not to exceed $70,000,000, consisting of $60,000,000
aggregate principal amount of Term Loans, and $10,000,000 aggregate principal
amount of Revolving Commitments, the proceeds of which will be used for the
purposes specified in Section 2.5 hereof;

WHEREAS, Company has agreed to secure all of its Obligations by granting to
Collateral Agent, for the benefit of Secured Parties, a First Priority Lien on
substantially all of its assets, including a pledge of all of the Capital Stock
of each of its Domestic Subsidiaries and sixty-five percent (65%) of all the
Capital Stock of each of its first-tier Foreign Subsidiaries; and

WHEREAS, Guarantors have agreed to jointly and severally guarantee the
Obligations of Company hereunder and to secure their respective Obligations by
granting to Collateral Agent, for the benefit of Secured Parties, a First
Priority Lien on substantially all of their respective assets, including a
pledge of all of the Capital Stock of each of their respective Domestic
Subsidiaries (including Company) and sixty-five percent (65%) of all the Capital
Stock of each of their respective first-tier Foreign Subsidiaries.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

SECTION 1. DEFINITIONS AND INTERPRETATION

1.1 Definitions.

The following terms used herein, including in the preamble, recitals, exhibits
and schedules hereto, shall have the following meanings:

“Accounts” means all “accounts” (as defined in the UCC) of Company (or, if
referring to another Person, of such Person), including, without limitation,
accounts, accounts receivable, monies due or to become due and obligations in
any form (whether arising in

 

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connection with contracts, contract rights, instruments, general intangibles, or
chattel paper), in each case whether arising out of goods sold or services
rendered or from any other transaction and whether or not earned by performance,
now or hereafter in existence, and all documents of title or other documents
representing any of the foregoing, and all collateral security and guaranties of
any kind, now or hereafter in existence, given by any Person with respect to any
of the foregoing.

“Act” as defined in Section 4.26.

“Adjusted LIBOR Rate” means, for any Interest Rate Determination Date with
respect to an Interest Period for a LIBOR Rate Loan, the rate per annum obtained
by dividing (and rounding upward to the next whole multiple of  1/16 of 1%)
(i) (a) the rate per annum (rounded to the nearest 1/100 of 1%) equal to the
rate determined by Administrative Agent to be the offered rate which appears on
the page of the Reuters Screen which displays an average British Bankers
Association Interest Settlement Rate (such page currently being Reuters Screen
LIBOR01 Page) for deposits (for delivery on the first day of such period) with a
term equivalent to such period in Dollars, determined as of approximately 11:00
a.m. (London, England time) on such Interest Rate Determination Date, or (b) in
the event the rate referenced in the preceding clause (a) does not appear on
such page or service or if such page or service shall cease to be available, the
rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined
by Administrative Agent to be the offered rate on such other page or other
service which displays an average British Bankers Association Interest
Settlement Rate for deposits (for delivery on the first day of such period) with
a term equivalent to such period in Dollars, determined as of approximately
11:00 a.m. (London, England time) on such Interest Rate Determination Date, or
(c) in the event the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to
the offered quotation rate to first class banks in the London interbank market
by GS Bank or any other Lender selected by Administrative Agent for deposits
(for delivery on the first day of the relevant period) in Dollars of amounts in
same day funds comparable to the principal amount of the applicable Loan of GS
Bank or any other Lender selected by Administrative Agent, for which the
Adjusted LIBOR Rate is then being determined with maturities comparable to such
period as of approximately 11:00 a.m. (London, England time) on such Interest
Rate Determination Date, by (ii) an amount equal to (a) one, minus (b) the
Applicable Reserve Requirement.

“Administrative Agent” as defined in the preamble hereto.

“Adverse Proceeding” means any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration (whether or
not purportedly on behalf of Holdings or any of its Subsidiaries) at law or in
equity, or before or by any Governmental Authority, domestic or foreign, whether
pending or, to the knowledge of Holdings or any of its Subsidiaries, threatened
in writing against Holdings or any of its Subsidiaries or affecting any property
of Holdings or affecting any of its Subsidiaries.

“Affected Lender” as defined in Section 2.17(b).

“Affected Loans” as defined in Section 2.17(b).

 

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“Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote ten percent (10%) or more of the Securities
having ordinary voting power for the election of directors of such Person, or
(ii) to direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract or
otherwise. Notwithstanding anything to the contrary herein, neither
Administrative Agent, Lender, nor any of their respective Affiliates shall be
deemed to be an Affiliate of any Credit Party. The term “Affiliate” shall
include any member of the senior management group of Holdings and its
Subsidiaries for purposes of the definitions of “Net Asset Sale Proceeds” and
“Net Insurance/Condemnation Proceeds”, and Sections 2.13, 6.5 and 6.12 hereof.

“Agent” means each of Administrative Agent and Collateral Agent.

“Aggregate Amounts Due” as defined in Section 2.16.

“Aggregate Payments” as defined in Section 7.2.

“Agreement” means this Credit and Guaranty Agreement, dated as of December 9,
2010, as it may be amended, amended and restated, supplemented or otherwise
modified from time to time.

“Applicable Margin” means (i) from the Closing Date until the date of delivery
of the Compliance Certificate and the financial statements required to be
delivered pursuant to Section 5.1(c) for the Fiscal Year ending January 1, 2012,
a percentage, per annum, equal to (a) five and one-half percent (5.50%), with
respect to LIBOR Rate Loans and (b) four and one-half percent (4.50%), with
respect to Base Rate Loans; and (ii) thereafter, a percentage, per annum,
determined by reference to the Senior Leverage Ratio in effect from time to time
as set forth below:

 

Senior Leverage Ratio

   Applicable Margin
for Term Loans
and Revolving Loans that
are LIBOR Rate Loans     Applicable Margin
for Term Loans
and Revolving Loans that
are Base Rate Loans  

greater than 2.00 to 1.00

     5.50 %      4.50 % 

less than or equal to 2.00 to 1.00 but greater than 1.50 to 1.00

     4.875 %      3.875 % 

less than or equal to 1.50 to 1.00

     4.50 %      3.50 % 

 

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No change in the Applicable Margin shall be effective until three (3) Business
Days after the date on which Administrative Agent shall have received the
applicable financial statements pursuant to Sections 5.1(b) or (c), together
with a Compliance Certificate calculating the Senior Leverage Ratio pursuant to
Section 5.1(d). At any time Company has not submitted to Administrative Agent
the applicable information as and when required under Section 5.1(b), (c), or
(d), the Applicable Margin shall be determined as if the Senior Leverage Ratio
were in excess of 2.00 to 1.00. Within one (1) Business Day of receipt of the
applicable information under Section 5.1(d), Administrative Agent shall give
each Lender telefacsimile or telephonic notice (confirmed in writing) of the
Applicable Margin in effect from such date. Without limitation of any other
provision of this Agreement or any other remedy available to Administrative
Agent or Lenders under any of the Credit Documents, to the extent that any
financial statements or any information contained in any Compliance Certificate
delivered pursuant to Section 5.1(b), (c), or (d) shall be incorrect in any
manner and Company or any other Credit Party shall deliver to Administrative
Agent and/or Lenders corrected financial statements or other corrected
information in a Compliance Certificate (or otherwise), Administrative Agent may
recalculate the Applicable Margin based upon such corrected financial statements
or such other corrected information, and, upon written notice thereof to
Company, the Loans shall bear interest based upon such recalculated Applicable
Margin retroactively from the date of delivery of the erroneous financial
statements or other erroneous information in question.

“Applicable Reserve Requirement” means, at any time, for any LIBOR Rate Loan,
the maximum rate, expressed as a decimal, at which reserves (including, without
limitation, any basic marginal, special, supplemental, emergency or other
reserves) are required to be maintained with respect thereto against
“Eurocurrency liabilities” (as such term is defined in Regulation D) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System or other applicable banking regulator. Without limiting the
effect of the foregoing, the Applicable Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(i) any category of liabilities which includes deposits by reference to which
the applicable Adjusted LIBOR Rate or any other interest rate of a Loan is to be
determined, or (ii) any category of extensions of credit or other assets which
include LIBOR Rate Loans. A LIBOR Rate Loan shall be deemed to constitute
Eurocurrency liabilities and as such shall be deemed subject to reserve
requirements without benefits of credit for proration, exceptions or offsets
that may be available from time to time to the applicable Lender. The rate of
interest on LIBOR Rate Loans shall be adjusted automatically on and as of the
effective date of any change in the Applicable Reserve Requirement.

“Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer, license or other disposition to any
Person (other than to or with a Credit Party which is not Holdings), in one
transaction or a series of transactions, of all or any part of any Credit
Party’s assets or properties of any kind, whether real, personal, or mixed and
whether tangible or intangible, whether now owned or hereafter acquired,
including, without limitation, the Capital Stock of any of Credit Party, other
than (i) inventory (or other assets) sold or leased in the ordinary course of
business; (ii) issuance or sale of Capital Stock of Holdings; (iii) the
conversion of cash into Cash Equivalents and Cash Equivalents into cash;
(iv) (A) the disposition of property or assets as a direct result of an event
giving rise to Net Insurance/Condemnation Proceeds or (B) the sale, lease,
transfer or other disposition of

 

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machinery, parts and equipment and/or any inventory no longer used or useful in
the conduct of the business of any Credit Party (including disposition in
connection with ceasing operations) in an amount not to exceed $2,000,000 in net
proceeds in any four consecutive Fiscal Quarter period; (v) the voluntary
termination of Hedging Agreements; (vi) the transfer of assets pursuant to
Permitted Investments; and (vii) the liquidation of any Subsidiary of a Credit
Party into such Credit Party or the liquidation of any Subsidiary that is not a
Credit Party into any other Subsidiary that is not a Credit Party.

“Asset Sale Reinvestment Amounts” has the meaning given to such term in
Section 2.13(a).

“Assignment Agreement” means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or modifications as
may be approved by Administrative Agent.

“Authorized Officer” means, as applied to any Person, any individual holding the
position of chairman of the board (if an officer), chief executive officer,
president or one of its vice presidents (or the equivalent thereof), and such
Person’s chief financial officer or treasurer.

“Availability” means, on any date of determination, (i)(A) the sum of the
trailing twelve-months Consolidated Adjusted EBITDA of Holdings and its
Subsidiaries as of the last day of the most recently ended fiscal month for
which financial statements have been delivered pursuant to Section 5.1(a)
multiplied by (B) the then in effect maximum Senior Leverage Multiple less
(ii) the sum of (A) the aggregate principal balance of the Loans as of such date
plus (B) all other Consolidated Total Debt as of such date minus (C) Cash and
Cash Equivalents in excess of $1,000,000. Availability shall be computed on a
pro forma basis.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or any successor statute.

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

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

“Beneficiary” means each Agent, Lender and Lender Counterparty.

“Business Day” means (i) any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the State of New York or the State of Texas or
is a day on which banking institutions located in either such state are
authorized or required by law or other governmental action to close, and
(ii) with respect to all notices, determinations, fundings and payments in
connection with the Adjusted LIBOR Rate or any LIBOR Rate Loans, the term
“Business Day” shall mean any day which is a Business Day described in
clause (i) and which is also a day for trading by and between banks in Dollar
deposits in the London interbank market.

 

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“Capital Lease” means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person (i) as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person or (ii) as lessee which is a transaction of a type
commonly known as a “synthetic lease” (i.e., a transaction that is treated as an
operating lease for accounting purposes but with respect to which payments of
rent are intended to be treated as payments of principal and interest on a loan
for Federal income tax purposes).

“Capital Stock” means 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),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.

“Cash” means money, currency or a credit balance in any demand or Deposit
Account; provided, however, that notwithstanding anything to the contrary
contained herein, for purposes of calculating compliance with the requirements
of Sections 3 and 6 hereof “Cash” shall include any amounts that would be
considered “cash” under GAAP or “cash” as recorded on the books of the Company
and the Guarantors, and “Cash-on-hand” with respect to any Person means all of
its Cash.

“Cash Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government, or (b) issued by any agency or
instrumentality of the United States the obligations of which are backed by the
full faith and credit of the United States, in each case maturing within one
year after such date; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, a rating of at
least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing
no more than one year from the date of creation thereof and having, at the time
of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1
from Moody’s; (iv) time deposits, certificates of deposit or bankers’
acceptances maturing within one year after such date and issued or accepted by
any Lender or by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia that (a) is
at least “adequately capitalized” (as defined in the regulations of its primary
Federal banking regulator), and (b) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000; (v) repurchase agreements with any
Lender or with any bank described in the preceding clause (iv) or a recognized
securities dealer for the type of investments described in clause (i) above;
(vi) investments by a Foreign Subsidiary in any foreign equivalents of the types
investments described in clauses (i) through (iv) above; and (vii) shares of any
money market mutual fund that (a) has substantially all of its assets invested
continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000, and (c) has the
highest rating obtainable from either S&P or Moody’s; provided, however, that
notwithstanding anything to the contrary contained herein “Cash Equivalents”
shall exclude Restricted Cash.

 

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“Certificate Regarding Non-Bank Status” means a certificate substantially in the
form of Exhibit F.

“Change of Control” means, the occurrence of any of the following at any time,
(a) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2)
of the Securities Exchange Act), other than Sponsor, becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act) of more than
fifty percent (50%) on a fully diluted basis of then outstanding voting
interests in the Capital Stock of Holdings, measured by voting power rather than
the number of shares and representing a greater percentage of such voting power
than that represented by the voting interests of Holdings then owned or
controlled directly or indirectly by Sponsor; (b) Holdings shall cease to own,
directly or indirectly, 100% on a fully diluted basis of the economic and voting
interests in the Capital Stock of Intermediate Holding or Italian Restaurant
Holdings, or (c) Intermediate Holdings shall cease to own, directly or
indirectly, 100% on a fully diluted basis of the economic and voting interests
in the Capital Stock of the Company.

“Class” means (i) with respect to Lenders, each of the following classes of
Lenders: (a) Lenders having Term Loan Exposure and (b) Lenders having Revolving
Exposure and (ii) with respect to Loans, each of the following classes of Loans:
(a) Term Loans and (b) Revolving Loans.

“Closing Date” means the date on which the Term Loans are made.

“Closing Date Certificate” means a Closing Date Certificate substantially in the
form of Exhibit G-1.

“Closing Date Material Adverse Effect” means an occurrence, development or
change that has had or could reasonably be expected to have a material adverse
effect on the business, financial condition, or results of operations of
Holdings and its Subsidiaries, taken as a whole; provided, however, that none of
the following shall constitute a Closing Date Material Adverse Effect nor shall
be taken into account in determining whether a Closing Date Material Adverse
Effect has occurred: (a) changes or conditions, including changes in the
economy, financial markets or political conditions, whether resulting from acts
of terrorism or war or otherwise, affecting the U.S. economy or the industry in
which Holdings and its Subsidiaries operate; (b) any adverse change, effect,
event, occurrence, state of facts or development resulting from any change in
regulatory conditions or change in applicable laws affecting the industry in
which Holdings and its Subsidiaries operate or changes in the interpretation of
such regulatory conditions or applicable laws; (c) any failure by Holdings to
meet projections or forecasts, provided that the underlying causes of any such
failure may be considered in determining whether there is a Closing Date
Material Adverse Effect; (d) any change in accounting requirements or principles
required by GAAP or required by any change in applicable laws and any
restatement of Holdings’ financial statements as a result thereof or public
announcement related thereto; (e) any flood, earthquake or other natural
disaster; or (f) the commencement, continuation or escalation of a war, armed
hostilities or other international or national calamity

 

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or act of terrorism; provided, further, that in the case of each of the
preceding clauses (b), (d), (e) and (f), the change, effect, event or
circumstance referred to therein does not adversely affect Holdings and its
Subsidiaries to a greater degree than and to the extent that such change,
effect, event or circumstance affects the business of other comparable companies
in the industries in which Holdings operates.

“Collateral” means, collectively, all of the real, personal and mixed property
(including Capital Stock) in which Liens are purported to be granted pursuant to
the Collateral Documents as security for the Obligations.

“Collateral Agent” as defined in the preamble hereto.

“Collateral Documents” means the Pledge and Security Agreement, the Mortgages,
each Deposit Account Control Agreement, the Trademark Security Agreement, and
all other instruments, documents and agreements delivered by any Credit Party
pursuant to this Agreement or any of the other Credit Documents in order to
grant to Collateral Agent, for the benefit of Secured Parties, a Lien on any
real, personal or mixed property of that Credit Party as security for the
Obligations, as each is amended, amended and restated, replaced, joined,
extended, supplemented and/or otherwise modified from time to time.

“Collateral Questionnaire” means a certificate in form reasonably satisfactory
to Collateral Agent that provides information with respect to the personal or
mixed property of each Credit Party.

“Commitment” means any Revolving Commitment or Term Loan Commitment.

“Company” as defined in the preamble hereto.

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

“Consolidated Adjusted EBITDA” means, for any period, an amount determined for
Holdings and its Subsidiaries on a consolidated basis equal to (i) the sum,
without duplication, of the amounts for such period of (a) Consolidated Net
Income, plus (b) Consolidated Interest Expense, plus (c) provisions for taxes
based on income, plus (d) total depreciation expense, plus (e) total
amortization expense, plus (f) amortization of restricted stock expense, plus
(g) other non-Cash items reducing Consolidated Net Income (excluding any such
non-Cash item to the extent that it represents an accrual or reserve for
potential Cash items in any future period or amortization of a prepaid Cash item
that was paid in a prior period), plus (h) Transaction Costs that are not
capitalized or that are written off, plus (i) operating expenses, charges and
losses incurred in connection with the cessation of business activities or
related to discontinued operations up to $2,000,000 in any four consecutive
Fiscal Quarter period, plus (j) Pre-Opening costs up to (1) $800,000 per
domestic restaurant and (2) $1,200,000 per foreign restaurant, plus (k) FICA
credits, plus (l) losses on foreign currency transactions, plus (m) management,
license, royalty and/or franchise fee income related to Joint Ventures to the
extent the income of such Joint Ventures were excluded in the calculation of
Consolidated Net Income, plus (n) write off of deferred financing fees, plus
(o) identifiable annualized expense reductions

 

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with respect to, and that can be implemented within ninety (90) days of, the
closing of any Permitted Acquisition up to $500,000 in any four consecutive
Fiscal Quarter period (or such greater amount as approved by Administrative
Agent, in its reasonable discretion), plus (p) legal fees and settlement charges
related to the cessation or discontinuation of any business operations, plus
(q) up to $200,000 of operating losses related to the operation of Morton’s
Miami Beach during any four consecutive Fiscal Quarter period, plus (r) the
Company’s proportionate share of Excluded Joint Venture income to the extent
distributed in cash, plus (s) any pro forma rent savings resulting from the
re-negotiation of leasehold interests in real property up to $1,500,000 in any
four consecutive Fiscal Quarter period (excluding any such amounts recognized
during such period), plus (t) management bonus expense up to $1,200,000 incurred
during the Fiscal Quarter ending January 2, 2011, minus (ii) the sum, without
duplication of the amounts for such period of (a) non-Cash items increasing
Consolidated Net Income for such period (excluding any such non-Cash item to the
extent it represents (1) the reversal of an accrual or reserve for potential
Cash item in any prior period or (2) the amortization of income or the accrual
of revenue or income for which the cash is received in a prior or subsequent
period), plus (b) interest income, plus (c) other extraordinary income, plus
(d) losses attributable to any Joint Venture to the extent funded in cash by a
Credit Party; provided however, (A) except as specifically provided above, none
of the foregoing amounts attributable to any Credit Party’s interest in any
Joint Venture shall be included for purposes of calculating “Consolidated
Adjusted EBITDA” and (B) for the purposes of calculating “Consolidated Excess
Cash Flow” and “Consolidated Fixed Charge Coverage Ratio”, Consolidated Adjusted
EBITDA shall not include the items described in clauses (i)(h), (i), (j), (k),
(p), (q), (r), (s) and (t) of this definition; provided further however, for the
purposes of calculating “Availability” and “Senior Leverage Ratio”, Consolidated
Adjusted EBITDA for each of the fiscal months identified on Schedule 1.1 shall
be the amounts set forth thereon.

“Consolidated Capital Expenditures” means, for any period, the aggregate of all
expenditures of Holdings and its Subsidiaries during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in
“purchase of property and equipment or which should otherwise be capitalized” or
similar items reflected in the consolidated statement of cash flows of Holdings
and its Subsidiaries, net of landlord contributions and tenant improvement
allowances and abatements, excluding that portion of Consolidated Capital
Expenditures that (i) is attributable to Excluded Joint Ventures and that is
wholly financed by the third-party partner of such Excluded Joint Venture (and
not by a Credit Party or a wholly-owned Subsidiary thereof) or (ii) is financed
with the proceeds of Indebtedness.

“Consolidated Cash Interest Expense” means, for any period, Consolidated
Interest Expense for such period based upon GAAP, excluding any paid-in-kind
interest, amortization of deferred financing costs, and any realized or
unrealized gains or losses attributable to Interest Rate Agreements (excluding
that portion of Consolidated Cash Interest Expense that is attributable to
Excluded Joint Venture Indebtedness).

“Consolidated Current Assets” means, as at any date of determination, the total
assets of Holdings and its Subsidiaries on a consolidated basis that may
properly be classified as current assets in conformity with GAAP, excluding Cash
and Cash Equivalents.

 

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“Consolidated Current Liabilities” means, as at any date of determination, the
total liabilities of Holdings and its Subsidiaries on a consolidated basis that
may properly be classified as current liabilities in conformity with GAAP,
excluding the current portion of long-term debt.

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive)
determined for Holdings and its Subsidiaries on a consolidated basis equal to:
(i) the sum, without duplication, of the amounts for such period of
(a) Consolidated Adjusted EBITDA, plus (b) decreases in Restricted Cash pledged
to a Third Party L/C Issuer, plus (c) interest income, plus (d) other
non-ordinary course income (excluding any gains or losses attributable to Asset
Sales), plus (e) the Consolidated Working Capital Adjustment, minus (ii) the
sum, without duplication, of the amounts for such period of (a) voluntary and
scheduled repayments of Consolidated Total Debt (excluding repayments of
Revolving Loans except to the extent the Revolving Commitments are permanently
reduced in connection with such repayments), plus (b) Consolidated Capital
Expenditures (net of any proceeds of (x) Net Asset Sale Proceeds to the extent
reinvested in accordance with Section 2.13(a), (y) Net Insurance/Condemnation
Proceeds to the extent reinvested in accordance with Section 2.13(b), and
(z) any proceeds of related financings with respect to such expenditures), plus
(c) the amount budgeted for Consolidated Capital Expenditures permitted for the
current period under Section 6.8(d) that was not expended and is permitted to be
carried forward to the next succeeding period, plus (d) Consolidated Cash
Interest Expense, plus (e) provisions for current taxes based on income of
Holdings and its Subsidiaries and payable in cash with respect to such period,
plus (f) amounts paid to repurchase Capital Stock, plus (g) increases in
Restricted Cash pledged to a Third Party L/C Issuer, plus (h) amounts paid in
connection with Permitted Acquisitions or Permitted Investments, plus
(i) payments made pursuant to settlement agreements, plus (j) deferred expenses
for legal settlements, landlord disputes and payments for closed restaurant and
severance.

“Consolidated Fixed Charges” means, for any period, the sum, without
duplication, of the amounts determined for Holdings and its Subsidiaries on a
consolidated basis equal to (i) Consolidated Cash Interest Expense,
(ii) scheduled payments of principal on Consolidated Total Debt,
(iii) Consolidated Capital Expenditures (including any capitalized interest),
and (iv) the current portion of taxes provided for with respect to such period
in accordance with GAAP, excluding those taxes related to Excluded Joint
Ventures.

“Consolidated Interest Expense” means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP)
of Holdings and its Subsidiaries on a consolidated basis with respect to all
outstanding Consolidated Total Debt, including all commissions, discounts and
other fees and charges owed with respect to letters of credit and net costs
under Interest Rate Agreements, but excluding, however, any amounts referred to
in Section 2.10(c) and the Fee Letter payable on or before the Closing Date.

“Consolidated Liquidity” means, for any period an amount determined for Holdings
and its Subsidiaries on a consolidated basis equal to the sum of
(i) Cash-on-hand of Holdings and its Subsidiaries (excluding any Restricted
Cash), plus (ii) the lesser of (x) (a) the Revolving Commitments of all of the
Lenders in the aggregate, minus (b) the Total Utilization of Revolving
Commitments and (y) Availability.

 

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“Consolidated Net Income” means, for any period, (i) the net income (or loss) of
Holdings and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP (excluding, without
duplication, extraordinary and non-recurring items, impairment charges related
to goodwill, property, plant and equipment, and any other assets, and currency
translation charges), minus (ii) the sum of (a) the income (or loss) of any
Joint Venture, plus, (b) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Holdings or is merged into or consolidated with
Holdings or any of its Subsidiaries or that Person’s assets are acquired by
Holdings or any of its Subsidiaries, plus (c) any gains or losses attributable
to Asset Sales, plus (d) (to the extent not included in clause (a) above) any
net extraordinary gains or net extraordinary losses.

“Consolidated Total Debt” means, as at any date of determination, the aggregate
amount of all Indebtedness of Holdings and its Subsidiaries, excluding Excluded
Joint Venture Indebtedness, determined on a consolidated basis in accordance
with GAAP.

“Consolidated Working Capital” means, as at any date of determination, the
excess or deficiency of Consolidated Current Assets over Consolidated Current
Liabilities.

“Consolidated Working Capital Adjustment” means, for any period of determination
on a consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period, excluding
the effects of changes in (i) Consolidated Working Capital attributable to
Excluded Joint Ventures and (ii) current deferred tax assets and current
deferred tax liabilities to the extent such changes have no cash impact.

“Contractual Obligation” means, as applied to any Person, any provision of any
Security issued by that Person or of any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject.

“Contributing Guarantors” as defined in Section 7.2.

“Controlled Account” means a Deposit Account or Securities Account of a Credit
Party which is subject to a Deposit Account Control Agreement or Securities
Account Control Agreement in favor of the Collateral Agent, for the benefit of
the Secured Parties, in accordance with the terms of the Pledge and Security
Agreement.

“Conversion/Continuation Date” means the effective date of a continuation or
conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.

“Conversion/Continuation Notice” means a Conversion/Continuation Notice
substantially in the form of Exhibit A-2.

“Counterpart Agreement” means a Counterpart Agreement substantially in the form
of Exhibit H delivered by a Credit Party pursuant to Section 5.10.

“Credit Date” means the date of a Credit Extension.

 

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“Credit Document” means any of this Agreement, the Notes, if any, the Collateral
Documents, the Fee Letter, and all other documents, instruments or agreements
executed and delivered by a Credit Party for the benefit of any Agent or any
Lender in connection herewith.

“Credit Extension” means the making of a Loan.

“Credit Party” means, at each relevant time of determination, (i) Holdings,
(ii) Intermediate Holdings, (iii) the Company, and (iv) each of their respective
direct and indirect Subsidiaries that is now or hereafter becomes a party to a
Credit Document.

“Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Holdings’ and its Subsidiaries’ operations
and not for speculative purposes.

“Default” means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.

“Default Excess” means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding
principal amount of Loans of all Lenders (calculated as if all Defaulting
Lenders (other than such Defaulting Lender) had funded all of their respective
Defaulted Loans) over the aggregate outstanding principal amount of all Loans of
such Defaulting Lender.

“Default Period” means, with respect to any Defaulting Lender, the period
commencing on the date of the applicable Funding Default, or violation of
Section 9.5(c), and ending on the earliest of the following dates: (i) the date
on which all Commitments are cancelled or terminated and/or the Obligations are
declared or become immediately due and payable, (ii) the date on which (a) the
Default Excess with respect to such Defaulting Lender shall have been reduced to
zero (whether by the funding by such Defaulting Lender of any Defaulted Loans of
such Defaulting Lender or by the non-pro rata application of any voluntary or
mandatory prepayments of the Loans in accordance with the terms of Section 2.12
or Section 2.13 or by a combination thereof), and (b) such Defaulting Lender
shall have delivered to Company and Administrative Agent a written reaffirmation
of its intention to honor its obligations hereunder with respect to its
Commitments, (iii) the date on which Company, Administrative Agent and Requisite
Lenders waive all Funding Defaults of such Defaulting Lender in writing, and
(iv) the date on which Administrative Agent shall have waived all violations of
Section 9.5(c) by such Defaulting Lender in writing.

“Defaulted Loan” as defined in Section 2.21.

“Defaulting Lender” as defined in Section 2.21.

“Default Rate” means any interest payable pursuant to Section 2.9.

 

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“Deposit Account” means a demand, time, savings, passbook or like account with a
bank, savings and loan association, credit union or like organization, other
than an account evidenced by a negotiable certificate of deposit.

“Deposit Account Control Agreement” means any deposit account control agreement
executed pursuant to Section 4.4.4(c) of the Pledge and Security Agreement, duly
executed by the parties named therein and in form and substance satisfactory to
Administrative Agent.

“Documentation Agent” as defined in the preamble hereto.

“Dodd-Frank Act” shall mean the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Pub. L. 111-203, H.R. 4173) signed into law on July 21, 2010, as
amended from time to time.

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

“Domestic Subsidiary” means any Subsidiary organized under the laws of the
United States of America, any State thereof or the District of Columbia.

“Eligible Assignee” means (i) in the case of the Revolving Loans or Revolving
Commitments, (a) any Lender with Revolving Exposure or any Affiliate (other than
a natural person) of a Lender with Revolving Exposure, (b) a commercial bank
organized under the laws of the United States, or any state thereof, and having
total assets or net worth in excess of $100,000,000, (c) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development or a political subdivision
of any such country and which has total assets or net worth in excess of
$100,000,000, provided that such bank is acting through a branch or agency
located in the United States, and (d) a finance company, insurance company, or
other financial institution or fund that is engaged in making, purchasing, or
otherwise investing in commercial loans in the ordinary course of its business
and having (together with its Affiliates) total assets or net worth in excess of
$100,000,000, (ii) in the case of the Term Loans, (a) any Lender, any Affiliate
of any Lender and any Related Fund (any two or more Related Funds being treated
as a single Eligible Assignee for all purposes hereof), and (b) any commercial
bank, insurance company, investment or mutual fund or other entity that is an
“accredited investor” (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans as one of its businesses, and (iii) any other
Person (other than a natural Person) approved by Administrative Agent; provided,
(x) neither Holdings nor any Subsidiary of Holdings shall, in any event, be an
Eligible Assignee and (y) no Person owning or controlling any trade debt or
Indebtedness of any Credit Party other than the Obligations or any Capital Stock
of any Credit Party (in each case, unless approved by the Administrative Agent)
shall in any event, be an Eligible Assignee.

“Employee Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed by, Holdings, any of its Subsidiaries or any
of their respective ERISA Affiliates.

 

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“Environmental Claim” means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any Governmental Authority or any other
Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law; (ii) in connection with any Hazardous
Material or any actual or alleged Hazardous Materials Activity; or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.

“Environmental Laws” means any and all current or future foreign or domestic,
federal or state (or any subdivision of either of them), statutes, ordinances,
orders, rules, regulations, judgments, Governmental Authorizations, or any other
requirements of Governmental Authorities relating to (i) environmental matters,
including those relating to any Hazardous Materials Activity; (ii) the
generation, use, storage, transportation or disposal of Hazardous Materials; or
(iii) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner applicable
to Holdings or any of its Subsidiaries or any Facility.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor thereto.

“ERISA Affiliate” means, as applied to any Person, (i) any corporation which is
a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person is a member;
and (iii) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of Holdings or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of Holdings
or any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Holdings or such Subsidiary and,
thereafter, for so long as Holdings or such Subsidiary could be liable under the
Internal Revenue Code or ERISA for any ERISA Event arising during the period
such entity was an ERISA Affiliate of Holdings or such Subsidiary.

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for thirty (30) day notice to the PBGC
has been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal
by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of

 

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any such Pension Plan resulting in liability to Holdings, any of its
Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or
4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Holdings, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 412(n) or 430(k) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

“Event of Default” means each of the conditions or events set forth in
Section 8.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute.

“Excluded Account” means individually or collectively as the context requires,
(i) any account used solely for payroll, payroll taxes or other employee wage
and benefit payments, (ii) any accounts maintained by any Credit Party solely to
secure Third Party Letters of Credit to the extent permitted under this
Agreement, (iii) any escrow accounts used solely for consideration that could
reasonably be expected to become payable in connection with Permitted
Acquisitions, (iv) any petty cash deposit account for which a control agreement
has not otherwise been obtained, so long as, with respect to this clause (iv),
the aggregate amount on deposit in each such petty cash account does not exceed
$50,000 at any one time and the aggregate amount on deposit in all such petty
cash accounts does not exceed $500,000 at any one time as of or after the
Closing Date (or such greater amounts approved by Administrative Agent from time
to time in its reasonable discretion) and (v) any Foreign Subsidiary Deposit
Account, so long as the aggregate amount on deposit in all such Foreign
Subsidiary Deposit Accounts does not exceed $2,000,000 at any one time as of or
after the Closing Date (or such greater amount approved by Administrative Agent
from time to time in its reasonable discretion).

 

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“Excluded Joint Venture Indebtedness” means Indebtedness of an Excluded Joint
Venture; provided, that, (i) such Indebtedness shall be non-recourse to any
Credit Party or Subsidiary or Affiliate thereof (other than such Excluded Joint
Venture) and (ii) no Credit Party or Subsidiary or Affiliate thereof (other than
such Excluded Joint Venture) shall make, or be obligated to make any payments of
any kind, nature or description with respect to such Indebtedness.

“Excluded Joint Ventures” means any (a) Joint Venture established in connection
with the start-up, opening and operation of new restaurant locations and (b) any
Subsidiary of a Joint Venture.

“Excluded Subsidiary” means collectively, (i) any Foreign Subsidiary, and
(ii) any Inactive Subsidiary.

“Existing Indebtedness” means Indebtedness and other obligations outstanding
under that certain Credit Agreement dated as of February 14, 2006 among the
Company, Holdings, its Subsidiaries, Wachovia Bank, National Association, as
administrative agent, and the other financial institutions party thereto.

“Existing Letter of Credit Obligations” means that certain irrevocable standby
letter of credit number SM237453W, issued on July 1, 2010, by Wells Fargo Bank,
N.A., in the face amount of $600,000, for the benefit of Zurich American
Insurance Company.

“Facility” means any real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.

“Fair Share Contribution Amount” as defined in Section 7.2.

“Fair Share” as defined in Section 7.2.

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code and
regulations or official interpretations thereof.

“Federal Funds Effective Rate” means for any day, the rate per annum (expressed,
as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided, (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to GS Bank or any other Lender selected by Administrative
Agent on such day on such transactions as determined by Administrative Agent.

“Fee Letter” means the letter agreement dated as of the Closing Date, as
amended, amended and restated, and/or otherwise modified from time to time.

 

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“Financial Officer Certification” means, with respect to the financial
statements for which such certification is required, the certification of an
officer of Holdings holding the position of, or performing equivalent functions
to, chief financial officer that such financial statements fairly present, in
all material respects, the financial condition of Holdings and its Subsidiaries
as at the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from audit and
normal year-end adjustments and the absence of footnotes.

“Financial Plan” as defined in Section 5.1(i).

“First Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that such Lien is the only Lien
to which such Collateral is subject, other than any Permitted Lien.

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

“Fiscal Year” means the fiscal year of Holdings and its Subsidiaries consisting
of the 52 or 53 week period ending on the Sunday closest to January 1 of each
calendar year.

“Fixed Charge Coverage Ratio” means the ratio as of the last day of (i) the
first Fiscal Quarter ending after the Closing Date of (a) Consolidated Adjusted
EBITDA for such Fiscal Quarter, multiplied by four (4), to (b) Consolidated
Fixed Charges for such Fiscal Quarter, multiplied by four (4); (ii) the second
Fiscal Quarter ending after the Closing Date of (a) Consolidated Adjusted EBITDA
for the two-Fiscal Quarters period ending on such date, multiplied by two (2),
to (b) Consolidated Fixed Charges for such two-Fiscal Quarters, multiplied by
two (2); (iii) the third Fiscal Quarter period ending after the Closing Date of
(a) Consolidated Adjusted EBITDA for the three-Fiscal Quarter period ending on
such date, multiplied by four-thirds (4/3rds), to (b) Consolidated Fixed Charges
for such three-Fiscal Quarter period, multiplied by four-thirds (4/3rds); and
(iv) any other Fiscal Quarter of (a) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter period then ending, to (b) Consolidated Fixed Charges for
such four-Fiscal Quarter period.

“Flood Hazard Property” means any Real Estate Asset subject to a mortgage in
favor of Collateral Agent, for the benefit of the Secured Parties, and located
in an area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Foreign Subsidiary Deposit Accounts” means all Deposit Accounts maintained by
Holdings’ Foreign Subsidiaries.

“Funding Default” as defined in Section 2.21.

“Funding Guarantors” as defined in Section 7.2.

“Funding Notice” means a notice substantially in the form of Exhibit A-1.

 

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“GAAP” means, subject to the limitations on the application thereof set forth in
Section 1.2, United States generally accepted accounting principles in effect as
of the date of determination thereof.

“Governmental Authority” means any federal, state, municipal, national or other
government, governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a municipality, state of the United States, the United States,
or a foreign entity or government.

“Governmental Authorization” means any permit, license, authorization, plan,
directive, consent order or consent decree of or from any Governmental
Authority.

“Grantor” as defined in the Pledge and Security Agreement.

“GS Bank” means Goldman Sachs Bank USA.

“Guaranteed Obligations” as defined in Section 7.1.

“Guarantor” means each of Holdings and each Domestic Subsidiary of Holdings
(other than Company, any Inactive Subsidiary and any Excluded Joint Venture).

“Guarantor Subsidiary” means each Guarantor other than Holdings.

“Guaranty” means the guaranty of each Guarantor set forth in Section 7.

“Hazardous Materials” means any chemical, material or substance, exposure to
which is prohibited, limited or regulated by any Governmental Authority or which
may or could pose a hazard to the health and safety of the owners, occupants or
any Persons in the vicinity of any Facility or to the indoor or outdoor
environment.

“Hazardous Materials Activity” means any past, current, proposed or threatened
activity, event or occurrence involving any Hazardous Materials, including the
use, manufacture, possession, storage, holding, presence, existence, location,
Release, threatened Release, discharge, placement, generation, transportation,
processing, construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.

“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at
any time or from time to time may be contracted for, charged, or received under
the laws applicable to any Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.

“Historical Financial Statements” means as of the Closing Date, (i) the audited
financial statements of Holdings and its Subsidiaries, for the Fiscal Year ended
January 3, 2010, consisting of balance sheets and the related consolidated
statements of income, stockholders’

 

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equity and cash flows for such Fiscal Year, and (ii) for the interim period from
January 4, 2010 to November 7, 2010, internally prepared, unaudited financial
statements of Holdings and its Subsidiaries, consisting of a balance sheet and
the related consolidated statements of income, stockholders’ equity and cash
flows for each quarterly period completed prior to forty-six (46) days before
the Closing Date and a balance sheet and the related consolidated statements of
income and cash flows for each monthly period completed prior to thirty-one
(31) days prior to the Closing Date, in the case of clauses (i) and (ii),
certified pursuant to a Financial Officer Certification.

“Holdings” as defined in the preamble hereto.

“Inactive Subsidiary” means any Subsidiary of Holdings that (a) does not engage
in any type of business activity (other than organizational or winding-up
activities), (b) does not own or possess any assets having a fair market value
in excess of $50,000 in the aggregate, including, without limitation, any
Capital Stock of any Credit Party (other than certain licenses which are in the
process of being terminated or transferred), (c) does not have any Indebtedness
and (d) has not entered into a lease or sublease of any real property.

“Increased-Cost Lenders” as defined in Section 2.22.

“Indebtedness” as applied to any Person, means, without duplication, (i) all
indebtedness for borrowed money; (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP; (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money;
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding (a) any such obligations incurred under ERISA,
(b) trade payables related to legal or accounting fees, and (c) other trade
payables incurred in the ordinary course of business that are not more than 180
days past due or, if more than 180 days past due, are being contested in good
faith by appropriate proceedings (so long as adequate reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor)); (v) all indebtedness secured by any
Lien on any property or asset owned or held by that Person regardless of whether
the indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person; (vi) the face amount of any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; (vii) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the Indebtedness of another; (viii) any obligation of such
Person the primary purpose or intent of which is to provide assurance to an
obligee that the Indebtedness of the obligor thereof will be paid or discharged,
or any agreement relating thereto will be complied with, or the holders thereof
will be protected (in whole or in part) against loss in respect thereof;
(ix) any liability of such Person for any Indebtedness of another through any
agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise
acquire such Indebtedness or any security therefor, or to provide funds for the
payment or discharge of such Indebtedness (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (b) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under
subclauses (a) or (b) of this clause (ix), the primary purpose or intent

 

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thereof is as described in clause (viii) above; and (x) all obligations of such
Person in respect of any exchange traded or over the counter derivative
transaction, including, without limitation, any Interest Rate Agreement and
Currency Agreement, whether entered into for hedging or speculative purposes
(with the amount of such obligations being the amount which would appear on a
balance sheet of that Person in accordance with GAAP).

“Indemnified Liabilities” means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
claims (including Environmental Claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
abate any Hazardous Materials Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (i) this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby (including the Lenders’ agreement to
make Credit Extensions or the use or intended use of the proceeds thereof, or
any enforcement of any of the Credit Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty)); (ii) the statements contained in any commitment
letter delivered by any Lender or Affiliate of a Lender to Company with respect
to the transactions contemplated by this Agreement; or (iii) any Environmental
Claim or any Hazardous Materials Activity relating to or arising from, directly
or indirectly, any past or present activity, operation, land ownership, or
practice of Holdings or any of its Subsidiaries.

“Indemnitee” as defined in Section 10.3.

“Indemnitee Agent Party” as defined in Section 9.6.

“Installment” as defined in Section 2.11(a).

“Installment Date” as defined in Section 2.11(a).

“Interest Payment Date” means with respect to (i) any Base Rate Loan, (a) the
last day of each month (or if such date is not a Business Day, the first
Business Day thereafter), commencing on the first such date to occur after the
Closing Date, and (b) the final maturity date of such Loan; and (ii) any LIBOR
Rate Loan, the last day of each Interest Period applicable to such Loan.

“Interest Period” means, in connection with a LIBOR Rate Loan, an interest
period of one-, two-, three-or six-months, as selected by Company in the
applicable Funding Notice or Conversion/Continuation Notice, (i) initially,
commencing on the Credit Date or

 

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Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter,
commencing on the day on which the immediately preceding Interest Period
expires; provided, (a) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless no further Business Day occurs in such month, in
which case such Interest Period shall expire on the immediately preceding
Business Day; (b) 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, subject to
clauses (c) and (d), of this definition, end on the last Business Day of a
calendar month; (c) no Interest Period with respect to any portion of any Class
of Term Loans shall extend beyond such Class’s Term Loan Maturity Date; and
(d) no Interest Period with respect to any portion of the Revolving Loans shall
extend beyond the Revolving Commitment Termination Date.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate hedging agreement
or other similar agreement or arrangement, each of which is for the purpose of
hedging the interest rate exposure associated with Holdings’ and its
Subsidiaries’ operations, (ii) approved by Administrative Agent, and (iii) not
for speculative purposes, each as amended, supplemented, or otherwise modified
from time to time in accordance with this Agreement.

“Interest Rate Determination Date” means, with respect to any Interest Period,
the date that is two Business Days prior to the first day of such Interest
Period.

“Intermediate Holdings” means Porterhouse, Inc., a Delaware corporation.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute.

“Investment” means (i) any direct or indirect purchase or other acquisition by
Holdings or any of its Subsidiaries of, or of a beneficial interest in, any of
the Securities of any other Person (other than a Guarantor Subsidiary); (ii) any
direct or indirect purchase or other acquisition for value, by any Subsidiary of
Holdings from any Person (other than Holdings or any Guarantor Subsidiary), of
any Capital Stock of such Person; and (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contributions by Holdings or any of its Subsidiaries to any other Person
(other than Holdings or any Guarantor Subsidiary), including all indebtedness
and accounts receivable from that other Person that are not current assets or
did not arise from sales to that other Person in the ordinary course of
business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.

“Italian Restaurant Holdings” means Italian Restaurants Holding Corp., a
Delaware corporation.

“Joint Venture” means a joint venture, partnership or other similar arrangement,
whether in corporate, partnership or other legal form.

 

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“Lead Arranger” as defined in the preamble hereto.

“Lender” means each financial institution listed on the signature pages hereto
as a Lender, and any other Person that becomes a party hereto pursuant to an
Assignment Agreement.

“Lender Counterparty” means each Lender or any Affiliate of a Lender
counterparty to an Interest Rate Agreement or Currency Agreement (including any
Person who is a Lender (and any Affiliate thereof) at the time of entering into
an Interest Rate Agreement or Currency Agreement, but subsequently ceases to be
a Lender) including, without limitation, each such Affiliate that enters into a
joinder agreement with Collateral Agent.

“LIBOR Rate Loan” means a Loan bearing interest at a rate determined by
reference to the Adjusted LIBOR Rate.

“Lien” means (i) any lien, mortgage, pledge, collateral assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, and
any lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing, and (ii) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.

“Liquidation Event” means any event described in Section 8.1(b), (f), (g) or
(h) that occurs with respect to an Inactive Subsidiary or with respect to an
operating Subsidiary as a result of such operating Subsidiary ceasing
operations.

“Loan” means individually or collectively as the context requires, a Term Loan
and/or a Revolving Loan.

“Margin Stock” as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

“Material Adverse Effect” means a material adverse effect on and/or material
adverse developments with respect to (i) the business operations, properties,
assets, or financial condition of Holdings and its Subsidiaries taken as a
whole; (ii) the ability of the Credit Parties, taken as a whole, to fully and
timely perform their Obligations; (iv) the legality, validity, binding effect,
or enforceability against the Credit Parties, taken as a whole, of a Credit
Document to which they are a party; or (v) the material rights, remedies and
benefits available to, or conferred upon, any Agent and any Lender or any
Secured Party under the Credit Documents.

“Material Contract” means any contract or other arrangement to which Holdings or
any of its Subsidiaries is a party (other than the Credit Documents) for which
breach, nonperformance, cancellation or failure to renew could reasonably be
expected to have a Material Adverse Effect, in each case, as amended, amended
and restated, replaced, renewed, extended, supplemented and/or otherwise
modified from time to time to the extent permitted by this Agreement.

 

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“Material Real Estate Asset” means any (i) fee owned Real Estate Asset listed on
Schedule 4.13 and (ii) fee owned Real Estate Asset acquired after Closing Date
having a fair market value in excess of $1,000,000 as of the date of the
acquisition thereof.

“Miami Beach Indebtedness” shall mean any Indebtedness of Morton’s Miami Beach
owing to Crown at Miami Beach, Ltd, a Florida limited partnership, or its
successors and assigns, but only to the extent such Indebtedness is non-recourse
to any Credit Party or Subsidiary thereof (other than to Morton’s Miami Beach).

“Moody’s” means Moody’s Investor Services, Inc.

“Mortgage” means a mortgage, deed of trust, deed to secure debt or similar
instrument, substantially in the form of Exhibit J, as it may be amended,
supplemented or otherwise modified from time to time.

“Mortgaged Property” each Real Estate Asset listed on Schedule 3.1(h).

“Morton’s Miami Beach” means Morton’s of Chicago Miami Beach, LLC, a Delaware
limited liability company.

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer
plan” as defined in Section 3(37) of ERISA.

“NAIC” means The National Association of Insurance Commissioners, and any
successor thereto.

“Narrative Report” means, with respect to the financial statements for which
such narrative report is required, a narrative report describing the operations
of Holdings and its Subsidiaries in the form prepared at such time for
presentation to the Board of Directors for the applicable month, Fiscal Quarter
or Fiscal Year and for the period from the beginning of the then current Fiscal
Year to the end of such period to which such financial statements relate with
comparison to and variances from the immediately proceeding period and budget,
together with the summary business report and CEO letter.

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal
to: (i) Cash payments received by Holdings or any of its Subsidiaries from such
Asset Sale, minus (ii) (a) any bona fide direct costs incurred in connection
with such Asset Sale to the extent paid or payable to non-Affiliates (including
sales commissions, legal, accounting and investment banking fees, and survey
costs), (b) income or gains taxes payable by the seller as a result of any gain
recognized in connection with such Asset Sale, (c) payment of the outstanding
principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is secured by a Lien on the stock or
assets in question and that is required to be repaid under the terms thereof as
a result of such Asset Sale, (d) a reasonable reserve for any indemnification
payments (fixed or contingent) attributable to seller’s indemnities and
representations and warranties to purchaser in respect of such Asset Sale
undertaken by Holdings or any of its Subsidiaries in connection with such Asset
Sale; provided that upon release of any such reserve, the amount released shall
be considered Net Asset Sale Proceeds; and (d) Holdings’ good faith estimate of
payments required to be made with respect to unassumed liabilities relating to
the assets and properties disposed of within one year after such Asset Sale.

 

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“Net Insurance/Condemnation Proceeds” means an amount equal to: (i) any Cash
payments or proceeds received by Holdings or any of its Subsidiaries (a) under
any casualty, business interruption or “key man” insurance policies in respect
of any covered loss thereunder, or (b) as a result of the taking of any assets
of Holdings or any of its Subsidiaries by any Person pursuant to the power of
eminent domain, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, minus
(ii) (a) any actual and reasonable costs incurred by Holdings or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Holdings or such Subsidiary in respect thereof, and (b) any bona fide direct
costs incurred in connection with any sale of such assets as referred to in
clause (i)(b) of this definition to the extent paid or payable to
non-Affiliates, including income taxes payable as a result of any gain
recognized in connection therewith.

“Non-US Lender” as defined in Section 2.19(c).

“Note” means individually or collectively as the context requires, a Term Loan
Note or a Revolving Loan Note.

“Notice” means a Funding Notice, or a Conversion/Continuation Notice.

“Obligations” means all obligations of every nature of each Credit Party from
time to time owed to the Agents (including former Agents), the Lenders or any of
them and Lender Counterparties, under any Credit Document or Interest Rate
Agreement and Currency Agreement, whether for principal, interest (including
interest which, but for the filing of a petition in bankruptcy with respect to
such Credit Party, would have accrued on any Obligation, whether or not a claim
is allowed against such Credit Party for such interest in the related bankruptcy
proceeding), payments for early termination of Interest Rate Agreements or
Currency Agreements, fees, expenses, indemnification or otherwise.

“Obligee Guarantor” as defined in Section 7.7.

“Organizational Documents” means (i) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, and (iv) with respect to any limited liability company,
its articles of organization, as amended, and its operating agreement, as
amended. In the event any term or condition of this Agreement or any other
Credit Document requires any Organizational Document to be certified by a
secretary of state or similar governmental official, the reference to any such
“Organizational Document” shall only be to a document of a type customarily
certified by such governmental official.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

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“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to Section 412 of the Internal Revenue Code or Section 302 of
ERISA.

“Permitted Acquisition” shall mean an acquisition or any series of related
acquisitions by a Credit Party of (a) all or substantially all of the assets of
a Person, all or a majority of the outstanding Voting Stock or economic
interests of a Person, or all of the remaining Voting Stock or economic
interests of any Joint Venture in which a Credit Party holds an interest or
(b) any division, line of business or other business unit of a Person (such
Person or such division, line of business or other business unit of such Person
shall be referred to herein as the “Target”), in each case that is a type of
business (or assets used in a type of business) permitted to be engaged in by
the Credit Parties and their Subsidiaries pursuant to Section 6.13 hereof, so
long as:

(i) immediately prior to, and after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing;

(ii) all transactions in connection therewith shall be consummated, in all
material respects, in accordance with all applicable laws and in conformity with
all applicable Governmental Authorizations;

(iii) the Administrative Agent, on behalf of the Lenders, shall have received
(or shall receive in connection with the closing of such acquisition) a first
priority perfected security interest in all property (including, without
limitation, Capital Stock) acquired with respect to the Target in accordance
with the terms of Section 5.10 and the Target, if a Person, shall have executed
a joinder agreement with Collateral Agent in accordance with the terms of
Section 5.10;

(iv) Holdings and its Subsidiaries shall be in compliance with the financial
covenants set forth in Section 6.8 on a pro forma basis after giving effect to
such acquisition as of the last day of the Fiscal Quarter most recently ended
(as determined in accordance with Section 1.4);

(v) the Company shall have delivered to Administrative Agent at least five
(5) Business Days prior to such proposed acquisition, a Compliance Certificate,
evidencing compliance with Section 6.8 as required under clause (iv) above,
together with all relevant financial information with respect to such acquired
assets, including without limitation, the aggregate consideration for such
acquisition and any other information required to demonstrate compliance with
Section 6.8;

(vi) any Person or assets or division acquired in accordance herewith (A) shall
be engaged in a type of business (or used in a type of business) permitted to be
engaged in by the Credit Parties and their Subsidiaries pursuant to Section 6.13
hereof and (B) for the four Fiscal Quarter period most recently ended prior to
the date of such acquisition, shall have generated earnings before income taxes,
depreciation, and amortization during such period that shall exceed the amount
of capital expenditures related to such Person or assets or division during such
period (calculated in-substantially the same manner as Consolidated Adjusted
EBITDA and Consolidated Capital Expenditures are calculated), unless otherwise
waived by Administrative Agent in its reasonable discretion;

 

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(vii) such acquisition shall not be a “hostile” acquisition and shall have been
approved by the Board of Directors and/or shareholders of the applicable Credit
Party and the Target;

(viii) the aggregate consideration (including the amount of any liabilities
assumed by the Credit Parties and their Subsidiaries), net of the Target’s cash
and Cash Equivalents, paid by the Credit Parties and their Subsidiaries (A) for
all such acquisitions made during any four Fiscal Quarter period shall not
exceed $10,000,000 and (B) for all such acquisitions made during the term of
this Agreement shall not exceed $50,000,000; provided however, the foregoing
amounts in clauses (A) and (B) of this paragraph (viii) shall be increased up to
(1) $15,000,000 and $75,000,000, respectively, if (I)(x) the Senior Leverage
Ratio is less than or equal to 2.5 to 1.0 (as of the most recent measurement
date immediately prior to any such acquisition) and (y) the Senior Leverage
Ratio would be less than or equal to 2.5 to 1.0 (calculated on a pro forma basis
after giving effect to any such acquisition) or (II) such incremental amounts
are funded solely with common equity interests in Holdings or Permitted
Preferred Stock, or the cash proceeds from the issuance of common stock of
Holdings or the cash proceeds from the issuance of Permitted Preferred Stock, or
the cash proceeds from the issuance of Subordinated Indebtedness, in each case,
in excess of the amount otherwise required by clause (x) below and
(2) $25,000,000 and $125,000,000, respectively, if such acquisitions are funded
solely with the common equity interests in Holdings or Permitted Preferred
Stock, or the cash proceeds from the issuance of common stock of Holdings, or
the cash proceeds from the issuance of Permitted Preferred Stock, or the cash
proceeds from the issuance of Subordinated Indebtedness;

(ix) the Credit Parties and their Subsidiaries shall not assume any Indebtedness
of the Target in connection with such acquisition (unless such Indebtedness is
of the type permitted under Sections 6.1(c) or (j) hereof, and Holdings and its
Subsidiaries would be in compliance with Sections 6.1(c) and (j) on a pro forma
basis after giving effect to such acquisition);

(x) not less than fifty percent (50%) of the total consideration paid in
connection with the acquisition shall be in the form of (A) common equity
interests in Holdings or Permitted Preferred Stock, (B) the proceeds of
issuances of equity by Holdings after the Closing Date not required to be used
to prepay the Loans or (B) the proceeds of Subordinated Indebtedness not
required to be used to prepay the Loans;

(xi) in the case of an acquisition of a majority (but not all) of the
outstanding Voting Stock or economic interests of a Person (such Person being
hereinafter referred to as the “Joint Venture Target”), (A) the Credit Parties
and each other Person holding Capital Stock in such Joint Venture Target (each
such Person being hereinafter referred to as a “Minority Shareholder”) shall
have entered into a stockholders agreement or similar agreement, in form and
substance satisfactory to Administrative Agent (which agreement shall, without
limitation, grant the Credit Parties the right to cause each Minority
Shareholder to sell all of its Capital Stock in such Joint Venture Target in
connection with any sale or other transfer of such Joint

 

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Venture Target approved by the Credit Parties) and (B) for the avoidance of
doubt, the Credit Parties and such Joint Venture Target shall have complied with
the requirements described in clause (iii) above); and

(xii) after giving effect to such acquisition, Consolidated Liquidity shall be
at least $2,000,000.

“Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.

“Permitted Preferred Stock” means preferred Capital Stock of Holdings that by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable) or upon the happening of any event or otherwise,
(a) is not mandatorily redeemable, in whole or in part, or required to be
repurchased or redeemed, in whole or in part, by Holdings, and which does not
require the payment of cash dividends or distributions, in each case, prior to
the date that is at least ninety-one (91) days after the later to occur of
(i) the Revolving Commitment Termination Date and (ii) the Term Loan Maturity
Date, (b) is not secured by the assets of any Credit Party, (c) is not
convertible or exchangeable into Indebtedness of any Credit Party and (d) does
not constitute Indebtedness of any Credit Party and (e) does not result in a
Change of Control.

“Permitted Preferred Securities Redemption” means the repurchase or redemption,
on or before December 31, 2012, of all or a portion of the Preferred Securities
for an amount not to exceed $6,000,000.

“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, Joint Ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.

“Phase I Report” means, with respect to any Facility, a report that (i) conforms
to the ASTM Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process, E 1527, (ii) was conducted no more than
six months prior to the date such report is required to be delivered hereunder,
by one or more environmental consulting firms reasonably satisfactory to
Administrative Agent, (iii) includes an assessment of asbestos-containing
materials at such Facility, (iv) is accompanied by (a) an estimate of the
reasonable worst-case cost of investigating and remediating any Hazardous
Materials Activity identified in the Phase I Report as giving rise to an actual
or potential material violation of any Environmental Law or as presenting a
material risk of giving rise to a material Environmental Claim, and (b) a
current compliance audit setting forth an assessment of Holdings’, its
Subsidiaries’ and such Facility’s current and past compliance with Environmental
Laws and an estimate of the cost of rectifying any non-compliance with current
Environmental Laws identified therein and the cost of compliance with reasonably
anticipated future Environmental Laws identified therein.

“Pledge and Security Agreement” means the Pledge and Security Agreement to be
executed by Company and each Guarantor substantially in the form of Exhibit I,
as it may be amended, amended and restated, joined, supplemented and/or
otherwise modified from time to time.

 

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“Preferred Securities” means the 1.2 million shares of Series A Preferred Stock
issued by Holdings in connection with the Settlement of the class action
captioned Johnson et al. vs. Morton’s Restaurant Group, Inc., et al. brought
before the American Arbitration Association.

“Pre-opening Costs” means customary costs and expenses incurred by Holdings or
its Subsidiaries prior to the opening of new or relocated restaurants,
including, without limitation, training costs, advertising expenses, food costs
and rent expense.

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money
Rates Section as the Prime Rate (currently defined as the base rate on corporate
loans posted by at least seventy percent (70%) of the nation’s ten (10) largest
banks), as in effect from time to time. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. Agent or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.

“Principal Office” means, for Administrative Agent, such Person’s “Principal
Office” as set forth on Appendix B, or such other office as such Person may from
time to time designate in writing to Company, Administrative Agent and each
Lender; provided, however, that for the purpose of making any payment on the
Obligations or any other amount due hereunder or any other Credit Document, the
Principal Office of Administrative Agent shall be 200 West Street, New York, New
York 10282 (or such other location within the City and State of New York as
Administrative Agent may from time to time designate in writing to Company and
each Lender).

“Projections” as defined in Section 4.8.

“Pro Rata Share” means (i) with respect to all payments, computations and other
matters relating to the Term Loan of any Lender, the percentage obtained by
dividing (a) the Term Loan Exposure of that Lender, by (b) the aggregate Term
Loan Exposure of all Lenders; and (ii) with respect to all payments,
computations and other matters relating to the Revolving Commitment or Revolving
Loans of any Lender, the percentage obtained by dividing (a) the Revolving
Exposure of that Lender, by (b) the aggregate Revolving Exposure of all Lenders.
For all other purposes with respect to each Lender, “Pro Rata Share” means the
percentage obtained by dividing (A) an amount equal to the sum of the Term Loan
Exposure and the Revolving Loan Exposure of that Lender, by (B) an amount equal
to the sum of the aggregate Term Loan Exposure and the aggregate Revolving
Exposure of all Lenders.

“Protective Advance” as defined in Section 2.2(c).

“Real Estate Asset” means, at any time of determination, any interest (fee,
leasehold or otherwise) then owned by any Credit Party in any real property.

“Reduction” as defined in Section 2.11(b).

“Reduction Date” as defined in Section 2.11(b).

 

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“Register” as defined in Section 2.6(b).

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

“Related Fund” means, with respect to any Lender that is an investment fund, any
other investment fund that invests in commercial loans and that is managed or
advised by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement of
any Hazardous Material through the air, soil, surface water or groundwater.

“Replacement Lender” as defined in Section 2.22.

“Required Prepayment Date” as defined in Section 2.14(c).

“Requisite Class Lenders” means, at any time of determination, but subject to
the provisions of Section 2.21, (i) for the Class of Lenders having Term Loan
Exposure, Lenders holding more than fifty percent (50%) of the aggregate Term
Loan Exposure of all Lenders; and (ii) for the Class of Lenders having Revolving
Exposure, Lenders holding more than fifty percent (50%) of the aggregate
Revolving Exposure of all Lenders.

“Requisite Lenders” means one or more Lenders having or holding Term Loan
Exposure and/or Revolving Exposure and representing more than fifty percent
(50%) of the sum of (i) the aggregate Term Loan Exposure of all Lenders; and
(ii) the aggregate Revolving Exposure of all Lenders.

“Restricted Cash” means money, currency or a credit balance in any Deposit
Account or Securities Account (i) held by any JV Subsidiary or (ii) pledged to a
Third Party L/C Issuer for the purposes of providing cash collateral to the
extent permitted by Sections 6.1(k) and Section 6.2(o) hereof.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of Capital Stock of Holdings
or Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of Capital Stock to the holders of that class; (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of Holdings or Company now or hereafter outstanding; (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants, options
or other rights to acquire shares of any class of Capital Stock of Holdings or
Company now or hereafter outstanding; and (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance), sinking
fund or similar payment with respect to, any Subordinated Indebtedness.

 

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“Revolving Commitment” means the commitment of a Lender to make or otherwise
fund any Revolving Loan and “Revolving Commitments” means such commitments of
all Lenders in the aggregate. The amount of each Lender’s Revolving Commitment,
if any, is set forth on Appendix A-3 or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions
hereof. The aggregate amount of the Revolving Commitments as of the Closing Date
is $10,000,000.

“Revolving Commitment Period” means the period from the Closing Date to but
excluding the Revolving Commitment Termination Date.

“Revolving Commitment Termination Date” means the earliest to occur of
(i) December 8, 2015; (ii) the date the Revolving Commitments are permanently
reduced to zero pursuant to Section 2.12(b) or 2.13; and (iii) the date of the
termination of the Revolving Commitments pursuant to Section 8.1.

“Revolving Exposure” means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Revolving Commitments, that
Lender’s Revolving Commitment; and (ii) after the termination of the Revolving
Commitments, the sum of the aggregate outstanding principal amount of the
Revolving Loans of that Lender.

“Revolving Loan” means a Loan made by a Lender to Company pursuant to
Section 2.2(a).

“Revolving Loan Note” means a promissory note in the form of Exhibit B-3, as it
may be amended, amended and restated, replaced, supplemented and/or otherwise
modified from time to time.

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation.

“Secured Parties” has the meaning assigned to that term in the Pledge and
Security Agreement.

“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

“Securities Account” has the meaning given to such term by Section 8-501 of the
UCC.

“Securities Act” means the Securities Act of 1933, as amended to the date hereof
and from time to time, and any successor statute.

 

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“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended
to the date hereof and from time to time, and any successor statute.

“Senior Leverage Multiple” means, as of the last day of any month ended during
the Fiscal Quarters set forth below, the correlative number indicated below:

 

Fiscal Quarter

   Senior Leverage
Multiple

January 2, 2011

   2.75

April 3, 2011

   2.75

July 3, 2011

   2.75

October 2, 2011

   2.75

January 1, 2012

   2.50

April 1, 2012

   2.50

July 1, 2012

   2.50

September 30, 2012

   2.50

December 30, 2012

   2.25

March 31, 2013

   2.25

June 30, 2013

   2.25

September 29, 2013

   2.25

December 29, 2013

   2.00

March 30, 2014

   2.00

June 29, 2014

   2.00

September 28, 2014

   2.00

December 28, 2014, and each Fiscal Quarter thereafter.

   1.75

“Senior Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter
or other date of determination of (i) Consolidated Total Debt (excluding
(a) Subordinated Indebtedness and (b) the Miami Beach Indebtedness) minus Cash
and Cash Equivalents in excess of $1,000,000 to (ii) Consolidated Adjusted
EBITDA for the four-Fiscal Quarter period ending on such date.

“Solvency Certificate” means a Solvency Certificate of the chief financial
officer of Holdings substantially in the form of Exhibit G-2.

“Solvent” means, with respect to the Credit Parties taken as a whole, that as of
the date of determination, both (i) (a) the sum of the Credit Parties’ debt
(including contingent

 

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liabilities) does not exceed the present fair saleable value of the Credit
Parties’ present assets; (b) the Credit Parties’ capital is not unreasonably
small in relation to its business as contemplated on the Closing Date and
reflected in the Projections or with respect to any transaction contemplated or
undertaken after the Closing Date; and (c) the Credit Parties have not incurred
and do not intend to incur, or believe that they will incur, debts beyond their
ability to pay such debts as they become due (whether at maturity or otherwise);
and (ii) the Credit Parties are “solvent” within the meaning given that term and
similar terms under applicable laws relating to fraudulent transfers and
conveyances. For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under Statement of Financial Accounting Standard No. 5).

“Sponsor” means (i) Castle Harlan Partners III, L.P. or any Affiliate or limited
partner thereof or any fund or account controlled or managed by or under common
control with Castle Harlan Partners III, L.P. or any Affiliate or limited
partner thereof, (ii) Castle Harlan, Inc. or (iii) Laurel Crown Capital, LLC or
any Affiliate or limited partner thereof or any fund or account controlled or
managed by or under common control Laurel Crown Capital, LLC or any Affiliate or
limited partner thereof, and employees, management and directors of, and pooled
investment vehicles managed by, any of the foregoing, their limited partners and
their respective Affiliates.

“Subject Transaction” means (a) any Asset Sale, (b) any Permitted Acquisition
and (c) any liquidation of a Subsidiary or cessation of business activities by a
Subsidiary.

“Subordination Agreement” means (a) an agreement among any Credit Party, a
subordinating creditor of such Credit Party and the Administrative Agent, on
behalf of the Lenders, pursuant to which, among other things, the Subordinated
Indebtedness is subordinated to the prior payment and satisfaction of the
Obligations and (b) any note, indenture, note purchase agreement or similar
instrument or agreement, pursuant to which the indebtedness evidenced thereby or
issued thereunder is subordinated to the Obligations by the express terms of
such note, indenture, note purchase agreement or similar instrument or
agreement, in each case, in form and substance reasonably satisfactory to
Administrative Agent and the Requisite Lenders and as the same may be amended,
amended and restated, supplemented and/or otherwise modified from time to time
in accordance with this Agreement.

“Subordinated Indebtedness” means any Indebtedness incurred by any Credit Party
that is expressly subordinated to the prior payment and satisfaction of the
Obligations pursuant to a Subordination Agreement, as the same may be increased,
renewed, replaced, extended, supplemented and/or otherwise modified in
accordance with this Agreement. Without limiting the foregoing, any such
Indebtedness shall (a) not require cash interest payments at a rate in excess of
thirteen percent (13%) per annum, (b) have no scheduled principal installments
and shall be due and payable only upon the maturity of such Indebtedness, and
(c) have a stated maturity date that is at least ninety-one (91) days after the
later to occur of (i) the Revolving Commitment Termination Date and (ii) the
Term Loan Maturity Date.

 

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“Subordinated Indebtedness Documents” means any agreement evidencing
Subordinated Indebtedness and all security agreements, guaranty agreements and
other documents, agreements and instruments executed in connection therewith, in
each case, as the same may be amended, amended and restated, replaced, renewed,
extended, supplemented and/or otherwise modified from time to time in accordance
with this Agreement.

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association, joint venture or other business entity
of which more than fifty percent (50%) of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
“qualifying share” of the former Person shall be deemed to be outstanding.
Notwithstanding anything to the contrary contained herein, the term “Subsidiary”
shall not include any Inactive Subsidiary for purposes of Section 4 hereof.

“Syndication Agent” as defined in the preamble hereto.

“Tax” means any present or future tax, levy, impost, duty, assessment, charge,
fee, deduction or withholding of any nature and whatever called, by whomsoever,
on whomsoever and wherever imposed, levied, collected, withheld or assessed;
provided, “Tax on the overall net income” of a Person shall be construed as a
reference to a tax imposed by the jurisdiction in which that Person is organized
or in which that Person’s applicable principal office (and/or, in the case of a
Lender, its lending office) is located or in which that Person (and/or, in the
case of a Lender, its lending office) is deemed to be doing business on all or
part of the net income, profits or gains (whether worldwide, or only insofar as
such income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise) of that Person (and/or, in the case of a
Lender, its applicable lending office) and any Taxes imposed on any
“withholdable payment” payable to such recipient as a result of the failure of
such recipient to satisfy the applicable requirements as set forth in FATCA
after December 31, 2012.

“Term Loan” means a Term Loan made by Lender pursuant to Section 2.1(a).

“Term Loan Commitment” means the commitment of a Lender to make or otherwise
fund a Term Loan and “Term Loan Commitments” means such commitments of all
Lenders in the aggregate. The amount of each Lender’s Term Loan Commitment, if
any, is set forth on Appendix A or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions
hereof. The aggregate amount of the Term Loan Commitments as of the Closing Date
is $60,000,000.

“Term Loan Exposure” means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Term Loans of such
Lender.

 

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“Term Loan Maturity Date” means the earlier of (i) December 8, 2015, and
(ii) the date that all Term Loans become due and payable in full hereunder,
whether by acceleration or otherwise.

“Term Loan Note” means a promissory note in the form of Exhibit B-1, as it may
be amended, amended and restated, replaced, supplemented and/or otherwise
modified from time to time.

“Terminated Lender” as defined in Section 2.22.

“Title Policy” as defined in Section 3.1(h).

“Third Party L/C Issuer” means a financial institution that is not an Affiliate
of Administrative Agent or a Lender and that issues Letters of Credit for the
account of the Company.

“Third Party Letter of Credit” means a standby letter of credit issued, or to be
issued, for the account of the Company and/or its Subsidiaries by a Third Party
L/C Issuer.

“Total Utilization of Revolving Commitments” means, as at any date of
determination, the aggregate principal amount of all outstanding Revolving
Loans.

“Trademark Security Agreement” as defined in the Pledge and Security Agreement.

“Transaction Costs” means the fees, costs and expenses incurred by Holdings,
Company or any of Company’s Subsidiaries in connection with the transactions
contemplated by the Credit Documents.

“Type of Loan” means with respect to either Term Loans or Revolving Loans, a
Base Rate Loan or a LIBOR Rate Loan.

“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

“Unadjusted LIBOR Rate Component” means that component of the interest costs to
the Company in respect of a LIBOR Rate Loan that is based upon the rate obtained
pursuant to clause (i) of the definition of Adjusted LIBOR Rate.

“Waivable Mandatory Prepayment” as defined in Section 2.14(c).

1.2 Accounting Terms.

Except as otherwise expressly provided herein, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP. Except as provided below in this Section 1.2, calculations in
connection with the definitions, covenants and other provisions hereof shall
utilize accounting principles and policies in conformity with those used to
prepare the Historical Financial Statements. Financial statements and other
information

 

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required to be delivered by Holdings to Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such preparation. If at any time, any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan Document
if such change were applied to such computation, and Holdings shall so request,
the Administrative Agent, the Lenders and Holdings shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Requisite Lenders);
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP as used to prepare the Historical Financial
Statements and (ii) Holdings shall provide to the Administrative Agent and the
Lenders such documents as reasonably requested by the Administrative Agent
setting forth a reconciliation between calculations of such ratio or requirement
made before and after giving effect to such change in GAAP.

1.3 Interpretation, etc.

Any of the terms defined herein may, unless the context otherwise requires, be
used in the singular or the plural, depending on the reference. References
herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an
Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise
specifically provided. The use herein of the word “include” or “including,” when
following any general statement, term or matter, shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
no limiting language (such as “without limitation” or “but not limited to” or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter. Unless otherwise
expressly provided herein, (a) all references to documents, instruments and
other agreements (including the Credit Documents) shall be deemed to include all
subsequent amendments, restatements, amendments and restatements, supplements
and other modifications thereto, but only to the extent that such amendments,
restatements, amendments and restatements, supplements and other modifications
are not prohibited by any Credit Document and (b) references to any law,
statute, rule or regulation shall include all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting
such law. Unless otherwise specified, all references herein to times of day
shall be references to New York City time (daylight or standard, as applicable).

1.4 Certain Calculations.

For purposes of (i) determining compliance with the financial covenants set
forth in Section 6.8, including when giving Pro Forma Effect to a Permitted
Acquisition pursuant to clause (iv) of the definition of “Permitted
Acquisitions,” and (ii) the calculation of the Senior Leverage Ratio for
purposes of Section 2.13(e) or the definition of “Applicable Margin”
(collectively, the “Applicable Calculations”), the following shall apply:

(a) If any Subject Transaction shall have occurred during the period of four
consecutive Fiscal Quarters ended on or prior to the applicable Calculation Date
(as hereinafter defined) (the “Test Period”) or subsequent to such Test Period
and on or prior to the applicable Calculation Date, the Applicable Calculations
shall be calculated with respect to such period giving pro forma effect to such
Subject Transaction.

 

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(b) In the event that Holdings or any of its Subsidiaries incurs, assumes,
guarantees, repays, repurchases, redeems, defeases, retires, extinguishes or
otherwise discharges any Indebtedness subsequent to the commencement of the Test
Period for which the Applicable Calculations are being calculated and on or
prior to the date on which the event for which the Applicable Calculations are
being calculated occurs or as of which the calculation is otherwise made (the
“Calculation Date”), then the Applicable Calculations will be calculated giving
pro forma effect to such incurrence, assumption, guarantee, repayment,
repurchase, redemption, defeasance, retirement, extinguishment or other
discharge of Indebtedness (and any change in Consolidated Interest Expense
resulting therefrom), and the use of the proceeds therefrom, as if the same had
occurred at the beginning of the applicable Test Period, provided that (i) in
calculating the Consolidated Cash Interest Expense and Consolidated Interest
Expense, no pro forma effect shall be given to the incurrence or repayment of
working capital borrowings, unless such Indebtedness has been permanently repaid
and (ii) in calculating the Senior Leverage Ratio as of the Calculation Date or
the last day of the Test Period, the amount of outstanding Consolidated Total
Debt and Subordinated Indebtedness shall be calculated based upon the amount
outstanding as of the Calculation Date or such last day of the Test Period, as
the case may be, giving pro forma effect to the incurrence or repayment of any
such Indebtedness on such date.

(c) If since the beginning of the Test Period any person (that subsequently
became a Subsidiary of Holdings or was merged with or into Holdings or any
Subsidiary of Holdings since the beginning of such period) shall have made any
transaction that would have required adjustment pursuant to this Section 1.4,
then the Applicable Calculations shall be calculated giving pro forma effect
thereto for such period as if such transaction had occurred at the beginning of
the applicable Test Period;

(d) In calculating the Applicable Calculations, any Person that is a Subsidiary
on the applicable Calculation Date will be deemed to have been a Subsidiary at
all times during such Test Period;

(e) In calculating the Applicable Calculations, any Person that is not a
Subsidiary on the applicable Calculation Date will be deemed not to have been a
Subsidiary at any time during such Test Period;

(f) In calculating the Applicable Calculations, if any Indebtedness bears a
floating rate of interest, the interest expense on such Indebtedness will be
calculated as if the rate in effect on the applicable Calculation Date had been
the applicable rate for the entire period (after giving effect to the operation
of any Hedging Agreement applicable to such Indebtedness); and

(g) In calculating the Applicable Calculations for any period, interest on any
Indebtedness under a revolving credit facility shall be computed based upon the
average daily balance of such Indebtedness during the portion of the period
during which the Indebtedness was outstanding.

 

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SECTION 2. LOANS

2.1 Term Loans.

(a) Loan Commitments. Subject to the terms and conditions hereof, each Lender
severally agrees to make, on the Closing Date, a Term Loan to Company in an
amount equal to such Lender’s Term Loan Commitment. Company may make only one
borrowing under the Term Loan Commitment which shall be on the Closing Date. Any
amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may
not be reborrowed. Subject to Sections 2.11, 2.12 and 2.13, all amounts owed
hereunder with respect to the Term Loan shall be paid in full no later than the
Term Loan Maturity Date. Each Lender’s Term Loan Commitment shall terminate
immediately and without further action on the Closing Date after giving effect
to the funding of such Lender’s Term Loan Commitment on such date.

(b) Borrowing Mechanics for Term Loans.

(i) Company shall deliver to Administrative Agent a fully executed Funding
Notice no later than one (1) Business Day prior to the Closing Date with respect
to Term Loans made on the Closing Date. Promptly upon receipt by Administrative
Agent of such Funding Notice, Administrative Agent shall notify each Lender of
the proposed borrowing.

(ii) Each Lender shall make its Term Loan available to Administrative Agent not
later than 12:00 p.m. (New York City time) on the Closing Date, by wire transfer
of same day funds in Dollars, at Administrative Agent’s Principal Office. Upon
satisfaction or waiver of the conditions precedent specified herein,
Administrative Agent shall make the proceeds of the Term Loans available to
Company on the Closing Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Company at Administrative Agent’s
Principal Office or to such other account as may be designated in writing to
Administrative Agent by Company.

2.2 Revolving Loans.

(a) Revolving Commitments. During the Revolving Commitment Period, subject to
the terms and conditions hereof, each Lender severally agrees to make Revolving
Loans to Company in an aggregate amount up to but not exceeding such Lender’s
Revolving Commitment; provided, that after giving effect to the making of any
Revolving Loans in no event shall the Total Utilization of Revolving Commitments
exceed the Revolving Commitments then in effect. Amounts borrowed pursuant to
this Section 2.2(a) may be repaid and reborrowed during the Revolving Commitment
Period. Each Lender’s Revolving Commitment shall expire on the Revolving
Commitment Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Commitments
shall be paid in full no later than such date.

 

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(b) Borrowing Mechanics for Revolving Loans.

(i) Except pursuant to Section 2.3(d), Revolving Loans that are Base Rate Loans
shall be made in an aggregate minimum amount of $100,000 and integral multiples
of $100,000 in excess of that amount, and Revolving Loans that are LIBOR Rate
Loans shall be in an aggregate minimum amount of $100,000 and integral multiples
of $100,000 in excess of that amount.

(ii) Whenever Company desires that Lenders make Revolving Loans, Company shall
deliver to Administrative Agent a fully executed Funding Notice by facsimile or
electronic mail no later than 12:00 p.m. (New York City time) at least three
(3) Business Days in advance of the proposed Credit Date in the case of a LIBOR
Rate Loan, and at least one (1) Business Day in advance of the proposed Credit
Date in the case of a Revolving Loan that is a Base Rate Loan. Except as
otherwise provided herein, a Funding Notice for a Revolving Loan that is a LIBOR
Rate Loan shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.

(iii) Notice of receipt of each Funding Notice in respect of Revolving Loans,
together with the amount of each Lender’s Pro Rata Share thereof, if any,
together with the applicable interest rate, shall be provided by Administrative
Agent to each applicable Lender by telefacsimile with reasonable promptness, but
(provided Administrative Agent shall have received such notice by 12:00 p.m.
(New York City time)) not later than 2:00 p.m. (New York City time) on the same
day as Administrative Agent’s receipt of such Notice from Company.

(iv) Each Lender shall make the amount of its Revolving Loan available to
Administrative Agent not later than 12:00 p.m. (New York City time) on the
applicable Credit Date by wire transfer of same day funds in Dollars, at
Administrative Agent’s Principal Office. Except as provided herein, upon
satisfaction or waiver of the conditions precedent specified herein,
Administrative Agent shall make the proceeds of such Revolving Loans available
to Company on the applicable Credit Date by causing an amount of same day funds
in Dollars equal to the proceeds of all such Revolving Loans received by
Administrative Agent from Lenders to be credited to the account of Company at
Administrative Agent’s Principal Office or such other account as may be
designated in writing to Administrative Agent by Company.

(c) Protective Advances. Subject to the limitations set forth below, and whether
or not an Event of Default or a Default shall have occurred and be continuing,
Administrative Agent is authorized by Company and the Lenders, from time to time
in Administrative Agent’s sole discretion (but Administrative Agent shall have
absolutely no obligation to), to make Revolving Loans to Company on behalf of
the Revolving Lenders, which Administrative Agent, in its sole discretion, deems
necessary or desirable (i) to preserve or protect the Collateral, or any portion
thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment
of the Loans and other Obligations, or (iii) to pay any other amount chargeable
to or required to be paid by Company pursuant to the terms of this Agreement and
the other Credit Documents, including, without limitation, payments of
principal, interest, fees and reimbursable expenses (any of such Loans are in
this clause (c) referred to as “Protective Advances”); provided, that the amount
of Revolving Loans plus Protective Advances shall not

 

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exceed the Revolving Commitments then in effect. Protective Advances may be made
even if the conditions precedent set forth in Section 3 have not been satisfied.
All Protective Advances shall be Base Rate Loans. Protective Advances shall not
exceed $2,000,000 in the aggregate at any time without the prior consent of
Requisite Lenders. Each Protective Advance shall be secured by the Liens in
favor of the Collateral Agent in and to the Collateral and shall constitute
Obligations hereunder. Company shall pay the unpaid principal amount and all
unpaid and accrued interest of each Protective Advance on the earlier of the
Revolving Commitment Termination Date and the date on which demand for payment
is made by Administrative Agent.

2.3 [Reserved.]

2.4 Pro Rata Shares; Availability of Funds.

(a) Pro Rata Shares. All Loans shall be made, and all participations purchased,
by Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any default
by any other Lender in such other Lender’s obligation to make a Loan requested
hereunder or purchase a participation required hereby nor shall any Term Loan
Commitment or any Revolving Commitment of any Lender be increased or decreased
as a result of a default by any other Lender in such other Lender’s obligation
to make a Loan requested hereunder or purchase a participation required hereby.

(b) Availability of Funds. Unless Administrative Agent shall have been notified
by any Lender prior to the applicable Credit Date that such Lender does not
intend to make available to Administrative Agent the amount of such Lender’s
Loan requested on such Credit Date, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on such Credit
Date and Administrative Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on such Credit
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three (3) Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent’s demand therefor, Administrative
Agent shall promptly notify Company and Company shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for
each day from such Credit Date until the date such amount is paid to
Administrative Agent, at the rate payable hereunder for Base Rate Loans for such
Class of Loans. Nothing in this Section 2.4(b) shall be deemed to relieve any
Lender from its obligation to fulfill its Term Loan Commitments and Revolving
Commitments hereunder or to prejudice any rights that Company may have against
any Lender as a result of any default by such Lender hereunder.

2.5 Use of Proceeds.

The proceeds of the Term Loans and the Revolving Loans, if any, made on the
Closing Date shall be used by Company (i) to repay the Existing Indebtedness and
(ii) to pay Transaction

 

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Costs. The proceeds of the Revolving Loans made after the Closing Date shall be
used by Company for working capital and general corporate purposes of Holdings
and its Subsidiaries (other than Inactive Subsidiaries). No portion of the
proceeds of any Credit Extension shall be used in any manner that causes or
might cause such Credit Extension or the application of such proceeds to violate
Regulation T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation thereof or to violate the
Exchange Act.

2.6 Evidence of Debt; Register; Lenders’ Books and Records; Notes.

(a) Lenders’ Evidence of Debt. Each Lender shall maintain on its internal
records an account or accounts evidencing the Obligations of Company to such
Lender, including the amounts of the Loans made by it and each repayment and
prepayment in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; provided, that the failure to make
any such recordation, or any error in such recordation, shall not affect any
Lender’s Revolving Commitments or Company’s Obligations in respect of any
applicable Loans; and provided further, in the event of any inconsistency
between the Register and any Lender’s records, the recordations in the Register
shall govern.

(b) Register. Administrative Agent shall maintain at its Principal Office a
register for the recordation of the names and addresses of Lenders and the
Revolving Commitments and Loans of each Lender from time to time (the
“Register”). The Register shall be available for inspection by Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice. Administrative Agent shall record in the Register the Revolving
Commitments and the Loans, and each repayment or prepayment in respect of the
principal amount of the Loans, and any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided, failure to
make any such recordation, or any error in such recordation, shall not affect
any Lender’s Revolving Commitments or Company’s Obligations in respect of any
Loan. Company hereby designates the entity serving as Administrative Agent to
serve as Company’s agent solely for purposes of maintaining the Register as
provided in this Section 2.6, and Company hereby agrees that, to the extent such
entity serves in such capacity, the entity serving as Administrative Agent and
its officers, directors, employees, agents and affiliates shall constitute
“Indemnitees.”

(c) Notes. If so requested by any Lender by written notice to Company (with a
copy to Administrative Agent) at least two (2) Business Days prior to the
Closing Date, or at any time thereafter, Company shall execute and deliver to
such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to Section 10.6) on the
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Company’s receipt of such notice) a Note or Notes to evidence such
Lender’s Term Loan or Revolving Loan, as the case may be.

2.7 Interest on Loans.

(a) Except as otherwise set forth herein, each Class of Loan shall bear interest
on the unpaid principal amount thereof from the date made through repayment
(whether by acceleration or otherwise) thereof as follows:

(i) if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or

 

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(ii) if a LIBOR Rate Loan, at the Adjusted LIBOR Rate plus the Applicable
Margin;

Notwithstanding anything to the contrary contained herein, (a) but subject to
Section 2.7(h), in no event shall (i) the Adjusted LIBOR Rate be less than one
and three-quarters percent (1.75%) per annum or (ii) the Base Rate be less than
four and three-quarters percent (4.75%) per annum and (b) but subject to
Section 2.9, all Revolving Loans made by Lenders to the Company solely for
purposes of providing cash collateral to a Third Party L/C Issuer, to the extent
permitted by Sections 6.1(k) and 6.2(o) hereof, shall bear interest at the
Applicable Margin for Revolving Loans that are LIBOR Rate Loans.

(b) The basis for determining the rate of interest with respect to any Loan, and
the Interest Period with respect to any LIBOR Rate Loan, shall be selected by
Company and notified to Administrative Agent and Lenders pursuant to the
applicable Funding Notice or Conversion/Continuation Notice, as the case may be.
If on any day a Loan is outstanding with respect to which a Funding Notice or
Conversion/Continuation Notice has not been delivered to Administrative Agent in
accordance with the terms hereof specifying the applicable basis for determining
the rate of interest, then for that day such Loan shall be a Base Rate Loan.

(c) In connection with LIBOR Rate Loans there shall be no more than seven
(7) Interest Periods outstanding at any time. In the event Company fails to
specify between a Base Rate Loan or a LIBOR Rate Loan in the applicable Funding
Notice or Conversion/Continuation Notice, such Loan (if outstanding as a LIBOR
Rate Loan) will be automatically converted into a Base Rate Loan on the last day
of the then-current Interest Period for such Loan (or if outstanding as a Base
Rate Loan will remain as, or (if not then outstanding) will be made as, a Base
Rate Loan). In the event Company fails to specify an Interest Period for any
LIBOR Rate Loan in the applicable Funding Notice or Conversion/Continuation
Notice, Company shall be deemed to have selected an Interest Period of one
month. As soon as practicable after 12:00 p.m. (New York City time) on each
Interest Rate Determination Date, Administrative Agent shall determine (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the LIBOR Rate Loans for
which an interest rate is then being determined for the applicable Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to Company and each Lender.

(d) Interest payable pursuant to Section 2.7(a) shall be computed on the basis
of a 360-day year, in each case for the actual number of days elapsed in the
period during which it accrues. In computing interest on any Loan, the date of
the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a LIBOR Rate
Loan, the date of conversion of such LIBOR Rate Loan to such Base Rate Loan, as
the case may be, shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted to a LIBOR Rate Loan, the date of conversion
of such Base Rate Loan to such LIBOR Rate Loan, as the case may be, shall be
excluded; provided, if a Loan is repaid on the same day on which it is made, one
day’s interest shall be paid on that Loan.

 

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(e) Except as otherwise set forth herein, interest on each Loan shall be payable
in arrears on and to (i) each Interest Payment Date applicable to that Loan;
(ii) upon any prepayment of that Loan, whether voluntary or mandatory, to the
extent accrued on the amount being prepaid; and (iii) at maturity, including
final maturity.

(f) Notwithstanding anything to the contrary contained herein, the interest rate
on any Base Rate Loan for any day shall never be less than the sum of (i) the
rate appearing on Reuters Screen LIBOR01 Page (or any successor or substitute
page of such service or successor or substitute service acceptable to the
Administrative Agent) on such date (or the immediately preceding Business Day,
if such date is not a Business Day), as the rate for dollar deposits with a
maturity comparable to an Interest Period of one (1) month, divided by the sum
of (x) 1 minus (y) the Applicable Reserve Requirement plus (ii) the Applicable
Margin for LIBOR Rate Loans.

2.8 Conversion/Continuation.

(a) Subject to Section 2.17 and so long as no Default or Event of Default shall
have occurred and then be continuing, Company shall have the option:

(i) to convert at any time all or any part of any Term Loan or Revolving Loan
equal to $100,000 and integral multiples of $100,000 in excess of that amount
from one Type of Loan to another Type of Loan; provided, a LIBOR Rate Loan may
only be converted on the expiration of the Interest Period applicable to such
LIBOR Rate Loan unless Company shall pay all amounts due under Section 2.17 in
connection with any such conversion; or

(ii) upon the expiration of any Interest Period applicable to any LIBOR Rate
Loan, to continue all or any portion of such Loan equal to $100,000 and integral
multiples of $100,000 in excess of that amount as a LIBOR Rate Loan.

(b) Company shall deliver a Conversion/Continuation Notice to Administrative
Agent no later than 12:00 p.m. (New York City time) at least one (1) Business
Day in advance of the proposed conversion date (in the case of a conversion to a
Base Rate Loan) and at least three (3) Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a LIBOR Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any LIBOR
Rate Loans (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.

2.9 Default Interest.

Upon the occurrence and during the continuance of an Event of Default, the
principal amount of all Loans outstanding and, to the extent permitted by
applicable law, any interest

 

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payments on the Loans or any fees or other amounts owed hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate that is two percent (2%) per annum in excess of the interest rate
otherwise payable hereunder with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is two percent (2%) per
annum in excess of the interest rate otherwise payable hereunder for Base Rate
Loans); provided, in the case of LIBOR Rate Loans, upon the expiration of the
Interest Period in effect at the time any such increase in interest rate is
effective such LIBOR Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is two (2%) per
annum in excess of the interest rate otherwise payable hereunder for Base Rate
Loans. Payment or acceptance of the increased rates of interest provided for in
this Section 2.9 is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.

2.10 Fees.

(a) Company agrees to pay to Lenders having Revolving Exposure, commitment fees
equal to (1) the average of the daily difference between (i) the Revolving
Commitments, and (ii) the aggregate principal amount of outstanding Revolving
Loans, multiplied by (2) one-half of one percent (0.50%) per annum, which
commitment fees shall be paid to Administrative Agent as set forth in
Section 2.15(a) and upon receipt, Administrative Agent shall promptly distribute
to each Lender its Pro Rata Share thereof.

(b) All fees referred to in Section 2.10(a) shall be calculated on the basis of
a 360-day year and the actual number of days elapsed and shall be payable
monthly in arrears on the last day of each month during the Revolving Commitment
Period, commencing on the first such date to occur after the Closing Date, and
on the Revolving Commitment Termination Date.

(c) In addition to any of the foregoing fees, Company agrees to pay to Agents
such other fees in the amounts and at the times separately agreed upon.

The fees described in this Sections 2.10 and in the Fee Letter constitute part
of the Obligations. All fees described in this Section 2.10 and in the Fee
Letter shall be deemed earned in full on the date when the same is due and
payable hereunder and shall not be subject to rebate or proration upon
termination of this Agreement for any reason.

 

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2.11 Scheduled Payments/Commitment Reductions.

(a) Scheduled Installments. The principal amounts of the Term Loans shall be
repaid in consecutive quarterly installments (each, an “Installment”) in the
aggregate amounts set forth below on the Business Day immediately preceding the
last day of each Fiscal Quarter set forth in the table below (each, an
“Installment Date”), commencing January 2, 2011:

 

Fiscal Quarter

   Term Loan Installments  

January 2, 2011

   $ 2,600,000.00   

April 3, 2011

   $ 466,666.67   

July 3, 2011

   $ 466,666.67   

October 2, 2011

   $ 466,666.66   

January 1, 2012

   $ 2,600,000.00   

April 1, 2012

   $ 466,666.67   

July 1, 2012

   $ 466,666.67   

September 30, 2012

   $ 466,666.66   

December 30, 2012

   $ 3,900,000.00   

March 31, 2013

   $ 700,000.00   

June 30, 2013

   $ 700,000.00   

September 29, 2013

   $ 700,000.00   

December 29, 2013

   $ 3,900,000.00   

March 30, 2014

   $ 700,000.00   

June 29, 2014

   $ 700,000.00   

September 28, 2014

   $ 700,000.00   

December 28, 2014

   $ 3,900,000.00   

March 29, 2015

   $ 700,000.00   

June 28, 2015

   $ 700,000.00   

September 27, 2015

   $ 700,000.00   

Term Loan Maturity Date

    
 
  The unpaid principal
amount of the Term
Loan then outstanding   
  
  

Notwithstanding the foregoing, (x) such Installments shall be reduced in
connection with any voluntary or mandatory prepayments of the Term Loan in
accordance with Sections 2.11, 2.12 and 2.13, as applicable; and (y) the Term
Loan, together with all other amounts owed hereunder with respect thereto,
shall, in any event, be paid in full no later than the Term Loan Maturity Date.

 

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2.12 Voluntary Prepayments/Commitment Reductions.

(a) Voluntary Prepayments.

(i) Any time and from time to time:

(1) with respect to Base Rate Loans, Company may prepay any such Loans on any
Business Day in whole or in part, in an aggregate minimum amount of $100,000 and
integral multiples of $100,000 in excess of that amount; and

(2) with respect to LIBOR Rate Loans, Company may prepay any such Loans on any
Business Day in whole or in part (together with any amounts due pursuant to
Section 2.17(c)) in an aggregate minimum amount of $100,000 and integral
multiples of $100,000 in excess of that amount.

(ii) All such prepayments shall be made:

(1) upon not less than one (1) Business Day’s prior written or telephonic notice
in the case of Base Rate Loans; and

(2) upon not less than three (3) Business Days’ prior written or telephonic
notice in the case of LIBOR Rate Loans,

in each case given to Administrative Agent by 12:00 p.m. (New York City time) on
the date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (and Administrative Agent will promptly transmit such
telephonic or original notice for Term Loans or Revolving Loans, as the case may
be, by telefacsimile or telephone to each Lender). Upon the giving of any such
notice, the principal amount of the Loans specified in such notice shall become
due and payable on the prepayment date specified therein. Any such voluntary
prepayment shall be applied as specified in Section 2.14(a) with respect to
Revolving Loans and Section 2.14(b) with respect to Term Loans.

(b) Voluntary Commitment Reductions.

(i) Company may, upon not less than three (3) Business Days’ prior written
notice (which may be given by telefacsimile or electronic mail) or telephonic
notice confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by telefacsimile
or telephone to each applicable Lender), at any time and from time to time
terminate in whole or permanently reduce in part (i) the Revolving Commitments
in an amount up to the amount by which the Revolving Commitments exceed the
Total Utilization of Revolving Commitments at the time of such proposed
termination or reduction, or (ii) any unused portion of the Term Loan
Commitments; provided, any such partial reduction of the Revolving Commitments
and the Term Loan Commitments shall be in an aggregate minimum amount of
$500,000 and integral multiples of $100,000 in excess of that amount.

(ii) Company’s notice to Administrative Agent shall designate the date (which
shall be a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving
Commitments shall be effective on the date specified in Company’s notice and
shall reduce the Revolving Commitment of each Lender proportionately to its Pro
Rata Share thereof.

 

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2.13 Mandatory Prepayments/Commitment Reductions.

(a) Asset Sales. No later than the third (3rd) Business Day following the date
of receipt by any Credit Party of any Net Asset Sale Proceeds in excess of
$2,000,000 in the aggregate in any four consecutive Fiscal Quarter period,
Company shall prepay the Loans and/or the Revolving Commitments shall be
permanently reduced as set forth in Section 2.14(b) in an aggregate amount equal
to such Net Asset Sale Proceeds; provided, so long as no Default or Event of
Default shall have occurred and be continuing, upon delivery of a written notice
to Administrative Agent, Company shall have the option, directly or through one
or more Subsidiaries, to invest Net Asset Sale Proceeds (the “Asset Sale
Reinvestment Amounts”) in assets of the general type used in the business of
Company if such assets are purchased or constructed within three hundred sixty
(360) days following receipt of such Net Asset Sale Proceeds; provided further,
pending any such reinvestment all Asset Sale Reinvestment Amounts shall be, at
the option of Company, either (i) held at all times prior to such reinvestment,
in an escrow account in form and substance reasonably acceptable to
Administrative Agent, or (ii) applied to prepay Revolving Loans to the extent
then outstanding (without a reduction in Revolving Commitments) and upon such
application, the Administrative Agent shall establish a reserve against
Availability in an amount equal to the amount of such Asset Sale Reinvestment
Amounts so applied and, to the extent such Asset Sale Reinvestment Amounts
exceed the amount required to prepay all such Revolving Loans, the balance
thereof shall be held at all times prior to such reinvestment in an escrow
account in form and substance reasonable acceptable to Administrative Agent. In
the event that the Asset Sale Reinvestment Amounts are not reinvested by Company
prior to the earlier of (i) the last day of such three hundred sixty (360) day
period and (ii) the date of the occurrence of an Event of Default,
Administrative Agent shall apply such Asset Sale Reinvestment Amounts to the
Obligations as set forth in Section 2.14(b).

(b) Insurance/Condemnation Proceeds. No later than the fifth (5th) Business Day
following the date of receipt by Holdings or any of its Subsidiaries, or
Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds
in excess of $2,000,000, Company shall prepay the Loans and/or the Revolving
Commitments shall be permanently reduced as set forth in Section 2.14(b) in an
aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided, so
long as no Default or Event of Default shall have occurred and be continuing,
upon delivery of a written notice to Administrative Agent, Company shall have
the option, directly or through one or more of its Subsidiaries to invest such
Net Insurance/Condemnation Proceeds within three hundred sixty (360) days of
receipt thereof in assets of the general type used in the business of Holdings
and its Subsidiaries, which investment may include the repair, restoration or
replacement of the applicable assets thereof; provided further, pending any such
investment all such Net Insurance/Condemnation Proceeds, shall be, at the option
of the Company, either (i) held at all times prior to such investment, in an
escrow account in form and substance reasonably acceptable to Administrative
Agent, or (ii) applied to prepay Revolving Loans to the extent outstanding
(without a reduction in Revolving Commitments) and upon such application, the
Administrative Agent shall establish a reserve against Availability in an amount
equal to the amount of such Net Insurance/Condemnation

 

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Proceeds so applied and, to the extent such Net Insurance/Condemnation Proceeds
exceed the amount required to prepay all such Revolving Loans, the balance
thereof shall be held at all times prior to such reinvestment in an escrow
account in form and substance reasonable acceptable to Administrative Agent. In
the event that the Net Insurance/Condemnation Proceeds are not invested by
Company prior to the earlier of (i) the last day of such three hundred sixty
(360) day period and (ii) the date of the occurrence of an Event of Default,
Administrative Agent shall apply such Net Insurance/Condemnation Proceeds to the
Obligations as set forth in Section 2.14(b).

(c) Issuance of Equity Securities. Not later than the Business Day after receipt
by Holdings of any Cash proceeds from a capital contribution to, or the issuance
of any Capital Stock of, Holdings or any of its Subsidiaries (other than
(i) Capital Stock issued pursuant to any employee stock or stock option
compensation plan, to consummate the Permitted Preferred Securities Redemption,
to consummate Permitted Acquisitions or for other purposes approved in writing
by Administrative Agent, or (ii) Cash proceeds from the issuance of any common
stock of Holdings or Permitted Preferred Stock of up to an aggregate amount not
to exceed $5,000,000 in any four consecutive Fiscal Quarter period, but only to
the extent that (x) no Default or Event of Default has occurred and is
continuing and (y) one hundred percent (100%) of such Cash proceeds are utilized
by Holdings or its Subsidiaries to fund Capital Expenditures or for general
corporate purposes), Company shall prepay the Loans and/or the Revolving
Commitments shall be permanently reduced as set forth in Section 2.14(b) in an
aggregate amount equal to one hundred percent (100%) of such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, in each case, paid to non-Affiliates, including reasonable
legal fees and expenses.

(d) Issuance of Debt. On the date of receipt by Holdings or any of its
Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of
Holdings or any of its Subsidiaries (other than with respect to any Indebtedness
permitted to be incurred pursuant to Section 6.1), Company shall prepay the
Loans and/or the Revolving Commitments shall be permanently reduced as set forth
in Section 2.14(b) in an aggregate amount equal to 100% of such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, in each case, paid to non-Affiliates, including reasonable
legal fees and expenses.

(e) Consolidated Excess Cash Flow. In the event that there shall be Consolidated
Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year 2011), Company
shall, no later than ninety (90) days after the end of such Fiscal Year, prepay
the Loans and/or the Revolving Commitments shall be permanently reduced as set
forth in Section 2.14(b) in an aggregate amount equal to (i) fifty percent
(50%) of such Consolidated Excess Cash Flow if Holdings and its Subsidiaries’
Senior Leverage Ratio is equal to or greater than 2.00 to 1.00 as of the last
Fiscal Quarter of such Fiscal Year; (ii) twenty-five percent (25%) of such
Consolidated Excess Cash Flow if Holdings and its Subsidiaries’ Senior Leverage
Ratio is less than 2.00 to 1.00 but greater than 1.49 to 1.00 as of the last
Fiscal Quarter of such Fiscal Year; and (iii) zero percent (0%) of such
Consolidated Excess Cash Flow if Holdings’ and its Subsidiaries Senior Ratio
Leverage is less than or equal to 1.49 to 1.00 as of the last Fiscal Quarter of
such Fiscal Year. The amount of any prepayment otherwise required by this
Section 2.13(e) with respect to any Fiscal Year shall be treated as voluntary
prepayments made pursuant to Section 2.12(a).

 

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(f) Revolving Loans. Company shall from time to time prepay the Revolving Loans
to the extent necessary so that the Total Utilization of Revolving Commitments
shall not at any time exceed the Revolving Commitments then in effect.

(g) Prepayment of Excess Outstanding Amounts. Concurrently with the delivery of
the financial statements pursuant to Sections 5.1(a), 5.1(b) and 5.1(c), Company
shall prepay Loans in an amount equal to 100% of the amount by which (x) the
Consolidated Total Debt as of the date of such financial statements exceeds
(y) Consolidated Adjusted EBITDA for the twelve-month period ending on the last
day of fiscal month for which such financial statements were prepared,
multiplied by the then applicable Leverage Multiple.

(h) Tax Refunds. On the date of receipt by Holdings or any of its Subsidiaries
of any tax refunds in excess of $2,000,000 in the aggregate in any Fiscal Year,
Company shall prepay Loans and/or Revolving Commitments shall be reduced as set
forth in Section 2.14(b) in the amount of such tax refunds in excess of
$2,000,000.

(i) Change of Control. Upon any Change of Control, Company shall prepay the
Loans and all other outstanding Obligations in full (unless otherwise waived in
writing by Administrative Agent in its reasonable discretion).

(j) Prepayment Certificate. Concurrently with any prepayment of the Loans and/or
reduction of the Revolving Commitments pursuant to Sections 2.13(a) through
2.13(e), Company shall deliver to Administrative Agent a certificate of an
Authorized Officer demonstrating the calculation of the amount of the applicable
net proceeds or Consolidated Excess Cash Flow as the case may be. In the event
that Company shall subsequently determine that the actual amount of proceeds
received exceeded the amount set forth in such certificate, Company shall
promptly make an additional prepayment of the Loans and/or the Revolving
Commitments shall be permanently reduced in an amount equal to the prepayment
that would have been required under this Section in respect of such excess, and
Company shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation of such
excess.

2.14 Application of Prepayments/Reductions.

(a) Application of Voluntary Prepayments of Revolving Loans. Any prepayment of
any Revolving Loan pursuant to Section 2.12 shall be applied to repay
outstanding Revolving Loans to the full extent thereof (without any reduction in
the Revolving Commitments except pursuant to Section 2.12(b)).

(b) Application of Prepayments by Type of Loans. Any voluntary prepayments of
Term Loans pursuant to Section 2.12 and any mandatory prepayment of any Loan
pursuant to Section 2.13 shall be applied as follows:

first, to the payment of all fees, and all expenses specified in Section 10.2,
to the full extent thereof;

 

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second, to the payment of any accrued interest at the Default Rate, if any;

third, to the payment of any accrued interest (other than Default Rate
interest);

fourth, except in connection with any Waivable Mandatory Prepayment in
Section 2.14(c), to prepay Term Loans on a pro rata basis (in accordance with
the respective outstanding principal amounts thereof) to reduce the remaining
scheduled Installments of principal on such Term Loans; and

fifth, to prepay the Revolving Loans to the full extent thereof and to further
permanently reduce the Revolving Commitments to the full extent thereof.

(c) Waivable Mandatory Prepayment. Anything contained herein to the contrary
notwithstanding, in the event Company is required to make any mandatory
prepayment (a “Waivable Mandatory Prepayment”) of the Term Loans, not less than
three (3) Business Days prior to the expected date (the “Required Prepayment
Date”) on which Company is required to make such Waivable Mandatory Prepayment,
Company shall notify Administrative Agent of the expected amount of such
prepayment, and Administrative Agent will promptly thereafter notify each Lender
holding an outstanding Term Loan of the amount of such Lender’s Pro Rata Share
of such Waivable Mandatory Prepayment and such Lender’s option to refuse such
amount. Each such Lender may exercise such option by giving written notice to
Company and Administrative Agent of its election to do so on or before the first
Business Day prior to the Required Prepayment Date (it being understood that any
Lender which does not notify Company and Administrative Agent of its election to
exercise such option on or before the first Business Day prior to the Required
Prepayment Date shall be deemed to have elected, as of such date, not to
exercise such option). On the Required Prepayment Date, Company shall pay to
Administrative Agent the amount of the Waivable Mandatory Prepayment, which
amount shall be applied (i) in an amount equal to that portion of the Waivable
Mandatory Prepayment payable to those Lenders that have elected not to exercise
such option, to prepay the Term Loans of such Lenders (which prepayment shall be
applied to the scheduled Installments of principal of the Term Loans in
accordance with Section 2.14(b)), and (ii) to the extent of any excess, to
Company for working capital and general corporate purposes.

(d) Application of Prepayments of Loans to Base Rate Loans and LIBOR Rate Loans.
Considering each Class of Loans being prepaid separately, any prepayment thereof
shall be applied first to Base Rate Loans to the full extent thereof before
application to LIBOR Rate Loans, in each case in a manner which minimizes the
amount of any payments required to be made by Company pursuant to
Section 2.17(c).

2.15 General Provisions Regarding Payments.

(a) All payments by Company of principal, interest, fees and other Obligations
shall be made in Dollars in immediately available funds, without defense,

 

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recoupment, setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent, for the account of Lenders, not later than
2:00 p.m. (New York City time) on the date due at 399 Park Avenue, New York, New
York 10043 or via wire transfer of immediately available funds to account number
30627664 maintained by Administrative Agent with Citibank, N.A. (ABA
No. 021000089) in New York City (or at such other location or bank account
within the City and State of New York as may be designated by Administrative
Agent from time to time); funds received by Administrative Agent after that time
on such due date shall be deemed to have been paid by Company on the next
Business Day.

(b) All payments in respect of the principal amount of any Loan (other than
voluntary prepayments of Revolving Loans) shall be accompanied by payment of
accrued interest on the principal amount being repaid or prepaid.

(c) Administrative Agent shall promptly distribute to each Lender at such
address as such Lender shall indicate in writing, such Lender’s applicable Pro
Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due with respect thereto, including,
without limitation, all fees payable with respect thereto, to the extent
received by Administrative Agent.

(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any LIBOR
Rate Loans, Administrative Agent shall give effect thereto in apportioning
payments received thereafter.

(e) Subject to the provisos set forth in the definition of “Interest Period,”
whenever any payment to be made hereunder shall be stated to be due on a day
that is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest hereunder or of the commitment fees hereunder.

(f) [Reserved.]

(g) Administrative Agent shall deem any payment by or on behalf of Company
hereunder that is not made in same day funds prior to 2:00 p.m. (New York City
time) to be a non-conforming payment. Any such payment shall not be deemed to
have been received by Administrative Agent until the later of (i) the time such
funds become available funds, and (ii) the applicable next Business Day.
Administrative Agent shall give prompt telephonic notice to Company and each
applicable Lender (confirmed in writing) if any payment is non-conforming. Any
non-conforming payment may constitute or become a Default or Event of Default in
accordance with the terms of Section 8.1(a). Interest shall continue to accrue
on any principal as to which a non-conforming payment is made until such funds
become available funds (but in no event less than the period from the date of
such payment to the next succeeding applicable Business Day) at the Default Rate
determined pursuant to Section 2.9 from the date such amount was due and payable
until the date such amount is paid in full.

(h) If an Event of Default shall have occurred and not otherwise been waived,
and the maturity of the Obligations shall have been accelerated pursuant to
Section 8.1, all

 

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payments or proceeds received by any Agent hereunder or under any Collateral
Document in respect of any of the Obligations (including, but not limited to,
Obligations arising under any Interest Rate Agreement or Currency Agreement that
are owing to any Lender or Lender Counterparty), including, but not limited to
all proceeds received by any Agent in respect of any sale, any collection from,
or other realization upon all or any part of the Collateral, shall be applied in
full or in part as follows: first, to the payment of all costs and expenses of
such sale, collection or other realization, including reasonable compensation to
each Agent and its agents and counsel, and all other expenses, liabilities and
advances made or incurred by any Agent in connection therewith, and all amounts
for which any Agent is entitled to indemnification hereunder or under any
Collateral Document (in its capacity as an Agent and not as a Lender) and all
advances made by any Agent under any Collateral Document for the account of the
applicable Grantor, and to the payment of all costs and expenses paid or
incurred by any Agent in connection with the exercise of any right or remedy
hereunder or under any Collateral Document, all in accordance with the terms
hereof or thereof; second, to the extent of any excess of such proceeds, to the
payment of all other Obligations for the ratable benefit of the Lenders and the
Lender Counterparties; and third, to the extent of any excess of such proceeds,
to the payment to or upon the order of such Grantor or to whosoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct.

2.16 Ratable Sharing.

Lenders hereby agree among themselves that, except as otherwise provided in the
Collateral Documents with respect to amounts realized from the exercise of
rights with respect to Liens on the Collateral, if any of them shall, whether by
voluntary payment (other than as a result of Section 2.14(c) a voluntary
prepayment of Loans made and applied in accordance with the terms hereof),
through the exercise of any right of set-off or banker’s lien, by counterclaim
or cross action or by the enforcement of any right under the Credit Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of fees and
other amounts then due and owing to such Lender hereunder or under the other
Credit Documents (collectively, the “Aggregate Amounts Due” to such Lender)
which is greater than the proportion received by any other Lender in respect of
the Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each
other Lender of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Company or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker’s lien, set-off or counterclaim with respect to any and all monies owing
by Company to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.

 

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2.17 Making or Maintaining LIBOR Rate Loans.

(a) Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any LIBOR Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such LIBOR Rate Loans
on the basis provided for in the definition of Adjusted LIBOR Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to, LIBOR
Rate Loans until such time as Administrative Agent notifies Company and Lenders
that the circumstances giving rise to such notice no longer exist, and (ii) any
Funding Notice or Conversion/Continuation Notice given by Company with respect
to the Loans in respect of which such determination was made shall be deemed to
be rescinded by Company.

(b) Illegality or Impracticability of LIBOR Rate Loans. In the event that on any
date any Lender shall have determined (which determination shall be final and
conclusive and binding upon all parties hereto but shall be made only after
consultation with Company and Administrative Agent) that the making, maintaining
or continuation of its LIBOR Rate Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful), or (ii) has
become impracticable, as a result of contingencies occurring after the date
hereof which materially and adversely affect the London interbank market or the
position of such Lender in that market, then, and in any such event, such Lender
shall be an “Affected Lender” and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (1) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, LIBOR Rate Loans
shall be suspended until such notice shall be withdrawn by the Affected Lender,
(2) to the extent such determination by the Affected Lender relates to a LIBOR
Rate Loan then being requested by Company pursuant to a Funding Notice or a
Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or
continue such Loan as or convert such Loan to, as the case may be) a Base Rate
Loan, (3) the Affected Lender’s obligation to maintain its outstanding LIBOR
Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of
the expiration of the Interest Period then in effect with respect to the
Affected Loans or when required by law, and (4) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a LIBOR Rate Loan then being requested by
Company pursuant to a Funding Notice or a Conversion/Continuation Notice,
Company shall have the option, subject to the provisions of Section 2.17(c), to
rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders
by giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice

 

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of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section 2.17(b)
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, LIBOR Rate Loans in accordance
with the terms hereof.

(c) Compensation for Breakage or Non-Commencement of Interest Periods. Company
shall compensate each Lender, upon written request by such Lender (which request
shall set forth the basis for requesting such amounts), for all reasonable
losses, expenses and liabilities (including any interest paid or calculated to
be due and payable by such Lender to lenders of funds borrowed by it to make or
carry its LIBOR Rate Loans and any loss, expense or liability sustained by such
Lender in connection with the liquidation or re-employment of such funds but
excluding loss of anticipated profits) which such Lender may sustain: (i) if for
any reason (other than a default by such Lender) a borrowing of any LIBOR Rate
Loan does not occur on a date specified therefor in a Funding Notice or a
telephonic request for borrowing, or a conversion to or continuation of any
LIBOR Rate Loan does not occur on a date specified therefor in a
Conversion/Continuation Notice or a telephonic request for conversion or
continuation; (ii) if any prepayment or other principal payment of, or any
conversion of, any of its LIBOR Rate Loans occurs on any day other than the last
day of an Interest Period applicable to that Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise); or (iii) if any prepayment
of any of its LIBOR Rate Loans is not made on any date specified in a notice of
prepayment given by Company.

(d) Booking of LIBOR Rate Loans. Any Lender may make, carry or transfer LIBOR
Rate Loans at, to, or for the account of any of its branch offices or the office
of an Affiliate of such Lender.

2.18 Increased-Costs; Capital Adequacy; etc.

(a) Compensation For Increased-Costs and Taxes. Subject to the provisions of
Section 2.19 (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender shall determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any change in any law, treaty or governmental rule,
regulation or order, or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law): (i) subjects such Lender (or its
applicable lending office) to any additional Tax (other than any Tax on the
overall net income of such Lender) with respect to this Agreement or any of the
other Credit Documents or any of its obligations hereunder or thereunder or any
payments to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder; (ii) imposes, modifies or
holds applicable any reserve (including any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, Federal Deposit
Insurance Corporation (FDIC) insurance or similar requirement against assets
held by, or deposits or other liabilities in or for the account of, or advances
or loans by, or other credit extended by, or any

 

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other acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to LIBOR Rate Loans that are
reflected in the definition of Adjusted LIBOR Rate); or (iii) imposes any other
condition (other than with respect to a Tax matter) on or affecting such Lender
(or its applicable lending office) or its obligations hereunder or the London
interbank market; and the result of any of the foregoing is to increase the cost
to such Lender of agreeing to make, making or maintaining Loans hereunder or to
reduce any amount received or receivable by such Lender (or its applicable
lending office) with respect thereto; then, in any such case, Company shall
promptly pay to such Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender in its sole discretion shall determine) as may be necessary to compensate
such Lender for any such increased-cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
Section 2.18(a), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.

(b) Capital Adequacy Adjustment. In the event that any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
Closing Date of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender’s Loans or Revolving Commitments or other obligations hereunder
with respect to the Loans to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five (5) Business
Days after receipt by Company from such Lender of the statement referred to in
the next sentence, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Company (with a
copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to Lender under
this Section 2.18(b), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.

(c) For purposes of this Section 2.18, the Dodd-Frank Act and any and all rules,
regulations, orders, requests, guidelines and directives adopted, promulgated or
implemented in connection therewith are deemed to have been introduced and
adopted after the date of this Agreement.

(d) No claim by a Lender pursuant to this Section 2.18 shall be made with
respect to any increased costs incurred or reductions suffered more than 90 days
prior to the date of the Lender’s statement setting forth the amounts payable
pursuant to this Section.

 

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2.19 Taxes; Withholding, etc.

(a) Payments to Be Free and Clear. All sums payable by any Credit Party
hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.

(b) Withholding of Taxes. If any Credit Party or any other Person is required by
law to make any deduction or withholding on account of any such Tax from any sum
paid or payable by any Credit Party to Administrative Agent or any Lender under
any of the Credit Documents: (i) Company shall notify Administrative Agent of
any such requirement or any change in any such requirement as soon as Company
becomes aware of it; (ii) Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the liability to pay
is imposed on any Credit Party) for its own account or (if that liability is
imposed on Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of Administrative Agent or such Lender; (iii) the sum payable by
such Credit Party in respect of which the relevant deduction, withholding or
payment is required shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment, Administrative Agent
or such Lender, as the case may be, receives on the due date a net sum equal to
what it would have received had no such deduction, withholding or payment been
required or made; and (iv) within thirty (30) days after paying any sum from
which it is required by law to make any deduction or withholding, and within
thirty (30) days after the due date of payment of any Tax which it is required
by clause (ii) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant taxing or
other authority; provided, no such additional amount shall be required to be
paid to any Lender under clause (iii) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature pages
hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any applicable tax law (including, without limitation,
applicable judicial decisions, statutes, regulations and other administrative
interpretations) shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, in respect of payments to such Lender.

(c) Evidence of Exemption From U.S. Withholding Tax. Each Lender that is not a
United States Person (as such term is defined in Section 7701(a)(30) of the
Internal Revenue Code) for U.S. federal income tax purposes (a “Non-US Lender”)
shall deliver to Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Lender listed on the signature pages
hereof on the Closing Date) or on or prior to the date of the Assignment
Agreement pursuant to which it becomes a Lender (in the case of each other
Lender), and at such other times as may be necessary in the determination of
Company or Administrative Agent (each in the reasonable exercise of its
discretion), (i) two original copies of Internal Revenue Service Form W-8BEN,
W-8IMY or W-8ECI (or any successor forms),

 

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properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by Company to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any payments to
such Lender of principal, interest, fees or other amounts payable under any of
the Credit Documents, or (ii) if such Lender is not a “bank” or other Person
described in Section 881(c)(3) of the Internal Revenue Code and cannot deliver
Internal Revenue Service Form W-8ECI pursuant to clause (i) above, a Certificate
Regarding Non-Bank Status together with two original copies of Internal Revenue
Service Form W-8BEN (or any successor form), properly completed and duly
executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company to establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of interest payable under
any of the Credit Documents. Each Lender required to deliver any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters pursuant to this Section 2.19(c) hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or inaccurate in any material
respect, that such Lender shall promptly deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue Service Form
W-8BEN or W-8ECI, or a Certificate Regarding Non-Bank Status and two original
copies of Internal Revenue Service Form W-8BEN (or any successor form), as the
case may be, properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by Company to confirm or establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to payments to
such Lender under the Credit Documents, or notify Administrative Agent and
Company of its inability to deliver any such forms, certificates or other
evidence. Company shall not be required to pay any additional amount to any
Non-US Lender under Section 2.19(b)(iii) if such Lender shall have failed (1) to
deliver the forms, certificates or other evidence referred to in the second
sentence of this Section 2.19(c), or (2) to notify Administrative Agent and
Company of its inability to deliver any such forms, certificates or other
evidence, as the case may be; provided, if such Lender shall have satisfied the
requirements of the first sentence of this Section 2.19(c) on the Closing Date
or on the date of the Assignment Agreement pursuant to which it became a Lender,
as applicable, nothing in this last sentence of Section 2.19(c) shall relieve
Company of its obligation to pay any additional amounts pursuant this
Section 2.19 in the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer
legally able to deliver forms, certificates or other evidence at a subsequent
date establishing the fact that such Lender is not subject to withholding as
described herein. If a payment made to a Lender under any Credit Document would
be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender fails
to comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as
applicable), such Lender shall deliver to the Company and the Administrative
Agent (A) a certification signed by the chief financial officer, principal
accounting officer, treasurer or controller, and (B) other documentation
reasonably required by the Company and the Administrative Agent sufficient for
the Company and the Administrative Agent to comply with their obligations under
FATCA and to determine that such Lender has complied with such applicable
reporting requirements.

 

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2.20 Obligation to Mitigate.

Each Lender agrees that, as promptly as practicable after the officer of such
Lender responsible for administering its Loans becomes aware of the occurrence
of an event or the existence of a condition that would cause such Lender to
become an Affected Lender or that would entitle such Lender to receive payments
under Section 2.17, 2.18 or 2.19, it will, to the extent not inconsistent with
the internal policies of such Lender and any applicable legal or regulatory
restrictions, use reasonable efforts to (a) make, issue, fund or maintain its
Credit Extensions, including any Affected Loans, through another office of such
Lender, or (b) take such other measures as such Lender may deem reasonable, if
as a result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender pursuant to Section 2.17, 2.18
or 2.19 would be materially reduced and if, as determined by such Lender in its
sole discretion, the making, issuing, funding or maintaining of such Revolving
Commitments or Loans through such other office or in accordance with such other
measures, as the case may be, would not otherwise adversely affect such
Revolving Commitments, Loans or the interests of such Lender; provided, such
Lender will not be obligated to utilize such other office pursuant to this
Section 2.20 unless Company agrees to pay all incremental expenses incurred by
such Lender as a result of utilizing such other office as described above. A
certificate as to the amount of any such expenses payable by Company pursuant to
this Section 2.20 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender to Company (with a copy to Administrative
Agent) shall be conclusive absent manifest error.

2.21 Defaulting Lenders.

Anything contained herein to the contrary notwithstanding, in the event that any
Lender violates any provision of Section 9.5(c), or, other than at the direction
or request of any regulatory agency or authority, defaults (in each case, a
“Defaulting Lender”) in its obligation to fund (a “Funding Default”) any
Revolving Loan (a “Defaulted Loan”), then (a) during any Default Period with
respect to such Defaulting Lender, such Defaulting Lender shall be deemed not to
be a “Lender” for purposes of voting on any matters (including the granting of
any consents or waivers) with respect to any of the Credit Documents; (b) to the
extent permitted by applicable law, until such time as the Default Excess, if
any, with respect to such Defaulting Lender shall have been reduced to zero,
(i) any voluntary prepayment of the Revolving Loans shall, if Administrative
Agent so directs at the time of making such voluntary prepayment, be applied to
the Revolving Loans of other Lenders as if such Defaulting Lender had no
Revolving Loans outstanding and the Revolving Exposure of such Defaulting Lender
were zero, and (ii) any mandatory prepayment of the Revolving Loans shall, if
Administrative Agent so directs at the time of making such mandatory prepayment,
be applied to the Revolving Loans of other Lenders (but not to the Revolving
Loans of such Defaulting Lender) as if such Defaulting Lender had funded all
Defaulted Loans of such Defaulting Lender, it being understood and agreed that
Company shall be entitled to retain any portion of any mandatory prepayment of
the Revolving Loans that is not paid to such Defaulting Lender solely as a
result of the operation of the provisions of this clause (b); (c) such
Defaulting Lender’s Revolving Commitment and outstanding Revolving Loans shall
be excluded for purposes of calculating the Revolving Commitment fee payable to
Lenders in respect of any day during any Default Period with respect to such
Defaulting Lender, and such Defaulting Lender shall not be entitled to receive
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Revolving Commitment fee pursuant to Section 2.10 with respect to such
Defaulting Lender’s Revolving Commitment in respect of any Default Period with
respect to such Defaulting Lender; and (d) the Total Utilization of Revolving
Commitments as at any date of determination shall be calculated as if such
Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender. No
Revolving Commitment or Term Loan Commitment of any Lender shall be increased or
otherwise affected, and, except as otherwise expressly provided in this
Section 2.21, performance by Company of its obligations hereunder and the other
Credit Documents shall not be excused or otherwise modified as a result of any
Funding Default or the operation of this Section 2.21. The rights and remedies
against a Defaulting Lender under this Section 2.21 are in addition to other
rights and remedies which Company may have against such Defaulting Lender with
respect to any Funding Default and which Administrative Agent or any Lender may
have against such Defaulting Lender with respect to any Funding Default or
violation of Section 9.5(c).

2.22 Removal or Replacement of a Lender.

Anything contained herein to the contrary notwithstanding, in the event that:
(a) (i) any Lender (an “Increased-Cost Lender”) shall give notice to Company
that such Lender is an Affected Lender or that such Lender is entitled to
receive payments under Section 2.18, 2.19 or 2.20, (ii) the circumstances which
have caused such Lender to be an Affected Lender or which entitle such Lender to
receive such payments shall remain in effect, and (iii) such Lender shall fail
to withdraw such notice within five (5) Business Days after Company’s request
for such withdrawal; or (b) (i) any Lender shall become a Defaulting Lender,
(ii) the Default Period for such Defaulting Lender shall remain in effect, and
(iii) such Defaulting Lender shall fail to cure the default as a result of which
it has become a Defaulting Lender within five (5) Business Days after Company’s
request that it cure such default; or (c) in connection with any proposed
amendment, modification, termination, waiver or consent with respect to any of
the provisions hereof as contemplated by Section 10.5(b), the consent of
Administrative Agent (if required) and Requisite Lenders shall have been
obtained but the consent of one or more of such other Lenders (each a
“Non-Consenting Lender”) whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the “Terminated Lender”), the Company may, by giving
written notice to the Administrative Agent and any Terminated Lender of its
election to do so, elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding Loans and its
Revolving Commitments, if any, in full to one or more Eligible Assignees (each a
“Replacement Lender”) in accordance with the provisions of Section 10.6 and
Terminated Lender shall pay any fees payable thereunder in connection with such
assignment; provided, (1) on the date of such assignment, the Replacement Lender
shall pay to Terminated Lender an amount equal to the sum of (A) an amount equal
to the principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender, (B) an amount equal to all accrued, but theretofore unpaid
fees (if any) owing to such Terminated Lender pursuant to Section 2.10; (2) on
the date of such assignment, Company shall pay any amounts payable to such
Terminated Lender pursuant to Section 2.18 or 2.19; and (3) in the event such
Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall
consent, at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender. Upon the prepayment of all
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termination of such Terminated Lender’s Revolving Commitments, if any, such
Terminated Lender shall no longer constitute a “Lender” for purposes hereof;
provided, any rights of such Terminated Lender to indemnification hereunder
shall survive as to such Terminated Lender.

SECTION 3. CONDITIONS PRECEDENT

3.1 Closing Date.

The obligation of each Lender to make a Credit Extension on the Closing Date is
subject to the satisfaction, or waiver in accordance with Section 10.5, of the
following conditions on or before the Closing Date:

(a) Credit Documents; Funding Notice. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender, and a duly executed Funding
Notice, in each case, in form and substance reasonably satisfactory to
Administrative Agent.

(b) Organizational Documents; Incumbency. Administrative Agent shall have
received (i) sufficient copies of each Organizational Document executed and
delivered by each Credit Party, as applicable, and, to the extent applicable,
certified as of a recent date by the appropriate governmental official, for each
Lender, each dated the Closing Date or a recent date prior thereto;
(ii) signature and incumbency certificates of the officers of such Person
executing the Credit Documents to which it is a party; (iii) resolutions of the
Board of Directors or similar governing body of each Credit Party approving and
authorizing the execution, delivery and performance of this Agreement and the
other Credit Documents to which it is a party or by which it or its assets may
be bound as of the Closing Date, certified as of the Closing Date by its
secretary or an assistant secretary as being in full force and effect without
modification or amendment; and (iv) a good standing certificate from the
applicable Governmental Authority of each Credit Party’s jurisdiction of
incorporation, organization or formation and in each jurisdiction in which it is
qualified as a foreign corporation or other entity to do business, each dated a
recent date prior to the Closing Date.

(c) Organizational and Capital Structure. The organizational structure and
capital structure of Holdings and its Subsidiaries shall be as set forth on
Schedules 4.1 and 4.2, respectively.

(d) Subordinated Indebtedness Documents. Administrative Agent shall have
received each Subordinated Indebtedness Document existing as of the Closing Date
(if any), together with all exhibits and schedules thereto, and all amendments,
modifications, supplements and waivers thereto, along with each applicable
Subordination Agreement, in each case, certified by an Authorized Officer of
Holdings as being true, correct and complete, and in form and substance
reasonably satisfactory to Administrative Agent.

(e) Existing Indebtedness. On the Closing Date, Holdings and its Subsidiaries
shall have (i) repaid in full all Existing Indebtedness (other than the Existing
Letter of Credit Obligations), (ii) terminated any commitments to lend or make
other extensions of credit thereunder, (iii) delivered to Administrative Agent
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release all Liens securing Existing Indebtedness or other obligations of
Holdings and its Subsidiaries thereunder being repaid on the Closing Date, and
(iv) made arrangements satisfactory to Administrative Agent with respect to the
cancellation of any letters of credit outstanding thereunder (other than the
Existing Letter of Credit Obligations).

(f) Transaction Costs. On or prior to the Closing Date, Company shall have
delivered to Administrative Agent Company’s reasonable best estimate of the
Transactions Costs (other than fees payable to any Agent).

(g) Governmental Authorizations and Consents. Each Credit Party shall have
obtained all Governmental Authorizations and all consents of other Persons, in
each case that are necessary in connection with the transactions contemplated by
the Credit Documents and each of the foregoing shall be in full force and effect
and in form and substance reasonably satisfactory to Administrative Agent.

(h) [Reserved].

(i) Personal Property Collateral. In order to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid, perfected First Priority
security interest in the personal property Collateral, Collateral Agent shall
have received:

(i) evidence satisfactory to Collateral Agent of the compliance by each Credit
Party of their obligations under the Pledge and Security Agreement and the other
Collateral Documents (including, without limitation, their obligations to
authorize or execute, as the case may be, and deliver UCC financing statements,
originals of securities, instruments and chattel paper and any agreements
governing deposit and/or securities accounts as provided therein);

(ii) A completed Collateral Questionnaire dated the Closing Date and executed by
an Authorized Officer of each Credit Party, together with all attachments
contemplated thereby, including (A) the results of a recent search, by a Person
reasonably satisfactory to Collateral Agent, of all effective UCC financing
statements (or equivalent filings) made with respect to any personal or mixed
property of any Credit Party in the jurisdictions specified in the Collateral
Questionnaire, together with copies of all such filings disclosed by such
search, and (B) UCC termination statements (or similar documents) duly executed
by all applicable Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective UCC financing statements (or equivalent
filings) disclosed in such search (other than any such financing statements in
respect of Permitted Liens); and

(iii) To the extent not covered by the opinion contemplated by clause (m) below,
opinions of counsel (which counsel shall be reasonably satisfactory to
Collateral Agent) with respect to the creation and perfection of the security
interests in favor of Collateral Agent in such Collateral and such other matters
governed by the laws of each jurisdiction in which any Credit Party or any
personal property Collateral is located as Collateral Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Collateral Agent.

 

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(j) Environmental Reports. Administrative Agent shall have received a Phase I
Report for the Mortgaged Properties specified by Administrative Agent in form
and scope satisfactory to Administrative Agent.

(k) Financial Statements; Projections. Lenders shall have received from Holdings
(i) the Historical Financial Statements, (ii) a consolidated balance sheet of
Holdings and its Subsidiaries as at the end of the month most recently ended
prior to the Closing Date giving pro forma effect to the consummation of the
transactions contemplated by the Credit Documents to occur on or prior to the
Closing Date, which consolidated balance sheet shall be in form and substance
reasonably satisfactory to Administrative Agent, and (iii) the Projections.

(l) Evidence of Insurance. Collateral Agent shall have received a certificate
from Company’s insurance broker or other evidence reasonably satisfactory to it
that all insurance required to be maintained pursuant to Section 5.5 is in full
force and effect, together with endorsements naming the Collateral Agent, for
the benefit of Secured Parties, as additional insured and loss payee thereunder
to the extent required under Section 5.5.

(m) Opinions of Counsel to Credit Parties. Lenders and their respective counsel
shall have received originally executed copies of the favorable written opinions
of (i) Schulte, Roth & Zabel LLP and (ii) Wildman, Harrold, Allen & Dixon LLP,
counsel for Credit Parties, and as to such other matters as Administrative Agent
may reasonably request, in each case, dated as of the Closing Date and otherwise
in form and substance reasonably satisfactory to Administrative Agent (and each
Credit Party hereby instructs such counsel to deliver such opinions to Agents
and Lenders).

(n) Fees. Company shall have paid to Syndication Agent, Administrative Agent and
Documentation Agent, the fees payable on the Closing Date referred to in the Fee
Letter.

(o) Solvency Certificate. On the Closing Date, Administrative Agent shall have
received a Solvency Certificate from Company dated as of the Closing Date and
addressed to Administrative Agent and Lenders, and in form, scope and substance
reasonably satisfactory to Administrative Agent, with appropriate attachments
and demonstrating that after giving effect to the making of the Loans, Company
and its Subsidiaries are Solvent.

(p) Closing Date Certificate. The Credit Parties shall have delivered to
Administrative Agent an originally executed Closing Date Certificate, together
with all attachments thereto.

(q) Closing Date. Lenders shall have made the Term Loans to Company on or before
December 9, 2010.

(r) Representations and Warranties True. As of the Closing Date, the
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects before and after
giving effect to the making of the Term Loans and the Revolving Loans on the
Closing Date, and the Credit Parties shall be in compliance with all covenants,
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Default or Event of Default (other than those expressly waived in writing by
Administrative Agent) shall have occurred and be continuing or would exist after
giving effect to the Term Loans and the Revolving Loans to be made on the
Closing Date.

(s) Funds Flow. Administrative Agent shall have received a description of the
Company’s sources and uses of funds as of the Closing Date.

(t) Minimum Consolidated Liquidity. The pro forma balance sheet delivered
pursuant to Section 3.1(k) shall demonstrate to Administrative Agent that on the
Closing Date and immediately after giving effect to any Credit Extensions to be
made on the Closing Date, including the payment of all Transaction Costs
required to be paid in Cash, Holdings and its Subsidiaries shall have
Consolidated Liquidity equal to or greater than $2,000,000.

(u) Minimum EBITDA. The income statement of Holdings’ and its Subsidiaries for
the twelve-month period ended November 7, 2010, shall demonstrate to
Administrative Agent that on the Closing Date and immediately after giving
effect to any Credit Extensions to be made on the Closing Date, including the
payment of all Transaction Costs required to be paid in Cash, as of the Closing
Date, the Company shall have generated trailing twelve-month Consolidated
Adjusted EBITDA of at least $22,500,000.

(v) Maximum Senior Leverage Ratio. The pro forma balance sheet delivered
pursuant to Section 3.1(k) and the income statement delivered pursuant to
Section 3.1(u) shall demonstrate to Administrative Agent that on the Closing
Date and immediately after giving effect to any Credit Extensions to be made on
the Closing Date, including the payment of all Transaction Costs required to be
paid in Cash, the ratio of (i) Consolidated Total Debt for the Company and its
Subsidiaries as of the Closing Date to (ii) Consolidated Adjusted EBITDA for the
twelve-month period ending November 7, 2010 shall not be greater than 2.75:1.00.

(w) No Material Adverse Effect. Since January 3, 2010, no event, circumstance or
change shall have occurred that has caused or evidences, either in any case or
in the aggregate, a Closing Date Material Adverse Effect.

(x) Completion of Proceedings. All partnership, corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent and its counsel shall be satisfactory in form and substance
to Administrative Agent and such counsel, and Administrative Agent, and such
counsel shall have received all such counterpart originals or certified copies
of such documents as Administrative Agent may reasonably request.

Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.

 

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3.2 Conditions to Each Credit Extension.

(a) Conditions Precedent. The obligation of each Lender to make any Loan on any
Credit Date, including the Closing Date, are subject to the satisfaction, or
waiver in accordance with Section 10.5, of the following conditions precedent:

(i) Administrative Agent shall have received a fully executed and delivered
Funding Notice;

(ii) after making the Credit Extensions requested on such Credit Date, (x) the
Total Utilization of Revolving Commitments shall not exceed the Revolving
Commitments then in effect and (y) Availability would be $0 or greater;

(iii) as of such Credit Date, the representations and warranties contained
herein and in the other Credit Documents shall be true and correct in all
material respects on and as of that Credit Date to the same extent as though
made on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date;

(iv) as of such Credit Date, no event shall have occurred and be continuing or
would result from the consummation of the applicable Credit Extension that would
constitute an Event of Default or a Default; and

(v) as of such Credit Date, the Senior Leverage Ratio determined on a pro forma
basis as of such date after giving effect to the contemplated Credit Extension
shall not exceed the maximum Senior Leverage Ratio permitted as of the last day
of the immediately preceding Fiscal Quarter pursuant to Section 6.8.

(b) Notices. Any Notice shall be executed by an Authorized Officer in a writing
delivered to Administrative Agent. In lieu of delivering a Notice, Company may
give Administrative Agent telephonic notice by the required time of any proposed
borrowing or conversion/continuation, as the case may be; provided each such
notice shall be promptly confirmed in writing by delivery of the applicable
Notice to Administrative Agent on or before the applicable date of borrowing,
continuation/conversion or issuance. Neither Administrative Agent nor any Lender
shall incur any liability to Company in acting upon any telephonic notice
referred to above that Administrative Agent believes in good faith to have been
given by a duly authorized officer or other person authorized on behalf of
Company or for otherwise acting in good faith.

3.3 Conditions Subsequent to the Closing Date.

Company shall fulfill, on or before the date applicable thereto (which date can
be extended in writing by the Administrative Agent in its sole discretion), each
of the conditions subsequent specified in Section 5.15.

 

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SECTION 4. REPRESENTATIONS AND WARRANTIES

In order to induce Agents and Lenders to enter into this Agreement and to make
each Credit Extension to be made thereby, each Credit Party represents and
warrants to each Agent and Lender, on the Closing Date and on each Credit Date,
that the following statements are true and correct:

4.1 Organization; Requisite Power and Authority; Qualification.

Each of the Holdings and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
as identified in Schedule 4.1, (b) has all requisite power and authority to own
and operate its properties, to lease the properties it operates as lessee, to
carry on its business as now conducted and as proposed to be conducted, to enter
into the Credit Documents to which it is a party and to carry out the
transactions contemplated thereby and to conduct the business in which it is
currently engaged and (c) is qualified to do business and in good standing in
every jurisdiction where its assets are located and wherever necessary to carry
out its business and operations, except in jurisdictions where the failure to be
so qualified or in good standing has not had, and could not be reasonably
expected to have, a Material Adverse Effect.

4.2 Capital Stock and Ownership.

The Capital Stock of each of Holdings and its Subsidiaries has been duly
authorized and validly issued and is fully paid and non-assessable. Except as
set forth on Schedule 4.2, as of the date hereof, there is no existing option,
warrant, call, right, commitment or other agreement to which Holdings or any of
its Subsidiaries is a party requiring, and there is no membership interest or
other Capital Stock of Holdings or any of its Subsidiaries outstanding which
upon conversion or exchange would require, the issuance by Holdings or any of
its Subsidiaries of any additional membership interests or other Capital Stock
of Holdings or any of its Subsidiaries or other Securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase, a
membership interest or other Capital Stock of Holdings or any of its
Subsidiaries. Schedule 4.2 correctly sets forth the ownership interest of
Holdings and each of its Subsidiaries in their respective Subsidiaries as of the
Closing Date.

4.3 Due Authorization.

The execution, delivery and performance of the Credit Documents have been duly
authorized by all necessary action on the part of each Credit Party that is a
party thereto.

4.4 No Conflict.

The execution, delivery and performance by Credit Parties of the Credit
Documents to which they are parties and the consummation of the transactions
contemplated by the Credit Documents do not and will not (a) violate any
provision of any law or any governmental rule or regulation applicable to
Holdings or any of its Subsidiaries, any of the Organizational Documents of
Holdings or any of its Subsidiaries, or any order, judgment or decree of any
court or other agency of government binding on Holdings or any of its
Subsidiaries; (b) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Holdings or any of its Subsidiaries; (c) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Holdings or any
of its Subsidiaries (other than any Liens created under any of the Credit
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Collateral Agent, on behalf of Secured Parties); or (d) require any approval of
stockholders, members or partners or any approval or consent of any Person under
any Contractual Obligation of Holdings or any of its Subsidiaries, except for
such approvals or consents which will be obtained on or before the Closing Date
and disclosed in writing to Lenders.

4.5 Governmental Consents.

The execution, delivery and performance by Credit Parties of the Credit
Documents to which they are parties and the consummation of the transactions
contemplated by the Credit Documents do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any Governmental Authority, except for filings and recordings with
respect to the Collateral to be made, or otherwise delivered to Collateral Agent
for filing and/or recordation, as of the Closing Date.

4.6 Binding Obligation.

Each Credit Document has been duly executed and delivered by each Credit Party
that is a party thereto and is the legally valid and binding obligation of such
Credit Party, enforceable against such Credit Party in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability.

4.7 Historical Financial Statements.

The Historical Financial Statements were prepared in conformity with GAAP and
fairly present, in all material respects, the financial position, on a
consolidated basis, of the Persons described in such financial statements as at
the respective dates thereof and the results of operations and cash flows, on a
consolidated basis, of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. As of the Closing
Date, neither Holdings nor any of its Subsidiaries has any contingent liability
or liability for taxes, long-term lease or unusual forward or long-term
commitment that is not reflected in the Historical Financial Statements or the
notes thereto and which in any such case is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Holdings and any of its Subsidiaries taken as a whole.

4.8 Projections.

On and as of the Closing Date, the Projections of Holdings and its Subsidiaries
for the period of Fiscal Year 2010 through and including Fiscal Year 2015,
including monthly projections for each month during the Fiscal Year in which the
Closing Date takes place (the “Projections”) are based on good faith estimates
and assumptions made by the management of Holdings; provided, the Projections
are not to be viewed as facts and that actual results during the period or
periods covered by the Projections may differ from such Projections and that the
differences may be material.

 

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4.9 No Material Adverse Effect.

Since the Closing Date, no event, circumstance or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect.

4.10 No Restricted Junior Payments.

Since January 3, 2010, neither Holdings nor any of its Subsidiaries has directly
or indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted
pursuant to Section 6.5.

4.11 Adverse Proceedings, etc.

There are no Adverse Proceedings, individually or in the aggregate, that could
reasonably be expected to have a Material Adverse Effect. Neither Holdings nor
any of its Subsidiaries (a) is in violation of any applicable laws (excluding
Environmental Laws, which are specifically addressed by Section 4.14) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

4.12 Payment of Taxes.

Except as otherwise permitted under Section 5.3, all tax returns and reports of
Holdings and its Subsidiaries required to be filed by any of them have been
timely filed, and all taxes shown on such tax returns to be due and payable and
all assessments, fees and other governmental charges upon Holdings and its
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises which are due and payable have been paid when due and payable.
Holdings knows of no proposed tax assessment against Holdings or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect or which is not being actively contested by Holdings or such Subsidiary
in good faith and by appropriate proceedings; provided, such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.

4.13 Properties.

(a) Title. Each of Holdings and its Subsidiaries has (i) good, sufficient and
legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), and (iii) good title to (in the case of all other personal property),
all of their respective material properties and assets reflected in their
respective Historical Financial Statements referred to in Section 4.5 and in the
most recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.9. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.

 

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(b) Real Estate. As of the Closing Date, Schedule 4.13 contains a true, accurate
and complete list of all Real Estate Assets. As of the Closing Date, each lease
or sublease relating to such Real Estate Asset is in full force and effect and
Holdings does not have knowledge of any default that has occurred and is
continuing thereunder which could reasonably be expected to have a Material
Adverse Effect, and each such agreements constitute the legally valid and
binding obligation of each applicable Credit Party, enforceable against such
Credit Party in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors’ rights generally or by equitable principles.

4.14 Environmental Matters.

Neither Holdings nor any of its Subsidiaries nor any of their respective
Facilities or operations are subject to any outstanding written order, consent
decree or settlement agreement with any Person relating to any Environmental
Law, any Environmental Claim, or any Hazardous Materials Activity that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries has
received any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
§ 9604) or any comparable state law. There are and, to each of Holdings’ and its
Subsidiaries’ knowledge, have been, no conditions, occurrences, or Hazardous
Materials Activities which could reasonably be expected to form the basis of an
Environmental Claim against Holdings or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries nor, to
any Credit Party’s knowledge, any predecessor of Holdings or any of its
Subsidiaries has filed any notice under any Environmental Law indicating past or
present treatment of Hazardous Materials at any Facility, and none of Holdings’
or any of its Subsidiaries’ operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent, in violation of applicable Environmental
Laws. Compliance with all current or reasonably foreseeable future requirements
pursuant to or under Environmental Laws could not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect. No event or
condition has occurred or is occurring with respect to Holdings or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity which individually or in the
aggregate has had, or could reasonably be expected to have, a Material Adverse
Effect.

4.15 No Defaults.

Neither Holdings nor any of its Subsidiaries is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any of its Contractual Obligations, and no condition exists which,
with the giving of notice or the lapse of time or both, could constitute such a
default, except, with respect to any of the foregoing, where the consequences,
direct or indirect, of such default or defaults, if any, could not reasonably be
expected to have a Material Adverse Effect.

 

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4.16 Material Contracts.

Neither Holdings nor any of its Subsidiaries have any Material Contracts in
effect on the Closing Date.

4.17 Governmental Regulation.

Neither Holdings nor any of its Subsidiaries is subject to regulation under the
Public Utility Holding Company Act of 2005, the Federal Power Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable. Neither
Holdings nor any of its Subsidiaries is a “registered investment company” or a
company “controlled” by a “registered investment company” or a “principal
underwriter” of a “registered investment company” as such terms are defined in
the Investment Company Act of 1940.

4.18 Margin Stock.

Neither Holdings nor any of its Subsidiaries is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying any Margin Stock. No part of the proceeds of the Loans
made to such Credit Party will be used to purchase or carry any such Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
any such Margin Stock or for any purpose that violates, or is inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.

4.19 Employee Matters.

Neither Holdings nor any of its Subsidiaries is engaged in any unfair labor
practice that could reasonably be expected to have a Material Adverse Effect.
There is (a) no unfair labor practice complaint pending against Holdings or any
of its Subsidiaries, or to the best knowledge of Holdings and Company,
threatened against any of them before the National Labor Relations Board and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement that is so pending against Holdings or any of its
Subsidiaries or to the best knowledge of Holdings and Company, threatened
against any of them, (b) no strike or work stoppage in existence or threatened
involving Holdings or any of its Subsidiaries, and (c) to the best knowledge of
Holdings and Company, no union organization activity is taking place, except
(with respect to any matter specified in clause (a), (b) or (c) above, either
individually or in the aggregate) such as is not reasonably expected to have a
Material Adverse Effect.

4.20 Employee Benefit Plans.

Holdings, each of its Subsidiaries and each of their respective ERISA Affiliates
are in compliance with all applicable provisions and requirements of ERISA and
the Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan, except such as is not
reasonably expected to have a Material Adverse Effect. Each Employee Benefit
Plan which is intended to qualify under Section 401(a) of the Internal Revenue
Code has received a favorable determination letter from the Internal Revenue
Service indicating that such Employee Benefit Plan is so qualified and nothing
has occurred subsequent to the issuance of

 

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such determination letter which would cause such Employee Benefit Plan to lose
its qualified status. No liability to the PBGC (other than required premium
payments), the Internal Revenue Service, any Employee Benefit Plan or any trust
established under Title IV of ERISA has been or is expected to be incurred by
Holdings, any of its Subsidiaries or any of their ERISA Affiliates, except such
as is not reasonably expected to have a Material Adverse Effect. No ERISA Event
has occurred or is reasonably expected to occur, except such as is not
reasonably expected to have a Material Adverse Effect. Holdings, each of its
Subsidiaries and each of their ERISA Affiliates have complied with the
requirements of Section 515 of ERISA with respect to each Multiemployer Plan and
are not in material “default” (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan, except such as is not reasonably
expected to have a Material Adverse Effect.

4.21 Certain Fees.

No broker’s or finder’s fee or commission will be payable with respect hereto or
any of the transactions contemplated hereby.

4.22 Solvency.

The Credit Parties taken as a whole are and, upon the incurrence of any Credit
Extension by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.

4.23 Subordinated Indebtedness Documents.

Holdings and Company have delivered to Administrative Agent complete and correct
copies of (i) each Subordinated Indebtedness Document and of all exhibits and
schedules thereto (if any), and (ii) copies of any material amendment,
restatement, supplement or other modification to or waiver of each Subordinated
Indebtedness Document.

4.24 Compliance with Statutes, etc.

Each of the material licenses or permits required by any applicable federal,
state or local law, rule or regulation for the operation of its business, and
the expiration date thereof (if any), is identified on Schedule 4.24. Each of
Holdings and its Subsidiaries is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
Governmental Authorities, in respect of the conduct of its business and the
ownership of its property except such non-compliance that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

4.25 Disclosure.

No representation or warranty of any Credit Party contained in any Credit
Document or in any other documents, certificates or written statements furnished
to Lenders by or on behalf of Holdings or any of its Subsidiaries for use in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact (known to
Holdings or Company, in the case of any document not furnished by either of
them) necessary in order to make the statements contained herein or therein not
misleading in light of the

 

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circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Holdings or Company to be reasonable at
the time made, it being recognized by Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results. There are no facts known to Holdings or Company (other than matters of
a general economic or industry nature) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and that
have not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.

4.26 Patriot Act.

To the extent applicable, each Credit Party is in compliance, in all material
respects, with the (i) Trading with the Enemy Act, as amended, and each of the
foreign assets control regulations of the United States Treasury Department
(31 C.F.R., Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (ii) Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act of 2001) (the “Act”). No part of the
proceeds of the Loans will be used, directly or indirectly, for any payments to
any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

4.27 Inactive Subsidiaries.

Schedule 4.27 contains a true, correct and complete list of all Inactive
Subsidiaries existing as of the Closing Date.

SECTION 5. AFFIRMATIVE COVENANTS

Each Credit Party covenants and agrees that so long as any Commitment is in
effect and until payment in full of all Obligations, each Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 5.

5.1 Financial Statements and Other Reports.

Unless otherwise provided below, Holdings will deliver to Administrative Agent
and Lenders:

(a) Monthly Reports. As soon as available, and in any event within thirty-five
(35) days after the end of each month (including months which began prior to the
Closing Date), the consolidated balance sheet of Holdings and its Subsidiaries
as at the end of such month and the related consolidated statements of income
and of cash flows of Holdings and its Subsidiaries for such month and for the
period from the beginning of the then current Fiscal Year to the end of such
month, setting forth in the case of the statement of income, in comparative form
the corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current
Fiscal Year, all in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto.

 

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(b) Quarterly Financial Statements. As soon as available, and in any event no
later than the earlier of (i) the date Holdings is required to file its Form
10-Q with the SEC for any Fiscal Quarter, as applicable (taking into account any
extensions of the time to file) and (ii) within fifty (50) days after the end of
each such Fiscal Quarter (including the fourth Fiscal Quarter), the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income and of cash flows of
Holdings 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,
setting forth in the case of the statement of income, in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year,
all in reasonable detail, together with a Financial Officer Certification and a
Narrative Report with respect thereto.

(c) Annual Financial Statements. As soon as available, and in any event no later
than the earlier of (i) the date Holdings is required to file its Form 10-K with
the SEC for a Fiscal Year (taking into account any extensions of the time to
file) and (ii) within one hundred twenty (120) days after the end of each Fiscal
Year, (i) the consolidated balance sheet of Holdings and its Subsidiaries as at
the end of such Fiscal Year and the related consolidated statements of income,
stockholders’ equity and cash flows of Holdings and its Subsidiaries for such
Fiscal Year, in reasonable detail, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year, together with a
Financial Officer Certification and a Narrative Report with respect thereto; and
(ii) with respect to such consolidated financial statements a report thereon of
KPMG LLC or other independent certified public accountants of recognized
national standing selected by Holdings, and reasonably satisfactory to
Administrative Agent (which report shall be unqualified as to going concern and
scope of audit, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated financial position of
Holdings and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements);

(d) Compliance Certificate. Together with each delivery of financial statements
of Holdings and its Subsidiaries pursuant to Sections 5.1(b) and 5.1(c), a duly
executed and completed Compliance Certificate;

(e) Notice of Default. Promptly upon any officer of Holdings or Company
obtaining knowledge (i) of any condition or event that constitutes a Default or
an Event of Default or that notice has been given to Holdings or Company with
respect thereto; (ii) that any Person has given any notice to Holdings or any of
its Subsidiaries or taken any other action with respect to any event or
condition set forth in Section 8.1(b); or (iii) of the occurrence of any event
or change that has caused or evidences, either in any case or in the aggregate,
a Material Adverse Effect, a certificate of its Authorized Officers specifying
the nature and period of existence of such condition, event or change, or
specifying the notice given and action taken by any such Person and the nature
of such claimed Event of Default, Default, default, event or condition, and what
action Company has taken, is taking and proposes to take with respect thereto;

 

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(f) Notice of Litigation. Promptly upon any officer of Holdings or Company
obtaining knowledge of (i) the institution of any Adverse Proceeding not
previously disclosed in writing by Company to Lenders, or (ii) any material
development in any Adverse Proceeding that, in the case of either clause (i) or
(ii), could be reasonably expected to have a Material Adverse Effect, or seeks
to enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated hereby, written
notice thereof, together with such other non-privileged information as may be
reasonably available to Holdings or Company to enable Lenders and their counsel
to evaluate such matters;

(g) ERISA. (i) Promptly upon becoming aware of the occurrence of or forthcoming
occurrence of any ERISA Event that could reasonably be expected to result in a
material liability to Holdings or any of its Subsidiaries, a written notice
specifying the nature thereof, what action Holdings, any of its Subsidiaries or
any of their respective ERISA Affiliates has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto; and (ii) with reasonable promptness, upon the request of the
Administrative Agent or any Lender, copies of (1) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan; (2) all notices received by
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of
such other documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;

(h) Financial Plan. As soon as practicable and in any event no later than thirty
(30) days after the beginning of each Fiscal Year, a consolidated plan and
financial forecast for such Fiscal Year and each Fiscal Year (or portion
thereof) through the final maturity date of the Loans (a “Financial Plan”),
including (i) a forecasted consolidated balance sheet and forecasted
consolidated statements of income and cash flows of Holdings and its
Subsidiaries for each such Fiscal Year, together with pro forma Compliance
Certificates for each such Fiscal Year and including the assumptions on which
such forecasts are based, (ii) with respect to each such Fiscal Year, forecasted
consolidated statements of income and cash flows of Holdings and its
Subsidiaries for each month of such Fiscal Year, (iii) forecasts demonstrating
projected compliance with the requirements of Section 6.8 through the final
maturity date of the Loans, and (iv) forecasted liquidity through the final
maturity date of the Loans, together, in each case, with an explanation of the
assumptions on which such forecasts are based, all in form and substance
reasonably satisfactory to Agents; and

(i) Insurance Report. As soon as practicable and in any event by the last day of
each Fiscal Year, a report in form and substance satisfactory to Administrative
Agent outlining all material insurance coverage maintained as of the date of
such report by Holdings and its Subsidiaries and all material insurance coverage
planned to be maintained by Holdings and its Subsidiaries in the immediately
succeeding Fiscal Year;

 

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(j) Notice Regarding Material Contracts. Promptly, and in any event within ten
(10) Business Days after any Material Contract is entered into, terminated or
amended in a manner that is materially adverse to Holdings or such Subsidiary,
as the case may be, a written statement describing such event (including, with
respect to any such termination or amendment, an explanation of any actions
being taken with respect thereto), with copies of any such Material Contracts or
material amendments delivered to Administrative Agent (to the extent such
delivery is permitted by the terms of any such Material Contract, provided, no
such prohibition on delivery shall be effective if it were bargained for by
Holdings or its applicable Subsidiary with the intent of avoiding compliance
with this Section 5.1(j));

(k) Environmental Reports and Audits. As soon as practicable following receipt
thereof, copies of all environmental audits and reports with respect to
environmental matters at any Facility or which relate to any environmental
liabilities of Holdings or its Subsidiaries which, in any such case,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;

(l) Information Regarding Collateral. (a) Company will furnish to Collateral
Agent not less than fifteen (15) days prior written notice of any change (i) in
any Credit Party’s corporate name, (ii) in any Credit Party’s identity or
corporate structure, or (iii) in any Credit Party’s Federal Taxpayer
Identification Number. Company also agrees promptly to notify Collateral Agent
if any material portion of the Collateral is damaged or destroyed;

(m) Annual Collateral Verification. Each year, at the time of delivery of annual
financial statements with respect to the preceding Fiscal Year pursuant to
Section 5.1(c), Company shall deliver to Collateral Agent an Officer’s
Certificate confirming that there has been no change in such information since
the date of the Collateral Questionnaire delivered on the Closing Date or the
date of the most recent certificate delivered pursuant to this Section and/or
identifying such changes; and

(n) Other Information. Promptly upon the request of Administrative Agent, such
other information and data with respect to Holdings or any of its Subsidiaries
as from time to time may be reasonably requested by Administrative Agent.
Without limiting the foregoing, the General Counsel of Holdings shall (i) at the
request of Administrative Agent, hold quarterly telephone conferences with the
Administrative Agent for purposes of updating the Administrative Agent of any
material labor and employment matters involving Holdings and its Subsidiaries
(including wage and hour laws), and (ii) promptly advise the Administrative
Agent of any material labor and employment matters involving Holdings and its
Subsidiaries.

5.2 Existence.

Except as otherwise permitted under Section 6.9, each Credit Party will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its existence and all rights and franchises, licenses and
permits material to its business; provided, no Credit Party or any of its
Subsidiaries shall be required to preserve any such existence, right or
franchise, licenses and permits if such Person’s board of directors (or similar
governing body) shall determine that the preservation thereof is no longer
desirable in the conduct of the business of such Person, and that the loss
thereof will not reasonably be expected to have a Material Adverse Effect.

 

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5.3 Payment of Taxes and Claims.

Each Credit Party will, and will cause each of its Subsidiaries to, pay all
material Taxes imposed upon it or any of its properties or assets or in respect
of any of its income, businesses or franchises before any penalty or fine
accrues thereon, and all claims (including claims for labor, services, materials
and supplies) for sums that have become due and payable and that by law have or
may become a Lien upon any of its properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto; provided, no such
Tax or claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, so long as
(a) adequate reserve or other appropriate provision, as shall be required in
conformity with GAAP shall have been made therefor, and (b) in the case of a Tax
or claim which has or may become a Lien against any of the Collateral, such
contest proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such Tax or claim. No Credit Party will, nor will it
permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person (other than Holdings or any of
its Subsidiaries). In addition, Company agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (but excluding mortgage recording taxes, transfer taxes and
similar fees directly related to any Lien obtained in favor of Administrative
Agent on the Mortgaged Properties) imposed by any Governmental Authority that
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, except where the
failure to pay such amounts would not be materially adverse to Agent, the
Lenders or any Credit Party.

5.4 Maintenance of Properties.

Each Credit Party will, and will cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of Holdings and its Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof.

5.5 Insurance.

Holdings will maintain or cause to be maintained, with financially sound and
reputable insurers, (i) business interruption insurance reasonably satisfactory
to Administrative Agent, and (ii) casualty insurance, such public liability
insurance, third-party property damage insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of Holdings
and its Subsidiaries as may customarily be carried or maintained under similar
circumstances by Persons of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for such Persons. Without limiting the generality of the
foregoing, Holdings will maintain or cause to be maintained (a) flood insurance
with respect to each Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, in each case in compliance
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applicable regulations of the Board of Governors of the Federal Reserve System,
and (b) replacement value property insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times carried or maintained
under similar circumstances by Persons of established reputation engaged in
similar businesses. Each such policy of insurance shall (i) name Collateral
Agent, on behalf of Lenders as an additional insured thereunder as its interests
may appear, and (ii) in the case of each property insurance policy, contain a
loss payable clause or endorsement, satisfactory in form and substance to
Collateral Agent, that names Collateral Agent, on behalf of Secured Parties as
the loss payee thereunder and provides for at least thirty (30) days’ prior
written notice to Collateral Agent of any modification or cancellation of such
policy.

5.6 Inspections.

Each Credit Party will, and will cause each of its Subsidiaries to, permit any
authorized representatives designated by any Agent or any Lender to visit and
inspect any of the properties of any Credit Party and any of its respective
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and, from and after the occurrence and
during the continuance of an Event of Default, its independent public
accountants, all upon reasonable notice and at such reasonable times during
normal business hours and as often as may reasonably be requested; provided,
however, that the Agent and the Lenders shall use reasonable efforts to
coordinate any such visits and inspections.

5.7 Lenders Meetings.

Holdings and Company will, upon the request of Administrative Agent or Requisite
Lenders, participate in a meeting of Administrative Agent and Lenders once
during each Fiscal Year to be held at Company’s corporate offices (or at such
other location as may be agreed to by Company and Administrative Agent) at such
time as may be agreed to by Company and Administrative Agent.

5.8 Compliance with Laws.

Each Credit Party will comply, and shall cause each of its Subsidiaries and all
other Persons, if any, on or occupying any Facilities to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority, including all Environmental Laws, noncompliance with
which could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

5.9 Environmental.

(a) Environmental Disclosure. Holdings will deliver to Administrative Agent and
Lenders:

(i) as soon as practicable following receipt thereof, copies of all
environmental audits, investigations, analyses and reports of any kind or
character, whether prepared by personnel of Holdings or any of its Subsidiaries
or by independent

 

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consultants, Governmental Authorities or any other Persons, with respect to
significant environmental matters at any Facility or with respect to any
Environmental Claims, in each case which could reasonably be expected to have a
Material adverse Effect;

(ii) promptly upon the occurrence thereof, written notice describing in
reasonable detail (1) any Release required to be reported to any federal, state
or local governmental or regulatory agency under any applicable Environmental
Laws which could reasonably be expected to have a Material Adverse Effect, or
(2) any remedial action taken by Holdings or any other Person in response to
(A) any Hazardous Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (B) any
Environmental Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect;

(iii) as soon as practicable following the sending or receipt thereof by
Holdings or any of its Subsidiaries, a copy of any and all written
communications with respect to (1) any Environmental Claims that, individually
or in the aggregate, have a reasonable possibility of giving rise to a Material
Adverse Effect, (2) any Release required to be reported to any Governmental
Authority which could reasonably be expected to have a Material Adverse Effect,
and (3) any request for information from any Governmental Authority that
suggests such agency is investigating whether Holdings or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials Activity
which could reasonably be expected to have a Material Adverse Effect;

(iv) prompt written notice describing in reasonable detail (1) any proposed
acquisition of stock, assets, or property by Holdings or any of its Subsidiaries
that could reasonably be expected to (A) expose Holdings or any of its
Subsidiaries to, or result in, Environmental Claims that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or
(B) affect the ability of Holdings or any of its Subsidiaries to maintain in
full force and effect all material Governmental Authorizations required under
any Environmental Laws for their respective operations and (2) any proposed
action to be taken by Holdings or any of its Subsidiaries to modify current
operations in a manner that could reasonably be expected to subject Holdings or
any of its Subsidiaries to any additional material obligations or requirements
under any Environmental Laws; and

(v) with reasonable promptness, such other documents and information as from
time to time may be reasonably requested by Administrative Agent in relation to
any matters disclosed pursuant to this Section 5.9(a).

(b) Hazardous Materials Activities, Etc. Each Credit Party shall promptly take,
and shall cause each of its Subsidiaries promptly to take, any and all actions
necessary to (i) cure any violation of applicable Environmental Laws by such
Credit Party or its Subsidiaries that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and (ii) make an
appropriate response to any Environmental Claim against such Credit Party or any
of its Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

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5.10 Subsidiaries.

In the event that any Person becomes a Domestic Subsidiary of Company (other
than an Inactive Subsidiary), Company shall (a) concurrently with such Person
becoming a Domestic Subsidiary, cause such Domestic Subsidiary to become a
Guarantor hereunder and a Grantor under the Pledge and Security Agreement by
executing and delivering to Administrative Agent and Collateral Agent a
Counterpart Agreement, and (b) take all such actions and execute and deliver, or
cause to be executed and delivered, all such documents, instruments, agreements,
and certificates as are similar to those described in Sections 3.1(b), 3.1(i),
3.1(j), 3.1(k), 3.1(l) and 3.1(m). In the event that any Person becomes a
Foreign Subsidiary of Company, and the ownership interests of such Foreign
Subsidiary are directly owned by Company or by any Domestic Subsidiary thereof,
Company shall, or shall cause such Domestic Subsidiary to, concurrently deliver,
all such documents, instruments, agreements, and certificates as are similar to
those described in Section 3.1(b), and Company shall take, or shall cause such
Domestic Subsidiary to take, all of the actions referred to in Section 3.1(i)(i)
necessary to grant and to perfect a First Priority Lien in favor of Collateral
Agent, for the benefit of Secured Parties, under the Pledge and Security
Agreement in sixty-five percent (65%) of the voting ownership interests in a
first-tier Foreign Subsidiary and one hundred percent (100%) of the non-voting
ownership interests in a first-tier Foreign Subsidiary. With respect to each
such Subsidiary, Company shall promptly send to Administrative Agent written
notice setting forth with respect to such Person (i) the date on which such
Person became a Subsidiary of Company, and (ii) all of the data required to be
set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of Company;
provided, such written notice shall be deemed to supplement Schedule 4.1 and 4.2
for all purposes hereof.

5.11 Additional Material Real Estate Assets.

In the event that any Credit Party acquires a Material Real Estate Asset then
such Credit Party, within thirty (30) days (or such longer period to which the
Administrative Agent may agree) after acquiring such Material Real Estate Asset,
shall take all such actions and execute and deliver, or cause to be executed and
delivered, all such mortgages, documents, instruments, agreements, opinions and
certificates similar to those described in Sections 3.1(h), 3.1(j), and 3.1(l)
with respect to each such Material Real Estate Asset that Collateral Agent shall
reasonably request to create in favor of Collateral Agent, for the benefit of
Secured Parties, a valid and, subject to any filing and/or recording referred to
herein, perfected First Priority security interest in such Material Real Estate
Assets. In addition to the foregoing, Company shall, at the request of Requisite
Lenders, deliver, from time to time, to Administrative Agent such appraisals as
are required by law or regulation of Real Estate Assets with respect to which
Collateral Agent has been granted a Lien.

5.12 [Reserved].

 

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5.13 Further Assurances.

At any time or from time to time upon the reasonable request of Administrative
Agent, each Credit Party will, at its expense, promptly execute, acknowledge and
deliver such further documents and do such other acts and things as
Administrative Agent or Collateral Agent may reasonably request in order to
effect fully the purposes of the Credit Documents, including providing Lenders
with any information reasonably requested pursuant to Section 10.21. In
furtherance and not in limitation of the foregoing, each Credit Party shall take
such actions as Administrative Agent or Collateral Agent may reasonably request
from time to time to ensure that the Obligations are guarantied by the
Guarantors and are secured by substantially all of the assets of Holdings, and
its Domestic Subsidiaries and all of the outstanding Capital Stock of Company
and its Domestic Subsidiaries and 65% of the voting ownership interests of its
first-tier Foreign Subsidiaries and one hundred percent (100%) of the non-voting
ownership interests of its first-tier Foreign Subsidiaries.

5.14 Miscellaneous Business Covenants.

Unless otherwise consented to by Agents and Requisite Lenders:

(a) Non-Consolidation. Holdings will and will cause each of its Subsidiaries to:
(i) maintain entity records and books of account separate from those of any
other entity which is an Affiliate of such entity; (ii) not commingle its funds
or assets with those of any other entity which is an Affiliate of such entity;
and (iii) provide that its board of directors or other analogous governing body
will hold all appropriate meetings to authorize and approve such entity’s
actions, which meetings will be separate from those of other entities.

(b) Cash Management Systems. Holdings and its Subsidiaries shall establish and
maintain cash management systems reasonably acceptable to Administrative Agent,
including, without limitation, with respect to Controlled Account arrangements.
If the aggregate daily balance of Cash on deposit in all Foreign Subsidiary
Deposit Accounts exceeds $2,000,000 (or such greater amount approved by
Administrative Agent from time to time in its reasonable discretion) at any
time, Holdings shall, and shall cause its Foreign Subsidiaries to, immediately
transfer such excess to a Controlled Account. If the daily balance of Cash on
deposit in any Excluded Account of the type described in clause (iv) of such
definition exceeds $50,000 (or such greater amount approved by Administrative
Agent from time to time in its reasonable discretion), or if the aggregate daily
balance of Cash on deposit in all Excluded Accounts of the type described in
clause (iv) of such definition exceeds $500,000 (or such greater amount approved
by Administrative Agent from time to time in its reasonable discretion),
Holdings shall, and shall cause its Subsidiaries to, immediately transfer such
excess to a Controlled Account.

(c) Activities of Management. Each of the Chief Executive Officer, Chief
Financial Officer and General Counsel of Holdings shall devote substantially all
of his or her professional working time, attention, and energies to the
management of the businesses of Holdings and its Subsidiaries.

 

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5.15 Post Closing Matters.

Company shall, and shall cause each of the Credit Parties to, satisfy the
requirements set forth on Schedule 5.15 on or before the date specified for such
requirement or such later date to be determined by the Agent.

5.16 Material Contracts.

Holdings and its Subsidiaries shall at all times comply with all covenants,
obligations and other agreements set forth in all Material Contracts.

SECTION 6. NEGATIVE COVENANTS

Each Credit Party covenants and agrees that, so long as any Commitment is in
effect and until payment in full of all Obligations, such Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 6.

6.1 Indebtedness.

No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly
or indirectly, create, incur, assume or guaranty, or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:

(a) the Obligations;

(b) Indebtedness of any Guarantor Subsidiary to Company or to any other
Guarantor Subsidiary, or of Company to any Guarantor Subsidiary; provided,
(i) all such Indebtedness shall be evidenced by promissory notes and all such
notes shall be subject to a First Priority Lien pursuant to the Pledge and
Security Agreement, (ii) all such Indebtedness shall be unsecured and
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement that in any such case, is reasonably satisfactory to
Administrative Agent, and (iii) any payment by any such Guarantor Subsidiary
under any guaranty of the Obligations shall result in a pro tanto reduction of
the amount of any Indebtedness owed by such Subsidiary to Company or to any of
its Subsidiaries for whose benefit such payment is made;

(c) Subordinated Indebtedness in an aggregate principal amount not to exceed
(i) $10,000,000 if (x) the Senior Leverage Ratio is greater than 2.5 to 1.0 (as
of the most recent measurement date preceding the date of incurrence of any such
Subordinated Indebtedness) or (y) the Senior Leverage Ratio would be greater
than 2.5 to 1.0 after giving effect to the incurrence of any such Subordinated
Indebtedness (calculated on a pro forma basis) and (ii) $15,000,000 at any time
that (A) the Senior Leverage Ratio is less than or equal to 2.5 to 1.0 (as of
the most recent measurement date preceding the date of incurrence of any such
Subordinated Indebtedness) and (B) the Senior Leverage Ratio would be less than
or equal to 2.5 to 1.0 after giving effect to the incurrence of any such
Subordinated Indebtedness (calculated on a pro forma basis);

(d) Indebtedness incurred by Holdings or any of its Subsidiaries arising from
agreements providing for indemnification or from guaranties or letters of
credit, surety bonds or performance bonds securing the performance of Company or
any such Subsidiary pursuant to such agreements, or permitted dispositions of
any business, assets or Subsidiary of Holdings or any of its Subsidiaries;

 

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(e) Indebtedness which may be deemed to exist pursuant to any guaranties,
performance, surety, statutory, or appeal bonds or similar obligations incurred
in the ordinary course of business;

(f) Indebtedness in respect of netting services, overdraft protections and
otherwise in connection with deposit accounts;

(g) guaranties in the ordinary course of business of the obligations of
suppliers, customers, franchisees and licensees of Holdings and its
Subsidiaries;

(h) guaranties by Company of Indebtedness of a Guarantor Subsidiary or
guaranties by a Subsidiary of Company of Indebtedness of Company or a Guarantor
Subsidiary with respect, in each case, to Indebtedness otherwise permitted to be
incurred pursuant to this Section 6.1;

(i) Indebtedness described in Schedule 6.1, but not any extensions, renewals or
replacements of such Indebtedness except (i) renewals and extensions expressly
provided for in the agreements evidencing any such Indebtedness as the same are
in effect on the date of this Agreement, and (ii) refinancings and extensions of
any such Indebtedness if the terms and conditions thereof are not less favorable
to the obligor thereon or to the Lenders than the Indebtedness being refinanced
or extended, and the average life to maturity thereof is greater than or equal
to that of the Indebtedness being refinanced or extended; provided, such
Indebtedness permitted under the immediately preceding clause (i) or (ii) above
shall not (A) include Indebtedness of an obligor that was not an obligor with
respect to the Indebtedness being extended, renewed or refinanced, or (B) exceed
in a principal amount the Indebtedness being renewed, extended or refinanced
(except by an amount equal to the accrued but unpaid interest on such
Indebtedness, and customary and reasonable prepayments premiums or penalties and
fees and expenses incurred in connection with the renewal, extension or
refinancing);

(j) Indebtedness in an aggregate amount not to exceed at any time $5,000,000
with respect to (x) Capital Leases and (y) purchase money Indebtedness;
provided, in the case of clause (x), that any such Indebtedness shall be secured
only by the asset subject to such Capital Lease, and, in the case of clause (y),
that any such Indebtedness shall (i) be secured only by the asset acquired in
connection with the incurrence of such Indebtedness and (ii) constitute not less
than 100% of the aggregate consideration paid with respect to such asset;

(k) Indebtedness incurred by Company in respect of any Third Party Letter of
Credit issued by a Third Party L/C Issuer in an aggregate face amount not to
exceed $2,000,000 at any time;

(l) Excluded Joint Venture Indebtedness;

(m) the Miami Beach Indebtedness;

 

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(n) Indebtedness arising under Interest Rate Agreements and Currency Agreements;

(o) Indebtedness of Foreign Subsidiaries in an aggregate principal amount at any
time outstanding not to exceed $5,000,000;

(p) Indebtedness arising under forward commodities agreements for the purchase
of beef entered into in order to manage existing or anticipated commodities
price and supply risks and not for speculative purposes;

(q) Indebtedness of any Credit Party under insurance premium financings entered
into in the ordinary course of business;

(r) Indebtedness assumed pursuant to a Permitted Acquisition (and in compliance
with clause (ix) of such definition), and any refinancings, refundings, renewals
or extensions thereof; provided that (i) the principal amount of such
Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension except by an amount equal to the accrued but unpaid
interest on such refinanced Indebtedness and a reasonable premium or penalty
paid, and fees and expenses incurred, in connection with such refinancing and an
amount equal to any existing commitments unutilized thereunder and (ii) any
refinancing, refunding, renewal or extension of any Subordinated Indebtedness
shall be on subordination terms at least as favorable to the Lenders as, and no
more restrictive on Holdings and its Subsidiaries than the Subordinated
Indebtedness being refinanced, refunded, renewed or extended;

(s) Indebtedness of the Credit Parties secured solely by fee owned Real Estate
Assets which does not exceed $5,000,000 in an aggregate principal amount at any
time; provided such Indebtedness is non-recourse to any Credit Party; and

(t) other Indebtedness not described in clauses (a) through (s) above in an
aggregate principal amount not to exceed at any time $3,500,000.

6.2 Liens.

No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly
or indirectly, create, incur, assume or permit to exist any Lien on or with
respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Holdings or any of its
Subsidiaries, whether now owned or hereafter acquired, or any income or profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the UCC of any State or under any
similar recording or notice statute, except:

(a) Liens in favor of Collateral Agent for the benefit of Secured Parties
granted pursuant to any Credit Document;

(b) Liens for Taxes if obligations with respect to such Taxes are not yet due or
are being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted so long as the aggregate amount of such Taxes do not
exceed $2,500,000;

 

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(c) statutory Liens of landlords, banks (and rights of set-off), carriers,
warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law (other than any such Lien imposed pursuant to Section 401 (a)(29)
or 412(n) of the Internal Revenue Code or by ERISA), in each case incurred in
the ordinary course of business (i) for amounts not yet overdue, or (ii) for
amounts that are overdue and that (in the case of any such amounts overdue for a
period in excess of ten (10) days) are being contested in good faith by
appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;

(d) Liens incurred in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;

(e) easements, rights-of-way, restrictions, encroachments, and other minor
defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Holdings or any of its Subsidiaries;

(f) any interest or title of a lessor or sublessor under any lease of real
estate permitted hereunder;

(g) Liens solely on any cash earnest money deposits made by Holdings or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
permitted hereunder;

(h) purported Liens evidenced by the filing of precautionary UCC financing
statements relating solely to operating leases of personal property entered into
in the ordinary course of business;

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

(j) any zoning or similar law or right reserved to or vested in any governmental
office or agency to control or regulate the use of any real property;

(k) licenses of patents, trademarks and other intellectual property rights
granted by Holdings or any of its Subsidiaries in the ordinary course of
business and not interfering in any respect with the ordinary conduct of the
business of Company or such Subsidiary;

(l) Liens described in Schedule 6.2 or on a title report delivered pursuant to
Section 3.1(h)(iii);

 

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(m) Liens securing purchase money Indebtedness permitted pursuant to
Section 6.1(j); provided, any such Lien shall encumber only the asset acquired
with the proceeds of such Indebtedness;

(n) Liens on cash in favor of Wells Fargo Bank, N.A. but only to the extent such
Liens secure the Existing Letter of Credit Obligations;

(o) Liens on cash securing any Indebtedness permitted pursuant to
Section 6.1(k);

(p) Liens on Cash and Cash Equivalents in favor of any counterparty to an
Interest Rate Agreement or Currency Agreement;

(q) any extensions, renewal or replacement (or successive extensions, renewals
or replacements), in whole or in part, of any Lien referred to in this Section;
provided that such extension, renewal or replacement Lien shall be limited to
all or a part of the property which was subject to the Lien so extended, renewed
or replaced;

(r) Liens existing on the Closing Date and set forth on Schedule 6.2 and any
extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any such Lien; provided that such
extension, renewal or replacement Lien shall be limited to all or a part of the
property which was subject to the Lien so extended, renewed or replaced;
provided that no such Lien shall at any time be extended to cover property or
assets other than the property or assets subject thereto on the Closing Date;

(s) Liens arising out of judgments, attachments or awards not resulting in an
Event of Default and in respect of which the relevant Credit Party shall in good
faith be prosecuting an appeal or proceedings for review in respect of which
there shall be secured a subsisting stay of execution pending such appeal or
proceedings;

(t) Normal and customary Liens, rights of setoff and recoupment rights upon
deposits of cash in favor of banks or other depository institutions relating to
due and unpaid bank fees, bank charges, returned checks and chargebacks, and
other normal and customary obligations associated with the maintenance of
deposit accounts by such banks or other depository institutions;

(u) Liens on real estate securing Indebtedness permitted pursuant to
Section 6.1(s); and

(v) Other Liens not described in clauses (a) through (u) above securing
Indebtedness in an aggregate principal amount not to exceed at any time
$3,500,000.

6.3 Equitable Lien.

If any Credit Party or any of its Subsidiaries shall create or assume any Lien
upon any of its properties or assets, whether now owned or hereafter acquired,
other than Permitted Liens, it shall make or cause to be made effective
provisions whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as

 

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any such Indebtedness shall be so secured; provided, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.

6.4 No Further Negative Pledges.

Except with respect to (a) property encumbered by a Lien permitted by
Section 6.2 to secure payment of Indebtedness or property to be sold pursuant to
an executed agreement with respect to a permitted Asset Sale, (b) restrictions
by reason of customary provisions restricting assignments, subletting or other
transfers contained in leases, licenses and similar agreements entered into in
the ordinary course of business (provided that such restrictions are limited to
the property or assets secured by such Liens or the property or assets subject
to such leases, licenses or similar agreements, as the case may be) and
(c) restrictions in other Indebtedness incurred in compliance with Section 6.1;
provided that such restrictions, taken as a whole, are, in the good faith
judgment of the Company’s board of directors, no more materially restrictive
with respect to such encumbrances and restrictions than those contained in this
Agreement, no Credit Party nor any of its Subsidiaries shall enter into any
agreement prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.

6.5 Restricted Junior Payments.

No Credit Party shall, nor shall it permit any of its Subsidiaries or Affiliates
through any manner or means or through any other Person to, directly or
indirectly, declare, order, pay, make or set apart, or agree to declare, order,
pay, make or set apart, any sum for any Restricted Junior Payment, except that:

(a) Italian Restaurant Holdings, Company and any other first-tier Subsidiary of
Holdings may make Restricted Junior Payments to Holdings for general corporate
purposes of Holdings consistent with the past practices of Holdings, including,
for purpose of (i) paying general administrative costs and other costs and
expenses incurred in the ordinary course of business, (ii) discharging the
consolidated tax liabilities of Holdings and its Subsidiaries,
(iii) consummating Permitted Acquisitions and (iv) making capital contributions
to its Subsidiaries, in each case, so long as Holdings applies the full amount
of any such Restricted Junior Payment for such purpose and contributes any
excess amount to the Company;

(b) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, Company may make Restricted Junior
Payments to consummate any Permitted Preferred Securities Redemption;

(c) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, any Credit Party may repurchase Capital
Stock of Holdings (i) from officers, directors and employees of Holdings or any
Subsidiary in an aggregate amount not to exceed $2,000,000 in any four
consecutive Fiscal Quarter period of Holdings and $10,000,000 during the term of
this Agreement and (ii) from existing shareholders of Holdings (other than
officers, directors and employees of Holdings or any Subsidiary) in an aggregate
amount not to exceed $2,000,000 in any four consecutive Fiscal Quarter period of
Holdings and $10,000,000 during the term of this Agreement, in each case, so
long as Holdings applies the full amount of

 

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any such Restricted Junior Payment for such purpose and contributes any excess
amount to the Company; provided that, the foregoing amounts in this clause
(ii) shall be increased to $4,000,000 and $20,000,000, respectively, if (A) the
Senior Leverage Ratio set forth in Section 6.8(b) is less than or equal to 2.0
to 1.0 and (B) the Credit Parties are then in compliance with the Senior
Leverage Ratio (as of the most recent measurement date);

(d) Holdings may (i) repurchase Capital Stock to the extent such repurchase is
deemed to occur upon the exercise of options, warrants or other convertible
securities to the extent such Capital Stock represent a portion of the exercise
price of those options, warrants or other convertible securities and (ii) make
cash payments in lieu of the issuance of fractional shares in connection with
the exercise of options, warrants, or other convertible securities in an
aggregate amount not to exceed $250,000 in any four consecutive Fiscal Quarter
period of Holdings; and

(e) the Credit Parties may make other Restricted Junior Payments not described
in clauses (a) through (d) above, so long as (i) no Default or Event of Default
shall have occurred and be continuing or shall be caused thereby, and (ii) the
aggregate amount of all such Restricted Junior Payments made during the term of
this Agreement do not exceed $2,500,000

6.6 Restrictions on Subsidiary Distributions.

Except as provided herein, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary of Holdings to (a) pay dividends or make any other
distributions on any of such Subsidiary’s Capital Stock owned by Holdings or any
other Subsidiary of Holdings, (b) repay or prepay any Indebtedness owed by such
Subsidiary to Holdings or any other Subsidiary of Holdings, (c) make loans or
advances to Holdings or any other Subsidiary of Holdings, or (d) transfer any of
its property or assets to Holdings or any other Subsidiary of Holdings other
than restrictions (i) in agreements evidencing purchase money Indebtedness
permitted by Section 6.1(j) that impose restrictions on the property so
acquired, (ii) by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses, joint venture
agreements and similar agreements entered into in the ordinary course of
business, (iii) that are or were created by virtue of any transfer of, agreement
to transfer or option or right with respect to any property, assets or Capital
Stock not otherwise prohibited under this Agreement, (iv) any Permitted Lien or
any document or instrument governing any Permitted Lien; provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien, and (v) restrictions in other Indebtedness incurred in
compliance with Section 6.1; provided that such restrictions, taken as a whole,
are, in the good faith judgment of Holdings’ board of directors, no more
materially restrictive with respect to such encumbrances and restrictions than
those contained in this Agreement.

6.7 Investments.

No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly
or indirectly, make or own any Investment in any Person, including without
limitation any Joint Venture and any Foreign Subsidiary, except:

(a) Investments in Cash and Cash Equivalents;

 

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(b) equity Investments owned as of the Closing Date in any Subsidiary and
Investments made after the Closing Date in any wholly-owned Guarantor
Subsidiaries of Company;

(c) Investments (i) in any Securities received in satisfaction or partial
satisfaction thereof from financially troubled account debtors, and
(ii) deposits, prepayments and other credits to suppliers made in the ordinary
course of business consistent with the past practices of Holdings and its
Subsidiaries;

(d) intercompany loans to the extent permitted under Section 6.1(b);

(e) Consolidated Capital Expenditures permitted by Section 6.8(d);

(f) loans and advances to employees of Holdings and its Subsidiaries (i) made in
the ordinary course of business and described on Schedule 6.7, and (ii) any
refinancings of such loans after the Closing Date, in an aggregate amount not to
exceed $1,000,000;

(g) Investments described in Schedule 6.7;

(h) Permitted Acquisitions;

(i) Interest Rate Agreements and Currency Agreements;

(j) Non-cash consideration received from any Asset Sales permitted by
Section 6.9;

(k) Investments in Joint Ventures in an aggregate amount not to exceed
$3,500,000 per restaurant operated by any such Joint Venture (or such greater
amount as approved by Administrative Agent, in its reasonable discretion);

(l) Investments in Foreign Subsidiaries; and

(m) other Investments not described in clauses (a) through (l) above in an
aggregate amount not to exceed at any time $2,500,000.

Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
Payment not otherwise permitted under the terms of Section 6.5.

6.8 Financial Covenants.

(a) Fixed Charge Coverage Ratio. Holdings shall not permit the Fixed Charge
Coverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending January 2, 2011, to be less than 1.15 to 1.00.

 

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(b) Senior Leverage Ratio. Holdings shall not permit the Senior Leverage Ratio
as of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter
ending January 2, 2011, to exceed the correlative ratio indicated:

 

Fiscal Quarter

   Senior Leverage Ratio

January 2, 2011

   2.75 to 1.00

April 3, 2011

   2.75 to 1.00

July 3, 2011

   2.75 to 1.00

October 2, 2011

   2.75 to 1.00

January 1, 2012

   2.50 to 1.00

April 1, 2012

   2.50 to 1.00

July 1, 2012

   2.50 to 1.00

September 30, 2012

   2.50 to 1.00

December 30, 2012

   2.25 to 1.00

March 31, 2013

   2.25 to 1.00

June 30, 2013

   2.25 to 1.00

September 29, 2013

   2.25 to 1.00

December 29, 2013

   2.00 to 1.00

March 30, 2014

   2.00 to 1.00

June 29, 2014

   2.00 to 1.00

September 28, 2014

   2.00 to 1.00

December 28, 2014, and each Fiscal Quarter thereafter

   1.75 to 1.00

(c) Consolidated Adjusted EBITDA. Holdings shall not permit Consolidated
Adjusted EBITDA as at the end of any Fiscal Quarter, beginning with the Fiscal
Quarter ending January 2, 2011, for the four-Fiscal Quarter period then ended to
be less than the correlative amount indicated:

 

Fiscal Quarter

   Consolidated
Adjusted  EBITDA  

January 2, 2011

   $ 23,750,000   

April 3, 2011

   $ 23,500,000   

July 3, 2011

   $ 23,500,000   

October 2, 2011

   $ 23,000,000   

January 1, 2012

   $ 23,000,000   

April 1, 2012

   $ 24,000,000   

July 1, 2012

   $ 25,500,000   

September 30, 2012

   $ 27,000,000   

December 30, 2012

   $ 29,000,000   

March 31, 2013

   $ 29,000,000   

June 30, 2013

   $ 29,000,000   

September 29, 2013

   $ 29,000,000   

December 29, 2013

   $ 29,000,000   

March 30, 2014

   $ 32,000,000   

June 29, 2014

   $ 32,000,000   

September 28, 2014

   $ 32,000,000   

December 28, 2014

   $ 32,000,000   

March 29, 2015, and each Fiscal Quarter thereafter

   $ 34,000,000   

 

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(d) Maximum Consolidated Capital Expenditures. Holdings shall not, and shall not
permit its Subsidiaries to, make or incur Consolidated Capital Expenditures, in
any Fiscal Year indicated below (excluding the portion of any Capital
Expenditures funded by a third-party investor in connection with any Excluded
Joint Venture during such Fiscal Year) in excess of the corresponding amount set
forth below opposite such Fiscal Year; provided, such amount for any Fiscal Year
shall be increased by an amount equal to the excess, if any, of such amount for
the previous Fiscal Year (as adjusted in accordance with this proviso) over the
actual amount of Consolidated Capital Expenditures for such previous Fiscal
Year:

 

Fiscal Year

   Consolidated
Capital Expenditures  

January 2, 2011

   $ 9,000,000   

January 1, 2012

   $ 14,000,000   

December 30, 2012

   $ 19,000,000   

December 29, 2013

   $ 24,000,000   

December 28, 2014

   $ 29,000,000   

December 27, 2015

   $ 31,000,000   

 

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(e) Minimum Consolidated Liquidity. Holdings shall not permit Consolidated
Liquidity to be less than $1,000,000 at any time.

6.9 Fundamental Changes; Disposition of Assets; Acquisitions.

No Credit Party shall, nor shall it permit any of its Subsidiaries to, enter
into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part of
its business, assets or property of any kind whatsoever, whether real, personal
or mixed and whether tangible or intangible, whether now owned or hereafter
acquired, or acquire by purchase or otherwise (other than purchases or other
acquisitions of inventory, materials and equipment and Capital Expenditures in
the ordinary course of business) the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person or any division
or line of business or other business unit of any Person, except:

(a) any Subsidiary of Holdings may be merged with or into Company or any
Subsidiary, or be liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to
Company or any Subsidiary; provided, in the case of any such transaction
involving a Guarantor Subsidiary, such Guarantor Subsidiary, shall be the
continuing or surviving Person or the transferee of the business, property or
assets;

(b) sales or other dispositions of assets that do not constitute Asset Sales;

(c) Asset Sales, the proceeds of which when aggregated with the proceeds of all
other Asset Sales made within the same Fiscal Year, are less than $5,000,000;
provided (1) the consideration received for such assets shall be in an amount at
least equal to the fair market value thereof (determined in good faith by the
board of directors of Company (or similar governing body)), (2) no less than 75%
thereof shall be paid in Cash, and (3) the Net Asset Sale Proceeds thereof shall
be applied as required by Section 2.13(a); and

(d) Investments made in accordance with Section 6.7.

6.10 Disposal of Subsidiary Interests.

Except for any sale of all of its interests in the Capital Stock of any of its
Subsidiaries constituting Joint Ventures or in compliance with the provisions of
Section 6.9, no Credit Party shall, nor shall it permit any of its Subsidiaries
to, (a) directly or indirectly sell, assign, pledge or otherwise encumber or
dispose of any Capital Stock of any of its Subsidiaries, except for the Liens
created under the Security Documents or to qualify directors if required by
applicable law; or (b) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any Capital Stock of
any of its Subsidiaries, except to another Credit Party (subject to the
restrictions on such disposition otherwise imposed hereunder), or to qualify
directors if required by applicable law.

 

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6.11 Sales and Lease-Backs.

No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly
or indirectly, become or remain liable as lessee or as a guarantor or other
surety with respect to any lease of any property (whether real, personal or
mixed), whether now owned or hereafter acquired, which such Credit Party (a) has
sold or transferred or is to sell or to transfer to any other Person (other than
Holdings or any of its Subsidiaries), or (b) intends to use for substantially
the same purpose as any other property which has been or is to be sold or
transferred by such Credit Party to any Person (other than Holdings or any of
its Subsidiaries) in connection with such lease, except for any such transaction
if, after giving effect thereto, the Credit Parties shall be in compliance with
Section 6.1, 6.2 and 6.9.

6.12 Transactions with Shareholders and Affiliates.

No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly
or indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate; provided, however, that the Credit Parties and
their Subsidiaries may enter into or permit to exist any such transaction if the
terms of such transaction are not less favorable to such Credit Party or
Subsidiary, as the case may be, than those that might be obtained at the time
from a Person who is not such a holder or Affiliate; further, provided, that the
foregoing restrictions shall not apply to (a) any transaction between Company
and any Subsidiary; (b) reasonable and customary fees paid to members of the
board of directors (or similar governing body) of Holdings and its Subsidiaries;
(c) compensation arrangements for officers and other employees of Holdings and
its Subsidiaries entered into in the ordinary course of business (including,
without limitation, employment agreements, change of control agreements and
similar agreements with senior management); (d) transactions described in
Schedule 6.12; (e) transactions with Joint Ventures; and (f) Restricted Junior
Payments permitted by Section 6.5. The Company shall promptly disclose in
writing each transaction with any Affiliate of Holdings to Administrative Agent.

6.13 Conduct of Business; Foreign Subsidiaries.

From and after the Closing Date, no Credit Party shall, nor shall it permit any
of its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by such Credit Party on the Closing Date, and (ii) such other lines
of business as may be reasonably related or complementary thereto.

6.14 Permitted Activities of Holdings and Intermediate Holdings.

Neither Holdings nor Intermediate Holdings shall (a) incur, directly or
indirectly, any Indebtedness or any other obligation or liability whatsoever
other than the Obligations and the Indebtedness and obligations under the
Subordinated Indebtedness Documents; (b) create or suffer to exist any Lien upon
any property or assets now owned or hereafter acquired by it other than the
Liens created under the Collateral Documents to which it is a party or permitted
pursuant to Section 6.2; (c) engage in any business or activity or own any
assets other than (i) (A) with respect to Holdings, holding 100% of the Capital
Stock of Intermediate Holdings, Italian Restaurant Holdings, and Peasant Holding
Corp., a Delaware corporation, and (B) with respect to Intermediate Holdings,
holding 100% of the Capital Stock of Company; (ii) performing its obligations
and activities incidental thereto under the Credit Documents, and

 

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to the extent not inconsistent therewith, under the Subordinated Indebtedness
Documents; and (iii) making Restricted Junior Payments and Investments to the
extent permitted by this Agreement; (d) consolidate with or merge with or into,
or convey, transfer or lease all or substantially all its assets to, any Person;
(e) sell or otherwise dispose of any Capital Stock of any of its Subsidiaries;
(f) create or acquire any Subsidiary or make or own any Investment in any Person
other than Company; or (g) fail to hold itself out to the public as a legal
entity separate and distinct from all other Persons.

6.15 [Reserved.]

6.16 Amendments or Waivers with Respect to Subordinated Indebtedness.

No Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or
otherwise change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness by more than 200 basis points, change (to earlier dates) any dates
upon which payments of principal or interest are due thereon, change any event
of default or condition to an event of default with respect thereto (other than
to eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions of such Subordinated Indebtedness (or of any
guaranty thereof), or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations
of the obligor thereunder or to confer any additional rights on the holders of
such Subordinated Indebtedness (or a trustee or other representative on their
behalf) which would be materially adverse to any Credit Party or Lenders.

6.17 Fiscal Year.

No Credit Party shall, nor shall it permit any of its Subsidiaries to change its
Fiscal Year.

6.18 Deposit Accounts.

No Credit Party shall establish or maintain a Deposit Account that is not a
Controlled Account and no Credit Party will deposit proceeds in a Deposit
Account which is not a Controlled Account (other than Excluded Accounts).

6.19 Amendments to Organizational Agreements and Material Contracts.

No Credit Party shall (a) amend or permit any amendments to any Credit Party’s
Organizational Documents; or (b) amend or permit any amendments to, or terminate
or permit the termination of, or waive any provision of, any Material Contract,
if, in the case of either (a) or (b) above, such amendment, termination, or
waiver would be materially adverse to Administrative Agent or the Lenders.

 

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6.20 Prepayments of Certain Indebtedness.

No Credit Party shall, directly or indirectly, voluntarily purchase, redeem,
defease or prepay any principal of, premium, if any, interest or other amount
payable in respect of any Indebtedness prior to its scheduled maturity, other
than (i) the Obligations, (ii) the Miami Beach Indebtedness or (ii) Indebtedness
secured by a Permitted Lien if the asset securing such Indebtedness has been
sold or otherwise disposed of in accordance with Section 6.9.

SECTION 7. GUARANTY

7.1 Guaranty of the Obligations.

Subject to the provisions of Section 7.2, Guarantors jointly and severally
hereby irrevocably and unconditionally guaranty to Administrative Agent for the
ratable benefit of the Beneficiaries the due and punctual payment in full of all
Obligations when the same shall become due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) (collectively, the
“Guaranteed Obligations”).

7.2 Contribution by Guarantors.

All Guarantors desire to allocate among themselves (collectively, the
“Contributing Guarantors”), in a fair and equitable manner, their obligations
arising under this Guaranty. Accordingly, in the event any payment or
distribution is made on any date by a Guarantor (a “Funding Guarantor”) under
this Guaranty such that its Aggregate Payments exceeds its Fair Share as of such
date, such Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in an amount sufficient to cause each
Contributing Guarantor’s Aggregate Payments to equal its Fair Share as of such
date. “Fair Share” means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (a) the ratio of (i) the Fair Share
Contribution Amount with respect to such Contributing Guarantor, to (ii) the
aggregate of the Fair Share Contribution Amounts with respect to all
Contributing Guarantors multiplied by, (b) the aggregate amount paid or
distributed on or before such date by all Funding Guarantors under this Guaranty
in respect of the obligations Guaranteed. “Fair Share Contribution Amount”
means, with respect to a Contributing Guarantor as of any date of determination,
the maximum aggregate amount of the obligations of such Contributing Guarantor
under this Guaranty that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any comparable applicable provisions of state law;
provided, solely for purposes of calculating the “Fair Share Contribution
Amount” with respect to any Contributing Guarantor for purposes of this
Section 7.2, any assets or liabilities of such Contributing Guarantor arising by
virtue of any rights to subrogation, reimbursement or indemnification or any
rights to or obligations of contribution hereunder shall not be considered as
assets or liabilities of such Contributing Guarantor. “Aggregate Payments”
means, with respect to a Contributing Guarantor as of any date of determination,
an amount equal to (1) the aggregate amount of all payments and distributions
made on or before such date by such Contributing Guarantor in respect of this
Guaranty (including, without limitation, in respect of this Section 7.2), minus
(2) the aggregate amount of all payments received on or before such date by such
Contributing Guarantor from the other Contributing Guarantors as contributions
under this

 

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Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third-party beneficiary to the contribution agreement set forth
in this Section 7.2.

7.3 Payment by Guarantors.

Subject to Section 7.2, Guarantors hereby jointly and severally agree, in
furtherance of the foregoing and not in limitation of any other right which any
Beneficiary may have at law or in equity against any Guarantor by virtue hereof,
that upon the failure of Company to pay any of the Guaranteed Obligations when
and as the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)), Guarantors will upon
demand pay, or cause to be paid, in Cash, to Administrative Agent for the
ratable benefit of Beneficiaries, an amount equal to the sum of the unpaid
principal amount of all Guaranteed Obligations then due as aforesaid, accrued
and unpaid interest on such Guaranteed Obligations (including interest which,
but for Company’s becoming the subject of a case under the Bankruptcy Code,
would have accrued on such Guaranteed Obligations, whether or not a claim is
allowed against Company for such interest in the related bankruptcy case) and
all other Guaranteed Obligations then owed to Beneficiaries as aforesaid.

7.4 Liability of Guarantors Absolute.

Each Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Guaranteed Obligations. In furtherance of the
foregoing and without limiting the generality thereof, each Guarantor agrees as
follows:

(a) this Guaranty is a guaranty of payment when due and not of collectability.
This Guaranty is a primary obligation of each Guarantor and not merely a
contract of surety;

(b) Administrative Agent may enforce this Guaranty upon the occurrence of an
Event of Default notwithstanding the existence of any dispute between Company
and any Beneficiary with respect to the existence of such Event of Default;

(c) the obligations of each Guarantor hereunder are independent of the
obligations of Company and the obligations of any other guarantor (including any
other Guarantor) of the obligations of Company, and a separate action or actions
may be brought and prosecuted against such Guarantor whether or not any action
is brought against Company or any of such other guarantors and whether or not
Company is joined in any such action or actions;

(d) payment by any Guarantor of a portion, but not all, of the Guaranteed
Obligations shall in no way limit, affect, modify or abridge any Guarantor’s
liability for any

 

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portion of the Guaranteed Obligations which has not been paid. Without limiting
the generality of the foregoing, if Administrative Agent is awarded a judgment
in any suit brought to enforce any Guarantor’s covenant to pay a portion of the
Guaranteed Obligations, such judgment shall not be deemed to release such
Guarantor from its covenant to pay the portion of the Guaranteed Obligations
that is not the subject of such suit, and such judgment shall not, except to the
extent satisfied by such Guarantor, limit, affect, modify or abridge any other
Guarantor’s liability hereunder in respect of the Guaranteed Obligations;

(e) any Beneficiary, upon such terms as it deems appropriate, without notice or
demand and without affecting the validity or enforceability hereof or giving
rise to any reduction, limitation, impairment, discharge or termination of any
Guarantor’s liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guaranteed Obligations; (ii) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the Guaranteed Obligations,
any other guaranties of the Guaranteed Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guaranteed
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case as
such Beneficiary in its discretion may determine consistent herewith or the
applicable Interest Rate Agreement and Currency Agreement and any applicable
security agreement, including foreclosure on any such security pursuant to one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, and even though such action operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of any Guarantor against Company or any security for the Guaranteed Obligations;
and (vi) exercise any other rights available to it under the Credit Documents or
Interest Rate Agreements and Currency Agreements; and

(f) this Guaranty and the obligations of Guarantors hereunder shall be valid and
enforceable and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason (other than payment in full of the
Guaranteed Obligations), including the occurrence of any of the following,
whether or not any Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or agreement or election not to
assert or enforce, or the stay or enjoining, by order of court, by operation of
law or otherwise, of the exercise or enforcement of, any claim or demand or any
right, power or remedy (whether arising under the Credit Documents or any
Interest Rate Agreement or Currency Agreement, at law, in equity or otherwise)
with respect to the Guaranteed Obligations or any agreement relating thereto, or
with respect to any other guaranty of or security for the payment of the
Guaranteed Obligations; (ii) any rescission, waiver, amendment or modification
of, or any consent to departure from, any of the terms or provisions (including
provisions relating to events of default) hereof, any of the other Credit
Documents, any of the Interest Rate Agreements or

 

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Currency Agreements or any agreement or instrument executed pursuant thereto, or
of any other guaranty or security for the Guaranteed Obligations, in each case
whether or not in accordance with the terms hereof or such Credit Document, such
Interest Rate Agreement or Currency Agreement or any agreement relating to such
other guaranty or security; (iii) the Guaranteed Obligations, or any agreement
relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received from any
source (other than payments received pursuant to the other Credit Documents or
any of the Interest Rate Agreements or Currency Agreements or from the proceeds
of any security for the Guaranteed Obligations, except to the extent such
security also serves as collateral for indebtedness other than the Guaranteed
Obligations) to the payment of indebtedness other than the Guaranteed
Obligations, even though any Beneficiary might have elected to apply such
payment to any part or all of the Guaranteed Obligations; (v) any Beneficiary’s
consent to the change, reorganization or termination of the corporate structure
or existence of Holdings or any of its Subsidiaries and to any corresponding
restructuring of the Guaranteed Obligations; (vi) any failure to perfect or
continue perfection of a security interest in any collateral which secures any
of the Guaranteed Obligations; (vii) any defenses, set-offs or counterclaims
which Company may allege or assert against any Beneficiary in respect of the
Guaranteed Obligations, including failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or delay to do any other
act or thing, which may or might in any manner or to any extent vary the risk of
any Guarantor as an obligor in respect of the Guaranteed Obligations.

7.5 Waivers by Guarantors.

Each Guarantor hereby waives, for the benefit of Beneficiaries: (a) any right to
require any Beneficiary, as a condition of payment or performance by such
Guarantor, to (i) proceed against Company, any other guarantor (including any
other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any such other guarantor or
any other Person, (iii) proceed against or have resort to any balance of any
Deposit Account or credit on the books of any Beneficiary in favor of Company or
any other Person, or (iv) pursue any other remedy in the power of any
Beneficiary whatsoever; (b) any defense arising by reason of the incapacity,
lack of authority or any disability or other defense of Company or any other
Guarantor including any defense based on or arising out of the lack of validity
or the unenforceability of the Guaranteed Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
Company or any other Guarantor from any cause other than payment in full of the
Guaranteed Obligations; (c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (d) any
defense based upon any Beneficiary’s errors or omissions in the administration
of the Guaranteed Obligations, except behavior which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or otherwise, which are
or might be in conflict with the terms hereof and any legal or equitable
discharge of such Guarantor’s obligations hereunder, (ii) the benefit of any
statute of limitations affecting such Guarantor’s liability hereunder or the
enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims,
and (iv) promptness, diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of

 

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protest, notices of dishonor and notices of any action or inaction, including
acceptance hereof, notices of default hereunder, the Interest Rate Agreements or
Currency Agreements or any agreement or instrument related thereto, notices of
any renewal, extension or modification of the Guaranteed Obligations or any
agreement related thereto, notices of any extension of credit to Company and
notices of any of the matters referred to in Section 7.4 and any right to
consent to any thereof; and (g) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.

7.6 Guarantors’ Rights of Subrogation, Contribution, etc.

Until the Guaranteed Obligations shall have been indefeasibly paid in full and
the Revolving Commitments shall have terminated and each Guarantor hereby waives
any claim, right or remedy, direct or indirect, that such Guarantor now has or
may hereafter have against Company or any other Guarantor or any of its assets
in connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including without limitation (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against
Company with respect to the Guaranteed Obligations, (b) any right to enforce, or
to participate in, any claim, right or remedy that any Beneficiary now has or
may hereafter have against Company, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guaranteed Obligations shall have been
indefeasibly paid in full and the Revolving Commitments shall have terminated
and each Guarantor shall withhold exercise of any right of contribution such
Guarantor may have against any other guarantor (including any other Guarantor)
of the Guaranteed Obligations, including, without limitation, any such right of
contribution as contemplated by Section 7.2. Each Guarantor further agrees that,
to the extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification such
Guarantor may have against Company or against any collateral or security, and
any rights of contribution such Guarantor may have against any such other
guarantor, shall be junior and subordinate to any rights any Beneficiary may
have against Company, to all right, title and interest any Beneficiary may have
in any such collateral or security, and to any right any Beneficiary may have
against such other guarantor. If any amount shall be paid to any Guarantor on
account of any such subrogation, reimbursement, indemnification or contribution
rights at any time when all Guaranteed Obligations shall not have been finally
and indefeasibly paid in full, such amount shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms hereof.

7.7 Subordination of Other Obligations.

Any Indebtedness of Company or any Guarantor now or hereafter held by any
Guarantor (the “Obligee Guarantor”) is hereby subordinated in right of payment
to the Guaranteed Obligations, and any such indebtedness collected or received
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Guarantor after an Event of Default has occurred and is continuing shall be held
in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith
be paid over to Administrative Agent for the benefit of Beneficiaries to be
credited and applied against the Guaranteed Obligations but without affecting,
impairing or limiting in any manner the liability of the Obligee Guarantor under
any other provision hereof.

7.8 Continuing Guaranty.

This Guaranty is a continuing guaranty and shall remain in effect until all of
the Guaranteed Obligations shall have been indefeasibly paid in full and the
Revolving Commitments shall have terminated. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Guaranteed Obligations.

7.9 Authority of Guarantors or Company.

It is not necessary for any Beneficiary to inquire into the capacity or powers
of any Guarantor or Company or the officers, directors or any agents acting or
purporting to act on behalf of any of them.

7.10 Financial Condition of Company.

Any Credit Extension may be made to Company or continued from time to time, and
any Interest Rate Agreements or Currency Agreements may be entered into from
time to time, in each case without notice to or authorization from any Guarantor
regardless of the financial or other condition of Company at the time of any
such grant or continuation or at the time such Interest Rate Agreement or
Currency Agreement is entered into, as the case may be. No Beneficiary shall
have any obligation to disclose or discuss with any Guarantor its assessment, or
any Guarantor’s assessment, of the financial condition of Company. Each
Guarantor has adequate means to obtain information from Company on a continuing
basis concerning the financial condition of Company and its ability to perform
its obligations under the Credit Documents and the Interest Rate Agreements and
Currency Agreements, and each Guarantor assumes the responsibility for being and
keeping informed of the financial condition of Company and of all circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations. Each
Guarantor hereby waives and relinquishes any duty on the part of any Beneficiary
to disclose any matter, fact or thing relating to the business, operations or
conditions of Company now known or hereafter known by any Beneficiary.

7.11 Bankruptcy, etc.

(a) So long as any Guaranteed Obligations remain outstanding, no Guarantor
shall, without the prior written consent of Administrative Agent acting pursuant
to the instructions of Requisite Lenders, commence or join with any other Person
in commencing any bankruptcy, reorganization or insolvency case or proceeding of
or against Company or any other Guarantor. The obligations of Guarantors
hereunder shall not be reduced, limited, impaired, discharged, deferred,
suspended or terminated by any case or proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Company or any other Guarantor or by any defense which Company
or any other Guarantor may have by reason of the order, decree or decision of
any court or administrative body resulting from any such proceeding.

 

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(a) Each Guarantor acknowledges and agrees that any interest on any portion of
the Guaranteed Obligations which accrues after the commencement of any case or
proceeding referred to in clause (a) above (or, if interest on any portion of
the Guaranteed Obligations ceases to accrue by operation of law by reason of the
commencement of such case or proceeding, such interest as would have accrued on
such portion of the Guaranteed Obligations if such case or proceeding had not
been commenced) shall be included in the Guaranteed Obligations because it is
the intention of Guarantors and Beneficiaries that the Guaranteed Obligations
which are guaranteed by Guarantors pursuant hereto should be determined without
regard to any rule of law or order which may relieve Company of any portion of
such Guaranteed Obligations. Guarantors will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or similar
person to pay Administrative Agent, or allow the claim of Administrative Agent
in respect of, any such interest accruing after the date on which such case or
proceeding is commenced.

(b) In the event that all or any portion of the Guaranteed Obligations are paid
by Company, the obligations of Guarantors hereunder shall continue and remain in
full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) are rescinded or recovered directly or
indirectly from any Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments which are so rescinded or recovered shall
constitute Guaranteed Obligations for all purposes hereunder.

7.12 Discharge of Guaranty Upon Sale of Guarantor.

If all of the Capital Stock of any Guarantor or any of its successors in
interest hereunder shall be sold or otherwise disposed of (including by merger
or consolidation) in accordance with the terms and conditions hereof, the
Guaranty of such Guarantor or such successor in interest, as the case may be,
hereunder shall automatically be discharged and released without any further
action by any Beneficiary or any other Person effective as of the time of such
Asset Sale.

SECTION 8. EVENTS OF DEFAULT

8.1 Events of Default.

If any one or more of the following conditions or events (each, an “Event of
Default”) shall occur:

(a) Failure to Make Payments When Due. Failure by Company to pay (i) the
principal of and premium, if any, on any Loan whether at stated maturity, by
acceleration or otherwise; (ii) when due any installment or mandatory prepayment
of principal of any Loan, or (iii) within three (3) Business Days after the due
date therefore, any interest on any Loan or any fee or any other amount due
hereunder.

(b) Default in Other Agreements. (i) Failure of any Credit Party or any of their
respective Subsidiaries to pay when due any principal of or interest on or any
other amount

 

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payable in respect of one or more items of Indebtedness (other than Indebtedness
referred to in Section 8.1(a)) in an individual principal amount of $2,500,000
or more or with an aggregate principal amount of $3,500,000 or more, in each
case beyond the grace period, if any, provided therefor; or (ii) breach or
default by any Credit Party with respect to any other material term of (1) one
or more items of Indebtedness in the individual or aggregate principal amounts
referred to in clause (i) above, or (2) any loan agreement, mortgage, indenture
or other agreement relating to such item(s) of Indebtedness, in each case beyond
the grace period, if any, provided therefor, if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness (or
a trustee on behalf of such holder or holders), to cause, that Indebtedness to
become or be declared due and payable (or subject to a compulsory repurchase or
redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or

(c) Breach of Certain Covenants. Failure of any Credit Party to perform or
comply with any term or condition contained in Section 2.5, Section 5.1 (other
than Sections 5.1(i), 5.1(j), 5.1(l), 5.1(m) and 5.1(n)(ii)), Section 5.2,
Section 5.3, Section 5.5, Section 5.6, Section 5.7, Section 5.8, Section 5.9,
Section 5.11, Section 5.14, Section 5.15, or Section 6; or

(d) Breach of Representations, etc. Any representation, warranty, certification
or other statement made or deemed made by any Credit Party in any Credit
Document or in any statement or certificate at any time given by any Credit
Party or any of its Subsidiaries in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect as of
the date made or deemed made; or

(e) Other Defaults Under Credit Documents. Any Credit Party shall default in the
performance of or compliance with any term contained herein or any of the other
Credit Documents, other than any such term referred to in any other Section of
this Section 8.1, and such default shall not have been remedied or waived within
thirty (30) days after the earlier of (i) an officer of such Credit Party
becoming aware of such default, or (ii) receipt by Company of notice from
Administrative Agent or any Lender of such default; or

(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court of
competent jurisdiction shall enter a decree or order for relief in respect of
Holdings or any of its Subsidiaries in an involuntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings or any of its Subsidiaries
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Holdings or any of its Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Holdings or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Holdings or any of
its Subsidiaries, and any such event described in this clause (ii) shall
continue for sixty (60) days without having been dismissed, bonded or
discharged; or

 

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(g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Holdings or any of
its Subsidiaries shall have an order for relief entered with respect to it or
shall commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Holdings or any of its Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Holdings or any of its Subsidiaries shall be unable, or shall
fail generally, or shall admit in writing its inability, to pay its debts as
such debts become due; or the board of directors (or similar governing body) of
Holdings or any of its Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to herein or in Section 8.1(f); or

(h) Judgments and Attachments. Any money judgment, writ or warrant of attachment
or similar process involving (i) in any individual case an amount in excess of
$2,500,000 and (ii) in the aggregate at any time an amount in excess of
$3,500,000 (in either case to the extent not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against Holdings or any of its Subsidiaries or any of
their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of sixty days (60) (or in any event later than five days
prior to the date of any proposed sale thereunder); or

(i) Dissolution. Any order, judgment or decree shall be entered against any
Credit Party decreeing the dissolution or split up of such Credit Party and such
order shall remain undischarged or unstayed for a period in excess of thirty
days; or

(j) Employee Benefit Plans. (i) There shall occur one or more ERISA Events which
individually or in the aggregate results in or might reasonably be expected to
result in liability of Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates in excess of $2,500,000 during the term hereof; or
(ii) there exists any fact or circumstance that would permit the imposition of a
Lien or security interest under Section 412(n) of the Internal Revenue Code or
under ERISA; or

(k) Guaranties, Collateral Documents and other Credit Documents. At any time
after the execution and delivery thereof, (i) the Guaranty for any reason, other
than the satisfaction in full of all Obligations, shall cease to be in full
force and effect (other than in accordance with its terms) or shall be declared
to be null and void or any Guarantor shall repudiate its obligations thereunder,
(ii) this Agreement or any Collateral Document ceases to be in full force and
effect (other than by reason of a release of Collateral in accordance with the
terms hereof or thereof or the satisfaction in full of the Obligations in
accordance with the terms hereof) or shall be declared null and void, or
Collateral Agent shall not have or shall cease to have a valid and perfected
Lien in any Collateral purported to be covered by the Collateral Documents with
the priority required by the relevant Collateral Document, in each case for any
reason other than the failure of Collateral Agent or any Secured Party to take
any action within its control, or (iii) any Credit Party shall contest the
validity or enforceability of any Credit Document in writing or deny in writing
that it has any further liability, including with respect to future advances by
Lenders, under any Credit Document to which it is a party;

 

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THEN, (1) upon the occurrence of any Event of Default described in
Section 8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any
other Event of Default, at the request of (or with the consent of) Requisite
Lenders, upon notice to Company by Administrative Agent, (A) the Commitments, if
any, of each Lender having such Commitments; (B) each of the following shall
immediately become due and payable, in each case without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by each Credit Party: (I) the unpaid principal amount of and accrued
interest on the Loans and (II) all other Obligations; and (C) Administrative
Agent may cause Collateral Agent to enforce any and all Liens and security
interests created pursuant to Collateral Documents.

Notwithstanding the foregoing, a Liquidation Event shall not constitute an Event
of Default; provided, that (a) no more than five Liquidation Events affecting
operating Subsidiaries shall occur in any Fiscal Year of Holdings; (b) the
obligations of each such Subsidiary shall be non-recourse to Holdings or any
other Credit Party (other than limited guaranties by Holdings of remaining lease
rental payment obligations, so long as Holdings fulfills its obligations under
any such limited guaranty); and (c) not later than five (5) Business Days’ after
the occurrence of any Liquidation Event, Company shall provide notice to
Administrative Agent of such Liquidation Event.

SECTION 9. AGENTS

9.1 Appointment of Agents.

GS Bank is hereby appointed Administrative Agent and Collateral Agent hereunder
and under the other Credit Documents and each Lender hereby authorizes GS Bank,
in such capacity, to act as its agent in accordance with the terms hereof and
the other Credit Documents. Each Agent hereby agrees to act upon the express
conditions contained herein and the other Credit Documents, as applicable. The
provisions of this Section 9 are solely for the benefit of Agents and Lenders
and no Credit Party shall have any rights as a third-party beneficiary of any of
the provisions thereof. In performing its functions and duties hereunder, each
Agent shall act solely as an agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Holdings or any of its Subsidiaries.

9.2 Powers and Duties.

Each Lender irrevocably authorizes each Agent to take such action on such
Lender’s behalf and to exercise such powers, rights and remedies hereunder and
under the other Credit Documents as are specifically delegated or granted to
such Agent by the terms hereof and thereof, together with such powers, rights
and remedies as are reasonably incidental thereto. Each Agent shall have only
those duties and responsibilities that are expressly specified herein and the
other Credit Documents. Each Agent may exercise such powers, rights and remedies
and perform such duties by or through its agents or employees. No Agent shall
have, by reason hereof or any of the other Credit Documents, a fiduciary
relationship in respect of any Lender; and nothing herein or any of the other
Credit Documents, expressed or implied, is intended to or shall be so construed
as to impose upon any Agent any obligations in respect hereof or any of the
other Credit Documents except as expressly set forth herein or therein.

 

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9.3 General Immunity.

(a) No Responsibility for Certain Matters. No Agent shall be responsible to any
Lender for the execution, effectiveness, genuineness, validity, enforceability,
collectability or sufficiency hereof or any other Credit Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
any Agent to Lenders or by or on behalf of any Credit Party to any Agent or any
Lender in connection with the Credit Documents and the transactions contemplated
thereby or for the financial condition or business affairs of any Credit Party
or any other Person liable for the payment of any Obligations, nor shall any
Agent be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained in
any of the Credit Documents or as to the use of the proceeds of the Loans or as
to the existence or possible existence of any Event of Default or Default or to
make any disclosures with respect to the foregoing. Anything contained herein to
the contrary notwithstanding, Administrative Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the component
amounts thereof.

(b) Exculpatory Provisions. No Agent nor any of its officers, partners,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by any Agent under or in connection with any of the Credit Documents
except to the extent caused by such Agent’s gross negligence or willful
misconduct, as determined by a court of competent jurisdiction in a final,
non-appealable order. Each Agent shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection
herewith or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Holdings and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against any Agent as a result of such Agent
acting or (where so instructed) refraining from acting hereunder or any of the
other Credit Documents in accordance with the instructions of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
Section 10.5).

 

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9.4 Agents Entitled to Act as Lender.

The agency hereby created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, any Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans,
each Agent shall have the same rights and powers hereunder as any other Lender
and may exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term “Lender” shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, and generally engage in any kind of banking, trust, financial advisory or
other business with Holdings or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection herewith and otherwise
without having to account for the same to Lenders.

9.5 Lenders’ Representations, Warranties and Acknowledgment.

(a) Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with Credit Extensions hereunder and that it has made
and shall continue to make its own appraisal of the creditworthiness of Holdings
and its Subsidiaries. No Agent shall have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and no Agent shall have
any responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.

(b) Each Lender, by delivering its signature page to this Agreement and funding
its Term Loan and/or Revolving Loans on the Closing Date, shall be deemed to
have acknowledged receipt of, and consented to and approved, each Credit
Document and each other document required to be approved by any Agent, Requisite
Lenders or Lenders, as applicable on the Closing Date.

(c) Each Lender (i) represents and warrants that as of the Closing Date neither
such Lender nor its Affiliates or Related Funds owns or controls, or owns or
controls any Person owning or controlling, any trade debt or Indebtedness of any
Credit Party other than the Obligations (including, but not limited to, any
Permitted Second Lien Refinancing) or any Capital Stock of any Credit Party and
(ii) covenants and agrees that from and after the Closing Date neither such
Lender nor its Affiliates and Related Funds shall purchase any trade debt or
Indebtedness of any Credit Party other than the Obligations (including, but not
limited to, any Permitted Second Lien Refinancing) or Capital Stock described in
clause (i) above without the prior written consent of the Administrative Agent.

9.6 Right to Indemnity.

Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify
each Agent, their Affiliates and their respective officers, partners, directors,
trustees, employees and agents of each Agent (each, an “Indemnitee Agent
Party”), to the extent that such Indemnitee Agent Party shall not have been
reimbursed by any Credit Party, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses

 

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(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Indemnitee Agent Party in exercising its powers, rights and remedies or
performing its duties hereunder or under the other Credit Documents or otherwise
in its capacity as such Indemnitee Agent Party in any way relating to or arising
out of this Agreement or the other Credit Documents, IN ALL CASES, WHETHER OR
NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE,
CONTRIBUTORY, OR SOLE NEGLIGENCE OF SUCH INDEMNITEE AGENT PARTY; provided, no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Indemnitee Agent Party’s gross negligence or willful
misconduct, as determined by a court of competent jurisdiction in a final,
non-appealable order. If any indemnity furnished to any Indemnitee Agent Party
for any purpose shall, in the opinion of such Indemnitee Agent Party, be
insufficient or become impaired, such Indemnitee Agent Party may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished; provided, in no event
shall this sentence require any Lender to indemnify any Indemnitee Agent Party
against any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement in excess of such Lender’s Pro Rata Share
thereof; and provided further, this sentence shall not be deemed to require any
Lender to indemnify any Indemnitee Agent Party against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement described in the proviso in the immediately preceding sentence.

9.7 Successor Administrative Agent and Collateral Agent.

(a) Administrative Agent and Collateral Agent may resign at any time by giving
thirty (30) days’ prior written notice thereof to Lenders and Company. Upon any
such notice of resignation, Requisite Lenders shall have the right, upon five
(5) Business Days’ notice to Company, to appoint a successor Administrative
Agent and Collateral Agent, which successor shall be approved by Company (such
approval not to be unreasonably withheld or delayed) so long as no Default or
Event of Default has occurred and is continuing. Upon the acceptance of any
appointment as Administrative Agent and Collateral Agent hereunder by a
successor Administrative Agent and Collateral Agent, that successor
Administrative Agent and Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent and Collateral Agent and the retiring Administrative Agent
and Collateral Agent shall promptly (i) transfer to such successor
Administrative Agent and Collateral Agent all sums, Securities and other items
of Collateral held under the Collateral Documents, together with all records and
other documents necessary or appropriate in connection with the performance of
the duties of the successor Administrative Agent and Collateral Agent under the
Credit Documents, and (ii) execute and deliver to such successor Administrative
Agent and Collateral Agent such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Administrative Agent and Collateral Agent of the
security interests created under the Collateral Documents, whereupon such
retiring Administrative Agent and Collateral Agent shall be discharged from its
duties and obligations hereunder. After any retiring Administrative Agent’s and
Collateral Agent’s resignation hereunder as Administrative Agent and Collateral
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent and
Collateral Agent hereunder.

 

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(b) Notwithstanding anything herein to the contrary, Administrative Agent and
Collateral Agent may assign their rights and duties as Administrative Agent and
Collateral Agent hereunder to an Affiliate of GS Bank without the prior written
consent of, or prior written notice to, Company or the Lenders; provided that
Company and the Lenders may deem and treat such assigning Administrative Agent
and Collateral Agent as the Administrative Agent and Collateral Agent for all
purposes hereof, unless and until such assigning Administrative Agent or
Collateral Agent, as the case may be, provides written notice to Company and the
Lenders of such assignment. Upon such assignment such Affiliate shall succeed to
and become vested with all rights, powers, privileges and duties as
Administrative Agent and Collateral Agent hereunder and under the other Credit
Documents.

9.8 Collateral Documents and Guaranty.

(a) Agents under Collateral Documents and Guaranty. Each Lender hereby further
authorizes Administrative Agent or Collateral Agent, as applicable, on behalf of
and for the benefit of Lenders, to be the agent for and representative of
Lenders with respect to the Guaranty, the Collateral and the Collateral
Documents. Subject to Section 10.5, without further written consent or
authorization from Lenders, Administrative Agent or Collateral Agent, as
applicable may execute any documents or instruments necessary to (i) release any
Lien encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted hereby or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under Section 10.5) have
otherwise consented, or (ii) release any Guarantor from the Guaranty pursuant to
Section 7.12 or with respect to which Requisite Lenders (or such other Lenders
as may be required to give such consent under Section 10.5) have otherwise
consented.

(b) Right to Realize on Collateral and Enforce Guaranty. Anything contained in
any of the Credit Documents to the contrary notwithstanding, Company,
Administrative Agent, Collateral Agent and each Lender hereby agree that (i) no
Lender shall have any right individually to realize upon any of the Collateral
or to enforce the Guaranty, it being understood and agreed that all powers,
rights and remedies hereunder may be exercised solely by Administrative Agent,
on behalf of Lenders in accordance with the terms hereof and all powers, rights
and remedies under the Collateral Documents may be exercised solely by
Collateral Agent, and (ii) in the event of a foreclosure by Collateral Agent on
any of the Collateral pursuant to a public or private sale, Collateral Agent or
any Lender may be the purchaser of any or all of such Collateral at any such
sale and Collateral Agent, as agent for and representative of Secured Parties
(but not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Collateral Agent at such sale.

 

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SECTION 10. MISCELLANEOUS

10.1 Notices.

Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given to a Credit Party, Collateral Agent,
Administrative Agent, shall be sent to such Person’s address as set forth on
Appendix B or in the other relevant Credit Document, and in the case of any
Lender, the address as indicated on Appendix B or otherwise indicated to
Administrative Agent in writing. Each notice hereunder shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service and signed for against receipt thereof, upon
receipt of telefacsimile or telex, or three (3) Business Days after depositing
it in the United States mail with postage prepaid and properly addressed;
provided, no notice to any Agent shall be effective until received by such
Agent.

10.2 Expenses.

Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (a) all the Administrative Agent’s actual and
reasonable costs and expenses of preparation of the Credit Documents and any
consents, amendments, waivers or other modifications thereto; (b) all the
reasonable fees, expenses and disbursements of counsel to Agents in connection
with the negotiation, preparation, execution and administration of the Credit
Documents and any consents, amendments, waivers or other modifications thereto
and any other documents or matters requested by Company; (d) all the actual
costs and reasonable expenses of creating and perfecting Liens in favor of
Collateral Agent, for the benefit of Secured Parties, including filing and
recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums and reasonable fees, expenses and disbursements of
counsel to each Agent and of counsel providing any opinions that any Agent or
Requisite Lenders may request in respect of the Collateral or the Liens created
pursuant to the Collateral Documents; (e) all the Administrative Agent’s actual
costs and reasonable fees, expenses for, and disbursements of any of
Administrative Agent’s, auditors, accountants, consultants or appraisers whether
internal or external, and all reasonable attorneys’ fees (including allocated
costs of internal counsel and expenses and disbursements of outside counsel)
incurred by Administrative Agent; (f) all the actual costs and reasonable
expenses (including the reasonable fees, expenses and disbursements of any
appraisers, consultants, advisors and agents employed or retained by Collateral
Agent and its counsel) in connection with the custody or preservation of any of
the Collateral; (g) all other actual and reasonable costs and expenses incurred
by each Agent in connection with the syndication of the Loans and Commitments
and the negotiation, preparation and execution of the Credit Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (h) after the occurrence of a Default or
an Event of Default, all costs and expenses, including reasonable attorneys’
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by any Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Credit Documents by reason of such Default or Event of Default (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a “work out” or pursuant to any insolvency or bankruptcy cases or
proceedings. Notwithstanding the foregoing, all mortgage recording taxes,
transfer taxes, legal fees, recording costs and similar fees directly related to
any Lien obtained in favor of Administrative Agent on the Mortgaged Properties
will be paid by Administrative Agent and not by any Credit Party.

 

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10.3 Indemnity.

(a) In addition to the payment of expenses pursuant to Section 10.2, whether or
not the transactions contemplated hereby shall be consummated, each Credit Party
agrees to defend (subject to Indemnitees’ selection of counsel), indemnify, pay
and hold harmless, each Agent and Lender, their Affiliates and their respective
officers, partners, directors, trustees, employees and agents of each Agent and
each Lender (each, an “Indemnitee”), from and against any and all Indemnified
Liabilities, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN
PART, OUT OF THE COMPARATIVE, CONTRIBUTORY, OR SOLE NEGLIGENCE OF SUCH
INDEMNITEE; provided, no Credit Party shall have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise from the gross negligence or willful
misconduct, as determined by a court of competent jurisdiction in a final,
non-appealable order, of that Indemnitee. To the extent that the undertakings to
defend, indemnify, pay and hold harmless set forth in this Section 10.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.

(b) To the extent permitted by applicable law, no Credit Party shall assert, and
each Credit Party hereby waives, any claim against Lenders, Agents and their
respective Affiliates, directors, employees, attorneys or agents, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) (whether or not the claim therefor is based
on contract, tort or duty imposed by any applicable legal requirement) arising
out of, in connection with, as a result of, or in any way related to, this
Agreement or any Credit Document or any agreement or instrument contemplated
hereby or thereby or referred to herein or therein, the transactions
contemplated hereby or thereby, any Loan or the use of the proceeds thereof or
any act or omission or event occurring in connection therewith, and Holdings and
Company hereby waives, releases and agrees not to sue upon any such claim or any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.

10.4 Set-Off.

In addition to any rights now or hereafter granted under applicable law and not
by way of limitation of any such rights, upon the occurrence of any Event of
Default each Lender, and their respective Affiliates each of is hereby
authorized by each Credit Party at any time or from time to time subject to the
consent of Administrative Agent (such consent not to be unreasonably withheld or
delayed), without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set-off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts (in whatever currency)) and any
other Indebtedness at any time held or owing by such Lender to or for the credit
or the account of any Credit Party (in whatever currency) against and

 

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on account of the obligations and liabilities of any Credit Party to such Lender
and under the other Credit Documents, including all claims of any nature or
description arising out of or connected hereto or with any other Credit
Document, irrespective of whether or not (a) such Lender shall have made any
demand hereunder, (b) the principal of or the interest on the Loans or any other
amounts due hereunder shall have become due and payable pursuant to Section 2
and although such obligations and liabilities, or any of them, may be contingent
or unmatured or (c) such obligation or liability is owed to a branch or office
of such Lender different from the branch or office holding such deposit or
obligation or such Indebtedness.

10.5 Amendments and Waivers.

(a) Requisite Lenders’ Consent. Subject to Sections 10.5(b) and 10.5(c), no
amendment, modification, termination or waiver of any provision of the Credit
Documents, or consent to any departure by any Credit Party therefrom, shall in
any event be effective without the written concurrence of the Requisite Lenders.

(b) Affected Lenders’ Consent. Without the written consent of each Lender (other
than a Defaulting Lender) that would be affected thereby, no amendment,
modification, termination, or consent shall be effective if the effect thereof
would:

(i) extend the scheduled final maturity of any Loan or Note;

(ii) waive, reduce or postpone any scheduled repayment (but not prepayment);

(iii) reduce the rate of interest on any Loan (other than any waiver of any
increase in the interest rate applicable to any Loan pursuant to Section 2.9) or
any fee payable hereunder;

(iv) extend the time for payment of any such interest or fees;

(v) reduce the principal amount of any Loan;

(vi) amend, modify, terminate or waive any provision of this Section 10.5(b) or
Section 10.5(c);

(vii) amend the definition of “Requisite Lenders” or “Pro Rata Share”; provided,
with the consent of Administrative Agent and the Requisite Lenders, additional
extensions of credit pursuant hereto may be included in the determination of
“Requisite Lenders” or “Pro Rata Share” on substantially the same basis as the
Term Loan Commitments, the Term Loans, the Revolving Commitments and the
Revolving Loans are included on the Closing Date;

(viii) release all or substantially all of the Collateral or all or
substantially all of the Guarantors from the Guaranty except as expressly
provided in the Credit Documents; or

 

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(ix) consent to the assignment or transfer by any Credit Party of any of its
rights and obligations under any Credit Document.

(c) Other Consents. No amendment, modification, termination or waiver of any
provision of the Credit Documents, or consent to any departure by any Credit
Party therefrom, shall:

(i) increase any Revolving Commitment of any Lender over the amount thereof then
in effect without the consent of such Lender; provided, no amendment,
modification or waiver of any condition precedent, covenant, Default or Event of
Default shall constitute an increase in any Revolving Commitment of any Lender;

(ii) amend the definition of “Requisite Class Lenders” without the consent of
Requisite Class Lenders of each Class; provided, with the consent of
Administrative Agent and the Requisite Lenders, additional extensions of credit
pursuant hereto may be included in the determination of such “Requisite Class
Lenders” on substantially the same basis as the Term Loan Commitments, the Term
Loans, the Revolving Commitments and the Revolving Loans are included on the
Closing Date;

(iii) amend, modify, terminate or waive any provision of Section 3.2(a) with
regard to any Credit Extension (whether constituting a Revolving Loan or a Term
Loan) without the consent of Requisite Class Lenders of the affected Class;

(iv) alter the required application of any repayments or prepayments as between
Classes pursuant to Section 2.14 without the consent of Requisite Class Lenders
of each Class which is being allocated a lesser repayment or prepayment as a
result thereof; provided, Administrative Agent and the Requisite Lenders may
waive, in whole or in part, any prepayment so long as the application, as
between Classes, of any portion of such prepayment which is still required to be
made is not altered; or

(v) amend, modify, terminate or waive any provision of Section 9 as the same
applies to any Agent, or any other provision hereof as the same applies to the
rights or obligations of any Agent, in each case without the consent of such
Agent.

(d) Execution of Amendments, etc. Administrative Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.5 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by a
Credit Party, on such Credit Party.

 

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10.6 Successors and Assigns; Participations.

(a) Generally. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders. No Credit Party’s rights or
obligations hereunder nor any interest therein may be assigned or delegated by
any Credit Party without the prior written consent of all Lenders. Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, Indemnitee Agent Parties under
Section 9.6, Indemnitees under Section 10.3, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby,
Affiliates of each of the Agents and Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

(b) Register. Company, Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes hereof, and
no assignment or transfer of any such Commitment or Loan shall be effective, in
each case, unless and until an Assignment Agreement effecting the assignment or
transfer thereof shall have been delivered to and accepted by Administrative
Agent and recorded in the Register as provided in Section 10.6(e). Prior to such
recordation, all amounts owed with respect to the applicable Commitment or Loan
shall be owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans.

(c) Right to Assign. Each Lender shall have the right at any time to sell,
assign or transfer all or a portion of its rights and obligations under this
Agreement, including, without limitation, all or a portion of its Commitment or
Loans owing to it or other Obligations (provided, however, that each such
assignment shall be of a uniform, and not varying, percentage of all rights and
obligations under and in respect of any Loan and any related Commitments):

(i) to any Affiliate of such Lender and/or, in the case of the Term Loans held
by any Lender other than GS Bank and its Affiliates, any Related Fund, upon the
giving of notice to Company and Administrative Agent; and

(ii) to any Person otherwise constituting an Eligible Assignee with the consent
of Administrative Agent and, provided, no Default or Event of Default has
occurred and is continuing, the Company; provided, each such assignment pursuant
to this Section 10.6(c)(ii) shall be in an aggregate amount of not less than
(A) $1,000,000 (or such lesser amount as may be agreed to by Company and
Administrative Agent or as shall constitute the aggregate amount of the
Revolving Commitments and Revolving Loans of the assigning Lender) with respect
to the assignment of the Revolving Commitments and Revolving Loans and
(B) $1,000,000 (or such lesser amount as may be agreed to by Company and
Administrative Agent or as shall constitute the aggregate amount of the Term
Loan of a particular tranche of the assigning Lender) with respect to the
assignment of Term Loans.

(d) Mechanics. The assigning Lender and the assignee thereof shall execute and
deliver to Administrative Agent an Assignment Agreement, together with such
forms, certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such Assignment
Agreement may be required to deliver to Administrative Agent pursuant to
Section 2.19(c).

 

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(e) Notice of Assignment. Upon its receipt and acceptance of a duly executed and
completed Assignment Agreement, any forms, certificates or other evidence
required by this Agreement in connection therewith, Administrative Agent shall
record the information contained in such Assignment Agreement in the Register,
shall give prompt notice thereof to Company and shall maintain a copy of such
Assignment Agreement.

(f) Representations and Warranties of Assignee. Each Lender, upon execution and
delivery hereof or upon executing and delivering an Assignment Agreement, as the
case may be, represents and warrants as of the Closing Date or as of the
applicable Effective Date (as defined in the applicable Assignment Agreement)
that (i) it is an Eligible Assignee; (ii) it has experience and expertise in the
making of or investing in commitments or loans such as the applicable
Commitments or Loans, as the case may be; (iii) it will make or invest in, as
the case may be, its Commitments or Loans for its own account in the ordinary
course of its business and without a view to distribution of such Commitments or
Loans within the meaning of the Securities Act or the Exchange Act or other
federal securities laws (it being understood that, subject to the provisions of
this Section 10.6, the disposition of such Revolving Commitments or Loans or any
interests therein shall at all times remain within its exclusive control); and
(iv) such Lender does not own or control, or own or control any Person owning or
controlling, any trade debt or Indebtedness of any Credit Party other than the
Obligations or any Capital Stock of any Credit Party.

(g) Effect of Assignment. Subject to the terms and conditions of this
Section 10.6, as of the “Effective Date” specified in the applicable Assignment
Agreement: (i) the assignee thereunder shall have the rights and obligations of
a “Lender” hereunder to the extent such rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement and shall thereafter
be a party hereto and a “Lender” for all purposes hereof; (ii) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned thereby pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination hereof under
Section 10.8) and be released from its obligations hereunder (and, in the case
of an Assignment Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations hereunder, such Lender shall cease to be a party
hereto; provided, anything contained in any of the Credit Documents to the
contrary notwithstanding and (y) such assigning Lender shall continue to be
entitled to the benefit of all indemnities hereunder as specified herein with
respect to matters arising out of the prior involvement of such assigning Lender
as a Lender hereunder); (iii) the Commitments shall be modified to reflect the
Commitment of such assignee and any Commitment of such assigning Lender, if any;
and (iv) if any such assignment occurs after the issuance of any Note hereunder,
the assigning Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its applicable Notes to
Administrative Agent for cancellation, and thereupon Company shall issue and
deliver new Notes, if so requested by the assignee and/or assigning Lender, to
such assignee and/or to such assigning Lender, with appropriate insertions, to
reflect the new Commitments and/or outstanding Loans of the assignee and/or the
assigning Lender.

 

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(h) Participations. Each Lender shall have the right at any time to sell one or
more participations to any Person (other than Holdings, any of its Subsidiaries
or any of its Affiliates) in all or any part of its Commitments, Loans or in any
other Obligation. The holder of any such participation, other than an Affiliate
of the Lender granting such participation, shall not be entitled to require such
Lender to take or omit to take any action hereunder except with respect to any
amendment, modification or waiver that would (i) extend the final scheduled
maturity of any Loan Note, or reduce the rate or extend the time of payment of
interest or fees thereon (except in connection with a waiver of applicability of
any post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant’s participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any participant
if the participant’s participation is not increased as a result thereof),
(ii) consent to the assignment or transfer by any Credit Party of any of its
rights and obligations under this Agreement, or (iii) release all or
substantially all of the Collateral under the Collateral Documents or all or
substantially all of the Guarantors from the Guaranty (in each case, except as
expressly provided in the Credit Documents) supporting the Loans hereunder in
which such participant is participating. Company agrees that each participant
shall be entitled to the benefits of Sections 2.17(c), 2.18 and 2.19 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to clause (c) of this Section; provided, (i) a participant shall not be
entitled to receive any greater payment under Section 2.18 or 2.19 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 Company’s prior written consent, and (ii) a
participant that would be a Non-US Lender if it were a Lender shall not be
entitled to the benefits of Section 2.19 unless Company is notified of the
participation sold to such participant and such participant agrees, for the
benefit of Company, to comply with Section 2.19 as though it were a Lender. To
the extent permitted by law, each participant also shall be entitled to the
benefits of Section 10.4 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.16 as though it were a Lender. In the event
that any Lender sells participations in the Revolving Commitments and Loans (a
“Registered Loan”), such Lender, as a non-fiduciary agent of Company, shall
maintain a register on which it enters the name of all participants in the
Registered Loans held by it and the principal amount (and stated interest
thereon) of the portion of the Registered Loan which is the subject of the
participation (the “Participant Register”). A Registered Loan may be
participated in whole or in part only by registration of such participation on
the Participant Register. Any participation of such Registered Loan may be
effected only by the registration of such participation on the Participant
Register. The Participant Register shall be available for inspection by the
Company at any reasonable time and from time to time upon reasonable prior
notice.

(i) Certain Other Assignments. In addition to any other assignment permitted
pursuant to this Section 10.6, any Lender may assign, pledge and/or grant a
security interest in, all or any portion of its Loans, the other Obligations
owed by or to such Lender, and its Notes, if any, to secure obligations of such
Lender including, without limitation, any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any operating circular issued by such Federal Reserve Bank;
provided, no

 

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Lender, as between Company and such Lender, shall be relieved of any of its
obligations hereunder as a result of any such assignment and pledge, and
provided further, in no event shall the applicable Federal Reserve Bank, pledgee
or trustee be considered to be a “Lender” or be entitled to require the
assigning Lender to take or omit to take any action hereunder.

10.7 Independence of Covenants.

All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or condition exists.

10.8 Survival of Representations, Warranties and Agreements.

All representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.17(c), 2.18, 2.19, 10.2,
10.3, 10.4, and 10.10 and the agreements of Lenders set forth in Sections 2.16,
9.3(b) and 9.6 shall survive the payment of the Loans, and the termination
hereof.

10.9 No Waiver; Remedies Cumulative.

No failure or delay on the part of any Agent or any Lender in the exercise of
any power, right or privilege hereunder or under any other Credit Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. The rights, powers and remedies given to
each Agent and each Lender hereby are cumulative and shall be in addition to and
independent of all rights, powers and remedies existing by virtue of any statute
or rule of law or in any of the other Credit Documents or any of the Interest
Rate Agreements and Currency Agreements. Any forbearance or failure to exercise,
and any delay in exercising, any right, power or remedy hereunder shall not
impair any such right, power or remedy or be construed to be a waiver thereof,
nor shall it preclude the further exercise of any such right, power or remedy.

10.10 Marshalling; Payments Set Aside.

Neither any Agent nor any Lender shall be under any obligation to marshal any
assets in favor of any Credit Party or any other Person or against or in payment
of any or all of the Obligations. To the extent that any Credit Party makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent, on behalf of Lenders), or Administrative Agent, Collateral Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.

 

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10.11 Severability.

In case any provision in or obligation hereunder or any Note or other Credit
Document shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

10.12 Obligations Several; Actions in Concert.

The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitment of any other Lender hereunder.
Nothing contained herein or in any other Credit Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity.
Anything in this Agreement or any other Credit Document to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or any Note or otherwise with respect to the Obligations without first
obtaining the prior written consent of Agent or Requisite Lenders (as
applicable), it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and any Note or otherwise with respect to
the Obligations shall be taken in concert and at the direction or with the
consent of Agent or Requisite Lenders (as applicable).

10.13 Headings.

Section headings herein are included herein for convenience of reference only
and shall not constitute a part hereof for any other purpose or be given any
substantive effect.

10.14 APPLICABLE LAW.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) THEREOF.

10.15 CONSENT TO JURISDICTION.

(A) ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR
RELATING HERETO OR ANY OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH

 

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CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF FORUM NON-CONVENIENS; (c) AGREES
THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE
CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1 AND TO ANY
PROCESS AGENT SELECTED IN ACCORDANCE WITH SECTION 3.1(aa) ABOVE IS SUFFICIENT TO
CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; AND (d) AGREES THAT AGENTS AND LENDERS RETAIN THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION.

(B) EACH CREDIT PARTY HEREBY AGREES THAT PROCESS MAY BE SERVED ON IT BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE ADDRESSES PERTAINING TO IT AS
SPECIFIED IN SECTION 10.1. ANY AND ALL SERVICE OF PROCESS AND ANY OTHER NOTICE
IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE EFFECTIVE AGAINST ANY CREDIT
PARTY IF GIVEN BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY
ANY OTHER MEANS OR MAIL WHICH REQUIRES A SIGNED RECEIPT, POSTAGE PREPAID, MAILED
AS PROVIDED ABOVE.

10.16 WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR
UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP
THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON
THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS
AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT
IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
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THIS SECTION 10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

10.17 Confidentiality.

Each Lender shall hold all non-public information regarding Company and its
Subsidiaries and their businesses identified as such by Company and obtained by
such Lender pursuant to the requirements hereof in accordance with such Lender’s
customary procedures for handling confidential information of such nature, it
being understood and agreed by Company that, in any event, a Lender may make
(i) disclosures of such information to Affiliates of such Lender and to their
agents and advisors (and to other persons authorized by a Lender or Agent to
organize, present or disseminate such information in connection with disclosures
otherwise made in accordance with this Section 10.17), (ii) disclosures of such
information reasonably required by any bona fide or potential assignee,
transferee or participant in connection with the contemplated assignment,
transfer or participation by such Lender of any Loans or any participations
therein or by any direct or indirect contractual counterparties (or the
professional advisors thereto) in Interest Rate Agreements and Currency
Agreements (provided, such counterparties and advisors are advised of and agree
to be bound by the provisions of this Section 10.17), (iii) disclosure to any
rating agency when required by it, provided that, prior to any disclosure, such
rating agency shall undertake in writing to preserve the confidentiality of any
confidential information relating to the Credit Parties received by it from any
of the Agents or any Lender, (iv) disclosure to any Lender’s financing sources,
provided that prior to any disclosure, such financing source is informed of the
confidential nature of the information, and (v) disclosures required or
requested by any Governmental Authority or representative thereof or by the NAIC
or pursuant to legal or judicial process or other legal proceeding; provided,
unless specifically prohibited by applicable law or court order, each Lender
shall make reasonable efforts to notify Company of any request by any
Governmental Authority or representative thereof (other than any such request in
connection with any examination of the financial condition or other routine
examination of such Lender by such Governmental Authority) for disclosure of any
such non-public information prior to disclosure of such information.
Notwithstanding the foregoing, on or after the Closing Date, Administrative
Agent may, at its own expense issue news releases and publish “tombstone”
advertisements and other announcements relating to this transaction in
newspapers, trade journals and other appropriate media (which may include use of
logos of one or more of the Credit Parties)(collectively, “Trade
Announcements”). No Credit Party shall issue any Trade Announcement except
(i) disclosures required by applicable law, regulation, legal process or the
rules of the Securities and Exchange Commission or (ii) with the prior approval
of Administrative Agent.

10.18 Usury Savings Clause.

Notwithstanding any other provision herein, the aggregate interest rate charged
or agreed to be paid with respect to any of the Obligations, including all
charges or fees in connection therewith deemed in the nature of interest under
applicable law shall not exceed the

 

-116-

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

Highest Lawful Rate. If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate, the outstanding amount of the Loans made hereunder shall bear interest at
the Highest Lawful Rate until the total amount of interest due hereunder equals
the amount of interest which would have been due hereunder if the stated rates
of interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder (taking into account the increase provided for above) is less than
the total amount of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times been in effect,
then to the extent permitted by law, Company shall pay to Administrative Agent
an amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
Lenders and Company to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender’s option be applied to the outstanding amount of the Loans made hereunder
or be refunded to Company. In determining whether the interest contracted for,
charged, or received by Administrative Agent or a Lender exceeds the Highest
Lawful Rate, such Person may, to the extent permitted by applicable law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest, throughout the contemplated term of the
Obligations hereunder.

10.19 Counterparts.

This Agreement may be executed in any number of counterparts, each of which when
so executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page of this Agreement by facsimile or other
electronic transmission shall be as effective as delivery of an original manual
executed counterpart of this Agreement.

10.20 Effectiveness.

This Agreement shall become effective upon the execution of a counterpart hereof
by each of the parties hereto and receipt by Company and Administrative Agent of
written or telephonic notification of such execution and authorization of
delivery thereof.

10.21 Patriot Act.

Each Lender and Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies Company that pursuant to the requirements of the Act, it
is required to obtain, verify and record information that identifies Company,
which information includes the name and address of Company and other information
that will allow such Lender or Administrative Agent, as applicable, to identify
Company in accordance with the Act.

 

-117-

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10.22 No Advisory or Fiduciary Relationship.

In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof
or of any Credit Document), each Credit Party acknowledges and agrees that:
(a)(i) the arranging and other services regarding this Agreement provided by
Administrative Agent are arm’s-length commercial transactions between the Credit
Parties, on the one hand, and Administrative Agent on the other hand, (ii) each
Credit Party has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (iii) each Credit Party is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Credit
Documents; (b)(i) each of Administrative Agent and the Lenders is and has been
acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor,
agent or fiduciary for any Credit Party or any other Person and (ii) none of
Administrative Agent or any Lender has any obligation to any Credit Party or any
of their respective Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other
Credit Documents; and (c) Administrative Agent and the Lenders may be engaged in
a broad range of transactions that involve interests that differ from those of
the Credit Parties and their respective Affiliates, and neither Administrative
Agent nor any Lender has any obligation to disclose any of such interests to the
any Credit Party or any of their respective Affiliates. To the fullest extent
permitted by law, each Credit Party hereby waives and releases any claims that
it may have against each of Administrative Agent and the Lenders with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated hereby.

[Remainder of page intentionally left blank]

 

-118-

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

 

COMPANY:   Morton’s of Chicago, Inc.,   an Illinois corporation     By:  

/S/ RONALD M. DINELLA

      Name: Ronald M. DiNella       Title: Senior Vice President HOLDINGS:  

Morton’s Restaurant Group, Inc.,

 

a Delaware corporation

    By:  

/S/ RONALD M. DINELLA

      Name: Ronald M. DiNella       Title: Senior Vice President GUARANTORS:  

Arnie Morton’s of Chicago/Burbank LLC,

a Delaware limited liability company

 

Arnie Morton’s of Chicago/Figueroa LLC,

a Delaware limited liability company

 

Arnie Morton’s of Chicago/Woodland Hills, LLC,

a Delaware limited liability company

 

Bertolini’s Restaurants, Inc.,

a Delaware corporation

 

Bertolini’s of Las Vegas, Inc.,

a Delaware corporation

 

Italian Restaurants Holding Corp.,

a Delaware corporation

 

MOCGC Corp.,

a Virginia corporation

 

[SIGNATURE PAGE TO CREDIT AND GUARANTY AGREEMENT]

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

 

 

Morton’s Mexico Holding (USA), LLC,

a Delaware limited liability company

 

Morton’s of Chicago Florida Holding, Inc.,

a Delaware corporation

 

Morton’s of Chicago Holding, Inc.,

a Delaware corporation

 

Morton’s of Chicago Maryland Holding, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Anaheim, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Atlanta, Inc.,

an Illinois corporation

 

Morton’s of Chicago/Atlantic City, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Baltimore LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Bethesda LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Boca Raton LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Boston LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Boston Seaport, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Brooklyn, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Buckhead, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Capitol Mall, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Carew Tower, LLC,

a Delaware limited liability company

 

[SIGNATURE PAGE TO CREDIT AND GUARANTY AGREEMENT]

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

 

 

Morton’s of Chicago/Charlotte LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Chicago, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Clayton, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Cleveland, Inc.,

an Illinois corporation

 

Morton’s of Chicago/Coral Gables, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Crystal City LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Dallas Crescent, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Dallas, Inc.,

an Illinois corporation

 

Morton’s of Chicago/Denver Crescent Town Center, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Denver, Inc.,

an Illinois corporation

 

Morton’s of Chicago/Fifth Avenue, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Flamingo Road Corp.,

a Delaware corporation

 

Morton’s of Chicago/Fort Lauderdale, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Great Neck LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Hackensack LLC,

a Delaware limited liability company

 

[SIGNATURE PAGE TO CREDIT AND GUARANTY AGREEMENT]

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

 

 

Morton’s of Chicago/Hartford LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Honolulu LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Houston, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Indianapolis LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Indian Wells, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Jacksonville LLC,

a Delaware limited liability company

 

Morton’s of Chicago/King of Prussia LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Louisville LLC,

a Delaware limited liability company

 

Morton’s of Chicago/McKinney, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Miami Beach, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Miami LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Naperville, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Nashville, Inc.,

a Delaware corporation

 

Morton’s of Chicago/New Orleans LLC,

a Delaware limited liability company

 

Morton’s of Chicago/North Miami Beach, LLC,

a Delaware limited liability company

 

[SIGNATURE PAGE TO CREDIT AND GUARANTY AGREEMENT]

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

 

 

Morton’s of Chicago/Northbrook, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Orlando LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Palm Beach LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Palm Desert, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Philadelphia, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Phoenix, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Pittsburgh, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Pittsburgh LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Portland, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Puerto Rico, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Reston LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Richmond LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Rosemont, Inc.,

an Illinois corporation

 

[SIGNATURE PAGE TO CREDIT AND GUARANTY AGREEMENT]

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

 

 

Morton’s of Chicago/San Antonio, Inc.,

a Delaware corporation

 

Morton’s of Chicago/San Diego, Inc.,

a Delaware corporation

 

Morton’s of Chicago/San Francisco, Inc.,

a Delaware corporation

 

Morton’s of Chicago/San Jose, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Santa Ana, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Schaumburg LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Scottsdale, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Seattle, Inc.,

a Delaware corporation

 

Morton’s of Chicago/Stamford LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Troy, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Virginia, Inc.,

an Illinois corporation

 

Morton’s of Chicago/Wacker Place, LLC,

a Delaware limited liability company

 

Morton’s of Chicago/Washington D.C. Inc.,

a Delaware corporation

 

Morton’s of Chicago/Washington Square, Inc.,

a Delaware corporation

 

Morton’s of Chicago/White Plains LLC,

a Delaware limited liability company

 

[SIGNATURE PAGE TO CREDIT AND GUARANTY AGREEMENT]

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

 

 

Porterhouse of Los Angeles, Inc.,

a Delaware corporation

 

Porterhouse, Inc.,

a Delaware corporation

    By:  

/s/ RONALD M. DINELLA

    Name:   Ronald M. DiNella     Title:   Senior Vice President  

Chicago Steakhouse, Inc.,

a Texas corporation

 

Houston Steakhouse, Inc.,

a Texas corporation

 

McKinney Steakhouse LLC,

a Texas limited liability company

 

San Antonio Steakhouse, Inc.,

a Texas corporation

    By:  

/s/ RONALD M. DINELLA

    Name:   Ronald M. DiNella     Title:   President

 

[SIGNATURE PAGE TO CREDIT AND GUARANTY AGREEMENT]

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

 

 

GOLDMAN SACHS BANK USA, as Administrative Agent, Collateral Agent and Lead
Arranger

    By:  

/s/ STEPHEN HIPP

    Name:   Stephen Hipp     Title:   Authorized Signatory  

GOLDMAN SACHS BANK USA, as a Lender

    By:  

/s/ STEPHEN HIPP

    Name:   Stephen Hipp     Title:   Authorized Signatory

 

[SIGNATURE PAGE TO CREDIT AND GUARANTY AGREEMENT]

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

APPENDIX A-1

TO CREDIT AND GUARANTY AGREEMENT

Term Loan Commitments

 

Lender

   Term Loan Commitment      Pro Rata Share  

Goldman Sachs Bank USA

   $ 60,000,000.00         100.00 % 

Total

   $ 60,000,000.00         100.00 % 

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

APPENDIX A-2

TO CREDIT AND GUARANTY AGREEMENT

Revolving Commitments

 

Lender

   Revolving Commitment      Pro Rata Share  

Goldman Sachs Bank USA

   $ 10,000,000.00         100.00 % 

Total

   $ 10,000,000.00         100.00 % 

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

APPENDIX B

TO CREDIT AND GUARANTY AGREEMENT

Notice Addresses

If to any Credit Party:

c/o Morton’s of Chicago, Inc.

325 North LaSalle Street

Suite 500

Chicago, Illinois 60654

Attention: In-house Counsel

Telecopier: 312-706-0135

in each case, with a copy to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attention: Ronald Risdon

Telecopier: 212.593.5955

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

GOLDMAN SACHS BANK USA

as Administrative Agent, Collateral Agent and Lead Arranger

Principal Office:

Goldman Sachs Bank USA

6011 Connection Drive

Irving, Texas 75039

Attention: Morton’s of Chicago, Account Manager

Telecopier: (972) 368-5099

Goldman Sachs Bank USA

6011 Connection Drive

Irving, Texas 75039

Attention: In-House Counsel

Telecopier: (972) 368-5099

in each case, with a copy to:

Patton Boggs LLP

2000 McKinney Avenue, Suite 1700

Dallas, Texas 75201

Attention: Jeff Cole

Telecopier: (214) 758-1550

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

Goldman Sachs Bank USA

as a Lender

Lenders’ Principal Office:

Goldman Sachs Bank USA

6011 Connection Drive

Irving, Texas 75039

Attention: Morton’s of Chicago, Account Manager

Telecopier: (972) 368-5099

with copies to:

Goldman Sachs Bank USA

6011 Connection Drive

Irving, Texas 75039

Attention: In-House Counsel

Telecopier: (972) 368-5099

and:

Patton Boggs LLP

2000 McKinney Avenue, Suite 1700

Dallas, Texas 75201

Attention: Jeff Cole

Telecopier: (214) 758-1550

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

Schedule 1.1

HISTORICAL EBITDA

 

Fiscal Month

   Consolidated Adjusted EBITDA  

November, 2009

   $ 1,719,746   

December, 2009

   $ 5,175,803   

January, 2010

   $ 1,703,552   

February, 2010

   $ 3,397,260   

March, 2010

   $ 1,611,546   

April, 2010

   $ 3,859,154   

May, 2010

   $ 861,912   

June, 2010

   $ 354,618   

July, 2010

   $ 772,836   

August, 2010

   $ 1,484   

September, 2010

   $ 1,770,059   

 

EXHIBIT A-1-1

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

SCHEDULE 3.1 (h)

CREDIT AND GUARANTY AGREEMENT

MORTGAGED PROPERTIES

 

Morton’s of Chicago/Great Neck LLC  

777 Northern Blvd.

Great Neck, NY 11020

Morton’s of Chicago/Jacksonville LLC  

1510 Riverplace Blvd.

Jacksonville, FL 32207

Morton’s of Chicago/North Miami Beach, LLC  

17399 Biscayne Blvd.

N. Miami, FL 33160

Morton’s of Chicago/Schaumburg LLC  

1470 McConnor Parkway

Schaumburg, IL 60173

Morton’s of Chicago/Scottsdale, Inc.  

15233 N. Kierland Blvd.

Scottsdale, AZ 85254

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

SCHEDULE 4.1

CREDIT AND GUARANTY AGREEMENT

Jurisdictions of Organization and Qualification

 

      

Legal Name

   Fed. Id#   

State of Inc.

/State qual. to

do business in

   Date
of Incorp.   1       Morton’s Restaurant Group, Inc.    13-3490149    DE   
10/3/1988   2       Porterhouse, Inc.    22-2828525   

DE

IL

   8/3/1987   3       Morton’s of Chicago, Inc.    36-2963061   

IL

HI

WI

   5/2/1978   4       Morton’s of Chicago/Atlanta, Inc.    58-1604103   

IL

GA

   2/5/1985   5       Morton’s of Chicago/Buckhead, Inc.    58-2073163   

DE

GA

   9/2/1993   6       Morton’s of Chicago/Chicago, Inc.    36-3813773   

DE

IL

   9/23/1991   7       Morton’s of Chicago/Clayton, Inc    36-3899556   

DE

MO

   4/12/1993   8       Morton’s of Chicago/Cleveland, Inc.    34-1642143   

IL

OH

   11/29/1989   9       Morton’s of Chicago/Dallas, Inc.    36-3447352   

IL

TX

   2/5/1986   10       Morton’s of Chicago/Denver, Inc.    84-0972465   

IL

CO

   12/19/1984

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

  11       Morton’s of Chicago/Fifth Avenue, Inc.    13-3702276   

DE

NY

   12/29/1992   12       Morton’s of Chicago/Flamingo Road Corp.    88-0428235
  

DE

NV

   5/12/1999   13       Morton’s of Chicago/Houston, Inc.    76-0480470   

DE

TX

   10/14/1993   14       Morton’s of Chicago/Nashville, Inc.    62-1555524   

DE

TN

   7/26/1993   15       Morton’s of Chicago/Palm Desert, Inc.    33-0573585   

DE

CA

   9/15/1992   16       Morton’s of Chicago/Phoenix, Inc.    86-0669799   

DE

AZ

   10/23/1990   17       Morton’s of Chicago/Pittsburgh, Inc.    25-1707046   

DE

PA

   2/9/1993   18       Morton’s of Chicago/Portland, Inc.    36-4184660   

DE

OR

   10/16/1997   19       Morton’s of Chicago/Puerto Rico, Inc.    66-0578469   

DE

PR

   10/15/1999   20       Morton’s of Chicago/Rosemont, Inc.    36-3647177    IL
   2/8/1989   21       Morton’s of Chicago/San Antonio, Inc.    74-2585678   

DE

TX

   10/23/1990   22       Morton’s of Chicago/San Diego, Inc.    93-1206885   

DE

CA

   4/2/1996   23       Morton’s of Chicago/San Francisco, Inc.    94-3199306   

DE

CA

   9/28/1993   24       Morton’s of Chicago/Santa Ana, Inc.    33-0538029   

DE

CA

   8/21/1992   25       Morton’s of Chicago/Scottsdale, Inc.    36-4206009   

DE

AZ

   2/3/1998

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

  26       Morton’s of Chicago/Seattle, Inc.    91-1943719   

DE

WA

   7/6/1998   27       Morton’s of Chicago/Virginia, Inc.    54-1536742   

IL

VA

   12/21/1989   28       Morton’s of Chicago/Washington D.C., Inc.    98-0115765
  

DE

DC

   3/27/1990   29       Morton’s of Chicago/Washington Square, Inc.   
52-1973878   

DE

DC

   4/18/1996   30       Porterhouse of Los Angeles, Inc.    95-4346738   

DE

CA

   7/10/1991   31       MOCGC Corp.    06-1635276   

VA

IL

   9/14/2001   32       Chicago Steakhouse, Inc.++    75-2165973    TX   
3/20/1987   33       McKinney Steakhouse LLC++    20-5280426    TX    6/20/2006
  34       Houston Steakhouse, Inc. ++    76-0480466    TX    4/4/1995   35   
   San Antonio Steakhouse, Inc ++    74-2596248    TX    2/7/1991   36      
Morton’s of Chicago Holding, Inc.    36-4283747   

DE

IL

NJ

   11/4/1998   37       Morton’s of Chicago/Anaheim LLC    03-0582995   

DE

CA

   12/1/2005   38       Morton’s of Chicago/Atlantic City LLC    34-2012888   

DE

NJ

   8/11/2004   39       Morton’s of Chicago/Baltimore LLC    20-4471758   

DE

MD

   6/3/2005   40       Morton’s of Chicago/Bethesda LLC    87-0646507   

DE

MD

   9/29/1999   41       Morton’s of Chicago/Boca Raton LLC    20-4471747   

DE

FL

   6/3/2005   42       Morton’s of Chicago/Boston LLC    11-3483522   

DE

MA

   11/17/1998   43       Morton’s of Chicago/Boston Seaport LLC    20-8402105   

DE

MA

   1/5/2007

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

  44       Morton’s of Chicago/Brooklyn LLC    26-1887809   

DE

NY

   11/30/2007   45       Arnie Morton’s of Chicago/Burbank LLC    52-2344093   

DE

CA

   7/19/2001   46       Morton’s of Chicago/Capitol Mall, LLC    26-2728345   

DE

CA

   3/31/2008   47       Morton’s of Chicago/Carew Tower LLC    20-8119275   

DE

OH

   7/21/2006   48       Morton’s of Chicago/Charlotte LLC    11-3483524   

DE

NC

   11/30/1998   49       Morton’s of Chicago/Coral Gables LLC    14-1947000   

DE

FL

   6/13/2005   50       Morton’s of Chicago/Crystal City LLC    52-2328882   

DE

VA

   5/21/2001   51       Morton’s of Chicago/Dallas Crescent, LLC    26-3263955
  

DE

TX

   7/21/2008   52       Morton’s of Chicago/Denver Crescent Town Center LLC   
84-1507073   

DE

CO

   5/5/1999   53       Arnie Morton’s of Chicago/Figueroa LLC    52-2285128   

DE

CA

   11/30/2000   54       Morton’s of Chicago/Fort Lauderdale LLC    71-0964658
  

DE

FL

   3/4/2004   55       Morton’s of Chicago/Great Neck LLC    11-3464741   

DE

NY

   12/7/1998   56       Morton’s of Chicago/Hackensack LLC    52-2285085   

DE

NJ

   11/16/2000   57       Morton’s of Chicago/ Hartford LLC    06-1566519   

DE

CT

   8/23/1999   58       Morton’s of Chicago/Honolulu LLC    99-0351666   

DE

HI

   8/30/2000   59       Morton’s of Chicago/Indian Wells, LLC    Pending   

DE

CA

   11/30/2007

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

  60       Morton’s of Chicago/Indianapolis LLC    35-2076460   

DE

IN

   4/15/1999   61       Morton’s of Chicago/Jacksonville LLC    58-2453593   

DE

FL

   3/12/1999   62       Morton’s of Chicago/King of Prussia LLC    23-3091798   

DE

PA

   5/14/2001   63       Morton’s of Chicago/Louisville LLC    61-1370928   

DE

KY

   4/6/2000   64       Morton’s of Chicago/McKinney LLC    11-3483547   

DE

TX

   11/30/1998   65       Morton’s of Chicago/Miami LLC    20-4471743   

DE

FL

   6/3/2005   66       Morton’s of Chicago/Miami Beach LLC    26-2579242   

DE

FL

   1/24/2008   67       Morton’s of Chicago/Naperville, LLC    26-0510979   

DE

IL

   1/22/2007   68       Morton’s of Chicago/ New Orleans LLC    72-1474726   

DE

LA

   4/27/2000   69       Morton’s of Chicago/North Miami Beach LLC    20-4471721
  

DE

FL

   6/3/2005   70       Morton’s of Chicago/ Northbrook LLC    42-1690860   

DE

IL

   8/8/2005   71       Morton’s of Chicago/Orlando LLC    20-4471716   

DE

FL

   6/3/2005   72       Morton’s of Chicago/Palm Beach LLC    20-4471701   

DE

FL

   6/3/2005   73       Morton’s of Chicago/Philadelphia LLC    68-0622610   

DE

PA

   1/24/2006   74       Morton’s of Chicago/Pittsburgh LLC    11-3483546   

DE

PA

   11/30/1998   75       Morton’s of Chicago/Reston LLC    54-2015638   

DE

VA

   9/8/2000

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

  76       Morton’s of Chicago/Richmond LLC    52-2285125   

DE

VA

   11/3/2000   77       Morton’s of Chicago/San Jose LLC    20-4868359   

DE

CA

   2/28/2006   78       Morton’s of Chicago/Schaumburg LLC    36-4294309   

DE

IL

   4/28/1999   79       Morton’s of Chicago/Stamford LLC    06-1542688   

DE

CT

   11/30/1998   80       Morton’s of Chicago/Troy LLC    84-1661965   

DE

MI

   11/29/2004   81       Morton’s of Chicago/Wacker Place LLC    84-1646609   

DE

IL

   4/8/2004   82       Morton’s of Chicago/White Plains LLC    41-2107441   

DE

NY

   6/25/2003   83       Arnie Morton’s of Chicago/Woodland Hills, LLC   
20-5280332   

DE

CA

   6/15/2006   84       Morton’s of Chicago Florida Holding, Inc.    38-3725075
   DE    6/3/2005   85       Morton’s of Chicago Maryland Holding, Inc.   
36-4577413    DE    6/3/2005   86       Morton’s Mexico Holding (USA), LLC   
26-3264595    DE    5/27/2008   87       Italian Restaurants Holding Corp   
11-3092950   

DE

NV

   12/12/1991   88       Bertolini’s Restaurants, Inc.    11-3092952   

DE

NV

   12/12/1991   89       Bertolini’s of Las Vegas, Inc. (Operating as Trevi)   
11-3092953   

DE

NV

   12/18/1991

FOOTNOTES:

 

++ Created for liquor license purposes

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

SCHEDULE 4.2

CREDIT AND GUARANTY AGREEMENT

Capital Stock and Ownership

The 1,200,000 shares of Series A Convertible Preferred Stock issued by Morton’s
Restaurant Group, Inc. may be converted by the holder thereof into 1,200,000
shares of Morton’s Restaurant Group, Inc. common stock after two years from the
date of issuance of the Preferred Stock.

 

    

Legal Name

  

Authorized

Shares

  

Issued

Shares

   Par
Value     

Owner/Manager

   Ownership
Interest            

Note: Common shares

unless noted

                   1    Quantum Restaurant Development Corporation    1,500   
1,000      no par       Morton’s Restaurant Group, Inc.      100 %  2   
Porterhouse, Inc.    2,000    1,000    $ 0.01       Morton’s Restaurant Group,
Inc.      100 %  3    Morton’s of Chicago, Inc.    2,000    1,000    $ 1.00   
   Porterhouse, Inc.      100 %  4    Morton’s of Chicago/Atlanta, Inc.   
50,000    2,000    $ 10.00       Morton’s of Chicago, Inc.      100 %  5   
Morton’s of Chicago/Buckhead, Inc.    1,500    1,000      no par       Morton’s
of Chicago, Inc.      100 %  6    Morton’s of Chicago/Chicago, Inc.    3,000   
1,000      no par       Morton’s of Chicago, Inc.      100 %  7    Morton’s of
Chicago/Cincinnati, Inc.    3,000    1,000      no par       Morton’s of
Chicago, Inc.      100 %  8    Morton’s of Chicago/Clayton, Inc    1,500   
1,000      no par       Morton’s of Chicago, Inc.      100 %  9    Morton’s of
Chicago/Cleveland, Inc.    50,000    2,000    $ 10.00       Morton’s of Chicago,
Inc.      100 %  10    Morton’s of Chicago/Columbus, Inc.    3,000    1,000     
no par       Morton’s of Chicago, Inc.      100 %  11    Morton’s of
Chicago/Dallas, Inc.    50,000    2,000    $ 10.00       Morton’s of Chicago,
Inc.      100 % 

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

12    Morton’s of Chicago/Denver, Inc.    50,000    2,000    $ 10.00      
Morton’s of Chicago, Inc.      100 %  13    Morton’s of Chicago/Detroit, Inc.   
3,000    1,000      no par       Morton’s of Chicago, Inc.      100 %  14   
Morton’s of Chicago/Fifth Avenue, Inc.    1,500    1,000      no par      
Morton’s of Chicago, Inc.      100 %  15    Morton’s of Chicago/Flamingo Road
Corp.    1,500    1,000      no par       Morton’s of Chicago, Inc.      100 % 
16    Morton’s of Chicago/Houston, Inc.    1,500    1,000      no par      
Morton’s of Chicago, Inc.      100 %  17    Morton’s of Chicago/Minneapolis,
Inc.    3,000    1,000      no par       Morton’s of Chicago, Inc.      100 % 
18    Morton’s of Chicago/Nashville, Inc.    1,500    1,000      no par      
Morton’s of Chicago, Inc.      100 %  19    Morton’s of Chicago/Palm Desert,
Inc.    3,000    1,000      no par       Morton’s of Chicago, Inc.      100 % 
20    Morton’s of Chicago/Philadelphia, Inc.    50,000    2,000    $ 10.00      
Morton’s of Chicago, Inc.      100 %  21    Morton’s of Chicago/Phoenix, Inc.   
3,000    1,000      no par       Morton’s of Chicago, Inc.      100 %  22   
Morton’s of Chicago/Pittsburgh, Inc.    3,000    1,000      no par      
Morton’s of Chicago, Inc.      100 %  23    Morton’s of Chicago/Portland, Inc.
   1,500    1,000      no par       Morton’s of Chicago, Inc.      100 %  24   
Morton’s of Chicago/Puerto Rico, Inc.    1,500    1,000      no par      
Morton’s of Chicago, Inc      100 %  25    Morton’s of Chicago/Rosemont, Inc.   
50,000    2,000    $ 10.00       Morton’s of Chicago, Inc.      100 %  26   
Morton’s of Chicago/Sacramento, Inc.    3,000    1,000      no par      
Morton’s of Chicago, Inc.      100 %  27    Morton’s of Chicago/San Antonio,
Inc.    3,000    1,000      no par       Morton’s of Chicago, Inc.      100 % 
28    Morton’s of Chicago/San Diego, Inc.    1,500    1,000      no par      
Morton’s of Chicago, Inc.      100 %  29    Morton’s of Chicago/San Francisco,
Inc.    1,500    1,000      no par       Morton’s of Chicago, Inc.      100 % 
30    Morton’s of Chicago/Santa Ana, Inc.    3,000    1,000      no par      
Morton’s of Chicago, Inc.      100 %  31    Morton’s of Chicago/Scottsdale, Inc.
   1,500    1,000      no par       Morton’s of Chicago, Inc.      100 % 

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

32    Morton’s of Chicago/Seattle, Inc.    1,500    1,000      no par      
Morton’s of Chicago, Inc.      100 %  33    Morton’s of Chicago/Virginia, Inc.
   50,000    2,000    $ 10.00       Morton’s of Chicago, Inc.      100 %  34   
Morton’s of Chicago/Washington D.C., Inc.    3,000    1,000      no par      
Morton’s of Chicago, Inc.      100 %  35    Morton’s of Chicago/Washington
Square, Inc.    1,500    1,000      no par       Morton’s of Chicago, Inc.     
100 %  36    Morton’s of Chicago/West Street, Inc.    1,500    1,000      no par
      Morton’s of Chicago, Inc.      100 %  37    Morton’s of Chicago/Westbrook,
Inc.    50,000    2,000    $ 10.00       Morton’s of Chicago, Inc.      100 % 
38    Porterhouse of Los Angeles, Inc.    3,000    1,000      no par      
Morton’s of Chicago, Inc.      100 %  39    MOCGC Corp.    1,500    1,000     
no par       Morton’s of Chicago, Inc.      100 %  40    Chicago Steakhouse,
Inc.    100,000    1,000    $ 1.00       MOC/Dallas, Inc.      100 %  41   
McKinney Steakhouse LLC    NA    NA      NA       MOC/McKinney LLC      100 % 
42    Houston Steakhouse, Inc.    10,000    1,000    $ 1.00       MOC/Houston,
Inc.      100 %  43    San Antonio Steakhouse, Inc    100,000    1,000    $ 1.00
      MOC/San Antonio, Inc.      100 %  44    Morton’s of Chicago Holding, Inc.
   1,500    1,000      no par       Morton’s of Chicago, Inc.      100 %  45   
Morton’s of Chicago/Anaheim LLC    N/A    N/A      N/A       MOC Holding, Inc.
     100 %  46    Morton’s of Chicago/Atlantic City LLC    N/A    N/A      N/A
      MOC Holding, Inc.      100 %  47    Morton’s of Chicago/Baltimore LLC   
N/A    N/A      N/A       Morton’s of Chicago Maryland Holding, Inc.      100 % 
48    Morton’s of Chicago/Bethesda LLC    N/A    N/A      N/A       Morton’s of
Chicago Maryland Holding, Inc.      100 %  49    Morton’s of Chicago/Boca Raton
LLC    N/A    N/A      N/A       Morton’s of Chicago Florida Holding, Inc.     
100 %  50    Morton’s of Chicago/Boston LLC    N/A    N/A      N/A       MOC
Holding, Inc.      100 % 

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

51    Morton’s of Chicago/Boston Seaport LLC    N/A    N/A      N/A       MOC
Holding, Inc.      100 %  52    Morton’s of Chicago/Brooklyn LLC    N/A    N/A
     N/A       MOC Holding, Inc.      100 %  53    Arnie Morton’s of
Chicago/Burbank LLC    N/A    N/A      N/A       MOC Holding, Inc.      100 % 
54    Morton’s of Chicago/Capitol Mall, LLC    N/A    N/A      N/A       MOC
Holding Inc.      100 %  55    Morton’s of Chicago/Carew Tower LLC    N/A    N/A
     N/A       MOC Holding, Inc.      100 %  56    Morton’s of Chicago/Charlotte
LLC    N/A    N/A      N/A       MOC Holding, Inc.      100 %  57    Morton’s of
Chicago/Coral Gables LLC    N/A    N/A      N/A       Morton’s of Chicago
Florida Holding, Inc.      100 %  58    Morton’s of Chicago/Crystal City LLC   
N/A    N/A      N/A       MOC Holding, Inc.      100 %  59    Morton’s of
Chicago/Dallas Crescent, LLC    N/A    N/A      N/A       MOC Holding, Inc.     
100 %  60    Morton’s of Chicago/Denver Crescent Town Center LLC    N/A    N/A
     N/A       MOC Holding, Inc.      100 %  61    Arnie Morton’s of
Chicago/Figueroa LLC    N/A    N/A      N/A       MOC Holding, Inc      100 % 
62    Morton’s of Chicago/Fort Lauderdale LLC    N/A    N/A      N/A       MOC
Holding, Inc.      100 %  63    Morton’s of Chicago/Great Neck LLC    N/A    N/A
     N/A       MOC Holding, Inc.      100 %  64    Morton’s of
Chicago/Hackensack LLC    N/A    N/A      N/A       MOC Holding, Inc.      100
%  65    Morton’s of Chicago/ Hartford LLC    N/A    N/A      N/A       MOC
Holding, Inc.      100 %  66    Morton’s of Chicago/Honolulu LLC    N/A    N/A
     N/A       MOC Holding, Inc.      100 %  67    Morton’s of Chicago/Indian
Wells, LLC    N/A    N/A      N/A       MOC Holding, Inc.      100 %  68   
Morton’s of Chicago/Indianapolis LLC    N/A    N/A      N/A       MOC Holding,
Inc.      100 %  69    Morton’s of Chicago/Jacksonville LLC    N/A    N/A     
N/A       MOC Holding, Inc.      100 % 

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

70    Morton’s of Chicago/Kansas City LLC    N/A    N/A      N/A       MOC
Holding, Inc.      100 %  71    Morton’s of Chicago/King of Prussia LLC    N/A
   N/A      N/A       MOC Holding, Inc.      100 %  72    Morton’s of
Chicago/Leawood, LLC    N/A    N/A      N/A       MOC Holding, Inc.      100 % 
73    Morton’s of Chicago/La Jolla LLC    N/A    N/A      N/A       MOC Holding,
Inc.      100 %  74    Morton’s of Chicago/Louisville LLC    N/A    N/A      N/A
      MOC Holding, Inc.      100 %  75    Morton’s of Chicago/McKinney LLC   
N/A    N/A      N/A       MOC Holding, Inc.      100 %  76    Morton’s of
Chicago/Miami LLC    N/A    N/A      N/A       Morton’s of Chicago Florida
Holding, Inc.      100 %  77    Morton’s of Chicago/Miami Beach LLC    N/A   
N/A      N/A       Morton’s of Chicago Florida Holding, Inc.      100 %  78   
Morton’s of Chicago/Naperville, LLC    N/A    N/A      N/A       MOC Holding,
Inc.      100 %  79    Morton’s of Chicago/ New Orleans LLC    N/A    N/A     
N/A       MOC Holding, Inc.      100 %  80    Morton’s of Chicago/North Miami
Beach LLC    N/A    N/A      N/A       Morton’s of Chicago Florida Holding, Inc.
     100 %  81    Morton’s of Chicago/ Northbrook LLC    N/A    N/A      N/A   
   MOC Holding, Inc.      100 %  82    Morton’s of Chicago/Orlando LLC    N/A   
N/A      N/A       Morton’s of Chicago Florida Holding, Inc.      100 %  83   
Morton’s of Chicago/Palm Beach LLC    N/A    N/A      N/A       Morton’s of
Chicago Florida Holding, Inc.      100 %  84    Morton’s of Chicago/Park Place
MD, LLC    N/A    N/A      N/A       MOC Maryland Holding, Inc.      100 %  85
   Morton’s of Chicago/Philadelphia LLC    N/A    N/A      N/A       MOC
Holding, Inc.      100 %  86    Morton’s of Chicago/Pittsburgh LLC    N/A    N/A
     N/A       MOC/Pittsburgh, Inc.      100 %  87    Morton’s of Chicago/Reston
LLC    N/A    N/A      N/A       MOC Holding, Inc.      100 %  88    Morton’s of
Chicago/Richmond LLC    N/A    N/A      N/A       MOC Holding, Inc.      100 % 

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

89    Morton’s of Chicago/San Jose LLC    N/A    N/A      N/A       MOC Holding,
Inc.      100 %  90    Morton’s of Chicago/Schaumburg LLC    N/A    N/A      N/A
      MOC Holding, Inc.      100 %  91    Morton’s of Chicago/SouthPark LLC (10)
   N/A    N/A      N/A       MOC Holding, Inc.      100 %  92    Morton’s of
Chicago/Stamford LLC    N/A    N/A      N/A       MOC Holding, Inc.      100 % 
93    Arnie Morton’s of Chicago/Torrance LLC    N/A    N/A      N/A       MOC
Holding, Inc.      100 %  94    Morton’s of Chicago/Troy LLC    N/A    N/A     
N/A       MOC Holding, Inc.      100 %  95    Morton’s of Chicago/Wacker Place
LLC    N/A    N/A      N/A       MOC Holding, Inc.      100 %  96    Morton’s of
Chicago/Waltham, LLC *    N/A    N/A      N/A       MOC Holding, Inc.      100
%  97    Morton’s of Chicago/White Plains LLC    N/A    N/A      N/A       MOC
Holding, Inc.      100 %  98    Morton’s of Chicago/Wisconsin LLC.    N/A    N/A
     N/A       MOC Holding, Inc.      100 %  99    Arnie Morton’s of
Chicago/Woodland Hills, LLC    N/A    N/A      N/A       MOC Holding, Inc.     
100 %  100    Morton’s of Chicago Florida Holding, Inc.    1,500    1,000     
no par       MOC Holding, Inc.      100 %  101    Morton’s of Chicago Maryland
Holding, Inc.    1,500    1,000      no par       MOC Holding, Inc.      100 % 
102    Morton’s of Chicago (Singapore) Pte. Ltd.    100,000    100    $ 1.00 SD
      Morton’s of Chicago, Inc.      100 %  103    Morton’s of Chicago/Toronto,
Inc.    1,500    1,000      no par       Morton’s of Chicago, Inc.      100 % 
104    Morton’s of Chicago/Vancouver, Inc.    1,500    1,000    $ 1.00      
Morton’s of Chicago, Inc.      100 %  105    Morton’s Asia Holding Limited   
1,000    100    $ HK 10       Morton’s of Chicago, Inc.      100 %  106   
Morton’s of Chicago Kowloon Limited    1,000    98    $ HK 10       Morton’s
Asia Holding Limited.      100 % 

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107    Morton’s of Chicago Macau Limitada    25    25    $
  MOP
24,000   
      Morton’s Asia Holding Limited      96 %              $
  MOP
1,000   
      MOC Kowloon Limited      0.04 %  108    Morton’s of Chicago Hong Kong
Limited    1,000    65    $ HK 10       Morton’s of Chicago, Inc      100 %  109
   Morton’s Mexico Holding (USA), LLC    N/A    N/A      N/A       Morton’s of
Chicago, Inc.      100 %  110    Morton’s Holding Company Mexico, S. de R.L. de
C.V.    N/A    One Class B Participation Unit      N/A       Morton’s Mexico
Holding (USA), LLC      50.01 %           One Class A Participation Unit      
Carnsa SA de CV      49.99 %  111    Morton’s Service Company (Mexico), S. de
R.L. de C.V.    N/A    Participation Units      N/A       Morton’s Holding
Company Mexico, S. de R.L. de C.V.      99.97 %           Participation Units   
   Morton’s Mexico Holding (USA), LLC      .0.03 %  112    Morton’s Palmas, S.
de R.L. de C.V.    N/A    Participation Units      N/A       Morton’s Holding
Company Mexico, S. de R.L. de C.V.      99.97 %           Participation Units   
   Morton’s Mexico Holding (USA), LLC      0.03 %  113    Morton’s China Holding
Company Limited (HK)    10,000    5,001 Ordinary Shares    $ 1.00       Morton’s
Asia Holding Limited (HK)      50.01 %           4,999 Ordinary Shares      
China Broadband Communications Investment Limited (BVI)      49.99 %  114   
Shanghai Morton’s Food and Beverage Management Co. Ltd. (PRC)    N/A    NA     
N/A       Morton’s China Holding Company Limited (HK)      100 %  115    Italian
Restaurants Holding Corp    3,000    1,000      no par       Morton’s Restaurant
Group, Inc.      100 %  116    Bertolini’s Restaurants, Inc.    3,000    1,000
     no par       Italian Restaurants Holding Corp.      100 %  117   
Bertolini’s of Circle Centre, Inc.    1,500    1,000      no par      
Bertolini’s Restaurants, Inc.      100 %  118    Bertolini’s/King of Prussia,
Inc.    1,500    1,000      no par       Bertolini’s Restaurants, Inc.      100
%  119   

Bertolini’s of Las Vegas, Inc.

(Operating as Trevi)

   3,000    1,000      no par       Bertolini’s Restaurants, Inc.      100 % 
120    Bertolini’s at Market Square, Inc.    3,000    1,000    $ 0.01      
Bertolini’s Restaurants, Inc.      100 %  121    Bertolini’s at Village Square,
Inc.    1,500    1,000      no par       Bertolini’s Restaurants, Inc.      100
% 

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

122    Peasant Holding Corp.    3,000    1,000    $ 0.01       Morton’s
Restaurant Group, Inc.      100 %  123    Mick’s at PA Ave., Inc.    3,000   
1,000      no par       Peasant Holding Corp.      100 %  124    Mick’s at Fair
Oaks, Inc.    1,500    1,000      no par       Peasant Holding Corp.      100 % 
125    Mick’s at Annapolis Mall, Inc.    1,500    1,000      no par      
Peasant Holding Corp.      100 %  126    Morton’s of Chicago / Bertolini’s
Employee Assistance Fund, Inc.    1,500    1,000      no par       Morton’s of
Chicago, Inc.      100 % 

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SCHEDULE 4.13

CREDIT AND GUARANTY AGREEMENT

Real Estate Assets

 

    

Credit Party

  

Address of Restaurant

  

Owned/

Leased

1    Morton’s of Chicago/Anaheim LLC   

1895 S. Harbor Blvd.

Anaheim, CA 92802

   Leased 2    Morton’s of Chicago/Atlanta, Inc.   

SunTrust Plaza Bldg.

303 Peachtree Center Ave.

Atlanta, GA 30308

   Leased 3    Morton’s of Chicago/Atlantic City, LLC   

Caesars Atlantic City

2100 Pacific Avenue

Atlantic City, NJ 08401

   Leased 4    Morton’s of Chicago/Baltimore, LLC   

300 South Charles St.

Baltimore, MD 21201

   Leased 5    Morton’s of Chicago/Bethesda LLC   

Hyatt Regency Hotel

7400 Wisconsin Avenue

Bethesda, MD 20814

   Leased 6    Morton’s of Chicago/Boca Raton, LLC   

5050 Town Center Circle

Boca Raton, FL 33486

   Leased 7    Morton’s of Chicago/Boston LLC   

One Exeter Plaza

699 Boylston at Exeter

Boston, MA 02116

   Leased 8    Morton’s of Chicago/Boston Seaport LLC   

Two Seaport Lane

Boston, MA 02210

   Leased 9    Morton’s of Chicago/Brooklyn LLC   

339 Adams Street

Brooklyn, NY 11201

   Leased 10    Morton’s of Chicago/Buckhead, Inc.   

Peachtree Lenox Bldg.

3379 Peachtree Rd. N.E.

Atlanta, GA 30326

   Leased 11    Arnie Morton’s of Chicago/Burbank LLC   

3400 West Olive Avenue

Burbank, CA 91505

   Leased 12    Morton’s of Chicago/Capitol Mall LLC   

621 Capitol Mall

Sacramento, CA 95814

   Leased 13    Morton’s of Chicago/Carew Tower LLC   

The Carew Tower

441 Vine Street, Suite 1H

Cincinnati, OH 45202

   Leased 14    Morton’s of Chicago/Charlotte LLC   

227 W. Trade St.

Charlotte, NC 28202

   Leased 15    Morton’s of Chicago/Chicago, Inc.   

1050 N. State St.

Chicago, IL 60610

   Leased 16    Morton’s of Chicago/Clayton, Inc.   

7822 Bonhomme Ave.

Clayton, MO 63105

   Leased 17    Morton’s of Chicago/Cleveland, Inc.   

The Avenue at Tower City Center

1600 W. Second Street

Cleveland, Ohio 44113

   Leased 18    Morton’s of Chicago/Coral Gables LLC   

2333 Ponce de Leon Blvd.

Coral Gables, FL 33134

   Leased

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

19    Morton’s of Chicago/Crystal City LLC   

1631 Crystal Square Arcade

Arlington, VA 22202

   Leased 20    Morton’s of Chicago/Dallas, Inc. (closing Feb. 2011)   

501 Elm Street

Dallas, TX 75202

   Leased 21    Morton’s of Chicago/Dallas Crescent LLC (opening Feb. 2011)   

2222 McKinney

Suite 200

Dallas, TX 75201

   Leased 22    Morton’s of Chicago/Denver, Inc.   

1710 Wynkoop St.

Denver, CO 80202

   Leased 23    Morton’s of Chicago/Denver Crescent Town Center, LLC   

Denver Crescent Town Center

8480 E. Belleview Ave.

Greenwood Village, CO 80111

   Leased 24    Arnie Morotn’s of Chicago/ Figueroa LLC   

735 S.Figueroa Street, Suite 207

Los Angeles, CA 90017

   Leased 25    Morton’s of Chicago/Fifth Avenue, Inc.   

New York, NY

551 5th Ave

New York, NY 10017

   Leased 26    Morton’s of Chicago/Flamingo Road Corp.   

400 East Flamingo Road

Las Vegas, NV 89109

   Leased 27    Morton’s of Chicago/Fort Lauderdale, LLC   

500 E. Broward Blvd Ste: 127

Fort Lauderdale, FL 33394

   Leased 28    Morton’s of Chicago/Great Neck LLC   

777 Northern Blvd.

Great Neck, NY 11020

  

Owned with

Section of

Leased Land

29    Morton’s of Chicago/Hackensack LLC   

Riverside Square Mall

One Riverside Square

Hackensack, NJ 07601

   Leased 30    Morton’s of Chicago/Hartford LLC   

30 State House Square

Hartford, CT 06103

   Leased 31    Morton’s of Chicago/Honolulu LLC   

Ala Moana Shopping Center

1450 Ala Moana Blvd.

Honolulu, Hawaii 96814

   Leased 32    Morton’s of Chicago/Houston, Inc.   

Centre at Post Oak

5000 Westheimer

Houston, Texas 77056

   Leased 33    Morton’s of Chicago/Indianapolis LLC   

41 E. Washington Ave.

Indianapolis, IN 46204

   Leased 34    Morton’s of Chicago/Jacksonville LLC   

1510 Riverplace Blvd.

Jacksonville, FL 32207

   Owned 35    Morton’s of Chicago/King of Prussia LLC   

The Pavilion at King of Prussia Mall

500 Mall Blvd.

King of Prussia, PA 19406

   Leased 36    Morton’s of Chicago/Louisville LLC   

626 West Main Street

Louisville, KY 40202

   Leased 37    Morton’s of Chicago/McKinney LLC   

1001 McKinney Street Suite A4

Houston, TX 77002

   Leased 38    Morton’s of Chicago/Miami, LLC   

1200 Brickell Ave.

Miami, FL 33131

   Leased 39    Morton’s of Chicago/Miami Beach, LLC   

4041 Collins Avenue

Miami Beach, FL 33140

   Leased 40    Morton’s of Chicago/Naperville, LLC   

1751 Freedom Drive

Naperville, IL 60563

   Leased 41    Morton’s of Chicago/Nashville, Inc.   

618 Church St.

Nashville, TN 37219

   Leased 42    Morton’s of Chicago/New Orleans LLC   

One Canal Place

365 Canal St.

New Orleans, LA 70130

   Leased

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

43    Morton’s of Chicago/Northbrook, LLC   

707 Skokie Blvd.

Northbrook, IL 60062

   Leased 44    Morton’s of Chicago/North Miami Beach, LLC   

17399 Biscayne Blvd.

N. Miami, FL 33160

   Owned 45    Morton’s of Chicago/Orlando, LLC   

Dr. Phillips Market Place

7600 Dr. Phillips Blvd.

Orlando, Florida 32819

   Leased 46    Morton’s of Chicago/Palm Beach, LLC   

777 S. Flagler Dr.

W. Palm Beach, FL 33401

   Leased 47    Morton’s of Chicago/Palm Desert, Inc.   

74-880 Country Club Drive

Palm Desert, CA 92260

   Leased 48    Morton’s of Chicago/Philadelphia LLC   

1411 Walnut Street

Philadelphia, PA 19102

   Leased 49    Morton’s of Chicago/Phoenix, Inc.   

Shops at the Esplanade

2501 E. Camelback Rd.

Phoenix, AZ 85016

   Leased 50    Morton’s of Chicago/Pittsburgh LLC   

CNG Tower

625 Liberty Avenue

Pittsburgh, PA 15222

   Leased 51    Morton’s of Chicago/Portland, Inc.   

213 SW Clay Street

Portland, OR 97201

   Leased 52    Morton’s of Chicago/Puerto Rico, Inc.   

1 Calle San Geronimo Grounds

San Juan, PR 00901

   Leased 53    Morton’s of Chicago/Reston LLC   

Reston Town Center

One Freedom Square

11956 Market Street

Reston, VA 20190

   Leased 54    Morton’s of Chicago/Richmond LLC   

111 Virginia St.

Richmond, VA 23219

   Leased 55    Morton’s of Chicago/Rosemont, Inc.   

Columbia Centre III

9525 W. Bryn Mawr Ave.

Rosemont, IL 60018

   Leased 56    Morton’s of Chicago/San Antonio, Inc.   

849 E. Commerce Street

San Antonio, TX 78205

   Leased 57    Morton’s of Chicago/San Diego, Inc.   

The Harbor Club

285 J Street

San Diego, CA 92101

   Leased 58    Morton’s of Chicago/San Francisco, Inc.   

400 Post St., Lower Level

San Francisco, CA 94102

   Leased 59    Morton’s of Chicago/San Jose LLC   

177 Park Avenue, Suite 100

San Jose, CA 95113

   Leased 60    Morton’s of Chicago/Santa Ana, Inc.   

1641 W. Sunflower Ave.

Santa Ana, CA 92704

   Leased 61    Morton’s of Chicago/Schaumburg LLC   

1470 McConnor Parkway

Schaumburg, IL 60173

   Owned 62    Morton’s of Chicago/Scottsdale, Inc.   

15233 N. Kierland Blvd.

Scottsdale, AZ 85254

   Owned 63    Morton’s of Chicago/Seattle, Inc.   

1511 6th Avenue

Seattle, WA 98101

   Leased 64    Morton’s of Chicago/Stamford LLC   

UBS Warburg Building

377 North State St.

Stamford, CT 06901

   Leased 65    Morton’s of Chicago/Troy, LLC   

888 West Big Beaver Rd

Suite 308

Troy, MI 48084

   Leased

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

66    Morton’s of Chicago/Virginia, Inc.   

8075 Leesburg Pike

Vienna, VA 22182

   Leased 67    Morton’s of Chicago/Wacker Place, LLC   

65 East Wacker Place

Chicago, IL 60601

   Leased 68    Morton’s of Chicago/Washington D.C. Inc.   

3251 Prospect St, NW

Washington, DC 20007

   Leased 69    Morton’s of Chicago/Washington Square, Inc.   

1050 Connecticut Ave.

Washington, DC 20036

   Leased 70    Morton’s of Chicago/White Plains LLC   

9 Maple Ave.

White Plains, NY 10605

   Leased 71    Arnie Morton’s of Chicago/Woodland Hills LLC   

6250 Canoga Ave., Suite111

Woodland Hills, CA 91367

   Leased 72    Porterhouse of Los Angeles, Inc.   

SLS Hotel at Beverly Hills

435 La Cienega Boulevard

Beverly Hills, CA 90048

   Leased 73    Bertolini’s of Las Vegas, Inc. (DBA Trevi)   

Forum Shops at Caesars Palace

3500 Las Vegas Blvd., Suite G-9

Las Vegas, NV 89109

   Leased 74    Morton’s of Chicago, Inc.   

325 N. LaSalle Street, Suite 500

Chicago, IL 60654

   Leased 75    Morton’s Restaurant Group, Inc.   

3333 New Hyde Park Rd

New Hyde Park, NY 11042

   Leased 76    Morton’s of Chicago / Indian Wells LLC   

Indian Wells Town Center

Washington Street and Miles Avenue

Indian Wells, CA

   Lease

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

SCHEDULE 4.16

CREDIT AND GUARANTY AGREEMENT

Material Contracts

None

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

SCHEDULE 4.24

CREDIT AND GUARANTY AGREEMENT

Licenses and Permits

 

Due Date

  

City

  

Name of License

  

License

Number

30-Sep-11

   Anaheim    State ABC Liquor License    441414

15-Aug-11

  

Arlington

(Crystal City)

   State ABC Liquor License    13675

31-Oct-11

   Atlanta    State Dept of Revenue - Liquor License    34289

31-Oct-11

   Atlanta   

State Dept of Revenue-Liquor License

- bar.12.21

   54099

15-Nov-10

   Atlanta    City Business Tax Reg. Cert./ Liquor License    008613A20

15-Nov-10

   Atlanta    City Business Tax Reg. Cert./ Liquor License - bar.12.21   
08613A21

30-Jun-11

   Atlantic City    Casino Service Industry License (CSI)   

Vendor I.D.

No. 66471

30-Jun-11

   Atlantic City    Casino Hotel Application Beverage (CHAB) License   
3333-01-050-001

31-Mar-11

   Baltimore    City Liquor License    LB044

31-Mar-11

   Bethesda    State Liquor License    BBWLHR377

31-Jul-11

   Beverly Hills    State Alcoholic Beverage    269437

31-Mar-11

   Boca Raton    State Alcohol/Tobacco    BEV 6011859

30-Nov-11

   Boston    City Common Victualler (Liquor) License    CV7AL0379

30-Nov-11

   Boston Seaport    City Common Victualler (Liquor) License    CV7AL0666

15-Oct-12

   Brooklyn    State Liquor License - First Floor - Main Bar    1205369

15-Oct-12

   Brooklyn    State Liquor License - Upstairs - Additional Bar    1205370

31-Oct-11

   Buckhead    State Liquor License    32319

31-Oct-11

   Buckhead    State Liquor License-Additional Facility    32320

15-Nov-11

   Buckhead    City Liquor License    042586A20

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

15-Nov-11

   Buckhead    City Liquor License - Additional Facility    042586A21

30-Apr-11

   Burbank    State On-Sale General Eating Place Liquor License    384243

30-Apr-11

   Burbank    State Event Permit Liquor License    384243

31-Oct-11

   Capitol Mall    State Alcoholic Beverage    468321

31-Oct-11

   Capitol Mall   

State Liquor License -

Caterer Permit

   468321 1

15-May-11

   Carew Tower    State Liquor License    6186895

30-Apr-11

   Charlotte    State/Sell Mixed Bev at Retail    92667MB

30-Apr-11

   Charlotte    State/Serve Mixed Bev Liquor at Catered Events    92667CP

30-Apr-11

   Charlotte    State/Sell at Retail Malt Bev on Premise    92667AJ

30-Apr-11

   Charlotte    State/Sell at Retail Fortified Wine on Premise    92667AN

30-Apr-11

   Charlotte    State/Sell at Retail Unfortified Wine on Premise    92667AL

30-Apr-11

   Charlotte    City &/or County (Beer, Wine, etc) Privilege License   
20-0062326

30-Apr-11

  

Chicago

(State Street)

   State Liquor License    10-1A-0038648

15-Mar-11

  

Chicago

(State Street)

   City Liquor (Consumption of Premises) License    81794 (acct # 11454)

1-May-11

   Clayton    State Liquor - Sunday by Drink    78111

1-May-11

   Clayton    State Retail Liquor by Drink    77219

31-Oct-11

   Clayton    County Retail by the Drink Liquor License    52568

31-Oct-11

   Clayton    County Sunday Restaurant Bar Liquor License    52569

28-Feb-11

   Clayton    City Outdoor Seating Permit    0D09-0117

15-Jul-11

   Clayton    City Liquor License    10579

15-Sep-11

   Cleveland    State Liquor License    6186900

31-Mar-13

   Conn. Avenue    Alcoholic Beverage Control License    24326

31-Mar-11

   Coral Gables    State Alcohol/Tobacco License    BEV2328775

31-Jan-11

  

Costa Mesa

(Santa Ana)

   State Liquor License    372706

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

5-Jun-11

   Dallas    State Mixed Beverage & Mixed Beverage Late Hours    MB222435

1-Jun-11

   Dallas    County Liquor-Mixed Beverage    73182

5-Jun-11

   Dallas    City Liquor-Mixed Beverage    1129829

22-Aug-11

   Denver    State Liquor License    21-59091

22-Aug-11

   Denver    City & County (Liquor & Retail Food) License    60481

26-Oct-11

   Denver Tech    State Liquor License    40-11137

26-Oct-11

   Denver Tech    City Liquor License   

No. 91 Series

of 2010

30-Sep-11

   Figueroa    State Liquor License - Restaurant    47-373737

30-Sep-11

   Figueroa    State Liquor License - Event Permit    77-373737

30-Sep-11

   Figueroa    State Liquor License - Caterer Permit    58-373737

31-Mar-11

   Fort Lauderdale    State Alcohol/Tobacco License    BEV1618856

15-Sep-11

   Great Neck    State On Premises Liquor License    1100575

30-Jun-11

   Hackensack    State Plenary Retail Consumption License    0223-32-010-011

5-Sep-11

   Hartford    Liquor Permit    LIR 15805

7-Apr-11

   Hong Kong    Liquor Licensing Board Liquor License    5261005584

30-Jun-11

   Honolulu    City & County Liquor License    R0616

1-Nov-11

   Houston Downtown    State Liquor Mixed Beverage & Cartage License    MB643881

1-Nov-11

   Houston Downtown    County Mixed Beverage, Mixed Beverage Late Hours &
Beverage Cartage Permit    N/A

1-Nov-11

   Houston Downtown    City Mixed Beverage, Mixed Beverage Late Hours & Beverage
Cartage Permit    36487,36488,36490, 36491, 36492, 36493

22-Jan-11

   Houston Galleria    State Liquor Mixed Beverage    MB40467

22-Jan-11

   Houston Galleria    County Mixed Beverage & Mixed Beverage Late Hours    N/A

22-Jan-11

   Houston Galleria    City Mixed Beverage Liquor License    MB262135

29-May-11

   Indianapolis    State Retailer Permit    RR4910409

30-Sep-11

   Jacksonville    State Alcohol    BEV 2607600

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

1-Mar-11

   King of Prussia    (Restaurant) Liquor License & Sunday Sales   

R19375/

SS19375

15-Jan-11

   Las Vegas    Liquor    1003557-LIQ-103

30-Nov-11

   Louisville    A.B.C. (State) Malt Beverage Retail, Caterer’s, Special Sunday
Retail Drink & Restaurant Liquor Drink License    056-CL-85, 056-LS-1536,
056-B-5527, 056-RD-1952

20-Nov-11

   Louisville    Louisville Metro Alcoholic Beverage Control License    6842

15-Oct-11

   Macau    Restaurant License    0428/2009

N/A

   Mexico City    Restaurant/Bar    MPA080729F38

31-Mar-11

   Miami    Alcohol Beverage & Tobacco    BEV2322508

31-Mar-11

   Miami Beach    Alcohol Beverage & Tobacco    BEV 2329684

31-Jan-11

   Naperville    State Liquor License    10-1A-0080707

25-Jan-11

   Naperville    City Liquor License    09-00014286

21-Aug-11

   Nashville    State Liquor By the Drink    11838

21-Aug-11

   Nashville    Receipt for Davidson County Liquor Privilege Tax    145712/11838

31-Dec-11

   Nashville    Annual Privilege Tax (for Beer Permit)    17637

30-Apr-11

   New Orleans    State “AR/BL” (Restaurant Beer & Liquor) Liquor License   
3.6E+09

30-Apr-11

   New Orleans    State “AR/R” (Restaurant) Liquor License    3.6E+09

1-Apr-11

   New Orleans    City Alcoholic Beverage Permit (Liquor)    40674

1-Apr-11

   New Orleans    City Alcoholic Beverage Permit (Beer)    40675

15-Aug-11

  

New York

(5th Ave)

   State On Premises Liquor License    1026020/795844

31-Jul-11

   Northbrook    State Liquor License    11-1A-0073521

31-Dec-10

   Northbrook    Village Liquor License    1190

31-Mar-11

   North Miami    Alcohol Bev & Tobacco    BEV2322899

30-Sep-11

   Orlando    Alcohol Bev & Tobacco    BEV5807137

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

31-Mar-11

   Palm Beach    Alcohol Bev & Tobacco    BEV-6006094

30-Nov-11

   Palm Desert    State Liquor License    287463

2-Sep-11

   Philadelphia    State Liquor License    R1291/ SS1291

31-Mar-11

   Phoenix    State Liquor License    12073116

1-Apr-11

   Phoenix    City Liquor License    950077848

1-Apr-11

   Pittsburgh    State Liquor License    R 16455/ SS16455

1-Jun-11

   Portland    State Liquor License    139934

15-Sep-11

   Reston    State ABC Liquor License    012220

15-Jan-11

   Richmond    Liquor License    23656

31-May-11

   Rosemont    State Liquor Control Commission    10-1A-0020227

10-Dec-11

   Rosemont    Village Liquor License    2874

17-Sep-11

   San Antonio    State Mixed Beverage & Late Hours Permit   

MB224838/

LB224838

17-Sep-11

   San Antonio    County Mixed Beverage & Late Hours Permit   

MB224838/

LB224838

17-Sep-11

   San Antonio    City Mixed Beverage & Late Hours Permit   

MB224838/

LB224838

30-Nov-11

   San Diego    State Liquor License    322495

30-Jun-11

   San Francisco    State Alcoholic Beverage License    294155

31-Dec-11

   San Jose    State Alcoholic Beverage License    439905

31-Aug-11

   San Juan    Liquor License    1798D000044

31-Oct-11

   Schaumburg    State Liquor License -    11-1A-0040768

15-Dec-10

   Schaumburg    Village Liquor License    17489

31-Mar-11

   Scottsdale    State Liquor License    12074083

31-Dec-10

   Scottsdale    City Liquor License    98010170

15-Jul-11

   Seattle    State Spirits/BR/WN Rest Lounge    081720

31-Dec-11

   Singapore    Liquor License   

L/LL/007314/

2009/P

31-Dec-11

   Singapore    Extended Hour Liquor License   

L/LL/009397/

2009/E

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

15-Apr-11    Southfield   

State Liquor License -

CLOSED JUNE 27, 2009

   6808 2009 SS 11-Jul-11    Stamford    Liquor Permit    LIR 15555 2-Sep-12   
Toronto    Liquor License    806213 15-Apr-11    Troy    Liquor License   
143840-2010 SS 15-Sep-11    Tyson’s Corner    State ABC License    51817
31-Jan-11    Wacker Place    State Liquor License - 1st Floor    10-1A-0065309
31-Oct-11    Wacker Place    State Liquor License - 2nd Floor    11-1A-0074635
15-Sep-12    Wacker Place    City Liquor License - 1st Floor    1491374
15-Sep-12    Wacker Place    City Liquor License - 2nd Floor    1675357
31-Mar-13   

Washington, DC

(Georgetown)

   Alcoholic Beverage Control License    3880 15-May-12    White Plains    State
Liquor License    114689 31-Aug-11    Woodland Hills    State Liquor License   
442878 1-Mar-11   

Bertolini’s of

King of Prussia

  

State Liquor License - CLOSED

AUGUST 10, 2009

   R20132/ SS20132 15-Jan-11    Trevi - Bertolini’s of Las Vegas    County
Liquor License    1001036-LIQ-124

In addition to the liquor licenses listed above, the grantors maintain other
business licenses and permits obtained in the ordinary course of business.

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

SCHEDULE 4.27

CREDIT AND GUARANTY AGREEMENT

 

Inactive Subsidiaries    Fed. Id#      Quantum Restaurant Development
Corporation    11-3198385    Inactive Morton’s of Chicago/Cincinnati, Inc.   
31-1311669    Restaurant closed Morton’s of Chicago/Columbus, Inc.    31-1311701
   Restaurant closed Morton’s of Chicago/Detroit, Inc.    38-3061966   
Restaurant closed Morton’s of Chicago/Minneapolis, Inc.    36-3776421   
Restaurant closed Morton’s of Chicago/Philadelphia, Inc.    36-3322496   
Inactive Morton’s of Chicago/Sacramento, Inc.    68-0285990    Restaurant closed
Morton’s of Chicago/West Street, Inc.    13-3819860    Restaurant closed
Morton’s of Chicago/Westbrook, Inc.    36-3421647    Restaurant closed Morton’s
of Chicago/Kansas City LLC    36-4287244    Restaurant closed Morton’s of
Chicago/Leawood, LLC    26-1273357    Restaurant closed Morton’s of Chicago/La
Jolla LLC    33-0928522    Inactive Morton’s of Chicago/Park Place MD, LLC   
20-8119108    Restaurant closed Morton’s of Chicago/SouthPark LLC    56-2139509
   Restaurant closed Arnie Morton’s of Chicago/Torrance LLC    Pending   
Inactive Morton’s of Chicago/Waltham, LLC    Pending    Inactive Morton’s of
Chicago/Wisconsin LLC.    36-4425343    Inactive Morton’s of Chicago/Vancouver,
Inc.    98-0228074    Restaurant closed Morton’s of Chicago Hong Kong Limited   
52-2300629    Restaurant closed Bertolini’s of Circle Centre, Inc.    35-1973525
   Restaurant closed Bertolini’s/King of Prussia, Inc.    23-2808728   
Restaurant closed Bertolini’s at Market Square, Inc.    58-1883708    Restaurant
closed Bertolini’s at Village Square, Inc.    88-0387999    Restaurant closed
Mick’s at PA Ave., Inc.    52-1789891    Restaurant closed Mick’s at Fair Oaks,
Inc.    52-1826175    Restaurant closed Mick’s at Annapolis Mall, Inc.   
52-1842226    Restaurant closed Peasant Holding Corp    58-1883832   
Inactive Holding Company

Notes relating to inactive subsidiaries:

 

•  

Bertolini’s King of Prussia, Inc. - is a party to a settlement agreement with
former landlord pursuant to which its liquor license is pending transfer to
landlord.

 

•  

Morton’s of Chicago / Detroit, Inc. - is a party to a settlement agreement with
former landlord pursuant to which its liquor license is held in “safekeeping” by
licensing authority pending direction from landlord to transfer; if not
transferred by a certain date then the license will be terminated.

 

•  

Morton’s of Chicago / Park Place MD LLC and Morton’s of Chicago / Leawood LLC
are all party to separate settlement agreements with their former landlords
pursuant to which monthly payments for agreed upon period of time are required
to be paid to landlord. Holdings is obligated to make the payments due under the
Park Place settlement agreement. Company is obligated to make the payments due
under the Leawood settlement agreement.

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

 

•  

Mick’s at PA Ave., Inc, Mick’s at Fair Oaks, Inc., and Mick’s at Annapolis Mall,
Inc. - have tax net operating losses.

Morton’s of Chicago/Kansas City LLC and Morton’s of Chicago/Sacramento, Inc.
have both agreed to enter into settlement agreements with their former landlords
to resolve claims against each entity and their parent companies related to
their respective restaurant closures. The Kansas City settlement requires
Morton’s to pay $575,000 and the Sacramento settlement requires Morton’s to pay
$75,000, in each case in return for releases against all Morton’s entities.
Settlement documentation is pending.

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

SCHEDULE 5.15

Post Closing Matters

1. Within 45 Business Days after the Closing Date (or such longer period as
agreed in writing by Administrative Agent), the Credit Parties shall have
delivered to Collateral Agent:

(a) fully executed and notarized Mortgages, in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering each Mortgaged
Property;

(b) ALTA mortgagee title insurance policies or binders providing unconditional
commitments therefor issued by one or more title companies reasonably
satisfactory to Collateral Agent with respect to each Mortgaged Property (each,
a “Title Policy”), in amounts not less than the fair market value of each
Closing Date Mortgaged Property, together with a title report issued by a title
company with respect thereto, dated not more than thirty (30) days prior to the
Closing Date and copies of all recorded documents listed as exceptions to title
or otherwise referred to therein, each in form and substance reasonably
satisfactory to Collateral Agent and (b) evidence satisfactory to Collateral
Agent that such Credit Party has paid to the title company or to the appropriate
Governmental Authorities all expenses and premiums of the title company and all
other sums required in connection with the issuance of each Title Policy and all
recording and stamp taxes (including mortgage recording and intangible taxes)
payable in connection with recording the Mortgages for each Mortgaged Property
in the appropriate real estate records;

(c) evidence of flood insurance with respect to each Flood Hazard Property that
is located in a community that participates in the National Flood Insurance
Program, in each case in compliance with any applicable regulations of the Board
of Governors of the Federal Reserve System, in form and substance reasonably
satisfactory to Collateral Agent; and

(d) ALTA surveys of all Mortgaged Properties, certified to Collateral Agent and
dated not more than thirty (30) days prior to the Closing Date.

2. Within 15 Business Days after the Closing Date (or such longer period as
agreed in writing by Administrative Agent), the Credit Parties shall deliver to
Collateral Agent a Deposit Account Control Agreement with respect to each of the
Deposit Accounts identified below:

 

Grantor

   Depository Bank    Type of
Account    Account No. Morton’s of Chicago, Inc.    Bank of America   
Concentration    xxxxxxxxxx Bertolini’s Restaurants, Inc.    Bank of America   
Concentration    xxxxxxxxxx Morton’s of Chicago, Inc.    Bank of America   
Business
Checking    xxxxxxxxxx
 

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

3. Within 30 Business Days after the Closing Date (or such longer period as
agreed in writing by Administrative Agent), the applicable Credit Party shall
cause to be delivered to Collateral Agent, the following certificates of
authority:

 

Credit Party

   Jurisdiction Arnie Morton’s of Chicago/Figueroa LLC    California Morton’s of
Chicago/Anaheim LLC    California Morton’s of Chicago/Capitol Mall LLC   
California Morton’s of Chicago/Indian Wells, LLC    California Morton’s of
Chicago/Puerto Rico, Inc    Puerto Rico Morton’s of Chicago, Inc.    Hawaii
Morton’s of Chicago Holding, Inc.    Illinois, New Jersey

4. Within 7 Business Days after the Closing Date (or such longer period as
agreed in writing by Administrative Agent), Holdings shall cause to be delivered
to Collateral Agent, all certificates and other documents of title evidencing
Holdings’ ownership of the Capital Stock of each Subsidiary owned as of the
Closing Date, together with stock transfer forms for each, executed in blank by
the owner of such Capital Stock, in each case, in form and substance reasonably
satisfactory to Collateral Agent.

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

SCHEDULE 6.1

CREDIT AND GUARANTY AGREEMENT

Certain Indebtedness

 

Title

   Date of
Agreement      Maturity
Date      Parties to Agreement      Amount
Outstanding as
of Nov. 7, 2010  

NONE

           

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

SCHEDULE 6.2

CREDIT AND GUARANTY AGREEMENT

Certain Liens

 

     Amount      Date  

Morton’s of Chicago/Rosemont, Inc.

     

K & K Iron Works

   $ 40,645         08/10/2010   

Jameson Sheet Metal, Inc.

   $ 30,044         09/24/2010   

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

SCHEDULE 6.7

CREDIT AND GUARANTY AGREEMENT

Certain Investments

Guardian Life Insurance Company of America – Morton’s of Chicago, Inc

(Life insurance policy on Klaus Fritsch). Policy # 2769107. Original policy date
- 1/27/1981. Death benefit is $86,379 with a Cash Value of $30,020.23.

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

SCHEDULE 6.12

CREDIT AND GUARANTY AGREEMENT

Certain Affiliate Transactions

 

  1. Restricted stock awards granted to independent Board Members

 

  2. Morton’s Restaurant Group Dining Cards issued to all Board Members

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

EXHIBIT A-1 TO

CREDIT AND GUARANTY AGREEMENT

FUNDING NOTICE

Reference is made to that certain Credit and Guaranty Agreement, dated as of
December 9, 2010 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among MORTON’S RESTAURANT GROUP, INC., a Delaware corporation
(“Holdings”), MORTON’S OF CHICAGO, INC., an Illinois corporation (“Company”),
CERTAIN SUBSIDIARIES OF HOLDINGS, as Guarantors, the Lenders party thereto from
time to time, and GOLDMAN SACHS BANK USA, as Administrative Agent, Collateral
Agent and Lead Arranger.

Pursuant to Sections 2.1 and 2.2 of the Credit Agreement, Company desires that
Lenders make the following Loans to Company in accordance with the applicable
terms and conditions of the Credit Agreement on December 9, 2010 (the “Credit
Date”):

 

  1. Revolving Loans

 

¨   

Base Rate Loans:

   $ [    ,    ,     ]  ¨   

LIBOR Loans, with an Initial Interest Period of              Month(s):

   $ [    ,    ,     ] 

 

  2. Term Loans

 

¨   

Base Rate Loans:

   $ [    ,    ,     ]  ¨   

LIBOR Loans, with an Initial Interest Period of              Month(s):

   $ [    ,    ,     ] 

Company hereby certifies that:

(i) immediately after giving effect to the making of the Loans requested on the
Credit Date, (A) the Total Utilization of Revolving Commitments shall not exceed
the Revolving Commitments then in effect, (B) Availability shall be $0 or
greater, (C) the Senior Leverage Ratio determined on a pro forma basis after
giving effect to the contemplated Credit Extension shall not exceed the maximum
Senior Leverage Ratio permitted as of the last day of the immediately preceding
Fiscal Quarter pursuant to Section 6.8, and (D) the aggregate Cash and Cash
Equivalents of Holdings and its Subsidiaries will not exceed $2,000,000;

(ii) as of the Credit Date and immediately after giving effect to the making of
the Loans requested on the Credit Date, the representations and warranties
contained in each of the Credit Documents are true and correct in all material
respects, except to the extent such representations and warranties specifically
relate to an earlier date (in which case such representations and warranties
were true and correct in all material respects on and as of such earlier date);

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

(iii) as of the Credit Date, no event has occurred and is continuing or would
result from the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Default.

The foregoing certifications, together with the computations set forth in Annex
A-1 hereto and the supporting detail for the calculation of “Consolidated
Adjusted EBITDA” and “Consolidated Net Income” in the form of Annex A-2 hereto,,
are made and delivered [mm/dd/yy] pursuant to Section 2.1(b) of the Credit
Agreement and are made in my capacity as Chief Financial Officer of Holdings and
the Company and not in my individual capacity (and without any personal
liability).

 

Date: [mm/dd/yy]    

MORTON’S OF CHICAGO, INC.

    By:  

 

    Name:     Title:

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

ANNEX A-1 TO

EXHIBIT A-1 TO

CREDIT AND GUARANTY

AGREEMENT

FOR THE FISCAL [QUARTER] [YEAR] ENDING [MM/DD/YY].

 

1.    

Consolidated Adjusted EBITDA:1          
          (i) - (ii) = $[    ,    ,    ]

     (i)           $ [    ,    ,     ]     

(a)  

   Consolidated Net Income:    $ [    ,    ,     ]     

(b)

   Consolidated Interest Expense:    $
[    ,    ,    
] 
   

(c)

   provisions for taxes based on income:    $ [    ,    ,     ]     

(d)

   total depreciation expense:    $ [    ,    ,     ]     

(e)

   total amortization expense:    $ [    ,    ,     ]     

(f)

   amortization of restricted stock expense:    $ [    ,    ,     ]     

(g)

   other non Cash items reducing Consolidated Net Income:2    $ [    ,    ,    
]     

(h)

   Transaction Costs that are not capitalized or that are written off:    $
[    ,    ,     ]      (i)    operating expenses, charges and losses incurred in
connection with the cessation of business activities or related to discontinued
operations up to $2,000,000 in any four consecutive Fiscal Quarter period:    $
[    ,    ,     ]     

(j)

   Pre-Opening costs up to (1) $800,000 per domestic restaurant and (2)
$1,200,000 per foreign restaurant:    $ [    ,    ,     ]     

(k)

   FICA credits:    $ [    ,    ,     ]     

(l)

   losses on foreign currency transactions:    $ [    ,    ,     ] 

 

1

Excluding any of the following amounts attributable to any Credit Party’s
interest in a Joint Venture. In addition, Consolidated Adjusted EBITDA for
purposes of calculating “Availability” and “Senior Leverage Ratio” for each of
the fiscal months identified on Annex I shall be the amounts set forth thereon.

2

Excluding any such non-Cash item to the extent that it represents an accrual or
reserve for potential Cash items in any future period or amortization of a
prepaid Cash item that was paid in a prior period.

 

EXHIBIT A-1-1

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

 

    (m)    management, license, royalty and/or franchise fee income related to
Joint Ventures to the extent the income of such Joint Ventures were excluded in
the calculation of Consolidated Net Income:    $ [    ,    ,     ]      (n)   
write off of deferred financing fees:    $ [    ,    ,     ]      (o)   
identifiable annualized expense reductions with respect to, and that can be
implemented within ninety (90) days of, the closing of any Permitted Acquisition
up to $500,000 in any four consecutive Fiscal Quarter period (or such greater
amount as approved by Administrative Agent, in its reasonable discretion):    $
[    ,    ,     ]      (p)    legal fees and settlement charges related to the
cessation or discontinuation of any business operations:    $ [    ,    ,     ] 
    (q)    up to $200,000 of operating losses related to the operation of
Morton’s Miami Beach during any four consecutive Fiscal Quarter period:    $
[    ,    ,     ]      (r)    the Company’s proportionate share of Excluded
Joint Venture income to the extent distributed in cash:    $ [    ,    ,     ] 
    (s)    any pro forma rent savings resulting from the re-negotiation of
leasehold interests in real property up to $1,500,000 (excluding any amounts
recognized during such period):    $ [    ,    ,     ]      (t)    management
bonus expense up to $1,200,000 incurred during the Fiscal Quarter ending
January 2, 2011:    $ [    ,    ,     ]    (ii)         $ [    ,    ,     ] 

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

    (a)    non-Cash items increasing Consolidated Net Income:3    $
[    ,    ,     ]      (b)    interest income:    $ [    ,    ,     ]      (c)
   other extraordinary income:    $ [    ,    ,     ]      (d)    losses
attributable to any Joint Venture to the extent funded in cash by a Credit
Party:    $ [    ,    ,     ]  2.   Consolidated Total Debt:4    $
[    ,    ,     ]  3.   Senior Leverage Ratio:                    (i)/(ii) =   
$ [    ,    ,     ]      (i)=   

(a)-(b)

   $ [    ,    ,     ]        

(a)     Consolidated Total Debt (excluding Subordinated Indebtedness and the
Miami Beach Indebtedness)

   $ [    ,    ,     ]        

(b)     Cash and Cash

Equivalents in excess of $1,000,000:

   $ [    ,    ,     ]      (ii)    Consolidated Adjusted EBITDA for the
trailing twelve Month period:    $ [    ,    ,     ] 

 

  Actual:      .    :1.00     Required:      .    :1.00  

 

4.

  Consolidated Liquidity:                    (i) + (ii) =    $ [    ,    ,    
]      (i)    Cash on-hand of Holdings and its Subsidiaries:5    $
[    ,    ,     ]      (ii)    the lesser of:          

(a)     the Revolving Commitments of all the Lenders in the aggregate minus the
Total Utilization of Revolving Commitments and

   $ [    ,    ,     ] 

 

3

Excluding any such non-Cash item to the extent it represents (1) the reversal of
an accrual or reserve for potential Cash item in any prior period or (2) the
amortization of income or the accrual of revenue or income for which the cash is
received in a prior or subsequent period.

4

Excluding Excluded Joint Venture Indebtedness, determined on a consolidated
basis in accordance with GAAP.

5

Excluding any Restricted Cash.

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

 

      

(b)     Availability:

   $ [    ,    ,     ]         Actual:        $                           
Required:    $ 2,000,000    5.  

Availability:                                             (i) – (ii) =

     $[    ,    ,    ]      (i)=   (a) * (b)      $[    ,    ,    ]       

(a)     Consolidated Adjusted EBITDA for the trailing twelve month period

     $[    ,    ,    ]       

(b)     Senior Leverage Multiple

     $[    ,    ,    ]      (ii)=   (c) + (d) – (e)      $[    ,    ,    ]     
 

(c)     Aggregate principal balance of the Loans as of such date

     $[    ,    ,    ]       

(d)     all other Consolidated Total Debt as of such date

     $[    ,    ,    ]       

(e)     Cash and Cash Equivalents in excess of $1,000,000

     $[    ,    ,    ]   

[Remainder of Page Intentionally Left Blank]

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

ANNEX A-2 TO

EXHIBIT A-1 TO

CREDIT AND GUARANTY

AGREEMENT

Supporting Detail

(See Attached.)

 

EXHIBIT A-1-1

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

ANNEX A-3 TO

EXHIBIT A-1 TO

CREDIT AND GUARANTY

AGREEMENT

 

Fiscal Month

   Consolidated Adjusted EBITDA  

November, 2009

   $ 1,719,746   

December, 2009

   $ 5,175,803   

January, 2010

   $ 1,703,552   

February, 2010

   $ 3,397,260   

March, 2010

   $ 1,611,546   

April, 2010

   $ 3,859,154   

May, 2010

   $ 861,912   

June, 2010

   $ 354,618   

July, 2010

   $ 772,836   

August, 2010

   $ 1,484   

September, 2010

   $ 1,770,059   

October, 2010

   $ 4,575,472   

 

EXHIBIT A-1-1

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

EXHIBIT A 2 TO

CREDIT AND GUARANTY AGREEMENT

CONVERSION/CONTINUATION NOTICE

Reference is made to that certain Credit and Guaranty Agreement, dated as of
December 9, 2010 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among MORTON’S RESTAURANT GROUP, INC., a Delaware corporation
(“Holdings”), MORTON’S OF CHICAGO, INC., an Illinois corporation (“Company”),
CERTAIN SUBSIDIARIES OF HOLDINGS, as Guarantors, the Lenders party thereto from
time to time, and GOLDMAN SACHS BANK USA, as Administrative Agent, Collateral
Agent and Lead Arranger.

Pursuant to Section 2.8 of the Credit Agreement, Company desires to convert or
to continue the following Loans, each such conversion and/or continuation to be
effective as of [mm/dd/yy]:

 

  1. Term Loans:

 

$[    ,    ,    ]   

LIBOR Loans to be continued with Interest Period of          month(s)

$[    ,    ,    ]   

Base Rate Loans to be converted to LIBOR Loans with Interest Period of         
month(s)

$[    ,    ,    ]   

LIBOR Loans to be converted to Base Rate Loans

 

  3. Revolving Loans:

 

$[    ,    ,    ]   

LIBOR Loans to be continued with Interest Period of          month(s)

$[    ,    ,    ]   

Base Rate Loans to be converted to LIBOR Loans with Interest Period of         
month(s)

$[    ,    ,    ]   

LIBOR Loans to be converted to Base Rate Loans

Company hereby certifies that as of the date hereof, no event has occurred and
is continuing or would result from the consummation of the conversion and/or
continuation contemplated hereby that would constitute an Event of Default or a
Default.

 

Date: [mm/dd/yy]     MORTON’S OF CHICAGO, INC.     By:  

 

    Name:     Title:

 

EXHIBIT A-2-1

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

EXHIBIT B 1 TO

CREDIT AND GUARANTY AGREEMENT

TERM LOAN NOTE

 

$60,000,000

December 9, 2010

   New York, New York

FOR VALUE RECEIVED, MORTON’S OF CHICAGO, INC., an Illinois corporation
(“Company”), promises to pay GOLDMAN SACHS BANK USA (“Payee”) or its registered
assigns the principal amount of Sixty Million and no/100 Dollars ($60,000,000)
in the installments referred to below.

Company also promises to pay interest on the unpaid principal amount hereof,
from the date hereof until paid in full, at the rates and at the times which
shall be determined in accordance with the provisions of that certain Credit and
Guaranty Agreement, dated as of December 9, 2010 (as amended, restated, amended
and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among MORTON’S RESTAURANT GROUP, INC., a
Delaware corporation (“Holdings”), Company, certain Subsidiaries of Holdings, as
Guarantors, the Lenders party thereto from time to time, and GOLDMAN SACHS BANK
USA, as Administrative Agent, Collateral Agent and Lead Arranger.

Company shall make scheduled principal payments on this Note as set forth in
Section 2.11 of the Credit Agreement.

This Note is the “Term Loan Note” referred to in the Credit Agreement in the
aggregate principal amount of $60,000,000 and is issued pursuant to and entitled
to the benefits of the Credit Agreement, to which reference is hereby made for a
more complete statement of the terms and conditions under which the Term Loan
evidenced hereby was made and is to be repaid.

All payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds at the Principal
Office of Administrative Agent or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
the obligations evidenced hereby shall have been accepted by Administrative
Agent and recorded in the Register, Company, each Agent and Lenders shall be
entitled to deem and treat Payee as the owner and holder of this Note and the
obligations evidenced hereby. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, the failure to make a notation of
any payment made on this Note shall not limit or otherwise affect the
obligations of Company hereunder with respect to payments of principal of or
interest on this Note.

This Note is subject to mandatory prepayment and to prepayment at the option of
Company, each as provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

 

EXHIBIT B-1-1

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

Upon the occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

The terms of this Note are subject to amendment only in the manner provided in
the Credit Agreement.

No reference herein to the Credit Agreement and no provision of this Note or the
Credit Agreement shall alter or impair the obligations of Company, which are
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.

Company promises to pay all costs and expenses, including reasonable attorneys’
fees, all as provided in the Credit Agreement, incurred in the collection and
enforcement of this Note. Company and any endorsers of this Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest and demand notice of
every kind.

IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

 

MORTON’S OF CHICAGO, INC. By:  

 

Name: Title:

 

EXHIBIT B-1

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

EXHIBIT B 2 TO

CREDIT AND GUARANTY AGREEMENT

REVOLVING LOAN NOTE

 

$10,000,000

December 9, 2010

   New York, New York

FOR VALUE RECEIVED, MORTON’S OF CHICAGO, INC., an Illinois corporation
(“Company”), promises to pay GOLDMAN SACHS BANK USA (“Payee”) or its registered
assigns, on or before the Revolving Commitment Termination Date, the lesser of
(a) Ten Million and no/100 Dollars ($10,000,000) and (b) the unpaid principal
amount of all advances made by Payee to Company as Revolving Loans under the
Credit Agreement referred to below.

Company also promises to pay interest on the unpaid principal amount hereof,
from the date hereof until paid in full, at the rates and at the times which
shall be determined in accordance with the provisions of that certain Credit and
Guaranty Agreement, dated as of December 9, 2010 (as amended, restated, amended
and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among MORTON’S RESTAURANT GROUP, INC., a
Delaware corporation (“Holdings”), Company, certain Subsidiaries of Holdings, as
Guarantors, the Lenders party thereto from time to time, and GOLDMAN SACHS BANK
USA, as Administrative Agent, Collateral Agent and Lead Arranger.

This Note is one of the “Revolving Loan Notes” referred to in the Credit
Agreement in the aggregate principal amount of $10,000,000 and is issued
pursuant to and entitled to the benefits of the Credit Agreement, to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Loans evidenced hereby were made and are to be
repaid.

All payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds at the Principal
Office of Administrative Agent or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
the obligations evidenced hereby shall have been accepted by Administrative
Agent and recorded in the Register, Company, each Agent and Lenders shall be
entitled to deem and treat Payee as the owner and holder of this Note and the
obligations evidenced hereby. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, the failure to make a notation of
any payment made on this Note shall not limit or otherwise affect the
obligations of Company hereunder with respect to payments of principal of or
interest on this Note.

This Note is subject to mandatory prepayment and to prepayment at the option of
Company, each as provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

 

EXHIBIT B-3-1

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

Upon the occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

The terms of this Note are subject to amendment only in the manner provided in
the Credit Agreement.

No reference herein to the Credit Agreement and no provision of this Note or the
Credit Agreement shall alter or impair the obligations of Company, which are
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.

Company promises to pay all costs and expenses, including reasonable attorneys’
fees, all as provided in the Credit Agreement, incurred in the collection and
enforcement of this Note. Company and any endorsers of this Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest and demand notice of
every kind.

IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

 

MORTON’S OF CHICAGO, INC. By:  

 

Name: Title:

 

EXHIBIT B-3-2

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

TRANSACTIONS ON

REVOLVING LOAN NOTE

 

Date

   Amount of Loan
Made this Date      Amount of Principal
Paid this Date      Outstanding Principal
Balance This Date      Notation
Made By                                      

 

EXHIBIT B-3-3

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

EXHIBIT C TO

CREDIT AND GUARANTY AGREEMENT

COMPLIANCE CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:

1. I am the Chief Financial Officer of each of MORTON’S RESTAURANT GROUP, INC.,
a Delaware corporation (“Holdings”), and MORTON’S OF CHICAGO, INC., an Illinois
corporation (“Company”).

2. I have reviewed the terms of that certain Credit and Guaranty Agreement,
dated as of December 9, 2010 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Holdings, Company, certain Subsidiaries of
Holdings, as Guarantors, the Lenders party thereto from time to time, and
GOLDMAN SACHS BANK USA, as Administrative Agent, Collateral Agent and Lead
Arranger, and I have made, or have caused to be made under my supervision, a
review in reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by the attached financial
statements.

3. The examination described in paragraph 2 above did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes an
Event of Default or Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth in a separate attachment, if any, to this
Certificate, describing in detail, the nature of the condition or event, the
period during which it has existed and the action which Company has taken, is
taking, or proposes to take with respect to each such condition or event.

4. The financial statements attached hereto fairly present, in all material
respects, the financial condition of Holdings and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments.

The foregoing certifications, together with the computations set forth in Annex
A-1 hereto, the supporting detail for the calculation of “Consolidated Adjusted
EBITDA”, “Consolidated Net Income” and “Fixed Charges” set forth in the form of
Annex A-2 hereto, and the financial statements delivered with this Certificate
in support hereof, are made and delivered [mm/dd/yy] pursuant to Section 5.1(d)
of the Credit Agreement and are made in my capacity as Chief Financial Officer
of Holdings and the Company and not in my individual capacity (and without any
personal liability).

 

MORTON’S RESTAURANT GROUP, INC. MORTON’S OF CHICAGO, INC. By:  

 

Name: Title: Chief Financial Officer

 

EXHIBIT C-1

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

ANNEX A TO

COMPLIANCE CERTIFICATE

FOR THE FISCAL [QUARTER] [YEAR] ENDING [MM/DD/YY].

 

1.

  Consolidated Adjusted EBITDA:6    (i) - (ii) = $[    ,    ,    ]         (i)
                  $ [    ,    ,     ]       (a)    Consolidated Net Income:   
   $ [    ,    ,     ]       (b)    Consolidated Interest Expense:       $
[    ,    ,     ]       (c)    provisions for taxes based on income:       $
[    ,    ,     ]       (d)    total depreciation expense:       $
[    ,    ,     ]       (e)    total amortization expense:       $
[    ,    ,     ]       (f)    amortization of restricted stock expense:       $
[    ,    ,     ]       (g)    other non Cash items reducing Consolidated Net
Income:7       $ [    ,    ,     ]       (h)    Transaction Costs that are not
capitalized or that are written off:       $ [    ,    ,     ]       (i)   
operating expenses, charges and losses incurred in connection with the cessation
of business activities or related to discontinued operations up to $2,000,000 in
any four consecutive Fiscal Quarter period:       $ [    ,    ,     ]       (j)
   Pre-Opening costs up to (1) $800,000 per domestic restaurant and (2)
$1,200,000 per foreign restaurant:       $ [    ,    ,     ]       (k)    FICA
credits:       $ [    ,    ,     ]       (l)    losses on foreign currency
transactions:       $ [    ,    ,     ]       (m)    management, license,
royalty and/or franchise fee income related to Joint      

 

6

Excluding any of the following amounts attributable to any Credit Party’s
interest in a Joint Venture. In addition, Consolidated Adjusted EBITDA for
purposes of calculating “Availability” and “Senior Leverage Ratio” for each of
the fiscal months identified on Annex I shall be the amounts set forth thereon.

7

Excluding any such non-Cash item to the extent that it represents an accrual or
reserve for potential Cash items in any future period or amortization of a
prepaid Cash item that was paid in a prior period.

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

 

           Ventures to the extent the income of such Joint Ventures were
excluded in the calculation of Consolidated Net Income:       $ [    ,    ,    
]          (n)    write off of deferred financing fees:       $ [    ,    ,    
]          (o)    identifiable annualized expense reductions with respect to,
and that can be implemented within ninety (90) days of, the closing of any
Permitted Acquisition up to $500,000 in any four consecutive Fiscal Quarter
period (or such greater amount as approved by Administrative Agent, in its
reasonable discretion):       $ [    ,    ,     ]          (p)    legal fees and
settlement charges related to the cessation or discontinuation of any business
operations:       $ [    ,    ,     ]          (q)    up to $200,000 of
operating losses related to the operation of Morton’s Miami Beach during any
four consecutive Fiscal Quarter period:       $ [    ,    ,     ]          (r)
   the Company’s proportionate share of Excluded Joint Venture income to the
extent distributed in cash:       $ [    ,    ,     ]          (s)    any pro
forma rent savings resulting from the re-negotiation of leasehold interests in
real property up to $1,500,000 (excluding any amounts recognized during such
period):       $ [    ,    ,     ]          (t)    management bonus expense up
to $1,200,000 incurred during the Fiscal Quarter ending January 2, 2011:       $
[    ,    ,     ]     (ii)                  $ [    ,    ,     ]          (a)   
non-Cash items increasing Consolidated Net Income:8       $ [    ,    ,     ] 

 

 

8

Excluding any such non-Cash item to the extent it represents (1) the reversal of
an accrual or reserve for potential Cash item in any prior period or (2) the
amortization of income or the accrual of revenue or income for which the cash is
received in a prior or subsequent period.

 

2

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

 

     (b)    interest income:       $ [    ,    ,     ]       (c)    other
extraordinary income:       $ [    ,    ,     ]       (d)    losses attributable
to any Joint Venture to the extent funded in cash by a Credit Party:       $
[    ,    ,     ]                  

Actual:

$[    ,    ,    ]

                   

Required:

$[    ,    ,    ]

   2.   Consolidated Capital Expenditures:9          $ [    ,    ,     ]      
           

Actual:

$[    ,    ,    ]

                   

Required:

$[    ,    ,    ]

                   

Carryover:10

$                

   3.  

Consolidated Cash Interest Expense:11

         $ [    ,    ,     ]  4.  

Consolidated Current Assets:12

         $ [    ,    ,     ]  5.  

Consolidated Current Liabilities:13

         $ [    ,    ,     ]  6.  

Consolidated Excess Cash Flow:

   (i) - (ii) =       $ [    ,    ,     ]    (i)    (a)   

Consolidated Adjusted EBITDA:14

      $ [    ,    ,     ] 

 

9

Excluding that portion of Consolidated Capital Expenditures that (i) is
attributable to Excluded Joint Ventures and that is wholly financed by the
third-party partner of such Excluded Joint Venture (and not by a Credit Party or
a wholly-owned Subsidiary thereof) or (ii) is financed with the proceeds of
Indebtedness.

10

Representing an amount equal to the excess, if any, of Consolidated Capital
Expenditures for the previous Fiscal Year over the actual amount of Consolidated
Capital Expenditures for such previous Fiscal Year, pursuant to Section 6.8(d)
of the Credit Agreement.

11

Excluding that portion of Consolidated Cash Interest Expense that is
attributable to Excluded Joint Venture Indebtedness.

12

Excluding Cash and Cash Equivalents.

13

Excluding the current portion of long-term debt.

14

Excluding the following amounts, to the extent included in the calculation of
“Consolidated Adjusted EBITDA”: (i) Transaction Costs that are not capitalized
or that are written off, (ii) operating expenses, charges and losses incurred in
connection with the cessation of business activities or related to discontinued
operations, (iii) Pre-Opening Costs, (iv) FICA credits, (v) legal fees and
settlement charges related to the cessation or discontinuation of any business
operations, (vi) operating losses related to the operation of Morton’s Miami
Beach, (vii) the Company’s proportionate share of Excluded Joint Venture income
to the extent distributed in cash, (viii) any pro forma rent savings resulting
from the re-negotiation of leasehold interests in real property) and (ix)
management bonus expense incurred in the Fiscal Quarter ending January 2, 2011.

 

3

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

 

     (b)   

decreases in Restricted Cash pledged to a Third Party L/C Issuer:

      $ [    ,    ,     ]       (c)    interest income:       $ [    ,    ,    
]       (d)    other income:15       $ [    ,    ,     ]       (e)   
Consolidated Working Capital Adjustment:       $ [    ,    ,     ]    (ii)   

(a)

  

voluntary and scheduled repayments of Consolidated Total Debt:16

      $ [    ,    ,     ]       (b)    Consolidated Capital Expenditures:17   
   $ [    ,    ,     ]       (c)    the amount budgeted for Consolidated Capital
Expenditures permitted for the current period under Section 6.8(d) that was not
expended and is permitted to be carried forward to the next succeeding period:
      $ [    ,    ,     ]       (d)    Consolidated Cash Interest Expense:      
$ [    ,    ,     ]       (e)    provisions for current taxes based on income of
Holdings and its Subsidiaries and payable in cash with respect to such period:
      $ [    ,    ,     ]       (f)    amounts paid to repurchase Capital Stock:
      $ [    ,    ,     ]       (g)   

increases in Restricted Cash pledged to a Third Party L/C Issuer:

      $ [    ,    ,     ]       (h)   

amounts paid in connection with Permitted Acquisitions or Permitted Investments:

      $ [    ,    ,     ] 

 

15

Excluding any gains or losses attributable to Asset Sales.

16

Excluding repayments of Revolving Loans except to the extent the Revolving
Credit Commitments are permanently reduced in connection with such repayments.

17

Net of any proceeds of (x) Net Asset Sale Proceeds to the extent reinvested in
accordance with Section 2.13(a), (y) Net Insurance/Condemnation Proceeds to the
extent reinvested in accordance with Section 2.13(b), and (z) any proceeds of
related financings with respect to such expenditures.

 

4

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

 

    

(i)

   payments made pursuant to settlement agreements:       $ [    ,    ,     ]   
   (j)    deferred expenses for legal settlements, landlord disputes and
payments for closed restaurant and severance:       $ [    ,    ,     ]  7.  

Consolidated Fixed Charges:

   (i) + (ii) + (iii) + (iv) =       $ [    ,    ,     ]       (i)   
Consolidated Cash Interest Expense:       $ [    ,    ,     ]      

(ii)

   scheduled payments of principal on Consolidated Total Debt:       $
[    ,    ,     ]      

(iii)

   Consolidated Capital Expenditures (including any capitalized interest):      
$ [    ,    ,     ]      

(iv)

   the current portion of taxes provided for with respect to such period in
accordance with GAAP:18       $ [    ,    ,     ]  8.  

Consolidated Interest Expense:

         $ [    ,    ,     ]  9.  

Consolidated Net Income:

   (i) - (ii) =       $ [    ,    ,     ]    (i)   

the net income (or loss) of Holdings and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
conformity with GAAP:19

      $ [    ,    ,     ]    (ii)   

(a)

   the income (or loss) of any Joint Venture:       $ [    ,    ,     ]      
(b)    the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings or any of
its Subsidiaries or that Person’s assets are acquired by Holdings or any of its
Subsidiaries:       $ [    ,    ,     ]       (c)    any gains or losses
attributable to Asset Sales:       $ [    ,    ,     ]       (d)    to the
extent not included in clause (ii)(a) above, any net extraordinary gains or net
extraordinary losses:       $ [    ,    ,     ]  10.  

Consolidated Total Debt:20

         $ [    ,    ,     ] 

 

18

Excluding those taxes related to Excluded Joint Ventures.

19

Excluding extraordinary and non-recurring items, impairment charges related to
goodwill, property, plant and equipment, and any other assets, and currency
translation charges.

20

Excluding Excluded Joint Venture Indebtedness, determined on a consolidated
basis in accordance with GAAP.

 

5

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

 

11.   Consolidated Working Capital:    (i) - (ii) =       $ [    ,    ,     ]   
   (i)    Consolidated Current Assets:       $ [    ,    ,     ]       (ii)   
Consolidated Current Liabilities:       $ [    ,    ,     ]  12.  

Consolidated Working Capital Adjustment:

   (i) - (ii) =       $ [    ,    ,     ]       (i)   

Consolidated Working Capital as of the beginning of such period:

      $ [    ,    ,     ]       (ii)   

Consolidated Working Capital as of the end of such period:21

      $ [    ,    ,     ]  13.  

Fixed Charge Coverage Ratio:

   (i)/(ii) =            (i)   

Consolidated Adjusted EBITDA for the four Fiscal Quarter period then ended:22

      $ [    ,    ,     ]       (ii)   

Consolidated Fixed Charges for such four Fiscal Quarter period:

      $ [    ,    ,     ]                   Actual:        .    :1.00           
         Required:        .    :1.00   

 

21

Excluding the effects of changes in (i) Consolidated Working Capital
attributable to Excluded Joint Ventures and (ii) current deferred tax assets and
current deferred tax liabilities to the extent such changes have no cash impact

22

Excluding the following amounts, to the extent included in the calculation of
“Consolidated Adjusted EBITDA”: (i) Transaction Costs that are not capitalized
or that are written off, (ii) operating expenses, charges and losses incurred in
connection with the cessation of business activities or related to discontinued
operations, (iii) Pre-Opening Costs, (iv) FICA credits, (v) legal fees and
settlement charges related to the cessation or discontinuation of any business
operations, (vi) operating losses related to the operation of Morton’s Miami
Beach, (vii) the Company’s proportionate share of Excluded Joint Venture income
to the extent distributed in cash, (viii) any pro forma rent savings resulting
from the re-negotiation of leasehold interests in real property) and (ix)
management bonus expense incurred in the Fiscal Quarter ending January 2, 2011.

 

6

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

 

14.  

Senior Leverage Ratio:

   (i)/(ii) =       $ [    ,    ,     ]       (i)=   

(a)-(b)

         $ [    ,    ,     ]          (a)    Consolidated Total Debt (excluding
Subordinated Indebtedness and the Miami Beach Indebtedness)       $
[    ,    ,     ]          (b)   

Cash and Cash Equivalents in excess of $1,000,000:

      $ [    ,    ,     ]       (ii)   

Consolidated Adjusted EBITDA for the four Fiscal Quarter period then ended:

      $ [    ,    ,     ]                   Actual:        .    :1.00           
         Required:        .    :1.00   

15.

 

Consolidated Liquidity:

   (i) + (ii) =       $ [    ,    ,     ]       (i)   

Cash on-hand of Holdings and its Subsidiaries:23

      $ [    ,    ,     ]       (ii)   

the lesser of:

                 (a)   

the Revolving Commitments of all the Lenders in the aggregate minus the Total
Utilization of Revolving Commitments and

      $ [    ,    ,     ]          (b)    Availability:          $
[    ,    ,     ]                   Actual:    $                              
   Required:    $                

16.

 

Availability:

   (i) – (ii) =         $[    ,    ,    ]           

(i)=

  

(a) * (b)

           $[    ,    ,    ]              

(a)

   Consolidated Adjusted EBITDA for the four Fiscal Quarter period then ended   
     $[    ,    ,    ]              

(b)

   Senior Leverage Multiple            $[    ,    ,    ]         

 

23

Excluding any Restricted Cash.

 

7

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

 

  (ii)=    (c) + (d) – (e)            $[    ,    ,    ]              

(c)

   Aggregate principal balance of the Loans as of such date        
$[    ,    ,    ]              

(d)

   all other Consolidated Total Debt as of such date         $[    ,    ,    ]
             

(e)

   Cash and Cash Equivalents in excess of $1,000,000         $[    ,    ,    ]
        

 

8

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

ANNEX A-2 TO

COMPLIANCE CERTIFICATE

Supporting Documentation for the Calculation of “Consolidated Adjusted EBITDA”
and “Fixed Charges”

(See Attached.)

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

ANNEX A-3 TO

COMPLIANCE CERTIFICATE

 

Fiscal Month

   Consolidated Adjusted EBITDA  

November, 2009

   $ 1,719,746   

December, 2009

   $ 5,175,803   

January, 2010

   $ 1,703,552   

February, 2010

   $ 3,397,260   

March, 2010

   $ 1,611,546   

April, 2010

   $ 3,859,154   

May, 2010

   $ 861,912   

June, 2010

   $ 354,618   

July, 2010

   $ 772,836   

August, 2010

   $ 1,484   

September, 2010

   $ 1,770,059   

October, 2010

   $ 4,575,472   

 

EXHIBIT D-1

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

EXHIBIT E TO

CREDIT AND GUARANTY AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (the “Assignment”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name
of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as it may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, the interest in and to all of the
Assignor’s rights and obligations under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interest identified below of all of the Assignor’s outstanding
rights and obligations under the respective facilities identified below
(including, to the extent included in any such facilities, letters or credit)
(the “Assigned Interest”). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and the Credit
Agreement, without representation or warranty by the Assignor.

 

1.   

Assignor:

  

                                                                         

2.    Assignee:                                 
                                                    , an Eligible Assignee 3.   
Borrower(s):    Morton’s of Chicago, Inc. 4.    Administrative Agent:    Goldman
Sachs Bank USA, as the administrative agent under the Credit Agreement 5.   
Credit Agreement:    Credit and Guaranty Agreement, dated as of December 9, 2010
among Morton’s Restaurant Group, Inc. (“Holdings”), Morton’s of Chicago, Inc.,
certain Subsidiaries of Holdings, as Guarantors, the Lenders party thereto from
time to time, and Goldman Sachs Bank USA, as Administrative Agent, Collateral
Agent and Lead Arranger.

 

EXHIBIT E-1

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

 

6. Assigned Interest:

 

Facility Assigned

   Aggregate Amount of
Commitment/Loans
for all Lenders      Amount of
Commitment/Loans
Assigned      Percentage Assigned
of
Commitment/Loans
[******]               [*******]    $                                $
                                                          %  $
                        $                                $
                                
                        
% 

Effective Date:                     , 20     [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

7. Notice and Wire Instructions:

 

  [NAME OF ASSIGNOR]     [NAME OF ASSIGNEE]   Notices:     Notices:  

 

   

 

 

 

   

 

 

 

   

 

 

Attention:

Telecopier:

   

Attention:

Telecopier:

  with a copy to:     with a copy to:  

 

   

 

 

 

   

 

 

 

   

 

 

Attention:

Telecopier:

   

Attention:

Telecopier:

  Wire Instructions:     Wire Instructions:

 

[******] Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.

 

EXHIBIT E-2

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

 

[*******] Fill in the appropriate terminology for the types of facilities under
the Credit Agreement that are being assigned under this Assignment (e.g.
“Revolving Loan Commitment”, “Term Loan Commitment”, etc.)

 

EXHIBIT E-3

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

The terms set forth in this Assignment are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

Name: Title: ASSIGNEE [NAME OF ASSIGNEE] By:  

 

Name: Title:

Consented to and Accepted:

 

GOLDMAN SACHS BANK USA, as
Administrative Agent

By:  

 

Name: Title: [MORTON’S OF CHICAGO, INC.]1 By:  

 

Name: Title:

 

1

Signature block for Company to be deleted if consent of Company is not required
pursuant to Section 10.6(c) of the Credit Agreement.

 

EXHIBIT E-4

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

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT

AND ASSUMPTION AGREEMENT

 

1. Representations and Warranties.

 

  1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby;
and (b) assumes no responsibility with respect to (i) any statements, warranties
or representations made in or in connection with any Credit Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document delivered pursuant
thereto, other than this Assignment (herein collectively the “Credit
Documents”), or any collateral thereunder, (iii) the financial condition of the
Company, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Credit Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Credit Document.

 

  1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and to consummate the transactions contemplated hereby and to
become a Lender under the Credit Agreement, (ii) it meets all requirements of an
Eligible Assignee under the Credit Agreement, (iii) from and after the Effective
Date, it shall be bound by the provisions of the Credit Agreement and, to the
extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and to purchase the Assigned
Interest on the basis of which it has made such analysis and decision, and
(v) if it is a Non US Lender, attached to the Assignment is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at that time, continue to make its own credit decisions in taking or
not taking action under the Credit Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Documents are required to be performed by it as a Lender.

 

2. Payments. All payments with respect to the Assigned Interests shall be made
on the Effective Date as follows:

 

  2.1

With respect to Assigned Interests for Term Loans, unless notice to the contrary
is delivered to the Lender from the Administrative Agent, payment to the
Assignor by the Assignee in respect of the Assigned Interest shall include such
compensation to the Assignor as may be agreed upon by the Assignor and the

 

ANNEX 1-1

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

 

Assignee with respect to all unpaid interest which has accrued on the Assigned
Interest to but excluding the Effective Date. On and after the applicable
Effective Date, the Assignee shall be entitled to receive all interest paid or
payable with respect to the Assigned Interest, whether such interest accrued
before or after the Effective Date.

 

  2.2 With respect to Assigned Interests for Revolving Loans, from and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.

 

3. General Provisions. This Assignment shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns. This
Assignment may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature
page of this Assignment by telecopy shall be effective as delivery of a manually
executed counterpart of this Assignment. This Assignment shall be governed by,
and construed in accordance with, the internal laws of the State of New York
without regard to conflict of laws principles thereof (other than Sections
5-1401 and 5-1402 of the New York General Obligations Law).

 

Annex 1-2

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

EXHIBIT F TO

CREDIT AND GUARANTY AGREEMENT

CERTIFICATE REGARDING NON BANK STATUS

Reference is made to that certain Credit and Guaranty Agreement, dated as of
December 9, 2010 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among MORTON’S RESTAURANT GROUP, INC., a Delaware corporation
(“Holdings”), MORTON’S OF CHICAGO, INC., an Illinois corporation (“Company”),
CERTAIN SUBSIDIARIES OF HOLDINGS, as Guarantors, the Lenders party thereto from
time to time, and GOLDMAN SACHS BANK USA, as Administrative Agent, Collateral
Agent and Lead Arranger. Pursuant to Section 2.19(c) of the Credit Agreement,
the undersigned hereby certifies that it is not a “bank” or other Person
described in Section 881(c)(3) of the Internal Revenue Code of 1986, as amended.

 

[NAME OF LENDER] By:  

 

Name: Title:

 

Exhibit F-1

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

EXHIBIT G-1 TO

CREDIT AND GUARANTY AGREEMENT

CLOSING DATE CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFY AS FOLLOWS AS OF DECEMBER 9, 2010

1. I am the Chief Financial Officer of MORTON’S RESTAURANT GROUP, INC., a
Delaware corporation, (“Holdings”) and MORTON’S OF CHICAGO, INC., an Illinois
corporation, (“Company”). I am certifying to the matters set forth below in my
capacity as Chief Financial Officer of Holdings and the Company and not in my
individual capacity (and without any personal liability).

2. I have reviewed the terms of the Credit and Guaranty Agreement, dated as of
December 9, 2010 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among Holdings, Company, CERTAIN SUBSIDIARIES OF HOLDINGS, as Guarantors,
the Lenders party thereto from time to time, and GOLDMAN SACHS BANK USA, as
Administrative Agent, Collateral Agent and Lead Arranger.

3. Company requests that Lenders make the following Loans to Company on
December 9, 2010 (the “Closing Date”):

 

(a)

   Revolving Loans:    $ [    ,    ,     ] 

(b)

   Term Loan:    $ [    ,    ,     ] 

4. I have reviewed the terms of Section 3 of the Credit Agreement and the
definitions and provisions contained in such Credit Agreement relating thereto,
and in my opinion I have made, or have caused to be made under my supervision,
such examination or investigation as is necessary to enable me to express an
informed opinion as to the matters referred to herein.

5. Based upon my review and examination described in paragraph 4 above, I
certify, on behalf of Holdings and Company, that:

(i) as of the Closing Date and immediately after giving effect to the making of
the Loans requested on the Closing Date, the representations and warranties
contained in each of the Credit Documents are true and correct in all respects,
except to the extent such representations and warranties specifically relate to
an earlier date (in which case such representations and warranties were true and
correct in all respects on and as of such earlier date);

(ii) as of the Closing Date, (a) no injunction or other restraining order has
been issued, and (b) no hearing to cause an injunction or other restraining
order to be issued is pending or noticed, in either case, with respect to any
action, suit or proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
borrowing contemplated by the Credit Agreement; and

(iii) as of the Closing Date, no event has occurred and is continuing or would
result from the consummation of the borrowing contemplated by the Credit
Agreement that would constitute an Event of Default or a Default.

 

Exhibit G-1-1

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

6. The Credit Parties have delivered to Administrative Agent, on or prior to the
Closing Date, true, complete and correct copies of (a) the Historical Financial
Statements, (b) a consolidated balance sheet of Holdings and its Subsidiaries as
at the end of the month most recently ended prior to the Closing Date, giving
pro forma effect to the consummation of the transactions contemplated by the
Credit Documents to occur on or prior to the Closing Date, and (c) the
Projections.

[Remainder of page intentionally left blank.]

 

Exhibit G-1-2

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

The foregoing certifications are made and delivered as of the date first written
above.

 

MORTON’S RESTAURANT GROUP, INC. MORTON’S OF CHICAGO, INC. By:  

 

Name: Title: Chief Financial Officer

 

Exhibit G-1-3

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

EXHIBIT G-2 TO

CREDIT AND GUARANTY AGREEMENT

SOLVENCY CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS AS OF DECEMBER 9, 2010

1. I am the Chief Financial Officer of MORTON’S RESTAURANT GROUP, INC., a
Delaware corporation (“Holdings”), and MORTON’S OF CHICAGO, INC., an Illinois
corporation (“Company”). The following certifications are made in my capacity as
Chief Financial Officer of Holdings and the Company and not in my individual
capacity (and without any personal liability).

2. Reference is made to that certain Credit and Guaranty Agreement, dated as of
December 9, 2010 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among Holdings, Company, CERTAIN SUBSIDIARIES OF HOLDINGS, as Guarantors,
the Lenders party thereto from time to time, and GOLDMAN SACHS BANK USA, as
Administrative Agent, Collateral Agent and Lead Arranger.

3. I have reviewed the terms of Sections 3.1(o) and 4.22 of the Credit Agreement
and the definitions and provisions contained in the Credit Agreement relating
thereto, and, in my opinion, have made, or have caused to be made under my
supervision, such examination or investigation as is necessary to enable me to
express an informed opinion as to the matters referred to herein.

4. Based upon my review and examination described in paragraph 3 above, I
certify that as of the date hereof, after giving effect to the making of the
Loans requested on the Closing Date and the consummation of the other
transactions contemplated by the Credit Documents to occur on or prior to the
Closing Date, the Credit Parties taken as a whole are Solvent.

[Signature Page Follows]

 

Exhibit G-2-1

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

The foregoing certifications are made and delivered as of the date first written
above.

 

MORTON’S RESTAURANT GROUP, INC.

MORTON’S OF CHICAGO, INC.

By:  

 

Name: Title: Chief Financial Officer

 

Exhibit G-1-2

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

EXHIBIT H TO

CREDIT AND GUARANTY AGREEMENT

COUNTERPART AGREEMENT

This COUNTERPART AGREEMENT, dated [mm/dd/yy] (this “Counterpart Agreement”) is
delivered pursuant to that certain Credit and Guaranty Agreement, dated as of
December 9, 2010 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among MORTON’S RESTAURANT GROUP, INC., a Delaware corporation
(“Holdings”), MORTON’S OF CHICAGO, INC., an Illinois corporation (“Company”),
CERTAIN SUBSIDIARIES OF HOLDINGS, as Guarantors, the Lenders party thereto from
time to time, and GOLDMAN SACHS BANK USA, as Administrative Agent, Collateral
Agent and Lead Arranger.

Section 1. Pursuant to Section 5.10 of the Credit Agreement, the undersigned
hereby:

(a) agrees that this Counterpart Agreement may be attached to the Credit
Agreement and that by the execution and delivery hereof, the undersigned becomes
a Guarantor under the Credit Agreement and agrees to be bound by all of the
terms thereof;

(b) represents and warrants that each of the representations and warranties set
forth in the Credit Agreement and each other Credit Document and applicable to
the undersigned is true and correct both before and after giving effect to this
Counterpart Agreement, except to the extent that any such representation and
warranty relates solely to any earlier date, in which case such representation
and warranty is true and correct as of such earlier date;

(c) agrees to irrevocably and unconditionally guaranty the due and punctual
payment in full of all Obligations when the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a))
and in accordance with Section 7 of the Credit Agreement; and

(d) the undersigned hereby (i) agrees that this counterpart may be attached to
the Pledge and Security Agreement, (ii) agrees that the undersigned will comply
with all the terms and conditions of the Pledge and Security Agreement as if it
were an original signatory thereto, (iii) grants to the Collateral Agent, for
the benefit of the Secured Parties (as such term is defined in the Pledge and
Security Agreement) a security interest in all of the undersigned’s right, title
and interest in and to all “Collateral” (as such term is defined in the Pledge
and Security Agreement, and subject to Section 2.2 thereof) of the undersigned,
in each case whether now or hereafter existing or in which the undersigned now
has or hereafter acquires an interest and wherever the same may be located and
(iv) delivers to Collateral Agent supplements to all schedules attached to the
Pledge and Security Agreement. All such Collateral shall be deemed to be part of
the “Collateral” and hereafter subject to each of the terms and conditions of
the Pledge and Security Agreement.

Section 2. The undersigned agrees from time to time, upon request of
Administrative Agent, to take such additional actions and to execute and deliver
such additional documents and instruments as Administrative Agent may reasonably
request to effect the transactions contemplated by, and to carry out the intent
of, this Counterpart Agreement. Neither this Counterpart Agreement nor any term
hereof may be changed, waived, discharged or terminated, except by an instrument
in writing signed by the party (including, if applicable, any party required to
evidence its consent to or acceptance of this Counterpart Agreement) against
whom enforcement of such change, waiver, discharge or termination is sought. Any

 

Exhibit H-1

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

notice or other communication herein required or permitted to be given shall be
given in accordance with Section 10.1 of the Credit Agreement, and all for
purposes thereof, the notice address of the undersigned shall be the address as
set forth on the signature page hereof. In case any provision in or obligation
under this Counterpart Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

THIS COUNTERPART AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

Exhibit H-2

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

IN WITNESS WHEREOF, the undersigned has caused this Counterpart Agreement to be
duly executed and delivered by its duly authorized officer as of the date above
first written.

 

[NAME OF SUBSIDIARY] By:  

 

  Name:   Title:

 

Address for Notices:

 

 

 

Attention: Telecopier with a copy to:

 

 

 

Attention: Telecopier ACKNOWLEDGED AND ACCEPTED, as of the date above first
written:

 

GOLDMAN SACHS BANK USA, as Administrative Agent and Collateral Agent By:  

 

  Name:   Title:

 

Exhibit H-3

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

EXHIBIT I TO

CREDIT AND GUARANTY AGREEMENT

PLEDGE AND SECURITY AGREEMENT

[ATTACHED]

 

Exhibit I-1

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

EXHIBIT J TO

CREDIT AND GUARANTY AGREEMENT

FORM OF MORTGAGE

[ATTACHED]