Filed by Bowne Pure Compliance



 



Exhibit
10.2



 






REWARDS NETWORK INC.




AND




EACH OF ITS DOMESTIC SUBSIDIARIES SIGNATORY HERETO




 





LOAN AND SECURITY AGREEMENT




Dated: November 6, 2007




 





RBS BUSINESS CAPITAL,




a Division of RBS Asset Finance, Inc.,

Individually and as Agent for any Lender which is

or becomes a Party hereto




 








 


 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 1. CREDIT FACILITY
	 	 	1	 
	 
	 	 	 	 
	1.1 Loans
	 	 	1	 
	1.2 Letters of Credit; LC Guaranties
	 	 	3	 
	 
	 	 	 	 
	SECTION 2. INTEREST, FEES AND CHARGES
	 	 	4	 
	 
	 	 	 	 
	2.1 Interest
	 	 	4	 
	2.2 Computation of Interest and Fees
	 	 	4	 
	2.3 Fee Letter
	 	 	4	 
	2.4 Letter of Credit and LC Guaranty Fees
	 	 	4	 
	2.5 Unused Line Fee
	 	 	5	 
	2.6 Intentionally Omitted
	 	 	5	 
	2.7 Audit Fees
	 	 	5	 
	2.8 Reimbursement of Expenses
	 	 	5	 
	2.9 Bank Charges
	 	 	6	 
	2.10 Collateral Protection Expenses; Appraisals
	 	 	6	 
	2.11 Payment of Charges
	 	 	6	 
	2.12 No Deductions
	 	 	6	 
	 
	 	 	 	 
	SECTION 3. LOAN ADMINISTRATION
	 	 	7	 
	 
	 	 	 	 
	3.1 Manner of Borrowing Revolving Credit Loans/LIBOR Option
	 	 	7	 
	3.2 Payments
	 	 	11	 
	3.3 Mandatory Prepayments
	 	 	12	 
	3.4 Application of Payments and Collections
	 	 	12	 
	3.5 All Loans to Constitute One Obligation
	 	 	13	 
	3.6 Loan Account
	 	 	13	 
	3.7 Statements of Account
	 	 	13	 
	3.8 Increased Costs
	 	 	13	 
	3.9 Basis for Determining Interest Rate Inadequate
	 	 	14	 
	3.10 Sharing of Payments, Etc
	 	 	15	 
	3.11 Replacement of Lenders
	 	 	15	 
	 
	 	 	 	 
	SECTION 4. TERM AND TERMINATION
	 	 	16	 
	 
	 	 	 	 
	4.1 Term of Agreement
	 	 	16	 
	4.2 Termination
	 	 	16	 
	 
	 	 	 	 
	SECTION 5. SECURITY INTERESTS
	 	 	17	 
	 
	 	 	 	 
	5.1 Security Interest in Collateral
	 	 	17	 
	5.2 Other Collateral
	 	 	18	 
	5.3 Lien Perfection; Further Assurances
	 	 	19	 
	5.4 Lien on Realty
	 	 	19	 






 


i









 







TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 6. COLLATERAL ADMINISTRATION
	 	 	20	 
	 
	 	 	 	 
	6.1 General
	 	 	20	 
	6.2 Administration of Accounts
	 	 	21	 
	6.3 Intentionally Omitted
	 	 	22	 
	6.4 Administration of Equipment
	 	 	22	 
	6.5 Payment of Charges
	 	 	23	 
	 
	 	 	 	 
	SECTION 7. REPRESENTATIONS AND WARRANTIES
	 	 	23	 
	 
	 	 	 	 
	7.1 General Representations and Warranties
	 	 	23	 
	7.2 Continuous Nature of Representations and Warranties
	 	 	31	 
	7.3 Survival of Representations and Warranties
	 	 	31	 
	 
	 	 	 	 
	SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
	 	 	31	 
	 
	 	 	 	 
	8.1 Affirmative Covenants
	 	 	31	 
	8.2 Negative Covenants
	 	 	35	 
	8.3 Specific Financial Covenants
	 	 	39	 
	 
	 	 	 	 
	SECTION 9. CONDITIONS PRECEDENT
	 	 	39	 
	 
	 	 	 	 
	9.1 Documentation
	 	 	39	 
	9.2 No Default
	 	 	40	 
	9.3 Other Conditions
	 	 	40	 
	9.4 Availability
	 	 	40	 
	9.5 No Litigation
	 	 	40	 
	9.6 Material Adverse Effect
	 	 	40	 
	9.7 Cash Deposit
	 	 	40	 
	 
	 	 	 	 
	SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
	 	 	40	 
	 
	 	 	 	 
	10.1 Events of Default
	 	 	40	 
	10.2 Acceleration of the Obligations
	 	 	43	 
	10.3 Other Remedies
	 	 	43	 
	10.4 Setoff and Sharing of Payments
	 	 	44	 
	10.5 Remedies Cumulative; No Waiver
	 	 	45	 
	 
	 	 	 	 
	SECTION 11. AGENT
	 	 	45	 
	 
	 	 	 	 
	11.1 Authorization and Action
	 	 	45	 
	11.2 Agent’s Reliance, Etc
	 	 	46	 
	11.3 RBS and Affiliates
	 	 	47	 
	11.4 Lender Credit Decision
	 	 	47	 
	11.5 Indemnification
	 	 	47	 
	11.6 Rights and Remedies to Be Exercised by Agent Only
	 	 	47	 
	11.7 Agency Provisions Relating to Collateral
	 	 	48	 
	11.8 Agent’s Right to Purchase Commitments
	 	 	48	 






 


ii









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	11.9 Right of Sale, Assignment, Participations
	 	 	49	 
	11.10 Amendment
	 	 	50	 
	11.11 Resignation of Agent; Appointment of Successor
	 	 	51	 
	11.12 Audit and Examination Reports; Disclaimer by Lenders
	 	 	51	 
	 
	 	 	 	 
	SECTION 12. MISCELLANEOUS
	 	 	52	 
	 
	 	 	 	 
	12.1 Power of Attorney
	 	 	52	 
	12.2 Indemnity
	 	 	53	 
	12.3 Sale of Interest
	 	 	53	 
	12.4 Severability
	 	 	53	 
	12.5 Successors and Assigns
	 	 	53	 
	12.6 Cumulative Effect; Conflict of Terms
	 	 	53	 
	12.7 Execution in Counterparts
	 	 	54	 
	12.8 Notice
	 	 	54	 
	12.9 Consent
	 	 	55	 
	12.10 Credit Inquiries
	 	 	55	 
	12.11 Time of Essence
	 	 	55	 
	12.12 Entire Agreement
	 	 	55	 
	12.13 Interpretation
	 	 	55	 
	12.14 Confidentiality
	 	 	55	 
	12.15 GOVERNING LAW; CONSENT TO FORUM
	 	 	55	 
	12.16 WAIVERS BY BORROWERS
	 	 	56	 
	12.17 Advertisement
	 	 	57	 
	12.18 Reimbursement
	 	 	57	 
	12.19 Patriot Act Notice
	 	 	58	 






 


iii









 






Execution Copy




LOAN AND SECURITY AGREEMENT




THIS LOAN AND SECURITY AGREEMENT is made as of this 6th day of November, 2007, by and among
RBS BUSINESS CAPITAL, a division of RBS Asset Finance, Inc., a New York corporation (“RBS”) with an
office at 71 South Wacker Drive, Suite 2800, Chicago, Illinois 60606, individually as a Lender and
as Agent (“Agent”) for itself and any other financial institution which is or becomes a party
hereto (each such financial institution, including RBS, is referred to hereinafter individually as
a “Lender” and collectively as the “Lenders”), the Lenders and REWARDS NETWORK INC., a Delaware
corporation (“RNI”), with its chief executive office and principal place of business at Two North
Riverside Plaza, Suite 950, Chicago, Illinois 60606 and each domestic subsidiary of RNI signatory
hereto (RNI and each such subsidiary are sometimes hereinafter referred to individually as a
“Borrower” and collectively as “Borrowers”). Capitalized terms used in this Agreement have the
meanings assigned to them in Appendix A, General Definitions. Accounting terms not otherwise
specifically defined herein shall be construed in accordance with GAAP consistently applied.



SECTION 1. CREDIT FACILITY




Subject to the terms and conditions of, and in reliance upon the representations and
warranties made in, this Agreement and the other Loan Documents, Lenders agree to make a Total
Credit Facility of up to $25,000,000 available upon Borrowers’ request therefor, as follows:



1.1 Loans.



1.1.1 Revolving Credit Loans. Each Lender agrees, severally and not jointly, for so
long as no Default or Event of Default exists, to make Revolving Credit Loans to Borrowers from
time to time during the period from the date hereof to but not including the last day of the Term,
as requested by Borrower Representative, on its own behalf and on behalf of all other Borrowers in
the manner set forth in subsection 3.1.1 hereof, up to a maximum principal amount at any time
outstanding equal to the lesser of (i) such Lender’s Revolving Loan Commitment minus the
product of such Lender’s Revolving Loan Percentage and the LC Amount minus the product of
such Lender’s Revolving Loan Percentage and reserves, if any and (ii) the product of such Lender’s
Revolving Loan Percentage and an amount equal to the Borrowing Base at such time minus the
LC Amount minus reserves, if any. Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent shall reasonably deem necessary or appropriate
in Agent’s Judgment exercised in good faith, against the amount of Revolving Credit Loans which
Borrowers may otherwise request under this subsection 1.1.1 including, without limitation, with
respect to (i) price adjustments, damages, unearned discounts, returned products or other matters
for which credit memoranda are issued in the ordinary course of any Borrower’s business;
(ii) potential dilution related to Accounts; (iii) other sums chargeable against Borrowers’ Loan
Account as Revolving Credit Loans under any section of this Agreement; (iv) amounts owing by any
Borrower to any Person to the extent secured by a Lien on, or trust over, any Property of Borrower;
(v) amounts owing by any Borrower in connection with Product Obligations; and (vi) such other
specific events, conditions or contingencies as to which Agent, in Agent’s Judgment exercised in
good faith, determines reserves should be established from time to time hereunder. Notwithstanding
the foregoing, Agent shall not establish any reserves in respect of any 


 


 









 






matters relating to any items of
Collateral that have been taken into account in determining Eligible Accounts, Eligible Dining
Credits or Eligible RCR Loans, as applicable or any adjustments in the lending formula used in
determining the Borrowing Base. The amount of any reserve established by Agent shall have a
reasonable relationship to the event, condition or other matter which is the basis for such Reserve
as determined by Agent in good faith in Agent’s Judgment. In the event that Agent deems it
necessary or appropriate to establish any such reserve, to change any applicable advance rate
contained in the definition of Borrowing Base or to change the criteria for Eligible Accounts,
Eligible Dining Credits or Eligible RCR Loans, to make any adjustment to any Borrowing Base
Certificate, Lender shall give notice of such event(s) to a Responsible Officer, any such reserve,
change or adjustment shall only be effective upon notice of such item to Borrower Representative
(which notice may be telephonic or electronic). Agent shall also discuss with Borrower
Representative the reasons leading to the establishment of any such reserve, change in advance rate
or change in eligibility requirements. Further, any reserve or classification of an Account,
Dining Credit or RCR Loan as in-eligible shall not be duplicative with any reserves or similar
items accounted for by Borrowers in their preparation of the Borrowing Base Certificate. The
Revolving Credit Loans shall be repayable in accordance with the terms of the Revolving Notes and
shall be secured by all of the Collateral. Subject to the terms hereof, Revolving Credit Loans may
be borrowed, repaid without penalty or premium, except as otherwise provided in subsection 3.1.9
hereof, and reborrowed.



1.1.2 Overadvances. Insofar as Borrower Representative, on its own behalf and on
behalf of all other Borrowers, may request and Agent or Majority Lenders (as provided below) may be
willing in their sole and absolute discretion to make Revolving Credit Loans to Borrowers at a time
when the unpaid balance of Revolving Credit Loans plus the sum of the LC Amount plus the amount of
LC Obligations that have not been reimbursed by Borrowers or funded with a Revolving Credit Loan,
plus reserves, exceeds, or would exceed with the making of any such Revolving Credit Loan, the
Borrowing Base (and such Loan or Loans being herein referred to individually as an “Overadvance”
and collectively, as “Overadvances”), Agent shall enter such Overadvances as debits in the Loan
Account. All Overadvances shall be repaid on demand, shall be secured by the Collateral and shall
bear interest as provided in this Agreement for Revolving Credit Loans generally. Any Overadvance
made pursuant to the terms hereof shall be made by all Lenders ratably in accordance with their
respective Revolving Loan Percentages. Overadvances in the aggregate amount of $500,000 or less
may, unless a Default or Event of Default has occurred and is continuing, be made in the sole and
absolute discretion of Agent. Overadvances in an aggregate amount of more than $500,000 but less
than $1,000,000 may, unless a Default or an Event of Default has occurred and is continuing, be
made in the sole and absolute discretion of the Majority Lenders. Overadvances in an aggregate
amount of $1,000,000 or more and Overadvances to be made after the occurrence and during the
continuation of a Default or an Event of Default shall require the consent of all Lenders. The
foregoing notwithstanding, in no event, unless otherwise consented to by all Lenders, (w) shall any
Overadvances be outstanding for more than sixty (60) consecutive days, (x) after all outstanding
Overadvances have been repaid, shall Agent or Lenders make any additional Overadvances unless sixty
(60) days or more have expired since the last date on which any Overadvances were outstanding,
(y) shall Overadvances be outstanding on more than ninety (90) days within any one hundred eighty
day (180) period or (z) shall Agent make Revolving Credit Loans on behalf of Lenders under this
subsection 1.1.2 to the extent such Revolving Credit
Loans would cause a Lender’s share of the Revolving Credit Loans to exceed such Lender’s
Revolving Loan Commitment minus such Lender’s Revolving Loan Percentage of the LC Amount.


 


2









 





1.1.3 Use of Proceeds. The Revolving Credit Loans shall be used solely for
(i) Borrowers’ general operating capital needs in a manner consistent with the provisions of this
Agreement and all applicable laws, (ii) to make Distributions or prepayments or repurchases of
Convertible Debentures as provided in subsection 8.2.7, and (iii) other purposes permitted under
this Agreement.



1.1.4 Agent Loans. Upon the occurrence and during the continuance of an Event of
Default, Agent, in its sole discretion, may make Revolving Credit Loans on behalf of Lenders, in an
aggregate amount not to exceed $1,000,000, if Agent, in its reasonable business judgment, deems
that such Revolving Credit Loans are necessary or desirable (i) to protect all or any portion of
the Collateral, (ii) to enhance the likelihood, or maximize the amount of, repayment of the Loans
and the other Obligations, or (iii) to pay any other amount chargeable to Borrowers pursuant to
this Agreement, including without limitation costs, fees and expenses as described in Sections 2.8
and 2.9 (hereinafter, “Agent Loans”); provided, that in no event shall (a) the maximum
principal amount of the Revolving Credit Loans exceed the aggregate Revolving Loan Commitments and
(b) Majority Lenders may at any time revoke Agent’s authorization to make Agent Loans. Any such
revocation must be in writing and shall become effective prospectively upon Agent’s receipt
thereof. Each Lender shall be obligated to advance its Revolving Loan Percentage of each Agent
Loan. If Agent Loans are made pursuant to the preceding sentence, then (a) the Borrowing Base
shall be deemed increased by the amount of such permitted Agent Loans, but only for so long as
Agent allows such Agent Loans to be outstanding, and (b) all Lenders that have committed to make
Revolving Credit Loans shall be bound to make, or permit to remain outstanding, such Agent Loans
based upon their Revolving Loan Percentages in accordance with the terms of this Agreement.



1.2 Letters of Credit; LC Guaranties. Agent agrees, for so long as no Default or
Event of Default exists and if requested by Borrower Representative, on its own behalf and on
behalf of all other Borrowers, to (i) issue its, or cause to be issued by Bank or another Affiliate
of Agent, on the date requested by Borrower Representative, on its own behalf and on behalf of all
other Borrowers, Letters of Credit for the account of Borrowers or (ii) execute LC Guaranties by
which Agent, Bank, or another Affiliate of Agent, on the date requested by Borrower Representative,
on its own behalf and on behalf of all other Borrowers, shall guaranty the payment or performance
by Borrowers of their reimbursement obligations with respect to letters of credit; provided
that the LC Amount shall not exceed $1,000,000 at any time. No Letter of Credit or LC Guaranty may
have an expiration date after the last day of the Term. Notwithstanding anything to the contrary
contained herein, Borrowers, Agent and Lenders hereby agree that all LC Obligations and all
obligations of Borrowers relating thereto shall be satisfied by the prompt issuance of one or more
Revolving Credit Loans that are Prime Rate Revolving Loans, which Borrowers hereby acknowledge are
requested and Lenders hereby agree to fund. In the event that Revolving Credit Loans are not, for
any reason, promptly made to satisfy all then existing LC Obligations, each Lender hereby agrees to
pay to Agent, on demand, an amount equal to such LC Obligations multiplied by such
Lender’s Revolving Loan Percentage, and until so paid, such amount shall be secured by the
Collateral and shall bear
interest and be payable at the same rate and in the same manner as Prime Rate Revolving Loans.
Immediately upon the issuance of a Letter of Credit or an LC Guaranty under this Agreement, each
Lender shall be deemed to have irrevocably and unconditionally purchased and received from Agent,
without recourse or warranty, an undivided interest and participation therein equal to such LC
Obligations multiplied by such Lender’s Revolving Loan Percentage.


 


3









 





SECTION 2. INTEREST, FEES AND CHARGES




2.1 Interest.



2.1.1 Rates of Interest. Interest shall accrue on the principal amount of the Prime
Rate Loans outstanding at the end of each day at a fluctuating rate per annum equal to the
Applicable Margin then in effect plus the Prime Rate. Said rate of interest shall increase
or decrease by an amount equal to any increase or decrease in the Prime Rate, effective as of the
opening of business on the day that any such change in the Prime Rate occurs. If Borrower
Representative, on its own behalf and on behalf of all other Borrowers, exercises the LIBOR Option
as provided in Section 3.1, interest shall accrue on the principal amount of the LIBOR Rate Loans
outstanding at the end of each day at a rate per annum equal to the Applicable Margin then in
effect plus the LIBOR Lending Rate applicable to each LIBOR Rate Loans for the
corresponding Interest Period.



2.1.2 Default Rate of Interest. At the option of Agent or the Majority Lenders, upon
and after the occurrence of an Event of Default, and during the continuation thereof, the principal
amount of all Loans shall bear interest at a rate per annum equal to 2.0% plus the interest
rate otherwise applicable thereto (the “Default Rate”).



2.1.3 Maximum Interest. In no event whatsoever shall the aggregate of all amounts
deemed interest hereunder or under the Notes and charged or collected pursuant to the terms of this
Agreement or pursuant to the Notes exceed the highest rate permissible under any law which a court
of competent jurisdiction shall, in a final determination, deem applicable hereto (the “Maximum
Rate”). If any provisions of this Agreement or the Notes are in contravention of any such law,
such provisions shall be deemed amended to conform thereto. If at any time, the amount of interest
paid hereunder is limited by the Maximum Rate, and the amount at which interest accrues hereunder
is subsequently below the Maximum Rate, the rate at which interest accrues hereunder shall remain
at the Maximum Rate, until such time as the aggregate interest paid hereunder equals the amount of
interest that would have been paid had the Maximum Rate not applied.



2.2 Computation of Interest and Fees. Interest, Letter of Credit and LC Guaranty fees
and Unused Line Fees hereunder shall be calculated daily and shall be computed on the actual number
of days elapsed over a year of 360 days.



2.3 Fee Letter. Borrowers shall pay to Agent certain fees and other amounts in
accordance with the terms of the fee letter between Borrowers and Agent (the “Fee Letter”).


 


4









 





2.4 Letter of Credit and LC Guaranty Fees. Borrowers shall pay to Agent for all
Letters of Credit and LC Guaranties of letters of credit, for the ratable benefit of Lenders a per
annum fee equal to the Applicable Margin then in effect for LIBOR Revolving Loans of the
aggregate undrawn available amount of such Letters of Credit and LC Guaranties outstanding
from time to time during the term of this Agreement, plus, for the benefit of Bank, all
normal and customary charges associated with the issuance, processing and administration thereof,
which fees and charges shall be deemed fully earned upon issuance of each such Letter of Credit or
LC Guaranty or as advised by Agent or Bank, shall be due and payable on the first Business Day of
each month or as advised by Agent or Bank and shall not be subject to rebate or proration upon the
termination of this Agreement for any reason.



2.5 Unused Line Fee. Borrowers shall pay to Agent, for the ratable benefit of
Lenders, a fee (the “Unused Line Fee”) equal to 0.25% per annum multiplied by the average daily
amount by which the Revolving Credit Maximum Amount exceeds the sum of (i) the outstanding
principal balance of the Revolving Credit Loans plus (ii) the LC Amount.



2.6 Intentionally Omitted.



2.7 Audit Fees. Borrowers shall pay to Agent audit fees in accordance with Agent’s
current schedule of fees in effect from time to time in connection with audits of the books and
records and Properties of Borrowers and their Subsidiaries and such other matters as Agent shall
deem appropriate in its reasonable credit judgment, plus all reasonable out-of-pocket expenses
incurred by Agent in connection with such audits; provided, that so long as no Event of
Default has occurred and is continuing, Borrowers shall not be liable for such audit fees incurred
in connection with more than four (4) such audits during any fiscal year, whether such audits are
conducted by employees of Agent or by third parties hired by Agent; provided that if there
are no outstanding Revolving Credit Loans or Letters of Credit, Borrowers shall not be liable for
such audit fees incurred in connection with more than one audit during any fiscal year. Such audit
fees and out-of-pocket expenses shall be payable on the first day of the month following the date
of issuance by Agent of a request for payment thereof to Borrowers upon demand therefor by Agent
from time to time. Agent may, in its discretion, provide for the payment of such amounts by making
appropriate Revolving Credit Loans to Borrowers and charging Borrowers’ Loan Account therefor.



2.8 Reimbursement of Expenses. If, at any time or times regardless of whether or not
an Event of Default then exists, (i) Agent incurs legal or accounting expenses or any other costs
or out-of-pocket expenses in connection with (1) the negotiation and preparation of this Agreement
or any of the other Loan Documents, any amendment of or modification of this Agreement or any of
the other Loan Documents, or any syndication or attempted syndication of the Obligations
(including, without limitation, printing and distribution of materials to prospective Lenders and
all costs associated with bank meetings, but excluding any closing fees paid to Lenders in
connection therewith) or (2) the administration of this Agreement or any of the other Loan
Documents and the transactions contemplated hereby and thereby; or (ii) Agent or any Lender incurs
reasonable out of pocket legal or accounting expenses or any other costs or out-of-pocket expenses
in connection with (1) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Agent, any Lender, any Borrower or any other Person) relating to the Collateral, this
Agreement or any of the other Loan Documents or any Borrower’s, any of its Subsidiaries’ or any
Guarantor’s affairs; (2) any attempt to enforce any rights of Agent or any Lender against any
Borrower or any other Person which may be obligated to Agent or any Lender by virtue of this
Agreement or any of the other Loan Documents, including, without limitation, the Account Debtors; or (3) any attempt to inspect, verify, protect,



 


5









 






preserve,
restore, collect, sell, liquidate or otherwise dispose of or realize upon the Collateral; then all
such reasonable out-of-pocket legal and accounting expenses, other reasonable costs and out of
pocket expenses of Agent or any Lender, as applicable, shall be charged to Borrowers;
provided, that Borrowers shall not be responsible for such costs and out-of-pocket expenses
to the extent incurred because of the gross negligence or willful misconduct of Agent or any
Lender. All amounts chargeable to Borrowers under this Section 2.8 shall be Obligations secured by
all of the Collateral, shall be payable on demand to Agent or such Lender, as the case may be, and
shall bear interest from the date such demand is made until paid in full at the rate applicable to
Prime Rate Revolving Loans from time to time. Borrowers shall also reimburse Agent for expenses
incurred by Agent in its administration of the Collateral to the extent and in the manner provided
in Sections 2.9 and 2.10 hereof.



2.9 Bank Charges. Borrowers shall pay to Agent, on demand, any and all fees, costs or
expenses which Agent or any Lender pays to a bank or other similar institution arising out of or in
connection with (i) the forwarding to any Borrower or any other Person on behalf of any Borrower,
by Agent or any Lender, of proceeds of Loans made to Borrowers pursuant to this Agreement and
(ii) the depositing for collection by Agent or any Lender of any check or item of payment received
or delivered to Agent or any Lender on account of the Obligations.



2.10 Collateral Protection Expenses; Appraisals. All out-of-pocket expenses incurred
in protecting, storing, warehousing, insuring, handling, maintaining and shipping the Collateral,
and any and all excise, property, sales, and use taxes imposed by any state, federal, or local
authority on any of the Collateral or in respect of the sale thereof shall be borne and paid by
Borrowers. If Borrowers fail to promptly pay any portion thereof when due, Agent may, at its
option, but shall not be required to, pay the same and charge Borrowers therefor; provided
that the foregoing shall not prevent Borrowers from contesting any such item in good faith and by
appropriate proceedings, so long as any such contest does not materially affect Agent’s Lien on the
applicable Collateral. Additionally, from time to time, Agent may, at Borrowers’ expense, obtain
appraisals from appraisers (who may be personnel of Agent), stating the then current fair market
value or orderly liquidation value of the Dining Credits; provided that so long as no Event
of Default has occurred and is continuing, Borrowers shall not be liable for fees and expenses
incurred in connection with more than one appraisal during any fiscal year. Any such appraisal
shall be conducted using the same methodology as used in the appraisal of Dining Credits conducted
by Agent (or its agents) prior to the Closing Date.



2.11 Payment of Charges. All amounts chargeable to Borrowers under this Agreement
shall be Obligations secured by all of the Collateral, shall be, unless specifically otherwise
provided, payable on demand and shall bear interest from the date demand was made or such amount is
due, as applicable, until paid in full at the rate applicable to Prime Rate Revolving Loans from
time to time.


 


6









 





2.12 No Deductions. Any and all payments or reimbursements made hereunder shall be
made free and clear of and without deduction for any and all taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto; excluding, however, the
following: taxes imposed on the income of Agent or any Lender or franchise taxes by the
jurisdiction under the laws of which Agent or any Lender is organized or doing business or any
political subdivision thereof and taxes imposed on its income by the jurisdiction of Agent’s
or such Lender’s applicable lending office or any political subdivision thereof or franchise taxes
(all such taxes, levies, imposts, deductions, charges or withholdings and all liabilities with
respect thereto excluding such taxes imposed on net income, herein “Tax Liabilities”). If any
Borrower shall be required by law to deduct any such Tax Liabilities from or in respect of any sum
payable hereunder to Agent or any Lender, then the sum payable hereunder shall be increased as may
be necessary so that, after all required deductions are made, Agent or such Lender receives an
amount equal to the sum it would have received had no such deductions been made.



SECTION 3. LOAN ADMINISTRATION




3.1 Manner of Borrowing Revolving Credit Loans/LIBOR Option. Borrowings under the
credit facility established pursuant to Section 1 hereof shall be as follows:



3.1.1 Loan Requests; Revolving Credit Loans. A request for a Revolving Credit Loan
shall be made, or shall be deemed to be made, in the following manner: (a) Borrower
Representative, on its own behalf and on behalf of all other Borrowers, may give Agent notice of
its intention to borrow, in which notice Borrower Representative shall specify the amount of the
proposed borrowing of a Revolving Credit Loan and the proposed borrowing date, which shall be a
Business Day, no later than 12:00 p.m. (New York time) (11:00 a.m. New York time on the last
Business Day of each month) on the proposed borrowing date (or in accordance with subsection 3.1.7,
3.1.8 or 3.1.9, as applicable, in the case of a request for a LIBOR Rate Loan), provided,
however, that no such request may be made at a time when there exists a Default or an Event
of Default; and (b) the becoming due of any amount required to be paid under this Agreement, or the
Notes, whether as interest or for any other Obligation, shall be deemed irrevocably to be a request
for a Revolving Credit Loan on the due date in the amount required to pay such interest or other
Obligation.



3.1.2 Disbursement. Borrowers hereby irrevocably authorize Agent to disburse the
proceeds of each Loan requested, or deemed to be requested, pursuant to subsection 3.1.1 as
follows: (i) the proceeds of each Revolving Credit Loan requested under subsection 3.1.1(a) shall
be disbursed by Agent in lawful money of the United States of America in immediately available
funds by wire transfer to such bank account as may be agreed upon by Borrowers and Agent from time
to time or elsewhere if pursuant to a written direction from Borrowers; and (ii) the proceeds of
each Revolving Credit Loan deemed requested under subsection 3.1.1(b) shall be disbursed by Agent
by way of direct payment of the relevant interest or other Obligation. If at any time any Loan is
funded by Agent or Lenders in excess of the amount requested or deemed requested by Borrowers,
Borrowers agree to repay the excess to Agent promptly upon the earlier to occur of (a) any
Borrower’s discovery of the error and (b) notice thereof to Borrowers from Agent or any Lender.




 


7









 








3.1.3 Payment by Lenders. Agent shall give to each Lender prompt written notice by
facsimile, telex or cable of the receipt by Agent from Borrower Representative of any request for a
Revolving Credit Loan. Each such notice shall specify the requested date and amount of such
Revolving Credit Loan, whether such Revolving Credit Loan shall be subject to the LIBOR Option, and
the amount of each Lender’s advance thereunder (in accordance with its applicable Revolving Loan
Percentage. Each Lender shall, not later than 1:00 p.m. (New York
time) on such requested date, wire to a bank designated by Agent the amount of that Lender’s
Revolving Loan Percentage of the requested Revolving Credit Loan. The failure of any Lender to
make the Revolving Credit Loans to be made by it shall not release any other Lender of its
obligations hereunder to make its Revolving Credit Loan. Neither Agent nor any other Lender shall
be responsible for the failure of any other Lender to make the Revolving Credit Loan to be made by
such other Lender. The foregoing notwithstanding, Agent, in its sole discretion, may from its own
funds make a Revolving Credit Loan on behalf of any Lender. In such event, the Lender on behalf of
whom Agent made the Revolving Credit Loan shall reimburse Agent for the amount of such Revolving
Credit Loan made on its behalf, on a weekly (or more frequent, as determined by Agent in its sole
discretion) basis. On each such settlement date, Agent will pay to each Lender the net amount
owing to such Lender in connection with such settlement, including without limitation amounts
relating to Loans, fees, interest and other amounts payable hereunder. The entire amount of
interest attributable to such Revolving Credit Loan for the period from the date on which such
Revolving Credit Loan was made by Agent on such Lender’s behalf until Agent is reimbursed by such
Lender, shall be paid to Agent for its own account.



3.1.4 Authorization. Borrowers hereby irrevocably authorize Agent, in Agent’s sole
discretion, to advance to Borrowers, and to charge to Borrowers’ Loan Account hereunder as a
Revolving Credit Loan (which shall be a Prime Rate Revolving Loan), a sum sufficient to pay all
interest accrued on the Obligations during the immediately preceding month and to pay all fees,
costs and expenses and other Obligations at any time owed by any Borrower to Agent or any Lender
hereunder.



3.1.5 Letter of Credit and LC Guaranty Requests. A request for a Letter of Credit or
LC Guaranty shall be made in the following manner: Borrower Representative, on its own behalf and
on behalf of all other Borrowers, may give Agent and Bank a written notice of its request for the
issuance of a Letter of Credit or LC Guaranty, not later than 12:00 p.m. (New York time) (11:00
a.m. New York time on the last Business Day of each month), one Business Day before the proposed
issuance date thereof, in which notice Borrower Representative shall specify the issuance date and
format and wording for the Letter of Credit or LC Guaranty being requested (which shall be
satisfactory to Agent and the Person being asked to issue such Letter of Credit or LC Guaranty);
provided, that no such request may be made at a time when there exists a Default or Event
of Default. Such request shall be accompanied by an executed application and reimbursement
agreement in form and substance reasonably satisfactory to Agent and the Person being asked to
issue the Letter of Credit or LC Guaranty, as well as any required resolutions and other documents.



3.1.6 Method of Making Requests. As an accommodation to Borrowers, unless a Default
or an Event of Default is then in existence, (i) Agent shall permit telephonic or electronic
requests for Revolving Credit Loans to Agent, (ii) Agent and Bank may, in their discretion, permit
electronic transmittal of requests for Letters of Credit and LC Guaranties to them, and (iii) Agent
may, in Agent’s discretion, permit electronic transmittal of instructions, authorizations,
agreements or reports to Agent. Unless Borrower Representative, on its own behalf and on behalf of
all other Borrowers specifically directs Agent or Bank in writing not to accept or act upon
telephonic or electronic communications from any Borrower, neither Agent nor Bank shall have any
liability to Borrowers for any loss or damage suffered by any Borrower as a result of Agent’s or
Bank’s honoring of any requests, execution of any instructions, authorizations or agreements or reliance on any reports communicated to it telephonically or
electronically and purporting to have been sent to Agent or Bank by any Borrower, and neither Agent
nor Bank shall have any duty to verify the origin of any such communication or the authority of the
Person sending it. Each telephonic request for a Revolving Credit Loan, Letter of Credit or LC
Guaranty accepted by Agent and Bank, if applicable, hereunder shall be promptly followed by a
written confirmation of such request from Borrower Representative to Agent and Bank, if applicable.




 


8









 







3.1.7 LIBOR Rate Loan Request. By delivering a borrowing request to Agent on or
before 10:00 a.m., New York time, on a Business Day, Borrower Representative, on its own behalf and
on behalf of each other Borrower, may from time to time irrevocably request, on not less than two
nor more than five Business Days’ notice, that a LIBOR Rate Loan be made in a minimum amount of
$500,000 and integral multiples of $100,000, with an Interest Period of one, two and three months.
On the terms and subject to the conditions of this agreement, each LIBOR Rate Loan shall be made
available to Borrowers no later than 12:00 p.m. New York time on the first day of the applicable
Interest Period by deposit to the account of the Borrower as shall have been specified in its
borrowing request. In no event shall Borrowers be permitted to have outstanding at any one time
LIBOR Rate Loans with more than four (4) different Interest Periods.



3.1.8 Continuation and Conversion Elections. By delivering a continuation/conversion
notice to the Bank on or before 10:00 a.m., New York time, on a Business Day, Borrowers’
Representative, on its own behalf and on behalf of each other Borrower, may from time to time
irrevocably elect, on not less than two nor more than five Business Days’ notice, that all, or any
portion in an aggregate minimum amount of $500,000 and integral multiples of $100,000, of any LIBOR
Rate Loan be converted on the last day of an Interest Period into a LIBOR Rate Loan with a
different Interest Period, or continued on the last day of an Interest Period as a LIBOR Rate Loan
with a similar Interest Period, provided, however, that no portion of the
outstanding principal amount of any LIBOR Rate Loans may be converted to, or continued as, LIBOR
Rate Loans when any Default or Event of Default has occurred and is continuing, and no portion of
the outstanding principal amount of any LIBOR Rate Loans may be converted to LIBOR Rate Loans of a
different duration if such LIBOR Rate Loans relate to any Hedging Obligations. If any Default or
Event of Default has occurred and is continuing (if Agent or Majority Lenders does not otherwise
elect to exercise any right to accelerate the Loans it is granted hereunder), or in the absence of
delivery of a continuation/conversion notice with respect to any LIBOR Rate Loan at least two
Business Days before the last day of the then current Interest Period with respect thereto, each
maturing LIBOR Rate Loan shall automatically be continued as a Prime Rate Loan.



3.1.9 Voluntary Prepayment of LIBOR Rate Loans. LIBOR Rate Loans may be prepaid upon
the terms and conditions set forth herein. For LIBOR Rate Loans in connection with which Borrowers
have or may incur Hedging Obligations, additional obligations may be associated with prepayment, in
accordance with the terms and conditions of the applicable Hedging Contracts. Borrower
Representative, on its own behalf and on behalf of each other Borrower, shall give Agent, no later
than 11:00 a.m., New York City time, at least four (4) Business Days notice of any proposed
prepayment of any LIBOR Rate Loans, specifying the


 


9









 







proposed date of payment of such LIBOR Rate
Loans, and the principal amount to be paid. Each
 partial prepayment of the principal amount of LIBOR Rate Loans shall be in an integral
multiple of $500,000 and integral multiples of $100,000 and accompanied by the payment of all
charges outstanding on such LIBOR Rate Loans and of all accrued interest on the principal repaid to
the date of payment. Borrowers acknowledge that prepayment or acceleration of a LIBOR Rate Loan
during an Interest Period shall result in Lenders incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to ascertain the extent of such
costs, expenses and/or liabilities. Therefore, all full or partial prepayments of LIBOR Rate Loans
shall be accompanied by, and Borrowers hereby promise to pay, on each date a LIBOR Rate Loan is
prepaid or the date all sums payable hereunder become due and payable, by acceleration or
otherwise, in addition to all other sums then owing, an amount (“LIBOR Rate Loan Prepayment Fee”)
determined by Agent pursuant to the following formula:




(a) the then current rate for United States Treasury securities (bills on a discounted
basis shall be converted to a bond equivalent) with a maturity date closest to the end of the
Interest Period as to which prepayment is made, subtracted from




(b) the LIBOR Lending Rate plus the Applicable Margin applicable to the LIBOR Rate Loan
being prepaid.



If the result of this calculation is zero or a negative number, then there shall be no LIBOR Rate
Loan Prepayment Fee. If the result of this calculation is a positive number, then the resulting
percentage shall be multiplied by:




(c) the amount of the LIBOR Rate Loan being prepaid.



The resulting amount shall be divided by:




(d) 360



and multiplied by:




(e) the number of days remaining in the Interest Period as to which the prepayment is
being made.



Said amount shall be reduced to present value calculated by using the referenced United States
Treasury securities rate and the number of days remaining on the Interest Period for the LIBOR Rate
Loan being prepaid.



The resulting amount of these calculations shall be the LIBOR Rate Loan Prepayment Fee.



3.1.10 Inability to Make LIBOR Rate Loans. Notwithstanding any other provision
hereof, if any applicable law, treaty, regulation or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for any Lender (for purposes of this
subsection 3.1.10, the term “Lender” shall include the office or branch where such Lender or any
corporation or bank then controlling such Lender makes or maintains any LIBOR Rate Loans) to make
or maintain its LIBOR Rate Loans, or if with respect to any Interest Period, Agent is unable to
determine the LIBOR relating thereto, or adverse or unusual conditions in, or changes in applicable
law relating to, the London interbank market make it, in the reasonable judgment of Agent, impracticable to fund therein any of the LIBOR Rate Loans, or make the
projected LIBOR unreflective of the actual costs of funds therefor to any Lender, the obligation of
Agent and Lenders to make or continue LIBOR Rate Loans or convert Prime Rate Loans to LIBOR Rate
Loans hereunder shall forthwith be suspended during the pendency of such circumstances and
Borrowers shall, if any affected LIBOR Rate Loans are then outstanding, promptly upon request from
Agent, convert such affected LIBOR Rate Loans into Prime Rate Loans.




 


10









 







3.2 Payments. Except where evidenced by notes or other instruments issued or made by
Borrowers to any Lender and accepted by such Lender specifically containing payment instructions
that are in conflict with this Section 3.2 (in which case the conflicting provisions of said notes
or other instruments shall govern and control), the Obligations shall be payable as follows:



3.2.1 Principal; Revolving Credit Loans. Principal on account of Revolving Credit
Loans shall be payable by Borrowers to Agent for the ratable benefit of Lenders immediately upon
the earliest of (i) the receipt by Agent or any Borrower of any proceeds of any of the Collateral
(except as otherwise provided herein), including without limitation pursuant to subsections 3.3 and
6.2.4, to the extent of said proceeds, subject to Borrowers’ rights to reborrow such amounts in
compliance with subsection 1.1.1 hereof; (ii) the occurrence of an Event of Default in consequence
of which Agent or Majority Lenders elect to accelerate the maturity and payment of the Obligations,
or (iii) termination of this Agreement pursuant to Section 4 hereof; provided,
however, that, if an Overadvance shall exist at any time, Borrowers shall, on demand, repay
the Overadvance. Each payment (including principal prepayment) by Borrowers on account of
principal of the Revolving Credit Loans shall be applied first to Prime Rate Revolving Loans and
then to LIBOR Rate Revolving Loans.



3.2.2 Interest Provisions. Interest on the outstanding principal amount of any Loan
shall be payable on the applicable Interest Payment Date.



3.2.3 Costs, Fees and Charges. Costs, fees and charges payable pursuant to this
Agreement shall be payable by Borrowers to Agent, as and when provided in Section 2 or Section 3
hereof, as applicable to Agent or a Lender, as applicable, or to any other Person designated by
Agent or such Lender in writing.



3.2.4 Other Obligations. The balance of the Obligations requiring the payment of
money, if any, shall be payable by Borrowers to Agent for distribution to Lenders, as appropriate,
as and when provided in this Agreement, the Other Agreements or the Security Documents, or on
demand, whichever is later.



3.2.5 LIBOR Rate Loans. If the application of any payment made in accordance with the
provisions of this Section 3.3 at a time when no Event of Default has occurred and is continuing
would result in termination of a LIBOR Rate Loan prior to the last day of the Interest Period for
such LIBOR Rate Loan, the amount of such prepayment shall not be applied to such LIBOR Rate Loan,
but will, at Borrowers’ option, be held by Agent in a non-interest bearing account at Bank, which
account is in the name of Agent and from which account only Agent can make any withdrawal, in each
case to be applied as such amount would
otherwise have been applied under this Section 3.3 at the earlier to occur of (i) the last day
of the relevant Interest Period or (ii) the occurrence of a Default or an Event of Default.


 


11









 





3.3 Mandatory Prepayments.



3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation of Collateral. Except as
provided in subsections 6.4.2 and 8.2.9, if any Borrower or any of its Subsidiaries sells any of
the Collateral or if any of the Collateral is lost or destroyed or taken by condemnation, Borrowers
shall, unless otherwise agreed by Majority Lenders, pay to Agent for the ratable benefit of Lenders
as and when received by any Borrower or such Subsidiary and as a mandatory prepayment of the Loans,
as herein provided, a sum equal to the proceeds (including insurance payments but net of costs and
taxes incurred in connection with such sale or event) received by Borrowers or such Subsidiary from
such sale, loss, destruction or condemnation. The applicable prepayment shall be applied to reduce
the outstanding principal balance of the Revolving Credit Loans, but shall not permanently reduce
the Revolving Loan Commitments.



3.3.2 Proceeds from Issuance of Additional Indebtedness or Equity. If any Borrower
issues any additional Indebtedness (other than Indebtedness permitted pursuant to subsection 8.2.3)
or obtains any additional equity in a manner permitted under this Agreement, Borrowers shall pay to
Agent for the ratable benefit of Lenders, when and as received by such Borrower and as a mandatory
prepayment of the Obligations, a sum equal to one hundred percent (100%) of the net proceeds to
such Borrower of the issuance of such Indebtedness or equity. Any such prepayment shall be applied
to the Loans in the manner specified in the second sentence of subsection 3.3.1 until payment
thereof in full.



3.4 Application of Payments and Collections.



3.4.1 Collections. All items of payment received by Agent by 12:00 noon, New York,
New York, time, on any Business Day shall be deemed received on that Business Day. All items of
payment received after 12:00 noon, New York, New York, time, on any Business Day shall be deemed
received on the following Business Day. If as the result of collections of Accounts as authorized
by subsection 6.2.4 hereof or otherwise, a credit balance exists in the Loan Account, such credit
balance shall not accrue interest in favor of Borrowers, but shall be disbursed to Borrowers or
otherwise at Borrower Representative’s direction in the manner set forth in subsection 3.1.2, upon
Borrower Representative’s request at any time, so long as no Default or Event of Default then
exists. Agent may at its option, offset such credit balance against any of the Obligations upon
and during the continuance of an Event of Default.



3.4.2 Apportionment, Application and Reversal of Payments. Principal and interest
payments shall be apportioned ratably among Lenders (according to the unpaid principal balance of
the Loans to which such payments relate held by each Lender). All payments shall be remitted to
Agent and all such payments not relating to principal or interest of specific Loans, or not
constituting payment of specific fees, and all proceeds of Accounts, or, except as provided in
subsection 3.3.1, other Collateral received by Agent, shall be applied, ratably, subject to the
provisions of this Agreement, first, to pay any fees, indemnities, or expense
reimbursements (other than amounts related to Product Obligations) then due to Agent or Lenders
from Borrowers; second, to pay interest due from


 


12









 






Borrowers in respect of all Loans,
including Agent Loans; third, to pay or prepay principal of Agent Loans; fourth, to pay or
prepay principal of the Revolving Credit Loans (other than Agent Loans) and unpaid reimbursement
obligations in respect of Letters of Credit; fifth, to pay an amount to Agent equal to all
outstanding Letter of Credit Obligations to be held as cash Collateral for such Obligations;
sixth, to the payment of any other Obligation (other than amounts related to Product
Obligations) due to Agent or any Lender by Borrowers; and seventh, to pay any fees,
indemnities or expense reimbursements related to Product Obligations. After the occurrence and
during the continuance of an Event of Default, Agent shall have the continuing exclusive right to
apply and reapply any and all such payments and collections received at any time or times hereafter
by Agent or its agent against the Obligations, in such manner as Agent may deem advisable,
notwithstanding any entry by Agent or any Lender upon any of its books and records.



3.5 All Loans to Constitute One Obligation. The Loans and LC Guarantees shall
constitute one general Obligation of Borrowers, and shall be secured by Agent’s Lien upon all of
the Collateral.



3.6 Loan Account. Agent shall enter all Loans as debits to a loan account (the “Loan
Account”) and shall also record in the Loan Account all payments made by Borrowers on any
Obligations and all proceeds of Collateral which are finally paid to Agent, and may record therein,
in accordance with customary accounting practice, other debits and credits, including interest and
all charges and expenses properly chargeable to Borrowers. Agent shall provide Borrowers with
reasonable access to such Loan Account for Borrowers’ review.



3.7 Statements of Account. Agent will account to Borrower Representative monthly with
a statement of Loans, charges and payments made pursuant to this Agreement during the immediately
preceding month, and such account rendered by Agent shall be deemed final, binding and conclusive
upon Borrowers absent demonstrable error unless Agent is notified by Borrowers in writing to the
contrary within 45 days of the date each accounting is received by Borrowers. Such notice shall
only be deemed an objection to those items specifically objected to therein.



3.8 Increased Costs.




(a) If on or after the date hereof the adoption of any applicable law, rule or
regulation or guideline (whether or not having the force of law), or any change therein, or
any change in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or administration thereof,
or compliance by the Bank with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency:




(x) shall subject the Bank to any tax, duty or other charge with respect to its LIBOR
Rate Loans or its obligation to make LIBOR Rate Loans, or shall change the basis of taxation
of payments to the Bank of the principal of or interest on its LIBOR Rate Loans or any other
amounts due under this agreement in respect of its LIBOR Rate Loans or its obligation to
make LIBOR Rate Loans (except for the introduction of, or change in the rate of, tax on the
overall net income of the Bank or franchise taxes, imposed by the jurisdiction (or any
political subdivision or taxing authority thereof)
under the laws of which the Bank is organized or in which the Bank’s principal
executive office is located); or


 


13









 








(y) shall impose, modify or deem applicable any reserve, special deposit or similar
requirement (including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System of the United States) against assets of, deposits
with or for the account of, or credit extended by, Agent or any Lender or shall impose on
Agent or any Lender or on the London interbank market any other condition affecting its
LIBOR Rate Loans or its obligation to make LIBOR Rate Loans;



and the result of any of the foregoing is to increase the cost to Agent or any Lender of making or
maintaining any LIBOR Rate Loan, or to reduce the amount of any sum received or receivable by Agent
or any Lender under this Agreement with respect thereto, by an amount deemed by Agent or any Lender
to be material, then, within 15 days after Borrower Representative’s receipt of a certificate from
Agent or such Lender setting forth in reasonable detail a calculation of such amount(s), Borrowers
shall pay to Agent, for its own account or the account of the applicable Lender, such additional
amount or amounts as will compensate Agent or such Lender for such increased cost or reduction;
provided that Borrowers shall not be required to compensate Agent or any Lender for any such amount
incurred more than 180 days prior to the delivery of such certificate.




(b) If any Lender gives a notice under Section 3.8, then such Lender shall use
reasonable efforts to designate a different lending office or to assign its rights and
obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment
of such Lender, such designation or assignment (a) would eliminate the need for such notice
or reduce amounts payable in the future, as applicable; and (b) in each case, would not
subject such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. Borrowers agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.



3.9 Basis for Determining Interest Rate Inadequate. In the event that Agent or any
Lender shall have determined that:




(i) reasonable means do not exist for ascertaining the LIBOR for any Interest Period;
or




(ii) Dollar deposits in the relevant amount and for the relevant maturity are not
available in the London interbank market with respect to a proposed LIBOR Rate Loan, or a
proposed conversion of a Prime Rate Loan into a LIBOR Rate Loan; then




 


14









 









Agent or such Lender shall give Borrowers prompt written, telephonic or electronic notice of the
determination of such effect. If such notice is given, (i) any such requested LIBOR Rate Loan
shall be made as a Prime Rate Loan, unless Borrower Representative, on its own behalf and on behalf
of all other Borrowers, shall notify Agent no later than 10:00 a.m. (Chicago, Illinois time) three
(3) Business Days’ prior to the date of such proposed borrowing that the request for such
 borrowing shall be canceled or made as an unaffected type of LIBOR Rate Loan, and (ii) any Prime
Rate Loan which was to have been converted to an affected type of LIBOR Rate Loan shall be
continued as or converted into a Prime Rate Loan, or, if Borrowers shall notify Agent, no later
than 10:00 a.m. (Chicago, Illinois time) three (3) Business Days prior to the proposed conversion,
shall be maintained as an unaffected type of LIBOR Rate Loan.



3.10 Sharing of Payments, Etc. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of
any Loan made by it in excess of its ratable share of payments on account of Loans made by all
Lenders, such Lender shall forthwith purchase from each other Lender such participation in such
Loan as shall be necessary to cause such purchasing Lender to share the excess payment ratably with
each other Lender; provided, that, if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded
and such Lender shall repay to the purchasing Lenders the purchase price to the extent of such
recovery, together with an amount equal to such Lender’s ratable share (according to the proportion
of (i) the amount of such Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. Borrowers agree that any Lender so purchasing a
participation from another Lender pursuant to this Section 3.10 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of setoff) with respect
to such participation as fully as if such Lender were the direct creditor of Borrowers in the
amount of such participation. Notwithstanding anything to the contrary contained herein, all
purchases and repayments to be made under this Section 3.10 shall be made through Agent and
recorded in the Loan Account.



3.11 Replacement of Lenders. Within thirty (30) days after (i) receipt by Agent of
notice and demand from any Lender for payment of additional costs as provided in Section 3.8,
(ii) any Lender is a Defaulted Lender, and the circumstances causing such status shall not have
been cured or waived, or (iii) any failure by any Lender to consent to a requested amendment,
waiver or modification to any Loan Document in which Majority Lenders have already consented to
such amendment, waiver or modification but the consent of each Lender, or each Lender affected
thereby, is required with respect thereto, (each relevant Lender in the foregoing clauses (i)
through (iii) being any “Affected Lender”) each of Borrower Representative and Agent may, at its
option, notify such Affected Lender and, in the case of Borrower Representative’s election, the
Agent, of such Person’s intention to obtain, a Borrowers’ expense, a replacement Lender
(“Replacement Lender”) for such Lender, which Replacement Lender shall be acceptable to Agent, in
Agent’s Judgment, and, in the event the Replacement Lender is to replace an Affected Lender
described in the preceding clause (iii) such Replacement Lender consents to the requested
amendment, waiver or modification making the replacement Lender an Affected Lender. In the event
Borrower or Agent, as applicable, obtains a Replacement Lender within ninety (90) days following
notice of its intention to do so, the Affected Lender shall sell, at par, and assign all of its
Loans and funding commitments hereunder to such Replacement Lender in accordance with the
procedures set forth in Section 12.5; provided, that (A) Borrowers shall have, as
applicable, reimbursed such Lender for its increased costs and additional payments for which it is
entitled to reimbursement under any of Section 3.8, of this Agreement through the date of such sale
and assignment and (B) Borrowers shall pay to Administrative Agent


 


15









 






the $3,500 processing fee in
respect of such assignment. In the event that a replaced Lender does not execute an Assignment Agreement pursuant to Section 12.5 within five (5) Business Days
after receipt by such replaced Lender of notice of replacement pursuant to this Section 3.11 and
presentation to such replaced Lender of an Assignment Agreement evidencing an assignment pursuant
to this Section 3.11, such replaced Lender shall be deemed to have consented to the terms of such
Assignment Agreement, and any such Assignment Agreement executed by Agent, the Replacement Lender
and, to the extent required pursuant to Section 12.5, Borrowers, shall be effective for purposes of
this Section 3.11 and Section 12.5. Upon any such assignment and payment, such replaced Lender
shall no longer constitute a “Lender” for purposes hereof, other than with respect to such rights
and obligations that survive termination as set forth in Section 12.2.



SECTION 4. TERM AND TERMINATION




4.1 Term of Agreement. Subject to the right of Lenders to cease making Loans to
Borrowers during the continuance of any Default or Event of Default, this Agreement shall be in
effect for a period of two (2) years from the date hereof, through and including November 6, 2009
(the “Term”), unless terminated as provided in Section 4.2 hereof.



4.2 Termination.



4.2.1 Termination by Lenders. Agent may, and at the direction of Majority Lenders
shall, terminate this Agreement without notice upon or after the occurrence and during the
continuance of an Event of Default. Further, Agent may, and at the direction of Majority Lenders
shall, terminate this Agreement, upon two (2) Business Days’ notice to Borrower Representative, if
Borrowers have not obtained a firm commitment to Refinance the Convertible Debentures, the terms
and conditions of which commitment and Refinancing are acceptable to Agent in Agent’s Judgment, on
or prior to August 15, 2008.



4.2.2 Termination by Borrowers. Upon at least 30 days prior written notice to Agent
and Lenders, Borrowers may, at their option, terminate this Agreement; provided,
however, that no such termination shall be effective until Borrowers have paid or
collateralized to Agent’s reasonable satisfaction all of the Obligations (other than contingent
Obligations (including contingent indemnity claims)) in immediately available funds, all Letters of
Credit and LC Guaranties have expired, terminated or have been cash collateralized to Agent’s
reasonable satisfaction and Borrowers have complied with subsection 3.1.9. Except as otherwise
provided in subsection 3.1.9, any such termination shall be without prepayment penalty or
termination charge to Borrowers. Any notice of termination given by Borrowers shall be irrevocable
unless all Lenders otherwise agree in writing and no Lender shall have any obligation to make any
Loans or issue or procure any Letters of Credit or LC Guaranties on or after the termination date
stated in such notice. Borrowers may elect to terminate this Agreement in its entirety only. No
section of this Agreement or type of Loan available hereunder may be terminated singly.


 


16









 





4.2.3 Effect of Termination. All of the Obligations shall be immediately due and
payable upon the termination date stated in any notice of termination of this Agreement. All
undertakings, agreements, covenants, warranties and representations of Borrowers contained in the
Loan Documents shall survive any such termination and Agent shall retain its Liens in the
Collateral and Agent and each Lender shall retain all of its rights and remedies under the
Loan Documents notwithstanding such termination until all Obligations (other than contingent
Obligations) including contingent indemnity claims)) have been discharged or paid, in full, in
immediately available funds, including, without limitation, all Obligations under Section 2.6 and
subsection 3.2.5 resulting from such termination. Notwithstanding the foregoing or the payment in
full of the Obligations, Agent shall not be required to terminate its Liens in the Collateral
unless, with respect to any loss or damage Agent may incur as a result of dishonored checks or
other items of payment received by Agent from any Borrower or any Account Debtor and applied to the
Obligations, Agent shall, at its option, (i) have received a written agreement reasonably
satisfactory to Agent, executed by any Borrower and by any Person whose loans or other advances to
Borrowers are used in whole or in part to satisfy the Obligations, indemnifying Agent and each
Lender from any such loss or damage or (ii) have retained cash Collateral or other Collateral for
such period of time as Agent, in its reasonable discretion, may deem necessary to protect Agent and
each Lender from any such loss or damage.



SECTION 5. SECURITY INTERESTS




5.1 Security Interest in Collateral. To secure the prompt payment and performance to
Agent and each Lender of the Obligations, each Borrower hereby grants to Agent for the benefit of
itself and each Lender a continuing Lien upon all of such Borrower’s assets, including all of the
following Property and interests in Property of such Borrower, whether now owned or existing or
hereafter created, acquired or arising and wheresoever located:




(i) Accounts;




(ii) Certificated Securities;




(iii) Chattel Paper;




(iv) Computer Hardware and Software and all rights with respect thereto, including, any
and all licenses, options, warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights, renewal rights and indemnifications,
and any substitutions, replacements, additions or model conversions of any of the foregoing;




(v) Contract Rights;




(vi) Deposit Accounts;




(vii) Documents;




(viii) Equipment;




(ix) Financial Assets;




(x) Fixtures;


 


17









 






(xi) General Intangibles, including Payment Intangibles and Software;




(xii) Goods (including all of its Equipment, Fixtures and Inventory), and all
accessions, additions, attachments, improvements, substitutions and replacements thereto and
therefor;




(xiii) Instruments;




(xiv) Intellectual Property;




(xv) Inventory;




(xvi) Investment Property;




(xvii) money (of every jurisdiction whatsoever);




(xviii) Letter-of-Credit Rights;




(xix) Payment Intangibles;




(xx) Security Entitlements;




(xxi) Software;




(xxii) Supporting Obligations;




(xxiii) Uncertificated Securities; and




(xxiv) to the extent not included in the foregoing, all other personal property of any
kind or description;



together with all books, records, writings, data bases, information and other property relating to,
used or useful in connection with, or evidencing, embodying, incorporating or referring to any of
the foregoing, and all Proceeds, products, offspring, rents, issues, profits and returns of and
from any of the foregoing; provided that, to the extent that the provisions of any lease or
license of Computer Hardware and Software or Intellectual Property expressly prohibit (which
prohibition is enforceable under applicable law) any assignment thereof, and the grant of a
security interest therein, Agent will not enforce its security interest in such Borrower’s rights
under such lease or license (other than in respect of the Proceeds thereof) for so long as such
prohibition continues, it being understood that upon request of Agent, such Borrower will in good
faith use reasonable efforts to obtain consent for the creation of a security interest in favor of
Agent (and to Agent’s enforcement of such security interest) in Agent’s rights under such lease or
license.



5.2 Other Collateral.



5.2.1 Commercial Tort Claims. Borrowers shall promptly notify Agent in writing upon
any Borrower incurring or otherwise obtaining a Commercial Tort Claim (having a value reasonably
expected to be in excess of $50,000 ($1,000 if an Event of Default has occurred
and is continuing)) after the Closing Date against any third party and, upon request of Agent,
promptly enter into an amendment to this Agreement and do such other acts or things deemed
appropriate by Agent to give Agent a security interest in any such Commercial Tort Claim.
Borrowers represent and warrant that as of the date of this Agreement, to their knowledge, no
Borrower possesses any Commercial Tort Claims.


 


18









 






5.2.2 Other Collateral. Borrowers shall promptly notify Agent in writing upon
acquiring or otherwise obtaining any Collateral after the date hereof consisting of Deposit
Accounts, Investment Property, Letter-of-Credit Rights or Electronic Chattel Paper and, upon the
request of Agent, promptly execute such other documents, and do such other acts or things deemed
appropriate by Agent to deliver to Agent control with respect to such Collateral; promptly notify
Agent in writing upon acquiring or otherwise obtaining any Collateral after the date hereof
consisting of Documents or Instruments and, upon the request of Agent, will promptly execute such
other documents, and do such other acts or things deemed appropriate by Agent to deliver to Agent
possession of such Documents which are negotiable and Instruments, and, with respect to
nonnegotiable Documents, to have such nonnegotiable Documents issued in the name of Agent; and with
respect to Collateral in the possession of a third party, other than Certificated Securities and
Goods covered by a Document, obtain an acknowledgement from the third party that it is holding the
Collateral for the benefit of Agent.



5.3 Lien Perfection; Further Assurances. Borrowers shall deliver such UCC-1 financing
statements as are required by the UCC and shall execute and deliver such other instruments,
assignments or documents as are necessary to perfect Agent’s Lien upon any of the Collateral and
shall take such other action as may be reasonably required to perfect or to continue the perfection
of Agent’s Lien upon the Collateral. Unless prohibited by applicable law, each Borrower hereby
authorizes Agent to file any such financing statement, including, without limitation, financing
statements that indicate the Collateral (i) as all assets of such Borrower or words of similar
effect, or (ii) as being of an equal or lesser scope, or with greater or lesser detail, than as set
forth in Section 5.1, on such Borrower’s behalf. Each Borrower also hereby ratifies its
authorization for Agent to have filed in any jurisdiction any like financing statements or
amendments thereto if filed prior to the date hereof. The parties agree that a carbon,
photographic or other reproduction of this Agreement shall be sufficient as a financing statement
and may be filed in any appropriate office in lieu thereof. At Agent’s request, each Borrower
shall also promptly execute or cause to be executed and shall deliver to Agent any and all
documents, instruments and agreements deemed necessary by Agent, to give effect to or carry out the
terms or intent of the Loan Documents.



5.4 Lien on Realty. If any Borrower shall acquire at any time or times hereafter any
fee simple interest in other real Property (other than leasehold interests in sales offices or
warehouses), such Borrower agrees promptly to execute and deliver to Agent, for its benefit and the
ratable benefit of Lenders, as additional security and Collateral for the Obligations, deeds of
trust, security deeds, mortgages or other collateral assignments reasonably satisfactory in form
and substance to Agent and its counsel (herein collectively referred to as “New Mortgages”)
covering such real Property. Each New Mortgage shall be duly recorded (at Borrowers’ expense) in
each office where such recording is required to constitute a valid Lien on the real Property
covered thereby. In respect to any New Mortgage, Borrowers shall deliver to Agent, at Borrowers’
expense, mortgagee title insurance policies issued by a title insurance company reasonably satisfactory to Agent, which policies shall be in form and substance reasonably
satisfactory to Agent and shall insure a valid Lien in favor of Agent for the benefit of itself and
each Lender on the Property covered thereby, subject only to Permitted Liens and those other
exceptions reasonably acceptable to Agent and its counsel. Borrowers shall also deliver to Agent
such other usual and customary documents, including, without limitation, ALTA Surveys of the real
Property described in any New Mortgage, as Agent and its counsel may reasonably request relating to
the real Property subject to the New Mortgages.



 


19









 








SECTION 6. COLLATERAL ADMINISTRATION




6.1 General.



6.1.1 Location of Collateral. All Collateral, other than Inventory in transit, motor
vehicles and Collateral being repaired at third party locations, will at all times be kept by
Borrowers and their Subsidiaries at one or more of the business locations set forth in
Exhibit 6.1.1 hereto, as updated by Borrowers providing prior written notice to Agent of
any new location.



6.1.2 Insurance of Collateral. Borrowers shall maintain and pay for insurance upon
all Collateral wherever located and with respect to the business of Borrowers and each of their
Subsidiaries, covering casualty, hazard, public liability, workers’ compensation and such other
risks in such amounts and with such insurance companies as are reasonably satisfactory to Agent.
Borrowers shall deliver certificates of insurance with respect to such policies to Agent as
promptly as practicable, with satisfactory lender’s loss payable endorsements, naming Agent as a
loss payee, assignee or additional insured, as appropriate, as its interest may appear, and showing
only such other loss payees, assignees and additional insureds as are reasonably satisfactory to
Agent. Each policy of insurance or endorsement shall contain a clause requiring the insurer to
give not less than 10 days’ prior written notice to Agent in the event of cancellation of the
policy for nonpayment of premium and not less than 30 days’ prior written notice to Agent in the
event of cancellation of the policy for any other reason whatsoever and a clause specifying that
the interest of Agent shall not be impaired or invalidated by any act or neglect of any Borrower,
any of its Subsidiaries or the owner of the Property or by the occupation of the premises for
purposes more hazardous than are permitted by said policy. Borrowers agree to deliver to Agent,
promptly as rendered, true copies of all reports made in any reporting forms to insurance
companies. All proceeds of business interruption insurance (if any) of Borrowers and their
Subsidiaries shall be remitted to Agent for application to the outstanding balance of the Revolving
Credit Loans.



Unless Borrowers provide Agent with evidence of the insurance coverage required by this
Agreement, Agent may purchase insurance at Borrowers’ expense to protect Agent’s interests in the
Properties of Borrowers and their Subsidiaries. This insurance may, but need not, protect the
interests of Borrowers and their Subsidiaries. The coverage that Agent purchases may not pay any
claim that any Borrowers or any Subsidiary makes or any claim that is made against any Borrower or
any such Subsidiary in connection with said Property. Borrowers may later cancel any insurance
purchased by Agent, but only after providing Agent with evidence that Borrowers and their
Subsidiaries have obtained insurance as required by this Agreement. If Agent purchases insurance,
Borrowers will be responsible for the costs of that
insurance, including interest and any other charges Agent may impose in connection with the
placement of insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Obligations. The costs of the insurance
may be more than the cost of insurance that Borrowers and their Subsidiaries may be able to obtain
on their own.


 


20









 





6.1.3 Protection of Collateral. Neither Agent nor any Lender shall be liable or
responsible in any way for the safekeeping of any of the Collateral or for any loss or damage
thereto (except for reasonable care in the custody thereof while any Collateral is in Agent’s or
any Lender’s actual possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency or other person whomsoever, but the same
shall be at Borrowers’ sole risk.



6.2 Administration of Accounts.



6.2.1 Records, Schedules and Assignments of Accounts. Borrowers shall keep accurate
and complete records of their Accounts and Dining Credits all payments and collections thereon and
shall submit to Agent on such periodic basis as Agent shall request a sales and collections report
for the preceding period, in form consistent with the reports currently prepared by Borrowers with
respect to such information. Concurrently with the delivery of each Borrowing Base Certificate
described in subsection 8.1.4, or quarterly if a Trigger Period has not occurred and is continuing,
or more frequently as requested by Agent in Agent’s Judgment, from and after the date hereof,
Borrowers shall deliver to Agent a detailed aged trial balance of all of its Accounts, Dining
Credits and RCR Loans, specifying the names, addresses, face values, dates of invoices and due
dates for each Account Debtor obligated on an Account, a Dining Credit or an RCR Loan so listed
(“Schedule of Accounts”), and upon Agent’s request therefor, copies of proof of delivery and the
original copy of all documents, including, without limitation, repayment histories and present
status reports relating to the Accounts so scheduled and such other matters and information
relating to the status of then existing Accounts as Agent shall reasonably request. If requested
by Agent in Agent’s Judgment, Borrowers shall execute and deliver to Agent formal written
assignments of all of its Accounts weekly or daily, which shall include all Accounts that have been
created since the date of the last assignment, together with copies of invoices or invoice
registers related thereto.



6.2.2 Discounts, Allowances, Disputes. If any Borrower grants any discounts,
allowances or credits with respect to any Account, Dining Credit or RCR Loan, Borrowers shall
reflect such discounts, allowances or credits, as the case may be, to Agent as part of the next
required Schedule of Accounts.



6.2.3 Account Verification. Any of Agent’s officers, employees or agents shall have
the right, at any time or times hereafter, in the name of Agent, any designee of Agent or any
Borrower, to verify the validity, amount or any other matter relating to any Accounts by mail,
telephone, electronic communication or otherwise. Borrowers shall cooperate fully with Agent in an
effort to facilitate and promptly conclude any such verification process. Unless an Event of
Default has occurred and is continuing, any such verifications shall be conducted in the name of
Borrower Representative or a third party.


 


21









 





6.2.4 Maintenance of Dominion Account. Commencing with the date which is the earlier
of 120 days after the Closing Date or the date on which Borrowers request a Revolving Credit Loan
or the issuance of a Letter of Credit, Borrowers shall maintain Dominion Accounts at Bank (or such
other lockbox servicer reasonably acceptable to Agent) pursuant to lockbox or other arrangements
reasonably acceptable to Agent. Borrowers shall enter into an agreement (in form and substance
satisfactory to Agent) from Bank, establishing Agent’s control over and Lien in the lockbox or
Dominion Account, which may be exercised by Agent during any Trigger Period, requiring immediate
deposit of all remittances received in the lockbox to a Dominion Account, and waiving offset rights
of Bank, except for customary administrative charges. If a Dominion Account is not maintained with
Bank, Agent may, during any Trigger Period, require immediate transfer of all funds in such account
to a Dominion Account maintained with Bank. Neither Agent nor Lenders assume any responsibility to
Borrowers for any lockbox arrangement or Dominion Account, including any claim of accord and
satisfaction or release with respect to any Payment Items accepted by any bank.



6.2.5 Collection of Accounts, Proceeds of Collateral. Each Borrower agrees that all
invoices rendered and other requests made by any Borrower for payment in respect of Accounts shall
contain a written statement directing payment in respect of such Accounts to be paid to a lockbox
established pursuant to subsection 6.2.4. To expedite collection, each Borrower shall endeavor in
the first instance to make collection of its Accounts for Agent. All remittances received by any
Borrower on account of Accounts, together with the proceeds of any other Collateral, shall be held
as Agent’s property, for its benefit and the benefit of Lenders, by such Borrower as trustee of an
express trust for Agent’s benefit and such Borrower shall immediately deposit same in kind in the
Dominion Account. Agent retains the right at all times after the occurrence and during the
continuance of a Default or an Event of Default to notify Account Debtors that Borrowers’ Accounts
have been assigned to Agent and to collect Borrowers’ Accounts directly in its own name, or in the
name of Agent’s agent, and to charge the collection costs and expenses, including attorneys’ fees,
to Borrowers.



6.2.6 Taxes. If an Account includes a charge for any tax payable to any governmental
taxing authority, Agent is authorized, in its sole discretion, to pay the amount thereof to the
proper taxing authority for the account of Borrowers and to charge Borrowers therefor, except for
taxes that (i) are being actively contested in good faith and by appropriate proceedings and with
respect to which Borrowers maintain reasonable reserves on its books therefor and (ii) would not
reasonably be expected to result in any Lien other than a Permitted Lien. In no event shall Agent
or any Lender be liable for any taxes to any governmental taxing authority that may be due by any
Borrower.



6.3 Intentionally Omitted.



6.4 Administration of Equipment.



6.4.1 Records and Schedules of Equipment. Borrowers shall keep records of their
Equipment which shall be complete and accurate in all material respects itemizing and describing
the kind, type, quality, quantity and book value of its Equipment and all dispositions made in
accordance with subsection 6.4.2 hereof, and upon request by Agent, Borrowers shall, and shall
cause each of their Subsidiaries to, furnish Agent with a current schedule containing the
foregoing information on at least an annual basis and more often if reasonably requested by
Agent. Promptly after the request therefor by Agent, Borrowers shall deliver to Agent any and all
evidence of ownership, if any, of any of their Equipment.


 


22









 






6.4.2 Dispositions of Equipment. Borrowers shall not, and shall not permit any of
their Subsidiaries to, sell, lease or otherwise dispose of or transfer any of their respective
Equipment or other fixed assets or any part thereof without the prior written consent of Agent;
provided, however, that the foregoing restriction shall not apply, for so long as no
Default or Event of Default exists and is continuing, to (i) dispositions of Equipment and other
fixed assets which, in the aggregate during any consecutive twelve-month period, have a fair market
value or a book value, whichever is more, of $500,000 or less, provided that all proceeds
thereof are remitted to Agent for application to the Loans as provided in subsection 3.3.1, or
(ii) replacements of Equipment or other fixed assets that are substantially worn, damaged or
obsolete with Equipment or other fixed assets of like kind, function and value which are useful in
the business of any Borrower or one of its Subsidiaries, provided that the replacement
Equipment or other fixed assets shall be acquired within 90 days after any disposition of the
Equipment or other fixed assets that are to be replaced and the replacement Equipment or other
fixed assets shall be free and clear of Liens other than Permitted Liens that are not Purchase
Money Liens.



6.5 Payment of Charges. All amounts chargeable to Borrowers under Section 6 hereof
shall be Obligations secured by all of the Collateral, shall be payable on demand and shall bear
interest from the date such advance was made until paid in full at the rate applicable to Prime
Rate Revolving Loans from time to time.



SECTION 7. REPRESENTATIONS AND WARRANTIES




7.1 General Representations and Warranties. To induce Agent and each Lender to enter
into this Agreement and to make advances hereunder, Borrowers warrant, represent and covenant to
Agent and each Lender, on a joint and several basis, that:



7.1.1 Qualification. Each Borrower and each of its Subsidiaries is a corporation,
limited partnership or limited liability company duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization. Each Borrower
and each of its Subsidiaries is duly qualified and is authorized to do business and is in good
standing as a foreign limited liability company, limited partnership or corporation, as applicable,
in each state or jurisdiction listed on Exhibit 7.1.1 hereto and in all other states and
jurisdictions in which the failure of any Borrower or any of its Subsidiaries to be so qualified
could reasonably be expected to have a Material Adverse Effect.



7.1.2 Power and Authority. Each Borrower and each of its Subsidiaries is duly
authorized and empowered to enter into, execute, deliver and perform this Agreement and each of the
other Loan Documents to which it is a party. The execution, delivery and performance of this
Agreement and each of the other Loan Documents have been duly authorized by all necessary corporate
or other relevant action and do not and will not: (i) require any consent or approval of the
partners, shareholders or members of any Borrower or any of the shareholders, partners or members,
as the case may be, of any Subsidiary of any Borrower; (ii) contravene any Borrower’s or any of its
Subsidiaries’ charter, articles or certificate of incorporation, partnership agreement, certificate of formation,



 


23









 






by-laws, limited liability agreement, operating agreement
or other organizational documents (as the case may be); (iii) violate, or cause any Borrower or any
of its Subsidiaries to be in default under, any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award in effect having applicability to such
Borrower or any of its Subsidiaries, the violation of which could reasonably be expected to have a
Material Adverse Effect; (iv) result in a breach of or constitute a default under any indenture or
loan or credit agreement or any other agreement, lease or instrument to which any Borrower or any
of its Subsidiaries is a party or by which it or its Properties may be bound or affected, the
breach of or default under which could reasonably be expected to have a Material Adverse Effect; or
(v) result in, or require, the creation or imposition of any Lien (other than Permitted Liens) upon
or with respect to any of the Properties now owned or hereafter acquired by any Borrower or any of
its Subsidiaries.



7.1.3 Legally Enforceable Agreement. This Agreement is, and each of the other Loan
Documents when delivered under this Agreement will be, a legal, valid and binding obligation of
each Borrower and each of its Subsidiaries party thereto, enforceable against it in accordance with
its respective terms, except as such enforceability may be limited by bankruptcy, insolvency, or
other laws affecting creditors’ rights generally or by principles of equity.



7.1.4 Capital Structure. Exhibit 7.1.4 hereto states, as of the date hereof,
(i) the correct name of each of the Subsidiaries of each Borrower, its jurisdiction of
incorporation or organization and the percentage of its Voting Stock owned by the applicable
Borrower, (ii) the name of each Borrower’s and each of its Subsidiaries’ corporate or joint venture
relationships and the nature of the relationship, (iii) the number, nature and holder (except with
respect to RNI) of all outstanding Securities of each Borrower and the holder of Securities of each
Subsidiary of each Borrower and (iv) the number of authorized, issued and treasury Securities of
each Borrower. Borrower has good title to all of the Securities it purports to own of each of such
Subsidiaries, free and clear in each case of any Lien other than Permitted Liens. All such
Securities have been duly issued and are fully paid and non-assessable. As of the date hereof,
there are no outstanding options to purchase, or any rights or warrants to subscribe for, or any
commitments or agreements to issue or sell any Securities or obligations convertible into, or any
powers of attorney relating to any Securities of any Borrower (other than RNI) or any of its
Subsidiaries. Except as set forth on Exhibit 7.1.4, as of the date hereof, there are no
outstanding agreements or instruments binding upon any of any Borrower’s or any of its
Subsidiaries’ partners, members or shareholders, as the case may be, relating to the ownership of
its Securities.



7.1.5 Names; Organization. Since November 1, 2002, neither any Borrower nor any of
its Subsidiaries has been known as or has used any legal, fictitious or trade names except those
listed on Exhibit 7.1.5 hereto. Except as set forth on Exhibit 7.1.5, neither any
Borrower nor any of its Subsidiaries has been the surviving entity of a merger or consolidation or
has acquired all or substantially all of the assets of any Person. Each of each Borrower’s and
each of its Subsidiaries’ state(s) of incorporation or organization, Type of Organization and
Organizational I.D. Number is set forth on Exhibit 7.1.5. The exact legal name of each
Borrower and each of its Subsidiaries is set forth on Exhibit 7.1.5. Borrowers also
represent and warrant that 47K Corp., a New Jersey corporation (“Inactive Subsidiary”), is a
Subsidiary of a Borrower that Borrowers are in the process of dissolving and that Inactive
Subsidiary has no operations
and has assets and liabilities of less than $10,000 each. So long as such representation and
warranty is true, Agent and Lenders agree that Inactive Subsidiary shall not be subject to the
representations, warranties, covenants or other terms of the Agreement or other Loan Documents and
Borrowers shall not be required to pledge to Agent the capital stock of Inactive Subsidiary.


 


24









 





7.1.6 Business Locations; Agent for Process. Each of each Borrower’s and each of its
Subsidiaries’ chief executive office, location of books and records and other places of business
are as listed on Exhibit 6.1.1 hereto, as updated from time to time by Borrowers in
accordance with the provisions of subsection 6.1.1. During the preceding one-year period, neither
any Borrower nor any of its Subsidiaries has had an office, place of business or agent for service
of process, other than as listed on Exhibit 6.1.1. All tangible Collateral is and will at
all times be kept by Borrowers and their Subsidiaries in accordance with subsection 6.1.1. Except
as shown on Exhibit 6.1.1, as of the date hereof, no Inventory is stored with a bailee,
distributor, warehouseman or similar party, nor is any Inventory consigned to any Person.



7.1.7 Title to Properties; Priority of Liens. Each Borrower and each of its
Subsidiaries has good, indefeasible and marketable title to and fee simple ownership of, or valid
and subsisting leasehold interests in, all of its real Property, and good title to all of the
Collateral and all of its other Property, in each case, free and clear of all Liens except
Permitted Liens. Each Borrower and each of its Subsidiaries has paid or discharged all lawful
claims which, if unpaid, might become a Lien against any of such Borrower’s or such Subsidiary’s
Properties that is not a Permitted Lien. The Liens granted to Agent under Section 5 hereof are
first priority Liens, subject only to Permitted Liens.




7.1.8 Accounts; Dining Credits and RCR Loans.




(a) Agent may rely, in determining which Accounts are Eligible Accounts, on all
statements and representations made by Borrowers with respect to any Account or Accounts.
With respect to each of Borrowers’ Accounts, whether or not such Account is an Eligible
Account, unless otherwise disclosed to Agent in writing (including by not scheduling the
applicable Account as an Eligible Account on a Borrowing Base Certificate):




(i) It is genuine and in all respects what it purports to be, and it is not evidenced
by a judgment;




(ii) It arises out of a completed, bona fide rendition of services by a
Borrower, in the ordinary course of its business and in accordance with the terms and
conditions of all contracts or other documents relating thereto and forming a part of the
contract between a Borrower and the Account Debtor;




(iii) It is for a liquidated amount as stated in the applicable Dining Contract
covering such rendition of services, a copy of which has been furnished or is available to
Agent;




(iv) There are no facts, events or occurrences which in any way impair the validity or
enforceability of any Accounts or tend to reduce the amount
payable thereunder from the face amount of the statements delivered or made available
to Agent with respect thereto;


 


25









 






(v) To the best of Borrowers’ knowledge, the Account Debtor thereunder (1) had the
capacity to contract at the time any contract or other document giving rise to the Account
was executed and (2) at such time such Account Debtor was Solvent; and




(vi) To the best of Borrowers’ knowledge, there are no proceedings or actions which are
threatened or pending against the Account Debtor thereunder which might result in any
material adverse change in such Account Debtor’s financial condition or the collectibility
of such Account.




(b) Agent may rely, in determining which Dining Credits are Eligible Dining Credits, on
all statements and representations made by Borrowers with respect to any Dining Credit or
Dining Credits. With respect to each of Borrowers’ Dining Credits, whether or not such
Dining Credit is an Eligible Dining Credit, unless otherwise disclosed to Agent in writing
(including by not scheduling the applicable Dining Credit as an Eligible Dining Credit on a
Borrowing Base Certificate):




(i) It is genuine and in all respects what it purports to be, and it is not evidenced
by a judgment;




(ii) It arises out of a completed, bona fide rendition of services or
advances by a Borrower, in the ordinary course of its business and in accordance with the
terms and conditions of the applicable Dining Contract, copies of which Dining Contract(s)
have been furnished or are available to Agent;




(iii) There are no facts, events or occurrences which in any way impair the validity or
enforceability of any Dining Credits or tend to reduce the amount payable thereunder from
the amounts shown on the statements delivered or made available to Agent with respect
thereto;




(iv) To the best of Borrowers’ knowledge, the Restaurant Account Debtor thereunder
(1) had the capacity to contract at the time Dining Contract(s) was (were) executed and
(2) at such time such Dining Contract Account Debtor was Solvent; and




(v) To the best of Borrowers’ knowledge, there are no proceedings or actions which are
threatened or pending against the Dining Contract Account Debtor thereunder which might
result in any material adverse change in such Dining Contract Account Debtor’s financial
condition or the collectibility of such Dining Credit.




 


26









 








(c) Agent may rely, in determining which RCR Loans are Eligible RCR Loans, on all
statements and representations made by Borrowers with respect to any RCR Loan or RCR Loans.
With respect to each of Borrowers’ RCR Loans, whether or not such RCR Loan is an Eligible RCR
Loan, unless otherwise disclosed to Agent in writing
(including by not scheduling the applicable RCR Loan as an Eligible RCR Loan on a
Borrowing Base Certificate):




(i) It is genuine and in all respects what it purports to be, and it is not evidenced
by a judgment;




(ii) It arises out of a completed, bona fide loan or advance of funds
by a Borrower, in the ordinary course of its business and in accordance with the terms and
conditions of the applicable RCR Loan Documents;




(iii) There are no facts, events or occurrences which in any way impair the validity or
enforceability of any RCR Loan or RCR Loan Document or tend to reduce the amount payable
thereunder from the amounts shown on the statements delivered or made available to Agent
with respect thereto;




(iv) To the best of Borrowers’ knowledge, the RCR Loan Account Debtor thereunder
(1) had the capacity to contract at the time any RCR Loan Document giving rise to or
evidencing the RCR Loan Account was executed and (2) at such time such RCR Loan Account
Debtor was Solvent; and




(v) To the best of Borrowers’ knowledge, there are no proceedings or actions which are
threatened or pending against the RCR Loan Account Debtor thereunder which might result in
any material adverse change in such RCR Loan Account Debtor’s financial condition or the
collectibility of such Account.



7.1.9 Equipment. The Equipment of each Borrower and its Subsidiaries is in good
operating condition and repair, and all necessary replacements of and repairs thereto shall be made
so that the operating efficiency thereof shall be maintained and preserved, reasonable wear and
tear excepted. Neither any Borrower nor any of its Subsidiaries will permit any Equipment to
become affixed to any real Property leased to any Borrower or any of its Subsidiaries so that an
interest arises therein under the real estate laws of the applicable jurisdiction unless the
landlord of such real Property has executed a landlord waiver or leasehold mortgage in favor of and
in form reasonably acceptable to Agent, and Borrowers will not permit any of the Equipment of any
Borrower or any of its Subsidiaries to become an accession to any personal Property other than
Equipment that is subject to first priority (except for Permitted Liens) Liens in favor of Agent.



7.1.10 Financial Statements; Fiscal Year. The Consolidated and consolidating balance
sheets of Borrowers and their Subsidiaries (including the accounts of all Subsidiaries of Borrowers
and their respective Subsidiaries for the respective periods during which a Subsidiary relationship
existed) as of December 31, 2006, and the related statements of income, changes in shareholder’s
equity, and changes in financial position for the periods ended on such dates, have been prepared
in accordance with GAAP, and present fairly in all material respects the financial positions of
Borrowers and such Persons, taken as a whole, at such dates and the results of Borrowers’ and such
Persons’ operations, taken as a whole, for such periods. As of the date hereof, since December 31,
2006, there has been no material adverse change in the financial position of Borrowers and their
Subsidiaries, taken as a whole, as reflected in the Consolidated
balance sheet as of such date. As of the date hereof, the fiscal year of Borrowers and each
of its Subsidiaries ends on December 31 of each year.


 


27









 






7.1.11 Full Disclosure. The financial statements referred to in subsection 7.1.10
hereof do not, nor does this Agreement or any other written statement of Borrowers to Agent or any
Lender contain any untrue statement of a material fact or omit a material fact necessary to make
the statements contained therein or herein not misleading, in any material respect. There is no
fact which Borrowers have failed to disclose to Agent or any Lender in writing which could
reasonably be expected to have a Material Adverse Effect.



7.1.12 Solvent Financial Condition. Each Borrower and each of its Subsidiaries, is
now and, after giving effect to the initial Loans to be made and the initial Letters of Credit and
LC Guaranties to be issued hereunder, all related transactions will be and the reimbursement
provisions of Section 12.18, Solvent.



7.1.13 Surety Obligations. Except as set forth on Exhibit 7.1.13, as of the
date hereof, neither any Borrower nor any of its Subsidiaries is obligated as surety or indemnitor
under any surety or similar bond or other contract or has issued or entered into any agreement to
assure payment, performance or completion of performance of any undertaking or obligation of any
Person.



7.1.14 Taxes. Borrower Representative’s federal tax identification number is
84-6028875. The federal (or applicable Canadian, if any) tax identification number of each
Subsidiary of Borrower Representative is shown on Exhibit 7.1.14 hereto. Each Borrower and
each of its Subsidiaries has filed all material federal, state and local tax returns and other
reports relating to taxes it is required by law to file, and has paid, or made provision for the
payment of, all taxes, assessments, fees, levies and other governmental charges upon it, its income
and Properties as and when such taxes, assessments, fees, levies and charges are due and payable,
unless and to the extent any thereof are being actively contested in good faith and by appropriate
proceedings, and each Borrower and each of its Subsidiaries maintains reasonable reserves on its
books therefor. The provision for taxes on the books of each Borrower and its Subsidiaries is
adequate for all years not closed by applicable statutes, and for the current fiscal year.



7.1.15 Brokers. Except as shown on Exhibit 7.1.15 hereto, there are no claims
for brokerage commissions, finder’s fees or investment banking fees in connection with the
transactions contemplated by this Agreement.



7.1.16 Patents, Trademarks, Copyrights and Licenses. Each Borrower and each of its
Subsidiaries owns, possesses or licenses or has the right to use all the patents, trademarks,
service marks, trade names, copyrights, licenses and other Intellectual Property necessary for the
present and planned future conduct of its business without any known conflict with the rights of
others, except for such conflicts as could not reasonably be expected to have a Material Adverse
Effect. All such federally registered patents, trademarks, service marks, trade names, copyrights,
licenses and other similar rights are listed on Exhibit 7.1.16 hereto. No claim has been
asserted to any Borrower or any Subsidiary of any Borrower which is currently pending that their
use of their Intellectual Property or the conduct of their business does or may infringe upon the
Intellectual Property rights of any third party. To the knowledge of Borrowers and except as set forth on Exhibit 7.1.16 hereto, as of the date hereof, no Person is engaging in any
activity



 


28









 






that infringes in any material respect upon any Borrower’s or any of its Subsidiaries’
material Intellectual Property. Except as set forth on Exhibit 7.1.16, each Borrower’s and
each of its Subsidiaries’ material trademarks, service marks and copyrights are registered with the
U.S. Patent and Trademark Office or in the U.S. Copyright Office, as applicable. The consummation
and performance of the transactions and actions contemplated by this Agreement and the other Loan
Documents, including, without limitation, the exercise by Agent of any of its rights or remedies
under Section 10, will not result in the termination or impairment of any of such Borrower’s or any
of its Subsidiaries’ ownership or rights relating to its Intellectual Property, except for such
Intellectual Property rights the loss or impairment of which could not reasonably be expected to
have a Material Adverse Effect. Except as listed on Exhibit 7.1.16 and except as could not
reasonably be expected to have a Material Adverse Effect, (i) neither any Borrower nor any of its
Subsidiaries is in breach of, or default under, any term of any license or sublicense with respect
to any of its Intellectual Property and (ii) to the knowledge of Borrowers, no other party to such
license or sublicense is in breach thereof or default thereunder, and such license is valid and
enforceable.



7.1.17 Governmental Consents. Each Borrower and each of its Subsidiaries has, and is
in good standing with respect to, all governmental consents, approvals, licenses, authorizations,
permits, certificates, inspections and franchises necessary to continue to conduct its business as
heretofore or proposed to be conducted by it and to own or lease and operate its Properties as now
owned or leased by it, except where the failure to possess or so maintain such rights could not
reasonably be expected to have a Material Adverse Effect.



7.1.18 Compliance with Laws. Each Borrower and each of its Subsidiaries has duly
complied, and its Properties, business operations and leaseholds are in compliance with, the
provisions of all federal, state and local laws, rules and regulations applicable to such Borrower
or such Subsidiary, as applicable, its Properties or the conduct of its business, except for such
non-compliance as could not reasonably be expected to have a Material Adverse Effect, and there
have been no citations, notices or orders of noncompliance issued to any Borrower or any of its
Subsidiaries under any such law, rule or regulation, except where such noncompliance could not
reasonably be expected to have a Material Adverse Effect. Each Borrower and each of its
Subsidiaries has established and maintains an adequate monitoring system to insure that it remains
in compliance in all material respects with all federal, state and local rules, laws and
regulations applicable to it.



7.1.19 Restrictions. Neither any Borrower nor any of its Subsidiaries is a party or
subject to any contract or agreement which restricts its right or ability to incur Indebtedness,
other than as set forth on Exhibit 7.1.19 hereto, none of which prohibit the execution of
or compliance with this Agreement or the other Loan Documents by any Borrower or any of its
Subsidiaries, as applicable.



7.1.20 Litigation. Except as set forth on Exhibit 7.1.20 hereto or as
disclosed in the Public Filings existing as of the Closing Date and accrued for in RNI’s most
recent financial statements, there are no actions, suits, proceedings or investigations pending, or
to the knowledge of Borrowers, threatened, against or affecting any Borrower or any of its
Subsidiaries, which, singly or in the aggregate, could reasonably be expected to have a Material
Adverse Effect. Neither any Borrower nor any of its Subsidiaries is in default with respect
to any order, writ, injunction, judgment, decree or rule of any court, governmental authority or
arbitration board or tribunal, which, singly or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.


 


29









 





7.1.21 No Defaults. No event has occurred and no condition exists which would, upon
or after the execution and delivery of this Agreement or any Borrower’s performance hereunder,
constitute a Default or an Event of Default. Neither any Borrower nor any of its Subsidiaries is
in default in (and no event has occurred and no condition exists which constitutes, or which the
passage of time or the giving of notice or both would constitute, a default in) the payment of any
Indebtedness to any Person for Money Borrowed in excess of $250,000.



7.1.22 Leases. Exhibit 7.1.22 hereto is a complete listing of all capitalized
and operating personal property leases of Borrowers and their Subsidiaries and all real property
leases of Borrowers and their Subsidiaries (in each case with annual rentals of $150,000 or more).
Each Borrower and each of its Subsidiaries is in full compliance with all of the terms of each of
its respective capitalized and operating leases, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.



7.1.23 Pension Plans. Except as disclosed on Exhibit 7.1.23 hereto, neither
any Borrower nor any of its Subsidiaries has any Plan. Each Borrower and each of its Subsidiaries
is in compliance with the requirements of ERISA and the regulations promulgated thereunder with
respect to each Plan, except where the failure to so comply could not reasonably be expected to
have a Material Adverse Effect. No fact or situation that could reasonably be expected to result
in a material adverse change in the financial condition of Borrowers and their Subsidiaries exists
in connection with any Plan. Neither any Borrower nor any of their Subsidiaries has any withdrawal
liability in connection with a Multiemployer Plan.



7.1.24 Trade Relations. There exists no actual or, to Borrowers’ knowledge,
threatened termination, cancellation or limitation of, or any modification or change in, the
business relationship between any Borrower or any of its Subsidiaries and any customer or any group
of customers whose purchases individually or in the aggregate are material to the business of
Borrowers and their Subsidiaries, or with any material supplier, except in each case, where the
same could not reasonably be expected to have a Material Adverse Effect, and there exists no
present condition or state of facts or circumstances which would prevent any Borrower or any of its
Subsidiaries from conducting such business after the consummation of the transactions contemplated
by this Agreement in substantially the same manner in which it has heretofore been conducted.



7.1.25 Labor Relations. Except as described on Exhibit 7.1.25 hereto, as of
the date hereof, neither any Borrower nor any of its Subsidiaries is a party to any collective
bargaining agreement. There are no material grievances, disputes or controversies with any union
or any other organization of any Borrower’s or any of its Subsidiaries’ employees, or threats of
strikes, work stoppages or any asserted pending demands for collective bargaining by any union or
organization, except those that could not reasonably be expected to have a Material Adverse Effect.


 


30









 






7.1.26 Related Businesses. Borrowers are engaged in the businesses of marketing
services, business intelligence, loyalty programs and access to capital to the restaurant industry
as of the Closing Date, as well as in certain other businesses. These operations require financing
on a basis such that the credit supplied can be made available from time to time to Borrowers, as
required for the continued successful operation of Borrowers taken as a whole. Borrowers have
requested the Lenders to make credit available hereunder primarily for the purposes set forth in
Section 1.1.3 and generally for the purposes of financing the operations of Borrowers. Each
Borrower and each Subsidiary of each Borrower expects to derive benefit (and the Board of Directors
of each Borrower and each Subsidiary of each Borrower has determined that such Borrower or
Subsidiary may reasonably be expected to derive benefit), directly or indirectly, from a portion of
the credit extended by Lenders hereunder, both in its separate capacity and as a member of the
group of companies, since the successful operation and condition of each Borrower and each
Subsidiary of each Borrower is dependent on the continued successful performance of the functions
of the group as a whole. Each Borrower acknowledges that, but for the agreement of each of the
other Borrowers to execute and deliver this Agreement, Agent and Lenders would not have made
available the credit facilities established hereby on the terms set forth herein.



7.2 Continuous Nature of Representations and Warranties. During a Trigger Period,
each representation and warranty contained in this Agreement and the other Loan Documents shall be
continuous in nature and shall remain accurate, complete and not misleading at all times during the
term of this Agreement, except for changes in the nature of any Borrower’s or one of any Borrower’s
Subsidiary’s business or operations that would render the information in any exhibit attached
hereto or to any other Loan Document either inaccurate, incomplete or misleading, so long as
Majority Lenders have consented to such changes, such changes are expressly permitted by this
Agreement or such changes do not have or evidence a Material Adverse Effect. Borrowers shall have
the right to amend the Exhibits attached hereto from time to time so long as any such amendment
does not have or evidence a Material Adverse Effect. Without limiting the generality of the
foregoing, except as otherwise qualified by the preceding sentence, each Loan request made or
deemed made pursuant to subsection 3.1.1 hereof shall constitute Borrowers’ reaffirmation, as of
the date of each such loan request, of each representation, warranty or other statement made or
furnished to Agent or any Lender by or on behalf of any Borrower, any Subsidiary of any Borrower,
or any Guarantor in this Agreement, any of the other Loan Documents, or any instrument, certificate
or financial statement furnished in compliance with or in reference thereto.



7.3 Survival of Representations and Warranties. All representations and warranties of
Borrowers contained in this Agreement or any of the other Loan Documents shall survive the
execution, delivery and acceptance thereof by Agent and each Lender and the parties thereto and the
closing of the transactions described therein or related thereto.



 


31









 





SECTION 8. COVENANTS AND CONTINUING AGREEMENTS




8.1 Affirmative Covenants. During the Term, and thereafter for so long as there are
any Obligations (other than contingent Obligations (including contingent indemnity claims))
outstanding, Borrowers covenant that, unless otherwise consented to by Majority Lenders, in
writing, they shall:




8.1.1 Visits and Inspections; Lender Meeting. Permit (i) representatives of Agent,
and during the continuation of any Default or Event of Default any Lender, from time to time, as
often as may be reasonably requested, but only during normal business hours, to visit and inspect
the Properties of each Borrower and each of its Subsidiaries, inspect, audit and make extracts from
its books and records, and discuss with its officers, its employees and its independent
accountants, each Borrower’s and each of its Subsidiaries’ business, assets, liabilities, financial
condition, business prospects and results of operations and (ii) appraisers engaged pursuant to
Section 2.10 (whether or not personnel of Agent), from time to time, as often as may be reasonably
requested, but only during normal business hours, to visit and inspect the Properties of each
Borrower and each of its Subsidiaries, for the purpose of completing appraisals pursuant to
Section 2.10. Agent, if no Default or Event of Default then exists, shall give Borrowers
reasonable prior notice of any such inspection or audit. Without limiting the foregoing, Borrowers
will participate and will cause their key management personnel to participate in a meeting with
Agent and Lenders periodically during each year, which meeting(s) shall be held at such times and
such places as may be reasonably requested by Agent.



8.1.2 Notices. Promptly notify Agent in writing of the occurrence of any event or the
existence of any fact which renders any representation or warranty in this Agreement or any of the
other Loan Documents inaccurate, incomplete or misleading in any material respect as of the date
made or remade. In addition, Borrowers agree to provide Agent with prompt written notice of any
change in the information disclosed in any Exhibit hereto (other than those specifically relating
to the date hereof), in each case after giving effect to the materiality limits and Material
Adverse Effect qualifications contained therein.



8.1.3 Financial Statements. Keep, and cause each of their Subsidiaries to keep,
adequate records and books of account with respect to its business activities in which proper
entries are made in accordance with customary accounting practices reflecting all its financial
transactions; and cause to be prepared and furnished to Agent and each Lender, the following, all
to be prepared in accordance with GAAP applied on a consistent basis, unless Borrowers’ certified
public accountants concur in any change therein and such change is disclosed to Agent and is
consistent with GAAP:




(i) not later than 90 days after the close of each fiscal year of Borrower
Representative, unqualified (except for a qualification for a change in accounting
principles with which the accountant concurs) audited financial statements of Borrower
Representative and its Subsidiaries as of the end of such year, on a Consolidated and
consolidating basis, certified by a firm of independent certified public accountants of
recognized standing selected by Borrower Representative but reasonably acceptable to Agent
and, within a reasonable time thereafter a copy of any management letter issued in
connection therewith;




(ii) not later than 30 days after the end of each month hereafter, including the last
month of Borrower Representative’s fiscal year, unaudited interim financial statements of
Borrower Representative and its Subsidiaries as of the end of such month and of the portion
of the fiscal year then elapsed, on a Consolidated and consolidating basis, certified by the
principal financial officer of Borrower Representative as prepared in accordance with GAAP
and fairly presenting in all material
respects the financial position and results of operations of Borrower Representative
and its Subsidiaries for such month and period subject only to changes from audit and
year-end adjustments and except that such statements need not contain notes;


 


32









 






(iii) together with each delivery of financial statements pursuant to clauses (i) and
(ii) of this subsection 8.1.3, a management report (1) setting forth in comparative form the
corresponding figures for the corresponding periods of the previous fiscal year and the
corresponding figures from the most recent Projections for the current fiscal year delivered
pursuant to subsection 8.1.7 and (2) identifying the reasons for any significant variations.
The information above shall be presented in reasonable detail and shall be certified by the
principal financial officer of Borrower Representative to the effect that such information
fairly presents in all material respects the results of operation and financial condition of
Borrower Representative and its Subsidiaries as at the dates and for the periods indicated;




(iv) promptly after the sending or filing thereof, as the case may be, copies of any
proxy statements, financial statements or reports which Borrower Representative has made
available to its Securities holders and copies of any regular, periodic and special reports
or registration statements which Borrower Representative or any of its Subsidiaries files
with the Securities and Exchange Commission or any governmental authority which may be
substituted therefor or any national securities exchange;




(v) upon request of Agent, copies of any annual report to be filed with ERISA in
connection with each Plan; and




(vi) such other data and information (financial and otherwise) as Agent or any Lender,
from time to time, may reasonably request, bearing upon or related to the Collateral or
Borrowers’ or any of their Subsidiaries’ financial condition or results of operations.



Concurrently with the delivery of the financial statements described in clause (i) of this
subsection 8.1.3, Borrowers shall forward to Agent a copy of the accountants’ letter to Borrower
Representative’s management that is prepared in connection with such financial statements.
Concurrently with the delivery of the financial statements described in paragraph (i) and (ii) of
this subsection 8.1.3, or more frequently if requested by Agent, in Agent’s Judgment, Borrowers
shall cause to be prepared and furnished to Agent a Compliance Certificate in the form of
Exhibit 8.1.3 hereto executed by the principal financial officer of Borrower Representative
(a “Compliance Certificate”).



8.1.4 Borrowing Base Certificates. On or before the 15th day of each month from and
after the date hereof, Borrowers shall deliver to Agent, in form reasonably acceptable to Agent, a
Borrowing Base Certificate as of the last day of the immediately preceding month, with such
supporting materials as Agent shall reasonably request. If Borrowers deem it advisable, or Agent
shall request, in Agent’s Judgment, Borrowers shall execute and deliver to Agent Borrowing Base
Certificates more frequently than monthly.


 


33









 





8.1.5 Landlord Agreements. Upon request by Agent, provide Agent with copies of all
agreements between any Borrower or any of its Subsidiaries and any landlord which owns any premises
at which any Collateral may, from time to time, be kept. With respect to any lease (other than
leases for sales offices), in any case entered into after the Closing Date, Borrowers shall provide
Agent with landlord waivers, with respect to such premises. Such landlord waivers shall be in a
form supplied by Agent to Borrowers with such reasonable revisions as are customarily accepted by
Agent or by similar financial institutions in similar financial transactions.



8.1.6 Guarantor Financial Statements. Deliver or cause to be delivered to Agent
financial statements, if any, for each Guarantor (to the extent not Consolidated with the financial
statements delivered to Agent under subsection 8.1.3 and to the extent any such Guaranty Agreement
exists) in form and substance satisfactory to Agent at such intervals and covering such time
periods as Agent may request.



8.1.7 Projections. No later than the last day of each fiscal year of RNI, deliver to
Agent Projections of Borrower Representative and each of its Subsidiaries for the forthcoming
fiscal year, month by month. Agent and Lenders understand and agree that (i) any projections
furnished to the Agent or any Lender are subject to significant uncertainties and contingencies,
which are beyond the Borrowers’ control, (ii) no assurance is given by any Borrower that such
projections will be realized, and (iii) the actual results may differ from such projections and
such differences may be material. Borrowers consent that any such Projections delivered to Agent
will, at the time of delivery to Agent, be based on reasonable assumptions, as determined by RNI’s
senior management and shall, in light of such assumptions, be realistic and achievable.



8.1.8 Subsidiaries. Cause each domestic Subsidiary of each Borrower, whether now or
hereafter in existence, promptly upon Agent’s request therefor, to execute and deliver to Agent a
Guaranty Agreement and a security agreement pursuant to which such domestic Subsidiary guaranties
the payment of all Obligations and grants to Agent a first priority Lien (subject only to Permitted
Liens) on all of its Properties of the types described in Section 5.1. Additionally, the
applicable Borrower shall execute and deliver to Agent a pledge agreement pursuant to which such
Borrower grants to Agent a first priority Lien (subject only to Permitted Liens) with respect to
all of the issued and outstanding Securities of each domestic Subsidiary and 66% of the issued and
outstanding Securities of each foreign Subsidiary.



8.1.9 Deposit and Brokerage Accounts. For each deposit account or brokerage account
that any Borrower at any time opens or maintains, Borrowers shall, at Agent’s request and option,
pursuant to an agreement in form and substance reasonably satisfactory to Agent, cause the
depository bank or securities intermediary, as applicable, to agree to comply at any time with
instructions from Agent to such depository bank or securities intermediary, as applicable,
directing the disposition of funds from time to time credited to such deposit or brokerage account,
without further consent of Borrowers.



8.1.10 Cash Management Services. Commencing with the date that is 120 days after the
Closing Date, Borrowers shall maintain its lockbox deposit and disbursement accounts with Bank and
shall utilize Bank for its other cash management and/or treasury services.


 


34









 





8.2 Negative Covenants. During the Term, and thereafter for so long as there are any
Obligations (often than contingent obligations (including contingent indemnity claims))
outstanding, Borrowers covenant that, unless otherwise consented to by Majority Lenders, in
writing, they shall not:



8.2.1 Mergers; Consolidations; Acquisitions; Structural Changes. Merge or
consolidate, or permit any Subsidiary of any Borrower to merge or consolidate, with any Person;
nor, except upon thirty (30) days’ notice to Agent, change its or any of its Subsidiaries’ state of
incorporation or organization, Type of Organization or Organizational I.D. Number; nor except upon
thirty days’ notice to Agent change its or any of its Subsidiaries’ legal name; nor acquire, nor
permit any of its Subsidiaries to acquire, all or any substantial part of the Properties of any
Person, except for:




(i) mergers of any Subsidiary of a Borrower into another Borrower or another
wholly-owned Subsidiary of a Borrower; and




(ii) acquisitions of assets consisting of fixed assets or real property that constitute
Capital Expenditures permitted under subsection 8.2.8.



8.2.2 Loans. Make, or permit any Subsidiary of any Borrower to make, any loans or
other advances of money to any Person, other than (i) for salary, travel advances, advances against
commissions and other similar advances to employees in the ordinary course of business,
(ii) extensions of trade credit in the ordinary course of business consistent with past practice,
(iii) deposits with financial institutions permitted under this Agreement, (iv) prepaid expenses,
(v)  RCR Loans and loans and advances make pursuant to Dining Contracts and (vi) unsecured
intercompany loans from one Borrower to another provided that the aggregate amount of all
such intercompany loans outstanding at one time shall not exceed $500,000.



8.2.3 Total Indebtedness. Create, incur, assume, or suffer to exist, or permit any
Subsidiary of any Borrower to create, incur or suffer to exist, any Indebtedness, except:




(i) Obligations owing to Agent or any Lender under this Agreement or any of the other
Loan Documents;




(ii) Indebtedness, including without limitation Subordinated Debt, existing on the date
of this Agreement and listed on Exhibit 8.2.3;




(iii) Permitted Purchase Money Indebtedness;




(iv) contingent liabilities arising out of endorsements of checks and other negotiable
instruments for deposit or collection in the ordinary course of business;




(v) Guaranties of any Indebtedness permitted hereunder;




(vi) Indebtedness in respect of intercompany loans permitted under subsection 8.2.2(v);


 


35









 






(vii) to the extent not included above, trade payables, accruals and accounts payable
in the ordinary course of business (in each case to the extent not overdue) not for Money
Borrowed;




(viii) Indebtedness outstanding in respect of the Convertible Debentures and Permitted
Refinancings thereof;




(ix) Indebtedness incurred in the ordinary course of business in connection with
operating leases; and




(x) Indebtedness not included in paragraphs (i) through (ix) above which does not
exceed at any time, in the aggregate, the sum of $500,000.



8.2.4 Affiliate Transactions. Enter into, or be a party to, or permit any Subsidiary
of any Borrower to enter into or be a party to, any transaction with any Affiliate of Borrower or
any holder of any Securities of any Borrower or any Subsidiary of any Borrower, including without
limitation any management, consulting or similar fees, except (i) in the ordinary course of and
pursuant to the reasonable requirements of such Borrower’s or such Subsidiary’s business and upon
fair and reasonable terms which are fully disclosed to Agent and are no less favorable to such
Borrower or such Subsidiary than would be obtained in a comparable arms-length transaction with a
Person not an Affiliate or Security holder of any Borrower, and (ii) as otherwise permitted under
this Agreement.



8.2.5 Limitation on Liens. Create or suffer to exist, or permit any Subsidiary of any
Borrower to create or suffer to exist, any Lien upon any of its Property, income or profits,
whether now owned or hereafter acquired, except:




(i) Liens at any time granted in favor of Agent for the benefit of Lenders;




(ii) Liens for taxes, assessments or governmental charges (excluding any Lien imposed
pursuant to any of the provisions of ERISA) not yet due, or being contested in the manner
described in subsection 7.1.14 hereto, but only if in Agent’s judgment such Lien would not
reasonably be expected to adversely effect Agent’s rights or the priority of Agent’s lien on
any Collateral;




(iii) Liens arising in the ordinary course of the business of any Borrower or any of
its Subsidiaries by operation of law or regulation, but only if payment in respect of any
such Lien is not at the time required and such Liens do not, in the aggregate, materially
detract from the value of the Property of such Borrower or any of its Subsidiaries or
materially impair the use thereof in the operation of the business of such Borrower or any
of its Subsidiaries;




(iv) Purchase Money Liens securing Permitted Purchase Money Indebtedness;




(v) such other Liens as appear on Exhibit 8.2.5 hereto;


 


36









 






(vi) Liens incurred or deposits made in the ordinary course of business in connection
with (1) worker’s compensation, social security, unemployment insurance and other like laws
or (2) sales contracts, leases, statutory obligations, work in progress advances and other
similar obligations not incurred in connection with the borrowing of money or the payment of
the deferred purchase price of property;




(vii) reservations, covenants, zoning and other land use regulations, title exceptions
or encumbrances granted in the ordinary course of business, affecting real Property owned or
leased by a Borrower or one of its Subsidiaries; provided that such exceptions do
not in the aggregate materially interfere with the use of such Property in the ordinary
course of any Borrower’s or such Subsidiary’s business;




(viii) judgment Liens that do not give rise to an Event of Default under
subsection 10.1.15; and




(ix) such other Liens as Majority Lenders may hereafter approve in writing.




8.2.6 Payments and Amendments of Certain Debt.




(i) make or permit any Subsidiary of any Borrower to make any payment of any part or
all of any Subordinated Debt or take any other action or omit to take any other action in
respect of any Subordinated Debt, except in accordance with the subordination agreement
relative thereto or the subordination provisions thereof;




(ii) amend or modify any agreement, instrument or document evidencing or relating to
any Subordinated Debt or, except in connection with a Permitted Refinancing, the Convertible
Debentures; and




(iii) except in connection with a Permitted Refinancing or as provided below, make of
permit any Subsidiary of any Borrower to make any prepayment of interest or principal on
Convertible Debentures or to repurchase or otherwise prepay any of the Convertible
Debentures.



The foregoing notwithstanding, Borrowers may repurchase or repay a portion of the Convertible
Debentures (or Permitted Refinancings thereof) and/or make a Distribution in the form of open
market repurchases of Borrower Representative’s publicly traded common stock so long as after
giving effect to any such repurchase, prepayment or Distribution: (x) the aggregate amount of all
such repurchases, prepayments or Distributions made with the proceeds of Revolving Credit Loans
does not exceed $10,000,000 during the Term; and (y) if any Revolving Credit Loan or Letter of
Credit is outstanding (i) the Convertible Debentures have been Refinanced pursuant to a Permitted
Refinancing; (ii) the Fixed Charge Coverage Ratio for the most recently ended Testing Period
computed on a pro forma basis assuming that such Distribution, repurchase or repayment was made
within such Testing Period would exceed 1.10 to 1; (iii) no Default or Event of Default has
occurred and is continuing; and (iv) Availability on an average pro forma basis for the 30 days
immediately prior to any such repurchase, prepayment or Distribution and immediately after such
repurchase, prepayment or Distribution shall equal or exceed $15,000,000. As used herein, Testing
Period means the three month period
ending December 31, 2007, the six month period ending March 31, 2007, the nine month period
ending June 30, 2007 and any twelve month period ending any September 30, December 31, March 31 or
June 30 thereafter.


 


37









 





8.2.7 Distributions. Declare or make, or permit any Subsidiary of any Borrower to
declare or make, any Distributions, except for:




(i) Distributions by any Subsidiary of a Borrower to a Borrower;




(ii) Distributions paid solely in Securities of a Borrower or any of its Subsidiaries;




(iii) Distributions by a Borrower in amounts necessary to permit such Borrower to
repurchase Securities of a Borrower from employees of any Borrower or any of its
Subsidiaries upon the termination of their employment, so long as no Default or Event of
Default exists at the time of or would be caused by the making of such Distributions and the
aggregate cash amount of such Distributions, measured at the time when made, does not exceed
$500,000 in any fiscal year of Borrowers; and




(iv) as provided in subsection 8.2.6 above.



8.2.8 Capital Expenditures. Make Capital Expenditures (including, without limitation,
by way of capitalized leases) which, in the aggregate, as to Borrowers and all of their
Subsidiaries, exceed $7,000,000 during any fiscal year of Borrowers, except that 50% of the unused
portion of the Capital Expenditure allowance for any fiscal year may be carried over to the
immediately succeeding fiscal year only, to be used in such succeeding fiscal year after all of the
Capital Expenditure allowance for that year has been used.



8.2.9 Disposition of Assets. Sell, lease or otherwise dispose of any of, or permit
any Subsidiary of any Borrower to sell, lease or otherwise dispose of any of, its Properties,
including any disposition of Property as part of a sale and leaseback transaction, to or in favor
of any Person, except for:




(i) sales of Inventory in the ordinary course of business;




(ii) transfers of Property to a Borrower by a Subsidiary of a Borrower;




(iii) dispositions of Property that is substantially worn, damaged, uneconomic,
obsolete or no longer useful in the business of any Borrower (subject to subsection 6.4.2
hereof);




(iv) dispositions of investments described in paragraphs (iv), (v), (vi) and (vii) of
the definition of the term “Restricted Investments”; and




(v) other dispositions expressly authorized by this Agreement.




 


38









 








8.2.10 Securities of Subsidiaries. Permit any of their Subsidiaries to issue any
additional Securities except to a Borrower and except for director’s qualifying Securities.



8.2.11 Restricted Investment. Make or have, or permit any Subsidiary of any Borrower
to make or have, any Restricted Investment.



8.2.12 Subsidiaries and Joint Ventures. Create, acquire or otherwise suffer to exist,
or permit any Subsidiary of any Borrower to create, acquire or otherwise suffer to exist, any
Subsidiary or joint venture arrangement not in existence as of the date hereof.



8.2.13 Tax Consolidation. File or consent to the filing of any consolidated income
tax return with any Person other than another Borrower and Borrowers’ Subsidiaries.



8.2.14 Organizational Documents. Agree to, or suffer to occur, any amendment,
supplement or addition to its or any of their Subsidiaries’ charter, articles or certificate of
incorporation, certificate of formation, limited partnership agreement, bylaws, limited liability
agreement, operating agreement or other organizational documents (as the case may be), that would
reasonably be expected to have a Material Adverse Effect.



8.2.15 Fiscal Year End. Change, or permit any Subsidiary of any Borrower to change,
its fiscal year end.



8.2.16 Negative Pledges. Enter into any agreement limiting the ability of Borrower or
any of its Subsidiaries to voluntarily create Liens upon any of its Property.



8.3 Specific Financial Covenants. During the Term, and thereafter for so long as
there are any Obligations (other than contingent Obligations (including contingent indemnity
claims)) outstanding, Borrowers covenant that, unless otherwise consented to by Majority Lenders,
in writing, they shall comply with all of the financial covenants set forth in Exhibit 8.3 hereto.
If GAAP changes from the basis used in preparing the audited financial statements delivered to
Agent by Borrowers on or before the Closing Date, Borrowers will provide Agent with certificates
demonstrating compliance with such financial covenants and will include, at the election of
Borrowers or upon the request of Agent, calculations setting forth the adjustments necessary to
demonstrate how Borrowers are also in compliance with such financial covenants based upon GAAP as
in effect on the Closing Date.



SECTION 9. CONDITIONS PRECEDENT




Notwithstanding any other provision of this Agreement or any of the other Loan Documents, and
without affecting in any manner the rights of Agent or any Lender under the other sections of this
Agreement, no Lender shall be required to make any Loan, nor shall Agent be required to issue or
procure any Letter of Credit or LC Guaranty unless and until each of the following conditions has
been and continues to be satisfied or waived:



9.1 Documentation. Agent shall have received, in form and substance satisfactory to
Agent and its counsel, a duly executed copy of this Agreement and the other Loan Documents,
together with such additional documents, instruments, opinions and certificates as Agent and its counsel shall require in connection therewith from time to time, all in form and substance
satisfactory to Agent and its counsel.



 


39









 








9.2 No Default. No Default or Event of Default shall exist.



9.3 Other Conditions. Each of the conditions precedent set forth in the Loan
Documents shall have been satisfied or waived.



9.4 Availability. Agent shall have determined that immediately upon the effectiveness
of this Agreement and the payment of all closing costs incurred in connection with the transactions
contemplated by this Agreement (treating any accrued closing costs as paid), Availability shall not
be less than $25,000,000.



9.5 No Litigation. No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court, governmental agency or
legislative body to (x) enjoin, restrain or prohibit, or to obtain damages in respect of, or which
is related to or arises out of this Agreement or the consummation of the transactions contemplated
hereby, or (y) except as described in the Public Filings existing as of the Closing Date or in
Schedule 7.1.20, which could reasonably be expected to have or evidence a Material Adverse
Effect.



9.6 Material Adverse Effect. As of the Closing Date, since September 30, 2007, there
has not been any material adverse change in its business, assets, financial condition, income or
prospects and no event or condition exists which would be reasonably likely to result in any
Material Adverse Effect.



9.7 Cash Deposit. On or prior to the Closing Date, Borrowers shall have deposited at
least $5,000,000 (which amount shall increase to $20,000,000 on or prior to the date which is
30 days after the Closing Date) in a Bank (or an affiliate of a Bank) depository account, which
depository account shall be pledged to Agent as additional Collateral pursuant to a usual and
customary Deposit Account Control Agreement. Thereafter, Borrowers covenant to maintain at least
$15,000,000 on deposit at Bank until such time as Borrowers have established lockbox and
disbursement accounts with Bank and are utilizing Bank for its other cash management and/or
treasury services.



SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT




10.1 Events of Default. The occurrence of one or more of the following events shall
constitute an “Event of Default”:



10.1.1 Payment of Obligations. Borrowers shall fail to pay any of the Obligations
(other than an Overadvance) hereunder or under any Note on the due date thereof (whether due at
stated maturity, on demand, upon acceleration or otherwise).



10.1.2 Misrepresentations. Any representation, warranty or other statement made or
furnished to Agent or any Lender by or on behalf of any Borrower, any Subsidiary of any Borrower or
any Guarantor in this Agreement, any of the other Loan Documents or any instrument, certificate or
financial statement furnished in compliance with or in reference thereto proves to have been false or misleading in any material respect when made, furnished or
reaffirmed pursuant to Section 7.2 hereof.



 


40









 







10.1.3 Breach of Specific Covenants. Any Borrower shall fail or neglect to perform,
keep or observe any covenant contained in Section or subsection 5.2 (Other Collateral), 5.3 (Lien
Perfection; Further Assurances), 5.4 (Lien on Realty), 6.1.1 (Location of Collateral), 6.1.2
(Insurance of Collateral), 6.2.4 (Maintenance of Dominion Account), 6.2.5 (Collection of Accounts;
Proceeds of Collateral), 8.1.1 (Visits and Inspections; Lender Meeting), 8.1.2 (Notices), 8.1.4
(Borrowing Base Certificates), 8.1.9 (Deposit and Brokerage Accounts), 8.1.10 (Interest Rate
Protection), 8.2 (Negative Covenants) or 8.3 (Specific Financial Covenants) hereof on the date that
Borrowers are required to perform, keep or observe such covenant or shall fail or neglect to
perform, keep or observe any covenant contained in Section 8.1.3 (Financial Statements) or 8.1.7
(Projections) hereof within 5 days following the date on which Borrowers are required to perform,
keep or observe such covenant.



10.1.4 Breach of Other Covenants. Borrowers shall fail or neglect to perform, keep or
observe any covenant contained in this Agreement (other than a covenant which is dealt with
specifically elsewhere in Section 10.1 hereof) and the breach of such other covenant is not cured
to Agent’s satisfaction within 30 days after the sooner to occur of any Borrower’s receipt of
notice of such breach from Agent or the date on which such failure or neglect first becomes known
to any officer of any Borrower.



10.1.5 Default Under Security Documents or Other Agreements. Any event of default
shall occur under, or any Borrower, any of its Subsidiaries or any other Guarantor shall default in
the performance or observance of any term, covenant, condition or agreement contained in, any of
the Security Documents, or the Other Agreements and such default shall continue beyond any
applicable grace period.



10.1.6 Other Defaults. There shall occur any default or event of default on the part
of any Borrower, any Subsidiary of any Borrower or any other Guarantor under any agreement,
document or instrument to which such Borrower, such Subsidiary of such Borrower or such Guarantor
is a party or by which such Borrower, such Subsidiary of such Borrower or such Guarantor or any of
its Property is bound, evidencing or relating to any Indebtedness (other than the Obligations) with
an outstanding principal balance in excess of $250,000, which Default or Event of Default has not
been cured or waived within the applicable grace or cure period, if the payment or maturity of such
Indebtedness is or could be accelerated in consequence of such event of default or demand for
payment of such Indebtedness is made or could be made in accordance with the terms thereof.



10.1.7 Uninsured Losses. Any material loss, theft, damage or destruction of any
portion of the Collateral having a fair market value of $250,000, in the aggregate, if not fully
covered (subject to such deductibles and self-insurance retentions as Agent shall have permitted)
by insurance.



10.1.8 Insolvency and Related Proceedings. Borrowers, taken as a whole, shall cease
to be Solvent or any Borrower shall suffer the appointment of a receiver, trustee, custodian or
similar fiduciary, or shall make an assignment for the benefit of creditors, or any petition for an order for relief shall be filed by or against any Borrower under U.S. federal bankruptcy
laws (if against any Borrower, the continuation of such proceeding for more than 60 days), or any
Borrower shall make any offer of settlement, extension or composition to their respective unsecured
creditors generally.



 


41









 







10.1.9 Business Disruption; Condemnation. There shall occur a cessation of a
substantial part of the business of any Borrower, any Subsidiary of any Borrower or any other
Guarantor for a period which materially adversely affects such Borrower’s, such Subsidiary’s or
such Guarantor’s capacity to continue its business on a profitable basis; or any Borrower, any
Subsidiary of any Borrower or any other Guarantor shall suffer the loss or revocation of any
material license or permit now held or hereafter acquired by any Borrower, any Subsidiary of any
Borrower or any other Guarantor which is necessary to the continued or lawful operation of its
business; or any Borrower, any Subsidiary of any Borrower or any other Guarantor shall be enjoined,
restrained or in any way prevented by court, governmental or administrative order from conducting
all or any material part of its business affairs; or any material lease or agreement pursuant to
which any Borrower, any Subsidiary of any Borrower or any other Guarantor leases, uses or occupies
any Property shall be canceled or terminated prior to the expiration of its stated term, except any
such lease or agreement the cancellation or termination of which could not reasonably be expected
to have a Material Adverse Effect; or any material portion of the Collateral shall be taken through
condemnation or the value of such Property shall be impaired through condemnation.



10.1.10 Change of Ownership. (a) a Change in Control shall have occurred or
(b) Borrower Representative shall cease to own and control, beneficially and of record (directly or
indirectly), 100% of the issued and outstanding Securities and Voting Stock of each of its
Subsidiaries.



10.1.11 ERISA. A Reportable Event shall occur which, in Agent’s reasonable
determination, constitutes grounds for the termination by the Pension Benefit Guaranty Corporation
of any Plan or for the appointment by the appropriate United States district court of a trustee for
any Plan, or any Plan shall be terminated or any such trustee shall be requested or appointed, or
if any Borrower, any Subsidiary of any Borrower or any other Guarantor is in “default” (as defined
in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan resulting from
such Borrower’s, such Subsidiary’s or such Guarantor’s complete or partial withdrawal from such
Plan and any such event could reasonably be expected to have a Material Adverse Effect.



10.1.12 Challenge to Agreement. Any Borrower, any Subsidiary of Borrower or any other
Guarantor, or any Affiliate of any of them, shall challenge or contest in any action, suit or
proceeding the validity or enforceability of this Agreement or any of the other Loan Documents, the
legality or enforceability of any of the Obligations or the perfection or priority of any Lien
granted to Agent.



10.1.13 Repudiation of or Default Under Guaranty Agreement. Any Guarantor shall
revoke or attempt to revoke the Guaranty Agreement signed by such Guarantor, or shall repudiate
such Guarantor’s liability thereunder or shall be in default under the terms thereof.


 


42









 





10.1.14 Criminal Forfeiture. Any Borrower, any Subsidiary of Borrower or any other
Guarantor shall be criminally indicted or convicted under any law that could lead to a forfeiture
of any Property (with a value of $250,000 or more) of any Borrower, any Subsidiary of Borrower or
any other Guarantor.



10.1.15 Judgments. Any money judgment, writ of attachment or similar processes
(collectively, “Judgments”) are issued or rendered against any Borrower, any Subsidiary of any
Borrower or any other Guarantor, or any of their respective Property (i) in the case of money
judgments, in an amount of $250,000 or more for any single judgment, attachment or process or
$500,000 or more for all such judgments, attachments or processes in the aggregate, in each case in
excess of any applicable insurance with respect to which the insurer has admitted liability, and
(ii) in the case of non-monetary Judgments, such Judgment or Judgments (in the aggregate) could
reasonably be expected to have a Material Adverse Effect, in each case which Judgment is not
stayed, released or discharged within 30 days.



10.2 Acceleration of the Obligations. Upon or at any time after the occurrence and
during the continuance of an Event of Default, (i) the Revolving Loan Commitments shall, at the
option of Agent or Majority Lenders be terminated and/or (ii) Agent or Majority Lenders may declare
all or any portion of the Obligations at once due and payable without presentment, demand protest
or further notice by Agent or any Lender, and Borrowers shall forthwith pay to Agent, the full
amount of such Obligations, provided, that upon the occurrence of an Event of Default
specified in subsection 10.1.8 hereof, the Revolving Loan Commitments shall automatically be
terminated and all of the Obligations shall become automatically due and payable, in each case
without declaration, notice or demand by Agent or any Lender.



10.3 Other Remedies. Upon the occurrence and during the continuance of an Event of
Default, Agent shall have and may exercise from time to time the following other rights and
remedies:



10.3.1 All of the rights and remedies of a secured party under the UCC or under other
applicable law, and all other legal and equitable rights to which Agent or Lenders may be entitled,
all of which rights and remedies shall be cumulative and shall be in addition to any other rights
or remedies contained in this Agreement or any of the other Loan Documents, and none of which shall
be exclusive.



10.3.2 The right to take immediate possession of the Collateral, and to (i) require each
Borrower and each of its Subsidiaries to assemble the Collateral, at Borrowers’ expense, and make
it available to Agent at a place designated by Agent which is reasonably convenient to both
parties, and (ii) enter any premises where any of the Collateral shall be located and to keep and
store the Collateral on said premises until sold (and if said premises be the Property of any
Borrower or any Subsidiary of any Borrower, Borrowers agree not to charge, or permit any of its
Subsidiaries to charge, Agent for storage thereof).




 


43









 






10.3.3 The right to sell or otherwise dispose of all or any Collateral in its then condition,
or after any further manufacturing or processing thereof, at public or private sale or sales, with
such notice as may be required by law, in lots or in bulk, for cash or on credit, all as Agent, in
its sole discretion, may deem advisable. Agent may, at Agent’s option, disclaim any
 and all warranties regarding the Collateral in connection with any such sale. Borrowers agree
that 10 days’ written notice to Borrowers or any of their Subsidiaries of any public or private
sale or other disposition of Collateral shall be reasonable notice thereof, and such sale shall be
at such locations as Agent may designate in said notice. Agent shall have the right to conduct
such sales on any Borrower’s or any of its Subsidiaries’ premises, without charge therefor, and
such sales may be adjourned from time to time in accordance with applicable law. Agent shall have
the right to sell, lease or otherwise dispose of the Collateral, or any part thereof, for cash,
credit or any combination thereof, and Agent, on behalf of Lenders, may purchase all or any part of
the Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of
such purchase price, may set off the amount of such price against the Obligations. The proceeds
realized from the sale of any Collateral may be applied, after allowing 2 Business Days for
collection, first to the costs, expenses and attorneys’ fees incurred by Agent in collecting the
Obligations, in enforcing the rights of Agent and Lenders under the Loan Documents and in
collecting, retaking, completing, protecting, removing, storing, advertising for sale, selling and
delivering any Collateral, second to the interest due upon any of the Obligations; and third, to
the principal of the Obligations. If any deficiency shall arise, each Borrower and each Guarantor
shall remain jointly and severally liable to Agent and Lenders therefor.



10.3.4 Agent is hereby granted a license or other right to use, without charge, each
Borrower’s and each of its Subsidiaries’ labels, patents, copyrights, licenses, rights of use of
any name, trade secrets, trade names, trademarks and advertising matter, or any Property of a
similar nature, as it pertains to the Collateral, in completing, advertising for sale and selling
any Collateral and each Borrower’s and each of its Subsidiaries’ rights under all licenses and all
franchise agreements shall inure to Agent’s benefit. Agent agrees not to exercise any such license
or right to use unless an Event of Default exists and is continuing.



10.3.5 Agent may, at its option, require Borrowers to deposit with Agent funds equal to the LC
Amount and, if Borrowers fail to promptly make such deposit, Agent may advance such amount as a
Revolving Credit Loan (whether or not an Overadvance is created thereby). Each such Revolving
Credit Loan shall be secured by all of the Collateral and shall constitute a Prime Rate Revolving
Loan. Any such deposit or advance shall be held by Agent as a reserve to fund future payments on
such LC Guaranties and future drawings against such Letters of Credit. At such time as all LC
Guaranties have been paid or terminated and all Letters of Credit have been drawn upon or expired,
any amounts remaining in such reserve shall be applied against any outstanding Obligations, or, if
all Obligations have been indefeasibly paid in full, returned to Borrowers.



10.4 Setoff and Sharing of Payments. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default, each Lender is hereby authorized by Borrowers at any time or
from time to time, with prior written consent of Agent and with reasonably prompt subsequent notice
to Borrowers (any prior or contemporaneous notice to Borrowers being hereby expressly waived) to
set off and to appropriate and to apply any and all (i) balances held by such Lender at any of its
offices for the account of any Borrower or any of its Subsidiaries (regardless of whether such
balances are then due to a Borrower or its Subsidiaries), and (ii) other property at any time held
or owing by such Lender to or for the credit or for the account of any Borrower or any of its
Subsidiaries, against and on account of any of the Obligations. Any Lender exercising a right to set off shall, to the extent the amount of any such set off exceeds its Revolving
Loan Percentage of the amount set off, purchase for cash (and the other Lenders shall sell)
interests in each such other Lender’s pro rata share of the Obligations as would be necessary to
cause such Lender to share such excess with each other Lender in accordance with their respective
Revolving Loan Percentages. Each Borrower agrees, to the fullest extent permitted by law, that any
Lender may exercise its right to set off with respect to amounts in excess of its pro rata share of
the Obligations and upon doing so shall deliver such excess to Agent for the benefit of all Lenders
in accordance with the Revolving Loan Percentages.



 


44









 







10.5 Remedies Cumulative; No Waiver. All covenants, conditions, provisions,
warranties, guaranties, indemnities, and other undertakings of Borrowers contained in this
Agreement and the other Loan Documents, or in any document referred to herein or contained in any
agreement supplementary hereto or in any schedule or in any Guaranty Agreement given to Agent or
any Lender or contained in any other agreement between any Lender and Borrowers or between Agent
and Borrowers heretofore, concurrently, or hereafter entered into, shall be deemed cumulative to
and not in derogation or substitution of any of the terms, covenants, conditions, or agreements of
Borrowers herein contained. The failure or delay of Agent or any Lender to require strict
performance by Borrowers of any provision of this Agreement or to exercise or enforce any rights,
Liens, powers, or remedies hereunder or under any of the aforesaid agreements or other documents or
security or Collateral shall not operate as a waiver of such performance, Liens, rights, powers and
remedies, but all such requirements, Liens, rights, powers, and remedies shall continue in full
force and effect until all Loans and other Obligations owing or to become owing from Borrowers to
Agent and each Lender have been fully satisfied. None of the undertakings, agreements, warranties,
covenants and representations of Borrowers contained in this Agreement or any of the other Loan
Documents and no Default or Event of Default by Borrowers under this Agreement or any other Loan
Documents shall be deemed to have been suspended or waived by Lenders, unless such suspension or
waiver is by an instrument in writing specifying such suspension or waiver and is signed by a duly
authorized representative of Agent and directed to Borrowers.



SECTION 11. AGENT




11.1 Authorization and Action. Each Lender hereby appoints and authorizes Agent to
take such action on its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto. Each Lender hereby acknowledges that Agent shall not have by
reason of this Agreement assumed a fiduciary relationship in respect of any Lender. In performing
its functions and duties under this Agreement, Agent shall act solely as agent of Lenders and shall
not assume, or be deemed to have assumed, any obligation toward, or relationship of agency or trust
with or for, Borrower. As to any matters not expressly provided for by this Agreement and the
other Loan Documents (including without limitation enforcement and collection of the Notes), Agent
may, but shall not be required to, exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, whenever such instruction shall be
requested by Agent or required hereunder, or a greater or lesser number of Lenders if so required
hereunder, and such instructions shall be binding upon all Lenders; provided, that Agent
shall be fully justified in failing or refusing to take any action which exposes Agent to any liability or which is contrary to this Agreement, the other Loan
Documents or applicable law, unless Agent is indemnified to its satisfaction by the other Lenders
against any and all liability and expense which it may incur by reason of taking or continuing to
take any such action. If Agent seeks the consent or approval of the Majority Lenders (or a greater
or lesser number of Lenders as required in this Agreement), with respect to any action hereunder,
Agent shall send notice thereof to each Lender and shall notify each Lender at any time that the
Majority Lenders (or such greater or lesser number of Lenders) have instructed Agent to act or
refrain from acting pursuant hereto.



 


45









 







11.2 Agent’s Reliance, Etc. Neither Agent, any Affiliate of Agent, nor any of their
respective directors, officers, agents or employees shall be liable for any action taken or omitted
to be taken by it or them under or in connection with this Agreement or the other Loan Documents,
except for its or their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Agent: (i) may treat each Lender party hereto as the holder of
Obligations until Agent receives written notice of the assignment or transfer of such lender’s
portion of the Obligations signed by such Lender and in form reasonably satisfactory to Agent;
(ii) may consult with legal counsel, independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes no warranties or
representations to any Lender and shall not be responsible to any Lender for any recitals,
statements, warranties or representations made in or in connection with this Agreement or any other
Loan Documents; (iv) shall not have any duty beyond Agent’s customary practices in respect of loans
in which Agent is the only lender, to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the
part of Borrowers, to inspect the property (including the books and records) of Borrowers, to
monitor the financial condition of Borrowers or to ascertain the existence or possible existence or
continuation of any Default or Event of Default; (v) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto
or thereto; (vi) shall not be liable to any Lender for any action taken, or inaction, by Agent upon
the instructions of Majority Lenders pursuant to Section 11.1 hereof or refraining to take any
action pending such instructions; (vii) shall not be liable for any apportionment or distributions
of payments made by it in good faith pursuant to Section 3 hereof; (viii) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon any notice,
consent, certificate, message or other instrument or writing (which may be by telephone, facsimile,
telegram, cable or telex) believed in good faith by it to be genuine and signed or sent by the
proper party or parties; and (ix) may assume that no Event of Default has occurred and is
continuing, unless Agent has actual knowledge of the Event of Default, has received notice from
Borrowers or Borrowers’ independent certified public accountants stating the nature of the Event of
Default, or has received notice from a Lender stating the nature of the Event of Default and that
such Lender considers the Event of Default to have occurred and to be continuing. In the event any
apportionment or distribution described in clause (vii) above is determined to have been made in
error, the sole recourse of any Person to whom payment was due but not made shall be to recover
from the recipients of such payments any payment in excess of the amount to which they are
determined to have been entitled.


 


46









 





11.3 RBS and Affiliates. With respect to its commitment hereunder to make Loans, RBS
shall have the same rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise the same as though it were not Agent; and the terms “Lender,”
“Lenders” or “Majority Lenders” shall, unless otherwise expressly indicated, include RBS in its
individual capacity as a Lender. RBS and its Affiliates may lend money to, and generally engage
in any kind of business with, Borrowers, and any Person who may do business with or own Securities
of any Borrower, all as if RBS were not Agent and without any duty to account therefor to any
other Lender.



11.4 Lender Credit Decision. Each Lender acknowledges that it has, independently and
without reliance upon Agent or any other Lender and based on the financial statements referred to
herein and such other documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon 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 decisions in
taking or not taking action under this Agreement. Agent shall not have any duty or responsibility,
either initially or on an ongoing basis, to provide any Lender with any credit or other similar
information regarding Borrowers.



11.5 Indemnification. Lenders agree to indemnify Agent (to the extent not reimbursed
by Borrowers), in accordance with their respective Aggregate Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent under this Agreement; provided that no
Lender shall be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Agent’s gross
negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share, as set forth above, of any
out-of-pocket expenses (including attorneys’ fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or enforcement (whether
through negotiation, legal proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the extent that Agent is
not reimbursed for such expenses by Borrowers. The obligations of Lenders under this Section 11.5
shall survive the payment in full of all Obligations and the termination of this Agreement. If
after payment and distribution of any amount by Agent to Lenders, any Lender or any other Person,
including Borrowers, any creditor of any Borrower, a liquidator, administrator or trustee in
bankruptcy, recovers from Agent any amount found to have been wrongfully paid to Agent or disbursed
by Agent to Lenders, then Lenders, in accordance with their respective Aggregate Percentages, shall
reimburse Agent for all such amounts.



11.6 Rights and Remedies to Be Exercised by Agent Only. Each Lender agrees that,
except as set forth in Section 10.4, no Lender shall have any right individually (i) to realize
upon the security created by this Agreement or any other Loan Document, (ii) to enforce any
provision of this Agreement or any other Loan Document, or (iii) to make demand under this
Agreement or any other Loan Document.


 


47









 





11.7 Agency Provisions Relating to Collateral. Each Lender authorizes and ratifies
Agent’s entry into this Agreement and the Security Documents for the benefit of Lenders. Each
Lender agrees that any action taken by Agent with respect to the Collateral in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by Agent of the powers set
forth herein or therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all Lenders. Agent is hereby authorized on behalf of all
Lenders, without the necessity of any notice to or further consent from any Lender to take any
action with respect to any Collateral or the Loan Documents which may be necessary to perfect and
maintain perfected Agent’s Liens upon the Collateral, for its benefit and the ratable benefit of
Lenders. Lenders hereby irrevocably authorize Agent, at its option and in its discretion, to
release any Lien granted to or held by Agent upon any Collateral (i) upon termination of the
Agreement and payment and satisfaction of all Obligations; or (ii) constituting property being sold
or disposed of if Borrowers certify to Agent that the sale or disposition is made in compliance
with subsection 8.2.9 hereof (and Agent may rely conclusively on any such certificate, without
further inquiry); or (iii) constituting property in which no Borrower owned any interest at the
time the Lien was granted or at any time thereafter; or (iv) in connection with any foreclosure
sale or other disposition of Collateral after the occurrence and during the continuation of an
Event of Default; or (v) if approved, authorized or ratified in writing by Agent at the direction
of all Lenders. Upon request by Agent at any time, Lenders will confirm in writing Agent’s
authority to release particular types or items of Collateral pursuant hereto. Agent shall have no
obligation whatsoever to any Lender or to any other Person to assure that the Collateral exists or
is owned by any Borrower or is cared for, protected or insured or has been encumbered or that the
Liens granted to Agent herein or pursuant to the Security Documents have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of its rights, authorities and powers
granted or available to Agent in this Section 11.7 or in any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or event related
thereto, Agent may act in any manner it may deem appropriate, in its sole discretion, but
consistent with the provisions of this Agreement, including given Agent’s own interest in the
Collateral as a Lender and that Agent shall have no duty or liability whatsoever to any Lender.



11.8 Agent’s Right to Purchase Commitments. Agent shall have the right, but shall not
be obligated, at any time upon written notice to any Lender and with the consent of such Lender,
which may be granted or withheld in such Lender’s sole discretion, to purchase for Agent’s own
account all of such Lender’s interests in this Agreement, the other Loan Documents and the
Obligations, for the face amount of the outstanding Obligations owed to such Lender, including
without limitation all accrued and unpaid interest and fees.


 


48









 





11.9 Right of Sale, Assignment, Participations. Except as set forth below, Borrowers
hereby consent to any Lender’s participation, sale, assignment, transfer or other disposition, at
any time or times hereafter, of this Agreement and any of the other Loan Documents, or of any
portion hereof or thereof, including, without limitation, such Lender’s rights, title, interests,
remedies, powers and duties hereunder or thereunder subject to the terms and conditions set forth
below:



11.9.1 Sales, Assignments. Each Lender hereby agrees that, with respect to any sale
or assignment (i) no such sale or assignment shall be for an amount of less than $5,000,000,
(ii) each such sale or assignment shall be made on terms and conditions which are customary in the
industry at the time of the transaction, (iii) Agent and, in the absence of a Default or Event of
Default, Borrowers, must consent, such consent not to be unreasonably withheld, to each such
assignment to a Person that is not an original signatory to this Agreement, (iv) the assigning
Lender shall pay to Agent a processing and recordation fee of $3,500 and any out-of-pocket
attorneys’ fees and expenses incurred by Agent in connection with any such sale or assignment,
(v) Agent, the assigning Lender and the assignee Lender shall each have executed and delivered an
Assignment and Acceptance Agreement and (vi) Agent shall at all times hold a majority of the
Revolving Loan Commitment. After such sale or assignment has been consummated (x) the assignee
Lender thereupon shall become a “Lender” for all purposes of this Agreement and (y) the assigning
Lender shall have no further liability for funding the portion of Revolving Loan Commitments
assumed by such other Lender.



11.9.2 Participations. Any Lender may grant participations in its extensions of
credit hereunder to any other Lender or other lending institution (a “Participant”),
provided that (i) no such participation shall be for an amount of less than $5,000,000,
(ii) no Participant shall thereby acquire any direct rights under this Agreement, (iii) no
Participant shall be granted any right to consent to any amendment, except to the extent any of the
same pertain to (1) reducing the aggregate principal amount of, or interest rate on, or fees
applicable to, any Loan or (2) extending the final stated maturity of any Loan or the stated
maturity of any portion of any payment of principal of, or interest or fees applicable to, any of
the Loans; provided that the rights described in this subclause (2) shall not be deemed to
include the right to consent to any amendment with respect to or which has the effect of requiring
any mandatory prepayment of any portion of any Loan or any amendment or waiver of any Default or
Event of Default, (iv) no sale of a participation in extensions of credit shall in any manner
relieve the originating Lender of its obligations hereunder, (v) the originating Lender shall
remain solely responsible for the performance of such obligations, (vi) Borrowers and Agent shall
continue to deal solely and directly with the originating Lender in connection with the originating
Lender’s rights and obligations under this Agreement and the other Loan Documents, (vii) in no
event shall any financial institution purchasing the participation grant a participation in its
participation interest in the Loans without the prior written consent of Agent, and, in the absence
of a Default or an Event of Default, Borrowers, which consents shall not unreasonably be withheld
and (viii) all amounts payable by Borrowers hereunder shall be determined as if the originating
Lender had not sold any such participation.



11.9.3 Certain Agreements of Borrowers. Borrowers agree that (i) they will use their
best efforts to assist and cooperate with each Lender in any manner reasonably requested by such
Lender to effect the sale of participation in or assignments of any of the Loan Documents or any portion thereof or interest therein, including, without limitation, assisting in the
preparation of appropriate disclosure documents and making members of management available at
reasonable times to meet with and answer questions of potential assignees and Participants; and
(ii) subject to the provisions of Section 12.14 hereof, such Lender may disclose credit information
regarding Borrowers to any potential Participant or assignee.



 


49









 






11.9.4 Non U.S. Resident Transferees. If, pursuant to this Section 11.9, any interest
in this Agreement or any Loans is transferred to any transferee which is organized under the laws
of any jurisdiction other than the United States or any state thereof, the transferor Lender shall
cause such transferee (other than any Participant), and may cause any Participant, concurrently
with and as a condition precedent to the effectiveness of such transfer, to (i) represent to the
transferor Lender (for the benefit of the transferor Lender, Agent, and Borrowers) that under
applicable law and treaties no taxes will be required to be withheld by Agent, any Borrowers or the
transferor Lender with respect to any payments to be made to such transferee in respect of the
interest so transferred, (ii) furnish to the transferor Lender, Agent and Borrowers either United
States Internal Revenue Service Form W-8BEN or United States Internal Revenue Service Form W-8ECI
(wherein such transferee claims entitlement to complete exemption from United States federal
withholding tax on all interest payments hereunder), and (iii) agree (for the benefit of the
transferor Lender, Agent and Borrowers) to provide the transferor Lender, Agent and Borrowers a new
Form W-8BEN or Form W-8ECI upon the obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws and regulations and amendments duly
executed and completed by such transferee, and to comply from time to time with all applicable
United States laws and regulations with regard to such withholding tax exemption.



11.10 Amendment. No amendment or waiver of any provision of this Agreement or any
other Loan Document (including without limitation any Note), nor consent to any departure by
Borrowers therefrom, shall in any event be effective unless the same shall be in writing and signed
by the Majority Lenders and Borrowers, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided, that no
amendment, waiver or consent shall be effective, unless (i) in writing and signed by each Lender,
to do any of the following: (1) increase or decrease the aggregate Loan Commitments, or any
Lender’s Revolving Loan Commitment, (2) reduce the principal of, or interest on, any amount payable
hereunder or under any Note, other than those payable only to RBS in its capacity as Agent, which
may be reduced by RBS unilaterally, (3) increase or decrease any interest rate payable hereunder,
(4) postpone any date fixed for any payment of principal of, or interest on, any amounts payable
hereunder or under any Note, other than those payable only to RBS in its capacity as Agent, which
may be postponed by RBS unilaterally, (5) increase any advance percentage contained in the
definition of the term Borrowing Base, (6) reduce the number of Lenders that shall be
required for Lenders or any of them to take any action hereunder, (7) release or discharge any
Person liable for the performance of any obligations of any Borrower hereunder or under any of the
Loan Documents, (8) amend any provision of this Agreement that requires the consent of all Lenders
or consent to or waive any breach thereof, (9) amend the definition of the term Majority
Lenders, (10) amend this Section 11.10 or (11) release any substantial portion of the
Collateral, unless otherwise permitted pursuant to Section 11.7 hereof; or (ii) in writing and
signed by Agent in addition to the Lenders required above to affect the rights or duties of Agent
under this Agreement, any Note or any other Loan Document. If a fee is to be paid by Borrowers in connection with any waiver or amendment
hereunder, the agreement evidencing such amendment or waiver may, at the discretion of Agent (but
shall not be required to), provide that only Lenders executing such agreement by a specified date
may share in such fee (and in such case, such fee shall be divided among the applicable Lenders on
a pro rata basis without including the interests of any Lenders who have not timely executed such
agreement).



 


50









 







11.11 Resignation of Agent; Appointment of Successor. Agent may resign as Agent by
giving not less than thirty (30) days’ prior written notice to Lenders and Borrowers. If Agent
shall resign under this Agreement, then, (i) subject to the consent of Borrowers (which consent
shall not be unreasonably withheld and which consent shall not be required during any period in
which a Default or an Event of Default exists), Majority Lenders shall appoint from among Lenders a
successor agent for Lenders or (ii) if a successor agent shall not be so appointed and approved
within the thirty (30) day period following Agent’s notice to Lenders and Borrowers of its
resignation, then Agent shall appoint a successor agent who shall serve as Agent until such time as
Majority Lenders appoint a successor agent, subject to Borrowers’ consent as set forth above. Upon
its appointment, such successor agent shall succeed to the rights, powers and duties of Agent and
the term “Agent” shall mean such successor effective upon its appointment, and the former Agent’s
rights, powers and duties as Agent shall be terminated without any other or further act or deed on
the part of such former Agent or any of the parties to this Agreement. After the resignation of
any Agent hereunder, the provisions of this Section 11 shall inure to the benefit of such former
Agent and such former Agent shall not by reason of such resignation be deemed to be released from
liability for any actions taken or not taken by it while it was an Agent under this Agreement.



11.12 Audit and Examination Reports; Disclaimer by Lenders. By signing this
Agreement, each Lender:




(a) is deemed to have requested that Agent furnish such Lender, promptly after it
becomes available, a copy of each audit or examination report (each a “Report” and
collectively, “Reports”) prepared by or on behalf of Agent;




(b) expressly agrees and acknowledges that Agent (i) does not make any representation or
warranty as to the accuracy of any Report, and (ii) shall not be liable for any information
contained in any Report;




(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that Agent or other party performing any audit or examination will inspect only
specific information regarding Borrowers and will rely significantly upon Borrowers’ books
and records, as well as on representations of Borrowers’ personnel;




(d) agrees to keep all Reports confidential and strictly for its internal use, and not
to distribute except to its participants, or use any Report in any other manner, in
accordance with the provisions of Section 12.14; and


 


51









 







(e) without limiting the generality of any other indemnification provision contained in
this Agreement, agrees: (i) to hold Agent and any such other Lender preparing a Report
harmless from any action the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may make to Borrowers, or the
indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrowers; and (ii) to pay and protect, and indemnify, defend and hold Agent and any
such other Lender preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses and other amounts (including attorneys’ fees and
expenses) incurred by Agent and any such other Lender preparing a Report as the direct or
indirect result of any third parties who might obtain all or part of any Report through the
indemnifying Lender.



SECTION 12. MISCELLANEOUS




12.1 Power of Attorney. Each Borrower hereby irrevocably designates, makes,
constitutes and appoints Agent (and all Persons designated by Agent) as such Borrower’s true and
lawful attorney (and agent-in-fact), solely with respect to the matters set forth in this
Section 12.1, and Agent, or Agent’s agent, may, without notice to any Borrower and in any
Borrower’s or Agent’s name, but at the cost and expense of Borrowers:



12.1.1 At such time or times as Agent or said agent, in its sole discretion, may determine,
after and during the occurrence of an Event of Default, or during a Trigger Period with respect to
the operation of the Dominion Account, endorse any Borrower’s name on any checks, notes,
acceptances, drafts, money orders or any other evidence of payment or proceeds of the Collateral
which come into the possession of Agent or under Agent’s control.



12.1.2 At such time or times upon or after the occurrence and during the continuance of an
Event of Default (provided that the occurrence of an Event of Default shall not be required with
respect to clauses (iv), (vi), and (ix) below during a Trigger Period in connection with the
operation of the Dominion Account), as Agent or its agent in its sole discretion may determine:
(i) demand payment of the Accounts from the Account Debtors, enforce payment of the Accounts by
legal proceedings or otherwise, and generally exercise all of any Borrower’s rights and remedies
with respect to the collection of the Accounts; (ii) settle, adjust, compromise, discharge or
release any of the Accounts or other Collateral or any legal proceedings brought to collect any of
the Accounts or other Collateral; (iii) sell or assign any of the Accounts and other Collateral
upon such terms, for such amounts and at such time or times as Agent deems advisable, and at
Agent’s option, with all warranties regarding the Collateral disclaimed; (iv) take control, in any
manner, of any item of payment or proceeds relating to any Collateral; (v) prepare, file and sign
any Borrower’s name to a proof of claim in bankruptcy or similar document against any Account
Debtor or to any notice of lien, assignment or satisfaction of lien or similar document in
connection with any of the Collateral; (vi) receive, open and dispose of all mail addressed to any
Borrower and notify postal authorities to change the address for delivery thereof to such address
as Agent may designate; (vii) endorse the name of any Borrower upon any of the items of payment or
proceeds relating to any Collateral and deposit the same to the account of Agent on account of the
Obligations; (viii) endorse the name of any Borrower upon any chattel paper, document, instrument,
invoice, freight bill, bill of lading or similar document or agreement relating to the Accounts, Inventory and any other Collateral;
(ix) use any Borrower’s stationery and sign the name of any Borrower to verifications of the
Accounts and notices thereof to Account Debtors; (x) use the information recorded on or contained
in any data processing equipment and Computer Hardware and Software relating to the Accounts,
Inventory, Equipment and any other Collateral; (xi) make and adjust claims under policies of
insurance; and (xii) do all other acts and things necessary, in Agent’s determination, to fulfill
any Borrower’s obligations under this Agreement.



 


52









 







The power of attorney granted hereby shall constitute a power coupled with an interest and
shall be irrevocable.



12.2 Indemnity. Each Borrower hereby agrees to indemnify Agent and each Lender (and
each of their Affiliates) and hold Agent and each Lender (and each of their Affiliates) harmless
from and against any liability, loss, damage, suit, action or proceeding ever suffered or incurred
by any such Person (including reasonable attorneys’ fees and legal expenses) as the result of such
Borrower’s failure to observe, perform or discharge such Borrower’s duties hereunder. In addition,
each Borrower shall defend Agent and each Lender (and each of their Affiliates) against and save it
harmless from all claims of any Person with respect to the Collateral (except those resulting from
the gross negligence or intentional misconduct of Agent, any Lender or any Affiliate of Agent or
any Lender, as applicable). Without limiting the generality of the foregoing, these indemnities
shall extend to any claims asserted against Agent or any Lender (and each of their Affiliates) by
any Person under any Environmental Laws by reason of any Borrower’s or any other Person’s failure
to comply with laws applicable to solid or hazardous waste materials or other toxic substances.
Notwithstanding any contrary provision in this Agreement, the obligation of Borrowers under this
Section 12.2 shall survive the payment in full of the Obligations (other than contingent
Obligations (including contingent indemnity claims)) and the termination of this Agreement.



12.3 Sale of Interest. No Borrower may sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the Obligations, or any portion thereof,
including, without limitation, such Borrower’s rights, title, interests, remedies, powers and
duties hereunder or thereunder.



12.4 Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.



12.5 Successors and Assigns. This Agreement, the Other Agreements and the Security
Documents shall be binding upon and inure to the benefit of the successors and assigns of each
Borrower, Agent and each Lender permitted under Section 11.9 hereof.



12.6 Cumulative Effect; Conflict of Terms. The provisions of the Other Agreements and
the Security Documents are hereby made cumulative with the provisions of this Agreement. Except as
otherwise provided in any of the other Loan Documents by specific reference to the applicable
provision of this Agreement, if any provision contained in this Agreement is in direct conflict with, or inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.




 


53









 








12.7 Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which counterparts taken
together shall constitute but one and the same instrument.



12.8 Notice. Except as otherwise provided herein, all notices, requests and demands
to or upon a party hereto, to be effective, shall be in writing, and shall be sent by certified or
registered mail, return receipt requested, by personal delivery against receipt, by overnight
courier or by facsimile and, unless otherwise expressly provided herein, shall be deemed to have
been validly served, given, delivered or received immediately when delivered against receipt, three
(3) Business Days’ after deposit in the mail, postage prepaid, one (1) Business Day after deposit
with an overnight courier or, in the case of facsimile notice, when sent with respect to machine
confirmed, addressed as follows:



	 	 	 	 	 
	 

	 	(A) If to Agent:
	 	RBS Business Capital,
	 

	 	 	 	a division of RBS Asset Finance, Inc.
	 

	 	 	 	71 South Wacker Drive
	 

	 	 	 	Suite 2800
	 

	 	 	 	Chicago, Illinois 60606
	 

	 	 	 	Attention: Senior Portfolio Manager
	 

	 	 	 	Facsimile No.: (312) 777-4003
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Vedder, Price, Kaufman & Kammholz, P.C.
	 

	 	 	 	222 North LaSalle Street
	 

	 	 	 	Suite 2600
	 

	 	 	 	Chicago, Illinois 60601
	 

	 	 	 	Attention: John T. McEnroe
	 

	 	 	 	Facsimile No.: (312) 609-5005
	 
	 	 	 	 
	 

	 	(B) If to Borrowers:
	 	Rewards Network Inc.
	 

	 	 
	 	Two North Riverside Plaza, Suite 950
	 

	 	 	 	Chicago, Illinois 60606
	 

	 	 	 	Attention: Christopher Locke, Chief Financial Officer
	 

	 	 	 	Facsimile No.: (312) 264-6295
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Reed Smith LLP
	 

	 	 	 	10 South Wacker Drive, 40th Floor
	 

	 	 	 	Chicago, Illinois 60606-7507
	 

	 	 	 	Attention: Benjamin L. Brimeyer
	 

	 	 	 	Facsimile No.: (312) 207-6400






(C) If to any Lender, at its address indicated on the signature pages hereof or
in an Assignment and Acceptance Agreement, 

or to such other address as each party may designate for itself by notice given in accordance with
this Section 12.8; provided, however, that any notice, request or demand to or upon
Agent or a Lender pursuant to subsection 3.1.1 or 4.2.2 hereof shall not be effective until
received by Agent or such Lender.



 


54









 






12.9 Consent. Whenever Agent’s, Majority Lenders’ or all Lenders’ consent is required
to be obtained under this Agreement, any of the Other Agreements or any of the Security Documents
as a condition to any action, inaction, condition or event, except as otherwise specifically
provided herein, Agent, Majority Lenders or all Lenders, as applicable, shall be authorized to give
or withhold such consent in its or their sole and absolute discretion and to condition its or their
consent upon the giving of additional Collateral security for the Obligations, the payment of money
or any other matter.



12.10 Credit Inquiries. Borrowers hereby authorize and permit Agent and each Lender
to respond to usual and customary credit inquiries from third parties concerning any Borrower or
any of its Subsidiaries.



12.11 Time of Essence. Time is of the essence of this Agreement, the Other Agreements
and the Security Documents.



12.12 Entire Agreement. This Agreement and the other Loan Documents, together with
all other instruments, agreements and certificates executed by the parties in connection therewith
or with reference thereto, embody the entire understanding and agreement between the parties hereto
and thereto with respect to the subject matter hereof and thereof and supersede all prior
agreements, understandings and inducements, whether express or implied, oral or written.



12.13 Interpretation. No provision of this Agreement or any of the other Loan
Documents shall be construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having or being deemed to
have structured or dictated such provision.



12.14 Confidentiality. Agent and each Lender shall hold all nonpublic information
obtained pursuant to the requirements of this Agreement in accordance with Agent’s and such
Lender’s customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make disclosure reasonably
required by a prospective participant or assignee in connection with the contemplated participation
or assignment or as required or requested by any governmental authority or representative thereof
or pursuant to legal process and shall require any such participant or assignee to agree to comply
with this Section 12.14.



 


55









 





 12.15 GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED
AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN CHICAGO, ILLINOIS. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS;
PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER
THAN ILLINOIS, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT’S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT
OF AGENT’S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH
JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF ILLINOIS. AS PART OF THE
CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL
PLACE OF BUSINESS OF ANY BORROWER, AGENT OR ANY LENDER, EACH BORROWER HEREBY CONSENTS AND AGREES
THAT THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR, AT AGENT’S OPTION, THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, SHALL HAVE EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWERS ON THE ONE HAND AND AGENT OR ANY LENDER
ON THE OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT. EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY OBJECTION WHICH ANY
BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF
SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
BORROWERS AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF BORROWERS’ ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE
RIGHT OF AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
PRECLUDE THE ENFORCEMENT BY AGENT OR ANY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR
THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
JURISDICTION.



12.16 WAIVERS BY BORROWERS. EACH BORROWER WAIVES (i) THE RIGHT TO TRIAL BY JURY
(WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF
ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL;
(ii) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT,
MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER,
ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS , CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD
BY AGENT OR ANY LENDER ON WHICH BORROWERS MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS




 


56









 






WHATEVER AGENT OR ANY LENDER MAY DO IN THIS REGARD; (iii) NOTICE PRIOR TO AGENT’S TAKING POSSESSION OR
CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO
ALLOWING AGENT TO EXERCISE ANY OF AGENT’S REMEDIES; (iv) THE BENEFIT OF ALL VALUATION, APPRAISEMENT
AND EXEMPTION LAWS; (v) NOTICE OF ACCEPTANCE HEREOF; AND (vi) EXCEPT AS PROHIBITED BY LAW, ANY
RIGHT TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING
WAIVERS ARE A MATERIAL INDUCEMENT TO AGENT’S AND EACH LENDER’S ENTERING INTO THIS AGREEMENT AND
THAT AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH
BORROWERS. EACH BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH
ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.



12.17 Advertisement. Borrowers hereby authorize Agent to publish the name of any
Borrower and the amount of the credit facility provided hereunder in any “tombstone” or comparable
advertisement which Agent elects to publish.



12.18 Reimbursement. The undertaking by Borrowers to repay the Obligations and each
representation, warranty or covenant of each Borrower are and shall be joint and several. To the
extent that any Borrower shall be required to pay a portion of the Obligations which shall exceed
the amount of loans, advances or other extensions of credit received by such Borrower and all
interest, costs, fees and expenses attributable to such loans, advances or other extensions of
credit, then such Borrower shall be reimbursed by the other Borrowers for the amount of such
excess. This Section 12.18 is intended only to define the relative rights of Borrowers, and
nothing set forth in Section 12.18 is intended or shall impair the obligations of each Borrower,
jointly and severally, to pay to Agent and Lenders the Obligations as and when the same shall
become due and payable in accordance with the terms hereof. Notwithstanding anything to the
contrary set forth in this Section 12.18 or any other provisions of this Agreement, it is the
intent of the parties hereto that the liability incurred by each Borrower in respect of the
Obligations of the other Borrowers (and any Lien granted by each Borrower to secure such
Obligations), not constitute a fraudulent conveyance or fraudulent transfer under the provisions of
any applicable law of any state or other governmental unit (“Fraudulent Conveyance”).
Consequently, each Borrower, Agent and each Lender hereby agree that if a court of competent
jurisdiction determines that the incurrence of liability by any Borrower in respect of the
Obligations of any other Borrower (or any Liens granted by such Borrower to secure such
Obligations) would, but for the application of this sentence, constitute a Fraudulent Conveyance,
such liability (and such Liens) shall be valid and enforceable only to the maximum extent that
would not cause the same to constitute a Fraudulent Conveyance, and this Agreement and the other
Loan Documents shall automatically be deemed to have been amended accordingly, nunc pro tunc.


 


57









 





12.19 Patriot Act Notice. Agent and Lenders hereby notify Borrowers that pursuant to
the requirements of the Patriot Act, Agent and Lenders are required to obtain, verify and record
information that identifies each Borrower, including its legal name, address, tax ID number and
other information that will allow Agent and Lenders to identify it in accordance with the Patriot
Act. Agent and Lenders will also require information regarding each personal guarantor, if any,
and may require information regarding any Borrower’s management and owners, such as legal name,
address, social security number and date of birth.



(Signature Page Follows)




 


58









 









(Signature Page to Loan and Security Agreement)





IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year specified at the
beginning of this Agreement.



	 	 	 	 	 	 	 
	 	 	REWARDS NETWORK INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher J. Locke	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Christopher J. Locke

Senior Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	REWARDS NETWORK 
ESTABLISHMENT SERVICES INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher J. Locke	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Christopher J. Locke

Senior Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	REWARDS NETWORK 
INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher J. Locke	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Christopher J. Locke

Senior Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	RTR FUNDING LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher J. Locke	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Christopher J. Locke

Senior Vice President and Treasurer	 	 






 


 









 








(Signature Page to Loan and Security Agreement)




	 	 	 	 	 	 	 
	 	 	RESTAURANT CASH LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher J. Locke	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Christopher J. Locke

Senior Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	RESTAURANT CASH CALIFORNIA LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher J. Locke	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Christopher J. Locke

Senior Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	REWARDS NETWORK SERVICES INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher J. Locke	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Christopher J. Locke

Senior Vice President and Treasurer	 	 






 


 









 




(Signature Page to Loan and Security Agreement)




	 	 	 	 	 	 	 
	 	 	RBS BUSINESS CAPITAL, a division of RBS Asset Finance, Inc.,
as Agent and as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John S. Gil	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	John S. Gil

Vice President	 	 
	 
	 

	 	Revolving Loan Commitment: $25,000,000	 	 







 


 










 




APPENDIX A




GENERAL DEFINITIONS




When
used in the Loan and Security Agreement dated as of November 6, 2007, by and among RBS
Business Capital, a division of RBS Asset Finance, Inc., individually and as Agent, the other
financial institutions which are or become parties thereto and Rewards Network Inc. and each
domestic subsidiary of Rewards Network Inc. signatory thereto (a) the terms Account,
Certificated Security, Chattel Paper, Commercial Tort Claims, Deposit
Account, Document, Electronic Chattel Paper, Equipment, Financial
Asset, Fixture, General Intangibles, Goods, Instruments,
Inventory, Investment Property, Letter-of-Credit Rights, Payment
Intangibles, Proceeds, Security, Security Entitlement,
Software, Supporting Obligations, Tangible Chattel Paper and
Uncertificated Security have the respective meanings assigned thereto under the UCC;
(b) all terms reflecting Collateral having the meanings assigned thereto under the UCC shall be
deemed to mean such Property, whether now owned or hereafter created or acquired by any Borrower or
in which such Borrower now has or hereafter acquires any interest; (c) capitalized terms which are
not otherwise defined have the respective meanings assigned thereto in said Loan and Security
Agreement; and (d) the following terms shall have the following meanings (terms defined in the
singular to have the same meaning when used in the plural and vice versa):



Account Debtor - any Person who is or may become obligated under or on account of any
Account, Contract Right, Chattel Paper or General Intangible, including, without limitation, Dining
Credits.



Affiliate - a Person (other than a Subsidiary): (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under common control with,
a Person; (ii) which beneficially owns or holds 10% or more of any class of the Voting Stock of a
Person; or (iii) 10% or more of the Voting Stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest) of which is beneficially owned or held by a Person
or a Subsidiary of a Person.



Agent - RBS Citizens, N.A. in its capacity as agent for the Lenders under the
Agreement and any successor in that capacity appointed pursuant to subsection 11.11 of the
Agreement.



Agent’s Judgment – Agent’s commercially reasonable credit judgment determination on a
basis consistent with its credit procedures for lending purposes as generally applied.




Agent Loans — as defined in subsection 1.1.4 of the Agreement.



Aggregate Percentage - with respect to each Lender, the percentage equal to the
quotient of (i) such Lender’s Loan Commitment divided by (ii) the aggregate of all Loan
Commitments.



Agreement - the Loan and Security Agreement referred to in the first sentence of this
Appendix A, all Exhibits and Schedules thereto and this Appendix A, as each of the same may be
amended from time to time.



 


A-1









 





ALTA Survey — a survey prepared in accordance with the standards adopted by the
American Land Title Association and the American Congress on Surveying and Mapping in
 1997, known as the “Minimum Standard Detail Requirements of Land Title Surveys”. The ALTA
Survey shall be in sufficient form to satisfy the requirements of                      Title Insurance
Company to provide extended coverage over survey defects and shall also show the location of all
easements, utilities, and covenants of record, dimensions of all improvements, encroachments from
any adjoining property, and certify as to the location of any flood plain area affecting the
subject real estate. The ALTA Survey shall contain the following certification: “To [Name of
Applicable Borrower], RBS Citizens, N.A. as Agent, and                      Title Insurance Company. This
is to certify that this map of plat and the survey on which it is based were made in accordance
with the “Minimum Standard Detail Requirements for Land Title Surveys” jointly established and
adopted by ALTA and ACSM in 1997. (signed (SEAL) License No.                     ”.



Applicable Margin – with respect to Prime Rate Revolving Loans: zero percent (0%) and
with respect to LIBOR Revolving Loans: one and one-half percent (1.50%).



Assignment and Acceptance Agreement — an assignment and acceptance agreement in form
and content reasonably acceptable to Agent pursuant to which a Lender assigns to another Lender all
or any portion of any of such Lender’s Revolving Loan Commitment as permitted pursuant to the terms
of this Agreement.



Availability - the amount of additional money which Borrowers are entitled to borrow
from time to time as Revolving Credit Loans, such amount being the difference derived when the sum
of the principal amount of Revolving Credit Loans then outstanding (including any amounts which
Agent or any Lender may have paid for the account of any Borrower pursuant to any of the Loan
Documents and which have not been reimbursed by Borrowers), the LC Amount and any reserves is
subtracted from the Borrowing Base. If the amount outstanding is equal to or greater than the
Borrowing Base, Availability is 0.



Average Life – as of the date of determination, with respect to any Money Borrowed,
the quotient obtained by dividing (i) the sum of the products of numbers of months from the date of
determination to the dates of each successive scheduled principal payment of such Money Borrowed
multiplied by the amount of such payment by (ii) the sum of all such payments.



Bank – RBS Citizens, N.A.



Borrowing Base - as at any date of determination thereof, an amount equal to the
lesser of:



(i) the Revolving Credit Maximum Amount; and



(ii) an amount (the “Collateral Borrowing Base”) equal to the sum of



(a) 85% of the net amount of Eligible Accounts (other than Eligible Dining Credits and
Eligible RCR Loans) outstanding at such date; plus



(b) the lesser of (x) 50% of the net amount of Eligible Dining Credits and (y) 85% of the Net
Orderly Liquidation Value of Eligible Dining Credits outstanding at such time; plus




(c) the lesser of (x) $2,000,000 and (y) 50% of the net amount of Eligible RCR Loans
outstanding at such time.



 


A-2









 






The limitations set forth in the immediately preceding sentence and each of the advance rates
set forth above may be adjusted downward by Agent, as Agent shall deem necessary or appropriate in
Agent’s Judgment. For purposes hereof, (x) the net amount of Eligible Accounts at any time shall
be the face amount of such Eligible Accounts less any and all returns, rebates, discounts (which
may, at Agent’s option, be calculated on shortest terms), credits, allowances or excise taxes of
any nature at any time issued, owing, claimed by Account Debtors, granted, outstanding or payable
in connection with such Accounts at such time, (y) the net amount of Eligible Dining Credits shall
be the cash value of such Dining Credits less any reserve established by a Borrower with respect to
such Eligible Dining Credits and (z) the net amount of Eligible RCR Loans shall be the outstanding
principal balance of such Eligible RCR Loans less any reserves established by a Borrower with
respect to such Eligible RCR Loans.



Borrowing Base Certificate — a certificate by a responsible officer of Borrower
Representative, on its own behalf and on behalf of all other Borrowers, substantially in the form
of Exhibit 8.1.4 (or another form reasonably acceptable to Agent) setting forth the
calculation of the Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be reasonably satisfactory to Agent. All calculations of the Borrowing Base in
connection with the preparation of any Borrowing Base Certificate shall originally be made by
Borrowers and certified to Agent; provided, that Agent shall have the right to review and
adjust, in the exercise of Agent’s Judgment, any such calculation after giving notice thereof to
Borrowers, (1) to reflect its reasonable estimate of declines in value of any of the Collateral
described therein, and (2) to the extent that in Agent’s Judgment such calculation is not in
accordance with this Agreement.



Borrower Representative – Rewards Network Inc.



Business Day - any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the State of Illinois or is a day on which banking institutions located in either
of such states are closed.



Canadian Subsidiary(ies) – Rewards Network Canada GP Corp., a Nova Scotia corporation
and/or Rewards Network Canada L.P., an Ontario limited partnership.



Capital Expenditures - expenditures made or liabilities incurred for the acquisition
of any fixed assets or improvements, replacements, substitutions or additions thereto which have a
useful life of more than one year, including the total principal portion of Capitalized Lease
Obligations.



Capitalized Lease Obligation - any Indebtedness represented by obligations under a
lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.



 


A-3









 





Change of Control – an event or series of events by which:



(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than any such “person” or “group” existing as of the Closing Date, becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, provided that a person shall be deemed to have “beneficial ownership” of all
securities that such person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of thirty-five percent (35%) or more of
the combined voting power of Borrower Representative’s outstanding Equity Interests ordinarily
having the right to vote at an election of directors; or



(b) the majority of the board of directors of Borrower Representative fails to consist of
Continuing Directors; or



(c) Borrower Representative consolidates with or mergers into another corporation or conveys,
transfers or leases all or substantially all of its property to any Person, or any corporation
consolidates with or merges into Borrower Representative, in any such event pursuant to a
transaction in which the outstanding Equity Interests of Borrower Representative are reclassified
or changed into or exchanged for cash, securities (not constituting Equity Interests) or other
property; or



(d) Borrower Representative shall cease to own and control directly or indirectly all of the
economic and voting rights associated with all of the outstanding Equity Interests of its existing
Subsidiaries so owned and controlled as of the Closing Date.



Closing Date - the date on which all of the conditions precedent in Section 9 of the
Agreement are satisfied or waived and the initial Loan is made or the initial Letter of Credit or
LC Guaranty is issued under the Agreement.



Collateral - all of the Property and interests in Property described in Section 5 of
the Agreement, and all other Property and interests in Property that now or hereafter secure the
payment and performance of any of the Obligations.




Collateral Borrowing Base – as defined in the definition of Borrowing Base.



Compliance Certificate — as defined in subsection 8.1.3 of the Agreement.



Computer Hardware and Software — all of any Borrower’s rights (including rights as
licensee and lessee) with respect to (i) computer and other electronic data processing hardware,
including all integrated computer systems, central processing units, memory units, display
terminals, printers, computer elements, card readers, tape drives, hard and soft disk drives,
cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices
and other related computer hardware; (ii) all Software and all software programs designed for use
on the computers and electronic data processing hardware described in clause (i) above, including
all operating system software, utilities and application programs in any form (source code and
object code in magnetic tape, disk or hard copy format or any other listings whatsoever); (iii) any
firmware associated with any of the foregoing; and (iv) any documentation for hardware, Software
and firmware described in clauses (i), (ii) and (iii) above, including flow charts, logic diagrams,
manuals, specifications, training materials, charts and pseudo codes.



Consolidated - the consolidation in accordance with GAAP of the accounts or other
items as to which such term applies.


 


A-4









 





Continuing Director - means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (a) was a member of such
board of directors on the date of this Agreement, or (b) was nominated for election or elected to
such board of directors with the approval of the Continuing Directors who were members of such
board at the time of such nomination or election.



Contract Right — any right of any Borrower to payment under a contract for the sale or
lease of goods or the rendering of services, which right is at the time not yet earned by
performance.



Convertible Debentures – those certain 3.25% Convertible Subordinated Debentures
issued by Borrower Representative pursuant to the terms and conditions of that certain Indenture
dated October 15, 2003 by and among Borrower Representative (f/k/a iDine Rewards Network Inc.) and
LaSalle National Bank Association, as Trustee, as the same may be amended, supplemented, restated
or modified from time to time.



Default - an event or condition the occurrence of which would, with the lapse of time
or the giving of notice, or both, become an Event of Default.




Default Rate - as defined in subsection 2.1.2 of the Agreement.



Defaulted Lender – as defined in the definition of Majority Lenders.



Derivative Obligations - every obligation of a Person under any forward contract,
futures contract, exchange contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar agreement), the value of which is
dependent upon interest rates, currency exchange rates, commodities or other indices.



Dining Contract(s) – as defined in the definition of Dining Credits.



Dining Credit Account Debtor – as defined in the definition of Dining Credits.



Dining Credits – amounts owed to a Borrower and arising out of a contract or agreement
(“Dining Contract”) between a Borrower and a Person engaged in the restaurant industry (a “Dining
Credit Account Debtor”) pursuant to which, inter alia, a Borrower shall (i) advance
funds to the Dining Credit Card Account Debtor to purchase future credit card receivables generated
by qualified transactions at the Dining Credit Account Debtor by members of Borrowers’ programs and
(ii) agree to provide other services to such Dining Credit Account Debtor, and said Dining Credit
Account Debtor shall pay the applicable Borrower the purchased future credit card receivables and
other amounts due under the applicable Dining Contract to the applicable Borrower.



Distribution - in respect of any Person means and includes: (i) the payment of any
dividends or other distributions on Securities (except distributions in such Securities) and
(ii) the redemption or acquisition of Securities of such Person, as the case may be, unless made
contemporaneously from the net proceeds of the sale of Securities.


 


A-5









 





Dominion Account - a special bank account or accounts of Agent established by
Borrowers or any one of them pursuant to subsection 6.2.4 of the Agreement at banks selected by
Borrower Representative, but acceptable to Agent in its reasonable discretion, and over which Agent
shall have sole and exclusive access and control for withdrawal purposes.



Eligible Account - an Account arising in the ordinary course of the business of any
Borrower from the sale of goods or rendition of services which Agent, in Agent’s Judgment, deems to
be an Eligible Account. Without limiting the generality of the foregoing, no Account shall be an
Eligible Account if:



(i) it arises out of a sale made or services rendered by a Borrower to a Subsidiary of a
Borrower or an Affiliate of a Borrower or to a Person controlled by an Affiliate of a Borrower; or



(ii) it remains unpaid more than 10 days after the original due date; or



(iii) the total unpaid Accounts of the Account Debtor exceed 20% of the net amount of all
Eligible Accounts, but only to the extent of such excess; or



(iv) any covenant, representation or warranty contained in the Agreement with respect to such
Account has been breached; or



(v) the Account Debtor is also a creditor or supplier of a Borrower or any Subsidiary of a
Borrower, or the Account Debtor has disputed liability with respect to such Account, or the Account
Debtor has made any claim with respect to any other Account due from such Account Debtor to a
Borrower or any Subsidiary of a Borrower, or the Account otherwise is or may become subject to
right of setoff by the Account Debtor, provided, that any such Account shall be eligible to
the extent such amount thereof exceeds such contract, dispute, claim, setoff or similar right; or



(vi) the Account Debtor has commenced a voluntary case under the federal bankruptcy laws, as
now constituted or hereafter amended, or made an assignment for the benefit of creditors, or a
decree or order for relief has been entered by a court having jurisdiction in the premises in
respect of the Account Debtor in an involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or any other petition or other application for relief under the
federal bankruptcy laws, as now constituted or hereafter amended, has been filed against the
Account Debtor, or if the Account Debtor has failed, suspended business, ceased to be Solvent, or
consented to or suffered a receiver, trustee, liquidator or custodian to be appointed for it or for
all or a significant portion of its assets or affairs; or



(vii) it arises from a sale made or services rendered to an Account Debtor outside the United
States, unless the sale is either (1) to an Account Debtor located in Ontario or any other province
of Canada in which the Personal Property Security Act has been adopted in substantially the same
form as currently in effect in Ontario or (2) on letter of credit, guaranty or acceptance terms, in
each case acceptable to Agent in its reasonable credit judgment; or



(viii) it is subject to a reserve established by a Borrower for potential returns or refunds,
to the extent of such reserve; or


 


A-6









 





(ix) the Account Debtor is the United States of America or any department, agency or
instrumentality thereof, unless the applicable Borrower assigns its right to payment of such
Account to Agent, in a manner satisfactory to Agent, in its reasonable credit judgment, so as to
comply with the Assignment of Claims Act of 1940 (31 U.S.C. §203 et seq., as
amended); or



(x) it is not at all times subject to Agent’s duly perfected, first priority security interest
or is subject to a Lien that is not a Permitted Lien; or



(xi) the services giving rise to such Account have not been performed by the applicable
Borrower and accepted by the Account Debtor or the Account otherwise does not represent a final
sale; or



(xii) the Account is evidenced by chattel paper or an instrument of any kind, or has been
reduced to judgment; or



(xiii) Any Borrower or a Subsidiary of any Borrower has made any agreement with the Account
Debtor for any extension, compromise, settlement or modification of the Account or deduction
therefrom, except for discounts or allowances which are made in the ordinary course of business for
prompt payment and which discounts or allowances are reflected in the calculation of the face value
of each invoice related to such Account; or



(xiv) 25% or more of the Accounts owing from the Account Debtor are not Eligible Accounts
hereunder; or



(xv) it represents service charges, late fees or similar charges; or



(xvi) payment of the applicable Account has been rejected; or



(xvii) it is not otherwise acceptable to Agent in Agent’s Judgment.



For purposes of this Agreement, Eligible Accounts shall not include Eligible Dining Credits
and Eligible RCR Loans; provided, however, that Eligible Accounts shall include
amounts that have become due and owing under any Dining Contract as a result of a customer of such
Dining Credit Account Debtor making a purchase with an affinity credit card.



Eligible Dining Credits – a Dining Credit arising in the ordinary course of the
business of any Borrower which Agent, in Agent’s Judgment, deems to be an Eligible Dining Credit.
Without limiting the generality of the foregoing, no Dining Credit shall be an Eligible Dining
Credit if:



(i) it arises out of advances made or services rendered by a Borrower to a Subsidiary of a
Borrower or an Affiliate of a Borrower or to a Person controlled by an Affiliate of a Borrower; or



(ii) the applicable Dining Credit Account Debtor has committed a material breach of the
applicable Dining Contract and such breach continues uncured or unwaived for fourteen (14) days;


 


A-7









 





(iii) the total unpaid Dining Credits of the Dining Credit Account Debtor exceed 20% of the
net amount of all Dining Credits, but only to the extent of such excess; or



(iv) any covenant, representation or warranty contained in the Agreement with respect to such
Dining Credit has been breached; or



(v) the Dining Credit Account Debtor is also a creditor or supplier of a Borrower or any
Subsidiary of a Borrower, or the Dining Credit Account Debtor has disputed liability with respect
to such Dining Credit, or the Dining Credit Account Debtor has made any claim with respect to any
other Dining Credit due from such Dining Credit Account Debtor to a Borrower or any Subsidiary of a
Borrower, or the Dining Credit otherwise is or may become subject to right of setoff by the Dining
Credit Account Debtor, provided, that any such Dining Credit or other Account shall be
eligible to the extent such amount thereof exceeds such contract, dispute, claim, setoff or similar
right; or



(vi) the Dining Credit Account Debtor has commenced a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or made an assignment for the benefit of
creditors, or a decree or order for relief has been entered by a court having jurisdiction in the
premises in respect of the Dining Credit Account Debtor in an involuntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other petition or other
application for relief under the federal bankruptcy laws, as now constituted or hereafter amended,
has been filed against the Dining Credit Account Debtor, or if the Dining Credit Account Debtor has
failed, suspended business, ceased to be Solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant portion of its assets or
affairs; or



(vii) it arises from an advance made or services rendered to a Dining Credit Account Debtor
outside the United States, unless the advance made or services rendered is either (1) to an Dining
Credit Account Debtor located in Ontario or any other province of Canada in which the Personal
Property Security Act has been adopted in substantially the same form as currently in effect in
Ontario or (2) on letter of credit, guaranty or acceptance terms, in each case acceptable to Agent
in its reasonable credit judgment; or



(viii) it is not at all times subject to Agent’s duly perfected, first priority security
interest or is subject to a Lien that is not a Permitted Lien; or




(ix) the Dining Credit has been reduced to judgment; or



(x) Any Borrower or a Subsidiary of any Borrower has made any agreement with the Dining Credit
Account Debtor for any extension, compromise, settlement or modification of the Dining Credit or
deduction therefrom other than in the ordinary course of business; or



(xi) 25% or more of the Dining Credits owing from the Dining Credit Account Debtor are not
Eligible Dining Credits hereunder; or



(xii) it represents service charges, late fees or similar charges; or



(xiii) it is not otherwise acceptable to Agent in Agent’s Judgment.


 


A-8









 





For purposes of this Agreement, Eligible Dining Credits shall not include amounts that have
become due under any Dining Contract as a result of a customer of such Dining Credit Account Debtor
making a purchase with an affinity credit card, which amounts are eligible to be included in
Eligible Accounts.



Eligible RCR Loans — an RCR Loan arising in the ordinary course of the business of any
Borrower which Agent, in Agent’s Judgment, deems to be an Eligible RCR Loan. Without limiting the
generality of the foregoing, no RCR Loan shall be an Eligible RCR Loan if:



(i) it arises out of advances made by a Borrower to a Subsidiary of a Borrower or an Affiliate
of a Borrower or to a Person controlled by an Affiliate of a Borrower; or




(ii) it, or any portion thereof, remains unpaid more than 5 days after the due date; or



(iii) the total unpaid RCR Loans of the RCR Loan Account Debtor exceed 20% of the net amount
of all RCR Loans, but only to the extent of such excess; or



(iv) any covenant, representation or warranty contained in the Agreement with respect to such
RCR Loan has been breached; or



(v) the RCR Loan Account Debtor is also a creditor or supplier of a Borrower or any Subsidiary
of a Borrower, or the RCR Loan Account Debtor has disputed liability with respect to such RCR Loan,
or the RCR Loan Account Debtor has made any claim with respect to any other RCR Loan due from such
RCR Loan Account Debtor to a Borrower or any Subsidiary of a Borrower, or the RCR Loan otherwise is
or may become subject to right of setoff by the RCR Loan Account Debtor, provided, that any
such RCR Loan shall be eligible to the extent such amount thereof exceeds such contract, dispute,
claim, setoff or similar right; or



(vi) the RCR Loan Account Debtor has commenced a voluntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or made an assignment for the benefit of creditors,
or a decree or order for relief has been entered by a court having jurisdiction in the premises in
respect of the RCR Loan Account Debtor in an involuntary case under the federal bankruptcy laws, as
now constituted or hereafter amended, or any other petition or other application for relief under
the federal bankruptcy laws, as now constituted or hereafter amended, has been filed against the
RCR Loan Account Debtor, or if the RCR Loan Account Debtor has failed, suspended business, ceased
to be Solvent, or consented to or suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets or affairs; or



(vii) the RCR Loan Account Debtor is located outside the United States, unless either (1) to
an RCR Loan Account Debtor located in Ontario or any other province of Canada in which the Personal
Property Security Act has been adopted in substantially the same form as currently in effect in
Ontario or (2) the applicable RCR Loan is secured by a letter of credit, guaranty or acceptance
terms, in each case acceptable to Agent in its reasonable credit judgment; or



(viii) it is not at all times subject to Agent’s duly perfected, first priority security
interest (which may be effected by designating an employee of a Borrower to act as an agent of
Agent for purposes of holding Instruments) or is subject to a Lien that is not a Permitted Lien; or


 


A-9









 





(ix) the RCR Loan has been reduced to judgment; or



(x) Any Borrower or a Subsidiary of any Borrower has made any agreement with the RCR Loan
Account Debtor for any extension, compromise, settlement or modification of the RCR Loan or
deduction therefrom; or



(xi) 25% or more of the RCR Loans owing from the RCR Loan Account Debtor are not Eligible RCR
Loans hereunder; or



(xii) it represents service charges, late fees or similar charges; or



(xiii) it is not otherwise acceptable to Agent in Agent’s Judgment.



Environmental Laws - all federal, state and local laws, rules, regulations,
ordinances, orders and consent decrees relating to health, safety and environmental matters.



Equity Interest – the interest of any (a) shareholder in a corporation, (b) partner in
a partnership (whether general, limited, limited liability or joint venture), (c) member in a
limited liability, company, or (d) other Person having any other form of equity security or
ownership interest.



ERISA - the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute, and all rules and regulations from time to time promulgated thereunder.




Event of Default - as defined in Section 10.1 of the Agreement.



Fee Letter - as defined in Section 2.3 of the Agreement.



GAAP - generally accepted accounting principles in the United States of America in
effect from time to time.



Gross Availability – the amount being the difference derived when the sum of the
principal amount of Revolving Credit Loans then outstanding (including any amounts which Agent or
any Lender may have paid for the account of any Borrower pursuant to any of the Loan Documents and
which have not been reimbursed by Borrowers), the LC Amount and any reserves is subtracted from the
Collateral Borrowing Base. If the amount outstanding is equal to or greater than the Collateral
Borrowing Base, Gross Availability is 0.



Guarantors – any Person who now or hereafter guarantees payment or performance of the
whole or any part of the Obligations.



Guaranty Agreements - any Continuing Guaranty Agreement, in form and substance
reasonably satisfactory to Agent, together with each other guaranty hereafter executed by any
Guarantor.



Inactive Subsidiary – as defined in subsection 7.1.5 of the Agreement.



Indebtedness - as applied to a Person means, without duplication:


 


A-10









 





(i) all items which in accordance with GAAP would be included in determining total liabilities
as shown on the liability side of a balance sheet of such Person as at the date as of which
Indebtedness is to be determined, including, without limitation, Capitalized Lease Obligations;



(ii) all obligations of other Persons which such Person has guaranteed;



(iii) all reimbursement obligations in connection with letters of credit or letter of credit
guaranties issued for the account of such Person;



(iv) Derivative Obligations; and



(v) in the case of Borrowers (without duplication), the Obligations.



Intellectual Property - all past, present and future: trade secrets, know-how and
other proprietary information; trademarks, internet domain names, service marks, trade dress, trade
names, business names, designs, logos, slogans (and all translations, adaptations, derivations and
combinations of the foregoing) indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications for registrations
which have heretofore been or may hereafter be issued thereon throughout the world; copyrights
(including copyrights for computer programs) and copyright registrations or applications for
registrations which have heretofore been or may hereafter be issued throughout the world and all
tangible property embodying the copyrights, unpatented inventions (whether or not patentable);
patent applications and patents; industrial design applications and registered industrial designs;
license agreements related to any of the foregoing and income therefrom; books, records, writings,
computer tapes or disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical manifestations, embodiments or
incorporations of any of the foregoing; the right to sue for all past, present and future
infringements of any of the foregoing; all other intellectual property; and all common law and
other rights throughout the world in and to all of the foregoing.



Interest Payment Date –as to any Prime Rate Loan, the first day of each calendar
month, and (b) as to any LIBOR Rate Loan, the last day of each Interest Period for such LIBOR Rate
Loan, and in addition, where the applicable Interest Period exceeds three months, the date every
three months after the beginning of such Interest Period. If an Interest Payment Date falls on a
date that is not a Business Day, such Interest Payment Date shall be deemed to be the immediately
succeeding Business Day.




Interest Period - relative to any LIBOR Rate Loans



(a) initially, the period beginning on (and including) the date on which such LIBOR Rate Loan
is made or continued as, or converted into, a LIBOR Rate Loan pursuant to Section 3.1 and
ending on (but excluding) the day which numerically corresponds to such date one, two or three
months thereafter (or, if such month has no numerically corresponding day, on the last Business Day
of such month), in each case as the Borrower may select in its notice pursuant to
Section 3.1; and


 


A-11









 





(b) thereafter, each period commencing on the last day of the next preceding Interest Period
applicable to such LIBOR Rate Loan and ending one, two or three months thereafter, as selected by
the Borrower by irrevocable notice to Agent not less than two Business Days prior to the last day
of the then current Interest Period with respect thereto;



provided, however, that



(c) all Interest Periods of the same duration which commence on the same date shall end on the
same date;



(d) Interest Periods commencing on the same date for LIBOR Rate Loans comprising part of the
same advance under this agreement shall be of the same duration;



(e) Interest Periods for LIBOR Rate Loans in connection with which Borrowers have or may incur
Hedging Obligations with Agent shall be of the same duration as the relevant periods set under the
applicable Hedging Contracts;



(f) if such Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next following Business Day unless such day falls in the next
calendar month, in which case such Interest Period shall end on the first preceding Business Day;
and




(g) no Interest Period may end later than the termination of this agreement.



LC Amount - at any time, the greater of the aggregate maximum committed amount and the
aggregate undrawn available amount of all Letters of Credit and LC Guaranties then outstanding.



LC Guaranty - any guaranty pursuant to which Agent or any Affiliate of Agent shall
guaranty the payment or performance by Borrowers of their reimbursement obligation under any letter
of credit.



LC Obligations - any Obligations that arise from any draw against any Letter of Credit
or against any Letter of Credit supported by an LC Guaranty.



Letter of Credit - any standby or documentary letter of credit issued by Agent or any
Affiliate of Agent for the account of any Borrower.



LIBOR – relative to any Interest Period for LIBOR Rate Loans, the offered rate for
deposits of U.S. Dollars in an amount approximately equal to the amount of the requested LIBOR Rate
Loans for a term coextensive with the designated Interest Period which the British Bankers’
Association fixes as its LIBOR rate as of 11:00 a.m. London time on the day which is two London
Banking Days prior to the beginning of such Interest Period.



LIBOR Lending Rate – relative to any LIBOR Rate Loan to be made, continued or
maintained as, or converted into, a LIBOR Rate Loan for any Interest Period, a rate per annum
determined pursuant to the following formula:


 


A-12









 





	 	 	 	 	 
	LIBOR Lending Rate

	 	=
	 	LIBOR
	 

	 	 	 	 
	 

	 	 	 	(1.00 – LIBOR Reserve Percentage)






LIBOR Rate Loans – the LIBOR Revolving Loans.



LIBOR Option – the option granted pursuant to Section 3.1 of the Agreement to have the
interest on all or any portion of the principal amount of the Revolving Credit Loans based on the
LIBOR.



LIBOR Request - a notice in writing (or by telephone confirmed electronically or by
telecopy or other facsimile transmission on the same day as the telephone request) from Borrower
Representative to Agent requesting that interest on a Revolving Credit Loan be based on the LIBOR
Lending Rate, specifying: (i) the first day of the Interest Period (which shall be a Business Day);
(ii) the length of the Interest Period; (iii) whether the LIBOR Rate Loan is a new Loan, a
conversion of a Prime Rate Loan, or a continuation of a LIBOR Rate Loan; and (iv) the dollar amount
of the LIBOR Rate Loan, which shall be in an amount not less than $500,000 or an integral multiple
of $100,000 in excess thereof.



LIBOR Reserve Percentage – relative to any day of any Interest Period for LIBOR Rate
Loans, the maximum aggregate (without duplication) of the rates (expressed as a decimal fraction)
of reserve requirements (including all basic, emergency, supplemental, marginal and other reserves
and taking into account any transitional adjustments or other scheduled changes in reserve
requirements) under any regulations of the Board of Governors of the Federal Reserve System (the
“Board”) or other governmental authority having jurisdiction with respect thereto as issued from
time to time and then applicable to assets or liabilities consisting of “Eurocurrency Liabilities,”
as currently defined in Regulation D of the Board, having a term approximately equal or comparable
to such Interest Period.



LIBOR Revolving Loan – any Revolving Loan for the periods when the rate of interest
applicable to such Revolving Loan is calculated by reference to the LIBOR Lending Rate.



Lien – any interest in Property securing an obligation owed to, or a claim by, a
Person other than the owner of the Property, whether such interest is based on common law, statute
or contract. The term “Lien” shall also include rights of seller under conditional sales contracts
or title retention agreements, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting
Property. For the purpose of the Agreement, a Borrower shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement or other
arrangement pursuant to which title to the Property has been retained by or vested in some other
Person for security purposes.



Loan Account - the loan account established on the books of Agent pursuant to
Section 3.6 of the Agreement.



Loan Commitment - with respect to any Lender, the amount of such Lender’s Revolving
Loan Commitment.



Loan Documents - the Agreement, the Other Agreements and the Security Documents.


 


A-13









 





Loans - all loans and advances of any kind made by Agent, any Lender, or any Affiliate
of Agent or any Lender, pursuant to the Agreement.



London Banking Day - any date on which commercial banks are open for business in
London, England.



Majority Lenders - as of any date, Lenders holding greater than 50% of the Revolving
Loan Commitments determined on a combined basis and following the termination of the Revolving Loan
Commitments, Lenders holding greater than 50% of the outstanding Loans, LC Amounts and LC
Obligations not yet reimbursed by Borrower or funded with a Revolving Credit Loan;
provided, that (i) in each case, if there are 2 or more Lenders with outstanding Loans, LC
Amounts, unfunded and unreimbursed LC Obligations or Revolving Loan Commitments, at least 2 Lenders
shall be required to constitute Majority Lenders; and (ii) prior to termination of the Revolving
Loan Commitments, if any Lender (a “Defaulted Lender”) breaches its obligation to fund any
requested Revolving Credit Loan, then for so long as such breach exists, such Defaulted Lender’s
Revolving Loan Commitments, outstanding Loans and LC Obligations shall be excluded for the purposes
of calculating Majority Lenders.



Material Adverse Effect - (i) a material adverse effect on the business, financial
condition, operation, performance or properties of Borrowers and their Subsidiaries taken as a
whole, (ii) a material adverse effect on the rights and remedies of Agent or Lenders under the Loan
Documents, or (iii) the material impairment of the ability of any Borrowers and any of their
Subsidiaries, taken as a whole, to perform its obligations hereunder or under any Loan Document.



Money Borrowed - (i) Indebtedness arising from the lending of money by any Person to
any Borrower or any of its Subsidiaries; (ii) Indebtedness, whether or not in any such case arising
from the lending by any Person of money to any Borrower or any of its Subsidiaries, (1) which is
represented by notes payable or drafts accepted that evidence extensions of credit, (2) which
constitutes obligations evidenced by bonds, debentures, notes or similar instruments, or (3) upon
which interest charges are customarily paid (other than accounts payable) or that was issued or
assumed as full or partial payment for Property; (iii) Indebtedness that constitutes a Capitalized
Lease Obligation; (iv) reimbursement obligations with respect to letters of credit or guaranties of
letters of credit and (v) Indebtedness of any Borrower or any of its Subsidiaries under any
guaranty of obligations that would constitute Indebtedness for Money Borrowed under clauses (i)
through (iii) hereof, if owed directly by Borrower or any of its Subsidiaries. Money Borrowed
shall not include trade payables or accrued expenses.



Multiemployer Plan - has the meaning set forth in Section 4001(a)(3) of ERISA.



New Mortgages — as defined in Section 5.4 of the Agreement.



Notes - the Revolving Notes.


 


A-14









 





Obligations - all Loans, all LC Obligations, all reimbursement and other obligations
with respect to Letters of Credit and all other advances, debts, liabilities, obligations,
covenants and duties, together with all interest, fees and other charges thereon, owing, arising,
due or payable from any Borrower to Agent, for its own benefit, from any Borrower to Agent for the
benefit of
any Lender, from any Borrower to any Lender or from any Borrower to Bank or any other
Affiliate of Agent, of any kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under the Agreement or any of the other Loan
Documents or otherwise, whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due, now existing or hereafter
arising and however acquired, including without limitation any Product Obligations owing to Agent,
any Lender, Bank or any Affiliate of Bank or Agent.



Organizational I.D. Number - with respect to any Person, the organizational
identification number assigned to such Person by the applicable governmental unit or agency of the
jurisdiction of organization of such Person.



Other Agreements - any and all agreements, instruments and documents (other than the
Agreement and the Security Documents), heretofore, now or hereafter executed by Borrower, any
Subsidiary of Borrower or any other third party and delivered to Agent or any Lender in respect of
the transactions contemplated by the Agreement.



Overadvance - as defined in subsection 1.1.2 of the Agreement.



Patent Security Agreement - any patent collateral assignment agreement pursuant to
which any Borrower assigns to Agent, for the benefit of Lenders, such Person’s interests in its
patents, as security for the Obligations.



Payment Item: each check, draft or other item of payment payable to a Borrower,
including those constituting proceeds of any Collateral.



Permitted Liens - any Lien of a kind specified in subsection 8.2.5 of the Agreement.



Permitted Purchase Money Indebtedness - Purchase Money Indebtedness of any Borrower
incurred after the date hereof which is secured by a Purchase Money Lien and the principal amount
of which, when aggregated with the principal amount of all other such Indebtedness and Capitalized
Lease Obligations of Borrowers and their Subsidiaries at the time outstanding, does not exceed
$500,000. For the purposes of this definition, the principal amount of any Purchase Money
Indebtedness consisting of capitalized leases (as opposed to operating leases) shall be computed as
a Capitalized Lease Obligation.



Permitted Refinancing – Money Borrowed that Refinances any Indebtedness of a Borrower
or a Subsidiary of a Borrower existing on the closing of incurred in compliance with this
Agreement, including, Money Borrowed that Refinances Permitted Refinancings; provided,
however, that



(i) except with respect to Refinancings of the Convertible Debentures, such Permitted
Refinancing has a Stated Maturity no earlier than the Stated Maturity of the Money Borrowed being
Refinanced;



(ii) except with respect to Refinancings of the Convertible Debentures, such Permitted
Refinancing has an Average Life at the time such Permitted Refinancing is incurred that is equal to
or greater than the Average Life of the Money Borrowed being Refinanced;


 


A-15









 





(iii) such Permitted Refinancing has an aggregate principal amount (or if incurred with
original issue discount, an aggregate issue price) that is equal to or less than the aggregate
principal amount (or if incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and defeasance costs) under
the Money Borrowed being Refinanced; and



(iv) the terms and conditions of the proposed Permitted Refinancing, taken as a whole, as
determined by Agent, in Agent’s Judgment, are not more adverse, in any material respect, to
Borrowers or Agent and Lenders than the Money Borrowed being Refinanced.



Person - an individual, partnership, corporation, limited liability company, joint
stock company, land trust, business trust, or unincorporated organization, or a government or
agency or political subdivision thereof.



Plan - an employee benefit plan now or hereafter maintained for employees of any
Borrower or any of their Subsidiaries that is covered by Title IV of ERISA.



Pledge Agreement – the Pledge Agreement to be executed by Borrower Representative or
any other Borrower as applicable on or abut the Closing Date, or thereafter, in favor of Agent for
the benefit of itself and Lenders with respect to the common equity Securities of each Borrower
Representative’s Subsidiaries, as such Pledge Agreement shall be amended from time to time after
the Closing Date.



Prime Rate – the rate of interest announced by Bank in Chicago, Illinois from time to
time as its “Prime Rate.” Borrower acknowledges that Bank may make loans to its customers above,
at or below the Prime Rate. Interest accruing by reference to the Prime Rate shall be calculated
on the basis of actual days elapsed and a 360-day year.



Prime Rate Revolving Loan or Prime Rate Loans – any Revolving Loan for the periods
when the rate of interest applicable to such Revolving Loan is calculated by reference to the Prime
Rate.



Product Obligations - every obligation of any Borrower under and in respect of any one
or more of the following types of services or facilities extended to such Borrower by Bank, Agent,
any Lender or any Affiliate of Bank or Agent: (i) credit cards, (ii) cash management or related
services including the automatic clearing house transfer of funds for the account of such Borrower
pursuant to agreement or overdraft, (iii) treasury management, including controlled disbursement
services and (iv) Derivative Obligations.



Projections – Borrowers’ forecasted Consolidated and consolidating (i) balance sheets,
(ii) profit and loss statements, (iii) cash flow statements, and (iv) capitalization statements,
all prepared on a consistent basis with the historical financial statements of Borrowers and their
Subsidiaries, together with appropriate supporting details and a statement of underlying
assumptions.



Property - any interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible.


 


A-16









 





Public Filings – RNI’s annual reports on Form 10-K as filed with the SEC and RNI’s
quarterly reports on Form 10-Q as filed with the SEC.



Purchase Money Indebtedness - includes (i) Indebtedness (other than the Obligations)
for the payment of all or any part of the purchase price of any fixed assets, (ii) any Indebtedness
(other than the Obligations) incurred at the time of or within 10 days prior to or after the
acquisition of any fixed assets for the purpose of financing all or any part of the purchase price
thereof, and (iii) any renewals, extensions or refinancings thereof, but not any increases in the
principal amounts thereof outstanding at the time.



Purchase Money Lien - a Lien upon fixed assets which secures Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to the fixed assets the
purchase price of which was financed through the incurrence of the Purchase Money Indebtedness
secured by such Lien.



RBS – as defined in the preamble hereto.



RCR Account Debtor – as defined in the definition of RCR Loans.



RCR Loans – amounts owed to a Borrower and arising out of a loan agreement or similar
document (“RCR Loan Documents”) between a Borrower and a Person engaged in the restaurant or
hospitality industry (“RCR Loan Account Debtor”) pursuant to which a Borrower shall advance funds
to such RCR Loan Account Debtor and said RCR Loan Account Debtor shall repay such advances pursuant
to regularly scheduled installments of principal and interest as set forth in the applicable RCR
Loan Documents.



RCR Loan Documents – as defined in the definition of RCR Loans.



Refinance – in respect of any Indebtedness, to refinance, extend, renew, refund,
repay, prepay, purchase, redeem, defease or retire, or to issue other Indebtedness in exchange or
replacement for, such Indebtedness. Refinanced and Refinancing shall have
correlative meanings.



Reportable Event - any of the events set forth in Section 4043(c) of ERISA.



Reserve Percentage - the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve
System against “Euro-currency Liabilities” as defined in Regulation D.



Responsible Officer – Borrower Representative’s chief financial officer and such other
officer of Borrower Representative designated as such to Agent by such chief financial officer.



 


A-17









 





Restricted Investment - any investment made in cash or by delivery of Property to any
Person, whether by acquisition of stock, Indebtedness or other obligation or Security, or by loan,
advance or capital contribution, or otherwise, or in any Property except the following:



(i) investments by a Borrower, to the extent existing on the Closing Date, in one or more
Subsidiaries of such Borrower;



(ii) Property to be used in the ordinary course of business;



(iii) Current Assets arising from the sale of goods and services in the ordinary course of
business of any Borrower or any of its Subsidiaries;



(iv) investments in direct obligations of the United States of America, or any agency thereof
or obligations guaranteed by the United States of America; provided that such obligations
mature within one year from the date of acquisition thereof;



(v) investments in certificates of deposit maturing within one year from the date of
acquisition and fully insured by the Federal Deposit Insurance Corporation;



(vi) investments in commercial paper given the highest rating by a national credit rating
agency and maturing not more than 270 days from the date of creation thereof;



(vii) investments in money market, mutual or similar funds having assets in excess of
$100,000,000 and the investments of which are limited to investment grade securities;



(viii) intercompany loans permitted under subsection 8.2.2(v) of the Agreement;



(ix) investments existing on the date hereof and listed on Exhibit 8.2.11 hereto; and



(x) investments otherwise expressly permitted pursuant to the Agreement.



Revolving Credit Loan - a Loan made by any Lender pursuant to Section 1.1 of the
Agreement.



Revolving Credit Maximum Amount - $25,000,000.



Revolving Loan Commitment - with respect to any Lender, the amount of such Lender’s
Revolving Loan Commitment pursuant to subsection 1.1.1 of the Agreement, as set forth below such
Lender’s name on the signature page hereof or any Assignment and Acceptance Agreement executed by
such Lender.



Revolving Loan Percentage - with respect to each Lender, the percentage equal to the
quotient of such Lender’s Revolving Loan Commitment divided by the aggregate of all
Revolving Loan Commitments.



Revolving Notes - the Secured Promissory Notes to be executed by Borrowers on or about
the Closing Date in favor of each Lender to evidence the Revolving Credit Loans, which shall be in
the form of Exhibit 1.1 to the Agreement, together with any replacement or successor notes
therefor.



SEC – the Securities and Exchange Commission.



Security - all shares of stock, partnership interests, membership interests,
membership units or other ownership interests in any other Person and all warrants, options or
other rights to acquire the same.


 


A-18









 





Security Documents - the Guaranty Agreements, the Patent Security Agreement, the
Pledge Agreement, the Trademark Security Agreement and all other instruments and agreements now or
at any time hereafter securing the whole or any part of the Obligations.



Solvent - as to any Person, that such Person (i) owns Property whose fair saleable
value delivered on a going concern basis is greater than the amount required to pay all of such
Person’s Indebtedness (including contingent debts), (ii) is able to pay all of its Indebtedness as
such Indebtedness matures in the ordinary course of business and (iii) has capital sufficient to
carry on its business and transactions and all business and transactions in which it is about to
engage.



Stated Maturity – means, with respect, to any Money Borrowed, the date specified in
such agreements evidencing such Money Borrowed as the fixed date on which the final payment of
principal of such Money Borrowed is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such security at the option
of the holder thereof upon the happening of any contingency unless such contingency has occurred).



Subordinated Debt - Indebtedness of any Borrower or any Subsidiary of any Borrower
that is subordinated to the Obligations in a manner reasonably satisfactory to Agent, and contains
terms, including without limitation, payment terms, satisfactory to Agent.



Subsidiary - any Person of which another Person owns, directly or indirectly through
one or more intermediaries, more than 50% of the Voting Stock at the time of determination.



Term - as defined in Section 4.1 of the Agreement.



Total Credit Facility - $25,000,000, as reduced or increased from time to time
pursuant to the terms of the Agreement.



Trademark Security Agreement – any trademark collateral assignment pursuant to which
any Borrower assigns to Agent, for the benefit of Lenders, such Person’s interest in its trademarks
as security for the Obligations.



Trigger Period – the period (a) commencing on the day the principal amount of
outstanding Revolving Credit Loans exceeds $0; and (b) continuing until the principal amount of
outstanding Revolving Credit Loans is $0.



Type of Organization - with respect to any Person, the kind or type of entity by which
such Person is organized, such as a corporation or limited liability company.



UCC - the Uniform Commercial Code as in effect in the State of Illinois on the date of
this Agreement, as it may be amended or otherwise modified.




Unused Line Fee - as defined in Section 2.5 of the Agreement.



Voting Stock - Securities of any class or classes of a corporation, limited
partnership or limited liability company or any other entity the holders of which are ordinarily,
in the absence
of contingencies, entitled to vote with respect to the election of corporate directors (or
Persons performing similar functions).


 


A-19









 





Other Terms. All other terms contained in the Agreement shall have, when the context
so indicates, the meanings provided for by the UCC to the extent the same are used or defined
therein.



Certain Matters of Construction. The terms “herein”, “hereof” and “hereunder” and
other words of similar import refer to the Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. The section
titles, table of contents and list of exhibits appear as a matter of convenience only and shall not
affect the interpretation of the Agreement. All references to statutes and related regulations
shall include any amendments of same and any successor statutes and regulations. All references to
any of the Loan Documents shall include any and all modifications thereto and any and all
extensions or renewals thereof.




 


A-20









 







EXHIBIT 8.3




FINANCIAL COVENANTS




DEFINITIONS




Consolidated Net Income (Loss) — with respect to any fiscal period, the net income (or
loss) of Borrower Representative and its Subsidiaries determined in accordance with GAAP on a
Consolidated basis; provided, however, Consolidated Net Income shall not include: (a) the income
(or loss) of any Person (other than a subsidiary of a Borrower) in which Borrowers or any of their
wholly-owned subsidiaries has an ownership interest unless received in a cash distribution or
requiring the payment of cash; (b) the income (or loss) of any Person accrued prior to the date it
became a Subsidiary of a Borrower or is merged into or consolidated with such Borrower; (c) all
amounts included in determining net income (or loss) in respect of the write-up of assets on or
after the Closing Date, including the subsequent amortization or expensing of the written-up
portion of the assets; (d) extraordinary gains as defined under GAAP; and (e) gains from asset
dispositions (other than sales of inventory).



Current Assets – at any date means the amount at which all of the Consolidated current
liabilities of Borrower Representative and its Subsidiaries would be properly classified as current
liabilities shown on a Consolidated balance sheet at such date in accordance with GAAP.



Current Liabilities – at any date means the amount at which all of the Consolidated
current liabilities of Borrower Representative and its Subsidiaries would be properly classified as
current liabilities shown on a Consolidated balance sheet at such date in accordance with GAAP,
excluding that portion, if any, of the Obligations or the Indebtedness outstanding under the
Convertible Debentures classified as a current liability.



EBITDA – with respect to any period, the sum of Consolidated Net Income (Loss) before
Interest Expense, income taxes, depreciation and amortization for such period (but excluding any
extraordinary gains for such period), plus the sum of (i) non-cash gains and losses (as
determined by Agent in Agent’s Judgment), plus (ii) fees and expenses incurred in
connection with the negotiation and finalization of the Loan Documents, plus (iii) up to
$2,000,000 of fees and expenses incurred in connection with a Permitted Refinancing of the
Convertible Debentures, all as determined for Borrower Representative and its Subsidiaries on a
Consolidated basis and in accordance with GAAP.



Fixed Charge Coverage Ratio – with respect to any period, the ratio of (i) EBITDA for
such period minus the sum of (a) any provision for (plus any benefit from) income taxes
including in the determination of net earnings (or loss) for such period plus
(b) non-financed Capital Expenditures during such period, to (ii) Fixed Charges for such period,
all as determined for Borrower Representative and its Subsidiaries on a Consolidated basis and in
accordance with GAAP.



Fixed Charges – with respect to any period, the sum of: (i) scheduled principal
payments required to be made during such period in respect to Indebtedness for Money Borrowed
(including the principal portion of Capitalized Lease Obligations), but excluding scheduled
principal payments required pursuant to the Convertible Debentures (but including
scheduled principal payments required under any Permitted Refinancings thereof) plus
(iii) Interest Expense for such period, all as determined for Borrower Representative and its
Subsidiaries on a Consolidated basis and in accordance with GAAP.


 


Exhibit 8.3 - Page 1









 





Interest Expense — with respect to any period, cash interest expense paid for such
period, including without limitation the interest portion of Capitalized Lease Obligations,
plus the Letter of Credit and LC Guaranty fees paid in cash during such period, net of
interest income, all as determined for Borrower Representative and its Subsidiaries on a
Consolidated basis and in accordance with GAAP.




Quick Ratio – as of any date the ratio of Current Assets to Current Liabilities.



COVENANTS




1. Gross Availability. Borrowers shall not permit Gross Availability at any time to
be less than $5,000,000.



2. Fixed Charge Coverage Ratio. Borrowers shall not permit the Fixed Charge Coverage
Ratio for any period set forth below to be less than the ratio set forth below opposite such
period:



	 	 	 
	Period	 	Ratio
	 
	 	 
	Three Month Period Ended December 31, 2007

	 	1.10 to 1.0
	 
	 	 
	Six Month Period Ended March 31, 2008

	 	1.10 to 1.0
	 
	 	 
	Nine Month Period Ended June 30, 2008

	 	1.10 to 1.0
	 
	 	 
	Twelve Month Period Ended September 30, 2008 and the last day
of each December, March, June and September thereafter

	 	1.10 to 1.0






3. Quick Ratio. Borrowers shall not permit the Quick Ratio as of any date set forth
below to be less than the ratio set forth below opposite such date:



	 	 	 
	Date	 	Ratio
	 
	 	 
	December 31, 2007 and the last day of March, June, September
and December thereafter

	 	4.00 to 1.0







 


Exhibit 8.3 - Page 2