Document:

Exhibit 10.1

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

 

among

 

 

ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.,

as Borrower,

 

 

CERTAIN SUBSIDIARIES OF THE BORROWER,

as Guarantors,

 

 

THE LENDERS NAMED HEREIN

 

 

AND

 

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Syndication Agent,

 

WELLS FARGO BANK, N.A.

and

US BANK NATIONAL ASSOCIATION,

as Co-Documentation Agents

 

and

 

BANK OF AMERICA, N.A.,

as Administrative Agent

 

 

Dated as of July 16, 2004

 

 

Arranged by:

 

BANC OF AMERICA SECURITIES LLC

and

WACHOVIA CAPITAL MARKETS, LLC,

as Joint Lead Arrangers and Joint Book Managers

 

 

TABLE OF CONTENTS

 

	
  SECTION 1 DEFINITIONS

  	
   

  
	
  1.1

  	
  Definitions.

  	
   

  
	
  1.2

  	
  Computation of Time Periods.

  	
   

  
	
  1.3

  	
  Accounting Terms; Certain Calculations

  	
   

  
	
  1.4

  	
  Letter of Credit Amounts.

  	
   

  
	
  SECTION 2 CREDIT FACILITIES

  	
   

  
	
  2.1

  	
  Revolving Loans.

  	
   

  
	
  2.2

  	
  Borrowing Procedures.

  	
   

  
	
  2.3

  	
  Interest.

  	
   

  
	
  2.4

  	
  Repayment.

  	
   

  
	
  2.5

  	
  Revolving Notes.

  	
   

  
	
  2.6

  	
  Additional Provisions relating to Letters
  of Credit.

  	
   

  
	
  2.7

  	
  Additional Provisions relating to Swingline
  Loans.

  	
   

  
	
  2.8

  	
  Extension of Termination Date.

  	
   

  
	
  SECTION 3 OTHER PROVISIONS RELATING TO
  CREDIT FACILITIES

  	
   

  
	
  3.1

  	
  Default Rate.

  	
   

  
	
  3.2

  	
  Extension and Conversion.

  	
   

  
	
  3.3

  	
  Prepayments.

  	
   

  
	
  3.4

  	
  Termination and Reduction of Commitments

  	
   

  
	
  3.5

  	
  Fees.

  	
   

  
	
  3.6

  	
  Capital Adequacy.

  	
   

  
	
  3.7

  	
  Inability To Determine Interest Rate.

  	
   

  
	
  3.8

  	
  Illegality.

  	
   

  
	
  3.9

  	
  Requirements of Law.

  	
   

  
	
  3.10

  	
  Taxes.

  	
   

  
	
  3.11

  	
  Funding Losses.

  	
   

  
	
  3.12

  	
  Certain Limitations.

  	
   

  
	
  3.13

  	
  Pro Rata Treatment; Administrative Agent’s
  Clawback.

  	
   

  
	
  3.14

  	
  Sharing of Payments.

  	
   

  
	
  3.15

  	
  Payments, Computations, Etc.

  	
   

  
	
  3.16

  	
  Evidence of Debt.

  	
   

  
	
  SECTION 4 GUARANTY

  	
   

  
	
  4.1

  	
  The Guarantee.

  	
   

  
	
  4.2

  	
  Obligations Unconditional.

  	
   

  
	
  4.3

  	
  Reinstatement.

  	
   

  
	
  4.4

  	
  Certain Additional Waivers.

  	
   

  
	
  4.5

  	
  Remedies.

  	
   

  
	
  4.6

  	
  Rights of Contribution.

  	
   

  
	
  4.7

  	
  Continuing Guarantee.

  	
   

  
	
  SECTION 5 CONDITIONS

  	
   

  
	
  5.1

  	
  Conditions to Closing.

  	
   

  
	
  5.2

  	
  Conditions to All Extensions of Credit.

  	
   

  
	
  SECTION 6 REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
  6.1

  	
  Financial Condition.

  	
   

  
	
  6.2

  	
  No Changes.

  	
   

  

 

i

 

	
  6.3

  	
  Organization; Existence; Compliance with
  Law.

  	
   

  
	
  6.4

  	
  Power; Authorization; Enforceable
  Obligations.

  	
   

  
	
  6.5

  	
  No Legal Bar.

  	
   

  
	
  6.6

  	
  No Material Litigation.

  	
   

  
	
  6.7

  	
  No Default.

  	
   

  
	
  6.8

  	
  Ownership of Property; Liens.

  	
   

  
	
  6.9

  	
  Intellectual Property.

  	
   

  
	
  6.10

  	
  No Burdensome Restrictions.

  	
   

  
	
  6.11

  	
  Taxes.

  	
   

  
	
  6.12

  	
  ERISA

  	
   

  
	
  6.13

  	
  Governmental Regulations, Etc.

  	
   

  
	
  6.14

  	
  Subsidiaries.

  	
   

  
	
  6.15

  	
  Purpose of Extensions of Credit.

  	
   

  
	
  6.16

  	
  Environmental Matters.

  	
   

  
	
  6.17

  	
  Obligations under Leases.

  	
   

  
	
  6.18

  	
  Shareholder Pledge Agreement.

  	
   

  
	
  6.19

  	
  Disclosure.

  	
   

  
	
  6.20

  	
  Bank Accounts.

  	
   

  
	
  6.21

  	
  Solvency.

  	
   

  
	
  6.22

  	
  Collateral Matters.

  	
   

  
	
  SECTION 7 AFFIRMATIVE COVENANTS

  	
   

  
	
  7.1

  	
  Financial Statements.

  	
   

  
	
  7.2

  	
  Certificates; Other Information.

  	
   

  
	
  7.3

  	
  Notices.

  	
   

  
	
  7.4

  	
  Payment of Obligations.

  	
   

  
	
  7.5

  	
  Conduct of Business and Maintenance of
  Existence.

  	
   

  
	
  7.6

  	
  Maintenance of Property; Insurance.

  	
   

  
	
  7.7

  	
  Inspection of Property; Books and Records;
  Discussions.

  	
   

  
	
  7.8

  	
  Environmental Laws.

  	
   

  
	
  7.9

  	
  Financial Covenants.

  	
   

  
	
  7.10

  	
  [Reserved].

  	
   

  
	
  7.11

  	
  Additional Guaranties and Stock Pledges.

  	
   

  
	
  7.12

  	
  Ownership of Subsidiaries.

  	
   

  
	
  7.13

  	
  Use of Proceeds.

  	
   

  
	
  7.14

  	
  Acknowledgment of Grant of Security Interest in Deposit Accounts.

  	
   

  
	
  7.15

  	
  Qualifying IPO.

  	
   

  
	
  SECTION 8 NEGATIVE COVENANTS

  	
   

  
	
  8.1

  	
  Indebtedness.

  	
   

  
	
  8.2

  	
  Liens.

  	
   

  
	
  8.3

  	
  Consolidation, Merger, Divestiture, etc.

  	
   

  
	
  8.4

  	
  Acquisitions.

  	
   

  
	
  8.5

  	
  Investments.

  	
   

  
	
  8.6

  	
  Change in Fiscal Year; Change in Legal
  Name, State of Formation or Structure.

  	
   

  
	
  8.7

  	
  Restricted Payments.

  	
   

  
	
  8.8

  	
  Sale Leasebacks.

  	
   

  
	
  8.9

  	
  No Further Negative Pledges.

  	
   

  

 

ii

 

	
  8.10

  	
  No Foreign Subsidiaries.

  	
   

  
	
  8.11

  	
  Public Offering.

  	
   

  
	
  SECTION 9 EVENTS OF DEFAULT

  	
   

  
	
  9.1

  	
  Events of Default.

  	
   

  
	
  9.2

  	
  Acceleration; Remedies.

  	
   

  
	
  SECTION 10 ADMINISTRATIVE AGENT

  	
   

  
	
  10.1

  	
  Appointment and Authorization of
  Administrative Agent.

  	
   

  
	
  10.2

  	
  Delegation of Duties.

  	
   

  
	
  10.3

  	
  Liability of Administrative Agent.

  	
   

  
	
  10.4

  	
  Reliance by Administrative Agent.

  	
   

  
	
  10.5

  	
  Notice of Default.

  	
   

  
	
  10.6

  	
  Credit Decision; Disclosure of Information
  by Administrative Agent.

  	
   

  
	
  10.7

  	
  Indemnification of Administrative Agent.

  	
   

  
	
  10.8

  	
  Administrative Agent in its Individual
  Capacity.

  	
   

  
	
  10.9

  	
  Successor Administrative Agent.

  	
   

  
	
  10.10

  	
  Other Agents; Lead Managers.

  	
   

  
	
  10.11

  	
  Administrative Agent May File Proofs of
  Claim.

  	
   

  
	
  10.12

  	
  Collateral and Guaranty Matters.

  	
   

  
	
  10.13

  	
  Subordination Documents.

  	
   

  
	
  SECTION 11 MISCELLANEOUS

  	
   

  
	
  11.1

  	
  Notices and Other Communications; Facsimile Copies.

  	
   

  
	
  11.2

  	
  Right of Set-Off.

  	
   

  
	
  11.3

  	
  Successors and Assigns.

  	
   

  
	
  11.4

  	
  No Waiver; Remedies Cumulative.

  	
   

  
	
  11.5

  	
  Expenses; Indemnity; Damage Waiver.

  	
   

  
	
  11.6

  	
  Amendments, Waivers and Consents.

  	
   

  
	
  11.7

  	
  Counterparts.

  	
   

  
	
  11.8

  	
  Headings.

  	
   

  
	
  11.9

  	
  Survival of Indemnity and Representations
  and Warranties.

  	
   

  
	
  11.10

  	
  Governing Law; Submission to Jurisdiction;
  Venue.

  	
   

  
	
  11.11

  	
  Severability.

  	
   

  
	
  11.12

  	
  Entirety.

  	
   

  
	
  11.13

  	
  Binding Effect; Termination.

  	
   

  
	
  11.14

  	
  Confidentiality.

  	
   

  
	
  11.15

  	
  USA PATRIOT Act Notice.

  	
   

  
	
  11.16

  	
  Notice by Borrower regarding Nonpublic
  Information.

  	
   

  
	
  11.17

  	
  Consent to Security Interest in Deposit
  Accounts.

  	
   

  
	
  11.18

  	
  Conflict.

  	
   

  

 

iii

 

SCHEDULES

 

	
  Schedule 2.1

  	
   

  	
  Lenders
  and Commitments

  
	
  Schedule 2.2

  	
   

  	
  Form
  of Notice of Borrowing

  
	
  Schedule 2.5

  	
   

  	
  Form
  of Revolving Note

  
	
  Schedule 2.6

  	
   

  	
  Existing
  Letters of Credit

  
	
  Schedule 3.2

  	
   

  	
  Form
  of Notice of Extension/Conversion

  
	
  Schedule 5.1(h)-1

  	
   

  	
  Form
  of Amendment to Senior Subordination Agreement

  
	
  Schedule 5.1(h)-2

  	
   

  	
  Form
  of Amendment to Junior/Senior Subordination Agreement

  
	
  Schedule 6.9

  	
   

  	
  Intellectual
  Property

  
	
  Schedule 6.14

  	
   

  	
  Subsidiaries

  
	
  Schedule 6.20

  	
   

  	
  Bank
  Accounts

  
	
  Schedule 6.22(a)

  	
   

  	
  Locations
  Owned and Leased Real Property

  
	
  Schedule 6.22(b)

  	
   

  	
  Locations
  of Tangible Personal Property

  
	
  Schedule 6.22(c)

  	
   

  	
  Chief
  Executive Office, Etc.

  
	
  Schedule 6.22(d)

  	
   

  	
  Changes
  in Legal Name, State of Formation or Structure

  
	
  Schedule 7.2

  	
   

  	
  Form
  of Officer’s Compliance Certificate

  
	
  Schedule 7.11(a)

  	
   

  	
  Form
  of Joinder Agreement

  
	
  Schedule 7.11(b)

  	
   

  	
  Form
  of Shareholder Pledge Agreement

  
	
  Schedule 8.1

  	
   

  	
  Indebtedness

  
	
  Schedule 11.1

  	
   

  	
  Certain
  Notice Addresses

  
	
  Schedule 11.3

  	
   

  	
  Form
  of Assignment and Assumption

  

 

iv

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS
AMENDED AND RESTATED CREDIT AGREEMENT (the “Credit Agreement”) dated as of
July 16, 2004 is by and among ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.,
a Delaware corporation (the “Borrower”), the Guarantors (defined
herein), the Lenders (defined herein) and BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”).

 

W I T N E S S E T H

 

WHEREAS,
revolving credit facilities (the “Existing Credit Facilities”) have been
established in favor of the Borrower pursuant to that Amended and Restated
Credit Agreement (as amended, modified, supplemented and extended, the “Existing
Credit Agreement”) dated as of September 30, 2002 among the Borrower,
the guarantors identified therein, the lenders identified therein and Bank of
America, N.A., as administrative agent;

 

WHEREAS,
the Borrower has requested certain modifications to the Existing Credit
Facilities;

 

WHEREAS,
the lenders have agreed to amend and restate the Existing Credit Agreement on
the terms and conditions set forth herein; and

 

WHEREAS,
this Credit Agreement is given in amendment to, restatement of and substitution
for the Existing Credit Agreement.

 

NOW,
THEREFORE, IN CONSIDERATION of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

SECTION 1

DEFINITIONS

 

1.1                                 Definitions.

 

As
used in this Credit Agreement, the following terms shall have the meanings
specified below unless the context otherwise requires:

 

“Acquisition”
means any transaction in which any member of the Consolidated Group directly or
indirectly (i) acquires all or
substantially all of (A) the Property of
another Person or (B) any division,
business unit or product line of another Person, in each case whether through a
purchase of assets, merger or otherwise, or (ii)
acquires (in one transaction or as the most recent transaction in a series of
transactions) control of at least a majority of the Voting Stock of a
corporation, partnership, joint venture or limited liability company, other
than the acquisition of Voting Stock of a Wholly Owned Subsidiary solely in
connection with the organization and capitalization of that Subsidiary by a
member of the Consolidated Group.

 

“Adjusted
Transaction Receivables” means the sum of (a) all Transaction Receivables minus
(b) Excluded Transaction Receivables, other than any such Transaction
Receivables which have been charged-off by the applicable member of the
Consolidated Group.

 

“Administrative
Agent” shall have the meaning assigned to such term in the heading hereof,
together with any successors or assigns.

 

 

“Administrative
Agent’s Fee Letter” means that certain letter agreement dated as of
March 25, 2004 among the Administrative Agent, the Arranger and the
Borrower, as amended, modified, supplemented or replaced from time to time.

 

“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by
the Administrative Agent.

 

“Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person.  For purposes of this
definition, “control” when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

 

“Agent-Related
Persons” means the Administrative Agent, together with its Affiliates
(including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.

 

“Aggregate
Revolving Committed Amount” shall have the meaning given to such term in
Section 2.1(a).

 

“Applicable
Percentage” means, for any day, the rate per annum set forth below opposite
the applicable Consolidated Senior Leverage Ratio then in effect, it being
understood that the Applicable Percentage for (i) Base Rate Loans shall be the
percentage set forth under the column “Base Rate Loans”, (ii) Eurodollar Loans
shall be the percentage set forth under the column “Eurodollar Loans”, (iii)
the Letter of Credit Fee shall be the percentage set forth under the column
“Eurodollar Loans”, and (iv) the Commitment Fee shall be the percentage set
forth under the column “Commitment Fee”.

 

	
  Pricing

  Level

  	
   

  	
  Consolidated Senior

  Leverage Ratio

  	
   

  	
  Eurodollar Loans

  	
   

  	
  Base Rate Loans

  	
   

  	
  Commitment

  Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  Less than or equal to 0.5:1.0

  	
   

  	
  2.50

  	
  %

  	
  0.75

  	
  %

  	
  0.50

  	
  %

  
	
  II

  	
   

  	
  Less than or equal to 1.0:1.0 but greater than 0.5:1.0

  	
   

  	
  2.75

  	
  %

  	
  1.00

  	
  %

  	
  0.50

  	
  %

  
	
  III

  	
   

  	
  Less than or equal to 1.5:1.0 but greater than 1.0:1.0

  	
   

  	
  3.00

  	
  %

  	
  1.25

  	
  %

  	
  0.50

  	
  %

  
	
  IV

  	
   

  	
  Greater than 1.5:1.0

  	
   

  	
  3.25

  	
  %

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  

 

The
Applicable Percentage shall be determined and adjusted quarterly on the date
(each a “Rate Determination Date”) five (5) Business Days after the date
by which the annual and quarterly compliance certificates and related financial
statements are required to be furnished to the Administrative Agent in
accordance with the provisions of Section 7.1(a), Section 7.1(b) and
Section 7.2(b) (the “Required Financial Information”), as
appropriate; provided that:

 

(a)                                  the initial Applicable Percentages shall be
based on Pricing Level III and shall remain in effect at such Pricing Level
until the first Rate Determination Date to occur after the Closing Date, and

 

(b)                                 notwithstanding the foregoing, in the event
any Required Financial Information is not delivered to the Administrative Agent
by the date required by Section 7.1(a), Section 7.1(b)

 

2

 

or
Section 7.2(b), as appropriate, the Applicable Percentages shall be based
on Pricing Level III until the date five (5) Business Days after the
appropriate Required Financial Information is delivered to the Administrative
Agent, whereupon the Applicable Percentages shall thereafter be adjusted (until
the next Rate Determination Date) based on the information contained in such
Required Financial Information.

 

Subject
to the qualifications set forth above, each Applicable Percentage shall be
effective from a Rate Determination Date until the next Rate Determination
Date.  The Administrative Agent shall
determine the appropriate Applicable Percentages in the pricing matrix promptly
upon receipt of the quarterly or annual compliance certificate and related
financial information and shall promptly notify the Borrower and the Lenders of
any change thereof.  Such determinations
by the Administrative Agent shall be conclusive absent manifest error.  Adjustments in the Applicable Percentages
shall be effective as to existing Extensions of Credit as well as new
Extensions of Credit made thereafter.

 

“Approved
Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender, provided that such Fund regularly
participates in revolving credit facilities similar to those provided under the
Credit Agreement.

 

“Arranger”
means each of Banc of America Securities
LLC and Wachovia Capital Markets, LLC in its capacity as joint lead arranger
and joint book manager.

 

“Assignment
and Assumption” means a written assignment and assumption agreement in
substantially the form of Schedule 11.3.

 

“Auto-Extension
Letter of Credit” has the meaning set forth in Section 2.6(a)(iii).

 

“Bank
of America” means Bank of America, N.A. and its successors.

 

“Bankruptcy
Code” means the Bankruptcy Code in Title 11 of the United States Code, as
amended, modified, succeeded or replaced from time to time.

 

“Bankruptcy
Event” means, with respect to any Person, the occurrence of any of the
following with respect to such Person: (i) any Governmental Authority having
jurisdiction over such Person shall enter a decree or order for relief in
respect of such Person in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there shall be
commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case, proceeding
or other action shall remain undismissed, undischarged or unbonded for a period
of sixty (60) consecutive days; or (iii) such Person shall commence a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part
of its Property or make any general assignment for the benefit of creditors; or
(iv) such Person shall be unable to, or shall admit in writing its inability
to, pay its debts generally as they become due.

 

3

 

“Base
Rate” means for any day a fluctuating rate per annum equal to the higher of
(a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate.”  The “prime rate” is
a rate set by Bank of America based upon various factors including Bank of
America’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. 
Any change in the “prime rate” announced by Bank of America shall take
effect at the opening of business on the day specified in the public
announcement of such change.

 

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

 

“Borrower”
means Advance America, Cash Advance Centers, Inc., a Delaware corporation, as
referenced in the opening paragraph, and its permitted successors and assigns.

 

“Borrower
Pledge Agreement” means the Amended and Restated Borrower Pledge Agreement
dated as of the Closing Date given by the Borrower to the Administrative Agent
to secure the obligations of the Credit Parties under the Credit Documents, as
amended and modified from time to time.

 

“Branch
Operating Income” means for each branch operating location for members of
the Consolidated Group, on a branch-by-branch basis, for any period, the sum of
(a) net income (but excluding for
purposes hereof, extraordinary gains and losses and gains or losses from the
sale or disposition of assets and, in each case, related tax effects thereon
and any bad debt expense accrued in excess of the actual bad debt write-off net
of recoveries) plus (b) in the
case of the remaining components, to the extent deducted in determining net
income, the sum of (i) interest expense,
(ii) all provisions for federal, state
and local income taxes, (iii)
amortization, (iv) corporate, general and
administrative expenses, and (v) fees
charged by the Borrower or the Borrower’s Subsidiaries to each branch, in each
case determined in accordance with GAAP.

 

“Business
Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in Charlotte, North Carolina, Spartanburg, South Carolina or
New York, New York are authorized or required by law to close, except  that,
when used in connection with a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in Dollar deposits in the London
interbank eurodollar market.

 

“Capital
Lease” means, as applied to any Person, any lease of any Property by that
Person as lessee which, in accordance with GAAP, is or should be accounted for
as a capital lease on the balance sheet of that Person.

 

“Capital
Lease Obligation” means the capital lease obligations relating to a Capital
Lease determined in accordance with GAAP.

 

“Capital
Stock” means (i) in the case of a corporation, capital stock, (ii) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (iii) in the case of a partnership, partnership interests (whether general
or limited), (iv) in the case of a limited liability company, membership
interests and (v) any other equity or ownership interest or participation.

 

“Cash
Equivalents” means (a) securities issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of

 

4

 

the United States of America is pledged in support thereof) having
maturities of not more than twelve months from the date of acquisition, (b)
Dollar denominated time deposits and certificates of deposit of (i) any Lender,
or (ii) any domestic commercial bank of recognized standing (y) having capital
and surplus in excess of $500,000,000 and (z) whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Moody’s
is at least P-1 or the equivalent thereof (any such bank being an “Approved
Bank”), in each case with maturities of not more than 270 days from the date
of acquisition, (c) commercial paper and variable or fixed rate notes issued by
any Approved Bank (or by the parent company thereof) or any variable rate notes
issued by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody’s and maturing within six months of the date of acquisition,
(d) repurchase agreements entered into by a Person with a bank or trust company
(including any of the Lenders) or recognized securities dealer having capital
and surplus in excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America in which such Person shall have a
perfected first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at least 100%
of the amount of the repurchase obligations, (e) obligations of any State of
the United States of America or any political subdivision thereof, the interest
with respect to which is exempt from federal income taxation under
Section 103 of the Internal Revenue Code, having a long term rating of at
least AA- or Aa-3 by S&P or Moody’s, respectively, and maturing within
three years from the date of acquisition thereof, (f) Investments in municipal
auction preferred stock (i) rated AAA (or the equivalent thereof) or better by
S&P or Aaa (or the equivalent thereof) or better by Moody’s and (ii) with
dividends that reset at least once every 365 days, (g) Investments, classified
in accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at least
$100,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (f), and (h)
other Investments deemed to be cash equivalents in accordance with GAAP.

 

“Change
of Control” means the occurrence of either of the following events:

 

(a)                                  prior to the occurrence of a Qualifying IPO:

 

(i)                                     a “person” or “group” within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act (other than the Permitted
Shareholders) becomes the “beneficial owner” (as defined in Rule 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of Voting Stock
representing more than 50% of the Voting Stock of the Borrower on a fully
diluted basis; or

 

(ii)                                  individuals who on the date of this Credit
Agreement constitute the Board of Directors of the Borrower (the “Board”)
(together with any new directors whose election by the Board or whose
nomination for election by the Borrower’s stockholders was approved by a vote
of at least two-thirds of the members of the Board then in office who either
were members of the Board on the date of this Credit Agreement or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the members of the Board then in office; or

 

(b)                                 subsequent to the occurrence of a Qualifying
IPO:

 

(i)                                     any
“person” or “group” within the meaning
of Sections 13(d) and 14(d)(2) of the Exchange Act (other than the
Permitted Shareholders and any employee benefit plan of the Borrower or its
Subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly
or indirectly, of Voting Stock

 

5

 

representing
more than 35% of the Voting Stock of the Borrower on a fully diluted basis;
or

 

(ii)                                  during
any period of 24 consecutive months, a majority of the members of the board of
directors (or other equivalent governing body) of the Borrower cease to be
composed of individuals (A) who were
members of that board  (or other
equivalent governing body) on the first day of such period, (B) whose election or nomination to that
board  (or other equivalent governing
body) was approved by individuals referred to in clause (A) above constituting
at the time of such election or nomination at least a majority of that board
(or other equivalent governing body) or (C)
whose election or nomination to that board (or other equivalent governing body)
was approved by individuals referred to in clauses (A) or (B) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body (excluding, in the case of both clause
(A) and clause (B), any individual whose initial nomination for, or assumption
of office as, a member of that board (or other equivalent governing body)
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors (or other equivalent governing body)).

 

“Closing
Date” means the date hereof.

 

“Collateral”
means, as of any date of determination, a collective reference to the
collateral that is identified in, and covered by, the Collateral Documents.

 

“Collateral
Documents” means a collective reference to the Security Agreement, the
Pledge Agreements and such other documents executed and delivered in connection
with the attachment and perfection of the Administrative Agent’s security
interests and liens arising thereunder, including without limitation, UCC
financing statements and patent, trademark and copyright filings.

 

“Commitments”
means the Revolving Commitments, the LOC Commitment and the Swingline
Commitment.

 

“Commitment
Fee” shall have the meaning given such term in Section 3.5(a).

 

“Commitment
Period” means the period from and including the Closing Date to but not including
the earlier of (i) the Termination Date or (ii) the date on which the
Commitments terminate in accordance with the provisions of this Credit
Agreement.

 

“Consolidated
Adjusted EBITDA” means, for the members of Consolidated Group for any
period, the sum of (i) Consolidated EBITDA for such period minus (ii)
Consolidated Capital Expenditures for such period minus (iii) federal,
state and local income taxes paid during such period minus (iv)
Permitted Tax Dividends paid during such period, in each case on a consolidated
basis determined in accordance with GAAP.

 

“Consolidated
Capital Expenditures” means, for any period, without duplication and on a
consolidated basis determined in accordance with GAAP, all expenditures
(whether paid in cash or other consideration) of the members of the
Consolidated Group during such period that, in accordance with GAAP, are or
should be included in additions to property, plant and equipment or similar
items reflected in the consolidated financial statements for such period; provided,
that Consolidated Capital Expenditures shall not include, for purposes hereof,
(a) expenditures of proceeds of Divestitures in accordance with
Section 3.3(b)(ii), (b) expenditures of proceeds of insurance settlements,
condemnation awards and other

 

6

 

settlements
in respect of lost, destroyed, damaged or condemned assets, equipment or other
property to the extent such expenditures are made to replace or repair such
lost, destroyed, damaged or condemned assets, equipment or other property or
otherwise to acquire assets or properties useful in the business of the members
of the Consolidated Group within six (6) months of receipt of such proceeds and
(c) Capital Lease Obligations relating to the Borrower’s headquarters in
Spartanburg, South Carolina.

 

“Consolidated
EBITDA” means, for the members of the Consolidated Group for any period,
the sum of (a) Consolidated Net Income
for such period plus (b) to the
extent deducted in determining Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such
period, (ii) all provisions for federal,
state and local income taxes (including, without limitation, Permitted Tax
Dividends) for such period, (iii)
depreciation and amortization for such period, (iv)
the amount of any cash reimbursement received from the Sellers under the
indemnification provisions of the NCA/UCA Acquisition Agreement for such period
and (v) expenses, charges and write-offs
in an aggregate amount of up to $8 million incurred by the Borrower in
connection with a Qualifying IPO and any secondary public offering of the
Capital Stock of the Borrower, in each case on a consolidated basis determined
in accordance with GAAP.

 

“Consolidated
Fixed Charge Coverage Ratio” means, as of the end of each fiscal quarter of
the Borrower, the ratio of Consolidated Adjusted EBITDA for the period of four
consecutive fiscal quarters ending as of such day to Consolidated Fixed Charges
for the period of four consecutive fiscal quarters ending as of such day.

 

“Consolidated
Fixed Charges” means, for the members of the Consolidated Group for any
period, the sum of (a) Consolidated
Interest Expense for such period plus (b)
scheduled current maturities of Consolidated Funded Debt (including, for
purposes hereof, mandatory commitment reductions, sinking fund payments,
payments in respect of the principal component under Capital Leases and the
like relating thereto, but excluding scheduled current maturities of the
Subordinated Debt) for such period plus (c)
Restricted Payments (other than (i)
Permitted Tax Dividends, (ii) the
Permitted Equity Payment, (iii) the Prior
Equity Payment, (iv) Permitted
Subordinated Debt Redemption, (v)
redemption of the Subordinated Debt with the proceeds of a Qualifying IPO and (vi) payment of the principal of the
Subordinated Debt upon the scheduled final maturity thereof) for such period,
in each case determined in accordance with GAAP.

 

“Consolidated
Funded Debt” means, for the members of the Consolidated Group as of any day,
Funded Debt on a consolidated basis determined in accordance with GAAP.

 

“Consolidated
Group” means the Borrower and its Subsidiaries.

 

“Consolidated
Interest Expense” means, for the members of the Consolidated Group for any
period, gross interest expense (including amortization of debt discount and
premium, the interest component under capital leases and the implied interest
component under securitization transactions), without deduction or off-set for
interest income, on a consolidated basis determined in accordance with GAAP.

 

“Consolidated
Net Income” means, for the members of the Consolidated Group for any
period, net income on a consolidated basis determined in accordance with GAAP,
but excluding for purposes of determining the Consolidated Senior Leverage
Ratio and the Consolidated Fixed Charge Coverage Ratio, any extraordinary gains
or losses and related tax effects thereon.

 

“Consolidated
Net Worth” means, for the members of the Consolidated Group as of any day,
shareholders’ equity or net worth on a consolidated basis determined in
accordance with GAAP.

 

“Consolidated
Senior Funded Debt” means Consolidated Funded Debt that is not Subordinated
Debt.

 

7

 

“Consolidated
Senior Leverage Ratio” means, as of the last day of each fiscal quarter of
the Borrower, the ratio of Consolidated Senior Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters ending
as of such day.

 

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

 

“Credit
Documents” means a collective reference to this Credit Agreement, the
Revolving Notes, the LOC Documents, the Collateral Documents, each Joinder
Agreement, the Administrative Agent’s Fee Letter, and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto.

 

“Credit
Party” means any of the Borrower and the Guarantors.

 

“Debt
Transaction” means, with respect to any member of the Consolidated Group,
any sale, issuance, placement, guaranty, assumption or collateralization of
Funded Debt, whether or not evidenced by a promissory note or other written
evidence of indebtedness, except for Funded Debt permitted under
Section 8.1.

 

“Default”
means any event, act or condition which with notice or lapse of time, or both,
would constitute an Event of Default.

 

“Defaulting
Lender” means, at any time, any Lender that, at such time, (i) has failed
to make a Loan or purchase a risk participation in LOC Obligations or Swingline
Loans required pursuant to the terms of this Credit Agreement, (ii) has failed
to pay to the Administrative Agent or any Lender an amount owed by such Lender
pursuant to the terms of the Credit Agreement or any other of the Credit
Documents, or (iii) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
proceeding.

 

“Divestiture”
means any transaction by which any member of the Consolidated Group (a) sells, leases, transfers or otherwise
disposes of (i) any Property with which
an ongoing business is conducted; (ii)
all or substantially all or any substantial portion of its Property; or (C) the
Capital Stock of a Subsidiary, or (b) for
purposes of Section 3.3(b)(ii) only, receives any cash insurance proceeds
or condemnation award payable by reason of theft, loss, physical destruction or
damage, taking or similar event with respect to any of its Property, in each
case other than (x) the sale of inventory in the ordinary course of business,
(y) the sale, lease, transfer or other disposition of plant, property and
equipment which is no longer used or useful in the business of such member of
the Consolidated Group or (z) sales, leases, transfers or other dispositions of
Property or Capital Stock of a Subsidiary by one member of the Consolidated
Group to a Domestic Credit Party.

 

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

 

“Domestic
Subsidiary” means any Subsidiary that is incorporated or organized under
the laws of any State of the United States of America or the District of
Columbia.

 

“Eligible
Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural
person) approved by (i) the
Administrative Agent, the Issuing Lender and the Swingline Lender, and (ii) unless an Event of Default has occurred and
is continuing, the

 

8

 

Borrower
(each such approval not to be unreasonably withheld or delayed); provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

“Environmental
Laws” means any and all lawful and applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.

 

“Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of the Borrower or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of
any Materials of Environmental Concern, (c) exposure to any Materials of
Environmental Concern, (d) the release or threatened release of any Materials
of Environmental Concern into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

 

“Equity
Payments” means Restricted Payments of the type described in clauses (i),
(ii) and (iii) of the definition of Restricted Payment.

 

“Equity
Transaction” means, with respect to any member of the Consolidated Group,
any issuance, sale, transfer or other disposition of its Capital Stock, other
than  (a)
an issuance to a Credit Party by a Subsidiary of such Credit Party, (b) an issuance made to qualify directors where
required by applicable law, (c) an
issuance in connection with a conversion of debt securities to equity, (d) an issuance in connection with the exercise
by any former, present or future employee, officer or director under a Stock
Option Plan, provided such Stock Option Plan does not exceed ten percent
(10%) of the total equity in the Borrower, on a fully-diluted, as if converted,
basis, and (e) an issuance of the Capital
Stock of the Borrower in connection with an Acquisition permitted under
Section 8.4.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
thereunder, all as the same may be in effect from time to time.  References to sections of ERISA shall be
construed also to refer to any successor sections.

 

“ERISA
Affiliate” means an entity which is under common control with any member of
the Consolidated Group within the meaning of Section 4001(a)(14) of ERISA,
or is a member of a group which includes any member of the Consolidated Group
and which is treated as a single employer under Sections 414(b) or (c) of the
Internal Revenue Code.

 

“ERISA
Event” means (i) with respect to any Plan, the occurrence of a Reportable
Event or the substantial cessation of operations (within the meaning of Section 4062(e)
of ERISA); (ii) the withdrawal by any member of the Consolidated Group or any
ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section 4001(a)(2)
of ERISA), or the termination of a Multiple Employer Plan; (iii) the
distribution of a notice of intent to terminate or the actual termination of a
Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the
institution of proceedings

 

9

 

to
terminate or the actual termination of a Plan by the PBGC under
Section 4042 of ERISA; (v) any event or condition which would reasonably
be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (vi)
the complete or partial withdrawal of any member of the Consolidated Group or
any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect to
any Plan; or (vii) the adoption of an amendment to any Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA.

 

“Eurodollar
Base Rate” means, for any Interest Period with respect to any Eurodollar
Loan:

 

(a)                                  the rate per annum equal to the rate
determined by the Administrative Agent to be the offered rate that appears on
the page of the Telerate screen (or any successor thereto) that displays an
average British Bankers’ Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
or

 

(b)                                 if the rate referenced in the preceding
clause (a) does not appear on such page or service or such page or service
shall not be available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other service
that displays an average British Bankers’ Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, or

 

(c)                                  if the rates referenced in the preceding
clauses (a) and (b) are not available, the rate per annum (rounded upward to
the next 1/100th of 1%) determined by the Administrative Agent as
the rate of interest at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Loan being made, continued or converted by Bank of America and with
a term equivalent to such Interest Period would be offered by Bank of America’s
London Branch to major banks in the London interbank eurodollar market at their
request at approximately 4:00 p.m. (London time) two Business Days prior to the
first day of such Interest Period.

 

“Eurodollar
Rate” means, for any Interest Period with respect to any Eurodollar Loan, a
rate per annum determined by the Administrative Agent to be equal to the
quotient obtained by dividing (a) the Eurodollar Base Rate for such Eurodollar
Loan for such Interest Period by (b) one minus the Eurodollar Reserve
Percentage for such Eurodollar Loan for such Interest Period.

 

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

 

“Eurodollar
Reserve Percentage” means, for any day during any Interest Period, the
reserve percentage (expressed as a decimal, carried out to five decimal places)
in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).  The Eurodollar Rate for
each outstanding Eurodollar Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.

 

10

 

“Event
of Default” means such term as defined in Section 9.1.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and all
regulations issued pursuant thereto.

 

“Excluded
Transaction Receivables” means Transaction Receivables (i) as to which the
related checks are returned for insufficient funds, improper endorsement,
fraud, closed accounts or stop pays and (ii) which are more than sixty (60)
days past due and for which a repayment schedule has not been established
and maintained by the applicable customer and the applicable member of the
Consolidated Group.

 

“Existing
Letters of Credit” means those Letters of Credit outstanding on the Closing
Date and identified on Schedule 2.6.

 

“Extension
of Credit” means, as to any Lender, the making of (including the extension
or conversion of), or participation in, a Loan by such Lender or the issuance
or extension of, or participation in, a Letter of Credit by such Lender.

 

“Family
Members” means, with respect to any individual, any grandparent, parent,
lineal descendant (including adoptive relationships), sibling or spouse of such
individual, any grandparent, parent, lineal descendant (including adoptive
relationships), sibling or spouse of any of the foregoing and any entity all of
the economic interests in which is beneficially owned by any of the foregoing,
and any trust created for the benefit of any of the foregoing.

 

“Federal Funds Rate” means, for any day, the rate per annum
equal to the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by
the Administrative Agent.

 

“Fees”
means all fees payable pursuant to Section 3.5.

 

“Foreign
Lender” has the meaning set forth in Section 3.10(d).

 

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

 

“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, without duplication, (i) all
Indebtedness of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (iii) all purchase money
Indebtedness (including for purposes hereof, indebtedness and obligations
described in clauses (iii) and (iv) of the definition of “Indebtedness”) of
such Person, including without limitation the principal portion of all
obligations of such Person under Capital Leases, (iv) all Support Obligations
of such Person with respect to

 

11

 

Funded Debt of another Person, (v) the then maximum available amount of
all standby letters of credit issued for the account of such Person (other than
Letters of Credit issued in support of obligations of such Person under
Treasury Management Agreements up to a maximum available amount of $2,500,000),
(vi) the maximum available amount of all acceptances created for the account of
such Person, (vii) all Funded Debt of another Person secured by a Lien on any
Property of such Person, whether or not such Funded Debt has been assumed, provided
that for purposes of this clause (vii) the amount of such Funded Debt shall be
limited to the greater of (A) the amount of such Funded Debt as to which there
is recourse to such Person and (B) the fair market value of the Property which
is subject to the Lien, (viii) the outstanding principal amount attributed to
such Person or such Person’s Property under any securitization transaction, and
(ix) the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product to which such Person is a party, where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP.  The
Funded Debt of any Person shall include the Funded Debt of any partnership or
joint venture in which such Person is a general partner or joint venturer, but
only to the extent to which there is recourse to such Person for the payment of
such Funded Debt.  The Funded Debt of any
Person shall not include (i) all obligations of such Person in respect of Swap
Contracts and (ii) all obligations of such Person under Treasury Management
Agreements.

 

“GAAP”
means generally accepted accounting principles in the United States of America
applied on a consistent basis and subject to the terms of Section 1.3.

 

“Governmental
Authority” means any federal, state, local or foreign court or governmental
agency, authority, instrumentality or regulatory body.

 

“Guarantors”
means the Persons identified as “Guarantor” on the signature pages hereto and
each other Person which hereafter becomes a Guarantor by execution of a Joinder
Agreement (or guaranty agreement acceptable to the Administrative Agent),
together with their successors and permitted assigns.

 

“Indebtedness”
of any Person means (i) all obligations of such Person for borrowed money, (ii)
all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (iii) all
obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered
into in the ordinary course of business), (iv) all obligations of such Person
issued or assumed as the deferred purchase price of Property or services
purchased by such Person (other than trade debt incurred in the ordinary course
of business and due within six months of the incurrence thereof) which would
appear as liabilities on a balance sheet of such Person, (v) all obligations of
such Person under take-or-pay or similar arrangements or under commodities
agreements, (vi) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, provided that for purposes hereof the
amount of such Indebtedness shall be limited to the greater of (A) the amount
of such Indebtedness as to which there is recourse to such Person and (B) the
fair market value of the Property which is subject to the Lien, (vii) all
Support Obligations of such Person, (viii) the principal portion of all
obligations of such Person under Capital Leases, (ix) all obligations of such
Person in respect of Swap Contracts, (x) all obligations of such Person under
Treasury Management Agreements, (xi) the maximum amount of all standby letters
of credit issued or bankers’ acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the
extent unreimbursed), (xii) all preferred stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due, by a fixed date occurring prior to the Termination Date,
(xiii) the outstanding principal amount attributed to such Person or such
Person’s Property under any securitization

 

12

 

transaction and (xiv) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product to which such Person is a party,
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP.  The Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, but only to the extent to which there is
recourse to such Person for payment of such Indebtedness.

 

“Indemnified
Liabilities” has the meaning set forth in Section 11.5(b).

 

“Indemnitees”
has the meaning set forth in Section 11.5(b).

 

“Interest
Payment Date” means (a) as to any
Base Rate Loan (other than any Swingline Loan), the last day of each March,
June, September and December and the Termination Date, (b) as to any Swingline Loan, (i) the last day of each March, June,
September and December and the Termination Date or (ii) in the event that an “auto-borrow” or “zero
balance” or other similar arrangement shall then be in place between the
Borrower and the Swingline Lender and such arrangement provides for different
interest payment dates, then such payment dates provided by such arrangement,
and (c) as to any Eurodollar Loan, the
last day of each Interest Period for such Loan, the date of repayment of
principal of such Loan and on the Termination Date, and in addition where the
applicable Interest Period is more than three months, then also on the date
three months from the beginning of the Interest Period, and each three months
thereafter.  If an Interest Payment Date
falls on a date that is not a Business Day, such Interest Payment Date shall be
deemed to be the next succeeding Business Day.

 

“Interest
Period” means a period of one, two, three or six months’ duration, as the
Borrower may elect, commencing in each case on the date of the borrowing
(including conversions, extensions and renewals); provided, however,
(A) if any Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day (where
the next succeeding Business Day falls in the next succeeding calendar month,
then on the next preceding Business Day), (B) no Interest Period shall extend
beyond the Termination Date and (C) where an Interest Period begins on a day
for which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on the last
day of such calendar month.

 

“Internal
Revenue Code” means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time.  References to sections of the Internal
Revenue Code shall be construed also to refer to any successor sections.

 

“ISP” means, with respect to any Letter of Credit, the
“International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as may
be in effect at the time of issuance).

 

“Investment”,
in any Person, means any loan or advance to such Person, any purchase or other
acquisition of any Capital Stock, warrants, rights, options, obligations or other
securities of, or equity interest in, such Person, any capital contribution to
such Person or any other investment in such Person, including, without
limitation, any Support Obligation incurred for the benefit of such Person.

 

“Issuing
Lender” means Bank of America and its successors in such capacity.

 

“Joinder
Agreement” means a Joinder Agreement substantially in the form of Schedule 7.11(a)
hereto, executed and delivered by a Domestic Subsidiary of the Borrower in
accordance with the provisions

 

13

 

of Section 7.11(a).

 

“Junior
Subordination Agreement” means that Subordination of Indebtedness Owed to
Certain Shareholders dated as of the Closing Date among certain holders of the
Subordinated Debt and the Administrative Agent.

 

“Junior/Senior
Subordination Agreement” means the Junior Subordination Agreement dated as
of October 15, 1999 among the Borrower, the Administrative Agent, the
holders of the Senior Subordinated Debt identified therein and the holders of
the Junior Subordinated Debt identified therein, as amended, modified and
supplemented from time to time.

 

“Junior/Senior
Subordination Agreement Amendment” has the meaning set forth in Section 5.01(h)(ii).

 

“Lenders”
means the Persons identified as “Lenders” on the signature pages hereto, and
their successors and assigns.

 

“Letter
of Credit” means any Existing Letter of Credit and any standby letter of
credit issued by the Issuing Lender pursuant to Section 2.1(b).

 

“Letter
of Credit Application” means an application and agreement for the issuance
or amendment of a letter of credit in the form from time to time in use by the
Issuing Lender (if such application and agreement is inconsistent with this
Credit Agreement, this Credit Agreement shall control).

 

“Letter
of Credit Fee” shall have the meaning given such term in
Section 3.5(b)(i).

 

“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
security interest, encumbrance, lien (statutory or otherwise), preference,
priority or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, and any
lease in the nature thereof).

 

“Loans”
means the Revolving Loans and the Swingline Loans, and the Eurodollar Loans,
Base Rate Loans and Quoted Rate Swingline Loans comprising such Loans.

 

“LOC
Commitment” means, with respect to the Issuing Lender, the commitment of
the Issuing Lender to issue, and to honor payment obligations under, Letters of
Credit hereunder and, with respect to each Lender, the commitment of each
Lender to purchase risk participations in the Letters of Credit up to such
Lender’s Revolving Commitment Percentage of the LOC Committed Amount.

 

“LOC
Committed Amount” shall have the meaning assigned to such term in
Section 2.1(b).

 

“LOC
Documents” means, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection
therewith, any Letter of Credit Application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (i) the
rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.

 

“LOC
Obligations” means, at any time, the sum of (i) the maximum amount which
is, or at any time thereafter may become, available to be drawn under Letters
of Credit then outstanding, assuming compliance

 

14

 

with all requirements for drawings referred to in such Letters of
Credit plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by the Issuing Lender but not theretofore reimbursed.  For all
purposes of this Credit Agreement, if on any date of determination a Letter of
Credit has expired by its terms but any amount may still be drawn thereunder by
reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn.

 

“Material
Adverse Effect” means a material adverse effect on (i) the condition
(financial or otherwise), operations, business, assets, liabilities or
prospects of the Consolidated Group taken as a whole, (ii) the ability of the
Credit Parties taken as a whole to perform any material obligation under the
Credit Documents to which it is a party or (iii) the rights and remedies of the
Lenders under the Credit Documents.

 

“Materials
of Environmental Concern” means any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under any
Environmental Laws, including, without limitation, asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.

 

“McKenzie
Escrow Notes” means (a) $2,200,000
aggregate principal amount of Senior Subordinated Notes dated January 17,
2002 and payable to Steven A. McKenzie and (b)
$600,000 aggregate principal amount of Senior Subordinated Notes dated
January 17, 2002 and payable to Brenda B. McKenzie, each as amended on
September 30, 2002 and as may be further amended, modified and
supplemented from time to time.

 

“Moody’s”
means Moody’s Investors Service, Inc., or any successor or assignee of the
business of such company in the business of rating securities.

 

“Multiemployer
Plan” means a Plan which is a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA.

 

“Multiple
Employer Plan” means a Plan (other than a Multiemployer Plan) which any
member of the Consolidated Group or any ERISA Affiliate and at least one
employer other than any member of the Consolidated Group or any ERISA Affiliate
are contributing sponsors.

 

“NCA/UCA
Acquisition Agreement” means the Contribution Agreement dated as of
October 26, 1999 among the holders of the Capital Stock of the NCA/UCA
Companies (the “Sellers”) and the Borrower, as amended, modified and
supplemented from time to time.

 

“Net
Proceeds” means gross cash proceeds (including any cash received by way of
deferred payment pursuant to a promissory note, receivable or otherwise, but
only as and when received) received in connection with a Divestiture or Debt
Transaction, net of (i) reasonable transaction costs, including in the case of
a Debt Transaction, underwriting discounts and commissions, and in the case of
a Divestiture occurring in connection with a claim under an insurance policy,
costs incurred in connection with adjustment and settlement of the claim, (ii)
estimated taxes payable in connection therewith, and (iii) in the case of a
Divestiture or Debt Transaction, any amounts payable in respect of Funded Debt,
including without limitation principal, interest, premiums and penalties, which
is secured by, or otherwise related to, any property, asset or liability which
is the subject thereof to the extent that such Funded Debt and any payments in
respect thereof are paid with a portion of the proceeds therefrom.

 

“Non-Extension
Notice Date” has the meaning set forth in Section 2.6(a)(iii).

 

15

 

“Notice
of Borrowing” means a written notice of borrowing in substantially the form
of Schedule 2.2.

 

“Notice
of Extension/Conversion” means a written notice of extension or conversion
in substantially the form of Schedule 3.2.

 

“Obligations” means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Credit Party arising under any Credit
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against
any Credit Party or any Affiliate thereof of any proceeding under any bankruptcy, insolvency or other similar
law naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding. The
foregoing shall also include (a) all obligations under any Swap Contract
between any Credit Party and any Lender or Affiliate of a Lender that is
permitted to be incurred pursuant to Section 8.1 and (b) all
obligations under any Treasury Management Agreement between any Credit Party
and any Lender or Affiliate of a Lender.

 

“Operating
Lease” means, as applied to any Person, any lease (including, without
limitation, leases which may be terminated by the lessee at any time) of any
Property which is not a Capital Lease other than any such lease in which that
Person is the lessor.

 

“Other
Taxes” shall have the meaning assigned to such term in Section 3.10.

 

“Participant”
has the meaning set forth in Section 11.3(d).

 

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

 

“Permitted
Equity Payment” means the payment by the Borrower on or before the date
thirty (30) days following the Closing Date of a cash dividend or distribution
to its shareholders in an aggregate amount of up to $50 million.

 

“Permitted
Investments” means Investments which are (a)
cash and Cash Equivalents; (b) accounts
receivable created, acquired or made in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms including,
without limitation, accounts receivable acquired by Persons to whom the
Borrower provides marketing and/or administrative services; (c) Transaction Receivables; (d) Investments consisting of stock,
obligations, securities or other property received in settlement of accounts
receivable (created in the ordinary course of business) from obligors; (e) Support Obligations permitted by
Section 8.1; (f) Acquisitions
permitted by Section 8.4; (g)
advances or loans to employees, directors or officers not to exceed $500,000 in
the aggregate at any time outstanding; (h)
Investments existing on the Closing Date made by members of the Consolidated
Group in their Subsidiaries and Affiliates; (i)
Investments by members of the Consolidated Group in and to the Borrower and its
Domestic Subsidiaries; and (j) other
loans, advances and investments of a nature not contemplated in the foregoing
subsections in an amount not to exceed $1,000,000 in the aggregate at any time
outstanding.

 

“Permitted
Liens” means:

 

(a)                                  Liens arising under the Credit Documents;

 

(b)                                 Liens (other than Liens created or imposed
under ERISA) for taxes, assessments or

 

16

 

governmental charges or levies not yet due or Liens for taxes being
contested in good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to foreclosure, sale or
loss on account thereof);

 

(c)                                  statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of title
arising in the ordinary course of business, provided that such Liens
secure only amounts not yet due and payable or, if due and payable, are unfiled
and no other action has been taken to enforce the same or are being contested
in good faith by appropriate proceedings for which adequate reserves determined
in accordance with GAAP have been established (and as to which the Property
subject to any such Lien is not yet subject to foreclosure, sale or loss on
account thereof);

 

(d)                                 consensual Liens of landlords in furniture,
fixtures, equipment and leasehold improvements of a member of the Consolidated
Group to secure leasehold obligations of such member of the Consolidated Group;

 

(e)                                  Liens (other than Liens created or imposed
under ERISA) incurred or deposits made by the members of the Consolidated Group
in the ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);

 

(f)                                    Liens in connection with attachments or
judgments (including judgment or appeal bonds), provided that, to the
extent that such attachments and judgments exceed $250,000 in the aggregate,
such judgments secured shall, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have been
discharged within 30 days after the expiration of any such stay;

 

(g)                                 easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or irregularities in title and
other similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes;

 

(h)                                 Liens securing purchase money and
sale/leaseback Indebtedness (including Capital Leases) to the extent permitted
under Sections 8.1(b) and 8.1(c) provided that any such Lien attaches
only to the Property financed or leased and such Lien attaches thereto
concurrently with or within 90 days after the acquisition or construction
thereof in connection with the purchase money transactions and within 30 days
after the closing of any sale/leaseback transaction;

 

(i)                                     leases or subleases granted to others not
interfering in any material respect with the business of any member of the
Consolidated Group;

 

(j)                                     any interest of title of a lessor under, and
Liens arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to, leases
permitted by this Credit Agreement;

 

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

 

(l)                                     Liens created or deemed to exist in
connection with a Securitization Transaction (including any related filings of
any financing statements), but only to the extent that any such Lien relates to
the

 

17

 

Securitization Receivables actually sold, contributed, financed or
otherwise conveyed pursuant to such transaction;

 

(m)                               Liens deemed to exist in connection with Investments in repurchase
agreements permitted under Section 8.5;

 

(n)                                 normal and customary rights of setoff upon
deposits of cash in favor of banks or other depository institutions; and

 

(o)                                 Liens in favor of National Integrity Life
Insurance Company with respect to all rights, title, and interests of the
Borrower in, under and to (1) that certain Lease Agreement by and between
Borrower and Church and Commerce, LLC, a South Carolina limited liability
company dated September 1, 2000, as amended by Lease Commencement
Agreement dated February 22, 2002, (2) that certain Dunbar Street Garage
Parking Agreement by and between the Borrower and City of Spartanburg dated
March 27, 2002, and (3) all other parking agreements and parking rights of
the Borrower in the City of Spartanburg Garage located at 150 Dunbar Street now
or hereafter existing.

 

“Permitted
Shareholders” means George D. Johnson, Jr., William M. Webster IV, Stewart
H. Johnson, Dean L. Buntrock and entities controlled by any or all of them or
any of their Family Members.

 

“Permitted
Subordinated Debt Redemption” means the repayment by the Borrower of up to
$15,500,000 of Subordinated Debt.

 

“Permitted
Tax Dividends” has the meaning set forth in Section 8.7.

 

“Person”
means any individual, partnership, joint venture, firm, corporation, limited
liability company, association, trust or other enterprise (whether or not
incorporated) or any Governmental Authority.

 

“Plan”
means any employee benefit plan (as defined in Section 3(3) of ERISA)
which is covered by ERISA and with respect to which any member of the
Consolidated Group or any ERISA Affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an
“employer” within the meaning of Section 3(5) of ERISA.

 

“Pledge
Agreements” means the Borrower Pledge Agreement and, during the Shareholder
Pledge Period, the Shareholder Pledge Agreement.

 

“Prior
Equity Payment” means the payment by the Borrower in the fiscal quarter
ended December 31, 2003 of a cash dividend or distribution to its
shareholders in the amount of $30 million.

 

“Pro
Forma Basis” means, for purposes of calculating the financial covenants in
Section 7.9, that any Acquisition, Divestiture or Restricted Payment shall
be deemed to have occurred as of the first day of the four fiscal quarter
period ending as of the most recent fiscal quarter end preceding the date of
such Acquisition, Divestiture or Restricted Payment with respect to which the
Administrative Agent and the Lenders have received the Officer’s Certificate
required by Section 7.2(b).  In
connection with the foregoing, (a) with respect to any Divestiture, (i) income
statement and cash flow statement items (whether positive or negative)
attributable to the Property disposed of shall be excluded to the extent
relating to the applicable period and (ii) Indebtedness which is retired shall
be excluded and deemed to have been retired as of the first day of the
applicable period and (b) with respect to any Acquisition, (i) income
statement items attributable to the Person or Property acquired shall be
included to the extent relating to any period applicable in such calculations
to the extent (A) such items are not otherwise

 

18

 

included in such income statement items for the Borrower and its
Subsidiaries and (B) such items are supported by financial statements or other
information reasonably satisfactory to the Administrative Agent and (ii) any
Indebtedness incurred or assumed by the Borrower or any Subsidiary (including
the Person or Property acquired) in connection with such transaction and any
Indebtedness of the Person or Property acquired which is not retired in
connection with such transaction shall be deemed to have been incurred as of
the first day of the applicable period.

 

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

 

“Qualifying
IPO” means an equity issuance by the Borrower which includes of a primary
(whether alone or in connection with a secondary public offering) public
offering (other than a public offering pursuant to a registration statement on
Form S-8) of the common Capital Stock of the Borrower (a) pursuant to
an effective registration statement filed with the SEC in accordance with the
Securities Act of 1933, as amended, and (b) resulting in net cash proceeds
to the Borrower in an amount equal to at least the then outstanding principal
amount of the Subordinated Debt (other than the McKenzie Escrow Notes).

 

“Quoted
Rate” means, with respect to any Quoted Rate Swingline Loan, the fixed or
floating percentage rate per annum, if any, offered by the Swingline Lender and
accepted by the Borrower.

 

“Quoted
Rate Swingline Loan” means a Swingline Loan bearing interest at the Quoted
Rate.

 

“Rate
Determination Date” shall have the meaning assigned to such term in the
definition of “Applicable Percentage”.

 

“Register”
shall have the meaning given such term in Section 11.3(c).

 

“Regulation
D, T or U” means Regulation D, T or U, respectively, of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.

 

“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.

 

“Release”
means any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the environment
(including the abandonment or discarding of barrels, containers and other
closed receptacles containing any Materials of Environmental Concern).

 

“Reportable
Event” means any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the notice requirement has been waived by
regulation.

 

“Required
Financial Information” means the annual and quarterly compliance
certificates and related financial statements and information required by the
provisions of Section 7.1(a), Section 7.1(b) and Section 7.2(b),
as referenced in the definition of “Applicable Percentage”.

 

“Required
Lenders” means, at any time, (a) at
least five (5) Lenders that in the aggregate have more than fifty percent (50%)
of the Revolving Commitments, or (b) if
the Revolving Commitments have been terminated, at least five (5) Lenders that
in the aggregate have more than fifty percent (50%) of the aggregate principal
amount of the Revolving Obligations outstanding (taking into account in each
case risk participations in LOC Obligations and Swingline Loans); provided
that, in the case of each of (a) and (b) above, the Revolving Commitments of,
and outstanding principal amount of Revolving Obligations

 

19

 

(taking into account in each case risk participations in LOC
Obligations and Swingline Loans) owing to, a Defaulting Lender shall be
excluded for purposes hereof in making a determination of Required Lenders.

 

“Requirement
of Law” means any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or to which any of its material Property is
subject.

 

“Responsible
Officer” means any of the Chief Executive Officer, the Chief Financial
Officer, the Controller, the Chief Operating Officer, the Chief Accounting
Officer or the Treasurer of the Borrower.

 

“Restricted
Payment” means (i) any dividend or other distribution, direct or indirect,
on account of any shares of any class of Capital Stock now or hereafter
outstanding, except (A) a dividend payable solely in shares of that class to
the holders of that class, and (B) dividends and other distributions payable to
members of the Consolidated Group, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
stock now or hereafter outstanding, and (iv) any payment of interest or
principal on (including, without limitation, any payment upon maturity), and
any prepayment, redemption, defeasance or acquisition for value of (including
by way of deposit of money or securities with trustees with respect thereto
prior to the due date for the purpose of payment when due), any Subordinated
Debt.

 

“Revolving
Commitment” means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans in an aggregate principal amount at any time
outstanding of up to such Lender’s Revolving Committed Amount.

 

“Revolving
Commitment Percentage” means, for each Lender, a fraction (expressed as a
decimal) the numerator of which is the Revolving Committed Amount of such
Lender at such time and the denominator of which is the Aggregate Revolving
Committed Amount at such time.  The
initial Revolving Commitment Percentage of each Lender is set forth on Schedule 2.1.

 

“Revolving
Committed Amount” means, with respect to each Lender, the amount of such
Lender’s Revolving Commitment, as such amount may be reduced from time to time
in accordance with the provisions hereof. 
The initial Revolving Committed Amount of each Lender is set forth on Schedule 2.1.

 

“Revolving
Loans” shall have the meaning assigned to such term in Section 2.1(a).

 

“Revolving
Note” or “Revolving Notes” means the promissory notes of the
Borrower in favor of each of the Lenders evidencing the Revolving Loans and
Swingline Loans in substantially the form attached as Schedule 2.5,
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, supplemented, extended, renewed or replaced from time to
time.

 

“Revolving
Obligations” means, collectively, the Revolving Loans, Swingline Loans and
LOC Obligations.

 

“SEC”
means the Securities and Exchange Commission and any successor Governmental
Authority.

 

“Securitization
Receivables” means any accounts receivable, notes receivable, rights to
future lease payments or residuals or other similar rights to payment of such
member of the Consolidated Group,

 

20

 

any assets related thereto or otherwise customarily sold or pledged in
securitization transactions and all proceeds of the foregoing.

 

“Securitization
Transaction” means any financing transaction (or series of financing
transactions) entered into by a member of the Consolidated Group pursuant to
which such member of the Consolidated Group may sell, convey or otherwise
transfer, or grant a security interest in, any Securitization Receivables to a
Subsidiary, Affiliate or any other Person.

 

“S&P”
means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc., or
any successor or assignee of the business of such division in the business of
rating securities.

 

“Security
Agreement” means the Amended and Restated Security Agreement dated as of
the Closing Date given by the Credit Parties to the Administrative Agent to
secure the obligations of the Credit Parties under the Credit Documents, as
amended and modified from time to time.

 

“Sellers”
has the meaning assigned to such term in the definition of “NCA/UCA Acquisition
Agreement” in this Section 1.1.

 

“Senior
Subordination Agreement” means that Subordination Agreement dated as of
October 25, 1999 among the holders of the Subordinated Debt that are
identified therein or that have agreed to be subject thereto and Bank of
America, N.A., as administrative agent for the senior creditors identified
therein, as amended, modified or supplemented from time to time.

 

“Senior
Subordination Agreement Amendment” has the meaning set forth in
Section 5.1(h)(i).

 

“Shareholder
Pledge Date” means March 31, 2005.

 

“Shareholder
Pledge Period” means the period commencing on the Shareholder Pledge Date
and ending on the date the Shareholder Pledge Agreement terminates in
accordance with its terms.

 

“Shareholder
Pledge Agreement” means the pledge agreement executed and delivered by the
shareholders of the Borrower pursuant to Section 7.11(b), as amended,
modified and supplemented from time to time.

 

“Single
Employer Plan” means any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan or a Multiple Employer Plan.

 

“Solvent”
means, with respect to any Person as of a particular date, that on such date
(a) such Person is able to pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the ordinary course of
business, (b) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person’s Property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged or is to engage, (d)
the fair value of the Property of such Person is greater than the total amount
of liabilities, including, without limitation, contingent liabilities, of such
Person and (e) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured.  In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an

 

21

 

actual or matured liability.

 

“Specified
Default” means any of the following:

 

(a)                                  a Default or Event of Default under
Section 9.1(a);

 

(b)                                 an Event of Default arising as a result of
the failure to comply with any of Section 7.9(a), (b) or (c).

 

“Stock
Option Plan” means any stock incentive plan, stock option plan or other
equity-based compensation plan or arrangement of the Borrower.

 

“Subordinated
Debt” means the Subordinated Notes of the Borrower outstanding on the
Closing Date and described on Schedule 8.1, as amended, modified,
supplemented and replaced from time to time.

 

“Subordination
Agreements” means the Junior Subordination Agreement, the Junior/Senior
Subordination Agreement and the Senior Subordination Agreement.

 

“Subsidiary”
means, as to any Person at any time, (a) any corporation more than 50% of whose
Voting Stock is at such time owned by such Person directly or indirectly
through Subsidiaries, and (b) any partnership, association, joint venture or
other entity in which such Person directly or indirectly through Subsidiaries
has more than 50% of the Voting Stock. 
Unless otherwise identified, “Subsidiary” or “Subsidiaries” shall mean
Subsidiaries of the Borrower.

 

“Support
Obligations” means, with respect to any Person, without duplication, any
obligations of such Person (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) guaranteeing or
intended to guarantee any Indebtedness of any other Person in any manner,
whether direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof, but
specifically excluding guaranties or other assurances with respect to
performance obligations under bids or contracts made or entered into in the
ordinary course of business.  The amount
of any Support Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount
(or maximum principal amount, if larger) of the Indebtedness in respect of
which such Support Obligation is made.

 

“Swap Contract” means (a) any and all rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether
or not any such transaction is governed by or subject to any master agreement,
and (b) any and all transactions of any kind, and the related confirmations,
which are subject to the terms and

 

22

 

conditions of, or governed by, any form of master agreement published
by the International Swaps and Derivatives Association, Inc., any International
Foreign Exchange Master Agreement, or any other master agreement (any such
master agreement, together with any related schedules and confirmations, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.

 

“Swingline
Commitment” means the commitment of the Swingline Lender to make Swingline
Loans in an aggregate principal amount at any time outstanding up to the
Swingline Committed Amount and the commitment of the Lenders to purchase risk
participations in the Swingline Loans up to their respective Revolving
Commitment Percentages as provided in Section 2.1(d).

 

“Swingline
Committed Amount” means the amount of the Swingline Lender’s Swingline
Commitment as specified in Section 2.1(c).

 

“Swingline
Lender” means Bank of America and its successors in such capacity.

 

“Swingline
Loan” means a swingline revolving loan made by the Swingline Lender
pursuant to the provisions of Section 2.1(c).

 

“Taxes”
shall have the meaning assigned to such term in Section 3.10.

 

“Termination
Date” means July 16, 2009, as such date may be extended pursuant to
Section 2.8.

 

“Transaction
Receivables” means all cash advances to customers of the members of the
Consolidated Group in the ordinary course of business and the fees related
thereto.

 

“Treasury
Management Agreements” means any and all agreements provided to any member
of the Consolidated Group by a Lender or an Affililate of a Lender governing
the provision of treasury or cash management services, including, without
limitation, funds transfer, automated clearinghouse, zero balance accounts,
returned check concentration, controlled disbursement, lockbox, account
reconciliation and reporting and trade finance services.

 

“Voting
Stock” means, with respect to any Person, Capital Stock issued by such
Person the holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing similar
functions) of such Person, even though the right so to vote has been suspended
by the happening of such a contingency.

 

“Wholly
Owned Subsidiary” of any Person means any Subsidiary 100% of whose Voting
Stock is at the time owned by such Person directly or indirectly through other
Wholly Owned Subsidiaries.

 

1.2                                 Computation of Time
Periods.

 

For
purposes of computation of periods of time hereunder, the word “from” means
“from and including” and the words “to” and “until” each mean “to but
excluding.”

 

1.3                                 Accounting Terms; Certain
Calculations

 

(a)                                  Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Lenders hereunder shall be prepared, in
accordance with GAAP applied on a consistent basis.  All calculations made for the purposes of
determining compliance with this Credit Agreement shall (except as

 

23

 

otherwise expressly provided herein) be made by application of GAAP
applied on a basis consistent with the most recent annual or quarterly
financial statements delivered pursuant to Section 7.1; provided, however,
if (a) the Borrower shall object to determining such compliance on such basis
at the time of delivery of such financial statements due to any change in GAAP
or the rules promulgated with respect thereto or (b) the Administrative Agent
or the Required Lenders shall so object in writing within 30 days after
delivery of such financial statements, then, in either case, such calculations
shall be made on a basis consistent with the most recent financial statements
delivered by the Borrower to the Lenders as to which no such objection shall
have been made.

 

(b)                                 Notwithstanding anything to the contrary
contained in subsection (a) above, the parties hereto agree that the
financial covenants set forth in Section 7.9 shall be calculated on a Pro
Forma Basis with respect to any Acquisition or Divestiture occurring within the
applicable four fiscal quarter period.

 

1.4                                 Letter of Credit Amounts.

 

Unless otherwise specified, all references herein to the amount of a
Letter of Credit at any time shall be deemed to mean the maximum face amount of
such Letter of Credit after giving effect to all increases thereof contemplated
by such Letter of Credit or the LOC Documents related thereto, whether or not
such maximum face amount is in effect at such time.

 

SECTION 2

CREDIT FACILITIES

 

2.1                                 Revolving Loans.

 

(a)                                  Revolving Commitment. 
During the Commitment Period, subject to the terms and conditions
hereof, each Lender severally agrees to make revolving credit loans (the “Revolving
Loans”) in Dollars to the Borrower from time to time in the amount of such
Lender’s Revolving Commitment Percentage of such Revolving Loans for the
purposes hereinafter set forth; provided that (i) the aggregate
principal amount of Revolving Obligations outstanding at any time shall not
exceed TWO HUNDRED SIXTY-FIVE MILLION DOLLARS ($265,000,000) (as such amount
may be increased and reduced from time to time in accordance with the
provisions hereof, the “Aggregate Revolving Committed Amount”), and (ii)
each Lender’s Revolving Commitment Percentage of Revolving Obligations
outstanding at any time shall not exceed such Lender’s Revolving Committed
Amount.  Revolving Loans may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower
may request, and may be repaid and reborrowed in accordance with the provisions
hereof.

 

(b)                                 Letter of Credit Commitment. During the Commitment Period, in reliance
upon the agreements of the Lenders set forth in Section 2.6(b) and subject
to the terms and conditions hereof and of the LOC Documents, if any, and such
other terms and conditions which the Issuing Lender may reasonably require, the
Issuing Lender shall issue, and the Lenders shall participate in, such Letters
of Credit in Dollars as the Borrower may request for its own account or for the
account of another Credit Party as provided herein, in a form acceptable to the
Issuing Lender, for the purposes hereinafter set forth; provided that
(i) the aggregate amount of LOC Obligations at any time shall not exceed TWENTY
MILLION DOLLARS ($20,000,000) (as such amount may be reduced from time to time
in accordance with the provisions hereof, the “LOC Committed Amount”),
(ii) the aggregate principal amount of Revolving Obligations outstanding
at any time shall not exceed the Aggregate Revolving Committed Amount, and
(iii) each Lender’s Revolving Commitment Percentage of Revolving Obligations

 

24

 

outstanding at any time shall not exceed such Lender’s Revolving
Committed Amount.  Letters of Credit
issued hereunder shall not have an original expiry date more than one year from
the date of issuance or extension.  If
any Letter of Credit issued hereunder shall have an expiry date, whether as
originally issued or by extension, extending beyond the Termination Date, the
Borrower shall, on the Termination Date, either (i) cause such Letter of Credit
to be surrendered to the Issuing Lender, (ii) provide to the Issuing Lender a
back-to-back letter of credit in respect thereof reasonably satisfactory to the
Issuing Lender or (iii) provide cash collateral to the Issuing Lender (pursuant
to documentation reasonably satisfactory to the Administrative Agent) in an
amount equal to the maximum amount available to be drawn under such Letter of Credit
plus all fees that will accrue with respect to such Letter of Credit through
the expiry date thereof.  Each Letter of
Credit shall comply with the related LOC Documents.  The issuance date of each Letter of Credit
shall be a Business Day.  All Existing
Letters of Credit shall be deemed to have been issued pursuant to this Credit
Agreement, and from and after the Closing Date shall be subject to and governed
by the terms of this Credit Agreement.

 

(c)                                  Swingline Commitment. 
During the Commitment Period, subject to the terms and conditions hereof
and in reliance upon the agreements of the Lenders set forth in Section 2.7,
the Swingline Lender, in its individual capacity, agrees to make certain
revolving credit loans (the “Swingline Loans”) in Dollars to the
Borrower for the purposes hereinafter set forth; provided, however,
(i) the aggregate principal amount of Swingline Loans outstanding at any time
shall not exceed FIFTEEN MILLION DOLLARS ($15,000,000) (as such amount may be
reduced from time to time in accordance with the provisions hereof, the “Swingline
Committed Amount”), and (ii) the aggregate principal amount of Revolving
Obligations outstanding at any time shall not exceed the Aggregate Revolving
Committed Amount.  Swingline Loans may
consist of Base Rate Loans or Quoted Rate Swingline Loans, as the Borrower may
request, and may be repaid or reborrowed in accordance with the provisions
hereof.  Immediately upon the
making of a Swingline Loan, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swingline Lender a
risk participation in such Swingline Loan in an amount equal to the product of
such Lender’s Revolving Commitment Percentage times the amount of such
Swingline Loan.

 

(d)                                 Accordion
Feature.  The Borrower may at any
time and from time to time, upon prior written notice by the Borrower to the
Administrative Agent, increase the Aggregate Revolving Committed Amount by up
to TEN MILLION DOLLARS ($10,000,000) with additional Revolving Commitments from
any existing Lender or new Revolving Commitments from any other Person selected
by the Borrower and approved by the Administrative Agent in its reasonable
discretion; provided that:

 

(A)                              any
such increase shall be in a minimum principal amount of $5 million and in
integral multiples of $5 million in excess thereof;

 

(B)                                no
Default or Event of Default shall be continuing at the time of any such
increase;

 

(C)                                no
existing Lender shall be under any obligation to increase its Revolving
Commitment and any such decision whether to increase its Revolving Commitment
shall be in such Lender’s sole and absolute discretion;

 

(D)                               any
new Lender shall join this Credit Agreement by executing such joinder documents
reasonably required by the Administrative Agent; and

 

(E)                                 the
Borrower will provide such supporting resolutions, legal opinions and other
items as the Administrative Agent may request in its reasonable discretion.

 

25

 

In connection with any such increase in the Aggregate Revolving
Committed Amount, Schedule 2.1 shall be revised by the
Administrative Agent to reflect the new Revolving Commitments and distributed
to the Lenders.

 

2.2                                 Borrowing Procedures.

 

(a)                                  Notice of Request for Extensions of Credit.  The
Borrower shall request Loans by written notice (or telephonic notice promptly
confirmed in writing) as follows:

 

(i)                                     Revolving Loans. 
Except as provided in Section 2.6(c) and 2.7, in the case of
Revolving Loans, to the Administrative Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to the date of the
requested borrowing in the case of Base Rate Loans, and on the third Business
Day prior to the date of the requested borrowing in the case of Eurodollar
Loans.  Each such request for borrowing
shall be irrevocable, shall be in substantially the form of Schedule 2.2
and shall specify (A) a Revolving Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing shall be
comprised initially of Base Rate Loans, Eurodollar Loans or a combination
thereof, and if Eurodollar Loans are requested, the initial Interest Period(s)
therefor.  The Administrative Agent shall
give notice to each Lender promptly upon receipt of a Notice of Borrowing
pursuant to this Section 2.2(a)(i), the contents thereof and each such
Lender’s share of any borrowing to be made pursuant thereto.

 

(ii)                                  Swingline Loans.  In
the case of Swingline Loans, to the Swingline Lender not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of the requested borrowing
(or such later time as may be agreed by the Swingline Lender).  Each such request for borrowing shall be
irrevocable, shall be in substantially the form of Schedule 2.2 and
shall specify (A) a Swingline Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate principal amount
to be borrowed, and (D) the interest rate option and Interest Period requested
therefor, if applicable.  Notwithstanding
the foregoing, in the event that an “auto-borrow” or “zero balance” or similar
arrangement shall then be in place between the Borrower and the Swingline
Lender, the Borrower shall request Swingline Loans pursuant to such alternative
notice arrangements, if any, provided thereunder or in connection
therewith.  Each Swingline Loan shall
have a maturity date as the Borrower may request and the Swingline Lender may
agree, provided that the maturity date shall not be later than the date
thirty (30) days after the date of the borrowing thereof.

 

(b)                                 Minimum Amounts.  Each
Eurodollar Loan shall be in a minimum aggregate principal amount of $2,500,000
and integral multiples of $500,000 in excess thereof, and each Base Rate Loan
(other than Swingline Loans) shall be in a minimum aggregate principal amount
of $1,000,000 (or, in the case of Revolving Loans, the remaining Aggregate
Revolving Committed Amount, if less) and integral multiples of $100,000 in
excess thereof.  Each Swingline Loan
shall be in a minimum principal amount of $1,000,000 and integral multiples of
$100,000 in excess thereof, provided that in the event that an
“auto-borrow” or “zero balance” or other similar arrangement shall then be in
place between the Borrower and the Swingline Lender, each Swingline Loan
advance shall be in such minimum amounts, if any, provided by such agreement.

 

(c)                                  Information Not Provided.  If
in connection with any request for a Loan, the Borrower shall fail to specify
(i) an applicable Interest Period in the case of a Eurodollar Loan, the
Borrower shall be deemed to have requested an Interest Period of one month, or
(ii) the type of Loan requested, the Borrower shall be deemed to have requested
a Base Rate Loan.

 

26

 

(d)                                 Maximum Number of Eurodollar Loans.  In
connection with any request for a Loan, the Revolving Loans may be comprised of
no more than ten (10) Eurodollar Loans outstanding at any time.  For purposes hereof, Eurodollar Loans with
separate or different Interest Periods will be considered as separate
Eurodollar Loans even if their Interest Periods expire on the same date.

 

(e)                                  Advances.  Each Lender will make its
Revolving Commitment Percentage of each Revolving Loan borrowing available to
the Administrative Agent for the account of the Borrower, or in such other
manner as the Administrative Agent may specify in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the applicable Notice
of Borrowing in Dollars and in funds immediately available to the
Administrative Agent.  In each case, such
borrowing will then be made available to the Borrower by the Administrative
Agent by crediting the account of the Borrower with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.

 

2.3                                 Interest.

 

Subject
to Section 3.1, the Loans hereunder shall bear interest at a per annum
rate, payable in arrears on each applicable Interest Payment Date (or at such
other times as may be specified herein), as follows:

 

(a)                                  Base Rate Loans. 
During such periods as the Loans shall be comprised of Base Rate Loans,
the sum of the Base Rate plus the Applicable Percentage;

 

(b)                                 Eurodollar Loans. 
During such periods as the Loans shall be comprised of Eurodollar Loans,
the sum of the Eurodollar Rate plus the Applicable Percentage; and

 

(c)                                  Quoted Rate Swingline Loans. 
During such periods as the Swingline Loans shall be comprised of Quoted
Rate Swingline Loans, the Quoted Rate.

 

2.4                                 Repayment.

 

(a)                                  Revolving Loans.  The
principal amount of all Revolving Loans shall be due and payable in full on the
Termination Date.

 

(b)                                 Swingline Loans.  The
principal amount of any Swingline Loan shall be due and payable in full on the
earlier of (A) the maturity date agreed to by the Swingline Lender and the
Borrower with respect to such Swingline Loan (such maturity date shall not be
later than the date thirty (30) days after the date of the borrowing thereof)
or (B) the Termination Date.

 

2.5                                 Revolving Notes.

 

The
Revolving Loans and the Swingline Loans shall be evidenced by the Revolving
Notes.

 

2.6                                 Additional Provisions
relating to Letters of Credit.

 

(a)                                  Procedures for Issuance and Amendment of
Letters of Credit; Auto-Extension Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or
amended, as the case may be, upon the

 

27

 

request
of the Borrower delivered to the Issuing Lender (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the
Borrower.  Such Letter of Credit
Application must be received by the Issuing Lender and the Administrative Agent
not later than 11:00 a.m. at least two Business Days (or such later date and
time as the Issuing Lender may agree in a particular instance in its sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be.  In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the Issuing
Lender: (A) the proposed issuance date of the requested Letter of Credit (which
shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof;
(D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full
text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the Issuing Lender may
require.  In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the Issuing Lender
(A) the Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the Issuing Lender may require.  Additionally, the Borrower shall
furnish to Issuing Lender and the Administrative Agent such other
documents and information pertaining to such requested Letter of Credit
issuance or amendment, including any LOC Documents, as the Issuing Lender or
the Administrative Agent may require.

 

(ii)                                  Promptly after receipt of any Letter of
Credit Application, the Issuing Lender will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has received a
copy of such Letter of Credit Application from the Borrower and, if not, the
Issuing Lender will provide the Administrative Agent with a copy thereof.  Unless the Issuing Lender has received
written notice from any Lender, the Administrative Agent or any Credit Party,
at least one Business Day prior to the requested date of issuance or amendment
of the applicable Letter of Credit, that one or more applicable conditions
contained in Section 5 shall not be satisfied, then the Issuing Lender shall, on the requested date, issue a Letter of
Credit for the account of the Borrower or enter into the applicable amendment,
as the case may be.

 

(iii)                               If the Borrower so requests in any applicable Letter of Credit
Application, the Issuing Lender may, in its sole and absolute discretion, agree
to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension
Letter of Credit”); provided that any such Auto-Extension Letter
of Credit must permit the Issuing Lender to prevent any such extension at least
once in each twelve-month period (commencing with the date of issuance of such
Letter of Credit) by giving prior notice to the beneficiary thereof not later
than a day (the “Non-Extension Notice Date”) in each such twelve-month
period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the Issuing
Lender, the Borrower shall not be required to make a specific request to the
Issuing Lender for any such extension. 
Once an Auto-Extension Letter of Credit has been issued, the Lenders
shall be deemed to have authorized (but may not require) the Issuing Lender to
permit the extension of such Letter of Credit at any time to an expiry date not
later than the Termination Date; provided, however, that the
Issuing Lender shall not permit any such extension if (A) the Issuing Lender
has determined that it would not be permitted to, or would have no obligation
to, at such time issue such Letter of Credit in its revised form (as extended)
under the terms hereof (by reason of the provisions of Section 2.6(j) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is two Business Days before the
Non-Extension Notice Date (1) from the Administrative Agent that the Required
Lenders have elected not to permit such extension or (2) from the
Administrative Agent, any Lender or the Borrower that one or more of

 

28

 

the
applicable conditions specified in Section 5.2 is not then
satisfied, and in each case directing the Issuing Lender not to permit
such extension.

 

(iv)                              Promptly after its delivery of any Letter of Credit or any amendment to
a Letter of Credit to an advising bank with respect thereto or to the
beneficiary thereof, the Issuing Lender will also deliver to the Borrower and
the Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

 

(b)                                 Participation.  Each
Lender, with respect to the Existing Letters of Credit, hereby purchases a
participation interest in the Existing Letters of Credit, and with respect to
Letters of Credit issued on or after the Closing Date, upon issuance of a
Letter of Credit, shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder, in each case in an amount equal to its
Revolving Commitment Percentage of such Letter of Credit and the obligations
arising thereunder and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be obligated to pay to the
Issuing Lender therefor and discharge when due, its Revolving Commitment
Percentage of such Letter of Credit and the obligations arising
thereunder.  Without limiting the scope
and nature of each Lender’s participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required hereunder or
under any such Letter of Credit, each such Lender shall pay to the Issuing
Lender its pro rata share of such unreimbursed drawing in same day funds on the
day of notification by the Issuing Lender of an unreimbursed drawing pursuant
to the provisions of subsection (d) below. 
The obligation of each Lender to so reimburse the Issuing Lender shall
be absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event.  Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the Issuing Lender
under any Letter of Credit, together with interest as hereinafter provided.

 

(c)                                  Reimbursement.  Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the Issuing Lender will promptly notify the
Borrower.  Not later than 11:00 am on the
date of any payment by the Issuing Lender under a Letter of Credit, the
Borrower shall reimburse the Issuing Lender through the Administrative Agent in
an amount equal to such drawing.  If the
Borrower fails to so reimburse the Issuing Lender by such time, the Borrower
shall be deemed to have requested that the Lenders make a Revolving Loan on the
date of such drawing in the amount of such drawing as provided in
subsection (c) and subsection (d) below on the related Letter of Credit,
the proceeds of which will be used to satisfy the related reimbursement
obligations.  The Borrower promises to
reimburse the Issuing Lender on the day of drawing under any Letter of Credit
(either with the proceeds of a Revolving Loan obtained hereunder or otherwise)
in same day funds.  If the Borrower
notifies the Issuing Lender that it intends to reimburse the Issuing Lender
other than through a Revolving Loan and thereafter shall fail to reimburse the
Issuing Lender as provided hereinabove, the unreimbursed amount of such drawing
shall bear interest at a per annum rate equal to the Base Rate plus the sum of
(i) the Applicable Percentage and (ii) two percent (2%).  The Borrower’s reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff, counterclaim or defense to payment the
Borrower may claim or have against the Issuing Lender, the Administrative
Agent, the Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit.  The Issuing Lender will promptly notify the
Lenders of the amount of any unreimbursed drawing and each Lender shall
promptly pay to the Administrative Agent for the account of the Issuing Lender
in Dollars and in immediately available funds, the amount of such Lender’s pro
rata share of such unreimbursed drawing. 
Such payment shall be made on the day such notice is received by such
Lender from the Issuing Lender if such notice is received at or before 2:00
P.M. (Charlotte, North Carolina time) otherwise such payment shall be made at
or before 12:00 Noon (Charlotte, North Carolina

 

29

 

time) on the Business Day next succeeding the day such notice is
received.  If such Lender does not pay
such amount to the Issuing Lender in full upon such request, such Lender shall,
on demand, pay to the Administrative Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date of such
drawing until such Lender pays such amount to the Issuing Lender in full at a rate
per annum equal to, if paid within two (2) Business Days of the date that such
Lender is required to make payments of such amount pursuant to the preceding
sentence, the Federal Funds Rate and thereafter at a rate equal to the Base
Rate.  Each Lender’s obligation to make
such payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever.  Simultaneously with the
making of each such payment by a Lender to the Issuing Lender, such Lender
shall, automatically and without any further action on the part of the Issuing
Lender or such Lender, acquire a participation in an amount equal to such
payment (excluding the portion of such payment constituting interest owing to
the Issuing Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC Documents, and
shall have a claim against the Borrower with respect thereto.

 

(d)                                 Repayment with Revolving Loans.  On
any day on which the Borrower shall have requested, or been deemed to have
requested, a Revolving Loan advance to reimburse a drawing under a Letter of
Credit, the Administrative Agent shall give notice to the Lenders that a
Revolving Loan has been requested or deemed requested by the Borrower to be
made in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan advance comprised of Base Rate Loans (or Eurodollar Loans to the
extent the Borrower has complied with the procedures of Section 2.2(a)(i)
with respect thereto) shall be immediately made to the Borrower by all Lenders
(notwithstanding any termination of the Commitments pursuant to
Section 9.2) pro  rata based on the respective Revolving
Commitment Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2) and the proceeds
thereof shall be paid directly to the Issuing Lender for application to the respective
LOC Obligations.  Each such Lender hereby
irrevocably agrees to make its pro rata share of each such Revolving Loan
immediately upon any such request or deemed request in the amount, in the
manner and on the date specified in the preceding sentence notwithstanding
(i) the amount of such borrowing may not comply with the minimum amount for
advances of Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii) whether a
Default or an Event of Default then exists, (iv) failure for any such request
or deemed request for Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which Revolving
Loans are otherwise permitted to be made hereunder or (vi) any termination of
the Commitments relating thereto immediately prior to or contemporaneously with
such borrowing.  In the event that any
Revolving Loan cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower or any
Guarantor), then each such Lender hereby agrees that it shall forthwith
purchase (as of the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or after such date and
prior to such purchase) from the Issuing Lender such participation in the
outstanding LOC Obligations as shall be necessary to cause each such Lender to
share in such LOC Obligations ratably (based upon the respective Revolving
Commitment Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2)), provided
that in the event such payment is not made on the day of drawing, such Lender
shall pay in addition to the Issuing Lender interest on the amount of its
unfunded risk participation at a rate equal to, if paid within two (2) Business
Days of the date of drawing, the Federal Funds Rate, and thereafter at the Base
Rate.

 

(e)                                  Designation of other Credit Parties as
Account Parties.  Notwithstanding anything to the

 

30

 

contrary set forth in this Credit Agreement, including without
limitation Section 2.1(c), a Letter of Credit issued hereunder may contain
a statement to the effect that such Letter of Credit is issued for the account
of a Credit Party other than the Borrower, provided that notwithstanding such
statement, the Borrower shall be deemed to be the account party for all
purposes of this Credit Agreement for such Letter of Credit and such statement
shall not affect the Borrower’s reimbursement obligations hereunder with
respect to such Letter of Credit.

 

(f)                                    Renewal, Extension.  The
renewal or extension of any Letter of Credit shall, for purposes hereof, be
treated in all respects the same as the issuance of a new Letter of Credit
hereunder.

 

(g)                                 Applicability of ISP.  Unless otherwise expressly agreed by
the Issuing Lender and the Borrower when a Letter of Credit is issued
(including any such agreement applicable to an Existing Letter of Credit), the
rules of the ISP shall apply to each Letter of Credit.

 

(h)                                 Indemnification; Nature of Issuing Lender’s
Duties.

 

(i)                                     In addition to its other obligations under
this Section 2.6(h), the Borrower hereby agrees to protect, indemnify, pay
and save the Issuing Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys’ fees) that the Issuing Lender may incur or be subject to
as a consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called “Government
Acts”).

 

(ii)                                  As between the Borrower and the Issuing
Lender, the Borrower, subject to Section 2.6(h)(v), shall assume all risks
of the acts, omissions or misuse of any Letter of Credit by the beneficiary
thereof.  Except for those events
described in subsections (A) and (B) of Section 2.6(h)(v), the Issuing
Lender shall not be responsible:  (A) for
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) for errors, omissions, interruptions
or delays in transmission or delivery to the Issuing Lender of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in cipher,
occurring prior to the receipt by the Issuing Lender of such message; (D) for
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the proceeds thereof; and
(E) for any consequences arising from causes beyond the control of the Issuing
Lender, including, without limitation, any Government Acts.  None of the above shall affect, impair, or
prevent the vesting of the Issuing Lender’s rights or powers hereunder.

 

(iii)                               In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any action taken
or omitted by the Issuing Lender, under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in good faith, shall
not put such Issuing Lender under any resulting liability to the Borrower or
any other Credit Party.  It is the
intention of the parties that this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against any and all risks
involved in the issuance of the Letters of Credit, all of which risks are
hereby assumed by the Borrower (on behalf of itself and each of the

 

31

 

other
Credit Parties), including, without limitation, any and all Government
Acts.  The Issuing Lender shall not, in
any way, be liable for any failure by the Issuing Lender or anyone else to pay
any drawing under any Letter of Credit as a result of any Government Acts or
any other cause beyond the control of the Issuing Lender.

 

(iv)                              Nothing in this subsection (h) is
intended to limit the reimbursement obligations of the Borrower contained in
subsection (c) above.  The
obligations of the Borrower under this subsection (h) shall survive the
termination of this Credit Agreement.  No
act or omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Issuing Lender to enforce
any right, power or benefit under this Credit Agreement.

 

(v)                                 Notwithstanding anything to the contrary
contained in this subsection (h), the Borrower shall have no obligation to
indemnify the Issuing Lender in respect of any liability incurred by the
Issuing Lender (A) arising out of the gross negligence or willful misconduct of
the Issuing Lender, as determined by a court of competent jurisdiction, or (B)
caused by the Issuing Lender’s failure to pay under any Letter of Credit after
presentation to it of a request strictly complying with the terms and conditions
of such Letter of Credit, as determined by a court of competent jurisdiction,
unless such payment is prohibited by any law, regulation, court order or
decree.

 

(i)                                     Responsibility of Issuing Lender. It is expressly understood and agreed that
the obligations of the Issuing Lender to the Lenders are only those expressly
set forth in this Credit Agreement and that the Issuing Lender shall be
entitled to assume that the conditions precedent set forth in Section 5.2
have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however,
that nothing set forth in this Section 2.6 shall be deemed to prejudice
the right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this
Section 2.6 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit constituted
gross negligence or willful misconduct on the part of the Issuing Lender.

 

(j)                                     Limitation on Obligation of the Issuing
Lender.  Notwithstanding anything contained herein to
the contrary, the Issuing Lender shall not be under any obligation to issue,
renew or extend any Letter of Credit if (i)
any order, judgment or decree of any Governmental Authority or arbitrator shall
by its terms purport to enjoin or restrain the Issuing Lender from issuing such
Letter of Credit, or any applicable law, rule or regulation or any request or
directive (whether or not having the force of law) from any governmental 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, reserve or capital
requirement (for which the Issuing Lender is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the Issuing
Lender any unreimbursed loss, costs or expense which was not applicable on the
Closing Date and which the Issuing Lender should deem material to it in good
faith, (ii) the issuance, renewal or
extension would violate one or more policies of the Issuing Lender or (iii) a default of any Lender’s
obligations to fund under Section 2.3(c) or Section 2.3(d)
exists or any Lender is at such time a Defaulting Lender hereunder, unless the
Issuing Lender has entered into satisfactory arrangements with the Borrower or
such Lender to eliminate the Issuing Lender ‘s risk with respect to such Lender.

 

(k)                                  Conflict with LOC Documents.  In
the event of any conflict between this Credit Agreement and any LOC Document
(including any letter of credit application), this Credit Agreement shall control.

 

32

 

2.7                                 Additional Provisions
relating to Swingline Loans.

 

(a)                                  The Swingline Lender may, at any time, in its
sole discretion, by written notice to the Borrower and the Lenders, demand
repayment of its Swingline Loans by way of a Revolving Loan advance, in which
case the Borrower shall be deemed to have requested a Revolving Loan advance
comprised solely of Base Rate Loans in the amount of such Swingline Loans; provided,
however, that any such demand shall be deemed to have been given one
Business Day prior to the Termination Date and on the date of the occurrence of
any Event of Default described in Section 9.1 and upon acceleration of the
indebtedness hereunder and the exercise of remedies in accordance with the
provisions of Section 9.2.  Each
Lender hereby irrevocably agrees to make its Revolving Commitment Percentage of
each such Revolving Loan in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such borrowing may not comply with the minimum
amount for advances of Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure of any such request or deemed request for Revolving
Loan to be made by the time otherwise required hereunder, (v) whether the date of such borrowing is a date
on which Revolving Loans are otherwise permitted to be made hereunder or (vi) any termination of the Commitments relating
thereto immediately prior to or contemporaneously with such borrowing.  In the event that any Revolving Loan cannot
for any reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any Guarantor), then each
Lender hereby agrees that it shall forthwith fund (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such funding) from the
Swingline Lender such Lender’s risk participation in the outstanding Swingline
Loans plus interest thereon from the date such borrowing would otherwise
have occurred to the date of such funding, at a rate per annum equal to the
Federal Funds Rate.  All interest payable on the Swingline Loans
shall be for the account of the Swingline Lender until the date as of which the
respective risk participation is funded.

 

(b)                                 If any payment
received by the Swingline Lender in respect of principal or interest on any
Swingline Loan is required to be returned by the Swingline Lender under any of
the circumstances described in Section 11.16 (including pursuant to any
settlement entered into by the Swingline Lender in its discretion), each Lender
shall pay to the Swingline Lender its Revolving Commitment Percentage thereof
on demand of the Swingline Lender, plus interest thereon from the date of such
demand to the date such amount is returned, at a rate per annum equal to the
Federal Funds Rate.  The obligations of the Lenders under this
clause shall survive the payment in full of the Obligations and the termination
of this Credit Agreement.

 

2.8                                 Extension of Termination
Date.

 

The
Borrower may, by providing written notice to the Administrative Agent not less
than thirty (30) days nor more than forty-five (45) days prior to the first
anniversary of the Closing Date, request that the Lenders agree to extend the
Termination Date by one year.  The
Administrative Agent will promptly notify the Lenders of its receipt of such
request for an extension.  Within 20 days
of its receipt of notice from the Administrative Agent, each Lender will
provide written notice to the Administrative Agent of its decision whether to
agree to the requested extension, provided that the failure by any
Lender to timely provide such written notice to the Administrative Agent shall
be deemed to constitute a refusal by such Lender to the requested
extension.  If each Lender consents to
the requested extension, then the Termination Date shall be extended by one
year.

 

33

 

SECTION 3

OTHER PROVISIONS RELATING TO CREDIT FACILITIES

 

3.1                                 Default Rate.

 

Upon
the occurrence, and during the continuance, of an Event of Default, at the
request of the Required Lenders, the principal of and, to the extent permitted
by law, interest on the Loans and any other amounts owing hereunder or under
the other Credit Documents shall bear interest, payable on demand, at a per
annum rate 2% greater than the rate which would otherwise be applicable (or if
no rate is applicable, whether in respect of interest, fees or other amounts,
then 2% greater than the sum of the Base Rate plus the Applicable Percentage).

 

3.2                                 Extension and Conversion.

 

Subject
to the terms of Section 5.2, the Borrower shall have the option, on any
Business Day, to extend existing Eurodollar Loans into a subsequent permissible
Interest Period or to convert Base Rate Loans into Eurodollar Loans or to
convert Eurodollar Loans into Base Rate Loans; provided, however,
that (i) except as provided in Section 3.8, Eurodollar Loans may be
converted into Base Rate Loans only on the last day of the Interest Period
applicable thereto, (ii) Eurodollar Loans may be extended as, and Base Rate
Loans may be converted into, Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Revolving
Loans extended as, or converted into, Eurodollar Loans shall be subject to the
terms of the definition of “Interest Period” set forth in
Section 1.1 and shall be in such minimum amounts as provided in
Section 2.2(b), and (iv) any request for extension or conversion of a
Eurodollar Loan which shall fail to specify an Interest Period shall be deemed
to be a request for an Interest Period of one month.  Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephone notice promptly confirmed in writing) to the Administrative Agent
prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of, in
the case of the conversion of a Eurodollar Loan into a Base Rate Loan, and on
the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Revolving Loans to be so extended or converted,
the types of Revolving Loans into which such Revolving Loans are to be
converted and, if appropriate, the applicable Interest Periods with respect
thereto.  Each request for extension of a
Eurodollar Loan or conversion of a Base Rate Loan into a Eurodollar Loan shall
be irrevocable and shall constitute a representation and warranty by the
Borrower of the matters specified in Section 5.2.  In the event the Borrower fails to request an
extension or conversion of any Eurodollar Loan in accordance with this Section,
or any such conversion or extension is not permitted or required by this
Section, then such Eurodollar Loan shall be automatically converted into a Base
Rate Loan at the end of the Interest Period applicable thereto.  The Administrative Agent shall give each
Lender notice as promptly as practicable of any such proposed extension or
conversion affecting any Loan made by such Lender.

 

3.3                                 Prepayments.

 

(a)                                  Voluntary Prepayments.  The
Loans may be repaid in whole or in part without premium or penalty; provided
that (i) Eurodollar Loans may be prepaid only upon three (3) Business Days’
prior written notice to the Administrative Agent and must be accompanied by
payment of any amounts owing under Section 3.11, (ii) Base Rate Loans may
be prepaid only upon prior written notice to the Administrative Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of the
prepayment, and (iii) partial prepayments shall be (A) in the case of
Eurodollar Loans, in a minimum aggregate principal amount of $2,500,000 and
integral multiples of $500,000 in excess thereof, (B) in the case of Base Rate
Loans (other than Swingline Loans that are Base Rate Loans), in a minimum
aggregate principal amount of $1,000,000 and integral multiples of $100,000 in
excess thereof and (C) in the case of

 

34

 

Swingline
Loans, in a minimum aggregate principal amount of $1,000,000 and integral
multiples of $100,000 in excess thereof, provided that in the event that
an “auto-borrow” or “zero balance” or other similar arrangement shall then be
in place between the Borrower and the Swingline Lender, Swingline Loans shall
be prepaid in such minimum amounts, if any, provided by such agreement.

 

(b)                                 Mandatory Prepayments.

 

(i)                                     Revolving Committed Amount.  If
at any time, (A) the aggregate principal amount of Revolving Obligations shall
exceed the Aggregate Revolving Committed Amount, (B) the aggregate amount of
LOC Obligations shall exceed the LOC Committed Amount or (C) the aggregate principal
amount of Swingline Loans shall exceed the Swingline Committed Amount, the
Borrower shall immediately make payment on the Revolving Loans, on the
Swingline Loans and/or to a cash collateral account in respect of the LOC
Obligations, in an amount sufficient to eliminate the excess.

 

(ii)                                  Divestitures.  The
Revolving Obligations shall be prepaid as hereafter provided in an amount equal
to one hundred percent (100%) of the Net Proceeds received from any
Divestitures to the extent (A) such Net Proceeds are not reinvested in the same
or similar Property within six (6) months of the date of such Divestiture, and
(B) the aggregate amount of such Net Proceeds not reinvested in accordance with
the foregoing clause (A) shall exceed $1,000,000 in any fiscal year.

 

(iii)                               Debt Transactions.  The
Revolving Obligations shall be prepaid as hereafter provided in an amount equal
to one hundred percent (100%) of the Net Proceeds received from any Debt
Transaction.

 

(c)                                  Application.

 

(i)                                     Voluntary Prepayments. 
Voluntary prepayments shall be applied as specified by the Borrower or,
if not so specified by the Borrower, first to Swingline Loans, then to Base
Rate Loans, then to Eurodollar Loans in direct order of Interest Period
maturities and then to a cash collateral account to secure LOC Obligations.

 

(ii)                                  Mandatory Prepayments. 
Mandatory prepayments shall be applied first to Swingline Loans, then
Base Rate Loans, then to Eurodollar Loans in direct order of Interest Period
maturities and then to a cash collateral account to secure the LOC Obligations.

 

(d)                                 Prepayment Account.  If
the Borrower is required to make a mandatory prepayment of Eurodollar Loans
pursuant to Section 3.3(b)(ii) or (iii), the Borrower shall have the
right, in lieu of making such prepayment in full, to deposit an amount equal to
such mandatory prepayment with the Administrative Agent in a cash collateral
account maintained (pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the Administrative
Agent.  Any amounts so deposited shall be
held by the Administrative Agent as collateral for the prepayment of such
Eurodollar Loans and shall be applied to the prepayment of the applicable
Eurodollar Loans at the end of the current Interest Periods applicable
thereto.  At the request of the Borrower,
amounts so deposited shall be invested by the Administrative Agent in Cash
Equivalents maturing prior to the date or dates on which it is anticipated that
such amounts will be applied to prepay such Eurodollar Loans; any interest
earned on such Cash Equivalents will be for the account of the Borrower and the
Borrower will deposit with the Administrative Agent the amount of any loss on
any such Cash Equivalents to the extent necessary in order that the amount of
the prepayment to be made with the

 

35

 

deposited amounts may not be reduced.

 

3.4                                 Termination and Reduction
of Commitments

 

(a)                                  Voluntary Reductions.  The
Revolving Commitments may be terminated or permanently reduced in whole or in
part by the Borrower upon three (3) Business Days’ prior written notice to the
Administrative Agent, provided that (i) after giving effect to any
voluntary reduction, the aggregate amount of Revolving Obligations shall not
exceed the Aggregate Revolving Committed Amount, as reduced, and (ii) partial
reductions shall be in a minimum principal amount of $5,000,000, and in
integral multiples of $1,000,000 in excess thereof.

 

(b)                                 Mandatory Reduction.  On
the date thirty (30) days prior to the maturity date of any Subordinated Debt
(other than (i) the McKenzie Escrow Notes
and (ii) the Subordinated Debt that
matures on October 15, 2004), the Aggregate Revolving Committed Amount
shall automatically be temporarily reduced by an amount equal to the principal
amount of such Subordinated Debt (the “Reserve Amount”) and the Borrower
shall repay the outstanding Revolving Obligations to the extent that on the
date of such temporary reduction the amount of the outstanding Revolving Obligations
exceeds the Aggregate Revolving Committed Amount, as reduced.  Such temporary reduction shall remain in
effect until the maturity date of such Subordinated Debt (or such earlier date
as such Subordinated Debt is repaid in full). 
On the maturity date of such Subordinated Debt, the Aggregate Revolving
Committed Amount shall automatically be permanently increased by the Reserve
Amount, provided that no Default or Event of Default shall have occurred
and be continuing.

 

(c)                                  Termination.  The Revolving Commitments
shall terminate on the Termination Date.

 

3.5                                 Fees.

 

(a)                                  Commitment Fee.  In
consideration of the Revolving Commitments, the Borrower agrees to pay to the
Administrative Agent for the ratable benefit of the Lenders a commitment fee
(the “Commitment Fee”) in Dollars equal to the Applicable Percentage per
annum on the average daily unused amount of the Aggregate Revolving Committed
Amount for the applicable period.  The
Commitment Fee shall be payable quarterly in arrears on the last Business Day
of each March, June, September and December (for the calendar quarter
(or portion thereof) then ending) and on the Termination Date.  For purposes of computation of the Commitment
Fee, Swingline Loans shall not shall be counted toward or considered usage of
the Aggregate Revolving Committed Amount.

 

(b)                                 Letter of Credit Fees.

 

(i)                                     Letter of Credit Fee.  In
consideration of the LOC Commitment, the Borrower agrees to pay to the
Administrative Agent for the ratable benefit of the Lenders a fee (the “Letter
of Credit Fee”) in Dollars for each Letter of Credit equal to the
Applicable Percentage per annum on the average daily maximum amount available
to be drawn under such Letter of Credit (but only to the extent such
maximum amount is then in effect under such Letter of Credit) from the date of issuance to the date of
expiration. The Letter of Credit Fee shall be payable quarterly in arrears on
the last Business Day of each March, June, September and
December (for the calendar quarter (or portion thereof) then ending) and
on the Termination Date.

 

(ii)                                  Issuing Lender Fee.  In
addition to the Letter of Credit Fee, the Borrower agrees to pay to the Issuing
Lender for its own account without sharing by the other Lenders a fronting and
negotiation fee in Dollars for each Letter of Credit equal to one-eighth of one
percent

 

36

 

(0.125%)
per annum on the average daily maximum amount available to be drawn under
Letters of Credit (but only to the extent such maximum amount is then in
effect under such Letter of Credit) from the date of issuance to the date of expiration.  Such fee shall be payable quarterly in
arrears on the last Business Day of each March, June, September and
December (for the calendar quarter (or portion thereof) then ending) and
on the Termination Date.

 

3.6                                 Capital Adequacy.

 

If
any Lender has reasonably determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender’s capital or assets as a consequence
of its commitments or obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender’s policies with respect to
capital adequacy), then, subject to the provisions of Section 3.12, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.

 

3.7                                 Inability To Determine
Interest Rate.

 

If
prior to the first day of any Interest Period, the Administrative Agent shall
have determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Base
Rate for such Interest Period, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter (which notice shall be withdrawn by the Administrative
Agent whenever such circumstances no longer exist).  If such notice is given (a) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans and (b) any Loans that were to have been converted on
the first day of such Interest Period to or continued as Eurodollar Loans shall
be converted to or continued as Base Rate Loans.  Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Base Rate Loans to
Eurodollar Loans.

 

3.8                                 Illegality.

 

Notwithstanding
any other provision herein, if the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof occurring after the
Closing Date shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Credit Agreement, (a) such Lender
shall promptly give written notice of such circumstances to the Borrower and
the Administrative Agent (which notice shall be withdrawn by such Lender
whenever such circumstances no longer exist), (b) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and,
until such time as it shall no longer be unlawful for such Lender to make or
maintain Eurodollar Loans, such Lender shall then have a commitment only to
make a Base Rate Loan when a Eurodollar Loan is requested and (c) such Lender’s
Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then
current Interest Periods with respect to such Loans or within such earlier
period as required by law.  If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to
Section 3.11.

 

37

 

3.9                                 Requirements of Law.

 

If,
after the date hereof, the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof applicable to any Lender, or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority, in
each case made subsequent to the Closing Date (or, if later, the date on which
such Lender becomes a Lender):

 

(a)                                  shall subject such Lender to any tax of any
kind whatsoever with respect to any Letter of Credit, any Eurodollar Loans made
by it or its obligation to make Eurodollar Loans, or change the basis of
taxation of payments to such Lender in respect thereof (except for (i) Taxes
and Other Taxes covered by Section 3.10 (including Taxes imposed solely by
reason of Section 3.10(e)) and (ii) changes in taxes measured by or
imposed upon the overall net income, or franchise tax (imposed in lieu of such
net income tax), of such Lender or its applicable lending office, branch, or
any affiliate thereof));

 

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

 

(c)                                  shall impose on such Lender any other
condition (excluding any tax of any kind whatsoever);

 

and
the result of any of the foregoing is to increase the cost to such Lender, by
an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, subject to the provisions of
Section 3.12, the Borrower shall be obligated to promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable, provided that, in any
such case, the Borrower may elect to convert the Eurodollar Loans made by such
Lender hereunder to Base Rate Loans by giving the Administrative Agent at least
one Business Day’s notice of such election, in which case the Borrower shall
promptly pay to such Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 3.11.  Each Lender agrees that, as promptly as
practicable after it becomes aware of any circumstances of the type referred to
in paragraphs (a) through (c) above which would result in any such increased
cost or reduced amount receivable, the affected Lender shall, to the extent not
inconsistent with such Lender’s internal policies of general application,
designate a different lending office for the making of Loans hereunder or
otherwise use reasonable commercial efforts to minimize the amounts payable to
it by the Borrower pursuant to this Section 3.9.  The agreements of the Borrower in this
Section 3.9 shall survive the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.

 

3.10                           Taxes.

 

(a)                                  Any and all payments by the Borrower to or
for the account of any Lender or the Administrative Agent hereunder or under
any other Credit Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding,
in the case of each Lender and the

 

38

 

Administrative Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or its
applicable lending office) or the Administrative Agent (as the case may be) is
organized or maintained or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings,
and liabilities being hereinafter referred to as “Taxes”).  If the Borrower shall be required by law to
deduct or withhold any Taxes from or in respect of any sum payable under this
Credit Agreement or any other Credit Document to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions or withholdings (including deductions
or withholdings applicable to additional sums payable under this
Section 3.10) such Lender or the Administrative Agent receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions or withholdings, (iii) the Borrower
shall pay the full amount deducted or withheld to the relevant taxation
authority or other Governmental Authority in accordance with applicable law,
and (iv) within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 11.1, the original or a certified copy of a receipt evidencing
payment thereof.

 

(b)                                 In addition, the Borrower agrees to pay any
and all present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any payment made
under this Credit Agreement or any other Credit Document or from the execution
or delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as “Other Taxes”).

 

(c)                                  The Borrower agrees to indemnify each Lender
and the Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section 3.10) paid by such
Lender or the Administrative Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom or with respect
thereto.

 

(d)                                 (i)                                     Each
Lender that is not a “United States person” within the meaning of
Section 7701(a)(30) of the Internal Revenue Code (a “Foreign Lender”)
shall deliver to the Administrative Agent and the Borrower, prior to receipt of
any payment subject to withholding under the Internal Revenue Code (or upon
accepting an assignment of an interest herein), two duly signed completed
copies of either IRS Form W-8BEN or any successor thereto (relating to such
Foreign Lender and entitling it to an exemption from withholding tax on all
payments to be made to such Foreign Lender by the Borrower pursuant to this
Credit Agreement) or IRS Form W-8ECI or any successor thereto (relating to all
payments to be made to such Foreign Lender by the Borrower pursuant to this
Credit Agreement) or such other evidence satisfactory to the Borrower and the
Administrative Agent that such Foreign Lender is entitled to an exemption from
U.S. withholding tax, including any exemption pursuant to Section 881(c)
of the Internal Revenue Code.  Thereafter
and from time to time, each such Foreign Lender shall (A) promptly submit to the Administrative Agent and the Borrower
such additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to
the Borrower and the Administrative Agent of any available exemption from,
United States withholding taxes in respect of all payments to be made to such
Foreign Lender by the Borrower pursuant to this Credit Agreement, (B) promptly notify the Administrative Agent and
the Borrower of any change in circumstances which would modify or render
invalid any claimed exemption, and (C)
take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement
of applicable laws that the Borrower make any deduction or withholding for
taxes from amounts payable to such Foreign Lender.

 

39

 

(ii)                                  The
Borrower shall not be required to pay any additional amount to any Foreign
Lender under Section 3.10 (A)
with respect to any Taxes required to be deducted or withheld on the basis of
the information, certificates or statements of exemption such Lender transmits
with an IRS Form W-8IMY pursuant to this Section 3.10(d) or (B) if such Lender shall have failed to satisfy
the foregoing provisions of this Section 3.10(d); provided
that if such Lender shall have satisfied the requirement of this Section 3.10(d)(i)
on the date such Lender became a Lender or ceased to act for its own account
with respect to any payment under any of the Credit Documents, nothing in this Section 3.10(d)
shall relieve the Borrower of its obligation to pay any amounts pursuant to Section 3.10
in the event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Credit Documents is not
subject to withholding.

 

(e)                                  If any Lender determines that it has
recovered or used as a credit any amount withheld on its account pursuant to
Section 3.10, it shall reimburse (without any interest) the Borrower to
the extent of such amount so determined to have been recovered (to the extent
of any tax benefit actually received) or used as a credit, provided that
nothing in this paragraph (g) shall require any Lender to make available its
tax returns (or any other information relating to its taxes which it deems to
be confidential).

 

(f)                                    Without prejudice to the survival of any
other agreement of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 3.10 shall survive the repayment of
the Loans, LOC Obligations and other obligations under the Credit Documents and
the termination of the Commitments hereunder.

 

3.11                           Funding Losses.

 

Upon
demand of any Lender (with a copy to the Administrative Agent) from time to
time, the Borrower shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense incurred by it as a result of:

 

(a)                                  any continuation, conversion, payment or
prepayment of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise); or

 

(b)                                 any failure by the Borrower (for a reason
other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower;

 

including
any loss of anticipated profits and any loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain such Loan or from fees
payable to terminate the deposits from which such funds were obtained; provided
that the Borrower shall not be required to compensate a Lender for any loss,
cost or expenses incurred by such Lender in connection with a prepayment made
in accordance with Section 3.13(b)(i) if such prepayment resulted from
such Lender’s failure to make its share of the applicable borrowing
available to the Administrative Agent.  The Borrower shall also pay
any customary administrative fees charged by such Lender in connection with the
foregoing.  For purposes of calculating
amounts payable by the Borrower to the Lenders under this Section 3.11,
each Lender shall be deemed to have funded each Eurodollar Loan made by it at
the Eurodollar Base Rate for

 

40

 

such
Loan by a matching deposit or other borrowing in the applicable offshore Dollar
interbank market for a comparable amount and for a comparable period, whether
or not such Eurodollar Loan was in fact so funded.

 

3.12                           Certain Limitations.

 

(a)                                  The provisions of Sections 3.6, 3.9, 3.10 and
3.11 hereof shall be subject to the following:

 

(i)                                     Each Lender that desires compensation or
indemnification under Sections 3.6, 3.9 or 3.11 hereof shall notify the
Borrower through the Administrative Agent of any event occurring after the
Closing Date entitling such Lender to compensation or indemnification under any
of such Sections as promptly as practicable, but in any event within 90 days
after the occurrence of the event giving rise thereto; provided that if
any such Lender fails to give such notice within 90 days after the occurrence
of such an event, such Lender shall only be entitled to compensation or indemnification
in respect of such event accruing under Sections 3.6, 3.9 or 3.11 hereof with
respect to the period from and after the date 90 days prior to the date that
such Lender does give notice.

 

(ii)                                  Any notice given by a Lender pursuant to
subsection (a) above shall certify (i) that one of the events described in
Sections 3.6, 3.9 or 3.11 hereof has occurred, describing in reasonable detail
the nature of such event, (ii) as to the increased cost, reduced amount
receivable or loss or expense resulting from such event and (iii) as to the
additional amount demanded by such Lender, attaching a reasonably detailed
explanation of the calculation thereof. 
Such a certificate as to any compensation or indemnification payable
pursuant to Sections 3.6, 3.9 or 3.11, submitted by such Lender through the
Administrative Agent to the Borrower, shall be prima facie evidence assumed to
be correct.

 

(b)                                 If any Lender requests compensation or
indemnification from the Borrower under Sections 3.6, 3.9 or 3.10 hereof or if
any Lender is a Defaulting Lender (each an “Affected Lender”), the
Borrower may, at its option, notify the Administrative Agent and such Affected
Lender of its intention to replace the Affected Lender.  So long as no Event of Default shall have
occurred and be continuing, the Borrower may obtain, at the Borrower’s expense,
a replacement Lender for such Affected Lender. 
If the Borrower obtains a replacement Lender within ninety (90) days
following notice of its intention to do so, such Affected Lender must sell and
assign its Loans and any Revolving Commitment to such replacement Lender
pursuant to Section 11.3(b) hereof (without giving effect to any
requirement therein that the Administrative Agent consent thereto), for an
amount equal to the principal balance of all Loans held by such Affected Lender
and all accrued interest and Fees with respect thereto through the date of such
sale, provided that the Borrower shall have paid to such Affected Lender
the compensation or indemnification that it is entitled to receive under
Sections 3.6, 3.9 or 3.10 hereof, through the date of such sale and
assignment.  Notwithstanding the
foregoing, in the case of any Lender requesting compensation or indemnification
from the Borrower under Sections 3.6, 3.9 or 3.10 hereof, the Borrower shall
not have the right to obtain a replacement Lender if such Affected Lender
rescinds its demand for such compensation or indemnification within fifteen
(15) days following its receipt of the Borrower’s notice of intention to
replace such affected Lender. 
Additionally, in the case of any Lender requesting compensation or
indemnification from the Borrower under Sections 3.6, 3.9 or 3.10 hereof, if
the Borrower either (i) fails to notify
the Administrative Agent and such Affected Lender of its intention to replace
such Affected Lender within fifteen (15) days after receipt by the Borrower of
written demand from such Affected Lender for payment of compensation or
indemnification or (ii) timely gives a
notice to the Administrative Agent and such Affected Lender of its intention to
replace such Affected Lender but does not so replace

 

41

 

such Affected Lender within ninety (90) days thereafter, the Borrower’s
rights under this Section 3.12(c) shall terminate with respect to such
circumstances and the Borrower shall promptly pay all compensation or
indemnification to which such Affected Lender is entitled pursuant to Sections
3.6, 3.9 or 3.10 hereof.

 

3.13                           Pro Rata Treatment;
Administrative Agent’s Clawback.

 

Except
to the extent otherwise provided herein:

 

(a)                                  Pro Rata Treatment.  Each
Revolving Loan advance, each payment or prepayment of principal of any
Revolving Loan, each payment of reimbursement obligations arising from drawings
under Letters of Credit, each payment of interest on Revolving Loans, each
payment of interest on reimbursement obligations arising from drawings under
Letters of Credit, each payment of the Commitment Fee, each payment of the
Letter of Credit Fee, each reduction of the Aggregate Revolving Committed
Amount and each conversion or extension of any Revolving Loan shall be
allocated pro rata among the Lenders in accordance with their respective
Revolving Commitment Percentages.

 

(b)                                 Administrative
Agent’s Clawback.

 

(i)                                     Funding
by Lenders; Presumption by Administrative Agent.  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
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 in immediately available funds 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
(A) 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 (B) in the
case of a payment to be made by the Borrower, the interest rate applicable to the applicable borrowing.  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 (i) the amount so paid shall constitute such Lender’s Loan included
in such borrowing and (ii) if the
Borrower has previously repaid such Lender’s share of the applicable borrowing
to the Administrative Agent, the Administrative Agent shall promptly remit to
the Borrower such amount paid by the Borrower. 
Any payment by the Borrower under this Section 3.13(a)(i) 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.  The
Borrower shall not be required to compensate a Lender under Section 3.11
for any loss, cost or expenses incurred by such Lender in connection with a
prepayment made in accordance with Section 3.13(b)(i) if such prepayment
resulted from such Lender’s failure to make its share of the applicable
borrowing available to the Administrative Agent.

 

(ii)                                  Payments by
Borrower; Presumptions by Administrative Agent.  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

 

42

 

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, in
immediately available funds 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.

 

A notice of the Administrative Agent to any
Lender or the Borrower with respect to any amount owing under this
subsection (b) shall be conclusive, absent manifest error.

 

(c)                                  Failure
to Satisfy Conditions Precedent.  If
any Lender makes available to the Administrative Agent funds for any Loan to be
made by such Lender as provided in the foregoing provisions of this
Section 2, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Extensions of
Credit set forth in Section 5 are not satisfied or waived in accordance
with the terms hereof, the Administrative Agent shall return such funds (in
like funds as received from such Lender) to such Lender, without interest.

 

(d)                                 Obligations
of Lenders Several.  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 11.5(c)
are several and not joint.  The failure
of any Lender to make any Loan, to fund any such participation or to make any
payment under Section 11.5(c) on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such
date, and no Lender shall be responsible for the failure of any other Lender to
so make its Loan, to purchase its participation or to make its payment under Section 11.5(c).

 

(e)                                  Funding
Source.  Nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan in any particular place
or manner.

 

3.14                           Sharing of Payments.

 

The
Lenders agree among themselves that, in the event that any Lender shall obtain
payment in respect of any Loan, LOC Obligations or any other obligation owing
to such Lender under this Credit Agreement through the exercise of a right of
setoff, banker’s lien or counterclaim, or pursuant to a secured claim under
Section 506 of the Bankruptcy Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, in excess of its pro rata share of such payment as provided for in
this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a participation in such Loans, LOC Obligations and other obligations in
such amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all Lenders share such payment in accordance with
their respective ratable shares as provided for in this Credit Agreement.  The Lenders further agree among themselves
that if payment to a Lender obtained by such Lender through the exercise of a
right of setoff, banker’s lien, counterclaim or other event as aforesaid shall
be rescinded or must otherwise be restored, each Lender which shall have shared
the benefit of such payment shall, by repurchase of a participation theretofore
sold, return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. 
The Borrower agrees that any

 

43

 

Lender so purchasing such a participation may, to the fullest extent
permitted by law, exercise all rights of payment, including setoff, banker’s
lien or counterclaim, with respect to such participation as fully as if such
Lender were a holder of such Loan, LOC Obligations or other obligation in the
amount of such participation.  Except as
otherwise expressly provided in this Credit Agreement, if any Lender or the
Administrative Agent shall fail to remit to the Administrative Agent or any
other Lender an amount payable by such Lender or the Administrative Agent to
the Administrative Agent or such other Lender pursuant to this Credit Agreement
on the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to the Administrative Agent or such other Lender at a rate
per annum equal to the Federal Funds Rate. 
If under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a setoff to which this
Section 3.14 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 under this Section 3.14 to share in the
benefits of any recovery on such secured claim.

 

3.15                           Payments, Computations,
Etc.

 

(a)                                  Except as otherwise specifically provided
herein, all payments hereunder shall be made to the Administrative Agent in
Dollars and in immediately available funds, without condition or deduction for
any counterclaim, defense, recoupment or setoff, at the Administrative Agent’s
office specified in Section 11.1 not later than 2:00 P.M. (Charlotte,
North Carolina time) on the date when due. 
Payments received after such time shall be deemed to have been received
on the next succeeding Business Day.  The
Administrative Agent may (but shall not be obligated to) debit the amount of
any such payment which is not made by such time to any ordinary deposit account
of the Borrower maintained with the Administrative Agent (with notice to the
Borrower).  Subject to
Section 3.3(c), the Borrower shall, at the time it makes any payment under
this Credit Agreement, specify to the Administrative Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower hereunder
to which such payment is to be applied (and in the event that the Borrower
fails to so specify, or if such application would be inconsistent with the
terms hereof, the Administrative Agent shall distribute such payment to the
Lenders in such manner as the Administrative Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder, subject
to the terms of Section 3.13(a)). 
The Administrative Agent will distribute such payments to such Lenders,
if any such payment is received prior to 2:00 P.M. (Charlotte, North Carolina
time) on a Business Day in like funds as received prior to the end of such
Business Day and otherwise the Administrative Agent will distribute such
payment to such Lenders entitled thereto on the next succeeding Business
Day.  Whenever any payment hereunder
shall be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day (subject to
accrual of interest and Fees for the period of such extension).  Except as expressly provided otherwise
herein, all computations of interest and fees shall be made on the basis of the
actual number of days elapsed over a year of 360 days, except with respect to
computation of interest on Base Rate Loans which (unless the Base Rate is
determined by reference to the Federal Funds Rate) shall be calculated based on
a year of 365 or 366 days, as appropriate. 
Interest shall accrue from and include the date of borrowing, but exclude
the date of payment.

 

(b)                                 Allocation of Payments After Event of Default.  After
the exercise of remedies provided for in Section 9.2 (or after the
Loans have automatically become immediately due and payable and the LOC
Obligations have automatically been required to be cash collateralized as set
forth in Section 9.2), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in the following
order:

 

First, to payment of that portion of the
Obligations constituting fees, indemnities, expenses and other amounts
(including fees, charges and disbursements of counsel to the Administrative
Agent and amounts payable under Section 3) payable to the Administrative
Agent in its capacity as such;

 

44

 

Second, to payment of that portion of the
Obligations constituting fees, indemnities and other amounts (other than
principal and interest) payable to the Lenders and the Issuing Lender
(including fees, charges and disbursements of counsel to the respective Lenders
and the Issuing Lender and amounts payable under Section 3), ratably among them
in proportion to the amounts described in this clause Second payable to
them;

 

Third, to payment of that portion of the
Obligations constituting accrued and unpaid interest on the Loans and
unreimbursed drawings under Letters of Credit and fees, premiums and scheduled periodic payments, and any interest
accrued thereon, due under any Swap Contract between any Credit Party and any
Lender, or any Affiliate of a Lender, to the extent such Swap Contract is
permitted by Section 8.1, ratably among the Lenders (and, in
the case of such Swap Contracts, Affiliates of Lenders) and the Issuing Lender
in proportion to the respective amounts described in this clause Third
held by them;

 

Fourth, to (a) payment of that portion of the
Obligations constituting unpaid principal of the Loans and unreimbursed
drawings under Letters of Credit, (b) payment of breakage, termination or other payments, and any interest accrued
thereon, due under any Swap Contract between any Credit Party and any Lender,
or any Affiliate of a Lender, to the extent such Swap Contract is permitted by Section 8.1,
(c) payments of amounts due
under any Treasury Management Agreement between any Credit Party and any
Lender, or any Affiliate of a Lender and (d) cash collateralize that
portion of LOC Obligations comprised of the aggregate undrawn amount of Letters
of Credit, ratably among the Lenders (and, in the case of such Swap Contracts
and Treasury Management Agreements, Affiliates of Lenders) and the Issuing
Lender in proportion to the respective amounts described in this clause Fourth
held by them; and

 

Last, the balance, if any, after all of the
Obligations have been indefeasibly paid in full, to the Borrower or as
otherwise required by Law.

 

Amounts used to cash collateralize the aggregate undrawn amount of
Letters of Credit pursuant to clause Fourth above shall be applied to
satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as cash
collateral after all Letters of Credit have either been fully drawn or expired,
such remaining amount shall be applied to the other Obligations, if any, in the
order set forth above.

 

3.16                           Evidence of Debt.

 

(a)                                  Each Lender shall maintain an account or
accounts evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Credit Agreement.  Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update its
account or accounts from time to time, as necessary.

 

(b)                                 The Administrative Agent shall maintain the
Register pursuant to Section 11.3(c) hereof, and a subaccount for each
Lender, in which Register and subaccounts (taken together) shall be recorded
(i) the amount, type and Interest Period of each such Loan hereunder, (ii) the
amount of any principal or interest due and payable or to become due and
payable to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from or for the account of the Borrower and
each Lender’s share thereof.  The
Administrative Agent will make reasonable efforts to maintain the accuracy of
the

 

45

 

subaccounts referred to in the preceding sentence and to promptly
update such subaccounts from time to time, as necessary.

 

(c)                                  The entries made in the accounts, Register
and subaccounts maintained pursuant to subsection (b) of this
Section 3.16 (and, if consistent with the entries of the Administrative
Agent, subsection (a)) shall 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 any 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 the
Loans made by such Lender in accordance with the terms hereof.

 

SECTION 4

GUARANTY

 

4.1                                 The Guarantee.

 

(a)                                  Each of the Guarantors hereby jointly and
severally guarantees to the Administrative Agent and each holder of the
Obligations as hereinafter provided the prompt payment of the Obligations in full
when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof.  The
Guarantors hereby further agree that if any of the Obligations are not paid in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Obligations, the same will be promptly paid in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) in accordance
with the terms of such extension or renewal.

 

(b)                                 Notwithstanding any provision to the contrary
contained herein or in any other of the Credit Documents or in any Swap
Contract or Treasury Management Agreement, to the extent the obligations of a
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of each
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).

 

4.2                                 Obligations Unconditional.

 

The
obligations of the Guarantors under Section 4.1 hereof are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents, Swap
Contracts or Treasury Management Agreements, or any other agreement or instrument
referred to therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances.  Each
Guarantor agrees that such Guarantor shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrower or any other
Guarantor of the Obligations for amounts paid under this Section 4 until
such time as the Lenders (and any Affiliates of Lenders entering into Swap
Contracts or Treasury Management Agreements) have been paid in full, all
Commitments under the Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or reimbursement
of funds from the Lenders in connection with monies received under the Credit
Documents, Swap Contracts and Treasury Management

 

46

 

Agreements.  Without limiting the generality of the
foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:

 

(i) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Obligations shall
be extended, or such performance or compliance shall be waived;

 

(ii) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Swap Contract, any Treasury Management Agreement or any
other agreement or instrument referred to in the Credit Documents, Swap
Contracts or Treasury Management Agreements shall be done or omitted;

 

(iii) the maturity of any of the Obligations shall be accelerated, or
any of the Obligations shall be modified, supplemented or amended in any
respect, or any right under any of the Credit Documents, any Swap Contract, any
Treasury Management Agreement or any other agreement or instrument referred to
in the Credit Documents, Swap Contracts or Treasury Management Agreements shall
be waived or any other guarantee of any of the Obligations or any security
therefor shall be released or exchanged in whole or in part or otherwise dealt
with;

 

(iv) any Lien granted to, or in favor of, the Administrative Agent or
any Lender or Lenders as security for any of the Obligations shall fail to
attach or be perfected; or

 

(v) any of the Obligations shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of any
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of any Guarantor).

 

With
respect to its obligations hereunder, each Guarantor hereby expressly waives
diligence, presentment, demand of payment, protest and all notices whatsoever,
and any requirement that the Administrative Agent or any Lender exhaust any
right, power or remedy or proceed against any Person under any of the Credit
Documents, any Swap Contract, any Treasury Management Agreement or any other
agreement or instrument referred to in the Credit Documents, Swap Contracts or
Treasury Management Agreements, or against any other Person under any other
guarantee of, or security for, any of the Obligations.

 

4.3                                 Reinstatement.

 

The
obligations of the Guarantors under this Section 4 shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Person in respect of the Obligations is rescinded or must be otherwise
restored by any holder of any of the Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and each Guarantor
agrees that it will indemnify the Administrative Agent and each Lender on
demand for all reasonable costs and expenses (including, without limitation,
reasonable fees and expenses of counsel) incurred by the Administrative Agent
or such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.

 

4.4                                 Certain Additional Waivers.

 

Without
limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. Sec. 26-7
through 26-9, inclusive.  Each of the

 

47

 

Guarantors further agrees that such Guarantor shall have no right of
recourse to security for the Obligations, except through the exercise of the
rights of subrogation pursuant to Section 4.2.

 

4.5                                 Remedies.

 

The
Guarantors agree that, to the fullest extent permitted by law, as between the
Guarantors, on the one hand, and the Administrative Agent and the Lenders, on
the other hand, the Obligations may be declared to be forthwith due and payable
as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in
Section 9.2) for purposes of Section 4.1 notwithstanding any stay,
injunction or other prohibition preventing such declaration (or preventing the
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Obligations being
deemed to have become automatically due and payable), the Obligations (whether
or not due and payable by any other Person) shall forthwith become due and
payable by the Guarantors for purposes of Section 4.1.

 

4.6                                 Rights of Contribution.

 

The
Guarantors hereby agree, as among themselves, that if any Guarantor shall
become an Excess Funding Guarantor (as defined below), each other Guarantor
shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding
Guarantor an amount equal to such Guarantor’s Pro Rata Share (as defined below
and determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below).  The payment
obligation of any Guarantor to any Excess Funding Guarantor under this
Section 4.6 shall be subordinate and subject in right of payment to the
prior payment in full of the obligations of such Guarantor under the other
provisions of this Section 4, and such Excess Funding Guarantor shall not
exercise any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations.  For purposes hereof, (i) “Excess Funding Guarantor” shall mean, in respect of any
obligations arising under the other provisions of this Section 4
(hereafter, the “Guarantied Obligations”), an Guarantor that has paid an
amount in excess of its Pro Rata Share of the Guarantied Obligations; (ii) “Excess Payment” shall mean, in
respect of any Guarantied Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guarantied Obligations; and (iii) “Pro Rata Share”, for the purposes
of this Section 4.6, shall mean, for any Guarantor, the ratio (expressed
as a percentage) of (a) the amount by
which the aggregate present fair saleable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (b) the amount by which the aggregate present
fair saleable value of all assets and other properties of the Borrower and all
of the Guarantors exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Borrower and the Guarantors hereunder) of
the Borrower and all of the Guarantors, all as of the Closing Date (if any
Guarantor becomes a party hereto subsequent to the Closing Date, then for the
purposes of this Section 4.6 such subsequent Guarantor shall be deemed to
have been an Guarantor as of the Closing Date and the information pertaining
to, and only pertaining to, such Guarantor as of the date such Guarantor became
an Guarantor shall be deemed true as of the Closing Date).

 

4.7                                 Continuing Guarantee.

 

The
guarantee in this Section 4 is a continuing guarantee, and shall apply to
all Obligations whenever arising.

 

48

 

SECTION 5

CONDITIONS

 

5.1                                 Conditions to Closing.

 

This
Credit Agreement shall become effective, and the initial Extensions of Credit
may be made, upon the satisfaction (or waiver) of the following conditions
precedent, each in form and substance satisfactory to the Administrative Agent
and each of the Lenders:

 

(a)                                  Execution of Credit Agreement and Credit
Documents.  Receipt by the Administrative Agent of (i)
multiple counterparts of this Credit Agreement, (ii) a Revolving Note for each
Lender and (iii) multiple counterparts of the Collateral Documents, in each
case executed by a duly authorized officer of each party thereto and in each
case conforming to the requirements of this Credit Agreement.

 

(b)                                 Legal Opinions. 
Receipt by the Administrative Agent of multiple counterparts of opinions
of counsel for the Credit Parties relating to the Credit Documents and the
transactions contemplated herein, in form and substance reasonably satisfactory
to the Administrative Agent and the Lenders.

 

(c)                                  Corporate Documents. 
Receipt of the following (or their equivalent) for each Credit Party:

 

(i)                                     Good Standing. 
Certificates of good standing, existence or its equivalent certified as
of a recent date by the appropriate governmental authorities of the state of
incorporation and the state in which its chief executive office is located.

 

(ii)                                  Officer’s Certificate.  An
officer’s certificate for each Credit Party dated as of the Closing Date in
form and substance reasonably acceptable to the Administrative Agent, with
appropriate insertions and attachments.

 

(d)                                 Financial Information. 
Receipt by the Administrative Agent and the Lenders of each of the
financial statements and related information referenced in Section 6.1(i)
and (ii) and all other financial information reasonably requested by the
Administrative Agent and the Lenders, in each case in form and substance
satisfactory to the Administrative Agent and the Lenders.

 

(e)                                  Priority of Liens.  The
Administrative Agent shall have received satisfactory evidence that (i) the
Administrative Agent, on behalf of the Lenders, holds a perfected, first
priority Lien on all Collateral and (ii) none of the Collateral is subject to
any Liens other than Permitted Liens.

 

(f)                                    Officer’s Certificates.  The
Administrative Agent shall have received a certificate or certificates executed
by a Responsible Officer of the Borrower as of the Closing Date, in form and substance
satisfactory to the Administrative Agent, stating that immediately after giving
effect to the initial Loans made and Letters of Credit issued on the Closing
Date, (i) no Default or Event of Default
exists, (ii) all representations and
warranties contained herein and in the other Credit Documents are true and
correct in all material respects and (iii)
the Credit Parties are in pro forma compliance with each of the financial
covenants set forth in Section 7.9 (assuming for purposes hereof that such
financial covenants were measured as of, and for the 12-month period ending on,
the last day of the calendar month ending immediately prior to such date).

 

(g)                                 Fees and Expenses. 
Receipt by the Administrative Agent and the Lenders of all fees and
expenses required to be paid to them on or prior to the Closing Date pursuant
to the Administrative

 

49

 

Agent’s Fee Letter, Section 3.5 or otherwise.

 

(h)                                 Subordinated Debt.

 

(i)                                     The Borrower and each holder of Subordinated
Debt party to the Senior Subordination Agreement shall have entered into an
amendment to the Senior Subordination Agreement in substantially the form of Schedule 5.1(h)-1
hereto (the “Senior Subordination Agreement Amendment”).

 

(ii)                                  The Borrower and each holder of Subordinated
Debt party to the Junior/Senior Subordination Agreement shall have entered into
an amendment to the Junior/Senior Subordination Agreement in substantially the
form of Schedule 5.1(h)-2 hereto (the “Junior/Senior
Subordination Agreement Amendment”).

 

(iii)                               The Borrower and each holder of Subordinated Debt party to the
Subordination of Indebtedness Owed to Shareholders dated September 30,
2002 shall enter into the Junior Subordination Agreement.

 

Without
limiting the generality of the provisions of Section 10.4, for purposes of
determining compliance with the conditions specified in this Section 5.1,
each Lender that has signed this Credit Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

5.2                                 Conditions to All
Extensions of Credit.

 

The
obligation of each Lender to make any Extension of Credit (including the
initial Extension of Credit) is subject to the satisfaction of the following
conditions precedent on the date of making such Extension of Credit:

 

(a)                                  Representations and Warranties.  The
representations and warranties made by the Credit Parties herein or in any
other Credit Documents or which are contained in any certificate furnished at
any time under or in connection herewith shall be true and correct in all
material respects on and as of the date of such Extension of Credit as if made
on and as of such date (except for those which expressly relate to an earlier
date and those which are untrue solely as a result of a change permitted by
this Credit Agreement).

 

(b)                                 No Default or Event of Default.  No
Default or Event of Default shall have occurred and be continuing on such date
or after giving effect to the Extension of Credit to be made on such date
unless such Default or Event of Default shall have been waived in accordance
with this Credit Agreement.

 

(c)                                  Section 2 and Section 3.2
Conditions.  Each of the conditions set forth in
Section 2 (and, in the case of an extension or conversion of a Revolving
Loan, the conditions set forth in Section 3.2) applicable to the requested
Extension of Credit shall have been satisfied.

 

Each
request for Extension of Credit (including extensions of Eurodollar Loans and
conversions of Base Rate Loans into Eurodollar Loans) and each acceptance by
the Borrower of an Extension of Credit (including extensions of Eurodollar
Loans and conversions of Base Rate Loans into Eurodollar Loans) shall be deemed
to constitute a representation and warranty by the Borrower as of the date of
such

 

50

 

Extension of Credit that the conditions precedent set forth in this
Section 5.2 have been satisfied or waived in accordance with this Credit
Agreement.

 

SECTION 6

REPRESENTATIONS AND WARRANTIES

 

To
induce the Lenders to enter into this Credit Agreement and to make Extensions
of Credit herein, each Credit Party hereby represents and warrants to the
Administrative Agent and to each Lender that:

 

6.1                                 Financial Condition.

 

Each
of the financial statements described below (copies of which have heretofore
been provided to the Administrative Agent for distribution to the Lenders) have
been prepared in accordance with GAAP consistently applied throughout the
periods covered thereby, are complete and correct in all material respects and
present fairly the financial condition and results from operations of the
entities and for the periods specified (subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes):

 

(i)                                     audited consolidated balance sheets of the
members of the Consolidated Group for the fiscal years ending December 31,
2001, September 30, 2002 and September 30, 2003, together with
related consolidated statements of income and cash flows for such fiscal years,
in each case certified by PricewaterhouseCoopers, LLP, certified public
accountants;

 

(ii)                                  company-prepared, unaudited consolidated
balance sheets of the members of the Consolidated Group for each of the twelve
months ending prior to the Closing Date, together with related consolidated
statements of income and cash flows for each such month; and

 

(iii)                               the financial statements delivered to the Administrative Agent by the
Credit Parties pursuant to Sections 7.1(a) and (b).

 

6.2                                 No Changes.

 

Since
September 30, 2003, there has been no circumstance, development or event
relating to or affecting the members of the Consolidated Group which has had or
would be reasonably expected to have a Material Adverse Effect.

 

6.3                                 Organization; Existence;
Compliance with Law.

 

Each
of the members of the Consolidated Group (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, except to the extent that the failure to be in
good standing would not, in the aggregate, have a Material Adverse Effect, (b)
has the corporate or other necessary power and authority, and the legal right,
to own and operate its Property, to lease the Property it operates as lessee
and to conduct the business in which it is currently engaged, except to the
extent that the failure to have such power, authority and right would not, in
the aggregate, have a Material Adverse Effect, (c) is duly qualified as a
foreign entity and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of Property or the conduct of its business
requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing would not, in the aggregate, have a
Material Adverse Effect, and (d) is in compliance with its certificate of

 

51

 

incorporation and bylaws (or other organizational or governing
documents) and all Requirements of Law, except to the extent that the failure to
comply therewith would not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.

 

6.4                                 Power; Authorization;
Enforceable Obligations.

 

Each
of the members of the Consolidated Group has the corporate or other necessary
power and authority, and the legal right, to make, deliver and perform the
Credit Documents to which it is a party and has taken all necessary corporate
or other action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is a party. 
No consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or any other Person is required in
connection with acceptance of extensions of credit or the making of the
guaranties hereunder or with the execution, delivery or performance of any
Credit Documents by the members of the Consolidated Group (other than those
which have been obtained, such filings as are required by the Securities and
Exchange Commission and to fulfill other reporting requirements with
Governmental Authorities) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).  Each Credit Document to which it is a party
constitutes a legal, valid and binding obligation of the Credit Parties
enforceable against each such Credit Party in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

 

6.5                                 No Legal Bar.

 

The
execution, delivery and performance of the Credit Documents, the borrowings
hereunder and the use of the Extensions of Credit will not violate any
Requirement of Law, the certificate of incorporation or bylaws (or other
organizational or governing documents) or any Contractual Obligation (except in
the case of leases entered into for branch or office space in the ordinary
course of business, which in the aggregate will not have a Material Adverse
Effect) of any member of the Consolidated Group (except those as to which
waivers or consents have been obtained), and will not result in, or require,
the creation or imposition of any Lien on any of its respective properties or
revenues pursuant to any Requirement of Law, its certificate of incorporation
or bylaws (or other organizational or governing documents) or Contractual
Obligation other than the Liens arising under or contemplated in connection
with the Credit Documents.  No member of
the Consolidated Group is in default under or with respect to any of its
Contractual Obligations in any respect that would reasonably be expected to
have a Material Adverse Effect.

 

6.6                                 No Material Litigation.

 

No
claim, litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the actual knowledge of the
Responsible Officers, threatened by or against, any members of the Consolidated
Group or against any of their respective properties or revenues which (a)
purports to affect the legality, validity or enforceability of any of the Credit
Documents and which is reasonably likely to be adversely determined, or (b) is
reasonably likely to have a Material Adverse Effect.

 

6.7                                 No Default.

 

No
Default or Event of Default has occurred and is continuing.

 

52

 

6.8                                 Ownership of Property;
Liens.

 

Each
of the members of the Consolidated Group has good and marketable title to, or
(subject to the documentation of certain agreed-upon leases between certain
members of the Consolidated Group) a valid leasehold interest in, all its
Property material to the Consolidated Group, except to the extent that the
failure to do so would not, in the aggregate, have a Material Adverse Effect;
and none of the Property of the members of the Consolidated Group is subject to
any Lien, except for Permitted Liens.

 

6.9                                 Intellectual Property.

 

Each
of the members of the Consolidated Group owns, or has the legal right to use,
all United States trademarks, service marks, trade names, copyrights, patents,
patent rights, franchises, licenses and other intellectual property rights (the
“Intellectual Property”) except for those the failure to own or have
such legal right to use would not be reasonably expected to have a Material
Adverse Effect.  Set forth on Schedule 6.9
is a list of all Intellectual Property registered or pending registration with
the United States Copyright Office or the United States Patent and Trademark
Office and owned by a Credit Party as of the Closing Date.

 

6.10                           No Burdensome Restrictions.

 

Neither
compliance with the certificate of incorporation or bylaws (or other
organizational or governing documents) nor compliance with any Requirement of
Law or Contractual Obligation of the members of the Consolidated Group would be
reasonably expected to have a Material Adverse Effect.

 

6.11                           Taxes.

 

Each
of the members of the Consolidated Group has filed or caused to be filed all
United States federal income tax returns and all other material tax returns
which, to the actual knowledge of any Responsible Officer, are required to be
filed and has paid (a) all taxes shown to be due and payable on said returns or
(b) all taxes shown to be due and payable on any assessments of which it has
received notice made against it or any of its Property and all other taxes,
fees or other charges imposed on it or any of its Property by any Governmental
Authority (other than any (i) taxes, fees or other charges with respect to
which the failure to pay, in the aggregate, would not have a Material Adverse
Effect or (ii) taxes, fees or other charges the amount or validity of which are
currently being contested and with respect to which reserves in conformity with
GAAP have been provided on the books of such Person), and no tax Lien has been
filed (other than tax Liens which, in the aggregate, would not have a Material
Adverse Effect), and, to the actual knowledge of the Responsible Officers, no
claim is being asserted, with respect to any such tax, fee or other charge
(other than such claims which, in the aggregate, would not have a Material Adverse
Effect).

 

6.12                           ERISA

 

Except
as would not reasonably be expected to have a Material Adverse Effect:

 

(a)                                  During the five-year period prior to the date
on which this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the actual knowledge of the Responsible Officers, no event or
condition has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no “accumulated
funding deficiency,” as such term is defined in Section 302 of ERISA and
Section 412 of the Internal Revenue Code, whether or not waived, has
occurred with respect to any Plan; (iii) each Plan has been maintained,
operated, and funded in compliance with its own terms and in material compliance
with the provisions of ERISA, the Internal Revenue Code, and any other

 

53

 

applicable federal or state laws; and (iv) no lien in favor of the PBGC
or a Plan has arisen or is reasonably likely to arise on account of any Plan.

 

(b)                                 The actuarial present value of all “benefit
liabilities” (as defined in Section 4001(a)(16) of ERISA), whether or not
vested, under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting Standards
Board Statement 87, utilizing the actuarial assumptions used in such Plan’s
most recent actuarial valuation report), did not exceed as of such valuation date
the fair market value of the assets of such Plan.

 

(c)                                  No member of the Consolidated Group nor any
ERISA Affiliate has incurred, or, to the actual knowledge of the Responsible
Officers, could be reasonably expected to incur, any withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan.  No member of the Consolidated Group nor any
ERISA Affiliate would become subject to any withdrawal liability under ERISA if
any member of the Consolidated Group or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. No member of the Consolidated Group nor any ERISA
Affiliate has received any notification that any Multiemployer Plan is in
reorganization (within the meaning of Section 4241 of ERISA), is insolvent
(within the meaning of Section 4245 of ERISA), or has been terminated
(within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the
actual knowledge of the Responsible Officers, reasonably expected to be in
reorganization, insolvent, or terminated.

 

(d)                                 No prohibited transaction (within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue Code)
or breach of fiduciary responsibility has occurred with respect to a Plan which
has subjected or may subject any member of the Consolidated Group or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA
or Section 4975 of the Internal Revenue Code, or under any agreement or
other instrument pursuant to which any member of the Consolidated Group or any
ERISA Affiliate has agreed or is required to indemnify any person against any
such liability.

 

(e)                                  No member of the Consolidated Group nor any
ERISA Affiliates has any material liability with respect to “expected
post-retirement benefit obligations” within the meaning of the Financial
Accounting Standards Board Statement 106. 
Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the
Internal Revenue Code apply has been administered in compliance in all material
respects of such sections.

 

6.13                           Governmental Regulations,
Etc.

 

(a)                                  No part of the proceeds of the Extensions of
Credit hereunder will be used, directly or indirectly, for the purpose of
purchasing or carrying any “margin stock” within the meaning of Regulation
U.  If requested by any Lender or the Administrative
Agent, the members of the Consolidated Group will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity with
the requirements of FR Form U-1 referred to in said Regulation U.  No indebtedness being reduced or retired out
of the proceeds of the Extensions of Credit hereunder was or will be incurred
for the purpose of purchasing or carrying any margin stock within the meaning
of Regulation U or any “margin security” within the meaning of Regulation
T.  “Margin stock” within the meanings of
Regulation U does not constitute more than 25% of the value of the consolidated
assets of the Borrower and its Subsidiaries. 
None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the proceeds of
the Loans) will violate or result in a violation of the Securities Act of 1933,
as amended, or the Exchange Act or Regulation T, U or X.

 

54

 

(b)                                 None of the members of the Consolidated Group
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act or the Investment Company Act of 1940, each as
amended.  In addition, none of the
members of the Consolidated Group is (i) an “investment company” registered or
required to be registered under the Investment Company Act of 1940, as amended,
or is controlled by such a company, or (ii) a “holding company”, or a
“subsidiary company” of a “holding company”, or an “affiliate” of a “holding
company” or of a “subsidiary” of a “holding company”, within the meaning of the
Public Utility Holding Company Act of 1935, as amended.

 

6.14                           Subsidiaries.

 

Set
forth on Schedule 6.14 are all the Subsidiaries of the Borrower on
the Closing Date and the jurisdiction of their incorporation.

 

6.15                           Purpose of Extensions of
Credit.

 

The
proceeds of the Loans will be used by the Borrower solely (a) to refinance the loans outstanding under the
Existing Credit Agreement, (b) to finance
the Permitted Equity Payment, (c) to
finance the Permitted Subordinated Debt Redemption, (d) to finance the repayment of the Subordinated Debt pursuant to
Section 3.4(b) and (e) for working
capital, capital expenditures and other lawful corporate purposes of the
members of the Consolidated Group.

 

6.16                           Environmental Matters.

 

Except
as would not reasonably be expected to have a Material Adverse Effect, to the
actual knowledge of each Responsible Officer:

 

(a)                                  Each of the facilities and properties owned,
leased or operated by the members of the Consolidated Group (the “Subject
Properties”) and all operations at the Subject Properties are in compliance
with all applicable Environmental Laws, and there is no violation of any
Environmental Law with respect to the Subject Properties or the businesses
operated by the members of the Consolidated Group (the “Businesses”),
and there are no conditions relating to the Businesses or Subject Properties
that could give rise to liability of any member of the Consolidated Group under
any applicable Environmental Laws.

 

(b)                                 None of the Subject Properties contains, or
has previously contained, any Materials of Environmental Concern at, on or
under the Subject Properties in amounts or concentrations that constitute or
constituted a violation of, or could give rise to liability of any member of
the Consolidated Group under, Environmental Laws.

 

(c)                                  None of the members of the Consolidated Group
has received any written or verbal notice of, or inquiry from any Governmental
Authority regarding, any violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Subject Properties or the
Businesses, nor does any Responsible Officer have actual knowledge that any
such notice will be received or is being threatened.

 

(d)                                 Materials of Environmental Concern have not
been transported or disposed of from the Subject Properties, or generated,
treated, stored or disposed of at, on or under any of the Subject Properties or
any other location, in each case by or on behalf any members of the
Consolidated Group in violation of, or in a manner that would be reasonably
likely to give rise to liability of any member of the Consolidated Group under,
any applicable Environmental Law.

 

55

 

(e)                                  No judicial proceeding or governmental or
administrative action is pending or, to the actual knowledge of any Responsible
Officer, threatened, under any Environmental Law to which any member of the
Consolidated Group is or will be named as a party, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to any member of the Consolidated Group, the
Subject Properties or the Businesses.

 

(f)                                    There has been no release or, threat of
release of Materials of Environmental Concern at or from the Subject
Properties, or arising from or related to the operations (including, without
limitation, disposal) of any member of the Consolidated Group in connection
with the Subject Properties or otherwise in connection with the Businesses, in
violation of or in amounts or in a manner that could give rise to liability of
any member of the Consolidated Group under Environmental Laws.

 

6.17                           Obligations under Leases.

 

Each
member of the Consolidated Group is current in payments, and is not otherwise
in default, under any lease for office or branch space, except as would not
result in lease payment obligations in excess of $500,000 in the aggregate for
the Consolidated Group as a whole at any time being owing and unpaid (including
amounts in dispute).

 

6.18                           Shareholder Pledge
Agreement.

 

If
a Qualifying IPO has not occurred on or prior to the Shareholder Pledge Date,
at all times during the Shareholder Pledge Period:

 

(a)                                  The Capital Stock pledged pursuant to the
Shareholder Pledge Agreement constitutes all of the issued and outstanding
Capital Stock of the Borrower (other than stock options).

 

(b)                                 All of the Capital Stock pledged pursuant to
the Shareholder Pledge Agreement has been duly and validly issued, is fully
paid and nonassessable and is owned of record by the Pledgors identified in the
Shareholder Pledge Agreement.

 

6.19                           Disclosure.

 

None
of the information, reports, financial statements, exhibits or schedules, taken
as a whole, furnished by or on behalf of any member of the Consolidated Group
to the Administrative Agent or any Lender in connection with the negotiation of
the Credit Documents or included therein or delivered pursuant thereto
contained any material misstatement of fact or omitted to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not materially misleading, provided that to
the extent any such information, report, financial statement, exhibit or
schedule was based upon or constitutes a forecast or projection, each of
the Credit Parties represents only that it acted in good faith and utilized
reasonable assumptions and due care in the preparation of such information,
report, financial statement, exhibit or schedule.

 

6.20                           Bank Accounts.

 

Set
forth on Schedule 6.20 is a complete and accurate list of all bank
accounts maintained by a member of the Consolidated Group with any bank or
other financial institution as of the Closing Date.

 

56

 

6.21                           Solvency.

 

The
Credit Parties are Solvent on a consolidated basis.

 

6.22                           Collateral Matters.

 

Set
forth on Schedule 6.22(a) is a list of each state in which any
Credit Party owns or leases any real property as of the Closing Date.  Set
forth on Schedule 6.22(b) is a list of all locations not owned or
leased by any Credit Party where any tangible personal property of any Credit
Party is stored or kept as of the Closing Date. 
Set forth on Schedule 6.22(c) is the chief executive office,
tax payer identification number and, if applicable, organizational
identification number of each Credit Party as of the Closing Date.  The exact legal name and state of organization
of each Credit Party is as set forth on the signature pages hereto.  Except as set forth on Schedule 6.22(d),
no Credit Party has during the five years preceding the Closing Date changed
its legal name, changed its state of formation or been party to a merger,
consolidation or other change in structure.

 

SECTION 7

AFFIRMATIVE COVENANTS

 

Each
Credit Party covenants and agrees that on the Closing Date, and so long as this
Credit Agreement is in effect or any amounts owing under any Credit Document
shall remain outstanding and until the Commitments have been terminated, the
Borrower shall, and in the case of Sections 7.4, 7.5, 7.6, 7.7, 7.8 and 7.14
shall cause each of its Subsidiaries to:

 

7.1                                 Financial Statements.

 

Furnish,
or cause to be furnished, to the Administrative Agent (and the Administrative
Agent shall promptly furnish to the Lenders):

 

(a)                                  Audited Financial Statements.  As
soon as available, but in any event within 120 days after the end of each
fiscal year, an audited consolidated balance sheet of the members of the
Consolidated Group as of the end of such fiscal year and the related
consolidated statements of operations, shareholders’ equity and cash flows for
such fiscal year, audited by PricewaterhouseCoopers, LLP, or other firm of
independent certified public accountants of nationally recognized standing
reasonably acceptable to the Required Lenders, setting forth in each case in
comparative form the figures for the previous fiscal year\, reported without a
“going concern” or like qualification or exception, or qualification indicating
that the scope of the audit was inadequate to permit such independent certified
public accountants to certify such financial statements without such
qualification.

 

(b)                                 Company-Prepared Financial Statements.  As
soon as available, but in any event

 

(i)                                     Prior to a Qualifying IPO:

 

(A)                              within thirty (30) days after the end of each
monthly period of each fiscal year of the members of the Consolidated Group,
unaudited consolidated balance sheets of the Consolidated Group as of the end
of each such monthly period, and consolidated statements of income and cash
flows of the Consolidated Group for such monthly period, all in reasonable
detail and certified by a Responsible Officer of the Borrower as to the
correctness and accuracy of the financial information contained therein;

 

57

 

(B)                                within thirty (30) days after the end of each
monthly period of each fiscal year of the members of the Consolidated Group, a
statement showing the revenue, expenses and Branch Operating Income for each
branch office of the members of the Consolidated Group for such monthly period,
all in reasonable detail and certified by a Responsible Officer of the Borrower
as to the correctness and accuracy of the financial information contained
therein; and

 

(C)                                within thirty (30) days after the end of each
monthly period of each fiscal year of the members of the Consolidated Group, an
aging report of the Transaction Receivables and other accounts receivable of
the members of the Consolidated Group.

 

(ii)                                  After a Qualifying IPO:

 

(A)                              within forty-five (45) days after the end of
each fiscal quarter of the members of the Consolidated Group, unaudited
consolidated balance sheets of the Consolidated Group as of the end of each
such fiscal quarter, and consolidated statements of income and cash flows of
the Consolidated Group for such fiscal quarter, all in reasonable detail and
certified by a Responsible Officer of the Borrower as to the correctness and
accuracy of the financial information contained therein;

 

(B)                                within forty-five (45) days after the end of
each fiscal quarter of the Consolidated Group, a statement showing the revenue,
expenses and Branch Operating Income for each branch office of the members of
the Consolidated Group for such fiscal quarter, all in reasonable detail and
certified by a Responsible Officer of the Borrower as to the correctness and
accuracy of the financial information contained therein; and

 

(C)                                within forty-five (45) days after the end of
each fiscal quarter of the members of the Consolidated Group, an aging report
of the Transaction Receivables and other accounts receivable of the members of
the Consolidated Group.

 

(iii)                               promptly upon receipt thereof, copies of all financial reports, in
addition to those provided pursuant to Section 7.1(a), submitted to the
members of the Consolidated Group by independent public accountants;

 

together
with, in each case, a consolidated balance sheet and consolidated statement of
income showing in comparative form the same information for the Consolidated
Group during the corresponding period or periods of the preceding fiscal year
or the portion of the fiscal year ending with such period, as applicable, in
each case subject to normal year-end audit adjustments.

 

All
such financial statements shall be complete and correct in all material
respects (subject, in the case of interim statements, to normal year-end audit
adjustments) and shall be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and further
accompanied by a description of, and an estimation of the effect on the
financial statements on account of, any change in the application of accounting
principles as provided in Section 1.3(a).

 

As to any information contained in materials furnished pursuant to Section 7.2(d),
the Borrower shall not be separately required to furnish such information under
clause (a) or (b)(ii)(A) above, but the foregoing shall not be in derogation of
the obligation of the Borrower to furnish the information and materials
described in clauses (a) and (b)(ii)(A) above at the times specified therein.

 

58

 

7.2                                 Certificates; Other
Information.

 

Furnish,
or cause to be furnished, to the Administrative Agent  (and the Administrative Agent shall promptly
furnish to the Lenders):

 

(a)                                  Accountant’s Certificate and Reports. 
Concurrently with the delivery of the financial statements referred to
in Section 7.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in the course
of performing their audit, nothing came to their attention that caused them to
believe the Borrower was not in compliance with the financial covenants
contained in Section 7.9 below insofar as such covenants relate to
accounting matters, except as specified in such certificate.

 

(b)                                 Officer’s Compliance Certificate. 
Concurrently with the delivery of the annual financial statements
pursuant to Section 7.1(a) and the financial statements delivered for the
period ending on the last day of each fiscal quarter of the Borrower pursuant
to Section 7.1(b), a certificate of a Responsible Officer in substantially
the form of Schedule 7.2 and stating that, to the best of such
Responsible Officer’s knowledge and belief, (i)
the financial statements fairly present in all material respects the financial
condition of the parties covered by such financial statements during the period
specified therein, (ii) during such
period the Credit Parties have observed or performed in all material respects
the covenants and other agreements hereunder and under the other Credit
Documents relating to them, and satisfied in all material respects the
conditions contained in this Credit Agreement to be observed, performed or
satisfied by them, and (iii) such
Responsible Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate (each an “Officer’s
Compliance Certificate”).  Each
Officer’s Compliance Certificate shall include reasonably detailed calculations
that demonstrate compliance with each of the financial covenants set forth in
Section 7.9.

 

(c)                                  Accountants’ Reports.  Promptly
upon receipt, a copy of any final (as distinguished from a preliminary or
discussion draft) “management letter” or other similar report submitted by
independent accountants or financial consultants to the members of the
Consolidated Group in connection with any annual, interim or special audit.

 

(d)                                 SEC Filings.  Following a Qualifying IPO, promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of the Borrower,
and copies of all annual, regular, periodic and special reports and
registration statements which the Borrower may file or be required to file with
the SEC under Section 13 or 15(d) of the Exchange Act;

 

(e)                                  Intellectual Property; Bank Accounts.  Concurrently
with the delivery of the annual financial statements pursuant to Section 7.1(a)
and the financial statements delivered
for the period ending on the last day of each fiscal quarter of the Borrower
pursuant Section 7.1(b), a certificate of a Responsible
Officer of the Borrower listing (i) all
applications, if any, for Copyrights, Patents or Trademarks (each such term as
defined in the Security Agreement) made since the date of the prior certificate
(or, in the case of the first such certificate, the Closing Date), (ii) all issuances of registrations or letters
on existing applications for Copyrights, Patents and Trademarks (each such term
as defined in the Security Agreement) received since the date of the prior
certificate (or, in the case of the first such certificate, the Closing Date),
(iii) all Trademark Licenses, Copyright
Licenses and Patent Licenses (each such term as defined in the Security
Agreement) entered into since the date of the prior certificate (or, in the
case of the first such certificate, the Closing Date) and (iv) all

 

59

 

bank
accounts opened by the Borrower or any Subsidiary with any bank or other
financial institution made since the date of the prior certificate (or,
in the case of the first such certificate, the Closing Date).

 

(f)                                    Officer’s Certificate Regarding Subordinated
Debt.  On or immediately before the date at least
thirty days prior to the scheduled maturity date of any outstanding
Subordinated Debt (other than (x) the McKenzie Escrow Notes and (y) the
Subordinate Debt that is scheduled to mature on October 15, 2004), the
Borrower shall deliver to the Administrative Agent a certificate executed by a
Responsible Officer demonstrating (i) the
amount of such Subordinated Debt (including all accrued interest) that is due
on such maturity date, (ii) the Borrower
has sufficient availability under the Revolving Commitments to repay in full
such Subordinated Debt (including all accrued interest) on its maturity date
and (iii) the Consolidated Senior Leverage Ratio would be less than 1.75:1.0
after giving effect to the repayment in full of such Subordinated Debt (including
all accrued interest) on its maturity
date (and the incurrence of any Funded Debt in connection with such repayment)
on a Pro Forma Basis.

 

(g)                                 Other Information. 
Promptly, such additional financial and other information as the
Administrative Agent, at the request of any Lender, may from time to time
reasonably request.

 

7.3                                 Notices.

 

Give
notice to the Administrative Agent (which shall promptly transmit such notice
to each Lender) of:

 

(a)                                  Defaults.  Promptly (and in any event
within five (5) Business Days) after any Responsible Officer has knowledge of
the occurrence of any Default or Event of Default.

 

(b)                                 Contractual Obligations. 
Promptly (and in any event within ten (10) Business Days) after any
Responsible Officer has knowledge of the occurrence of any default or event of
default under any Contractual Obligation of any member of the Consolidated
Group which would reasonably be expected to have a Material Adverse Effect.

 

(c)                                  Legal Proceedings. 
Promptly (and in any event within ten (10) Business Days) after any
Responsible Officer has knowledge of any litigation, or any investigation or
proceeding (including without limitation, any environmental proceeding), or any
material development in respect thereof, affecting any member of the
Consolidated Group which, if adversely determined, would reasonably be expected
to have a Material Adverse Effect.

 

(d)                                 ERISA.  Promptly (and in any event
within thirty (30) Business Days) after any Responsible Officer has knowledge
of (i) any event or condition, including, but not limited to, any Reportable
Event, that constitutes, or might reasonably lead to, an ERISA Event; (ii) with
respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA
or otherwise of any withdrawal liability assessed against any of their ERISA
Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of ERISA);
(iii) the failure to make full payment on or before the due date (including
extensions) thereof of all amounts which the members of the Consolidated Group
or any ERISA Affiliate are required to contribute to each Plan pursuant to its
terms and as required to meet the minimum funding standard set forth in ERISA
and the Internal Revenue Code with respect; or (iv) any change in the funding
status of any Plan that reasonably could be expected to have a Material

 

60

 

Adverse
Effect; together with a description of any such event or condition or a copy of
any such notice and a statement by the chief financial officer of the Borrower
briefly setting forth the details regarding such event, condition, or notice,
and the action, if any, which has been or is being taken or is proposed to be
taken by the Credit Parties with respect thereto.  Promptly upon request, the members of the
Consolidated Group shall furnish the Administrative Agent and the Lenders with
such additional information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return (Form 5500
series), as well as all schedules and attachments thereto required to be filed
with the Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Internal Revenue Code, respectively, for each “plan year” (within
the meaning of Section 3(39) of ERISA).

 

(e)                                  Other.  Promptly (and in any event
within ten (10) Business Days) any other development or event which a
Responsible Officer determines could reasonably be expected to have a Material
Adverse Effect.

 

Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the members of the Consolidated Group propose to take
with respect thereto.

 

7.4                                 Payment of Obligations.

 

Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, in accordance with prudent business practice
(subject, where applicable, to specified grace periods) all material
obligations of members of the Consolidated Group of whatever nature and any
additional costs that are imposed as a result of any failure to so pay,
discharge or otherwise satisfy such obligations, except when the amount or
validity of such obligations and costs is currently being contested in good
faith by appropriate proceedings and reserves, if applicable, in conformity
with GAAP with respect thereto have been provided on the books of the
Consolidated Group, as the case may be.

 

7.5                                 Conduct of Business and
Maintenance of Existence.

 

Continue
to engage in business of the same general type as conducted on the Closing Date
by the members of the Consolidated Group, taken as a whole, and similar or
related businesses; preserve, renew and keep in full force and effect its
corporate existence except as otherwise permitted by this Credit Agreement and
take all reasonable action to maintain all rights, privileges, licenses and
franchises necessary or desirable in the normal conduct of its business except
to the extent that failure to comply therewith would not, in the aggregate,
have a Material Adverse Effect; and comply with all Contractual Obligations,
its certificate of incorporation or bylaws (or other organizational or
governing documents) and all Requirements of Law applicable to it except to the
extent that failure to comply therewith would not, in the aggregate, have a
Material Adverse Effect.

 

7.6                                 Maintenance of Property;
Insurance.

 

(a)                                  Maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary
wear and tear excepted.

 

(b)                                 At all times maintain in full force and
effect insurance (including worker’s compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in such
amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are in accordance with normal industry practice
(or as otherwise required by the Collateral Documents).

 

61

 

7.7                                 Inspection of Property; Books
and Records; Discussions.

 

Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its businesses and activities; and permit,
during regular business hours and upon reasonable notice to a Responsible
Officer by the Administrative Agent, the Administrative Agent to visit and
inspect any of its properties and examine and make abstracts (including
photocopies) from any of its books and records (other than materials protected
by the attorney-client privilege and materials which the members of the
Consolidated Group may not disclose without violation of a confidentiality
obligation binding upon them) and to discuss the business, operations,
properties and financial and other condition of the members of the Consolidated
Group with officers and employees of the members of the Consolidated Group and,
so long as any discussion takes place in the presence of a Responsible Officer,
with officers and employees of the members of the Consolidated Group and with
the Borrower’s independent certified public accountants.  Prior to the occurrence of an Event of
Default, the costs and expenses of the Administrative Agent for up to three (3)
field audits in any fiscal year shall be paid by Borrower as provided in
Section 11.5(ii).  After the
occurrence and during the continuance of an Event of Default hereunder, the
costs and expenses of the Administrative Agent for additional field audits and
inspections shall be paid for by the Borrower.

 

7.8                                 Environmental Laws.

 

(a)                                  Comply in all material respects with, and
take reasonable actions 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 take
reasonable actions 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 failure to do so would not reasonably be
expected to have a Material Adverse Effect; and

 

(b)                                 Conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all material respects
with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested in
good faith by appropriate proceedings and the failure to do or the pendency of
such proceedings would not reasonably be expected to have a Material Adverse
Effect.

 

7.9                                 Financial Covenants.

 

Comply
with the following financial covenants (each of which shall be computed in
accordance with Section 1.3(b), to the extent applicable):

 

(a)                                  Consolidated Net Worth.  At
all times, the Consolidated Net Worth shall not be less than the sum of (i) $40 million plus (ii) as of the end of the fiscal quarter of the
Borrower ending June 30, 2004 and each fiscal quarter of the Borrower
ending thereafter, an amount (but not less than zero) equal to seventy-five
percent (75%) of the difference between (A)
Consolidated Net Income for such fiscal quarter and (B) Equity Payments (other than the Permitted Equity Payment) paid
during such fiscal quarter, such increases to be cumulative, plus (iii) an amount equal to one hundred percent
(100%) of net cash proceeds from any Equity Transaction occurring after the
Closing Date (after payment of all transaction costs, including expenses and
commissions).

 

(b)                                 Consolidated Senior Leverage Ratio. As of the end of each fiscal quarter of the
Borrower,

 

62

 

commencing with the fiscal quarter ending June 30, 2004, the
Consolidated Senior Leverage Ratio shall not be greater than 2.0:1.0.

 

(c)                                  Consolidated Fixed Charge Coverage Ratio. As of the end of each fiscal quarter of the
Borrower, commencing with the fiscal quarter ending June 30, 2004, the
Consolidated Fixed Charge Coverage Ratio shall not be less than 1.25:1.0.

 

(d)                                 Charge-Offs.  As of the end of each fiscal
quarter of the Borrower, commencing with the fiscal quarter ending
June 30, 2004, the average of the amount of actual charge-offs (net of
recoveries) incurred during each fiscal month ending during such fiscal quarter
shall not exceed four and one-half percent (4.50%) of the average of the amount
of the Adjusted Transaction Receivables outstanding at the end of each fiscal
month ending during such fiscal quarter.

 

7.10                           [Reserved].

 

7.11                           Additional Guaranties and
Stock Pledges.

 

(a)                                  At any time any Person becomes a Domestic
Subsidiary, shall within 30 days thereof, (i)
cause such Domestic Subsidiary to become a Guarantor by execution of a Joinder
Agreement, (ii) deliver with the Joinder
Agreement such supporting resolutions, incumbency certificates, corporate
formation and organizational documentation and opinions of counsel as the
Administrative Agent may reasonably request, and (iii) deliver stock certificates and related pledge agreements or
pledge joinder agreements evidencing the pledge of all of the Capital Stock of
such Domestic Subsidiary, together with undated stock transfer powers executed
in blank.

 

(b)                                 If a Qualifying IPO has not occurred on or
before the Shareholder Pledge Date, then the Borrower shall cause each of the
shareholders of the Borrower to do the following on or before the Shareholder
Pledge Date (or such later date as the Administrative Agent may agree to in its
sole discretion): (i) execute a pledge
agreement in substantially the form of Schedule 7.11(b) and deliver
the same to the Administrative Agent, (ii)
deliver to the Administrative Agent all stock certificates evidencing the Capital
Stock of the Borrower to the Administrative Agent, together with undated stock
transfer powers executed in blank, (iii)
deliver to the Administrative Agent such opinions of counsel as the
Administrative Agent may reasonably request and (iv) deliver to the Administrative Agent such other documents,
agreements and instruments as the Administrative Agent may reasonably request
in connection with the Shareholder Pledge Agreement.

 

7.12                           Ownership of Subsidiaries.

 

The
Borrower shall, directly or indirectly, own at all times 100% of the Capital
Stock of each of its Subsidiaries.

 

7.13                           Use of Proceeds.

 

Use
the Loans solely for the purposes provided in Section 6.15.

 

7.14                           Acknowledgment of Grant of
Security Interest in Deposit Accounts.

 

Use
best efforts to obtain a letter agreement from each financial institution
(other than any Lender) with which the Borrower or any Subsidiary maintains any
deposit account which letter agreement shall (a)
contain provisions substantially similar to Section 11.17 (with such changes
as may be approved by the

 

63

 

Administrative Agent) and (b)
otherwise be in form and substance reasonably satisfactory to the
Administrative Agent.

 

7.15                           Qualifying IPO.

 

Repay
the Subordinated Debt (other than the McKenzie Escrow Notes) and all accrued
interest thereon in full within ten (10) days of receipt by the Borrower of the
net proceeds of a Qualifying IPO and deliver satisfactory evidence of the same
to the Administrative Agent.

 

SECTION 8

NEGATIVE COVENANTS

 

Each
Credit Party covenants and agrees that on the Closing Date, and so long as this
Credit Agreement is in effect or any amounts owing under any Credit Document
shall remain outstanding and until the Commitments have been terminated, no member
of the Consolidated Group shall:

 

8.1                                 Indebtedness.

 

Contract,
create, incur, assume or permit to exist any Indebtedness, except:

 

(a)                                  Indebtedness arising or existing under this
Credit Agreement and the other Credit Documents;

 

(b)                                 Indebtedness set forth in Schedule 8.1,
and renewals, refinancings and extensions thereof on terms and conditions
consistent with then prevailing market standards for such existing
Indebtedness;

 

(c)                                  purchase money Indebtedness (including
Capital Lease Obligations) incurred after the Closing Date to provide all or a
portion of the purchase price or costs of construction of an asset or, in the
case of a sale/leaseback transaction as described in Section 8.8, to
finance the value of such asset owned by a member of the Consolidated Group, provided
that (i) such Indebtedness when incurred shall not exceed the purchase price or
cost of construction of such asset or, in the case of a sale/leaseback
transaction, the fair market value of such asset, (ii) no such Indebtedness
shall be refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing, and (iii) the total amount
of all such Indebtedness shall not exceed $1,500,000 at any time outstanding;

 

(d)                                 Indebtedness owing under Swap Contracts;

 

(e)                                  Indebtedness owing under Treasury Management
Agreements;

 

(f)                                    unsecured intercompany Indebtedness owing by
a member of the Consolidated Group to another member of the Consolidated Group;

 

(g)                                 the Subordinated Debt and renewals, refinancings
and refundings of the then outstanding principal amount provided that the terms
and conditions (including the terms of subordination) of any such renewal,
refinancing and refunding shall be reasonably satisfactory to the
Administrative Agent (provided that once any Subordinated Debt is repaid,
whether with the proceeds of a Qualifying IPO or otherwise, the amount of
Subordinated Debt permitted under this clause (g) shall

 

64

 

be
reduced by the amount of such repaid Subordinated Debt);

 

(h)                                 Securitization Transactions approved in
writing by the Required Lenders;

 

(i)                                     Support Obligations of Indebtedness permitted
under this Section 8.1; and

 

(j)                                     other unsecured Indebtedness of the Borrower
of up to $1,000,000 in the aggregate at any time outstanding.

 

In
addition, the members of the Consolidated Group will not amend or modify, nor
will they permit amendment, modification, waiver or acquiescence in respect of,
the terms of any Funded Debt permitted above if the effect thereof would be
adverse to the Lenders in any material respect.

 

8.2                                 Liens.

 

Contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or hereafter acquired, except for Permitted Liens.

 

8.3                                 Consolidation, Merger,
Divestiture, etc.

 

(a)                                  Enter into a transaction of merger or
consolidation, except

 

(i)                                     a member of the Consolidated Group may be a
party to a transaction of merger or consolidation with another member of the
Consolidated Group, provided that (A)
if the Borrower is a party thereto, the Borrower shall be the surviving
corporation, (B) if a Guarantor is a
party thereto and the Borrower is not a party thereto, the surviving
corporation shall be either a Guarantor or a Domestic Subsidiary that becomes a
Guarantor pursuant to Section 7.11(a) concurrently therewith, (C) no Default or Event of Default shall exist
either immediately prior to or immediately after giving effect thereto and (D) the Borrower shall provide ten (10) days
prior written notice to the Administrative Agent; and

 

(ii)                                  a Subsidiary of the Borrower may be a party
to a transaction of merger or consolidation with any Person (other than a
member of the Consolidated Group) in connection with an Acquisition permitted
under Section 8.4 and a Divestiture permitted under Section 8.3(b).

 

(b)                                 Make any Divestiture (other than a sale of
Securitization Receivables in connection with a Securitization Transaction
approved in writing by the Required Lenders) which:

 

(i)                                     in any instance (including any series of
related transactions comprising a Divestiture) shall be of Property (or of a
Person owning Property) constituting more than $1,000,000; or

 

(ii)                                  in the aggregate in any fiscal year shall be
of Property (or of a Person owning Property) constituting more than $2,500,000;

 

provided in the case of any Divestiture permitted
under subsections (i) and (ii) above, that no Default of Event of Default would
exist after giving effect thereto on a Pro Forma Basis.

 

(c)                                  In the case of the Borrower, liquidate,
wind-up or dissolve, whether voluntarily or involuntarily (or suffer to permit
any such liquidation or dissolution).

 

65

 

Any
consent of the Required Lenders requested by the Borrower in connection with a
Divestiture not otherwise permitted under this Section 8.3 shall not be
arbitrarily withheld or unreasonably delayed.

 

8.4                                 Acquisitions.

 

Make
any Acquisition unless

 

(a)                                  the cash consideration (including any
Indebtedness assumed) payable in respect of all Acquisitions (excluding
acquisitions consented to in writing by the Required Lenders) shall not exceed
$40,000,000 in the aggregate during the term of this Credit Agreement;

 

(b)                                 the Board of Directors of the Person which
is, or whose Property is, the subject of the Acquisition shall have approved
the Acquisition; and

 

(c)                                  no Default or Event of Default would exist
after giving effect thereto on a Pro Forma Basis.

 

8.5                                 Investments.

 

Make
any Investment in any Person except for Permitted Investments.

 

8.6                                 Change in Fiscal Year;
Change in Legal Name, State of Formation or Structure.

 

(a)                                  Change its fiscal year from a
September 30 fiscal year end (other than to a December 31 fiscal year
end after or in connection with a Qualifying IPO).

 

(b)                                 Change its legal name or state of formation
unless it has provided ten (10) days prior written notice to the Administrative
Agent.

 

8.7                                 Restricted Payments.

 

Make
or permit any Restricted Payments, other than:

 

(a)                                  so long as no Default or Event of Default shall
exist immediately prior thereto or would exist after giving effect thereto on a
Pro Forma Basis:

 

(i)                                     regularly scheduled payments of interest on
the Subordinated Debt;

 

(ii)                                  the Permitted Subordinated Debt Redemption;

 

(iii)                               principal payments on the Subordinated Debt
upon the final maturity of the Subordinated Debt, provided that (A) no Default or Event of Default has occurred
and is continuing, and (B) the
Consolidated Senior Leverage Ratio would be less than 1.75:1.0 after giving
effect to such principal payments (and any Funded Debt incurred in connection
therewith) on a Pro Forma Basis, as set forth in the officer’s certificate of
the Borrower delivered pursuant to Section 7.2(e);

 

(iv)                              redeem the Subordinated Debt with the
proceeds of a Qualifying IPO;

 

66

 

(v)                                 the Permitted Equity Payment; and

 

(vi)                              during each fiscal quarter of the Borrower,
Restricted Payments in an amount not to exceed (A)
if the Consolidated Senior Leverage Ratio would be less than 2.0:1.0 after
giving effect to any such Restricted Payments (and any Funded Debt incurred in
connection therewith) on a Pro Forma Basis, fifty percent (50%) of the
difference of (x) Consolidated Net Income for the most recent fiscal quarter
and (y) Permitted Tax Dividends paid during the most recent fiscal quarter, or
(B) if the Consolidated Senior Leverage
Ratio would be less than 1.25:1.0 after giving effect to any such Restricted
Payments (and any Funded Debt incurred in connection therewith) on a Pro Forma
Basis, seventy-five percent (75%) of the difference of (x) Consolidated Net
Income for the most recent fiscal quarter and (y) Permitted Tax Dividends paid
during the most recent fiscal quarter.

 

(b)                                 cash dividends to any shareholders of the
Borrower in an amount necessary to provide each shareholder with funds to pay
any federal, state or local income taxes (including estimated taxes and any tax
deficiencies or other subsequent adjustments to taxes) attributable to such
shareholder’s ownership interest in the Borrower; provided that, if at
the time of such dividend payment any Loans or Letters of Credit are
outstanding, then such dividend payment may be made only if no Specified
Default exists immediately prior to such dividend payment or would not exist
after giving effect to such dividend payment (“Permitted Tax Dividends”).

 

8.8                                 Sale Leasebacks.

 

Except
as permitted pursuant to Section 8.1(c) hereof, 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 now owned or hereafter acquired, (i) which such Person has sold or
transferred or is to sell or transfer to any other Person other than a member
of the Consolidated Group or (ii) which such Person intends to use for
substantially the same purpose as any other Property which has been sold or is
to be sold or transferred by such Person to any other Person in connection with
such lease.

 

8.9                                 No Further Negative
Pledges.

 

Except
with respect to (a) prohibitions against other encumbrances on specific
Property encumbered to secure payment of particular Indebtedness (which
Indebtedness relates solely to such specific Property, and improvements and
accretions thereto, and is otherwise permitted hereby) and (b) the Subordinated
Debt, no member of the Consolidated Group will enter into, assume or become
subject to any agreement prohibiting or otherwise restricting the creation or
assumption of any Lien upon its properties or assets, other than leasehold
improvements, furnishings, fixtures and equipment, whether now owned or
hereafter acquired, or requiring the grant of any security for such obligation
if security is given for some other obligation.

 

8.10                           No Foreign Subsidiaries.

 

Form,
acquire or otherwise permit to exist any Foreign Subsidiaries.

 

8.11                           Public Offering.

 

Issue
any Capital Stock of the Borrower in an initial public offering other than in
connection with a Qualifying IPO.

 

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SECTION 9

EVENTS OF DEFAULT

 

9.1                                 Events of Default.

 

An
Event of Default shall exist upon the occurrence of any of the following
specified events (each an “Event of Default”):

 

(a)                                  Payment.  Any Credit Party shall

 

(i)                                     default in the payment on the due date of any
principal of any of the Loans, or

 

(ii)                                  default, and such default shall continue for
three (3) or more Business Days, in the payment when due of any reimbursement
obligations arising from drawings under Letters of Credit, or of any interest
on the Loans or on any reimbursement obligations arising from drawings under
Letters of Credit, or of any Fees or other amounts owing hereunder, under any
of the other Credit Documents or in connection herewith or therewith; or

 

(b)                                 Representations.  Any
representation, warranty or statement made or deemed to be made herein, in any
of the other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue in any
material respect on the date as of which it was made or deemed to have been
made (other than those which are untrue solely as a result of changes permitted
by this Credit Agreement); or

 

(c)                                  Covenants.

 

(i)                                     Default in the due performance or observance
of any term, covenant or agreement contained in Section 7.2(f), 7.3(a),
7.9, 7.13, 7.15 or 8.1 through 8.10, inclusive, or

 

(ii)                                  Default in the due performance or observance
by it of any term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) of this Section 9.1) contained in this
Credit Agreement or any other Credit Document and such default shall continue
unremedied for a period of at least 30 days after the earlier of a Responsible
Officer becoming aware of such default or notice thereof by the Administrative
Agent; or

 

(d)                                 Other Credit Documents. 
Except as to the Credit Party which is dissolved, released or merged or
consolidated out of existence as the result of or in connection with a
dissolution, merger or disposition permitted by Section 8.3, any Credit
Document shall fail to be in full force and effect or to give the
Administrative Agent and/or the Lenders any material part of the Liens, rights,
powers and privileges purported to be created thereby; or

 

(e)                                  Guaranties.  Except as to the guaranty of
any Credit Party which is dissolved, released or merged or consolidated out of
existence as the result of or in connection with a dissolution, merger or
disposition permitted by Section 8.3, the guaranty given by any Guarantor
hereunder or any material provision thereof shall cease to be in full force and
effect, or any Guarantor hereunder or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor’s obligations under such
guaranty, or any Guarantor shall default in the due performance or observance
of any term, covenant or

 

68

 

agreement on its part to be performed or observed pursuant to any
guaranty; or

 

(f)                                    Bankruptcy, etc.  Any
Bankruptcy Event shall occur with respect to any Credit Party; or

 

(g)                                 Defaults under Other Agreements.  With
respect to any Indebtedness (other than Indebtedness outstanding under this
Credit Agreement) in excess of $1,000,000 in the aggregate for the Consolidated
Group taken as a whole, (A) (1) any Credit Party shall default in any payment
(beyond the applicable grace period with respect thereto, if any) with respect
to any such Indebtedness, or (2) the occurrence and continuance of a default in
the observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist (other than, with respect to
the Subordinated Debt, the occurrence of a Qualifying IPO, provided that the
Subordinated Debt is repaid in full within ten (10) days upon receipt by the
Borrower of any cash proceeds from such Qualifying IPO), the effect of which
default or other event or condition is to cause, or permit, the holder or holders
of such Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required),
any such Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof; or

 

(h)                                 Judgments.  Any member of the Consolidated
Group shall fail within 30 days of the date due and payable to pay, bond or
otherwise discharge any judgment, settlement or order for the payment of money
which judgment, settlement or order, when aggregated with all other such
judgments, settlements or orders due and unpaid at such time, exceeds $1,000,000,
and which is not stayed on appeal (or for which no motion for stay is pending)
or is not otherwise being executed; or

 

(i)                                     ERISA.  Any of the following events or
conditions, if such event or condition could reasonably be expected to have a
Material Adverse Effect: (1) any “accumulated funding deficiency,” as such term
is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code, whether or not waived, shall exist with respect to any Plan, or
any lien shall arise on the assets of a member of the Consolidated Group or any
ERISA Affiliate in favor of the PBGC or a Plan; (2) an ERISA Event shall occur
with respect to a Single Employer Plan, which is, in the reasonable opinion of
the Administrative Agent, likely to result in the termination of such Plan for
purposes of Title IV of ERISA; (3) an ERISA Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable
opinion of the Administrative Agent, likely to result in (i) the termination of
such Plan for purposes of Title IV of ERISA, or (ii) a member of the
Consolidated Group or any ERISA Affiliate incurring any liability in connection
with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency of (within the meaning of
Section 4245 of ERISA) such Plan; or (4) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code) or breach of fiduciary responsibility shall occur which
may subject a member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Internal Revenue Code, or under any agreement or other
instrument pursuant to which a member of the Consolidated Group or any ERISA
Affiliate has agreed or is required to indemnify any person against any such
liability; or

 

(j)                                     Subordination Agreements.  The
Obligations shall for any reason cease to be “Senior Debt” under any of the
Subordination Agreements or any of the Subordination Agreements shall fail to
be in full force and effect.

 

(k)                                  Ownership.  There shall occur a Change of
Control.

 

69

 

9.2                                 Acceleration; Remedies.

 

Upon
the occurrence and during the continuation of an Event of Default, the
Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:

 

(i)                                     Termination of Commitments. 
Declare the Commitments terminated whereupon the Commitments shall be
immediately terminated.

 

(ii)                                  Acceleration. 
Declare the unpaid principal of and any accrued interest in respect of
all Loans, any reimbursement obligations arising from drawings under Letters of
Credit and any and all other indebtedness or obligations of any and every kind
owing by the Credit Parties to the Administrative Agent and/or any of the
Lenders hereunder to be due whereupon the same shall be immediately due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by each of the Credit Parties.

 

(iii)                               Cash Collateral. 
Direct the Borrower to pay (and the Borrower agrees that upon receipt of
such notice, or upon the occurrence of an Event of Default under
Section 9.1(f), it will immediately pay) to the Administrative Agent
additional cash, to be held by the Administrative Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding
Letters of Credit in an amount equal to the maximum aggregate amount which may
be drawn under all Letters of Credits then outstanding.

 

(iv)                              Enforcement of Rights. 
Enforce any and all rights and interests created and existing under the
Credit Documents and all rights of set-off.

 

Notwithstanding
the foregoing, if an Event of Default specified in Section 9.1(f) shall
occur, then the Commitments shall automatically terminate and all Loans, all
reimbursement obligations arising from drawings under Letters of Credit, all
accrued interest in respect thereof, all accrued and unpaid Fees and other
indebtedness or obligations owing to the Administrative Agent and/or any of the
Lenders hereunder automatically shall immediately become due and payable
without presentment, demand, protest or the giving of any notice or other
action by the Administrative Agent or the Lenders, all of which are hereby
waived by the Credit Parties.

 

SECTION 10

ADMINISTRATIVE AGENT

 

10.1                           Appointment and Authorization
of Administrative Agent.

 

(a)                                  Each Lender hereby irrevocably appoints,
designates and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Credit Agreement and each other Credit
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Credit Agreement or any other Credit
Document, together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Credit Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied
covenants, functions,

 

70

 

responsibilities, duties, obligations or liabilities shall be read into
this Credit Agreement or any other Credit Document or otherwise exist against
the Administrative Agent.  Without
limiting the generality of the foregoing sentence, the use of the term “agent”
herein and in the other Credit Documents with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.

 

(b)                                 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 benefits and
immunities (i) provided to the Administrative Agent in this
Section 10 with respect to any acts taken or omissions suffered by the
Issuing Lender in connection with Letters of Credit issued by it or proposed to
be issued by it and the application and agreements for letters of credit pertaining
to the Letters of Credit as fully as if the term “Administrative Agent” as used
in this Section 10 included the Issuing Lender with respect to such acts
or omissions, and (ii) as additionally provided herein with respect to the
Issuing Lender.

 

10.2                           Delegation of Duties.

 

The
Administrative Agent may execute any of its duties under this Credit Agreement
or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects in the absence of gross negligence or willful misconduct.

 

10.3                           Liability of
Administrative Agent.

 

No
Agent-Related Person shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Credit Agreement or any
other Credit Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
any Credit Party or any officer thereof, contained herein or in any other
Credit Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under
or in connection with, this Credit Agreement or any other Credit Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or any other Credit Document, or for any failure of any Credit
Party or any other party to any Credit Document to perform its obligations
hereunder or thereunder.  No
Agent-Related Person shall be under any obligation to any Lender or participant
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Credit Agreement or any other
Credit Document, or to inspect the properties, books or records of any Credit
Party or any Affiliate thereof.

 

10.4                           Reliance by Administrative
Agent.

 

(a)                                  The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, communication,
signature, resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to any Credit Party), independent accountants and other experts selected by the
Administrative

 

71

 

Agent.  The Administrative Agent
shall be fully justified in failing or refusing to take any action under any
Credit Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.  The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Credit Agreement or any other Credit Document in accordance
with a request or consent of the Required Lenders (or such greater number of
Lenders as may be expressly required hereby in any instance) and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders.  Where this Credit
Agreement expressly permits or prohibits an action unless the Required Lenders
otherwise determine, the Administrative Agent shall, and in all other
instances, the Administrative Agent may, but shall not be required to, initiate
any solicitation for the consent or a vote of the Lenders.

 

(b)                                 For purposes of determining compliance with
the conditions specified in Section 5.1, each Lender that has signed this
Credit Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless
the Administrative Agent shall have received notice from such Lender prior to
the proposed Closing Date specifying its objection thereto.

 

10.5                           Notice of Default.

 

The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or the Borrower
referring to this Credit Agreement, describing such Default or Event of Default
and stating that such notice is a “notice of default.”  The Administrative Agent will notify the
Lenders of its receipt of any such notice. 
The Administrative Agent shall take such action with respect to such
Default or Event of Default as may be directed by the Required Lenders in
accordance with Section 9; provided, however, that unless
and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.

 

10.6                           Credit Decision;
Disclosure of Information by Administrative Agent.

 

Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by the Administrative Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of any Credit Party or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. 
Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Credit
Parties and their respective Subsidiaries, and all applicable bank or other
regulatory Laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Credit Agreement and to extend credit to the
Borrower and the other Credit Parties hereunder.  Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Credit Agreement and the other Credit Documents,
and to make such investigations as it deems

 

72

 

necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower
and the other Credit Parties.  Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent herein, the Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Credit Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.

 

10.7                           Indemnification of
Administrative Agent.

 

Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed
by or on behalf of any Credit Party and without limiting the obligation of any
Credit Party to do so), pro rata, and hold harmless each Agent-Related Person
from and against any and all Indemnified Liabilities incurred by it; provided,
however, that no Lender shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities to the
extent determined in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from such Agent-Related Person’s own gross
negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of
this Section.  Without limitation of the
foregoing, each Lender shall reimburse the Administrative Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including reasonable
fees and expenses of counsel) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Credit Agreement, any other Credit Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower.  The undertaking in this
Section shall survive termination of the Aggregate Revolving Commitments,
the payment of all Obligations and the resignation of the Administrative Agent.

 

10.8                           Administrative Agent in
its Individual Capacity.

 

Bank
of America and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Credit Parties and their respective Affiliates as
though Bank of America were not the Administrative Agent or the Issuing Lender
hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to
such activities, Bank of America or its Affiliates may receive information
regarding any Credit Party or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Credit Party or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them. 
With respect to its Loans, Bank of America shall have the same rights
and powers under this Credit Agreement as any other Lender and may exercise
such rights and powers as though it were not the Administrative Agent or the
Issuing Lender, and the terms “Lender” and “Lenders” include Bank of America in
its individual capacity.

 

10.9                           Successor Administrative
Agent.

 

The
Administrative Agent may resign as Administrative Agent upon thirty days’
notice to the Lenders; provided that any such resignation by Bank of America
shall also constitute its resignation as Issuing Lender and Swingline
Lender.  If the Administrative Agent
resigns under this Credit Agreement, the Required Lenders shall appoint from
among the Lenders a successor administrative agent for the

 

73

 

Lenders, which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of
Default (which consent of the Borrower shall not be unreasonably withheld or
delayed).  If no successor administrative
agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor administrative agent from among
the Lenders.

 

Upon
the acceptance of its appointment as successor administrative agent hereunder,
the Person acting as such successor administrative agent shall succeed to all
the rights, powers and duties of the retiring Administrative Agent and the term
“Administrative Agent” shall mean such successor administrative agent and the
retiring Administrative Agent’s appointment, powers and duties as Administrative
Agent shall be terminated.  If the
retiring Administrative Agent is at the time of such retirement the Issuing
Lender, then upon the acceptance of its appointment as successor administrative
agent hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Issuing Lender and
the term “Issuing Lender” shall mean such successor Letter of Credit issuer and
the retiring Issuing Lender’s rights, powers and duties as such shall be terminated,
without any other or further act or deed on the part of such retiring Issuing
Lender or any other Lender, other than the obligation of the successor Issuing
Lender to issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring Issuing Lender to effectively assume the
obligations of the retiring Issuing Lender with respect to such Letters of
Credit. If the retiring Administrative Agent is at the time of such retirement
the Swingline Lender, then upon the acceptance of its appointment as successor
administrative agent hereunder, the Person acting as such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Swingline Lender and the term “Swingline Lender” shall mean such
successor swingline lender and the retiring Swingline Lender’s rights, powers
and duties as such shall be terminated, without any other or further act or
deed on the part of such retiring Swingline Lender or any other Lender.  After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this
Section 10 and Sections 11.4 and 11.9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Credit Agreement.  If no
successor administrative agent has accepted appointment as Administrative Agent
by the date thirty days following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.

 

10.10                     Other Agents; Lead
Managers.

 

None
of the Lenders or other Persons identified on the facing page or signature
pages of this Credit Agreement as a “syndication agent,” “documentation agent,”
“co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger” or
“co-arranger” shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement other than, in the case of
such Lenders, those applicable to all Lenders as such.  Without limiting the foregoing, none of the
Lenders or other Persons so identified shall have or be deemed to have any
fiduciary relationship with any Lender. 
Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into
this Credit Agreement or in taking or not taking action hereunder.

 

10.11                     Administrative Agent May
File Proofs of Claim.

 

In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Credit Party, the Administrative Agent (irrespective
of whether the principal of any Loan or LOC Obligation shall then be

 

74

 

due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

(a)                                  to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the
Obligations that are owing and unpaid and to file such other documents as may
be necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative
Agent and their respective agents and counsel and all other amounts due the
Lenders and the Administrative Agent under Section 3.5 and
Section 11.5(a)) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 3.5 and Section 11.5(a).

 

Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.

 

10.12                     Collateral and Guaranty
Matters.

 

The
Lenders irrevocably authorize the Administrative Agent, at its option and in
its discretion,

 

(a)                                  to release any Lien on any Collateral granted
to or held by the Administrative Agent under any Credit Document (i) upon
termination of the Commitments and payment in full of all Obligations and the
expiration or termination of all Letters of Credit, (ii) that is
transferred or to be transferred as part of or in connection with any
Divestiture permitted hereunder or under any other Credit Document, or
(iii) as approved in accordance with Section 11.6;

 

(b)                                 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 under the definition of
“Permitted Liens”; and

 

(c)                                  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.

 

75

 

Upon
request by the Administrative Agent at any time, the Required 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 10.12.

 

10.13                     Subordination Documents.

 

Each
Lender authorizes and directs the Administrative Agent, on behalf of each
Lender, to enter into (a) the Senior
Subordination Agreement Amendment, (b)
the Junior Subordination Agreement and (c)
the Junior/Senior Subordination Agreement Amendment.

 

SECTION 11

MISCELLANEOUS

 

11.1                           Notices and Other
Communications; Facsimile Copies.

 

(a)                                  General.  Unless otherwise expressly
provided herein, all notices and other communications provided for hereunder
shall be in writing (including by facsimile transmission).  All such written notices shall be mailed,
faxed or delivered to the applicable address, facsimile number or (subject to
subsection (c) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:

 

(i)                                     if to the Borrower, the Administrative Agent,
the Issuing Lender or the Swingline Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on Schedule 11.1
or to such other address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to the other
parties; and

 

(ii)                                  if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number specified in its
Administrative Questionnaire (copies of which the Administrative Agent shall
deliver to the Borrower) or to such other address, facsimile number, electronic
mail address or telephone number as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, the Issuing Lender and the
Swingline Lender.

 

All
such notices and other communications shall be deemed to be given or made upon
the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of
subsection (c) below), when delivered; provided, however,
that (x) notices and other communications to the Administrative Agent, the
Issuing Lender and the Swingline Lender pursuant to Section 2 shall not be
effective until actually received by such Person and (y) notices and other
communications to the Borrower pursuant to Section 9.1 shall not be
effective until actually received by the Borrower.  In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.

 

(b)                                 Effectiveness of Facsimile Documents and
Signatures.  Credit Documents may be transmitted and/or
signed by facsimile.  The effectiveness
of any such documents and signatures shall,

 

76

 

subject to applicable Law, have the same force and effect as manually signed
originals and shall be binding on all Credit Parties, the Administrative Agent
and the Lenders.  The Administrative
Agent may also require that any such documents and signatures be confirmed by a
manually signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.

 

(c)                                  Limited Use of Electronic Mail.  Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such
as financial statements and other information as provided in Section 7.1,
and to distribute Credit Documents for execution by the parties thereto, and
may not be used for any other purpose.

 

(d)                                 Reliance by Administrative Agent and Lenders.  The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including any
telephonic Notice of Borrowing) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. 
The Borrower shall indemnify each Agent-Related Person and each Lender
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice purportedly given by or on behalf of the
Borrower.  All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

11.2                           Right of Set-Off.

 

In
addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default, each Lender is authorized at any time and from time to
time, without presentment, demand, protest or other notice of any kind (all of
which rights being hereby expressly waived), to set-off and to appropriate and
apply any and all deposits (general or special) and any other indebtedness at
any time held or owing by such Lender (including, without limitation branches,
agencies or Affiliates of such Lender wherever located) to or for the credit or
the account of any Credit Party against obligations and liabilities of such
Person to such Lender hereunder, under the Revolving Notes, the other Credit
Documents or otherwise, irrespective of whether such Lender shall have made any
demand hereunder and although such obligations, liabilities or claims, or any
of them, may be contingent or unmatured, and any such set-off shall be deemed
to have been made immediately upon the occurrence of an Event of Default even
though such charge is made or entered on the books of such Lender subsequent
thereto.  Any Person purchasing a
participation in the Loans and Commitments hereunder pursuant to
Section 3.14 or Section 11.3(d) may exercise all rights of set-off
with respect to its participation interest as fully as if such Person were a
Lender hereunder.

 

11.3                           Successors and Assigns.

 

(a)                                  The provisions of this Credit Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of
subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void).  Nothing in this Credit Agreement, expressed
or implied, shall be construed to confer upon any Person

 

77

 

(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of
this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Credit Agreement.

 

(b)                                 Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Credit Agreement (including all or a portion of its Commitment and the
Loans (including for purposes of this subsection (b), participations in
LOC Obligations and in Swingline Loans) at the time owing to it); provided
that (i) except 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 or an Affiliate of a Lender or an
Approved Fund with respect to a Lender, the aggregate amount of the Commitment
(which for this purpose includes Loans outstanding thereunder) or, if the
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
$5,000,000 unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (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 Credit Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not apply to rights in
respect of Swingline Loans; (iii) any assignment of a Revolving Commitment must
be approved by the Administrative Agent, the Issuing Lender and the Swingline
Lender unless the Person that is the proposed assignee is itself a Lender
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); and (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, and the Eligible Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent a Collateral
Questionnaire.  Subject to acceptance and
recording thereof by the Administrative Agent pursuant to subsection (c)
of this Section, from and after the effective date specified in each Assignment
and Assumption, the Eligible Assignee thereunder shall be a party to this
Credit Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Credit
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 Credit Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Credit Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 3.6, 3.9, 3.10, 3.11, 11.4
and 11.5 with respect to facts and circumstances occurring prior to the
effective date of such assignment).  Upon
request, the Borrower (at its expense) shall execute and deliver a Revolving
Note to the assignee Lender.  Any
assignment or transfer by a Lender of rights or obligations under this Credit
Agreement that does not comply with this subsection shall be treated for
purposes of this Credit Agreement as a sale by such Lender of a participation
in such rights and obligations in accordance with subsection (d) of this
Section.

 

(c)                                  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at the Administrative
Agent’s Office 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 and LOC Obligations 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 Credit Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.  In addition,

 

78

 

at
any time that a request for a consent for a material or substantive
change to the Credit Documents is pending, any Lender wishing to consult with
other Lenders in connection therewith may request and receive from the
Administrative Agent a copy of the Register.

 

(d)                                 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
Credit Agreement (including all or a portion of its Commitment and/or the Loans
(including such Lender’s participations in LOC Obligations and/or Swingline
Loans) owing to it); provided that (i) such Lender’s obligations
under this Credit 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 and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Credit
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 Credit Agreement and to approve
any amendment, modification or waiver of any provision of this Credit
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 the first proviso to Section 11.6
that affects such Participant.  Subject
to subsection (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.6, 3.9, 3.10 and
3.11  to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section.  To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.2  as
though it were a Lender, provided such Participant agrees to be subject
to Section 3.14 as though it were a Lender.

 

(e)                                  A Participant shall not be entitled to
receive any greater payment under Sections 3.6, 3.9 or 3.10  than the applicable Lender would have
been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.10 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 3.10 as though it were
a Lender.

 

(f)                                    Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Credit
Agreement (including under its Revolving Note, 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.

 

(g)                                 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, the New York State Electronic Signatures and Records
Act, or any other similar state laws based on the Uniform Electronic
Transactions Act

 

(h)                                 Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America may, (i) upon
thirty days’ notice to the Borrower and the Lenders, resign as Issuing Lender
and/or (ii)

 

79

 

upon thirty days’ notice to the Borrower, resign as Swingline
Lender.  In the event of any such
resignation as Issuing Lender or Swingline Lender, the Borrower shall be
entitled to appoint from among the Lenders a successor Issuing Lender or
Swingline Lender hereunder; provided, however, that no failure by
the Borrower to appoint any such successor shall affect the resignation of Bank
of America as Issuing Lender or Swingline Lender, as the case may be.  If Bank of America resigns as Issuing Lender,
it shall retain all the rights and obligations of the Issuing Lender hereunder
with respect to all Letters of Credit outstanding as of the effective date of
its resignation as Issuing Lender and all LOC Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund
risk participations in Letters of Credit pursuant to Section 2.6).  If Bank of America resigns as Swingline
Lender, it shall retain all the rights of the Swingline Lender provided for
hereunder with respect to Swingline Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swingline
Loans pursuant to Section 2.7.

 

11.4                           No Waiver; Remedies
Cumulative.

 

No
failure or delay on the part of the Administrative Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Administrative Agent or any
Lender and any of the Credit Parties shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder.  The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies
which the Administrative Agent or any Lender would otherwise have.  No notice to or demand on any Credit Party in
any case shall entitle the Borrower or any other Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the Lenders to any other or
further action in any circumstances without notice or demand.

 

11.5                           Expenses; Indemnity;
Damage Waiver.

 

(a)                                  Costs
and Expenses.  The Credit Parties
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 Credit 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 and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
Issuing Lender (including the fees, charges and disbursements of any counsel
for the Administrative Agent, any Lender or the Issuing Lender), and shall pay all fees and time charges for
attorneys who may be employees of the Administrative Agent, any Lender or the
Issuing Lender, in connection with the enforcement or protection of its
rights (A) in connection with this
Credit 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.

 

(b)                                 Indemnification
by the Borrower.  The Credit Parties
shall indemnify the Administrative Agent (and any sub-agent thereof), each
Lender and the Issuing 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 fees, charges and disbursements
of any counsel for any Indemnitee), and
shall indemnify and hold harmless

 

80

 

each Indemnitee from all fees and time
charges and disbursements for attorneys who may be employees of any Indemnitee,
incurred by any Indemnitee or asserted against any Indemnitee by any third
party or by the Borrower or any other Credit Party arising out of, in
connection with, or as a result of (i) the
execution or delivery of this Credit 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 Materials on or from any
property owned or operated by a Credit Party or any of its Subsidiaries, or any
Environmental Liability related in any way to a Credit Party or any of its
Subsidiaries, 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 Credit 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 (x) resulted
from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower or any other Credit Party
against an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Credit Document, if the Borrower or such Credit Party
has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.

 

(c)                                  Reimbursement
by Lenders.  To the extent that the
Credit Parties for any reason fail to indefeasibly pay any amount required
under subsection (a) or (b) of this Section to be paid by them
to the Administrative Agent (or any sub-agent thereof) (other than fees payable
to the Administrative Agent pursuant to the Administrative Agent’s Fee Letter
and fronting fees payable to the Issuing Lender pursuant to 3.05(b)(ii)), 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
Revolving Commitment Percentage (determined 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 sub-agent) 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 Issuing Lender in
connection with such capacity.  The
obligations of the Lenders under this subsection (c) are subject to the
provisions of Section 3.13(d).

 

(d)                                 Waiver
of Consequential Damages, Etc.  To
the fullest extent permitted by applicable law, no Credit Party shall assert,
and each Credit Party hereby waives, any claim against any Indemnitee, 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 Credit 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
subsection (b) above 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 in connection with this Credit Agreement or the other Credit Documents
or the transactions contemplated hereby or thereby.

 

(e)                                  Payments.  All amounts due under this Section shall
be payable not later than ten Business Days after demand therefor.

 

81

 

(f)                                    Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent and the Issuing Lender, the replacement of any Lender, the
termination of the Commitments and the repayment, satisfaction or discharge of
all Obligations.

 

11.6                           Amendments, Waivers and
Consents.

 

Neither
this Credit Agreement nor any other Credit Document nor any of the terms hereof
or thereof may be amended, changed, waived, discharged or terminated unless
such amendment, change, waiver, discharge or termination is in writing entered
into by, or approved in writing by, the Required Lenders and the Borrower, provided,
however, that:

 

(a)                                  without the consent of each Lender affected
thereby, neither this Credit Agreement nor any of the other Credit Documents
may be amended to

 

(i)                                     extend the final maturity of any Loan or the
time of payment of any reimbursement obligation arising from drawings under
Letters of Credit, or any portion thereof (other than a waiver or modification
of a mandatory prepayment under Section 3.3(b)(ii) or 3.3(b)(iii) which
shall be subject to the consent of the Required Lenders),

 

(ii)                                  reduce the rate or extend the time of payment
of interest on the Loans, LOC Obligations or Fees (other than a waiver of the
applicability of any increase in interest rates or Fees after the occurrence of
an Event of Default or on account of a failure to deliver financial statements
on a timely basis or an amendment to any financial covenant hereunder
(or any defined term used therein) even if the effect of such amendment would
be to reduce the rate of interest on any Loan or unreimbursed drawing on a
Letter of Credit or to reduce any fee payable hereunder),

 

(iii)                               reduce or waive the principal amount of any
Loan or of any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,

 

(iv)                              increase the Commitment of a Lender over the
amount thereof in effect (it being understood and agreed that a waiver of any
Default or Event of Default shall not constitute an increase in the Commitment
of any Lender),

 

(v)                                 release the Borrower or substantially all of
the Guarantors from its or their obligations under the Credit Documents,

 

(vi)                              except as the result of or in connection with
a Divestiture permitted under Section 8.3(b), release all or substantially
all of the Collateral,

 

(vii)                           amend, modify or waive any provision of this Section 11.6 or
Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.13, 3.14, 3.15, 9.1(a), 11.2,
11.3, 11.5 or 11.9,

 

(viii)                        reduce any percentage specified in, or otherwise modify, the definition
of Required Lenders, or

 

(ix)                                consent to the assignment or transfer by any Credit Party of any of its
rights and obligations under (or in respect of) the Credit Documents except as
permitted therein;

 

82

 

(b)                                 unless
also signed by the Issuing Lender, no amendment, waiver or consent shall affect
the rights or duties of the Issuing Lender under this Credit Agreement or any
LOC Document relating to any Letter of Credit issued or to be issued by it;

 

(c)                                  unless
also signed by the Swingline Lender, no amendment, waiver or consent shall
affect the rights or duties of the Swingline Lender under this Credit Agreement;
and

 

(d)                                 unless
also signed by the Administrative Agent, no amendment, waiver or consent shall
affect the rights or duties of the Administrative Agent under this Credit
Agreement or any other Credit Document;

 

Notwithstanding
the fact that the consent of all the Lenders is required in certain
circumstances as set forth above, (x) 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 supersede the unanimous consent provisions set forth herein and
(y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.

 

11.7                           Counterparts.

 

This
Credit Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
constitute one and the same instrument. 
It shall not be necessary in making proof of this Credit Agreement to
produce or account for more than one such counterpart.

 

11.8                           Headings.

 

The
headings of the sections and subsections hereof are provided for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Credit Agreement.

 

11.9                           Survival of Indemnity and
Representations and Warranties.

 

(a)                                  All indemnities set forth herein, including,
without limitation, in Section 2.6(h), 3.6, 3.9, 3.10, 3.11, 10.7 and 11.5
shall survive the execution and delivery of this Credit Agreement, the making
of the Loans, the issuance of the Letters of Credit, the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.

 

(b)                                 All representations and warranties made
hereunder and in any other Credit Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default or Event of Default at the time of any Extension of
Credit, and shall continue in full force and effect as long as any Loan or any
other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of
Credit shall remain outstanding.

 

11.10                     Governing Law; Submission
to Jurisdiction; Venue.

 

(a)                                  THIS CREDIT AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.

 

83

 

(b)                                 THE
BORROWER AND EACH OTHER CREDIT PARTY
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 THE STATE OF NORTH CAROLINA, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT
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 NORTH CAROLINA 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 CREDIT
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 CREDIT AGREEMENT OR ANY OTHER
CREDIT DOCUMENT AGAINST THE BORROWER OR
ANY OTHER CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(c)                                  THE
BORROWER AND EACH OTHER CREDIT PARTY
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 CREDIT
AGREEMENT OR ANY OTHER CREDIT DOCUMENT IN ANY COURT REFERRED TO IN
PARAGRAPH (b) OF THIS SECTION.  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)                                 SERVICE
OF PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN SECTION 11.1.  NOTHING IN
THIS CREDIT AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

(e)                                  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 CREDIT 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 (i) 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 (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

84

 

11.11                     Severability.

 

If
any provision of any of the Credit Documents is determined to be illegal,
invalid or unenforceable, such provision shall be fully severable and the
remaining provisions shall remain in full force and effect and shall be
construed without giving effect  to the
illegal, invalid or unenforceable provisions.

 

11.12                     Entirety.

 

This
Credit Agreement together with the other Credit Documents represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment letters
or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.

 

11.13                     Binding Effect;
Termination.

 

(a)                                  This Credit Agreement shall become effective
at such time on or after the Closing Date when it shall have been executed by
the Borrower, the Guarantors and the Administrative Agent, and the
Administrative Agent shall have received copies hereof (telefaxed or otherwise)
which, when taken together, bear the signatures of each Lender, and thereafter
this Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Guarantors, the Administrative Agent and each Lender and their
respective successors and assigns.

 

(b)                                 The term of this Credit Agreement shall
commence on the effective date pursuant to subsection (a) above and shall
continue until no Loans, LOC Obligations or any other amounts payable hereunder
or under any of the other Credit Documents shall remain outstanding and until
all of the Commitments hereunder shall have expired or been terminated.

 

11.14                     Confidentiality.

 

Each
of the Administrative Agent and the Lenders agrees 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 Affiliate’s respective partners, directors,
officers, employees, agents, advisors and 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 laws or
regulations or by any subpoena or similar legal process; (d) to any other party to this Credit Agreement;
(e) in connection with the exercise of
any remedies hereunder or under any other Credit Document or any action or
proceeding relating to this Credit Agreement or any other Credit Document 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 Credit 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; and (h) to the
extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent or any Lender or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower.  For the purposes of this Section, “Information”
means all information received from the Borrower or any Subsidiary relating to
the Borrower or any Subsidiary or any of their respective businesses, other
than any such information that is available to the Administrative Agent or any
Lender on a nonconfidential basis prior to disclosure by

 

85

 

the Borrower or any Subsidiary; provided that, in the case of
information received from the Borrower or any Subsidiary after the date hereof,
such information is clearly identified in writing 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.

 

11.15                     USA PATRIOT Act Notice.

 

Each Lender that is subject to
the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “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 Act.

 

11.16                     Notice by Borrower
regarding Nonpublic Information.

 

The
Borrower hereby notifies each Lender that the trading of the Capital Stock of
the Borrower based on non-public information, including non-public information
furnished by the Borrower pursuant to Sections 7.1 and 7.2 hereof, is a
violation of securities laws.

 

11.17                     Consent to Security
Interest in Deposit Accounts.

 

(a)                                  Each Lender (including each Lender that
becomes a party hereto after the Closing Date) acknowledges and consents to the
grant of the security interest pursuant to the Security Agreement in all
deposit accounts now or hereafter maintained by any Credit Party with such
Lender.

 

(b)                                 Each Lender (including each Lender that
becomes a party hereto after the Closing Date) acknowledges and agrees that
with respect to all deposit accounts now or hereafter maintained by any Credit
Party with such Lender, (i) prior to
receipt by such Lender of a Control Notice (as defined in clause (ii) below),
the Credit Parties shall be permitted full access to such depository accounts
and all amounts held in such depository accounts and (ii) during the existence of an Event of Default, (A) the Administrative Agent may, immediately
and without prior notice to the Credit Parties, provide written notice to such
Lender (each a “Control Notice”) directing such Lender to pay over to
the Administrative Agent all amounts in such depository accounts and (B) after receipt of a Control Notice, such
Lender shall comply with instructions originated by the Administrative Agent
without further consent by any Credit Party. 
The Administrative Agent shall apply such amounts paid over to the
Secured Obligations in accordance with Section 3.15 without prior notice
to or the consent of the Credit Party in whose name the account is held or any
other Credit Party or person

 

(c)                                  The
acknowledgment, consent and agreements of each Lender (including each Lender that becomes a party hereto after the Closing
Date) in this Section 11.17 shall survive the assignment by such
Lender of all or any portion of its
rights and obligations under this Credit Agreement.

 

11.18                     Conflict.

 

To
the extent that there is a conflict or inconsistency between any provision
hereof, on the one hand, and any provision of any Credit Document, on the other
hand, this Credit Agreement shall control.

 

86

 

[Signature Page to Follow]

 

87

 

IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Credit Agreement to be duly executed and delivered as of the date first above
written.

 

	
  BORROWER:

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John
  T. Egeland

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
  GUARANTORS:

  	
  AARC,
  INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Dan
  C. Breeden, Jr.

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
  ADVANCE
  AMERICA SERVICING OF ARKANSAS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA SERVICING OF INDIANA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA LEASING SERVICES, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John
  T. Egeland

  
	
   

  	
  Title:

  	
  President
  of each of the foregoing

  
	
   

  	
   

  
	
   

  	
  AAIC,
  INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF ALABAMA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF ALASKA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF ARIZONA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF ARKANSAS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF CALIFORNIA, LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF COLORADO, LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF CONNECTICUT, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF DELAWARE, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF DISTRICT OF

  
	
   

  	
  COLUMBIA,
  INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William
  M. Webster IV

  
	
   

  	
  Title:

  	
  President
  of each of the foregoing

  
					

 

[Signature Pages Continue]

 

 

	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF FLORIDA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF GEORGIA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF HAWAII, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF IDAHO, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF ILLINOIS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF INDIANA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF IOWA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF KANSAS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF KENTUCKY, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF LOUISIANA, LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF MAINE, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF MARYLAND, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF MASSACHUSETTS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF MICHIGAN, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF MINNESOTA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF MISSISSIPPI, LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF MISSOURI, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF MONTANA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF NEBRASKA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF NEVADA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF NEW HAMPSHIRE, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF NEW JERSEY, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF NEW MEXICO, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF NEW YORK, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF NORTH CAROLINA,

  INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William
  M. Webster IV

  
	
   

  	
  Title:

  	
  President
  of each of the foregoing

  
					

 

[Signature Pages Continue]

 

 

	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF NORTH DAKOTA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF OHIO, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF OKLAHOMA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF OREGON, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF PENNSYLVANIA, LLC,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF RHODE ISLAND, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF SOUTH CAROLINA, INC., a Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF SOUTH DAKOTA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF TENNESSEE, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF TEXAS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF UTAH, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF VERMONT, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF VIRGINIA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF WASHINGTON, LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF WEST VIRGINIA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF WISCONSIN, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF WYOMING, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  ADVANCE
  AMERICA SERVICING OF GEORGIA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF ALABAMA, L.L.C.,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF ARKANSAS, LLC,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF COLORADO, LLC,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William
  M. Webster IV

  
	
   

  	
  Title:

  	
  President
  of each of the foregoing

  
					

 

[Signature Pages Continue]

 

 

	
   

  	
  MCKENZIE
  CHECK ADVANCE OF INDIANA, LLC,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF IOWA, L.L.C.,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF KANSAS, LLC,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF MISSISSIPPI, LLC,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF MISSOURI, L.L.C.,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF NEBRASKA, LLC,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF NEW JERSEY, L.L.C.,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF OHIO, LLC,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF OREGON, LLC,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF WASHINGTON, L.L.C.,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  MCKENZIE
  CHECK ADVANCE OF WISCONSIN, LLC,

  
	
   

  	
  a
  Tennessee limited liability company

  
	
   

  	
  NCAS
  OF DELAWARE, LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
  NCAS
  OF NEW JERSEY, LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William
  M. Webster IV

  
	
   

  	
  Title:

  	
  President
  of each of the foregoing

  
	
   

  	
   

  	
   

  
	
   

  	
  ADVANCE
  AMERICA MONEY.COM, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Signature
  Pages Continue]

  
					

 

 

	
   

  	
  ADVANCE
  AMERICA SERVICING OF TEXAS, L.P.,

  
	
   

  	
  a
  Texas limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ADVANCE
  AMERICA, CASH ADVANCE CENTERS OF TEXAS, INC.,

  
	
   

  	
   

  	
  a
  Delaware corporation and its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William
  M. Webster IV

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  [Signature
  Pages Continue]

  
					

 

 

	
  ADMINISTRATIVE

  	
   

  
	
  AGENT:

  	
  BANK
  OF AMERICA, N.A., as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Signature
  Pages Continue]

  
					

 

 

	
  LENDERS:

  	
  BANK
  OF AMERICA, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Scott
  K. Mitchell

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  US
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL
  CITY BANK OF PENNSYLVANIA

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL
  BANK OF SOUTH CAROLINA

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CAROLINA
  FIRST BANK

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRST
  TENNESSEE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Signature
  Pages Continue]

  
					

 

 

	
   

  	
  BRANCH
  BANKING AND TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TEXAS
  CAPITAL BANK, NA

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:Exhibit 10.2

 

THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, OR TRANSFERRED EXCEPT
IN COMPLIANCE THEREWITH.

 

THIS
INSTRUMENT IS SUBJECT TO THE SUBORDINATION AGREEMENT DATED AS OF
OCTOBER 26, 1999 (AS AMENDED) BY AND AMONG ADVANCE AMERICA, CASH ADVANCE
CENTERS, INC. AND ITS SUBSIDIARIES AND AFFILIATES IDENTIFIED THEREIN, BANK OF
AMERICA, N.A., AND STEVE A. MCKENZIE, BRENDA B. MCKENZIE, NCAW, LLC, MCKENZIE
FAMILY PARTNERSHIP, L.P., MCKENZIE FAMILY PARTNERSHIP NO. 2, L.P., J. EDWARD
SCOGGINS, DARRYL M. WEAVER, DARRYL M. WEAVER IRREVOCABLE TRUST F/B/O CHILDREN
OF DARRYL M. WEAVER DATED JUNE 23, 1998, SHASTA MCKENZIE LILLARD FAMILY
TRUST DATED OCTOBER 30, 1997, ASHLEY ELIZABETH MCKENZIE FAMILY TRUST DATED
OCTOBER 30, 1997, STEVE A. MCKENZIE, JR. FAMILY TRUST DATED
OCTOBER 30, 1997, TRUST U/A STEVE A. MCKENZIE F/B/O SHASTA MCKENZIE
LILLARD DATED DECEMBER 23, 1993, TRUST U/A STEVE A. MCKENZIE F/B/O STEVE
A. MCKENZIE JR. DATED DECEMBER 23, 1993, AND TRUST U/A/ STEVE A. MCKENZIE
F/B/O ASHLEY ELIZABETH MCKENZIE DATED DECEMBER 23, 1993, THAT, AMONG OTHER
THINGS, CONTAINS PROVISIONS SUBORDINATING THE OBLIGATIONS OF ADVANCE AMERICA,
CASH ADVANCE CENTERS, INC. AND ITS SUBSIDIARIES AND AFFILIATES HEREUNDER
(INCLUDING, WITHOUT LIMITATION, THE OBLIGATIONS OF THE GUARANTORS) TO THE
OBLIGATIONS OF ADVANCE AMERICA, CASH ADVANCE CENTERS, INC. AND ITS SUBSIDIARIES
AND AFFILIATES TO THE SENIOR CREDITORS DEFINED IN SAID SUBORDINATION AGREEMENT AND
LIMITING THE RIGHTS OF THE HOLDER OF THIS INSTRUMENT TO RECEIVE PAYMENTS
HEREUNDER AND ACCELERATE THE MATURITY HEREOF, TO WHICH PROVISIONS SUCH HOLDER,
BY ACCEPTANCE HEREOF, AGREES.

 

	
  No. [      ]

  	
   

  	
  $[            ]

  
	
  Dated as of
  [             ]

  	
   

  	
   

  

 

ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.

 

13% Senior Subordinated Note Due 2007

 

ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.,
a Delaware corporation (together with its successors, transferees and assigns,
the “Issuer”), for value received,
hereby promises to pay, subject to Section 5 below, to the order of the
[              ]
(the “Holder”), the principal sum
of
[                  ]
($[                  ]),
by wire transfer of immediately available funds to the Holder’s account (the “Bank Account”) at a bank located in the
United States specified by the Seller Representative from time to time, on
October 15, 2007 (the “Maturity Date”),
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay, subject to Section 5 below, interest, in arrears, on the first day
of January, April, July and October (unless such day is not a
Business Day, in which event on the next succeeding Business Day) of each year
in which this Note remains outstanding and on the Maturity Date (each such
date, an “Interest Payment Date”),
commencing with
[                  ],
on the unpaid principal sum hereof

 

 

outstanding in like coin or
currency, at the rates per annum set forth below, by wire transfer of
immediately available funds to the Bank Account, from the most recent Interest
Payment Date to which interest has been paid in full on this Note, or if no
interest has been paid on this Note, from [                  ],
until payment in full of the principal sum hereof has been made.

 

This Note shall bear interest, commencing [                  ],
at a rate per annum (the “Interest Rate”) equal
to 13%. Interest on this Note will be calculated on the basis of a 365 day year
for the actual number of days elapsed; provided that the Issuer shall pay
interest on overdue principal at a rate per annum equal to 18% (the “Overdue Rate”), and interest on overdue
installments of interest, to the extent lawful, at the Overdue Rate.

 

Upon the occurrence and continuation of a
Payment Default (as defined below) with respect to this Note, at the option and
upon demand of the Holder of this Note, the Issuer shall pay any overdue
interest on this Note through the issuance of additional Notes (the “Additional Securities”).  Such Additional Securities shall be issued
in an aggregate principal amount equal to the amount of overdue interest
payable with respect to this Note and such Additional Securities shall be
identical to this Note except that such Additional Notes shall bear interest at
the Overdue Rate and shall be payable on demand and shall contain such other
terms and conditions reasonably satisfactory to the Holder.

 

This Note is one of the duly authorized notes
of the Issuer referred to in Section 2.3.2.2 of the Contribution
Agreement.

 

Section 1.                                            Certain
Terms Defined.

 

(a)                                  The following terms
for all purposes of this Note shall have the respective meanings specified
below.

 

“Affiliate” means,
with respect to any specified Person, any other Person directly or indirectly
controlling, controlled by, or under common control with such other
Person.  For the purposes of this
definition, the term “control”
(including with correlative meanings, the terms “controlling”, “controlled
by”, and “under common control with”),
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.

 

“Business Day” means
any day except a Saturday, Sunday, or other day on which commercial banks in
the City of Chicago or the City of New York are authorized by law to close.

 

“Capital Lease Obligations”
means any amount payable with respect to any lease of any tangible or
intangible property (whether real, personal or mixed), however denoted, which
is required by GAAP to be reflected as a liability on the face of the balance
sheet of the lessee thereunder.

 

“Closing Date” shall
have the meaning given such term in the Contribution Agreement.

 

2

 

“Common Stock”
means, with respect to the Issuer, any and all shares of common stock of the
Issuer.

 

“Contribution Agreement”
means the Contribution Agreement dated as of October 15, 1999, among the
Issuer and the Sellers, as amended.

 

“Indebtedness” means
for any Person without duplication: (a) all indebtedness, whether or not
represented by bonds, debentures, notes, securities, or other evidences of indebtedness,
for the repayment of money borrowed by such Person, (b) all indebtedness
representing deferred payment of the purchase price of property or assets,
except account payables or other obligations to trade creditors that have been
incurred in the ordinary course of business, (c) all Capital Lease Obligations
of such Person, (d) all indebtedness under guarantees, endorsements,
assumptions, or other contractual obligations of such Person, including any
letters of credit of such Person, or the obligations of such Person in respect
of, or to purchase or otherwise acquire, indebtedness of others, (e) all
indebtedness secured by a Lien existing on property owned by such Person,
whether or not the indebtedness secured thereby shall have been assumed by such
Person, (f) trade accounts payable more than one hundred twenty (120) days past
due, (g) all amendments, renewals, extensions, modifications, and refundings of
any indebtedness or obligations referred to in clauses (a), (b), (c), (d), (e),
or (f).

 

“Indemnification Obligations” means
any and all liabilities and obligations of the Holder to Issuer pursuant to
Section 11.1 of the Contribution Agreement that relates to the obligation
of the Holder to indemnify Issuer.

 

“Initial Shareholders” means
GDJ, Jr. Investments Limited Partnership, Stewart H. Johnson, Breeden
Investment Company, L.P., A. Foster Chapman, AAI/GDJ, III Trust dated 04/21/98,
AAI/SPJ Trust dated 04/21/98, Brannon Investments, L.P., S.P. Johnson
Irrevocable Trust Dtd. 12/13/94, Columbia Investments, L.L.C., Laurel
Investment Partners, L.L.C., and Beach Wheats Limited Partnership, or any of
their Affiliates.

 

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

 

“Lien” means any
lien, mortgage, security interest, tax lien, pledge, encumbrance, financing
statement, or conditional sale or title retention agreement, or any other
interest in property designed to secure the repayment of Indebtedness or any
other obligation, whether arising by agreement, operation of law, or otherwise.

 

“Other Acceleration Event”
means the acceleration of the principal amount of Indebtedness of the Issuer
(other than such Indebtedness in an aggregate principal amount not in excess of
$1,000,000) in advance of the stated maturity therefor, whether such
acceleration is voluntary, involuntary, by declaration, or otherwise or the
failure to pay such Indebtedness upon the stated maturity therefor.

 

“Payment Default”
means the failure to pay, when due (whether upon maturity, acceleration,
redemption, or otherwise), any principal of or interest on this Note and, other
than with respect to the payment of principal, such failure shall continue for
more than five (5) days.

 

3

 

“Permitted Indebtedness”
shall mean any Indebtedness permitted to be contracted, created, incurred, or
assumed or permitted to exist pursuant to the provisions of Section 8.1 of
the Senior Loan Agreement.

 

“Permitted Liens”
shall have the meaning given such term in the Senior Loan Agreement.

 

“Person” means any
individual, sole proprietorship, corporation, business trust, unincorporated
organization, association, company, partnership, limited liability company,
joint venture, governmental authority (whether a national, federal, state,
county, municipality, or otherwise, and shall include without limitation any
instrumentality, division, agency, body, or department thereof), or other
entity.

 

“Public Offering”
means the underwritten sale to the general public after the date hereof of
Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, as amended (other than a registration statement on Form
S-4, Form S-8 or any successor forms).

 

“Sellers” means
Steve A. McKenzie, Brenda B. McKenzie, NCAW, LLC, McKenzie Family Partnership,
L.P., McKenzie Family Partnership No. 2, L.P., J. Edward Scoggins, Darryl M.
Weaver, Darryl M. Weaver Irrevocable Trust f/b/o Children of Darryl M. Weaver
dated June 23, 1998, Shasta McKenzie Lillard Family Trust dated
October 30, 1997, Ashley Elizabeth McKenzie Family Trust dated
October 30, 1997, Steve A. McKenzie, Jr. Family Trust dated
October 30, 1997, Trust U/A Steve A. McKenzie f/b/o Shasta McKenzie
Lillard dated December 23, 1993, Trust U/A Steve A. McKenzie f/b/o Steve
A. McKenzie Jr. dated December 23, 1993, and Trust U/A Steve A. McKenzie
f/b/o Ashley Elizabeth McKenzie dated December 23, 1993, and their
respective transferees.

 

“Seller Notes”
means, collectively, the promissory notes of the Issuer, each initially dated
as of October 15, 1999, and each issued to a Seller, as more fully
described in Section 2.3.2.2 of the Contribution Agreement, including any
transfers or replacements thereof (including this Note).

 

“Seller Representative”
means Steve A. McKenzie and each of his successors and assigns.

 

“Senior Acceleration Event”
means (i) the acceleration of at least $1,000,000 of principal amount of Senior
Indebtedness in advance of the stated maturity therefor, whether such
acceleration is involuntary, by declaration or otherwise or the failure to pay
such Indebtedness upon the stated maturity therefor or (ii) a material breach
by the Issuer of any of its obligations to the Holder under the Subordination
Agreement.

 

“Senior Indebtedness” means
all Indebtedness (whether now outstanding or hereafter incurred) of the Issuer
in respect of the Senior Loan Agreement, including, without limitation, all
principal, interest, fees, expenses, indemnities, and all other amounts payable
under the Senior Loan Agreement and any notes, security documents, guarantees,
or other loan documents referred to therein, and any amendments, modifications
or supplements to, or any renewals, extensions, deferrals, refinancings and
refundings of, any of the foregoing.

 

4

 

“Senior Lender”
means, collectively, Bank of America, N.A. and the other lenders from time to
time under the Senior Loan Agreement, and each of their respective successors
and assigns, and any Person who replaces or refinances the Indebtedness of the
Issuer incurred under the Senior Loan Agreement.

 

“Senior Loan Agreement”
means the Amended and Restated Credit Agreement dated as of September 30,
2002 by and among Issuer (as borrower), the Subsidiaries and affiliates of the
Issuer identified therein (as guarantors), the lenders identified therein and
Bank of America, N.A. (as Administrative Agent) and all agreements, documents
and instruments delivered pursuant thereto in connection with the loans and
advances made thereunder, as such agreements and documents may be amended,
amended and restated, supplemented, consolidated or otherwise modified from
time to time in accordance with the terms and provisions of the Subordination
Agreement.

 

“Subordination Agreement”
means the Subordination Agreement dated as of October 26, 1999 among the
Issuer, the Senior Lender, the Holder, and the other Sellers, as such
subordination agreement may be amended, amended and restated, supplemented,
consolidated, or otherwise modified from time to time.

 

“Subordinated Debt” means,
collectively, the 13% Junior Unsecured Subordinated Notes Due 2007 of the
Issuer, as amended, each dated as of or after May 22, 2001, in the
aggregate principal amount of $11,557,890.42, including any transfers or replacements
thereof.

 

“Subordinated Debt Subordination Agreement” means
the Subordination Agreement dated as of October 15, 1999 among the Issuer,
the Senior Lender, the Holder, the other Sellers, and the Initial Shareholders,
as such subordination agreement may be amended, amended and restated,
supplemented, consolidated, or otherwise modified from time to time.

 

(b)                                 Each of the following
terms is defined in the Section set forth opposite such term:

 

	
  Term

  	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Change of Control

  	
   

  	
  4.2

  	
   

  
	
  Event of Default

  	
   

  	
  2.1

  	
   

  
	
  Prepayment Notice

  	
   

  	
  4.2

  	
   

  

 

Section 2.                                            Events
of Default and Remedies.

 

Section 2.1.                                   Event
of Default Defined: Acceleration of Maturity: Waiver of Default.  In case one or more of the following events
(“Events of Default”) (whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall have occurred and
be continuing:

 

(a)                                  a Payment Default;

 

5

 

(b)                                 a breach by the Issuer
of any covenant contained in Section 3 hereof or the occurrence of an
Event of Default by Issuer under the Subordinated Debt Subordination Agreement;

 

(c)                                  a Senior Acceleration
Event or an Other Acceleration Event;

 

(d)                                 the Issuer shall
permit or suffer to exist the entry of a decree or order for relief, entered by
a court of competent jurisdiction, in respect of the Issuer in an involuntary
case under any applicable bankruptcy, insolvency, or other similar law relating
to or affecting creditors’ rights generally now or hereafter in effect, or
appointing a receiver, liquidator, custodian, trustee, sequestrator (or similar
official) of the Issuer or for any substantial part of the property of the
Issuer or ordering the winding up or liquidation of the affairs of the Issuer
or any such case or proceeding shall have been commenced against the Issuer
seeking such a decree or order that remains unstayed and in effect or has not
been dismissed for a period of 90 days; or

 

(e)                                  the Issuer shall
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law relating to or affecting creditors’ rights generally now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, custodian, trustee, sequestrator (or
similar official) of the Issuer or for any substantial part of the property of
the Issuer or the Issuer shall make any general assignment for the benefit of
creditors;

 

then, and in each and every such case, other
than an Event of Default described in clauses (a), (b), and (c) above, the
aggregate outstanding principal amount of this Note, together with any accrued
or unpaid interest thereon, shall become and be immediately due and payable
without any declaration, presentment, demand, protest, notice of default,
notice of acceleration or other act on the part of the Holder, all of which are
hereby expressly waived.  Subject to
Section 5 hereof, upon the occurrence of an Event of Default described in
clauses (a), (b), or (c), the Holder of this Note may (in addition to any other
right, power, or remedy permitted to the Holder by law) declare the entire
aggregate outstanding principal amount of this Note due and payable and the
same, together with any accrued and unpaid interest thereon, shall thereupon
become forthwith due and payable, without any presentment, demand, protest,
notice of default, notice of acceleration, or other notices of any kind, all of
which are hereby expressly waived.

 

Section 2.2.                                   Powers
and Remedies Cumulative; Delay or Omission Not Waiver of Default.  No right or remedy herein conferred upon or
reserved to the Holder is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.

 

No delay or omission of the Holder to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and every power and remedy given by this Note or by law may be
exercised from time to time, and as often as shall be deemed expedient, by the
Holder.

 

6

 

Any term or provision of this Note (including
this Section 2.2) to the contrary notwithstanding, the Holder shall have
no right (directly or indirectly) to exercise, nor shall any Holder in fact
exercise (directly or indirectly), any rights or remedies against the Issuer,
any of its subsidiaries or any of their respective assets in respect of any
breach hereunder or otherwise, nor shall the Holder commence (directly or
indirectly) any litigation, action or other proceeding against any of the
foregoing in respect of any breach hereunder or otherwise, unless (but only
unless) an Event of Default has occurred and is continuing, and, in such event,
the exercise of any such right or remedy shall be subject to Section 5
hereof.

 

Section 2.3.                                   Waiver
of Past Defaults.  The Holder may
waive any past Event of Default hereunder and its consequences.  In the case of any such waiver, the Issuer
and the Holder shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereon.

 

Upon any such waiver, such Event of Default
shall cease to exist and be deemed to have been cured and not to have occurred,
and any Event of Default arising therefrom shall be deemed to have been cured,
and not to have occurred for every purpose of this Note; but no such waiver
shall extend to any subsequent or other Event of Default or impair any right
consequent thereon.

 

Section 3.                                            Covenants.  (a) The Issuer shall not grant, create,
incur, assume, or permit to exist any Liens with respect to any of its property
and assets, whether now owned or hereinafter acquired, except for Permitted
Liens.

 

(b)                                 The Issuer shall not
contract, create, incur, assume, or permit to exist any Indebtedness, except
for Permitted Indebtedness.

 

(c)                                  The Issuer shall not
make any payment of principal of any of the Subordinated Debt if such payment
is not permitted by the terms of the Subordinated Debt Subordination Agreement.

 

Section 4.                                            Redemption
and Prepayment.

 

Section 4.1.                                   Optional
Redemption.

 

(a)                                  So long as no default
exists or would occur under or in respect of any Senior Indebtedness, the
Issuer at its option may at any time redeem all, or from time to time any part
of, the principal amount of this Note, without penalty or premium, at a price
equal to 100% of the principal amount of this Note so redeemed, together with
accrued and unpaid interest on such principal through the date of redemption,
by giving at least five (5) days notice of such redemption to the Seller
Representative, specifying the date of redemption, the Seller Notes or portions
thereof to be redeemed, the place to surrender such Seller Notes, and the
redemption price.

 

(b)                                 In the event the
Issuer shall redeem this Note or any portion hereof, the Holder hereby agrees
to surrender this Note for payment of the redemption price at the times and at
the place and in the manner instructed by Issuer.  Upon payment of the redemption price of the portion of this Note
called for redemption, interest on the principal amount of this Note so called

 

7

 

for redemption shall cease to
accrue (regardless of the failure, if any, of the Holder to surrender this Note
for payment as described above), and all rights of the Holder thereof (except
the right to receive from the Issuer the redemption price) shall cease. Upon
surrender in accordance with said instructions of the Issuer to the Holder of
this Note (properly endorsed or assigned for transfer, if the Board of
Directors of the Issuer shall so require), this Note (or portion hereof) shall
be redeemed by the Issuer at the aforesaid redemption price.  In case this Note is redeemed in part, a new
Note, in substantially the same form and incorporating substantially the same
terms as this Note, shall be issued to the Holder representing the unredeemed portion
of this Note without cost to the Holder hereof.

 

Section 4.2.                                   Prepayment
upon Change of Control and Public Offering.

 

(a)                                  If there shall occur
a Change in Control (as defined below) or a Public Offering, the Holder shall
have the right, at such Holder’s option, to require the Issuer to prepay, and
upon the exercise of such right the Issuer shall prepay:  (i) in the case of a Change of Control,
the aggregate principal amount of this Note outstanding as of the date of
prepayment, together with accrued and unpaid interest through the date of
prepayment, or (ii) in the case of a Public Offering, an amount equal to
the lesser of (A)  the aggregate principal amount of this Note
outstanding, plus all accrued and unpaid interest thereon to the date of
prepayment or (B) the product of 50% of the net proceeds to the Issuer
from a Public Offering multiplied by a fraction, the numerator of which is the
aggregate outstanding principal amount of this Note, together with accrued but
unpaid interest, and the denominator of which is the aggregate outstanding
principal amount of the Seller Notes, together with all accrued but unpaid
interest thereon.  All prepayments made
pursuant to this Section 4.2(a) shall be applied first to all accrued and
unpaid interest and second to outstanding principal.  For purposes of this Section 4.2, “Change of Control” means the sale, transfer, or other
disposition by the Initial Shareholders, in a single transaction or a series of
transactions, of more than 25% of the Common Stock that is issued and
outstanding to another Person or Persons.

 

(b)                                 On or before the tenth
day after the occurrence of a Change of Control or a Public Offering, the
Issuer shall send the Seller Representative a notice (a “Prepayment Notice”) advising the Seller
Representative of the rights of the Holder hereunder and specifying the date,
not less than 20 nor more than 60 days after the date such notice is delivered
to the Seller Representative, on which the Issuer proposes to prepay this Note
(or portion hereof) if the Holder requests prepayment pursuant to
Section 4.2(b); provided that no failure of the Issuer to give such
notice shall limit the rights of the Holder hereunder.  If the Holder wishes to exercise its rights
hereunder it shall cause the Seller Representative to deliver to the Issuer, on
or before the fifteenth day after receipt by the Seller Representative of the
Prepayment Notice, written notice (which shall be irrevocable) of such Holder’s
exercise of such right, which notice shall set forth the name of the Holder and
the aggregate principal amount of this Note held by such Holder as to which an
election to exercise its rights hereunder is being made.

 

(c)                                  From and after the
prepayment date set forth in the Prepayment Notice (unless an Event of Default
shall be made by the Issuer in providing money for the prepayment of this Note
or portion hereof), interest on the principal amount this Note to be prepaid,
if the Holder elected to have this Note (or portion hereof) prepaid as set
forth in the foregoing paragraph (b), shall cease to accrue, and all rights of
the Holder thereof (except the right to receive from the Issuer

 

8

 

such prepayment) shall
cease.  Upon surrender in accordance
with said notice of the certificate for this Note so required to be prepaid
(properly endorsed or assigned for transfer, if the Board of Directors of the
Issuer shall so require and the Prepayment Notice shall so state), this Note
(or portion hereof) shall be prepaid by the Issuer in the amount required by
Section 4.2(a).  In case this Note
is prepaid in part, a new Note, in substantially the same form and
incorporating substantially the same terms as this Note, shall be issued to the
Holder representing the unpaid portion of this Note without cost to the Holder
thereof.

 

Section 5.                                            Subordination.  The Issuer covenants and agrees and the
Holder, by its acceptance hereof likewise covenants and agrees, in each case
notwithstanding any other provisions of this Note or any other agreement,
document or instrument (it being the express agreement of such Holder that the
provisions of this Section 5 and thereby the provisions of the
Subordination Agreement shall govern in the event of any conflicting terms or
provisions herein or otherwise), that this Note shall be issued subject to the
provisions of the Subordination Agreement; and the Person holding this Note,
whether upon original issue or upon transfer, assignment, or exchange thereof
accepts and agrees that the payment of the principal of, interest on or any
other amounts or obligations (monetary or otherwise) on, under or in respect of
this Note by or on behalf of the Issuer shall, to the extent and in the manner
set forth in the Subordination Agreement, be subordinated and junior in right
of payment, to the prior payment in full in cash of all Senior Indebtedness.

 

Section 6.                                            Miscellaneous.

 

Section 6.1.                                   Modification
of Notes.  This Note may be modified
with the written consent of the Issuer and the Holder.  The Holder may waive compliance by the
Issuer of any provision of this Note.

 

Section 6.2.                                   Set-Off.  Notwithstanding anything contained herein to
the contrary, if any Indemnification Obligations are due and owing by the
Holder (or any prior holder of a note representing some or all of the principal
amount hereof) to Issuer, at the sole discretion of the Issuer, and in
accordance with the terms of the Contribution Agreement, the Issuer may set off
and apply all or any portion of such Indemnification Obligations to the
Indebtedness due and owing, or that will become due and owing, to the Holder
under this Note (including to the same extent that the Issuer would have been
able to set off such Indemnification Obligations against such prior holder(s))
in the order in which such payments are to be made in accordance with the terms
of this Note.  The Issuer shall notify
the Seller Representative in writing of the amounts, if any, it has elected to
offset pursuant to this Section 6.2 on or prior to the time
payments to be offset hereunder would otherwise be required to be made.

 

Section 6.3.                                   Miscellaneous.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of South Carolina
applicable to contracts made and to be performed therein and without regard to
such State’s conflict of law provisions; the rights and remedies of the parties
hereunder shall be determined in accordance with the laws of South
Carolina.  The Issuer and the Holder
acknowledge that the provisions of this Section 6.3 are just, fair and
reasonable to the parties and the parties’ respective agents, employees, and
representatives.  The Issuer and the
Holder further acknowledge that such provisions represent terms that have been
bargained for in the course of the parties’ discussions and negotiations

 

9

 

leading to the agreement, and
that the bargaining power of the Issuer and the Holder is approximately equal
in the matters set forth in this agreement. 
The Issuer hereby waives presentment, demand, notice, protest, and all
other demands and notices in connection with the delivery, acceptance,
performance, and enforcement of this Note, except as specifically provided
herein, and consents to extensions of the time of payment, or forbearance or
other indulgence without notice. The Holder by acceptance of this Note agrees
to be bound by the provisions of this Note and the Subordination
Agreement.  The Section headings
herein are for convenience only and shall not affect the construction hereof.

 

Section 6.4.                                   Transfer.  This Note is registered on the books of the
Issuer and is transferable only upon the prior written consent of Issuer (which
consent may not be unreasonably withheld) and only by surrender thereof at the
principal office of the Issuer duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered Holder of this Note or
its attorney duly authorized in writing. 
Any such transferee shall be deemed a Holder hereunder.

 

Section 6.5.                                   Seller
Representative.  The Holder hereby
consents and approves to the appointment of Steve A. McKenzie as initial Seller
Representative and hereby agrees that the Seller Representative may act, and
receive notices, on behalf of the Holder as specified and provided in this Note.  If Steve A. McKenzie or his duly approved
successors or assigns cease for any reason to act in the capacity of Seller
Representative and no Person is approved by the Issuer and a majority of the
holders of the aggregate outstanding principal amount of the Seller Notes as a
successor or assign thereof, all references to Seller Representative contained
in this Note shall be deemed to mean the Holder of this Note.

 

[Signature Page Follows]

 

10

 

IN WITNESS WHEREOF, the Issuer
has caused this instrument to be duly executed as of this
[        ] day of
[                  ],
[          ].

 

 

	
   

  	
  ADVANCE
  AMERICA, CASH

  ADVANCE CENTERS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  John T.
  Egeland, President

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