Exhibit 10.2


 


EXECUTION COPY




 





 


$65,000,000


 


SECOND LIEN
CREDIT AGREEMENT


 


among


 


NEW WORLD
RESTAURANT GROUP, INC.,

as Borrower,


 


The Several
Lenders

from Time to Time Parties Hereto,


 


and


 


BEAR STEARNS
CORPORATE LENDING INC.,

as Administrative Agent


 


Dated as of January 26,
2006




 


 





 


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


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.

  	
  Defined Terms

  	
  1

  
	
   

  	
  1.2.

  	
  Other Definitional Provisions

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
  AMOUNT AND TERMS OF TERM LOAN COMMITMENTS

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Term Loan Commitments

  	
  22

  
	
   

  	
  2.2.

  	
  Procedure for Term Loan Borrowing

  	
  22

  
	
   

  	
  2.3.

  	
  Repayment of Term Loans

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
  [Reserved]

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
  GENERAL PROVISIONS APPLICABLE TO TERM LOANS

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  Optional Prepayments

  	
  23

  
	
   

  	
  4.2.

  	
  Mandatory Prepayments and Term Loan Commitment Reductions

  	
  24

  
	
   

  	
  4.3.

  	
  Conversion and Continuation Options

  	
  25

  
	
   

  	
  4.4.

  	
  Limitations on Eurodollar Tranches

  	
  26

  
	
   

  	
  4.5.

  	
  Interest Rates and Payment Dates

  	
  26

  
	
   

  	
  4.6.

  	
  Computation of Interest and Fees

  	
  26

  
	
   

  	
  4.7.

  	
  Inability to Determine Interest Rate

  	
  27

  
	
   

  	
  4.8.

  	
  Pro Rata Treatment and Payments

  	
  27

  
	
   

  	
  4.9.

  	
  Requirements of Law

  	
  28

  
	
   

  	
  4.10.

  	
  Taxes

  	
  30

  
	
   

  	
  4.11.

  	
  Indemnity

  	
  31

  
	
   

  	
  4.12.

  	
  Change of Lending Office

  	
  32

  
	
   

  	
  4.13.

  	
  Replacement of Lenders

  	
  32

  
	
   

  	
  4.14.

  	
  Evidence of Debt

  	
  32

  
	
   

  	
  4.15.

  	
  Illegality

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1.

  	
  Financial Condition

  	
  33

  
	
   

  	
  5.2.

  	
  No Change

  	
  34

  
	
   

  	
  5.3.

  	
  Corporate Existence; Compliance with Law

  	
  34

  
	
   

  	
  5.4.

  	
  Power; Authorization; Enforceable Obligations

  	
  34

  
	
   

  	
  5.5.

  	
  No Legal Bar

  	
  35

  
	
   

  	
  5.6.

  	
  Litigation

  	
  35

  
	
   

  	
  5.7.

  	
  No Default

  	
  35

  
	
   

  	
  5.8.

  	
  Ownership of Property; Liens

  	
  35

  
	
   

  	
  5.9.

  	
  Intellectual Property

  	
  35

  
	
   

  	
  5.10.

  	
  Taxes

  	
  36

  
	
   

  	
  5.11.

  	
  Federal Regulations

  	
  36

  



 


i

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  5.12.

  	
  Labor Matters

  	
  36

  
	
   

  	
  5.13.

  	
  ERISA

  	
  36

  
	
   

  	
  5.14.

  	
  Investment Company Act; Other Regulations

  	
  37

  
	
   

  	
  5.15.

  	
  Subsidiaries

  	
  37

  
	
   

  	
  5.16.

  	
  Use of Proceeds

  	
  37

  
	
   

  	
  5.17.

  	
  Environmental Matters

  	
  37

  
	
   

  	
  5.18.

  	
  Accuracy of Information, etc.

  	
  38

  
	
   

  	
  5.19.

  	
  Security Documents

  	
  38

  
	
   

  	
  5.20.

  	
  Solvency

  	
  39

  
	
   

  	
  5.21.

  	
  Second Lien Obligations

  	
  39

  
	
   

  	
  5.22.

  	
  Inactive Subsidiaries

  	
  39

  
	
   

  	
  5.23.

  	
  Material Contracts

  	
  39

  
	
   

  	
  5.24.

  	
  Bank Accounts.

  	
  39

  
	
   

  	
  5.25.

  	
  Insurance.

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
  CONDITIONS PRECEDENT

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1.

  	
  Conditions to the Closing Date

  	
  39

  
	
   

  	
  6.2.

  	
  Conditions to the Initial Borrowing Date

  	
  41

  
	
   

  	
  6.3.

  	
  Additional Conditions to Term Loans

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
  AFFIRMATIVE COVENANTS

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1.

  	
  Financial Statements

  	
  44

  
	
   

  	
  7.2.

  	
  Certificates; Other Information

  	
  45

  
	
   

  	
  7.3.

  	
  Payment of Obligations

  	
  46

  
	
   

  	
  7.4.

  	
  Maintenance of Existence; Compliance

  	
  46

  
	
   

  	
  7.5.

  	
  Maintenance of Property; Insurance

  	
  46

  
	
   

  	
  7.6.

  	
  Inspection of Property; Books and Records; Discussions

  	
  47

  
	
   

  	
  7.7.

  	
  Notices

  	
  47

  
	
   

  	
  7.8.

  	
  Environmental Laws

  	
  47

  
	
   

  	
  7.9.

  	
  Interest Rate Protection

  	
  48

  
	
   

  	
  7.10.

  	
  Additional Collateral, etc.

  	
  48

  
	
   

  	
  7.11.

  	
  Further Assurances

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
  NEGATIVE COVENANTS

  	
  50

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1.

  	
  Financial Condition Covenants

  	
  50

  
	
   

  	
  8.2.

  	
  Indebtedness

  	
  52

  
	
   

  	
  8.3.

  	
  Liens

  	
  54

  
	
   

  	
  8.4.

  	
  Fundamental Changes

  	
  55

  
	
   

  	
  8.5.

  	
  Disposition of Property

  	
  56

  
	
   

  	
  8.6.

  	
  Restricted Payments

  	
  56

  
	
   

  	
  8.7.

  	
  Capital Expenditures

  	
  57

  
	
   

  	
  8.8.

  	
  Investments

  	
  57

  
	
   

  	
  8.9.

  	
  Certain Payments and Modifications of Certain Debt Instruments

  	
  58

  
	
   

  	
  8.10.

  	
  Transactions with Affiliates

  	
  59

  



 


ii

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  8.11.

  	
  Sales and Leasebacks

  	
  59

  
	
   

  	
  8.12.

  	
  Hedge Agreements

  	
  59

  
	
   

  	
  8.13.

  	
  Changes in Fiscal Periods

  	
  60

  
	
   

  	
  8.14.

  	
  Negative Pledge Clauses

  	
  60

  
	
   

  	
  8.15.

  	
  Clauses Restricting Subsidiary Distributions

  	
  60

  
	
   

  	
  8.16.

  	
  Lines of Business

  	
  60

  
	
   

  	
  8.17.

  	
  Inactive Subsidiaries

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
  EVENTS OF DEFAULT

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
  THE AGENTS

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1.

  	
  Appointment

  	
  64

  
	
   

  	
  10.2.

  	
  Delegation of Duties

  	
  64

  
	
   

  	
  10.3.

  	
  Exculpatory Provisions

  	
  64

  
	
   

  	
  10.4.

  	
  Reliance by Agents

  	
  64

  
	
   

  	
  10.5.

  	
  Notice of Default

  	
  65

  
	
   

  	
  10.6.

  	
  Non-Reliance on Agents and Other Lenders

  	
  65

  
	
   

  	
  10.7.

  	
  Indemnification

  	
  66

  
	
   

  	
  10.8.

  	
  Agent in Its Individual Capacity

  	
  66

  
	
   

  	
  10.9.

  	
  Successor Administrative Agent

  	
  66

  
	
   

  	
  10.10.

  	
  Agents Generally

  	
  67

  
	
   

  	
  10.11.

  	
  The Lead Arranger

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
  MISCELLANEOUS

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1.

  	
  Amendments and Waivers

  	
  67

  
	
   

  	
  11.2.

  	
  Notices

  	
  69

  
	
   

  	
  11.3.

  	
  No Waiver; Cumulative Remedies

  	
  70

  
	
   

  	
  11.4.

  	
  Survival of Representations and Warranties

  	
  70

  
	
   

  	
  11.5.

  	
  Payment of Expenses and Taxes

  	
  70

  
	
   

  	
  11.6.

  	
  Successors and Assigns; Participations and Assignments

  	
  71

  
	
   

  	
  11.7.

  	
  Adjustments; Set-off

  	
  75

  
	
   

  	
  11.8.

  	
  Counterparts

  	
  76

  
	
   

  	
  11.9.

  	
  Severability

  	
  76

  
	
   

  	
  11.10.

  	
  Integration; Intercreditor and Subordination Agreements

  	
  76

  
	
   

  	
  11.11.

  	
  GOVERNING LAW

  	
  76

  
	
   

  	
  11.12.

  	
  Submission To Jurisdiction; Waivers

  	
  76

  
	
   

  	
  11.13.

  	
  Acknowledgments

  	
  77

  
	
   

  	
  11.14.

  	
  Releases of Guarantees and Liens

  	
  77

  
	
   

  	
  11.15.

  	
  Confidentiality

  	
  78

  
	
   

  	
  11.16.

  	
  Revival and Reinstatement of Obligations

  	
  78

  
	
   

  	
  11.17.

  	
  WAIVERS OF JURY TRIAL

  	
  78

  
	
   

  	
  11.18.

  	
  Delivery of Addenda

  	
  78

  



 


iii

















 


	
  SCHEDULES:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.4

  	
   

  	
  Consents,
  Authorizations, Filings and Notices

  	
   

  
	
  5.15

  	
   

  	
  Subsidiaries

  	
   

  
	
  5.19(a)

  	
   

  	
  UCC Filing
  Jurisdictions

  	
   

  
	
  5.22

  	
   

  	
  Inactive
  Subsidiaries

  	
   

  
	
  5.24

  	
   

  	
  Bank
  Accounts

  	
   

  
	
  5.25

  	
   

  	
  Insurance

  	
   

  
	
  8.2(f)

  	
   

  	
  Existing
  Indebtedness

  	
   

  
	
  8.3(g)

  	
   

  	
  Existing
  Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Form of
  Addendum

  	
   

  
	
  B

  	
   

  	
  Form of
  Assignment and Assumption

  	
   

  
	
  C

  	
   

  	
  Form of
  Compliance Certificate

  	
   

  
	
  D

  	
   

  	
  Form of
  Guarantee and Collateral Agreement

  	
   

  
	
  E

  	
   

  	
  [Reserved]

  	
   

  
	
  F

  	
   

  	
  Form of
  Exemption Certificate

  	
   

  
	
  G

  	
   

  	
  Form of
  Term Note

  	
   

  
	
  H

  	
   

  	
  Form of
  Closing Certificate

  	
   

  
	
  I-1

  	
   

  	
  Form of
  Legal Opinion of Holme Roberts & Owen LLP

  	
   

  
	
  I-2

  	
   

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

  	
   

  
	
  J

  	
   

  	
  Form of
  Intercreditor Agreement

  	
   

  
	
  K

  	
   

  	
  Form of
  Subordinated Loan Agreement

  	
   

  
	
  L

  	
   

  	
  Form of
  Subordination Agreement

  	
   

  
	
  M

  	
   

  	
  Form of
  Solvency Certificate

  	
   

  



 


iv

















 


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


 


W
I  T  N  E  S  S  E  T  H:


 


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


 


WHEREAS, the
Borrower has requested that the Lenders make available the credit facility
described in this Agreement in order to finance the Refinancing and to pay fees
and expenses related to the Refinancing; and


 


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


 


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


 


SECTION 1.   DEFINITIONS


 


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


 


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


 


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


 


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


 


“Affiliate”:  as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.  For purposes
of this definition, “control” of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors (or persons


 

















 


performing
similar functions) of such Person or (b) direct or cause the direction of
the management and policies of such Person, whether by contract or otherwise.


 


“Agents”:  the collective reference to the Lead Arranger
and the Administrative Agent.


 


“Aggregate
Exposure”:  with respect to any
Lender at any time, an amount equal to (a) until the Initial Borrowing
Date, the amount of such Lender’s Term Loan Commitment at such time and (b) thereafter,
the then unpaid principal amount of such Lender’s Term Loans.


 


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


 


“Agreement”:  this Second Lien Credit Agreement.


 


“Applicable
Margin”:  (a) 6.75%, in the case
of Eurodollar Loans and (b) 5.75%, in the case of Base Rate Loans.


 


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


 


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


 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


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


 


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


 


“Capital
Expenditures”:  for any period, with
respect to any Person, without duplication, (i) the aggregate of all
expenditures by such Person and its Subsidiaries for the acquisition of fixed
or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements) during such period, in each case, that
should be capitalized under GAAP on a consolidated balance sheet of such Person
and its Subsidiaries and (ii) Capital Lease Obligations incurred by such
Person and its Subsidiaries during such period, provided that (a) the
cost of any Investment permitted under Sections 8.8(k) or 8.8(l) shall not
constitute a Capital Expenditure by the Borrower or any of its Subsidiaries and
(b) Capital Expenditures funded with Reinvestment Deferred Amounts shall
not be deemed to be Capital Expenditures.


 


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


 


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


 


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


 


3

















 


“Cash
Equivalents”:  (a) marketable
direct obligations issued by, or unconditionally guaranteed by, the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within one calendar year
from the date of acquisition; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities of six
months or less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States or any state
thereof having combined capital and surplus of not less than $500,000,000; (c) commercial
paper of an issuer rated at least A-1 by Standard & Poor’s Ratings
Services (“S&P”) or P-1 by Moody’s Investors Service, Inc. (“Moody’s”),
or carrying an equivalent rating by a nationally recognized rating agency, if
both of the two named rating agencies cease publishing ratings of commercial
paper issuers generally, and maturing within six months from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition,
having a term of not more than 30 days, with respect to securities issued
or fully guaranteed or insured by the United States government; (e) securities
with maturities of one year or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least
A by S&P or A by Moody’s; (f) securities with maturities of six months
or less from the date of acquisition backed by standby letters of credit issued
by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition; or (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition or
money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company
Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s
and (iii) have portfolio assets of at least $5,000,000,000.


 


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


 


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


 


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


 


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


 


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


 


4

















 


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


 


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


 


“Consolidated
Current Assets”:  at any date, all
amounts (other than cash and Cash Equivalents but including any “restricted
cash” under GAAP) that would, in conformity with GAAP, be set forth opposite
the caption “total current assets” (or any like caption) on a consolidated
balance sheet of the Borrower and its Subsidiaries at such date.


 


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


 


“Consolidated
EBITDA”:  for any period,
Consolidated Net Income for such period plus, without duplication and to
the extent deducted in determining Consolidated Net Income for such period, the
sum of (a) income tax expense, (b) interest expense, amortization or
writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including the Term Loans,
the First Lien Term Loans and the Subordinated Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but
not limited to, goodwill) and organization costs, (e) any extraordinary
charges or extraordinary losses determined in accordance with GAAP, (f) non-cash
compensation expenses arising from the issuance of stock, options to purchase
stock and stock appreciation rights to the employees of the Borrower, (g) reasonable
legal, accounting, financing, consulting, advisory and out-of-pocket fees and
expenses incurred in connection with the initial consummation of permitted
incurrences of Indebtedness by the Borrower or any of its Subsidiaries after
the date hereof under Section 8.2(a), 8.2(b), 8.2(c), 8.2(g), 8.2(l) or
8.2(m), issuances of Capital Stock of the Borrower, permitted Dispositions
under Sections 8.5(f), 8.5(g) or 8.5(i) and permitted Investments
under Sections 8.8(k) or 8.8(l), (h) fees and expenses related to store
closures incurred during the first three fiscal years ending after the Initial
Borrowing Date and not exceeding $1,000,000 per fiscal year, (i) non-cash
charges related to changes in the


 


5

















 


exposure of
the Borrower and its Subsidiaries under Hedge Agreements, (j) reorganization
costs, expenses or charges recorded during the fiscal year ended December 31,
2005 not exceeding $1,600,000 in the aggregate (with such amounts to be added
back in the quarter (and any four quarter period which includes such quarter)
during which the cost, expense or charge was recorded and only the amount
recorded during such quarter), (k) cash expenses related to the “Ruskin Moscou
Faltischek, P.C. v. New World Restaurant Group, Inc.” litigation in an
aggregate amount not to exceed $500,000 (with such expenses to be added back in
the quarter (and any four quarter period which includes such quarter) during
which such expense is recorded and only the amount recorded during such
quarter) and (l) any other non-cash charges, non-cash expenses or non-cash
losses of the Borrower or any of its Subsidiaries for such period (excluding
any such charge, expense or loss incurred in the ordinary course of business that
constitutes an accrual of or a reserve for cash charges for any future period),
provided, however, that cash payments made in such period or in
any future period in respect of such non-cash charges, expenses or losses
(excluding any such charge, expense or loss incurred in the ordinary course of
business that constitutes an accrual of or a reserve for cash charges for any
future period) shall be subtracted from Consolidated Net Income in calculating
Consolidated EBITDA in the period when such payments are made, and minus,
to the extent included in determining such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary income
or gains determined in accordance with GAAP and (c) any other non-cash
income (excluding any items that represent the reversal of any accrual of, or
cash reserve for, anticipated cash charges in any prior period that are
described in the parenthetical to clause (l) above), all as determined on
a consolidated basis.  For the purposes
of calculating Consolidated EBITDA for any period of four consecutive fiscal
quarters (each, a “Reference Period”) pursuant to any determination of
the Consolidated Leverage Ratio, (i) if at any time during such Reference
Period the Borrower or any Subsidiary shall have made any Material Disposition,
the Consolidated EBITDA for such Reference Period shall be reduced by an amount
equal to the Consolidated EBITDA (if positive) attributable to the property
that is the subject of such Material Disposition for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (ii) if during such
Reference Period the Borrower or any Subsidiary shall have made a Material
Acquisition, Consolidated EBITDA for such Reference Period shall be calculated
after giving pro  forma effect thereto as if such Material
Acquisition occurred on the first day of such Reference Period.  As used in this definition, “Material
Acquisition” means any Acquisition that involves the payment of
consideration by the Borrower and its Subsidiaries in excess of $2,500,000; and
“Material Disposition” means any Disposition of property or series of related
Dispositions of property that yields gross proceeds to the Borrower or any of its
Subsidiaries in excess of $2,500,000.


 


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


 


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


 


6

















 


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


 


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


 


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


 


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


 


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


 


“Consolidated
Net Income”:  for any period, the
consolidated net income (or loss) of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded (a) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of dividends
or similar distributions and (b) the undistributed earnings of any
Subsidiary of the Borrower (other than a Subsidiary Guarantor) to the extent
that the


 


7

















 


declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any Contractual Obligation (other than under any
Loan Document) or Requirement of Law applicable to such Subsidiary, provided,
that this clause (b) shall not apply to customary surplus requirements
under applicable law related to the payment of dividends.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Defaulting
Lender”:  as defined in Section 4.13.


 


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


 


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


 


8

















 


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


 


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


 


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


 


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


 


“Eurocurrency
Reserve Requirements”:  for any day
as applied to a Eurodollar Loan, the aggregate (without duplication) of the
maximum rates (expressed as a decimal fraction) of reserve requirements in
effect on such day (including basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board) maintained by a member bank of
the Federal Reserve System.


 


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


 


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


 


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


 




	
   

  	
  Eurodollar Base Rate

  	
   

  
	
  1.00 - Eurocurrency Reserve Requirements

  






 


9

















 


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


 


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


 


“Excess
Cash Flow”:  for any fiscal year of
the Borrower, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated
Net Income for such fiscal year (other than Consolidated Net Income arising out
of any Asset Sale during such fiscal year), (ii) the amount of all
non-cash charges (including depreciation and amortization) deducted in arriving
at such Consolidated Net Income, (iii) decreases in Consolidated Working
Capital for such fiscal year, (iv) the aggregate net amount of non-cash
loss on the Disposition of Property by the Borrower and its Subsidiaries during
such fiscal year (other than sales of inventory in the ordinary course of
business), to the extent deducted in arriving at such Consolidated Net Income,
and (v) cash payments in respect of the net decrease (if any) during such
period of outstanding Investments under Sections 8.8(d), (f) and (g), over
(b) the sum, without duplication, of (i) the amount of all non-cash
gains or credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount of Capital Expenditures of the Borrower and its Subsidiaries
during such fiscal year (excluding the principal amount of Indebtedness
incurred to finance such expenditures (but including repayments of any such
Indebtedness incurring during such period or any prior period)), (iii) the
aggregate amount of all prepayments of Revolving Loans (as defined in the First
Lien Credit Agreement) and Swingline Loans (as defined in the First Lien Credit
Agreement) during such fiscal year to the extent accompanying permanent
optional reductions of the Revolving Commitments (as defined in the First Lien
Credit Agreement) and all optional prepayments of the Term Loans and the First
Lien Loans during such fiscal year together with any prepayment premium paid in
connection therewith, (iv) the aggregate amount of all regularly scheduled
principal payments of Long-Term Debt (including the Term Loans, the First Lien
Loans and the Subordinated Loans) of the Borrower and its Subsidiaries made
during such fiscal year (other than in respect of any revolving credit facility
to the extent there is not an equivalent permanent reduction in commitments
thereunder), (v) increases in Consolidated Working Capital for such fiscal
year, (vi) the aggregate net amount of non-cash gain on the Disposition of
Property by the Borrower and its Subsidiaries during such fiscal year (other
than sales of inventory in the ordinary course of business), to the extent
included in arriving at such Consolidated Net Income, (vii) cash payments
in respect of the net increase (if any) during such period of outstanding
Investments under Sections 8.8(d), (f) and (g) and (viii) cash
contributions required by law to be made to, and made to, any Plan during such
period.


 


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


 


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


 


“Excluded
Items”: collectively, (i) the Series Z Preferred, (ii) the
NJEDA Debt, (iii) the Indebtedness under the Coke Beverage Marketing
Agreement and (iv) Cash Collateralized Surety Bonds, provided, that
(x) the NJEDA Debt shall constitute an Excluded Item only to the extent cash
reserves are maintained exclusively for the purpose of repaying the NJEDA Debt
at its maturity and (y) the Coke Beverage Marketing Agreement shall only


 


10

















 


constitute an
Excluded Item to the extent a default shall not have occurred and be continuing
thereunder which permits The Coca-Cola Company to terminate such agreement
(after giving effect to any applicable cure periods) and to cause the “Advance”
or similar advances thereunder to become due and payable unless the parties to
the Coke Beverage Marketing Agreement are negotiating in good faith to resolve
such default in accordance with the dispute resolution provisions in such
agreement (in which case the Coke Beverage Marketing Agreement shall remain an
Excluded Item until the parties are no longer engaged in such negotiations in
accordance with such provisions).


 


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


 


“Facility”:  the Term Loan Commitments and the Term Loans
made thereunder.


 


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


 


“First Lien
Administrative Agent”: Well Fargo Foothill, Inc. and its successors
and assigns.


 


“First Lien
Credit Agreement”: the First Lien Credit Agreement, dated as of January 26,
2006, among the Borrower, the several banks and other financial institutions
from time to time parties thereto, and Wells Fargo Foothill, Inc., as
administrative agent.


 


“First Lien
Loans”: collectively, the term loans and the revolving loans made under the
First Lien Credit Agreement.


 


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


 


“First Lien
Term Loans”: the “Term Loans” as defined in the First Lien Credit
Agreement.


 


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


 


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


 


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


 


“Governmental
Authority”:  any nation or
government, any state or other political subdivision thereof, any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative


 


11

















 


functions of
or pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).


 


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


 


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


 


“Guarantee
Obligation”:  as to any Person (the “guaranteeing
person”), any obligation of (a) the guaranteeing person or (b) another
Person (including any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity
or similar obligation, in either case guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the “primary obligor”) in
any manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable pursuant to the terms
of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.


 


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


 


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


 


“Indebtedness”:  of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of such
Person’s business that are not outstanding after the later of (i) 60 days
after the invoice date or (ii) 30 days after payment is due), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in


 


12

















 


the event of
default are limited to repossession or sale of such property), (e) all
Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under or in
respect of acceptances, letters of credit, surety bonds or similar arrangements,
(g) for the purpose of Section 8.2 and the definition of Replacement
Equity only, the liquidation value of all mandatorily redeemable preferred
Capital Stock of such Person, (h) all Guarantee Obligations of such Person
in respect of obligations of the kind referred to in clauses (a) through
(g) above, (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including accounts and contract rights) owned
by such Person, whether or not such Person has assumed or become liable for the
payment of such obligation, (j) for the purposes of Section 8.2 and Section 9(e) only,
all obligations of such Person in respect of Hedge Agreements and (k) other
than with respect to Section 9(e), all obligations under the Coke Beverage
Marketing Agreement or other similar agreements to the extent such obligations
constitute “take-or-pay” arrangements, provided, that for the purposes
of this definition, the “principal amount” of the obligations of such Person in
respect of any Hedge Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Person would be required
to pay if such Hedge Agreement were terminated at such time.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness expressly provide
that such Person is not liable therefor.


 


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


 


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


 


“Insolvent”:  pertaining to a condition of Insolvency.


 


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


 


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


 


“Interest
Payment Date”:  (a) as to any
Base Rate Loan, the last day of each March, June, September and December to
occur while such Base Rate Loan is outstanding and the final maturity date of
such Base Rate Loan, (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such Interest Period, (c) as
to any Eurodollar Loan


 


13

















 


having an
Interest Period longer than three months, each day that is three months, or a
whole multiple thereof, after the first day of such Interest Period and the
last day of such Interest Period and (d) as to any Base Rate Loan, the
date of any repayment or prepayment made in respect thereof.


 


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


 


(i)            if
any Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;


 


(ii)           the
Borrower may not select an Interest Period under a particular Facility that
would extend beyond the date final payment is due on the Term Loans; and


 


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


 


“Investments”:  as defined in Section 8.8.


 


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


 


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


 


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


 


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


 


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


 


14

















 


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


 


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


 


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


 


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


 


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


 


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


 


“Net Cash
Proceeds”:  (a) in connection
with any Asset Sale or any Recovery Event, the proceeds thereof received by any
Group Member in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or by the
Disposition of any non-cash consideration received in connection therewith or
otherwise, but only as and when received) of such Asset Sale or Recovery Event,
net of attorneys’ fees, accountants’ fees, other consultants’ fees, investment
banking or brokerage fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset that
is the subject of such Asset Sale or Recovery Event (other than any Lien
pursuant to a Security Document) and other customary fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and net of reserve
amounts established by the Borrower or any Subsidiary for liabilities
reasonably anticipated in connection with such Asset Sale or Recovery Event so
long as such reserve amounts are comprised of segregated cash or Cash
Equivalents and will constitute Net Cash Proceeds to the extent such reserve
amounts are no longer required to be maintained and (b) in connection with
any issuance or sale of Capital Stock, any capital contribution or any
incurrence of Indebtedness, the cash proceeds received by any Group


 


15

















 


Member from
such issuance, contribution or incurrence, net of attorneys’ fees, other
consultants’ fees, investment banking or brokerage fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.


 


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


 


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


 


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


 


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


 


“Obligations”:  as defined in the Intercreditor Agreement.


 


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


 


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


 


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


 


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


 


“Permitted
Refinancing Indebtedness”: 
Indebtedness of any Group Member which satisfies each of the following
conditions:  (i) to the extent that
the Net Cash Proceeds of such Indebtedness are used to prepay the Subordinated
Loans (or any other subordinated Indebtedness incurred pursuant to this clause
(i)), such Indebtedness shall be subordinated to the Obligations under the Loan
Documents on substantially the same terms and conditions as are applicable to
the Subordinated Loans or on such other terms as may be approved by the
Administrative Agent and the Required Lenders; (ii) the Consolidated
Leverage Ratio at such time and after giving effect thereto is equal to or less
than 3.25 to 1.00 with respect to any prepayment of Subordinated Loans or any
other Indebtedness incurred pursuant to Section 8.2(c); (iii) no
Default or Event of Default shall have occurred and be continuing or would
result from the incurrence of such Indebtedness; (iv) the Administrative
Agent shall have received a copy of all the documents relating to such
Indebtedness at least five days prior to the funding of any such Indebtedness; (v) the
terms and conditions of any such Indebtedness shall not be materially more
restrictive taken as a whole to the Borrower and its Subsidiaries than the
terms of the Indebtedness being refinanced as determined in good faith by the
Borrower; (vi) in the case of Indebtedness used to refinance Subordinated
Loans or any other Indebtedness incurred pursuant to Section 8.2(c), such
Indebtedness shall not have a stated final maturity before the maturity date of
the Indebtedness being refinanced thereby and shall not be subject to any
amortization or required repurchase or redemption obligations on or prior to
such date; (vii) the Net Cash Proceeds of such Indebtedness are
concurrently applied to the prepayment of the


 


16

















 


Indebtedness
to be refinanced with such Net Cash Proceeds; and (viii) the
Administrative Agent shall have received a certificate of a Responsible Officer
certifying compliance with the conditions set forth in this definition (and
attaching reasonable detailed supporting calculations and other information
reasonably required by the Administrative Agent).


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Reference
Bank”:  Bank of New York.


 


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


 


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


 


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


 


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


 


17

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Required
Lenders”:  at any time, the holders
of more than 50% of (a) until the Initial Borrowing Date, the Term Loan
Commitments then in effect and (b) thereafter, the aggregate unpaid
principal amount of the Term Loans then outstanding.


 


“Requirement
of Law”:  as to any Person, the
Certificate of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in


 


18

















 


each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.


 


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


 


“Restricted
Payments”:  as defined in Section 8.6.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


19

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Term Loan”:  as defined in Section 2.1.


 


“Term Loan
Commitment”: as to any Lender, the obligation of such Lender, if any, to
make a Term Loan to the Borrower hereunder in a principal amount not to exceed
the amount set forth under the heading “Term Loan Commitment” under such Lender’s
name on


 


20

















 


such Lender’s
Addendum.  The original aggregate amount
of the Term Loan Commitments is $65,000,000.


 


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


 


“Transferee”:  any Assignee or Participant.


 


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


 


“United
States”:  the United States of
America.


 


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


 


“Voidable
Transfer”: as defined in Section 11.16.


 


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


 


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


 


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


 


(b)           As
used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP, (ii) the
words “include,” “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”, (iii) the word “incur” shall be construed
to mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words “incurred” and “incurrence” shall have correlative
meanings), (iv) the words “asset” and “property” (when used in the lower
case) shall be construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties, including cash,
Capital Stock, securities, revenues, accounts, leasehold interests and contract
rights, and (v) references to agreements or other Contractual Obligations
shall, unless otherwise specified, be deemed to refer to such agreements or
Contractual Obligations as amended, supplemented, restated or otherwise
modified from time to time (subject to any applicable restrictions hereunder).


 


(c)           The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular


 


21

















 


provision of this Agreement, and Section, Schedule and Exhibit references
are to this Agreement unless otherwise specified.


 


(d)           The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.


 


(e)           Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP; provided that, if the
Borrower notifies the Administrative Agent that such Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have
been withdrawn or such provision amended in accordance herewith.


 


(f)            References
herein to fiscal periods ending on March 31, June 30, September 30
or December 31 during any fiscal year of the Borrower, shall mean the
applicable fiscal period of the Borrower ending on or about such date.


 


SECTION 2.   AMOUNT AND TERMS OF TERM LOAN
COMMITMENTS


 


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


 


2.2.          Procedure
for Term Loan Borrowing.  The
Borrower has informed the Administrative Agent, the Lead Arranger and the Lenders
that, in the connection with the consummation of the Refinancing, it will
require that the Term Loans be made available to it prior to 10 A.M., New
York City time, on the Initial Borrowing Date. 
In that connection, the Borrower has requested that each Lender make
available to the Lead Arranger on the Business Day preceding the anticipated
Initial Borrowing Date (such preceding date, the “Pre-Funding Date”) an
amount in immediately available funds equal to the Term Loan or Term Loans to
be made by such Lender on the Initial Borrowing Date (it being understood that
the Lenders in making available such funds to the Lead Arranger shall not be
deemed to have made the Term Loans and the Term Loans shall only be made on the
Initial Borrowing Date following receipt of the notice referred to in the
immediately following sentence, and the satisfaction of the conditions set
forth in Section 6.2).  The Borrower
shall notify the Lead Arranger and the Administrative Agent of the anticipated
Initial Borrowing Date at least two Business Days prior to the occurrence
thereof and shall give them a notice specifying (i) the amount and Type of


 


22

















 


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


 


2.3.          Repayment
of Term Loans.  The Term Loan of each
Lender shall be repayable in full in a single installment on the date that is
six years after the Initial Borrowing Date, provided that, if the Borrower
has not, on or prior to March 30, 2009, either (i) extended the
mandatory redemption date of the Series Z Preferred to a date that is on
or after the date that is six years and six months after the Closing Date or (ii) redeemed
all the outstanding Series Z Preferred with the proceeds of an issuance of
Replacement Equity, the Borrower shall repay the remaining outstanding balance
of the Term Loans on March 30, 2009, provided, that in the event
that the mandatory redemption date of the Series Z Preferred is extended
after the date hereof, then the reference to March 30, 2009 shall be
deemed to be a reference to the date which is one fiscal quarter prior to the
then effective mandatory redemption date of the Series Z Preferred (it
being understood, for the avoidance of doubt, that, for purposes of this
proviso, any extension of the scheduled redemption date of the Series Z
Preferred must be effective and not subject to any conditions (which have not
been satisfied) or acceleration provisions).


 


SECTION 3.   [RESERVED]


 


SECTION 4.   GENERAL PROVISIONS APPLICABLE TO TERM
LOANS


 


4.1.          Optional
Prepayments.  (a)  The Borrower
may at any time and from time to time prepay the Term Loans, in whole or in
part without premium or penalty, except as expressly provided in the last
sentence of this Section 4.1(a) upon irrevocable notice delivered to
the Administrative Agent no later than 11:00 A.M., New York City
time, three Business Days prior thereto, in the case of Eurodollar Loans, and
no later than 11:00 A.M., New York City time, one Business Day
prior thereto, in the case of Base Rate Loans, which notice shall specify the
date and amount of prepayment and whether the prepayment is of Eurodollar Loans
or Base Rate Loans; provided that, if a Eurodollar Loan is prepaid on
any day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant


 


23

















 


to Section 4.11.  Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.  If any such
notice is given, the amount specified in such notice shall be due and payable
on the date specified therein, together with accrued interest to such date on
the amount prepaid.  Partial prepayments
of Term Loans shall be in an aggregate principal amount of $1,000,000 or a
whole multiple thereof.  Each optional
prepayment in respect of the Term Loans on or prior to the second anniversary
of the Initial Borrowing Date shall be accompanied by a prepayment premium
equal to (i) if such prepayment is made on or prior to the first
anniversary of the Initial Borrowing Date, 2% of the principal amount of such
prepayment and (ii) if such prepayment is made after the first anniversary
of the Initial Borrowing Date and on or prior to the second anniversary of the
Initial Borrowing Date, 1% of the principal amount of such prepayment.


 


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


 


(b)           If
any Indebtedness shall be incurred by any Group Member (other than Excluded
Indebtedness), an amount equal to 100% of the Net Cash Proceeds thereof shall
be applied on the date of such incurrence toward the prepayment of the Term
Loans.


 


(c)           If
on any date any Group Member shall receive Net Cash Proceeds from any Asset
Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in
respect thereof, such Net Cash Proceeds shall be applied on such date toward
the prepayment of the Term Loans; provided, that, notwithstanding the
foregoing, on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans.


 


24

















 


(d) If, for any fiscal year of the
Borrower commencing with the fiscal year ending December 31, 2006, there
shall be Excess Cash Flow, the Borrower shall, on the relevant Excess Cash Flow
Application Date, apply the ECF Percentage of such Excess Cash Flow toward the
prepayment of the Term Loans, provided that any required prepayment
pursuant to this Section 4.2(d) will be reduced to the extent
necessary so that, after giving effect to the prepayment (if any) required
under this Section 4.2(d), the aggregate amount of cash and Cash
Equivalents of the Borrower and its Subsidiaries (other than any such cash or
Cash Equivalents which are subject to a Lien permitted by Section 8.3 or
constitute “restricted cash” in accordance with GAAP) as of the last day of the
relevant fiscal year will not be less than $5,000,000.  Each such prepayment and commitment reduction
shall be made on a date (an “Excess Cash Flow Application Date”) no
later than five days after the earlier of (i) the date on which the
financial statements of the Borrower referred to in Section 7.1(a), for
the fiscal year with respect to which such prepayment is made, are required to
be delivered to the Lenders and (ii) the date such financial statements
are actually delivered.


 


(e) The application of any prepayment
pursuant to Section 4.2 shall be made, first, to Base Rate Loans
and, second, to Eurodollar Loans. 
Each prepayment of the Loans under Section 4.2 shall be accompanied
by accrued interest to the date of such prepayment on the amount prepaid.


 


(f) Notwithstanding anything to the contrary
in this Agreement, the amount of any mandatory repayment of Term Loans required
pursuant to Sections 4.2(a), 4.2(b), 4.2(c) or 4.2(d) of this
Agreement shall be reduced by the aggregate amount by which the First Lien Term
Loans have been prepaid and/or the Revolving Commitments (as defined in the
First Lien Credit Agreement) have been reduced pursuant to Section 4.2 of
the First Lien Credit Agreement or loans have been permanently prepaid or
commitments permanently reduced with respect to Permitted Refinancing
Indebtedness permitted under Section 8.2(b).


 


4.3.          Conversion
and Continuation Options.  (a)  The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., New York City time, on the Business Day preceding
the proposed conversion date, provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto.  The Borrower may elect
from time to time to convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., New York City time, on the third Business Day
preceding the proposed conversion date (which notice shall specify the length
of the initial Interest Period therefor), provided that no Base Rate
Loan may be converted into a Eurodollar Loan when any Event of Default has
occurred and is continuing and the Administrative Agent or the Required Lenders
have determined in its or their sole discretion not to permit such
conversions.  Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.


 


(b) Any Eurodollar Loan may be continued as
such upon the expiration of the then current Interest Period with respect
thereto by the Borrower giving irrevocable notice to the Administrative Agent,
in accordance with the applicable provisions of the term “Interest Period” set
forth in Section 1.1, of the length of the next Interest Period to be
applicable to such Term Loans, provided that no Eurodollar Loan may be
continued as such when any Event of Default


 


25

















 


has occurred and is continuing and the Administrative Agent has or the
Required Lenders have determined in its or their sole discretion not to permit
such continuations, and provided, further, that if the Borrower
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Term Loans shall be automatically converted to Base Rate Loans on the last day
of such then expiring Interest Period. 
Upon receipt of any such notice the Administrative Agent shall promptly
notify each relevant Lender thereof.


 


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


 


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


 


(b) Each Base Rate Loan shall bear interest
at a rate per annum equal to the Base Rate plus the Applicable Margin.


 


(c) (i)  If all or a portion of the
principal amount of any Term Loan shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus
2%, and (ii) if all or a portion of any interest payable on any Term Loan
or any commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate then
applicable to Base Rate Loans plus 2%, in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment
until such amount is paid in full (as well after as before judgment).


 


(d) Interest shall be payable in arrears on
each Interest Payment Date, provided that interest accruing pursuant to
paragraph (c) of this Section shall be payable from time to time
on demand.


 


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


 


26

















 


(b) Each determination of an interest rate by
the Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error.  The Administrative Agent
shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 4.5(a).


 


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


 


(a) the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, or


 


(b) the Administrative Agent shall have
received notice from the Required Lenders that the Eurodollar Rate determined
or to be determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such Lenders) of
making or maintaining their affected Term Loans during such Interest Period,


 


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


 


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


 


(b) Each payment (including each prepayment)
by the Borrower on account of principal of and interest on the Term Loans shall
be made pro  rata according to the respective outstanding
principal amounts of the Term Loans then held by the Term Lenders.  Amounts prepaid on account of the Term Loans
may not be reborrowed.


 


(c) [Reserved]


 


(d) All payments (including prepayments) to
be made by the Borrower hereunder, whether on account of principal, interest,
fees or otherwise, shall be made without setoff or counterclaim and shall be
made prior to 12:00 Noon, New York City time, on the due date
thereof to the Administrative Agent, for the account of the Lenders, at the
Funding Office, in Dollars and in immediately available funds.  The Administrative Agent shall distribute
such payments to the Lenders promptly upon receipt in like funds as
received.  If any payment


 


27

















 


hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day.  If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be made
on the immediately preceding Business Day. 
In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.


 


(e) Unless the Administrative Agent shall
have been notified in writing by any Lender prior to a borrowing that such
Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount.  If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the greater of (i) the Federal Funds
Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation for the
period until such Lender makes such amount immediately available to the
Administrative Agent.  A certificate of
the Administrative Agent submitted to any Lender with respect to any amounts
owing under this paragraph shall be conclusive in the absence of manifest error.  If such Lender’s share of such borrowing is
not made available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to Base Rate Loans, on demand, from the Borrower.


 


(f) Unless the Administrative Agent shall
have been notified in writing by the Borrower prior to the date of any payment
due to be made by the Borrower hereunder that the Borrower will not make such
payment to the Administrative Agent, the Administrative Agent may assume that
the Borrower is making such payment, and the Administrative Agent may, but
shall not be required to, in reliance upon such assumption, make available to the
Lenders their respective pro  rata shares of a corresponding
amount.  If such payment is not made to
the Administrative Agent by the Borrower within three Business Days after such
due date, the Administrative Agent shall be entitled to recover, on demand,
from each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate.  Nothing herein shall be deemed to limit the
rights of the Administrative Agent or any Lender against the Borrower.


 


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


 


(i)            shall
subject any Lender to any tax of any kind whatsoever with respect to this
Agreement or any Eurodollar Loan made by it, or change the basis


 


28

















 


of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by Section 4.10 and
except for any tax on the overall net income of such Lender);


 


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


 


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


 


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


 


(b) If any Lender shall have determined that
the adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by such
Lender or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender’s or such corporation’s capital
as a consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such corporation’s policies
with respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such corporation for such reduction.


 


(c) A Lender shall be required to submit a
certificate as to any additional amounts payable pursuant to this Section, and
any such certificate submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest
error.  Notwithstanding anything to the
contrary in this Section, the Borrower shall not be required to compensate a Lender
pursuant to this Section for any amounts incurred more than six months
prior to the date that such Lender notifies the Borrower of such Lender’s
intention to claim compensation therefor; provided that, if the
circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect.  The obligations of the Borrower
pursuant to this Section shall survive the


 


29

















 


termination of this Agreement and the payment of the Term Loans and all
other amounts payable hereunder.


 


4.10.        Taxes.  (a)  All payments made by the
Borrower under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on any Agent or any Lender as a
result of a present or former connection between such Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) or Other Taxes are required to be withheld from any amounts payable
to any Agent or any Lender hereunder, the amounts so payable to such Agent or
such Lender shall be increased to the extent necessary to yield to such Agent
or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to
such Lender’s failure to comply with the requirements of paragraph (d) or
(e) of this Section or (ii) that are United States
withholding taxes imposed on amounts payable to such Lender at the time such
Lender becomes a party to this Agreement, except to the extent that such Lender’s
assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.


 


(b) In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with
applicable law.


 


(c) Whenever any Non-Excluded Taxes or Other
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of the relevant Agent or Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof.  If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts
or other required documentary evidence, the Borrower shall indemnify the Agents
and the Lenders for any incremental taxes, interest or penalties that may
become payable by any Agent or any Lender as a result of any such failure.


 


(d) Each Lender (or Transferee) that is not a
“U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S.
Lender”) shall deliver to the Borrower and the Administrative Agent (or, in
the case of a Participant, to the Lender from which the related participation
shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN
or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of “portfolio interest”, a statement
substantially in the form of Exhibit F and a


 


30

















 


Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan
Documents.  Such forms shall be delivered
by each Non-U.S. Lender on or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation).  In addition, each Non-U.S. Lender shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. 
Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.


 


(e) A Lender that is entitled to an exemption
from or reduction of non-U.S. withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate, provided
that such Lender is legally entitled to complete, execute and deliver such
documentation and in such Lender’s judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.


 


(f) The agreements in this Section shall
survive the termination of this Agreement and the payment of the Term Loans and
all other amounts payable hereunder.


 


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


 


31

















 


absence of manifest error.  This covenant shall survive the termination
of this Agreement and the payment of the Term Loans and all other amounts
payable hereunder.


 


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


 


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


 


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


 


(b) The Administrative Agent, on behalf of
the Borrower, shall maintain the Register pursuant to Section 11.6(b), and
a subaccount therein for each Lender, in which shall be recorded (i) the
amount of each Term Loan made hereunder and any Note evidencing such Term Loan,
the Type of such Term Loan and each Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) both the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender’s share thereof.


 


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(c) The entries made in the Register and the
accounts of each Lender maintained pursuant to Section 4.14(a) shall,
to the extent permitted by applicable law, be prima  facie
evidence of the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Borrower to repay (with applicable interest) the Term Loans made to the
Borrower by such Lender in accordance with the terms of this Agreement.


 


(d) The Borrower agrees that, upon the request
to the Administrative Agent by any Lender, the Borrower will execute and
deliver to such Lender a promissory note of the Borrower evidencing any Term
Loans of such Lender, substantially in the form of Exhibit G with
appropriate insertions as to date and principal amount.


 


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


 


SECTION 5.   REPRESENTATIONS
AND WARRANTIES


 


To induce the
Agents and the Lenders to enter into this Agreement and to make the Term Loans,
the Borrower hereby represents and warrants to each Agent and each Lender that:


 


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


 


33

















 


(b) The audited consolidated balance sheets
of the Borrower and its consolidated Subsidiaries as at December 31, 2003
and December 31, 2004, and the related consolidated statements of
operations, changes in stockholders’ equity and of cash flows for each of the
three years in the period ended December 31, 2004, reported on by and
accompanied by the report from Grant Thornton LLP, present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations
and its consolidated cash flows for the respective fiscal years then
ended.  The unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at its
fiscal quarter ending September 30, 2005, and the related unaudited
consolidated (i) statements of operations and cash flows for the
three-month and year-to-date periods ended on such date and (ii) the
statement of stockholders’ equity for the year-to-date period ended on such
date, present fairly the consolidated financial condition of the Borrower and
its consolidated Subsidiaries as at such date, and the consolidated results of
its operations and its consolidated cash flows for the three-month period then
ended (subject to normal year-end audit adjustments and the absence of
footnotes).  All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein).  No Group Member has
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph.  During the period from December 31, 2004
to and including the date hereof there has been no Disposition by the Borrower
and its Subsidiaries of any material part of its business or property.


 


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


 


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


 


5.4.          Power;
Authorization; Enforceable Obligations. 
Each Loan Party has the power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to obtain extensions of credit hereunder.  Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this


 


34

















 


Agreement.  No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Refinancing and the extensions of credit hereunder or with
the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 5.4,
which consents, authorizations, filings and notices have been obtained or made
and are in full force and effect and (ii) the filings referred to in Section 5.19.  Each Loan Document has been (or on the
Initial Borrowing Date will be) duly executed and delivered on behalf of each
Loan Party party thereto.  This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against each such Loan Party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).


 


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


 


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


 


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


 


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


 


5.9.          Intellectual
Property.  Each Group Member owns, is
licensed to use or is otherwise lawfully permitted to use, all material
Intellectual Property necessary for the conduct of its business as currently
conducted; no material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does the Borrower know of
any valid basis for any such claim; and to the knowledge of the Borrower, the
use of such Intellectual


 


35

















 


Property by each Group Member does not infringe on the
rights of any Person in any material respect.


 


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


 


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


 


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


 


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


 


36

















 


withdrawal (as defined in Section 4203 of ERISA)
or partial withdrawal (as defined in Section 4205 of ERISA) from any
Multiemployer Plan as of the valuation date most closely preceding the date on
which this representation is made or deemed made.  No such Multiemployer Plan is in
Reorganization or Insolvent.


 


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


 


5.15.        Subsidiaries.  Except as disclosed to the Administrative
Agent by the Borrower in writing from time to time after the Closing Date, (a) Schedule 5.15
sets forth the name and jurisdiction of incorporation of each Subsidiary and,
as to each such Subsidiary, the percentage of each class of Capital Stock owned
by any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors’ qualifying shares) of
any nature relating to any Capital Stock of any Subsidiary, except as created
by the Loan Documents.


 


5.16.        Use
of Proceeds.  The proceeds of the
Term Loans shall be used to finance the Refinancing and to pay related fees and
expenses, with any excess to be available for general corporate purposes.


 


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


 


(a) the facilities and properties owned,
leased or operated by any Group Member (the “Properties”) do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability under, any
Environmental Law;


 


(b) no Group Member has received or is aware
of any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the business
operated by any Group Member (the “Business”), nor does the Borrower
have knowledge or reason to believe that any such notice will be received or is
being threatened;


 


(c) Materials of Environmental Concern have
not been transported or disposed of from the Properties in violation of, or in
a manner or to a location that could give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties
in violation of, or in a manner that could give rise to liability under, any
applicable Environmental Law;


 


37

















 


(d) no judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the Borrower,
threatened, under any Environmental Law to which any Group Member is or will be
named as a party with respect to the Properties or the Business, nor are there
any consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding
under any Environmental Law with respect to the Properties or the Business;


 


(e) there has been no release or threat of
release of Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of any Group Member in connection
with the Properties or otherwise in connection with the Business, in violation
of or in amounts or in a manner that could give rise to liability under
Environmental Laws;


 


(f) the Properties and all operations at the
Properties are in compliance, and have in the last five years been in compliance,
with all applicable Environmental Laws, and there is no contamination at, under
or about the Properties or violation of any Environmental Law with respect to
the Properties or the Business; and


 


(g) no Group Member has assumed any liability
of any other Person under Environmental Laws.


 


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


 


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


 


38

















 


Agreement), second priority) Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Second Lien
Obligations, in each case prior and superior in right to any other Person
(except Liens permitted by Section 8.3).


 


(b) As of the Closing Date and as of the
Initial Borrowing Date, neither the Borrower nor any of its Subsidiaries owns
any real property.


 


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


 


5.21.        Second
Lien Obligations.  The Obligations of
the Loan Parties under the Loan Documents constitute Second Lien Obligations
(as defined in the Intercreditor Agreement) and “Designated Senior Indebtedness”
of the Borrower under and as defined in the Subordination Agreement.  The obligations of each Subsidiary Guarantor
under the Guarantee and Collateral Agreement constitute “Designated Senior
Indebtedness” of such Subsidiary Guarantor under and as defined in the
Subordination Agreement.


 


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


 


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


 


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


 


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


 


SECTION 6.   CONDITIONS
PRECEDENT


 


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


 


(a) Credit Agreement.  The Administrative Agent and the Lead
Arranger shall have received this Agreement, or, in the case of the Lenders, an
Addendum, executed and delivered by each Agent, the Borrower and each Person
that is a Lender as of the Closing Date.


 


39

















 


(b) First Lien Credit Agreement,
Subordinated Loan Agreement and Intercreditor Agreement. The Administrative
Agent and the Lead Arranger shall have received satisfactory evidence that (i) the
First Lien Credit Agreement shall have been duly executed and delivered by all
parties thereto and that the Closing Date has occurred thereunder, (ii) the
Subordinated Loan Agreement shall have been duly executed and delivered by all
parties thereto and shall have become effective in accordance with its terms, (iii) the
Intercreditor Agreement shall have been duly executed and delivered by all
parties thereto and shall be in full force and effect and (iv) the
Subordination Agreement shall have been duly executed and delivered by all
parties thereto and shall be in full force and effect (such satisfaction in
each case evidenced by the Administrative Agent’s and the Lead Arranger’s execution
of this Agreement).


 


(c) The Senior Notes.  The Administrative Agent and the Lead
Arranger shall have received satisfactory evidence that the Borrower shall have
issued on or prior to the Closing Date an irrevocable instruction to the
trustee for the Senior Notes directing the trustee to issue an irrevocable
notice to the holders of the Senior Notes redeeming the outstanding principal
amount of such Senior Notes.


 


(d) Capital Structure.  The capital and ownership structure of the
Borrower and its Subsidiaries shall be reasonably satisfactory to the
Administrative Agent and the Lead Arranger after giving effect to the
Refinancing (such satisfaction to be evidenced by the Administrative Agent’s
and the Lead Arranger’s execution of this Agreement).


 


(e) Pro Forma Balance Sheet; Financial
Statements.  The Lenders shall have
received the financial statements described in Section 5.1, and such
financial statements shall not, in the reasonable judgment of the Lenders,
reflect any material adverse change in the consolidated financial condition of
the Borrower and its Subsidiaries, as reflected in the financial statements or
projections most recently delivered by the Borrower to the Administrative Agent
and the Lead Arranger (such receipt and judgment to be evidenced by each Lender’s
execution of this Agreement).


 


(f) Approvals.  All material governmental and third party
approvals necessary in connection with the Refinancing, the continuing
operations of the Group Members and the transactions contemplated hereby shall
have been obtained and be in full force and effect.


 


(g) Lien Searches.  The Administrative Agent and the Lead
Arranger shall have received the results of a recent lien search in each of the
jurisdictions where the Loan Parties are organized, and such search shall
reveal no liens on any of the assets of the Loan Parties except for liens
permitted by Section 8.3 or to be discharged on or prior to the Initial
Borrowing Date pursuant to documentation satisfactory to the Administrative
Agent and the Lead Arranger (such satisfaction to be evidenced by the
Administrative Agent’s and the Lead Arranger’s execution of this Agreement).


 


(h) Fees.  The Lenders and the Agents shall have
received all fees that are then required to be paid by the Borrower hereunder or
previously agreed to in writing by the Borrower and the Agents.


 


40

















 


(i) Closing Certificates.  The Administrative Agent and the Lead
Arranger shall have received (i) a certificate of each Loan Party, dated
the Closing Date, substantially in the form of Exhibit H, with appropriate
insertions
and attachments including the certificate of incorporation of each Loan Party
(which will include, where applicable, the certificate of designation for the Series Z
Preferred) that is a corporation certified by the relevant authority of the
jurisdiction of organization of such Loan Party, and (ii) a long form good
standing certificate for each Loan Party from its jurisdiction of organization.


 


(j) PATRIOT Act.  The Lenders shall have received, sufficiently
in advance of the Closing Date, all documentation and other information
required by bank regulatory authorities under applicable “know your customer”
and anti-money laundering rules and regulations, including without limitation
the United States PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), in each case if requested by such Lender
(such satisfaction to be evidenced by each Lender’s execution of this
Agreement).


 


(k) Coke Contract.  The Administrative Agent and the Lead
Arranger shall have received copies of the Coke Beverage Marketing Agreement,
together with a certificate of a Responsible Officer of the Borrower certifying
such document as being a true, correct, and complete copy thereof.


 


(l) Legal Opinions.  The Administrative Agent and the Lead
Arranger shall have received the following executed legal opinions:


 


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


 


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


 


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


 


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


 


(a) Guarantee and Collateral Agreements.  The Administrative Agent and the Lead
Arranger shall have received (i) the Guarantee and Collateral Agreement,
executed and delivered by the Borrower and each Subsidiary Guarantor, (ii) an
Acknowledgment and Consent in the form attached to the Guarantee and Collateral
Agreements, executed and delivered by each Issuer (as defined therein), if any,
that is not a Loan Party and (iii) the First Lien Credit Documents (except
to the extent previously delivered pursuant to Section 6.1(b) above).


 


41

















 


(b) First Lien Loans.  The Borrower shall have received $80,000,000
in gross cash proceeds from borrowings of the Term Loans (as defined in the
First Lien Credit Agreement).


 


(c) Subordinated Loans.  The Borrower shall have received $24,375,000
in gross proceeds from the Subordinated Loans under the Subordinated Loan
Agreement.


 


(d) Existing Credit Facility.  (i) The Administrative Agent and the
Lead Arranger shall have received or shall concurrently receive satisfactory
evidence that the Existing Credit Facility shall have been terminated and all
amounts thereunder shall have been paid in full and (ii) satisfactory
arrangements shall have been made for the termination of all Liens granted in
connection therewith.


 


(e) The Senior Notes.  (i) The Administrative Agent and the
Lead Arranger shall have received or shall concurrently receive satisfactory
evidence that the redemption price for all Senior Notes outstanding on the
Initial Borrowing Date has been irrevocably deposited with the trustee for the
Senior Notes and the Borrower shall have discharged its obligations under the
related indenture (except for obligations that by the terms thereof survive)
and all amounts otherwise due and payable thereunder shall have been paid in
full and (ii) satisfactory arrangements shall have been made for the
termination of all Liens granted in connection therewith.


 


(f) Legal Opinions.  The Administrative Agent and the Lead
Arranger shall have received the following executed legal opinions:


 


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


 


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


 


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


 


(g) Pledged Stock; Stock Powers; Pledged
Notes.  The First Lien Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) if
reasonably requested by the First Lien Administrative Agent, each promissory
note (if any) pledged to the First Lien Administrative Agent pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor thereof, in
each case, to be held by the First Lien Administrative Agent as bailee for the
benefit of the Secured Parties (subject to the Intercreditor Agreement).


 


42

















 


(h) Filings, Registrations and Recordings.  Each document (including any Uniform
Commercial Code financing statement) required by the Security Documents or
under law or reasonably requested by the Administrative Agent and the Lead
Arranger to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien on the
Collateral described therein, prior and superior in right to any other Person
(other than with respect to Liens expressly permitted by Section 8.3),
shall be in proper form for filing, registration or recordation.


 


(i) Solvency Certificate.  The Administrative Agent and the Lead
Arranger shall have received a solvency certificate from the chief financial
officer of the Borrower in the form of Exhibit M.


 


(j) Insurance.  The
Administrative Agent and the Lead Arranger shall have received insurance
certificates satisfying the requirements of Section 5.3(b) of the
Guarantee and Collateral Agreements.


 


(k) Fees.  The Lenders and the Agents shall have
received all fees that are then required to be paid by the Borrower hereunder
or previously agreed to in writing by the Borrower and the Agents, and all
expenses which are required to be paid by the Borrower hereunder for which
invoices have been presented (including the reasonable fees and expenses of
legal counsel), on or before the Initial Borrowing Date.  All such amounts will be paid out of proceeds
of Term Loans made on the Initial Borrowing Date and will be reflected in the
funding instructions given by the Borrower to the Administrative Agent on or
before the Initial Borrowing Date.


 


(l) Required Liquidity.  The Administrative Agent shall have received
a certificate from the Chief Financial Officer certifying that the sum of (i) the
Available Revolving Commitments (as defined in the First Lien Credit Agreement)
on the Initial Borrowing Date (after giving effect to the Refinancing) and (ii) the
aggregate unrestricted and unencumbered cash and Cash Equivalents of the
Borrower and its Subsidiaries is not less than the sum of (x) $6,000,000 less
(y) all fees and expenses paid to any Agent or Lender (or any agent or lender
in connection with the First Lien Credit Agreement) prior to the Initial
Borrowing Date.


 


6.3.          Additional
Conditions to Term Loans.  The
agreement of each Lender to make the Term Loans is subject to the satisfaction
of the following conditions precedent:


 


(a) Representations and Warranties.  Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material aspects (except that such materiality qualifier shall
not be applicable to any representations and warranties that are already
qualified or modified by materiality in the text thereof) on and as of such
date as if made on and as of such date, except to the extent such
representations and warranties related solely to an earlier date, in which case
such representations and warranties shall have been true and correct in all
material aspects (except that such materiality qualifier shall not be
applicable to any representations and warranties that are already qualified or
modified by materiality in the text thereof) on and as of such earlier date.


 


43

















 


(b) No Default.  No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.


 


The borrowing by the
Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such borrowing that the conditions contained in this
Section 6.3 have been satisfied.


 


SECTION 7.   AFFIRMATIVE COVENANTS


 


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


 


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


 


(a) as soon as available, but in any event
within 90 days (or such earlier date specified for the filing of annual
reports on Form 10-K under Section 13 of the Exchange Act) after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end
of such fiscal year and the related audited consolidated statements of income
and of cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, reported on without
a “going concern” or like qualification or exception, or qualification arising
out of the scope of the audit, by Grant Thornton LLP or other independent
certified public accountants of nationally recognized standing;


 


(b) as soon as available, but in any event
not later than 45 days (or such earlier date specified for the filing of
quarterly reports on Form 10-Q under Section 13 of the Exchange Act)
after the end of each of the first three quarterly periods of each fiscal year
of the Borrower, the unaudited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous fiscal
year, certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence of
footnotes); and


 


(c) as soon as available, but in any event
not later than 30 days after the end of each month occurring during each
fiscal year of the Borrower (other than the third, sixth, ninth and twelfth
such month), the unaudited consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of such month and the related unaudited consolidated
statements of income and of cash flows for such month and the portion of the
fiscal year through the end of such month, setting forth in each case in
comparative form the figures for the previous fiscal year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments and the absence of footnotes).


 


44

















 


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


 


Information
required to be delivered pursuant to this Section 7.1 shall be deemed to
have been delivered to the Lenders on the date on which the Borrower provides
written notice to the Lenders that such information has been posted on the
Borrower’s website on the Internet at http://www. nwrgi.com or is available on
the website of the SEC at http://www.sec.gov (to the extent such information
has been posted or is available as described in such notice).  Information required to be delivered pursuant
to this Section 7.1 may also be delivered by electronic communication
pursuant to procedures approved by the Administrative Agent pursuant to Section 11.2.


 


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


 


(a) concurrently with the delivery of any
financial statements pursuant to Section 7.1, (i) a certificate of a
Responsible Officer stating that, to the best of each such Responsible Officer’s
knowledge, each Loan Party during such period has observed or performed all of
its covenants and other agreements, and satisfied every condition, contained in
this Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as specified in
such certificate and (ii) in the case of quarterly or annual financial
statements, (x) a Compliance Certificate containing all information and
calculations necessary for determining compliance by each Group Member with the
provisions of this Agreement referred to therein as of the last day of the
fiscal quarter or fiscal year of the Borrower, as the case may be, and
(y) to the extent not previously disclosed to the Administrative Agent, a
listing of any Intellectual Property registered in the United States acquired
by any Loan Party since the date of the most recent list delivered pursuant to
this clause (y) (or, in the case of the first such list so delivered,
since the Closing Date);


 


(b) as soon as available, and in any event no
later than 45 days after the end of each fiscal year of the Borrower, a
detailed consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, the related consolidated statements of
projected cash flow, projected changes in financial position and projected
income and a description of the underlying assumptions applicable thereto),
and, as soon as available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the “Projections”),
which Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections were prepared in good faith
and were based upon assumptions which, in light of the circumstances under
which they were made, were believed by the Borrower in good faith to be
reasonable at the time made (it being understood that projections by their
nature are


 


45

















 


inherently uncertain, actual results may differ from projections and
such differences may be material);


 


(c) if the Borrower is not then a reporting
company under the Securities Exchange Act of 1934, as amended, within
45 days after the end of each fiscal quarter of the Borrower (or
90 days, in the case of the last fiscal quarter of any fiscal year), a
narrative discussion and analysis of the financial condition and results of
operations of the Borrower and its Subsidiaries for such fiscal quarter and for
the period from the beginning of the then current fiscal year to the end of
such fiscal quarter, as compared to the portion of the Projections covering
such periods and to the comparable periods of the previous fiscal year;


 


(d) no later than ten Business Days prior to
the effectiveness thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the Series Z
Preferred;


 


(e) within five days after the same are sent,
copies of all financial statements and reports that the Borrower sends to the
holders of any class of its debt securities or public equity securities and,
within five days after the same are filed, copies of all financial statements
and reports that the Borrower may make to, or file with, the SEC; and


 


(f) promptly, such additional financial and
other information as any Lender may from time to time reasonably request.


 


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


 


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


 


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


 


46

















 


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


 


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


 


(a) the occurrence of any Default or Event of
Default;


 


(b) any (i) default or event of default
under any Contractual Obligation of any Group Member or (ii) litigation,
investigation or proceeding that may exist at any time between any Group Member
and any Governmental Authority, that in either case, has a reasonable likelihood
of being adversely determined and, if not cured or if adversely determined, as
the case may be, could reasonably be expected to have a Material Adverse
Effect;


 


(c) any litigation or proceeding affecting
any Group Member (i) in which the amount involved is $2,500,000 or more
and not covered by insurance, (ii) in which injunctive or similar relief
is sought that, if adversely determined, could reasonably be expected to have a
Material Adverse Effect or (iii) which relates to any Loan Document;


 


(d) the following events, as soon as possible
and in any event within 30 days after the Borrower knows or has reason to
know thereof:  (i) the occurrence of
any Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal
from, or the termination, Reorganization or Insolvency of, any Plan; and


 


(e) any development or event that has had or
could reasonably be expected to have a Material Adverse Effect.


 


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


 


7.8.          Environmental
Laws.  (a)  Comply in all
material respects with, and take all commercially reasonable efforts to ensure
compliance in all material respects by all tenants and subtenants, if any,
with, all applicable Environmental Laws, and obtain and comply


 


47

















 


in all material respects with and maintain, and ensure
that all tenants and subtenants obtain and comply in all material respects with
and maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws.


 


(b) Conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all material respects
with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.


 


7.9.          Interest
Rate Protection.  In the case of the
Borrower, within 90 days after the Initial Borrowing Date, enter into, and
thereafter maintain, Hedge Agreements to the extent necessary to provide that
at least 50% of the aggregate principal amount of the Term Loans and the
Subordinated Loans is subject to either a fixed interest rate or interest rate
protection for a period of not less than two years, which Hedge Agreements
shall have terms and conditions reasonably satisfactory to the Administrative
Agent.


 


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


 


(b) With respect to any fee interest in any
real property having a value (together with improvements thereof) of at least
$500,000 acquired after the Initial Borrowing Date by any Group Member (other
than (x) any such real property subject to a Lien expressly permitted by Section 8.3(h) and
(y) real property acquired by any Foreign Subsidiary), promptly (i) execute
and deliver a Mortgage, covering such real property, which shall grant to the
Administrative Agent for the benefit of the Secured Parties a first priority
security interest (or, prior to the Discharge of First Lien Obligations (as
defined in the Intercreditor Agreement), second priority) in such property
(subject, in each case, to Liens permitted by Section 8.3), (ii) if
requested by the Administrative Agent, provide the relevant Lenders with
(x) title and extended coverage insurance covering such real property in
an amount at least equal to the purchase price of such real property (or such
other amount as shall be reasonably specified by the Administrative Agent) as
well as a current ALTA survey thereof, together with a surveyor’s certificate
and (y) any consents or estoppels reasonably deemed necessary or advisable
by the Administrative Agent in connection with such Mortgage, each of the
foregoing in form and substance


 


48

















 


reasonably satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the Administrative
Agent.


 


(c) With respect to any new Subsidiary (other
than a Foreign Subsidiary) created or acquired after the Initial Borrowing Date
by any Group Member (which, for the purposes of this paragraph (c), shall
include any existing Subsidiary that ceases to be a Foreign Subsidiary),
promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary to grant to the Administrative Agent, for the benefit of
the Secured Parties, a perfected first priority security interest (or
prior to the Discharge of First Lien Obligations (as defined in the
Intercreditor Agreement), second priority) in the Capital Stock of such new
Subsidiary, (ii) deliver to the Administrative Agent (or, prior to the
discharge and satisfaction in full of the First Lien Obligations, the First
Lien Administrative Agent as bailee) the certificates representing such Capital
Stock, if any, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the relevant Group Member, (iii) cause
such new Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement, (B) to take such actions necessary to grant to the
Administrative Agent for the benefit of the Lenders a perfected first priority
security interest (or, prior to the Discharge of First Lien Obligations (as
defined in the Intercreditor Agreement), second priority) in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, in the case of the Secured Parties, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law or as may be requested by
the Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the form of Exhibit H,
with appropriate insertions and attachments, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.


 


(d) With respect to any new Foreign
Subsidiary created or acquired after the Initial Borrowing Date by any Group
Member (other than by any Group Member that is a Foreign Subsidiary), promptly (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable
to grant the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest (or, prior to the Discharge of First
Lien Obligations (as defined in the Intercreditor Agreement), second priority)
in the Capital Stock of such new Subsidiary (provided that in no event
shall more than 65% of the total voting power of the outstanding Capital Stock
of any such new Subsidiary be required to be so pledged), (ii) deliver to
the Administrative Agent (or, prior to the Discharge of First Lien Obligations
(as defined in the Intercreditor Agreement), the First Lien Administrative
Agent as bailee) the certificates representing such pledged Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the relevant Group Member and take such other action as
may be necessary or, in the opinion of the Administrative, desirable to perfect
such Administrative Agent security interest therein, and (iii) if
requested by the Administrative, deliver to the Administrative legal opinions
relating to the matters described above, which


 


49

















 


opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative.


 


(e) Within 60 days following the Initial
Borrowing Date, cause all cash and Cash Equivalents of the Borrower and the
Subsidiary Guarantors to be deposited or maintained in accounts which are
subject to Control Agreements (except for accounts the aggregate amount of cash
and Cash Equivalents in which do not exceed $1,000,000 in the aggregate and
cash and Cash Equivalents subject to Liens permitted under Section 8.3
other than 8.2(b)).


 


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


 


SECTION 8.   NEGATIVE
COVENANTS


 


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


 


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


 


	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  
	
  March 31, 2006

  	
   

  	
  5.50 to 1:00

  	
   

  
	
  June 30, 2006

  	
   

  	
  5.50 to 1:00

  	
   

  
	
  September 30, 2006

  	
   

  	
  5.50 to 1:00

  	
   

  
	
  December 31, 2006

  	
   

  	
  5.25 to 1:00

  	
   

  



 


50

















 


	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  
	
  March 31, 2007

  	
   

  	
  5.00 to 1:00

  	
   

  
	
  June 30, 2007

  	
   

  	
  5.00 to 1:00

  	
   

  
	
  September 30, 2007

  	
   

  	
  4.75 to 1:00

  	
   

  
	
  December 31, 2007

  	
   

  	
  4.50 to 1:00

  	
   

  
	
  March 31, 2008

  	
   

  	
  4.25 to 1:00

  	
   

  
	
  June 30, 2008

  	
   

  	
  4.25 to 1:00

  	
   

  
	
  September 30, 2008

  	
   

  	
  4.00 to 1:00

  	
   

  
	
  December 31, 2008

  	
   

  	
  4.00 to 1:00

  	
   

  
	
  March 31, 2009

  	
   

  	
  3.75 to 1:00

  	
   

  
	
  June 30, 2009

  	
   

  	
  3.75 to 1:00

  	
   

  
	
  September 30, 2009

  	
   

  	
  3.50 to 1:00

  	
   

  
	
  December 31, 2009

  	
   

  	
  3.50 to 1:00

  	
   

  
	
  March 31, 2010

  	
   

  	
  3.50 to 1:00

  	
   

  
	
  June 30, 2010

  	
   

  	
  3.25 to 1:00

  	
   

  
	
  September 30, 2010

  	
   

  	
  3.25 to 1:00

  	
   

  
	
  December 31, 2010

  	
   

  	
  3.25 to 1:00

  	
   

  
	
  March 30, 2011

  	
   

  	
  3.25 to 1:00

  	
   

  



 


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


 


	
  Fiscal Quarter

  	
   

  	
  Consolidated First Lien

  Leverage Ratio

  	
   

  
	
  March 31, 2006

  	
   

  	
  2.75 to 1:00

  	
   

  
	
  June 30, 2006

  	
   

  	
  2.75 to 1:00

  	
   

  
	
  September 30, 2006

  	
   

  	
  2.75 to 1:00

  	
   

  
	
  December 31, 2006

  	
   

  	
  2.50 to 1:00

  	
   

  
	
  March 31, 2007

  	
   

  	
  2.50 to 1:00

  	
   

  
	
  June 30, 2007

  	
   

  	
  2.50 to 1:00

  	
   

  
	
  September 30, 2007

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  December 31, 2007

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  March 31, 2008

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  June 30, 2008

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  September 30, 2008

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  December 31, 2008

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  March 31, 2009

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  June 30, 2009

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  September 30, 2009

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  December 31, 2009

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  March 31, 2010

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  June 30, 2010

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  September 30, 2010

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  December 31, 2010

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  March 30, 2011

  	
   

  	
  2.25 to 1:00

  	
   

  



 


51

















 


(c) Consolidated Fixed Charge Coverage
Ratio.  Permit the Consolidated Fixed
Charge Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:


 


	
  Fiscal Quarter

  	
   

  	
  Consolidated Fixed Charge

  Coverage Ratio

  	
   

  
	
  March 31, 2006

  	
   

  	
  1.25 to 1:00

  	
   

  
	
  June 30, 2006

  	
   

  	
  1.25 to 1:00

  	
   

  
	
  September 30, 2006

  	
   

  	
  1.30 to 1:00

  	
   

  
	
  December 31, 2006

  	
   

  	
  1.30 to 1:00

  	
   

  
	
  March 31, 2007

  	
   

  	
  1.35 to 1:00

  	
   

  
	
  June 30, 2007

  	
   

  	
  1.35 to 1:00

  	
   

  
	
  September 30, 2007

  	
   

  	
  1.40 to 1:00

  	
   

  
	
  December 31, 2007

  	
   

  	
  1.40 to 1:00

  	
   

  
	
  March 31, 2008

  	
   

  	
  1.40 to 1:00

  	
   

  
	
  June 30, 2008

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  September 30, 2008

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  December 31, 2008

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  March 31, 2009

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  June 30, 2009

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  September 30, 2009

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  December 31, 2009

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  March 31, 2010

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  June 30, 2010

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  September 30, 2010

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  December 31, 2010

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  March 30, 2011

  	
   

  	
  1.65 to 1:00

  	
   

  



 


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


 


(a) Indebtedness of any Loan Party pursuant
to any Loan Document;


 


(b) Indebtedness of any Loan Party under the
First Lien Credit Agreement or any Permitted Refinancing Indebtedness, provided
that the aggregate principal amount of such Indebtedness may not exceed
$100,000,000 at any time outstanding or cause the Cap Amount (as defined in the
Intercreditor Agreement) to be exceeded and may not be reborrowed after
repayment thereof (other than pursuant to revolving commitments which remain in
effect);


 


(c) Indebtedness of the Borrower and the
Subsidiary Guarantors under the Subordinated Loan Agreement or any Permitted
Refinancing Indebtedness; provided that


 


52

















 


the aggregate principal amount of such Indebtedness may not exceed
$25,000,000 (plus the amount of any accrued or capitalized payment in kind
interest) at any time outstanding and may not be reborrowed after repayment
thereof;


 


(d) Indebtedness (i) of the Borrower to
any Subsidiary, (ii) of any Subsidiary Guarantor to the Borrower or any
other Subsidiary, (iii) of any Foreign Subsidiary to any other Foreign
Subsidiary and (iv) to the extent permitted by Section 8.8(k), of any
Foreign Subsidiary to the Borrower or any Subsidiary Guarantor;


 


(e) Guarantee Obligations incurred in the
ordinary course of business by the Borrower or any of its Subsidiaries of (i) obligations
of the Borrower, any Subsidiary Guarantor and, to the extent permitted by Section 8.8(k),
of any Foreign Subsidiary and (ii) operating lease obligations of the
Borrower or any such Subsidiary assumed by a third party in connection with a
store closure or conversion, in each case consistent with past practice;


 


(f) Indebtedness and Guarantee Obligations
outstanding on the date hereof and listed on Schedule 8.2(f) and
any refinancings, refundings, renewals or extensions thereof (without
increasing, or shortening the maturity of, the principal amount thereof);


 


(g) Indebtedness (including, without limitation,
Capital Lease Obligations) secured by Liens permitted by Section 8.3(h) in
an aggregate principal amount not to exceed $3,300,000 at any one time
outstanding;


 


(h) Indebtedness of the Borrower in respect
of the Series Z Preferred and any Replacement Equity consisting of
preferred stock of the Borrower;


 


(i) Hedge Agreements permitted under Section 8.12;


 


(j) until the Initial Borrowing Date, (i) Indebtedness
of the Borrower in respect of the Existing Credit Facility and the Senior Notes
and (ii) Guarantee Obligations of any Subsidiary in respect of such
Indebtedness;


 


(k) Indebtedness resulting from (A) surety
and appeal bonds incurred in the ordinary course of business and (B) the
honoring of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business so long as, in the case of this clause
(B), such Indebtedness is repaid within three Business Days;


 


(l) Indebtedness in respect of the “Advance”
or similar advances (including advances made subsequent to the Closing Date)
under the Coke Beverage Marketing Agreement (as in effect on the date hereof)
and up to $1,100,000 in additional outstanding advances under the Coke Beverage
Marketing Agreement; and


 


(m) additional Indebtedness of the Borrower
or any of its Subsidiaries (not otherwise permitted under this Section 8.2)
in an aggregate principal amount (for the Borrower and all Subsidiaries) not to
exceed $5,500,000 at any one time outstanding.


 


53

















 


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


 


(a) Liens for taxes not yet due or that are
being contested or disputed in good faith by appropriate proceedings, provided
that adequate reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;


 


(b) Liens on the Collateral securing
Indebtedness of Borrower and its Subsidiaries permitted by Section 8.2(b);


 


(c) carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s, landlords’ or other like Liens arising in the
ordinary course of business that are not overdue for a period of more than
45 days or that are being contested in good faith by appropriate
proceedings;


 


(d) pledges or deposits in connection with
workers’ compensation, unemployment insurance and other social security
legislation;


 


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


 


(f) zoning restrictions, easements,
rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business and minor irregularities of title that, in the
aggregate, are not substantial in amount and that do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business utilizing the property subject to
such encumbrances and restrictions;


 


(g) Liens in existence on the date hereof
listed on Schedule 8.3(g), securing Indebtedness permitted by Section 8.2(f),
provided that no such Lien is spread to cover any additional property
after the Closing Date and that the amount of Indebtedness secured thereby is
not increased (other than accrual of interest, fees and costs in accordance
with the terms thereof);


 


(h) Liens securing Indebtedness of the
Borrower or any other Subsidiary incurred pursuant to Section 8.2(g) to
finance the acquisition of fixed or capital assets, provided that (i) such
Liens shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time encumber
any property other than the property financed by such Indebtedness and (iii) the
amount of Indebtedness secured thereby is not increased (other than accrual of
interest, fees and costs in accordance with the terms thereof);


 


(i) judgment Liens in respect of judgments
not constituting Events of Default under Section 9(h) so long as (A) such
judgment Liens are released within 90 days after


 


54

















 


the entry thereof or (B) the aggregate amount covered by all such
judgment Liens does not exceed $2,750,000 at any time;


 


(j) Liens created pursuant to the Security
Documents;


 


(k) any interest or title of a lessor or any
lessor’s lender under any lease entered into by the Borrower or any other
Subsidiary in the ordinary course of its business and covering only the assets
so leased;


 


(l) Liens not otherwise permitted by this Section so
long as (i) the aggregate outstanding principal amount of the obligations
secured thereby does not exceed $1,100,000 at any time and (ii) the
aggregate fair market value (determined as of the date such Lien is incurred)
of the assets encumbered thereby does not exceed (as to the Borrower and all Subsidiaries)
$1,650,000 at any one time;


 


(m) Liens existing on fixed or capital assets
at the time of the acquisition thereof by the Borrower or any Subsidiary, provided,
that (x) neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets thereto exceeds
(as to the Borrower and all Subsidiaries) $1,100,000 at any one time, (y) such
Liens were not created in connection with or in contemplation of such
acquisition and (z) such Liens do not cover any additional property and the
obligations secured thereby are not increased;


 


(n) Liens resulting from the granting of
licenses in the ordinary course of business to any Person to use any
Intellectual Property; and


 


(o) until the Initial Borrowing Date, Liens
securing Indebtedness of the Borrower or any of the Subsidiary Guarantors in
respect of the Existing Credit Facility, the Senior Notes and any Guarantee
Obligations of any Subsidiary in respect of such Indebtedness.


 


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


 


(a) any Subsidiary of the Borrower may be
merged or consolidated with or into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation) or with or into any
Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be
the continuing or surviving corporation) or, subject to Section 8.8(k),
with or into any Foreign Subsidiary;


 


(b) (i) any Subsidiary of the Borrower
may Dispose of any or all of its assets (upon voluntary liquidation or otherwise)
to the Borrower or any Subsidiary Guarantor or, to the extent permitted by Section 8.8(k),
any Foreign Subsidiary and (ii) following the Disposition of all of its
assets in accordance with clause (i) above, such Subsidiary may
liquidate, wind up or dissolve;


 


55

















 


(c) any Subsidiary may merge with another
Person to effect a transaction permitted under Sections 8.8(k) and (l);
and


 


(d) transactions permitted under Section 8.5
shall be permitted.


 


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


 


(a) the Disposition (including abandonment of
Intellectual Property) of obsolete or worn out property or of property no
longer useful or used in the Borrower’s or any of the Subsidiaries’ business,
in each case, in the ordinary course of business, whether now owned or
hereafter acquired;


 


(b) the sale of inventory in the ordinary
course of business;


 


(c) Dispositions permitted by Section 8.4(b);


 


(d) the sale or issuance of any Subsidiary’s
Capital Stock to the Borrower or any Wholly Owned Subsidiary Guarantor;


 


(e) the sale or discount without recourse of
accounts receivable or notes receivable arising in the ordinary course of
business, or the conversion or exchange of accounts receivable into or for
notes receivable, in connection with the compromise or collection thereof;


 


(f) the Disposition of the Capital Stock or
the assets of Manhattan Bagels Company, Inc., provided that, (i) the
consideration received in any such Disposition shall be in an amount at least
equal to the fair market value of such Property and (ii) at least 50% of
the consideration received in any such Disposition shall be in cash;


 


(g) the Disposition of assets of the New
World Coffee business and the Capital Stock or assets of Chesapeake Bagel
Franchise Corp.;


 


(h) subleases, licenses, franchises and
dispositions or cancellations of leases, licenses or franchise agreements in
the ordinary course of business; and


 


(i) the Disposition of other property for
consideration not to exceed $5,500,000 in the aggregate for any calendar year
of the Borrower.


 


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


 


56

















 


(a) any Subsidiary may make Restricted
Payments to the Borrower or any Wholly Owned Subsidiary Guarantor; and


 


(b) so long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom, the Borrower
may purchase the Borrower’s common stock or common stock options from present
or former officers, consultants or employees of any Group Member upon the
death, disability or termination of employment of such officer, consultant or
employee, provided, that the aggregate amount of payments hereunder
after the date hereof (net of any proceeds received by the Borrower after the
date hereof in connection with resales of any common stock or common stock
options so purchased) shall not exceed $1,100,000.


 


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


 


	
  Fiscal Year

  	
   

  	
  Capital Expenditures

  	
   

  
	
  2006

  	
   

  	
  $

  	
  22,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  22,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  27,500,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  22,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  22,000,000

  	
   

  
	
  2011

  	
   

  	
  $

  	
  22,000,000

  	
   

  



 


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


 


(a) extensions of trade credit in the
ordinary course of business;


 


(b) Investments in cash and Cash Equivalents;


 


(c) Guarantee Obligations permitted by Section 8.2;


 


(d) loans and advances to officers,
directors, consultants, employees of any Group Member of the Borrower in the
ordinary course of business (including for indemnification, travel,
entertainment and relocation expenses) in an aggregate amount for all Group
Members not to exceed $550,000 at any one time outstanding;


 


(e) Investments in notes receivable and other
instruments and securities obtained in connection with transactions permitted
by Section 8.5(e);


 


(f) intercompany Investments by (i) any
Group Member in the Borrower or any Person that, prior to such Investment, is a
Subsidiary Guarantor or (ii) any Foreign Subsidiary in any Foreign
Subsidiary;


 


57

















 


(g) Investments resulting from payments
required under Hedge Agreements permitted under Section 8.12;


 


(h) Investments resulting from non-cash
consideration received in connection with Asset Sales so long as the aggregate
outstanding amount of such Investments does not exceed $8,250,000 at any time;


 


(i) Capital Expenditures permitted under Section 8.7;


 


(j) (i) loans to franchisees and area
developers in an amount not to exceed $275,000 in any fiscal year and (ii) existing
loans to franchisees not to exceed $275,000 in the aggregate;


 


(k) in addition to Investments otherwise
expressly permitted by this Section, Investments (including Acquisitions) by
the Borrower or any of its Subsidiaries in an aggregate amount outstanding
(valued at cost) not to exceed at any one time the sum of (i) $1,100,000
plus (ii) the product of (x) $1,100,000 and (y) the number of calendar
years ended after the Closing Date minus (iii) the outstanding amount of
any Investments made in reliance on Section 8.8(l)(iv)(y);


 


(l) Acquisitions, provided that (i) no
Default or Event of Default shall have then occurred and be continuing or would
result therefrom, (ii) such Acquisition is initiated and completed on a “friendly”
basis, (iii) if such Acquisition is a Material Acquisition, after giving
effect thereto on a pro  forma basis as if such Acquisition were
completed on the first day of the most recent period of four consecutive fiscal
quarters for which financial statements have been delivered, the Borrower would
have been in compliance with Sections 8.1(a) and 8.1(b) (assuming the
required ratio was 0.25 to 1.00 lower than the then applicable ratio), (iv) the
consideration for any such Acquisition shall consist exclusively of a
combination of (x) common stock of the Borrower and (y) other consideration in
connection with such Acquisition in an aggregate amount outstanding (valued at
cost) not to exceed at any one time the sum of (I) $1,100,000 plus (II) the
product of (A) $1,100,000 and (B) the number of calendar years ended
after the Closing Date minus (III) the outstanding amount of any Investments
made in reliance on Section 8.8(k) and (v) the Borrower shall have
delivered a certificate of a Responsible Officer certifying compliance with the
foregoing conditions (and attaching reasonably detailed calculations) at least
five Business Days prior to the consummation thereof; and


 


(m) deposits permitted by Section 8.3(e).


 


8.9.          Certain
Payments and Modifications of Certain Debt Instruments.  

(a)  Make or offer to make any optional or voluntary payment, optional or
voluntary prepayment, optional or voluntary repurchase or optional or voluntary
redemption of or otherwise optionally or voluntarily defease or segregate funds
with respect to (i) the Series Z Preferred or any Replacement Equity
(other than with the Net Cash Proceeds of any Replacement Equity), (ii) the
Subordinated Loans or any Permitted Refinancing Indebtedness incurred pursuant
to Section 8.2(c) (in each case, other than with the Net Cash
Proceeds of (x) any Capital Stock issued to any Group Member or the Permitted
Investors, (y) so long as (A) the Consolidated Leverage Ratio at


 


58

















 


such time and after giving effect thereto is equal to
or less than 3.25 to 1.00 and (B) no Default or Event of Default shall
have occurred and be continuing or would result therefrom, any issuance of
common stock of the Borrower, or (z) so long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom, Permitted Refinancing
Indebtedness), (b) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the
terms of (i) the Series Z Preferred or any Replacement Equity
consisting of preferred stock (other than any such amendment, modification,
waiver or other change that (A) would extend or eliminate the scheduled
redemption date or reduce the amount of any scheduled redemption payment or
reduce the rate or extend any date for payment of dividends thereon and (B) does
not involve the payment of a consent fee other than any consent fees paid in
connection with the extension of the scheduled redemption date in an aggregate
amount not exceeding $250,000) or (ii) the Subordinated Loan Agreement
(other than any such amendment, modification, waiver or other change that (A) would
extend or eliminate the maturity or reduce the amount of any payment of
principal thereof or reduce the rate or extend any date for payment of interest
thereon and (B) does not involve the payment of a consent fee), (c) designate
any Indebtedness (other than obligations of the Loan Parties pursuant to the
Loan Documents or the First Lien Loan Documents (as defined in the
Intercreditor Agreement) or any Permitted Refinancing Indebtedness in respect
thereof) as “Designated Senior Indebtedness” (or any other defined term having
a similar purpose) for the purposes of the Subordination Agreement or (d) make
any payment in respect of any Indebtedness under the Coke Beverage Marketing
Agreement or any other Indebtedness of the type described in clause (k) of the
definition thereof, to the extent that, after giving effect thereto, the
Available Revolving Commitment (as defined in the First Lien Credit Agreement)
would be less than $2,200,000.


 


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


 


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


 


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


 


59

















 


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


 


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


 


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


 


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


 


60

















 


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


 


SECTION 9.   EVENTS OF
DEFAULT


 


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


 


(a) the Borrower shall fail to pay any
principal of any Term Loan when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Term Loan, or any other amount
payable hereunder or under any other Loan Document, within five days after any
such interest or other amount becomes due in accordance with the terms hereof;
or


 


(b) any representation or warranty made or
deemed made by any Loan Party herein or in any other Loan Document or that is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been inaccurate in any material
respect (except that such materiality qualifier shall not be applicable to any
representations and warranties that are already qualified or modified by
materiality in the text thereof) on or as of the date made or deemed made; or


 


(c) (i)  any Loan Party shall
default in the observance or performance of any agreement contained in
clause (i) or (ii) of Section 7.4(a) (with respect to
the Borrower only), Section 7.5(b), Section 7.7(a) or Section 8
of this Agreement or Sections 5.5(a) and 5.7(b) of either
Guarantee and Collateral Agreement or (ii) an “Event of Default” under and
as defined in any Mortgage shall have occurred and be continuing; or


 


(d) any Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days after notice to the Borrower from the Administrative
Agent or the Required Lenders; or


 


(e) any Group Member (other than an Inactive
Subsidiary) (i) defaults in making any payment of any principal of any
Indebtedness (including the First Lien Loans, the Subordinated Loans and any
Guarantee Obligation, but excluding the Term Loans) on the scheduled or
original due date with respect thereto; or (ii) defaults in making any
payment of any interest on any such Indebtedness beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created; or (iii) defaults in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement (including the First Lien Credit Agreement and the
Subordinated Loan Agreement) evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or beneficiary of
such Indebtedness (or a trustee or agent on behalf of such holder or


 


61

















 


beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or to become subject to
a mandatory offer to purchase by the obligor thereunder or (in the case of any
such Indebtedness constituting a Guarantee Obligation) to become payable; provided,
that a default, event or condition described in clause (i), (ii) or (iii) of
this paragraph (e) shall not at any time constitute an Event of
Default unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the aggregate
$2,750,000; or


 


(f) (i) any Group Member (other than an
Inactive Subsidiary) shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Group Member shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Group Member (other than an Inactive Subsidiary) any
case, proceeding or other action of a nature referred to in clause (i) above
that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against any Group Member (other than an Inactive Subsidiary) any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within
60 days from the entry thereof; or (iv) any Group Member (other than
an Inactive Subsidiary) shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) any Group Member (other
than an Inactive Subsidiary) shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or


 


(g) (i)  any Person shall engage in
any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan, (ii) any “accumulated funding deficiency”
(as defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise
on the assets of any Group Member or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) any Group Member or any
Commonly Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a withdrawal from,
or the


 


62

















 


Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist with respect to a Plan; and in
each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could, in
the sole judgment of the Required Lenders, reasonably be expected to have a
Material Adverse Effect; or


 


(h) one or more judgments or decrees shall be
entered against any Group Member involving in the aggregate a liability (not
paid or fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $2,750,000 or more, which such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or


 


(i) any of the Security Documents shall
cease, for any reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or


 


(j) the guarantee contained in Section 2
of the Guarantee and Collateral Agreement shall cease, for any reason, to be in
full force and effect or any Loan Party or any Affiliate of any Loan Party
shall so assert; or


 


(k) (i) (A) the Permitted Investors
shall cease to own of record and beneficially at least a majority of the
outstanding common stock of the Borrower and (B) any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), excluding the
Permitted Investors, shall become, or obtain right (whether by means of
warrants, options or otherwise) to become, the “beneficial owner” (as defined
in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 25% of the outstanding common stock of the Borrower; (ii) the
Permitted Investors shall cease to own of record and beneficially at least 40%
of the outstanding amount of common stock of the Borrower; (iii) Continuing
Directors shall cease to constitute a majority of the board of directors of the
Borrower shall cease to consist of a majority of Continuing Directors; or (iv) a
Specified Change of Control shall occur; or


 


(l) the Subordinated Loans or the guarantees
thereof shall cease, for any reason (other than as a result of any amendment or
waiver pursuant to Section 11.1 or any amendment or waiver pursuant to Section 20
of the Subordination Agreement), to be validly subordinated to the Obligations
under the Loan Documents as provided in the Subordination Agreement, or any
Loan Party, any Affiliate of any Loan Party or any holder of Subordinated Loans
shall so assert;


 


then, and in
any such event, (A) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f) above with respect
to the Borrower, automatically the Term Loan Commitments shall immediately
terminate and the Term Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the other Loan Documents shall
immediately become due and payable, and (B) if such event is any other
Event of Default, the following action may be taken:  with the consent of the Required Lenders, the
Administrative Agent may,


 


63

















 


or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Term Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Loan Documents
to be due and payable forthwith, whereupon the same shall immediately become
due and payable.  Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived by the Borrower.


 


SECTION 10.   THE AGENTS


 


10.1.        Appointment.  Each Lender hereby irrevocably designates and
appoints each Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes such Agent,
in such capacity, to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto.  
Notwithstanding any provision to the contrary elsewhere in this Agreement,
no Agent shall have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against any Agent.


 


10.2.        Delegation
of Duties.  Each Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.


 


10.3.        Exculpatory
Provisions.  Neither any Agent nor
any of their respective officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (i) liable for any action lawfully taken or omitted
to be taken by it or such Person under or in connection with this Agreement or
any other Loan Document (except to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such Person’s own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by any
Loan Party or any officer thereof contained in this Agreement or any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agents under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder.  The
Agents shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party.


 


10.4.        Reliance
by Agents.  Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or


 


64

















 


conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by such Agent.  The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed
with the Administrative Agent.  Each Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such
action.  The Agents shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.


 


10.5.        Notice
of Default.  No Agent shall be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless such Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders (or, if so specified by
this Agreement, all Lenders or any other instructing group of Lenders specified
by this Agreement); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.


 


10.6.        Non-Reliance
on Agents and Other Lenders.  Each
Lender expressly acknowledges that neither the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender.  Each Lender represents to the Agents that it
has, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and enter
into this Agreement.  Each Lender also
represents that it will, independently and without reliance upon any Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Loan Parties and their affiliates.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or


 


65

















 


responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or
any affiliate of a Loan Party that may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.


 


10.7.        Indemnification.  The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever that may at any
time (whether before or after the payment of the Loans) be imposed on, incurred
by or asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court
of competent jurisdiction to have resulted from such Agent’s gross negligence
or willful misconduct.  The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.


 


10.8.        Agent
in Its Individual Capacity.  Each
Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Loan Party as though such Agent were
not an Agent.  With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.


 


10.9.        Successor
Administrative Agent.  The
Administrative Agent may resign as Administrative Agent upon 10 days’
notice to the Lenders and the Borrower. 
If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 9(a) or
Section 9(f) with respect to the Borrower shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term “Administrative
Agent” shall mean such successor agent effective upon such appointment and
approval, and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. 
If no successor agent has accepted appointment as Administrative


 


66

















 


Agent by the date that is 10 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall
assume and perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.  After any retiring
Administrative Agent’s resignation as Administrative Agent, the provisions of
this Section 10 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.


 


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


 


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


 


SECTION 11.   MISCELLANEOUS


 


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


 


(i)            forgive
the principal amount or extend the final scheduled date of maturity of any Term
Loan, extend the scheduled date of any amortization payment in respect of any
Term Loan, reduce the stated rate of any interest or fee payable hereunder
(except (x) in connection with the waiver of applicability of any
post-default increase in interest rates, which waiver shall be effective with
the consent of the Required Lenders) and (y) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or fees for purposes
of this clause (i)) or extend the scheduled date of any payment thereof
without the written consent of each Lender affected thereby;


 


(ii)           release
all or substantially all of the Collateral under the Security Documents or
release all or substantially all of the Subsidiary Guarantors from their
obligations, in each case without the written consent of all the Lenders;


 


67

















 


(iii)          eliminate
or reduce the voting rights of any Lender under this Section 11.1 without
the written consent of such Lender;


 


(iv)          reduce
any percentage specified in the definition of Required Lenders or consent to
the assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, in each case without the
written consent of all Lenders;


 


(v)           subject
to the following two paragraphs of this Section 11.1, amend, modify or
waive any provision of Section 4.8 without the written consent of the
Required Lenders, provided, that any amendment, modification or waiver
of Section 4.8 which changes the pro  rata provision therein
shall require the written consent of each Lender adversely affected thereby;


 


(vi)          reduce
the amount of Net Cash Proceeds or Excess Cash Flow required to be applied to
prepay Term Loans under this Agreement without the written consent of the
Required Lenders;


 


(vii)         amend,
modify or waive any provision of Section 10 without the written consent of
each Agent adversely affected thereby; and


 


(viii)        amend,
modify or waive Section 6.5 of the Guarantee and Collateral Agreement so
as to alter the ratable treatment of the Second Lien Obligations with respect
to the Loan Documents, the Specified Hedge Agreements and the Specified Cash
Management Agreements, in a manner adverse to any Second Lien Qualified
Counterparty with Second Lien Obligations then outstanding without the written
consent of any such Second Lien Qualified Counterparty.


 


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


 


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


 


In
addition, notwithstanding the foregoing, this Agreement may be amended with the
written consent of the Administrative Agent, the Borrower and the Lenders
providing the


 


68

















 


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


 


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


 


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


 


	
  The Borrower:

  	
   

  	
  New World
  Restaurant Group, Inc.

  1687 Cole Boulevard

  Golden, CO 80401

  
	
   

  	
   

  	
  Attention:

  	
  Richard P.
  Dutkiewicz, Chief 

  Financial Officer

  
	
   

  	
   

  	
  Telecopy:

  	
  (303)
  568-8402

  
	
   

  	
   

  	
  Telephone:
  (303) 568-8004

  
	
   

  	
   

  	
   

  
	
  The
  Administrative Agent:

  	
   

  	
  Bear Stearns
  Corporate Lending Inc.

  383 Madison Avenue

  New York, New York 10179

  
	
   

  	
   

  	
  Attention:

  	
  Bram Smith

  
	
   

  	
   

  	
  Telecopy:

  	
  (917)
  849-1542

  
	
   

  	
   

  	
  Telephone:
  (212) 272-3669

  
					



 


69

















 


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


 


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


 


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


 


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


 


11.5.        Payment
of Expenses and Taxes.  The Borrower
agrees (a) to pay or reimburse each Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to each Agent and filing and recording fees and
expenses, with statements with respect to the foregoing initially expected
(assuming the Closing Date occurs) to be submitted to the Borrower prior to the
Initial Borrowing Date (in the case of amounts to be paid on the Initial
Borrowing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as such Agent shall deem appropriate, (b) to pay or
reimburse each Lender and each Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to such Agent, (c) to pay,
indemnify, and hold each Lender and each Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, that
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender
and each Agent and their respective officers, directors,


 


70

















 


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


 


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


 


(b)           (i)  Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender
may assign to one or more assignees (each, an “Assignee”) all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Term Loan Commitments and the Term Loans at the time owing to
it) with the prior written consent (any such consent not to be unreasonably
withheld) of:


 


(A) the Borrower, provided that no
consent of the Borrower shall be required for an (x) assignment to a
Lender, an affiliate of a Lender, an Approved Fund (as defined below) or, if an
Event of Default under Section 9(a) or (f) has occurred and is
continuing, any other Person, (y) any assignment by the Administrative
Agent or the Lead Arranger (or


 


71

















 


their affiliates), provided that any such assignment of a Term
Loan Commitment pursuant to this clause (y) shall require the consent of the
Borrower (such consent not to be unreasonably withheld) unless such assignment
is made in connection with the primary syndication of the Facilities to a
Person disclosed to the Borrower prior to the Closing Date or (z) any
assignment of Term Loans; and


 


(B) the Administrative Agent, provided
that no consent of the Administrative Agent shall be required for (x) an
assignment to an Assignee that is a Lender immediately prior to giving effect
to such assignment, (y) any assignment by the Administrative Agent (or its
affiliates) or (z) any assignment of Term Loans.


 


(ii)           Assignments
shall be subject to the following additional conditions:


 


(A) except in the case of an assignment to a
Lender, an affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Term Loan Commitments or Term
Loans under any Facility, the amount of the Term Loan Commitments or Term Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $1,000,000 and, after
giving effect thereto, the assigning Lender (if it shall retain any Terms
Loans) shall have Term Loan Commitments and Term Loans aggregating at least
$1,000,000, unless each of the Borrower and the Administrative Agent otherwise
consent, provided that (1) no such consent of the Borrower shall be
required if an Event of Default under Section 9(a) or (f) has
occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Lender and its affiliates or Approved Funds, if any;


 


(B) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
and, subject to Section 4.13, the assigning Lender or the assignee Lender
shall pay a processing and recordation fee of $3,500 (except for the
Administrative Agent, the Lead Arranger and any of their Affiliates and the
Borrower and except for assignments by a Lender to any of its Affiliates or
Approved Funds);


 


(C) the Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an administrative
questionnaire; and


 


(D) in the case of an assignment by a Lender
to a CLO related to such Lender (as defined below), the assigning Lender shall
retain the sole right to approve any amendment, modification or waiver of any
provision of this Agreement and the other Loan Documents, provided that
the


 


72

















 


Assignment and Assumption between such Lender and such CLO may provide
that such Lender will not, without the consent of such CLO, agree to any
amendment, modification or waiver that (1) requires the consent of each
Lender directly affected thereby pursuant to the proviso to the second sentence
of Section 11.1 and (2) directly affects such CLO.


 


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


 


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


 


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


 


(iii)          Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) below,
from and after the effective date specified in each Assignment and Assumption
the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 4.9, 4.10, 4.11 and 10.5). 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 11.6 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.


 


(iv)          The
Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Term Loan Commitments of, and principal amount of the
Term Loans owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”).  The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.


 


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(v)           Upon
its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an Assignee, the Assignee’s completed administrative
questionnaire (unless the Assignee shall already be a Lender hereunder) and any
written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register.  No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.


 


(c)           (i)  Any
Lender may, without the consent of the Borrower or the Administrative Agent,
sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Term Loan Commitments and the Term
Loans owing to it); provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (C) the Borrower, the Administrative Agent, and the other
Lenders shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement.  Any agreement pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that (1) requires the
consent of each Lender directly affected thereby pursuant to the proviso to the
second sentence of Section 11.1 and (2) directly affects such
Participant.  Subject to paragraph (c)(ii) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 4.9, 4.10 and 4.11 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. 
To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 10.14(b) as though it were a Lender, provided
such Participant shall be subject to Section 10.14(b) as though it
were a Lender.


 


(ii)           A
Participant shall not be entitled to receive any greater payment under Section 4.9
or 4.10 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  Any Participant that is a
Non-U.S. Lender shall not be entitled to the benefits of Section 4.10
unless such Participant complies with Sections 4.10(d) and 4.10(e).


 


(d) Any Lender
may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.


 


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(e) The
Borrower, upon receipt of written notice from the relevant Lender, agrees to
issue Notes to any Lender requiring Notes to facilitate transactions of the
type described in paragraph (d) above.


 


(f) Notwithstanding
the foregoing, any Conduit Lender may assign any or all of the Term Loans it
may have funded hereunder to its designating Lender without the consent of the
Borrower or the Administrative Agent and without regard to the limitations set
forth in Section 11.6(b).  Each of
the Borrower, each Lender and the Administrative Agent hereby confirms that it
will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify,
save and hold harmless each other party hereto for any loss, cost, damage or
expense arising out of its inability to institute such a proceeding against
such Conduit Lender during such period of forbearance.


 


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


 


(b) In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by applicable
law, upon the occurrence and during the continuance of an Event of Default
under Section 9(a) hereof, to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the Borrower,
as the case may be.  Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such setoff and application.


 


75

















 


11.8.        Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.  Delivery of an
executed signature page of this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.  A set of copies of this Agreement signed by
all the parties shall be lodged with the Borrower and the Administrative Agent.


 


11.9.        Severability.  Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


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


 


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


 


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


 


(a) submits for itself and its property in
any legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York located in the City or County of New York,
the courts of the United States for the Southern District of
New York, and appellate courts from any thereof;


 


(b) consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;


 


(c) agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the Borrower at its address set forth in


 


76

















 


Section 11.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;


 


(d) agrees that nothing herein shall affect
the right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and


 


(e) waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.


 


11.13.      Acknowledgments.  The Borrower hereby acknowledges that:


 


(a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;


 


(b) no Agent or Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Agents and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and


 


(c) no joint venture is created hereby or by
the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the Lenders.


 


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


 


(b) At such
time as the Term Loans and the other Second Lien Obligations under the Loan
Documents (other than Second Lien Obligations under or in respect of Specified
Hedge Agreements or Specified Cash Management Agreements and unasserted
contingent indemnification obligations) shall have been paid in full and the
Term Loan Commitments have been terminated, the Collateral shall be released
from the Liens created by the Security Documents, and the Security Documents
and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Loan Party under the Security
Documents shall terminate, all without delivery of any instrument or
performance of any act by any Person, provided that, the Administrative
Agent agrees upon such termination to promptly deliver to the Borrower UCC-3
termination statements, discharges of existing Mortgages, and other release and
termination documents as are reasonably requested by the Borrower to discharge
the Liens as a matter of public record.


 


77

















 


11.15.      Confidentiality.  Each Agent and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement; provided that nothing herein shall prevent any
Agent or any Lender from disclosing any such information (a) to any Agent,
any other Lender or any Lender Affiliate, (b) subject to an agreement to
comply with the provisions of this Section, to any actual or prospective
Transferee or any direct or indirect counterparty to any Hedge Agreement (or
any professional advisor to such counterparty), (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors or
those of any of its affiliates (it being understood that the persons to whom
such disclosure is made will be informed of the confidential nature of such
information and such Agent or such Lender, as the case may be, shall be
responsible for the compliance of such person with this Section), (d) upon
the request or demand of any Governmental Authority, (e) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required
to do so in connection with any litigation or similar proceeding, (g) that
has been publicly disclosed (other than
as a result of prohibited disclosure by the Agents or the Lenders), (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with
respect to such Lender, or (i) in connection with the exercise of any
remedy hereunder or under any other Loan Document.  Each Agent and each Lender agrees that in the
event such Agent or such Lender is requested or required to disclose such
information pursuant to clauses (d), (e) or (f) above, such Agent or
such Lender, as the case may be, shall, to the extent practicable, provide the
Borrower with notice of any such request or requirement.


 


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


 


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


 


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


 


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


 


	
   

  	
  NEW WORLD
  RESTAURANT GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul J.B. Murphy, III

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paul J.B. Murphy, III

  
	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  BEAR, STEARNS &
  CO. INC., as Sole Lead

  Arranger and Sole Bookrunner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bram Smith

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Bram Smith

  
	
   

  	
   

  	
  Title:

  	
  Senior Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAR STEARNS
  CORPORATE LENDING INC.,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bram Smith

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Bram Smith

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
						



 


 


[Signature Page to Second
Lien Credit Agreement]


 


79