CREDIT AGREEMENT 

among 

KRISPY KREME DOUGHNUT CORPORATION,

as Borrower, 

KRISPY KREME DOUGHNUTS, INC., 
as
Parent Guarantor, 

THE LENDERS NAMED HEREIN, 

and 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent, 

$40,000,000 Senior Secured Credit
Facilities 

Dated as of July 12, 2013

















TABLE OF CONTENTS 

		     		     	Page
	ARTICLE I
	 
	DEFINITIONS
	 
	1.1		Defined Terms		1
	1.2		Accounting Terms		25
	1.3		Other Terms; Construction		25
	 
	ARTICLE II
	 
	AMOUNT AND TERMS OF THE
  LOANS
	 
	2.1		Commitments		26
	2.2		Borrowings		27
	2.3		Disbursements; Funding Reliance; Domicile of
    Loans		30
	2.4		Evidence of Debt; Notes		31
	2.5		Termination and Reduction of Commitments and Swingline
      Commitment		31
	2.6		Mandatory Payments and Prepayments		32
	2.7		Voluntary Prepayments		33
	2.8		Interest		33
	2.9	 	Fees		35
	2.10		Interest Periods		36
	2.11		Conversions and Continuations		37
	2.12		Method of Payments; Computations; Apportionment of
      Payments		38
	2.13		Recovery of Payments		41
	2.14		Use of Proceeds		41
	2.15		Pro Rata Treatment	 	41
	2.16		Increased Costs; Change in Circumstances;
      Illegality		42
	2.17		Taxes		44
	2.18		Compensation		46
	2.19		Replacement of Lenders; Mitigation of Costs		47
	2.20		Defaulting Lenders		48
	2.21		Commitment Increase		51
	 
	ARTICLE III
	 
	LETTERS OF CREDIT
	 
	3.1		Issuance		52
	3.2		Notices		53
	3.3		Participations		54
	3.4		Reimbursement		54
	3.5		Payment by Revolving Loans		55
	3.6		Payment to Revolving Credit Lenders		56
	3.7		Obligations Absolute		56



i







TABLE OF CONTENTS
(continued) 

		     		     	Page
	3.8		Cash Collateral Account		57
	3.9		The Issuing Lender		58
	3.10		Effectiveness		58
	 
	ARTICLE IV
	 
	CONDITIONS OF BORROWING
	 
	4.1		Conditions of Initial
    Borrowing		59
	4.2		Conditions of All Borrowings		62
	 
	ARTICLE V
	 
	REPRESENTATIONS AND WARRANTIES
	 
	5.1		Corporate Organization and
    Power		63
	5.2		Authorization; Enforceability		63
	5.3		No Violation		64
	5.4		Governmental and Third-Party Authorization;
    Permits		64
	5.5		Litigation		64
	5.6		Taxes		64
	5.7	 	Subsidiaries and Joint
    Ventures		65
	5.8		Full Disclosure		65
	5.9		Margin Regulations		65
	5.10		No Material Adverse Effect	 	66
	5.11		Financial Matters		66
	5.12		Ownership of Properties		67
	5.13		ERISA		67
	5.14		Environmental Matters		67
	5.15		Compliance with Laws		68
	5.16		Intellectual Property		68
	5.17		Investment Company Act		68
	5.18		Insurance		69
	5.19		Material Contracts		69
	5.20		Security Documents		69
	5.21		Labor Relations		69
	5.22		No Burdensome Restrictions		70
	5.23		OFAC; Anti-Terrorism Laws		70
	 
	ARTICLE VI
	 
	AFFIRMATIVE COVENANTS
	 
	6.1		Financial Statements		70
	6.2		Other Business and Financial Information		71



ii







TABLE OF CONTENTS
(continued) 

		     		     	Page
	6.3		Existence; Franchises; Maintenance of
      Properties		74
	6.4		Compliance with Laws		74
	6.5		Payment of Obligations		74
	6.6		Insurance		74
	6.7		Maintenance of Books and Records;
      Inspection		75
	6.8		Subsidiaries		75
	6.9		Additional Security		78
	6.10		Environmental Laws		78
	6.11	 	Bank Accounts		78
	6.12		Public/Private Information		79
	6.13		OFAC, PATRIOT Act Compliance		79
	6.14		Further Assurances	 	79
	 
	ARTICLE VII
	 
	FINANCIAL COVENANTS
	 
	7.1		Leverage Ratio		79
	7.2		Fixed Charge Coverage Ratio		79
	 
	ARTICLE VIII
	 
	NEGATIVE COVENANTS
	 
	8.1		Merger; Consolidation		80
	8.2		Indebtedness		80
	8.3		Liens		82
	8.4		Asset Dispositions		84
	8.5		Investments		86
	8.6		Restricted Payments		87
	8.7		Transactions with Affiliates		88
	8.8		Lines of Business		89
	8.9		Sale-Leaseback Transactions		89
	8.10		Certain Amendments		90
	8.11		Limitation on Certain
      Restrictions		90
	8.12		No Other Negative Pledges		90
	8.13		Ownership of Subsidiaries		91
	8.14		Fiscal Year		91
	8.15		Accounting Changes		91
	 
	ARTICLE IX
	 
	EVENTS OF DEFAULT
	 
	9.1		Events of Default		91
	9.2		
      Remedies: Termination of Commitments, Acceleration,
      etc.
		94
	9.3		
      Remedies: Set-Off
		95



iii







TABLE OF CONTENTS
(continued) 

		     		     	Page
	ARTICLE X
	 
	THE ADMINISTRATIVE AGENT
	 
	10.1		Appointment and Authority		95
	10.2		Rights as a Lender		95
	10.3		Exculpatory Provisions		96
	10.4		Reliance by Administrative Agent		97
	10.5		Delegation of Duties		97
	10.6		Resignation of Administrative Agent		97
	10.7		Non-Reliance on Administrative Agent
      and Other Lenders		98
	10.8		Collateral and Guaranty Matters		98
	10.9		Issuing Lender and Swingline
      Lender		99
	 
	ARTICLE XI
	 
	MISCELLANEOUS
	 
	11.1		Expenses; Indemnity; Damage
      Waiver		99
	11.2		Governing Law; Submission to Jurisdiction; Waiver of
      Venue; Service of Process		100
	11.3		Waiver of Jury Trial		101
	11.4		Notices; Effectiveness; Electronic
Communication		102
	11.5		Amendments, Waivers, etc.		103
	11.6		Successors and Assigns		105
	11.7		No Waiver		109
	11.8		Survival		109
	11.9	 	Severability		110
	11.10		Construction		110
	11.11		Confidentiality		110
	11.12		Counterparts; Integration; Effectiveness	 	111
	11.13		Disclosure of Information		111
	11.14		USA Patriot Act Notice		111



iv







EXHIBITS 

	Exhibit A-1	     	[Reserved]
	Exhibit A-2		Form of Revolving Note
	Exhibit A-3		Form of Swingline Note
	Exhibit B-1		Form of Notice of Borrowing
	Exhibit B-2		Form of Notice of Swingline Borrowing
	Exhibit B-3		Form of Notice of Conversion/Continuation
	Exhibit B-4		Form of Letter of Credit Notice
	Exhibit C		Form of Compliance Certificate
	Exhibit D		Form of Assignment and Assumption
	Exhibit E		Form of Security Agreement
	Exhibit F		Form of Guaranty
	Exhibit G		Form of Financial Condition Certificate
	 
	 
	SCHEDULES
	 
	Schedule 1.1(a)		Commitments and Notice Addresses
	Schedule 1.1(b)		Immaterial Subsidiaries
	Schedule 5.1	 	Jurisdictions of Organization
	Schedule 5.4		Consents and Approvals
	Schedule 5.7		Subsidiaries; Joint Ventures
	Schedule 5.12		Real Property Interests
	Schedule 5.16		Intellectual Property
	Schedule 8.3		Liens
	Schedule 8.7		Transactions with Affiliates
	Schedule 8.11		Certain Restrictions



v







CREDIT AGREEMENT 

     THIS CREDIT
AGREEMENT, dated as of the 12th
day of July, 2013, is made among KRISPY KREME
DOUGHNUT CORPORATION, a North Carolina
corporation (the “Borrower”), KRISPY KREME DOUGHNUTS,
INC., a North Carolina corporation (the
“Parent”),
the Lenders (as hereinafter defined), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders. 

BACKGROUND STATEMENT 

    
The Borrower has requested that the Lenders make available to the
Borrower a revolving credit facility in the aggregate principal amount of
$40,000,000. The Borrower will use the proceeds of these facilities as provided
in Section 2.14. The Lenders are willing to make available to the Borrower the credit
facilities described herein subject to and on the terms and conditions set forth
in this Agreement. 

AGREEMENT 

    
NOW, THEREFORE, in
consideration of the mutual provisions, covenants and agreements herein
contained, the parties hereto hereby agree as follows: 

ARTICLE I 

DEFINITIONS 

    
1.1 Defined Terms. For purposes of this
Agreement, in addition to the terms defined elsewhere herein, the following
terms have the meanings set forth below (such meanings to be equally applicable
to the singular and plural forms thereof): 

    
“Account Designation
Letter” means a letter from the Borrower to
the Administrative Agent, duly completed and signed by an Authorized Officer of
the Borrower and in form and substance reasonably satisfactory to the
Administrative Agent, listing any one or more accounts to which the Borrower may
from time to time request the Administrative Agent to forward the proceeds of
any Loans made hereunder. 

    
“Additional Commitment” has the meaning given to such term in Section 2.21(c).


    
“Additional Lender” has the meaning given to such term in Section 2.21(a).


    
“Adjusted Base Rate” means, at any time with respect to any Base Rate Loan of any
Class, a rate per annum equal to the Base Rate as in effect at such time plus
the Applicable Percentage for Base Rate Loans of such Class as in effect at such
time. 

    
“Adjusted LIBOR Rate” means, at any time with respect to any LIBOR Loan of any
Class, a rate per annum equal to the LIBOR Rate as in effect at such time plus
the Applicable Percentage for LIBOR Loans of such Class as in effect at such
time. 







     “Administrative Agent” means
Wells Fargo, in its capacity as Administrative Agent appointed under
Section 10.1, and its successors and permitted assigns in such capacity. 

    
“Affected Class” has the meaning given to such term in Section 11.5. 

    
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, (i) Controls or is
Controlled by or is under common Control with the Person specified or (ii)
beneficially owns, is owned by or is under common ownership with respect to
securities or other ownership interests of such Person having 10% or more of the
combined voting power of the then outstanding securities or other ownership
interests of such Person ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the election of directors or
other governing body of such Person. Notwithstanding the foregoing, neither the
Administrative Agent nor any Lender shall be deemed an “Affiliate” of any
Company Party. 

     “Agent
Parties” has the meaning given to such term in Section 11.4(b). 

    
“Aggregate Revolving Credit
Exposure” means, at any time, the sum of (i)
the aggregate principal amount of Revolving Loans outstanding at such time, (ii)
the aggregate Letter of Credit Exposure of all Revolving Credit Lenders at such
time and (iii) the aggregate principal amount of Swingline Loans outstanding at
such time (or, in the event the Swingline Loans are administered in accordance
with a Wells Fargo Financial Management Account or similar cash management
product offered by Wells Fargo, the entire Swingline Commitment at such time).


    
“Agreement” means this Credit Agreement, as amended, modified, restated or
supplemented from time to time in accordance with its terms. 

     “Applicable
Percentage” means, at any time from and after the Closing Date, the applicable percentage (i) to be added to the Base
Rate for purposes of determining the Adjusted Base Rate, (ii) to be added to the LIBOR Rate for purposes of determining the Adjusted
LIBOR Rate and (iii) to be used in calculating the commitment fee payable pursuant to Section 2.9(b), in each case as determined
under the following matrix with reference to the Leverage Ratio: 


			Interest	Interest	
			Margin
      for	Margin
      for	
			LIBOR
      Rate	Base
      Rate	Commitment
	Level	Leverage Ratio	Loans	Loans	Fee
	I	Less than or equal to 0.65 to 1.00	1.25%	0.25%	0.15%
	II	Greater than
      0.65 to 1.00 but	1.50%	0.50%	0.25%
		less than or equal to 1.25 to 1.00			
	III	Greater than
      1.25 to 1.00 but	1.80%	0.80%	0.30%
		less than or equal to 1.85 to 1.00			




2








			Interest	Interest	
			Margin
      for	Margin
      for	
			LIBOR Rate	Base Rate	Commitment
	Level	Leverage
      Ratio	Loans	Loans	Fee
	IV	Greater than or equal to 1.85 to 1.00	2.15%	1.15%	0.35%




     On each
Adjustment Date (as hereinafter defined), the Applicable Percentage for all
Loans and the commitment fee payable pursuant to Section 2.9(b) shall be adjusted
effective as of such Adjustment Date (based upon the calculation of the Leverage
Ratio as of the last day of the Reference Period to which such Adjustment Date
relates) in accordance with the above matrix; provided, however, that, notwithstanding the
foregoing or anything else herein to the contrary, (i) if at any time the
Borrower shall have failed to deliver any of the financial statements as
required by Section 6.1(a) or 6.1(b), as the case may be, or the Compliance Certificate as
required by Section 6.2(a), then at all times from and including the date on which such
statements and Compliance Certificate are required to have been delivered until
the date on which the same shall have been delivered, each Applicable Percentage
shall be determined based on Level IV above (notwithstanding the actual Leverage
Ratio), and (ii) the determination of the Applicable Percentage shall be subject
to Section 2.8(f). For purposes of this definition, “Adjustment Date” means, with respect
to any Reference Period of the Borrower beginning with the Reference Period
after the Closing Date, the day (or, if such day is not a Business Day, the next
succeeding Business Day) of delivery by the Borrower in accordance with
Section 6.1(a) or 6.1(b), as the case may be, of (i) financial statements as of the end of and
for such Reference Period and (ii) a duly completed Compliance Certificate with
respect to such Reference Period. From the Closing Date until the first
Adjustment Date requiring a change in any Applicable Percentage as provided
herein, each Applicable Percentage shall be based on Level I above. 

    
“Approved Fund” means any Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender, or (iii) a Person (or an Affiliate of a
Person) that administers or manages a Lender. 

    
“Asset Disposition” means any sale, assignment, lease, conveyance, transfer or
other disposition by the Parent or any of its Subsidiaries (whether in one or a
series of transactions) of all or any of its assets, business or other
properties (including Capital Stock of Subsidiaries and leasehold interests),
other than pursuant to a Casualty Event. 

    
“Assignment and
Assumption” means an Assignment and
Assumption entered into by a Lender and an assignee (with the consent of any
Person whose consent is required by Section
11.6(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit
D or any other form approved by the
Administrative Agent. 

    
“Authorized Officer” means, with respect to any action specified herein to be
taken by or on behalf of a Credit Party, any officer of such Credit Party duly
authorized to take such action on its behalf, and whose signature and incumbency
shall have been certified to the Administrative Agent by the secretary or an
assistant secretary of such Credit Party. 

3







     “Bankruptcy Code” means 11
U.S.C. §§ 101 et seq., as amended from time to time, and any successor statute, and all
regulations from time to time promulgated thereunder. 

    
“Bankruptcy Event” means the occurrence of an Event of Default pursuant to
Section 9.1(f) or 9.1(g). 

    
“Base Rate” means the highest of (i) the per annum interest rate publicly announced
from time to time by Wells Fargo in Charlotte, North Carolina, to be its prime
rate (which may not necessarily be its lowest or best lending rate), as adjusted
to conform to changes as of the opening of business on the date of any such
change in such prime rate, (ii) the Federal Funds Rate plus 0.5% per annum, as
adjusted to conform to changes as of the opening of business on the date of any
such change in the Federal Funds Rate, and (iii) the LIBOR Rate for an Interest
Period of 1 month plus the difference between the Applicable Percentage for LIBOR
Rate Loans and the Applicable Percentage for Base Rate Loans at any level, as
adjusted to conform to changes as of the opening of business on the date of any
such change of such LIBOR Rate. 

    
“Base Rate Loan” means, at any time, any Loan that bears interest at such
time at the applicable Adjusted Base Rate. 

    
“Borrower” has the meaning given to such term in the introductory paragraph
hereof. 

    
“Borrowing” means the incurrence by the Borrower (including as a result of
conversions and continuations of outstanding Loans pursuant to Section 2.11) on a single
date of a group of Loans of a single Class and Type (or a Swingline Loan made by
the Swingline Lender) and, in the case of LIBOR Loans, as to which a single
Interest Period is in effect. 

    
“Borrowing Date” means, with respect to any Borrowing, the date upon which
such Borrowing is made. 

    
“Business Day” means (i) any day other than a Saturday or Sunday, a legal
holiday or a day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to be closed and (ii) in
respect of any determination relevant to a LIBOR Loan, any such day that is also
a day on which trading in Dollar deposits is conducted by banks in London,
England in the London interbank Eurodollar market. 

    
“Capital Lease” means, with respect to any Person, any lease of property
(whether real, personal or mixed) by such Person as lessee that is or is
required to be, in accordance with GAAP, recorded as a capital lease on such
Person’s balance sheet. 

    
“Capital Lease
Obligations” means, with respect to any
Person, the obligations of such Person to pay rent or other amounts under any
Capital Leases, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP. 

    
“Capital Stock” means (i) with respect to any Person that is a corporation,
any and all shares, interests or equivalents in capital stock (whether voting or
nonvoting, and whether common or preferred) of such corporation, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership, limited liability company or other equity interests of such Person;
and in each case, any and all warrants, rights or options to purchase any of the
foregoing. 

4







     “Cash Collateral Account”
has the meaning given to such term in Section
3.8. 

    
“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Administrative Agent, the Issuing
Lender or the Swingline Lender (as applicable) and the Lenders, as collateral
for the Letter of Credit Exposure, the Swingline Exposure, or obligations of
Lenders to fund participations in respect of either thereof (as the context may
require), cash or deposit account balances or, if the Issuing Lender or the
Swingline Lender benefiting from such collateral shall agree in its sole
discretion, other credit support, in each case pursuant to documentation in form
and substance satisfactory to (a) the Administrative Agent and (b) the Issuing
Lender or the Swingline Lender. “Cash Collateral” shall have a meaning
correlative to the foregoing and shall include the proceeds of such cash
collateral and other credit support. 

    
“Cash Equivalents” means (i) securities issued or unconditionally guaranteed or
insured by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within one year from the date of acquisition, (ii) commercial paper
issued by any Person organized under the laws of the United States of America,
maturing within 180 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by
Standard & Poor’s Ratings Services or at least P-1 or the equivalent thereof
by Moody’s Investors Service, Inc., (iii) time deposits and certificates of
deposit maturing within 180 days from the date of issuance and issued by a bank
or trust company organized under the laws of the United States of America or any
state thereof (y) that has combined capital and surplus of at least $500,000,000
or (z) that has (or is a subsidiary of a bank holding company that has) a
long-term unsecured debt rating of at least A or the equivalent thereof by
Standard & Poor’s Ratings Services or at least A2 or the equivalent thereof
by Moody’s Investors Service, Inc., (iv) repurchase obligations with a term not
exceeding 30 days with respect to underlying securities of the types described
in clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above, and (v) money market funds at
least 95% of the assets of which are continuously invested in securities of the
foregoing types. 

    
“Cash Lease Payments” means, with respect to any Reference Period, the aggregate
amount of cash payments paid (or required to be paid) by the Parent and its
Subsidiaries during such Reference Period, whether or not such payments are
accounted for as expenses for such Reference Period in accordance with GAAP, for
(i) obligations under operating leases for real property and equipment (net of
cash payments received by the Borrower and its Subsidiaries during such
Reference Period under subleases related thereto), (ii) Lease Payments on Closed
Stores and (iii) Lease Settlement Payments to the extent the aggregate amount of
such settlement payments exceeds $1,500,000 during such Reference Period or
$5,000,000 in the aggregate after the Closing Date. 

    
“Casualty Event” means, with respect to any property (including any interest
in property) of any Company Party, any loss of, damage to, or condemnation or
other taking of, such property for which such Company Party receives insurance
proceeds, proceeds of a condemnation award or other
compensation. 

5







     “Change in Law” means the
occurrence, after the date of this Agreement, of any of the following: (i) the
adoption or taking effect of any law, rule, regulation or treaty, (ii) any
change in any law, rule, regulation or treaty or in the administration,
interpretation or application thereof by any Governmental Authority or (iii) the
making or issuance of any request, guideline or directive (whether or not having
the force of law) by any Governmental Authority; provided that notwithstanding anything
herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (y) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities, in each case pursuant to Basel
III, shall in each case be deemed to be a “Change in Law”, regardless of the
date enacted, adopted or issued. 

    
“Change in Control” means (i) the Parent shall cease to own directly 100% of the
issued and outstanding Capital Stock of the Borrower, (ii) any Person or two or
more Persons acting in concert shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act) of 35% or more of the outstanding shares of the Capital Stock (but
excluding nonvoting stock for purposes of this determination) of the Parent, or
(iii) as of any date a majority of the board of directors of the Parent consists
of individuals who were not either (A) directors of the Parent as of the
corresponding date of the previous year, (B) selected or nominated to become
directors by the board of directors of the Parent of which a majority consisted
of individuals described in clause (A), or (C) selected or nominated to become
directors by the board of directors of the Parent of which a majority consisted
of individuals described in clause (A) and individuals described in clause (B).


    
“Class” has the meaning given to such term in Section 2.2(a). 

    
“Closed Stores” means stores and other places of business that have been
closed or operations have otherwise been discontinued by the Parent or any of
its Subsidiaries. 

    
“Closing Date” means the date upon which the initial extensions of credit
are made pursuant to this Agreement, which shall be the date upon which each of
the conditions set forth in Sections
4.1 and 4.2 shall have been satisfied or
waived in accordance with the terms of this Agreement. 

    
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute, and all rules and regulations from time to time
promulgated thereunder. 

    
“Collateral” means all the assets, property and interests in property that shall
from time to time be pledged or be purported to be pledged as direct or indirect
security for the Obligations pursuant to any one or more of the Security
Documents. 

    
“Commitment” means, with respect to any Lender, such Lender’s Revolving Credit
Commitment. 

6








     “Commodity Exchange Act”
means the Commodity Exchange Act (7 U.S.C. § 1 et seq.) and any successor
statute. 

    
“Company Parties” means the Parent, the Borrower, the Subsidiaries of the
Parent and the Borrower, and their respective successors. 

    
“Compliance Certificate” means a fully completed and duly executed certificate in the
form of Exhibit C, together with a Covenant Compliance Worksheet. 

    
“Consolidated EBITDA” means, for any Reference Period, the aggregate of (i)
Consolidated Net Income for such period, plus (ii) to the extent reflected in
determining Consolidated Net Income for such period and without duplication, the
sum of (A) interest expense, (B) foreign, federal, state, local and other income
taxes, (C) depreciation and amortization, (D) rent expense (net of sublease
income) and lease termination costs, (E) the aggregate amount of cash or
non-cash charges for such period in respect of Guaranty Obligations, (F) the
aggregate amount of all other non-cash charges reducing Consolidated Net Income
(excluding any non-cash charge that (x) results in the accrual of a reserve for
cash charges in any future period, or (y) the write-off of uncollectible
accounts receivable) for such period, and (G) fees and expenses incurred in
connection with the Transactions (including fees and expenses associated with
terminating the Existing Senior Credit Facilities and the termination of any
Hedge Agreements in connection therewith) in an amount reasonably acceptable to
the Administrative Agent, minus (iii) to the extent taken into
account in the calculation of Consolidated Net Income for such period and
without duplication, the sum of (A) the aggregate amount of all non-cash items
increasing Consolidated Net Income (other than the accrual of revenue recording
a receivable in the ordinary course of business) for such period, (B) the
aggregate amount of cash or non-cash credits for such period in respect to
Guaranty Obligations, and (C) interest income, minus (iv) the aggregate amount of
Cash Lease Payments for such period, minus (v) the aggregate amount of cash
payments paid (or required to be paid) in respect of Guaranty Obligations for
such period to the extent that the aggregate amount of such payments exceeds
$1,000,000 during such Reference Period or $3,000,000 in the aggregate after the
Closing Date. 

    
“Consolidated Fixed
Charges” means, for any Reference Period, the
aggregate (without duplication) of the following, all determined on a
consolidated basis for the Parent and its Subsidiaries in accordance with GAAP:
(i) Consolidated Interest Expense to the extent paid (or required to be paid) in
cash during such Reference Period, (ii) Cash Lease Payments for such Reference
Period and (iii) the aggregate (without duplication) of all scheduled payments
of principal on Funded Debt required to have been made by the Parent and its
Subsidiaries during such Reference Period (whether or not such payments are
actually made). 

    
“Consolidated Funded
Debt” means, as of any date of determination,
the aggregate (without duplication) of all Funded Debt of the Parent and its
Subsidiaries as of such date. 

    
“Consolidated Interest
Expense” means, for any Reference Period, the
sum
(without duplication) of (i) total interest expense (calculated net of interest
income) of the Parent and its Subsidiaries for such Reference Period in respect
of Consolidated Funded Debt (including, without limitation, all such interest
expense accrued or capitalized during such Reference Period, whether or not actually paid during such Reference Period), determined on
a consolidated basis in accordance with GAAP, (ii) all net amounts payable or
receivable under or in respect of interest rate Hedge Agreements, to the extent
paid or accrued by the Parent and its Subsidiaries during such Reference Period,
and (iii) all recurring unused commitment fees and other ongoing fees in respect
of Funded Debt (including the unused fees and letter of credit fees provided for
under Section 2.9) paid, accrued or capitalized by the Parent and its Subsidiaries during
such Reference Period. 

7 







     “Consolidated Net Income”
means, for any Reference Period, net income (or loss) for the Parent and its
Subsidiaries for such Reference Period, determined on a consolidated basis in
accordance with GAAP (after deduction for minority interests); provided that, in making
such determination, there shall be excluded (i) the net income of any other
Person that is not a Subsidiary of the Borrower (or is accounted for by the
Borrower by the equity method of accounting) except to the extent of actual
payment of cash dividends or distributions by such Person to the Borrower or any
Subsidiary of the Borrower during such Reference Period, (ii) the net income (or
loss) of any other Person acquired by, or merged with, the Parent or any of its
Subsidiaries for any period prior to the date of such acquisition or merger,
(iii) the net positive income of any Subsidiary of the Parent to the extent that
the declaration or payment of dividends or similar distributions by such
Subsidiary of such net income is not at the time permitted by operation of the
terms of its charter, certificate of incorporation or formation or other
constituent document or any agreement or instrument (other than a Credit
Document) or Requirement of Law applicable to such Subsidiary, (iv) unrealized
gains and losses with respect to obligations under Hedge Agreements for such
period, and (v) gains or losses on Asset Dispositions or Casualty Events.


    
“Control” means, with respect to any Person, the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms “Controlled” and “Controlling” have correlative
meanings. 

    
“Covenant Compliance
Worksheet” means a fully completed worksheet
in the form of Attachment A to Exhibit
C. 

    
“Credit Documents” means this Agreement, the Notes, the Letters of Credit, the
Security Agreement, the Guaranty, any other Security Documents, and all other
agreements, instruments, documents and certificates now or hereafter executed
and delivered to the Administrative Agent or any Lender by or on behalf of the
Borrower or any other Credit Party with respect to this Agreement, in each case
as amended, modified, supplemented or restated from time to time; but
specifically excluding any Hedge Agreement to which the Borrower and any Hedge
Party are parties. 

    
“Credit Exposure” means, with respect to any Lender at any time, the sum of
(i) the aggregate principal amount of all Loans made by such Lender that are
outstanding at such time, (ii) such Lender’s Swingline Exposure at such time and
(iii) such Lender’s Letter of Credit Exposure at such time. 

8 







     “Credit Parties” means the
Parent, the Borrower, the Subsidiary Guarantors, and their respective
successors. 

    
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.


    
“Default” means an Event of Default or any event or condition that, with the
passage of time or giving of notice, or both, would constitute an Event of
Default. 

    
“Defaulting Lender” means, subject to Section 2.20(b) any Lender that, as determined
by the Administrative Agent (with notice to the Borrower of such determination),
(i) has failed to perform any of its funding obligations hereunder, including in
respect of its Loans or participations in Letters of Credit or Swingline Loans,
within one Business Day of the date required to be funded by it hereunder, (ii) has
notified the Borrower or the Administrative Agent that it does not intend to
comply with its funding obligations or has made a public statement to that
effect with respect to its funding obligations hereunder or under other
agreements in which it commits to extend credit, (iii) has failed, within one
Business Day after request by the Administrative Agent, to confirm in a manner
satisfactory to the Administrative Agent that it will comply with its funding
obligations, or (iv) has, or has a direct or indirect parent company that has
(A) become the subject of a proceeding under any Debtor Relief Law, or (B) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation or its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity; provided, that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority. 

    
“Disqualified Capital
Stock” means, with respect to any Person, any
Capital Stock of such Person that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event or otherwise, (i) matures or is mandatorily redeemable or
subject to any mandatory repurchase requirement, pursuant to a sinking fund
obligation or otherwise, (ii) is redeemable or subject to any mandatory
repurchase requirement at the sole option of the holder thereof, or (iii) is
convertible into or exchangeable for (whether at the option of the issuer or the
holder thereof) (y) debt securities or (z) any Capital Stock referred to in (i)
or (ii) above, in each case under (i), (ii) or (iii) above at any time on or
prior to the 91st day after the Revolving Credit Maturity Date;
provided,
however,
that only the portion of Capital Stock that so matures or is mandatorily
redeemable, is so redeemable at the option of the holder thereof, or is so
convertible or exchangeable on or prior to such date shall be deemed to be
Disqualified Capital Stock. For the avoidance of doubt, Capital Stock shall not
be Disqualified Capital Stock if it is convertible into or exchangeable for
common stock so long as such common stock does not have any of the attributes
set forth in clauses (i), (ii) or (iii) of this definition. 

    
“Dollars” or “$” means dollars of the United States of America. 

9 







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

    
“Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, allegations, notices of
noncompliance or violation, investigations by a Governmental Authority, or
proceedings (including, without limitation, administrative, regulatory and
judicial proceedings) relating in any way to any Hazardous Substance, any actual
or alleged violation of or liability under any Environmental Law or any permit
issued, or any approval given, under any Environmental Law (collectively,
“Claims”),
including, without limitation, (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from any Hazardous
Substance or arising from alleged injury or threat of injury to human health or
the environment. 

    
“Environmental Laws” means any and all federal, state and local laws, statutes,
ordinances, rules, regulations, permits, licenses, approvals, rules of common
law and orders of courts or Governmental Authorities, relating to the protection
of human health, occupational safety with respect to exposure to Hazardous
Substances, or the environment, now or hereafter in effect, and in each case as
amended from time to time, including, without limitation, requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Substances. 

    
“Equity Issuance” means the issuance, sale or other disposition by any Company
Party of its Capital Stock or any rights, warrants or options to purchase or
acquire any shares of its Capital Stock or any other security or instrument
representing, convertible into or exchangeable for an equity interest in any
Company Party or the receipt by the Parent after the Closing Date of any capital
contribution (whether or not evidenced by any Capital Stock issued by the
recipient of such contribution); provided, however, that the term Equity Issuance
shall not include the issuance, sale or other disposition of (i) any Capital
Stock by any Subsidiary of the Borrower to the Borrower or any other Subsidiary
of the Borrower, or by the Borrower to the Parent, if such Capital Stock
(excluding the portion of any Foreign Subsidiary’s Capital Stock not required to
be pledged hereunder) is pledged to the Administrative Agent pursuant to the
Security Agreement, or (ii) any Capital Stock of the Parent, any rights or
options for the Parent’s Capital Stock, and the underlying shares issued upon
the exercise thereof, in each case issued, sold or granted to directors and
employees of the Company Parties pursuant to employee benefit plans, employment
agreements or other employment arrangements approved by the Board of Directors
of the Parent. 

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

    
“ERISA Affiliate” means any Person (including any trade or business, whether
or not incorporated) deemed to be under “common control” with, or a member of
the same “controlled group” as, the Borrower or any of
its Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o) of the
Code or Section 4001 of ERISA. 

10 







     “ERISA Event” means any of
the following with respect to a Plan or Multiemployer Plan, as applicable: (i) a
Reportable Event, (ii) a complete or partial withdrawal by the Borrower or any
ERISA Affiliate from a Multiemployer Plan that results in liability under
Section 4201 or 4204 of ERISA, or the receipt by the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA, (iii) the distribution
by the Borrower or any ERISA Affiliate under Section 4041 or 4041A of ERISA of a
notice of intent to terminate any Plan or the taking of any action to terminate
any Plan, (iv) the commencement of proceedings by the PBGC under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Borrower or any ERISA Affiliate of a notice from any
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan, (v) the institution of a proceeding by any fiduciary of
any Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which is not dismissed within 60 days, (vi) the imposition
upon the Borrower or any ERISA Affiliate of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, or the imposition or threatened imposition of any Lien upon any assets of
the Borrower or any ERISA Affiliate as a result of any alleged failure to comply
with the Code or ERISA in respect of any Plan, (vii) the engaging in or
otherwise becoming liable for a nonexempt Prohibited Transaction by the Borrower
or any ERISA Affiliate, or a violation of the applicable requirements of Section
404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the
Code by any fiduciary of any Plan for which the Borrower or any of its ERISA
Affiliates may be directly or indirectly liable, (viii) the failure of any Plan
to satisfy the minimum funding standard of Section 302 of ERISA and Section 412
of the Code, whether or not waived, (ix) with respect to plan years beginning
prior to January 1, 2008, the adoption of an amendment to any Plan that,
pursuant to Section 307 of ERISA, would require the provision of security to
such Plan by the Borrower or an ERISA Affiliate, or (x) with respect to plan
years beginning on or after the PPA 2006 Effective Date, the incurrence of an
obligation to provide a notice under Section 101(j) of ERISA, the adoption of an
amendment which may not take effect due to the application of Section 436(c)(1)
of the Code or Section 206(g)(2)(A) of ERISA, or the payment of a contribution
in order to satisfy the requirements of Section 436(c)(2) of the Code or Section
206(g)(2)(B) of ERISA. 

    
“Event of Default” has the meaning given to such term in Section 9.1. 

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

    
“Excluded Swap
Obligation” means, with respect to any
Guarantor, any Swap Obligation if, and to the extent that, all or a portion of
guarantee of such Guarantor of, or the grant by such Guarantor of a security
interest to secure, such Swap Obligation (or any guarantee thereof) is or
becomes illegal under the Commodity Exchange Act or any rule, regulation or
order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of such Guarantor’s failure
for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations
thereunder at the time the guarantee of such Guarantor or the grant of such
security interest becomes effective with respect to such Swap Obligation. If a
Swap Obligation arises under a master agreement governing more than one swap,
such exclusion shall apply only to the portion of such Swap Obligation that is
attributable to swaps for which such guarantee or security interest is or
becomes illegal. 

11 







     “Excluded Taxes” means, with
respect to the Administrative Agent, any Lender, the Issuing Lender or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (i) taxes imposed on or measured by its overall net income (however denominated),
and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which
its applicable Lending Office is located, (ii) any branch profits taxes imposed by the United States or any similar tax imposed
by any other jurisdiction in which the Borrower is located, (iii) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.19(a)), any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 2.17(e),
except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending
Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section
2.17(a) and (iv) any U.S. Federal withholding taxes imposed by FATCA. 

    
“Existing Senior Credit
Facilities” has the meaning given to such
term in Section 4.1(f). 

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

    
“Federal Funds Rate” means, for any period, a fluctuating per annum interest rate
(rounded upwards, if necessary, to the nearest 1/100 of one percentage point)
equal for each day during such period to the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Administrative Agent. 

    
“Federal Reserve Board” means the Board of Governors of the Federal Reserve System
or any successor thereto. 

    
“Financial Condition
Certificate” means a fully completed and duly
executed certificate, in substantially the form of Exhibit G, together with the
attachments thereto. 

12 







     “Financial Officer” means,
with respect to the Parent or the Borrower, the chief financial officer, vice
president - finance, principal accounting officer or treasurer of the Parent or
the Borrower, as applicable. 

    
“Fiscal Quarter” or “FQ” means a fiscal quarter of the Parent and its Subsidiaries.
The first Fiscal Quarter of Fiscal Year 2014 ended on May 5, 2013. 

    
“Fiscal Year” or “FY” means a fiscal year of the Parent and its Subsidiaries. The end of
Fiscal Year 2014 is on or about January 31, 2014. 

    
“Fixed
Charge Coverage Ratio” means, as of the last
day of any Reference Period ending on the last day of a Fiscal Quarter, the
ratio of (i) the aggregate of (A) Consolidated EBITDA for such Reference Period,
plus (B)
Cash Lease Payments for such Reference Period, minus (C) foreign, federal, state,
local and other income taxes of the Parent and its Subsidiaries paid or payable
in cash for such Reference Period, minus (D) Unfinanced Capital
Expenditures for such Reference Period, minus (E) the aggregate of all
Restricted Payments made during such Reference Period in accordance with
Section 8.6(v), minus (F) the purchase price of all acquisitions of all or substantially all
of the assets of any Krispy Kreme store or franchise (or all of the Capital
Stock of any Krispy Kreme franchisee) during such Reference Period to (ii)
Consolidated Fixed Charges for such Reference Period. 

    
“Foreign Lender” means, with respect to the Borrower, any Lender that is
organized under the laws of a jurisdiction other than that in which the Borrower
is resident for tax purposes. For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction. 

    
“Foreign Subsidiary” means a Subsidiary of the Borrower that is a “controlled
foreign corporation,” as such term is defined in Section 957 of the Code;
provided,
that any first-tier Foreign Subsidiary that is a disregarded entity for tax
purposes shall not be deemed to be a Foreign Subsidiary. 

    
“Fronting Exposure” means, at any time there is a Defaulting Lender, (i) with
respect to the Issuing Lender, such Defaulting Lender’s Letter of Credit
Exposure with respect to Letters of Credit issued by the Issuing Lender other
than such portion of such Defaulting Lender’s Letter of Credit Exposure as to
which such Defaulting Lender’s participation obligation has been reallocated to
other Lenders or Cash Collateralized in accordance with Section 2.20, and (ii) with respect
to any Swingline Lender, such Defaulting Lender’s Swingline Exposure with
respect to outstanding Swingline Loans made by the Swingline Lender other than
Swingline Loans as to which such Defaulting Lender’s participation obligation
has been reallocated to other Lenders or Cash Collateralized in accordance with
Section
2.20. 

    
“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.


    
“Funded Debt” means, with respect to any Person, all Indebtedness of such Person
(other than Indebtedness (i) with respect to Hedge Agreements and (ii) permitted
under Section 8.2(iv)). 

13 







     “GAAP” means generally
accepted accounting principles in the United States of America, as set forth in
the statements, opinions and pronouncements of the Accounting Principles Board,
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained, as in effect
from time to time (subject to the provisions of Section 1.2). 

    
“Governmental Authority” means the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank). 

    
“Guarantor” means the Parent and any Subsidiary of the Borrower that is a guarantor
of the Obligations under the Guaranty (or under another guaranty agreement in
form and substance satisfactory to the Administrative Agent) and has granted to
the Administrative Agent a Lien upon and security interest in its personal
property assets pursuant to the Security Agreement. 

    
“Guaranty” means a guaranty agreement made by the Guarantors in favor of the
Administrative Agent and the Lenders, in substantially the form of
Exhibit F,
as amended, modified, restated or supplemented from time to time. 

    
“Guaranty Obligation” means, with respect to any Person, any direct or indirect
liability of such Person with respect to any Indebtedness, liability or other
obligation (the “primary obligation”) of another Person (the “primary obligor”), whether or not
contingent, (i) to purchase, repurchase or otherwise acquire such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or provide funds (x) for the payment or discharge of any such
primary obligation or (y) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor (including, without limitation, keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements), (iii) to
lease or purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor in respect thereof to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary obligation
against loss or failure or inability to perform in respect thereof;
provided,
however,
that, with respect to the Parent and its Subsidiaries, the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Guaranty Obligation of any
guaranteeing Person hereunder shall be deemed to be (a) in the case of any
Guaranty Obligation in respect of any Indebtedness, the lesser of (i) the
principal amount of such Indebtedness, and (ii) the maximum amount for which
such guaranteeing Person may be liable pursuant to the terms of the applicable
guaranty, and (b) in the case of any other Guaranty Obligation (including,
without limitation, any liabilities related to operating leases), the
guaranteeing Person’s maximum reasonably anticipated liability in respect
thereof as determined by such guaranteeing Person in good faith. 

    
“Hazardous Substance” means any substance or material meeting any one or more of
the following criteria: (i) it is or contains a substance designated as a
hazardous waste, hazardous substance, hazardous
material, pollutant, contaminant or toxic substance under any Environmental Law,
(ii) it is toxic, explosive, corrosive, ignitable, infectious, radioactive,
mutagenic or otherwise hazardous to human health or the environment and is or
becomes regulated by any Governmental Authority, (iii) its presence may require
investigation or response under any Environmental Law, (iv) it constitutes a
nuisance, trespass or health or safety hazard to Persons or neighboring
properties, or (v) it is or contains, without limiting the foregoing, asbestos,
polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or wastes, crude oil, nuclear fuel,
natural gas or synthetic gas. 

14 







     “Hedge Agreement” means any
interest or foreign currency rate swap, cap, collar, option, hedge, forward rate
or other similar agreement or arrangement designed to protect against
fluctuations in interest rates, currency exchange rates or spot prices of raw
materials. 

    
“Hedge Party” means any Lender or any Affiliate of any Lender in its capacity as a
counterparty to any Hedge Agreement with the Borrower or any Subsidiary, which
Hedge Agreement is permitted under this Agreement to be entered into by the
Borrower, or any former Lender or any Affiliate of any former Lender in its
capacity as a counterparty to any such Hedge Agreement entered into prior to the
date such Person or its Affiliate ceased to be a Lender. 

    
“Immaterial Subsidiary” means, at any time, any Subsidiary of the Borrower that (i)
owns, together with its Subsidiaries, assets constituting no more than 5.0% of
the book value of the assets of the Parent and its Subsidiaries, taken as a
whole, (ii) accounts for no more than 5.0% of the Consolidated EBITDA of the
Parent and its Subsidiaries, taken as a whole, (iii) owns no Intellectual
Property that is registered with the U.S. Patent and Trademark Office or the
U.S. Copyright Office that are material to the business and operations of the
Company Parties, taken as a whole, and (iv) has been designated as an
“Immaterial Subsidiary” by the Borrower pursuant to a notice delivered in
accordance with this Agreement to the Administrative Agent; provided that if (x) the
aggregate assets of the Subsidiaries designated as Immaterial Subsidiaries at
such time constitute more than 10.0% of the book value of the assets of the
Parent and its Subsidiaries, taken as a whole, or (y) the aggregate Consolidated
EBITDA of the Subsidiaries designated as Immaterial Subsidiaries at such time
constitute more than 10.0% of the Consolidated EBITDA of the Parent and its
Subsidiaries, taken as a whole, then, in either case, one or more of such
Subsidiaries shall for all purposes of this Agreement be deemed no longer to be
Immaterial Subsidiaries in descending order based on the amounts of their
consolidated book value or Consolidated EBITDA, as applicable, until such excess
shall have been eliminated. The Borrower designates the Subsidiaries set forth
on Schedule 1.1(b) as Immaterial Subsidiaries as of the Closing Date. 

    
“Increasing Lender” has the meaning given to such term in Section 2.21(a).


    
“Indebtedness” means, with respect to any Person (without duplication), (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments, or upon
which interest payments are customarily made, (iii) the maximum stated or face
amount of all surety bonds, letters of credit and bankers’ acceptances issued or
created for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed), (iv) all obligations of such
Person to pay the deferred purchase price of property or
services (excluding trade payables incurred in the ordinary course of business
and not more than 60 days past due), (v) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person, (vi) all Capital Lease Obligations of such
Person, (vii) all Disqualified Capital Stock issued by such Person, with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, (viii) the principal balance outstanding and
owing by such Person under any synthetic lease, tax retention operating lease or
similar off-balance sheet financing product, (ix) all Guaranty Obligations of
such Person with respect to Indebtedness of another Person, (x) all obligations
of such Person with respect to Hedge Agreements, calculated as of any date as if
such agreement or arrangement were terminated as of such date, and (xi) all
indebtedness of the types referred to in clauses (i) through (x) above (A) of
any partnership or unincorporated joint venture in which such Person is a
general partner or joint venturer to the extent such Person is liable therefor
or (B) secured by any Lien on any property or asset owned or held by such Person
regardless of whether or not the indebtedness secured thereby shall have been
incurred or assumed by such Person or is nonrecourse to the credit of such
Person, the amount thereof being equal to the value of the property or assets
subject to such Lien. 

15 







     “Indemnified Taxes” means
Taxes other than Excluded Taxes. 

    
“Intellectual Property” means (i) all inventions (whether or not patentable and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissues,
continuations, continuations-in-part, divisions, revisions, extensions, and
reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (iii) all copyrightable works and all copyrights (registered and
unregistered), (iv) all trade secrets and confidential information (including,
without limitation, financial, business and marketing plans and customer and
supplier lists and related information), (v) all computer software and software
systems (including, without limitation, data, databases and related
documentation), (vi) all Internet web sites and domain names, (vii) all
technology, know-how, processes and other proprietary rights, and (viii) all
licenses or other agreements to or from third parties regarding any of the
foregoing. 

    
“Interest Period” has the meaning given to such term in Section 2.10. 

    
“Investments” has the meaning given to such term in Section 8.5. 

    
“Issuing Lender” means Wells Fargo in its capacity as issuer of the Letters
of Credit, and its successors in such capacity. 

    
“Joint Venture” means any Person that is not a Subsidiary in which the
Borrower or any of its Subsidiaries has made any Investment comprising more than
10% of the Capital Stock of such Person. The term “Joint Venture” shall include,
without limitation, any Person in which the Borrower or any of its Subsidiaries
has made an Investment that would be, in conformity with GAAP, set forth
opposite the caption “Investment in equity method franchisees” (or any like
caption) on a consolidated balance sheet of the Parent and its Subsidiaries.


16 







     “Lease Payments on Closed Stores” means rents and other amounts or sums paid or payable in cash pursuant
to operating leases for real property and equipment used in Closed Stores,
excluding Lease Settlement Payments. 

    
“Lease Settlement
Payments” means the amounts paid or payable
in cash in settlement of all future obligations under terminated operating
leases of real property and equipment.


    
“Lender” means each of the Revolving Credit Lenders and the Swingline
Lender.

    
“Lending Office” means, with respect to any Lender, the office of such Lender
designated as such in such Lender’s Administrative Questionnaire or in
connection with an Assignment and Assumption, or such other office as may be
otherwise designated in writing from time to time by such Lender to the Borrower
and the Administrative Agent. A Lender may designate separate Lending Offices as
provided in the foregoing sentence for the purposes of making or maintaining
different Types of Loans, and, with respect to LIBOR Loans, such office may be a
domestic or foreign branch or Affiliate of such Lender. 

    
“Letter of Credit
Exposure” means, with respect to any
Revolving Credit Lender at any time, such Lender’s ratable share (based on the
proportion that its Revolving Credit Commitment bears to the aggregate Revolving
Credit Commitments at such time) of the sum of (i) the aggregate Stated Amount
of all Letters of Credit outstanding at such time and (ii) the aggregate amount
of all Reimbursement Obligations outstanding at such time. 

    
“Letter of Credit Maturity
Date” means the fifth Business Day prior to
the Revolving Credit Maturity Date. 

    
“Letter of Credit
Notice” has the meaning given to such term in
Section 3.2. 

    
“Letter of Credit
Sublimit” means $12,500,000 or, if less, the
aggregate Revolving Credit Commitments at the time of determination, as such
amount may be increased or reduced at or prior to such time in accordance with
the terms hereof. 

    
“Letters of Credit” has the meaning given to such term in Section 3.1. 

    
“Leverage Ratio” means, as of the last day of any Reference Period ending on
the last day of a Fiscal Quarter, the ratio of (i) Consolidated Funded Debt as
of such date to (ii) Consolidated EBITDA for such Reference Period. 

    
“LIBOR Loan” means, at any time, any Loan that bears interest at such time at the
applicable Adjusted LIBOR Rate. 

    
“LIBOR Rate” means, with respect to each LIBOR Loan comprising part of the same
Borrowing for any Interest Period, an interest rate per annum obtained by
dividing (i) (y) the rate of interest appearing on Reuters Screen LIBOR01 Page
(or any successor page) that represents an average British Bankers Association
Interest Settlement Rate for Dollar deposits or (z) if no such rate is
available, the rate of interest determined by the Administrative Agent to be the
rate or the arithmetic mean of rates at which Dollar deposits in immediately
available funds are offered to first-tier banks in the London interbank
Eurodollar market, in each case under (y) and (z) above
at approximately 11:00 a.m., London time, two Business Days prior to the first
day of such Interest Period for a period substantially equal to such Interest
Period and in an amount substantially equal to the amount of Wells Fargo’s LIBOR
Loan comprising part of such Borrowing, by (ii) the amount equal to 1.00 minus
the Reserve Requirement (expressed as a decimal) for such Interest Period.


17 







     “Lien” means any mortgage,
pledge, hypothecation, assignment, security interest, lien (statutory or
otherwise), charge or other encumbrance of any nature, whether voluntary or
involuntary, including, without limitation, the interest of any vendor or lessor
under any conditional sale agreement, title retention agreement, Capital Lease
or any other lease or arrangement having substantially the same effect as any of
the foregoing. 

    
“Loans” means any or all of the Revolving Loans and the Swingline Loans.


    
“Margin Stock” has the meaning given to such term in Regulation U.


    
“Material Adverse
Effect” means a material adverse effect upon
(i) the business, assets, properties, liabilities (actual or contingent),
operations or condition (financial or otherwise) of the Parent and its
Subsidiaries, taken as a whole, (ii) the ability of the Credit Parties (taken as
a whole) to perform their obligations under this Agreement or any of the other
Credit Documents or (iii) the legality, validity or enforceability of this
Agreement or any of the other Credit Documents or the rights and remedies of the
Administrative Agent and the Lenders hereunder and thereunder. 

    
“Material Contract” has the meaning given to such term in Section 5.19. 

    
“Multiemployer Plan” means any “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate makes, is making or is obligated to make contributions or
has made or been obligated to make contributions. 

    
“Net Cash Proceeds” means, in the case of any Casualty Event or Asset
Disposition, the aggregate cash proceeds received by any Company Party in
respect thereof (including, in the case of a Casualty Event, insurance proceeds
and condemnation awards), less (i) reasonable fees and out-of-pocket expenses
payable by the Parent or any of its Subsidiaries in connection therewith, (ii)
taxes paid or payable as a result thereof, and (iii) the amount required to
retire Indebtedness (other than the Obligations) to the extent such Indebtedness
is secured by Permitted Liens on the subject property; it being understood that
the term “Net Cash Proceeds” shall include, as, when and to the extent received, any cash
received upon the sale or other disposition of any non-cash consideration
received by any Company Party in respect of any of the foregoing events
(including without limitation any promissory note). 

    
“Nonconsenting Lender” means any Lender that does not approve a consent, waiver or
amendment to any Credit Document requested by the Borrower or the Administrative
Agent and that requires the approval of all Lenders (or all Lenders directly
affected thereby) under Section
11.5 when the Required Lenders have agreed to
such consent, waiver or amendment. 

    
“Notes” means any or all of the Revolving Notes and the Swingline Note.


18 









     “Notice of Borrowing” has
the meaning given to such term in Section
2.2(b). 

    
“Notice of
Conversion/Continuation” has the meaning
given to such term in Section
2.11(b). 

    
“Notice of Swingline
Borrowing” has the meaning given to such term
in Section 2.2(d). 

    
“Obligations” means all principal of and interest (including interest accruing after
the filing of a petition or commencement of a case by or with respect to the
Borrower seeking relief under any applicable federal and state laws pertaining
to bankruptcy, reorganization, arrangement, moratorium, readjustment of debts,
dissolution, liquidation or other debtor relief, specifically including, without
limitation, the Bankruptcy Code and any fraudulent transfer and fraudulent
conveyance laws, whether or not the claim for such interest is allowed in such
proceeding) on the Loans and Reimbursement Obligations and all fees, expenses,
indemnities and other obligations owing, due or payable at any time by the
Parent, the Borrower or any Subsidiary Guarantor to the Administrative Agent,
any Lender, the Swingline Lender, the Issuing Lender or any other Person
entitled thereto, under this Agreement or any of the other Credit Documents
(other than Excluded Swap Obligations), and all payment and other obligations
owing or payable at any time by the Borrower to any Hedge Party under or in
connection with any Hedge Agreement permitted by this Agreement (other than
Excluded Swap Obligations), in each case whether direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, and whether existing by contract, operation
of law or otherwise. 

    
“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control, and any successor thereto. 

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

    
“Parent” has the meaning given to such term in the introductory paragraph
hereof. 

    
“Participant” has the meaning given to such term in Section 11.6(e). 

    
“PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
(USA PATRIOT Act) of 2001, as amended from time to time, and any successor
statute, and all rules and regulations from time to time promulgated thereunder.


    
“Payment Office” means the office of the Administrative Agent designated on
Schedule 1.1(a) under the heading “Instructions for wire transfers to the Administrative
Agent,” or such other office as the Administrative Agent may designate to the
Lenders and the Borrower for such purpose from time to time. 

    
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA, and any successor thereto. 

19 







     “Permitted Liens” has the
meaning given to such term in Section
8.3. 

    
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity. 

    
“Plan” means any “employee pension benefit plan” within the meaning of Section
3(2) of ERISA that is subject to the provisions of Title IV of ERISA (other than
a Multiemployer Plan) and to which the Borrower or any ERISA Affiliate may have
any liability. 

    
“Platform” has the meaning given to such term in Section 11.4(b). 

    
“PPA 2006 Effective
Date” means, with respect to any Plan, except
as hereinafter provided, the first day of the first plan year beginning on or
after January 1, 2008, However, solely with respect to a Plan maintained
pursuant to one or more collective bargaining agreements between employee
representatives and one or more employers ratified before January 1, 2008, such
term means the first day of the first plan year beginning on or after the
earlier of (A) and (B), where (A) is the later of (x) the date on which the last
collective bargaining agreement relating to the Plan terminates (determined
without regard to any extension thereof agreed to after August 17, 2006), or (y)
the first day of the first plan year beginning on or after January 1, 2008; and
(B) is January 1, 2010. 

    
“Prohibited Transaction” means any transaction described in (i) Section 406 of ERISA
that is not exempt by reason of Section 408 of ERISA or by reason of a
Department of Labor prohibited transaction individual or class exemption or (ii)
Section 4975(c) of the Code that is not exempt by reason of Section 4975(c)(2)
or 4975(d) of the Code. 

    
“Qualified ECP” means, in respect of any Swap Obligation, each Credit Party
that (i) has total assets exceeding $10,000,000 at the time the relevant
guarantee or grant of the relevant security interest becomes effective with
respect to such Swap Obligation or (ii) otherwise constitutes an “eligible
contract participant” under the Commodity Exchange Act or any regulations
promulgated thereunder and can cause another person to qualify as an “eligible
contract participant” at such time by entering into a keepwell under Section
1a(18)(A)(v)(II) of the Commodity Exchange Act. 

    
“Realty” means all real property and interests in real property now or hereafter
acquired or leased by any Company Party. 

    
“Reference Period” with respect to any date of determination, means (except as
may be otherwise expressly provided herein) the period of twelve consecutive
fiscal months of the Parent and its Subsidiaries immediately preceding such date
or, if such date is the last day of a Fiscal Quarter, the period of four
consecutive Fiscal Quarters ending on such date. 

    
“Refunded Swingline
Loans” has the meaning given to such term in
Section 2.2(e). 

    
“Register” has the meaning given to such term in Section 11.6(d). 

    
“Regulations D, T, U and
X” means Regulations D, T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.


20 







    
“Reimbursement
Obligation” has the meaning given to such
term in Section 3.4. 

    
“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates. 

    
“Reportable Event” means, with respect to any Plan, (i) any “reportable event”
within the meaning of Section 4043(c) of ERISA for which the 30-day notice under
Section 4043(a) of ERISA has not been waived by the PBGC (including, without
limitation, any failure to meet the minimum funding standard of, or timely make
any required installment under, Section 412 of the Code or Section 302 of ERISA,
regardless of the issuance of any waivers in accordance with Section 412 of the
Code), (ii) any such “reportable event” subject to advance notice to the PBGC
under Section 4043(b)(3) of ERISA, (iii) any application for a funding waiver or
an extension of any amortization period pursuant to Section 412 of the Code, and
(iv) a cessation of operations described in Section 4062(e) of ERISA.


    
“Required Lenders” means, at any time, the Lenders holding outstanding Credit
Exposure (excluding Swingline Loans) and unutilized Commitments (or, after the
termination of the Commitments, outstanding Credit Exposure (excluding Swingline
Loans)) representing more than 50% of the aggregate, at such time, of all
outstanding Credit Exposure (excluding Swingline Loans) and unutilized
Commitments (or, after the termination of the Commitments, the aggregate at such
time of all outstanding Credit Exposure (excluding Swingline Loans)),
provided
that the Commitment of, and the portion of the outstanding Credit Exposure held
or deemed held by, any Defaulting Lender shall be excluded for purposes of
making a determination of Required Lenders.


    
“Requirement of Law” means, with respect to any Person, the charter, articles or
certificate of organization or incorporation and bylaws or other organizational
or governing documents of such Person, and any statute, law, treaty, rule,
regulation, order, decree, writ, injunction or determination of any arbitrator
or court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject or otherwise pertaining to any or all of the transactions
contemplated by this Agreement and the other Credit Documents. 

    
“Reserve Requirement” means, with respect to any Interest Period, the reserve
percentage (expressed as a decimal and rounded upwards, if necessary, to the
next higher 1/100th of 1%) in effect from time to time during such
Interest Period, as provided by the Federal Reserve Board, applied for
determining the maximum reserve requirements (including, without limitation,
basic, supplemental, marginal and emergency reserves) applicable to Wells Fargo
under Regulation D with respect to “Eurocurrency liabilities” within the meaning
of Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding. 

    
“Responsible Officer” means, with respect to any Credit Party, the president, the
chief executive officer, the chief financial officer or any other Financial
Officer of such Credit Party. 

    
“Restricted Payments” has the meaning given to such term in Section 8.6. 

21 







     “Revolving Credit Commitment” means, with respect to any Lender at any time, the commitment of such
Lender to make Revolving Loans in an aggregate principal amount at any time
outstanding up to the amount set forth opposite such Lender’s name on
Schedule 1.1(a) under the caption “Revolving Credit Commitment” (or, in the case of an
Additional Lender, set forth in joinder agreement described in Section 2.21(c)(i)) or, if any such Lender has entered into one or more Assignment and
Assumptions, the amount set forth for such Lender at such time in the Register
maintained by the Administrative Agent pursuant to Section 11.6(c) as such Lender’s
“Revolving Credit Commitment,” in either case, as such amount may be increased
or reduced at or prior to such time pursuant to the terms hereof. 

    
“Revolving Credit
Exposure” means, with respect to any
Revolving Credit Lender at any time, the sum of (i) the aggregate principal
amount of all Revolving Loans made by such Lender that are outstanding at such
time, (ii) such Lender’s Letter of Credit Exposure at such time and (iii) such
Lender’s Swingline Exposure at such time. 

    
“Revolving Credit
Lender” means any Person signatory hereto as
a “Lender” having a Revolving Credit Commitment (or, after the Revolving Credit
Commitments have terminated, any Person holding outstanding Revolving Loans),
and each other Person that becomes a “Revolving Credit Lender” hereunder
pursuant to Section 2.21 or 11.6, and their respective successors and assigns. 

    
“Revolving Credit Maturity
Date” means the fifth anniversary of the
Closing Date. 

    
“Revolving Credit Termination
Date” means the Revolving Credit Maturity
Date or such earlier date of termination of the Revolving Credit Commitments
pursuant to Section 2.5 or 9.2. 

    
“Revolving Loans” has the meaning given to such term in Section 2.1(b). 

    
“Revolving Note” means, with respect to any Revolving Credit Lender
requesting the same, the promissory note of the Borrower in favor of such
Revolving Credit Lender evidencing the Revolving Loans made by such Lender
pursuant to Section 2.1(b), in substantially the form of Exhibit A-2, together with any
amendments, modifications and supplements thereto, substitutions therefor and
restatements thereof. 

    
“Sanctioned Country” means a country subject to a sanctions program identified on
the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs/, or as otherwise published from time to time. 

    
“Sanctioned Person” means (i) a Person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/-offices/enforcement/ofac/sdn/index.shtml, or as otherwise published from time to time, or (ii) (A) an
agency of the government of a Sanctioned Country, (B) an organization controlled
by a Sanctioned Country, or (C) a Person resident in a Sanctioned Country, to
the extent subject to a sanctions program administered by OFAC. 

    
“Security Agreement” means the Pledge and Security Agreement made by the Parent,
the Borrower and the Subsidiaries of the Borrower party thereto in favor of the
Administrative Agent, in substantially the form of
Exhibit E,
as amended, modified, restated or supplemented from time to time.


22 







    
“Security Documents” means the Security Agreement, the Post-Closing Agreement and
all other pledge agreements, security agreements, collateral assignments,
mortgages, deeds of trust, hypothecations or other similar agreements or
instruments executed and delivered by any Credit Party pursuant to
Section 6.8
or 6.9 or
otherwise in connection with the transactions contemplated hereby, in each case
as amended, modified, restated or supplemented from time to time.

    
“Specified Asset
Disposition” means any Asset Disposition or
series of Asset Dispositions (i) constituting the
sale of Capital Stock of a Subsidiary or (ii) in which the assets sold include
Realty or constitute all or substantially of the assets used by the Parent, the
Borrower and their respective Subsidiaries (A) at or in connection with the
operation of one or more retail store locations or (B) in one or more business
lines, segments or divisions. 

    
“Stated Amount” means, with respect to any Letter of Credit at any time
prior to its expiration, the aggregate amount available to be drawn thereunder
at such time (regardless of whether any conditions for drawing could then be
met). 

    
“Subsidiary” means, with respect to any Person, any corporation or other Person of
which more than 50% of the outstanding Capital Stock having ordinary voting
power to elect a majority of the board of directors, board of managers or other
governing body of such Person, is at the time, directly or indirectly, owned or
controlled by such Person and one or more of its other Subsidiaries or a
combination thereof (irrespective of whether, at the time, securities of any
other class or classes of any such corporation or other Person shall or might
have voting power by reason of the happening of any contingency). When used
without reference to a parent entity, the term “Subsidiary” shall be deemed to
refer to a Subsidiary of the Borrower. 

    
“Subsidiary Guarantor” means any Guarantor that is a Subsidiary of the Parent.


    
“Swap Obligation” means, with respect to any Guarantor, any obligation to pay
or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.


    
“Swingline Commitment” means $0. 

    
“Swingline Exposure” means, with respect to any Revolving Credit Lender at any
time, its maximum aggregate liability to make Refunded Swingline Loans pursuant
to Section 2.2(e) to refund, or to purchase participations pursuant to Section 2.2(f) in,
Swingline Loans that are outstanding at such time. 

    
“Swingline Lender” means Wells Fargo in its capacity as maker of Swingline
Loans, and its successors in such capacity. 

    
“Swingline Loans” has the meaning given to such term in Section 2.1(c). 

23 







    
“Swingline Maturity
Date” means the fifth Business Day prior to
the Revolving Credit Maturity Date. 

    
“Swingline Note” means, if requested by the Swingline Lender, the promissory
note of the Borrower in favor of the Swingline Lender evidencing the Swingline
Loans made by the Swingline Lender pursuant to Section 2.1(c), in substantially the
form of Exhibit A-3, together with any amendments, modifications and supplements thereto,
substitutions therefor and restatements thereof. 

    
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto. 

    
“Transactions” means, collectively, (i) the initial extensions of credit
hereunder on the Closing Date, and (ii) the payment of permitted fees and
expenses in connection with the foregoing. 

    
“Type” has the meaning given to such
term in Section 2.2(a). 

    
“Unfinanced Capital
Expenditures” means, for any period, the
aggregate amount that would, in accordance with GAAP, be included on the
consolidated statement of cash flows of the Parent and its Subsidiaries for such
period as additions to equipment, fixed assets, real property or improvements or
other capital assets (including, without limitation, Capital Lease Obligations),
except to the extent financed through the incurrence of Indebtedness;
provided,
however,
that Unfinanced Capital Expenditures shall not include any such expenditures (i)
for replacements, repairs or acquisitions of capital assets, to the extent made
with the proceeds of insurance from a Casualty Event, or (ii) for replacements,
repairs or acquisitions of capital assets, to the extent made with cash proceeds
from Asset Dispositions permitted under Section 8.4(iv), 8.4(v) or 8.4(ix). 

    
“Unfunded Pension
Liability” means, with respect to any Plan,
the excess of its benefit liabilities under Section 4001(a)(16) of ERISA over
the current value of its assets, determined in accordance with the applicable
assumptions used for funding under Section 412 of the Code for the applicable
plan year. 

    
“Unutilized Revolving Credit
Commitment” means, with respect to any
Revolving Credit Lender at any time, such Lender’s Revolving Credit Commitment
at such time less the sum of (i) the aggregate principal amount of all Revolving Loans made by
such Lender that are outstanding at such time, (ii) such Lender’s Letter of
Credit Exposure at such time and (iii) such Lender’s Swingline Exposure at such
time. 

    
“Unutilized Swingline
Commitment” means, with respect to the
Swingline Lender at any time, the Swingline Commitment at such time
less the
aggregate principal amount of all Swingline Loans that are outstanding at such
time. 

    
“Wells Fargo” means Wells Fargo Bank, National Association, and its successors and
assigns. 

24 







    
“Wholly Owned” means, with respect to any Subsidiary of any Person, that
100% of the outstanding Capital Stock of such Subsidiary (excluding in the case
of a Foreign Subsidiary only, any directors’ qualifying shares and shares
required to be held by foreign nationals) is owned, directly or indirectly, by
such Person. 

    
1.2 Accounting Terms. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with, GAAP
applied on a basis consistent with the most recent audited consolidated
financial statements of the Borrower delivered to the Lenders prior to the
Closing Date; provided that if the Borrower notifies the Administrative Agent that
it wishes to amend any financial covenant in Article VII to eliminate the effect of
any change in GAAP on the operation of such covenant (or if the Administrative
Agent notifies the Borrower that the Required Lenders wish to amend
Article VII
for such purpose), then the Borrower’s compliance with such covenant shall be
determined on the basis of GAAP as in effect immediately before the relevant
change in GAAP became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and the Required
Lenders. Notwithstanding the foregoing, for purposes of determining compliance
with the financial covenants contained in Article VII, any election by the
Parent or the Borrower or any of their respective Subsidiaries to measure an
item of Funded Debt using fair value (as permitted by Accounting Standards
Codification 825-10 or any similar standard) shall be disregarded and such
determination shall be made as if such election had not been made. 

    
1.3 Other Terms; Construction. 

    
(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,”
“includes”
and “including” shall be deemed to be followed by the phrase “without limitation.” The
word “will”
shall be construed to have the same meaning and effect as the word
“shall.”
Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented, restated or otherwise modified (subject to any restrictions on
such amendments, supplements, restatements or modifications set forth herein or
in any other Credit Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns permitted hereunder,
(iii) the words “herein,” “hereof” and “hereunder,” and words of similar
import when used in any Credit Document, shall be construed to refer to such
Credit Document in its entirety and not to any particular provision thereof,
(iv) all references in a Credit Document to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, the Credit Document in which such references appear, (v) any
reference to any law or regulation herein shall, unless otherwise specified,
refer to such law or regulation as amended, modified or supplemented from time
to time, and (vi) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.


25 







    
(b) All references herein to the Lenders or any of them shall be deemed to
include the Issuing Lender and the Swingline Lender unless specifically provided
otherwise or unless the context otherwise requires. 

ARTICLE II 

AMOUNT AND TERMS OF THE LOANS


     2.1 Commitments. 

    
(a) [Reserved].

    
(b) Each Revolving Credit Lender severally agrees, subject to and on the
terms and conditions of this Agreement, to make loans (each, a “Revolving Loan,” and
collectively, the “Revolving
Loans”) to the Borrower, from time to time on
any Business Day during the period from and including the Closing Date to but
not including the Revolving Credit Termination Date, in an aggregate principal
amount at any time outstanding not exceeding its Revolving Credit Commitment,
provided
that no Borrowing of Revolving Loans shall be made if, immediately after giving
effect thereto (and to any concurrent repayment of Swingline Loans with proceeds
of Revolving Loans made pursuant to such Borrowing), (y) the Revolving Credit
Exposure of any Revolving Credit Lender would exceed its Revolving Credit
Commitment at such time or (z) the Aggregate Revolving Credit Exposure would
exceed the aggregate Revolving Credit Commitments at such time. Subject to and
on the terms and conditions of this Agreement, the Borrower may borrow, repay
and reborrow Revolving Loans. 

    
(c) The Swingline Lender agrees, subject to and on the terms and conditions
of this Agreement, to make loans (each, a “Swingline Loan,” and collectively, the
“Swingline Loans”) to the Borrower, from time to time on any Business Day during the
period from the Closing Date to but not including the Swingline Maturity Date
(or, if earlier, the Revolving Credit Termination Date), in an aggregate
principal amount at any time outstanding not exceeding the Swingline Commitment.
Swingline Loans may be made even if the aggregate principal amount of
Swingline Loans outstanding at any time, when
added to the aggregate principal amount of the Revolving Loans made by the
Swingline Lender in its capacity as a Revolving Credit Lender outstanding at
such time and its Letter of Credit Exposure at such time, would exceed the
Swingline Lender’s own Revolving Credit Commitment at such time, but
provided
that no Borrowing of Swingline Loans shall be made if, immediately after giving
effect thereto, (y) the Revolving Credit Exposure of any Revolving Credit Lender
would exceed its Revolving Credit Commitment at such time or (z) the Aggregate
Revolving Credit Exposure would exceed the aggregate Revolving Credit
Commitments at such time, and provided further that the Swingline Lender
shall not make any Swingline Loan if any Lender is at that time a Defaulting
Lender, unless the Swingline Lender has entered into arrangements, including the
delivery of Cash Collateral, satisfactory to the Swingline Lender (in its sole
discretion) with the Borrower or such Lender to eliminate the Swingline Lender’s
actual or potential Fronting Exposure (after giving effect to Sections 2.20(a)(iii) and
2.20(a)(iv)) with respect to the Defaulting Lender arising from either the Swingline
Loan then proposed to be made or that the Swingline Loan and all other Swingline
Loans as to which the Swingline Lender has actual or potential Fronting
Exposure, as it may elect in its sole discretion. Subject to and on the terms
and conditions of this Agreement, the Borrower may
borrow, repay (including by means of a Borrowing of Revolving Loans pursuant to
Section 2.2(e)) and reborrow Swingline Loans. All Swingline Loans shall bear interest
at the Adjusted Base Rate. 

26 







     2.2 Borrowings. 

    
(a) The Revolving Loans (together with the Swingline Loans, a
“Class” of
Loan) shall, at the option of the Borrower and subject to the terms and
conditions of this Agreement, be either Base Rate Loans or LIBOR Loans (each, a
“Type” of
Loan), provided that (i) all Loans comprising the same Borrowing shall, unless otherwise
specifically provided herein, be of the same Type, and (ii) no LIBOR Loans may
be borrowed at any time prior to the third Business Day after the Closing Date.
The Swingline Loans shall be made and maintained as Base Rate Loans at all
times. 

     (b) In order to make a Borrowing (other than
(w) Borrowings of Swingline Loans, which shall be made pursuant to
Section 2.2(d), (x) Borrowings for the purpose of repaying Refunded Swingline Loans,
which shall be made pursuant to Section
2.2(e), (y) Borrowings for the purpose of
paying unpaid Reimbursement Obligations, which shall be made pursuant to
Section 3.5, and (z) Borrowings involving continuations or conversions of
outstanding Loans, which shall be made pursuant to Section 2.11), the Borrower will give
the Administrative Agent written notice not later than 11:00 a.m., Charlotte
time, prior to each Borrowing to be comprised of Base Rate Loans and three
Business Days prior to each Borrowing to be comprised of LIBOR Loans;
provided,
however,
that requests for the Borrowing of any Revolving Loans to be made on the Closing
Date may, at the discretion of the Administrative Agent, be given with less
advance notice than as specified hereinabove. Each such notice (each, a
“Notice of Borrowing”) shall be irrevocable, shall be given in the form of
Exhibit B-1
and shall specify (1) the aggregate principal amount, Class and initial Type of
the Loans to be made pursuant to such Borrowing, (2) in the case of a Borrowing
of LIBOR Loans, the initial Interest Period to be applicable thereto, and (3)
the requested Borrowing Date, which shall be a Business Day. Upon its receipt of
a Notice of Borrowing, the Administrative Agent will promptly notify each
applicable Lender of the proposed Borrowing. Notwithstanding anything to the
contrary contained herein: 

     (i) [reserved]; 

     (ii) the aggregate principal amount of each
Borrowing comprised of Base Rate Loans shall not be less than $3,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof (or, in the case
of a Borrowing of Revolving Loans, if less, in the amount of the aggregate
Revolving Credit Commitments less the Aggregate Revolving Credit Exposure), and
the aggregate principal amount of each Borrowing comprised of LIBOR Loans shall
not be less than $5,000,000 or, if greater, an integral multiple of $1,000,000
in excess thereof; 

     (iii) if the Borrower shall have failed to
designate the Type of Loans comprising a Borrowing, the Borrower shall be deemed
to have requested a Borrowing comprised of Base Rate Loans; and 

27 







     (iv) if the Borrower shall have failed to
select the duration of the Interest Period to be applicable to any Borrowing of
LIBOR Loans, then the Borrower shall be deemed to have selected an Interest
Period with a duration of one month. 

     (c) Not later than 1:00 p.m., Charlotte time,
on the requested Borrowing Date, each applicable Lender will make available to
the Administrative Agent at the Payment Office an amount, in Dollars and in
immediately available funds, equal to the amount of the Loan or Loans to be made
by such Lender. To the extent such Lenders have made such amounts available to
the Administrative Agent as provided hereinabove, the Administrative Agent will
make the aggregate of such amounts available to the Borrower in accordance with
Section 2.3(a) and in like funds as received by the Administrative Agent. 

     (d) In order to make a Borrowing of a
Swingline Loan (other than borrowings pursuant to a Wells Fargo Financial
Management Account or similar cash management product offered by Wells Fargo,
which shall be effected as provided thereunder), the Borrower will give the
Administrative Agent (and the Swingline Lender, if the Swingline Lender is not
also the Administrative Agent) written notice not later than 11:00 a.m.,
Charlotte time, on the date of such Borrowing. Each such notice (each, a
“Notice of Swingline Borrowing”) shall be given in the form of Exhibit B-2, shall be irrevocable and
shall specify (i) the principal amount of the Swingline Loan to be made pursuant
to such Borrowing (which shall not be less than $100,000 and, if greater, shall
be in an integral multiple of $100,000 in excess thereof (or, if less, in the
amount of the Unutilized Swingline Commitment)) and (ii) the requested Borrowing
Date, which shall be a Business Day. Not later than 1:00 p.m., Charlotte time,
on the requested Borrowing Date, the Swingline Lender will make available to the
Administrative Agent at the Payment Office an amount, in Dollars and in
immediately available funds, equal to the amount of the requested Swingline
Loan. To the extent the Swingline Lender has made such amount available to the
Administrative Agent as provided hereinabove, the Administrative Agent will make
such amount available to the Borrower in accordance with Section 2.3(a) and in like
funds as received by the Administrative Agent. 

     (e) With respect to any outstanding Swingline
Loans, the Swingline Lender may at any time (whether or not an Event of Default
has occurred and is continuing) in its sole and absolute discretion, and is
hereby authorized and empowered by the Borrower to, cause a Borrowing of
Revolving Loans to be made for the purpose of repaying such Swingline Loans by
delivering to the Administrative Agent (if the Administrative Agent is not also
the Swingline Lender) and each other Revolving Credit Lender (on behalf of, and
with a copy to, the Borrower), not later than 11:00 a.m., Charlotte time, one
Business Day prior to the proposed Borrowing Date therefor, a notice (which
shall be deemed to be a Notice of Borrowing given by the Borrower) requesting
the Revolving Credit Lenders to make Revolving Loans (which shall be made
initially as Base Rate Loans) on such Borrowing Date in an aggregate amount
equal to the amount of such Swingline Loans (the “Refunded Swingline Loans”) outstanding
on the date such notice is given that the Swingline Lender requests to be
repaid. Not later than 1:00 p.m., Charlotte time, on the requested Borrowing
Date, each Revolving Credit Lender (other than the Swingline Lender) will make
available to the Administrative Agent at the Payment Office an amount, in
Dollars and in immediately available funds, equal to the amount of the Revolving
Loan to be made by such Lender. To the extent the Revolving Credit Lenders have
made such amounts available to the Administrative Agent as provided hereinabove,
the Administrative Agent will make the aggregate of such
amounts available to the Swingline Lender in like funds as received by the
Administrative Agent, which shall apply such amounts in repayment of the
Refunded Swingline Loans. Notwithstanding any provision of this Agreement to the
contrary, on the relevant Borrowing Date, the Refunded Swingline Loans
(including the Swingline Lender’s ratable share thereof, in its capacity as a
Revolving Credit Lender) shall be deemed to be repaid with the proceeds of the
Revolving Loans made as provided above (including a Revolving Loan deemed to
have been made by the Swingline Lender), and such Refunded Swingline Loans
deemed to be so repaid shall no longer be outstanding as Swingline Loans but
shall be outstanding as Revolving Loans. If any portion of any such amount
repaid (or deemed to be repaid) to the Swingline Lender shall be recovered by or
on behalf of the Borrower from the Swingline Lender in any bankruptcy,
insolvency or similar proceeding or otherwise, the loss of the amount so
recovered shall be shared ratably among all the Revolving Credit Lenders in the
manner contemplated by Section
2.15(b). 

28 







     (f) If, as a result of any
bankruptcy, insolvency or similar proceeding with respect to the Borrower,
Revolving Loans are not made pursuant to Section 2.2(e) in an amount sufficient
to repay any amounts owed to the Swingline Lender in respect of any outstanding
Swingline Loans, or if the Swingline Lender is otherwise precluded for any
reason from giving a notice on behalf of the Borrower as provided for
hereinabove, the Swingline Lender shall be deemed to have sold without recourse,
representation or warranty (except for the absence of Liens thereon created,
incurred or suffered to exist by, through or under the Swingline Lender), and
each Revolving Credit Lender shall be deemed to have purchased and hereby agrees
to purchase, a participation in such outstanding Swingline Loans in an amount
equal to its ratable share (based on the proportion that its Revolving Credit
Commitment bears to the aggregate Revolving Credit Commitments at such time) of
the unpaid amount thereof together with accrued interest thereon. Upon one
Business Day’s prior notice from the Swingline Lender, each Revolving Credit
Lender (other than the Swingline Lender) will make available to the
Administrative Agent at the Payment Office an amount, in Dollars and in
immediately available funds, equal to its respective participation. To the
extent the Revolving Credit Lenders have made such amounts available to the
Administrative Agent as provided hereinabove, the Administrative Agent will make
the aggregate of such amounts available to the Swingline Lender in like funds as
received by the Administrative Agent. In the event any such Revolving Credit
Lender fails to make available to the Administrative Agent the amount of such
Lender’s participation as provided in this Section 2.2(f), the Swingline Lender
shall be entitled to recover such amount on demand from such Lender, together
with interest thereon for each day from the date such amount is required to be
made available for the account of the Swingline Lender until the date such
amount is made available to the Swingline Lender at the Federal Funds Rate for
the first three Business Days and thereafter at the Adjusted Base Rate
applicable to Revolving Loans. Promptly following its receipt of any payment by
or on behalf of the Borrower in respect of a Swingline Loan, the Swingline
Lender will pay to each Revolving Credit Lender that has acquired a
participation therein such Lender’s ratable share of such payment. 

    
(g) Notwithstanding any provision of this Agreement to the contrary, the
obligation of each Revolving Credit Lender (other than the Swingline Lender) to
make Revolving Loans for the purpose of repaying any Refunded Swingline Loans
pursuant to Section 2.2(e) and each such Lender’s obligation to purchase a participation
in any unpaid Swingline Loans pursuant to Section 2.2(f) shall be absolute and
unconditional and shall not be affected by any circumstance or event whatsoever, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right that such Lender may have
against the Swingline Lender, the Administrative Agent, the Borrower or any
other Person for any reason whatsoever, (ii) the occurrence or continuance of
any Default or Event of Default, (iii) the failure of the amount of such
Borrowing of Revolving Loans to meet the minimum Borrowing amount specified in
Section 2.2(b), or (iv) the failure of any conditions set forth in Section 4.2 or elsewhere
herein to be satisfied. 

29 







    
2.3 Disbursements; Funding Reliance; Domicile of Loans. 

    
(a) The Borrower hereby authorizes the Administrative Agent to disburse the
proceeds of each Borrowing in accordance with the terms of any written
instructions from any Authorized Officer of the Borrower, provided that the
Administrative Agent shall not be obligated under any circumstances to forward
amounts to any account not listed in an Account Designation Letter. The Borrower
may at any time deliver to the Administrative Agent an Account Designation
Letter listing any additional accounts or deleting any accounts listed in a
previous Account Designation Letter. 

    
(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section
2.2 or 3.5 and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation and (ii) in the case of a payment to be made by the
Borrower, the Adjusted Base Rate. If the Borrower and such Lender shall pay such
interest to the Administrative Agent for the same
or an overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Loan included in
such Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent. 

    
(c) The obligations of the Lenders hereunder to make Loans, to fund
participations in Letters of Credit and Swingline Loans and to make payments
pursuant to Section 11.1(c) are several and not joint. The failure of any Lender to make
any Loan, to fund any such participation or to make any such payment on any date
shall not relieve any other Lender of its corresponding obligation, if any,
hereunder to do so on such date, but no Lender shall be responsible for the
failure of any other Lender to so make its Loan, purchase its participation or
to make any such payment required hereunder. 

30 









     (d) Each Lender may, at its
option, make and maintain any Loan at, to or for the account of any of its
Lending Offices, provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan to or for the account of such
Lender in accordance with the terms of this Agreement. 

    
2.4 Evidence of Debt; Notes. 

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

    
(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.6(c), and a subaccount for each Lender, in which Register and subaccounts
(taken together) shall be recorded (i) the amount of each such Loan, the Class
and Type of each such Loan and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder in respect of each such Loan and
(iii) the amount of any sum received by the Administrative Agent hereunder from
the Borrower in respect of each such Loan and each Lender’s share thereof.


    
(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to Section 2.4(b) (and, if consistent with the entries of the Administrative
Agent, Section 2.4(a)) shall, to the extent permitted by applicable law, be prima
facie evidence of the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of any Lender or the Administrative Agent
to maintain such account, such Register or such subaccount, as applicable, or
any error therein, shall not in any manner affect the obligation of the Borrower
to repay (with applicable interest) the Loans made to the Borrower by such
Lender in accordance with the terms of this Agreement. 

    
(d) The Loans of each Class made by each Lender shall, if requested by the
applicable Lender (which request shall be made to the Administrative Agent), be
evidenced (i) in the case of Revolving Loans, by a Revolving Note appropriately
completed in substantially the form of Exhibit
A-2, and (ii) in the case of the Swingline
Loans, by a Swingline Note appropriately completed in substantially the form of
Exhibit A-3, in each case executed by the Borrower and payable to the order of such
Lender. Each Note shall be entitled to all of the benefits of this Agreement and
the other Credit Documents and shall be subject to the provisions hereof and
thereof. 

    
2.5 Termination and Reduction of Commitments and Swingline Commitment.

    
(a) The Revolving Credit Commitments shall be automatically and permanently
terminated on the Revolving Credit Termination Date, unless sooner terminated
pursuant to any other provision of this Section 2.5 or Section 9.2. The Swingline
Commitment shall be automatically and permanently terminated on the Swingline
Maturity Date, unless sooner terminated pursuant to any other provision of this
Section 2.5
or Section 9.2. 

31







    
(b) At
any time and from time to time after the date hereof, upon not less than five
Business Days’ prior written notice to the Administrative Agent (and in the case
of a termination or reduction of the Unutilized Swingline Commitment, the
Swingline Lender), the Borrower may terminate in whole or reduce in part the
aggregate Unutilized Revolving Credit Commitments or the Unutilized Swingline
Commitment, provided that any such partial reduction shall be in an aggregate
amount of not less than $5,000,000 ($500,000 in the case of the Unutilized
Swingline Commitment) or, if greater, an integral multiple of $1,000,000 in
excess thereof ($100,000 in the case of the Unutilized Swingline Commitment).
The amount of any termination or reduction made under this Section 2.5(b) may not
thereafter be reinstated. 

    
(c) Each reduction of the Revolving Credit Commitments pursuant to this
Section shall be applied ratably among the Revolving Credit Lenders according to
their respective Revolving Credit Commitments. Notwithstanding any provision of
this Agreement to the contrary, any reduction of the Revolving Credit
Commitments pursuant to this Section
2.5 that has the effect of reducing the
aggregate Revolving Credit Commitments to an amount less than the amount of the
Swingline Commitment or the Letter of Credit Sublimit at such time shall result
in an automatic corresponding reduction of the Swingline Commitment or the
Letter of Credit Sublimit, as the case may be, to the amount of the aggregate
Revolving Credit Commitments (as so reduced), without any further action on the
part of the Borrower, the Swingline Lender or any other Lender. 

    
2.6 Mandatory Payments and Prepayments.


    
(a) [Reserved]. 

    
(b) Except to the extent due or paid sooner pursuant to the provisions of
this Agreement, (i) the aggregate outstanding principal of the Revolving Loans
shall be due and payable in full on the Revolving Credit Maturity Date, and (ii)
the aggregate outstanding principal of the Swingline Loans shall be due and
payable in full on the Swingline Maturity Date. 

    
(c) In
the event that, at any time, the Aggregate Revolving Credit Exposure (excluding
the aggregate amount of any Swingline Loans to be repaid with proceeds of
Revolving Loans made on the date of determination) shall exceed the aggregate
Revolving Credit Commitments at such time (after giving effect to any concurrent
termination or reduction thereof), the Borrower will immediately prepay the
outstanding principal amount of the Swingline Loans and, to the extent of any
excess remaining after prepayment in full of outstanding Swingline Loans, the
outstanding principal amount of the Revolving Loans in the amount of such
excess; provided that, to the extent such excess amount is greater than the aggregate
principal amount of Swingline Loans and Revolving Loans outstanding immediately
prior to the application of such prepayment, the amount so prepaid shall be
retained by the Administrative Agent and held in the Cash Collateral Account as
cover for Letter of Credit Exposure, as more particularly described in
Section 3.8, and thereupon such cash shall be deemed to reduce the aggregate Letter
of Credit Exposure by an equivalent amount. 

32







    
2.7 Voluntary Prepayments. 

    
(a) At
any time and from time to time, the Borrower shall have the right to prepay the
Loans, in whole or in part, without premium or penalty (except as provided in
clause (iii) below), upon written notice given to the Administrative Agent not
later than 11:00 a.m., Charlotte time, three Business Days prior to each
intended prepayment of LIBOR Loans and one Business Day prior to each intended
prepayment of Base Rate Loans (other than Swingline Loans, which may be prepaid
on a same-day basis), provided that (i) each partial prepayment of LIBOR Loans shall be in
an aggregate principal amount of not less than $5,000,000 or, if greater, an
integral multiple of $1,000,000 in excess thereof, and each partial prepayment
of Base Rate Loans shall be in an aggregate principal amount of not less than
$3,000,000 or, if greater, an integral multiple of $1,000,000 in excess thereof
($100,000 and $100,000, respectively, in the case of Swingline Loans), (ii) no
partial prepayment of LIBOR Loans made pursuant to any single Borrowing shall
reduce the aggregate outstanding principal amount of the remaining LIBOR Loans
under such Borrowing to less than $5,000,000 or to any greater amount not an
integral multiple of $1,000,000 in excess thereof, and (iii) unless made
together with all amounts required under Section 2.18 to be paid as a
consequence of such prepayment, a prepayment of a LIBOR Loan may be made only on
the last day of the Interest Period applicable thereto. Each such notice shall
specify the proposed date of such prepayment and the aggregate principal amount,
Class and Type of the Loans to be prepaid (and, in the case of LIBOR Loans, the
Interest Period of the Borrowing pursuant to which made), and shall be
irrevocable and shall bind the Borrower to make such prepayment on the terms
specified therein. Revolving Loans and Swingline Loans prepaid pursuant to this
Section 2.7(a) may be reborrowed, subject to the terms and conditions of this
Agreement. In the event the Administrative Agent receives a notice of prepayment
under this Section, the Administrative Agent will give prompt notice thereof to
the Lenders; provided that if such notice has also been furnished to the Lenders,
the Administrative Agent shall have no obligation to notify the Lenders with
respect thereto. 

    
(b) Each prepayment of the Loans made pursuant to Section 2.7(a) shall be applied
ratably among the Lenders holding the Loans being prepaid, in proportion to the
principal amount held by each, provided that if any Lender is a
Defaulting Lender at the time of any such prepayment, any voluntary prepayment
of the Loans shall, if the Administrative Agent so directs at the time of making
such voluntary prepayment, be applied to the Loans of other Lenders as if such
Defaulting Lender had no Loans outstanding and the outstanding Loans of such
Defaulting Lender were zero. 

    
2.8 Interest. 

    
(a) The Borrower will pay interest in respect of the unpaid principal amount
of each Loan, from the date of Borrowing thereof until such principal amount
shall be paid in full, (i) at the Adjusted Base Rate, as in effect from time to
time during such periods as such Loan is a Base Rate Loan, and (ii) at the
Adjusted LIBOR Rate, as in effect from time to time during such periods as such
Loan is a LIBOR Loan. 

    
(b) Upon the occurrence and during the continuance of any Event of Default
under Section 9.1(a) or as a result of a Bankruptcy Event, and (at the election of
the Required Lenders) upon the occurrence and during the continuance of any
other Event of Default, all outstanding principal
amounts of the Loans and, to the greatest extent permitted by law, all interest
accrued on the Loans and all other accrued and outstanding fees and other
amounts hereunder or under any other Credit Document, shall bear interest at a
rate per annum equal to the interest rate applicable from time to time
thereafter to such Loans (whether the Adjusted Base Rate or the Adjusted LIBOR
Rate) plus
2% (or, in the case of interest, fees and other amounts for which no rate is
provided hereunder, at the Adjusted Base Rate applicable to Revolving Loans
plus 2%),
and, in each case, such default interest shall be payable on demand. To the
greatest extent permitted by law, interest shall continue to accrue after the
filing by or against the Borrower of any petition seeking any relief under or
pursuant to any Debtor Relief Law. 

33







     (c) Accrued (and theretofore
unpaid) interest shall be payable as follows: 

    
(i) in respect of each Base Rate Loan (including any Base Rate Loan or
portion thereof paid or prepaid pursuant to the provisions of Section 2.6, except as
provided hereinbelow), in arrears on the last Business Day of each calendar
quarter, beginning with the first such day to occur after the Closing Date;
provided
that in the event the Loans are repaid or prepaid in full and the Commitments
have been terminated, then accrued interest in respect of all Base Rate Loans
shall be payable together with such repayment or prepayment on the date thereof;


    
(ii) in respect of each LIBOR Loan (including any LIBOR Loan or portion
thereof paid or prepaid pursuant to the provisions of Section 2.6, except as provided
hereinbelow), in arrears (y) on the last Business Day of the Interest Period
applicable thereto (subject to the provisions of Section 2.10(iv)) and (z) in
addition, in the case of a LIBOR Loan with an Interest Period having a duration
of six months or longer, on each date on which interest would have been payable
under clause (y) above had successive Interest Periods of three month’s duration
been applicable to such LIBOR Loan; provided that in the event all LIBOR
Loans made pursuant to a single Borrowing are repaid or prepaid in full, then
accrued interest in respect of such LIBOR Loans shall be payable together with
such repayment or prepayment on the date thereof; and 

    
(iii) in respect of any Loan, at maturity (whether pursuant to acceleration or
otherwise) and, after maturity, on demand. 

    
(d) Nothing contained in this Agreement or in any other Credit Document shall
be deemed to establish or require the payment of interest to any Lender at a
rate in excess of the maximum rate permitted by applicable law. If the amount of
interest payable for the account of any Lender on any interest payment date
would exceed the maximum amount permitted by applicable law to be charged by
such Lender, the amount of interest payable for its account on such interest
payment date shall be automatically reduced to such maximum permissible amount.
In the event of any such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such Lender on any
interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence. 

34







     (e) The Administrative Agent
shall promptly notify the Borrower and the Lenders upon determining the interest
rate for each Borrowing of LIBOR Loans after its receipt of the relevant Notice
of Borrowing or Notice of Conversion/Continuation, and upon each change in the
Base Rate; provided, however, that the failure of the Administrative Agent to provide the Borrower or
the Lenders with any such notice shall neither affect any obligations of the
Borrower or the Lenders hereunder nor result in any liability on the part of the
Administrative Agent to the Borrower or any Lender. Each such determination
(including each determination of the Reserve Requirement) shall, absent manifest
error, be conclusive and binding on all parties hereto. 

    
(f) In
the event that any financial statement or Compliance Certificate delivered
pursuant to Section 5.11, 6.1 or 6.2 is shown to be inaccurate (regardless of whether this
Agreement or the Commitments are in effect when such inaccuracy is discovered),
and such inaccuracy, if corrected, would have led to the application of a higher
Applicable Percentage for any period (an “Applicable Period”) than the
Applicable Percentage applied for such Applicable Period, then the Borrower
shall immediately (i) deliver to the Administrative Agent a correct Compliance
Certificate for such Applicable Period, (ii) determine the Applicable Percentage
for such Applicable Period based upon the corrected Compliance Certificate, and
(iii) immediately pay to the Administrative Agent the accrued additional
interest and commitment fees owing as a result of such increased Applicable
Percentage for such Applicable Period, which payment shall be promptly applied
by the Administrative Agent in accordance with Section 2.12(e). This Section 2.8(e) is in
addition to the rights of the Administrative Agent and Lenders with respect to
Sections 2.8(b) and 9.1 and other respective rights under this Agreement. 

    
2.9 Fees. The Borrower agrees to pay:


    
(a) To
the Administrative Agent, for the account of Wells Fargo, an origination fee
equal to 0.10% of Wells Fargo’s Commitment as of the Closing Date, payable in
full on the Closing Date; 

    
(b) To
the Administrative Agent, for the account of each Revolving Credit Lender, a
commitment fee for each calendar quarter (or portion thereof) for the period
from the date of this Agreement to the Revolving Credit Termination Date, at a
per annum rate equal to the Commitment Fee Percentage in effect for such fee
from time to time during such quarter on such Lender’s ratable share (based on
the proportion that its Revolving Credit Commitment bears to the aggregate
Revolving Credit Commitments) of the average daily aggregate Unutilized
Revolving Credit Commitments (excluding clause (iii) of the definition thereof
for purposes of this Section
2.9(b) only), payable in arrears (i) on the
last Business Day of each calendar quarter, beginning with the first such day to
occur after the Closing Date, and (ii) on the Revolving Credit Termination Date;
provided,
however,
that no commitment fee shall accrue on the Unutilized Revolving Credit
Commitment of a Defaulting Lender during any period that such Lender shall be a
Defaulting Lender;

35







    
(c) To
the Administrative Agent, for the account of each Revolving Credit Lender, a
letter of credit fee for each calendar quarter (or portion thereof) in respect
of all Letters of Credit outstanding during such quarter, at a per annum rate
equal to the Applicable Percentage in effect from time to time during such
quarter for Revolving Loans that are maintained as LIBOR Loans, on such Lender’s
ratable share (based on the proportion that its Revolving Credit Commitment
bears to the aggregate Revolving Credit Commitments) of the daily average
aggregate Stated Amount of such Letters of Credit, payable in arrears (i) on the
last Business Day of each calendar quarter, beginning with the first such day to
occur after the Closing Date, and (ii) on the later of the Revolving Credit
Termination Date and the date of termination of the last outstanding Letter of
Credit; provided, however, that any Letter of Credit Fees otherwise payable for the account of a
Defaulting Lender with respect to any Letter of Credit as to which such
Defaulting Lender has not provided Cash Collateral satisfactory to the Issuing
Lender pursuant to Section
3.1(a) shall be payable, to the maximum
extent permitted by applicable Law, to the other Lenders in accordance with the
upward adjustments in their respective Applicable Percentages allocable to such
Letter of Credit pursuant to Section
2.20(a)(iv), with the balance of such fee,
if any, payable to the Issuing Lender for its own account; 

    
(d) At
all times that there are two or more Lenders, to the Issuing Lender, for its own
account, a facing fee for each calendar quarter (or portion thereof) in respect
of all Letters of Credit outstanding during such quarter, at a per annum rate of
0.125% on the daily average aggregate Stated Amount of such Letters of Credit,
payable in arrears (i) on the last Business Day of each calendar quarter,
beginning with the first such day to occur after the Closing Date, and (ii) on
the later of the Revolving Credit Termination Date and the date of termination
of the last outstanding Letter of Credit; 

    
(e) To
the Issuing Lender, for its own account, such commissions, transfer fees and
other fees and charges incurred in connection with the issuance and
administration of each Letter of Credit as are customarily charged from time to
time by the Issuing Lender for the performance of such services in connection
with similar letters of credit, or as may be otherwise agreed to by the Issuing
Lender, but without duplication of amounts payable under Section 2.9(d); and


    
2.10 Interest Periods. Concurrently with
the giving of a Notice of Borrowing or Notice of Conversion/Continuation in
respect of any Borrowing comprised of Base Rate Loans to be converted into, or
LIBOR Loans to be continued as, LIBOR Loans, the Borrower shall have the right
to elect, pursuant to such notice, the interest period (each, an
“Interest Period”) to be applicable to such LIBOR Loans, which Interest Period shall, at
the option of the Borrower, be a one, two, three or six-month period;
provided,
however,
that: 

    
(i) all LIBOR Loans comprising a single Borrowing shall at all times have the
same Interest Period; 

    
(ii) the initial Interest Period for any LIBOR Loan shall commence on the date
of the Borrowing of such LIBOR Loan (including the date of any continuation of,
or conversion into, such LIBOR Loan), and each successive Interest Period
applicable to such LIBOR Loan shall commence on the day on which the next
preceding Interest Period applicable thereto expires; 

36







    
(iii) LIBOR Loans may not be outstanding under more than eight separate
Interest Periods at any one time (for which purpose Interest Periods shall be
deemed to be separate even if they are coterminous); 

    
(iv) if any Interest Period otherwise would expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day unless such next succeeding Business Day falls in another calendar month, in
which case such Interest Period shall expire on the next preceding Business Day;


    
(v) [reserved]; 

    
(vi) the Borrower may not select any Interest Period that expires after the
Revolving Credit Maturity Date; 

    
(vii) if any Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month during which such Interest Period would
otherwise expire, such Interest Period shall expire on the last Business Day of
such calendar month; and 

    
(viii) the Borrower may not select any Interest Period (and consequently, no
LIBOR Loans shall be made) if a Default or Event of Default shall have occurred
and be continuing at the time of such Notice of Borrowing or Notice of
Conversion/Continuation with respect to any Borrowing. 

    
2.11 Conversions and Continuations.


    
(a) The Borrower shall have the right, on any Business Day occurring on or
after the Closing Date, to elect (i) to convert all or a portion of the
outstanding principal amount of any Base Rate Loans of any Class into LIBOR
Loans of the same Class, or to convert any LIBOR Loans of any Class the Interest
Periods for which end on the same day into Base Rate Loans of the same Class, or
(ii) upon the expiration of any Interest Period, to continue all or a portion of
the outstanding principal amount of any LIBOR Loans of any Class the Interest
Periods for which end on the same day for an additional Interest Period,
provided
that (w) any such conversion of LIBOR Loans into Base Rate Loans shall involve
an aggregate principal amount of not less than $3,000,000 or, if greater, an
integral multiple of $1,000,000 in excess thereof; any such conversion of Base
Rate Loans into, or continuation of, LIBOR Loans shall involve an aggregate
principal amount of not less than $5,000,000 or, if greater, an integral
multiple of $1,000,000 in excess thereof; and no partial conversion of LIBOR
Loans made pursuant to a single Borrowing shall reduce the outstanding principal
amount of such LIBOR Loans to less than $5,000,000 or to any greater amount not
an integral multiple of $1,000,000 in excess thereof, (x) except as otherwise
provided in Section 2.16(f), LIBOR Loans may be converted into Base Rate Loans only on
the last day of the Interest Period applicable thereto (and, in any event, if a
LIBOR Loan is converted into a Base Rate Loan on any day other than the last day
of the Interest Period applicable thereto, the Borrower will pay, upon such
conversion, all amounts required under Section
2.18 to be paid as a consequence thereof),
(y) no such conversion or continuation shall be permitted with regard to any
Base Rate Loans that are Swingline Loans, and (z) no conversion of Base Rate
Loans into LIBOR Loans or continuation of LIBOR Loans shall be permitted during
the continuance of a Default or Event of Default. 

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     (b) The Borrower shall make
each such election by giving the Administrative Agent written notice not later
than 11:00 a.m., Charlotte time, three Business Days prior to the intended
effective date of any conversion of Base Rate Loans into, or continuation of,
LIBOR Loans and one Business Day prior to the intended effective date of any
conversion of LIBOR Loans into Base Rate Loans. Each such notice (each, a
“Notice of
Conversion/Continuation”) shall be
irrevocable, shall be given in the form of Exhibit B-3 and shall specify (x) the
date of such conversion or continuation (which shall be a Business Day), (y) in
the case of a conversion into, or a continuation of, LIBOR Loans, the Interest
Period to be applicable thereto, and (z) the aggregate amount, Class and Type of
the Loans being converted or continued. Upon the receipt of a Notice of
Conversion/Continuation, the Administrative Agent will promptly notify each
applicable Lender of the proposed conversion or continuation. In the event that
the Borrower shall fail to deliver a Notice of Conversion/Continuation as
provided herein with respect to any outstanding LIBOR Loans, such LIBOR Loans
shall automatically be converted to Base Rate Loans upon the expiration of the
then current Interest Period applicable thereto (unless repaid pursuant to the
terms hereof). In the event the Borrower shall have failed to select in a Notice
of Conversion/Continuation the duration of the Interest Period to be applicable
to any conversion into, or continuation of, LIBOR Loans, then the Borrower shall
be deemed to have selected an Interest Period with a duration of one month.


    
2.12 Method of Payments; Computations; Apportionment of
Payments. 

    
(a) All payments by the Borrower hereunder shall be made without setoff,
counterclaim or other defense, in Dollars and in immediately available funds to
the Administrative Agent, for the account of
the Lenders entitled to such payment or the Swingline Lender, as the case may be
(except as otherwise expressly provided herein as to payments required to be
made directly to the Issuing Lender or the Lenders) at the Payment Office prior
to 12:00 noon, Charlotte time, on the date payment is due. Any payment made as
required hereinabove, but after 12:00 noon, Charlotte time, shall be deemed to
have been made on the next succeeding Business Day. If any payment falls due on
a day that is not a Business Day, then such due date shall be extended to the
next succeeding Business Day (except that in the case of LIBOR Loans to which
the provisions of Section
2.10(iv) are applicable, such due date shall
be the next preceding Business Day), and such extension of time shall then be
included in the computation of payment of interest, fees or other applicable
amounts. 

    
(b) The Administrative Agent will distribute to the Lenders like amounts
relating to payments made to the Administrative Agent for the account of the
Lenders as follows: (i) if the payment is received by 12:00 noon, Charlotte
time, in immediately available funds, the Administrative Agent will make
available to each relevant Lender on the same date, by wire transfer of
immediately available funds, such Lender’s ratable share of such payment (based
on the percentage that the amount of the relevant payment owing to such Lender
bears to the total amount of such payment owing to all of the relevant Lenders),
and (ii) if such payment is received after 12:00 noon, Charlotte time, or in
other than immediately available funds, the Administrative Agent will make
available to each such Lender its ratable share of such payment by wire transfer
of immediately available funds on the next succeeding Business Day (or in the
case of uncollected funds, as soon as practicable after collected).
Notwithstanding the foregoing or any contrary provision hereof, if any Lender
shall fail to make any payment required to be made by it hereunder to the
Administrative Agent, the Issuing Lender or the Swingline Lender, then the
Administrative Agent may, in its discretion, apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender’s obligations to the Administrative Agent, the Issuing Lender or the
Swingline Lender, as the case may be, until all such unsatisfied obligations are
fully paid. If the Administrative Agent shall not have made a required
distribution to the appropriate Lenders as required hereinabove after receiving
a payment for the account of such Lenders, the Administrative Agent will pay to
each such Lender, on demand, its ratable share of such payment with interest
thereon at the Federal Funds Rate for each day from the date such amount was
required to be disbursed by the Administrative Agent until the date repaid to
such Lender. The Administrative Agent will distribute to the Issuing Lender like
amounts relating to payments made to the Administrative Agent for the account of
the Issuing Lender in the same manner, and subject to the same terms and
conditions, as set forth hereinabove with respect to distributions of amounts to
the Lenders. 

38







    
(c) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Lender hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing
Lender, as the case may be, the amount due. In such event, if the Borrower has
not in fact made such payment, then each of the Lenders or the Issuing Lender,
as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or the Issuing
Lender, with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation. 

    
(d) All computations of interest and fees hereunder (including computations
of the Reserve Requirement) shall be made on the basis of a year consisting of
(i) in the case of interest on Base Rate Loans based on the prime commercial
lending rate of the Administrative Agent, 365/366 days, as the case may be, or
(ii) in all other instances, 360 days; and in each case under (i) and (ii)
above, with regard to the actual number of days (including the first day, but
excluding the last day) elapsed. 

    
(e) Notwithstanding any other provision of this Agreement or any other Credit
Document to the contrary, all amounts collected or received by the
Administrative Agent or any Lender after acceleration of the Loans pursuant to
Section 9.2
or in respect of any sale of, collection from or other realization upon all or
any part of the Collateral pursuant to the exercise by the Administrative Agent
of its remedies shall be applied by the Administrative Agent as follows:


    
(i) first, to the payment of all
reasonable out-of-pocket costs and expenses (including, without limitation,
reasonable attorneys’ and consultants’ fees irrespective of whether such fees
are allowed as a claim after the occurrence of a Bankruptcy Event) of the
Administrative Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
Administrative Agent with respect to the Collateral under or pursuant to the
terms of the Security Documents; 

39







    
(ii) second, to the payment of any fees
owed to the Administrative Agent hereunder or under any other Credit Document;


    
(iii) third, to the payment of all
reasonable and documented out-of-pocket costs and expenses (including, without
limitation, reasonable attorneys’ and consultants’ fees irrespective of whether
such fees are allowed as a claim after the occurrence of a Bankruptcy Event) of
each of the Lenders in connection with enforcing its rights under the Credit
Documents or otherwise with respect to the Obligations owing to such Lender;


    
(iv) fourth, to the payment of all of the
Obligations consisting of accrued fees and interest (including, without
limitation, fees incurred and interest accruing at the then applicable rate
after the occurrence of a Bankruptcy Event irrespective of whether a claim for
such fees incurred and interest accruing is allowed in such proceeding), and
including with respect to any Hedge Agreement between any Credit Party and any
Hedge Party (to the extent such Hedge Agreement is permitted hereunder), any
fees, premiums and scheduled periodic payments due under such Hedge Agreement
prior to any termination thereof and any interest accrued thereon; 

    
(v) fifth, to the payment of the
outstanding principal amount of the Obligations
(including the payment of any outstanding Reimbursement Obligations and the
obligation to Cash Collateralize Letter of Credit Exposure), and including with
respect to any Hedge Agreement between any Credit Party and any Hedge Party (to
the extent such Hedge Agreement is permitted hereunder), any breakage,
termination or other payments due under such Hedge Agreement and any interest
accrued thereon; 

    
(vi) sixth, to the payment of all other
Obligations and other obligations that shall have become due and payable under
the Credit Documents or otherwise and not repaid; and 

    
(vii) seventh, to the payment of the surplus
(if any) to whomever may be lawfully entitled to receive such surplus.


In carrying out the foregoing, (x) amounts
received shall be applied in the numerical order provided until exhausted prior
to application to the next succeeding category, (y) all amounts shall be
apportioned ratably among the Lenders or Hedge Parties in proportion to the
amounts of such principal, interest, fees or other Obligations owed to them
respectively pursuant to clauses (iii) through (vii) above, and (z) to the
extent that any amounts available for distribution pursuant to clause (v) above
are attributable to the issued but undrawn amount of outstanding Letters of
Credit, such amounts shall be held by the Administrative Agent to Cash
Collateralize Letter of Credit Exposure pursuant to Section 3.8. Notwithstanding the
foregoing, amounts received from any Credit Party shall not be applied to any
Excluded Swap Obligation of such Credit Party. 

40







     2.13 Recovery of
Payments. 

    
(a) The Borrower agrees that to the extent the Borrower makes a payment or
payments to or for the account of the Administrative Agent, the Swingline
Lender, any Lender or the Issuing Lender, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any Debtor Relief Law, common law or equitable cause (whether as a result
of any demand, settlement, litigation or otherwise), then, to the extent of such
payment or repayment, the Obligation intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been received.


    
(b) If any amounts distributed by the Administrative Agent to any Lender are
subsequently returned or repaid by the Administrative Agent to the Borrower, its
representative or successor in interest, or any other Person, whether by court
order, by settlement approved by the Lender in question, or pursuant to
applicable Requirements of Law, such Lender will, promptly upon receipt of
notice thereof from the Administrative Agent, pay the Administrative Agent such
amount. If any such amounts are recovered by the Administrative Agent from the
Borrower, its representative or successor in interest or such other Person, the
Administrative Agent will redistribute such amounts to the Lenders on the same
basis as such amounts were originally distributed. 

    
2.14 Use of Proceeds. The proceeds of the
Loans shall be used (i) to refinance the Existing Senior Credit Facilities, (ii)
for ongoing working capital and for other general corporate and business
purposes of the Borrower and its Subsidiaries, and (iii) to pay fees and
expenses related to the Transactions. 

    
2.15 Pro Rata Treatment. 

    
(a) Except in the case of Swingline Loans, all
fundings, continuations and conversions of Loans of any Class shall be made by
the Lenders pro rata on the basis of their respective Commitments to provide
Loans of such Class (in the case of the funding of Loans of such Class pursuant
to Section 2.2) or on the basis of their respective outstanding Loans of such Class (in
the case of continuations and conversions of Loans of such Class pursuant to
Section 2.11, and additionally in all cases in the event the Commitments for Loans of
such Class have expired or have been terminated), as the case may be from time
to time. All payments on account of principal of or interest on any Loans, fees
or any other Obligations owing to or for the account of any one or more Lenders
shall be apportioned ratably among such Lenders in proportion to the amounts of
such principal, interest, fees or other Obligations owed to them respectively.


    
(b) If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other Obligations hereunder resulting in such Lender’s receiving
payment of a proportion of the aggregate amount of its Loans and accrued
interest thereon or other such Obligations greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (a) notify the Administrative Agent of such fact, and (b) purchase (for
cash at face value) participations in the Loans and such other Obligations of
the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them,
provided
that (i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this Section shall not be construed to
apply to (x) any payment made by the Borrower pursuant to and in accordance with
the express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in Reimbursement Obligations or Swingline Loans to any
assignee or Participant, other than to the Borrower or any Subsidiary thereof
(as to which the provisions of this Section
2.15(b) shall apply). The Borrower consents
to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation. If under
any applicable Debtor Relief Laws, any Lender receives a secured claim in lieu
of a setoff to which this Section
2.15(b) applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this
Section 2.15(b) to share in the benefits of any recovery on such secured claim.


41







    
2.16 Increased Costs; Change in Circumstances; Illegality.

    
(a) If
any Change in Law shall: 

    
(i) impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except the Reserve Requirement reflected in the LIBOR Rate) or the
Issuing Lender; 

    
(ii) subject any Lender or the Issuing Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any LIBOR Loan made by it, or change the
basis of taxation of payments to such Lender or the Issuing Lender in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.17 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or the Issuing Lender); or 

    
(iii) impose on any Lender or the Issuing Lender or the London interbank market
any other condition, cost or expense affecting this Agreement or LIBOR Loans
made by such Lender or any Letter of Credit or participation therein;


and the result of any of the foregoing
shall be to increase the cost to such Lender of making or maintaining any LIBOR
Loan (or of maintaining its obligation to make any such Loan), or to increase
the cost to such Lender or the Issuing Lender of participating in, issuing or
maintaining any Letter of Credit (or of maintaining its obligation to
participate in or to issue any Letter of Credit), or to reduce the amount of any
sum received or receivable by such Lender or the Issuing Lender hereunder
(whether of principal, interest or any other amount), then, upon request of such
Lender or the Issuing Lender, the Borrower will pay to such Lender or the
Issuing Lender, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Lender, as the case may
be, for such additional costs incurred or reduction suffered.

42










     (b) If any Lender or the
Issuing Lender determines that any Change in Law affecting such Lender or the
Issuing Lender or any Lending Office of such Lender or such Lender’s or the
Issuing Lender’s holding company, if any, regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s or the
Issuing Lender’s capital or on the capital of such Lender’s or the Issuing
Lender’s holding company, if any, as a consequence of this Agreement, the
Commitments of such Lender or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by such Issuing
Lender, to a level below that which such Lender or such Issuing Lender or such
Lender’s or the Issuing Lender’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or the Issuing
Lender’s policies and the policies of such Lender’s or the Issuing Lender’s
holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Lender or such Lender’s or the Issuing Lender’s holding company for any such
reduction suffered. 

    
(c) A
certificate of a Lender or the Issuing Lender setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Lender or its holding
company, as the case may be, as specified in Section 2.16(a) or 2.16(b) and delivered to
the Borrower shall be conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Lender, as the case may be, the amount shown as due
on any such certificate within ten days after receipt thereof. 

    
(d) Failure or delay on the part of any Lender or the Issuing Lender to
demand compensation pursuant to the foregoing provisions of this Section shall
not constitute a waiver of such Lender’s or the Issuing Lender’s right to demand
such compensation, provided that the Borrower shall not be required to compensate a
Lender or the Issuing Lender pursuant to the foregoing provisions of this
Section for any increased costs incurred or reductions suffered more than nine
months prior to the date that such Lender or the Issuing Lender, as the case may
be, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender’s or the Issuing Lender’s intention to
claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof). 

    
(e) If, on or prior to the first day of any Interest Period, (y) the
Administrative Agent shall have determined that adequate and reasonable means do
not exist for ascertaining the applicable LIBOR Rate for such Interest Period or
(z) the Administrative Agent shall have received written notice from the
Required Lenders of their determination that the rate of interest referred to in
the definition of “LIBOR Rate” upon the basis of which the Adjusted LIBOR Rate
for LIBOR Loans for such Interest Period is to be determined will not adequately
and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans
during such Interest Period, the Administrative Agent will forthwith so notify
the Borrower and the Lenders. Upon such notice, (i) all then outstanding LIBOR
Loans shall automatically, on the expiration date of the respective Interest
Periods applicable thereto (unless then repaid in full), be converted into Base Rate Loans, (ii) the obligation of the Lenders to make,
to convert Base Rate Loans into, or to continue, LIBOR Loans shall be suspended
(including pursuant to the Borrowing to which such Interest Period applies), and
(iii) any Notice of Borrowing or Notice of Conversion/Continuation given at any
time thereafter with respect to LIBOR Loans shall be deemed to be a request for
Base Rate Loans, in each case until the Administrative Agent or the Required
Lenders, as the case may be, shall have determined that the circumstances giving
rise to such suspension no longer exist (and the Required Lenders, if making
such determination, shall have so notified the Administrative Agent), and the
Administrative Agent shall have so notified the Borrower and the Lenders.


43 







     (f) Notwithstanding any other
provision in this Agreement, if, at any time after the date hereof and from time
to time, any Lender shall have determined in good faith that the introduction of
or any change in any applicable law, rule or regulation or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance with any guideline or
request from any such Governmental Authority (whether or not having the force of
law), has or would have the effect of making it unlawful for such Lender to make
or to continue to make or maintain LIBOR Loans, such Lender will forthwith so
notify the Administrative Agent and the Borrower. Upon such notice, (i) each of
such Lender’s then outstanding LIBOR Loans shall automatically, on the
expiration date of the respective Interest Period applicable thereto (or, to the
extent any such LIBOR Loan may not lawfully be maintained as a LIBOR Loan until
such expiration date, upon such notice) and to the extent not sooner prepaid, be
converted into a Base Rate Loan, (ii) the obligation of such Lender to make, to
convert Base Rate Loans into, or to continue, LIBOR Loans shall be suspended
(including pursuant to any Borrowing for which the Administrative Agent has
received a Notice of Borrowing but for which the Borrowing Date has not
arrived), and (iii) any Notice of Borrowing or Notice of Conversion/Continuation
given at any time thereafter with respect to LIBOR Loans shall, as to such
Lender, be deemed to be a request for a Base Rate Loan, in each case until such
Lender shall have determined that the circumstances giving rise to such
suspension no longer exist and shall have so notified the Administrative Agent,
and the Administrative Agent shall have so notified the Borrower. 

    
2.17 Taxes.

    
(a) Any and all payments by or on account of any obligation of the Borrower
hereunder or under any other Credit Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes,
provided
that if the Borrower shall be required by applicable law to deduct any
Indemnified Taxes (including any Other Taxes) from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuing Lender, as the case
may be, receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law. 

    
(b) Without limiting the provisions of Section 2.17(a), the Borrower shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law. 

44 







    
(c) The Borrower shall indemnify the Administrative Agent, each Lender and
the Issuing Lender, within ten days after demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) paid by the Administrative Agent, such Lender or the Issuing Lender, as
the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Issuing Lender (with a
copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender or the Issuing Lender, shall be conclusive
absent manifest error. 

    
(d) As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent. 

    
(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
resident for tax purposes, or any treaty to which such jurisdiction is a party,
with respect to payments hereunder or under any other Credit Document shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law or reasonably requested by the Borrower or
the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. 

    
Without limiting the generality of the foregoing, in the event that the
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable: 

    
(i) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party, 

    
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,


    
(iii) in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate to
the effect that such Foreign Lender is not (A) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the
Code, or (C) a “controlled foreign corporation” described in Section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN, or 

45 







    
(iv) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower to determine the withholding or deduction
required to be made. 

     (f) If the Administrative
Agent, any Lender or the Issuing Lender determines, in its sole discretion, that
it has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, such Lender or the Issuing Lender, as the
case may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that the Borrower, upon the
request of the Administrative Agent, such Lender or the Issuing Lender, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the Issuing Lender in the event the
Administrative Agent, such Lender or the Issuing Lender is required to repay
such refund to such Governmental Authority. This Section 2.17(f) shall not be construed
to require the Administrative Agent, any Lender or the Issuing Lender to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to the Borrower or any other Person. 

    
2.18 Compensation. The Borrower will
compensate each Lender upon demand for all losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Lender to fund or maintain LIBOR Loans) that such Lender may incur or
sustain (i) if for any reason (other than a default by such Lender) a Borrowing
or continuation of, or conversion into, a LIBOR Loan does not occur on a date
specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation, (ii) if any repayment, prepayment or conversion of any
LIBOR Loan occurs on a date other than the last day of an Interest Period
applicable thereto (including as a consequence of any assignment made pursuant
to Section 2.19(a) or any acceleration of the maturity of the Loans pursuant to
Section 9.2), (iii) if any prepayment of any LIBOR Loan is not made on any date
specified in a notice of prepayment given by the Borrower or (iv) as a
consequence of any other failure by the Borrower to make any payments with
respect to any LIBOR Loan when due hereunder. Calculation of all amounts payable
to a Lender under this Section
2.18 shall be made as though such Lender had
actually funded its relevant LIBOR Loan through the purchase of a Eurodollar
deposit bearing interest at the LIBOR Rate in an amount equal to the amount of
such LIBOR Loan, having a maturity comparable to the relevant Interest Period;
provided,
however,
that each Lender may fund its LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section
2.18. A certificate (which shall be in
reasonable detail) showing the bases for the determinations set forth in this
Section 2.18 by any Lender as to any additional amounts
payable pursuant to this Section
2.18 shall be submitted by such Lender to the
Borrower either directly or through the Administrative Agent. Determinations set
forth in any such certificate made in good faith for purposes of this
Section 2.18 of any such losses, expenses or liabilities shall be conclusive absent
manifest error. 

46 







     2.19 Replacement of
Lenders; Mitigation of Costs. 

    
(a) The Borrower may, at any time at its sole expense and effort, require any
Lender (x) that has requested compensation from the Borrower under
Section 2.16(a) or 2.16(b) or payments from the Borrower under Section 2.17, or (y) the obligation of
which to make or maintain LIBOR Loans has been suspended under Section 2.16(f) or (z) that
is a Defaulting Lender or a Nonconsenting Lender, in any case upon notice to
such Lender and the Administrative Agent, to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section
11.6), all of its interests, rights and
obligations under this Agreement and the related Credit Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that:

    
(i) the Borrower shall have paid to the Administrative Agent the assignment
fee specified in Section
11.6(b)(iv); 

    
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and any funded participations in Letters of
Credit not refinanced through the Borrowing of Revolving Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 2.18) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts); 

    
(iii) in the case of any such assignment resulting from a request for
compensation under Section
2.16(a) or 2.16(b) or payments required to be
made pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments thereafter; and 

    
(iv) such assignment does not conflict with applicable Requirements of Law.


     If a Lender is
subject to this Section
2.19(a) solely because of circumstances
described in clauses (x) or (y) hereof, such Lender shall not be required to
make any such assignment or delegation if, prior thereto, as a result of a
waiver by such Lender, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply. Any such assignment or delegation
required by the Borrower pursuant to this Section 2.19 shall be without
prejudice to any right or remedy available to Borrower hereunder or under law.


    
(b) If
any Lender requests compensation under Section
2.16(a) or 2.16(b), or the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section
2.17, or if any Lender gives a notice
pursuant to Section 2.16(f), then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder 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 (i) would eliminate or reduce amounts payable pursuant
to Section 2.16(a), 2.16(b) or 2.17, as the case may be, in the future, or eliminate the need for the notice
pursuant to Section 2.16(f), as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment. 

47 







     2.20 Defaulting
Lenders. 

    
(a) Notwithstanding anything to the contrary contained in this Agreement, if
any Lender becomes a Defaulting Lender, then, until such time as such Lender is
no longer a Defaulting Lender, to the extent permitted by applicable law:


    
(i) Such Defaulting Lender’s right to approve or disapprove any amendment,
waiver or consent with respect to this Agreement shall be restricted as set
forth in the definition of Required Lenders and in Section 11.5. 

    
(ii) Any payment of principal, interest, fees or other amounts received by the
Administrative Agent for the account of such Defaulting Lender (whether
voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) shall be
applied at such time or times as may be determined by the Administrative Agent
as follows: first, to the payment of any amounts owing by such Defaulting Lender to the
Administrative Agent hereunder; second, to the payment on a pro rata
basis of any amounts owing by such Defaulting Lender to the Issuing Lender or
the Swingline Lender hereunder; third, if so determined by the
Administrative Agent or requested by the Issuing Lender or the Swingline Lender,
to be held as Cash Collateral for future funding obligations of such Defaulting
Lender in respect of any participation in any Letter of Credit or Swingline
Loan; fourth, as the Borrower may request (so long as no Default exists), to the
funding of any Loan in respect of which that Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent or to repay to the Borrower Cash Collateral provided by the
Borrower under this Section
2.20 in respect of Letters of Credit or
Swingline Loans; fifth, if so determined by the Administrative Agent and the
Borrower, to be held in a non-interest bearing deposit account and released in
order to (i) satisfy obligations of such Defaulting Lender to fund Loans under
this Agreement and (ii) Cash Collateralize, in accordance with Section 2.20(c), the
Issuing Lender’s future Fronting Exposure with respect to such Defaulting Lender
with respect to future Letters of Credit; sixth, to the payment of any amounts
owing to the Lenders, the Issuing Lender or the Swingline Lender as a result of
any judgment of a court of competent jurisdiction obtained by any Lender, the
Issuing Lender or the Swingline Lender against that Defaulting Lender as a
result of such Defaulting Lender’s breach of its obligations under this
Agreement; seventh, so long as no Default exists, to the payment of any amounts owing to
the Borrower as a result of any judgment of a court of competent jurisdiction
obtained by the Borrower against such Defaulting Lender as a result of such
Defaulting Lender's breach of its obligations under this Agreement; and
eighth, to
such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or any Letter of Credit Exposure in
respect of which such Defaulting Lender has not fully funded its appropriate
share, and (y) such Loans were made or the related Letters of Credit were issued
at a time when the conditions set forth in Section 5.2 were satisfied or waived,
such payment shall be applied solely to pay the Loans of, and obligations in
respect of Letters of Credit owed to, all non-Defaulting Lenders on a pro rata
basis prior to being applied to the payment of any Loans of, or obligations in
respect of Letters of Credit owed to, such Defaulting Lender. Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are
applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash
Collateral pursuant to this Section shall be deemed paid to and redirected by
such Defaulting Lender, and each Lender irrevocably consents hereto.


48 







    
(iii) All or any part of such Defaulting Lender’s Letter of Credit Exposure and
its Swingline Exposure shall automatically (effective on the day such Lender
becomes a Defaulting Lender) be reallocated among the non-Defaulting Lenders in
accordance with their respective Credit Exposures (calculated without regard to
such Defaulting Lender’s Commitment) but only to the extent that (x) no Default
shall have occurred and be continuing (and, unless the Borrower shall have
otherwise notified the Administrative Agent at the time, the Borrower shall be
deemed to have represented and warranted that such condition is satisfied at
such time), and (y) such reallocation does not cause the Revolving Credit
Exposure of any non-Defaulting Lender to exceed such non-Defaulting Lender’s
Commitment. 

    
(iv) If the reallocation described in Section 2.20(a)(iii) cannot, or can
only partially, be effected, the Borrower shall, without prejudice to any right
or remedy available to it hereunder or under law, within two Business Days
following notice by the Administrative Agent, (A) repay Swingline Loans in an
amount equal to the Swingline Lender’s Fronting Exposure and (B) Cash
Collateralize such Defaulting Lender’s Letter of Credit Exposure in accordance
with the procedures set forth in Section
2.20(c) (each after giving effect to any
partial reallocation pursuant to Section
2.20(a)(iii)). The Borrower shall be
permitted to Cash Collateralize such Letter of Credit Exposure and repay
Swingline Loans using Loans to the extent available to the Borrower in
accordance with this Agreement. 

     (b) If the Borrower, the
Administrative Agent, the Issuing Lender and the Swingline Lender agree in
writing in their sole discretion that a Defaulting Lender should no longer be
deemed to be a Defaulting Lender, the Administrative Agent will so notify the
parties hereto, whereupon as of the effective date specified in such notice and
subject to any conditions set forth therein (which may include arrangements with
respect to any Cash Collateral), that Lender will, to the extent applicable,
purchase that portion of outstanding Loans of the other Lenders or take such
other actions as the Administrative Agent may determine to be necessary to cause
the Revolving Loans and funded and unfunded participations in Letters of Credit
and Swingline Loans to be held on a pro rata basis by the Lenders in accordance
with their respective Credit Exposures (without giving effect to Section 2.20(a)(iii) or
2.20(a)(iv), whereupon such Lender will cease to be a Defaulting Lender;
provided
that no adjustments will be made retroactively with respect to fees accrued or
payments made by or on behalf of the Borrower while that Lender was a Defaulting
Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from
Defaulting Lender to Lender will constitute a waiver or release of any claim of
any party hereunder arising from that Lender’s having been a Defaulting Lender.


49 







     (c) At any time that there
shall exist a Defaulting Lender, within two Business Days upon the request of
the Administrative Agent, the Issuing Lender or the Swingline Lender, the
Borrower shall deliver to the Administrative Agent Cash Collateral in an amount
sufficient to cover all Fronting Exposure (after giving effect to
Sections 2.20(a)(iii) and 2.20(a)(iv) and any Cash Collateral
provided by the Defaulting Lender). 

     (i) All Cash Collateral (other than credit
support not constituting funds subject to deposit) shall be maintained in
blocked, non-interest bearing deposit accounts with the Administrative Agent.
The Borrower, and to the extent provided by any Lender, such Lender, hereby
grants to (and subjects to the control of) the Administrative Agent, for the
benefit of the Administrative Agent, the Issuing Lender and the Lenders
(including the Swingline Lender), and agrees to maintain, a first priority
security interest in all such cash, deposit accounts and all balances therein,
and all other property so provided as collateral pursuant hereto, and in all
proceeds of the foregoing, all as security for the obligations to which such
Cash Collateral may be applied pursuant to clause (ii) below. If at any time the
Administrative Agent determines that Cash Collateral is subject to any right or
claim of any Person other than the Administrative Agent as herein provided, or
that the total amount of such Cash Collateral is less than the applicable
Fronting Exposure and other obligations secured thereby, the Borrower or the
relevant Defaulting Lender will, promptly upon demand by the Administrative
Agent, pay or provide to the Administrative Agent additional Cash Collateral in
an amount sufficient to eliminate such deficiency. 

     (ii) Notwithstanding anything to the contrary
contained in this Agreement, Cash Collateral provided under this Section 2.20 in respect of
Letters of Credit or Swingline Loans shall be held and applied to the
satisfaction of the specific Letters of Credit or Swingline Loans (including, as
to Cash Collateral provided by a Defaulting Lender, obligations to fund
participations therein and any interest accrued on such obligation) and other
obligations for which the Cash Collateral was so provided, prior to any other
application of such property as may be provided for herein. 

     (iii) Cash Collateral (or the appropriate
portion thereof) provided to reduce Fronting Exposure or other obligations shall
be released promptly following (i) the elimination of the applicable Fronting
Exposure or other obligations giving rise thereto (including by the termination
of Defaulting Lender status of the applicable Lender (or, as appropriate, its
assignee)), or (ii) the Administrative Agent’s good faith determination that
there exists excess Cash Collateral; provided, however, that (x) Cash Collateral
furnished by or on behalf of a Credit Party shall not be released during the
continuance of a Default (and following application as provided in this
Section 2.20 may be otherwise applied in accordance with Section 2.15), and (y) the Person
providing Cash Collateral and each applicable Issuing Lender or Swingline Lender
may agree that Cash Collateral shall not be released but instead held to support
future anticipated Fronting Exposure or other obligations. 

50 







     2.21 Commitment Increase. 

    
(a) From time to time on and after the Closing Date and prior to the
Revolving Credit Termination Date, the Borrower may, upon at least 20 days’
notice to and with the consent of the Administrative Agent (which shall promptly
provide a copy of such notice and consent to the Lenders), propose to increase
the aggregate amount of the Revolving Credit Commitments by an amount which (i)
is not less than $5,000,000 and, if greater, an integral multiple of $1,000,000
in excess thereof, with respect to any such request and (ii) when aggregated
with all prior and concurrent increases in the Revolving Credit Commitments
pursuant to this Section 2.21, is not in excess of $50,000,000. If so consented to by the
Administrative Agent, the Borrower may increase the aggregate amount of the
Revolving Credit Commitments by (x) having another lender or lenders (each, an
“Additional Lender”) become party to this Agreement, (y) agreeing with any Lender (with the
consent of such Lender in its sole discretion) to increase its Revolving Credit
Commitment hereunder (each, an “Increasing
Lender”) or (z) a combination of the
procedures described in clauses (x) and (y) above; provided that no Lender shall be
obligated to increase its Revolving Credit Commitment without its consent.


    
(b) Any increase in the Revolving Credit Commitments pursuant to this
Section 2.21 shall be subject to satisfaction of the following conditions:


    
(i) The Borrower shall deliver to the Administrative Agent a certificate
dated as of the applicable increase date duly executed by an Authorized Officer
thereof certifying and attaching the resolutions adopted by the Borrower
approving or consenting to such increase; 

    
(ii) Each of the representations and warranties contained in Article V and in the other
Credit Documents shall be true and correct, in all material respects, on and as
of such Borrowing Date (including the Closing Date, in the case of the initial
Loans made hereunder) or date of issuance of a Letter of Credit with the same
effect as if made on and as of such date, both immediately before and after
giving effect to the Loans to be made or Letter of Credit to be issued on such
date (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty shall be true and correct as of such date);


    
(iii) Immediately after giving effect to such increase and any Indebtedness to
be incurred in connection therewith, the Borrower shall be in compliance with
Section 7.1
(determined on a pro forma basis for the Reference Period then most recently
ended for which the Borrower has delivered the financial statements required by
Section 6.1
(and a Compliance Certificate)); and 

    
(iv) At the time of such increase, no Default shall have occurred and be
continuing or would result from such increase. 

     (c) Upon any increase in the
amount of the Revolving Credit Commitments pursuant to this Section 2.21 (each, an
“Additional Commitment”): 

    
(i) Each Additional Lender and Increasing Lender shall enter into a joinder
agreement pursuant to which such Additional Lender or Increasing Lender shall,
as of the effective date of such increase, undertake an
Additional Commitment (or, in the case of an Increasing Lender, pursuant to
which such Increasing Lender’s Commitment shall be increased in the agreed
amount on such date) and such Additional Lender shall thereupon become (or, if
an Increasing Lender, continue to be) a “Revolving Credit Lender” for all
purposes hereof. 

51 







    
(ii) The Borrower shall, as applicable, in coordination with the
Administrative Agent, repay outstanding Loans and incur additional Loans from
other Lenders, pursuant to a reallocation agreement or otherwise, so that the
Lenders participate in each Borrowing pro rata on the basis of their respective
Revolving Credit Commitments (after giving effect to any increase in the
Commitments pursuant to this Section
2.21). Amounts
payable under Section 2.18 as a result of the actions required to be taken under this
Section 2.21 shall be paid in full by the Borrower. 

    
(iii) If any such Additional Lender is a Foreign Lender, such Additional Lender
shall deliver the forms required by Section
2.17. 

     (d) Each Additional
Commitment shall be made on the same terms as the Revolving Credit Commitments
in existence immediately prior to the date of such Additional Commitment;
provided
that the up-front fees applicable to any Additional Commitment shall be as
determined by the Borrower, the Administrative Agent and the Additional Lender
providing such Additional Commitment. 

ARTICLE III 

LETTERS OF CREDIT 

    
3.1 Issuance. Subject to and upon the
terms and conditions herein set forth, so long as no Default or Event of Default
has occurred and is continuing, the Issuing Lender will, at any time and from
time to time on and after the Closing Date and prior to the earlier of (i) the
Letter of Credit Maturity Date and (ii) the Revolving Credit Termination Date,
and upon request by the Borrower in accordance with the provisions of
Section 3.2, issue for the account of the Parent, the Borrower or their Subsidiaries
one or more irrevocable standby letters of credit denominated in Dollars and in
a form customarily used or otherwise approved by the Issuing Lender (together
with all amendments, modifications and supplements thereto, substitutions
therefor and renewals and restatements thereof, collectively, the
“Letters of Credit”). The Stated Amount of each Letter of Credit shall not be less than
such amount as may be acceptable to the Issuing Lender. Notwithstanding the
foregoing: 

    
(a) No Letter of Credit shall be issued if, after giving effect to such issuance, (i)
the Stated Amount when added to the aggregate Letter of Credit Exposure of the
Revolving Lenders at such time would exceed the Letter of Credit Sublimit at
such time, (ii) the Stated Amount when added to the Aggregate Revolving Credit
Exposure would exceed the aggregate Revolving Credit Commitments at such time,
or (iii) any Lender is at that time a Defaulting Lender, unless the Issuing
Lender has entered into an arrangement, including the delivery of Cash
Collateral, satisfactory to the Issuing Lender (in its sole discretion) with the
Borrower or such Lender to eliminate the Issuing Lender’s actual or potential
Fronting Exposure (after giving effect to Sections
2.20(a)(iii) and 2.20(a)(iv)) with respect to the
Defaulting Lender arising from either the Letter of Credit then proposed to be
issued or that Letter of Credit and all other Letter of Credit Exposure as to
which the Issuing Lender has actual or potential Fronting Exposure, as it may
elect in its sole discretion; 

52 







     (b) Notwithstanding that a
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, or otherwise will benefit, the Parent
or a Subsidiary of the Borrower, the Borrower shall be obligated to reimburse
the Issuing Lender hereunder for any and all drawings under such Letter of
Credit (and the Borrower hereby acknowledges that the issuance of Letters of
Credit for the benefit of the Parent or its Subsidiaries inures to the benefit
of the Borrower and that the Borrower’s business derives substantial benefits
from the businesses of the Parent and such Subsidiaries); 

    
(c) No
Letter of Credit shall be issued that by its terms expires later than the Letter
of Credit Maturity Date or, in any event, more than one year after its date of
issuance; provided, however, that a Letter of Credit may, if requested by the Borrower, provide by
its terms, and on terms acceptable to the Issuing Lender, for renewal for
successive periods of one year or less (but not beyond the Letter of Credit
Maturity Date), unless and until the Issuing Lender shall have delivered a
notice of nonrenewal to the beneficiary of such Letter of Credit; and


    
(d) The Issuing Lender shall be under no obligation to issue any Letter of
Credit if, at the time of such proposed issuance, (i) any order, judgment or
decree of any Governmental Authority or arbitrator shall purport by its terms to
enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Lender or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing
Lender refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Issuing Lender with respect to
such Letter of Credit any restriction or reserve or capital requirement (for
which the Issuing Lender is not otherwise compensated) not in effect on the
Closing Date, or any unreimbursed loss, cost or expense that was not applicable,
in effect or known to the Issuing Lender as of the Closing Date and that the
Issuing Lender in good faith deems material to it, or (ii) the Issuing Lender
shall have actual knowledge, or shall have received notice from any Lender,
prior to the issuance of such Letter of Credit that one or more of the
conditions specified in Section
4.1 (if applicable) or 4.2 are not then satisfied
(or have not been waived in writing as required herein) or that the issuance of
such Letter of Credit would violate the provisions of Section 3.1(a). 

    
3.2 Notices. Whenever the Borrower desires
the issuance of a Letter of Credit, the Borrower will give the Issuing Lender
written notice with a copy to the Administrative Agent not later than 11:00
a.m., Charlotte time, three Business Days (or such shorter period as is
acceptable to the Issuing Lender in any given case) prior to the requested date
of issuance thereof. Each such notice (each, a “Letter of Credit Notice”) shall be
irrevocable, shall be given in the form of Exhibit B-4 and shall specify (i) the
requested date of issuance, which shall be a Business Day, (ii) the requested
Stated Amount and expiry date of the Letter of Credit, and (iii) the name and
address of the requested beneficiary or beneficiaries of the Letter of Credit.
The Borrower will also complete any application procedures and documents
reasonably required by the Issuing Lender in connection with the issuance of any
Letter of Credit. Upon its issuance of any Letter of
Credit, the Issuing Lender will promptly notify the Administrative Agent of such
issuance, and the Administrative Agent will give prompt notice thereof to each
Revolving Credit Lender. The renewal or extension of any outstanding Letter of
Credit shall, for purposes of this Article
III, be treated in all respects as the
issuance of a new Letter of Credit. 

53 







     3.3 Participations. Immediately upon the
issuance of any Letter of Credit, the Issuing Lender shall be deemed to have
sold and transferred to each Revolving Credit Lender, and each Revolving Credit
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from the Issuing Lender, without recourse or warranty (except for the
absence of Liens thereon created, incurred or suffered to exist by, through or
under the Issuing Lender), an undivided interest and participation, pro rata
(based on the percentage of the aggregate Revolving Credit Commitments
represented by such Revolving Credit Lender’s Revolving Credit Commitment), in
such Letter of Credit, each drawing made thereunder and the obligations of the
Borrower under this Agreement with respect thereto and any Collateral or other
security therefor or guaranty pertaining thereto; provided, however, that the fee relating to
Letters of Credit described in Section
2.9(d) shall be payable directly to the
Issuing Lender as provided therein, and the other Revolving Credit Lenders shall
have no right to receive any portion thereof. In consideration and in
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Lender, such Lender’s pro rata share (determined as provided above)
of each Reimbursement Obligation not reimbursed by the Borrower on the date due
as provided in Section 3.4 or through the Borrowing of Revolving Loans as provided in
Section 3.5
(because the conditions set forth in Section
4.2 cannot be satisfied, or for any other
reason), or of any reimbursement payment required to be refunded to the Borrower
for any reason. Upon any change in the Revolving Credit Commitments of any of
the Revolving Credit Lenders pursuant to Section 2.21 or 11.6(a), with respect to
all outstanding Letters of Credit and Reimbursement Obligations there shall be
an automatic adjustment to the participations pursuant to this Section 3.3 to reflect the
new pro rata shares of any Additional Lenders or Increasing Lenders or the
assigning Lender and the assignee. Each Revolving Credit Lender’s obligation to
make payment to the Issuing Lender pursuant to this Section 3.3 shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the termination of the Revolving Credit Commitments or the existence
of any Default or Event of Default, and each such payment shall be made without
any offset, abatement, reduction or withholding whatsoever. 

     3.4 Reimbursement. The Borrower hereby
agrees to reimburse the Issuing Lender by making payment to the Administrative
Agent, for the account of the Issuing Lender, in immediately available funds,
for any payment made by the Issuing Lender under any Letter of Credit (each such
amount so paid until reimbursed, together with interest thereon payable as
provided hereinbelow, a “Reimbursement
Obligation”) immediately upon, and in any
event on the same Business Day as, the making of such payment by the Issuing
Lender (provided that any such Reimbursement Obligation shall be deemed timely satisfied
(but nevertheless subject to the payment of interest thereon as provided
hereinbelow) if satisfied pursuant to a Borrowing of Revolving Loans made on the
date of such payment by the Issuing Lender, as set forth more completely in
Section 3.5), together with interest on the amount so paid by the Issuing Lender, to
the extent not reimbursed prior to 2:00 p.m., Charlotte time, on the date of
such payment or disbursement, for the period from the date of the respective
payment to the date the Reimbursement Obligation created thereby is satisfied,
at the Adjusted Base Rate applicable to Revolving Loans as in effect from time to
time during such period, such interest also to be payable on demand. The Issuing
Lender will provide the Administrative Agent and the Borrower with prompt notice
of any payment or disbursement made or to be made under any Letter of Credit,
although the failure to give, or any delay in giving, any such notice shall not
release, diminish or otherwise affect the Borrower’s obligations under this
Section 3.4
or any other provision of this Agreement. The Administrative Agent will promptly
pay to the Issuing Lender any such amounts received by it under this
Section 3.4.

54 










     3.5 Payment by Revolving Loans. In the event that the Issuing Lender makes
any payment under any Letter of Credit and the Borrower shall not have timely satisfied in full its Reimbursement Obligation to
the Issuing Lender pursuant to Section 3.4, and to the extent that any amounts then held in the Cash Collateral Account
established pursuant to Section 3.8 shall be insufficient to satisfy such Reimbursement Obligation in full, the Issuing
Lender will promptly notify the Administrative Agent, and the Administrative Agent will promptly notify each Revolving Credit
Lender, of such failure. If the Administrative Agent gives such notice prior to 12:00 noon, Charlotte time, on any Business Day,
each Revolving Credit Lender will make available to the Administrative Agent, for the account of the Issuing Lender, its pro rata
share (based on the percentage of the aggregate Revolving Credit Commitments represented by such Lender’s Revolving Credit
Commitment) of the amount of such payment on such Business Day in immediately available funds. If the Administrative Agent gives
such notice after 12:00 noon, Charlotte time, on any Business Day, each such Revolving Credit Lender shall make its pro rata share
of such amount available to the Administrative Agent on the next succeeding Business Day. If and to the extent any Revolving Credit
Lender shall not have so made its pro rata share of the amount of such payment available to the Administrative Agent, such Lender
agrees to pay to the Administrative Agent, for the account of the Issuing Lender, forthwith on demand such amount, together with
interest thereon at the Federal Funds Rate for each day from such date until the date such amount is paid to the Administrative
Agent. The failure of any Revolving Credit Lender to make available to the Administrative Agent its pro rata share of any payment
under any Letter of Credit shall not relieve any other Revolving Credit Lender of its obligation hereunder to make available to
the Administrative Agent its pro rata share of any payment under any Letter of Credit on the date required, as specified above,
but no Revolving Credit Lender shall be responsible for the failure of any other Revolving Credit Lender to make available to
the Administrative Agent such other Revolving Credit Lender’s pro rata share of any such payment. Each such payment by a
Revolving Credit Lender under this Section 3.5 of its pro rata share of an amount paid by the Issuing Lender shall constitute
a Revolving Loan by such Revolving Credit Lender (the Borrower being deemed to have given a timely Notice of Borrowing therefor)
and shall be treated as such for all purposes of this Agreement; provided that for purposes of determining the aggregate
Unutilized Revolving Credit Commitments immediately prior to giving effect to the application of the proceeds of such Revolving
Loans, the Reimbursement Obligation being satisfied thereby shall be deemed not to be outstanding at such time. Each Revolving
Credit Lender’s obligation to make Revolving Loans pursuant to this Section 3.5 shall be absolute and unconditional
and shall not be affected by any circumstance whatsoever, including, without limitation, the failure of the amount of such Borrowing
of Revolving Loans to meet the minimum Borrowing amount specified in Section 2.2(b); provided, however, that
each Revolving Credit Lender’s obligation to make Revolving Loans pursuant to this Section 3.5 is subject to the conditions
set forth in Section 4.2 (other than delivery by the Borrower of a Notice of Borrowing). 

55







    
3.6 Payment to Revolving Credit Lenders.
Whenever the Issuing Lender receives a payment in respect of a Reimbursement
Obligation as to which the Administrative Agent has received, for the account of
the Issuing Lender, any payments from the Revolving Credit Lenders pursuant to
Section 3.5, the Issuing Lender will promptly pay to the Administrative Agent, and
the Administrative Agent will promptly pay to each Revolving Credit Lender that
has paid its pro rata share thereof, in immediately available funds, an amount
equal to such Revolving Credit Lender’s ratable share (based on the
proportionate amount funded by such Revolving Credit Lender to the aggregate
amount funded by all Revolving Credit Lenders) of such Reimbursement Obligation.


    
3.7 Obligations Absolute. The
Reimbursement Obligations of the Borrower shall be irrevocable, shall remain in
effect until the Issuing Lender shall have no further obligations to make any
payments or disbursements under any circumstances with respect to any Letter of
Credit, and shall be absolute and unconditional, shall not be subject to
counterclaim, setoff or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances: 

    
(a) Any lack of validity or enforceability of this Agreement, any of the
other Credit Documents or any documents or instruments relating to any Letter of
Credit; 

    
(b) Any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations in respect of any Letter of Credit or any
other amendment, modification or waiver of or any consent to departure from any
Letter of Credit or any documents or instruments relating thereto, in each case
whether or not the Borrower has notice or knowledge thereof; 

    
(c) The existence of any claim, setoff, defense or other right that the
Borrower may have at any time against a beneficiary named in a Letter of Credit,
any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the Issuing Lender, any
Lender or other Person, whether in connection with this Agreement, any Letter of
Credit, the Transactions or any unrelated transactions (including any underlying
transaction between the Borrower and the beneficiary named in any such Letter of
Credit); 

    
(d) Any draft, certificate or any other document presented under the Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
(provided
that such draft, certificate or other document appears on its face to comply
with the terms of such Letter of Credit), any errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, telecopier or
otherwise, or any errors in translation or in interpretation of technical terms;


    
(e) Any defense based upon the failure of any drawing under a Letter of
Credit to conform to the terms of the Letter of Credit (provided that any draft,
certificate or other document presented pursuant to such Letter of Credit
appears on its face to comply with the terms thereof), any nonapplication or
misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with such Letter of Credit; 

56







    
(f) The exchange, release, surrender or impairment of any Collateral or other
security for the Obligations; 

    
(g) The occurrence of any Default or Event of Default; or 

    
(h) Any other circumstance or event whatsoever, including, without
limitation, any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a Guarantor. 

    
Any action taken or omitted to be taken by the Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon the Borrower and
each Lender and shall not create or result in any liability of the Issuing
Lender to the Borrower or any Lender. It is expressly understood and agreed
that, for purposes of determining whether a wrongful payment under a Letter of
Credit resulted from the Issuing Lender’s gross negligence or willful
misconduct, (i) the Issuing Lender’s acceptance of documents that appear on
their face to comply with the terms of such Letter of Credit, without
responsibility for further investigation, regardless of any notice or
information to the contrary, (ii) the Issuing Lender’s exclusive reliance on the
documents presented to it under such Letter of Credit as to any and all matters
set forth therein, including the amount of any draft presented under such Letter
of Credit, whether or not the amount due to the beneficiary thereunder equals
the amount of such draft and whether or not any document presented pursuant to
such Letter of Credit proves to be insufficient in any respect (so long as such
document appears on its face to comply with the terms of such Letter of Credit),
and whether or not any other statement or any other document presented pursuant
to such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever, and (iii) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute gross negligence or willful misconduct of the Issuing Lender.


    
3.8 Cash Collateral Account. At any time
and from time to time (i) after the occurrence and during the continuance of an
Event of Default, the Administrative Agent may, and at the direction or with the
consent of the Required Lenders shall, require the Borrower to deliver to the
Administrative Agent such additional amount of cash as is equal to 105% of the
aggregate Stated Amount of all Letters of Credit at any time outstanding
(whether or not any beneficiary under any Letter of Credit shall have drawn or
be entitled at such time to draw thereunder) and (ii) in the event of a
prepayment under Section 2.6(c), the Administrative Agent will retain such
amount as may then be required to be retained, such amounts in each case under
clauses (i) and (ii) above to be held by the Administrative Agent in a cash
collateral account (the “Cash Collateral
Account”). The Borrower hereby grants to the
Administrative Agent, for the benefit of the Issuing Lender and the Lenders, a
Lien upon and security interest in the Cash Collateral Account and all amounts
held therein from time to time as security for Letter of Credit Exposure, and
for application to the Borrower’s Reimbursement Obligations as and when the same
shall arise. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest on the investment of such amounts in Cash Equivalents, which
investments shall be made at the direction of the Borrower (unless a Default or
Event of Default shall have occurred and be continuing, in which case the
determination as to investments shall be made at the option and in the discretion of the Administrative Agent), amounts in the Cash
Collateral Account shall not bear interest. Interest and profits, if any, on
such investments shall accumulate in such account. In the event of a drawing,
and subsequent payment by the Issuing Lender, under any Letter of Credit at any
time during which any amounts are held in the Cash Collateral Account, the
Administrative Agent will deliver to the Issuing Lender an amount equal to the
Reimbursement Obligation created as a result of such payment (or, if the amounts
so held are less than such Reimbursement Obligation, all of such amounts) to
reimburse the Issuing Lender therefor. Any amounts remaining in the Cash
Collateral Account (including interest) after the expiration of all Letters of
Credit and reimbursement in full of the Issuing Lender for all of its
obligations thereunder shall be held by the Administrative Agent, for the
benefit of the Borrower, to be applied against the Obligations in such order and
manner as the Administrative Agent may direct. If the Borrower is required to
provide Cash Collateral pursuant to Section
2.6(c), such amount (including interest), to
the extent not applied as aforesaid, shall be returned to the Borrower on
demand, provided that after giving effect to such return (i) the Aggregate Revolving
Credit Exposure would not exceed the aggregate Revolving Credit Commitments at
such time and (ii) no Default or Event of Default shall have occurred and be
continuing at such time. If the Borrower is required to provide Cash Collateral
as a result of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived. 

57







     3.9 The Issuing
Lender. The Issuing Lender shall act on
behalf of the Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and the Issuing Lender shall have all of the
rights, benefits and immunities (a) provided to the Administrative Agent in
Article X
with respect to any acts taken or omissions suffered by it in connection with
Letters of Credit issued by it or proposed to be issued by it and any documents
pertaining to such Letters of Credit as fully as if the term “Administrative
Agent” as used in Article X included the Issuing Lender with respect to such acts or
omissions, and (b) as additionally provided herein with respect to the Issuing
Lender. 

    
3.10 Effectiveness. Notwithstanding any
termination of the Revolving Credit Commitments or repayment of the Loans, or
both, the obligations of the Borrower under this Article III shall remain in full force
and effect until the Issuing Lender and the Revolving Credit Lenders shall have
no further obligations to make any payments or disbursements under any
circumstances with respect to any Letter of Credit. 

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ARTICLE IV 

CONDITIONS OF BORROWING


    
4.1 Conditions of Initial Borrowing. The
obligation of each Lender to make Loans in connection with the initial Borrowing
hereunder, and the obligation of the Issuing Lender to issue Letters of Credit
hereunder on the Closing Date, is subject to the satisfaction of the following
conditions precedent: 

    
(a) The Administrative Agent shall have received the following, each dated as
of the Closing Date (unless otherwise specified) and in such number of copies as
the Administrative Agent shall have requested: 

    
(i) to the extent requested by any Lender in accordance with Section 2.4(d), a Note or
Notes for such Lender, in each case duly completed in accordance with the
provisions of Section 2.4(d) and executed by the Borrower; 

    
(ii) the Guaranty, duly completed and executed by the Parent and each
Subsidiary party thereto; provided that no Foreign Subsidiary
shall be required to execute the Guaranty to the extent that the execution of
the Guaranty by such Foreign Subsidiary would result in material adverse federal
income tax consequences for the Parent as determined by whether the execution of
the Guaranty by such Foreign Subsidiary would constitute an investment of
earnings in United States property under Section 956 (or any successor statute)
of the Code which would trigger an increase in the gross income of the Parent
pursuant to Section 951 (or any successor provision) of the Code without
corresponding credits or other offsets; 

    
(iii) the Security Agreement, duly completed and executed by the Parent, the
Borrower and each Subsidiary Guarantor, together with any certificates
evidencing the Capital Stock being pledged thereunder as of the Closing Date
(limited to 65% of the Capital Stock of any first-tier Foreign Subsidiary to the
extent and for so long as, the pledge of any greater percentage would have
material adverse federal tax consequences for the Parent) and undated
assignments separate from certificate for any such certificate, duly executed in
blank; and in connection with the pledged Capital Stock of any Foreign
Subsidiary, such foreign pledge agreements, instruments and other documents as
shall, in the reasonable judgment of the Administrative Agent, be required or
advisable under applicable foreign Requirements of Law in order to effect such
pledge; 

    
(iv) Assignments and Grants of Security Interests for the federally registered
Intellectual Property referred to in Annexes D, E and F of the Security
Agreement, in substantially the form of Exhibits A and B (as applicable) to the
Security Agreement, in each case duly completed and executed by each applicable
Credit Party; and 

    
(v) the favorable opinions of Womble Carlyle Sandridge & Rice, LLP,
special counsel to the Credit Parties. 

    
(b) The Administrative Agent shall have received a certificate, signed by the
president, the chief executive officer or the chief financial officer of the
Borrower, dated the Closing Date and in form and
substance reasonably satisfactory to the Administrative Agent, certifying that
(i) all representations and warranties of the Credit Parties contained in this
Agreement and the other Credit Documents are true and correct as of the Closing
Date, both immediately before and after giving effect to the consummation of the
Transactions and the application of the proceeds thereof (except to the extent
any such representation or warranty is expressly stated to have been made as of
a specific date, in which case such representation or warranty shall be true and
correct as of such date), (ii) no Default or Event of Default has occurred and
is continuing, both immediately before and after giving effect to the
consummation of the Transactions and the application of the proceeds thereof,
(iii) both immediately before and after giving effect to the consummation of the
Transactions, no Material Adverse Effect has occurred since February 3, 2013,
and there exists no event, condition or state of facts that could reasonably be
expected to result in a Material Adverse Effect, and (iv) all conditions to the
initial extensions of credit hereunder set forth in this Section 4.1 and in
Section 4.2
have been satisfied or waived as required hereunder. 

59







     (c) The Administrative Agent
shall have received a certificate of the secretary or an assistant secretary of
each Credit Party executing any Credit Documents as of the Closing Date, dated
the Closing Date and in form and substance reasonably satisfactory to the
Administrative Agent, certifying (i) that attached thereto is a true and
complete copy of the articles or certificate of incorporation, certificate of
formation or other organizational document and all amendments thereto of such
Credit Party, certified as of a recent date by the Secretary of State (or
comparable Governmental Authority) of its jurisdiction of organization, and that
the same has not been amended since the date of such certification, (ii) that
attached thereto is a true and complete copy of the bylaws, operating agreement
or similar governing document of such Credit Party, as then in effect and as in
effect at all times from the date on which the resolutions referred to in clause
(iii) below were adopted to and including the date of such certificate, and
(iii) that attached thereto is a true and complete copy of resolutions adopted
by the board of directors (or similar governing body) of such Credit Party,
authorizing the execution, delivery and performance of this Agreement and the
other Credit Documents to which it is a party, and as to the incumbency and
genuineness of the signature of each officer of such Credit Party executing this
Agreement or any of such other Credit Documents, and attaching all such copies
of the documents described above. 

    
(d) The Administrative Agent shall have received a certificate as of a recent
date of the good standing of each Credit Party executing any Credit Documents as
of the Closing Date, under the laws of its jurisdiction of organization, from
the Secretary of State (or comparable Governmental Authority) of such
jurisdiction. 

    
(e) All approvals, permits and consents of any Governmental Authorities or
other Persons required in connection with the execution and delivery of this
Agreement, the other Credit Documents and the consummation of the Transactions
shall have been obtained, without the imposition of conditions that are not
acceptable to the Administrative Agent, and all related filings, if any, shall
have been made, and all such approvals, permits, consents and filings shall be
in full force and effect and the Administrative Agent shall have received such
copies thereof as it shall have reasonably requested; all applicable waiting
periods shall have expired without any adverse action being taken or threatened
by any Governmental Authority having jurisdiction; and no action, proceeding,
investigation, regulation or legislation shall have been instituted, threatened
or proposed before, and no order, injunction or decree shall have been entered
by, any court or other Governmental Authority, in each case to enjoin, restrain
or prohibit, to obtain substantial damages in respect of, or to impose
materially adverse conditions upon, this Agreement, any of the other Credit
Documents, the consummation of the Transactions or that could reasonably be
expected to have a Material Adverse Effect. 

60







    
(f) Concurrently with the making of the initial Loans hereunder, (i) all
principal, interest and other amounts outstanding under the Borrower’s existing
senior credit agreement (the “Existing Senior
Credit Facilities”), shall be repaid and
satisfied in full and all guarantees by the Company Parties relating thereto
extinguished, (ii) all commitments to extend credit under the agreements and
instruments relating to the Existing Senior Credit Facilities shall be
terminated, (iii) any Liens securing the Existing Senior Credit Facilities shall
be released and any related filings (including UCC filings, mortgages, and
intellectual property filings) terminated of record (or arrangements
satisfactory to the Administrative Agent made therefor), and (iv) any letters of
credit outstanding under the Existing Senior Credit Facilities for which any
Company Party is obligated shall have been terminated, canceled or replaced
(provided
that any letter of credit outstanding under the Existing Senior Credit
Facilities issued by the Issuing Lender shall be considered a Letter of Credit
hereunder); and the Administrative Agent shall have received evidence of the
foregoing satisfactory to it, including an escrow agreement or payoff letter
executed by the lenders or the agent under the Existing Senior Credit
Facilities. 

    
(g) The Administrative Agent shall have received certified reports from an
independent search service satisfactory to it listing any judgment or tax lien
filing or Uniform Commercial Code financing statement that names the Parent, the
Borrower, or any of the other Credit Parties as debtor in any of the
jurisdictions listed beneath its name on Annex B to the Security Agreement, and
the results thereof shall be reasonably satisfactory to the Administrative
Agent. 

    
(h) The Administrative Agent shall have received evidence in form and
substance satisfactory to it that all filings, recordings, registrations and
other actions (including, without limitation, the filing of duly completed UCC-1
financing statements in each jurisdiction listed on Annex A to the Security
Agreement) necessary to perfect the Liens created by the Security Documents
shall have been completed, or arrangements satisfactory to the Administrative
Agent for the completion thereof shall have been made. 

    
(i) Since February 3, 2013, both immediately before and after giving effect
to the consummation of the Transactions, there shall not have occurred (i) a
Material Adverse Effect or (ii) any event, condition or state of facts that
could reasonably be expected to have a Material Adverse Effect. 

    
(j) The Borrower shall have paid (i) to Wells Fargo, the fee described in
Section 2.9(a) and (ii) all other fees and reasonable expenses of the Administrative
Agent and the Lenders required hereunder or under any other Credit Document to
be paid on or prior to the Closing Date (including reasonable fees and expenses
of counsel) in connection with this Agreement, the other Credit Documents and
the Transactions. 

61







     (k)
The Administrative Agent shall have received copies of the financial statements referred to in Section 5.11(a). 

    
(l) The Administrative Agent shall have received an executed Financial
Condition Certificate in form and substance satisfactory to the Administrative
Agent. 

    
(m) The Administrative Agent shall be satisfied that, on a pro forma basis
after giving effect to the Transactions, the Leverage Ratio as of the Closing
Date would not have exceeded 1.00:1.0, and the Administrative Agent shall have
received a certificate of a Financial Officer of the Parent as to the foregoing
and other supporting documentation, all in form and substance satisfactory to
the Administrative Agent. 

    
(n) The Administrative Agent shall have received evidence in form and
substance satisfactory to it that all of the requirements of Section 6.6 have been
satisfied, including receipt of certificates of insurance evidencing the
insurance coverages described on Schedule
5.18 and naming the Administrative Agent as
loss payee or additional insured, as its interests may appear. 

    
(o) The Administrative Agent shall have received an Account Designation
Letter, together with written instructions from an Authorized Officer of the
Borrower, including wire transfer information, directing the payment of the
proceeds of the initial Loans to be made hereunder. 

    
(p) The Administrative Agent shall have received from the Parent and the
Borrower all documentation and other information requested by the Administrative
Agent that is required to satisfy applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation the PATRIOT Act.


    
(q) Each of the Administrative Agent and each Lender shall have received such
other documents, certificates, opinions and instruments in connection with the
transactions contemplated hereby as it shall have reasonably requested.


    
4.2 Conditions of All Borrowings. The
obligation of each Lender to make any Loans hereunder, including the initial
Loans (but excluding Revolving Loans made for the purpose of repaying Refunded
Swingline Loans pursuant to Section
2.2(e) or for the purpose of paying unpaid
Reimbursement Obligations pursuant to Section
3.5), and the obligation of the Issuing
Lender to issue any Letters of Credit hereunder, is subject to the satisfaction
of the following conditions precedent on the relevant Borrowing Date or date of
issuance: 

    
(a) The Administrative Agent shall have received a Notice of Borrowing in
accordance with Section 2.2(b), or (together with the Swingline Lender) a
Notice of Swingline Borrowing in accordance with Section 2.2(d), or (together with the
Issuing Lender) a Letter of Credit Notice in accordance with Section 3.2, as applicable;


    
(b) Each of the representations and warranties contained in Article V and in the other
Credit Documents shall be true and correct, in all material respects, on and as
of such Borrowing Date (including the Closing Date, in the case of the initial
Loans made hereunder) or date of issuance of a Letter of Credit with the same
effect as if made on and as of such date, both immediately before and after
giving effect to the Loans to be made or Letter of Credit to be issued on such
date (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty shall be true and correct as of such date); and
 

62







    
(c) No
Default or Event of Default shall have occurred and be continuing on such date,
both immediately before and after giving effect to the Loans to be made or
Letter of Credit to be issued on such date. 

Each giving of a Notice of Borrowing, a
Notice of Swingline Borrowing or a Letter of Credit Notice, and the consummation
of each Borrowing or issuance of a Letter of Credit, shall be deemed to
constitute a representation by the Borrower that the statements contained in
Sections 4.2(b) and 4.2(c) are true, both as of the date of such notice or request and as of the
relevant Borrowing Date or date of issuance. 

ARTICLE V 

REPRESENTATIONS AND WARRANTIES


    
To induce the Administrative Agent, the Issuing Lender and the Lenders to
enter into this Agreement and to induce the Lenders to extend the credit
contemplated hereby and the Issuing Lender to issue Letters of Credit, each of
the Parent and the Borrower represents and warrants to the Administrative Agent,
the Issuing Lender and the Lenders as follows: 

    
5.1 Corporate Organization and Power. Each
Company Party (i) is a corporation, a limited liability company or other legal
entity duly organized or formed, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, as the case may be
(which jurisdictions, as of the Closing Date, are set forth on Schedule 5.1), (ii) has the
full corporate, limited liability company or other organizational power and
authority to execute, deliver and perform the Credit Documents to which it is or
will be a party, to own and hold its property and to engage in its business as
presently conducted, and (iii) is duly qualified to do business as a foreign
corporation, limited liability company or other entity and is in good standing
in each jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified, except where the failure to be so
qualified, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. 

    
5.2 Authorization; Enforceability. Each
Credit Party has taken, or on the Closing Date will have taken, all necessary
organizational action, as applicable, to execute, deliver and perform each of
the Credit Documents to which it is or will be a party, and has, or on the
Closing Date (or any later date of execution and delivery) will have, validly
executed and delivered each of the Credit Documents to which it is or will be a
party. This Agreement constitutes, and each of the other Credit Documents upon
execution and delivery will constitute, the legal, valid and binding obligation
of each Credit Party that is a party hereto or thereto, enforceable against it
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, by general equitable principles or by
principles of good faith and fair dealing (regardless of whether enforcement is
sought in equity or at law). 

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5.3 No Violation. The execution, delivery
and performance by each Credit Party of each of the Credit Documents to which it
is or will be a party, and compliance by it with the terms hereof and thereof,
do not and will not (i) violate any provision of its articles or certificate of
incorporation or formation, its bylaws or operating agreement, or other
applicable formation or organizational documents, (ii) contravene any other
Requirement of Law applicable to it, (iii) conflict with, result in a breach of
or constitute (with notice, lapse of time or both) a default under any
indenture, mortgage, lease, agreement, contract or other instrument to which it
is a party, by which it or any of its properties is bound or to which it is
subject, or (iv) except for the Liens granted in favor of the Administrative
Agent pursuant to the Security Documents, result in or require the creation or
imposition of any Lien upon any of its properties, revenues or assets; except,
in the case of clauses (ii) and (iii) above, where such violations, conflicts,
breaches or defaults, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. 

    
5.4 Governmental and Third-Party Authorization; Permits. No consent, approval, authorization or other action by,
notice to, or registration or filing with, any Governmental Authority or other
Person is or will be required as a condition to or otherwise in connection with
the due execution, delivery and performance by each Credit Party of this
Agreement or any of the other Credit Documents to which it is or will be a party
or the legality, validity or enforceability hereof or thereof, other than (i)
filings of Uniform Commercial Code financing statements and other instruments
and actions necessary to perfect the Liens created by the Security Documents,
(ii) consents, authorizations and filings that have been (or on or prior to the
Closing Date will have been) made or obtained and that are (or on the Closing
Date will be) in full force and effect, which consents, authorizations and
filings are listed on Schedule
5.4, and (iii) consents and filings the
failure to obtain or make which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. Each Company Party
has, and is in good standing with respect to, all governmental approvals,
licenses, permits and authorizations necessary to conduct its business as
presently conducted and to own or lease and operate its properties, except for
those the failure to obtain which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. 

    
5.5 Litigation. There are no actions,
investigations, suits or proceedings pending or, to the knowledge of the
Borrower, threatened, at law, in equity or in arbitration, before any court,
other Governmental Authority, arbitrator or other Person, (i) against or
affecting any of the Company Parties or any of their respective properties that
could reasonably be expected to have a Material Adverse Effect, or (ii) with
respect to this Agreement or any of the other Credit Documents. 

    
5.6 Taxes. Each Company Party has timely
filed all material federal, state, local and foreign tax returns and reports
required to be filed by it and has paid, prior to the date on which penalties
would attach thereto or a Lien would attach to any of the properties of a
Company Party if unpaid, all taxes, assessments, fees and other charges levied
upon it or upon its properties that are shown thereon as due and payable, other
than those that are not yet delinquent or that are being contested in good faith
and by proper proceedings and for which adequate reserves have been established
in accordance with GAAP. Such returns accurately reflect in all material
respects all liability for taxes of the Company Parties for the periods covered
thereby. As of the Closing Date, there is no ongoing audit or examination or, to
the knowledge of the Borrower, other investigation by any Governmental Authority
of the tax liability of the Company Parties, and there is no material unresolved
claim by any Governmental Authority concerning the tax liability of any Company
Party for any period for which tax returns have been or were required to have
been filed, other than unsecured claims for which adequate reserves have been
established in accordance with GAAP. As of the Closing Date, no Company Party
has waived or extended or has been requested to waive or extend the statute of
limitations relating to the payment of any taxes the payment of which could
reasonably be expected to result in a Material Adverse Effect. 

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5.7 Subsidiaries and Joint Ventures.
Schedule 5.7 sets forth, as of the Closing Date, (i) all of the Subsidiaries of the
Parent (including the Borrower) and (ii) as to each Company Party (other than
the Parent), (x) the number of shares, units or other interests of each class of
Capital Stock outstanding, and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and similar
rights and (y) the direct holders of all such Capital Stock and the number of
shares, units, interests, options, warrants or other purchase rights held by
each. All outstanding shares of Capital Stock of the Parent and each of its
Subsidiaries are duly and validly issued, fully paid and nonassessable. Except
for the shares of Capital Stock and the other equity arrangements expressly
indicated on Schedule 5.7, as of the Closing Date there are no shares of Capital Stock,
warrants, rights, options or other equity securities, or other Capital Stock of
any Company Party (other than the Parent) outstanding or reserved for any
purpose. Schedule 5.7 also sets forth, as of the Closing Date, each Joint Venture
of the Parent or any Subsidiary thereof and the percentage ownership of the
Parent or such Subsidiary in such Joint Venture. 

    
5.8 Full Disclosure. All factual
information heretofore, contemporaneously or hereafter furnished in writing to
the Administrative Agent or any Lender by or on behalf of any Company Party for
purposes of or in connection with this Agreement, the other Credit Documents and
the Transactions is or will be true and accurate in all material respects on the
date as of which such information is dated or certified (or, if such information
has been updated, amended or supplemented, on the date as of which any such
update, amendment or supplement is dated or certified) and not made incomplete
by omitting to state a material fact necessary to make the statements contained
herein and therein, in light of the circumstances under which such information
was provided, not misleading. As of the Closing Date, there is no fact known to
any Company Party that has, or could reasonably be expected to have, a Material
Adverse Effect, which fact has not been set forth herein, in the financial
statements of the Borrower and its Subsidiaries furnished to the Administrative
Agent and/or the Lenders, or in any certificate, opinion or other written
statement made or furnished by the Borrower to the Administrative Agent and/or
the Lenders. 

    
5.9 Margin Regulations. No Company Party
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying Margin Stock. No
proceeds of the Loans will be used, directly or indirectly, to purchase or carry
any Margin Stock, to extend credit for such purpose or for any other purpose, in
each case that would violate or be inconsistent with Regulations D, T, U or X or
any provision of the Exchange Act. 

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5.10 No Material Adverse Effect. There has
been no Material Adverse Effect since February 3, 2013, and there exists no
event, condition or state of facts that could reasonably be expected to result
in a Material Adverse Effect. 

    
5.11 Financial Matters. 

    
(a) The Borrower has heretofore furnished to the Administrative Agent copies
of (i) the audited consolidated balance sheets of the Parent and its
Subsidiaries as of February 3, 2013, January 29, 2012, and January 30, 2011, in
each case with the related statements of income, cash flows and stockholders’
equity for the Fiscal Years then ended, together with the opinion of
PricewaterhouseCoopers LLP thereon, and (ii) the unaudited consolidated balance
sheet of the Parent and its Subsidiaries as of May 5, 2013, and the related
statements of income, cash flows and stockholders’ equity for the 3-month period
then ended. Such financial statements have been prepared in accordance with GAAP
(subject, with respect to the unaudited financial statements, to the absence of
notes required by GAAP and to normal year-end adjustments) and present fairly in
all material respects the financial condition of the Parent and its Subsidiaries
on a consolidated basis as of the respective dates thereof and the results of
operations of the Parent and its Subsidiaries on a consolidated basis for the
respective periods then ended. Except as fully reflected in the most recent
financial statements referred to above and the notes thereto, there are no
material liabilities or obligations with respect to the Parent and its
Subsidiaries of any nature whatsoever (whether absolute, contingent or otherwise
and whether or not due) that are required in accordance with GAAP to be
reflected in such financial statements and that are not so reflected.


    
(b) After giving effect to the consummation of the Transactions, each Credit
Party (i) has capital sufficient to carry on its businesses as conducted and as
proposed to be conducted, (ii) has assets with a fair saleable value, determined
on a going concern basis, which are (y) not less than the amount required to pay
the probable liability on its existing debts as they become absolute and matured
and (z) greater than the total amount of its liabilities (including identified
contingent liabilities, valued at the amount that can reasonably be expected to
become absolute and matured in their ordinary course), and (iii) does not intend
to, and does not believe that it will, incur debts or liabilities beyond its
ability to pay such debts and liabilities as they mature in their ordinary
course. 

    
(c) As of the Closing Date, since February 3, 2013, there has not been an occurrence of
a “material weakness” (as defined in statement on Auditing Standards No. 60) in,
or fraud that involves management or other employees who have a significant role
in, the Borrower’s internal controls over financial reporting, in each case as
described in Section 404 of the Sarbanes-Oxley Act of 2002 and all rules and
regulations promulgated thereunder and the accounting and auditing principles,
rules, standards and practices promulgated or approved with respect
thereto.

    
(d) Since January 30, 2011, neither (i) the board of directors of the Parent,
a committee thereof or an authorized officer of the Parent has concluded that
any financial statement previously furnished to the Administrative Agent should
no longer be relied upon because of an error, nor (ii) has the Parent been
advised by its auditors that a previously issued audit report or interim review
cannot be relied on. 

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     5.12 Ownership of Properties. Each Company Party (i) has good and marketable title to all
material real property owned by it, (ii) holds interests as lessee under valid
leases in full force and effect with respect to all material leased real and
personal property used in connection with its business, and (iii) has good title
to all of its other material properties and assets reflected in the most recent
financial statements referred to in Section
5.11(a) (except as sold or otherwise disposed
of since the date thereof in the ordinary course of business), except, in the
cases of clauses (ii) and (iii) only, where the failure to hold such title or
interests, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect and in each case free and clear of all Liens
other than Permitted Liens. Schedule 5.12 lists, as of the Closing Date and after
giving effect to the Transactions, all Realty of the Credit Parties, indicating
in each case the identity of the owner, the address of the property, the nature
of use of the premises, and whether such interest is a leasehold or fee
ownership interest. 

     5.13 ERISA. 

     (a) Each Company Party and its ERISA Affiliates is in
compliance with the applicable provisions of ERISA, and each Plan is and has
been administered in compliance with all applicable Requirements of Law,
including, without limitation, the applicable provisions of ERISA and the Code,
in each case except where the failure so to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No ERISA Event that could reasonably be expected to have a Material Adverse
Effect (i) has occurred within the five-year period prior to the Closing Date,
(ii) has occurred and is continuing, or (iii) to the knowledge of the Borrower,
is reasonably expected to occur with respect to any Plan. Except as could not
reasonably be expected to have a Material Adverse Effect, no Plan has any
Unfunded Pension Liability as of the most recent annual valuation date
applicable thereto, and no Company Party or any of its ERISA Affiliates has
engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA. 

     (b) No Company Party or any of its ERISA Affiliates
has any outstanding liability on account of a complete or partial withdrawal
from any Multiemployer Plan, and no Company Party or any of its ERISA Affiliates
would become subject to any liability under ERISA if any such Company Party or
ERISA Affiliate were to withdraw completely from all Multiemployer Plans as of
the most recent valuation date. No Multiemployer Plan is in “reorganization” or
is “insolvent” within the meaning of such terms under ERISA. 

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

     (a)
No Hazardous Substances are or have been
generated, used, located, released, treated, transported, disposed of or stored,
currently or in the past, (i) by any Company Party or (ii) to the knowledge of
the Borrower, by any other Person (including any predecessor in interest) or
otherwise, in either case in, on, about or to or from any portion of any real
property, leased, owned or operated by any Company Party, except in compliance
with all applicable Environmental Laws; no portion of any such real property or,
to the knowledge of the Borrower, any other real property at any time leased,
owned or operated by any Company Party is contaminated by any Hazardous
Substance; and no portion of any real property leased, owned or operated by any Company Party is presently
or, to the knowledge of the Borrower, has ever been, the subject of an
environmental audit, assessment or remedial action.

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     (b)
No portion of any real property leased, owned or
operated by any Company Party has been used by any Company Party or, to the
knowledge of the Borrower, by any other Person, as or for a mine, landfill, dump
or other disposal facility, gasoline service station or bulk petroleum products
storage facility; and no portion of such real property or any other real
property currently or at any time in the past leased, owned or operated by any
Company Party has, pursuant to any Environmental Law, been placed on the
“National Priorities List” or “CERCLIS List” (or any similar federal, state or
local list) of sites subject to possible environmental problems. 

     (c)
All activities and operations of the Company
Parties are in compliance with the requirements of all applicable Environmental
Laws; each Company Party has obtained all licenses and permits under
Environmental Laws necessary to its respective operations, all such licenses and
permits are being maintained in good standing, and each Company Party is in
compliance with all terms and conditions of such licenses and permits; and no
Company Party is involved in any suit, action or proceeding, or has received any
notice, complaint or other request for information from any Governmental
Authority or other Person, with respect to any actual or alleged Environmental
Claims, and to the knowledge of the Borrower, there are no threatened
Environmental Claims, nor any basis therefor. 

     5.15 Compliance with Laws. Each Company Party has timely filed all material reports,
documents and other materials required to be filed by it under all applicable
Requirements of Law with any Governmental Authority, has retained all material
records and documents required to be retained by it under all applicable
Requirements of Law, and is otherwise in compliance with all applicable
Requirements of Law in respect of the conduct of its business and the ownership
and operation of its properties, except in each case to the extent that the
failure to file, retain or comply therewith, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. 

     5.16 Intellectual Property. Each Company Party owns, or has the legal right to use, all
Intellectual Property necessary for it to conduct its business as currently
conducted. Schedule
5.16 lists, as of the Closing Date and
after giving effect to the Transactions, all material registered Intellectual
Property owned by any Credit Party. No claim has been asserted or is pending by
any Person challenging or questioning the use of any such Intellectual Property
or the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any such claim, and to the knowledge of the Borrower, the use
of such Intellectual Property by any Company Party does not infringe on the
known rights of any Person, except for such claims and infringements that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. 

     5.17 Investment Company Act. No Credit Party is an “investment company,” a company
“controlled” by an “investment company,” or an “investment advisor,” within the
meaning of the Investment Company Act of 1940, as amended. 

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     5.18 Insurance.
The Borrower has heretofore furnished to the Administrative Agent, an accurate
and complete list and a brief description (including the insurer, policy number,
type of insurance, coverage limits, deductibles, expiration dates and any
special cancellation conditions), as of the Closing Date, of all policies of
property and casualty, liability (including, but not limited to, product
liability), business interruption, workers’ compensation, and other forms of
insurance owned or held by the Credit Parties or pursuant to which any of their
respective assets are insured. The assets, properties and business of the
Company Parties are insured against such hazards and liabilities, under such
coverages and in such amounts, as are customarily maintained by prudent
companies similarly situated and under policies issued by insurers of recognized
responsibility. 

     5.19 Material Contracts. As of the Closing Date, each “material contract” (within the meaning of
Item 601(b)(10) of Regulation S-K under the Securities Act) to which any Company
Party is a party, by which any Company Party or its properties is bound or to
which any Company Party is subject (collectively, “Material Contracts”) is set forth in
the Parent’s Forms 10-K, Forms 10-Q and Forms 8-K filed pursuant to the Exchange
Act. As of the Closing Date and after giving effect to the Transactions, (i)
each Material Contract is in full force and effect and is enforceable by each
Company Party that is a party thereto in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally, by
general or equitable principles or by principles of good faith and fair dealing,
and (ii) no Company Party or, to the knowledge of the Borrower, any other party
thereto is in breach of or default under any Material Contract in any material
respect or has given notice of termination or cancellation of any Material
Contract. 

     5.20 Security Documents. The provisions of each of the Security Documents are and will be
effective to create in favor of the Administrative Agent, for its benefit and
the benefit of the Lenders, a valid and enforceable security interest in and
Lien upon all right, title and interest of each Credit Party that is a party
thereto in and to the Collateral purported to be pledged by it thereunder and
described therein, and upon (i) the initial extension of credit hereunder, (ii)
the filing of appropriately completed Uniform Commercial Code financing
statements and continuations thereof in the jurisdictions specified therein,
(iii) the filing of appropriately completed short-form assignments in the U.S.
Patent and Trademark Office and the U.S. Copyright Office, as applicable, and
(iv) the possession by the Administrative Agent of any certificates evidencing
the securities pledged thereby, duly endorsed or accompanied by duly executed
stock powers, such security interest and Lien shall constitute a fully perfected
and first priority security interest in and Lien upon such right, title and
interest of the applicable Credit Party in and to such Collateral, to the extent
that such security interest and Lien can be perfected by such filings, actions
and possession, subject only to Permitted Liens. 

     5.21 Labor Relations. No Company Party is engaged in any unfair labor practice within the
meaning of the National Labor Relations Act of 1947, as amended. As of the
Closing Date, there is (i) no unfair labor practice complaint before the
National Labor Relations Board, or grievance or arbitration proceeding arising
out of or under any collective bargaining agreement, pending or, to the
knowledge of the Borrower, threatened, against any Company Party, (ii) no
strike, lock-out, slowdown, stoppage, walkout or other labor dispute pending or,
to the knowledge of the Borrower, threatened, against any Company Party, and
(iii) to the knowledge of the Borrower, no petition for certification or union
election or union organizing activities taking place with respect to
any Company Party. As of the Closing Date, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of the Company Parties.

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     5.22 No Burdensome Restrictions. No Company Party is a party to any written agreement or
instrument or subject to any other obligations or any charter or corporate
restriction or any provision of any applicable Requirement of Law that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. 

     5.23 OFAC; Anti-Terrorism Laws.

     (a)
No Company Party or any Affiliate of any Company
Party (i) is a Sanctioned Person, (ii) has more than 10% of its assets in
Sanctioned Countries, or (iii) derives more than 10% of its operating income
from investments in, or transactions with, Sanctioned Persons or Sanctioned
Countries. No part of the proceeds of any Loan hereunder will be used directly
or indirectly to fund any operations in, finance any investments or activities
in or make any payments to, a Sanctioned Person or a Sanctioned Country.


     (b)
Neither the making of the Loans hereunder nor the
use of the proceeds thereof will violate the PATRIOT Act, the Trading with the
Enemy Act, as amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto. The Company
Parties are in compliance in all material respects with the PATRIOT Act.


ARTICLE VI 

AFFIRMATIVE COVENANTS 

     Each of the Parent and the Borrower
covenants and agrees that, until the termination of the Commitments, the
termination or expiration of all Letters of Credit and the payment in full in
cash of all principal and interest with respect to the Loans and all
Reimbursement Obligations together with all fees, expenses and other amounts
then due and owing hereunder: 

     6.1 Financial Statements. The Borrower will deliver to the Administrative Agent and to
each Lender: 

     (a)
As soon as available and in any event within 45
days after the end of each of the first three Fiscal Quarters of each Fiscal
Year, beginning with the first Fiscal Quarter for which such financial
statements were not delivered as of the Closing Date, unaudited consolidated
balance sheets of the Parent and its Subsidiaries as of the end of such Fiscal
Quarter, unaudited consolidated statements of income for the Parent and its
Subsidiaries for the Fiscal Quarter then ended and unaudited consolidated
statements of income, cash flows and stockholders’ equity for that portion of
the Fiscal Year then ended, in each case setting forth comparative consolidated
figures as of the end of and for the corresponding period in the preceding
Fiscal Year together with (except for the statement of stockholders’ equity)
comparative budgeted figures for the fiscal period then ended, all in reasonable
detail and prepared in accordance with GAAP (subject to the absence of notes
required by GAAP and subject to normal year-end adjustments) applied on a basis
consistent with that of the preceding quarter or containing disclosure of the
effect on the financial condition or results of
operations of any change in the application of accounting principles and
practices during such quarter;

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     (b)
As soon as available and in any event within 90
days after the end of each Fiscal Year, beginning with Fiscal Year 2014, an
audited consolidated balance sheet of the Parent and its Subsidiaries as of the
end of such Fiscal Year and the related audited consolidated statements of
income, cash flows and stockholders’ equity for the Parent and its Subsidiaries
for the Fiscal Year then ended, including the notes thereto, in each case
setting forth comparative consolidated figures as of the end of and for the
preceding Fiscal Year together with (except for the statement of stockholders’
equity) comparative budgeted figures for the Fiscal Year then ended, all in
reasonable detail and (with respect to the audited statements) certified by the
independent certified public accounting firm regularly retained by the Parent or
another independent certified public accounting firm of recognized national
standing reasonably acceptable to the Administrative Agent, together with (y) a
report thereon by such accountants that is not qualified as to going concern or
scope of audit and to the effect that such financial statements present fairly
in all material respects the consolidated financial condition and results of
operations of the Parent and its Subsidiaries as of the dates and for the
periods indicated in accordance with GAAP applied on a basis consistent with
that of the preceding year or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such year, and (z) a letter from such
accountants to the effect that, based on and in connection with their
examination of the financial statements of the Parent and its Subsidiaries, they
obtained no knowledge of the occurrence or existence of any Default or Event of
Default relating to accounting or financial reporting matters (which certificate
may be limited to the extent required by accounting rules or guidelines), or a
statement specifying the nature and period of existence of any such Default or
Event of Default disclosed by their audit. 

     6.2 Other Business and Financial
Information. The Borrower will deliver to the
Administrative Agent and each Lender: 

     (a) Concurrently with each delivery of the financial
statements described in Sections 6.1(a) and 6.1(b), a Compliance Certificate with
respect to the period covered by the financial statements being delivered
thereunder, executed by a Financial Officer of the Parent or Borrower, together
with a Covenant Compliance Worksheet reflecting the computation of the financial
covenants set forth in Article
VII as of the last day of the period covered
by such financial statements; 

     (b)
As soon as available and in any event not later
than 30 days after the commencement of each Fiscal Year, beginning with Fiscal
Year 2014, a consolidated operating budget for the Parent and its Subsidiaries
for such Fiscal Year (prepared on a quarterly basis), consisting of a
consolidated balance sheet and consolidated statements of income and cash flows,
together with a certificate of a Financial Officer of the Parent to the effect
that such budget has been prepared in good faith and is a reasonable estimate of
the financial position and results of operations of the Parent and its
Subsidiaries for the period covered thereby; and as soon as available from time
to time thereafter, any modifications or revisions to or restatements of such
budget; 

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     (c)
Promptly upon receipt thereof, copies of any
“management letter” submitted to any Company Party by its certified public
accountants in connection with each annual, interim or special audit, and
promptly upon completion thereof, any response reports from such Company Party
in respect thereof; 

     (d)
Promptly upon the sending, filing or receipt
thereof, copies of (i) all financial statements, reports, notices and proxy
statements that any Company Party shall send or make available generally to its
shareholders, (ii) all regular, periodic and special reports, registration
statements and prospectuses (other than on Form S-8) that any Company Party
shall render to or file with the Securities and Exchange Commission, the
National Association of Securities Dealers, Inc. or any national securities
exchange, and (iii) all press releases and other statements made available
generally by any Company Party to the public concerning material developments in
the business of the Company Parties; 

     (e)
Promptly upon (and in any event within five
Business Days after) any Responsible Officer of
any Company Party obtaining knowledge thereof, written notice of any of the
following: 

     (i) the occurrence of any Default or Event of
Default, together with a written statement of a Responsible Officer of the
Borrower specifying the nature of such Default or Event of Default, the period
of existence thereof and the action that the Borrower has taken and proposes to
take with respect thereto; 

     (ii) the institution or threatened institution
of (or the occurrence of any material development in) any action, suit,
investigation or proceeding against or affecting any Company Party, including
any such investigation or proceeding by any Governmental Authority (other than
routine periodic inquiries, investigations or reviews), that could reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect;


     (iii) the receipt by any Company Party from any
Governmental Authority of (A) any notice asserting any failure by any Company
Party to be in compliance with applicable Requirements of Law or that threatens
the taking of any action against any Company Party or sets forth circumstances
that could reasonably be expected to have a Material Adverse Effect, or (B) any
notice of any actual or threatened suspension, limitation or revocation of,
failure to renew, or imposition of any restraining order, escrow or impoundment
of funds in connection with, any license, permit, accreditation or authorization
of any Company Party, where such action could reasonably be expected to have a
Material Adverse Effect; 

     (iv) the occurrence of any ERISA Event,
together with (x) a written statement of a Responsible Officer of the Borrower
specifying the details of such ERISA Event and the action that the applicable
Company Party has taken and proposes to take with respect thereto, (y) a copy of
any notice with respect to such ERISA Event that may be required to be filed
with the PBGC and (z) a copy of any notice delivered by the PBGC to any Company
Party or an ERISA Affiliate with respect to such ERISA Event; 

72 







     (v) the occurrence of any material default
under, or any proposed or threatened termination or cancellation of, any
Material Contract or other material contract or agreement to which any Company
Party is a party, the default under or termination or cancellation of which
could reasonably be expected to have a Material Adverse Effect; 

     (vi) the occurrence of any of the following:
(x) the assertion of any Environmental Claim
against or affecting any Company Party or any real property leased, operated or
owned by any Company Party, or any Company Party’s discovery of a basis for any
such Environmental Claim; (y) the receipt by any Company Party of notice of any
alleged violation of or noncompliance with any Environmental Laws or release of
any Hazardous Substance; or (z) the taking of any investigation, remediation or
other responsive action by any Company Party or any other Person in response to
the actual or alleged violation of any Environmental Law by any Company Party or
generation, storage, transport, release, disposal or discharge of any Hazardous
Substances on, to, upon or from any real property leased, operated or owned by
any Company Party; but in each case under clauses (x), (y) and (z) above, only
to the extent the same could reasonably be expected to have a Material Adverse
Effect; 

     (vii) any Subsidiary previously designated as
an Immaterial Subsidiary being deemed no longer to be an Immaterial Subsidiary
due to the operation of the proviso in the definition of “Immaterial
Subsidiary”; 

     (viii) the occurrence of any damage, loss,
destruction, confiscation, condemnation, taking, diminution in value or other
Casualty Event with respect to any property of any Company Party, in each case
in excess of $10,000,000; and 

     (ix) any other matter or event that has, or
could reasonably be expected to have, a Material Adverse Effect, together with a
written statement of a Responsible Officer of the Borrower setting forth the
nature and period of existence thereof and the action that the affected Company
Parties have taken and propose to take with respect thereto; and 

     (f)
As promptly as reasonably possible, such other
information about the business, condition (financial or otherwise), operations
or properties of any Company Party as the Administrative Agent or any Lender may
from time to time reasonably request. 

     (g)
The financial statements and other items required
to be delivered by the Borrower pursuant to Sections 6.1(a), 6.1(b) and 6.2(d) of this Agreement
may be delivered by electronic communication and delivery including, the
Internet or intranet websites to which the Administrative Agent and each Lender
have access (including a commercial, third-party website such as www.Edgar.com).
Financial statements and other items delivered electronically shall be deemed to
have been delivered twenty-four (24) hours after the date and time on which the
Borrower posts such financial statements or items or the financial statements or
items become available on a commercial website and the Borrower notifies the
Administrative Agent and each Lender of said posting and provides a link
thereto; provided that if such item is not sent or posted during the normal business hours
of the recipient, said posting date and time shall be deemed to have commenced as of 9:00 a.m. on the
opening of business on the next Business Day for the recipient.

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     6.3 Existence; Franchises; Maintenance of
Properties. Each of the Parent and the
Borrower will, and will cause each of its Subsidiaries to, (i) maintain and
preserve in full force and effect its legal existence, except as expressly
permitted otherwise by Section
8.1, (ii) obtain, maintain and preserve in
full force and effect all other rights, franchises, licenses, permits,
certifications, approvals and authorizations required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except to the extent the failure to do so could
not reasonably be expected to have a Material Adverse Effect, and (iii) keep all
material properties in good working order and condition (normal wear and tear
and damage by casualty excepted) and from time to time make all necessary
repairs to and renewals and replacements of such properties, except to the
extent that any of such properties are obsolete or are being replaced or, in the
good faith judgment of the Borrower, are no longer useful or desirable in the
conduct of the business of the Company Parties. 

     6.4 Compliance with Laws. Each of the Parent and the Borrower will, and will cause
each of its Subsidiaries to, comply in all respects with all Requirements of Law
applicable in respect of the conduct of its business and the ownership and
operation of its properties, except to the extent the failure so to comply could
not reasonably be expected to have a Material Adverse Effect. 

     6.5 Payment of Obligations. Each of the Parent and the Borrower will, and will cause
each of its Subsidiaries to, (i) pay, discharge or otherwise satisfy at or
before maturity all liabilities and obligations as and when due (subject to any
applicable subordination, grace and notice provisions), except to the extent
failure to do so could not reasonably be expected to have a Material Adverse
Effect, and (ii) pay and discharge all material taxes, assessments and
governmental charges or levies imposed upon it, upon its income or profits or
upon any of its properties, prior to the date on which penalties would attach
thereto, and all lawful claims that, if unpaid, would become a Lien (other than
a Permitted Lien) upon any of the properties of any Company Party;
provided,
however,
that no Company Party shall be required to pay any such tax, assessment, charge,
levy or claim that is being contested in good faith and by proper proceedings
and as to which such Company Party is maintaining adequate reserves with respect
thereto in accordance with GAAP. 

     6.6 Insurance.

     (a)
Each of the Parent and the Borrower will, and
will cause each of its Subsidiaries to, (i) maintain with financially sound and
reputable insurance companies insurance with respect to its assets, properties
and business, against such hazards and liabilities, of such types and in such
amounts, as is customarily maintained by companies in the same or similar
businesses similarly situated, and (ii) at least 10 days prior to each
anniversary of the Closing Date, deliver certificates of such insurance to the
Administrative Agent with standard loss payable endorsements naming the
Administrative Agent as loss payee (on property and casualty policies) and
additional insured (on liability policies) as its interests may appear. Each
such policy of insurance shall contain a clause requiring the insurer to give
not less than 30 days’ prior written notice to the Administrative Agent before
any cancellation of the policies for any reason whatsoever and shall provide that any loss
shall be payable in accordance with the terms thereof notwithstanding any act of
any Company Party that might result in the forfeiture of such insurance.

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     (b)
Each of the Parent and the Borrower will, and
will cause each of its Subsidiaries to, direct all insurers under policies of
property and casualty insurance on the Collateral to pay all proceeds payable
thereunder directly to the Administrative Agent. The Administrative Agent shall
hold all such proceeds for the account of the Credit Parties. So long as no
Event of Default has occurred and is continuing, the Administrative Agent shall,
at the Borrower’s request, disburse such proceeds as payment for the purpose of
replacing or repairing destroyed or damaged assets, as and when required to be
paid and upon presentation of evidence satisfactory to the Administrative Agent
of such required payments and such other documents as the Administrative Agent
may reasonably request. 

     6.7 Maintenance of Books and Records;
Inspection. Each of the Parent and the
Borrower will, and will cause each of its Subsidiaries to, (i) maintain adequate
books, accounts and records, in which full, true and correct entries shall be
made of all financial transactions in relation to its business and properties,
and prepare all financial statements required under this Agreement, in each case
in accordance with GAAP and in compliance with the requirements of any
Governmental Authority having jurisdiction over it, and (ii) permit employees or
agents of the Administrative Agent or any Lender to visit and inspect its
properties and examine or audit its books, records, working papers and accounts
and make copies and memoranda of them, and to discuss its affairs, finances and
accounts with its officers and employees and, upon notice to the Parent and the
Borrower, the independent public accountants of the Parent, the Borrower and
their respective Subsidiaries (and by this provision each of the Parent and the
Borrower authorizes such accountants to discuss the finances and affairs of the
Parent, the Borrower and their respective Subsidiaries), all at such times and
from time to time, upon reasonable notice and during business hours, as may be
reasonably requested. 

     6.8 Subsidiaries. The Parent will take such action, and will cause each of its
Subsidiaries to take such action, from time to time as shall be necessary to
ensure that each Domestic Subsidiary (other than an Immaterial Subsidiary) is a
Subsidiary Guarantor hereunder. Without limiting the generality of the
foregoing, and except as set forth in Sections
6.8(d) and 6.8(e), in the event that the
Borrower may from time to time create or acquire new Wholly Owned Subsidiaries
in connection with Investments or otherwise as permitted under this Agreement,
or the Wholly Owned Subsidiaries of the Borrower may create or acquire new
Wholly Owned Subsidiaries, the Parent will take such action, and will cause each
of its Subsidiaries to take such action, to ensure that: 

     (a)
Concurrently with (and in any event within ten
Business Days after) the creation or direct or indirect acquisition by the
Parent thereof, (i) each such new Subsidiary (other than an Immaterial
Subsidiary) will execute and deliver to the Administrative Agent (A) a joinder
to the Guaranty, pursuant to which such new Subsidiary shall become a guarantor
thereunder and shall guarantee the payment in full of the Obligations of the
Borrower under this Agreement and the other Credit Documents, subject to any
limitations set forth therein, and (B) a joinder to the Security Agreement,
pursuant to which such new Subsidiary (other than an Immaterial Subsidiary)
shall become a party thereto and shall grant to the Administrative Agent a first priority Lien upon and security interest
in its accounts receivable, inventory, equipment, general intangibles and other
personal property as Collateral for its obligations under the Guaranty, subject
only to Permitted Liens and any limitations set forth therein, and (ii) the
Borrower will, or will cause the parent Subsidiary that owns the Capital Stock
of such new Subsidiary (other than an Immaterial Subsidiary) to, execute and
deliver to the Administrative Agent an amendment or supplement to the Security
Agreement pursuant to which all of the Capital Stock of such new Subsidiary
shall be pledged to the Administrative Agent, together with the certificates
evidencing such Capital Stock and undated stock powers duly executed in blank;

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     (b)
Concurrently with (and in any event within 30
Business Days after) the creation or acquisition of any new Subsidiary (other
than an Immaterial Subsidiary), the Borrower will deliver to the Administrative
Agent: 

     (i) a written legal opinion of counsel to
such Subsidiary addressed to the Administrative Agent and the Lenders, in form
and substance reasonably satisfactory to the Administrative Agent and its
counsel, which shall cover such matters relating to such Subsidiary and the
creation or acquisition thereof incident to the transactions contemplated by
this Agreement and this Section
6.8 and the other Credit Documents as set
forth in the legal opinion of counsel delivered to the Administrative Agent and
the Lenders on the Closing Date; 

     (ii) (A) a copy of the certificate of
incorporation (or other charter documents) of such Subsidiary, certified as of a
date that is acceptable to the Administrative Agent by the applicable
Governmental Authority of the jurisdiction of incorporation or organization of
such Subsidiary, (B) a copy of the bylaws or similar organizational document of
such Subsidiary, certified on behalf of such Subsidiary as of a date that is
acceptable to the Administrative Agent by the corporate secretary or assistant
secretary of such Subsidiary, (C) an original certificate of good standing for
such Subsidiary issued by the applicable Governmental Authority of the
jurisdiction of incorporation or organization of such Subsidiary and (D) copies
of the resolutions of the board of directors and, if required, stockholders or
other equity owners of such Subsidiary authorizing the execution, delivery and
performance of the agreements, documents and instruments executed pursuant to
Section 6.8(a), certified on behalf of such Subsidiary by an Authorized Officer of such
Subsidiary, all in form and substance reasonably satisfactory to the
Administrative Agent; 

     (iii) a report of Uniform Commercial Code
financing statement, tax and judgment lien searches performed against such
Subsidiary in each jurisdiction in which such Subsidiary is incorporated or
organized, has a place of business or maintains any assets, which report shall
show no Liens on its assets (other than Permitted Liens); 

     (iv) a certificate of the secretary or an
assistant secretary of such Subsidiary as to the incumbency and signature of the
officers executing agreements, documents and instruments executed pursuant to
Section 6.8(a); and 

     (v) a certificate executed by an Authorized
Officer of each of the Borrower and such Subsidiary, which shall constitute a
representation and warranty by the Borrower and such Subsidiary as of the
date of the creation or acquisition of such Subsidiary that all conditions
contained in this Agreement to such creation or acquisition have been satisfied,
in form and substance reasonably satisfactory to the Administrative Agent.

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     (c)
As promptly as reasonably possible, the Borrower
and its Subsidiaries will deliver any such other documents, certificates and
opinions, in form and substance reasonably satisfactory to the Administrative
Agent, as the Administrative Agent or the Required Lenders may reasonably
request in connection therewith and will take such other action as the
Administrative Agent may reasonably request to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected security
interest in the Collateral being pledged pursuant to the documents described
above;

     (d)
Notwithstanding the foregoing provisions of this
Section 6.8, with respect to any Subsidiary that is an Immaterial Subsidiary (but
only for so long as such Subsidiary is an Immaterial Subsidiary) (i) such
Immaterial Subsidiary shall not be required to become a Subsidiary Guarantor,
and (ii) the Parent and Borrower shall not be required to comply, or cause their
Subsidiaries to comply, with this Section
6.8 with respect to such Immaterial
Subsidiary, provided that the Capital Stock of such Immaterial Subsidiary (except
for an Immaterial Subsidiary that is a Foreign Subsidiary) shall still be
pledged to the Administrative Agent under the terms of the Security Agreement to
the extent that such pledge is effective (as between the applicable pledgor and
the Administrative Agent) without any amendment or supplement to the Security
Agreement and without the delivery of certificates evidencing the Capital Stock
of such Immaterial Subsidiary. Within 10 Business Days of any Subsidiary that
was an Immaterial Subsidiary no longer being an Immaterial Subsidiary, each of
the Parent and Borrower shall comply with this Section 6.8 with respect to such
Subsidiary. 

     (e)
Notwithstanding the foregoing provisions of this
Section 6.8
or Section 6.9, with respect to any Foreign Subsidiary, (i) the Capital Stock of such
Foreign Subsidiary will not be required to be pledged to the extent (but only to
the extent) that (x) such Foreign Subsidiary has assets with a fair market value
less than $100,000, (y) such Foreign Subsidiary is a Subsidiary of a Foreign
Subsidiary or (z) such pledge exceeds 65% of the voting Capital Stock of such
Foreign Subsidiary, unless and to the extent that the pledge of greater than 65%
of the voting Capital Stock of such Foreign Subsidiary would not cause any
materially adverse tax consequences to the Borrower, and (ii) such Foreign
Subsidiary will not be required to become a Subsidiary Guarantor or otherwise
execute the Security Agreement if doing so would cause any materially adverse
tax consequences to the Borrower or the Parent, determined by whether the
execution of the Guaranty by such Foreign Subsidiary would constitute an
investment of earnings in United States property under Section 956 (or any
successor statute) of the Code which would trigger an increase in the gross
income of the Parent pursuant to Section 951 (or any successor provision) of the
Code without corresponding credits or other offsets. Within 60 days, or such
longer period of time as the Administrative Agent and the Borrower shall agree,
of any Foreign Subsidiary (other than a Foreign Subsidiary that is a Subsidiary
of a Foreign Subsidiary) whose Capital Stock has not previously been pledged to
the Administrative Agent for the benefit of the Lenders, obtaining assets that,
when aggregated with all of the other assets of such Foreign Subsidiary, will
have a fair market value in excess of $100,000, each of the Parent and the
Borrower will, and will cause the parent of such Foreign Subsidiary to, execute
and deliver to the Administrative Agent an amendment or
supplement to the Security Agreement pursuant to which 65% of the Capital Stock
of such Foreign Subsidiary shall be pledged to the Administrative Agent,
together with the certificates evidencing such Capital Stock and undated stock
powers duly executed in blank.

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     6.9 Additional Security. Subject to Section 6.8(e), each of the Parent and the Borrower will,
and will cause each of its Subsidiaries (other than Immaterial Subsidiaries) to,
grant to the Administrative Agent, for the benefit of the Lenders, from time to
time security interests and other Liens in and upon such of its assets and
properties (other than Realty) as are not covered by the Security Documents
executed and delivered on the Closing Date or pursuant to Section 6.8, and as may be
reasonably requested from time to time by the Administrative Agent or the
Required Lenders. Such security interests and Liens shall be granted pursuant to
documentation in form and substance reasonably satisfactory to the
Administrative Agent and shall constitute valid and perfected security interests
and Liens, subject to no Liens other than Permitted Liens. 

     6.10 Environmental Laws. Each of the Parent and the Borrower will, and will cause each of its
Subsidiaries to, (i) comply in all material respects with, and use commercially
reasonable efforts to ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and use commercially
reasonable efforts to ensure that all tenants and subtenants obtain and comply
in all material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except to the extent that the failure to do so could not reasonably be
expected to have a Material Adverse Effect, and (ii) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions, required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws, except to the extent that the same are
being contested in good faith by appropriate proceedings or to the extent the
failure to conduct or complete any of the foregoing could not reasonably be
expected to have a Material Adverse Effect. 

     6.11 Bank Accounts. Each of the Parent and the Borrower will, and will cause each of its
Subsidiaries to, within a reasonable time following the Closing Date, maintain
at Wells Fargo all primary operating bank accounts and related cash management
and treasury services; provided that the Company Parties
shall not be required to maintain at Wells Fargo any bank account or related
cash management and treasury service to the extent (i) such bank account or
related cash management and treasury service does not meet the needs and
requirements of the Company Parties as reasonably determined by the Company
Parties or (ii) other banks or financial institutions are offering such bank
account or related cash management and treasury service to the applicable
Company Party on terms and prices more favorable than Wells Fargo as reasonably
determined by such Company Party. Each of the Parent and the Borrower will, and
will cause each of its Subsidiaries to, provide Wells Fargo with the first and
last opportunity to provide any commercial or corporate banking services
required, desired or used by any Company Party. 


78









     6.12 Public/Private Information. Each of the Parent and the Borrower will cooperate with the
Administrative Agent in connection with the publication of certain materials
and/or information provided by or on behalf of
the Borrower to the Administrative Agent and Lenders pursuant to this
Article VI
(collectively, the “Information
Materials”) and will designate Information
Materials (i) that are either available to the public or not material with
respect to the Parent and its Subsidiaries for purposes of federal and state
securities laws, as “Public Information” and (ii) that are not Public Information, as
“Private Information”. 

     6.13 OFAC, PATRIOT Act
Compliance. Each of the Parent and the
Borrower will, and will cause each of its Subsidiaries to, (i) refrain from
doing business in a Sanctioned Country or with a Sanctioned Person in violation
of the economic sanctions of the United States administered by OFAC, and (ii)
provide, to the extent commercially reasonable, such information and take such
actions as are reasonably requested by the Administrative Agent or any Lender in
order to assist the Administrative Agent and the Lenders in maintaining
compliance with the PATRIOT Act. 

    
6.14 Further Assurances. Each of the Parent
and Borrower will, and will cause each of its Subsidiaries to, make, execute,
endorse, acknowledge and deliver any amendments, modifications or supplements
hereto and restatements hereof and any other agreements, instruments or
documents, and take any and all such other actions, as may from time to time be
reasonably requested by the Administrative Agent or the Required Lenders to
perfect and maintain the validity and priority of the Liens granted pursuant to
the Security Documents and to effect, confirm or further assure or protect and
preserve the interests, rights and remedies of the Administrative Agent and the
Lenders under this Agreement and the other Credit Documents. 

ARTICLE VII 

FINANCIAL COVENANTS 

    
Each of the Parent and the Borrower covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full in cash of all principal and interest with
respect to the Loans and all Reimbursement Obligations together with all fees,
expenses and other amounts then due and owing hereunder: 

    
7.1 Leverage Ratio. The Parent will not
permit the Leverage Ratio as of the last day of any Fiscal Quarter to be greater
than 2.25:1.0. 

    
7.2 Fixed Charge Coverage Ratio. The
Parent will not permit the Fixed Charge Coverage Ratio as of the last day of any
Fiscal Quarter to be less than 1.30:1.00. 

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ARTICLE VIII 

NEGATIVE COVENANTS 

    
Each of the Parent and the Borrower covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full in cash of all principal and interest with
respect to the Loans and all Reimbursement Obligations together with all fees,
expenses and other amounts then due and owing hereunder: 

    
8.1 Merger; Consolidation. Each of the
Parent and the Borrower will not, and will not permit or cause any of its
Subsidiaries to, liquidate, wind up or dissolve, or enter into any
consolidation, merger or other combination, or agree to do any of the foregoing;
provided,
however,
that: 

    
(i) any Wholly Owned Subsidiary of the Borrower may merge or consolidate
with, or be liquidated into, (x) the Borrower (so long as the Borrower is the
surviving or continuing entity) or (y) any other Wholly Owned Subsidiary (so
long as, if either constituent entity is a Subsidiary Guarantor, the surviving
or continuing entity is a Subsidiary Guarantor), and in each case so long as no
Default or Event of Default has occurred and is continuing or would result
therefrom; 

    
(ii) any Wholly Owned Subsidiary of the Borrower may merge or consolidate with
another Person (other than another Company Party, which merger or consolidation
with another Company Party may be permitted under Section 8.1(i)), so long as (w) if
required by Section 6.8, the surviving entity is a Subsidiary Guarantor, (x) such
merger or consolidation is a permitted Investment under Section 8.5, (y) the
applicable conditions and requirements of Sections 6.8 and 6.9 are satisfied, and (z)
no Default or Event of Default has occurred and is continuing or would result
therefrom; 

    
(iii) the Borrower may merge or consolidate with another Person (other than
another Company Party, which merger or consolidation with another Company Party
may be permitted under Section 8.1(i)), so long as (w) the Borrower is the
surviving entity, (x) such merger or consolidation is a permitted Investment
under Section 8.5, (y) the applicable conditions and requirements of Sections 6.8 and
6.9 are
satisfied, and (z) no Default or Event of Default has occurred and is continuing
or would result therefrom; and 

    
(iv) to the extent not otherwise permitted under the foregoing clauses, any
Wholly Owned Subsidiary may be liquidated, wound up and dissolved;
provided
that (x) no Default or Event of Default has occurred and is continuing or would
result therefrom and (y) all distributions, dispositions and other transfers
made in connection therewith are otherwise permitted hereunder. 

     8.2 Indebtedness. Each of the Parent and the Borrower will not, and will not permit or
cause any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than (without duplication): 

    
(i) Indebtedness of the Credit Parties in favor of the Administrative Agent
and the Lenders incurred under this Agreement and the other Credit Documents;


80







    
(ii) purchase money Indebtedness of the Borrower and its Subsidiaries incurred
solely to finance the acquisition, construction or improvement of any equipment,
real property or other fixed assets in the ordinary course of business,
including Capital Lease Obligations, and any renewals, replacements,
refinancings or extensions thereof, provided that all such purchase money
Indebtedness shall not exceed $50,000,000 in aggregate principal amount
outstanding at any one time; 

    
(iii) unsecured loans and advances (A) by the Borrower or any Subsidiary to any
Subsidiary Guarantor, (B) by any Subsidiary to the Borrower, (C) by any
Subsidiary that is not a Subsidiary Guarantor to any other Subsidiary that is
not a Subsidiary Guarantor or (D) by the Borrower or any Subsidiary Guarantor to
a Subsidiary that is not a Subsidiary Guarantor, provided that the Indebtedness under
this clause (D) shall not exceed $2,500,000 in aggregate principal amount
outstanding at any time; 

    
(iv) Indebtedness of the Borrower under Hedge Agreements entered into in the
ordinary course of business to manage existing or anticipated interest rate,
foreign currency or commodity risks and not for speculative purposes (the
Administrative Agent and the Lenders acknowledge and agree that the manner in
which a Hedge Agreement may be treated or classified by the Borrower for
accounting purposes shall not be determinative as to whether a Hedge Agreement
has been entered into for speculative purposes); 

    
(v) Indebtedness existing on the Closing Date and heretofore described in
writing by the Borrower to the Administrative Agent (and any renewals,
replacements, refinancings or extensions of any such Indebtedness that do not
increase the outstanding principal amount thereof); 

    
(vi) Indebtedness consisting of Guaranty Obligations of the Parent, the
Borrower or any of the Subsidiary Guarantors incurred in the ordinary course of
business for the benefit of the Borrower or a Subsidiary Guarantor;
provided
that the primary obligation being guaranteed is expressly permitted by this
Agreement; 

    
(vii) overdrafts in operating accounts at banks incurred in the ordinary course
of business and in an aggregate amount not exceeding $500,000 outstanding at any
time; provided that no such overdraft shall remain outstanding for more than three (3)
Business Days; 

    
(viii) bankers acceptances opened for the benefit of the Borrower or a
Subsidiary in the ordinary course of business for the importing or exporting of
goods in an aggregate amount not exceeding $1,000,000 at any time; 

    
(ix) unsecured structured settlements of the Borrower and its Subsidiaries
relating to the payment, settlement or other resolution of any attachment,
judgment or action, investigation, suit or proceeding, pending or threatened, at
law, in equity or in arbitration before any court, Governmental Authority,
arbitrator or other Person not exceeding $10,000,000 in aggregate amount
outstanding at any time;

81







    
(x) letters of credit issued by Wells Fargo for the account of any Company
Party not exceeding $10,000,000 in aggregate stated or face amount at any time;
and 

    
(xi) other Indebtedness of the Borrower and its Subsidiaries not exceeding
$5,000,000 in aggregate principal amount outstanding at any time. 

    
8.3 Liens. Each of the Parent and the
Borrower will not, and will not permit or cause any of its Subsidiaries to,
directly or indirectly, make, create, incur, assume or suffer to exist, any Lien
upon or with respect to any part of its property or assets, whether now owned or
hereafter acquired, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien with respect
to any such property, asset, income or profits under the Uniform Commercial Code
of any state or under any similar recording or notice statute, or agree to do
any of the foregoing, other than the following (collectively, “Permitted Liens”):


    
(i) Liens in favor of the Administrative Agent and the Lenders created by or
otherwise existing under or in connection with this Agreement and the other
Credit Documents; 

    
(ii) Liens in existence on the Closing Date and set forth on Schedule 8.3, and any
extensions, renewals or replacements thereof; provided that any such extension,
renewal or replacement Lien shall be limited to all or a part of the property
that secured the Lien so extended, renewed or replaced (plus any improvements on
such property) and shall secure only those obligations that it secures on the
date hereof (and any renewals, replacements, refinancings or extensions of such
obligations that do not increase the outstanding principal amount thereof);


    
(iii) Liens imposed by law, such as Liens of carriers, warehousemen, mechanics,
materialmen, landlords, and other similar Liens imposed by law, incurred in the
ordinary course of business for sums not constituting borrowed money that are
not overdue for a period of more than 30 days or that are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required); 

    
(iv) any (x) Lien of a landlord (including with respect to association dues,
maintenance fees and similar items) under any lease pursuant to which the
Borrower or any of its Subsidiaries has a leasehold interest in any real
property, which Lien (A) secures sums not constituting borrowed money and (B) is
limited to the assets located on such real property, any security deposit with
respect to such lease and any sublease interest with respect to such real
property (and rents payable thereunder), and (y) Liens that have been granted by
any landlord on property over which the Borrower or any Subsidiary has any real
property interest; 

    
(v) Liens (other than any Lien imposed by ERISA, the creation or incurrence
of which would result in an Event of Default under Section 9.1(j)) incurred in the
ordinary course of business in connection with worker’s compensation,
unemployment insurance or other forms of governmental insurance or benefits, or
to secure the performance of letters of credit, bids, tenders, statutory
obligations, surety, performance and appeal bonds, leases, public or statutory
obligations, government contracts and other similar obligations (other than
obligations for borrowed money) entered into in the ordinary course of
business; 

82







     (vi) Liens for taxes,
assessments or other governmental charges or statutory obligations that are not
delinquent or remain payable without any penalty or that are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required); 

    
(vii) any attachment or judgment Lien not constituting an Event of Default
under Section 9.1(h); 

    
(viii) Liens securing Indebtedness permitted under Section 8.2(ii), provided that (x) any such
Lien shall attach to the property being acquired, constructed or improved with
such Indebtedness concurrently with or within 90 days after the acquisition (or
completion of construction or improvement) or the refinancing thereof by the
Borrower or such Subsidiary, (y) the amount of the Indebtedness secured by such
Lien shall not exceed 100% of the cost to the Borrower or such Subsidiary of
acquiring, constructing or improving the property and any other assets then
being financed solely by the same financing source, and (z) any such Lien shall
not encumber any other property of the Borrower or any of its Subsidiaries
except assets then being financed solely by the same financing source;


    
(ix) customary rights of set-off, revocation, refund or chargeback under
deposit agreements or under the Uniform Commercial Code of banks or other
financial institutions where the Parent or any of its Subsidiaries maintains
deposits (other than deposits intended as cash collateral) in the ordinary
course of business; 

    
(x) Liens arising solely by virtue of any statutory or common law provisions
relating to (i) liens in favor of securities intermediaries or (ii) rights of
setoff or similar rights and remedies as to securities accounts or other funds
maintained with securities intermediaries; 

    
(xi) Liens that arise in favor of banks under Article 4 of the Uniform
Commercial Code on items in collection and the
documents relating thereto and proceeds thereof; 

    
(xii) Liens created in the ordinary course of business in favor of banks and
other institutions to cover credit balances of any bank accounts of the Borrower
or any Subsidiary to facilitate the operation of cash pooling, recoupment and
set-off related to store-level credit card transactions or similar arrangements
in respect of such bank accounts in the ordinary course of business; 

    
(xiii) Liens arising from the filing (for notice purposes only) of UCC-1
financing statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) in respect of true leases otherwise permitted hereunder;


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(xiv) (a) all easements, zoning and other restrictions, rights of way,
reservations, licenses, encroachments, variations and similar restrictions,
charges and encumbrances on title that do not secure monetary obligations and do
not materially impair the use of such property for its intended purposes or the
value thereof, and (b) any other Lien or exception to coverage described in
mortgagee policies of title insurance issued in favor of and accepted by the
Administrative Agent in connection with the Existing Senior Credit Facilities;


    
(xv) any leases, subleases, licenses or sublicenses granted (i) by a Credit
Party or any Subsidiary thereof to any Credit Party or (ii) by the Borrower or
any of its Subsidiaries to third parties in the ordinary course of business and
not interfering in any material respect with the business of the Borrower and
its Subsidiaries, and any interest or title of a lessor, sublessor, licensor or
sublicensor under any lease or license permitted under this Agreement;


    
(xvi) Liens on cash, commodity accounts, commodity contracts, financial assets
and securities (other than any Investment in any Joint Venture or Subsidiary) of
the Borrower or any Subsidiary posted as margin in an aggregate amount not
exceeding $2,000,000 at any time to secure obligations of the Parent or any of
its Subsidiaries under commodity Hedge Agreements permitted by Sections 8.2(iv) and
8.5(vii);


    
(xvii) Liens on goods the purchase price of which is financed by a documentary
letter of credit issued for the account of the Borrower or any of its
Subsidiaries where such Lien secures the related reimbursement obligation owing
to the issuer of such letter of credit; 

    
(xviii) restrictions on pledges or transfers of capital stock imposed by the
partnership agreements, shareholders’ agreements, limited liability company
agreements, joint venture agreements and similar agreements set forth on
Schedule 8.3 or similar restrictions in amendments or restatements thereof which are
no more onerous than those included in such agreements as of the Closing Date;


    
(xix) Liens on cash or cash equivalents securing letters of credit, letters of
guaranty or bankers’ acceptances; and 

    
(xx) other Liens securing obligations of the Borrower and its Subsidiaries not
exceeding $1,000,000 in aggregate principal amount outstanding at any time.


    
8.4 Asset Dispositions. Each of the Parent
and the Borrower will not, and will not permit or cause any of its Subsidiaries
to, directly or indirectly, make or agree to make any Asset Disposition except
for: 

    
(i) the sale or other disposition of inventory and Cash Equivalents in the
ordinary course of business, non-exclusive licenses of intellectual property in
the ordinary course of business, and the sale, discount or write-off of past due
or impaired accounts receivable for collection purposes (but not for factoring,
securitization or other financing purposes), and the termination or unwinding of
Hedge Agreements permitted hereunder; 

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(ii) the sale or other disposition of assets pursuant to any Casualty Event;


    
(iii) the sale, lease or other disposition of assets by the Borrower or any
Subsidiary of the Borrower to the Borrower or to a Subsidiary Guarantor (or by
any Subsidiary that is not a Subsidiary Guarantor to another Subsidiary that is
not a Subsidiary Guarantor), in each case so long as no Default or Event of
Default shall have occurred and be continuing or would result therefrom;


    
(iv) the sale of assets by the Borrower and its Subsidiaries to the extent
approved by the Required Lenders; provided that any Net Cash Proceeds
therefrom are applied to the prepayment of the Loans to the extent required by
the Required Lenders approving such sale of assets; 

    
(v) the disposition in the ordinary course of business of equipment or other
capital assets that are obsolete or no longer necessary for the operations of
the Borrower and its Subsidiaries; provided that (x) such equipment is
exchanged for credit against the purchase price of other equipment, or (y) the
proceeds of such disposition are reasonably promptly applied to the purchase
price of other equipment; 

    
(vi) the sale of assets by the Borrower and its Subsidiaries to the extent
permitted by Section 8.9; 

    
(vii) the lease by the Borrower and its Subsidiaries of one or more parcels of
Realty for fair value; 

    
(viii) the sublease by the Borrower and its Subsidiaries of any property leased
to it by a third party, and the assignment of any lease for fair value and for
cash and/or promissory notes, provided that any promissory note
received as consideration is permitted under Section 8.5(xiv); and 

    
(ix) the sale of assets outside the ordinary course of business for fair value
and for cash and/or promissory notes, provided that (w) the aggregate
Consolidated EBITDA for the immediately preceding Fiscal Year generated by all
assets sold, or generated at the location of any Realty sold, in Specified Asset
Dispositions consummated during the current Fiscal Year shall not exceed 10% of
the Consolidated EBITDA of the Parent and its Subsidiaries for the immediately
preceding Fiscal Year, (x) the aggregate proceeds (including the principal
amount under any promissory note) from all such sales that are consummated
during any Fiscal Year shall not exceed 10% of all assets of the Parent and its
Subsidiaries (other than deferred income tax assets, goodwill, cash and Cash
Equivalents) that would, in accordance with GAAP, be classified on a
consolidated balance sheet of the Parent and its Subsidiaries as assets as of
the last day of the immediately preceding Fiscal Year, (y) any promissory note
received as consideration is permitted under Section 8.5(xiv), and (z) no Default
or Event of Default shall have occurred and be continuing or would result
therefrom. 

    
The Administrative Agent agrees to, at the Borrower’s expense, execute
such UCC termination statements or partial release statements, as applicable,
and other Lien release documents as the Borrower may reasonably request to
evidence the release of the Administrative Agent’s Lien
in respect of property conveyed, sold, transferred or otherwise disposed of in
compliance with this Section 8.4; provided, that the Borrower shall
provide to the Administrative Agent evidence of such transaction’s compliance
with this Section 8.4 as the Administrative Agent may reasonably request.


85







     8.5 Investments. Each of the Parent and
the Borrower will not, and will not permit or cause any of its Subsidiaries to,
directly or indirectly, purchase, own, invest in or otherwise acquire any
Capital Stock, evidence of indebtedness or other obligation or security or any
interest whatsoever in any other Person, or make or permit to exist any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any other Person, or purchase or otherwise acquire (whether in one
or a series of related transactions) any portion of the Capital Stock, assets,
business or properties of another Person, or create or acquire any Subsidiary,
or become a partner or joint venturer in any partnership or joint venture
(collectively, “Investments”), or make a commitment or otherwise agree to do any of the
foregoing, other than: 

    
(i) Investments consisting of Cash Equivalents; 

    
(ii) Investments consisting of the extension of trade credit, the creation of
prepaid expenses, the creation of security deposits, leases and similar prepaid
expenses, the purchase of inventory, supplies, equipment and other assets,
advances to employees, in each case by the Borrower and its Subsidiaries in the
ordinary course of business; 

    
(iii) Investments consisting of loans and advances to employees, officers or
directors of the Borrower and its Subsidiaries in the ordinary course of
business not exceeding $1,000,000 at any time outstanding; 

    
(iv) Investments (including equity securities and debt obligations) of the
Borrower and its Subsidiaries received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business; 

    
(v) without duplication, Investments consisting of intercompany Indebtedness
permitted under Section 8.2(iii); 

    
(vi) Investments existing as of the Closing Date and heretofore described in
writing by the Borrower to the Administrative Agent; 

    
(vii) Investments of the Borrower under Hedge Agreements entered into in the
ordinary course of business to manage existing or anticipated interest rate,
foreign currency or commodity risks and not for speculative purposes (the
Administrative Agent and the Lenders acknowledge and agree that the manner in
which a Hedge Agreement may be treated or classified by the Borrower for
accounting purposes shall not be determinative as to whether a Hedge Agreement
has been entered into for speculative purposes); 

    
(viii) Investments of the Parent in the Borrower and Investments of the Borrower
in its Subsidiaries, in each case to the extent made prior to the Closing Date;


86







    
(ix) Investments consisting of the making of capital contributions (x) by the
Parent in the Borrower, and (y) by the Borrower or any Subsidiary in any other
Wholly Owned Subsidiary that either is a Subsidiary Guarantor immediately prior
to, or will be a Subsidiary Guarantor immediately after giving effect to, such
Investment, provided that in the case of an acquisition of any newly created or
acquired Wholly Owned Subsidiary, the Borrower complies with the provisions of
Section 6.8; provided further that in no event shall any Foreign Subsidiary create or acquire any
Domestic Subsidiary; 

    
(x) Investments by (x) a Foreign Subsidiary in another Foreign Subsidiary,
and (y) an Immaterial Subsidiary in a Foreign Subsidiary or another Immaterial
Subsidiary; 

    
(xi) Investments of the Borrower or any Subsidiary consisting of the
conversion of any past due receivables to promissory notes or Capital Stock to
the extent such receivable arose from the sale of goods or services or the
accrual of royalties or other amounts under franchise agreements by the Borrower
or such Subsidiary in the ordinary course of business; 

    
(xii) Investments consisting of Indebtedness permitted under Section 8.2; 

    
(xiii) Investments of the Borrower and its Subsidiaries consisting of
acquisitions of all or substantially all of the assets of any Krispy Kreme store
or franchise (or all of the Capital Stock of any Krispy Kreme franchisee);


    
(xiv) other Investments of the Borrower and its Subsidiaries not otherwise
permitted under this Section
8.5 in an aggregate amount (valued at the
time of the respective Investment) not exceeding $20,000,000 at any time
outstanding for all such Investments. 

    
8.6 Restricted Payments. Each of the
Parent and the Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, declare or make any dividend payment,
or make any other distribution of cash, property or assets, in respect of any of
its Capital Stock or any warrants, rights or options to acquire its Capital
Stock, or purchase, redeem, retire or otherwise acquire for value any shares of
its Capital Stock or any warrants, rights or options to acquire its Capital
Stock, or set aside funds for any of the foregoing (all of the foregoing,
collectively, “Restricted
Payments”), except that: 

    
(i) the Parent and any of its Subsidiaries may declare and make dividend
payments or other distributions payable solely in its Capital Stock; 

    
(ii) each of the Borrower and its Subsidiaries may make payments to the Parent
for its proportionate share of the tax liability of the affiliated group of
entities that file consolidated federal income tax returns, provided that such payments
are used to pay taxes, and provided further that any tax refunds received
by the Parent that are attributable to the Borrower or any of its Subsidiaries
shall be returned promptly by the Parent to the Borrower; 

87 







    
(iii) each Wholly Owned Subsidiary of the Borrower may declare and make
dividend payments or other distributions to the Borrower or to another Wholly
Owned Subsidiary of the Borrower, in each case to the extent not prohibited
under applicable Requirements of Law; 

    
(iv) so long as no Default shall have occurred and be continuing or would
result therefrom, the Parent may purchase, redeem or retire, or make cash
dividend payments or other distributions in respect of, shares of its Capital
Stock (and, without duplication, the Borrower may dividend cash to the Parent in
order to make such redemptions); provided that, in respect of each such
Restricted Payment, (A) the Leverage Ratio, determined on a pro forma basis as
of the last day of the Reference Period then most recently ended for which the
Borrower has delivered the financial statements required by Section 6.1 and giving
effect to all borrowings (including any borrowings made in connection with such
Restricted Payment) and repayments made since such date, shall be less than
1.50:1.0 and (B) the aggregate amount of cash of the Borrower and its Domestic
Subsidiaries maintained in deposit accounts in the United States free and clear
of any Liens (other than nonconsensual Permitted Liens) plus the Unutilized
Revolving Credit Commitments, in each case determined on a pro forma basis after
giving effect to such Restricted Payment, shall be not less than $30,000,000;


    
(v) at
any time that any condition in clause (A) or (B) of Section 8.6(iv) is not satisfied, so
long as no Default shall have occurred and be continuing or would result
therefrom, the Parent may purchase, redeem or retire, or make cash dividend
payments or other distributions in respect of, shares of its Capital Stock (and,
without duplication, the Borrower may dividend cash to the Parent in order to
make such redemptions); provided that, in respect of each such
Restricted Payment, (A) the Parent shall be in compliance with the covenants set
forth in Article VII, determined on a pro forma basis for the Reference Period
then most recently ended for which the Borrower has delivered the financial
statements required by Section
6.1 and giving effect to all Restricted
Payments made in accordance with this Section
8.6(v) since the end of such Referenced
Period (including such Restricted Payment) and all borrowings (including any
borrowings made in connection with such Restricted Payment) and repayments made
since such date, and (B) the Borrower shall have delivered to the Administrative
Agent a certificate duly executed by a Financial Officer of the Borrower
certifying that the conditions contained in this Section 8.6(v) have been and will be
satisfied and setting forth in reasonable detail calculations demonstrating such
satisfaction; and 

    
(vi) the Borrower may declare and make dividend payments and other
distributions to the Parent for any Fiscal Year to enable the Parent to pay
directors’ fees and other ordinary and reasonable holding company operating
expenses. 

    
8.7 Transactions with Affiliates. Each of
the Parent and the Borrower will not, and will not permit or cause any of its
Subsidiaries to, enter into any transaction (including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service)
with any officer, director, stockholder or other Affiliate of the Parent or any
of its Subsidiaries, except in the ordinary course of its business and upon fair
and reasonable terms that are no less favorable to it than it would be obtained
in a comparable arm’s length transaction with a Person other than an Affiliate of the Parent or any of its Subsidiaries;
provided,
however,
that nothing contained in this Section
8.7 shall prohibit: 

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(i) transactions described on Schedule
8.7 (and any renewals or replacements thereof
on terms not materially more disadvantageous to the applicable Company Party) or
otherwise expressly permitted under this Agreement; 

    
(ii) transactions among the Borrower and/or the Subsidiary Guarantors not
prohibited under this Agreement (provided that such transactions shall
remain subject to any other applicable limitations and restrictions set forth in
this Agreement); 

     (iii) Equity Issuances by the Parent other than of Disqualified Capital Stock;


     (iv) transactions permitted by Section 8.6; or 

     (v) Investments permitted by Section 8.5.


    
8.8 Lines of Business. 

     (a) Each of the Parent and
the Borrower will not, and will not permit or cause any of its Subsidiaries
(other than Immaterial Subsidiaries) to, engage to any material extent in any
lines of business other than the lines of business in which the Parent, the
Borrower and its Subsidiaries are engaged on the Closing Date and such other
lines of business reasonably related or ancillary thereto. 

    
(b) Notwithstanding the provisions of Section 8.8(a) or any other provision
of this Agreement, the Parent shall not (i) hold any assets other than the
Capital Stock of the Borrower, cash and Cash Equivalents and rights under
employment agreements and written employment arrangements, (ii) have any
liabilities other than (A) liabilities under the Credit Documents, (B) tax
liabilities in the ordinary course of business, (C) liabilities under employment
agreements and written employment arrangements, (D) liabilities as a franchisor
(or as a guarantor of another Credit Party or Subsidiary of the Borrower as a
franchisor) arising under or related to franchise agreements, (E) liabilities
for settlements and judgments entered after the Closing Date other than any
settlements or judgments that would constitute an Event of Default, and (F)
corporate, administrative and operating expenses in the ordinary course of
business, or (iii) engage in any business other than (A) owning the Capital
Stock of the Borrower and activities incidental to such ownership, and (B)
acting as a guarantor of the Obligations hereunder and granting to the
Administrative Agent, for the benefit of the Lenders, a security interest in and
Lien upon its assets pursuant to the Security Documents to which it is a party.


    
8.9 Sale-Leaseback Transactions. Each of
the Parent and the Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
guarantor or other surety with respect to any lease, whether an operating lease
or a Capital Lease, of any property (whether real, personal or mixed, and
whether now owned or hereafter acquired) (i) that any Company Party has sold or
transferred (or is to sell or transfer) to a Person that is not a Company Party
or (ii) that any Company Party intends to use for substantially the same purpose
as any other property that, in connection with such lease, has been sold or
transferred (or is to be sold or transferred) by a Company Party to another
Person that is not a Company Party, in each case except
for transactions otherwise expressly permitted under this Agreement;
provided
that the Borrower and any of its Subsidiaries may engage in (x) sale-leaseback
transactions with respect to real or personal property sold by it for cash
consideration in an amount not less than the cost of such real or personal
property that is consummated within 90 days after the Borrower or any such
Subsidiary acquires or completes the construction of such property so long as,
after giving effect thereto, the Borrower is in compliance with Section 8.2(ii) and (y)
other sale lease-back transactions, the Net Cash Proceeds of which do not exceed
$10,000,000 in the aggregate after the Closing Date. 

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8.10 Certain Amendments. Each of the Parent
and the Borrower will not, and will not permit or cause any of its Subsidiaries
to, amend, modify or waive any provision of its articles or certificate of
incorporation or formation, bylaws, operating agreement or other applicable
formation or organizational documents, as applicable, the terms of any class or
series of its Capital Stock, in each case other than in a manner that could not
reasonably be expected to adversely affect the Lenders in any material respect
(provided
that the Borrower shall give the Administrative Agent and the Lenders notice of
any such amendment, modification or change, together with certified copies
thereof). 

    
8.11 Limitation on Certain Restrictions.
Each of the Parent and the Borrower will not, and will not permit or cause any
of its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any restriction or encumbrance on (a) the
ability of the Company Parties to perform and comply with their respective
obligations under the Credit Documents or (b) the ability of any Subsidiary of
the Borrower to make any dividend payment or other distribution in respect of
its Capital Stock, to repay Indebtedness owed to the Borrower or any other
Subsidiary, to make loans or advances to the Borrower or any other Subsidiary,
or to transfer any of its assets or properties to the Borrower or any other
Subsidiary, except (in the case of clause (b) above only) for such restrictions
or encumbrances existing under or by reason of (i) this Agreement and the other
Credit Documents, (ii) applicable Requirements of Law, (iii) customary
non-assignment provisions in leases and licenses of real or personal property
entered into by the Borrower or any Subsidiary as lessee or licensee in the
ordinary course of business, restricting the assignment or transfer thereof or
of property that is the subject thereof, (iv) conditions and restrictions
existing on the date hereof and contained in documents referenced in
Schedule 8.11 (and contained in any extension or renewal of, or any amendment or
modification of the relevant documentation, except to the extent expanding the
scope of any such restriction or condition), and (v) customary restrictions and
conditions contained in any agreement relating to the sale of assets (including
Capital Stock of a Subsidiary) pending such sale, provided that such restrictions and
conditions apply only to the assets being sold and such sale is permitted under
this Agreement. 

    
8.12 No Other Negative Pledges. Each of the
Parent and the Borrower will not, and will not permit or cause any of its
Subsidiaries to, enter into or suffer to exist any agreement or restriction
that, directly or indirectly, prohibits or conditions the creation, incurrence
or assumption of any Lien upon or with respect to any part of its property or
assets, whether now owned or hereafter acquired, or agree to do any of the
foregoing, except for such agreements or restrictions existing under or by
reason of (i) this Agreement and the other Credit Documents, (ii) applicable
Requirements of Law, (iii) any agreement or instrument creating a Permitted Lien
(but only to the extent such agreement or restriction applies to the assets
subject to such Permitted Lien), (iv) conditions and
restrictions existing on the date hereof and contained in documents referenced
in Schedule 8.11 (and contained in any extension or renewal of, or any amendment or
modification of the relevant documentation, except to the extent expanding the
scope of any such restriction or condition), (v) customary provisions in leases
and licenses of real or personal property entered into by the Borrower or any
Subsidiary as lessee or licensee in the ordinary course of business, restricting
the granting of Liens therein or in property that is the subject thereof, and
(vi) customary restrictions and conditions contained in any agreement relating
to the sale of assets (including Capital Stock of a Subsidiary) pending such
sale, provided that such restrictions and conditions apply only to the assets being
sold and such sale is permitted under this Agreement.

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     8.13 Ownership of
Subsidiaries. Each of the Parent and the
Borrower will not, and will not permit or cause any of its Subsidiaries to, have
any Subsidiaries other than Wholly Owned Subsidiaries. 

    
8.14 Fiscal Year. Each of the Parent and
the Borrower will not, and will not permit or cause any of its Subsidiaries to,
change its Fiscal Year or its method of determining Fiscal Quarters. 

    
8.15 Accounting Changes. Other than as
permitted pursuant to Section
1.2, each of the Parent and the Borrower will
not, and will not permit or cause any of its Subsidiaries to, make or permit any
material change in its accounting policies or reporting practices, except as may
be required by GAAP (or, in the case of Foreign Subsidiaries, generally accepted
accounting principles in the jurisdiction of its organization). 

ARTICLE IX 

EVENTS OF DEFAULT 

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


    
(a) The Borrower shall fail to pay when due (i) any principal of any Loan or
any Reimbursement Obligation, or (ii) any interest on any Loan, any fee payable
under this Agreement or any other Credit Document, or (except as provided in
clause (i) above) any other Obligation (other than any Obligation under a Hedge
Agreement), and (in the case of this clause (ii) only) such failure shall
continue for a period of three Business Days; 

    
(b) The Borrower or any other Credit Party shall (i) fail to observe, perform
or comply with any condition, covenant or agreement contained in any of
Sections 2.14, 6.2(e)(i), 6.3(i) or 6.8 or in Article VII or VIII or (ii) fail to observe, perform or comply with any
condition, covenant or agreement contained in Section 6.1, 6.2 (other than
Section 6.2(e)(i)) or 6.9 and (in the case of this clause (ii) only) such failure shall continue
unremedied for a period of five days after the earlier of (y) the date on which
a Responsible Officer of the Borrower acquires knowledge thereof and (z) the
date on which written notice thereof is delivered by the Administrative Agent or
any Lender to the Borrower; 

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(c) The Borrower or any other Credit Party shall fail to observe, perform or
comply with any condition, covenant or agreement contained in this Agreement or
any of the other Credit Documents other than those enumerated in Sections 9.1(a) and
9.1(b), and
such failure (i) by the express terms of such Credit Document, constitutes an
Event of Default, or (ii) shall continue unremedied for any grace period
specifically applicable thereto or, if no grace period is specifically
applicable, for a period of 30 days after the earlier of (y) the date on which a
Responsible Officer of the Borrower acquires knowledge thereof and (z) the date
on which written notice thereof is delivered by the Administrative Agent or any
Lender to the Borrower; or any default or event of default shall occur under any
Hedge Agreement to which the Borrower and any Hedge Party are parties and such
default or event of default shall continue after the expiration of any
applicable grace or cure period and is not waived by the counterparty to such
Hedge Agreement; 

    
(d) Any representation or warranty made or deemed made by or on behalf of the
Borrower or any other Credit Party in this Agreement, any of the other Credit
Documents or in any certificate, instrument, report or other document furnished
at any time in connection herewith or therewith shall prove to have been
incorrect, false or misleading in any material respect as of the time made,
deemed made or furnished; 

    
(e) The Borrower or any other Company Party (other than an Immaterial
Subsidiary) shall (i) fail to pay when due (whether by scheduled maturity,
acceleration or otherwise and after giving effect to any applicable grace period
or notice provisions) (y) any principal of or interest on any other Indebtedness
(other than the Indebtedness incurred pursuant to this Agreement or a Hedge
Agreement) having an aggregate principal amount of at least $5,000,000 or (z)
any termination or other payment under any Hedge Agreement covering a notional
amount of Indebtedness of at least $10,000,000 or (ii) fail to observe, perform
or comply with any condition, covenant or agreement contained in any agreement
or instrument evidencing or relating to any such Indebtedness, or any other
event shall occur or condition exist in respect thereof, and the effect of such
failure, event or condition is to cause, or permit the holder or holders of such
Indebtedness (or a trustee or agent on its or their behalf) to cause (with or
without the giving of notice, lapse of time, or both), without regard to any
subordination terms with respect thereto, such Indebtedness to become due, or to
be prepaid, redeemed, purchased or defeased, prior to its stated maturity;


    
(f) The Borrower or any other Company Party (other than an Immaterial
Subsidiary) shall (i) file a voluntary petition or commence a voluntary case
seeking liquidation, winding-up, reorganization, dissolution, arrangement,
readjustment of debts, composition or any other relief under any Debtor Relief
Law, (ii) consent to the institution of, or fail to controvert in a timely and
appropriate manner, any petition or case of the type described in
Section 9.1(g), (iii) apply for or consent to the appointment of or taking possession
by a custodian, trustee, receiver, conservator or similar official for or of
itself or all or a substantial part of its properties or assets, (iv) fail
generally, or admit in writing its inability, to pay its debts generally as they
become due, (v) make a general assignment for the benefit of creditors or (vi)
take any corporate action to authorize or approve any of the foregoing;


    
(g) Any involuntary petition or case shall be filed or commenced against the
Borrower or any other Company Party (other than
an Immaterial Subsidiary) seeking liquidation, winding-up, reorganization, dissolution, arrangement, readjustment of
debts, composition, the appointment of a custodian, trustee, receiver,
conservator or similar official for it or all or a substantial part of its
properties or any other relief under any Debtor Relief Law, and such petition or
case shall continue undismissed and unstayed for a period of 60 days; or an
order, judgment or decree approving or ordering any of the foregoing shall be
entered in any such proceeding; 

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(h) Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (to the extent not
paid or fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has the financial ability to perform and has acknowledged
liability in writing) in excess of $5,000,000 shall be entered or filed against
the Borrower or any other Company Party or any of their respective properties
and the same shall not be paid, dismissed, bonded, vacated, stayed or discharged
within a period of 30 days or in any event later than five days prior to the
date of any proposed sale of such property thereunder; 

    
(i) Any Security Document to which the Borrower or any other Credit Party is
now or hereafter a party shall for any reason cease to be in full force and
effect or cease to be effective to give the Administrative Agent a valid and
perfected security interest in and Lien upon the Collateral purported to be
covered thereby, subject to no Liens other than Permitted Liens, in each case
unless any such cessation occurs in accordance with the terms thereof or is due
to any act or failure to act on the part of the Administrative Agent or any
Lender, or the Borrower or any other Credit Party shall assert any of the
foregoing; or the Guaranty shall for any reason cease to be in full force and
effect as to any Guarantor, or any Guarantor or any Person acting on its behalf
shall deny or disaffirm such Guarantor’s obligations thereunder; 

    
(j) Any ERISA Event or any other event or condition shall occur or exist with
respect to any Plan or Multiemployer Plan that, when taken together with all
other ERISA Events and other events or conditions that have occurred or are then
existing, has or could reasonably be expected to result in a Material Adverse
Effect; 

    
(k) Any one or more licenses, permits, accreditations or authorizations of
the Borrower or any other Company Party shall be suspended, limited or
terminated or shall not be renewed, or any other action shall be taken, by any
Governmental Authority in response to any alleged failure by the Borrower or any
other Company Party to be in compliance with applicable Requirements of Law, and
such action, individually or in the aggregate, has or could reasonably be
expected to have a Material Adverse Effect; 

    
(l) Any one or more Environmental Claims shall have been asserted against the
Borrower or any other Company Party (or a reasonable basis shall exist therefor)
or the Borrower or any other Company Party shall have incurred or could
reasonably be expected to incur liability, interruption of operations or other
adverse effects as a result thereof; and such Environmental Claims, liability or
other effect, individually or in the aggregate, has or could reasonably be
expected to have a Material Adverse Effect; 

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(m) There shall occur any uninsured damage to, or loss, theft or destruction
of, any Collateral or other assets or properties of the Company Parties, to the
extent such uninsured damage, loss, theft or destruction exceeds $10,000,000 in
the aggregate; or 

    
(n) a
Change in Control shall have occurred. 

    
9.2 Remedies: Termination of Commitments, Acceleration, etc.
Upon and at any time after the occurrence and
during the continuance of any Event of Default, the Administrative Agent shall
at the direction, or may with the consent, of the Required Lenders, take any or
all of the following actions at the same or different times: 

    
(a) Declare the Commitments, the Swingline Commitment, and the Issuing
Lender’s obligation to issue Letters of Credit, to be terminated, whereupon the
same shall terminate; provided that, upon the occurrence of a Bankruptcy Event, the
Commitments, the Swingline Commitment and the Issuing Lender’s obligation to
issue Letters of Credit shall automatically be terminated; 

    
(b) Declare all or any part of the outstanding principal amount of the Loans
to be immediately due and payable, whereupon the principal amount so declared to
be immediately due and payable, together with all interest accrued thereon and
all other amounts payable under this Agreement and the other Credit Documents
(but excluding any amounts owing under any Hedge Agreement), shall become
immediately due and payable without presentment, demand, protest, notice of
intent to accelerate or other notice or legal process of any kind, all of which
are hereby knowingly and expressly waived by the Borrower; provided that, upon the
occurrence of a Bankruptcy Event, all of the outstanding principal amount of the
Loans and all other amounts described in this Section 9.2(b) shall automatically
become immediately due and payable without presentment, demand, protest, notice
of intent to accelerate or other notice or legal process of any kind, all of
which are hereby knowingly and expressly waived by the Borrower; 

    
(c) Direct the Borrower to deposit (and the Borrower hereby agrees, forthwith
upon receipt of notice of such direction from the Administrative Agent, to
deposit) with the Administrative Agent from time to time such additional amount
of cash as is equal to the aggregate Stated Amount of all Letters of Credit then
outstanding (whether or not any beneficiary under any Letter of Credit shall
have drawn or be entitled at such time to draw thereunder), such amount to be
held by the Administrative Agent in the Cash Collateral Account as security for
the Letter of Credit Exposure as described in Section 3.8; 

    
(d) Appoint or direct the appointment of a receiver for the properties and
assets of the Credit Parties, both to operate and to sell such properties and
assets, and the Borrower, for itself and on behalf of its Subsidiaries, hereby
consents to such right and such appointment and hereby waives any objection the
Borrower or any Subsidiary may have thereto or the right to have a bond or other
security posted by the Administrative Agent on behalf of the Lenders, in
connection therewith; and 

    
(e) Exercise all rights and remedies available to it under this Agreement,
the other Credit Documents and applicable law. 

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9.3 Remedies: Set-Off. Upon and at any
time after the occurrence and during the continuance of any Event of Default,
each Lender, the Issuing Lender and each of their respective Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the Issuing Lender or any such Affiliate to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement or any other Credit Document to
such Lender or the Issuing Lender, irrespective of whether or not such Lender or
the Issuing Lender shall have made any demand under this Agreement or any other
Credit Document and although such obligations of the Borrower may be contingent
or unmatured or are owed to a branch or office of such Lender or the Issuing
Lender different from the branch or office holding such deposit or obligated on
such indebtedness; provided, that in the event that any Defaulting Lender shall exercise
any such right of setoff, (x) all amounts so set off shall be paid over
immediately to the Administrative Agent for further application in accordance
with the provisions of Section
2.20 and, pending such payment, shall be
segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent, the Issuing Lender and the
Lenders (including the Swingline Lender), and (y) the Defaulting Lender shall
provide promptly to the Administrative Agent a statement describing in
reasonable detail the obligations owing to such Defaulting Lender as to which it
exercised such right of setoff. The rights of each Lender, the Issuing Lender
and their respective Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender, the
Issuing Lender or their respective Affiliates may have. Each Lender and the
Issuing Lender agrees to notify the Borrower and the Administrative Agent
promptly after any such setoff and application; provided that the failure to give such
notice shall not affect the validity of such setoff and application. 

ARTICLE X 

THE ADMINISTRATIVE AGENT


     10.1 Appointment and
Authority. Each of the Lenders (for purposes
of this Article, references to the Lenders shall also mean the Issuing Lender
and the Swingline Lender) hereby irrevocably appoints Wells Fargo to act on its
behalf as the Administrative Agent hereunder and under the other Credit
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. Except as set forth in Section 10.6, the provisions of this
Article are solely for the benefit of the Administrative Agent and the Lenders,
and neither the Borrower nor any other Company Party shall have rights as a
third party beneficiary of any of such provisions. 

    
10.2 Rights as a Lender. The Person serving
as the Administrative Agent hereunder shall have the same rights and powers in
its capacity as a Lender as any other Lender and may exercise the same as though
it were not the Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative Agent hereunder and without any duty to account therefor
to the Lenders. 

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     10.3 Exculpatory
Provisions. The Administrative Agent shall
not have any duties or obligations except those expressly set forth herein and
in the other Loan Documents. Without limiting the generality of the foregoing,
the Administrative Agent: 

    
(a) shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default or Event of Default has occurred and is continuing;


    
(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Credit Documents that the Administrative
Agent is required to exercise as directed in writing by the Required Lenders (or
such other number or percentage of the Lenders as shall be expressly provided
for herein or in the other Credit Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Credit Document or applicable law; and 

    
(c) shall not, except as expressly set forth herein and in the other Credit
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity. 

    
The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections
11.5 and 9.2) or (ii) in the absence of its own
gross negligence or willful misconduct. The Administrative Agent shall be deemed
not to have knowledge of any Default or Event of Default unless and until notice
describing such Default or Event of Default is given to the Administrative Agent
by the Borrower or a Lender. 

    
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Credit Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default or Event of Default,
(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Credit Document or any other agreement, instrument or
document or (v) the satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent. 

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10.4 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or the Issuing Lender, the Administrative Agent may presume that
such condition is satisfactory to such Lender or the Issuing Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the Issuing Lender prior to the making of such Loan or the issuance of such
Letter of Credit. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.


     10.5 Delegation of
Duties. The Administrative Agent may perform
any and all of its duties and exercise its rights and powers hereunder or under
any other Credit Document by or through any one or more sub-agents appointed by
the Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent. 

    
10.6 Resignation of Administrative Agent.
The Administrative Agent may at any time give notice of its resignation to the
Lenders and the Borrower. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that if the Administrative
Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Credit Documents (except that in the case of any collateral security
held by the Administrative Agent on behalf of the Lenders under any of the
Credit Documents, the retiring Administrative Agent shall continue to hold such
collateral security until such time as a successor Administrative Agent is
appointed) and (2) all payments, communications and determinations provided to
be made by, to or through the Administrative Agent shall instead be made by or
to each Lender directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Credit Documents (if not already
discharged therefrom as provided above in this Section).
The fees payable by the Borrower to a successor Administrative Agent shall be
the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the retiring Administrative Agent’s
resignation hereunder and under the other Credit Documents, the provisions of
this Article and Section 11.1 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.


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     10.7 Non-Reliance on
Administrative Agent and Other Lenders. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such 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 the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Credit Document or any related
agreement or any document furnished hereunder or thereunder. 

    
10.8 Collateral and Guaranty Matters.


    
(a) The Administrative Agent is hereby authorized on behalf of the Lenders,
without the necessity of any notice to or further consent from the Lenders, from
time to time (but without any obligation) to take any action with respect to the
Collateral and the Security Documents that may be deemed by the Administrative
Agent in its discretion to be necessary or advisable to perfect and maintain
perfected the Liens upon the Collateral granted pursuant to the Security
Documents. 

    
(b) The Lenders hereby authorize the Administrative Agent, at its option and
in its discretion, (i) to release any Lien granted to or held by the
Administrative Agent upon any Collateral (A) upon termination of the
Commitments, termination, expiration or Cash Collateralization of all
outstanding Letters of Credit and payment in full of all of the Obligations
(other than Obligations owing to any Hedge Party under or in connection with any
Hedge Agreement permitted by this Agreement) then due and payable, (B)
constituting property sold or to be sold or disposed of as part of or in
connection with any disposition expressly permitted hereunder or under any other
Credit Document or to which the Required Lenders have consented in writing or
(C) otherwise pursuant to and in accordance with the provisions of any
applicable Credit Document, (ii) to subordinate any Lien on any property granted
to or held by the Administrative Agent under any Credit Document to the holder
of any Lien on such property that is permitted by Section 8.3(viii); and (iii) to
release any Guarantor from its obligations under the Guaranty if such Person
ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Administrative Agent’s authority to release or subordinate its
interest in particular types or items of property, or to release any Guarantor
from its obligations under the Guaranty, pursuant to this Section 10.8(b).


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10.9 Issuing Lender and Swingline Lender.
The provisions of this Article
X (other than Sections 10.2 and 10.8) shall apply to the
Issuing Lender and the Swingline Lender mutatis mutandis to the same extent as such
provisions apply to the Administrative Agent. 

ARTICLE XI 

MISCELLANEOUS 

    
11.1 Expenses; Indemnity; Damage Waiver.


    
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred
by the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent), in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Credit Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Lender in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder, (iii) all reasonable out-of-pocket expenses incurred by
the Administrative Agent, any Lender or the Issuing Lender (including the
reasonable fees, charges and disbursements of any counsel for the Administrative
Agent, any Lender or the Issuing Lender), in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Credit Documents, including its rights under this Section, or (B) in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit, and (iv) any civil
penalty or fine assessed by OFAC against, and all reasonable costs and expenses
(including counsel fees and disbursements) incurred in connection with defense
thereof by, the Administrative Agent or any Lender as a result of conduct of the
Borrower that violates a sanction enforced by OFAC. 

    
(b) The Borrower shall indemnify the Administrative Agent (and any sub-agent
thereof), each Lender, and each Related Party of any of the foregoing persons
(each such person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the reasonable fees, charges and disbursements of
any counsel for any Indemnitee), incurred by any Indemnitee or asserted against
any Indemnitee by any third party or by the Borrower or any other Company Party
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Credit Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the Issuing Lender to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Substances on or from any property owned or
operated by any Company Party, or any Environmental Claim related in any way to
any Company Party, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a
third party or by the Borrower or any other Company Party, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee. 

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     (c) To the extent that the
Borrower for any reason fails to indefeasibly pay any amount required under
Section 11.1(a) or 11.1(b) to be paid by it to the Administrative Agent (or any sub-agent thereof),
the Issuing Lender or any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent), the
Issuing Lender or such Related Party, as the case may be, such Lender’s
proportion (based on the percentages as used in determining the Required Lenders
as of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such subagent) or the Issuing Lender in its capacity as such, or against any
Related Party of any of the foregoing acting for the Administrative Agent (or
any such sub-agent) or the Issuing Lender in connection with such capacity. The
obligations of the Lenders under this Section
11.1(c) are subject to the provisions of
Section 2.3(c). 

    
(d) To
the fullest extent permitted by applicable law, the Parent, the Borrower, each
other Company Party and each Related Party of any of the foregoing persons and
each Indemnitee shall not assert, and each hereby waives, any claim against the
Parent, the Borrower, each other Company Party and each Related Party or any
Indemnitee, as applicable, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Credit Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in Section 11.1(b) shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems (including Intralinks,
SyndTrak or similar systems) in connection with this Agreement or the other
Credit Documents or the transactions contemplated hereby or thereby;
provided
that such Indemnitee may be liable for such damages to the extent such damages
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee. 

    
(e) All amounts due under this Section shall be payable by the Borrower upon
demand therefor. 

    
11.2 Governing Law; Submission to Jurisdiction; Waiver of Venue; Service of
Process. 

    
(a) This Agreement and the other Credit Documents shall (except as may be
expressly otherwise provided in any Credit Document) be governed by, and
construed in accordance with, the law of the State of New York (including
Sections 5-1401 and 5-1402 of the New York General
Obligations Law, but excluding all other choice of law and conflicts of law
rules); provided that each Letter of Credit shall be governed by, and construed in
accordance with, the laws or rules designated in such Letter of Credit or
application therefor or, if no such laws or rules are designated, the
International Standby Practices of the International Chamber of Commerce, as in
effect from time to time (the “ISP”), and, as to matters not governed
by the ISP, the laws of the State of New York (including Sections 5-1401 and
5-1402 of the New York General Obligations Law, but excluding all other choice
of law and conflicts of law rules). 

100 







     (b) The Borrower irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the courts of the State of North Carolina sitting in Mecklenburg
County and of the United States District Court of the Western District of North
Carolina, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Credit Document, or
for recognition or enforcement of any judgment, and each of the parties hereto
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such state court or, to the
fullest extent permitted by applicable law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or in
any other Credit Document shall affect any right that the Administrative Agent,
any Lender or the Issuing Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Credit Document against the
Borrower or any other Company Party or its properties in the courts of any
jurisdiction. 

    
(c) The Borrower irrevocably and unconditionally waives, to the fullest
extent permitted by applicable law, any objection that it may now or hereafter
have to the laying of venue of any action or proceeding arising out of or
relating to this Agreement or any other Credit Document in any court referred to
in Section 11.2(b). Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court. 

    
(d) Each party hereto irrevocably consents to service of process in the
manner provided for notices in Section
11.4. Nothing in this Agreement will affect
the right of any party hereto to serve process in any other manner permitted by
applicable law. 

    
11.3 Waiver of Jury Trial. EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION. 

101 







     11.4 Notices;
Effectiveness; Electronic Communication.


    
(a) Except in the cases of notices and other communications expressly
permitted to be given by telephone (and except as provided in Section 11.4(b)), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows: 

    
(i) if to the Borrower, the Administrative Agent, the Issuing Lender or the
Swingline Lender, to it at the address (or telecopier number) specified for such
Person on Schedule 1.1(a); and 

    
(ii) if to any Lender, to it at its address (or telecopier number) set forth
in its Administrative Questionnaire. 

Notices sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the
next Business Day for the recipient). Notices delivered through electronic
communications to the extent provided in Section 11.4(b) shall be effective as
provided in Section 11.4(b). 

    
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communication including e-mail or by
posting such notices or communications on internet or intranet websites such as
SyndTrak or a substantially similar electronic transmission system (the
“Platform”)
pursuant to procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender pursuant to Article II if such Lender has notified
the Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communication pursuant to procedures approved by it,
provided
that approval of such procedures may be limited to particular notices or
communications. Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient,
such notice or communication shall be deemed to have been sent at the opening of
business on the next Business Day for the recipient, and (ii) notices or other
communications posted to an internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor. THE
PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” The Agent Parties (as defined
below) do not warrant the adequacy of the platform and expressly disclaim
liability for errors or omissions in the communications effected thereby. No
warranty of any kind, express, implied or statutory, including any warranty of merchantability,
fitness for a particular purpose, non-infringement of third-party rights or
freedom from viruses or other code defects, is made by any Agent Party in
connection with any such communications or the Platform. In no event shall the
Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to any Company Party, any Lender or any other Person
or entity for damages of any kind, including direct or indirect, special,
incidental or consequential damages, losses or expenses (whether in tort,
contract or otherwise) arising out of any Company Party’s or the Administrative
Agent’s transmission of any notices or communications through the Platform other
than for direct or actual damages resulting from the gross negligence or willful
misconduct of such Agent Party as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

102 










     (c)
Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto (except that each Lender need not give notice of any
such change to the other Lenders in their capacities as such). 

     11.5 Amendments, Waivers, etc. No amendment, modification, waiver or discharge or
termination of, or consent to any departure by any Credit Party from, any
provision of this Agreement or any other Credit Document shall be effective
unless in a writing signed by the Required Lenders (or by the Administrative
Agent at the direction or with the consent of the Required Lenders), and then
the same shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment,
modification, waiver, discharge, termination or consent shall: 

     (a)
unless agreed to in writing by each Lender
directly affected thereby, (i) reduce or forgive the principal amount of any
Loan or Reimbursement Obligation, reduce the rate of or forgive any interest
thereon (provided that only the consent of the Required Lenders shall be required to waive
the applicability of any post-default increase in interest rates), or reduce or
forgive any fees hereunder (other than fees payable to the Administrative Agent
or the Issuing Lender for its own account) (it being understood that an
amendment to the definition of Leverage Ratio (or any defined terms used
therein) shall not constitute a reduction of any interest rate or fees
hereunder), (ii) extend the final scheduled maturity date or any other scheduled
date for the payment of any principal of or interest on any Loan (including any
scheduled date for the mandatory reduction or termination of any Commitments,
but excluding any reduction or termination of the Revolving Credit Commitments
in connection therewith), extend the time of payment of any Reimbursement
Obligation or any interest thereon, extend the expiry date of any Letter of
Credit beyond the Letter of Credit Maturity Date, or extend the time of payment
of any fees hereunder (other than fees payable to the Administrative Agent or
the Issuing Lender for its own account), (iii) increase any Commitment of any
such Lender over the amount thereof in effect or extend the maturity thereof, or
(iv) reduce the percentage of the aggregate Commitments or of the aggregate
unpaid principal amount of the Loans, or the number or percentage of Lenders,
that shall be required for the Lenders or any of them to take or approve, or
direct the Administrative Agent to take, any action hereunder or under any other
Credit Document (including as set forth in the definition of “Required Lenders”);



103 







     (b)
unless agreed to in writing by all of the
Lenders, (i) release all or substantially all of the Collateral (except as may
be otherwise specifically provided in this Agreement or in any other Credit
Document), (ii) release any Guarantor (other than an Immaterial Subsidiary) from
its obligations under the Guaranty (other than
(A) as may be otherwise specifically provided in this Agreement or in any other
Credit Document or (B) in connection with the sale or other disposition of all
of the Capital Stock of such Guarantor in a transaction expressly permitted
under or pursuant to this Agreement), (iii) change any other provision of this
Agreement or any of the other Credit Documents requiring, by its terms, the
consent or approval of all the Lenders for such amendment, modification, waiver,
discharge, termination or consent, or (iv) change or waive any provision of
Section 2.15, any other provision of this Agreement or any other Credit Document
requiring pro rata treatment of any Lenders, or this Section 11.5; 

     (c)
unless agreed to in writing by the Issuing
Lender, the Swingline Lender or the Administrative Agent in addition to the
Lenders required as provided hereinabove to take such action, affect the
respective rights or obligations of the Issuing Lender, the Swingline Lender or
the Administrative Agent, as applicable, hereunder or under any of the other
Credit Documents; and 

     (d)
unless agreed to in writing by each Hedge Party
that would be adversely affected thereby in its capacity as such relative to the
Lenders, (i) amend the definition of “Secured Obligations” in any Security
Document or the definition of “Guaranteed Obligations” in the Guaranty (or any
similar defined term in any other Credit Document benefiting such Hedge Party),
(ii) amend the definition of “Secured Parties” in any Security Document or
“Guaranteed Parties” in the Guaranty (or any similar defined term in any other
Credit Document benefiting such Hedge Party), (iii) amend any provision
regarding priority of payments in this Agreement or any other Credit Document,
(iv) release all or substantially all of the Collateral (except as may be
otherwise specifically provided in this Agreement or in any other Credit
Document), or (v) release any Guarantor from its obligations under the Guaranty
(other than (A) as may be otherwise specifically provided in this Agreement or
in any other Credit Document or (B) in connection with the sale or other
disposition of all of the Capital Stock of such Guarantor in a transaction
expressly permitted under or pursuant to this Agreement); 

and provided further that if any amendment,
modification, waiver or consent would adversely affect the holders of Loans of a
particular Class (the “Affected
Class”) relative to holders of Loans of
another Class, then such amendment, modification, waiver or consent shall
require the written consent of Lenders holding at least 66 2/3% of the aggregate
outstanding principal amount of all Loans (and unutilized Commitments, if any)
of the Affected Class. 

Notwithstanding the fact that the consent
of all Lenders is required in certain circumstances as set forth above, each
Lender is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender acknowledges that
the provisions of Section 1126(c) of the Bankruptcy Code supersedes the
unanimous consent provisions set forth herein. 

Notwithstanding anything to the contrary
herein, (i) no Defaulting Lender shall have any right to approve or disapprove
any amendment, waiver or consent hereunder (and any amendment, waiver or consent
which by its terms requires the consent of all Lenders or each affected Lender
may be effected with the consent of the applicable Lenders other than Defaulting
Lenders), except that (x) the Commitment of any Defaulting Lender may not be
increased or extended without the consent of such Lender and (y) any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender more adversely than other
affected Lenders shall require the consent of such Defaulting Lender and (ii) if
the Administrative Agent and the Borrower shall have jointly identified (each in
its sole discretion) an obvious error or omission of a technical or immaterial
nature, in each case, in any provision of the Loan Documents, then the
Administrative Agent and the applicable Credit Parties shall be permitted to
amend such provision and such amendment shall become effective without any
further action or consent of any other party to any Loan Document if the same is
not objected to in writing by the Required Lenders within five Business Days
following the posting of such amendment to the Lenders.

104 








     11.6 Successors and Assigns. 

     (a)
The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Borrower nor
any other Credit Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an assignee in accordance with the
provisions of Section 11.6(b), (ii) by way of participation in accordance with the
provisions of Section 11.6(e) or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of Section 11.6(f) (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in Section 11.6(e) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement. 

     (b) Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans (including for
purposes of this Section 11.6(b), participations in Letters of Credit and in
Swingline Loans) at the time owing to it); provided that any such assignment
shall be subject to the following conditions:

     (i) (A) in the case of an assignment of the
entire remaining amount of the assigning Lender’s Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender, an Affiliate
of a Lender or an Approved Fund, no minimum amount need be assigned, and (B) in
any case not described in clause (A) above, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder) or, if
the applicable Commitment is not then in effect, the principal outstanding
balance of the Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date) shall not be
less than (x) $5,000,000, in the case of any assignment in respect of a
Revolving Credit Commitment (which for this purpose includes Revolving Loans
outstanding), or (y) the entire Swingline Commitment and the full amount of the
outstanding Swingline Loans, in the case of Swingline Loans, in any case,
treating assignments to two or more Approved Funds under common management as one assignment
for purposes of the minimum amounts, unless each of the Administrative Agent
and, so long as no Default or Event of Default has occurred and is continuing,
the Borrower otherwise consents (each such consent not to be unreasonably
withheld or delayed);

105 








     (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, except that this clause (ii) shall not (A) apply to rights in respect
of Swingline Loans or (B) prohibit any Lender from assigning all or a portion of
its rights and obligations among separate Classes of Loans and/or Commitments on
a non-pro rata basis; 

     (iii) no consent shall be required for any
assignment except to the extent required by clause (B) of Section 11.6(b)(i) and, in
addition: 

     (A) the consent of the Borrower (such consent
not to be unreasonably withheld or delayed) shall be required unless (y) a
Default or Event of Default has occurred and is continuing at the time of such
assignment or (z) such assignment is to a Lender, an Affiliate of a Lender or an
Approved Fund; provided that the Borrower shall be deemed to have consented to any
such assignment unless it shall object thereto by written notice to the
Administrative Agent within five (5) Business Days after having received notice
thereof; 

     (B) the consent of the Administrative Agent
(such consent not to be unreasonably withheld or delayed) shall be required for
assignments in respect of a Revolving Credit Commitment if such assignment is to
a Person that is not a Revolving Credit Lender, an Affiliate of such Lender or
an Approved Fund with respect to such Lender; 

     (C) the consent of the Issuing Lender (such
consent not to be unreasonably withheld or delayed) shall be required for any
assignment that increases the obligation of the assignee to participate in
exposure under one or more Letters of Credit (whether or not then outstanding);
and 

     (D) the consent of the Swingline Lender (such
consent not to be unreasonably withheld or delayed) shall be required for any
assignment in respect of a Revolving Credit Commitment; 

     (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500 for each assignment and the assignee, if it is not a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire; 

     (v) no such assignment shall be made to (A)
the Parent, the Borrower or any of their respective Affiliates or Subsidiaries
or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who,
upon becoming a Lender hereunder, would constitute any of the foregoing Persons
described in this clause (B); and 

     (vi) no such assignment shall be made to a
natural person. 

106 








Subject to acceptance and recording
thereof by the Administrative Agent pursuant to Section 11.6(c), from and after the
effective date specified in each Assignment and Assumption, the assignee
thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections
2.16(a), 2.16(b), 2.17, 2.18 and 11.1 with respect to facts and
circumstances occurring prior to the effective date of such assignment. If
requested by or on behalf of the assignee, the Borrower, at its own expense,
will execute and deliver to the Administrative Agent a new Note or Notes to the
order of the assignee (and, if the assigning Lender has retained any portion of
its rights and obligations hereunder, to the order of the assigning Lender),
prepared in accordance with the applicable provisions of Section 2.4 as necessary to
reflect, after giving effect to the assignment, the Commitments and/or
outstanding Loans, as the case may be, of the assignee and (to the extent of any
retained interests) the assigning Lender, in substantially the form of
Exhibits A-1, A-2 and/or A-3, as applicable. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 11.6(b) shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 11.6(e).


     (c)
In connection with any assignment of rights and
obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent or any Lender
hereunder (and interest accrued thereon), and (y) acquire (and fund as
appropriate) its full pro rata share of all Loans and participations in Letters
of Credit and Swingline Loans in accordance with its Credit Exposure.
Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under
applicable Law without compliance with the provisions of this paragraph, then
the assignee of such interest shall be deemed to be a Defaulting Lender for all
purposes of this Agreement until such compliance occurs. 

     (d)
The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at its address for notices
referred to in Schedule 1.1(a) a copy of each Assignment and Assumption delivered to it and
a register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive, and the Borrower, the Administrative Agent and the
Lenders may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. In addition,
the Administrative Agent shall maintain on the Register information regarding
the designation, revocation of designation, of any Lender as a Defaulting
Lender. The Register shall be available for inspection by each of the Borrower
and the Issuing Lender, at any reasonable time and from time to time upon
reasonable prior notice.

107 








     (e)
Any Lender may at any time, without the consent
of, or notice to, the Borrower or the Administrative Agent, sell participations
to any Person (other than a natural person or the Borrower or any of the
Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of
such Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitments and/or the Loans (including such Lender’s
participations in Letters of Credit and Swingline Loans) owing to it);
provided
that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Borrower, the Administrative
Agent, the Lenders, the Issuing Lender and the Swingline Lender shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement;
provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, waiver or other
modification described in Section
11.5(a) and clause (i) of Section 11.5(b) that
affects such Participant. Subject to Section
11.6(f), the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.16(a), 2.16(b), 2.17 and 2.18 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
Section 11.6(b). To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 9.3 as though it were a Lender; provided such Participant agrees to be
subject to Section 2.15(b) as though it were a Lender. 

     (f)
A Participant shall not be entitled to receive
any greater payment under Section 2.16(a), 2.16(b) or 2.17 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.17(e) as though it were a Lender. 

     (g)
Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Notes, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto. 

     (h)
The words “execution,” “signed,” “signature,” and
words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which
shall be of the same legal effect, validity or enforceability as a manually
executed signature or the use of a paper-based recordkeeping system, as the case
may be, to the extent and as provided for in any applicable law, including the
Federal Electronic Signatures in Global and National Commerce Act or any state
laws based on the Uniform Electronic Transactions Act.

108 








     (i)
Any Lender or participant may, in connection with
any assignment, participation, pledge or proposed assignment, participation or
pledge pursuant to this Section
11.6, disclose to the Assignee, Participant
or pledgee or proposed Assignee, Participant or pledgee any information relating
to the Borrower and its Subsidiaries furnished to it by or on behalf of any
other party hereto, provided that such Assignee, Participant or pledgee or proposed
Assignee, Participant or pledgee agrees in writing to keep such information
confidential to the same extent required of the Lenders under Section 11.11. 

     (j)
Notwithstanding anything to the contrary
contained herein, if Wells Fargo assigns all of its Revolving Credit Commitments
and Revolving Loans in accordance with this Section 11.6, Wells Fargo may resign
as Issuing Lender upon written notice to the Borrower and the Lenders. Upon any
such notice of resignation, the Borrower shall have the right to appoint from
among the Lenders a successor Issuing Lender; provided that no failure by the
Borrower to make such appointment shall affect the resignation of Wells Fargo as
Issuing Lender. Wells Fargo shall retain all of the rights and obligations of
the Issuing Lender hereunder with respect to all Letters of Credit issued by it
and outstanding as of the effective date of its resignation and all obligations
of the Borrower and the Revolving Credit Lenders with respect thereto (including
the right to require the Revolving Credit Lenders to make Revolving Loans or
fund participation interests pursuant to Article III). 

     11.7 No Waiver.
The rights and remedies of the Administrative Agent and the Lenders expressly
set forth in this Agreement and the other Credit Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or be construed to be a
waiver of any Default or Event of Default. No course of dealing between any
Company Party, the Administrative Agent or the Lenders or their agents or
employees shall be effective to amend, modify or discharge any provision of this
Agreement or any other Credit Document or to constitute a waiver of any Default
or Event of Default. No notice to or demand upon any Company Party in any case
shall entitle any Company Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the right of the
Administrative Agent or any Lender to exercise any right or remedy or take any
other or further action in any circumstances without notice or demand.


     11.8 Survival.
All representations, warranties and agreements made by or on behalf of the
Borrower or any other Credit Party in this Agreement and in the other Credit
Documents shall survive the execution and delivery hereof or thereof, the making
and repayment of the Loans and the issuance and repayment of the Letters of
Credit. In addition, notwithstanding anything herein or under applicable law to
the contrary, the provisions of this Agreement and the other Credit Documents relating to
indemnification or payment of costs and expenses, including, without limitation,
the provisions of Sections 2.8(f), 2.16(a), 2.16(b), 2.17, 2.18 and 11.1, shall survive the payment in
full of all Loans and Letters of Credit, the termination of the Commitments and
all Letters of Credit, and any termination of this Agreement or any of the other
Credit Documents.

109 








     11.9 Severability. To the extent any provision of this Agreement is prohibited by or
invalid under the applicable law of any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity and only in
such jurisdiction, without prohibiting or invalidating such provision in any
other jurisdiction or the remaining provisions of this Agreement in any
jurisdiction. Without limiting the foregoing provisions of this Section 11.9, if and to the
extent that the enforceability of any provisions in this Agreement relating to
Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good
faith by the Administrative Agent, the Issuing Lender or the Swingline Lender,
as applicable, then such provisions shall be deemed to be in effect only to the
extent not so limited. 

     11.10 Construction. The headings of the various articles, sections and subsections of this
Agreement and the table of contents have been inserted for convenience only and
shall not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control. Any Hedge Agreement between the
Borrower and any Hedge Party is an independent agreement governed by the writing
provisions of such Hedge Agreement, which shall remain in full force and effect,
unaffected by any repayment, prepayment, acceleration, reduction, increase or
change in the terms applicable to the Loans under this Agreement, except as
otherwise expressly provided in such Hedge Agreement, and any payoff statement
from the Administrative Agent relating to this Agreement shall not apply to such
Hedge Agreement except as expressly provided therein. 

     11.11 Confidentiality. Each of the Administrative Agent, the Lenders and the Issuing Lender
agree to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its and
its Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable Requirements of Law or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Credit Document or any Hedge Agreement or any
action or proceeding relating to this Agreement or any other Credit Document or
any Hedge Agreement or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, or (ii) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to the Borrower and its obligations,
(g) with the consent of the Borrower or (h) to the extent such Information (x)
becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender, the Issuing Lender or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower or
any of its Subsidiaries or Affiliates.

110 








     For purposes of this Section,
“Information” means all information received from the Company Parties relating to any
Company Party or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the
Issuing Lender on a nonconfidential basis prior to disclosure by any Company
Party, provided that, in the case of information received from any Company Party after
the date hereof, such information is clearly identified at the time of delivery
as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information. 

     11.12 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Credit
Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.1, this Agreement shall become effective when it shall have
been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement. 

     11.13 Disclosure of Information. The Borrower agrees and consents to the Administrative Agent’s disclosure of information relating to
this transaction to Gold
Sheets and other similar bank trade
publications. Such information will consist of deal terms and other information
customarily found in such publications. 

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


111 







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


	KRISPY KREME DOUGHNUT CORPORATION
	 
	By:	/s/ Douglas R. Muir	
	Name: 	Douglas R. Muir
	Title:	Chief
      Financial Officer



	KRISPY KREME DOUGHNUTS, INC.
	 
	By:	/s/ Douglas R. Muir	
	Name: 	Douglas R. Muir
	Title:	Chief
      Financial Officer











(signatures continued) 










[Signature page to Credit Agreement]









	WELLS
      FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent,
      Issuing
Lender and as a Lender
	 
	By:	/s/ R. Alan Proctor	
	Name: 	R.
      Alan Proctor
	Title:	Senior
      Vice President



















[Signature page to Credit Agreement]







EXHIBIT A-1 

[Reserved] 







EXHIBIT A-2 

Borrower’s Taxpayer Identification No.
______________


REVOLVING NOTE 

	$____________________	July __, 2013
		Charlotte, North
Carolina



     FOR VALUE
RECEIVED, KRISPY KREME DOUGHNUT CORPORATION,
a North Carolina corporation (the “Borrower”), hereby promises to pay to
the order of 

    
WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), at the offices of Wells Fargo Bank, National Association
(the “Administrative Agent”) located at 1525 W. W.T. Harris Blvd., Building 3A2,
Charlotte, North Carolina (or at such other place or places as the
Administrative Agent may designate), at the times and in the manner provided in
the Credit Agreement, dated as of July 12, 2013 (as amended, modified, restated
or supplemented from time to time, the “Credit
Agreement”), among the Borrower, Krispy Kreme
Doughnuts, Inc., the Lenders from time to time parties thereto, and Wells Fargo
Bank, National Association, as Administrative Agent, the principal sum
of

    
__________________________ DOLLARS ($___________), or such lesser amount as may constitute the
unpaid principal amount of the Revolving Loans made by the Lender, under the
terms and conditions of this promissory note (this “Revolving Note”) and the Credit
Agreement. The defined terms in the Credit Agreement are used herein with the
same meaning. The Borrower also promises to pay interest on the aggregate unpaid
principal amount of this Revolving Note at the rates applicable thereto from
time to time as provided in the Credit Agreement. 

    
This Revolving Note is one of a series of Revolving Notes referred to in
the Credit Agreement and is issued to evidence the Revolving Loans made by the
Lender pursuant to the Credit Agreement. All of the terms, conditions and
covenants of the Credit Agreement are expressly made a part of this Revolving
Note by reference in the same manner and with the same effect as if set forth
herein at length, and any holder of this Revolving Note is entitled to the
benefits of and remedies provided in the Credit Agreement and the other Credit
Documents. Reference is made to the Credit Agreement for provisions relating to
the interest rate, maturity, payment, prepayment and acceleration of this
Revolving Note. 

    
In the event of an acceleration of the maturity of this Revolving Note,
this Revolving Note shall become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower. 







     In the event this
Revolving Note is not paid when due at any stated or accelerated maturity, the
Borrower agrees to pay, in addition to the principal and interest, all costs of
collection, including reasonable attorneys’ fees. 

    
This Revolving Note shall be governed by and construed in accordance with
the internal laws and judicial decisions of the State of New York (including
Sections 5-1401 and 5-1402 of the New York General Obligations Law, but
excluding all other choice of law and conflicts of law rules). The Borrower
hereby submits to the nonexclusive jurisdiction and venue of the federal and
state courts located in Mecklenburg County, North Carolina, although the Lender
shall not be limited to bringing an action in such courts. 

    
IN WITNESS WHEREOF, the
Borrower has caused this Revolving Note to be executed by its duly authorized
corporate officer as of the day and year first above written. 


	KRISPY KREME
      DOUGHNUT
	CORPORATION
	 	
	 	
	By:	
	 	
	Name:  	
	 	
	Title:	



2







EXHIBIT A-3 

Borrower’s Taxpayer Identification No.
_____________


SWINGLINE NOTE 

	$____________	July __, 2013
		Charlotte, North
Carolina



     FOR VALUE
RECEIVED, KRISPY KREME DOUGHNUT CORPORATION,
a North Carolina corporation (the “Borrower”), hereby promises to pay to
the order of 

    
WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Swingline Lender”), at the offices of Wells Fargo Bank,
National Association (the “Administrative Agent”) located at 1525 W. W.T. Harris
Blvd., Building 3A2, Charlotte, North Carolina (or at such other place or places
as the Administrative Agent may designate), at the times and in the manner
provided in the Credit Agreement, dated as of July 12, 2013 (as amended,
modified, restated or supplemented from time to time, the “Credit Agreement”), among
the Borrower, Krispy Kreme Doughnuts, Inc., the Lenders from time to time
parties thereto, and Wells Fargo Bank, National Association, as Administrative
Agent, the principal sum of

    
__________________________ DOLLARS ($___________), or such lesser amount as may constitute the
unpaid principal amount of the Swingline Loans made by the Swingline Lender,
under the terms and conditions of this promissory note (this “Swingline Note”)
and the Credit Agreement. The defined terms in the Credit Agreement are used
herein with the same meaning. The Borrower also promises to pay interest on the
aggregate unpaid principal amount of this Swingline Note at the rates applicable
thereto from time to time as provided in the Credit Agreement. 

    
This Swingline Note is issued to evidence the Swingline Loans made by the
Swingline Lender pursuant to the Credit Agreement. All of the terms, conditions
and covenants of the Credit Agreement are expressly made a part of this
Swingline Note by reference in the same manner and with the same effect as if
set forth herein at length, and any holder of this Swingline Note is entitled to
the benefits of and remedies provided in the Credit Agreement and the other
Credit Documents. Reference is made to the Credit Agreement for provisions
relating to the interest rate, maturity, payment, prepayment and acceleration of
this Swingline Note. 

    
In the event of an acceleration of the maturity of this Swingline Note,
this Swingline Note shall become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower. 

    
In the event this Swingline Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys’ fees.








     This Swingline
Note shall be governed by and construed in accordance with the internal laws and
judicial decisions of the State of New York (including Sections 5-1401 and
5-1402 of the New York General Obligations Law, but excluding all other choice
of law and conflicts of law rules). The Borrower hereby submits to the
nonexclusive jurisdiction and venue of the federal and state courts located in
Mecklenburg County, North Carolina, although the Swingline Lender shall not be
limited to bringing an action in such courts. 

    
IN WITNESS WHEREOF, the
Borrower has caused this Swingline Note to be executed by its duly authorized
corporate officer as of the day and year first above written. 


	KRISPY KREME
      DOUGHNUT
	CORPORATION
	 	
	 	
	By:	
	 	
	Name:  	
	 	
	Title:	




2








EXHIBIT B-1 

NOTICE OF BORROWING 

[Date] 

Wells Fargo Bank, National
Association,
as Administrative Agent
1525 W. W.T. Harris Blvd
Building
3A2, Mailcode NC 0680 
Charlotte, North Carolina 28262 
Attention:
Syndication Agency Services 

Ladies and Gentlemen: 

     The undersigned,
KRISPY KREME DOUGHNUT
CORPORATION (the “Borrower”), refers to the Credit
Agreement, dated as of July 12, 2013, among the Borrower, Krispy Kreme
Doughnuts, Inc., certain Lenders from time to time parties thereto, and you, as
Administrative Agent for the Lenders (as amended, modified, restated or
supplemented from time to time, the “Credit
Agreement,” the terms defined therein being
used herein as therein defined), and, pursuant to Section 2.2(b) of the Credit
Agreement, hereby gives you, as Administrative Agent, irrevocable notice that
the Borrower requests a Borrowing of Revolving Loans under the Credit Agreement,
and to that end sets forth below the information relating to such Borrowing (the
“Proposed Borrowing”) as required by Section
2.2(b) of the Credit Agreement: 


    
(i) The
aggregate principal amount of the Proposed Borrowing is
$_______________.1

    
(ii) The
Loans comprising the Proposed Borrowing shall be initially made as [Base Rate
Loans] [LIBOR Loans].2 

    
(iii) [The
initial Interest Period for the LIBOR Loans comprising the Proposed Borrowing
shall be [one/two/three/six months].]3


____________________
    
1 Amount of Proposed Borrowing must comply with Section 2.2(b)
of the Credit Agreement. 
     2 Select the applicable Type
of Loans. 
     3 Include this clause in the case of a Proposed
Borrowing comprised of LIBOR Loans, and select the applicable Interest Period.








          (iv) The Proposed Borrowing is requested to be made on __________________ (the
“Borrowing Date”).4 

    
The Borrower hereby certifies that the following statements are true on
and as of the date hereof and will be true on and as of the Borrowing Date:



    
A. Each of
the representations and warranties contained in Article V of the Credit Agreement and
in the other Credit Documents is and will be true and correct, in all material
respects, on and as of each such date, with the same effect as if made on and as
of each such date, both immediately before and after giving effect to the
Proposed Borrowing and to the application of the proceeds therefrom (except to
the extent any such representation or warranty is expressly stated to have been
made as of a specific date, in which case such representation or warranty shall
be true and correct as of such date); 

    
B. No
Default or Event of Default has occurred and is continuing or would result from
the Proposed Borrowing or from the application of the proceeds therefrom; and


    
C. After
giving effect to the Proposed Borrowing, the sum of (i) the aggregate principal
amount of Revolving Loans outstanding, (ii) the aggregate Letter of Credit
Exposure of all Revolving Credit Lenders, and (iii) the aggregate principal
amount of Swingline Loans outstanding, will not exceed the aggregate Revolving
Credit Commitments. 




	
      Very truly yours, 

	 
	KRISPY KREME DOUGHNUT
	CORPORATION
	 	
	 	
	By:	
	 	
	Name:  	
	 	
	Title:	


____________________

     4 In
the case of LIBOR Loans, shall be a date at least three Business Days after the
date hereof. In the case of Base Rate Loans, if this Notice is received not
later than 11:00 a.m. Charlotte time on the date hereof, may be the date hereof,
or if this Notice is received after 11:00 a.m. Charlotte time on the date
hereof, shall be a Business Day at least one Business Day after the date hereof.


2







EXHIBIT B-2 

NOTICE OF SWINGLINE BORROWING


[Date] 

Wells Fargo Bank, National
Association,
as Administrative Agent
1525 W. W.T. Harris Blvd
Building
3A2, Mailcode NC 0680
Charlotte, North Carolina 28262
Attention:
Syndication Agency Services 

Wells Fargo Bank, National
Association,
as Swingline Lender
100 North Main Street
Winston-Salem,
North Carolina 27011
Attention: R. Alan Proctor 

Ladies and Gentlemen: 

     The undersigned,
KRISPY KREME DOUGHNUT
CORPORATION (the “Borrower”), refers to the Credit
Agreement, dated as of July 12, 2013, among the Borrower, Krispy Kreme
Doughnuts, Inc., certain Lenders from time to time parties thereto, and you, as
Administrative Agent for the Lenders (as amended, modified, restated or
supplemented from time to time, the “Credit
Agreement,” the terms defined therein being
used herein as therein defined), and, pursuant to Section 2.2(d) of the Credit
Agreement, hereby gives you, as Administrative Agent and as Swingline Lender,
irrevocable notice that the Borrower requests a Borrowing of a Swingline Loan
under the Credit Agreement, and to that end sets forth below the information
relating to such Borrowing (the “Proposed
Borrowing”) as required by Section 2.2(d) of the
Credit Agreement: 

         
(i) The
principal amount of the Proposed Borrowing is $_______________.1


         
(ii) The
Proposed Borrowing is requested to be made on __________________ (the
“Borrowing Date”). 

    
The Borrower hereby certifies that the following statements are true on
and as of the date hereof and will be true on and as of the Borrowing Date:


     A.
Each of the representations and warranties
contained in Article V of the Credit Agreement and in the other Credit Documents is
and will be true and correct, in all material respects, on and as of each such
date, with the same effect as if made on and as of each such date, both
immediately before and after giving effect to the Proposed Borrowing and to the
application of the proceeds therefrom (except to the extent any such
representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty shall be true and
correct as of such date); 

____________________
    
1 Amount of Proposed Borrowing
must comply with Section 2.2(d) of the Credit Agreement. 










     B. No Default or Event of Default
has occurred and is continuing or would result from the Proposed Borrowing or
from the application of the proceeds therefrom; and 

    
C. After
giving effect to the Proposed Borrowing, the sum of (i) the aggregate principal
amount of Revolving Loans outstanding, (ii) the aggregate Letter of Credit
Exposure of all Revolving Credit Lenders, and (iii) the aggregate principal
amount of Swingline Loans outstanding, will not exceed the aggregate Revolving
Credit Commitments. 




	
      Very truly yours, 

	 
	KRISPY KREME DOUGHNUT
	CORPORATION
	 	
	 	
	By:	
	 	
	Name:  	
	 	
	Title:	



2







EXHIBIT B-3 

NOTICE OF
CONVERSION/CONTINUATION 

[Date] 

Wells Fargo Bank, National
Association,
as Administrative Agent
1525 W. W.T. Harris Blvd
Building
3A2, Mailcode NC 0680
Charlotte, North Carolina 28262
Attention:
Syndication Agency Services 

Ladies and Gentlemen: 

     The undersigned,
KRISPY KREME DOUGHNUT
CORPORATION (the “Borrower”), refers to the Credit
Agreement, dated as of July 12, 2013, among the Borrower, Krispy Kreme
Doughnuts, Inc., certain Lenders from time to time parties thereto, and you, as
Administrative Agent for the Lenders (as amended, modified, restated or
supplemented from time to time, the “Credit
Agreement,” the terms defined therein being
used herein as therein defined), and, pursuant to Section 2.11(b) of the Credit
Agreement, hereby gives you, as Agent, irrevocable notice that the Borrower
requests a [conversion] [continuation]1 of Loans under the Credit
Agreement, and to that end sets forth below the information relating to such
[conversion] [continuation] (the “Proposed
[Conversion] [Continuation]”) as required by
Section 2.11(b) of the Credit Agreement: 


    
(i) The
Proposed [Conversion] [Continuation] is requested to be made on
_______________.2 

    
(ii) The
Proposed [Conversion] [Continuation] involves $____________3 in
aggregate principal amount of Revolving Loans made pursuant to a Borrowing on
________________,4 which Loans are presently maintained as [Base
Rate] [LIBOR] Loans and are proposed hereby to be [converted into Base Rate
Loans] [converted into LIBOR Loans] [continued as LIBOR Loans].5


____________________
    
1 Insert “conversion” or “continuation” throughout the notice,
as applicable. 
    
2 Shall be a Business Day at
least one Business Day after the date hereof (in the case of any conversion of
LIBOR Loans into Base Rate Loans) or at least three Business Days after the date
hereof (in the case of any conversion of Base Rate Loans into, or continuation
of, LIBOR Loans), and additionally, in the case of any conversion of LIBOR Loans
into Base Rate Loans, or continuation of LIBOR Loans, shall be the last day of
the Interest Period applicable to such LIBOR Loans. 
     3 Amount of Proposed Conversion or Continuation must comply
with Section 2.11(b) of the Credit Agreement.
     4 Insert the applicable
Borrowing Date for the Loans being converted or continued.
     5 Complete with the applicable
bracketed language. 








     (iii) [The initial Interest Period
for the Loans being [converted into] [continued as] LIBOR Loans pursuant to the
Proposed [Conversion] [Continuation] shall be [one/two/three/six
months].]6 


     The Borrower
hereby certifies that the following statement is true both on and as of the date
hereof and on and as of the effective date of the Proposed [Conversion]
[Continuation]: no Default or Event of Default has or will have occurred and is
continuing or would result from the Proposed [Conversion] [Continuation].



	
      Very truly yours, 

	 
	KRISPY KREME DOUGHNUT
	CORPORATION
	 	
	 	
	By:	
	 	
	Name:  	
	 	
	Title:	


____________________
     6
Include this clause in the case of a Proposed Conversion or Continuation
involving a conversion of Base Rate Loans into, or continuation of, LIBOR Loans,
and select the applicable Interest Period. 

2







EXHIBIT B-4 

LETTER OF CREDIT
NOTICE 

[Date] 

Wells Fargo Bank, National
Association,
as Administrative Agent
1525 W. W.T. Harris Blvd
Building
3A2, Mailcode NC 0680
Charlotte, North Carolina 28262
Attention:
Syndication Agency Services 

Wells Fargo Bank, National
Association,
as Issuing Lender
100 North Main Street
Winston-Salem,
North Carolina 27011
Attention: R. Alan Proctor 

Ladies and Gentlemen: 

     The undersigned,
KRISPY KREME DOUGHNUT
CORPORATION (the “Borrower”), refers to the Credit
Agreement, dated as of July 12, 2013, among the Borrower, Krispy Kreme
Doughnuts, Inc., certain Lenders from time to time parties thereto, and you, as
Administrative Agent for the Lenders (as amended, modified, restated or
supplemented from time to time, the “Credit
Agreement,” the terms defined therein being
used herein as therein defined), and, pursuant to Section 3.2 of the Credit Agreement,
hereby gives you, as Issuing Lender, irrevocable notice that the Borrower
requests the issuance of a Letter of Credit for its account under the Credit
Agreement, and to that end sets forth below the information relating to such
Letter of Credit (the “Requested Letter of
Credit”) as required by Section 3.2 of the Credit
Agreement: 


    
(i) The
Business Day on which the Requested Letter of Credit is requested to be issued
is _______________.1 

    
(ii) The
Stated Amount of the Requested Letter of Credit is $____________. 

    
(iii) The
expiry date of the Requested Letter of Credit is ______________. 

    
(iv) The
name and address of the beneficiary of the Requested Letter of Credit is
__________________________________________________________.


____________________
     1
Shall be at least three Business Days (or such shorter period as is acceptable
to the Issuing Lender in any given case) after the date hereof. 







     The undersigned
agrees to complete all application procedures and documents required by you in
connection with the Requested Letter of Credit. 

    
The undersigned hereby certifies that the following statements are true
on the date hereof and will be true on the date of issuance of the Requested
Letter of Credit: 


    
A. Each of
the representations and warranties contained in Article V of the Credit Agreement and
in the other Credit Documents is and will be true and correct, in all material
respects, on and as of each such date, with the same effect as if made on and as
of each such date, both immediately before and after giving effect to the
issuance of the Requested Letter of Credit (except to the extent any such
representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty shall be true and
correct as of such date); 

    
B. No
Default or Event of Default has occurred and is continuing or would result from
the issuance of the Requested Letter of Credit; and 

    
C. After
giving effect to the issuance of the Requested Letter of Credit, the sum of (i)
the aggregate principal amount of Revolving Loans outstanding, (ii) the
aggregate Letter of Credit Exposure of all Revolving Credit Lenders, and (iii)
the aggregate principal amount of Swingline Loans outstanding, will not exceed
the aggregate Revolving Credit Commitments. 




	
      Very truly yours, 

	 
	KRISPY KREME DOUGHNUT
	CORPORATION
	 	
	 	
	By:	
	 	
	Name:  	
	 	
	Title:	



2










EXHIBIT C 

COMPLIANCE CERTIFICATE


     THIS
CERTIFICATE is delivered pursuant to the
Credit Agreement, dated as of July 12, 2013 (the “Credit Agreement”), among
KRISPY KREME DOUGHNUT
CORPORATION, a North Carolina corporation
(the “Borrower”), KRISPY KREME DOUGHNUTS,
INC., a North Carolina corporation (the
“Parent”),
the Lenders from time to time parties thereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent. Capitalized terms used herein without
definition shall have the meanings given to such terms in the Credit Agreement.


    
The undersigned hereby certifies that: 

    
1. The
undersigned is a duly elected Financial Officer of the [Parent][Borrower].


    
2. Enclosed
with this Certificate are copies of the financial statements of the Parent and
its Subsidiaries as of _____________, and for the [________-month period] [year]
then ended, required to be delivered under Section [6.1(a)][6.1(b)] of the Credit
Agreement. Such financial statements have been prepared in accordance with GAAP
[(subject to the absence of notes required by GAAP and subject to normal
year-end adjustments)]1 applied on a basis consistent with that of
the preceding [quarter][year] and fairly present the financial condition of the
Parent and its Subsidiaries on a consolidated basis as of the date indicated and
the results of operation of the Parent and its Subsidiaries on a consolidated
basis for the period covered thereby. 

    
3. The
undersigned has reviewed the terms of the Credit Agreement and has made, or
caused to be made under the supervision of the undersigned, a review in
reasonable detail of the transactions and condition of the Parent and its
Subsidiaries during the accounting period covered by such financial statements.


    
4. The
examination described in paragraph 3 above did not disclose, and the undersigned
has no knowledge of the existence of, any Default or Event of Default during or
at the end of the accounting period covered by such financial statements or as
of the date of this Certificate[.][, except as set forth below. 

Describe here or in a separate attachment
any exceptions to paragraph 4 above by listing, in reasonable detail, the nature
of the Default or Event of Default, the period during which it existed and the
action that the Parent or the Borrower has taken or proposes to take with
respect thereto.] 

    
5. Attached
to this Certificate as Attachment A is a covenant compliance worksheet
reflecting the computation of the financial covenants set forth in Article VII
of the Credit Agreement as of the last day of the period covered by the
financial statements enclosed herewith. 
____________________
1 Insert in the case of
quarterly financial statements. 







     6. During the
period covered by the financial statements enclosed herewith, the Parent made
Restricted Payments of the type described in Sections 8.6(iv) and 8.6(v) of the Credit
Agreement in an aggregate amount equal to $____________, comprising
$____________ made in accordance with Section
8.6(iv) and $____________ made in accordance
with Section 8.6(v). The conditions set forth in Section 8.6(iv) of the Credit
Agreement were satisfied at the time each Restricted Payment made in accordance
therewith was made during such period. 

    
IN WITNESS WHEREOF, the
undersigned has executed and delivered this Certificate as of the _______ day of
_____________, ____. 


	By:	
	Name:  	
	Title:	




2







ATTACHMENT A 

COVENANT COMPLIANCE WORKSHEET




(Attached.) 

i 










EXHIBIT D 

ASSIGNMENT AND ASSUMPTION


     THIS
ASSIGNMENT AND ASSUMPTION (this
“Assignment and Assumption”) is dated as of the Effective Date set forth below and is
entered into by and between [NAME OF
ASSIGNOR] (the “Assignor”) and [NAME OF ASSIGNEE] (the
“Assignee”). Capitalized terms used but not defined herein shall have the meanings
given to them in the Credit Agreement identified below, receipt of a copy of
which is hereby acknowledged by the Assignee. The Standard Terms and Conditions
set forth in Annex 1 attached hereto (the “Standard Terms and Conditions”) are hereby
agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full. 

    
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor’s rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any Letters of Credit, guarantees, and
Swingline Loans included in such facilities) and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as the “Assigned Interest”). Such
sale and assignment is without recourse to the Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty
by the Assignor. 

	 	1.	Assignor:	 	 	 
	     	 	 	 	 	 
		2.  	Assignee:        
      		 	 
				[and is an Affiliate/Approved Fund of
      [identify Lender]1]
				 
		3.	Borrower:	Krispy Kreme Doughnut
    Corporation



     4. Administrative Agent: Wells
Fargo Bank, National Association, as the Administrative Agent under the Credit Agreement.

____________________
1Select as applicable.







     5. Credit Agreement: Credit
Agreement, dated as of July 12, 2013 (as amended, modified, restated or
supplemented from time to time, the “Credit
Agreement”), among the Borrower, Krispy Kreme
Doughnuts, Inc., certain lenders from time to time parties thereto (the
“Lenders”),
and Wells Fargo Bank, National Association, as Administrative Agent. 

    
6. Assigned
Interest: 

		Aggregate Amount of	Amount of	Percentage Assigned	
	Facility	Commitment/Loans
      for	Commitment/Loans	of	CUSIP
	Assigned2	all Lenders3	Assigned3	Commitment/Loans4	Number5
		$	$	                 
      %	
		$	$	                 
      %	
		$	$	                 
      %	



     7. Trade
Date:             ______________]6


    
8. Effective Date:     
______________ [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION
OF TRANSFER IN THE REGISTER THEREFOR.] 
____________________
2Fill
in the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g. “Revolving Credit
Commitment,” etc.).
3Amount to be adjusted by the counterparties to
take into account any payments or prepayments made between the Trade Date and
the Effective Date.
4Set forth, to at least 9 decimals, as a percentage
of the Commitment/Loans of all Lenders thereunder.
5Insert if applicable. 
6To be completed if the Assignor and the Assignee
intend that the minimum assignment amount is to be determined as of the Trade
Date. 

2







     The terms set
forth in this Assignment and Assumption are hereby agreed to: 


	ASSIGNOR:
	 	
	[NAME OF ASSIGNOR]
	 	
	By:	
	 	
	Name:   	
	 	
	Title:	
	 	
	ASSIGNEE:
	 	
	[NAME OF ASSIGNEE]
	 	
	By:	
	 	
	By:	
	 	
	Title:	




[Consented to and]7 Accepted:


WELLS FARGO BANK, NATIONAL
ASSOCIATION, 

as Administrative Agent 

	By:	
	 	
	Name:	
	 	
	Title:	
	 	
	[Consented
to:]8
	 
	[NAME OF RELEVANT
      PARTY]
	 
	By:	
	 	
	Name:  	
	 	
	Title:	

____________________

7To be
added only if the consent of the Administrative Agent is required by the terms
of the Credit Agreement.
8To be added only if the
consent of the Borrower and/or other parties (e.g. Swingline Lender, Issuing
Lender) is required by the terms of the Credit Agreement. 

3







ANNEX 1 to Assignment and Assumption


Credit Agreement, dated as of July 12,
2013, among Krispy Kreme Doughnut Corporation,
as Borrower, Krispy Kreme
Doughnuts, Inc., certain Lenders from time to time parties thereto,
and Wells
Fargo Bank, National Association, as Administrative Agent 

STANDARD TERMS AND CONDITIONS
FOR
ASSIGNMENT AND ASSUMPTION 

     1. Representations and
Warranties. 

    
1.1 Assignor. The Assignor (a) represents
and warrants that (i) it is the legal and beneficial owner of the Assigned
Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance
or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and
to consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any collateral thereunder, (iii) the
financial condition of the Parent, the Borrower, any of their respective
Subsidiaries or Affiliates or any other Person obligated in respect of any
Credit Document or (iv) the performance or observance by the Parent, the
Borrower, any of their respective Subsidiaries or Affiliates or any other Person
of any of their respective obligations under any Credit Document. 

    
1.2 Assignee. The Assignee (a) represents
and warrants that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an eligible Assignee under
Section 11.6 of the Credit Agreement (subject to receipt of such consents as may
be required under the Credit Agreement), (iii) from and after the Effective
Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.1 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment
and Assumption is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed by the Assignee;
and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Documents, and (ii) it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Documents are required to be
performed by it as a Lender. 







     2. Payments. From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts that
have accrued to but excluding the Effective Date and to the Assignee for amounts
that have accrued from and after the Effective Date. 

    
3. General Provisions. This Assignment
and Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns. This Assignment and
Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature
page of this Assignment and Assumption by telecopy shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption.
This Assignment and Assumption shall be governed by, and construed in accordance
with, the laws of the State of New York (including Sections 5-1401 and 5-1402 of
the New York General Obligations Law, but excluding all other choice of law and
conflicts of law rules). 










EXHIBIT E 

PLEDGE AND SECURITY AGREEMENT


[ attached separately ] 







EXHIBIT F 

GUARANTY AGREEMENT 

[ attached separately ] 









EXHIBIT G 

FINANCIAL CONDITION CERTIFICATE


     THIS FINANCIAL
CONDITION CERTIFICATE (this “Certificate”) is delivered
pursuant to the Credit Agreement, dated as of July 12, 2013 (the “Credit
Agreement”), among Krispy Kreme Doughnut Corporation, a North Carolina
corporation (the “Borrower”), Krispy Kreme Doughnuts, Inc., a North Carolina corporation
(the “Parent”), the Lenders from time to time parties thereto, and Wells Fargo Bank,
National Association, as Administrative Agent. Capitalized terms used herein
without definition shall have the meanings given to such terms in the Credit
Agreement. 

    
The undersigned hereby certifies for and on behalf of the Parent as
follows: 

    
1. Capacity. The undersigned is, and at
all pertinent times mentioned herein has been, the duly qualified and acting
Chief Financial Officer of the Parent, and in such capacity has responsibility
for the management of the Parent’s financial affairs and for the preparation of
the Parent’s financial statements. The undersigned has, together with other
officers of the Parent, acted on behalf of the Parent in connection with the
negotiation and consummation of the Credit Agreement, the initial extensions of
credit made under the Credit Agreement, the repayment of the Existing Senior
Credit Facilities, and the other Transactions described therein. 

    
2. Procedures. For purposes of this
Certificate, the undersigned has, as of or prior to the date hereof, undertaken
the following activities in connection herewith: 

    
2.1 The
undersigned has carefully reviewed the following: 

		(a)	       	the contents of this Certificate;
	          	 
		(b)		the Credit Agreement (including the exhibits and
      schedules thereto); and
		 
		(c)		the audited and unaudited financial statements of the
      Parent and its Subsidiaries referred to in Section 5.11(a) of the Credit
      Agreement.


     2.2 The undersigned has made
inquiries of certain other officers and personnel of the Parent and its
Subsidiaries with responsibility for financial and accounting matters regarding
(i) whether the unaudited financial statements described in paragraph 2.1(c)
above are in conformity with GAAP applied on a basis consistent with that of the
audited financial statements described in paragraph 2.1(c) above (subject to the
absence of footnotes required by GAAP and subject to normal year-end
adjustments), and whether notes omitted from such unaudited financial statements
would have disclosed any new information that would be necessary to make the
statements contained therein, taken as a whole, not misleading, and (ii) whether
such persons were aware of any events or conditions that, as of the date hereof,
would cause the statements made in paragraph 3 below to be untrue in any
material respect. 







     2.3 With respect to any contingent
liabilities of the Parent and its Subsidiaries on a pro forma basis after giving
effect to the Transactions, the undersigned: 

		(a)		has inquired of certain officers
      and other personnel of the Parent and its Subsidiaries who have
      responsibility for the legal, financial and accounting affairs of the
      Parent and its Subsidiaries, as to the existence and estimated amounts of
      all contingent liabilities known to them;
	          	 
		(b)	     	has confirmed with senior
      accounting officers of the Parent that, to the best of such officers’
      knowledge, (i) all appropriate items have been included in contingent
      liabilities made known to the undersigned in the course of the inquiry of
      the undersigned in connection herewith, and (ii) the amounts relating
      thereto were the maximum estimated amounts of liability reasonably likely
      to result therefrom as of the date hereof, and
		 
		(c)		confirms that, to the best of the
      undersigned’s knowledge, all material contingent liabilities that may
      arise from any pending litigation, asserted claims and assessments,
      guarantees, uninsured risks, and other relevant contingencies and
      circumstances have been considered in making the certification set forth
      herein, and with respect to each such contingent liability the maximum
      estimated amount of liability with respect thereto was used in making such
      certification.


     2.4 The undersigned has conferred
with counsel to the Parent for the purpose of discussing the meaning of the
contents of this Certificate. 

    
3. Certifications. Based on the
foregoing, the undersigned hereby certifies as follows: 

    
3.1 [Intentionally Omitted.] 

    
3.2 The
Parent and its Subsidiaries, taken as a whole, are not insolvent now, and the
incurrence by the Parent and its Subsidiaries of their respective liabilities
and obligations pursuant to the Credit Agreement and the other Credit Documents
and the consummation of the Transactions will not render them insolvent taken as
a whole. The undersigned understands that, in this context, (i) “insolvent”
means that the present fair saleable value of assets is less than the amount
that will be required to be paid on or in respect of the existing debts as such
debts mature in the ordinary course, (ii) “fair value” of assets means the
aggregate amount that could be realized within a reasonable time, either through
collection or sale of such assets at the regular market value as an ongoing
business, conceiving of the latter as the amount that could be obtained for the
property in question within such period by a capable and diligent seller from an
interested buyer who is willing to purchase under ordinary selling conditions,
and (iii) “debts” includes any legal liability, whether matured or unmatured,
liquidated or unliquidated, absolute, fixed or contingent, including any
guaranty or other contingent obligation. 

2







     3.3 The
undersigned reasonably believes that, by the incurrence of their respective
liabilities and obligations pursuant to the Credit Agreement and the other
Credit Documents and the consummation of the Transactions, the Parent and its
Subsidiaries, taken as a whole, will not incur debts beyond their ability to pay
as they mature in the ordinary course (taking into account the timing and
amounts of cash to be payable on or in respect of such debts). The undersigned
has concluded that the realization of current assets in the ordinary course of
business should be sufficient to pay recurring current debt, short-term debt and
long-term debt as such debts mature in their ordinary course, that the cash flow
(including earnings plus non-cash charges to earnings) should be sufficient to
provide cash necessary to repay loans made under the Credit Agreement and other
long-term indebtedness as such debt matures in its ordinary course, and that the
Borrower should have sufficient availability under the Credit Agreement to
satisfy its working capital and short-term liquidity requirements. 

    
3.4 After
giving effect to the consummation of the Transactions, the assets of the Parent
and its Subsidiaries, taken as a whole, do not constitute “unreasonably small
capital” (within the meaning of Section 548(a) of the Bankruptcy Code, 11 U.S.C.
Section 548(a)) for such Persons to carry on their businesses as now conducted
and as proposed to be conducted, taking into account the particular capital
requirements of the businesses conducted and to be conducted by them and the
availability of capital in respect thereof (with reference to, without
limitation, the Borrower’s available credit capacity). 

    
3.5 Neither
the Parent nor any of its Subsidiaries have executed the Credit Agreement or any
other documents mentioned therein, or made any transfer or incurred any
obligations thereunder, with intent to hinder, delay or defraud either present
or future creditors of such Person. 

    
3.6 The
statements made herein by the undersigned are based upon the personal knowledge
of the undersigned, or upon reports and other information given to the
undersigned by supervisory personnel of the Parent having principal and direct
responsibility for the reports and information given, and who in the opinion of
the undersigned are reliable and entitled to be relied upon. The statements made
herein are made in good faith and, to the best of the knowledge and belief of
the undersigned, are reasonable in all material respects. 

    
3.7 The
undersigned understands that the Lenders have performed their own review and
analysis of the financial condition of the Parent and its Subsidiaries, but that
the Lenders are relying on the foregoing statements in connection with the
extension of credit to the Borrower pursuant to the Credit Agreement.


3







     Executed on
behalf of the Parent this ____ day of July, 2013. 


	KRISPY KREME DOUGHNUTS,
      INC.
	 
	 
	By:	
	Name:  	Douglas R. Muir
	Title:	Chief Financial
Officer












Schedule 1.1(a) 

Commitments and Notice Addresses


	Commitments
	 
	Lender	Revolving Credit Commitment
	Wells Fargo Bank, National Association	$40,000,000
	Total	$40,000,000



Notice Addresses

	Party	Address
	
      Borrower 
	
      Krispy Kreme Doughnut
      Corporation
370 Knollwood Street, Suite 500
Winston-Salem, NC
      27103
Attention: Chief Financial Officer
Telephone: (336)
      725-2981
Telecopy: (336) 733-3790 

      with a copy to: 

      Krispy Kreme Doughnut
      Corporation
370 Knollwood Street, Suite 500
Winston-Salem, NC
      27103
Attention: General Counsel
Telephone: (336)
      725-2981
Telecopy: (336) 733-3790 

	
      Wells Fargo Bank, National
      Association 
	
      Wire Instructions: 

      Wells Fargo Bank, N.A.
ABA:
      121000248
Acct: 00698314050720 
Acct
      Name: Wholesale Loan Servicing
Ref: Krispy Kreme Doughnut Corp
      

      Address for notices: 

      Wells Fargo Bank, National
      Association
100 North Main Street
Winston-Salem, North Carolina
      27101
Attention: R. Alan Proctor 
Telephone: (336)
      732-6933
Telecopy: (336) 732-4833 










Schedule 1.1(b) 

Immaterial Subsidiaries


The Borrower designates the following
subsidiaries as Immaterial Subsidiaries on the Closing Date: 

KK Canada Holdings, Inc.
 Krispy Kreme
Canada, Inc.
Krispy Kreme Management I, LLC
Krispy Kreme Management II,
LLC
North Texas Doughnuts, L.P.
Northeast Doughnuts, LLC
Panhandle
Doughnuts, LLC
Rigel Holding, LLC
Southern
Doughnuts, LLC
Southwest Doughnuts, LLC
Krispy Kreme Asia Pacific, Ltd.

HDN Motor Coach, LLC







Schedule 5.1 

Jurisdictions of Organizations


		Jurisdiction of
      Incorporation/
	Legal Name of Credit
      Party	Organization
	Krispy Kreme Doughnut Corporation	North Carolina
	Krispy Kreme Doughnuts, Inc.	North Carolina
	HDN Development Corporation	Kentucky
	KK Canada Holdings, Inc.	North Carolina
	Krispy Kreme Canada, Inc.	North Carolina
	Krispy Kreme Management I, LLC	North Carolina
	Krispy Kreme Management II, LLC	North Carolina
	North Texas Doughnuts, L.P.	Texas
	Northeast Doughnuts, LLC	North Carolina
	Panhandle Doughnuts, LLC	North Carolina
	Rigel Holding, LLC	Nebraska
	Southern Doughnuts, LLC	North Carolina
	Southwest Doughnuts, LLC	North Carolina
	Krispy Kreme Asia Pacific, Ltd.	Hong Kong
	HDN Motor Coach, LLC	North
Carolina









Schedule 5.4 

Consents and Approvals


None. 







Schedule 5.7

Subsidiaries; Joint Ventures

Subsidiaries 

		No. of Shares, Units or
      Interests		No. of Shares, Units,
      Interests,
	Subsidiary	Outstanding	Direct Holder	Etc. Held by Direct
      Holder
	Krispy Kreme Doughnut Corporation	1 share of capital stock	Krispy Kreme Doughnuts, Inc.	1 share of capital stock
	HDN Development Corporation	100 shares of stock	Krispy Kreme Doughnut Corporation	100 shares of stock
	KK Canada Holdings, Inc.	1,100 shares of common stock	Krispy Kreme Doughnut Corporation	1,100 shares of common stock
	Krispy Kreme Asia Pacific Ltd.	10,000 shares of common stock	Krispy Kreme Doughnut Corporation	10,000 shares of common stock
	Krispy Kreme Canada, Inc.	100 shares of common stock	Krispy Kreme Doughnut Corporation	100 shares of common stock
	Krispy Kreme Management I, LLC	N/A	Krispy Kreme Doughnut Corporation	100% LLC Membership Interests
	Krispy Kreme Management II, LLC	N/A	Krispy Kreme Doughnut Corporation	100% LLC Membership Interests
	HDN Motor Coach, LLC	N/A	Krispy Kreme Doughnut Corporation	100% LLC Membership Interests
	North Texas Doughnuts, L.P.	N/A	Panhandle Doughnuts, LLC	99% Limited Partnership
  Interests
	N/A	Krispy Kreme Doughnut Corporation	1% General Partnership
Interests
	Northeast Doughnuts, LLC	N/A	Krispy Kreme Doughnut Corporation	100% LLC Membership Interests
	Panhandle Doughnuts, LLC	N/A	Krispy Kreme Doughnut Corporation	100% LLC Membership Interests
	Rigel Holding, LLC	N/A	Southwest Doughnuts, LLC	100% LLC Membership Interests
	Southern Doughnuts, LLC	N/A	Krispy Kreme Doughnut Corporation	100% LLC Membership Interests
	Southwest Doughnuts, LLC	N/A	Krispy Kreme Doughnut Corporation	100% LLC Membership
  Interests



The partnership existence of PRIZ Doughnuts, LP (“PRIZ”) has been forfeited. The Agent, Lenders, Borrowers and the Parent agree
that PRIZ shall not constitute a Subsidiary under the Credit Agreement so long as the Partnership existence of PRIZ is not
reinstated.







Joint Ventures

	Joint
    Venture	Subsidiary
      Investor	Percentage of
      Ownership
	KremeWorks Canada L.P.	Krispy Kreme Canada, Inc.	25.0%
	KremeWorks, LLC	Krispy Kreme Doughnut Corporation	24.5%
	Krispy Kreme of South Florida, LLC	Krispy Kreme Doughnut Corporation	35.25%
	1456212 Ontario Inc. (f/k/a KremeKo Inc.)
      *	Krispy Kreme Doughnut Corporation	40.64%



* Bankrupt entity which will be dissolved.







Schedule 5.12 

Realty

[attached] 









Schedule 5.12

Real Properties - Fee
Ownership

	Property
Name		Address1		City		St		ZIP		Type
	3	    	1428 West Innes Street	    	Salisbury	    	NC	    	28144	 
        	Company Store
	4		917 North Main Street		High Point		NC		27262		Company Store
	5		1814 Ivy Ave.		Winston-Salem		NC		27105		Commissary
	10		3250 Bragg Boulevard		Fayetteville		NC		28303		Company Store
	12		549 North Person Street		Raleigh		NC		27604		Company Store
	19		2990 E. Franklin Square		Gastonia,		NC		28052		Company Store
	23		6332 Richmond Highway		Alexandria		VA		22306		Company Store
	24	 	4901 Virginia Beach Boulevard		Virginia Beach		VA		23462		Company Store
	28		3400 West Mercury Boulevard		Hampton		VA		23666		Company Store
	40		302 N. Pleasantburg Drive		Greenville		SC		29607		Company Store
	42		6689 Highway #85		Riverdale		GA		30274		Company Store
	44		299 Cobb Parkway, S.		Marietta		GA		30060		Company Store
	45		295 Ponce de Leon Avenue		Atlanta		GA		30308		Company Store
	52		4244 Elvis Presley Boulevard		Memphis		TN		38116		Company Store
	53		6255 Winchester Road		Memphis		TN		38115		Company Store
	54		6201 Kingston Pike		Knoxville		TN		37919		Company Store
	58		5609 Brainerd Road		Chattanooga		TN		37411		Company Store
	59		110 Cox Creek Parkway, South		Florence		AL		35630		Company Store
	62		1901 Gallatin Pike		Madison		TN		37115		Company Store
	63		2103 Elliston Place		Nashville		TN		37203		Parking Lot
	64		408 Thompson Lane		Nashville		TN		37211		Company Store
	74		3920 Seventh Street Road		Louisville		KY		40216		Company Store
	76		3000 Bardstown Road		Louisville		KY		40205		Company Store
	82		11117 San Jose Boulevard		Jacksonville		FL		32223		Company Store
	87		1218 North Memorial Parkway		Huntsville		AL		35801		Company Store
	101		259 South Stratford Road		Winston-Salem		NC		27103		Company Store
	105		9301 East Independence Boulevard
      (Closed for construction temporarily)		Matthews		NC		28105		Company Store
	143	 	4129 Highway 78		Lilburn		GA		30047		Company Store
	154		1733 Mallory Lane		Brentwood		TN		37027		Company Store
	172		810 Cassat Avenue		Jacksonville		FL		32205		Company Store
	180		4141 Melrose Avenue		Roanoke		VA		24017	 	Depot
	197		4242 South Noland Road		Independence		MO		64055		Company Store
	203		720 North Glenstone Ave		Springfield	 	MO		65802		Held for Sale
	245		980 North Ninth Ave.		Pensacola		FL		32501		Company Store
	262		1100 E. County Line Road		Ridgeland		MS		39157		Company Store
	272		2866 Washington Road		Augusta		GA		30909		Company Store
	301		351 Lawton Avenue		Monroe		OH		45050		Commissary
	322		3690 West Dublin-Granville
    Road		Columbus		OH		43235		Company Store
	330		6907 Pearl Road		Middleburg Heights		OH		44130		Company Store
	361		727 N. Burkhardt Road		Evansville		IN		47715		Company Store
	362		5615 N Main Street		Mishawaka		IN		46545		Company Store
	470		8425 N. Florida Avenue		Tampa		FL		33604		Leased to Franchisee
	570		150 Tanger Boulevard		Branson		MO		65616		Leased to Franchisee
	974		3605 Ira E. Woods Avenue		Grapevine		TX		76051		Leased to Franchisee
	975		2600 S. Cooper Street		Arlington		TX		76015		Leased to Franchisee
	1155		633 Evans Street, SW		Atlanta		GA		30310		Leased to Franchisee
	Coventry House		185 Coventry Park Ln		Winston-Salem		NC		27104		House
	Centre Park		3190 Centre Park Blvd		Winston-Salem		NC		27107		Manufacturing and Office
	Distribution Center		331 E 17th St		Winston-Salem		NC		27105		Warehouse
	Ivy Avenue		1814 Ivy Avenue		Winston-Salem		NC		27105		Mix Plant and
  Office









Schedule 5.12

Real Properties - Leasehold
Interests

	Property Name		Lease Payee		Address1		City		St		ZIP		Use		Lease Type
	006 - Greensboro, NC	 
        	Garden Square Acquisition LLC	    	2401 Battleground Ave.	    	Greensboro	    	NC	    	27408	    	Company Store	    	Ground Lease
	007 - Greensboro, NC		Brown Investment Properties, Inc.		3704 High Point Road		Greensboro		NC		27407		Company Store		Space Lease
	012 - Raleigh, NC		Marion V. Aretakis		549 N Person Street		Raleigh		NC		27604		Parking Lot		Parking Lot
	014 - Concord, NC		Craver Properties of Concord, LLC		303 Wilshire Avenue, S.W.		Concord		NC		28025		Commissary		Premises Lease
	016 - Knightdale, NC		Knightdale Centers, LLC		The Shoppes at Midway
    Plantation		Knightdale		NC		27545		Company Store		Space Lease
	019 - Gastonia, NC		Centro Bradley SPE 1 LLC		2990 E. Franklin Square		Gastonia		NC		28052		Easement		Easement
	020D - Staunton, VA		Robert S. Peeler		2230 Croyden Lane		Staunton		VA		24401		Depot		Premises Lease
	022 - Charleston, WV		BAI Riverwalk, L.P.		42 Riverwalk Plaza, McCorkle Ave		Charleston		WV		25303		Company Store		Ground Lease
	022D - South Charleston, WV		Sunshine Real Estate, LLC		4521 McClung Street		South Charleston		WV		25309		Depot		Premises Lease
	036 - Richmond, VA		MORTON G. THALHIMER, INC		4910 West Broad Street		Richmond		VA		23230		Company Store		Ground Lease
	037 - Ashland, VA		Harrison & Bates
    Incorporated		116 Sylvia Road		Ashland		VA		23005		Depot		Space Lease
	041 - Cayce, SC		Indigo Associates LLC		1220 Knox Abbott Dr		Cayce		SC		29033		Company Store		Ground Lease
	046 - Roswell, GA		Dreamality Corp		791 Atlanta Street		Roswell		GA		30075		Company Store		Premises Lease
	049 - Duluth, GA		1500 Pleasant Hill Road Holdings, LLC		1550 Pleasant Hill Road		Duluth		GA		30097		Company Store		Space Lease
	051 - Columbia, SC		Landmark Square, L.P.		6614 Garners Ferry Road		Columbia		SC		29209		Company Store		Premises Lease
	054 - Knoxville, TN		Middlebrook Warehouses, LLC		3414-A Henson Road		Knoxville		TN		37921		Depot		Space Lease
	055 - Knoxville, TN		RPAI US Management LLC		4842 North Broadway		Knoxville		TN		37918		Company Store		Ground Lease
	056 - Mall of Georgia, GA		J P Capco Realty LLC		3387 Buford Drive		Buford		GA		30519		Company Store		Ground Lease
	059 - Florence, AL		Lowe's Home Centers, Inc.		110 Cox Creek Parkway		Florence		AL		35630		Easement		Easement
	063 - West End - Nashville, TN		Kermit C. Stengel Co.		2103 Elliston Place		Nashville		TN		37203		Company Store		Ground Lease
	064 - Nashville, TN		Patricia B. Warner		408 Thompson Lane		Nashville		TN		37211		Parking Lot		Ground Lease
	065D - Nashville, TN		Village Green II		508 Mapleleaf Drive		Nashville		TN		37210		Commissary		Space Lease
	070 - Woodbridge, VA		Wise Investments, LLC		14879 Persistence Drive		Woodbridge		VA		22191		Depot		Space Lease
	073D - Virginia Beach, VA		Central Drive Condos, LLC		541 Central Drive		Virginia Beach		VA		23454		Depot	 	Premises Lease
	075 - Clarksville, IN	 	Dennis Wesley Company, Inc.	 	1124 Veterans Parkway		Clarksville		IN		47129		Company Store		Space Lease
	076 - Louisville, KY		Billou Corporation		3000 Bardstown Road	 	Louisville		KY		40205-3009		Company Store		Easement
	077 - Louisville, KY		BRE Retail Residual Owner 2
    LLC		9569 Taylorsville Road		Louisville		KY		40299		Company Store		Space Lease
	085 - Savannah, GA		TGL, LLC		2749 Skidaway Road		Savannah		GA		31404-4409		Company Store		Premises Lease
	085 - Savannah, GA		New Plan Victory Square, LLC		2749 Skidaway Road		Savannah		GA		31404-4409	 	Parking Lot		Parking Lot
	086 - Savannah, GA		TGL, LLC		11506 Abercorn Street		Savannah		GA	 	31419-1902		Company Store		Premises Lease
	089 - Destin, FL		Charles C. Scruggs, III and Sharon
      Scruggs		795 Highway 98 East		Destin	 	FL		32541		Company Store		Premises Lease
	090 - Montgomery, AL		Plaza East LLC		5474 Atlanta Highway		Montgomery		AL		36109-3326		Company Store		Ground Lease
	095 - Greenville, SC		FLK Enterprises, LLC		1215 Woodruff Road		Greenville		SC		29615		Company Store		Premises Lease
	100 - Lexington, SC		Scarafoni Associates SC, LLC		5594-A Sunset Boulevard		Lexington		SC		29072-6500		Company Store		Space Lease
	101 - Winston-Salem, NC Parking Lot
      1		Norfolk Southern Corporation		259 South Stratford Road		Winston-Salem		NC		27103		Parking Lot		Parking Lot
	101 - Winston-Salem, NC Parking Lot 2		Norfolk Southern Railway Company		259 South Stratford Road		Winston-Salem		NC		27103		Parking Lot		Parking Lot
	110 - Winston-Salem, NC		Margate Plaza, Inc.		5914 University Parkway		Winston-Salem		NC		27105-1342		Company Store		Space Lease
	111 - Smyrna, TN		Ross Creek Place LLC		434 Sam Ridley Parkway		Smyrna		TN		37167		Company Store		Space Lease
	114 - Baltimore, MD		St. John Properties, Inc. - D		2505 Lord Baltimore Drive		Baltimore		MD		21244		Commissary		Space Lease
	116 - Richmond, VA - To be Constructed		Stonebridge Realty Holdings LLC		7000 Tim Price Way		Richmond		VA		23225		Future Company Store		Ground Lease
	117 - Fredricksburg, VA		Central Park 1211, LLC		1891 Carl D Silver Parkway		Fredricksburg		VA		22401-4969		Company Store		Ground Lease
	121 - Virginia Beach, VA		Two Farms, Inc.		5832 Northampton Boulevard		Virginia Beach		VA		23455		Company Store		Space Lease
	124 - Portsmouth, VA		VB Hospitality II, LLC		4028 Victory Boulevard		Portsmouth		VA		23701		Company Store		Space Lease
	126 - Charlotte, NC		Armand T. Daniel, Jr		119 N. Sharon Amity Road		Charlotte		NC		28211		Company Store		Premises Lease
	132 - Fuquay Varina, NC		Fuquay Commons LLLP		728 N. Judd Pkwy		Fuquay Varina		NC		27526		Company Store		Space Lease
	134 - Wake Forest, NC		Trademark Properties, Inc.		11721 Retail Drive		Wake Forest		NC		27587		Company Store		Space Lease
	135 - Chapel Hill, NC		Munch Family Properties LLC		157 East Franklin Street		Chapel Hill		NC		27514-3561		Company Store		Space Lease
	136 - Indian Land, SC		Indian Land Investors, LLC		10092 Charlotte Highway		Indian Land		SC		29707		Company Store		Space Lease









Schedule 5.12

Real Properties - Leasehold
Interests

	Property
Name		Lease Payee		Address1		City		St		ZIP		Use		Lease
Type
	137 - Rock Hill, SC	    	Galleria Celanese, LLC	    	1525 Celanese Road, Suite 101	    	Rock Hill	    	SC	    	29732	    	Company Store	    	Space Lease
	139 - Columbia, SC		Clemson Road Associates, LLC		110 Clemson Road		Columbia		SC		29229		Company Store		Space Lease
	140 - Burlington, NC - Under
      Construction		KKHMR LLC		182 Huffman Mill Road		Burlington		NC		27215		Future Company Store		Ground Lease
	146 - Atlanta, GA - Under
      Construction		Halpern Enterprises Inc		5768 Buford Highway, Suite 28		Atlanta		GA		30340		Future Company Store		Ground Lease
	148 - Roswell, GA - Under
      Construcion		Mansell Shops, LLC		10779 Alpharetta Highway		Roswell		GA		30076		Future Company Store		Ground Lease
	149 - Norcross, GA		SVN Gwinnett Park, LLC		4320 International Boulevard		Norcross		GA		30093		Commissary		Space Lease
	152 - Knoxville, TN		Spartan Holdings, LLC		11212 Kingston Pike		Knoxville		TN		37934		Company Store		Ground Lease
	158 - Johnson City, TN		Norman P. Snyder, Trustee		1100 West Market Street		Johnson City		TN		37604		Company Store		Premises Lease
	159 - Kingsport, TN		Milhorn & Pierce		5644 Ft. Henry Drive		Kingsport		TN		37663		Depot		Space Lease
	163 - Stockbridge, GA - To be
      Constructed		JEM Enterprises Inc		120 Georgia Highway 138		Stockbridge		GA		30281		Future Company Store		Ground Lease
	195 - Overland Park, KS		Indian Creek Shopping Center
      Company		10390 Metcalf Avenue		Overland Park		KS		66212		Company Store		Ground Lease
	196 - Merriam, KS		Sierra Management Corp		8805 Shawnee Mission Parkway		Merriam		KS		66202		Company Store		Ground Lease
	200 - Long Island City, NY - To be
      Upfitted		J Werwaiss LLC		45-48 37th Street		Long Island City		NY		11101		Future Commissary		Space Lease
	201 - Wichita, KS		Gregory A. Neville		8448 W. Central		Wichita		KS		67212		Subleased		Ground Lease
	208 - Shreveport, LA		MSCI 2006-HQ10 Youree Drive,
    LLC		7251 Youree Drive		Shreveport		LA		71105		Company Store		Ground Lease
	219 - New York, NY		National Railroad Passenger
    Corp.		2 Penn Station		New York		NY		10121		Company Store		Space Lease
	222 - Glen Burnie, MD		AMF Bowling Center, Inc.		6604 Ritchie Highway		Glen Burnie		MD		21061		Subleased		Ground Lease
	226 - Rockville, MD		FG Retail Group, LLC		14919 Shady Grove Road		Rockville		MD		20850		Company Store		Ground Lease
	232 - Jacksonville, FL		Atlantic Lowes, LLC		12973 Atlantic Blvd		Jacksonville		FL		32225		Company Store		Ground Lease
	237 - Columbus, OH		William James Briggs		1021 Polaris Parkway		Columbus		OH		43240		Company Store		Ground Lease
	245D - Pensacola, FL		Keenan Properties of Northwest
      Florida		3240 Fairfield Avenue		Pensacola		FL		32505		Depot		Premises Lease
	262 - Ridgeland, MS		Townline Square, LP		1100 E. County Line Road		Ridgeland		MS		39157		Easement		Easement
	271 - Augusta, GA		David Butler		1644 Gordon Highway		Augusta		GA		30906		Company Store		Premises Lease
	324 - Columbus, OH		YDT Sinclair Road, LLC		884 Freeway Drive North		Columbus		OH		43229		Depot		Space Lease
	325 - Akron, OH		Robert B. Simmons, LLC		354 South Maple		Akron		OH		44302		Company Store		Premises Lease
	330 - Middleburg Heights, OH Parking
      Lot		Centro GA Southland Shopping Center
      LLC		6907 Pearl Road	 	Middleburg Heights		OH		44130		Parking Lot		Parking Lot
	337 - Troy, MI		Sears, Roebuck and Company	 	208 W. 14 Mile Road		Troy		MI		48083		Company Store		Ground Lease
	338 - Allen Park, MI	 	DRM Development of Allen Park,
      LLC	 	15050 Southfield Road		Allen Park		MI		48101		Company Store		Ground Lease
	340 - Kettering, OH	 	Randy L Gunlock d/b/a RLG Woodman
      Ltd		2001 East Dorothy Lane		Kettering		OH		45420		Company Store		Ground Lease
	346 - Grand Rapids, MI		Centerpointe Partners LLC		2700 East Beltline Avenue SE		Grand Rapids	 	MI		49546-5914		Company Store	 	Ground Lease
	3509 - Washington, DC		1350 Connecticut Ave. LP		1350 Connecticut Ave., N.W.		Washington		DC		20036	 	Company Store		Space Lease
	355 - Fort Wayne, IN		Coldwater Shoppes LLC		5412 Coldwater Road		Fort Wayne		IN	 	46825		Subleased		Space Lease
	359 - Indianapolis, IN		2610 Fortune Circle East Holdings,
      LLC		1940 Executive Drive		Indianapolis		IN		46241		Commissary		Space Lease
	364 - Lexington, KY		Lexro Properties, LLC		2893 Richmond Road		Lexington		KY		40509		Company Store		Ground Lease
	364D - Lexington, KY		Lexro Properties, LLC		2893 Richmond Road, #120		Lexington		KY		40509		Depot		Space Lease
	370 - Winston-Salem, NC		Highwoods Realty Limited
      Partnership		370 Knollwood Street		Winston-Salem		NC		27103		Office		Premises Lease
	568 - Wichita, KS		Genwood Development Co., Inc.		7777 East Central		Wichita		KS		67206		Subleased		Ground Lease
	569 - Springfield, MO		Jared Enterprises, Inc.		3850 S. Campbell		Springfield		MO		65807-5340		Subleased		Ground Lease
	770 - Mesa, AZ		Levine Investments LP		6626 E Superstition Springs
    Blvd		Mesa		AZ		85206		Subleased		Ground Lease
	E01 - Winston-Salem, NC		East Bound & Down, LLC		1118 North Trade Street		Winston-Salem		NC		27101		Warehouse		Space
Lease












Schedule 5.16 

Intellectual Property 

The registered Intellectual Property
consists of all of the Patents, Copyrights, and Trademarks listed on Annexes D,
E, and F, respectively, to the Security Agreement, which Annexes are
incorporated into this Schedule 5.16 by reference. 







Schedule 8.3 

Liens 

The licenses arising out of and subject
to that certain Trademark License Agreement dated May 27, 1996, between HDN
Development Corporation and Krispy Kreme Doughnut Corporation. 

Krispy Kreme Doughnuts,
Inc. 

	Secured Party	Jurisdiction	File Number	File Date
	CSI Leasing,	North
      Carolina	20110079203G	9/15/11
	Inc.	Secretary of State		


Krispy Kreme Doughnut
Corporation 

	Secured Party	Jurisdiction	File Number	File Date
	Vesey Air,	North
      Carolina	Original
      Filing:	
	LLC	Secretary of
      State	
      20000095540
	9/25/00
			 	
			Continuation:	
			20050060855B	6/24/05
			 	
			Continuation:	
			20100048314E	6/17/10
	Cisco Systems	North
      Carolina	Original
      Filing:	
	Capital	Secretary of
      State	20050119849M	12/16/05
	Corporation			
			Continuation:	
			20100093531F	12/3/10
	Associated	North
      Carolina	20060035866H	4/11/06
	Bank, N.A.	Secretary of
      State		
			Continuation:	
	United Leasing		20110014128A	2/17/11
	Associates of			
	America, Ltd.			
	CSI Leasing,	North
      Carolina	20080069962C	7/30/08
	Inc.	Secretary of State		









	Secured Party	Jurisdiction	File Number	File Date
	CSI Leasing,	North
      Carolina	20080086854B	9/24/08
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20090000617G	1/5/09
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20090041280H	5/26/09
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20090071810K	9/18/09
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20090084829C	11/10/09
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20100012991G	2/18/10
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20100046951K	6/14/10
	Inc.	Secretary of State		
	SG Equipment	North
      Carolina	20100052913E	7/6/10
	Finance USA	Secretary of
      State		
	Corp.			
	SG Equipment	North
      Carolina	20100079588A	10/11/10
	Finance USA	Secretary of
      State		
	Corp.			
	CSI Leasing,	North
      Carolina	20100096022C	12/14/10
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20100096026H	12/14/10
	Inc. (partially	Secretary of
      State		
	assigned to SG			
	Equipment			
	Finance USA			
	Corp.)			
	CSI Leasing,	North
      Carolina	20100096030B	12/14/10
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20100096032E	12/14/10
	Inc.	Secretary of State		









	Secured Party	Jurisdiction	File Number	File Date
	CSI Leasing,	North
      Carolina	20100096044H	12/14/10
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20100096053H	12/14/10
	Inc.	Secretary of State		
	SG Equipment	North
      Carolina	20100098156C	12/21/10
	Finance USA	Secretary of
      State		
	Corp.			
	CSI Leasing,	North
      Carolina	20110021335K	3/15/11
	Inc.	Secretary of State		
	SG Equipment	North
      Carolina	20110060104G	7/12/11
	Finance USA	Secretary of
      State		
	Corp.			
	CSI Leasing,	North
      Carolina	20110060113G	7/12/11
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20110081956E	9/26/11
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20110086119M	10/10/11
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20110086737G	10/12/11
	Inc.	Secretary of State		
	CSI Leasing,	North
      Carolina	20120003469J	1/11/12
	Inc.	Secretary of State	 	
	CSI Leasing,	North
      Carolina	20120062419J	7/2/12
	Inc.	Secretary of State		
	De Lage	North
      Carolina	20120110964H	12/3/12
	Landen	Secretary of
      State		
	Financial			
	Services, Inc.			
	CSI Leasing,	North
      Carolina	20120110972G	12/3/12
	Inc.	Secretary of State		
	CSI Leasing,
Inc.	North Carolina
Secretary of State	20130057891H	6/14/13










Schedule 8.7 

Transactions with Affiliates


     None. 







Schedule 8.11 

Certain Restrictions 

None.