Exhibit 10.1
EXECUTION VERSION
FIRST LIEN CREDIT AND GUARANTY AGREEMENT
dated as of March 8, 2007
among
MOVIE GALLERY, INC.,
CERTAIN SUBSIDIARIES OF
MOVIE GALLERY, INC.
as Guarantors,
VARIOUS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Lead Arranger and Syndication Agent,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Administrative Agent
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Collateral Agent and Documentation Agent
 
$725,000,000 Senior Secured First Priority 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.
    34  
SECTION 2. LOANS AND LETTERS OF CREDIT
    35  
2.1. Term Loans
    35  
2.2. Revolving Loans
    35  
2.3. Swing Line Loans
    36  
2.4. Issuance of Letters of Credit and Purchase of Participations Therein
    39  
2.5. Issuance of Synthetic Letters of Credit and Purchase of Participations
Therein
    43  
2.6. Pro Rata Shares; Availability of Funds
    52  
2.7. Use of Proceeds
    53  
2.8. Evidence of Debt; Register; Lenders’ Books and Records; Notes
    53  
2.9. Interest on Loans
    54  
2.10. Conversion/Continuation
    57  
2.11. Default Interest
    57  
2.12. Fees
    58  
2.13. Scheduled Payments/Commitment Reductions
    59  
2.14. Voluntary Prepayments/Commitment Reductions
    59  
2.15. Mandatory Prepayments
    61  
2.16. Application of Prepayments
    63  
2.17. General Provisions Regarding Payments
    65  
2.18. Ratable Sharing
    66  
2.19. Making or Maintaining Eurodollar Rate Loans
    67  
2.20. Increased Costs; Capital Adequacy
    68  
2.21. Taxes; Withholding, etc.
    70  
2.22. Obligation to Mitigate
    72  
2.23. Defaulting Lenders
    72  
2.24. Removal or Replacement of a Lender
    73  
SECTION 3. CONDITIONS PRECEDENT
    74  
3.1. Closing Date
    74  
3.2. Conditions to Each Credit Extension
    79  
SECTION 4. REPRESENTATIONS AND WARRANTIES
    80  
4.1. Organization; Requisite Power and Authority; Qualification
    81  
4.2. Equity Interests and Ownership
    81  
4.3. Due Authorization
    81  
4.4. No Conflict
    81  
4.5. Governmental Consents
    82  
4.6. Binding Obligation
    82  
4.7. Historical Financial Statements
    82  
4.8. Projections
    82  
4.9. No Material Adverse Change
    82  
4.10. No Restricted Junior Payments
    82  

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              Page  
4.11. Adverse Proceedings, etc.
    82  
4.12. Payment of Taxes
    83  
4.13. Properties
    83  
4.14. Environmental Matters
    84  
4.15. No Defaults
    84  
4.16. Material Contracts
    84  
4.17. Governmental Regulation
    84  
4.18. Margin Stock
    84  
4.19. Employee Matters
    85  
4.20. Employee Benefit Plans
    85  
4.21. Certain Fees
    86  
4.22. Solvency
    86  
4.23. Compliance with Statutes, etc.
    86  
4.24. Disclosure
    86  
4.25. Patriot Act
    87  
SECTION 5. AFFIRMATIVE COVENANTS
    87  
5.1. Financial Statements and Other Reports
    87  
5.2. Existence
    91  
5.3. Payment of Taxes and Claims
    92  
5.4. Maintenance of Properties
    92  
5.5. Insurance
    92  
5.6. Books and Records; Inspections
    93  
5.7. Lenders Meetings
    93  
5.8. Compliance with Laws
    93  
5.9. Environmental
    93  
5.10. Subsidiaries
    94  
5.11. Additional Material Real Estate Assets
    95  
5.12. Interest Rate Protection
    95  
5.13. Further Assurances
    96  
5.14. Miscellaneous Covenants
    96  
SECTION 6. NEGATIVE COVENANTS
    96  
6.1. Indebtedness
    96  
6.2. Liens
    99  
6.3. No Further Negative Pledges
    101  
6.4. Restricted Junior Payments
    101  
6.5. Restrictions on Subsidiary Distributions
    102  
6.6. Investments
    102  
6.7. Financial Covenants
    103  
6.8. Fundamental Changes; Disposition of Assets; Acquisitions
    106  
6.9. Disposal of Subsidiary Interests
    108  
6.10. Sales and Lease-Backs
    108  
6.11. Transactions with Shareholders and Affiliates
    108  
6.12. Conduct of Business
    109  
6.13. Amendments or Waivers of Organizational Documents
    109  
6.14. Amendments or Waivers with respect to Certain Indebtedness
    109  

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              Page  
6.15. Limitation on Voluntary Payments and Amendments or Waivers of the Second
Lien Credit Agreement
    109  
6.16. Fiscal Year
    110  
SECTION 7. GUARANTY
    110  
7.1. Guaranty of the Obligations
    110  
7.2. Contribution by Guarantors
    110  
7.3. Payment by Guarantors
    111  
7.4. Liability of Guarantors Absolute
    111  
7.5. Waivers by Guarantors
    113  
7.6. Guarantors’ Rights of Subrogation, Contribution, etc.
    114  
7.7. Subordination of Other Obligations
    114  
7.8. Continuing Guaranty
    114  
7.9. Authority of Guarantors or Borrower
    115  
7.10. Financial Condition of Borrower
    115  
7.11. Bankruptcy, etc.
    115  
7.12. Discharge of Guaranty Upon Sale of Guarantor
    116  
SECTION 8. EVENTS OF DEFAULT
    116  
8.1. Events of Default
    116  
SECTION 9. AGENTS
    119  
9.1. Appointment of Agents
    119  
9.2. Powers and Duties
    119  
9.3. General Immunity
    120  
9.4. Agents Entitled to Act as Lender
    121  
9.5. Lenders’ Representations, Warranties and Acknowledgment
    121  
9.6. Right to Indemnity
    122  
9.7. Successor Administrative Agent, Collateral Agent and Swing Line Lender
    122  
9.8. Collateral Documents and Guaranty
    123  
9.9. Intercreditor Agreement
    124  
SECTION 10. MISCELLANEOUS
    124  
10.1. Notices
    124  
10.2. Expenses
    125  
10.3. Indemnity
    126  
10.4. Set-Off
    127  
10.5. Amendments and Waivers
    127  
10.6. Successors and Assigns; Participations
    130  
10.7. Independence of Covenants
    134  
10.8. Survival of Representations, Warranties and Agreements
    134  
10.9. No Waiver; Remedies Cumulative
    134  
10.10. Marshalling; Payments Set Aside
    135  
10.11. Severability
    135  
10.12. Obligations Several; Independent Nature of Lenders’ Rights
    135  
10.13. Headings
    135  
10.14. APPLICABLE LAW
    135  
10.15. CONSENT TO JURISDICTION
    136  
10.16. WAIVER OF JURY TRIAL
    136  
10.17. Confidentiality
    137  

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              Page  
10.18. Usury Savings Clause
    137  
10.19. Counterparts
    138  
10.20. Effectiveness
    138  
10.21. Patriot Act
    138  
10.22. Electronic Execution of Assignments
    138  
10.23. Post-Closing Actions
    138  

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          APPENDICES:   A-1  
Term Loan Commitments
    A-2  
Revolving Commitments
    A-3  
Synthetic LC Commitments
    B  
Notice Addresses
       
 
SCHEDULES:   1  
Fiscal Years
    2  
Fourth Quarter 2006 EBITDA Methodology
    3  
Existing Letters of Credit
    3.1(g)(i)  
Closing Date Mortgaged Properties
    3.2  
Sale-Leaseback Properties
    4.1  
Jurisdictions of Organization and Qualification
    4.2  
Equity Interests and Ownership
    4.7  
Lease Accounting Adjustments
    4.13  
Real Estate Assets
    4.16  
Material Contracts
    6.1  
Certain Indebtedness
    6.2  
Certain Liens
    6.5  
Certain Restrictions on Subsidiary Distributions
    6.6  
Certain Investments
    6.11  
Certain Affiliate Transactions
    10.23  
Post-Closing Actions
       
 
EXHIBITS:   A-1  
Funding Notice
    A-2  
Conversion/Continuation Notice
    A-3  
Issuance Notice
    B-1  
Term Loan Note
    B-2  
Revolving Loan Note
    B-3  
Swing Line Note
    C  
Compliance Certificate
    D  
Opinions of Counsel
    E  
Assignment Agreement
    F  
Certificate Re Non-bank Status
    G-1  
Closing Date Certificate
    G-2  
Solvency Certificate
    H  
Counterpart Agreement
    I  
Pledge and Security Agreement
    J  
Mortgage
    K  
Landlord Waiver and Consent Agreement
    L  
Intercompany Note
    M  
Senior Notes Refinancing Third Lien Intercreditor Terms
    N  
Loan-to-Value Ratio Certificate
    O  
Collateral Reporting

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FIRST LIEN CREDIT AND GUARANTY AGREEMENT
     This FIRST LIEN CREDIT AND GUARANTY AGREEMENT, dated as of March 8, 2007,
is entered into by and among MOVIE GALLERY, INC., a Delaware corporation
(“Borrower”), CERTAIN SUBSIDIARIES OF BORROWER, as Guarantors, the Lenders party
hereto from time to time, GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”), as
Syndication Agent (in such capacity, “Syndication Agent”) and as Administrative
Agent (together with its permitted successors in such capacity, “Administrative
Agent”), and WACHOVIA BANK, NATIONAL ASSOCIATION (“Wachovia”) as Collateral
Agent (together with its permitted successors in such capacity, “Collateral
Agent”) and as Documentation Agent (in such capacity, “Documentation Agent”).
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
Borrower, in an aggregate amount not to exceed $725,000,000, consisting of
$600,000,000 aggregate principal amount of Term Loans, $100,000,000 aggregate
principal amount of Revolving Commitments and $25,000,000 aggregate principal
amount of Synthetic LC Commitments, to be used to (a) in the case of the Term
Loans, together with the proceeds of the Second Lien Term Loans, (i) to fund the
refinancing of the Existing Indebtedness and (ii) to pay certain other fees and
expenses relating to the credit facilities established hereunder and (b) in the
case of Revolving Loans, Synthetic Letters of Credit and Letters of Credit, for
general corporate purposes of Borrower and its Subsidiaries;
     WHEREAS, Borrower 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 Equity
Interests of each of its Domestic Subsidiaries and 65% of all the Equity
Interests of each of its Foreign Subsidiaries; and
     WHEREAS, Guarantors have agreed to guarantee the obligations of Borrower
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
Equity Interests of each of their respective Domestic Subsidiaries (including
Borrower) and 65% of all the Equity Interests of each of their respective
Foreign Subsidiaries.
     NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, 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:

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     “Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date
with respect to an Interest Period for a Eurodollar 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 Telerate Screen which displays an average
British Bankers Association Interest Settlement Rate (such page currently being
page number 3740 or 3750, as applicable) 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 JPMorgan Chase Bank 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 Administrative
Agent, in its capacity as a Lender, for which the Adjusted Eurodollar 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, hearing (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Borrower or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Borrower or any of its Subsidiaries, threatened against or
adversely affecting Borrower or any of its Subsidiaries or any property of
Borrower or any of its Subsidiaries.
     “Affected Lender” as defined in Section 2.17(b).
     “Affected Loans” as defined in Section 2.17(b).
     “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 5% 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.

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     “Agent” means each of Administrative Agent, Syndication Agent, Collateral
Agent and Documentation Agent.
     “Agent Affiliates” as defined in Section 10.1(b).
     “Aggregate Amounts Due” as defined in Section 2.18.
     “Aggregate Payments” as defined in Section 7.2.
     “Agreement” means this First Lien Credit and Guaranty Agreement, dated as
of March 8, 2007, as it may be amended, supplemented or otherwise modified from
time to time.
     “Applicable Loan to Value Ratio” means a Loan to Value Ratio of 3.00:1.00
provided, that, (a) if there is an Event of Default as a result of the failure
of Borrower to comply with any of the covenants set forth in Section 6.7 hereof
as in effect on the date hereof (or as amended with the written consent of the
Lenders having or holding more than 50% of the aggregate Revolving Exposure of
all Lenders) (unless such Event of Default is waived or is the basis for any
amendment or modification to such covenants, with the written consent of the
Lenders having or holding more than 50% of the aggregate Revolving Exposure of
all Lenders), then on and after the date of such Event of Default, the
Applicable Loan to Value Ratio means a Loan to Value Ratio of 3.50:1.00 and
(b) if at any time during which the Applicable Loan to Value Ratio is 3.50:1.00,
upon the sooner to occur of (x) Borrower being in compliance with the covenants
set forth in Section 6.7 as in effect on the date hereof (or as amended with the
written consent of the Lenders having or holding more than 50% of the aggregate
Revolving Exposure of all Lenders) on or after the date of the receipt by
Collateral Agent of the financial statements in accordance with Section 5.1(a)
or Section 5.1(b) for the applicable period, (y) Borrower demonstrating
compliance with the covenants set forth in Section 6.7 as in effect on the date
hereof (or as amended with the written consent of the Lenders having or holding
more than 50% of the aggregate Revolving Exposure of all Lenders) as calculated
in month-end financial statements delivered to Collateral Agent prepared in
accordance with the financial statements delivered pursuant to Section 5.1(a) or
(z) the date Lenders having or holding Revolving Exposure and representing more
than 50% of the aggregate Revolving Exposure of all Lenders consent to the
waiver of such Event of Default as described in clause (a) of this definition
above, then, in each case, the Applicable Loan to Value Ratio shall mean
3.00:1.00, until such time as there may be any other Event of Default as
described in clause (a) of this definition above (unless such Event of Default
is waived or is the basis for any amendment or modification to such covenants,
with the written consent of the Lenders having or holding more than 50% of the
aggregate Revolving Exposure of all Lenders).
     “Applicable Margin’’ and “Applicable Revolving Commitment Fee Percentage’’
mean (i) with respect to Revolving Loans that are Eurodollar Rate Loans and the
Applicable Revolving Commitment Fee Percentage, (a) from the Closing Date until
the date of delivery of the Compliance Certificate and the financial statements
for the period ending the second full Fiscal Quarter after the Closing Date, a
percentage, per annum, determined by reference to the following table as if the
Secured Leverage Ratio then in effect were 2.50:1.00; and (b) thereafter, a
percentage, per annum, determined by reference to the Secured Leverage Ratio in
effect from time to time as set forth below:

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                              Applicable Revolving       Applicable Margin for  
  Commitment Fee   Secured Leverage Ratio   Revolving Loans     Percentage  
³ 2.50:1.00
  2.50%   0.50%
< 2.50:1.00
  2.25%   0.375%

     and (ii) with respect to Swing Line Loans and Revolving Loans that are Base
Rate Loans, an amount equal to (a) the Applicable Margin for Eurodollar Rate
Loans as set forth in clause (i)(a) or (i)(b) above, as applicable, minus
(b) 1.00% per annum. No change in the Applicable Margin or the Applicable
Revolving Commitment Fee Percentage shall be effective until three Business Days
after the date on which Administrative Agent shall have received the applicable
financial statements and a Compliance Certificate pursuant to Section 5.1(c)
calculating the Secured Leverage Ratio. At any time Borrower has not submitted
to Administrative Agent the applicable information as and when required under
Section 5.1(c), the Applicable Margin and the Applicable Revolving Commitment
Fee Percentage shall be determined as if the Secured Leverage Ratio were in
excess of 2.50:1.00. Within one Business Day of receipt of the applicable
information under Section 5.1(c), Administrative Agent shall give each Lender
telefacsimile or telephonic notice (confirmed in writing) of the Applicable
Margin and the Applicable Revolving Commitment Fee Percentage in effect from
such date.
     In the event that any financial statement or Compliance Certificate
delivered pursuant to Section 5.1 or otherwise is shown to be inaccurate
(regardless of whether this Agreement or the Commitments are in effect when such
inaccuracy is discovered), and such inaccuracy, if corrected, would have led to
the application of a higher Applicable Margin for any period (an “Applicable
Period”) then the Applicable Margin applied for such Applicable Period, then
(i) the Borrower shall immediately deliver to Administrative Agent and
Collateral Agent a correct Compliance Certificate for such Applicable Period,
(ii) the Applicable Margin shall be adjusted to reflect the correct Secured
Leverage Ratio, and (iii) Borrower shall immediately pay to Collateral Agent the
accrued additional interest owing as a result of such increased Applicable
Margin for such Applicable Period, which payment shall be promptly applied by
the Agent in accordance with Section 7.2 of the Pledge and Security Agreement.
This Section shall not limit the rights of Agents and Lenders with respect to
Section 2.11 or Section 8.1.
     “Applicable Reserve Requirement” means, at any time, for any Eurodollar
Rate Loan, the maximum rate, expressed as a decimal, at which reserves
(including 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 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 Eurodollar
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 Eurodollar Rate
Loans. A Eurodollar 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

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Eurodollar Rate Loans shall be adjusted automatically on and as of the effective
date of any change in the Applicable Reserve Requirement.
     “Approved Electronic Communications” means any notice, demand,
communication, information, document or other material that any Credit Party
provides to Administrative Agent pursuant to any Credit Document or the
transactions contemplated therein which is distributed to the Agents or to the
lenders by means of electronic communications pursuant to Section 10.1(b).
     “Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor),
sale and leaseback, assignment, conveyance, exclusive license (as licensor or
sublicensor), transfer or other disposition to, or any exchange of property
with, any Person (other than Borrower or any Guarantor Subsidiary), in one
transaction or a series of transactions, of all or any part of Borrower’s or any
of its Subsidiaries’ businesses, assets or properties of any kind, whether real,
personal, or mixed and whether tangible or intangible, whether now owned or
hereafter acquired, leased or licensed, including the Equity Interests of any of
Borrower’s Subsidiaries, other than (i) inventory (or other assets) sold, leased
or licensed out in the ordinary course of business (excluding any such sales,
leases or licenses out by operations or divisions discontinued or to be
discontinued), and (ii) sales, leases or licenses out of other assets for
aggregate consideration of less than $2,000,000 in the aggregate during any
Fiscal Year.
     “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.
     “Assignment Effective Date” as defined in Section 10.6(b).
     “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.
     “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.
     “Benchmark LIBOR Rate” as defined in Section 2.5(m).
     “Beneficiary” means each Agent, Issuing Bank, Synthetic LC Issuing Bank,
Lender and Lender Counterparty.

5

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     “Board of Governors” means the Board of Governors of the United States
Federal Reserve System, or any successor thereto.
     “Boards Transaction” means the acquisition by the Borrower or a Subsidiary
thereof of video and game stores from Boards, Inc. pursuant to, and on the terms
and conditions of, that certain License Agreement, dated January 25, 2001, by
and between Boards, Inc. and Hollywood Entertainment Corporation, a wholly-owned
Subsidiary of the Borrower.
     “Borrower” as defined in the preamble hereto.
     “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 is a day on
which banking institutions located in 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 Eurodollar
Rate or any Eurodollar 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.
     “Capital Lease” means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.
     “Cash” means money, currency or a credit balance in any demand or Deposit
Account.
     “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 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) 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) 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 and (vi) solely in respect of the cash management activities of
Subsidiaries of the Borrower organized under the laws of Canada or any province
or territory thereof, equivalents to the investments described in clause (i)
above to the extent guaranteed by the full faith and credit of the government of
Canada and equivalents of investments described in clauses (iii) and (iv)

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above issued, accepted or offered by the local office of any commercial bank
organized under the laws of Canada, or any province or territory thereof of such
Canadian Subsidiary, which bank has combined capital and surplus of not less
than $1,000,000,000.
     “Certificate re Non-Bank Status” means a certificate substantially in the
form of Exhibit F.
     “Change of Control” means, at any time, (i) any Person or “group” (within
the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) other than a
Permitted Holder (a) shall have acquired beneficial ownership of 35% or more on
a fully diluted basis of the voting and/or economic interest in the Equity
Interests of Borrower (provided, that if such percentage is exceeded as a result
of an exchange of the Borrower’s Equity Interests for Indebtedness, then this
subclause (i)(a) shall not be the basis of an Change of Control unless such
Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act) other than a Permitted Holder shall have beneficial ownership of
50% or more on a fully diluted basis of the voting and/or economic interest in
the Equity Interests of Borrower outstanding after giving effect to such
exchange of the Borrower’s Equity Interests for Indebtedness) or (b) shall have
obtained the power (whether or not exercised) to elect a majority of the members
of the board of directors (or similar governing body) of Borrower; (ii) the
majority of the seats (other than vacant seats) on the board of directors (or
similar governing body) of Borrower cease to be occupied by Persons who either
(a) were members of the board of directors of Borrower on the Closing Date or
(b) were nominated for election by the board of directors of Borrower, a
majority of whom were directors on the Closing Date or whose election or
nomination for election was previously approved by a majority of such directors;
or (iii) any “change of control” or similar event under the Senior Notes
Indenture.
     “Class” means with respect to Lenders, each of the following classes of
Lenders: (i) Lenders having Term Loan Exposure, (ii) Lenders having Revolving
Exposure and (iii) Lenders having Synthetic LC Deposits.
     “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 Mortgaged Property” as defined in Section 3.1(g).
     “Collateral” means, collectively, all of the real, personal and mixed
property (including Equity Interests) 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, the Intellectual Property Security Agreements, the Landlord Personal
Property Collateral Access Agreements, if any, and all other instruments,
documents and agreements delivered by any Credit Party pursuant to this
Agreement or any of the other Credit Documents

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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.
     “Collateral Questionnaire” means a certificate in form satisfactory to
Collateral Agent that provides information with respect to the personal or mixed
property of each Credit Party.
     “Commitment” means any Revolving Commitment, Synthetic LC Commitment or
Term Loan Commitment.
     “Compliance Certificate” means a Compliance Certificate substantially in
the form of Exhibit C.
     “Consolidated Adjusted EBITDA” means, for any period, an amount determined
for Borrower and its Subsidiaries on a consolidated basis equal to
(x) Consolidated Net Income, plus, to the extent reducing Consolidated Net
Income, the sum, without duplication, of amounts for (a) consolidated interest
expense (determined in accordance with GAAP), (b) provisions for taxes based on
income, (c) total depreciation expense, (d) total amortization expense
(excluding Rental Items amortization, except for one time and incremental
charges resulting from changes in accounting principals), (e) losses from Hedge
Agreements, (f) losses from discontinued operations, (g) losses from changes in
accounting principles, (h) fees and costs associated with the early
extinguishment of debt, (i) fees and other expenses made or incurred in
connection with the transactions contemplated hereby that are paid or accounted
for (without duplication) within 180 days of the Closing Date, (j) reasonable
fees or expenses relating to any issuance of Equity Interests, permitted
Investments, Permitted Acquisitions or Indebtedness, whether or not such
transaction is consummated, to the extent deducted in computing Consolidated Net
Income, and (k) other non-Cash charges reducing Consolidated Net Income
(excluding any such non-Cash charge to the extent that it represents an accrual
or reserve for potential Cash charge in any future period or amortization of a
prepaid Cash charge that was paid in a prior period), minus (y) to the extent
increasing Consolidated Net Income, the sum, without duplication, of amounts for
(a) gains from Hedge Agreements, (b) income from discontinued operations,
(c) income from changes in accounting principals and (d) other non-Cash gains
increasing Consolidated Net Income for such period (excluding any such non-Cash
gain to the extent it represents the reversal of an accrual or reserve for
potential Cash gain in any prior period). For all purposes of this Agreement,
Consolidated Adjusted EBITDA shall equal $105,900,000 for the first Fiscal
Quarter of 2006; $48,200,000 for the second Fiscal Quarter of 2006; $37,500,000
for the third Fiscal Quarter of 2006; and, for the fourth Fiscal Quarter of
2006, Consolidated Adjusted EBITDA shall be calculated using the actual results
of operations but calculated using the same methodology as employed when
determining “Bank EBITDA” as used in the February 2007 Presentation to Lenders
prepared by the Borrower as set forth on Schedule 2 hereto; provided that in the
event any fact related to a component of Consolidated Adjusted EBITDA used to
calculate the foregoing amounts changes, then the foregoing amounts shall be
recalculated to give effect to such changes using the same methodology as
employed when determining “Bank EBITDA” as used in the February 2007
Presentation to Lenders prepared by the Borrower as set forth on Schedule 2
hereto.

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     “Consolidated Capital Expenditures” means, for any period, the aggregate of
all expenditures of Borrower 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 similar items reflected in the
consolidated statement of cash flows of Borrower and its Subsidiaries (but shall
in any event exclude (i) the purchase or acquisition of assets pursuant to a
Permitted Acquisition and (ii) the Boards Transaction).
     “Consolidated Current Assets” means, as at any date of determination, the
total assets of Borrower and its Subsidiaries on a consolidated basis that may
properly be classified as current assets in conformity with GAAP, excluding Cash
and Cash Equivalents.
     “Consolidated Current Liabilities” means, as at any date of determination,
the total liabilities of Borrower 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) equal to: (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Adjusted EBITDA, (b) the Consolidated Working Capital
Adjustment, (c) the amount by which amortization of Rental Items exceeds cash
purchases of Rental Items and (d) extraordinary and non-recurring gains of the
type described in clause (e)(A) and (e)(B) of the definition of “Consolidated
Net Income” (not to exceed the aggregate amounts referred to in such clauses) to
the extent such gains are received in cash during such period, minus (ii) the
sum, without duplication, of the amounts for such period paid in cash from
operating cash flow of (a) scheduled repayments of Indebtedness for borrowed
money (excluding repayments of Revolving Loans or Swing Line Loans except to the
extent the Revolving Commitments are permanently reduced in connection with such
repayments, but including the principal component of Capital Leases),
(b) Consolidated Capital Expenditures (net of any proceeds of (y) any related
financings with respect to such expenditures and (z) any sales of assets used to
finance such expenditures), (c) Consolidated Interest Expense, (d) provisions
for current taxes based on income of Borrower and its Subsidiaries and payable
in cash with respect to such period, (e) the amount by which cash purchases of
Rental Items exceeds amortization of Rental Items, and (f) extraordinary and
non-recurring costs, losses and restructuring charges of the type described in
clauses (e)(D), (e)(E) and (e)(F) of the definition of “Consolidated Net Income”
(not to exceed the aggregate amounts referred to in such clauses) or in clauses
(x)(i) and (x)(j) of the definition of “Consolidated Adjusted EBITDA” to the
extent such charges are actually paid in cash during such period.
     “Consolidated Interest Expense” means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Borrower and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under Interest Rate
Agreements (and including Restricted Junior Payments made pursuant to
Section 6.4(f)), but excluding, however, any amount not payable in Cash and any
amounts referred to in Section 2.12(e)(i) payable on or before the Closing Date.

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     “Consolidated Net Income” means, for any period, (i) the net income (or
loss) of Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, but
excluding the effects of any of the following, (ii) (a) the income (or loss) of
any Person (other than a Subsidiary of Borrower) in which any other Person
(other than Borrower or any of its Subsidiaries) has a joint interest, except to
the extent of the amount of dividends or other distributions actually paid to
Borrower or any of its Subsidiaries by such Person during such period, (b) the
income (or loss) of any Person accrued prior to the date it becomes a Subsidiary
of Borrower or is merged into or consolidated with Borrower or any of its
Subsidiaries or that Person’s assets are acquired by Borrower or any of its
Subsidiaries, (c) the income of any Subsidiary of Borrower to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary, (d) any after-tax
gains or losses attributable to Asset Sales or returned surplus assets of any
Pension Plan, and (e) (to the extent not included in clauses (a) through
(d) above) any (A) net extraordinary gains, (B) non-recurring gains not to
exceed $10,000,0000 in the aggregate from and after the Closing Date, (C) net
extraordinary losses, (D) non-recurring losses not to exceed $10,000,0000 in the
aggregate from and after the Closing Date or (E) non-recurring costs, losses and
restructuring charges, in each case associated with general and administrative
costs (but in no event including costs associated with store openings, closings
and relocations) in connection with consolidating the operations of the Movie
Gallery division and the Hollywood division not to exceed $10,000,000 in the
aggregate.
     “Consolidated Total Debt” means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
     “Consolidated Working Capital” means, as at any date of determination, the
excess of Consolidated Current Assets over Consolidated Current Liabilities
(which may be a negative number).
     “Consolidated Working Capital Adjustment” means, for any period 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.
     “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.
     “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.

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     “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.
     “Credit Document” means any of this Agreement, the Notes, if any, the
Collateral Documents, the Intercreditor Agreement, any documents or certificates
executed by Borrower in favor of Issuing Bank relating to Letters of Credit, any
documents or certificates executed by Borrower in favor of Synthetic LC Issuing
Bank relating to Synthetic Letters of Credit, and all other documents,
instruments or agreements executed and delivered by a Credit Party for the
benefit of any Agent, Issuing Bank, Synthetic LC Issuing Bank or any Lender in
connection herewith.
     “Credit Extension” means the making of a Loan, the issuing of a Letter of
Credit or a Synthetic Letter of Credit, or the making of a Synthetic LC Deposit.
     “Credit Party” means Borrower and each Guarantor.
     “Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Borrower’s 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 (including 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 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 2.14 or
Section 2.15 or by a combination thereof) and (b) such Defaulting Lender shall
have delivered to Borrower and Administrative Agent a written reaffirmation of
its intention to honor its obligations hereunder with respect to its
Commitments, and (iii) the date on which Borrower, Administrative Agent and
Requisite Lenders waive all Funding Defaults of such Defaulting Lender in
writing.

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     “Defaulted Loan” as defined in Section 2.23.
     “Defaulting Lender” as defined in Section 2.23.
     “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.
     “Disclosed Matter” means the existence or occurrence of any matter which
has been disclosed by Borrower in any filing made by Borrower with the
Securities and Exchange Commission prior to the Closing Date and after
December 31, 2005 (including disclosures regarding financial performance or
condition as set forth in any Form 10-K or Form 10-Q during such period);
provided, that no matter shall constitute a “Disclosed Matter” to the extent it
shall prove to be, or shall become, materially more adverse to Borrower and its
Subsidiaries taken as a whole or to the Lenders than it would have reasonably
appeared to be on the basis of the disclosure contained in any of the documents
referred to above in this definition.
     “Disqualified Equity Interests” means any Equity Interest which, by its
terms (or by the terms of any security or other Equity Interests into which it
is convertible or for which it is exchangeable), or upon the happening of any
event or condition (i) matures or is mandatorily redeemable (other than solely
for Equity Interests which are not otherwise Disqualified Equity Interests),
pursuant to a sinking fund obligation or otherwise, (ii) is redeemable at the
option of the holder thereof (other than solely for Equity Interests which are
not otherwise Disqualified Equity Interests), in whole or in part,
(iii) provides for the scheduled payments or dividends in cash, or (iv) is or
becomes convertible into or exchangeable for Indebtedness or any other Equity
Interests that would constitute Disqualified Equity Interests, in each case,
prior to (A) the date that is 91 days after the Term Loan Maturity Date or
(B) in the case of Equity Interests issued in connection with any prepayment,
redemption, retirement or purchase of, or in exchange for, any Senior Notes
(and/or any Senior Note Refinancing indebtedness), the six year anniversary of
the Closing Date.
     “Documentation Agent” as defined in the preamble hereto.
     “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) 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 (ii) 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; provided, no Affiliate of Borrower shall be
an Eligible Assignee.

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     “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, Borrower, any of its Subsidiaries or any
of their respective ERISA Affiliates.
     “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 Borrower or any of its Subsidiaries or any Facility.
     “Equity Interests” 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 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.
     “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 Borrower or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Borrower or
any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Borrower or such Subsidiary and
with respect to liabilities arising after such period for which Borrower or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
     “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 30-day notice to the
PBGC has been waived by

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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 Borrower, 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 any such Pension Plan resulting in liability to Borrower, 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 Borrower, 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 Borrower, 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 therefore, or the receipt by Borrower,
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 Borrower, 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 Borrower, 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 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
     “Eurodollar Rate Loan” means a Loan bearing interest at a rate determined
by reference to the Adjusted Eurodollar Rate.
     “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.
     “Existing Indebtedness” means Indebtedness and other obligations
outstanding under that certain Credit Agreement, dated as of April 27, 2005 (as
amended, supplemented or

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otherwise modified), among the Borrower, Movie Gallery Canada, Inc., the banks,
financial institutions and other lenders named therein, Wachovia Bank, National
Association, as U.S. administrative agent, Congress Financial Corporation
(Canada), as Canadian administrative agent, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as syndication agent, and Bank of America, N.A., Calyon New
York Branch and Canadian Imperial Bank of Commerce, as co-documentation agents.
     “Facility” means any real property (including all buildings, fixtures or
other improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Borrower or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
     “Fair Share” as defined in Section 7.2.
     “Fair Share Contribution Amount” as defined in Section 7.2.
     “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 Administrative Agent, in its capacity as a Lender, on
such day on such transactions as determined by Administrative Agent.
     “Financial Officer Certification” means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer or (if such officer has been duly appointed in
accordance with the Organizational Documents of Borrower) the chief accounting
officer of Borrower that such financial statements fairly present, in all
material respects, the financial condition of Borrower 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.
     “Financial Plan” as defined in Section 5.1(h).
     “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 each 13 week period after the end of the Fiscal Year
except the last period in Fiscal Year 2007 and in Fiscal Year 2012, which shall
be a 14 week period.
     “Fiscal Year” means any 52 week period ending on the first Sunday following
December 30, except for 2007 and 2012, respectively, which shall be a 53 week
period ending January 6, 2008 and January 6, 2013, respectively (as set forth in
Schedule 1 hereto); references

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to a Fiscal Year with a number corresponding to any calendar year (e.g., the
“2007 Fiscal Year”) refer to the Fiscal Year ending on the first Sunday
following December 30 of such calendar year.
     “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.
     “Funding Default” as defined in Section 2.23.
     “Funding Guarantors” as defined in Section 7.2.
     “Funding Notice” means a notice substantially in the form of Exhibit A-1.
     “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 Acts” means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority.
     “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,
officer or examiner exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a 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.
     “GSCP” as defined in the preamble.
     “Guaranteed Obligations” as defined in Section 7.1.
     “Guarantor” means each of Borrower and each Domestic Subsidiary of Borrower
and, at the election of Borrower and upon compliance with Section 5.10, Movie
Gallery Canada.
     “Guarantor Subsidiary” means each Guarantor other than Borrower.
     “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

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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.
     “Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement
entered into with a Lender Counterparty and satisfactory to Administrative
Agent.
     “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 Borrower and its Subsidiaries, for the Fiscal
Years ended January 4, 2004, January 2, 2005 and January 1, 2006, consisting of
balance sheets and the related consolidated statements of operations,
stockholders’ equity and cash flows for such Fiscal Years, and (ii) the
unaudited financial statements of Borrower and its Subsidiaries as at the most
recent Fiscal Quarter ending 45 days or more prior to the Closing Date,
consisting of a balance sheet and the related consolidated statements of
operations, stockholders’ equity and cash flows for the three-, six-or
nine-month period, as applicable, ending on such date, and, in the case of
clauses (i) and (ii), certified by the chief financial officer of Borrower that
they fairly present, in all material respects, the financial condition of
Borrower 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.
     “Inactive Entities” means (a) the following entities in which Movie Gallery
US, LLC, a Guarantor, has an ownership interest as of the Closing Date:
CINEvents, Inc., DVDStation, Inc. and Echo, LLC; and (b) the following entity in
which Borrower and Movie Gallery US, LLC, a Guarantor, have an ownership
interest as of the Closing Date: Movie Gallery Mexico Inc., S. de R.L. de C.V.
     “Increased-Cost Lenders” as defined in Section 2.24.
     “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 any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from the date
of incurrence of the

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obligation in respect thereof or (b) evidenced by a note or similar written
instrument; (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) Disqualified Equity Interests, (viii) 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 obligation of another; (ix)
any obligation of such Person the primary purpose or intent of which is to
provide assurance to an obligee that the obligation 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; (x) any liability of such Person for an obligation of another
through any agreement (contingent or otherwise) (a) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (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 (x), the primary purpose or intent thereof is as
described in clause (ix) above; and (xi) all obligations of such Person in
respect of any exchange traded or over the counter derivative transaction,
including any Interest Rate Agreement and Currency Agreement, whether entered
into for hedging or speculative purposes; provided, in no event shall
obligations under any Interest Rate Agreement and any Currency Agreement be
deemed “Indebtedness” for any purpose under Section 6.7.
     “Indemnified Liabilities” means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
claims (including Environmental Claims), actions, judgments, suits, 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 or hearing commenced or
threatened by any Person, whether or not any such Indemnitee shall be designated
as a party or a potential party thereto (it being agreed that, such counsel fees
and expenses shall be limited to one primary counsel, and any additional special
and local counsel in each appropriate jurisdiction, for the Indemnitees, except
in the case of actual or potential conflicts of interest between or among the
Indemnitees), 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, Issuing Bank’s agreement to issue Letters
of Credit, Synthetic LC Issuing Bank’s agreement to issue Synthetic Letters of
Credit 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 the commitment letter

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delivered by any Lender to Borrower 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 Borrower or any of its Subsidiaries.
     “Indemnitee” as defined in Section 10.3.
     “Installment” as defined in Section 2.13.
     “Intellectual Property” as defined in the Pledge and Security Agreement.
     “Intellectual Property Asset” means, at the time of determination, any
interest (fee, license or otherwise) then owned by any Credit Party in any
Intellectual Property.
     “Intellectual Property Security Agreements” has the meaning assigned to
that term in the Pledge and Security Agreement.
     “Intercompany Note” means a promissory note substantially in the form of
Exhibit L evidencing Indebtedness owed among the Credit Parties and their
Subsidiaries.
     “Intercreditor Agreement” means that certain Intercreditor Agreement dated
as of the Closing Date among the Collateral Agent, Borrower, and the Second Lien
Collateral Agent.
     “Interest Coverage Ratio” means the ratio as of the last day of any Fiscal
Quarter of (i) Consolidated Adjusted EBITDA for the four Fiscal Quarter period
then ended to (ii) Consolidated Interest Expense for such four Fiscal Quarter
period.
     “Interest Payment Date” means with respect to (i) any Loan that is a Base
Rate Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date and the final
maturity date of such Loan; and (ii) any Loan that is a Eurodollar Rate Loan,
the last day of each Interest Period applicable to such Loan; provided, in the
case of each Interest Period of longer than three months “Interest Payment Date”
shall also include each date that is three months, or an integral multiple
thereof, after the commencement of such Interest Period.
     “Interest Period” means, in connection with a Eurodollar Rate Loan, an
interest period of one-, two-, three- or six-months, as selected by Borrower in
the applicable Funding Notice or Conversion/Continuation Notice, (i) initially,
commencing on the Credit Date or 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 the Term Loans

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shall extend beyond the 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 Borrower’s and its
Subsidiaries’ operations and not for speculative purposes.
     “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.
     “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.
     “Inventory” means all “inventory” as such term is defined in the UCC as in
effect on the Closing Date in the State of new York, wherever located, in which
any Person now or hereafter has rights.
     “Investment” means (i) any direct or indirect purchase or other acquisition
by Borrower 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 redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Borrower from any Person (other than
Borrower or any Guarantor Subsidiary), of any Equity Interests 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
Borrower or any of its Subsidiaries to any other Person (other than Borrower 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.
     “Issuance Notice” means an Issuance Notice substantially in the form of
Exhibit A-3.
     “Issuing Bank” means Wachovia as Issuing Bank hereunder with respect to
Letters of Credit, together with its permitted successors and assigns in such
capacity.
     “Joint Venture” means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
     “Kiosk Program” means the installation of movie rental kiosks in various
retail and other locations.

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     “Landlord Personal Property Collateral Access Agreement” means a Landlord
Waiver and Consent Agreement substantially in the form of Exhibit K with such
amendments or modifications as may be approved by Collateral Agent.
     “Leasehold Property” means any leasehold interest of any Credit Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Collateral Agent in its sole discretion as not
being required to be included in the Collateral.
     “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 a Hedge Agreement (including any Person who is a Lender (and any
Affiliate thereof) as of the Closing Date but subsequently, whether before or
after entering into a Hedge Agreement, ceases to be a Lender and any Person who
enters into a Hedge Agreement in connection with the transactions contemplated
by the Credit Documents prior to the Closing Date and is a Lender as of the
Closing Date), including each such Affiliate that enters into a joinder
agreement with Collateral Agent.
     “Letter of Credit” means a commercial or standby letter of credit issued or
to be issued by Issuing Bank under the Revolving Commitment pursuant to this
Agreement.
     “Letter of Credit Sublimit” means the lesser of (i) $15,000,000 and
(ii) the aggregate unused amount of the Revolving Commitments then in effect.
     “Letter of Credit Usage” means, as at any date of determination, the sum of
(i) the maximum aggregate amount which is, or at any time thereafter may become,
available for drawing under all Letters of Credit then outstanding, and (ii) the
aggregate amount of all drawings under Letters of Credit honored by Issuing Bank
and not theretofore reimbursed by or on behalf of Borrower.
     “Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter
of (i) Consolidated Total Debt as of such day to (ii) Consolidated Adjusted
EBITDA for the four-Fiscal Quarter period ending on such date.
     “Lien” means (i) any lien, mortgage, pledge, 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 or license 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.
     “Loan” means a Term Loan and a Revolving Loan.
     “Loan to Value Ratio” means, at any time, the ratio of (i) Value (as
determined by reference to the most recent calculation of Value delivered to
Collateral Agent and

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Administrative Agent pursuant to Section 5.1(p)) to (ii) Total Utilization of
Revolving Commitments.
     “Loan to Value Ratio Certificate” as defined in Section 5.1(p).
     “Margin Stock” as defined in Regulation U of the Board of Governors 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 condition (financial or otherwise) or prospects of
Borrower and its Subsidiaries taken as a whole; (ii) the ability of any Credit
Party to fully and timely perform its Obligations; (iii) the legality, validity,
binding effect or enforceability against a Credit Party of a Credit Document to
which it is a party; or (iv) the rights, remedies and benefits available to, or
conferred upon, any Agent and any Lender or any Secured Party under any Credit
Document; provided, that no Disclosed Matter shall constitute a Material Adverse
Effect.
     “Material Contract” means any contract or other arrangement to which
Borrower 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.
     “Material Real Estate Asset’’ means (i) (a) any fee-owned Real Estate Asset
having a fair market value in excess of $250,000 as of the date of the
acquisition thereof and (b) all Leasehold Properties other than those with
respect to which the aggregate payments under the remaining term of the lease
are less than $750,000 or (ii) any Real Estate Asset that the Requisite Lenders
have determined is material to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Borrower or any Subsidiary of
the Borrower.
     “Moody’s” means Moody’s Investor Services, Inc.
     “Mortgage” means a Mortgage substantially in the form of Exhibit J, as it
may be amended, supplemented or otherwise modified from time to time.
     “Movie Gallery Canada” means Movie Gallery Canada, Inc., a wholly-owned
Subsidiary of Borrower organized under the laws of the Province of New
Brunswick.
     “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 Borrower and its Subsidiaries which report meets the requirements
of Item 303 of Regulation S-K promulgated under the Securities Act for the
applicable Fiscal Quarter or Fiscal Year and for the period from

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the beginning of the then current Fiscal Year to the end of such period to which
such financial statements relate.
     “Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount
equal to: (i) Cash payments (including any Cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received by Borrower or any of its Subsidiaries
from such Asset Sale, minus (ii) any bona fide direct costs incurred in
connection with such Asset Sale, including (a) income or gains taxes payable by
the seller as a result of any gain recognized in connection with such Asset
Sale, (b) 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 and (c) 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 Borrower or any of its Subsidiaries in
connection with such Asset Sale.
     “Net Insurance/Condemnation Proceeds” means an amount equal to: (i) any
Cash payments or proceeds received by Borrower or any of its Subsidiaries
(a) under any casualty insurance policy in respect of a covered loss thereunder
or (b) as a result of the taking of any assets of Borrower 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 Borrower or any of its Subsidiaries in connection with the
adjustment or settlement of any claims of Borrower 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, including
income taxes payable as a result of any gain recognized in connection therewith.
     “Nonpublic Information” means information which has not been disseminated
in a manner making it available to investors generally, within the meaning of
Regulation FD.
     “Non-Core Assets” means assets of the Borrower and its Subsidiaries which
are not essential or material to the conduct of the businesses of the Borrower
and its Subsidiaries, including without limitation, (i) the corporate aircraft
of the Borrower and its Subsidiaries, (ii) the “Reel.com” assets, (iii) the
“Rack Division” assets, (iv) the iBlast division assets, (v) the assets and/or
Equity Interests of MG Automation, Inc. and MG Digital, Inc. and (vi) owned real
estate on the Closing Date.
     “Non-US Lender” as defined in Section 2.21(c).
     “Note” means a Term Loan Note, a Revolving Loan Note or a Swing Line Note.
     “Notice” means a Funding Notice, an Issuance Notice, or a Conversion/
Continuation Notice.
     “Obligations” means all obligations of every nature of each Credit Party,
including obligations 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 Hedge

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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),
reimbursement of amounts drawn under Letters of Credit, reimbursement of amounts
drawn under Synthetic Letters of Credit, payments for early termination of Hedge
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.
     “Patriot Act” as defined in Section 3.1(v).
     “PBGC” means the Pension Benefit Guaranty Corporation or any successor
thereto.
     “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” means any acquisition by Borrower or any of its
wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, all of the Equity Interests of, or a
business line or unit or a division of, any Person; provided,

  (i)   immediately prior to, and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing or would result
therefrom;     (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)  
in the case of the acquisition of Equity Interests, all of the Equity Interests
(except for any such Securities in the nature of directors’ qualifying shares
required pursuant to applicable law) acquired or otherwise issued by such Person
or any newly formed Subsidiary of Borrower in connection with such acquisition
shall be owned 100% by Borrower or a Guarantor Subsidiary thereof, and Borrower
shall have taken, or caused to be taken, as of the date such Person becomes a

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      Subsidiary of Borrower, each of the actions set forth in Sections 5.10
and/or 5.11, as applicable;     (iv)   Borrower and its Subsidiaries shall be in
compliance with the financial covenants set forth in Section 6.7 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 6.7(e));  
  (v)   Borrower shall have delivered to Administrative Agent (A) at least 10
Business Days prior to such proposed acquisition, (i) a Compliance Certificate
evidencing compliance with Section 6.7 as required under clause (iv) above and
(ii) all other relevant financial information with respect to such acquired
assets, including the aggregate consideration for such acquisition and any other
information required to demonstrate compliance with Section 6.7 and (B) promptly
upon request by Administrative Agent, (i) a copy of the purchase agreement
related to the proposed Permitted Acquisition (and any related documents
reasonably requested by Administrative Agent) and (ii) quarterly and annual
financial statements of the Person whose Equity Interests or assets are being
acquired for the twelve month (12) month period immediately prior to such
proposed Permitted Acquisition, including any audited financial statements that
are available;     (vi)   any Person or assets or division as acquired in
accordance herewith (y) shall be in same business or lines of business in which
Borrower and/or its Subsidiaries are engaged as of the Closing Date or any
business reasonably related thereto or a reasonable extension thereof and
(z) shall have generated positive cash flow for the four quarter period most
recently ended prior to the date of such acquisition; and     (vii)   the
aggregate unused portion of the Revolving Commitments at such time (after giving
effect to the consummation of the respective Permitted Acquisition and any
financing thereof) shall equal or exceed $50,000,000.

     “Permitted Holder” means J.T. Malugen, H. Harrison Parrish, any senior
executive officer of the Borrower on the date hereof and their respective
estates, spouses, and lineal descendants, and their legal representatives of any
of the foregoing, and the trustees of any bona fide trusts of which any of the
foregoing are the sole beneficiaries and grantors, or any corporation, limited
partnership, limited liability company and similar entity, a majority of the
voting Equity Interests of which is owned by any of the foregoing.
     “Permitted Liens” means each of the Liens permitted pursuant to
Section 6.2.
     “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,

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business trusts or other organizations, whether or not legal entities, and
Governmental Authorities.
     “Platform” as defined in Section 5.1(o).
     “Pledge and Security Agreement” means the Pledge and Security Agreement to
be executed by Borrower and each Guarantor substantially in the form of
Exhibit I, as it may be amended, supplemented or otherwise modified from time to
time.
     “Prime Rate” means the rate of interest quoted in The Wall Street Journal,
Money Rates Section as the Prime Rate (currently defined as the base rate on
corporate loans posted by at least 75% of the nation’s thirty (30) largest
banks), as in effect from time to time. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. 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 each of Administrative Agent, Swing Line
Lender, Issuing Bank and Synthetic LC Issuing Bank, such Person’s “Principal
Office” as set forth on Appendix B, or such other office or office of a third
party or sub-agent, as appropriate, as such Person may from time to time
designate in writing to Borrower, Administrative Agent 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; (ii) with respect to all payments, computations
and other matters relating to the participations in Synthetic Letters of Credit,
the Synthetic LC Deposits or the Synthetic LC Disbursements, the percentage
obtained by dividing (a) the Synthetic LC Deposit of that Lender by (b) the
aggregate Synthetic LC Deposits of all Lenders; and (iii) with respect to all
payments, computations and other matters relating to the Revolving Commitment or
Revolving Loans of any Lender or any Letters of Credit issued or participations
purchased therein by any Lender or any participations in Swing Line Loans
purchased therein by 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, the Synthetic LC Exposure and the Revolving Exposure of that
Lender, by (B) an amount equal to the sum of the aggregate Term Loan Exposure,
the aggregate Synthetic LC Exposure and the aggregate Revolving Exposure of all
Lenders.
     “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.
     “Refunded Swing Line Loans” as defined in Section 2.3(b)(iv).
     “Register” as defined in Section 2.8(b).

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     “Regulation D” means Regulation D of the Board of Governors, as in effect
from time to time.
     “Regulation FD” means Regulation FD as promulgated by the US Securities and
Exchange Commission under the Securities Act and Exchange Act as in effect from
time to time.
     “Reimbursement Date” as defined in Section 2.4(d).
     “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.
     “Rental Items” means video cassette tapes, digital versatile disc (DVD) or
video discs (regardless of format), video games, audiotapes and related
equipment to the extent that such items were acquired by the Borrower or any of
its Subsidiaries for sale or rental to their customers or are held by the
Borrower or such Subsidiary for sale or rental to their customers.
     “Replacement Lender” as defined in Section 2.24.
     “Requisite Lenders” means one or more Lenders having or holding Term Loan
Exposure, Synthetic LC Exposure and/or Revolving Exposure and representing more
than 50% of the sum of (i) the aggregate Term Loan Exposure of all Lenders,
(ii) the aggregate Synthetic LC Exposure of all Lenders and (iii) the aggregate
Revolving Exposure of all Lenders.
     “Restricted Junior Payment” means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Borrower
now or hereafter outstanding, except a dividend payable solely in shares of that
class of 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 stock of Borrower 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 stock of Borrower 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, or any other payment (other than principal or
interest), with respect to the Indebtedness outstanding under the Second Lien
Credit Agreement, the Senior Notes and any Indebtedness under the Senior Notes
Indenture.
     “Revolving Commitment” means the commitment of a Lender to make or
otherwise fund any Revolving Loan and to acquire participations in Letters of
Credit and Swing Line Loans hereunder 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

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Appendix A-2 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
$100,000,000.
     “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) March 31, 2007, if the Term Loans are not made on or before that date;
(ii) the fifth anniversary of the Closing Date, (iii) January 15, 2012, if the
Senior Notes Refinancing (including such refinancing accomplished pursuant to
the Senior Note Refinancing Third Lien Facility) has not occurred on or prior to
October 31, 2011, (iv) the date the Revolving Commitments are permanently
reduced to zero pursuant to Section 2.14(b) or 2.15, (v) 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 (a) the aggregate outstanding principal amount of the
Revolving Loans of that Lender, (b) in the case of Issuing Bank, the aggregate
Letter of Credit Usage in respect of all Letters of Credit issued by that Lender
(net of any participations by Lenders in such Letters of Credit), (c) the
aggregate amount of all participations by that Lender in any outstanding Letters
of Credit or any unreimbursed drawing under any Letter of Credit, (d) in the
case of Swing Line Lender, the aggregate outstanding principal amount of all
Swing Line Loans (net of any participations therein by other Lenders), and
(c) the aggregate amount of all participations therein by that Lender in any
outstanding Swing Line Loans.
     “Revolving Loan” means a Loan made by a Lender to Borrower pursuant to
Section 2.2(a).
     “Revolving Loan Note” means a promissory note in the form of Exhibit B-2,
as it may be amended, supplemented or otherwise modified from time to time.
     “S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation.
     “Scheduled Sale-Leaseback Properties” means the owned Real Estate Assets
identified on Schedule 3.2.
     “Second Lien Collateral Agent” means the “Collateral Agent” as defined in
the Second Lien Credit Agreement.
     “Second Lien Credit Agreement” means the Second Lien Term Loan and Guaranty
Agreement dated as of the Closing Date among Borrower, certain Subsidiaries of
Borrower, GSCP as sole lead arranger, sole book runner and sole syndication
agent and the other agents and lenders party thereto, as such may be amended,
supplemented or otherwise modified from time to time in accordance with this
Agreement.

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     “Second Lien Credit Documents” shall mean the “Credit Documents” as defined
in the Second Lien Credit Agreement.
     “Second Lien Term Loans” means term loans in an aggregate principal amount
of $175,000,000 made on the Closing Date under the Second Lien Credit Agreement.
     “Secured Leverage Ratio” means the ratio as of the last day of any Fiscal
Quarter of (i) Total Secured Debt as of such day to (ii) Consolidated Adjusted
EBITDA for the four-Fiscal Quarter period ending on such date.
     “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 Act” means the Securities Act of 1933, as amended from time to
time, and any successor statute.
     “Senior Notes” means Borrowers’ 11% Senior Notes due 2012.
     “Senior Notes Indenture” means that certain Indenture, dated as April 27,
2005, among Borrower, the guarantors party thereto, and SunTrust Bank, as
trustee, as such may be amended, supplemented or otherwise modified from time to
time in accordance with this Agreement.
     “Senior Notes Refinancing” means a refinancing, renewal or extension of the
Senior Notes issued pursuant to the Senior Notes Indenture on the following
terms: (A) the Indebtedness subject to any such refinancing, renewal or
extension is in an aggregate principal amount not greater than the aggregate
principal amount of the Senior Notes being renewed, refinanced or extended, plus
the amount of any premiums required to be paid thereon in accordance with the
terms of the Senior Notes Indenture (as in effect on the Closing Date) and the
Senior Notes (as in effect on the Closing Date) and reasonable fees and expenses
associated therewith (but not any consent fees or similar fees), (B) the
Indebtedness subject to such refinancing, renewal or extension shall be
unsecured and shall have a final maturity which is later than, and does not
require any scheduled amortization or other scheduled payments of principal
prior to, the six year anniversary of the Closing Date, (C) the cash yield or
cash interest on the Indebtedness subject to such refinancing, renewal or
extension shall not exceed the lesser of (x) the Adjusted Eurodollar Rate plus
9% or (y) 15%, (D) the covenants, events of default, subordination and other
provisions thereof (including any guarantees thereof) shall be, in the
aggregate, no less favorable to the Borrower and to the Lenders than those
contained in the Second Lien Credit Documents (provided that such provisions
shall not include financial covenants, and shall be subject to automatic
amendment to conform to any amendments made to

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the Second Lien Credit Documents) and (E) no Default or Event of Default shall
have occurred and be continuing or result therefrom.
     “Senior Notes Refinancing Third Lien Facility” means an exchange of the
Senior Notes issued pursuant to the Senior Notes Indenture on the following
terms: (A) the Senior Notes tendered in such exchange, and the Indebtedness
issued in exchanged for such Senior Notes, in each case is in an aggregate
principal amount not to exceed $325,000,00, (B) the Indebtedness exchanged for
such Senior Notes shall be secured by the Collateral (which Lien shall be
subject to the intercreditor provisions set forth on Exhibit M hereto) and shall
have a final maturity which is no earlier than, and does not require any
scheduled amortization or other scheduled payments of principal prior to, the
six year anniversary of the Closing Date, (C) the cash yield or cash interest on
the Indebtedness exchanged for such Senior Notes shall not exceed the lesser of
(x) the Adjusted Eurodollar Rate plus 7.50% or (y) 13%, (D) the covenants,
events of default, subordination and other provisions thereof (including any
guarantees thereof) shall be reasonably satisfactory to the Administrative Agent
and the Collateral Agent and shall be, in the aggregate, no less favorable to
the Borrower and to the Lenders than those contained in the Second Lien Credit
Documents (provided that such provisions shall not include financial covenants,
and shall be subject to automatic amendment to conform to any amendments made to
the Second Lien Credit Documents) and (E) no Default or Event of Default shall
have occurred and be continuing or result therefrom.
     “Solvency Certificate” means a Solvency Certificate of the chief financial
officer of Borrower substantially in the form of Exhibit G-2.
     “Solvent” means, with respect to any Credit Party, that as of the date of
determination, both (i) (a) the sum of such Credit Party’s debt (including
contingent liabilities) does not exceed the present fair saleable value of such
Credit Party’s present assets; (b) such Credit Party’s 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) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Person is “solvent”
within the meaning given that term and similar terms under the Bankruptcy Code
and 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).
     “Sub-Account” as defined in Section 2.5(i).
     “Subject Transaction” as defined in Section 6.7(f).
     “Subsidiary” means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without

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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.
     “Swing Line Lender” means Wachovia in its capacity as Swing Line Lender
hereunder, together with its permitted successors and assigns in such capacity.
     “Swing Line Loan” means a Loan made by Swing Line Lender to Borrower
pursuant to Section 2.3.
     “Swing Line Note” means a promissory note in the form of Exhibit B-3, as it
may be amended, supplemented or otherwise modified from time to time.
     “Swing Line Sublimit” means the lesser of (i) $40,000,000, and (ii) the
aggregate unused amount of Revolving Commitments then in effect.
     “Syndication Agent” as defined in the preamble hereto.
     “Synthetic LC Commitment” means the commitment of a Lender to acquire
participations in Synthetic Letters of Credit hereunder and “Synthetic LC
Commitments” means such commitments of all Lenders. The amount of each Lender’s
Synthetic LC 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 Synthetic LC
Commitments as of the Closing Date is $25,000,000.
     “Synthetic LC Commitment Period” means the period from the Closing Date to
but excluding the Synthetic LC Commitment Termination Date.
     “Synthetic LC Commitment Termination Date” means the earliest to occur of
(i) March 31, 2007, if the Term Loans are not made on or before that date,
(ii) the fifth anniversary of the Closing Date, (iii) January 15, 2012, if the
Senior Notes Refinancing (including such refinancing accomplished pursuant to
the Senior Note Refinancing Third Lien Facility) has not occurred on or prior to
October 31, 2011, (iv) the date the Synthetic LC Commitments are permanently
reduced to zero pursuant to Section 2.14(b), and (v) the date of the termination
of the Synthetic LC Commitments pursuant to Section 8.1.
     “Synthetic LC Deposit” means, with respect to each Synthetic LC Lender, the
amount of such Synthetic LC Lender’s Synthetic LC Commitment that such Synthetic
LC Lender shall deposit in such Synthetic LC Lender’s Sub-Account with
Administrative Agent on or after the Closing Date, and that amount shall in turn
be deposited by Administrative Agent in the Synthetic LC Deposit Account, as
such amount may be (a) reduced or reinstated from time to time as a result of
withdrawals from the Synthetic LC Deposit Account debited by Administrative
Agent from and payments to the Synthetic LC Deposit Account credited by
Administrative Agent to the Sub-Account of such Synthetic LC Lender pursuant to
Section 2.5,

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and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 10.6 and, “Synthetic LC Deposits” mean such
deposits of all Synthetic LC Lenders.
     “Synthetic LC Deposit Account” as defined in Section 2.5(i).
     “Synthetic LC Deposit Return” as defined in Section 2.5(m).
     “Synthetic LC Depositary Bank” shall mean Wachovia.
     “Synthetic LC Disbursement” means a payment made by Synthetic LC Issuing
Bank pursuant to a Synthetic Letter of Credit.
     “Synthetic LC Exposure” means, with respect to any Lender, as of any date
of determination, such Lender’s Pro Rata Share of the aggregate Synthetic LC
Deposits and Synthetic LC Usage (other than the portion of such Synthetic LC
Usage represented by amounts available for drawing, but not yet drawn, under
Synthetic Letters of Credit).
     “Synthetic LC Issuing Bank” means Wachovia as Synthetic LC Issuing Bank
hereunder with respect to Synthetic Letters of Credit, together with its
permitted successors and assigns in such capacity.
     “Synthetic LC Lender” means a Lender having an interest in the Synthetic LC
Deposit Account or the Synthetic LC Commitment.
     “Synthetic LC Reimbursement Date” as defined in Section 2.5(d).
     “Synthetic LC Usage” means, as of any date of determination, the sum of
(i) the maximum aggregate amount which is, or at any time thereafter may become,
available for drawing under all Synthetic Letters of Credit then outstanding,
and (ii) the aggregate amount of all Synthetic LC Disbursements not theretofore
reimbursed by or on behalf of Borrower.
     “Synthetic Letter of Credit” means a commercial or standby letter of credit
issued or to be issued by Synthetic LC Issuing Bank under the Synthetic LC
Commitment pursuant to this Agreement, and shall include, without limitation,
those letters of credit identified on Schedule 3 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).

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     “Term Loan” means a Term Loan made by a Lender to Borrower 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-1 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 $600,000,000.
     “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; provided, at any time prior to the making of the Term Loans, the Term
Loan Exposure of any Lender shall be equal to such Lender’s Term Loan
Commitment.
     “Term Loan Maturity Date” means the earliest to occur of (i) March 31,
2007, if the Term Loans are not made on or before that date, (ii) the fifth
anniversary of the Closing Date, (iii) January 15, 2012, if the Senior Notes
Refinancing (including such refinancing accomplished pursuant to the Senior Note
Refinancing Third Lien Facility) has not occurred on or prior to October 31,
2011, and (iv) the date that all Term Loans become due in 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, supplemented or otherwise modified from time to time.
     “Terminated Lender” as defined in Section 2.24.
     “Title Policy” as defined in Section 3.1(h).
     “Total Secured Debt” means, as at any date of determination, Indebtedness
with respect to Loans plus Letter of Credit Usage (only to the extent drawn and
not reimbursed) and Synthetic LC Usage (only to the extent drawn and not
reimbursed) plus Indebtedness with respect to Second Lien Term Loans plus any
other Indebtedness of the Borrower and any of its Subsidiaries secured by a Lien
(other than Indebtedness incurred pursuant to the Senior Notes Refinancing Third
Lien Facility).
     “Total Utilization of Revolving Commitments” means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans (other than Revolving Loans made for the purpose of repaying any
Refunded Swing Line Loans or reimbursing Issuing Bank for any amount drawn under
any Letter of Credit, but not yet so applied), (ii) the aggregate principal
amount of all outstanding Swing Line Loans and (iii) the Letter of Credit Usage.
     “Type of Loan” means (i) with respect to either Term Loans or Revolving
Loans, a Base Rate Loan or a Eurodollar Rate Loan, and (ii) with respect to
Swing Line Loans, a Base Rate Loan.

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     “UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
     “U.S. Lender” as defined in Section 2.21(c).
     “Value” means, with respect to Inventory of the Credit Parties in which
Collateral Agent has a perfected first priority (subject only to Permitted Liens
which arise by operation of law) security interest, the lower of cost or market
for such Inventory, or in the case of rental Inventory, the net book value of
rental Inventory (excluding the value of net rental Inventory subject to leases,
revenue sharing agreements or not otherwise owned by Borrower or any Guarantor),
in each case determined in a manner consistent with the current methodology and
practices of Borrower and the Guarantors, regardless of any changes in GAAP or
other changes, except as the Collateral Agent otherwise agrees.
     “Wachovia” as defined in the preamble.
     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. Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to Section 5.1(a) and
5.1(b) shall be prepared in accordance with GAAP as in effect at the time of
such preparation (and delivered together with the reconciliation statements
provided for in Section 5.1(d), if applicable). Subject to the foregoing,
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. If at any time any change
in GAAP (or a change in the application of the policies thereof) would affect
the computation of any financial ratio or requirement set forth in any Credit
Document, and Borrower or Requisite Lenders shall so request, Administrative
Agent, Requisite Lenders and Borrower 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 Requisite Lenders), provided
that, until so amended, such ratio or requirement shall continue to be computed
in accordance with GAAP prior to such change therein and Borrower shall provide
to Administrative Agent and Lenders reconciliation statements provided for in
Section 5.1(d).
     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 non-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. The terms lease and license shall include sub-lease and sub-license, as
applicable.

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  SECTION 2. LOANS AND LETTERS OF CREDIT
     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 Loan to Borrower in an
amount equal to such Lender’s Term Loan Commitment. Borrower 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 2.14(a) and 2.15, all amounts owed
hereunder with respect to the Term Loans 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.
          (b) Borrowing Mechanics for Term Loans.
          (i) Borrower shall deliver to Administrative Agent a fully executed
Funding Notice no later than (i) one day prior to the Closing Date for Base Rate
Loans, and (ii) three days prior to the Closing Date for Eurodollar Rate Loans.
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 the Principal Office designated
by Administrative Agent. Upon satisfaction or waiver of the conditions precedent
specified herein, Administrative Agent shall make the proceeds of the Term Loans
available to Borrower 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 Borrower at the Principal
Office designated by Administrative Agent or to such other account as may be
designated in writing to Administrative Agent by Borrower.
     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 Borrower 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.
          (b) Borrowing Mechanics for Revolving Loans.

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          (i) Except pursuant to Section 2.4(d) or 2.5(d), Revolving Loans that
are Base Rate Loans shall be made in an aggregate minimum amount of $1,000,000
and integral multiples of $1,000,000 in excess of that amount, and Revolving
Loans that are Eurodollar Rate Loans shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $1,000,000 in excess of that amount.
          (ii) Whenever Borrower desires that Lenders make Revolving Loans,
Borrower shall deliver to Administrative Agent (with a copy to Collateral Agent)
a fully executed and delivered Funding Notice no later than 10:00 a.m. (New York
City time) at least three Business Days in advance of the proposed Credit Date
in the case of a Eurodollar Rate Loan, and at least one 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 Eurodollar Rate Loan shall be irrevocable on and after the related
Interest Rate Determination Date, and Borrower 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 Collateral Agent and each applicable Lender by telefacsimile with
reasonable promptness, but (provided Administrative Agent shall have received
such notice by 10:00 a.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 Borrower.
          (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 the
Principal Office designated by Administrative Agent. 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 Borrower 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 Borrower at
the Principal Office designated by Administrative Agent or such other account as
may be designated in writing to Administrative Agent (with a copy to the
Collateral Agent) by Borrower.
     2.3. Swing Line Loans.
          (a) Swing Line Loans Commitments. During the Revolving Commitment
Period, subject to the terms and conditions hereof, Swing Line Lender hereby
agrees to make Swing Line Loans to Borrower in the aggregate amount up to but
not exceeding the Swing Line Sublimit; provided, that after giving effect to the
making of any Swing Line Loan, in no event shall the Total Utilization of
Revolving Commitments exceed the Revolving Commitments then in effect. Amounts
borrowed pursuant to this Section 2.3 may be repaid and reborrowed during the
Revolving Commitment Period. Swing Line Lender’s Revolving Commitment shall
expire

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on the Revolving Commitment Termination Date and all Swing Line Loans and all
other amounts owed hereunder with respect to the Swing Line Loans and the
Revolving Commitments shall be paid in full no later than such date.
          (b) Borrowing Mechanics for Swing Line Loans.
          (i) Swing Line Loans shall be made in an aggregate minimum amount of
$500,000 and integral multiples of $100,000 in excess of that amount.
          (ii) Whenever Borrower desires that Swing Line Lender make a Swing
Line Loan, Borrower shall deliver to Administrative Agent (with a copy to
Collateral Agent) a Funding Notice no later than 1:00 p.m. (New York City time)
on the proposed Credit Date. Unless Swing Line Lender has received notice from
the Administrative Agent to the contrary, Swing Line Lender shall be entitled to
rely on any certification from Borrower contained in any Funding Notice to the
effect that the conditions precedent to the issuance of any requested Swing Line
Loan have been satisfied in full.
          (iii) Unless Swing Line Lender has received notice from the
Administrative Agent that the conditions precedent to the issuance of any
requested Swing Line Loan have not been satisfied in full, then the Swing Line
Lender shall make the amount of its Swing Line Loan available to Administrative
Agent not later than 2:00 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 Swing Line Loans available to Borrower on the applicable Credit
Date by causing an amount of same day funds in Dollars equal to the proceeds of
all such Swing Line Loans received by Administrative Agent from Swing Line
Lender to be credited to the account of Borrower at Administrative Agent’s
Principal Office, or to such other account as may be designated in writing to
Administrative Agent (with a copy to Collateral Agent) by Borrower.
          (iv) With respect to any Swing Line Loans which have not been
voluntarily prepaid by Borrower pursuant to Section 2.14, Swing Line Lender may
at any time in its sole and absolute discretion, deliver to Administrative Agent
(with a copy to Borrower and Collateral Agent), no later than 11:00 a.m. (New
York City time) at least one Business Day in advance of the proposed Credit
Date, a notice (which shall be deemed to be a Funding Notice given by Borrower,
but Borrower shall not be deemed to have made any representations and warranties
in connection with such deemed Funding Notice) requesting that each Lender
holding a Revolving Commitment make Revolving Loans that are Base Rate Loans to
Borrower on such Credit Date in an amount equal to the amount of such Swing Line
Loans (the “Refunded Swing Line Loans”) outstanding on the date such notice is
given which Swing Line Lender requests Lenders to prepay. Anything contained in
this Agreement to the contrary notwithstanding, (1) the proceeds of such
Revolving Loans made by the Lenders other than Swing Line Lender shall be
immediately delivered by

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Administrative Agent to Swing Line Lender (and not to Borrower) and applied to
repay a corresponding portion of the Refunded Swing Line Loans and (2) on the
day such Revolving Loans are made, Swing Line Lender’s Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with the proceeds of a
Revolving Loan made by Swing Line Lender to Borrower, and such portion of the
Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing
Line Loans and shall no longer be due under the Swing Line Note of Swing Line
Lender but shall instead constitute part of Swing Line Lender’s outstanding
Revolving Loans to Borrower and shall be due under the Revolving Loan Note
issued by Borrower to Swing Line Lender. Borrower hereby authorizes
Administrative Agent and Swing Line Lender to charge Borrower’s accounts with
Administrative Agent and Swing Line Lender (up to the amount available in each
such account) in order to immediately pay Swing Line Lender the amount of the
Refunded Swing Line Loans to the extent the proceeds of such Revolving Loans
made by Lenders, including the Revolving Loans deemed to be made by Swing Line
Lender, are not sufficient to repay in full the Refunded Swing Line Loans. If
any portion of any such amount paid (or deemed to be paid) to Swing Line Lender
should be recovered by or on behalf of Borrower from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of
the amount so recovered shall be ratably shared among all Lenders in the manner
contemplated by Section 2.18.
          (v) If for any reason Revolving Loans are not made pursuant to
Section 2.3(b)(iv) in an amount sufficient to repay any amounts owed to Swing
Line Lender in respect of any outstanding Swing Line Loans on or before the
third Business Day after demand for payment thereof by Swing Line Lender, each
Lender holding a Revolving Commitment shall be deemed to, and hereby agrees to,
have purchased a participation in such outstanding Swing Line Loans, and in an
amount equal to its Pro Rata Share of the applicable unpaid amount together with
accrued interest thereon. Upon one Business Day’s notice from Swing Line Lender,
each Lender holding a Revolving Commitment shall deliver to Swing Line Lender an
amount equal to its respective participation in the applicable unpaid amount in
same day funds at the Principal Office of Swing Line Lender. In order to
evidence such participation each Lender holding a Revolving Commitment agrees to
enter into a participation agreement at the request of Swing Line Lender in form
and substance reasonably satisfactory to Swing Line Lender. In the event any
Lender holding a Revolving Commitment fails to make available to Swing Line
Lender the amount of such Lender’s participation as provided in this paragraph,
Swing Line Lender shall be entitled to recover such amount on demand from such
Lender together with interest thereon for three Business Days at the rate
customarily used by Swing Line Lender for the correction of errors among banks
and thereafter at the Base Rate, as applicable.
          (vi) Notwithstanding anything contained herein to the contrary,
(1) each Lender’s obligation to make Revolving Loans for the purpose of repaying
any Refunded Swing Line Loans pursuant to the second preceding paragraph and
each Lender’s obligation to purchase a participation in any unpaid Swing Line
Loans pursuant to the immediately preceding paragraph shall be absolute and
unconditional

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and shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against Swing Line Lender, any Credit Party or any other Person for any reason
whatsoever; (B) the occurrence or continuation of a Default or Event of Default;
(C) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of any Credit Party; (D) any
breach of this Agreement or any other Credit Document by any party thereto; or
(E) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided that such obligations of each Lender
are subject to the condition that Swing Line Lender believed in good faith that
all conditions under Section 3.2 to the making of the applicable Refunded Swing
Line Loans or other unpaid Swing Line Loans, were satisfied at the time such
Refunded Swing Line Loans or unpaid Swing Line Loans were made, or the
satisfaction of any such condition not satisfied had been waived by the
Requisite Lenders prior to or at the time such Refunded Swing Line Loans or
other unpaid Swing Line Loans were made; and (2) Swing Line Lender shall not be
obligated to make any Swing Line Loans (A) if it has elected not to do so after
the occurrence and during the continuation of a Default or Event of Default or
(B) at a time when a Funding Default exists unless Swing Line Lender has entered
into arrangements satisfactory to it and Borrower to eliminate Swing Line
Lender’s risk with respect to the Defaulting Lender’s participation in such
Swing Ling Loan, including by cash collateralizing such Defaulting Lender’s Pro
Rata Share of the outstanding Swing Line Loans.
          (vii) Upon the request by Swing Line Lender to have a Revolving Loan
made for the purpose of repaying any Refunded Swing Line Loan pursuant to the
immediately preceding paragraph (iv) or the request by Swing Line Lender to have
Lender purchase a participation in any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph (v), unless Swing Line Lender has received
notice from the Administrative Agent that the conditions precedent under
Section 3.2 were not satisfied in full at the time that the Swing Line Loan was
made to Borrower to which such Refunded Swing Line Loan relates or to which such
participation in any unpaid Swing Line Loans relates, Swing Line Lender shall be
deemed to have satisfied the condition of possessing a good faith belief that
all conditions precedent under Section 3.2 have been satisfied for purposes of
the immediately preceding paragraph (vi).
     2.4. Issuance of Letters of Credit and Purchase of Participations Therein.
          (a) Letters of Credit. During the Revolving Commitment Period, subject
to the terms and conditions hereof, Issuing Bank agrees to issue Letters of
Credit for the account of Borrower in the aggregate amount up to but not
exceeding the Letter of Credit Sublimit; provided, (i) each Letter of Credit
shall be denominated in Dollars; (ii) the stated amount of each Letter of Credit
shall not be less than $50,000 or such lesser amount as is acceptable to Issuing
Bank; (iii) after giving effect to such issuance, in no event shall the Total
Utilization of Revolving Commitments exceed the Revolving Commitments then in
effect; (iv) after giving effect to such issuance, in no event shall the Letter
of Credit Usage exceed the Letter of Credit Sublimit then in effect; (v) in no
event shall any standby Letter of Credit have an expiration date

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later than the earlier of (1) the Revolving Commitment Termination Date and
(2) the date which is one year from the date of issuance of such standby Letter
of Credit; and (vi) in no event shall any commercial Letter of Credit (x) have
an expiration date later than the earlier of (1) the Revolving Loan Commitment
Termination Date and (2) the date which is 180 days from the date of issuance of
such commercial Letter of Credit or (b) be issued if such commercial Letter of
Credit is otherwise in a form that is unacceptable to Issuing Bank in its
reasonable discretion. Subject to the foregoing, Issuing Bank may agree that a
standby Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each, unless Issuing Bank elects not
to extend for any such additional period; provided, Issuing Bank shall not
extend any such Letter of Credit if it has received written notice that an Event
of Default has occurred and is continuing at the time Issuing Bank must elect to
allow such extension; provided, further, in the event a Funding Default exists,
Issuing Bank shall not be required to issue any Letter of Credit unless Issuing
Bank has entered into arrangements satisfactory to it and Borrower to eliminate
Issuing Bank’s risk with respect to the participation in Letters of Credit of
the Defaulting Lender, including by cash collateralizing such Defaulting
Lender’s Pro Rata Share of the Letter of Credit Usage.
          (b) Notice of Issuance. Whenever Borrower desires the issuance of a
Letter of Credit, it shall deliver to Administrative Agent (with a copy to
Collateral Agent and Issuing Bank) an Issuance Notice no later than 12:00 p.m.
(New York City time) at least three Business Days (in the case of standby
letters of credit) or five Business Days (in the case of commercial letters of
credit), or in each case such shorter period as may be agreed to by Issuing Bank
in any particular instance, in advance of the proposed date of issuance. Upon
satisfaction or waiver of the conditions set forth in Section 3.2, Issuing Bank
shall issue the requested Letter of Credit only in accordance with Issuing
Bank’s standard operating procedures. Upon the issuance of any Letter of Credit
or amendment or modification to a Letter of Credit, Issuing Bank shall promptly
notify each Lender with a Revolving Commitment of such issuance, which notice
shall be accompanied by a copy of such Letter of Credit or amendment or
modification to a Letter of Credit and the amount of such Lender’s respective
participation in such Letter of Credit pursuant to Section 2.4(e). Unless the
Issuing Bank has received notice from the Administrative Agent to the contrary,
the Issuing Bank shall be entitled to rely on any certification from Borrower
contained in any Issuance Notice to the effect that the conditions precedent to
the issuance of any requested Letter of Credit have been satisfied in full.
          (c) Responsibility of Issuing Bank With Respect to Requests for
Drawings and Payments. In determining whether to honor any drawing under any
Letter of Credit by the beneficiary thereof, Issuing Bank shall be responsible
only to examine the documents delivered under such Letter of Credit with
reasonable care so as to ascertain whether they appear on their face to be in
accordance with the terms and conditions of such Letter of Credit. As between
Borrower and Issuing Bank, Borrower assumes all risks of the acts and omissions
of, or misuse of the Letters of Credit issued by Issuing Bank, by the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, Issuing Bank shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits

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thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of any
such Letter of Credit to comply fully with any conditions required in order to
draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of Issuing Bank,
including any Governmental Acts; none of the above shall affect or impair, or
prevent the vesting of, any of Issuing Bank’s rights or powers hereunder.
Without limiting the foregoing and in furtherance thereof, any action taken or
omitted by Issuing Bank under or in connection with the Letters of Credit or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not give rise to any liability on the part of Issuing Bank to
Borrower. Notwithstanding anything to the contrary contained in this Section
2.4(c), Borrower shall retain any and all rights it may have against Issuing
Bank for any liability arising solely out of the gross negligence or willful
misconduct of Issuing Bank.
          (d) Reimbursement by Borrower of Amounts Drawn or Paid Under Letters
of Credit. In the event Issuing Bank has determined to honor a drawing under a
Letter of Credit, it shall immediately notify Borrower and Administrative Agent
(with a copy to Collateral Agent), and Borrower shall reimburse Issuing Bank on
or before the Business Day immediately following the date on which such drawing
is honored (the “Reimbursement Date”) in an amount in Dollars and in same day
funds equal to the amount of such honored drawing; provided, anything contained
herein to the contrary notwithstanding, (i) unless Borrower shall have notified
Administrative Agent (with a copy to Collateral Agent) and Issuing Bank prior to
10:00 a.m. (New York City time) on the date such drawing is honored that
Borrower intends to reimburse Issuing Bank for the amount of such honored
drawing with funds other than the proceeds of Revolving Loans, Borrower shall be
deemed to have given a timely Funding Notice to Administrative Agent requesting
Lenders with Revolving Commitments to make Revolving Loans that are Base Rate
Loans on the Reimbursement Date in an amount in Dollars equal to the amount of
such honored drawing, and (ii) subject to satisfaction or waiver of the
conditions specified in Section 3.2, Lenders with Revolving Commitments shall,
on the Reimbursement Date, make Revolving Loans that are Base Rate Loans in the
amount of such honored drawing, the proceeds of which shall be applied directly
by Administrative Agent to reimburse Issuing Bank for the amount of such honored
drawing; and provided further, if for any reason proceeds of Revolving Loans are
not received by Issuing Bank on the Reimbursement Date in an amount equal to the
amount of such honored drawing, Borrower shall reimburse Issuing Bank, on
demand, in an amount in same day funds equal to the excess of the amount of such
honored drawing over the aggregate amount of such Revolving Loans, if any, which
are so received. Nothing in this Section 2.4(d) shall be deemed to relieve any
Lender with a Revolving Commitment from its obligation to make Revolving Loans
on the terms and conditions set forth herein, and Borrower shall retain any and
all rights it may have against any such Lender resulting from the failure of
such Lender to make such Revolving Loans under this Section 2.4(d).
          (e) Lenders’ Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Commitment shall be

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deemed to have purchased, and hereby agrees to irrevocably purchase, from
Issuing Bank a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender’s Pro Rata Share (with respect to
the Revolving Commitments) of the maximum amount which is or at any time may
become available to be drawn thereunder. In the event that Borrower shall fail
for any reason to reimburse Issuing Bank as provided in Section 2.4(d), Issuing
Bank shall promptly notify each Lender with a Revolving Commitment of the
unreimbursed amount of such honored drawing (including any interest payable in
connection therewith) and of such Lender’s respective participation therein
based on such Lender’s Pro Rata Share of the Revolving Commitments. Each Lender
with a Revolving Commitment shall make available to Issuing Bank an amount equal
to its respective participation, in Dollars and in same day funds, at the office
of Issuing Bank specified in such notice, not later than 12:00 p.m. (New York
City time) on the first business day (under the laws of the jurisdiction in
which such office of Issuing Bank is located) after the date notified by Issuing
Bank. In the event that any Lender with a Revolving Commitment fails to make
available to Issuing Bank on such business day the amount of such Lender’s
participation in such Letter of Credit as provided in this Section 2.4(e),
Issuing Bank shall be entitled to recover such amount on demand from such Lender
together with interest thereon for three Business Days at the rate customarily
used by Issuing Bank for the correction of errors among banks and thereafter at
the Base Rate. Nothing in this Section 2.4(e) shall be deemed to prejudice the
right of any Lender with a Revolving Commitment to recover from Issuing Bank any
amounts made available by such Lender to Issuing Bank pursuant to this Section
in the event that it is determined that the payment with respect to a Letter of
Credit in respect of which payment was made by such Lender constituted gross
negligence or willful misconduct on the part of Issuing Bank. In the event
Issuing Bank shall have been reimbursed by other Lenders pursuant to this
Section 2.4(e) for all or any portion of any drawing honored by Issuing Bank
under a Letter of Credit, such Issuing Bank shall distribute to each Lender
which has paid all amounts payable by it under this Section 2.4(e) with respect
to such honored drawing such Lender’s Pro Rata Share of all payments
subsequently received by Issuing Bank from Borrower in reimbursement of such
honored drawing when such payments are received. Any such distribution shall be
made to a Lender at its primary address set forth below its name on Appendix B
or at such other address as such Lender may request.
          (f) Obligations Absolute. The obligation of Borrower to reimburse
Issuing Bank for drawings honored under the Letters of Credit issued by it and
to repay any Revolving Loans made by Lenders pursuant to Section 2.4(d) and the
obligations of Lenders under Section 2.4(e) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms hereof under
all circumstances including any of the following circumstances: (i) any lack of
validity or enforceability of any Letter of Credit; (ii) the existence of any
claim, set-off, defense or other right which Borrower or any Lender may have at
any time against a beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), Issuing Bank, Lender or any
other Person or, in the case of a Lender, against Borrower, whether in
connection herewith, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Borrower or one of its
Subsidiaries and the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; (iv) payment by
Issuing Bank under any Letter of Credit against presentation of a draft or other
document which does not substantially comply with the terms of such Letter of
Credit; (v) any adverse change in

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the business, operations, properties, assets, condition (financial or otherwise)
or prospects of Borrower or any of its Subsidiaries; (vi) any breach hereof or
any other Credit Document by any party thereto; (vii) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Default shall have occurred and be
continuing; provided, in each case, that payment by Issuing Bank under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of Issuing Bank under the circumstances in question.
          (g) Indemnification. Without duplication of any obligation of Borrower
under Section 10.2 or 10.3, in addition to amounts payable as provided herein,
Borrower hereby agrees to protect, indemnify, pay and save harmless Issuing Bank
from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which Issuing
Bank may incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit by Issuing Bank, other than as a result of
(1) the gross negligence or willful misconduct of Issuing Bank or (2) the
wrongful dishonor by Issuing Bank of a proper demand for payment made under any
Letter of Credit issued by it, or (ii) the failure of Issuing Bank to honor a
drawing under any such Letter of Credit as a result of any Governmental Act.
     2.5. Issuance of Synthetic Letters of Credit and Purchase of Participations
Therein.
          (a) Synthetic Letters of Credit. During the Synthetic LC Commitment
Period, subject to the terms and conditions hereof, Synthetic LC Issuing Bank
agrees to issue Synthetic Letters of Credit for the account of Borrower in the
aggregate amount up to but not exceeding the aggregate Synthetic LC Commitments;
provided, (i) each Synthetic Letter of Credit shall be denominated in Dollars;
(ii) the stated amount of each Synthetic Letter of Credit shall not be less than
$50,000 or such lesser amount as is acceptable to Synthetic LC Issuing Bank;
(iii) after giving effect to such issuance, in no event shall the Synthetic LC
Usage exceed the amount in the Synthetic LC Deposit Account; (iv) in no event
shall any standby Synthetic Letter of Credit have an expiration date later than
the earlier of (1) the second Business Day prior to the Synthetic LC Commitment
Termination Date and (2) the date which is one year from the date of issuance of
such standby Synthetic Letter of Credit; and (v) in no event shall any
commercial Synthetic Letter of Credit (x) have an expiration date later than the
earlier of (1) the second Business Day prior to the Synthetic LC Commitment
Termination Date and (2) the date which is 180 days from the date of issuance of
such commercial Synthetic Letter of Credit or (y) be issued if such commercial
Synthetic Letter of Credit is otherwise unacceptable to Synthetic LC Issuing
Bank in its reasonable discretion. Subject to the foregoing, Synthetic LC
Issuing Bank may agree that a standby Synthetic Letter of Credit will
automatically be extended for one or more successive periods not to exceed one
year each, unless Synthetic LC Issuing Bank elects not to extend for any such
additional period; provided, Synthetic LC Issuing Bank shall not extend any such
Synthetic Letter of Credit if it has received written notice that an Event of
Default has occurred and is continuing at the time Synthetic LC Issuing Bank
must elect to allow such extension.
          (b) Notice of Issuance. Whenever Borrower desires the issuance of a
Synthetic Letter of Credit, it shall deliver to Administrative Agent (with a
copy to Collateral

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Agent and Synthetic LC Issuing Bank) an Issuance Notice no later than 12:00 p.m.
(New York City time) at least three Business Days (in the case of standby
letters of credit) or five Business Days (in the case of commercial letters of
credit), or in each case such shorter period as may be agreed to by Synthetic LC
Issuing Bank in any particular instance, in advance of the proposed date of
issuance. Upon satisfaction or waiver of the conditions set forth in
Section 3.2, Synthetic LC Issuing Bank shall issue the requested Synthetic
Letter of Credit only in accordance with Synthetic LC Issuing Bank’s standard
operating procedures. Upon the issuance of any Synthetic Letter of Credit or
amendment or modification to a Synthetic Letter of Credit, Synthetic LC Issuing
Bank shall promptly notify Administrative Agent (with a copy to Collateral
Agent) who shall promptly notify each Synthetic LC Lender of such issuance,
which notice shall be accompanied by a copy of such Synthetic Letter of Credit
or amendment or modification to a Synthetic Letter of Credit and the amount of
such Lender’s respective participation in such Synthetic Letter of Credit
pursuant to Section 2.5(e). Unless the Synthetic LC Issuing Bank has received
notice from the Administrative Agent to the contrary, the Synthetic LC Issuing
Bank shall be entitled to rely on any certification from Borrower contained in
any Issuance Notice to the effect that the conditions precedent to the issuance
of any requested Synthetic Letter of Credit have been satisfied in full.
          (c) Responsibility of Synthetic LC Issuing Bank With Respect to
Requests for Drawings and Payments. In determining whether to honor any drawing
under any Synthetic Letter of Credit by the beneficiary thereof, Synthetic LC
Issuing Bank shall be responsible only to examine the documents delivered under
such Synthetic Letter of Credit with reasonable care so as to ascertain whether
they appear on their face to be in accordance with the terms and conditions of
such Synthetic Letter of Credit. As between Borrower and Synthetic LC Issuing
Bank, Borrower assumes all risks of the acts and omissions of, or misuse of the
Synthetic Letters of Credit issued by Synthetic LC Issuing Bank, by the
respective beneficiaries of such Synthetic Letters of Credit. In furtherance and
not in limitation of the foregoing, Synthetic LC Issuing Bank shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of any such Synthetic Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Synthetic Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; (iii) failure of the beneficiary of any such Synthetic Letter of
Credit to comply fully with any conditions required in order to draw upon such
Synthetic Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Synthetic Letter of
Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary
of any such Synthetic Letter of Credit of the proceeds of any drawing under such
Synthetic Letter of Credit; or (viii) any consequences arising from causes
beyond the control of Synthetic LC Issuing Bank, including any Governmental
Acts; none of the above shall affect or impair, or prevent the vesting of, any
of Synthetic LC Issuing Bank’s rights or powers hereunder. Without limiting the
foregoing and in furtherance thereof, any action taken or omitted by Synthetic
LC Issuing Bank under or in connection with the Synthetic Letters of Credit or
any documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not give

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rise to any liability on the part of Synthetic LC Issuing Bank to Borrower.
Notwithstanding anything to the contrary contained in this Section 2.5(c),
Borrower shall retain any and all rights it may have against Synthetic LC
Issuing Bank for any liability arising solely out of the gross negligence or
willful misconduct of Synthetic LC Issuing Bank.
          (d) Reimbursement by Borrower of Amounts Drawn or Paid Under Synthetic
Letters of Credit. In the event Synthetic LC Issuing Bank has determined to
honor a drawing under a Synthetic Letter of Credit, it shall immediately notify
Borrower, Administrative Agent and Collateral Agent, and Borrower shall
reimburse such Synthetic LC Disbursement by paying to Administrative Agent on or
before the Business Day immediately following the date of notice to Borrower,
Collateral Agent and Administrative Agent of such Synthetic LC Disbursement (the
“Synthetic LC Reimbursement Date”) an amount in Dollars and in same day funds
equal to the amount of such Synthetic LC Disbursement. Promptly following
receipt by Administrative Agent of any payment from Borrower pursuant to this
paragraph in respect of any Synthetic LC Disbursement, Administrative Agent
shall distribute such payment to Synthetic LC Issuing Bank or, to the extent
payments have been made from the Synthetic LC Deposit Account pursuant to
paragraph (e) below, to the Synthetic LC Deposit Account for allocation by
Administrative Agent among the Sub-Accounts of the Synthetic LC Lenders in
accordance with their Pro Rata Shares.
          (e) Lenders’ Purchase of Participations in Synthetic Letters of
Credit. (i) Immediately upon the issuance of each Synthetic Letter of Credit,
each Synthetic LC Lender shall be deemed to have purchased, and hereby agrees to
irrevocably purchase, from Synthetic LC Issuing Bank a participation in such
Synthetic Letter of Credit and any Synthetic LC Disbursement thereunder in an
amount equal to such Lender’s Pro Rata Share (with respect to the Synthetic LC
Commitments) of the maximum amount which is or at any time may become available
to be drawn thereunder. In the event that Borrower shall fail for any reason to
reimburse Synthetic LC Issuing Bank in respect of a Synthetic LC Disbursement as
provided in Section 2.5(d), Synthetic LC Issuing Bank shall promptly notify
Administrative Agent and Collateral Agent, and Administrative Agent shall
thereafter promptly notify each Synthetic LC Lender, of the unreimbursed amount
of such Synthetic LC Disbursement, and Synthetic LC Depositary Bank shall pay to
Synthetic LC Issuing Bank, from the Synthetic LC Deposit Account, for the
account of each Synthetic LC Lender, an amount equal to such Synthetic LC
Lender’s Pro Rata Share of such Synthetic LC Disbursement, in Dollars and in
same day funds, at the office of Synthetic LC Issuing Bank specified in such
notice, not later than 12:00 p.m. (New York City time) on the first business day
(under the laws of the jurisdiction in which such office of Synthetic LC Issuing
Bank is located) after the date notified by Synthetic LC Issuing Bank. In the
event that the Synthetic LC Deposit Account is charged by Synthetic LC Issuing
Bank or Collateral Agent to reimburse Synthetic LC Issuing Bank pursuant to this
Section 2.5(e), Borrower shall pay over to Administrative Agent in reimbursement
of the applicable Synthetic LC Disbursement an amount equal to the amount so
charged, as provided in paragraph (d) above, and such payment shall be remitted
by Administrative Agent to Collateral Agent for deposit into the Synthetic LC
Deposit Account. Each Synthetic LC Lender irrevocably authorizes Collateral
Agent and the Synthetic LC Issuing Bank to apply, or to permit the Synthetic LC
Depositary Bank to apply, amounts of its Synthetic LC Deposit held in the
Synthetic LC Deposit Account as provided in this Section 2.5(e). Any payment
made from the Synthetic LC Deposit Account, pursuant to this paragraph to
reimburse Synthetic LC Issuing Bank for any Synthetic LC

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Disbursement shall not constitute a Loan and shall not relieve Borrower of its
obligation to reimburse such Synthetic LC Disbursement. The Synthetic LC
Depositary Bank agrees to make available amounts in the Synthetic LC Deposit
Account at the times and for the purposes set forth in this Section 2.5(e),
either by application of such amounts to reimburse Synthetic LC Issuing Bank (if
Synthetic LC Issuing Bank shall be the Synthetic LC Depositary Bank) or by
transfer of such amounts to Synthetic LC Issuing Bank or Collateral Agent, which
shall apply the amounts so transferred to reimburse Synthetic LC Issuing Bank
(if Synthetic LC Issuing Bank shall not be the Synthetic LC Depositary Bank).
          (f) Obligations Absolute. The obligation of Borrower to reimburse
Synthetic LC Issuing Bank for Synthetic LC Disbursements made by it and the
obligations of Lenders under Section 2.5(e) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms hereof under
all circumstances including any of the following circumstances: (i) any lack of
validity or enforceability of any Synthetic Letter of Credit; (ii) the existence
of any claim, set-off, defense or other right which Borrower or any Lender may
have at any time against a beneficiary or any transferee of any Synthetic Letter
of Credit (or any Persons for whom any such transferee may be acting), Synthetic
LC Issuing Bank, Lender or any other Person or, in the case of a Lender, against
Borrower, whether in connection herewith, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction between
Borrower or one of its Subsidiaries and the beneficiary for which any Synthetic
Letter of Credit was procured); (iii) any draft or other document presented
under any Synthetic Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (iv) payment by Synthetic LC Issuing Bank to the
beneficiary or as otherwise required by law under any Synthetic Letter of Credit
against presentation of a draft or other document which does not substantially
comply with the terms of such Synthetic Letter of Credit; (v) any adverse change
in the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Borrower or any of its Subsidiaries; (vi) any breach
hereof or any other Credit Document by any party thereto; (vii) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing; (viii) the fact that an Event of Default or a Default shall have
occurred and be continuing; or (ix) the return of the Synthetic LC Deposits;
provided, in each case, that payment by Synthetic LC Issuing Bank under the
applicable Synthetic Letter of Credit shall not have constituted gross
negligence or willful misconduct of Synthetic LC Issuing Bank under the
circumstances in question.
          (g) Indemnification. Without duplication of any obligation of Borrower
under Section 10.2 or 10.3, in addition to amounts payable as provided herein,
Borrower hereby agrees to protect, indemnify, pay and save harmless Synthetic LC
Issuing Bank from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and reasonable allocated costs of internal counsel)
which Synthetic LC Issuing Bank may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Synthetic Letter of Credit by
Synthetic LC Issuing Bank, other than as a result of (1) the gross negligence or
willful misconduct of Synthetic LC Issuing Bank or (2) the wrongful dishonor by
Synthetic LC Issuing Bank of a proper demand for payment made under any
Synthetic Letter of Credit issued by it, or (ii) the failure of Synthetic LC
Issuing Bank to honor a drawing under any such Synthetic Letter of Credit as a
result of any Governmental Act.

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          (h) Synthetic LC Issuing Bank Reports. Unless otherwise agreed by
Synthetic LC Issuing Bank and Administrative Agent, Synthetic LC Issuing Bank
shall report in writing to Administrative Agent (i) on or prior to each Business
Day on which Synthetic LC Issuing Bank issues, amends, renews or extends any
Synthetic Letter of Credit, the date of such issuance, amendment, renewal or
extension, and the aggregate face amount of the Synthetic Letters of Credit
issued, amended, renewed or extended by it and outstanding after giving effect
to such issuance, amendment, renewal or extension (and whether the amount
thereof has changed), it being understood that unless Synthetic LC Issuing Bank
has received notice from Administrative Agent that such increase is not then
permitted by the terms of this Agreement by 12:00 noon (New York City time),
then Synthetic LC Issuing Bank shall effect the issuance, renewal, extension or
amendment resulting in an increase in the amount of any Synthetic Letter of
Credit, (ii) on each Business Day on which Synthetic LC Issuing Bank makes a
Synthetic LC Disbursement, the date and amount of such Synthetic LC
Disbursement, (iii) on any Business Day on which Borrower fails to reimburse a
Synthetic LC Disbursement required to be reimbursed to Synthetic LC Issuing Bank
on such day, the date of such failure and the amount of such Synthetic LC
Disbursement and (iv) on any other Business Day, such other information as
Administrative Agent shall reasonably request as to the Synthetic Letters of
Credit issued by Synthetic LC Issuing Bank and outstanding on such Business Day.
          (i) Establishment of Synthetic LC Deposit Account and Sub-Accounts. On
or prior to the Closing Date, Synthetic LC Issuing Bank or Collateral Agent
shall establish a deposit account (the “Synthetic LC Deposit Account”) of
Synthetic LC Issuing Bank or Collateral Agent at the Synthetic LC Depositary
Bank with the title “Movie Gallery 2007 Credit Agreement Synthetic LC Deposit
Account”. Administrative Agent shall maintain records enabling it to determine
at any time the amount of the interest of each Synthetic LC Lender in the
Synthetic LC Deposit Account (the interest of each Synthetic LC Lender in the
Synthetic LC Deposit Account, as evidenced by such records, being referred to as
such Synthetic LC Lender’s “Sub-Account”). Each Sub-Account shall not be a
separate deposit account at the Synthetic LC Depositary Bank but shall only be a
notation in the records maintained by Administrative Agent. Synthetic LC Issuing
Bank, Collateral Agent and Synthetic LC Depositary Bank shall not be required to
maintain any records as to the interests of each Synthetic LC Lender (which
shall be maintained by Administrative Agent) or make any payments directly to
any Synthetic LC Lender (but only to Administrative Agent for payment to any
Synthetic LC Lender). Synthetic LC Issuing Bank, Collateral Agent and Synthetic
LC Depositary Bank shall not be required to maintain any records as to the
interests of each Synthetic LC Lender (which shall be maintained by
Administrative Agent) or make any payments directly to any Synthetic LC Lender
(but only to Administrative Agent for payment to any Synthetic LC Lender).
Administrative Agent shall establish such additional Sub-Accounts for assignee
Synthetic LC Lenders as Administrative Agent shall determine pursuant to
Section 10.6(g). No Person shall have the right to make any withdrawal from the
Synthetic LC Deposit Account or to exercise any other right or power with
respect thereto except as expressly provided in paragraph (l) below or in
Section 10.6(g). Without limiting the generality of the foregoing, each party
hereto acknowledges and agrees that the amounts on deposit in the Synthetic LC
Deposit Account are and will at all times be property of Collateral Agent or
Synthetic LC Issuing Bank, as the case may be, acting for the benefit of the
Synthetic LC Lenders, and that no amount on deposit at any time in the Synthetic
LC Deposit Account shall be the property of any of the Credit Parties,
constitute “Collateral” under the Credit Documents or otherwise be available in
any manner to satisfy any Obligations of any of

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the Credit Parties under the Credit Documents. Each Synthetic LC Lender agrees
that its right, title and interest in and to the Synthetic LC Deposit Account
shall be limited to the right, acting through Collateral Agent or Synthetic LC
Issuing Bank, as the case may be, to require amounts in its Sub-Account to be
applied as provided in paragraph (l) below and that it will have no right to
require the return of its portion of the amounts in the Synthetic LC Deposit
Account other than as expressly provided in such paragraph (l) (each Synthetic
LC Lender hereby acknowledging (i) that its portion of the amounts in the
Synthetic LC Deposit Account constitutes payment for its participations in
Synthetic Letters of Credit issued or to be issued hereunder, (ii) that its
portion of amounts in the Synthetic LC Deposit Account and any investments made
therewith shall be applied to reimburse Synthetic LC Issuing Bank hereunder in
respect of Synthetic Letters of Credit and (iii) that Synthetic LC Issuing Bank
will be issuing, amending, renewing and extending Synthetic Letters of Credit in
reliance on the availability of such Synthetic LC Lender’s portion of the
amounts in the Synthetic LC Deposit Account to discharge such Synthetic LC
Lender’s obligations in accordance with Section 2.5(e) in connection with any
Synthetic LC Disbursement thereunder). The funding of the Synthetic LC Deposits,
the establishment and funding of the Synthetic LC Deposit Account and the
agreements with respect thereto set forth in this Agreement constitute
arrangements among Administrative Agent, Collateral Agent, Synthetic LC Issuing
Bank and the Synthetic LC Lenders with respect to the funding obligations of the
Synthetic LC Lenders under this Agreement, and the amounts in the Synthetic LC
Deposit Account do not constitute a loan or extension of credit to any Credit
Party. No Credit Party shall have any responsibility or liability to the
Synthetic LC Lenders, the Agents or any other Person in respect of the
establishment, maintenance, administration or misappropriation of the Synthetic
LC Deposit Account (or any Sub-Account) or with respect to the investment of
amounts held therein, including pursuant to paragraph (n) below. Each of
Administrative Agent, Collateral Agent, Synthetic LC Issuing Bank and the
Synthetic LC Depositary Bank hereby waives any right of setoff against the
Synthetic LC Deposit Account that it may have under applicable law or otherwise
with respect to amounts owed to it by Synthetic LC Lenders other than in its
capacity as Synthetic LC Issuing Bank with respect to unreimbursed Synthetic LC
Disbursements (it being agreed that such waiver shall not reduce the rights of
the Synthetic LC Depositary Bank, in its capacity as Synthetic LC Issuing Bank
or otherwise, to apply or require the application of the amounts in the
Synthetic LC Deposit Account in accordance with the provisions of this
Agreement).
          (j) Funding of Synthetic LC Deposits.
          (i) Subject to the terms and conditions hereof, each Synthetic LC
Lender severally agrees to transfer to Administrative Agent for deposit in such
Synthetic LC Lender’s Sub-Account with Administrative Agent in an aggregate
amount up to but not exceeding such Synthetic LC Lender’s Synthetic LC
Commitment.
          (ii) Borrower shall deliver to Administrative Agent (with a copy to
Collateral Agent) a fully executed Funding Notice requesting that Synthetic LC
Lenders make Synthetic LC Deposits no later than three Business Days prior to
the Closing Date.

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          (iii) Notice of receipt of such Funding Notice in respect of Synthetic
LC Deposits, together with the amount of each Synthetic LC Lender’s Pro Rata
Share thereof shall be provided by Administrative Agent to each Synthetic LC
Lender and to Synthetic LC Depositary Bank.
          (iv) Each Synthetic LC Lender shall make the amount of its Synthetic
LC Deposit available to Administrative Agent not later than 1:00 p.m. (New York
City time) on the Closing Date by wire transfer of same day funds in Dollars, at
the Principal Office designated by Administrative Agent. Upon satisfaction or
waiver of the conditions precedent specified herein, Administrative Agent shall
remit to Collateral Agent the proceeds of such Synthetic LC Deposits for deposit
by Collateral Agent into the Synthetic LC Deposit Account.
          (v) Borrower may only request Synthetic LC Lenders to make Synthetic
LC Deposits on the Closing Date.
          (vi) Synthetic LC Deposits shall be available, on the terms and
subject to the conditions set forth herein, for application pursuant to
Section 2.5(e) to reimburse such Synthetic LC Lender’s Pro Rata Share of
Synthetic LC Disbursements that are not reimbursed by Borrower. The obligations
of Synthetic LC Lenders to make the deposits required by this Section 2.5(j) are
several, and no Synthetic LC Lender shall be responsible for any other Synthetic
LC Lender’s failure to make its deposit as so required.
          (k) Synthetic LC Deposits in Synthetic LC Deposit Account. The
following amounts will be deposited in the Synthetic LC Deposit Account at the
following times:
          (i) Each Synthetic LC Lender shall make such Synthetic LC Lender’s
Synthetic LC Deposits available to Administrative Agent in accordance with
Section 2.5(j). Thereafter, the Synthetic LC Deposits shall be available, on the
terms and subject to the conditions set forth herein, for application pursuant
to Section 2.5(e) to reimburse Synthetic LC Issuing Bank for such Synthetic LC
Lender’s Pro Rata Share of Synthetic LC Disbursements that are not reimbursed by
Borrower.
          (ii) On any date prior to the Synthetic LC Commitment Termination Date
on which Administrative Agent or Synthetic LC Issuing Bank receives any
reimbursement payment from Borrower in respect of a Synthetic LC Disbursement
with respect to which amounts were withdrawn from the Synthetic LC Deposit
Account to reimburse Synthetic LC Issuing Bank, subject to subparagraph
(iii) below, Administrative Agent shall remit to Collateral Agent, or Synthetic
LC Issuing Bank shall transfer to Collateral Agent, which shall deposit in the
Synthetic LC Deposit Account, and Administrative Agent shall credit to the
Sub-Accounts of the Synthetic LC Lenders, the portion of such reimbursement
payment to be deposited therein, in accordance with Section 2.5(e).
          (iii) If at any time when any amount is required to be deposited in
the Synthetic LC Deposit Account under subparagraph (ii) above the sum of such

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amount and the amount held in the Synthetic LC Deposit Account at such time
would exceed the total Synthetic LC Deposits, then such excess shall not be
deposited in the Synthetic LC Deposit Account and shall instead be paid to
Administrative Agent, which shall pay to each Synthetic LC Lender its Pro Rata
Share of such excess.
          (iv) Concurrently with the effectiveness of any assignment by any
Synthetic LC Lender of all or any portion of its Synthetic LC Deposit,
Administrative Agent shall transfer into the Sub-Account of the assignee the
corresponding portion of the amount on deposit in the assignor’s Sub-Account in
accordance with Section 10.6(g).
          (l) Withdrawals From and Closing of Synthetic LC Deposit Account.
Amounts on deposit in the Synthetic LC Deposit Account shall be withdrawn and
distributed (or transferred, in the case of subparagraph (iv) below) as follows:
          (i) On each date on which Synthetic LC Issuing Bank is to be
reimbursed by the Synthetic LC Lenders pursuant to Section 2.5(e) for any
Synthetic LC Disbursement made by Synthetic LC Issuing Bank, Administrative
Agent shall instruct Collateral Agent to, and Collateral Agent shall to the
extent funds are available, withdraw from the Synthetic LC Deposit Account the
amount of such unreimbursed Synthetic LC Disbursement (and Administrative Agent
shall debit the Sub-Account of each Synthetic LC Lender in the amount of such
Synthetic LC Lender’s Pro Rata Share of such unreimbursed Synthetic LC
Disbursement) and Collateral Agent shall apply such amount to reimburse
Synthetic LC Issuing Bank for such Synthetic LC Disbursement (if such Synthetic
LC Issuing Bank shall be the Synthetic LC Depositary Bank) or transfer such
amount to Administrative Agent, which shall apply the amount so transferred to
reimburse Synthetic LC Issuing Bank (if Synthetic LC Issuing Bank shall not be
the Synthetic LC Depositary Bank), all in accordance with Section 2.5(e).
          (ii) Concurrently with each voluntary reduction of the total Synthetic
LC Commitments pursuant to and in accordance with Section 2.14 or 2.16,
Administrative Agent shall instruct Collateral Agent to, and Collateral Agent
shall to the extent funds are available, withdraw from the Synthetic LC Deposit
Account and Collateral Agent shall remit such funds to Administrative Agent and
Administrative Agent shall pay to each Synthetic LC Lender such Synthetic LC
Lender’s Pro Rata Share of any amount by which the Synthetic LC Deposits, after
giving effect to such reduction of the total Synthetic LC Commitments, would
exceed the greater of the total Synthetic LC Commitments and the total Synthetic
LC Usage (and the Synthetic LC Depositary Bank agrees to pay over such amounts
in the Synthetic LC Deposit Account to Administrative Agent).
          (iii) Concurrently with any reduction of the total Synthetic LC
Commitments to zero pursuant to and in accordance with Section 2.14, 2.15 or
Section 8, Administrative Agent shall instruct Collateral Agent to, and
Collateral Agent shall to the extent funds are available, withdraw from the
Synthetic LC Deposit Account and Collateral Agent shall remit such funds to
Administrative Agent and

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Administrative Agent shall pay to each Synthetic LC Lender such Synthetic LC
Lender’s Pro Rata Share of the excess at such time of the aggregate amount of
the Synthetic LC Deposits over the Synthetic LC Usage (and the Synthetic LC
Depositary Bank agrees to pay over such amounts in the Synthetic LC Deposit
Account to Administrative Agent).
          (iv) Concurrently with the effectiveness of any assignment by any
Synthetic LC Lender of all or any portion of its Synthetic LC Deposit, the
corresponding portion of the assignor’s Sub-Account shall be transferred on the
records of Administrative Agent from the assignor’s Sub-Account to the
assignee’s Sub-Account in accordance with Section 10.6(g) and, if required by
Section 10.6(g), Administrative Agent shall close such assignor’s Sub-Account.
          (v) Upon the reduction of each of the total Synthetic LC Commitments
and the Synthetic LC Usage to zero, Administrative Agent shall instruct
Collateral Agent to, and Collateral Agent shall to the extent funds are
available, withdraw from the Synthetic LC Deposit Account and Collateral Agent
shall remit such funds to Administrative Agent and Administrative Agent shall
pay to each Synthetic LC Lender the entire remaining amount of such Synthetic LC
Lender’s Synthetic LC Deposit, and shall close the Synthetic LC Deposit Account
(and the Synthetic LC Depositary Bank agrees to pay over such amounts in the
Synthetic LC Deposit Account to Administrative Agent).
Each Synthetic LC Lender irrevocably and unconditionally agrees that its
Synthetic LC Deposit may be applied or withdrawn from time to time as set forth
in this paragraph (l).
          (m) Investment of Amounts in Synthetic LC Deposit Account. The
Synthetic LC Depositary Bank shall invest, or cause to be invested, the amounts
held from time to time in the Synthetic LC Deposit Account so as to earn for the
account of Collateral, acting on behalf of each Synthetic LC Lender, a return
thereon (the “Synthetic LC Deposit Return”) for each day at a rate per annum
equal to (i) the one month LIBOR rate as determined by Synthetic LC Depositary
Bank on such day (or if such day was not a Business Day, the first Business Day
immediately preceding such day) based on rates for deposits in dollars (as set
forth by Bloomberg L.P.-page BTMM or any other comparable publicly available
service as may be selected by Synthetic LC Depositary Bank) (the “Benchmark
LIBOR Rate”) minus (ii) 0.15% per annum (based on a 365/366 day year). The
Benchmark LIBOR Rate will be reset on each Business Day. The Synthetic LC
Deposit Return accrued through and including March 31, June 30, September 30 and
December 31 of each year shall be paid by the Synthetic LC Depositary Bank to
Administrative Agent, for payment to each Synthetic LC Lender, on the second
Business Day following such last day, commencing on the first such date to occur
after the Closing Date, and on the date on which each of the total Synthetic LC
Deposits and the Synthetic LC Usage shall have been reduced to zero.
          (n) Sufficiency of Synthetic LC Deposits to Provide for Undrawn/
Unreimbursed Synthetic Letters of Credit. Notwithstanding any other provision of
this Agreement, including Sections 2.1 and 2.5, no Synthetic Letter of Credit
shall be issued or increased as to its stated amount if, after giving effect to
such issuance or increase, the aggregate

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amount of the Synthetic LC Deposits would be less than the Synthetic LC Usage.
Administrative Agent agrees to provide, at the request of Synthetic LC Issuing
Bank or Collateral Agent, information to such Synthetic LC Issuing Bank or
Collateral Agent, respectively, as to the aggregate amount of the Synthetic LC
Deposits and the Synthetic LC Usage.
          (o) Satisfaction of Synthetic LC Lender Funding Obligations. Borrower
and Synthetic LC Issuing Bank each acknowledge and agree that, notwithstanding
any other provision contained in this Agreement, the deposits by Collateral
Agent for Administrative Agent, on behalf of each Synthetic LC Lender, in the
Synthetic LC Deposit Account on and after the Closing Date of funds equal to
such Synthetic LC Lender’s Synthetic LC Commitment will fully discharge the
obligation of such Synthetic LC Lender to reimburse such Synthetic LC Lender’s
Pro Rata Share of Synthetic LC Disbursements that are not reimbursed by Borrower
pursuant to Section 2.5(d), and that no other or further payments shall be
required to be made by any Synthetic LC Lender in respect of any such
reimbursement obligations.
     2.6. Pro Rata Shares; Availability of Funds.
          (a) Pro Rata Shares. All Loans and Synthetic LC Deposits 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 or Synthetic LC Deposit requested hereunder
or purchase a participation required hereby nor shall any Term Loan Commitment,
Synthetic LC 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 or Synthetic LC Deposit 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 Borrower 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 Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent’s demand therefor, (i) in the case of
Loans, Administrative Agent shall promptly notify Borrower and Borrower 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 the
applicable Loans and (ii) in the case of Synthetic LC Deposits, Administrative
Agent may withdraw from the Synthetic LC Deposit Account such corresponding
amount together with interest thereon, for each day from such Credit Date until
the date of such withdrawal by Administrative Agent, at the rate for Synthetic
LC Deposits provided in Section

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2.5(m). Nothing in this Section 2.6(b) shall be deemed to relieve any Lender
from its obligation to fulfill its Synthetic LC Commitment, Term Loan
Commitments and Revolving Commitments hereunder or to prejudice any rights that
Borrower may have against any Lender as a result of any default by such Lender
hereunder.
     2.7. Use of Proceeds. The proceeds of the Term Loans made on the Closing
Date shall be applied by Borrower to fund (i) the refinancing of Existing
Indebtedness and (ii) to pay certain other fees and expenses relating to the
credit facilities established hereunder. The proceeds of the Revolving Loans,
Swing Line Loans, Synthetic Letters of Credit and Letters of Credit made after
the Closing Date shall be applied by Borrower for working capital and general
corporate purposes of the Borrower and its 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 or any
other regulation thereof or to violate the Exchange Act.
     2.8. 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 Borrower
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 Borrower, 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 Borrower’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 (or its agent or sub-agent
appointed by it) shall maintain at the Principal Office a register for the
recordation of the names and addresses of Lenders, the Revolving Commitments and
Loans of each Lender and the Synthetic LC Commitments and Synthetic LC Deposits
of each Lender from time to time (the “Register”). The Register shall be
available for inspection by Borrower, Collateral Agent, any Lender (with respect
to any entry relating to such Lender’s Loans or Synthetic LC Deposits), Issuing
Bank (with respect to any entry relating to Letters of Credit), Synthetic LC
Issuing Bank (with respect to any entry relating to Synthetic Letters of Credit
or Synthetic LC Deposits) or Synthetic LC Depositary Bank (with respect to any
entry relating to Synthetic Letters of Credit or Synthetic LC Deposits) at any
reasonable time and from time to time upon reasonable prior notice.
Administrative Agent shall record, or shall cause to be recorded, in the
Register the Revolving Commitments and the Loans of each Lender and the
Synthetic LC Commitments and the Synthetic LC Deposits of each Lender, each in
accordance with the provisions of Section 10.6, and each repayment or prepayment
in respect of the principal amount of the Loans and each withdrawal from
Synthetic LC Deposit Account, and any such recordation shall be conclusive and
binding on Borrower 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 Synthetic LC Commitments or Borrower’s
Obligations in respect of any Loan or Synthetic LC Deposit. Borrower hereby
designates Wachovia to serve as Borrower’s agent solely for purposes of
maintaining the Register as provided in this Section 2.8, and Borrower

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hereby agrees that, to the extent Wachovia serves in such capacity, Wachovia and
its officers, directors, employees, agents, sub-agents and affiliates shall
constitute “Indemnitees.”
          (c) Notes. If so requested by any Lender by written notice to Borrower
(with a copy to Administrative Agent) at least two Business Days prior to the
Closing Date, or at any time thereafter, Borrower 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 Borrower’s receipt of such notice) a Note or Notes to evidence such
Lender’s Term Loan, Revolving Loan or Swing Line Loan, as the case may be.
     2.9. Interest on Loans.
          (a) Except as otherwise set forth herein, each 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) in the case of Revolving Loans:
     (1) if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or
     (2) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus the
Applicable Margin;
          (ii) in the case of Swing Line Loans, at the Base Rate plus the
Applicable Margin; and
          (iii) in the case of Term Loans:
     (1) if a Base Rate Loan, at the Base Rate plus 2.50% per annum; or
     (2) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus 3.50%
per annum;
          (b) The basis for determining the rate of interest with respect to any
Loan (except a Swing Line Loan which can be made and maintained as Base Rate
Loans only), and the Interest Period with respect to any Eurodollar Rate Loan,
shall be selected by Borrower and notified to Administrative Agent and Lenders
pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as
the case may be; provided, until the date that Syndication Agent notifies
Borrower that the primary syndication of the Loans, Synthetic LC Commitments and
Revolving Commitments has been completed, as determined by Syndication Agent,
the Term Loans shall be maintained as either (1) Eurodollar Rate Loans having an
Interest Period of no longer than one month or (2) Base Rate Loans. 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.

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          (c) In connection with Eurodollar Rate Loans there shall be no more
than five (5) Interest Periods outstanding at any time. In the event Borrower
fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the
applicable Funding Notice or Conversion/Continuation Notice, such Loan (if
outstanding as a Eurodollar 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 Borrower fails to
specify an Interest Period for any Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, Borrower shall be deemed to
have selected an Interest Period of one month. As soon as practicable after
10:00 a.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 Eurodollar 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 Borrower and
each Lender.
          (d) Interest payable pursuant to Section 2.9(a) shall be computed
(i) in the case of Base Rate Loans on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, 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 Term Loan, the last Interest Payment Date with
respect to such Term Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar 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 Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar 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.
          (e) Except as otherwise set forth herein, interest on each Loan
(i) shall accrue on a daily basis and shall be payable in arrears on each
Interest Payment Date with respect to interest accrued on and to each such
payment date; (ii) shall accrue on a daily basis and shall be payable in arrears
upon any prepayment of that Loan, whether voluntary or mandatory, to the extent
accrued on the amount being prepaid; and (iii) shall accrue on a daily basis and
shall be payable in arrears at maturity of the Loans, including final maturity
of the Loans; provided, however, with respect to any voluntary prepayment of a
Base Rate Loan, accrued interest shall instead be payable on the applicable
Interest Payment Date.
          (f) Borrower agrees to pay (x) to Issuing Bank as described in
paragraph (g) below, with respect to drawings honored under any Letter of
Credit, interest on the amount paid by Issuing Bank in respect of each such
honored drawing from the date such drawing is honored to but excluding the date
such amount is reimbursed by or on behalf of Borrower at a rate equal to (i) for
the period from the date such drawing is honored to but excluding the applicable
Reimbursement Date, the rate of interest otherwise payable hereunder with
respect to Revolving Loans that are Base Rate Loans, and (ii) thereafter, a rate
which is 2% per annum in excess of the rate of interest otherwise payable
hereunder with respect to Revolving Loans that are Base Rate

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Loans, and (y) to Administrative Agent, for the account of Synthetic LC Issuing
Bank and the Synthetic LC Lenders as described in paragraph (g) below, with
respect to any Synthetic LC Disbursement, interest on the amount paid by
Synthetic LC Issuing Bank in respect of each such Synthetic LC Disbursement from
the date of such Synthetic LC Disbursement to but excluding the date such amount
is reimbursed by or on behalf of Borrower at a rate equal to (i) for the period
from the date of such Synthetic LC Disbursement to but excluding the applicable
Synthetic LC Reimbursement Date, the rate of interest otherwise payable
hereunder with respect to Term Loans that are Base Rate Loans, and (ii)
thereafter, a rate which is 2% per annum in excess of the rate of interest
otherwise payable hereunder with respect to Term Loans that are Base Rate Loans.
          (g) Interest payable pursuant to Section 2.9(f) shall be computed on
the basis of a 365/366-day year for the actual number of days elapsed in the
period during which it accrues, and shall be payable on demand or, if no demand
is made, on the date on which the related drawing under a Letter of Credit or
Synthetic LC Disbursement, as applicable, is reimbursed in full by or on behalf
of Borrower. Promptly upon receipt by Administrative Agent of any payment of
interest due in respect of LC Disbursements pursuant to Section 2.9(f),
Administrative Agent shall distribute to each Synthetic LC Lender, out of the
interest received by Administrative Agent in respect of the period from the date
of such Synthetic LC Disbursement to but excluding the date on which such
Synthetic LC Disbursement is reimbursed by or on behalf of Borrower, the amount
that such Synthetic LC Lender would have been entitled to receive in respect of
the letter of credit fee that would have been payable in respect of such
Synthetic Letter of Credit for such period if no Synthetic LC Disbursement had
been made under such Synthetic Letter of Credit; in the event Synthetic LC
Issuing Bank shall have been reimbursed for all or any portion of such Synthetic
LC Disbursement pursuant to Section 2.5(e), Administrative Agent shall
distribute to each Synthetic LC Lender (other than a Defaulting Lender) such
Lender’s Pro Rata Share of any interest received by Administrative Agent in
respect of that portion of such Synthetic LC Disbursement so reimbursed by
Lenders for the period from the date on which Lenders made such reimbursement to
but excluding the date on which such portion of such Synthetic LC Disbursement
is reimbursed by Borrower, net of any amounts paid to such Lender pursuant to
the immediately preceding sentence in respect of letter of credit fees for such
period in respect of such Letter of Credit. Promptly upon receipt by Issuing
Bank of any payment of interest in respect of drawings under Letters of Credit
pursuant to Section 2.9(f), Issuing Bank shall distribute to each Lender, out of
the interest received by Issuing Bank in respect of the period from the date
such drawing is honored to but excluding the date on which Issuing Bank is
reimbursed for the amount of such drawing (including any such reimbursement out
of the proceeds of any Revolving Loans), the amount that such Lender would have
been entitled to receive in respect of the letter of credit fee that would have
been payable in respect of such Letter of Credit for such period if no drawing
had been honored under such Letter of Credit; in the event Issuing Bank shall
have been reimbursed by Lenders for all or any portion of such honored drawing,
Issuing Bank shall distribute to each Lender which has paid all amounts payable
by it under Section 2.4(e) with respect to such honored drawing such Lender’s
Pro Rata Share of any interest received by Issuing Bank in respect of that
portion of such honored drawing so reimbursed by Lenders for the period from the
date on which Issuing Bank was so reimbursed by Lenders to but excluding the
date on which such portion of such honored drawing is reimbursed by Borrower.
All interest payable pursuant to Section 2.9(f) that is not

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distributed to Lenders as described in the two preceding sentences shall be for
the account of the Issuing Bank or Synthetic LC Issuing Bank, as applicable.
     2.10. Conversion/Continuation.
          (a) Subject to Section 2.19 and so long as no Default or Event of
Default shall have occurred and then be continuing, Borrower shall have the
option:
          (i) to convert at any time all or any part of any Term Loan or
Revolving Loan equal to $5,000,000 and integral multiples of $1,000,000 in
excess of that amount from one Type of Loan to another Type of Loan; provided, a
Eurodollar Rate Loan may only be converted on the expiration of the Interest
Period applicable to such Eurodollar Rate Loan unless Borrower shall pay all
amounts due under Section 2.19 in connection with any such conversion; or
          (ii) upon the expiration of any Interest Period applicable to any
Eurodollar Rate Loan, to continue all or any portion of such Loan equal to
$5,000,000 and integral multiples of $1,000,000 in excess of that amount as a
Eurodollar Rate Loan.
Borrower shall deliver a Conversion/Continuation Notice to Administrative Agent
(with a copy to Collateral Agent) no later than 10:00 a.m. (New York City time)
at least one Business Day in advance of the proposed conversion date (in the
case of a conversion to a Base Rate Loan) and at least three Business Days in
advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). Except as
otherwise provided herein, a Conversion/Continuation Notice for conversion to,
or continuation of, any Eurodollar Rate Loans (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrower shall be bound to effect a conversion or
continuation in accordance therewith.
     2.11. Default Interest The principal amount of all Loans outstanding and
not paid when due and, to the extent permitted by applicable law, any interest
payments on the Loans or any fees or other amounts owed hereunder and not paid
when due, 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 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 2% per annum in
excess of the interest rate otherwise payable hereunder for Base Rate Loans that
are Revolving Loans); provided, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 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 2.11 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 Collateral Agent, Administrative
Agent or any Lender.

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     2.12. Fees.
          (a) Borrower agrees to pay to Lenders having Revolving Exposure:
          (i) commitment fees equal to (1) the average of the daily difference
between (a) the Revolving Commitments and (b) the aggregate principal amount of
(x) all outstanding Revolving Loans plus (y) the Letter of Credit Usage plus
(z) with respect to the commitment fees due to the Swing Line Lender under this
Section 2.12(a)(i), all outstanding Swing Line Loans, times (2) the Applicable
Revolving Commitment Fee Percentage; and
          (ii) letter of credit fees equal to (1) the Applicable Margin for
Revolving Loans that are Eurodollar Rate Loans, times (2) the average aggregate
daily maximum amount available to be drawn under all such Letters of Credit
(regardless of whether any conditions for drawing could then be met and
determined as of the close of business on any date of determination).
All fees referred to in this Section 2.12(a) shall be paid to Administrative
Agent at its Principal Office and upon receipt, Administrative Agent shall
promptly distribute to each Lender its Pro Rata Share thereof.
          (b) Borrower agrees to pay to Lenders having Synthetic LC Deposits
letter of credit fees equal to (i) the Adjusted Eurodollar Rate plus 3.50% per
annum times (ii) the average daily amount of total Synthetic LC Deposits (it
being understood that the Synthetic LC Deposit Return paid to Administrative
Agent on behalf of the Synthetic LC Lenders pursuant to Section 2.5(m) during
the applicable period referred to in Section 2.12(d) shall be credited towards
payment of the fees referred to in this Section 2.12(b) for such period). All
fees referred to in this Section 2.12(b) shall be paid to Administrative Agent
at its Principal Office and upon receipt, Administrative Agent shall promptly
distribute to each Lender its Pro Rata Share thereof.
          (c) Borrower agrees to pay the following fees:
          (i) directly to Issuing Bank, for its own account, a fronting fee
equal to 0.25% per annum, times the average aggregate daily maximum amount
available to be drawn under all Letters of Credit (determined as of the close of
business on any date of determination);
          (ii) directly to Synthetic LC Issuing Bank, for its own account, a
fronting fee equal to 0.25% per annum, times the average aggregate daily maximum
amount available to be drawn under all Synthetic Letters of Credit (determined
as of the close of business on any date of determination);
          (iii) directly to Issuing Bank, for its own account, such documentary
and processing charges for any issuance, amendment, transfer or payment of a
Letter of Credit as are in accordance with Issuing Bank’s standard schedule for
such charges and as in effect at the time of such issuance, amendment, transfer
or payment, as the case may be; and

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          (iv) directly to Synthetic LC Issuing Bank, for its own account, such
documentary and processing charges for any issuance, amendment, transfer or
payment of a Synthetic Letter of Credit as are in accordance with Synthetic LC
Issuing Bank’s standard schedule for such charges and as in effect at the time
of such issuance, amendment, transfer or payment, as the case may be.
          (d) All fees referred to in Section 2.12(a), 2.12(b), 2.12(c)(i) and
2.12(c)(ii) shall be calculated on the basis of a 360-day year and the actual
number of days elapsed and shall be payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year during the Revolving
Commitment Period, commencing on the first such date to occur after the Closing
Date, and on the Revolving Commitment Termination Date (it being understood that
the Synthetic LC Deposit Return paid to Administrative Agent on behalf of the
Synthetic LC Lenders pursuant to Section 2.5(m) during the applicable period
shall be credited towards payment of the fees referred to in Section 2.12(b) for
such period).
          (e) In addition to any of the foregoing fees, Borrower agrees to pay
(i) to Agents such other fees in the amounts and at the times separately agreed
upon and (ii) to Administrative Agent for the account of each Synthetic LC
Lender, the fees set forth in Section 2.5(m) (it being understood that the
Synthetic LC Deposit Return paid to Administrative Agent on behalf of the
Synthetic LC Lenders pursuant to Section 2.5(m) during the applicable period
shall be credited towards payment of the fees referred to in Section 2.12(b) for
such period).
     2.13. Scheduled Payments/Commitment Reductions.
  The principal amount of the Term Loans shall be repaid in consecutive
quarterly installments (each, an “Installment”) of 0.25% of the original
aggregate principal amount thereof, each on the last day of each calendar
quarter of each year commencing on June 30, 2007.
  Notwithstanding the foregoing, (x) such Installments shall be reduced in
connection with any voluntary or mandatory prepayments of the Term Loans, in
accordance with Sections 2.14, 2.15 and 2.16, as applicable; and (y) the Term
Loans, 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.
     2.14. Voluntary Prepayments/Commitment Reductions.
          (a) Voluntary Prepayments.
          (i) Subject to the terms of Section 2.14(c) below, any time and from
time to time:
     (1) with respect to Base Rate Loans, Borrower may prepay any such Loans on
any Business Day in whole or in part, in an aggregate minimum amount of
$1,000,000 and integral multiples of $1,000,000 in excess of that amount (or,
with respect to Revolving Loans, $1,000,000 or, if less, the then remaining
outstanding balance thereof);

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     (2) with respect to Eurodollar Rate Loans, Borrower may prepay any such
Loans on any Business Day in whole or in part in an aggregate minimum amount of
$1,000,000 and integral multiples of $1,000,000 in excess of that amount (or,
with respect to Revolving Loans, $1,000,000 or, if less, the then remaining
outstanding balance thereof); and
     (3) with respect to Swing Line Loans, Borrower may prepay any such Loans on
any Business Day in whole or in part in an aggregate minimum amount of $500,000,
and in integral multiples of $100,000 in excess of that amount (or, if less than
$500,000, the then remaining outstanding balance thereof).
          (ii) All such prepayments shall be made:
     (1) upon not less than one Business Day’s prior written or telephonic
notice in the case of Base Rate Loans;
     (2) upon not less than three Business Days’ prior written or telephonic
notice in the case of Eurodollar Rate Loans; and
     (3) upon written or telephonic notice on the date of prepayment, in the
case of Swing Line Loans;
in each case given to Administrative Agent or Swing Line Lender (with a copy to
Collateral Agent), as the case may be, 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 with a copy to Collateral 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) or Swing Line Lender, as the case may be. 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 2.16(a), and shall be
without penalty or premium of any kind, except to the extent of breakage and
other costs specifically provided for under this Agreement.
          (b) Voluntary Commitment Reductions.
          (i) Borrower may, upon not less than three Business Days’ prior
written or telephonic notice confirmed in writing to Administrative Agent with a
copy to Collateral 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, without premium or penalty, 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; provided, any such partial reduction of the
Revolving Commitments shall be in an

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aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in
excess of that amount.
          (ii) Borrower may, upon not less than three Business Days’ prior
written or telephonic notice confirmed in writing to Administrative Agent with a
copy to Collateral Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or telephone to
each applicable Lender and Synthetic LC Issuing Bank), at any time and from time
to time terminate in whole or permanently reduce in part, without premium or
penalty, the Synthetic LC Commitments in an amount up to the amount by which the
Synthetic LC Commitments exceed the Synthetic LC Usage at the time of such
proposed termination or reduction; provided, any such partial reduction of the
Synthetic LC Commitments shall be in an aggregate minimum amount of $1,000,000
and integral multiples of $500,000 in excess of that amount.
          (iii) Borrower’s notice to Administrative Agent (and copy to
Collateral 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 or Synthetic LC
Commitments shall be effective on the date specified in Borrower’s notice and
shall reduce the Revolving Commitment or Synthetic LC Commitments of each Lender
proportionately to its Pro Rata Share thereof.
          (c) Call Protection. All voluntary prepayments of all but not less
than all of the Term Loans and Synthetic LC Deposits effected on or prior to the
first anniversary of the Closing Date with the proceeds of a substantially
concurrent issuance or incurrence of new bank loans which (x) are incurred for
the primary purpose of refinancing the Term Loans and Synthetic LC Deposits and
decreasing the interest rate margins payable with respect thereto, (y) otherwise
have terms and conditions (and are in an aggregate principal amount)
substantially the same as those of the Term Loans and Synthetic LC Deposits as
in effect prior to the prepayment thereof and (z) are not otherwise in
connection with (i) a transaction and any transactions related thereto not
permitted by this Agreement (as determined prior to giving effect to any
amendment or waiver of this Agreement being adopted in connection with such
transaction and related transactions) or (ii) a public offering of Equity
Interests or debt securities (other than, for the avoidance of doubt, the
issuance of bank debt) by Borrower or any of its Subsidiaries, shall be
accompanied by a prepayment fee equal to 1.00% of the aggregate principal amount
of such prepayment.
     2.15. Mandatory Prepayments.
          (a) Asset Sales. No later than the first Business Day following the
date of receipt by Borrower or any of its Subsidiaries of any Net Asset Sale
Proceeds, Borrower shall prepay the Loans as set forth in Section 2.16(b) in an
aggregate amount equal to such Net Asset Sale Proceeds; provided, (i) so long as
no Default or Event of Default shall have occurred and be continuing, and
(ii) to the extent such Net Asset Sale Proceeds do not constitute proceeds of
dispositions permitted pursuant to Section 6.8(c)(ii), Borrower shall have the
option, directly or through one or more of its Subsidiaries, to invest Net Asset
Sale Proceeds within three hundred

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sixty five days of receipt thereof (A) in long-term productive assets (including
the assets of another Person (or the Equity Interests of a Person owning such
assets) of the general type used in the business of Borrower and its
Subsidiaries and (B) up to $15,000,000 in the aggregate of proceeds of Non-Core
Assets in Rental Items or inventory held for sale at stores; provided further,
pending any such investment all such Net Asset Sale Proceeds shall be applied to
prepay Revolving Loans to the extent outstanding (without a reduction in
Revolving Commitments).
          (b) Insurance/Condemnation Proceeds. No later than the first Business
Day following the date of receipt by Borrower or any of its Subsidiaries, or
Collateral Agent as loss payee, of any Net Insurance/Condemnation Proceeds,
Borrower shall prepay the Loans as set forth in Section 2.16(b) in an aggregate
amount equal to such Net Insurance/Condemnation Proceeds; provided, (i) so long
as no Default or Event of Default shall have occurred and be continuing, and
(ii) to the extent that aggregate Net Insurance/Condemnation Proceeds from the
Closing Date through the applicable date of determination do not exceed
$10,000,000, Borrower shall have the option, directly or through one or more of
its Subsidiaries to invest such Net Insurance/Condemnation Proceeds within three
hundred sixty five days of receipt thereof in long term productive assets of the
general type used in the business of Borrower 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, as the case may be, shall be applied to prepay
Revolving Loans to the extent outstanding (without a reduction in Revolving
Commitments).
          (c) Issuance of Equity Securities. On the date of receipt by Borrower
of any Cash proceeds from a capital contribution to, or the issuance of any
Equity Interests of, Borrower or any of its Subsidiaries (other than
(x) pursuant to any employee stock or stock option compensation plan, (y) up to
$75,000,000 in the aggregate of the proceeds of the issuance of Equity Interests
(that are not Disqualified Equity Interests) of the Borrower which are used to
prepay, redeem, retire or purchase the Senior Notes (provided no Default or
Event of Default shall have occurred and be then continuing), or (z) proceeds of
the issuance of Equity Interests (that are not Disqualified Equity Interests) to
finance the purchase of a Permitted Acquisition or Permitted Investment within
180 days of such issuance (provided no Default or Event of Default shall have
occurred and be then continuing)) Borrower shall prepay the Loans as set forth
in Section 2.16(b) in an aggregate amount equal to 50% of such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses; provided,
during any period in which the Secured Leverage Ratio (determined for any such
period by reference to the Compliance Certificate delivered pursuant to
Section 5.1(c) calculating the Secured Leverage Ratio as of the last day of the
most recently ended Fiscal Quarter) (i) shall be 2.50:1.00 or less, Borrower
shall only be required to make the prepayments and/or reductions otherwise
required hereby in an amount equal to 25% of such net proceeds and (ii) shall be
2.00:1.00 or less, Borrower shall not be required to make the prepayments and/or
reductions otherwise required hereby. (For the avoidance of doubt, it is hereby
agreed that proceeds of Equity Interests (that are not Disqualified Equity
Interests) not required to prepay Loans pursuant to this clause (c) may be used
to prepay, redeem, retire or purchase Senior Notes in addition to the exclusion
described in clause (y) above.)

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          (d) Issuance of Debt. On the date of receipt by Borrower or any of its
Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of
Borrower or any of its Subsidiaries (other than with respect to any Indebtedness
permitted to be incurred pursuant to Section 6.1), Borrower shall prepay the
Loans as set forth in Section 2.16(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, 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 the Fiscal
Year ending 2007), Borrower shall, no later than ninety days after the end of
such Fiscal Year, prepay the Loans as set forth in Section 2.16(b) in an
aggregate amount equal to (i) 75% of such Consolidated Excess Cash Flow minus
(ii) voluntary repayments of the Loans (excluding repayments of Revolving Loans
or Swing Line Loans except to the extent the Revolving Commitments are
permanently reduced in connection with such repayments); provided, that if, as
of the last day of the most recently ended Fiscal Year, the Secured Leverage
Ratio (determined for any such period by reference to the Compliance Certificate
delivered pursuant to Section 5.1(c) calculating the Secured Leverage Ratio as
of the last day of such Fiscal Year) (i)(A) shall be 2.00:1.00 or less, Borrower
shall only be required to make the prepayments and/or reductions otherwise
required hereby in an amount equal to 50% of such Consolidated Excess Cash Flow
or (B) shall be 1.50:1.00 or less, Borrower shall only be required to make the
prepayments and/or reductions otherwise required hereby in an amount equal to
25% of such Consolidated Excess Cash Flow, in each case minus (ii) voluntary
repayments of the Loans (excluding repayments of Revolving Loans or Swing Line
Loans except to the extent the Revolving Commitments are permanently reduced in
connection with such repayments).
          (f) Revolving Loans and Swing Loans. In the event that at any time
(i) the Total Utilization of Revolving Commitments shall exceed the Revolving
Commitments or (ii) the Loan to Value Ratio shall be less than the Applicable
Loan to Value Ratio, in either case Borrower shall immediately make a payment to
the Administrative Agent in the amount of such excess in the case of clause
(i) or in the amount required so that after giving effect thereto the Loan to
Value Ratio is equal to or greater than the Applicable Loan to Value Ratio under
clause (ii), in either case for application first, to the Swing Line Loans and
second, to the Revolving Loans.
          (g) Prepayment Certificate. Concurrently with any prepayment of the
Loans and/or reduction of the Revolving Commitments pursuant to Sections 2.15(a)
through 2.15(e), Borrower shall deliver to Administrative Agent (with a copy to
Collateral 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 Borrower shall subsequently
determine that the actual amount received exceeded the amount set forth in such
certificate, Borrower shall promptly make an additional prepayment of the Loans
and/or the Revolving Commitments shall be permanently reduced in an amount equal
to such excess, and Borrower shall concurrently therewith deliver to
Administrative Agent (with a copy to Collateral Agent) a certificate of an
Authorized Officer demonstrating the derivation of such excess.
     2.16. Application of Prepayments.

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          (a) Application of Voluntary Prepayments by Type of Loans. Subject to
Section 2.17(h), any prepayment of any Loan pursuant to Section 2.14(a) shall be
applied as specified by Borrower in the applicable notice of prepayment;
provided, in the event Borrower fails to specify the Loans to which any such
prepayment shall be applied, such prepayment shall be applied as follows:
          first, to repay outstanding Swing Line Loans to the full extent
thereof;
          second, to repay outstanding Revolving Loans to the full extent
thereof; and
          third, to prepay the Term Loans on a pro rata basis to reduce the
scheduled remaining Installments of principal of the Term Loans.
          (b) Application of Mandatory Prepayments. Subject to Section 2.17(h),
any amount required to be paid pursuant to Sections 2.15(a) through 2.15(e)
shall be applied as follows (so long as, after giving effect to the transactions
pursuant to Sections 2.15(a) through 2.15(e) and such application of payments
below, no Event of Default has occurred and is then continuing, including
without, limitation, compliance with the Applicable Loan to Value Ratio):
          first, to prepay the Terms Loans, applied on a pro rata basis to the
remaining scheduled the Installments of principal of the Term Loans, and
thereafter to any remaining principal amount of the Term Loans;
          second, to prepay Second Lien Term Loans in accordance with the Second
Lien Credit Agreement;
          third, to prepay the Swing Line Loans to the full extent thereof;
          fourth, to prepay the Revolving Loans and pay any outstanding
reimbursement obligations with respect to Letters of Credit and to pay any
outstanding reimbursement obligations with respect to Synthetic Letters of
Credit, in each case to the full extent thereof, on a pro rata basis (in
accordance with the outstanding principal amount of the Revolving Loans and
amount of outstanding reimbursement obligations with respect to Letters of
Credit, on the one hand, and the amount of outstanding reimbursement obligations
with respect to Synthetic Letters of Credit, on the other hand,); and
          fifth, to cash collateralize, on a pro rata basis, outstanding Letters
of Credit (without a reduction in the Revolving Commitments) on the one hand,
and outstanding Synthetic Letters of Credit and reduce the Synthetic LC
Commitments by the amount of such cash collateralization, on the other hand.
          (c) Application of Prepayments of Loans to Base Rate Loans and
Eurodollar 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 Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to be made by
Borrower pursuant to Section 2.19(c).

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     2.17. General Provisions Regarding Payments.
          (a) All payments by Borrower of principal, interest, fees and other
Obligations shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 p.m. (New York City time) on the date
due at the Principal Office designated by Administrative Agent for the account
of Lenders; for purposes of computing interest and fees, funds received by
Administrative Agent after that time on such due date shall be deemed to have
been paid by Borrower on the next succeeding 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, and all
such payments (and, in any event, any payments in respect of any Loan on a date
when interest is due and payable with respect to such Loan) shall be applied to
the payment of interest then due and payable before application to principal.
          (c) Administrative Agent (or its agent or sub-agent appointed by it)
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 thereto, including 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
Eurodollar 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” as they may apply to Revolving Loans, whenever any payment to be made
hereunder with respect to any Loan 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, with respect to Revolving Loans only, such extension of time shall be
included in the computation of the payment of interest hereunder or of the
Revolving Commitment fees hereunder.
          (f) Borrower hereby authorizes Administrative Agent and Collateral
Agent to charge Borrower’s accounts with Administrative Agent and Collateral
Agent in order to cause timely payment to be made to Administrative Agent and
Collateral Agent of all principal, interest, fees and expenses due hereunder
(subject to sufficient funds being available in its accounts for that purpose).
          (g) Administrative Agent shall deem any payment by or on behalf of
Borrower hereunder that is not made in same day funds prior to 12:00 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 Borrower,
Collateral Agent and each applicable Lender (confirmed in

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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 rate determined pursuant to
Section 2.11 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, or any Event of Default under Section 8.1(f) or (g) shall have
occurred, or as to any mandatory prepayments under Section 2.15 at any time an
Event of Default shall have occurred and not otherwise been waived in accordance
with the terms hereof, then, in each case, all payments or proceeds received by
Agents hereunder in respect of any of the Obligations, shall be applied in
accordance with the application arrangements described in Section 7.2 of the
Pledge and Security Agreement. In the event of any mandatory prepayments under
Sections 2.15(a) through 2.15(e), Borrower shall provide a certificate as to the
Loan to Value Ratio after giving effect to such mandatory prepayment, prior to
making any such mandatory prepayment, showing that the Applicable Loan to Value
Ratio is satisfied. If the Applicable Loan to Value Ratio shall not be satisfied
after giving effect to such mandatory prepayment, then such mandatory prepayment
shall be applied first to the principal of the Swing Line Loans and second to
the Revolving Loans, and thereafter in accordance with Section 2.16(b).
     2.18. Ratable Sharing. Lenders hereby agree among themselves that if any of
them shall, whether by voluntary payment (other than 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 Letters
of Credit, 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 Collateral
Agent, 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 Borrower 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. Borrower 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

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Borrower to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
     2.19. Making or Maintaining Eurodollar 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 Eurodollar 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 Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Borrower, Collateral Agent and each Lender of such determination,
whereupon (i) no Loans may be made as, or converted to, Eurodollar Rate Loans
until such time as Administrative Agent notifies Borrower, Collateral Agent and
Lenders that the circumstances giving rise to such notice no longer exist, and
(ii) any Funding Notice or Conversion/Continuation Notice given by Borrower with
respect to the Loans in respect of which such determination was made shall be
deemed to be a Funding Notice for or Conversion/Continuation Notice into Base
Rate Loans.
          (b) Illegality or Impracticability of Eurodollar 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 Borrower and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar 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 Borrower,
Collateral Agent 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, Eurodollar 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 Eurodollar Rate Loan then being requested by
Borrower 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 Eurodollar 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 Eurodollar Rate Loan then being requested by Borrower pursuant to a Funding
Notice or a Conversion/Continuation Notice, Borrower shall have the option,
subject to the provisions of Section 2.19(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

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Administrative Agent (with a copy to Collateral Agent) of such rescission on the
date on which the Affected Lender gives notice 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 2.19(b) shall affect the obligation of any Lender other
than an Affected Lender to make or maintain Loans as, or to convert Loans to,
Eurodollar Rate Loans in accordance with the terms hereof.
          (c) Compensation for Breakage or Non-Commencement of Interest Periods.
Borrower 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 by such
Lender to Lenders of funds borrowed by it to make or carry its Eurodollar 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 or a rescission pursuant to Section 2.19(b)) a
borrowing of any Eurodollar 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 Eurodollar 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 Eurodollar Rate Loans
occurs on a date prior to the last day of an Interest Period applicable to that
Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not made
on any date specified in a notice of prepayment given by Borrower.
          (d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.
          (e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.19 and under
Section 2.20 shall be made as though such Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.19 and under
Section 2.20.
     2.20. Increased Costs; Capital Adequacy.
          (a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.21 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender (which term shall include
Issuing Bank for purposes of this Section 2.20(a)) shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application

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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, 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 other acquisition of funds by, any office of such Lender (other than any
such reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar 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 participating in, issuing or maintaining Synthetic Letters of
Credit or Synthetic LC Deposits 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, Borrower 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 Borrower (with a copy to Collateral Agent and Administrative Agent) a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Lender under this Section 2.20(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 (which
term shall include Issuing Bank for purposes of this Section 2.20(b)) 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, Revolving Commitments, Synthetic LC Deposits or
Synthetic Letters of Credit, or participations therein or other obligations
hereunder with respect to the Loans or the Synthetic Letters of Credit 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

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Business Days after receipt by Borrower from such Lender of the statement
referred to in the next sentence, Borrower 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 Borrower (with a copy to Collateral Agent and Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to Lender under this Section 2.20(b), which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
          (c) Notice. Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital shall not constitute a
waiver of such Lender’s or the Issuing Bank’s right to demand such compensation;
provided that Borrower shall not be under any obligation to compensate any
Lender or the Issuing Bank under paragraph (a) or (b) of this Section 2.20 with
respect to increased costs or reductions with respect to any period prior to the
date that is 180 days prior to the date of the delivery of the statement
required pursuant to paragraph (a) or (b); provided further that the foregoing
limitation shall not apply to any increased costs or reductions arising out of
the retroactive application of any change in any law, treaty, governmental rule,
regulation or order within such 180-day period.
     2.21. 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 (which term shall include Issuing Bank for purposes of this
Section 2.21(b)) under any of the Credit Documents: (i) Borrower shall notify
Administrative Agent (with a copy to Collateral Agent) of any such requirement
or any change in any such requirement as soon as Borrower becomes aware of it;
(ii) Borrower 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 days after paying any sum from which it is
required by law to make any deduction or withholding, and within thirty days
after the due date of payment of any Tax which it is required by clause
(ii) above to pay, Borrower shall deliver to

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Administrative Agent (with a copy to Collateral 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 such requirement for a
deduction, withholding or payment as is mentioned therein 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, as the
case may be, 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 (with a copy to Collateral Agent)
for transmission to Borrower, 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 Borrower or Administrative Agent (each in the
reasonable exercise of its discretion), (i) two original copies of Internal
Revenue Service Form W-8BEN or W-8ECI (or any successor forms), properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Borrower 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 either
Internal Revenue Service Form W-8ECI pursuant to clause (i) above, a Certificate
re 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 Borrower 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 that is a United States person (as such term is
defined in Section 7701(a)(30) of the Internal Revenue Code) for United States
federal income tax purposes (a “U.S. Lender”) shall deliver to Administrative
Agent (with a copy to Collateral Agent) and Borrower on or prior to the Closing
Date (or, if later, on or prior to the date on which such Lender becomes a party
to this Agreement) two original copies of Internal Revenue Service Form W-9 (or
any successor form), properly completed and duly executed by such Lender,
certifying that such U.S. Lender is entitled to an exemption from United States
backup withholding tax, or otherwise prove that it is entitled to such an
exemption. 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 2.21(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 (with a copy to
Collateral Agent) for transmission to Borrower two new original copies of
Internal Revenue Service Form W-8BEN or W-8ECI , or a Certificate re

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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 Borrower 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 (with a copy to Collateral
Agent) and Borrower of its inability to deliver any such forms, certificates or
other evidence. Borrower shall not be required to pay any additional amount to
any Non-US Lender under Section 2.21(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 2.21(c), or (2) to notify Administrative Agent
(with a copy to Collateral Agent) and Borrower 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 2.21(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 2.21(c) shall relieve Borrower of its obligation to pay any
additional amounts pursuant this Section 2.21 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 properly entitled 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.
     2.22. Obligation to Mitigate. Each Lender (which term shall include Issuing
Bank for purposes of this Section 2.22) agrees that, as promptly as practicable
after the officer of such Lender responsible for administering its Loans or
Letters of Credit, as the case may be, 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 2.19, 2.20 or 2.21, 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 2.19, 2.20
or 2.21 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, Loans or Letters of Credit 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 Letters of Credit or the
interests of such Lender; provided, such Lender will not be obligated to utilize
such other office pursuant to this Section 2.22 unless Borrower 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 Borrower pursuant to this Section 2.22 (setting forth in
reasonable detail the basis for requesting such amount) submitted by such Lender
to Borrower (with a copy to Collateral Agent and Administrative Agent) shall be
conclusive absent manifest error.
     2.23. Defaulting Lenders. Anything contained herein to the contrary
notwithstanding, in the event that any Lender, other than at the direction or
request of any regulatory agency or authority, defaults (a “Defaulting Lender”)
in its obligation to fund (a

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“Funding Default”) any Revolving Loan or its portion of any unreimbursed
payment, or to make a Synthetic LC Deposit, including under Sections 2.3(b)(iv),
2.4 or 2.5 (in each case, 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 with respect to such Defaulting Lender shall have been reduced to
zero, (i) any voluntary prepayment of the Revolving Loans shall, if Borrower 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
Borrower 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 Borrower 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 and such Defaulting
Lender’s Pro Rata Share of the Letter of Credit Usage 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 any
Revolving Commitment fee pursuant to Section 2.12 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 and the aggregate Synthetic LC Exposure of all Lenders 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
Synthetic LC Commitment of any Lender shall be increased or otherwise affected,
and, except as otherwise expressly provided in this Section 2.23, performance by
Borrower 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 2.23. The rights and remedies against a Defaulting
Lender under this Section 2.23 are in addition to other rights and remedies
which Borrower 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.
     2.24. 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 Borrower that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.19, 2.20 or 2.21, (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 Business Days after Borrower’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 Business Days after Borrower’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

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consent of 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”), Borrower may, by giving written notice to Administrative
Agent (with a copy to Collateral 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, its Revolving
Commitments and its Synthetic LC Commitments and Synthetic LC Deposit, if any,
in full to one or more Eligible Assignees (each a “Replacement Lender”) in
accordance with the provisions of Section 10.6 and Borrower shall pay or cause
to be paid the fees, if any, payable thereunder in connection with any such
assignment from an Increased Cost Lender or a Non-Consenting Lender and the
Defaulting Lender shall pay the fees, if any, payable thereunder in connection
with any such assignment from such Defaulting Lender; 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 the Synthetic LC Deposit of such Terminated Lender, together
with all accrued Synthetic LC Deposit Return thereon, (C) an amount equal to all
unreimbursed Synthetic LC Disbursements that have been funded by such Terminated
Lender, together with all then unpaid interest with respect thereto at such time
and (D) an amount equal to all accrued, but theretofore unpaid fees owing to
such Terminated Lender pursuant to Section 2.12 and all other amounts owing to
such Terminated Lender pursuant to any other provision of any Credit Document;
(2) on the date of such assignment, Borrower shall pay any amounts payable to
such Terminated Lender pursuant to Section 2.19(c), 2.20 or 2.21; or otherwise
as if it were a prepayment 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; provided, Borrower may not make such election with
respect to any Terminated Lender that is also an Issuing Bank unless, prior to
the effectiveness of such election, Borrower shall have caused each outstanding
Letter of Credit issued thereby to be cancelled. Upon the prepayment of all
amounts owing to any Terminated Lender and the termination of such Terminated
Lender’s Revolving Commitments and Synthetic LC 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. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.

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          (b) Borrowings of Second Lien Term Loans. On or before the Closing
Date,
     (i) Borrower shall have received gross proceeds from the borrowing of
Second Lien Term Loans in an aggregate amount in cash of not less than
$175,000,000; and
     (ii) Borrower shall have delivered to Administrative Agent and Syndication
Agent complete, correct and conformed copies of the Second Lien Loan Agreement
and the other Second Lien Credit Documents.
          (c) 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; (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 (other than, in the case of
jurisdictions other than such Credit Party’s jurisdiction of incorporation,
organization or formation, where the failure to be in good standing or so
qualified could not be reasonably expected to have a Material Adverse Effect),
each dated a recent date prior to the Closing Date; and (v) such other documents
as Administrative Agent may reasonably request.
          (d) Organizational and Capital Structure. The organizational structure
and capital structure of Borrower and its Subsidiaries shall be as set forth on
Schedule 4.1.
          (e) Existing Indebtedness. On the Closing Date, Borrower and its
Subsidiaries shall have (i) repaid in full all Existing Indebtedness,
(ii) terminated any commitments to lend or make other extensions of credit
thereunder, (iii) delivered to Administrative Agent and Syndication Agent all
documents or instruments necessary to release all Liens securing Existing
Indebtedness or other obligations of Borrower and its Subsidiaries thereunder
being repaid on the Closing Date, and (iv) made arrangements satisfactory to
Administrative Agent and Syndication Agent with respect to the cancellation of
any letters of credit outstanding thereunder or the issuance of Letters of
Credit or Synthetic Letters of Credit to support the obligations of Borrower and
its Subsidiaries with respect thereto.
          (f) 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 or advisable 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 and Syndication Agent. All applicable waiting periods shall
have expired without any action being taken or threatened by any competent

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authority which would restrain, prevent or otherwise impose adverse conditions
on the transactions contemplated by the Credit Documents or the financing
thereof and no action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.
     (g) Real Estate Assets. In order 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
certain Real Estate Assets, Collateral Agent shall have received from Borrower
and each applicable Guarantor:
          (i) fully executed and notarized Mortgages, in proper form for
recording in all appropriate places in all applicable jurisdictions, encumbering
each Real Estate Asset listed in Schedule 3.1(g)(i) (each, a “Closing Date
Mortgaged Property”);
          (ii) an opinion of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) in each state in which a Closing Date
Mortgaged Property is located with respect to the enforceability of the form(s)
of Mortgages to be recorded in such state and such other matters as Collateral
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to Collateral Agent;
          (iii) (a) ALTA mortgagee title insurance policies or unconditional
commitments therefor issued by one or more title companies reasonably
satisfactory to Collateral Agent with respect to each Closing Date 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 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
Closing Date Mortgaged Property in the appropriate real estate records;
          (iv) flood certifications with respect to all Closing Date Mortgaged
Properties and 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, in form and substance reasonably satisfactory to
Collateral Agent; and

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          (v) ALTA surveys of all Closing Date Mortgaged Properties, certified
to Collateral Agent and dated not more than thirty days prior to the Closing
Date.
          (h) 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, the Credit
Parties shall have delivered to Collateral Agent:
          (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 their obligations to execute and
deliver UCC financing statements, originals of securities, instruments, chattel
paper and certificates of title 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;
          (iii) fully executed and notarized Intellectual Property Security
Agreements, in proper form for filing or recording in all appropriate places in
all applicable jurisdictions, memorializing and recording the encumbrance of the
Intellectual Property Assets listed in Schedule 4.7 to the Pledge and Security
Agreement;
          (iv) 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;
          (v) evidence that each Credit Party shall have taken or caused to be
taken any other action, executed and delivered or caused to be executed and
delivered any other agreement, document and instrument (including (i) a Landlord
Personal Property Collateral Access Agreement executed by the landlord of any
Leasehold Property which is a warehouse, distribution center or other location
at which a material amount of Collateral is located, and by the applicable
Credit Party and (ii) any intercompany notes evidencing Indebtedness permitted
to be incurred pursuant to Section 6.1(b)) and made or caused to be made any
other filing and recording (other than as set forth herein) reasonably required
by Collateral Agent; and
          (vi) evidence satisfactory to Collateral Agent that Borrower has
retained, at its sole cost and expense, a service provider acceptable to
Collateral Agent for the tracking of all of UCC financing statements of Borrower
and the Guarantors and that will provide notification to Collateral Agent of,
among other things, the upcoming lapse or expiration thereof.

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          (i) Environmental Reports. Administrative Agent, Collateral Agent and
Syndication Agent shall have received reports and other information, in form,
scope and substance reasonably satisfactory to Administrative Agent and
Syndication Agent, regarding environmental matters relating to the Facilities.
          (j) Financial Statements; Projections. Lenders shall have received
from Borrower (i) the Historical Financial Statements, (ii) pro forma
consolidated balance sheets of Borrower and its Subsidiaries as at the Closing
Date, and reflecting the transactions contemplated by the Credit Documents to
occur on or prior to the Closing Date, which pro forma balance sheet shall be in
form and substance satisfactory to Administrative Agent and Syndication Agent,
and (iii) the Projections.
          (k) Evidence of Insurance. Collateral Agent shall have received a
certificate from Borrower’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.
          (l) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions of Alston & Bird LLP, counsel for Credit Parties, in
the form of Exhibit D, and as to such other matters as Administrative Agent or
Syndication Agent may reasonably request, dated as of the Closing Date and
otherwise in form and substance reasonably satisfactory to Administrative Agent
and Syndication Agent (and each Credit Party hereby instructs such counsel to
deliver such opinions to Agents and Lenders).
          (m) Fees. Borrower shall have paid to Agents the fees payable on the
Closing Date referred to in Section 2.12(e).
          (n) Solvency Certificate. On the Closing Date Administrative Agent,
Collateral Agent and Syndication Agent shall have received a Solvency
Certificate from Borrower and in form, scope and substance satisfactory to
Administrative Agent and Syndication Agent, and demonstrating that after giving
effect to the consummation of the transactions contemplated by the initial
borrowings hereunder and under the Second Lien Credit Agreement and any rights
of contribution, each of Borrower and its Subsidiaries is and will be Solvent.
          (o) Closing Date Certificate. Borrower shall have delivered to
Administrative Agent, Collateral Agent and Syndication Agent an originally
executed Closing Date Certificate, together with all attachments thereto.
          (p) Credit Rating. The credit facilities provided for under this
Agreement shall have been assigned a credit rating by either S&P and/or Moody’s.
          (q) Closing Date. Lenders shall have made the Term Loans to Borrower
on or before March 31, 2007.
          (r) No Litigation. There shall not exist any action, suit,
investigation, litigation, proceeding, hearing or other legal or regulatory
developments, pending or threatened

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in any court or before any arbitrator or Governmental Authority that, in the
reasonable opinion of Administrative Agent and Syndication Agent, singly or in
the aggregate, materially impairs the transactions contemplated by the Credit
Documents, or that could have a Material Adverse Effect.
          (s) 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 or Syndication Agent and its counsel shall be
satisfactory in form and substance to Administrative Agent and Syndication Agent
and such counsel, and Administrative Agent, Syndication Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent or Syndication Agent may reasonably request.
          (t) Letter of Direction. Administrative Agent and Collateral Agent
shall have received a duly executed letter of direction from Borrower addressed
to GSCP, Administrative Agent and Collateral Agent, on behalf of itself and
Lenders, directing the disbursement on the Closing Date of the proceeds of the
Term Loans made on such date (it being understood that there shall be no
Revolving Loans or Swing Line Loans made, or Letters of Credit issued, on the
Closing Date).
          (u) Minimum EBITDA. Administrative Agent, Collateral Agent and
Syndication Agent shall have received evidence reasonably satisfactory to
Administrative Agent, Collateral Agent and Syndication Agent that the
Consolidated Adjusted EBITDA of Borrower for the twelve-month period ending on
December 31, 2006 was not less than $233,000,000.
          (v) Patriot Act. Prior to the Closing Date, the Arranger shall have
received all documentation and other information required by bank regulatory
authorities under applicable “know-your-customer” and anti-money laundering
rules and regulations, including the U.S.A. Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”).
          (w) Loan to Value Ratio Certificate. Collateral Agent and
Administrative Agent shall have received a Loan to Value Ratio Certificate
certifying that the Borrower has a Loan to Value Ratio of not less than
3.00:1.00.
     3.2. Conditions to Each Credit Extension.
          (a) Conditions Precedent. The obligation of each Lender to make any
Loan, or Issuing Bank to issue any Letter of Credit, 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 or Issuance Notice, as the case may be;
          (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) the Loan to Value Ratio shall not
be less than the Applicable Loan to Value Ratio;

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          (iii) after making the Credit Extensions requested on such Credit
Date, the total Synthetic LC Usage shall not exceed the total Synthetic LC
Deposits;
          (iv) as of such Credit Date, the representations and warranties
contained herein and in the other Credit Documents (other than, for Credit
Extensions involving the continuation of Eurodollar Rate Loans into a new
Interest Periods, those set forth in Section 4.9 and Section 4.11) 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;
          (v) 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;
          (vi) on or before the date of issuance of any Letter of Credit,
Administrative Agent shall have received all other information required by the
applicable Issuance Notice, and such other documents or information as Issuing
Bank may reasonably require in connection with the issuance of such Letter of
Credit; and
          (vii) after giving effect to such Credit Extension and the use of
proceeds thereof the aggregate Cash and Cash Equivalents of Borrower and its
Subsidiaries will not exceed $50,000,000.
Any Agent or Requisite Lenders shall be entitled, but not obligated to, request
and receive, prior to the making of any Credit Extension, additional information
reasonably satisfactory to the requesting party confirming the satisfaction of
any of the foregoing if, in the good faith judgment of such Agent or Requisite
Lender such request is warranted under the circumstances.
          (b) Notices. Any Notice shall be executed by an Authorized Officer in
a writing delivered to Administrative Agent. In lieu of delivering a Notice,
Borrower may give Administrative Agent telephonic notice by the required time of
any proposed borrowing, conversion/continuation or issuance of a Letter of
Credit, 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 Borrower 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 Borrower or for
otherwise acting in good faith.
     SECTION 4. REPRESENTATIONS AND WARRANTIES
       In order to induce Lenders and Issuing Bank to enter into this Agreement
and to make each Credit Extension to be made thereby, each Credit Party
represents and warrants to each

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Lender and Issuing Bank, 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
Borrower 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 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 (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. Equity Interests and Ownership. The Equity Interests of Subsidiaries
of Borrower 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 any of Subsidiary of Borrower is a party requiring, and there is no
membership interest or other Equity Interests of any of Subsidiary of Borrower
outstanding which upon conversion or exchange would require, the issuance by any
Subsidiary of Borrower of any additional membership interests or other Equity
Interests of any of Subsidiary of Borrower or other Securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase, a
membership interest or other Equity Interests of any of Subsidiary of Borrower.
Schedule 4.2 correctly sets forth the ownership interest of Borrower 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 (i) any provision of any law or any governmental rule or regulation
applicable to Borrower or any of its Subsidiaries, (ii) any of the
Organizational Documents of Borrower or any of its Subsidiaries, or (iii) any
order, judgment or decree of any court or other agency of government binding on
Borrower 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 Borrower or any of its Subsidiaries except to the
extent such conflict, breach or default could not reasonably be expected to have
a Material Adverse Effect; (c) result in or require the creation or imposition
of any Lien upon any of the properties or assets of Borrower or any of its
Subsidiaries (other than any Liens created under any of the Credit Documents in
favor of Collateral Agent, on behalf of Secured Parties, and Liens securing the
obligations under the Second Lien Credit Agreement); or (d) require any approval
of stockholders, members or partners or any approval or consent of any Person
under any Contractual Obligation of Borrower 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 and except for any such approvals or
consents the failure of which to obtain will not have a Material Adverse Effect.

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     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
(i) audit and normal year-end adjustments and (ii) the possible adjustment
described in Schedule 4.7 hereto. As of the Closing Date, neither Borrower nor
any of its Subsidiaries has any contingent liability or liability for taxes,
long-term lease (other than store leases entered into in the ordinary course of
business) 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 Borrower and any of its
Subsidiaries taken as a whole.
     4.8. Projections. On and as of the Closing Date, the projections of
Borrower and its Subsidiaries for the period of Fiscal Year 2007 through and
including Fiscal Year 2010 (the “Projections”) are based on good faith estimates
and assumptions made by the management of Borrower; 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; provided further, as of the Closing Date,
management of Borrower believed that the Projections were reasonable and
attainable.
     4.9. No Material Adverse Change. Since January 1, 2006, 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 1, 2006, neither
Borrower 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 6.4.
     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.

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Neither Borrower nor any of its Subsidiaries (a) is in violation of any
applicable laws (including Environmental Laws) 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 federal, material state, material provincial and other material tax returns
and reports of Borrower and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes due and payable and all assessments, fees
and other governmental charges upon Borrower 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. Borrower knows of no proposed
tax assessment against Borrower or any of its Subsidiaries which is not being
actively contested by Borrower 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 Borrower 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), (iii) valid licensed rights in (in the case of licensed
interests in intellectual property) and (iv) good title to (in the case of all
other personal property), all of their respective properties and assets
reflected in their respective Historical Financial Statements referred to in
Section 4.7 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 6.8 and, with respect to the foregoing clause (ii),
except as could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Except as permitted by this Agreement, all
such properties and assets are free and clear of Liens.
          (b) Real Estate. As of the Closing Date, Schedule 4.13 contains a
true, accurate and complete list of (i) all Real Estate Assets, and (ii) all
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Estate Asset of any Credit Party, regardless of whether such Credit
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under such lease, sublease or assignment. Except as could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, each agreement listed in clause (ii) of the immediately
preceding sentence is in full force and effect and Borrower does not have
knowledge of any default that has occurred and is continuing thereunder, and
each such agreement constitutes 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.

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     4.14. Environmental Matters. Neither Borrower 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 Borrower 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 Borrower’ 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 Borrower or any of
its Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Neither Borrower nor any of its
Subsidiaries nor, to any Credit Party’s knowledge, any predecessor of Borrower
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 Borrower’s 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. 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 Borrower 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 Borrower 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 where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.
     4.16. Material Contracts. Schedule 4.16 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date, and
except as described thereon, all such Material Contracts are in full force and
effect and no defaults currently exist thereunder.
     4.17. Governmental Regulation. Neither Borrower nor any of its Subsidiaries
is subject to regulation under 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 Borrower 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 Borrower 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

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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.
     4.19. Employee Matters. Neither Borrower 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 Borrower or any of its Subsidiaries, or to the best knowledge of
Borrower and Borrower, 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 Borrower or
any of its Subsidiaries or to the best knowledge of Borrower and Borrower,
threatened against any of them, (b) no strike or work stoppage in existence or
threatened involving Borrower or any of its Subsidiaries, and (c) to the best
knowledge of Borrower and Borrower, no union representation question existing
with respect to the employees of Borrower or any of its Subsidiaries and, to the
best knowledge of Borrower and Borrower, no union organization activity that 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
likely to have a Material Adverse Effect.
     4.20. Employee Benefit Plans. Borrower, 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, in each case, where the failure to comply or
perform would not reasonably be expected to result in liabilities of the
Borrower and its Subsidiaries in excess of $15,000,000 in the aggregate or have
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 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
(other than routine contributions) or any trust established under Title IV of
ERISA (other than routine contributions) has been or is expected to be incurred
by Borrower, any of its Subsidiaries or any of their ERISA Affiliates, which
would, when taken together with all such liabilities, exceed $15,000,000 in the
aggregate for the Borrower and its Subsidiaries or which would reasonably be
expected to have Material Adverse Effect. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all such ERISA
Events, would exceed $15,000,000 in the aggregate for the Borrower and its
Subsidiaries or would reasonably be expected to have Material Adverse Effect.
Except to the extent required under Section 4980B of the Internal Revenue Code
or similar state laws and to the extent an employee became entitled to benefits
prior to his or her termination of employment (e.g., severance, long term
disability benefits, etc.), no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates. The present value of the aggregate benefit liabilities under
each Pension Plan sponsored, maintained or contributed to by Borrower, any of
its Subsidiaries or any of their ERISA Affiliates (determined as of the end of
the most recent plan year on the basis of the actuarial assumptions specified
for funding purposes in the most recent actuarial valuation for

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such Pension Plan), did not exceed the aggregate current value of the assets of
such Pension Plan. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available, the potential liability of
Borrower, its Subsidiaries and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of
ERISA), when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA is zero. Borrower, 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.
     4.21. Certain Fees. No broker’s or finder’s fee or commission will be
payable with respect to the transactions contemplated by the Credit Documents,
except as payable to the Agents and the Lenders.
     4.22. Solvency. The Credit Parties are and, upon the incurrence of any
Obligation by any Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
     4.23. Compliance with Statutes, etc. Each of Borrower 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 (including
compliance with all applicable Environmental Laws with respect to any Real
Estate Asset or governing its business and the requirements of any permits
issued under such Environmental Laws with respect to any such Real Estate Asset
or the operations of Borrower or any of its Subsidiaries), except such
non-compliance that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
     4.24. 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 any Agent or Lender by or on behalf of Borrower
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 Borrower, in the case of any document not
furnished by it) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made, except for the possible adjustment to the Historical Financial Statements
described in Schedule 4.7 hereto. Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by Borrower 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 materially and adversely from the projected
results. There are no facts known (or which should upon the reasonable exercise
of diligence be known) to Borrower (other than matters of a general economic
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

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          4.25. 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 Untied
States Treasury Department (31 CFR, 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). 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.
     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 and cancellation or
expiration of all Letters of Credit and Synthetic Letters of Credit, 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. Borrower will deliver to
Administrative Agent and Lenders:
          (a) Quarterly Financial Statements. As soon as available, and in any
event within 50 days after the end of each of the first three Fiscal Quarters of
each Fiscal Year, commencing with the Fiscal Quarter in which the Closing Date
occurs, the consolidated balance sheets of Borrower and its Subsidiaries as at
the end of such Fiscal Quarter and the related consolidated statements of
operations, stockholders’ equity and cash flows of Borrower and its Subsidiaries
for such Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, setting forth in each
case 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;
          (b) Annual Financial Statements. As soon as available, and in any
event within 105 days after the end of each Fiscal Year, commencing with the
Fiscal Year in which the Closing Date occurs, (i) the consolidated balance
sheets of Borrower and its Subsidiaries as at the end of such Fiscal Year and
the related consolidated statements of operations, stockholders’ equity and cash
flows of Borrower and its Subsidiaries for such Fiscal Year, setting forth in
each case in comparative form the corresponding figures for the previous Fiscal
Year covered by such financial statements, in reasonable detail, 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
Ernst & Young LLP or other independent certified public accountants of
recognized national standing selected by Borrower, 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
Borrower and its Subsidiaries as at the dates indicated and

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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) and that the examination by
such accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards) together
with a written statement by such independent certified public accountants
stating (1) that their audit examination has included a review of the terms of
Section 6.7 of this Agreement and the related definitions, (2) whether, in
connection therewith, any condition or event that constitutes a Default or an
Event of Default under Section 6.7 has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof, and (3) if provided by such independent certified public
accountants, that nothing has come to their attention that causes them to
believe that the information contained in any Compliance Certificate is not
correct or that the matters set forth in such Compliance Certificate are not
stated in accordance with the terms hereof;
          (c) Compliance Certificate. Together with each delivery of financial
statements of Borrower and its Subsidiaries pursuant to Sections 5.1(a) and
5.1(b), a duly executed and completed Compliance Certificate;
          (d) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements, the
consolidated financial statements of Borrower and its Subsidiaries delivered
pursuant to Section 5.1(a) or 5.1(b) will differ in any material respect from
the consolidated financial statements that would have been delivered pursuant to
such subdivisions had no such change in accounting principles and policies been
made, then, together with the first delivery of such financial statements after
such change, one or more statements of reconciliation for all such prior
financial statements in form and substance satisfactory to Administrative Agent
provided, that this Section 5.1(d) shall not apply in the event Borrower or
Requisite Lenders do not make the request referred to in, and the Credit
Documents are not amended in the manner described in, Section 1.2;
          (e) Notice of Default. Promptly upon any officer of Borrower obtaining
knowledge (i) of any condition or event that constitutes a Default or an Event
of Default or that notice has been given to Borrower with respect thereto;
(ii) that any Person has given any notice to Borrower 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 Officer 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 Borrower has
taken, is taking and proposes to take with respect thereto;
          (f) Notice of Litigation. Promptly upon any officer of Borrower
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any
Adverse Proceeding not previously disclosed in writing by Borrower to Lenders,
or (ii) any material development in any Adverse Proceeding that, in the case of
either clause (i) or (ii), if adversely determined 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

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contemplated hereby, written notice thereof together with such other information
as may be reasonably available to Borrower to enable Lenders and their counsel
to evaluate such matters;
          (g) ERISA. (i) Promptly upon any officer of Borrower becoming aware of
the occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Borrower, 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, copies of (1) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by
Borrower, 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 Borrower, 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 which, in each of (i) and (ii) relate to matters or liabilities that,
when taken together with all such matters and liabilities, exceed $15,000,000 in
the aggregate for the Borrower and its Subsidiaries or which would reasonably be
expected to have Material Adverse Effect;
          (h) Financial Plan. As soon as practicable and in any event no later
than forty five days after the end of each Fiscal Year, a consolidated plan and
financial forecast for such Fiscal Year (a “Financial Plan”), including (i) a
forecasted consolidated balance sheet and forecasted consolidated statements of
operations and cash flows of Borrower and its Subsidiaries for each such Fiscal
Years and (ii) forecasted consolidated statements of operations and cash flows
of Borrower and its Subsidiaries for each month of such current Fiscal Year;
          (i) Insurance Report. As soon as practicable and in any event by the
last day of each Fiscal Year, a certificate from Borrower’s insurance broker(s)
in form and substance satisfactory to Administrative Agent outlining all
material insurance coverage maintained as of the date of such certificate by
Borrower and its Subsidiaries;
          (j) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Borrower;
          (k) Notice Regarding Material Contracts. Promptly, and in any event
within ten Business Days (i) after any Material Contract of Borrower or any of
its Subsidiaries is terminated or amended in a manner that is materially adverse
to Borrower or such Subsidiary, as the case may be, or (ii) any new Material
Contract is entered into, a written statement describing such event, with copies
of such material amendments or new contracts, 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 Borrower or its applicable Subsidiary with the intent of
avoiding compliance with this Section 5.1(k)), and an explanation of any actions
being taken with respect thereto;
          (l) Information Regarding Collateral. (a) Borrower will furnish to
Collateral Agent prompt written notice of any change (i) in any Credit Party’s
corporate name, (ii) in any Credit Party’s identity or corporate structure,
(iii) in any Credit Party’s jurisdiction of

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organization or (iv) in any Credit Party’s Federal Taxpayer Identification
Number or state organizational identification number. Borrower agrees not to
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for Collateral Agent to continue at all times following such
change to have a valid, legal and perfected security interest in all the
Collateral as contemplated in the Collateral Documents. Borrower 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(a), Borrower shall deliver to Collateral Agent a certificate of
its Authorized Officer (i) either 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 (ii) certifying that all
Uniform Commercial Code financing statements (including fixtures filings, as
applicable) and all supplemental intellectual property security agreements or
other appropriate filings, recordings or registrations, have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above (or in such Collateral
Questionnaire) to the extent necessary to effect, protect and perfect the
security interests under the Collateral Documents for a period of not less than
18 months after the date of such certificate (except as noted therein with
respect to any continuation statements to be filed within such period);
     (n) Other Information. (A) Promptly upon their becoming available, copies
of (i) all financial statements, reports, notices and proxy statements sent or
made available generally by Borrower to its security holders acting in such
capacity or by any Subsidiary of Borrower to its security holders other than
Borrower or another Subsidiary of Borrower, (ii) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Borrower or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, (iii) all press releases and other statements made available
generally by Borrower or any of its Subsidiaries to the public concerning
material developments in the business of Borrower or any of its Subsidiaries,
and (B) such other information and data with respect to Borrower or any of its
Subsidiaries as from time to time may be reasonably requested by Administrative
Agent (for itself or any Lender, Issuing Bank or Synthetic LC Issuing Bank);
     (o) Certification of Public Information. Concurrently with the delivery of
any document or notice required to be delivered pursuant to this Section 5.1,
Borrower shall indicate in writing whether such document or notice contains
Nonpublic Information. Borrower and each Lender acknowledge that certain of the
Lenders may be “public-side” Lenders (Lenders that do not wish to receive
material non-public information with respect to Borrower, its Subsidiaries or
their securities) and, if documents or notices required to be delivered pursuant
to this Section 5.1 or otherwise are being distributed through
IntraLinks/IntraAgency, SyndTrak or another relevant website or other
information platform (the “Platform”), any document or notice that Borrower has
indicated contains Nonpublic Information shall not be posted on that portion of
the Platform designated for such public-side Lenders. If Borrower has not
indicated whether a document or notice delivered pursuant to this Section 5.1
contains solely Nonpublic Information,

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Administrative Agent reserves the right to post such document or notice solely
on that portion of the Platform designated for Lenders who wish to receive
material nonpublic information with respect to Borrower, its Subsidiaries and
their securities;
          (p) Loan to Value; Collateral Reporting. No less frequently than with
the delivery of financial statements of Borrower and its Subsidiaries pursuant
to Sections 5.1(a) and 5.1(b), Borrower shall provide to Collateral Agent and
Administrative Agent (i) a certificate substantially similar in form and
substance to the certificate attached hereto as Exhibit N (the “Loan to Value
Ratio Certificate”) certifying as to the calculation of the correct Value as of
the end of such period and setting forth the correct Loan to Value Ratio as of
such date based on closing book values of Borrower and its Subsidiaries and
(ii) a Collateral report with the reports identified on Exhibit O hereto (and,
in the case of clause (i) above, at any time that the Total Utilization of
Revolving Commitments is greater than or equal to $50,000,000 for any five
(5) Business Days in any calendar month, Borrower shall provide to Collateral
Agent and Administrative Agent a Loan to Value Ratio Certificate certifying as
to the calculation of the correct Value as of the end of such period and setting
forth the correct Loan to Value Ratio as of such date within 25 days after the
end of each such calendar month, which Value shall not be based on closing book
values but shall be based on Borrower’s best estimates of data).
Documents required to be delivered pursuant to Section 5.1(a), (b), (j), (k) or
(n) (to the extent any such documents are included in materials otherwise filed
with the Securities and Exchange Commission) may be delivered electronically and
if so delivered, shall be deemed to have been delivered on the date (i) on which
Borrower posts such documents with the Securities and Exchange Commission; or
(ii) on which such documents are posted on Borrower’s behalf on an Internet or
intranet website, if any, to which each Lender, Issuing Bank, Synthetic LC
Issuing Bank and each Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that: (i) Borrower shall deliver paper copies of such documents to either
Administrative Agent or any Lender that requests Borrower to deliver such paper
copies until a written request to cease delivering paper copies is given by such
Administrative Agent or such Lender and (ii) Borrower shall notify each
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 5.1(c) to the Administrative Agent. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by Borrower with any
such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.
     5.2. Existence. Except as otherwise permitted under Section 6.8, 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 (other than Borrower with respect to existence) or any of its Subsidiaries
shall be required to preserve any such existence, right or franchise, licenses
and permits if the failure to do so, individually or in the aggregate, would 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 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
(i) such Tax or claim does not, together with all other Taxes then remaining
unpaid, exceed $250,000 in the aggregate or (ii) 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
Borrower or any of its Subsidiaries).
     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 Borrower 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. Borrower will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Borrower 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, Borrower 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 with any applicable
regulations of the Board of Governors of the Federal Reserve System, and
(b) replacement value casualty 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 business (it being understood and agreed that Borrower’s hazard
self-insurance program of $250,000 per store consistent with past prudent
business practice and currently in effect as of the Closing Date is acceptable).
Each such policy of insurance shall (i) name Collateral Agent, on behalf of
Secured Parties, as an additional insured thereunder as its interests may
appear, (ii) in the case of each casualty insurance policy, contain a loss
payable clause or endorsement, satisfactory in form and substance to Collateral
Agent, that names Collateral Agent, on behalf of the Secured Parties, as the
loss payee thereunder and provide for at least thirty days’ prior written notice
to Collateral Agent of any modification or cancellation of such policy.

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     5.6. Books and Records; Inspections. Each Credit Party will, and will cause
each of its Subsidiaries to, keep proper books of record and accounts in which
full, true and correct entries in conformity in all material respects with GAAP
shall be made of all dealings and transactions in relation to its business and
activities. Each Credit Party will, and will cause each of its Subsidiaries to,
permit any authorized representatives designated by Collateral Agent,
Administrative 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 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 so long as no Event of Default has occurred
and is continuing, the Collateral Agent may visit Borrower only once during any
Fiscal Year at Borrower’s expense, and no Lender or Administrative Agent may
visit the Borrower more than once per Fiscal Year and such visit shall be at the
expense of such Lender or Administrative Agent, as applicable.
     5.7. Lenders Meetings. Borrower 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 Borrower’s corporate offices
(or at such other location as may be agreed to by Borrower and Administrative
Agent) at such time as may be agreed to by Borrower 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. Borrower 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 Borrower or any of its Subsidiaries
or by independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or with
respect to any material Environmental Claims;
          (ii) promptly upon an officer of Borrower obtaining knowledge of 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, (2) any remedial
action taken by Borrower 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

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reasonable possibility of resulting in a Material Adverse Effect, and
(3) Borrower’s discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Facility that could cause such Facility or
any part thereof to be subject to any material restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental Laws;
          (iii) as soon as practicable following the sending or receipt thereof
by Borrower 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 federal, state or
local governmental or regulatory agency, and (3) any request for information
from any governmental agency that suggests such agency is investigating whether
Borrower or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity that, individually or in the aggregate, has a
reasonable possibility of resulting in a Material Adverse Effect;
          (iv) prompt written notice describing in reasonable detail (1) any
proposed acquisition of stock, assets, or property by Borrower or any of its
Subsidiaries that could reasonably be expected to (A) expose Borrower 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 Borrower 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 Borrower or any of its Subsidiaries to modify current
operations in a manner that could reasonably be expected to subject Borrower 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.
     5.10. Subsidiaries. In the event that any Person becomes a Domestic
Subsidiary of Borrower (or Borrower elects to have Movie Gallery Canada become a
Guarantor), Borrower shall (a) promptly cause such Domestic Subsidiary (or Movie
Gallery Canada, as the case may be) 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

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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(c), 3.1(g),
3.1(h), 3.1(i) and 3.1(l). In the event that any Person becomes a Foreign
Subsidiary of Borrower, and the ownership interests of such Foreign Subsidiary
are owned by Borrower or by any Domestic Subsidiary thereof, Borrower shall, or
shall cause such Domestic Subsidiary to, deliver, all such documents,
instruments, agreements, and certificates as are similar to those described in
Sections 3.1(c), and Borrower shall take, or shall cause such Domestic
Subsidiary to take, all of the actions referred to in Section 3.1(h)(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 65% of such Equity Interests. In the event that any Inactive Entity
shall have total revenues exceeding $1,000,000 for any four consecutive Fiscal
Quarters after the Closing Date or at any time after the Closing Date shall have
total assets exceeding $1,000,000, Borrower shall, or shall cause any Domestic
Subsidiary holding the Equity Interests in such Inactive Entity to, take, all of
the actions referred to in Section 3.1(h)(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 such Equity Interests (to
the extent required pursuant to the terms of the Pledge and Security Agreement).
With respect to each such Subsidiary, Borrower 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 Borrower, and (ii) all
of the data required to be set forth in Schedules 4.1 and 4.2 with respect to
all Subsidiaries of Borrower; and 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
(i) any Credit Party acquires a Material Real Estate Asset, (ii) a Real Estate
Asset owned or leased on the Closing Date becomes a Material Real Estate Asset
or (iii) the Scheduled Sale-Leaseback Properties (or any of them) that
constitutes a Material Real Estate Asset are not disposed of pursuant to a sale
and leaseback transaction described in Section 6.10 which shall close on or
before May 15, 2007, and, in each case, such interest has not otherwise been
made subject to the Lien of the Collateral Documents in favor of Collateral
Agent, for the benefit of Secured Parties, then such Credit Party shall promptly
(and, in respect of the Scheduled Sale-Leaseback Properties, no later than
June 15, 2007) 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(g), 3.1(h)
and 3.1(i) 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, Borrower shall, at the request
of Collateral Agent, deliver, from time to time, to Collateral 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. Interest Rate Protection. No later than ninety (90) days
following the Closing Date and at all times thereafter until the third
anniversary of the Closing Date, Borrower shall obtain and cause to be
maintained protection against fluctuations in interest rates pursuant to one or
more Interest Rate Agreements in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent, in order to ensure that no less than
50% of the aggregate principal amount of the total Indebtedness for borrowed
money of Borrower and its

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Subsidiaries then outstanding is either (i) subject to such Interest Rate
Agreements or (ii) Indebtedness that bears interest at a fixed rate.
          5.13. Further Assurances. At any time or from time to time upon the
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. 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 Borrower, and
its Subsidiaries and all of the outstanding Equity Interests of Borrower and its
Subsidiaries (subject to limitations contained in the Credit Documents with
respect to Foreign Subsidiaries).
          5.14. Miscellaneous Covenants. Unless otherwise consented to by Agents
or Requisite Lenders:
               (a) Maintenance of Ratings. At all times, Borrower shall use
commercially reasonable efforts to maintain ratings issued by Moody’s and S&P
with respect to its senior secured debt.
               (b) Cash Management Systems. Borrower and its Subsidiaries shall
establish and maintain cash management systems in accordance with the terms of
the Collateral Documents.
               (c) Total Utilization of Revolving Commitments. Borrower and its
Subsidiaries (i) shall cause the Total Utilization of Revolving Commitments to
not exceed the Revolving Commitments then in effect and (y) shall cause the Loan
to Value Ratio not to be less than the Applicable Loan to Value Ratio.
  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 and cancellation or
expiration of all Letters of Credit and Synthetic Letters of Credit, 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 Borrower or to
any other Guarantor Subsidiary, or of Borrower to any Guarantor Subsidiary;
provided, (i) all such Indebtedness shall be evidenced by the Intercompany Note,
which shall be subject to a First

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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 Intercompany
Note, 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 Borrower or to any of its Subsidiaries
for whose benefit such payment is made;
               (c) Indebtedness (i) under the Second Lien Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $175,000,000
plus (x) the principal amount of “New Term Loans” (under and as defined in the
Second Lien Credit Agreement) added to the principal amount thereunder in
accordance with the terms of the Second Lien Credit Agreement as in effect on
the Closing Date in an aggregate amount not to exceed $25,000,000 plus (y) the
amount of any “PIK Interest” (under and as defined in the Second Lien Credit
Agreement) added to the principal amount thereunder in accordance with the terms
of the Second Lien Credit Agreement as in effect on the Closing Date (provided
that the aggregate additional principal amount of secured Indebtedness incurred
under this clause (i) is permitted pursuant to the terms of the Senior Notes
Indenture), and (ii) subject to the terms of the Intercreditor Agreement,
Indebtedness incurred to refinance, renew or replace the Indebtedness referred
to in the foregoing clause (i) in whole or in part;
               (d) Indebtedness incurred by Borrower or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guaranties or letters of credit, surety
bonds or performance bonds securing the performance of Borrower or any such
Subsidiary pursuant to such agreements, in connection with Permitted
Acquisitions or permitted dispositions of any business, assets or Subsidiary of
Borrower or any of its Subsidiaries;
               (e) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal 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 Company and
its Subsidiaries;
               (h) guaranties by Borrower of Indebtedness of a Guarantor
Subsidiary or guaranties by a Guarantor Subsidiary of Indebtedness of Borrower
or another Guarantor Subsidiary with respect, in each case, to Indebtedness
otherwise permitted to be incurred pursuant to this Section 6.1; provided, that
if the Indebtedness that is being guarantied is unsecured and/or subordinated to
the Obligations, the guaranty shall also be unsecured and/or subordinated to the
Obligations;
               (i) (A) Indebtedness existing on the Closing Date and 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

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Indebtedness as the same are in effect on the date of this Agreement and
(ii) refinancings, renewals 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, renewed or extended, and the
average life to maturity thereof is greater than or equal to that of the
Indebtedness being refinanced, renewed 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, (B) exceed in a
principal amount the Indebtedness being renewed, extended or refinanced plus the
amount of any interest, premium, or penalties required to be paid thereon plus
fees and expenses associated therewith or (C) be incurred, created or assumed if
any Default or Event of Default has occurred and is continuing or would result
therefrom, and (B) the Senior Notes, but not any extensions, renewals or
replacements of such Indebtedness except pursuant to a Senior Notes Refinancing
and/or the Senior Note Refinancing Third Lien Facility;
               (j) Indebtedness in respect of Hedge Agreements entered into in
the ordinary course of business and not for speculative purposes;
               (k) Indebtedness with respect to Capital Leases (i) in an
aggregate amount (together with the aggregate amount of Indebtedness incurred
pursuant to Section 6.1(l)(i)) not to exceed at any time $10,000,000 outstanding
and (ii) in connection with the Kiosk Program in an aggregate amount not to
exceed at any time $15,000,000 outstanding;
               (l) purchase money Indebtedness (i) in an aggregate amount
(together with the aggregate amount of Indebtedness incurred pursuant to
Section 6.1(k)(i)) not to exceed at any time $10,000,000 outstanding and (ii) in
connection store shell construction in the ordinary course of business in an
aggregate amount not to exceed at any time $10,000,000 outstanding; provided,
any such Indebtedness (A) shall be secured only by the asset acquired,
constructed or improved in connection with the incurrence of such Indebtedness,
and (B) shall constitute not less than 90% of the aggregate consideration paid
with respect to such asset;
               (m) (i) Indebtedness of a Person or Indebtedness attaching to
assets of a Person that, in either case, becomes a Subsidiary or Indebtedness
attaching to assets that are acquired by Borrower or any of its Subsidiaries, in
each case after the Closing Date as the result of a Permitted Acquisition, in an
aggregate amount not to exceed $10,000,000 at any one time outstanding, provided
that (x) such Indebtedness existed at the time such Person became a Subsidiary
or at the time such assets were acquired and, in each case, was not created in
anticipation thereof and (y) such Indebtedness is not guaranteed in any respect
by Borrower or any Subsidiary (other than by any such Person that so becomes a
Subsidiary), and (ii) any refinancing, refunding, renewal or extension of any
Indebtedness specified in subclause (i) above, provided, that (1) the principal
amount of any such Indebtedness is not increased above the principal amount
thereof outstanding immediately prior to such refinancing, refunding, renewal or
extension plus the amount of any interest, premium or penalties required to be
paid thereon plus fees and expenses associated therewith, (2) the direct and
contingent obligors with respect to such Indebtedness are not changed and
(3) such Indebtedness shall not be secured by any assets other than the assets
securing the Indebtedness being renewed, extended or refinanced;

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               (n) Indebtedness of any Foreign Subsidiary (i) to any other
wholly owned Foreign Subsidiary, (ii) to any other Subsidiary to extent
permitted as an Investment pursuant to Section 6.6(i) or (iii) in an aggregate
amount not to exceed at any time $15,000,000;
               (o) other Indebtedness of Borrower and its Subsidiaries in an
aggregate amount not to exceed at any time $40,000,000, provided that (i) such
Indebtedness is unsecured (except to the extent permitted to be secured under
Section 6.2(q)), (ii) no more than $20,000,000 in principal amount of such
Indebtedness shall be payable prior to the earlier of the Term Loan Maturity
Date and the payment in full of the Obligations and (iii) no such Indebtedness
may be incurred and owing by a Foreign Subsidiary or an Inactive Entity.
          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 Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired or licensed, or any income, profits or royalties 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, profits or royalties under the UCC of any State or under any
similar recording or notice statute or under the intellectual property laws,
rules or procedures, except:
               (a) Liens in favor of Collateral Agent for the benefit of Secured
Parties granted pursuant to any Credit Document;
               (b) Liens for Taxes not yet delinquent or are being contested, in
each case in accordance with Section 5.3;
               (c) statutory Liens of landlords, banks (and rights of set-off),
of 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 five 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 Borrower or any of its Subsidiaries;

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               (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
Borrower 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) non-exclusive outbound licenses of patents, copyrights,
trademarks and other intellectual property rights granted by Borrower or any of
its Subsidiaries in the ordinary course of business and not interfering in any
respect with the ordinary conduct of or materially detracting from the value of
the business of Borrower or such Subsidiary;
               (l) (x) Liens on the collateral securing obligations under the
Second Lien Credit Agreement; provided that such Liens are subordinated to the
Liens securing the Obligations in accordance with the terms of the Intercreditor
Agreement; and (y) Liens on the collateral securing obligations under the Senior
Notes Refinancing Third Lien Facility; provided that such Liens are subordinated
to the Liens securing the Obligations pursuant to an intercreditor agreement
satisfactory to the Administrative Agent and the Collateral Agent and otherwise
on the terms set forth on Exhibit M hereto;
               (m) Liens described in Schedule 6.2 or on a title report
delivered pursuant to Section 3.1(g)(iii);
               (n) Liens securing Indebtedness (i) permitted pursuant to
Section 6.1(k) or 6.1(l), provided any such Lien shall encumber only the asset
acquired, constructed or improved with the proceeds of such Indebtedness and
(ii) permitted pursuant to Section 6.1(m), to the extent described in Section
6.1(m);
               (o) Liens on the assets of Foreign Subsidiaries (other than the
Collateral) securing Indebtedness permitted to be incurred pursuant to
Section 6.1(n);
               (p) Liens arising out of judgments or awards in connection with
court proceedings which do not constitute an Event of Default; and
               (q) Liens securing other Indebtedness and obligations in an
aggregate amount not to exceed at any time $5,000,000.

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          6.3. No Further Negative Pledges. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or 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) the Second Lien Credit Documents, 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, to secure the Obligations.
          6.4. 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) Borrower may (i) make regularly scheduled payments of
interest or required prepayments of principal and interest in respect of the
Second Lien Term Loans in accordance with the terms of the Second Lien Credit
Agreement and the Intercreditor Agreement and (ii) refinance the Second Lien
Term Loan in accordance with Section 6.1(c);
               (b) Borrower may (i) make regularly scheduled payments of
interest or required prepayments of principal and interest in respect of the
Senior Notes in accordance with the terms of the Senior Notes and the Senior
Notes Indenture and (ii) prepay, redeem, retire or purchase the Senior Notes
(A) pursuant to the Senior Notes Refinancing and/or the Senior Note Refinancing
Third Lien Facility, (B) pursuant to an exchange of Equity Interests (that are
not Disqualified Equity Interests) for such Senior Notes directly with the
holders of such Senior Notes (provided that the principal amount of the Senior
Notes exchanged shall be considered proceeds for purposes of the $75,000,000
threshold in Section 2.15(c)(y)) or (C) with the proceeds from the issuance of
Equity Interests (that are not Disqualified Equity Interests) of the Borrower
not required to prepay the Loans pursuant to Section 2.15(c));
               (c) Borrower may pay dividends in the form of its common Equity
Interests;
               (d) any Subsidiary may make Restricted Junior Payments to a
Credit Party;
               (e) any Credit Party may make Restricted Junior Payments of the
type described in clauses (i), (ii) and (iii) of the definition thereof in an
amount equal to the proceeds of Equity Interests not required to prepay the
Loans pursuant to Section 2.15(c);
               (f) Borrower may make Restricted Junior Payments in respect of
Equity Interests (that are not Disqualified Equity Interests), the proceeds of
which are used to prepay, redeem, retire or purchase the Senior Notes (and/or
any Senior Note Refinancing indebtedness) in an amount equal to the Consolidated
Interest Expense that would have accrued and been payable on the amount of
Senior Notes (and/or any Senior Note Refinancing indebtedness) so prepaid,
redeemed, retired or purchased (such Consolidated Interest Expense not to exceed
8%

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per annum on the principal amount of the Senior Notes (and/or any Senior Note
Refinancing indebtedness) so prepaid, redeemed, retired or purchased); and
               (g) the Credit Parties may make Restricted Junior Payments of the
type described in clauses (i), (ii) and (iii) of the definition thereof in an
amount not to exceed (A) $1,000,000 in the aggregate in any Fiscal Year and (B)
$3,000,000 in the aggregate from the Closing Date to the date of determination.
          6.5. 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
Borrower to (a) pay dividends or make any other distributions on any of such
Subsidiary’s Equity Interests owned by Borrower or any other Subsidiary of
Borrower, (b) repay or prepay any Indebtedness owed by such Subsidiary to
Borrower or any other Subsidiary of Borrower, (c) make loans or advances to
Borrower or any other Subsidiary of Borrower, or (d) transfer, lease or license
any of its property or assets to Borrower or any other Subsidiary of Borrower
other than restrictions (i) in agreements evidencing Indebtedness permitted by
Section 6.1(k), 6.1(l) or 6.1(m) that impose restrictions on the property so
acquired, constructed or improved, (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 Equity Interests not otherwise prohibited under this
Agreement (including an agreement which has been entered into in connection with
the sale or transfer of assets or Equity Interests of a Subsidiary permitted
hereunder) that impose restrictions on such Equity Interests or assets, (iv) any
agreement of a Foreign Subsidiary governing the Indebtedness permitted by
Section 6.1(n)(iii) (provided that such restrictions are no more onerous or
restrictive than those set forth herein and do not prevent the Obligations being
secured as provided herein and in the other Credit Documents), (v) described on
Schedule 6.5, (v) existing under the Second Lien Credit Agreement or the Senior
Note Refinancing Third Lien Facility, or (vi) that exist under or by reason of
applicable law.
          6.6. 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 any Joint Venture, except:
               (a) Investments in Cash and Cash Equivalents;
               (b) equity Investments owned as of the Closing Date in any
Subsidiary and Investments made after the Closing Date in Borrower and any
wholly-owned Guarantor Subsidiary of Borrower;
               (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 Borrower and its
Subsidiaries;

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               (d) intercompany loans to the extent permitted under
Section 6.1(b) and Section 6.1(n)(i);
               (e) Consolidated Capital Expenditures with respect to Borrower
and the Guarantors permitted by Section 6.7(d);
               (f) loans and advances to employees of Borrower and its
Subsidiaries made in the ordinary course of business in an aggregate principal
amount not to exceed $1,000,000 in the aggregate;
               (g) Permitted Acquisitions permitted pursuant to Section 6.8;
               (h) Investments described in Schedule 6.6;
               (i) other Investments in Subsidiaries other than wholly-owned
Guarantor Subsidiaries of Borrower in an aggregate amount not to exceed at any
time $20,000,000; provided, that no such Investments may be made in Inactive
Entities unless the Equity Interests therein are then pledged to Collateral
Agent in accordance with Section 5.10 and pursuant to the terms of the Pledge
and Security Agreement;
               (j) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
               (k) non-cash consideration issued by the purchaser of assets in
connection with a sale of such assets to the extent permitted by Section 6.8;
               (l) Investments in respect of the Boards Transaction; and
               (m) additional Investments (other than in Foreign Subsidiaries)
so long as the aggregate amount invested, loaned or advanced pursuant to this
clause (determined without regard to any write-downs or write-offs of such
investments, loans and advances) does not exceed $25,000,000 in the aggregate at
any time outstanding.
     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 6.4.
          6.7. Financial Covenants.
               (a) Interest Coverage Ratio. Borrower shall not permit the
Interest Coverage Ratio as of the last day of any Fiscal Quarter, beginning with
the Fiscal Quarter ending March 31, 2007, to be less than the correlative ratio
indicated:

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      Fiscal   Interest Coverage Quarter Ending   Ratio
April 1, 2007
  1.40:1.00
July 1, 2007
  1.40:1.00
September 30, 2007
  1.40:1.00
January 6, 2008
  1.40:1.00
April 6, 2008
  1.50:1.00
July 6, 2008
  1.50:1.00
October 5, 2008
  1.50:1.00
January 4, 2009
  1.50:1.00
April 5, 2009
  1.60:1.00
July 5, 2009
  1.60:1.00
October 4, 2009
  1.60:1.00
January 3, 2010
  1.60:1.00
April 4, 2010
  1.75:1.00
July 4, 2010
  1.75:1.00
October 3, 2010
  1.75:1.00
January 2, 2011
  1.75:1.00
Thereafter
  2.00:1.00

               (b) Leverage Ratio. Borrower shall not permit the Leverage Ratio
as of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter
ending March 31, 2007, to exceed the correlative ratio indicated:

      Fiscal     Quarter Ending   Leverage Ratio
April 1, 2007
  6.75:1.00
July 1, 2007
  6.75:1.00
September 30, 2007
  6.75:1.00
January 6, 2008
  6.75:1.00
April 6, 2008
  6.25:1.00
July 6, 2008
  6.25:1.00
October 5, 2008
  6.25:1.00
January 4, 2009
  6.25:1.00
April 5, 2009
  5.50:1.00
July 5, 2009
  5.50:1.00
October 4, 2009
  5.50:1.00
January 3, 2010
  5.50:1.00
April 4, 2010
  4.75:1.00
July 4, 2010
  4.75:1.00
October 3, 2010
  4.75:1.00
January 2, 2011
  4.75:1.00
Thereafter
  4.00:1.00

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               (c) Secured Leverage Ratio. Borrower shall not permit the Secured
Leverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending March 31, 2007, to exceed the correlative ratio indicated:

      Fiscal   Secured Leverage Quarter Ending   Ratio
April 1, 2007
  4.75:1.00
July 1, 2007
  4.75:1.00
September 30, 2007
  4.75:1.00
January 6, 2008
  4.75:1.00
April 6, 2008
  4.25:1.00
July 6, 2008
  4.25:1.00
October 5, 2008
  4.25:1.00
January 4, 2009
  4.25:1.00
April 5, 2009
  3.75:1.00
July 5, 2009
  3.75:1.00
October 4, 2009
  3.75:1.00
January 3, 2010
  3.75:1.00
April 4, 2010
  3.00:1.00
July 4, 2010
  3.00:1.00
October 3, 2010
  3.00:1.00
January 2, 2011
  3.00:1.00
Thereafter
  2.50:1.00

               (d) Maximum Consolidated Capital Expenditures. Borrower shall
not, and shall not permit its Subsidiaries to, make or incur Consolidated
Capital Expenditures, in any Fiscal Year indicated below, in an aggregate amount
for Borrower and its Subsidiaries 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 (i) the excess, if any, (but in no
event more than $22,500,000) of such amount for the immediately preceding Fiscal
Year (as adjusted in accordance with this proviso) over the actual amount of
Consolidated Capital Expenditures for such previous Fiscal Year and (ii) 30% of
the amount of Consolidated Excess Cash Flow for the immediately preceding Fiscal
Year not required to prepay the Loans pursuant to Section 2.15(e) in an amount
not to exceed $10,000,000 in any such Fiscal Year:

          Fiscal   Consolidated Capital Year   Expenditures
2007
  $ 45,000,000  
2008
  $ 45,000,000  
2009
  $ 45,000,000  
2010
  $ 45,000,000  
2011
  $ 45,000,000  

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               (e) Certain Calculations. With respect to any period during which
a Permitted Acquisition or an Asset Sale has occurred (each, a “Subject
Transaction”), for purposes of determining compliance with the financial
covenants set forth in this Section 6.7 (but not for purposes of determining the
Applicable Margin or Applicable Revolving Commitment Fee Percentage),
Consolidated Adjusted EBITDA shall be calculated with respect to such period on
a pro forma basis (including pro forma adjustments arising out of events which
are directly attributable to a specific transaction, are factually supportable
and are expected to have a continuing impact, in each case determined on a basis
consistent with Article 11 of Regulation S-X promulgated under the Securities
Act and as interpreted by the staff of the Securities and Exchange Commission,
which would include cost savings resulting from head count reduction, closure of
facilities and similar restructuring charges, which pro forma adjustments shall
be certified by the chief financial officer of Borrower) using the historical
(audited, if available) financial statements of any business so acquired or to
be acquired or sold or to be sold and the consolidated financial statements of
Borrower and its Subsidiaries which shall be reformulated as if such Subject
Transaction, and any Indebtedness incurred or repaid in connection therewith,
had been consummated or incurred or repaid at the beginning of such period (and
assuming that such Indebtedness bears interest during any portion of the
applicable measurement period prior to the relevant acquisition at the weighted
average of the interest rates applicable to outstanding Loans incurred during
such period).
          6.8. 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
license, 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, leased or licensed, 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 Borrower may be merged with or into
Borrower or any Guarantor 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 Borrower or any Guarantor Subsidiary; provided, in the case of
such a merger, Borrower or such Guarantor Subsidiary, as applicable shall be the
continuing or surviving Person;
               (b) sales or other dispositions of assets that do not constitute
Asset Sales;
               (c) Asset Sales (i) the proceeds of which (valued at the
principal amount thereof in the case of non-Cash proceeds consisting of notes or
other debt Securities and valued at fair market value in the case of other
non-Cash proceeds) when aggregated with the proceeds of all other Asset Sales
made from the Closing Date to the date of determination, are less than

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$50,000,000 in the aggregate and (ii) by Foreign Subsidiaries of Borrower
organized under any of the laws of Canada and/or Province or Territory thereof,
or by Borrower of the Equity Interests in such Foreign Subsidiaries; provided,
in each case (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 Borrower (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 2.15(a);
               (d) disposals of obsolete, worn out or surplus property;
               (e) Permitted Acquisitions, for which the aggregate amount of
Cash consideration for all such Permitted Acquisitions from the Closing Date to
the date of determination does not exceed the sum of (i) $50,000,000 plus
(ii) the aggregate amount of the proceeds of Equity Interests issued to finance
such Permitted Acquisition within 180 days of such issuance and received by the
Borrower since the Closing Date (and not otherwise required to be used to prepay
Loans pursuant to Section 2.15(c) hereof or used to prepay, redeem, retire or
purchase Senior Notes as provided herein);
               (f) sale-leaseback transactions permitted by Section 6.10;
               (g) sales and other dispositions of Non-Core Assets, the proceeds
of which (valued at the principal amount thereof in the case of non-Cash
proceeds consisting of notes or other debt Securities and valued at fair market
value in the case of other non-Cash proceeds) when aggregated with the proceeds
of all other such sales or dispositions of Non-Core Assets made from the Closing
Date to the date of determination, are less than $40,000,000 in the aggregate
(when aggregated with sale-leaseback transactions pursuant to Section 6.10(i)
and (ii)); 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 Borrower (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 2.15(a);
               (h) Investments made in accordance with Section 6.6;
               (i) any Foreign Subsidiary of Borrower may be merged with or into
a wholly-owned Foreign Subsidiary of Borrower, or be liquidated, wound up or
dissolve, 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 a wholly owned Foreign Subsidiary of Borrower;
and
               (j) the merger of a special purpose subsidiary, a majority of the
voting Equity Interests of which is owned by one or more Permitted Holders, into
Borrower; provided, however, that (i) the Borrower is the surviving corporation,
(ii) no Default in Event of Default exists immediately before or immediately
after the consummation of such merger, (iii) such special purpose subsidiary
shall be an entity formed solely for the purpose of acquiring the Equity
Interests of Borrower and merging with and into the Borrower, and shall have no
liabilities, indebtedness or other obligations, (iv) the Administrative Agent
shall be satisfied that, immediately after the consummation of such merger,
there shall be no adverse change in the

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financial position, stockholders’ equity or results of operations of the
Borrower as surviving entity and its subsidiaries, or in the tax, accounting,
legal, environmental, regulatory and other issues relevant to the Borrower as
surviving entity and its subsidiaries than immediately prior to such merger and
(v) the Credit Parties 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 (including, without limitation, similar to
those described in Sections 3.1(g), 3.1(h) and 3.1(i)) requested by the
Administrative Agent.
          6.9. Disposal of Subsidiary Interests. Except for any sale of all of
its interests in the Equity Interests of any of its Subsidiaries in compliance
with the provisions of Section 6.8 and Liens permitted under Sections 6.2(a),
and 6.2(l), 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 Equity Interests of any of its Subsidiaries, except 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 Equity Interests 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.
          6.10. 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 Borrower 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 Borrower or any of its Subsidiaries) in
connection with such lease, except (i) any such transaction involving all or a
portion of the Scheduled Sale-Leaseback Properties on terms no less favorable
than those disclosed to the Administrative Agent prior to the Closing Date,
(ii) sale-leasebacks of Non-Core Assets not to exceed $20,000,000 in the
aggregate on fair and reasonable terms no less favorable to such Credit Party
than it could obtain in an arm’s-length transaction with a Person that is not an
Affiliate and pursuant to documentation reasonably acceptable to the
Administrative Agent and (iii) any Capital Lease and Liens in connection
therewith permitted by Section 6.1(k) and 6.2(n), provided that the aggregate
amount permitted under Section 6.8(g) for dispositions of Non-Core Assets is not
exceeded after giving effect to the sale-leaseback transactions described in the
foregoing clauses (i) and (ii).
          6.11. 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 of Borrower on terms that are less favorable to Borrower or that
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 as determined in good faith
by the disinterested members of the Board of Directors of the Borrower;
provided, the foregoing restriction shall not apply to (a) any transaction
between Borrower and any Guarantor Subsidiary; (b) reasonable and customary fees
paid to members of the board of directors (or similar governing body) of
Borrower and its Subsidiaries; (c) compensation arrangements for officers and
other employees of Borrower and its Subsidiaries entered into in the ordinary
course of business; (d) the provision of officers’ and

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directors’ indemnification and insurance in the ordinary course of business to
the extent permitted by applicable law; (e) transactions described in
Schedule 6.11; (f) Indebtedness may be incurred to the extent permitted by
Section 6.1(n)(i) or Section 6.1(n)(ii); and (g) Investments may be made to the
extent permitted by Section 6.6(i).
          6.12. Conduct of Business. 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 similar or related businesses or reasonable extension of such
businesses and (ii) such other lines of business as may be consented to by
Requisite Lenders.
          6.13. Amendments or Waivers of Organizational Documents. No Credit
Party shall nor shall it permit any of its Subsidiaries to, agree to any
amendment, restatement, supplement or other modification to, or waiver of, any
of its Organizational Documents after the Closing Date in a manner that would
adversely affect the ability of such Credit Party to perform its obligations
under the Credit Documents or adversely affect the rights, remedies and benefits
available to, or conferred upon, any Agent and any Lender or any Secured Party
under any Credit Document.
          6.14. Amendments or Waivers with respect to Certain Indebtedness. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or
otherwise change the terms of the Senior Notes or the Senior Notes Indenture, 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
Indebtedness, 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 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
Indebtedness (or a trustee or other representative on their behalf) which would
be adverse to any Credit Party or Lenders); provided, that the foregoing shall
not restrict (x) the Senior Notes Refinancing or the Senior Note Refinancing
Third Lien Facility or (y) the use of proceed from the issuance of Equity
Interests prepay, redeem, retire or purchase the Senior Notes to the extent
described in Section 2.15(c) (provided the proceeds of such issuance are applied
in accordance with, and to the extent required by, Section 2.15(c)).
          6.15. Limitation on Voluntary Payments and Amendments or Waivers of
the Second Lien Credit Agreement. No Credit Party shall, nor shall it permit any
of its Subsidiaries to, (a) make or offer to make any optional or voluntary
payment, prepayment, repurchase or redemption of, or otherwise voluntarily or
optionally defease any Second Lien Term Loans or segregate funds for any such
payment, prepayment, repurchase, redemption or defeasance (provided that the
foregoing shall not restrict a refinancing of the Second Lien Term Loans
permitted by the Intercreditor Agreement) or (b) agree to any amendment,
restatement, supplement or other modification to, or waiver of, any of its
material rights under the Second Lien Credit Agreement or the other Second Lien
Credit Documents after the Closing Date that is prohibited under Section 5.3 of
the Intercreditor Agreement without in each case obtaining the

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prior written consent of Requisite Lenders to such amendment, restatement,
supplement or other modification or waiver.
          6.16. Fiscal Year. No Credit Party shall, nor shall it permit any of
its Subsidiaries to change its Fiscal Year.
     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 or thereunder 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 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 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

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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 Borrower 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 Borrower’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 Borrower 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 Borrower 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 Borrower and the obligations of any other guarantor
(including any other Guarantor) of the obligations of Borrower, and a separate
action or actions may be brought and prosecuted against such Guarantor whether
or not any action is brought against Borrower or any of such other guarantors
and whether or not Borrower 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 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

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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 Hedge 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 Borrower or any security for the Guaranteed Obligations;
and (vi) exercise any other rights available to it under the Credit Documents or
any Hedge 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 Hedge Agreements, 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 Hedge Agreements

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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 Hedge
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 Hedge 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 Borrower 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 Borrower 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
Borrower, any other guarantor (including any other Guarantor) of the Guaranteed
Obligations or any other Person, (ii) proceed against or exhaust any security
held from Borrower, 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 Borrower 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 Borrower 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 Borrower 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 protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Hedge 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 Borrower
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.

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          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 all Letters of Credit shall have
expired or been cancelled, each Guarantor hereby waives any claim, right or
remedy, direct or indirect, that such Guarantor now has or may hereafter have
against Borrower 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 (a) any right
of subrogation, reimbursement or indemnification that such Guarantor now has or
may hereafter have against Borrower 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 Borrower, 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 all Letters of Credit shall have expired or been cancelled,
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 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 Borrower 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 Borrower,
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 Borrower
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 by the Obligee
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
paid in full and the Revolving Commitments and Synthetic LC Commitments shall
have terminated and all Letters of Credit shall have expired or been cancelled.
Each Guarantor hereby irrevocably waives any right to revoke this Guaranty as to
future transactions giving rise to any Guaranteed Obligations.

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          7.9. Authority of Guarantors or Borrower. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Borrower
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
          7.10. Financial Condition of Borrower. Any Credit Extension may be
made to Borrower or continued from time to time, and any Hedge 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 Borrower at
the time of any such grant or continuation or at the time such Hedge 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 Borrower. Each Guarantor has adequate
means to obtain information from Borrower on a continuing basis concerning the
financial condition of Borrower and its ability to perform its obligations under
the Credit Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Borrower 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 Borrower 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 Borrower 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 Borrower or any
other Guarantor or by any defense which Borrower 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.
               (b) 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
Borrower 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.
               (c) In the event that all or any portion of the Guaranteed
Obligations are paid by Borrower, 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

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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
Equity Interests 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 shall occur:
               (a) Failure to Make Payments When Due. Failure by Borrower to pay
(i) when due any principal of any Loan, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; (ii) when due any amount payable to Issuing Bank in reimbursement of
any drawing under a Letter of Credit, (iii) when due any amount in reimbursement
of any Synthetic LC Disbursement; or (iv) any interest on any Loan or any fee or
any other amount due hereunder within five days after the date due; or
               (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 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 $5,000,000 or more or with an aggregate principal
amount of $15,000,000 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 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 2.7,
Sections 5.1(e) and 5.1(f), Section 5.2 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

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               (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 days after the earlier of (i) an officer of such Credit
Party becoming aware of such default or (ii) receipt by Borrower 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 Borrower 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 Borrower 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 Borrower 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
Borrower 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 Borrower or any of
its Subsidiaries, and any such event described in this clause (ii) shall
continue for sixty days without having been dismissed, bonded or discharged; or
               (g) Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Borrower 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 Borrower or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) Borrower 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 Borrower 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 $10,000,000 or (ii) in the aggregate at any time an amount
in excess of $20,000,000 (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 Borrower 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 (or in any event
later than five days prior to the date of any proposed sale thereunder); or

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               (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 an ERISA Event
which individually results in or might reasonably be expected to result in
liability of Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $10,000,000 during the term hereof; (ii) 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 Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates in excess of
$15,000,000 during the term hereof; or (iii) there exists any fact or
circumstance that reasonably could be expected to result in the imposition of a
Lien or security interest under Section 412(n) of the Internal Revenue Code or
under ERISA which (A) individually results in or might reasonably be expected to
result in liability or obligations of Borrower, any of its Subsidiaries or any
of their respective ERISA Affiliates in excess of $10,000,000 during the term
hereof or (B) in the aggregate results in or might reasonably be expected to
result in liability or obligations of Borrower, any of its Subsidiaries or any
of their respective ERISA Affiliates in excess of $15,000,000 during the term
hereof; or
               (k) Change of Control. A Change of Control shall occur; or
               (l) 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, the Intercreditor 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 or shall contest the validity or perfection of any Lien
in any Collateral purported to be covered by the Collateral Documents;
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 Borrower by Administrative Agent, (A) the Revolving
Commitments, if any, of each Lender having such Revolving Commitments and the
obligation of Issuing Bank to issue any Letter of Credit shall immediately
terminate; (B) the Synthetic LC Commitments, if any, of each Lender having such
Synthetic LC Commitments and the obligation of Synthetic LC Issuing Bank to
issue any Synthetic Letter of Credit shall immediately terminate; (C) 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

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are hereby expressly waived by each Credit Party: (I) the unpaid principal
amount of and accrued interest on the Loans, (II) the unreimbursed amounts of
Synthetic LC Disbursements, (III) an amount equal to the maximum amount that may
at any time be drawn under all Letters of Credit and Synthetic Letters of Credit
then outstanding (regardless of whether any beneficiary under any such Letter of
Credit or Synthetic Letter of Credit shall have presented, or shall be entitled
at such time to present, the drafts or other documents or certificates required
to draw under such Letters of Credit or Synthetic Letters of Credit), and
(IV) all other Obligations; provided, the foregoing shall not affect in any way
the obligations of Lenders under Section 2.3(b)(v), Section 2.4(e) or
Section 2.5(e); (D) Administrative Agent may cause Collateral Agent to enforce
any and all Liens and security interests created pursuant to Collateral
Documents; and (E) Administrative Agent shall direct Borrower to pay (and
Borrower hereby agrees upon receipt of such notice, or upon the occurrence of
any Event of Default specified in Sections 8.1(f) and (g) to pay) to
Administrative Agent such additional amounts of cash as reasonably requested by
Issuing Bank, to be held as security for Borrower’s reimbursement Obligations in
respect of Letters of Credit then outstanding.
     SECTION 9. AGENTS
          9.1. Appointment of Agents. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes GSCP to act as Syndication Agent in
accordance with the terms hereof and the other Credit Documents. GSCP is hereby
appointed Administrative Agent hereunder and under the other Credit Documents
and each Lender hereby authorizes GSCP to act as Administrative Agent in
accordance with the terms hereof and the other Credit Documents. Wachovia is
hereby appointed Documentation Agent hereunder and each Lender hereby authorizes
Wachovia to act as Documentation Agent in accordance with the terms hereof and
the other Credit Documents. Wachovia is hereby appointed Collateral Agent
hereunder and under the other Credit Documents and each Lender hereby authorizes
Wachovia to act as Collateral Agent in accordance with the terms hereof and the
other Credit Documents. Each Agent hereby agrees to act in its capacity as such
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 Borrower or any of its Subsidiaries.
Each of Syndication Agent and Documentation Agent, without consent of or notice
to any party hereto, may assign any and all of its rights or obligations
hereunder to any of its Affiliates. As of the Closing Date, neither GSCP, in its
capacity as Syndication Agent, nor Wachovia, in its capacity as Documentation
Agent, shall have any obligations but shall be entitled to all benefits of this
Section 9.
          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

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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.
          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 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 Letter of Credit Usage 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. 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 Borrower 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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               (c) Delegation of Duties. Administrative Agent may perform any
and all of its duties and exercise its rights and powers under this Agreement or
under any other Credit Document by or through any one or more sub-agents
appointed by Administrative Agent. Administrative Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Affiliates. The exculpatory, indemnification and other
provisions of this Section 9.3 and of Section 9.6 shall apply to any the
Affiliates of Administrative Agent and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent. All of the rights,
benefits, and privileges (including the exculpatory and indemnification
provisions) of this Section 9.3 and of Section 9.6 shall apply to any such
sub-agent and to the Affiliates of any such sub-agent, and shall apply to their
respective activities as sub-agent as if such sub-agent and Affiliates were
named herein. Notwithstanding anything herein to the contrary, with respect to
each sub-agent appointed by Administrative Agent, (i) such sub-agent shall be a
third party beneficiary under this Agreement with respect to all such rights,
benefits and privileges (including exculpatory rights and rights to
indemnification) and shall have all of the rights and benefits of a third party
beneficiary, including an independent right of action to enforce such rights,
benefits and privileges (including exculpatory rights and rights to
indemnification) directly, without the consent or joinder of any other Person,
against any or all of the Credit Parties and the Lenders, (ii) such rights,
benefits and privileges (including exculpatory rights and rights to
indemnification) shall not be modified or amended without the consent of such
sub-agent, and (iii) such sub-agent shall only have obligations to
Administrative Agent and not to any Credit Party, Lender or any other Person and
no Credit Party, Lender or any other Person shall have any rights, directly or
indirectly, as a third party beneficiary or otherwise, against such sub-agent.
          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 and the Letters of Credit, 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 Borrower or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Borrower 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 Borrower 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
Borrower 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

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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 or an Assignment Agreement and funding its Term Loan, Synthetic LC
Deposit 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.
          9.6. Right to Indemnity. Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify each Agent, to the extent that such Agent
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 (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent 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 Agent in any way relating to or arising out of this Agreement
or the other Credit Documents; 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 Agent’s
gross negligence or willful misconduct. If any indemnity furnished to any Agent
for any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided, in no event shall this sentence require any Lender to
indemnify any Agent 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 Agent 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, Collateral Agent and Swing Line
Lender. Administrative Agent may resign at any time by giving thirty days’ prior
written notice thereof to Lenders and Borrower, and Administrative Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Borrower and Administrative Agent and signed
by Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days’ notice to
Borrower, to appoint a successor Administrative Agent. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Administrative Agent and the retiring or removed Administrative Agent
shall promptly transfer to such successor Administrative Agent all records and
other documents necessary or appropriate in connection with the performance of
the duties of the successor Administrative Agent under the Credit Documents,
whereupon such retiring or removed Administrative Agent shall be discharged from
its duties and obligations hereunder. If the Requisite Lenders have not
appointed a successor Administrative Agent, Administrative Agent shall have the
right to appoint a financial institution to act as Administrative Agent
hereunder and in any case, Administrative Agent’s resignation shall

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become effective on the thirtieth day after such notice of resignation. If
neither the Requisite Lenders nor Administrative Agent have appointed a
successor Administrative Agent, the Requisite Lenders shall be deemed to
succeeded to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent After any retiring or removed
Administrative Agent’s resignation or removal hereunder as Administrative 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 hereunder.
The Collateral Agent may resign in accordance with the terms of the Pledge and
Security Agreement. Any resignation or removal of Wachovia or its successor as
Collateral Agent pursuant to the Pledge and Security Agreement shall also
constitute the resignation or removal of Wachovia or its successor as Swing Line
Lender, and any successor Collateral Agent appointed pursuant to the Pledge and
Security Agreement shall, upon its acceptance of such appointment, become the
successor Swing Line Lender for all purposes hereunder. In such event
(a) Borrower shall prepay any outstanding Swing Line Loans made by the retiring
or removed Collateral Agent in its capacity as Swing Line Lender, (b) upon such
prepayment, the retiring or removed Collateral Agent and Swing Line Lender shall
surrender any Swing Line Note held by it to Borrower for cancellation, and
(c) Borrower shall issue, if so requested by successor Collateral Agent and
Swing Line Loan Lender, a new Swing Line Note to the successor Collateral Agent
and Swing Line Lender, in the principal amount of the Swing Line Loan Sublimit
then in effect and with other appropriate insertions.
          9.8. Collateral Documents and Guaranty.
               (a) Agents under Collateral Documents and Guaranty. Each Secured
Party hereby further authorizes Administrative Agent or Collateral Agent, as
applicable, on behalf of and for the benefit of Secured Parties, to be the agent
for and representative of the Secured Parties with respect to the Guaranty, the
Collateral and the Collateral Documents; provided that neither Administrative
Agent nor Collateral Agent shall owe any fiduciary duty, duty of loyalty, duty
of care, duty of disclosure or any other obligation whatsoever to any holder of
Obligations with respect to any Hedge Agreement. Subject to Section 10.5,
without further written consent or authorization from any Secured Party,
Administrative Agent or Collateral Agent, as applicable shall, at the request
and expense of Borrower, execute any documents or instruments necessary to
(i) in connection with a sale or disposition of assets permitted by this
Agreement, release any Lien encumbering any item of Collateral that is the
subject of such sale or other disposition of assets 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,
Borrower, Administrative Agent, Collateral Agent and each Secured Party hereby
agree that (i) no Secured Party 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 the Secured Parties 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
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any of the Collateral pursuant to a public or private sale or other disposition,
Collateral Agent or any Lender may be the purchaser or licensor of any or all of
such Collateral at any such sale or other disposition 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 or other disposition.
               (c) Rights under Hedge Agreements. No Hedge Agreement will create
(or be deemed to create) in favor of any Lender Counterparty that is a party
thereto any rights in connection with the management or release of any
Collateral or of the obligations of any Guarantor under the Credit Documents
except as expressly provided in Section 10.5(c)(v) of this Agreement and
Section 7.2 of the Pledge and Security Agreement.
          9.9. Intercreditor Agreement.
     Each Lender hereby consents to and approves each and all of the provisions
of the Intercreditor Agreement, including the purchase rights set forth in
Section 5.6 thereof, and irrevocably authorizes and directs the Collateral Agent
to execute and deliver the Intercreditor Agreement and to exercise and enforce
its rights and remedies and perform its obligations thereunder.
  SECTION 10. MISCELLANEOUS
          10.1. Notices.
               (a) Notices Generally. Any notice or other communication herein
required or permitted to be given to a Credit Party, Syndication Agent,
Documentation Agent, Collateral Agent, Administrative Agent, Swing Line Lender,
Issuing Bank, Synthetic LC Issuing Bank, 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. Except as otherwise set forth in
paragraph (b) below, 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 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; provided further, any
such notice or other communication shall at the request of Administrative Agent
be provided to any sub-agent appointed pursuant to Section 9.3(c) hereto as
designated by Administrative Agent from time to time.
               (b) Electronic Communications.
          (i) Notices and other communications to the Lenders, Issuing Bank and
Synthetic LC Issuing Bank hereunder may be delivered or furnished by

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electronic communication (including e-mail and Internet or intranet websites,
including the Platform) pursuant to procedures approved by Administrative Agent,
provided that the foregoing shall not apply to notices to any Lender, Issuing
Bank or Synthetic LC Issuing Bank pursuant to Section 2 if such Lender, Issuing
Bank or Synthetic LC Issuing Bank, as applicable, has notified Administrative
Agent that it is incapable of receiving notices under such Section by electronic
communication. Administrative Agent or Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications. Unless
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
          (ii) Each of the Credit Parties understands that the distribution of
material through an electronic medium is not necessarily secure and that there
are confidentiality and other risks associated with such distribution and agrees
and assumes the risks associated with such electronic distribution, except to
the extent caused by the willful misconduct or gross negligence of
Administrative Agent.
          (iii) The Platform and any Approved Electronic Communications are
provided “as is” and “as available”. None of the Agents or any of their
respective officers, directors, employees, agents, advisors or representatives
(the “Agent Affiliates”) warrant the accuracy, adequacy, or completeness of the
Approved Electronic Communications or the Platform and each expressly disclaims
liability for errors or omissions in the Platform and the Approved Electronic
Communications. No warranty of any kind, express, implied or statutory,
including any warranty of merchantability, fitness for a particular purpose,
non-infringement of third party rights or freedom from viruses or other code
defects is made by the Agent Affiliates in connection with the Platform or the
Approved Electronic Communications.
          (iv) Each of the Credit Parties, the Lenders, Issuing Bank, Synthetic
LC Issuing Bank and the Agents agree that Administrative Agent may, but shall
not be obligated to, store any Approved Electronic Communications on the
Platform in accordance with Administrative Agent’s customary document retention
procedures and policies.
          10.2. Expenses. Whether or not the transactions contemplated hereby
shall be consummated, Borrower agrees to pay promptly (a) all the actual and
reasonable costs and

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expenses of the Agents, Issuing Bank and Synthetic LC Issuing Bank 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 Borrower, including, without
limitation, the reasonable fees, expenses and disbursements of counsel (in each
case including allocated costs of internal counsel); (b) all the costs of
furnishing all opinions by counsel for Borrower and the other Credit Parties;
(c) all the actual costs and reasonable expenses of creating, perfecting and
recording Liens in favor of Collateral Agent, for the benefit of the 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; (d) all
the actual costs and reasonable fees, expenses and disbursements of any
auditors, accountants, consultants or appraisers (provided, that, so long as no
Event of Default has occurred and is continuing, no more than one such third
party appraiser, consultant or advisor shall be retained on behalf the Agents,
Issuing Bank, Synthetic LC Issuing Bank and Lenders without the prior written
consent of the Borrower); (e) 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; (f) 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 (g) 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, lease or license 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.
          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
and the officers, partners, members, directors, trustees, advisors, employees,
agents, sub-agents and Affiliates of each Agent and each Lender (each, an
“Indemnitee”), from and against any and all Indemnified Liabilities; provided,
(i) 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 of that
Indemnitee and (ii) no Credit Party shall be liable for any settlement of any
claim or proceeding effected by any Indemnitee without the prior written consent
of Borrower (which consent shall not be unreasonably withheld or delayed), but
if settled with such consent or if there shall be a final judgment against an
Indemnitee, each of the Credit Parties shall indemnify and hold harmless such
Indemnitees from and against any loss or liability by reason of such settlement
or

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judgment in the manner set forth in this Agreement. 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 each
Lender, each Agent and their respective Affiliates, directors, employees,
attorneys, agents or sub-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,
arising out of, 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 Borrower 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 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) 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 against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder, the Letters of Credit, the Synthetic
Letters of Credit and participations therein and under the other Credit
Documents, including all claims of any nature or description arising out of or
connected hereto, the Letters of Credit, the Synthetic Letters of Credit and
participations therein or with any other Credit Document, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit, the Synthetic Letters of Credit 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.
          10.5. Amendments and Waivers.
               (a) Requisite Lenders’ Consent. Subject to the additional
requirements of 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; provided that
Administrative Agent may, with the consent of Borrower only, amend, modify or
supplement this Agreement to cure any ambiguity, omission, defect or
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such amendment, modification or supplement does not adversely affect the rights
of any Lender, Issuing Bank or Synthetic LC Issuing Bank.
               (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) extend the stated expiration date of any Letter of Credit beyond
the Revolving Commitment Termination Date, or extend the stated expiration date
of any Synthetic Letter of Credit beyond the Synthetic LC Commitment Termination
Date;
          (iv) extend the date on which any Synthetic LC Deposit is required to
be made by, or returned to, any Synthetic LC Lender.
          (v) 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 2.11) or any fee or any premium payable hereunder;
          (vi) extend the time for payment of any such interest or fees;
          (vii) reduce the principal amount of any Loan or any reimbursement
obligation in respect of any Letter of Credit or Synthetic Letter of Credit;
          (viii) amend, modify, terminate or waive any provision of
Section 2.14(b)(iii), this Section 10.5(b), Section 10.5(c) or any other
provision of this Agreement that expressly provides that the consent of all
Lenders is required;
          (ix) amend the definition of “Requisite Lenders” or “Pro Rata Share”;
provided, with the consent of 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 Synthetic LC Commitments, the Synthetic LC Deposits, the
Revolving Commitments and the Revolving Loans are included on the Closing Date;
          (x) 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
          (xi) consent to the assignment or transfer by any Credit Party of any
of its rights and obligations under any Credit Document.

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               (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 Commitment of any Lender over the amount thereof then
in effect without the written 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 Commitment of any Lender;
          (ii) amend, modify, terminate or waive any provision hereof relating
to the Swing Line Sublimit or the Swing Line Loans without the written consent
of Swing Line Lender;
          (iii) alter the required application of any repayments or prepayments
as between Classes pursuant to Section 2.16 without the written consent of
Lenders holding more than 50% of the aggregate Term Loan Exposure of all
Lenders, Synthetic LC Exposure of all Lenders or Revolving Exposure of all
Lenders, as applicable, of each Class which is being allocated a lesser
repayment or prepayment as a result thereof; provided, 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;
          (iv) amend, modify, terminate or waive any obligation of Lenders
relating to (x) the Letters of Credit, including the purchase of participations
in Letters of Credit as provided in Section 2.4(e) without the written consent
of Administrative Agent, Collateral Agent and Issuing Bank, or (y) the Synthetic
Letters of Credit, including the purchase of participations in Synthetic Letters
of Credit as provided in Section 2.5(e) without the written consent of
Administrative Agent, Collateral Agent and Synthetic LC Issuing Bank;
          (v) amend, modify or waive this Agreement or the Pledge and Security
Agreement so as to alter the ratable treatment of Obligations arising under the
Credit Documents and Obligations arising under Hedge Agreements or the
definition of “Lender Counterparty,” “Hedge Agreement,” “Obligations,” or
“Secured Obligations” in each case in a manner adverse to any Lender
Counterparty with Obligations then outstanding without the written consent of
any such Lender Counterparty;
          (vi) 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 written
consent of such Agent;
          (vii) amend, modify or waive the definition of “Applicable Loan to
Value Ratio”, “Loan to Value Ratio”, “Inventory” or “Value” under this
Agreement, or Section 2.15(f), Section 2.16, Section 2.17(h),
Section 3.2(a)(ii), Section 5.1(p) or Section 5.14(c) (notwithstanding anything
to the contrary contained

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in Section 5.14) of this Agreement, or Section 7.2 of the Pledge and Security
Agreement, in each case without the written consent of the Collateral Agent;
          (viii) amend, modify, terminate or waive any provision of Section 8.1
of the Pledge and Security Agreement, as the same applies to the Collateral
Agent, or any other provision thereof as the same applies to the rights or
obligations of the Collateral Agent, in each case without the written consent of
the Collateral Agent; or
          (ix) amend, modify, terminate or waive any provision of this Agreement
as the same applies to the rights or obligations of the Issuing Bank, Synthetic
LC Issuing Bank or the Synthetic LC Depositary Bank, in each case without the
written consent of the Issuing Bank, Synthetic LC Issuing Bank or the Synthetic
LC Depositary Bank, respectively.
               (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.
          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, 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. Borrower, 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, Synthetic LC Deposits and Loans listed
therein for all purposes hereof, and no assignment or transfer of any such
Commitment, Synthetic LC Deposit or Loan shall be effective, in each case,
unless and until recorded in the Register following receipt of an Assignment
Agreement effecting the assignment or transfer thereof, in each case, as
provided in Section 10.6(d). Each assignment shall be recorded in the Register
on the Business Day the Assignment Agreement is received by Administrative
Agent, if received by 12:00 noon New York City time, and on the following
Business Day if received after such time, prompt notice thereof shall be
provided to Borrower and a copy of such Assignment Agreement shall be
maintained, as applicable. The date of such recordation of a transfer shall be
referred to herein

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as the “Assignment Effective Date.” 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, Synthetic LC Deposits 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 all or a portion of its Commitment, Synthetic LC
Deposit or Loans owing to it or other Obligations (provided, however, that pro
rata assignments shall not be required and each assignment shall be of a
uniform, and not varying, percentage of all rights and obligations under and in
respect of any applicable Loan and any related Commitments):
          (i) to any Person meeting the criteria of clause (i) of the definition
of the term of “Eligible Assignee” upon the giving of notice to Borrower and
Administrative Agent; and
          (ii) to any Person meeting the criteria of clause (ii) of the
definition of the term of “Eligible Assignee” upon giving of notice to Borrower
and Administrative Agent and, in the case of assignments of Revolving Loans or
Revolving Commitments to any such Person (except in the case of assignments made
by or to GSCP), consented to by each of Borrower and Administrative Agent (such
consent not to be (x) unreasonably withheld or delayed or, (y) in the case of
Borrower, required at any time an Event of Default shall have occurred and then
be continuing); provided, further 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 Borrower 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, (B)
$2,500,000 (or such lesser amount as may be agreed to by Borrower and
Administrative Agent or as shall constitute the aggregate amount of the Term
Loans of the assigning Lender) with respect to the assignment of Term Loans and
(C) $250,000 (or such lesser amount as may be agreed to by Borrower and
Administrative Agent or as shall constitute the aggregate amount of the
Synthetic LC Commitment and Synthetic LC Deposits of the assigning Lender) with
respect to the assignment of the Synthetic LC Commitment and Synthetic LC
Deposits.
               (d) Mechanics. Assignments and assumptions of Loans, Synthetic LC
Deposits and Commitments shall only be effected by manual execution and delivery
to Administrative Agent of an Assignment Agreement. Assignments shall be
effective as of the Assignment Effective Date. In connection with all
assignments there shall be delivered to Administrative Agent 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 pursuant to Section 2.21(c).
               (e) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon succeeding to an interest in the
Commitments, Synthetic

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LC Deposits, and Loans, as the case may be, represents and warrants as of the
Closing Date or as of the Assignment Effective Date 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, Synthetic LC Deposits
or Loans, as the case may be; and (iii) it will make or invest in, as the case
may be, its Commitments, Synthetic LC Deposits or Loans for its own account in
the ordinary course and without a view to distribution of such Commitments,
Synthetic LC Deposits 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 Commitments,
Synthetic LC Deposits or Loans or any interests therein shall at all times
remain within its exclusive control).
               (f) Effect of Assignment. Subject to the terms and conditions of
this Section 10.6, as of the Assignment Effective Date with respect to any
Assignment Agreement (i) the assignee thereunder shall have the rights and
obligations of a “Lender” hereunder to the extent of its interest in the Loans,
Synthetic LC Deposits and Commitments as reflected in the Register 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 to the assignee, 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
covering all or the remaining portion of an assigning Lender’s rights and
obligations hereunder, such Lender shall cease to be a party hereto on the
Assignment Effective Date; provided, anything contained in any of the Credit
Documents to the contrary notwithstanding, (x) Issuing Bank shall continue to
have all rights and obligations thereof with respect to any Letters of Credit
issued by such Issuing Bank until the cancellation or expiration of such Letters
of Credit and the reimbursement of any amounts drawn thereunder, (y) Synthetic
LC Issuing Bank shall continue to have all rights and obligations thereof with
respect to any Synthetic Letters of Credit issued by such Synthetic LC Issuing
Bank until the cancellation or expiration of such Synthetic Letters of Credit
and the reimbursement of any amounts drawn thereunder and (z) 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 any 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 Borrower 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 Revolving Commitments
and/or outstanding Loans of the assignee and/or the assigning Lender.
               (g) Synthetic LC Deposits. In connection with each assignment of
a Synthetic LC Deposit, the Synthetic LC Deposit of the assigning Synthetic LC
Lender shall not be released, but shall instead be purchased by the relevant
assignee, and the amount of such Synthetic LC Deposit shall continue to be held
in the Synthetic LC Deposit Account for application (to the extent not already
applied) in accordance with Section 2.5 to satisfy such assignee’s obligations
in respect of the Synthetic LC Usage. Each Synthetic LC Lender agrees that
immediately prior to each such assignment (i) Administrative Agent shall
establish a new Sub-Account in the name of the assignee, (ii) a corresponding
portion of the amount held in the

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Synthetic LC Deposit Account credited by Administrative Agent to the Sub-Account
of the assigning Synthetic LC Lender shall be purchased by the assignee and
shall be transferred from the assigning Synthetic LC Lender’s Sub-Account to the
assignee’s Sub-Account and (iii) if after giving effect to such assignment the
Synthetic LC Deposit of the assigning Synthetic LC Lender shall be zero,
Administrative Agent shall close the Sub-Account of such assigning Synthetic LC
Lender.
               (h) Participations.
          (i) Each Lender shall have the right at any time to sell one or more
participations to any Person (other than Borrower, any of its Subsidiaries or
any of its Affiliates) in all or any part of its Commitments, Loans or in any
other Obligation.
          (ii) 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 (A) extend the final scheduled
maturity of any Loan, Note, Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Commitment Termination Date) or Synthetic
Letter of Credit (unless such Synthetic Letter of Credit is not extended beyond
the Synthetic LC Termination Date) in which such participant is participating,
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), (B) consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under this Agreement or (C) release all or substantially all of the Collateral
under the Collateral Documents (except as expressly provided in the Credit
Documents) supporting the Loans hereunder in which such participant is
participating.
          (iii) Borrower agrees that each participant shall be entitled to the
benefits of Sections 2.19(c), 2.20 and 2.21 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (c) of
this Section; provided, (x) a participant shall not be entitled to receive any
greater payment under Section 2.20 or 2.21 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 Borrower’s prior written consent and (y) a participant that would be a
Non-US Lender if it were a Lender shall not be entitled to the benefits of
Section 2.21 unless Borrower is notified of the participation sold to such
participant and such participant agrees, for the benefit of Borrower, to comply
with Section 2.21 as though it were a Lender; provided further that, except as
specifically set forth in clauses (x) and (y) of this sentence, nothing herein
shall require any notice to Borrower or any other Person in connection with the
sale of any

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participation. 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 2.18 as though it were a
Lender.
               (i) Certain Other Assignments and Participations. In addition to
any other assignment or participation permitted pursuant to this Section 10.6:
          (i) any Lender may assign and/or pledge 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 any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors and any
operating circular issued by such Federal Reserve Bank; and
          (ii) notwithstanding anything to the contrary in this Section 10.6,
any Lender may sell participations (or otherwise transfer its rights) in or to
all or a portion of its rights and obligations under the Credit Documents
(including all its rights and obligations with respect to the Term Loans,
Revolving Loans, Letters of Credit and Synthetic Letters of Credit) to one or
more lenders or other Persons that provide financing to such Lender;
provided, that no Lender, as between Borrower and such Lender, shall be relieved
of any of its obligations hereunder as a result of any such assignment, pledge,
participation or other transfer and provided further, that in no event shall the
applicable Federal Reserve Bank, pledge, trustee, lender or other financing
source described in the preceding clauses (i) or (ii) be considered to be a
“Lender” or be entitled to require the assigning, selling or transferring 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 2.19(c), 2.20, 2.21, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.18, 9.3(b)
and 9.6 shall survive the payment of the Loans, the return of the Synthetic LC
Deposits, the cancellation or expiration of the Letters of Credit and the
Synthetic Letters of Credit, and the reimbursement of any amounts drawn
thereunder, 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

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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 Hedge 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 any 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.
          10.11. Severability. In case any provision in or obligation hereunder
or under any 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; Independent Nature of Lenders’ Rights. 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. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
          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 THEREOF.

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          10.15. CONSENT TO JURISDICTION. 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 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; (D) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (C) 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
(E) 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.
          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 SPECIFICALLY REFERRING TO 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

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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 Agent, and each Lender (which term shall
for the purposes of this Section 10.17 include Issuing Bank and Synthetic LC
Issuing Bank) shall hold all non-public information regarding Borrower and its
Subsidiaries and their businesses identified as such by Borrower 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 Borrower that, in any event, each Agent and each
Lender may make (i) disclosures of such information to Affiliates of such Lender
or Agent and to their respective 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, pledgee, transferee or participant in
connection with the contemplated assignment, pledge, transfer or participation
of any Loans or any participations therein or by any direct or indirect
contractual counterparties (or the professional advisors thereto) to any swap or
derivative transaction relating to Borrower and its obligations (provided, such
assignees, pledgees, transferees, participants, counterparties and advisors are
advised of and agree to be bound by either the provisions of this Section 10.17
or other provisions at least as restrictive as 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, and (iv) disclosures
required or requested by any governmental agency or representative thereof or by
the NAIC or pursuant to legal or judicial process; provided, unless specifically
prohibited by applicable law or court order, each Lender and each Agent shall
make reasonable efforts to notify Borrower of any request by any governmental
agency 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 agency) for disclosure of any such non-public
information prior to disclosure of such information. In addition, each Agent and
each Lender may disclose the existence of this Agreement and the information
about this Agreement to market data collectors, similar services providers to
the lending industry, and service providers to the Agents and the Lenders in
connection with the administration and management of this Agreement and the
other Credit Documents.
          10.18. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged 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 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
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Agreement had at all times been in effect, then to the extent permitted by law,
Borrower 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 Borrower 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
Borrower.
          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.
          10.20. Effectiveness. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrower 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 Borrower that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrower and other information that will allow such Lender or
Administrative Agent, as applicable, to identify Borrower in accordance with the
Patriot Act.
          10.22. Electronic Execution of Assignments. The words “execution,”
“signed,” “signature,” and words of like import in any Assignment Agreement
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
          10.23. Post-Closing Actions. Notwithstanding anything to the contrary
contained in this Agreement or the other Loan Documents, the parties hereto
acknowledge and agree that Borrower and its Subsidiaries shall be required to
take the actions specified in Schedule 10.23 as promptly as practicable, and in
any event within the time periods set forth in Schedule 10.23 or such other time
periods as Administrative Agent may agree. The provisions of Schedule 10.23
shall be deemed incorporated by reference herein as fully as if set forth herein
in their entirety. All provisions of this Agreement and the other Credit
Documents (including, without limitation, all conditions precedent,
representations, warranties, certificates, borrowing notices, covenants, events
of default and other agreements herein and therein) shall be deemed modified to
the extent necessary to effect the foregoing (and to permit the taking of the
actions described above within the time periods required above, rather than as
otherwise provided in the Credit Documents); provided that (a) to the extent any
representation and warranty would not be true

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because the foregoing actions were not taken on the Closing Date, the respective
representation and warranty shall be required to be true and correct in all
material respects at the time the respective action is taken (or was required to
be taken) in accordance with the foregoing provisions of this Section 10.23 and
(b) all representations and warranties relating to the Collateral Documents
shall be required to be true immediately after the actions required to be taken
by this Section 10.23 have been taken (or were required to be taken). The
parties hereto acknowledge and agree that the failure to take any of the actions
required above within the relevant time periods required above shall give rise
to an immediate Event of Default pursuant to this Agreement.
[Remainder of page intentionally left blank]

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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.

            MOVIE GALLERY, INC.
      By:         Name:   S. Page Todd      Title:   Executive Vice President,
Secretary, and
General Counsel        MOVIE GALLERY US, LLC
      By:   Movie Gallery, Inc., its Manager and Sole Member             By:    
    Name:   S. Page Todd      Title:   Executive Vice President, Secretary, and
General Counsel        M.G. DIGITAL, LLC
      By:   Movie Gallery US, LLC, its Manager and Sole Member    

           
 
  By:   Movie Gallery, Inc., its Manager and  
 
      Sole Member  

           
 
  By:    
 
 
 
  Name:   S. Page Todd  
 
  Title:   Executive Vice President, Secretary, and  
 
      General Counsel  

[Signatures Continued on the Next Page]

 

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            M.G.A REALTY I, LLC
      By:   Movie Gallery US, LLC, its Manager and Sole         Member   

             
 
  By:   Movie Gallery, Inc., its Manager and    
 
      Sole Member    

             
 
  By:    
 
   
 
  Name:   S. Page Todd    
 
  Title:   Executive Vice President, Secretary, and    
 
      General Counsel    

            HOLLYWOOD ENTERTAINMENT CORPORATION
      By:         Name:   S. Page Todd      Title:   Executive Vice President,
Secretary, and General Counsel        MG AUTOMATION LLC
      By:   Hollywood Entertainment Corporation, its Manager and Sole Member    
        By:         Name:   S. Page Todd      Title:   Executive Vice President,
Secretary, and General Counsel   

 

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            GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Administrative Agent, Syndication Agent and a
Lender
      By:           Authorized Signatory           

 

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            WACHOVIA BANK, NATIONAL ASSOCIATION,
as Collateral Agent, Documentation Agent, Swing Line
Lender, Issuing Bank, Synthetic LC Issuing Bank and a
Lender
      By:           Name:           Title: