Document:

Exhibit
10.1

 

 

CUSIP
Numbers:  Deal #88268DAA1

Revolver #88268DAB9

 

$150,000,000

 

CREDIT
AGREEMENT
Dated as of October 8, 2004

among

TEXAS ROADHOUSE, INC.,

as the Borrower,

 

BANK
OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender

and L/C Issuer,

and

The Other Lenders Party Hereto

 

BANC
OF AMERICA SECURITIES LLC,
as Co-Lead Arranger,

 

and

 

NATIONAL
CITY BANK OF KENTUCKY,

as Co-Lead Arranger and as Syndication Agent,

 

 

 

TABLE
OF CONTENTS

 

	
  Section

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 1 DEFINITIONS AND ACCOUNTING
  TERMS

  	
   

  
	
  1.01

  	
   

  	
  Defined Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.02

  	
   

  	
  Other Interpretive Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.03

  	
   

  	
  Accounting Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.04

  	
   

  	
  UCC Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.05

  	
   

  	
  Rounding

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.06

  	
   

  	
  Times of Day

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.07

  	
   

  	
  Letter of Credit Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 2 THE COMMITMENTS AND CREDIT
  EXTENSIONS

  	
   

  
	
  2.01

  	
   

  	
  Committed Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.02

  	
   

  	
  Borrowings, Conversions and Continuations of Committed Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.03

  	
   

  	
  Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.04

  	
   

  	
  Swing Line Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.05

  	
   

  	
  Prepayments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.06

  	
   

  	
  Termination or Reduction of Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.07

  	
   

  	
  Repayment of Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.08

  	
   

  	
  Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.09

  	
   

  	
  Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.10

  	
   

  	
  Computation of Interest and Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.11

  	
   

  	
  Evidence of Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.12

  	
   

  	
  Payments Generally; Administrative Agent’s
  Clawback

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.13

  	
   

  	
  Sharing of Payments by Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.14

  	
   

  	
  Security

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 3
  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  

 

1

 

	
  3.01

  	
   

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.02

  	
   

  	
  Illegality

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.03

  	
   

  	
  Inability to Determine Rates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.04

  	
   

  	
  Increased Costs

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.05

  	
   

  	
  Compensation for Losses

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.06

  	
   

  	
  Mitigation Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.07

  	
   

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 4 CONDITIONS PRECEDENT TO
  CREDIT EXTENSIONS

  	
   

  
	
  4.01

  	
   

  	
  Conditions of Initial Credit Extension

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.02

  	
   

  	
  Conditions to all Credit Extensions

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 5 REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  5.01

  	
   

  	
  Existence, Qualification and Power; Compliance with Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.02

  	
   

  	
  Authorization; No Contravention

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.03

  	
   

  	
  Governmental Authorization; Other Consents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.04

  	
   

  	
  Binding Effect

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.05

  	
   

  	
  Financial Statements; No Material Adverse
  Effect

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.06

  	
   

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.07

  	
   

  	
  No Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.08

  	
   

  	
  Ownership of Property; Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.09

  	
   

  	
  Environmental Compliance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.10

  	
   

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.11

  	
   

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.12

  	
   

  	
  ERISA Compliance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.13

  	
   

  	
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.14

  	
   

  	
  Margin Regulations; Investment Company Act;
  Public Utility Holding Company Act

  	
   

  

 

2

 

	
  5.15

  	
   

  	
  Material Contracts

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.16

  	
   

  	
  Disclosure

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.17

  	
   

  	
  Compliance with Laws

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.18

  	
   

  	
  Intellectual Property; Licenses, Etc

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.19

  	
   

  	
  Employee Relations

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.20

  	
   

  	
  Burdensome Provisions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.21

  	
   

  	
  Survival of Representations and Warranties,
  Etc

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 6 AFFIRMATIVE COVENANTS

  	
   

  
	
  6.01

  	
   

  	
  Financial Statements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.02

  	
   

  	
  Certificates; Other Information

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.03

  	
   

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.04

  	
   

  	
  Payment of Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.05

  	
   

  	
  Preservation of Existence, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.06

  	
   

  	
  Maintenance of Properties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.07

  	
   

  	
  Maintenance of Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.08

  	
   

  	
  Compliance with Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.09

  	
   

  	
  Environmental Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.10

  	
   

  	
  Compliance with ERISA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.11

  	
   

  	
  Compliance With Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.12

  	
   

  	
  Books and Records

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.13

  	
   

  	
  Inspection Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.14

  	
   

  	
  Use of Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.15

  	
   

  	
  Additional Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.16

  	
   

  	
  Required Joint Venture Distributions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.17

  	
   

  	
  Holdings Roll-Up

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.18

  	
   

  	
  Further Assurances

  	
   

  

 

3

 

	
  Article 7 NEGATIVE COVENANTS

  	
   

  
	
  7.01

  	
   

  	
  Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.02

  	
   

  	
  Investments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.03

  	
   

  	
  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.04

  	
   

  	
  Fundamental Changes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.05

  	
   

  	
  Dispositions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.06

  	
   

  	
  Restricted Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.07

  	
   

  	
  Limitations on Exchange and Issuance of
  Capital Stock

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.08

  	
   

  	
  Change in Nature of Business

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.09

  	
   

  	
  Accounting Changes; Organizational
  Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.10

  	
   

  	
  Transactions with Affiliates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.11

  	
   

  	
  Burdensome Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.12

  	
   

  	
  Use of
  Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.13

  	
   

  	
  Impairment of Security Interests

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.14

  	
   

  	
  Restrictions on Conduct of IP Holdco

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.15

  	
   

  	
  Financial Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.16

  	
   

  	
  Capital Expenditures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.17

  	
   

  	
  Restaurant Expenditure Limitations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.18

  	
   

  	
  Consolidated New Unit Pre-Opening Costs
  Limitations

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 8 EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
  8.01

  	
   

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.02

  	
   

  	
  Remedies Upon Event of Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.03

  	
   

  	
  Application of Funds

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 9 ADMINISTRATIVE AGENT

  	
   

  
	
  9.01

  	
   

  	
  Appointment and Authority

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.02

  	
   

  	
  Rights as a Lender

  	
   

  

 

4

 

	
  9.03

  	
   

  	
  Exculpatory Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.04

  	
   

  	
  Reliance by Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.05

  	
   

  	
  Delegation of Duties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.06

  	
   

  	
  Resignation of Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.07

  	
   

  	
  Non-Reliance on Administrative Agent and
  Other Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.08

  	
   

  	
  No Other Duties, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.09

  	
   

  	
  Administrative Agent May File Proofs of
  Claim

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.10

  	
   

  	
  Collateral and Guaranty Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 10 MISCELLANEOUS

  	
   

  
	
  10.01

  	
   

  	
  Amendments, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.02

  	
   

  	
  Notices; Effectiveness; Electronic
  Communication

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.03

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.04

  	
   

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.05

  	
   

  	
  Payments Set Aside

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.06

  	
   

  	
  Successors and Assigns

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.07

  	
   

  	
  Treatment of Certain Information;
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.08

  	
   

  	
  Right of Setoff

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.09

  	
   

  	
  Interest Rate Limitation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.10

  	
   

  	
  Counterparts; Integration; Effectiveness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.11

  	
   

  	
  Survival of Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.12

  	
   

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.13

  	
   

  	
  Governing Law; Jurisdiction; Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.14

  	
   

  	
  Waiver of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.15

  	
   

  	
  USA PATRIOT Act Notice

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.16

  	
   

  	
  Time of the Essence

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  

 

5

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.01(a)

  	
   

  	
  Existing Letters of Credit

  
	
  2.01

  	
   

  	
  Commitments and Commitment Percentages

  
	
  5.01

  	
   

  	
  Jurisdictions of Organization and
  Qualification

  
	
  5.06

  	
   

  	
  Litigation

  
	
  5.09

  	
   

  	
  Environmental Matters

  
	
  5.11

  	
   

  	
  Taxes

  
	
  5.12

  	
   

  	
  ERISA Plans

  
	
  5.13

  	
   

  	
  Subsidiaries and Other Equity Investments

  
	
  5.15

  	
   

  	
  Material Contracts

  
	
  5.18

  	
   

  	
  Intellectual Property

  
	
  7.01

  	
   

  	
  Existing Liens

  
	
  7.02

  	
   

  	
  Existing Investments

  
	
  7.03

  	
   

  	
  Existing Indebtedness

  
	
  11.02

  	
   

  	
  Administrative Agent’s Office, Certain
  Addresses for Notices

  

 

[The Registrant agrees to furnish supplementally a copy of the omitted
schedules to the SEC upon request.]

 

	
  EXHIBITS

  	
   

  	
   

  
	
  Form of

  
	
  A

  	
   

  	
  Committed Loan Notice

  
	
  B

  	
   

  	
  Swing Line Loan Notice

  
	
  C

  	
   

  	
  Note

  
	
  D

  	
   

  	
  Compliance Certificate

  
	
  E

  	
   

  	
  Assignment and Assumption

  
	
  F

  	
   

  	
  Guaranty

  
	
  G

  	
   

  	
  Pledge Agreement

  

 

CREDIT
AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of October 8,
2004, among TEXAS ROADHOUSE, INC.,
a Delaware corporation (the “Borrower”), each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”),
BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C
Issuer, and NATIONAL CITY BANK OF KENTUCKY, as Syndication Agent.

 

The Borrower has requested, among other things, that the Lenders
provide a revolving credit facility, a swing line facility and a letter of
credit facility, and the Lenders are willing to do so on the terms and
conditions set forth herein

 

In consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby covenant and agree as follows:

 

DEFINITIONS
AND ACCOUNTING TERMS

 

Defined Terms.  As used in this Agreement, the following
terms shall have the meanings set forth below:

 

6

 

“Administrative Agent” means Bank of America, N.A. in its
capacity as administrative agent under any of the Loan Documents, or any
successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s
address and, as appropriate, account as set forth on Schedule 11.02,
or such other address or account as the Administrative Agent may from time to
time notify the Borrower and the Lenders.

 

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

 

“Affiliate” means, with respect to any
Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the Person specified.  “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto. 
Without limiting the generality of the foregoing, a Person shall be
deemed to be Controlled by another Person if such other Person possesses,
directly or indirectly, power to vote 16% or more of the securities having
ordinary voting power for the election of directors, managing general partners
or the equivalent.

 

“Aggregate
Commitments” means the Commitments of all the Lenders.  On the Closing Date the Aggregate Commitments
shall be $150,000,000.

 

“Agreement” means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time.

 

“Applicable Percentage” means with respect to any Lender at any
time, the percentage (carried out to the ninth decimal place) of the Aggregate
Commitments represented by such Lender’s Commitment at such time.  If the commitment of each Lender to make
Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have
been terminated pursuant to Section 8.02 or if the Aggregate
Commitments have expired, then the Applicable Percentage of each Lender shall
be determined based on the Applicable Percentage of such Lender most recently
in effect, giving effect to any subsequent assignments.  The initial Applicable Percentage of each
Lender is set forth opposite the name of such Lender on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable.

 

“Applicable Rate” means the following percentages per annum,
based upon the Consolidated Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

 

Applicable
Rate

 

	
  Pricing

  Level

  	
   

  	
  Consolidated Total

  Leverage Ratio

  	
   

  	
  Commitment

  Fee

  	
   

  	
  Eurodollar Rate

  Loans

  	
   

  	
  Base Rate

  Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Less than or equal to 1.50x

  	
   

  	
  0.15

  	
  %

  	
  0.75

  	
  %

  	
  0.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Less than or equal to 2.00x but greater
  than 1.50x

  	
   

  	
  0.20

  	
  %

  	
  1.00

  	
  %

  	
  0.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Less than or equal to 2.50x but greater
  than 2.00x

  	
   

  	
  0.25

  	
  %

  	
  1.25

  	
  %

  	
  0.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Greater than 2.50x

  	
   

  	
  0.25

  	
  %

  	
  1.50

  	
  %

  	
  0.0

  	
  %

  

 

7

 

Any increase or decrease in the Applicable Rate resulting from a change
in the Consolidated Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.02(b); provided, however,
that if a Compliance Certificate is not delivered when due in accordance with
such Section, then Pricing Level 4 shall apply as of the first Business Day
after the date on which such Compliance Certificate was required to have been
delivered.

 

“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.

 

“Assignment and Assumption” means an assignment and assumption
entered into by a Lender and an Eligible Assignee (with the consent of any
party whose consent is required by Section 10.06(b), and accepted
by the Administrative Agent, in substantially the form of Exhibit E or
any other form approved by the Administrative Agent.

 

“Assumed Capital Expenditures” means, for any four (4) quarter
period, an amount equal to the product of (a) $30,000 times (b) the
number of Restaurants owned by the Borrower and its Subsidiaries, which such
Restaurants have been open for more than eighteen (18) months.

 

“Attributable Indebtedness” means, on any date, in respect of
any capital lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP.

 

“Audited Financial Statements” has the meaning set forth in Section 4.01(f).

 

“Availability Period” means the period from and including the
Closing Date to the earliest of (a) the Maturity Date, (b) the date of
termination of the Aggregate Commitments pursuant to Section 2.06,
and (c) the date of termination of the commitment of each Lender to make Loans
and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant
to Section 8.02.

 

“Available Cash” means, as of any date of determination, the
aggregate amount of all cash and cash equivalents of the Borrower and its
Subsidiaries up to an aggregate amount equal to the amount of the Preferred
Redemption and which such cash or cash equivalents are readily marketable and
available for the immediate funding of the Preferred Redemption as of such date
of determination.

 

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

 

“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 such 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 Committed Loan” means a Committed Loan that is a Base
Rate Loan.

 

“Base Rate Loan” means a Loan that bears interest based on the
Base Rate.

 

“Borrower” has the meaning set forth in the introductory
paragraph hereto.

 

“Borrower IPO” has the meaning set forth in Section 4.01(i).

 

“Borrowing” means a Committed Borrowing or a Swing Line
Borrowing, as the context may require.

 

8

 

“Business Day” means any day other than a Saturday, Sunday or
other day on which commercial banks are authorized to close under the Laws of,
or are in fact closed in either (a) the state where the Administrative Agent’s
Office is located or (b) New York, New York and, if such day relates to any
Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits
are conducted by and between banks in the London interbank eurodollar market.

 

“Capital Asset” means, with respect to the Borrower and its
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a consolidated balance sheet of the
Borrower and its Subsidiaries.

 

“Capital Expenditures” means with
respect to the Borrower and its Subsidiaries for any period, the aggregate cost
of all Capital Assets acquired by the Borrower and its Subsidiaries during such
period, as determined in accordance with GAAP minus, to the extent
included in the foregoing, expenditures made by the Borrower and its
Subsidiaries during such period (a) with the proceeds of insurance or a
condemnation claim to restore or replace property or assets to the condition of
such property or assets immediately prior to any damage, loss, destruction or
condemnation of the same, (b) pursuant to Section 7.02(g), and
(c) in connection with the trade-in of property or assets pursuant to Section 7.05(c).

 

“Cash Collateralize” has the meaning
set forth in Section 2.03(g).

 

“Change in Law” means the occurrence,
after the date of this Agreement, of any of the following: (a) the adoption or
taking effect of any law, rule, regulation or treaty, (b) any change in any
law, rule, regulation or treaty or in the administration, interpretation or
application thereof by any Governmental Authority or (c) the making or issuance
of any request, guideline or directive (whether or not having the force of law)
by any Governmental Authority.

 

“Change of Control” means an event or
series of events by which (i) W. Kent Taylor (and any Persons which are formed
for estate planning or charitable purposes and which are beneficially owned or
controlled by W. Kent Taylor and/or W. Kent Taylor’s estate and/or any of W.
Kent Taylor’s heirs or immediate family members) shall fail to collectively own
twenty percent (20%) or more of the Equity Interests of the Borrower entitled
to vote for the members of the board of directors or equivalent governing body
of the Borrower on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to any
option right), or (ii) any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding
any employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan), other than a “person” or “group” consisting
of, or controlled by, the Permitted Equityholders, becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act
of 1934, except that a person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire
(such right, an “option right”), whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
twenty-five percent (25%) or more of the Equity Interests of the Borrower
entitled to vote for members of the board of directors or equivalent governing
body of the Borrower on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to any
option right).

 

“Closing Date” means the first date
all the conditions precedent in Section 4.01 are satisfied or waived
in accordance with Section 10.01.

 

“Code” means the Internal Revenue Code of 1986.

 

“Co-Lead Arrangers” means, collectively, Banc of America Securities LLC, and National City Bank of
Kentucky.

 

9

 

“Collateral” means the collateral security for all or a portion
of the Obligations pledged or granted pursuant to the Security Documents.

 

“Commitment” means, as to each Lender, its obligation to (a)
make Committed Loans to the Borrower pursuant to Section 2.01, (b)
purchase participations in L/C Obligations, and (c) purchase participations in
Swing Line Loans, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time
in accordance with this Agreement.

 

“Commitment Fee” has the meaning set forth in Section 2.09(a).

 

“Committed Borrowing” means a borrowing consisting of
simultaneous Committed Loans of the same Type and, in the case of Eurodollar
Rate Loans, having the same Interest Period made by each of the Lenders
pursuant to Section 2.01.

 

“Committed Loan” has the meaning set forth in Section 2.01.

 

“Committed Loan Notice” means a notice of (a) a Committed
Borrowing, (b) a conversion of Committed Loans from one Type to the other, or
(c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a),
which, if in writing, shall be substantially in the form of Exhibit A.

 

“Compliance Certificate” means a certificate substantially in
the form of Exhibit D.

 

“Consolidated and Consolidating” means, with respect to any
financial statements of the Borrower and its Subsidiaries, financial statements
structured, organized and providing similar information and analysis as set
forth in the Audited Financial Statements or Unaudited Quarterly Financial
Statements, as applicable.

 

“Consolidated Adjusted Funded Indebtedness” means, as of any date
of determination, for the Borrower and its Subsidiaries on a consolidated
basis, the sum of (a) the outstanding principal amount of all obligations,
whether current or long-term, for borrowed money (including Obligations
hereunder) and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments, plus (b) all purchase money
Indebtedness, plus (c) all direct obligations arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments, plus (d) all obligations in
respect of the deferred purchase price of property or services (other than
trade accounts payable in the ordinary course of business), plus (e)
Attributable Indebtedness in respect of capital leases, plus (f) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other
Person, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, plus (g) without duplication, all Guarantees with respect to
outstanding Indebtedness of the types specified in clauses (a) through (f)
above of Persons other than the Borrower or any Subsidiary, plus (h) all
Indebtedness of the types referred to in clauses (a) through (g) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) which such partnership or joint
venture is not a direct or indirect Subsidiary of the Borrower, in which the
Borrower or a Subsidiary is a general partner or joint venturer, unless such
Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary,
plus (i) an amount equal to the product of eight (8) times Consolidated
Rental Expense (excluding up to $2,500,000 of Consolidated Rental Expense
attributable to equipment leases) for four Fiscal Quarters most recently ended.

 

“Consolidated EBITDA” means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, an amount equal to Consolidated
Net Income for such period plus the 

 

10

 

following to the extent deducted in calculating such Consolidated Net
Income:  (a) Consolidated Interest
Charges for such period, (b) the provision for federal, state, local and
foreign income taxes payable (but not any tax loss or refund) by the Borrower
and its Subsidiaries for such period, and (c) the amount of depreciation and
amortization expense deducted in determining such Consolidated Net Income.

 

“Consolidated EBITDAR” means, for any period, the sum of
Consolidated EBITDA plus Consolidated Rental Expense for such period.

 

“Consolidated Fixed Charges” means, for any period, the sum of
the following determined on a consolidated basis, for the Borrower and its
Subsidiaries in accordance with GAAP: 
(a) Consolidated Interest Charges paid or payable in cash for such period,
(b) the amount of scheduled principal payments with respect to Indebtedness for
such period, (c) Consolidated Rental Expense for such period, (d) dividends and
other distributions paid in cash for such period (excluding any dividends and
distributions to minority owners of Joint Venture Subsidiaries), (e) cash taxes
paid during such period, (f) an amount equal to the amount by which (i) actual
cash dividends and distributions to minority owners of the Joint Venture
Subsidiaries exceed (ii) the actual minority ownership expense attributable to
such minority owners of the Joint Venture Subsidiaries, (g) Assumed Capital
Expenditures and (h) amounts paid to repurchase shares of the Borrower’s
Capital Stock pursuant to Section 7.06(f).

 

“Consolidated Fixed Charge Coverage Ratio” means, as of any date
of determination, the ratio of (a) Consolidated EBITDAR for the period of the
four Fiscal Quarters most recently ended to
(b) Consolidated Fixed Charges for such period.

 

“Consolidated Interest Charges” means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related expenses
of the Borrower and its Subsidiaries in connection with borrowed money
(including capitalized interest) or in connection with the deferred purchase
price of assets, in each case to the extent treated as interest in accordance
with GAAP, (b) the portion of Consolidated Rental Expense with respect to such
period under capital leases that is treated as interest in accordance with
GAAP, and (c) the amount of net settlement obligations of the Borrower and its
Subsidiaries under any Swap Contract respecting interest rate management and
relating to the spread between the fixed interest rate under such Swap Contract
and the floating interest rate hedged thereby.

 

“Consolidated Leverage Ratio” means, as of any date of
determination, the ratio of (a) the sum of (i) Consolidated Adjusted Funded
Indebtedness as of such date less (ii) until the consummation of the
Preferred Redemption, Available Cash in excess of Five Million Dollars
($5,000,000) as of such date to (b)
the sum of (i) Consolidated EBITDAR for the period of the four fiscal quarters
most recently ended for which the Borrower has delivered financial statements
pursuant to Section 6.01(a) or Section 6.01 (b), plus
(ii) Consolidated New Unit Pre-Opening Costs (up to the maximum amount
permitted by Section 7.18 hereunder) deducted from Consolidated Net
Income for such period.

 

“Consolidated Net Income” means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, the net income of the
Borrower and its Subsidiaries (excluding (I) extraordinary or one-time gains
and (II) extraordinary or one-time non-cash losses) and (including
extraordinary or one-time cash losses to the extent not offset by extraordinary
or one-time cash gains during the same fiscal period) for that period; provided
that (a) the net income (or loss) of any Person, in which the Borrower or any
of its Subsidiaries has a joint interest with a third party, shall be excluded
from Consolidated Net Income except to the extent such net 

 

11

 

income is actually paid to the Borrower or any of its Subsidiaries by
dividend or other distribution during such period; provided that the net
income (or loss) of any Person excluded by operation of this clause (a) prior
to the date such Person becomes a wholly-owned Subsidiary shall be included on
a pro forma, historical basis, as if such Person had been wholly-owned as of
the first date of such period, and (b) the net income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of such Person or is merged
into or consolidated with such Person or any of its Subsidiaries or that Person’s
assets are acquired by such Person or any of its Subsidiaries shall be included
on a pro forma, historical basis (after giving effect to any adjustments to the
net income (or loss) of such newly acquired Person; provided that (x)
such adjustments have been identified in writing by the Borrower at the time of
such acquisition, (y) such adjustments have been approved by the Administrative
Agent prior to the closing of such acquisition, and (z) with respect to any
acquisition, the amount of the adjustments relating to such acquisition do not
exceed an amount equal to twenty-five percent (25%) of the net income (or loss)
of such newly acquired Person) as if such Person had been a Subsidiary for the
entire period.

 

“Consolidated New Unit Pre-Opening Costs” shall mean “start-up
costs” (such term used herein as defined in SOP 98-5 published by the American
Institute of Certified Public Accountants) related to the acquisition, opening
and organizing of New Units, such costs including, without limitation,
staff-training, recruiting and travel costs for employees engaged in such
start-up activities.

 

“Consolidated Rental Expense” shall
mean, for any period, for the Borrower and its Subsidiaries on a consolidated
basis, the operating lease expense of the Borrower and its Subsidiaries
determined in accordance with GAAP for leases with an initial term greater than
one year, as disclosed in the notes to the consolidated financial statements of
the Borrower and its Subsidiaries.

 

“Consolidated Tangible Net Worth”
means, as of any date of determination, for the Borrower and its Subsidiaries
on a consolidated basis, Shareholders’ Equity of the Borrower and its
Subsidiaries on that date minus
the Intangible Assets of the Borrower and its Subsidiaries on that date; provided
that intercompany Debt to Affiliates shall be excluded from the calculation of “Consolidated
Tangible Net Worth.”

 

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

 

“Control” has the meaning set forth in the definition of “Affiliate.”

 

“Credit Extension” means each of the following: (a) a Borrowing
and (b) an L/C Credit Extension.

 

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

 

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

 

“Default Rate” means an interest rate equal to (a) the Base Rate
plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus
(c) two percent (2%) per annum; provided, however, that with respect
to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to
the 

 

12

 

interest rate (including any Applicable Rate) otherwise applicable to
such Loan plus two percent (2%) per annum, in each case to the fullest extent
permitted by applicable Laws.

 

“Defaulting Lender” means any Lender
that (a) has failed to fund any portion of the Committed Loans, participations
in L/C Obligations or participations in Swing Line Loans required to be funded
by it hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within
one Business Day of the date when due, unless the subject of a good faith
dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy
or insolvency proceeding.

 

“Disposition” or “Dispose” means the sale, transfer,
license, lease or other disposition (including any sale and leaseback
transaction) of any property by any Person, including any sale, assignment,
transfer or other disposal, with or without recourse, of any notes or accounts
receivable or any rights and claims associated therewith.

 

“Disposition Proceeds” has the meaning set forth in Section 2.05(c).

 

“Dollar” and “$” mean lawful
money of the United States.

 

“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 L/C Issuer and the Swing
Line Lender, and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval referred to in the foregoing
clauses (i) and (ii) 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 Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges
to waste or public systems.

 

“Environmental Liability” means any
liability, contingent or otherwise (including any liability for damages, costs
of environmental remediation, fines, penalties or indemnities), of the
Borrower, any other Loan Party or any of their respective Subsidiaries 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 Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials 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 Interests” means, with respect
to any Person, all of the shares of capital stock of (or other ownership or
profit interests in) such Person, all of the warrants, options or other rights
for the purchase or acquisition from such Person of shares of capital stock of
(or other ownership or profit interests in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or options
for the purchase or acquisition from such Person of such shares (or such other
interests), and all of the other ownership or profit interests in such Person
(including partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement
Income Security Act of 1974.

 

13

 

“ERISA Affiliate” means any trade or business (whether or not
incorporated) under common control with any Loan Party within the meaning of Section 414(b)
or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by any Loan Party or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial employer (as defined in Section 4001(a)(2) of ERISA)
or a cessation of operations that is treated as such a withdrawal under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Loan
Party or any ERISA Affiliate.

 

“Eurodollar Base Rate” has the meaning set forth in the
definition of Eurodollar Rate.

 

“Eurodollar Rate” means for any Interest Period with respect to
a Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:

 

	
  Eurodollar Rate =

  	
  Eurodollar
  Base Rate

  
	
  1.00 –
  Eurodollar Reserve Percentage

  

 

Where,

 

“Eurodollar Base Rate” means, for such
Interest Period:

 

(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 (2) 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 (2)
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 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
Rate 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 (2) Business Days prior to
the first day of such Interest Period.

 

14

 

“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
FRB 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 Rate Loan shall be adjusted automatically as of the effective date
of any change in the Eurodollar Reserve Percentage.

 

“Eurodollar Rate Loan” means a Committed Loan that bears
interest at a rate based on the Eurodollar Rate.

 

“Event of Default” has the meaning set forth in Section 8.01.

 

“Excluded Taxes” means, with respect to the Administrative
Agent, any Lender, the L/C Issuer or any other recipient of any payment to be
made by or on account of any obligation of any Loan Party hereunder or under
any other Loan Document, (a) taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable Lending
Office is located, (b) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction in which any Loan Party is
located and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by any Loan Party under Section 10.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party hereto (or designates a new
Lending Office) or is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with Section 3.01(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment),
to receive additional amounts from any Loan Party with respect to such
withholding tax pursuant to Section 3.01(a).

 

“Existing Letters of Credit” means those letters of credit
listed on Schedule 1.01(a) and issued under the Holdings Credit
Agreement.

 

“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.

 

“Fee Letter” means the letter agreement, dated August 13,
2004, among the Borrower, the Administrative Agent and the Banc of America
Securities LLC.

 

“Fiscal Quarter” means each of the four periods of thirteen (13)
consecutive weeks which make up the Fiscal Year.

 

“Fiscal Year” means the Borrower’s Fiscal Year, which is the
period of fifty-two (52) or fifty-three (53) consecutive weeks ending on the
last Tuesday of the calendar year.

 

15

 

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

 

“FRB” means the Board of Governors of the Federal Reserve System
of the United States.

 

“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.

 

“GAAP” means generally accepted accounting principles in the
United States set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or
such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the
circumstances as of the date of determination, consistently applied.

 

“Governmental Approvals” means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all Governmental Authorities.

 

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

 

“Guarantee” means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. 
The amount of any Guarantee shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.

 

“Guarantors”
means, collectively, (a) Holdings and (b) all existing and future direct and
indirect Subsidiaries of the Borrower (other than IP Holdco) (for the purposes
of this definition, any wholly-owned subsidiary of Holdings shall be deemed to
be a wholly-owned subsidiary of the Borrower).

 

16

 

“Guaranty” means the collective reference to each guaranty
agreement executed, from time to time, by each of the applicable Guarantors in
favor of the Administrative Agent on behalf of the Lenders, substantially in
the form of Exhibit F.

 

“Hazardous Materials” means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.

 

“Holdings” means Texas Roadhouse Holdings LLC, a Kentucky
limited liability company.

 

“Holdings Credit Agreement” means that certain Credit Agreement,
dated as of July 16, 2003 between Holdings, the lenders party thereto and
Bank of America, N.A. as administrative agent, as amended, restated,
supplemented or otherwise modified.

 

“Holdings Roll-Up” has the meaning set forth in Section 6.17.

 

“Indebtedness” means, as to any Person at a particular time,
without duplication, all of the following, whether or not included as
indebtedness or liabilities in accordance with GAAP:

 

(a)                                                                                  all
obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar
instruments;

 

(b)                                                                                 all
direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments;

 

(c)                                                                                  net
obligations of such Person under any Swap Contract;

 

(d)                                                                                 all
obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of
business);

 

(e)                                                                                  indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;

 

(f)                                                                                    capital
leases; and

 

(g)                                                                                 all
Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which
such Person is a general partner or a joint venturer, unless such Indebtedness
is expressly made non-recourse to such Person. 
The amount of any net obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date.  The amount of any capital lease as of any
date shall be deemed to be the amount of Attributable Indebtedness in respect
thereof as of such date.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees” has the meaning set forth in Section 10.04(b).

 

“Intangible Assets” means assets that are considered to be
intangible assets under GAAP, including customer lists, goodwill, computer
software, copyrights, trade names, trademarks, patents, franchises, licenses,
unamortized deferred charges, unamortized debt discount and capitalized research
and development costs.

 

“Interest Payment Date” means, (a) as to any Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to such Loan
and the Maturity Date; provided, however, that if 

 

17

 

any Interest Period for a Eurodollar Rate Loan exceeds three months,
the respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan (including a Swing Line Loan), the last Business Day of each March,
June, September and December and the Maturity Date.

 

“Interest Period” means, as to each Eurodollar Rate Loan, the
period commencing on the date such Eurodollar Rate Loan is disbursed or
converted to or continued as a Eurodollar Rate Loan and ending on the date one,
two, three or six months thereafter, as selected by the Borrower in its
Committed Loan Notice; provided that:

 

(i)                                                                                     any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end
on the next preceding Business Day;

 

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

 

(iii)                                                                               no
Interest Period shall extend beyond the Maturity Date.

 

“Investment” means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person,
(b) a loan, advance or capital contribution to, Guarantee or assumption of debt
of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. 
For purposes of covenant compliance, the amount of any Investment shall
be the amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

 

“IP Holdco” means Texas Roadhouse Delaware, LLC, a Delaware
limited liability company, and an indirect Subsidiary of the Borrower that owns
trademarks, copyrights and patents.

 

“IP Rights” has the meaning set forth in Section 5.18.

 

“IRS” means the United States Internal Revenue Service.

 

“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).

 

“Issuer Documents” means with respect to any Letter of Credit,
the Letter Credit Application, and any other document, agreement and instrument
entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor
the L/C Issuer and relating to any such Letter of Credit.

 

“Joint Venture Subsidiary” means any direct or indirect non
wholly-owned Subsidiary of the Borrower.

 

“Laws” means, collectively, all international, foreign, Federal,
state and local statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority 

 

18

 

charged with the enforcement, interpretation or administration thereof,
and all applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

“L/C Advance” means, with respect to each Lender, such Lender’s
funding of its participation in any L/C Borrowing in accordance with its
Applicable Percentage.

 

“L/C Borrowing” means an extension of credit resulting from a
drawing under any Letter of Credit which has not been reimbursed on the date
when made or refinanced as a Committed Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of
Credit, the issuance thereof or extension of the expiry date thereof, or the
increase of the amount thereof.

 

“L/C Issuer” means Bank of America, N.A. in its capacity as
issuer of Letters of Credit hereunder, or any successor issuer of Letters of
Credit hereunder.

 

“L/C Obligations” means, as at any date of determination, the
aggregate amount available to be drawn under all outstanding Letters of Credit plus
the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.07.  For all purposes of this 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.

 

“Lender” has the meaning set forth in the introductory paragraph
hereto and, as the context requires, includes the L/C Issuer and the Swing Line
Lender.

 

“Lending Office” means, as to any Lender, the office or offices
of such Lender described as such in such Lender’s Administrative Questionnaire,
or such other office or offices as a Lender may from time to time notify the
Borrower and the Administrative Agent.

 

“Letter of Credit” means any letter of
credit issued hereunder and shall include the Existing Letters of Credit.  A Letter of Credit may be a commercial letter
of credit or a standby letter of credit.

 

“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 L/C Issuer.

 

“Letter of Credit Expiration Date” means the day that is thirty
(30) days prior to the Maturity Date then in effect (or, if such day is not a
Business Day, the next preceding Business Day).

 

“Letter of Credit Fee” has the meaning set forth in Section 2.03(i).

 

“Letter of Credit Sublimit” means an amount equal to the lesser
of (a) $10,000,000 and (b) the
Aggregate Commitments.  The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

“Lien” means any deed of trust, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
charge, or preference, priority or other security interest or preferential
arrangement in the nature of a security interest of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
any easement, right of way or other encumbrance on title to real property, and any
financing lease having substantially the same economic effect as any of the
foregoing).

 

“License Agreement” means the License Agreement, dated as of April 1,
1997 (as amended, restated, supplemented or otherwise modified) between
Holdings and IP Holdco with respect to the IP Rights.

 

19

 

“Loan” means an extension of credit by a Lender to the Borrower
under Article II in the form of a Committed Loan or a Swing Line
Loan.

 

“Loan Documents” means this Agreement, each Note, each Security
Document, each Issuer Document, the Fee Letter, and the Guaranty.

 

“Loan Parties” means, collectively, the Borrower and the
Guarantors.

 

“Material Adverse Effect” means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, assets,
liabilities (actual or contingent), or financial condition of the Borrower or
the Borrower and its Subsidiaries taken as a whole; (b) a material impairment
of the ability of any Loan Party to perform its obligations under any Loan
Document or any Material Contract, in each case to which it is a party; or (c)
a material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a
party.

 

“Material Contract” means (a) any contract or other agreement,
written or oral, of the Borrower or any of its Subsidiaries involving monetary
liability of or to any such Person in an amount in excess of the Threshold
Amount per annum, or (b) any other contract or agreement, written or oral,
of the Borrower or any of its Subsidiaries the failure to comply with which
could reasonably be expected to have a Material Adverse Effect.

 

“Maturity Date” means October 31, 2009.

 

“Multiemployer Plan” means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any
ERISA Affiliate makes or is obligated to make contributions, or during the
preceding five plan years, has made or been obligated to make contributions.

 

“Net Cash Proceeds” means:

 

(a)                                  with
respect to any incurrence of any Indebtedness by the Borrower or any
Subsidiary, the aggregate amount of all cash received by the Borrower or any
Subsidiary in respect of such Indebtedness, net of all reasonable fees, discounts,
commissions and expenses incurred by the Borrower or such Subsidiary in
connection therewith.

 

(b)                                 with
respect to the sale of any asset by the Borrower or any Subsidiary, the excess,
if any, of (i) the sum of cash and cash equivalents received in connection with
such sale (including any cash received by way of deferred payment pursuant to,
or by monetization of, a note receivable or otherwise, but only as and when so
received) over (ii) the sum of (A) the principal amount of any Indebtedness
that is secured by such asset and that is required to be repaid in connection
with the sale thereof (other than Indebtedness under the Loan Documents), (B)
the out-of-pocket expenses incurred by the Borrower or any Subsidiary in
connection with such sale and (C) income taxes reasonably estimated to be
actually payable within two years of the date of the relevant asset sale as a
result of any gain recognized in connection therewith;

 

(c)                                  with
respect to the sale of any capital stock or other equity interest by the Borrower
or any Subsidiary, the excess of (i) the sum of the cash and cash equivalents
received in connection with such sale over (ii) the underwriting discounts and
commissions, and other out-of-pocket expenses, incurred by the Borrower or such
Subsidiary in connection with such sale; and

 

(d)                                 with
respect to any payment under an insurance policy or in connection with a
condemnation proceeding, the amount of cash proceeds received by the Borrower
or any Subsidiary from an insurance company or Governmental Authority, as
applicable, net of all expenses of collection.

 

“New Units” shall mean, collectively, each particular Restaurant
whose ownership and operation by the Borrower or its Subsidiaries started on a
date after the Closing Date.

 

20

 

“Note” means a promissory note made by the Borrower in favor of
a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit
C.

 

“Obligations” means (a) all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
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 Loan Party or any Affiliate thereof of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding and (b)
all existing or future payments and other obligations owing by the Borrower
under (i) any Swap Contract (which such Swap Contract is permitted
hereunder) or any (ii) cash management or similar treasury or custodial
arrangements, in each case with respect to the foregoing clauses (i) and (ii)
such transaction entered into with any Person that is a Lender or an Affiliate
thereof at the time such transaction is entered into.

 

“Organization Documents” means, (a) with respect to any
corporation, the certificate or articles of incorporation and the bylaws (or
equivalent or comparable constitutive documents with respect to any non-U.S.
jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement
of formation or organization and any agreement, instrument, filing or notice
with respect thereto filed in connection with its formation or organization
with the applicable Governmental Authority in the jurisdiction of its formation
or organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

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

 

“Outstanding Amount” means (i) with respect to Committed Loans
and Swing Line Loans on any date, the aggregate outstanding principal amount
thereof after giving effect to any borrowings and prepayments or repayments of
Committed Loans and Swing Line Loans, as the case may be, occurring on such
date; and (ii) with respect to any L/C Obligations on any date, the amount of
such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any reimbursements
by the Borrower of Unreimbursed Amounts.

 

“Participant” has the meaning set forth in Section 10.06(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as
such term is defined in Section 3(2) of ERISA), other than a Multiemployer
Plan, that is subject to Title IV of ERISA and is sponsored or maintained by
the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA
Affiliate contributes or has an obligation to contribute, or in the case of a
multiple employer or other plan described in Section 4064(a) of ERISA, has
made contributions at any time during the immediately preceding five plan
years.

 

“Permitted Acquisition” has the meaning set forth in Section 7.02(g).

 

“Permitted Liens” means the Liens permitted pursuant to Section 7.01.

 

21

 

“Permitted Equityholders” means the collective reference to (a)
W. Kent Taylor, (b) Dr. John D. Rhodes, (c) Dr. Mohendra Patel, (d) Dr. Amar Desai,
and (e) with respect to each of the foregoing individuals, any Persons which
are formed for estate planning or charitable purposes and which are
beneficially owned or controlled by, such individual and/or such individual’s
estate and/or any of such individual’s heirs or immediate family members.

 

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

 

“Plan” means any “employee benefit plan” (as such term is
defined in Section 3(3) of ERISA) established by the Borrower or, with
respect to any such plan that is subject to Section 412 of the Code or
Title IV of ERISA, any ERISA Affiliate.

 

“Pledge Agreement” means the pledge agreement of even date
herewith executed by the Borrower and its Subsidiaries in favor of the
Administrative Agent for the ratable benefit of itself and the Lenders,
substantially in the form of Exhibit G, as amended restated,
supplemented or otherwise modified from time to time.

 

“Preferred Holdings Shares” means the collective reference to
the Preferred Shares of Holdings created pursuant to Amendment No. 2 to the
Amended and Restated Operating Agreement of Holdings.

 

“Preferred Redemption” has the meaning set forth in Section 6.17.

 

“Register” has the meaning set forth in Section 10.06(c).

 

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

 

“Reportable Event” means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the thirty (30) day notice period has
been waived.

 

“Request for Credit Extension” means (a) with respect to a
Borrowing, conversion or continuation of Committed Loans, a Committed Loan
Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.

 

“Required Joint Venture Distributions” means, with respect to
any Joint Venture Subsidiary, required monthly distributions of the maximum
amount of “net cash flow” (as defined in the applicable Organizational
Documents of such Joint Venture Subsidiary) to its equity holders in accordance
with the terms and conditions of the applicable Organizational Documents of
such Joint Venture Subsidiary.

 

“Required Lenders” means, as of any date of determination,
Lenders holding more than fifty percent (50%) of the Aggregate Commitments or,
if the commitment of each Lender to make Loans and the obligation of the L/C
Issuer to make L/C Credit Extensions have been terminated pursuant to Section 9.02,
Lenders holding in the aggregate more than fifty percent (50%) of the Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in L/C Obligations and Swing Line Loans being deemed “held”
by such Lender for purposes of this definition); provided that the
Commitment of, and the portion of the Total Outstandings held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

 

“Responsible Officer” means the chief executive officer,
president, chief financial officer, secretary or general counsel of a Loan
Party.  Any document delivered hereunder
that is signed by a Responsible Officer of a Loan Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Loan Party and 

 

22

 

such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.

 

“Restaurant” means a particular “Texas Roadhouse” restaurant at
a particular location that is owned by the Borrower or any Subsidiaries
thereof.

 

“Restricted Payment” means any dividend or other distribution
(whether in cash, securities or other property) with respect to any capital
stock or other Equity Interest of the Borrower or any Subsidiary, or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to the Borrower’s
stockholders, partners or members (or the equivalent Person thereof).

 

“SEC” means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.

 

“Security Documents” means the collective reference to the
Pledge Agreement and each other agreement or writing pursuant to which the
Borrower or any Subsidiary of the Borrower purports to pledge or grant a
security interest in any property or assets securing the Obligations or any
such purports to guaranty the payment and/or performance of the Obligations,
all as amended, restated, supplemented or otherwise modified from time to time.

 

“Shareholders’ Equity” means, as of any date of determination,
consolidated shareholders’ equity of the Borrower and its Subsidiaries as of
that date determined in accordance with GAAP.

 

“Solvent” means, as to the Borrower and its Subsidiaries on a
particular date, that any such Person (a) has capital sufficient to carry on
its business and transactions and all business and transactions in which it is
about to engage and is able to pay its debts as they mature, (b) owns property
having a value, both at fair valuation and at present fair saleable value,
greater than the amount required to pay its probable liabilities (including
contingencies), and (c) does not believe that it will incur debts or
liabilities beyond its ability to pay such debts or liabilities as they mature.

 

“Subsidiary” of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or
both, by such Person.  Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall
refer to a Subsidiary or Subsidiaries of the Borrower.

 

“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 conditions of, or governed by, any form of master
agreement published by the International Swaps and 

 

23

 

Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master agreement,
together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

“Swap Termination Value” means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as
the mark-to-market value(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).

 

“Swing Line” means the revolving credit facility made available
by the Swing Line Lender pursuant to Section 2.04.

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan
pursuant to Section 2.04.

 

“Swing Line Lender” means Bank of America, N.A. in its capacity
as provider of Swing Line Loans, or any successor swing line lender hereunder.

 

“Swing Line Loan” has the meaning set forth in Section 2.04(a).

 

“Swing Line Loan Notice” means a notice of a Swing Line
Borrowing pursuant to Section 2.04(b), which, if in writing, shall
be substantially in the form of Exhibit B.

 

“Swing Line Sublimit” means an amount equal to the lesser of (a)
$10,000,000 and (b) the Aggregate Commitments. 
The Swing Line Sublimit is part of, and not in addition to, the
Aggregate Commitments.

 

“Syndication Agent” means National City Bank of Kentucky.

 

“Tax Distributions” has the meaning set forth in Section 7.06(d).

 

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

 

“Threshold Amount” means $2,500,000.

 

“Total Outstandings” means the aggregate Outstanding Amount of
all Loans and all L/C Obligations.

 

“Type” means, with respect to a Committed Loan, its character as
a Base Rate Loan or a Eurodollar Rate Loan.

 

“UCC” means, subject to Section 1.04, the Uniform
Commercial Code in effect in the State of North Carolina, as amended or
modified from time to time.

 

“Unaudited Quarterly Financial Statements” has the meaning set
forth in Section 4.01(f).

 

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

 

“United States” and “U.S.” mean the United States of
America.

 

“Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i).

 

Other
Interpretive Provisions.  With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

 

(a)                                  The
definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include,”
“includes” and 

 

24

 

“including” shall be deemed to be
followed by the phrase “without limitation.” 
The word “will” shall be construed to have the same meaning and
effect as the word “shall.” 
Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,”
and words of similar import when used in any Loan Document, shall be construed
to refer to such Loan Document in its entirety and not to any particular
provision thereof, (iv) all references in a Loan Document to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, the Loan Document in which such
references appear, (v) any reference to any law shall include all statutory and
regulatory provisions consolidating, amending replacing or interpreting such
law and any reference to any law or regulation shall, unless otherwise
specified, refer to such law or regulation as amended, modified or supplemented
from time to time, and (vi) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

(b)                                                                                                                                 In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through”
means “to and including.”

 

(c)                                                                                                                                  Section headings
herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.

 

Accounting Terms.  (a)  Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed
herein.

 

(b)                                 Changes
in GAAP.  If at any time any change
in GAAP would affect the computation of any financial ratio or requirement set
forth in any Loan Document, and either the Borrower or the Required Lenders
shall so request, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the
approval of the Required Lenders); provided  that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower
shall provide to the Administrative Agent and the Lenders financial statements
and other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

 

UCC Terms. 
Terms defined in the UCC in effect on the Closing Date and not otherwise
defined herein shall, unless the context otherwise indicates, have the meanings
provided by those definitions.  Subject
to the foregoing, the term “UCC” refers, as of any date of
determination, to the UCC then in effect.

 

25

 

Rounding.  Any financial ratios required to be
maintained by the Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

 

Times of Day.  Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).

 

Letter of
Credit Amounts. 
Unless otherwise specified herein, the amount of a Letter of Credit at
any time shall be deemed to be the stated amount of such Letter of Credit in
effect at such time; provided, however, that with respect to any
Letter of Credit that, by its terms or the terms of any Issuer Document related
thereto, provides for one or more automatic increases in the stated amount
thereof, the amount of such Letter of Credit shall be deemed to be the maximum
stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

 

THE
COMMITMENTS AND CREDIT EXTENSIONS

 

Committed
Loans.  Subject
to the terms and conditions set forth herein, each Lender severally agrees to
make loans (each such loan, a “Committed Loan”) to the Borrower from
time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender’s Commitment; provided, however, that after giving effect
to any Committed Borrowing, (i) the Total Outstandings shall not exceed the
Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the
Committed Loans of any Lender, plus such Lender’s Applicable Percentage
of the Outstanding Amount of all L/C Obligations, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Commitment. 
Within the limits of each Lender’s Commitment, and subject to the other
terms and conditions hereof, the Borrower may borrow under this Section 2.01,
prepay under Section 2.05, and reborrow under this Section 2.01.  Committed Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.

 

Borrowings, Conversions and Continuations of Committed Loans.

 

(a)                                  Each
Committed Borrowing, each conversion of Committed Loans from one Type to the
other, and each continuation of Eurodollar Rate Loans shall be made upon the
Borrower’s irrevocable notice to the Administrative Agent, which may be given
by telephone.  Each such notice must be
received by the Administrative Agent not later than 11:00 a.m. (i) three (3)
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Committed Loans, and (ii) on the requested date of any
Borrowing of Base Rate Committed Loans. 
Each telephonic notice by the Borrower pursuant to this Section 2.02(a)
must be confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower.  Each Borrowing
of, conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess
thereof.  Except as provided in Sections
2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate
Committed Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof.  Each
Committed Loan Notice (whether telephonic or written) shall specify (i) whether
the Borrower is requesting a Committed Borrowing, a conversion of Committed
Loans from one Type to the other, or a 

 

26

 

continuation of Eurodollar Rate Loans, (ii) the requested date of the
Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Committed Loans to be borrowed,
converted or continued, (iv) the Type of Committed Loans to be borrowed or to
which existing Committed Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto.  If the Borrower fails to specify a Type of
Committed Loan in a Committed Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable
Committed Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Committed
Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one (1) month.

 

(b)                                 Following
receipt of a Committed Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Applicable Percentage of the applicable
Committed Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in the
preceding subsection.  In the case of a
Committed Borrowing, each Lender shall make the amount of its Committed Loan
available to the Administrative Agent in immediately available funds at the
Administrative Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicable
conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), the Administrative Agent
shall make all funds so received available to the Borrower in like funds as
received by the Administrative Agent either by (i) crediting the account of the
Borrower on the books of Bank of America with the amount of such funds or (ii)
wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent by the
Borrower; provided, however, that if, on the date the Committed
Loan Notice with respect to such Borrowing is given by the Borrower, there are
L/C Borrowings outstanding, then the proceeds of such Borrowing, first,
shall be applied to the payment in full of any such L/C Borrowings, and second,
shall be made available to the Borrower as provided above.

 

(c)                                  Except
as otherwise provided herein, a Eurodollar Rate Loan may be continued or
converted only on the last day of an Interest Period for such Eurodollar Rate
Loan.  During the existence of a Default,
no Loans may be requested as, converted to or continued as Eurodollar Rate
Loans without the consent of the Required Lenders.

 

(d)                                 The
Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon
determination of such interest rate.  At
any time that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America’s prime
rate used in determining the Base Rate promptly following the public
announcement of such change.

 

(e)                                  After
giving effect to all Committed Borrowings, all conversions of Committed Loans
from one Type to the other, and all continuations of Committed Loans as the
same Type, there shall not be more than ten (10) Interest Periods in effect
with respect to Committed Loans.

 

Letters of Credit.

 

(a)                                  The
Letter of Credit Commitment.

 

(i)                                                                                     Subject
to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in
reliance upon the agreements of the Lenders set forth in this Section 2.03,
(1)

 

27

 

from time to
time on any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit for the account of
the Borrower, and to amend or extend Letters
of Credit previously issued by it, in accordance with subsection (b)
below, and (2) to honor drawings under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the account
of the Borrower and the Existing Letters of Credit issued for the account of
Holdings and any drawings under any such Letter of Credit; provided that
after giving effect to any L/C Credit Extension with respect to any Letter of
Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments,
(y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and
(z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter
of Credit Sublimit.  Each request by the
Borrower for the issuance or amendment of a Letter of Credit shall be deemed to
be a representation by the Borrower that the L/C Credit Extension so requested
complies with the conditions set forth in the proviso to the preceding
sentence.  Within the foregoing limits,
and subject to the terms and conditions hereof, the Borrower’s ability to
obtain Letters of Credit shall be fully revolving, and accordingly the Borrower
may, during the foregoing period, obtain Letters of Credit to replace Letters
of Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall be
deemed to have been issued pursuant hereto, and from and after the Closing Date
shall be subject to and governed by the terms and conditions hereof.

 

(ii)                                  The L/C Issuer shall
not issue any Letter of Credit, if:

 

(A)                              subject to Section 2.03(b)(iii),
the expiry date of such requested Letter of Credit would occur more than twelve
(12) months after the date of issuance or last extension, unless the Required
Lenders have approved such expiry date; or

 

(B)                                the expiry date of such
requested Letter of Credit would occur after the Letter of Credit Expiration
Date, unless all the Lenders have approved such expiry date.

 

(iii)                               The L/C Issuer shall not
be under any obligation to issue any Letter of Credit if:

 

(A)                              any order, judgment or
decree of any Governmental Authority or arbitrator shall by its terms purport
to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any
Law applicable to the L/C Issuer or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the
issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good faith deems
material to it;

 

(B)                                the issuance of such
Letter of Credit would violate one or more policies of the L/C Issuer;

 

28

 

(C)                                except as otherwise
agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is
in an initial stated amount less than $50,000, in the case of a commercial
Letter of Credit, or $250,000, in the case of a standby Letter of Credit;

 

(D)                               such Letter of Credit is
to be denominated in a currency other than Dollars;

 

(E)                                 such Letter of Credit
contains any provisions for automatic reinstatement of the stated amount after
any drawing thereunder; or

 

(F)                                 a default of any
Lender’s obligations to fund under Section 2.03(c) exists or any
Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has
entered into satisfactory arrangements with the Borrower or such Lender to
eliminate the L/C Issuer’s risk with respect to such Lender.

 

(iv)                              The
L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be
permitted at such time to issue such Letter of Credit in its amended form under
the terms hereof.

 

(v)                                                                                 The
L/C Issuer shall be under no obligation to amend any Letter of Credit if (A)
the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

 

(vi)                                                                              The
L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer
shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article X with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and Issuer Documents pertaining to
such Letters of Credit as fully as if the term “Administrative Agent” as used
in Article X included the L/C Issuer with respect to such acts or
omissions, and (B) as additionally provided herein with respect to the L/C
Issuer.

 

(b)                                 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
request of the Borrower delivered to the L/C Issuer (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 L/C Issuer and the Administrative Agent not
later than 11:00 a.m. at least two Business Days (or such later date and time
as the Administrative Agent and the L/C Issuer may agree in a particular
instance in their 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 L/C
Issuer: (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 L/C Issuer 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 L/C Issuer (A)
the Letter 

 

29

 

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 L/C Issuer may require. 
Additionally, the Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may require.

 

(ii)                                                                                  Promptly
after receipt of any Letter of Credit Application, the L/C Issuer 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 L/C Issuer will provide the Administrative
Agent with a copy thereof.  Unless the
L/C Issuer has received written notice from any Lender, the Administrative
Agent or any Loan 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 Article IV shall not then be
satisfied, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of the
Borrower (or the applicable Subsidiary) or enter into the applicable amendment,
as the case may be, in each case in accordance with the L/C Issuer’s usual and
customary business practices. 
Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Issuer a risk participation in such Letter of Credit in
an amount equal to the product of such Lender’s Applicable Percentage times
the amount of such Letter of Credit.

 

(iii)                                                                               If
the Borrower so requests in any applicable Letter of Credit Application, the
L/C Issuer 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 L/C Issuer 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 L/C Issuer,
the Borrower shall not be required to make a specific request to the L/C Issuer
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 L/C Issuer to permit the extension of
such Letter of Credit at any time to an expiry date not later than the Letter
of Credit Expiration Date; provided, however, that the L/C Issuer
shall not permit any such extension if (A) the L/C Issuer has determined that
it would not be permitted, or would have no obligation, at such time to issue
such Letter of Credit in its revised form (as extended) under the terms hereof
(by reason of the provisions of clause (ii) or (iii) of Section 2.03(a)
or otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five 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 the
applicable conditions specified in Section 4.02 is not then
satisfied, and in each such case directing the L/C Issuer not to permit such
extension.

 

30

 

 

(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 L/C Issuer will also deliver to the Borrower and the Administrative Agent a
true and complete copy of such Letter of Credit or amendment.

 

(c)                                  Drawings
and Reimbursements; Funding of Participations.

 

(i)                                                                                     Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof.  Not later
than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of
Credit (each such date, an “Honor Date”), the Borrower shall reimburse
the L/C Issuer through the Administrative Agent in an amount equal to the
amount of such drawing.  If the Borrower
fails to so reimburse the L/C Issuer by such time, the Administrative Agent
shall promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Lender’s Applicable Percentage thereof. 
In such event, the Borrower shall be deemed to have requested a
Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in an
amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.02 for the principal amount of
Base Rate Loans, but subject to the amount of the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02
(other than the delivery of a Committed Loan Notice).  Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be
given by telephone if immediately confirmed in writing; provided that
the lack of such an immediate confirmation shall not affect the conclusiveness
or binding effect of such notice.

 

(ii)                                                                                  Each
Lender shall upon any notice pursuant to Section 2.03(c)(i) make
funds available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent’s Office in an amount equal to its Applicable
Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business
Day specified in such notice by the Administrative Agent, whereupon, subject to
the provisions of Section 2.03(c)(iii), each Lender that so makes
funds available shall be deemed to have made a Base Rate Committed Loan to the
Borrower in such amount.  The
Administrative Agent shall remit the funds so received to the L/C Issuer.

 

(iii)                                                                               With
respect to any Unreimbursed Amount that is not fully refinanced by a Committed
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02
cannot be satisfied or for any other reason, the Borrower shall be deemed to
have incurred from the L/C Issuer an L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due
and payable on demand (together with interest) and shall bear interest at the
Default Rate.  In such event, each Lender’s
payment to the Administrative Agent for the account of the L/C Issuer pursuant
to Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Lender in satisfaction of its participation obligation under this Section 2.03.

 

(iv)                                                                              Until
each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.03(c)
to reimburse the L/C Issuer for any amount drawn under any Letter of Credit,
interest in respect of such Lender’s Applicable Percentage of such amount shall
be solely for the account of the L/C Issuer.

 

31

 

(v)                                                                                 Each
Lender’s obligation to make Committed Loans or L/C Advances to reimburse the
L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the L/C Issuer, the Borrower or
any other Person for any reason whatsoever; (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing; provided, however, that each
Lender’s obligation to make Committed Loans pursuant to this Section 2.03(c)
is subject to the conditions set forth in Section 4.02 (other than
delivery by the Borrower of a Committed Loan Notice).  No such making of an L/C Advance shall
relieve or otherwise impair the obligation of the Borrower to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any Letter of
Credit, together with interest as provided herein.

 

(vi)                                                                              If
any Lender fails to make available to the Administrative Agent for the account
of the L/C Issuer any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.03(c) by the time specified
in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover
from such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the L/C
Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a
rate determined by the L/C Issuer in accordance with banking industry rules on
interbank compensation.  A certificate of
the L/C Issuer submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (vi) shall be conclusive absent
manifest error.

 

(d)                                 Repayment
of Participations.

 

(i)                                                                                     At
any time after the L/C Issuer has made a payment under any Letter of Credit and
has received from any Lender such Lender’s L/C Advance in respect of such
payment in accordance with Section 2.03(c), if the Administrative
Agent receives for the account of the L/C Issuer any payment in respect of the
related Unreimbursed Amount or interest thereon (whether directly from the
Borrower or otherwise, including proceeds of Cash Collateral applied thereto by
the Administrative Agent), the Administrative Agent will distribute to such
Lender its Applicable Percentage thereof (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.

 

(ii)                                                                                  If
any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(i) is required to be returned
under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the account
of the L/C Issuer its Applicable Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect. 
The obligations of the Lenders under this clause shall survive the
payment in full of the Obligations and the termination of this Agreement.

 

(e)                                  Obligations
Absolute. 
The obligation of the Borrower to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing
shall be absolute, 

 

32

 

unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including the
following:

 

(i)                                                                                     any
lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other Loan Document;

 

(ii)                                                                                  the
existence of any claim, counterclaim, setoff, defense or other right that the
Borrower or any Subsidiary may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;

 

(iii)                                                                               any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;

 

(iv)                                                                              any
payment by the L/C Issuer under such Letter of Credit against presentation of a
draft or certificate that does not strictly comply with the terms of such
Letter of Credit; or any payment made by the L/C Issuer under such Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

 

(v)                                                                                 any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute
a defense available to, or a discharge of, the Borrower or any Subsidiary.

 

The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim
of noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer.  The Borrower shall be conclusively deemed to
have waived any such claim against the L/C Issuer and its correspondents unless
such notice is given as aforesaid.

 

(f)                                    Role
of L/C Issuer.  Each Lender and the Borrower agree
that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.  None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Lender for (i)
any action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable; (ii) any action
taken or omitted in the absence of gross negligence or willful misconduct; or
(iii) the due execution, effectiveness, validity or enforceability of any
document or instrument related to any Letter of Credit or Issuer Document.  The Borrower hereby assumes all risks of the
acts or omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; provided, however, that this assumption is
not intended to, and shall not, preclude the Borrower’s pursuing such rights
and remedies as it may have against the beneficiary or transferee at law or
under any other agreement.  None of the
L/C Issuer, the Administrative Agent, any of their respective Related Parties
nor any correspondent, participant or assignee of 

 

33

 

the L/C Issuer shall be liable or responsible for any of the matters
described in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding,
the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrower, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by the Borrower
which the Borrower proves were caused by the L/C Issuer’s willful misconduct or
gross negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.   In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

 

(g)                                 Cash
Collateral.  Upon the request of the
Administrative Agent, (i) if the L/C Issuer has honored any full or partial
drawing request under any Letter of Credit and such drawing has resulted in an
L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C
Obligation for any reason remains outstanding, the Borrower shall, in each
case, immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations.  Sections 2.05 and 9.02(c)
set forth certain additional requirements to deliver Cash Collateral
hereunder.  For purposes of this Section 2.03,
Section 2.05  and Section 8.02(c),
“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant
to documentation in form and substance satisfactory to the Administrative Agent
and the L/C Issuer (which documents are hereby consented to by the Lenders).  Derivatives of such term have corresponding
meanings.  The Borrower hereby grants to
the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing.  Cash
Collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Bank of America.

 

(h)                                 Applicability
of ISP and UCP.  Unless otherwise expressly agreed
by the L/C Issuer and the Borrower when a Letter of Credit is issued (including
any such agreement applicable to an Existing Letter of Credit), (i) the rules
of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of
the Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce at the time of issuance
shall apply to each commercial Letter of Credit.

 

(i)                                     Letter
of Credit Fees.  The Borrower shall
pay to the Administrative Agent for the account of each Lender in accordance
with its Applicable Percentage a Letter of Credit fee (the “Letter of Credit
Fee”)  for each commercial and
standby Letter of Credit equal to one percent (1%) per annum  times the daily maximum amount
available to be drawn under such Letter of Credit (whether or not such maximum
amount is then in effect under such Letter of Credit).  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  Letter of Credit Fees shall be (i) computed
on a quarterly basis in arrears and (ii) due and payable on the first Business
Day after the end of each March, June, September and December, commencing
with the first such date to occur after the issuance of such Letter of Credit,
on the Letter of Credit Expiration Date and thereafter on demand.

 

34

 

(j)                                     Fronting
Fee and Documentary and Processing Charges Payable to L/C Issuer.  The
Borrower shall pay directly to the L/C Issuer, for its own account, a fronting
fee with respect to each Letter of Credit in the amounts and at the times
separately agreed upon in writing between the L/C Issuer and the Borrower.  In addition, the Borrower shall pay directly
to the L/C Issuer, for its own account, the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
the L/C Issuer relating to letters of credit as from time to time in
effect.  Such customary fees and standard
costs and charges are due and payable on demand and are nonrefundable.

 

(k)                                  Conflict
with Issuer Documents.  In the event
of any conflict between the terms hereof and the terms of any Issuer Document,
the terms hereof shall control.

 

Swing Line Loans.

 

(a)                                  The
Swing Line.  Subject to the terms and
conditions set forth herein, the Swing Line Lender agrees, in reliance upon the
agreements of the other Lenders set forth in this Section 2.04, to
make loans (each such loan, a “Swing Line Loan”) to the Borrower from time
to time on any Business Day during the Availability Period in an aggregate
amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated
with the Applicable Percentage of the Outstanding Amount of Committed Loans and
L/C Obligations of the Lender acting as Swing Line Lender, may exceed the
amount of such Lender’s Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of
the Committed Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment, and provided, further,
that the Borrower shall not use the proceeds of any Swing Line Loan to
refinance any outstanding Swing Line Loan. 
Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.04,
prepay under Section 2.05, and reborrow under this Section 2.04.  Each Swing Line Loan shall be a Base Rate
Loan.  Immediately upon the making of a
Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Lender’s Applicable Percentage times the amount of such Swing Line Loan.

 

(b)                                 Borrowing
Procedures.  Each Swing Line
Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing
Line Lender and the Administrative Agent, which may be given by telephone. Each
such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the requested borrowing date, and shall
specify (i) the amount to be borrowed, which shall be a minimum of $250,000,
and (ii) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed
promptly by delivery to the Swing Line Lender and the Administrative Agent of a
written Swing Line Loan Notice, appropriately completed and signed by a
Responsible Officer of the Borrower. 
Promptly after receipt by the Swing Line Lender of any telephonic Swing
Line Loan Notice, the Swing Line Lender will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has also
received such Swing Line Loan Notice and, if not, the Swing Line Lender will
notify the Administrative Agent (by telephone or in writing) of the contents
thereof.  Unless the Swing Line Lender
has received notice (by telephone or in writing) from the Administrative Agent
(including at the request of any Lender) prior to 2:00 p.m. on the date of 

 

35

 

the proposed Swing Line Borrowing (A) directing the Swing Line Lender
not to make such Swing Line Loan as a result of the limitations set forth in
the proviso to the first sentence of Section 2.04(a), or (B) that
one or more of the applicable conditions specified in Article IV is
not then satisfied, then, subject to the terms and conditions hereof, the Swing
Line Lender will, not later than 3:00 p.m. on the borrowing date specified in
such Swing Line Loan Notice, make the amount of its Swing Line Loan available
to the Borrower at its office by crediting the account of the Borrower on the
books of the Swing Line Lender in immediately available funds.

 

(c)                                  Refinancing
of Swing Line Loans.

 

(i)                                                                                     The
Swing Line Lender at any time in its sole and absolute discretion may request,
on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line
Lender to so request on its behalf), that each Lender make a Base Rate
Committed Loan in an amount equal to such Lender’s Applicable Percentage of the
amount of Swing Line Loans then outstanding. 
Such request shall be made in writing (which written request shall be
deemed to be a Committed Loan Notice for purposes hereof) and in accordance
with the requirements of Section 2.02, without regard to the
minimum and multiples specified therein for the principal amount of Base Rate
Loans, but subject to the unutilized portion of the Aggregate Commitments and
the conditions set forth in Section 4.02.  The Swing Line Lender shall furnish the
Borrower with a copy of the applicable Committed Loan Notice promptly after
delivering such notice to the Administrative Agent.  Each Lender shall make an amount equal to its
Applicable Percentage of the amount specified in such Committed Loan Notice
available to the Administrative Agent in immediately available funds for the
account of the Swing Line Lender at the Administrative Agent’s Office not later
than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Committed Loan to the
Borrower in such amount.  The
Administrative Agent shall remit the funds so received to the Swing Line
Lender.

 

(ii)                                                                                  If
for any reason any Swing Line Loan cannot be refinanced by such a Committed
Borrowing in accordance with Section 2.04(c)(i), the request for
Base Rate Committed Loans submitted by the Swing Line Lender as set forth
herein shall be deemed to be a request by the Swing Line Lender that each of
the Lenders fund its risk participation in the relevant Swing Line Loan and
each Lender’s payment to the Administrative Agent for the account of the Swing
Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment
in respect of such participation.

 

(iii)                                                                               If
any Lender fails to make available to the Administrative Agent for the account
of the Swing Line Lender any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be
entitled to recover from such Lender (acting through the Administrative Agent),
on demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the Swing Line Lender at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the Swing Line Lender in accordance
with banking industry rules on interbank compensation.  A certificate of the Swing Line Lender
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (iii) shall be conclusive absent manifest
error.

 

36

 

(iv)                                                                              Each
Lender’s obligation to make Committed Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.04(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however,
that each Lender’s obligation to make Committed Loans pursuant to this Section 2.04(c)
is subject to the conditions set forth in Section 4.02.  No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrower to repay Swing Line
Loans, together with interest as provided herein.

 

(d)                                 Repayment
of Participations.

 

(i)                                                                                     At
any time after any Lender has purchased and funded a risk participation in a
Swing Line Loan, if the Swing Line Lender receives any payment on account of
such Swing Line Loan, the Swing Line Lender will distribute to such Lender its
Applicable Percentage of such payment (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s
risk participation was funded) in the same funds as those received by the Swing
Line Lender.

 

(ii)                                                                                  If
any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, 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 Administrative Agent will make such demand upon the request of the
Swing Line Lender.  The obligations of
the Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.

 

(e)                                  Interest
for Account of Swing Line Lender. 
The Swing Line Lender shall be responsible for invoicing the Borrower
for interest on the Swing Line Loans. 
Until each Lender funds its Base Rate Committed Loan or risk participation
pursuant to this Section 2.04 to refinance such Lender’s Applicable
Percentage of any Swing Line Loan, interest in respect of such Applicable
Percentage shall be solely for the account of the Swing Line Lender.

 

(f)                                    Payments
Directly to Swing Line Lender.  The
Borrower shall make all payments of principal and interest in respect of the
Swing Line Loans directly to the Swing Line Lender.

 

Prepayments.

 

(a)                                  Voluntary
Prepayments of Committed Loans.  The
Borrower may, upon notice to the Administrative Agent, at any time or from time
to time voluntarily prepay Committed Loans in whole or in part without premium
or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 11:00 a.m. (A) three (3) Business Days
prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $1,000,000 or a whole multiple of
$1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed
Loans shall be in a principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding.  Each
such notice shall specify the date and amount of such prepayment and the

 

37

 

Type(s) of Committed Loans to be prepaid.  The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s Applicable Percentage of such prepayment.  If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.  Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 3.05.  Each such prepayment shall be applied to the
Committed Loans of the Lenders in accordance with their respective Applicable
Percentages.

 

(b)                                 Voluntary
Prepayments of Swing Line Loans.  The
Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided
that (i) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment,
and (ii) any such prepayment shall be in a minimum principal amount of
$100,000.  Each such notice shall specify
the date and amount of such prepayment. 
If such notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.

 

(c)                                  Mandatory
Prepayments of Committed Loans.

 

(i)                                          Aggregate
Commitments.  If for any reason the
Total Outstandings at any time exceed the Aggregate Commitments then in effect,
the Borrower shall immediately prepay Loans and/or Cash Collateralize the L/C
Obligations in an aggregate amount equal to such excess; provided, however,
that the Borrower shall not be required to Cash Collateralize the L/C
Obligations pursuant to this Section 2.05(c) unless after the
prepayment in full of the Loans the Total Outstandings exceed the Aggregate
Commitments then in effect.

 

(ii)                                       Debt Proceeds.  The Borrower shall make mandatory principal
prepayments of the Loans in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds from any incurrence of Indebtedness permitted
pursuant to Section 7.03(f) or any other Indebtedness not permitted
by the terms of this Agreement by the Borrower or any of its Subsidiaries.  Such prepayment shall be made within three
(3) Business Days after the date of receipt of Net Cash Proceeds of any such
transaction.

 

(iii)                                    Equity Proceeds.  The Borrower shall make mandatory principal
prepayments of the Loans in amounts equal to fifty percent (50%) of the
aggregate Net Cash Proceeds from any offering of equity securities by the
Borrower or any of its Subsidiaries (excluding (1) the Net Cash Proceeds of the
initial capital investment of any third party in any Joint Venture Subsidiary
unless the proceeds of such initial investment are distributed to the Borrower
or any Subsidiary thereof (other than such Joint Venture Subsidiary), (2) the
Net Cash Proceeds of any offerings of equity securities to employees pursuant
to incentive compensation plans in the ordinary course of business and (3) the Net
Cash Proceeds of any offerings of equity securities pursuant to the Borrower
IPO).  Such prepayment shall be made
within three (3) Business Days after the date of receipt of Net Cash Proceeds
of any such transaction.

 

(iv)                                   Asset Sale
Proceeds.  No later than one hundred
eighty (180) days following the receipt thereof, the Borrower shall make
mandatory principal prepayments of the 
Loans in amounts equal to one hundred percent (100%) of the aggregate
Net Cash Proceeds from the Disposition or series of related Dispositions of
assets by the Borrower or any of its Subsidiaries permitted pursuant to Section 7.05(i)
(the “Disposition Proceeds”); provided that:

 

38

 

(A)          any
prepayment required pursuant to this Section 2.05(c)(iii) with
respect to any Disposition Proceeds of less than $1,500,000.00 (any such
amounts, the “Deferred Proceeds”) may be deferred until such time as the
aggregate amount of all such Deferred Proceeds that have not previously been
reinvested or applied to prepay any Loans equals or exceeds $1,500,000.00; and

 

(B)           any
prepayment required pursuant to this Section 2.05(c)(iii) with
respect to any Disposition Proceeds received by Joint Venture Subsidiaries
shall be required only with respect to that portion of the Net Cash Proceeds
actually distributed to or received by the Borrower or any other Subsidiary
thereof.

 

Notwithstanding any of the foregoing to the contrary, upon and during
the continuance of an Event of Default and upon notice from the Administrative
Agent, all Disposition Proceeds received by the Borrower or any of its
Subsidiaries shall be applied to make prepayments of the Loans, such
prepayments to be made within three (3) Business Days after receipt of such
Disposition Proceeds.

 

(v)                                      Insurance and
Condemnation Proceeds.  No later than
one hundred eighty (180) days following the date of receipt by the Borrower or
any of its Subsidiaries of any Net Cash Proceeds under any of the insurance
policies maintained pursuant to Section 6.07 or from any
condemnation proceeding (the “Insurance and Condemnation Proceeds”)
which have not been reinvested as of such date in similar replacement assets,
the Borrower shall make mandatory principal prepayments of the Loans in amounts
equal to one hundred percent (100%) of the aggregate amount of such Insurance
and Condemnation Proceeds received by the Borrower or any of its Subsidiaries; provided
that any prepayment required pursuant to this Section 2.05(c)(iv)
with respect to any Insurance and Condemnation Proceeds by Joint Venture
Subsidiaries, such prepayment shall be required only with respect to that
portion of the Insurance and Condemnation Proceeds actually distributed to or
received by the Borrower or any Subsidiary thereof.  Notwithstanding any of the foregoing to the
contrary, upon and during the continuance of an Event of Default and upon
notice from the Administrative Agent, all Insurance and Condemnation Proceeds
received by the Borrower or any of its Subsidiaries shall be applied to make prepayments
of the Loans, such prepayments to be made within three (3) Business Days after
the Borrower’s receipt of such Insurance and Condemnation Proceeds.

 

(vi)                                   Notice; Manner of
Payment.  Upon the occurrence of any
event triggering the prepayment requirement under this Sections 2.05(c),
the Borrower shall promptly give written notice to the Administrative Agent and
upon receipt of such notice, the Administrative Agent shall promptly so notify
the Lenders.  Any prepayment of a
Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount
prepaid, together with any additional amounts required pursuant to Section 3.05.  Each such prepayment shall be applied to the
Committed Loans of the Lenders in accordance with their respective Applicable Percentages.

 

(vii)                                No Commitment
Reduction.  Amounts prepaid pursuant
to this Section 2.05(c) shall not reduce the Aggregate Commitments
and may be reborrowed.

 

Termination or Reduction of Commitments.  The Borrower may, upon notice to the
Administrative Agent, terminate the Aggregate Commitments, or from time to time
permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $1,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any 

 

39

 

concurrent prepayments hereunder, the Total Outstandings would exceed
the Aggregate Commitments, and (iv) if, after giving effect to any reduction of
the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line
Sublimit exceeds the amount of the Aggregate Commitments, such Sublimit shall
be automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify
the Lenders of any such notice of termination or reduction of the Aggregate
Commitments.  Any reduction of the
Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Applicable Percentage. 
All fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.

 

Repayment of Loans.

 

(a)                                  The
Borrower shall repay to the Lenders on the Maturity Date the aggregate
principal amount of Committed Loans outstanding on such date.

 

(b)                                 The
Borrower shall repay each Swing Line Loan on the Maturity Date.

 

Interest.

 

(a)                                  Subject
to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan
shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; (ii) each Base Rate Committed
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus
the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate.

 

(b)                                 (i)                                     If
any amount of principal of any Loan is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

 

(ii)                                  If any amount (other
than principal of any Loan) payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, then upon the request of the
Required Lenders, such amount shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws.

 

(iii)                               Upon the request of the
Required Lenders, while any Event of Default exists, the Borrower shall pay
interest on the principal amount of all outstanding Obligations hereunder at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

 

(iv)                              Accrued and unpaid
interest on past due amounts (including interest on past due interest) shall be
due and payable upon demand.

 

(c)                                  Interest
on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable
in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.

 

Fees.  In addition to certain fees described in
subsections (i) and (j) of Section 2.03:

 

(a)                                  Commitment
Fee. 
The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a
commitment fee (the “Commitment

 

40

 

Fee”) equal to the
Applicable Rate times the actual daily amount by which the Aggregate
Commitments exceed the sum of (i) the Outstanding Amount of Committed Loans and
(ii) the Outstanding Amount of L/C Obligations. 
The Commitment Fee shall accrue at all times during the Availability
Period, including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with
the first such date to occur after the Closing Date, and on the Maturity
Date.  The Commitment Fee shall be
calculated quarterly in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.

 

(b)                                 Other
Fees. 
(i)  The Borrower
shall pay to the Co-Lead Arrangers and the Administrative Agent for their own
respective accounts fees in the amounts and at the times separately agreed upon
in writing.  Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.

 

(ii)                                  The
Borrower shall pay to the Lenders such fees as shall have been separately
agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.

 

Computation of Interest and Fees.  All computations of interest for Base Rate
Loans when the Base Rate is determined by Bank of America’s “prime rate” shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.12(a), bear interest for one day.  Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.

 

Evidence of Debt.

 

(a)                                  The
Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent
in the ordinary course of business.  The
accounts or records maintained by the Administrative Agent and each Lender
shall be conclusive absent manifest error of the amount of the Credit
Extensions made by the Lenders to the Borrower and the interest and payments
thereon.  Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the
Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the accounts
and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence
of manifest error.  Upon the request of
any Lender made through the Administrative Agent, the Borrower shall execute
and deliver to such Lender (through the Administrative Agent) a Note, which
shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.

 

(b)                                 In
addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records

 

41

 

evidencing the purchases and sales by such Lender of participations in
Letters of Credit and Swing Line Loans. 
In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.

 

Payments
Generally; Administrative Agent’s Clawback.

 

(a)                                  General.  All payments to be made by the Borrower shall
be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.  Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein.  The Administrative
Agent will promptly distribute to each Lender its Applicable Percentage (or
other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

 

(b)                                 (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 Committed
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Committed Borrowing, the Administrative Agent may
assume that such Lender has made such share available on such date in accordance
with Section 2.02 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 Committed 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 Base Rate Loans.  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 Committed Borrowing to the Administrative Agent, then the amount so
paid shall constitute such Lender’s Committed Loan included in such Committed
Borrowing.  Any payment by the Borrower
shall be without prejudice to any claim the Borrower may have against a Lender
that shall have failed to make such payment to the Administrative Agent.

 

(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 L/C Issuer
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

 

42

 

reliance upon such assumption, distribute to the Lenders or the L/C
Issuer, 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 L/C Issuer, 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 L/C Issuer, 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 Article II,
and such funds are not made available to the Borrower by the Administrative
Agent because the conditions to the applicable Credit Extension set forth in Article IV
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall promptly 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 Committed Loans, to fund participations in
Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c)
are several and not joint.  The failure
of any Lender to make any Committed Loan, to fund any such participation or to
make any payment under Section 10.04(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 Committed Loan, to purchase its participation or to
make its payment under Section 10.04(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.

 

Sharing of
Payments by Lenders. 
If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of the Committed Loans made by it, or the participations in L/C Obligations or
in Swing Line Loans held by it resulting in such Lender’s receiving payment of
a proportion of the aggregate amount of such Committed Loans or participations
and accrued interest thereon greater than its pro  rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (a) notify the Administrative Agent of such fact, and (b) purchase (for
cash at face value) participations in the Committed Loans and subparticipations
in L/C Obligations and Swing Line Loans of the other Lenders, or make such
other adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Committed Loans and
other amounts owing them, provided that:

 

(i)                                     if any such
participations or subparticipations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

 

43

 

(ii)                                  the provisions of
this Section shall not be construed to apply to (x) any payment made by
the Borrower pursuant to and in accordance with the express terms of this
Agreement or (y) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Committed Loans or
subparticipations in L/C Obligations or Swing Line Loans to any assignee or
participant, other than to the Borrower or any Subsidiary thereof (as to which
the provisions of this Section shall apply).

 

The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

 

Security.    The Obligations shall be secured as
provided in the Security Documents.

 

TAXES, YIELD PROTECTION AND ILLEGALITY

 

Taxes.

 

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

 

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

 

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

 

(d)                                 Evidence
of Payments.  As soon as practicable
after any payment of Indemnified Taxes or Other Taxes by the Borrower to a
Governmental Authority, the Borrower shall deliver to the Administrative Agent
a copy of a receipt issued by such Governmental Authority evidencing

 

44

 

such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)                                    Treatment
of Certain Refunds.  If the
Administrative Agent, any Lender or the L/C Issuer determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses relating to such refund of the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrower, upon
the request of the Administrative Agent, such Lender or the L/C Issuer, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the L/C Issuer in 

 

45

 

the event the Administrative Agent, such Lender or the L/C Issuer is
required to repay such refund to such Governmental Authority.  This subsection shall not be construed
to require the Administrative Agent, any Lender or the L/C Issuer to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to the Borrower or any other Person.

 

Illegality.  If any Lender determines that any Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurodollar Rate Loans, or to determine or charge interest rates based upon
the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to the Borrower through the Administrative Agent, any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Committed Loans to Eurodollar Rate Loans shall be suspended until such Lender
notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower
shall, upon demand from such Lender (with a copy to the Administrative Agent),
prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to
Base Rate Loans, either on the last day of the Interest Period therefor, if
such Lender may lawfully continue to maintain such Eurodollar Rate Loans to
such day, or immediately, if such Lender may not lawfully continue to maintain
such Eurodollar Rate Loans.  Upon any
such prepayment or conversion, the Borrower shall also pay accrued interest on
the amount so prepaid or converted.

 

Inability to
Determine Rates. 
If the Required Lenders determine that for any reason in connection with
any request for a Eurodollar Rate Loan or a conversion to or continuation
thereof that (a) Dollar deposits are not being offered to banks in the London
interbank eurodollar market for the applicable amount and Interest Period of
such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist
for determining the Eurodollar Base Rate for any requested Interest Period with
respect to a proposed Eurodollar Rate Loan , or (c) the Eurodollar Base
Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, the Administrative Agent will promptly so notify the
Borrower and each Lender.  Thereafter,
the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall
be suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice.  Upon receipt
of such notice, the Borrower may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or, failing that, will
be deemed to have converted such request into a request for a Committed
Borrowing of Base Rate Loans in the amount specified therein.

 

Increased Costs.

 

(a)                                  Increased
Costs Generally.  If any Change in
Law shall:

 

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

 

(ii)                                  subject any Lender or
the L/C Issuer to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any participation in a Letter of Credit or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes or
Other Taxes

 

46

 

covered by Section 3.01 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or the L/C Issuer); or

 

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

 

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

 

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

 

(c)                                  Certificates
for Reimbursement.  A certificate of
a Lender or the L/C Issuer setting forth the amount or amounts necessary to
compensate such Lender or the L/C Issuer or its holding company, as the case
may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within ten (10) days after receipt thereof.

 

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

 

47

 

Compensation
for 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.  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 3.05, each Lender shall be deemed to
have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate
used in determining the Eurodollar Rate for such Loan by a matching deposit or
other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan
was in fact so funded.

 

Mitigation
Obligations;

 

Designation of a Different Lending Office.  If any Lender requests compensation under Section 3.04,
or the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01,
or if any Lender gives a notice pursuant to Section 3.02, then such
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 3.01 or 3.04, as
the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender.  The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

 

Survival.  All of the Borrower’s obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

CONDITIONS
PRECEDENT TO CREDIT EXTENSIONS

 

Conditions of Initial Credit Extension.  The obligation of the L/C Issuer and each
Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)                                  Loan
Documents, Certificates and Opinions. 
The Administrative Agent’s receipt of the following, each of which shall
be originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, 

 

48

 

each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and its legal counsel:

 

(i)                                     executed
counterparts of this Agreement, the applicable Security Documents, the Guaranty
and any other applicable Loan Documents, sufficient in number for distribution
to the Administrative Agent, each Lender and the Borrower;

 

(ii)                                  a
Note executed by the Borrower in favor of each Lender requesting a Note;

 

(iii)                               a
certificate of Responsible Officers of each Loan Party certifying as to the
incumbency and genuineness of the signature of each officer of each Loan Party
executing Loan Documents to which it is a party and certifying that attached
thereto is a true, correct and complete copy of (A) the articles or certificate
of incorporation or formation of each Loan Party and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority in its
jurisdiction of organization, (B) the bylaws or other governing document of
each Loan Party as in effect on the Closing Date, (C) resolutions duly adopted
by the board of directors or other governing body of each Loan Party
authorizing the borrowings contemplated hereunder and the execution, delivery
and performance of the Loan Documents to which it is a party, and (D)
certificates as of a recent date of the good standing of each Loan Party under
the laws of its jurisdiction of organization and, to the extent requested by
the Administrative Agent, each other jurisdiction where each Loan Party is
qualified to do business);

 

(iv)                              a
favorable opinion of Frost Brown Todd LLC, counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, in form and substance
satisfactory to the Administrative Agent;

 

(v)                                 a
certificate signed by a Responsible Officer of the Borrower certifying that
either (A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party and
the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;

 

(vi)                              a
certificate signed by a Responsible Officer of the Borrower certifying (A) that
the conditions specified in Sections 4.02(a) and (b) have been
satisfied, and (B) that since December 31, 2003, there has been no event
or circumstance that has had or could be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect upon, the
operations, business, assets, liabilities (actual or contingent) or financial
condition of the Borrower or the Borrower and its Subsidiaries taken as a whole
or in the facts and information regarding such entities as represented to date;

 

(vii)                           evidence
that all insurance required to be maintained pursuant to the Loan Documents has
been obtained and is in effect; and

 

(viii)                        such other
assurances, certificates, documents, consents or opinions as the Administrative
Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders reasonably
may require.

 

(b)                                 Collateral.

 

(i)                                     Filings and
Recordings.  Except as contemplated
pursuant to Section 6.17 hereto, the Administrative Agent shall be
satisfied that all filings and recordations that are necessary to perfect the
security interests of the Lenders in the Collateral shall have been received by
the Administrative Agent and the Administrative Agent shall have received
evidence 

 

49

 

satisfactory to the Administrative Agent that upon such filings and recordations
such security interests constitute valid and perfected first priority Liens
therein.

 

(ii)                                  Pledged Collateral.  The Administrative Agent shall have received
original stock certificates or other certificates (if any) evidencing the
capital stock or other ownership interests pledged pursuant to the Security
Documents, together with an undated stock power for each such certificate duly
executed in blank by the registered owner thereof.

 

(iii)                               Lien Search. The
Administrative Agent shall have received the results of Lien searches made
against the Borrower and the Loan Parties under the UCC (or applicable judicial
docket) as in effect in the jurisdiction of organization of such Person, in
form and substance satisfactory to the Administrative Agent, indicating among
other things that the Collateral is free and clear of any Lien.

 

(iv)                              Hazard and Liability
Insurance.  The Administrative Agent
shall have received certificates of insurance, evidence of payment of all
insurance premiums for the current policy year of each, and, if requested by
the Administrative Agent, copies (certified by a Responsible Officer) of
insurance policies in the form required under the Security Documents and
otherwise in form and substance reasonably satisfactory to the Administrative
Agent.

 

(c)                                  Payment
of Fees.  Any fees required to be
paid on or before the Closing Date shall have been paid.

 

(d)                                 Attorneys
Fees.  Unless waived by the
Administrative Agent, the Borrower shall have paid all fees, charges and
disbursements of counsel to the Administrative Agent to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of such
reasonable fees, charges and disbursements as shall constitute its reasonable
estimate of such incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a final
settling of accounts between the Borrower and the Administrative Agent).

 

(e)                                  Financial
Condition Certificate.  The Borrower
shall have delivered to the Administrative Agent a certificate, in form and
substance satisfactory to the Administrative Agent, and certified as accurate
by a Responsible Officer, that (A) the Borrower and each of its Subsidiaries
are each Solvent, (B) the Borrower’s payables are current and not past due, (C)
attached thereto are calculations evidencing compliance on a pro  forma
basis with the covenants contained in Section 7.15, and
(D) the financial projections previously delivered to the Administrative
Agent represent the good faith estimates (utilizing reasonable assumptions) of
the financial condition and operations of the Borrower and its Subsidiaries.

 

(f)                                    Financial
Statements.  The Administrative Agent
and the Lenders shall have received (A) the consolidating balance sheet of the
Borrower and its Subsidiaries and the related consolidating statements of
income or operations for the fiscal year ended December 31, 2003 (the “Consolidating
Financial Statements”), (B) the audited consolidated balance sheet of the
Borrower and its Subsidiaries and the related consolidated statements of income
or operations, shareholders’ equity and cash flows for the fiscal year December 31,
2003 (the “Consolidated Financial Statements,” together with the
Consolidating Financial Statements, the  “Audited
Financial Statements”), (C)  the
unaudited consolidating balance sheet of the Borrower and its Subsidiaries and
the related consolidating statements of income or operations for the fiscal
quarter ended April 1, 2004 (the “Consolidating Quarterly Financial Statements”),
and (D) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for the fiscal quarter ended April 1,
2004 (the “Consolidating Quarterly Financial Statements,” together with
Consolidating Unaudited Quarterly Financial Statement, the “Unaudited
Quarterly Financial 

 

50

 

Statements”), all in
form and substance satisfactory to the Administrative Agent and the Lenders and
prepared in accordance with GAAP, and such other financial information as the
Administrative Agent may reasonably request.

 

(g)                                 No
Injunction, Etc.  No action,
proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any Governmental Authority to enjoin,
restrain, or prohibit, or to obtain substantial damages in respect of, or which
is related to or arises out of the Loan Documents or the consummation of the
transactions contemplated thereby, or which, in the Administrative Agent’s
reasonable discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and the other Loan Documents.

 

(h)                                 Governmental
and Third Party Approvals.  The Loan
Parties shall have received all material governmental, shareholder and third
party consents and approvals necessary (as determined in the reasonable
discretion of the Administrative Agent) in connection with the transactions
contemplated by this Agreement and the other Loan Documents and the other
transactions contemplated hereby and all applicable waiting periods shall have
expired without any action being taken by any Person that could reasonably be
expected restrain, prevent or impose any material adverse conditions on any of
the Loan Parties or such other transactions or that could seek or threaten any
of the foregoing, and no law or regulation shall be applicable which in the
reasonable judgment of the Administrative Agent could reasonably be expected to
have such effect.

 

(i)                                     Consummation
of the Borrower IPO.  The
consummation of the initial public offering of stock described in Amendment
No. 6 to the Registration Statement on Form S-1 filed with the Securities
and Exchange Commission on September 20, 2004 (the “Borrower IPO”)
and receipt by the Borrower of no less than $75,000,000 in gross equity
proceeds.

 

(j)                                     Repayment
in full of the Holdings Credit Agreement. 
The Holdings Credit Agreement shall be repaid in full and terminated and
all collateral security therefore shall be released.

 

(k)                                  Other
Documents.  All opinions,
certificates and other instruments and all proceedings in connection with the
transactions contemplated by this Agreement shall be reasonably satisfactory in
form and substance to the Administrative Agent. 
The Administrative Agent shall have received copies of all other
documents, certificates and instruments reasonably requested thereby, with
respect to the transactions contemplated by this Agreement.

 

Without limiting the generality of the provisions of Section 10.04,
for purposes of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this 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.

 

Conditions to all Credit Extensions.  The obligation of each Lender to honor any
Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Committed Loans to the other Type, or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:

 

(a)                                  The
representations and warranties of the Borrower and each other Loan Party
contained in Article V or any other Loan Document, or which are
contained in any document furnished at any time under or in connection herewith
or therewith, shall be true and correct on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except that for purposes of this Section 4.02,
the representations and warranties 

 

51

 

contained in subsections (a) and (b) of Section 5.05 shall
be deemed to refer to the most recent statements furnished pursuant to clauses
(a) and (b), respectively, of Section 6.01.

 

(b)                                 No
Default shall exist, or would result from such proposed Credit Extension or
from the application of the proceeds thereof.

 

(c)                                  The
Administrative Agent and, if applicable, the L/C Issuer or the Swing Line
Lender shall have received a Request for Credit Extension in accordance with
the requirements hereof.

 

(d)                                 The
Administrative Agent shall have received each additional document, instrument, legal
opinion or other item reasonably requested by it.

 

Each Request for Credit Extension (other than
a Committed Loan Notice requesting only a conversion of Committed Loans to the
other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower
shall be deemed to be a representation and warranty that the conditions
specified in Sections 4.02(a) and (b) have been satisfied on and
as of the date of the applicable Credit Extension.

 

REPRESENTATIONS
AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and
the Lenders that:

 

Existence,
Qualification and Power; Compliance with Laws. 
The Borrower and each of its Subsidiaries (a) is a corporation,
partnership or limited liability company duly organized or formed, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and
all requisite governmental licenses, authorizations, consents and approvals to
(i) own its assets and carry on its business as now being conducted and
hereafter proposed to be conducted and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws.  The
jurisdictions in which the Borrower and its Subsidiaries are organized and
qualified to do business as of the Closing Date are described on Schedule 5.01.

 

Authorization; No Contravention.  The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien (other than a Permitted Lien)
under, (i) any Contractual Obligation to which such Person is a party or (ii)
any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject; or (c) violate
any Law.

 

Governmental Authorization; Other Consents.  No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.  Each of the Borrower and its Subsidiaries (a)
has all Governmental Approvals required by any applicable Law for it to conduct
its business, each of which is in full force and effect, is final and not
subject to review on appeal and is not the subject of any pending or, to the
best of its knowledge, threatened attack by direct or collateral proceeding,
(b) is in compliance with each Governmental 

 

52

 

Approval applicable to it and in compliance with all other applicable
Laws relating to it or any of its respective properties and (c) has timely
filed all material reports, documents and other materials required to be filed
by it under all applicable Laws with any Governmental Authority and has
retained all material records and documents required to be retained by it under
applicable Law.

 

Binding
Effect.  This
Agreement has been, and each other Loan Document, when delivered hereunder,
will have been, duly executed and delivered by each Loan Party that is party
thereto.  This Agreement constitutes, and
each other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.

 

Financial
Statements; No Material Adverse Effect.

 

(a)                                  The
Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the
Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all indebtedness and other liabilities, direct or
contingent, of the Borrower and its Subsidiaries as of the date thereof,
including liabilities for taxes, commitments and Indebtedness.

 

(b)                                 The
Unaudited Quarterly Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.

 

(c)                                  Since
the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

 

(d)                                 As
of the Closing Date and after giving effect to each Credit Extension made
hereunder, the Borrower and each of its Subsidiaries will be Solvent.

 

Litigation.  Except as specifically disclosed in Schedule 5.06,
there are no actions, suits, investigations or proceedings pending, or overtly
threatened in writing, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Borrower or any of its Subsidiaries
or against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby, or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.

 

No Default.  Neither the Borrower nor any Subsidiary is in
default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  No Default or an Event
of Default has occurred and is continuing or would result from the consummation
of the transactions contemplated by this Agreement or any other Loan Document.

 

Ownership of
Property; Liens. 
Each of the Borrower and each Subsidiary has good record and marketable
title in fee simple to, or valid leasehold interests in, all real property
necessary or used in the ordinary conduct of its business, and legal title to
all of its personal property and assets, including, but not limited to, those
reflected on the balance sheets of the Borrower and its Subsidiaries delivered
pursuant to Section 6.01, except those which have been disposed of
by the 

 

53

 

Borrower or its Subsidiaries subsequent to such date which dispositions
have been in the ordinary course of business or as otherwise expressly
permitted hereunder.  The property of the
Borrower and its Subsidiaries is subject to no Liens, other than Liens
permitted by Section 6.01.

 

Environmental
Compliance.

 

(a)                                  Except as set forth
on Schedule 5.09 (“Disclosed Environmental Matters”), the
properties owned, leased or operated by the Borrower and its Subsidiaries do
not contain, any Hazardous Materials in amounts or concentrations which (i)
constitute a violation of applicable Environmental Laws or (ii) could give rise
to liability under applicable Environmental Laws;

 

(b)                                 The Borrower, each
Subsidiary and such properties and all operations conducted in connection
therewith are in compliance, and have been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about such
properties or such operations which could interfere with the continued
operation of such properties or impair the fair saleable value thereof;

 

(c)                                  Except for Disclosed
Environmental Matters, neither the Borrower nor any Subsidiary thereof has
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters, Hazardous Materials, or
compliance with Environmental Laws, nor does the Borrower or any Subsidiary
thereof have knowledge or reason to believe that any such notice will be
received or is being threatened;

 

(d)                                 Hazardous Materials
have not been transported or disposed of to or from the properties owned,
leased or operated by the Borrower and its Subsidiaries in violation of, or in
a manner or to a location which could give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in violation of,
or in a manner that could give rise to liability under, any applicable
Environmental Laws;

 

(e)                                  No judicial
proceedings or governmental or administrative action is pending, or  overtly threatened in writing, under any
Environmental Law to which the Borrower or any Subsidiary thereof is or will be
named as a potentially responsible party with respect to such properties or
operations conducted in connection therewith, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Borrower, any Subsidiary or such
properties or such operations; and

 

(f)                                    There
has been no release, or to the best of the Borrower’s knowledge, threat of
release, of Hazardous Materials at or from properties owned, leased or operated
by the Borrower or any Subsidiary, now or in the past, in violation of or in
amounts or in a manner that could give rise to liability under Environmental
Laws.

 

Insurance.  The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies reasonably acceptable to the Administrative Agent and the Required
Lenders not Affiliates of the Borrower or any Subsidiary, in such amounts, with
such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties in
localities where the Borrower or the applicable Subsidiary operates.

 

Taxes.  The Borrower and its Subsidiaries have filed
all Federal, state and other material tax returns and reports required to be
filed, and have paid all Federal, state and other material taxes, assessments, fees
and other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves 

 

54

 

have been provided in accordance with GAAP.  Such returns accurately reflect in all
material respects all liability for taxes of the Borrower and its Subsidiaries
for the periods covered thereby.  Except
as set forth on Schedule 5.11, there are no ongoing audits or
examinations or, to the knowledge of the Borrower, other investigations by any
Governmental Authority of the tax liability of the Borrower and its
Subsidiaries.  No Governmental Authority
has asserted any Lien or other claim against the Borrower or any Subsidiary
thereof with respect to unpaid taxes which has not been discharged or
resolved.  The charges, accruals and
reserves on the books of the Borrower and any of its Subsidiaries in respect of
federal, state, local and other taxes for all Fiscal Years and portions thereof
since the organization of the Borrower and any of its Subsidiaries are in the
judgment of the Borrower adequate, and the Borrower does not anticipate any
additional taxes or assessments for any of such years.  There is no proposed tax assessment against
the Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect.

 

ERISA Compliance.

 

(a)                                  As of the Closing
Date, neither the Borrower nor any ERISA Affiliate maintains or contributes to,
or has any obligation under, any Plans other than those identified on Schedule 5.12.

 

(b)                                 Each
Plan is in compliance in all material respects with the applicable provisions
of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under Section 401(a)
of the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Borrower, nothing has
occurred which would prevent, or cause the loss of, such qualification.  The Borrower and each ERISA Affiliate have
made all required contributions to each Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.

 

(c)                                  There
are no pending, or overtly threatened in writing, claims, actions or lawsuits,
or action by any Governmental Authority, with respect to any Plan that could be
reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan that
has resulted or could reasonably be expected to result in a Material Adverse
Effect.

 

(d)                                 (i)   No
ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension
Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; (v) neither the Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA; and (vi) neither the Borrower nor any ERISA
Affiliate has engaged in a nonexempt prohibited transaction described in Section 406
of the ERISA or Section 4975 of the Code.

 

Subsidiaries.  As of the Closing Date, the Borrower has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13
and has no equity investments in any other corporation or entity other than
those specifically disclosed in Part(b) of Schedule 5.13.  As of the Closing Date, the capitalization of
the Borrower and its Subsidiaries consists of the number of shares, authorized,
issued and outstanding, of such classes and series, with or without par 

 

55

 

value, described on Schedule 5.13.  All outstanding shares have been duly
authorized and validly issued and are fully paid and nonassessable, with no
personal liability attaching to the ownership thereof, and not subject to any
preemptive or similar rights.  The
shareholders of the Subsidiaries of the Borrower and the number of shares owned
by each as of the Closing Date are described on Schedule 5.13.  As of the Closing Date, there are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the Borrower or its Subsidiaries, except as
described on Schedule 5.13.

 

Margin
Regulations; Investment Company Act; Public Utility Holding Company Act.

 

(a)                                  Neither
the Borrower nor any of its Subsidiaries is engaged, principally or as one of
its important activities, in the business of “purchasing” or “carrying” any “margin
stock” (as each such term is defined or used in Regulation U issued by the
FRB), or extending credit for the purpose of purchasing or carrying margin
stock.  No part of the proceeds of any of
the Loans or Letters of Credit will be used for purchasing or carrying margin
stock or for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X issued by the FRB.

 

(b)                                 Neither
the Borrower nor any of its Subsidiaries (i) is a “holding company,” or a “subsidiary
company” of a “holding company,” or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company,” within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered
as an “investment company” under the Investment Company Act of 1940.

 

Material
Contracts.  Schedule 5.15
sets forth a complete and accurate list of all Material Contracts of the
Borrower and its Subsidiaries in effect as of the Closing Date not listed on
any other Schedule hereto.  Other
than as set forth in Schedule 5.15, each such Material Contract is,
and after giving effect to the consummation of the transactions contemplated by
the Loan Documents will be, in full force and effect in accordance with the
terms thereof.  Neither the Borrower nor
any Subsidiary (nor, to the knowledge of the Borrower, any other party thereto)
is in breach of or in default under any Material Contract in any material
respect.

 

Disclosure.  The Borrower has disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of its Subsidiaries is subject, and
all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.  No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf
of any Loan Party to the Administrative Agent or any Lender in connection with
the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

 

Compliance
with Laws.  Each
of the Borrower and its Subsidiaries is in compliance in all material respects
with the requirements of all Laws and all orders, writs, injunctions and
decrees applicable to it or to its properties, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or (b)
the failure to comply therewith, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

 

56

 

Intellectual
Property; Licenses, Etc.  Except as set forth on Schedule 5.18,
IP Holdco owns, or possess the non-exclusive right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
licenses and other intellectual property rights (collectively, “IP Rights”)
that are reasonably necessary for the operation of the respective businesses of
the Borrower and its Subsidiaries, without conflict with the rights of any
other Person.  The Borrower and IP Holdco
have not received any notice of any slogan or other advertising device,
product, process, method, substance, part or other material now employed, or
now contemplated to be employed, by the Borrower or any Subsidiary that
infringes upon any rights held by any other Person.  No event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation or termination of
any such rights, and neither IP Holdco, the Borrower nor any Subsidiary thereof
is liable to any Person for infringement under applicable Law with respect to
any such rights as a result of its business operations.

 

Employee
Relations.  Each
of the Borrower and its Subsidiaries has a stable work force in place and is
not, as of the Closing Date, party to any collective bargaining agreement nor
has any labor union been recognized as the representative of its employees.  The Borrower knows of no pending, threatened
or contemplated strikes, work stoppage or other collective labor disputes
involving its employees or those of its Subsidiaries.

 

Burdensome
Provisions. 
Neither the Borrower nor any Subsidiary thereof is a party to any
indenture, agreement, lease or other instrument, or subject to any corporate or
partnership restriction, Governmental Approval or applicable Law which is so
unusual or burdensome as in the foreseeable future could be reasonably expected
to have a Material Adverse Effect.  The
Borrower and its Subsidiaries do not presently anticipate that future
expenditures needed to meet the provisions of any statutes, orders, rules or
regulations of a Governmental Authority will be so burdensome as to have a
Material Adverse Effect.  No Subsidiary
is party to any agreement or instrument or otherwise subject to any restriction
or encumbrance that restricts or limits its ability to make dividend payments
or other distributions in respect of its capital stock to the Borrower or any
Subsidiary or to transfer any of its assets or properties to the Borrower or
any other Subsidiary in each case other than existing under or by reason of the
Loan Documents or applicable Law.

 

Survival of Representations and Warranties, Etc.  All representations and warranties set forth
in this Article V and all representations and warranties contained in any
certificate, or any of the Loan Documents (including, but not limited to, any
such representation or warranty made in or in connection with any amendment thereto)
shall constitute representations and warranties made under this Agreement.  All representations and warranties made under
this Agreement shall be made or deemed to be made at and as of the Closing Date
(except those that are expressly made as of a specific date), shall survive the
Closing Date and shall not be waived by the execution and delivery of this
Agreement, any investigation made by or on behalf of the Lenders or any
borrowing hereunder.

 

AFFIRMATIVE
COVENANTS

 

So long as any
Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, the Borrower shall, and shall (except in the case of the
covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11)
cause each of its Subsidiaries to:

 

57

 

Financial
Statements. 
Deliver to the Administrative Agent and each Lender, in form and detail
satisfactory to the Administrative Agent and the Required Lenders:

 

(a)                                  as
soon as available, but in any event within ninety (90) days after the end of
each Fiscal Year of the Borrower, a Consolidated and Consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such Fiscal Year,
the related Consolidated and Consolidating statements of income or operations
for such Fiscal Year and the related consolidated statements of shareholders’
equity and cash flows for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, all in reasonable
detail and prepared in accordance with GAAP, audited and accompanied by a
report and opinion of an independent certified public accountant of nationally
recognized standing reasonably acceptable to the Required Lenders, which report
and opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any “going concern” or like qualification
or exception or any qualification or exception as to the scope of such audit;
it being acknowledged by the parties hereto that delivery of a copy the
Borrower’s Annual Report on Form 10-K on or before the date specified above
shall satisfy the requirements of this Section 6.01(a); and

 

(b)                                 as
soon as available, but in any event within forty-five (45) days after the end
of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower,
a Consolidated and Consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such Fiscal Quarter, the related Consolidated and
Consolidating statements of income or operations for such Fiscal Quarter and
for the portion of the Fiscal Year then ended and the related consolidated
statements of shareholders’ equity and cash flows for such Fiscal Quarter and
for the portion of the Fiscal Year then ended, setting forth in each case in
comparative form the figures for the corresponding Fiscal Quarter of the
previous Fiscal Year and the corresponding portion of the previous Fiscal Year,
all in reasonable detail and certified by a Responsible Officer of the Borrower
as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Borrower and its Subsidiaries on a
Consolidated and Consolidating basis in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes; it being
acknowledged by the parties hereto that delivery of a copy the Borrower’s
Quarterly Report on Form 10-Q on or before the date specified above shall
satisfy the requirements of this Section 6.01(b).

 

As to any information contained in materials furnished pursuant to Section 6.02(d),
the Borrower shall not be separately required to furnish such information under
clause (a) or (b) above, but the foregoing shall not be in derogation of the
obligation of the Borrower to furnish the information and materials described
in subsections (a) and (b) above at the times specified therein.

 

Certificates;
Other Information.  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)                                  concurrently
with the delivery of the financial statements referred to in Section 6.01(a),
a certificate of its independent certified public accountants certifying such
financial statements and stating that in the course of its audit (without any
obligation to conduct any other independent investigation) no knowledge was
obtained of any Default with the terms, covenants, provisions or conditions of Section 7.15
in so far as they relate to accounting matters or, if any such Default shall
exist, stating the nature and status of such event;

 

(b)                                 concurrently
with the delivery of the financial statements referred to in Sections 6.01(a)
and (b), a duly completed Compliance Certificate signed by a Responsible
Officer of the Borrower;

 

58

 

(c)                                  promptly
after any request by the Administrative Agent or any Lender, copies of any
detailed audit reports, management letters or recommendations submitted to the
board of directors of the Borrower by independent accountants in connection
with the accounts or books of the Borrower or any Subsidiary, or any audit of
any of them;

 

(d)                                 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 (excluding customary and routine correspondence regarding
distributions or financial statements), 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
Securities Exchange Act of 1934, and not otherwise required to be delivered to
the Administrative Agent pursuant hereto;

 

(e)                                  promptly,
and in any event within five Business Days after receipt thereof by any Loan
Party or any Subsidiary thereof, copies of each notice or other correspondence
received from the SEC (or comparable agency in any applicable non-U.S.
jurisdiction) concerning any investigation or possible investigation or other
inquiry by such agency regarding financial or other operational results of any
Loan Party or any Subsidiary thereof; and

 

(f)                                    promptly,
such additional information regarding the business, financial or corporate
affairs of the Borrower or any Subsidiary, or compliance with the terms of the
Loan Documents, as the Administrative Agent or any Lender may from time to time
reasonably request.

 

Documents required to be delivered pursuant to Section 6.01(a)
or (b) or Section 6.02(d) (to the extent any such documents
are included in materials otherwise filed with the SEC) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which the Borrower posts such documents, or provides a link
thereto on the Borrower’s website on the Internet at the website address listed
on Schedule 10.02; or (ii) on which such documents are posted on
the Borrower’s behalf on an Internet or intranet website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that: (i) the Borrower shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests the Borrower to deliver such
paper copies until a written request to cease delivering paper copies is given
by the Administrative Agent or such Lender and (ii) the Borrower shall notify
the Administrative Agent and each Lender (by telecopier or electronic mail) of
the posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such
documents.  Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide
paper copies of the Compliance Certificates required by Section 7.02(b)
to the Administrative Agent and each of the Lenders.  Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

 

The Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arranger will make available to the Lenders and the L/C Issuer
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials
on IntraLinks or another similar electronic system (the “Platform”) and
(b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to the Borrower or its securities)
(each, a “Public Lender”).  The 

 

59

 

Borrower
hereby agrees that (w) all Borrower Materials that are to be made available to
Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the
first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower
shall be deemed to have authorized the Administrative Agent, the Arranger, the
L/C Issuer and the Lenders to treat such Borrower Materials as either publicly
available information or not material information (although it may be sensitive
and proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (z) the Administrative Agent and the
Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC”
as being suitable only for posting on a portion of the Platform not designated “Public
Investor.”

 

Notices.  Promptly notify the Administrative Agent and
each Lender: 

 

of
(i) the occurrence of any Default or Event of Default, (ii) the occurrence or
existence of any event or circumstance that foreseeably will become a Default
or Event of Default or (iii) the occurrence of any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
default or event of default under any Material Contract to which the Borrower
or any of its Subsidiaries is a party or by which the Borrower or any
Subsidiary thereof or any of their respective properties may be bound; 

 

of
any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii)
any dispute, litigation, investigation, proceeding or suspension between the
Borrower or any or any Subsidiary and any Governmental Authority; (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws; and (iv) any dispute, litigation, investigation, proceeding
or suspension between the Borrower or any Subsidiary and any Person.

 

of the occurrence of any ERISA Event;

 

of any material change in accounting policies
or financial reporting practices by the Borrower or any Subsidiary; and

 

of any of the events described in Section 2.05(c).

 

Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto.  Each
notice pursuant to Section 6.03(a) shall describe with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.

 

Payment of Obligations.  Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless (i) the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Borrower or such Subsidiary or
(ii) the failure to so pay such liabilities, assessments or levies could not
reasonably be expected to have a Material Adverse

 

60

 

Effect;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property; and (c) all Indebtedness (in an amount equal to or in excess of the
Threshold Amount), as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.

 

Preservation
of Existence, Etc. 
(a)  Preserve, renew and maintain
in full force and effect its legal existence and good standing under the Laws
of the jurisdiction of its organization except in a transaction permitted by Section 7.04
or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits and licenses necessary or desirable in the normal conduct
of its business, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) preserve or
renew all of its registered patents, trademarks, trade names and service marks,
the non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

 

Maintenance of Properties.  (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; and (b) make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) use the
standard of care typical in the industry in the operation and maintenance of
its facilities.

 

Maintenance
of Insurance.  In
addition to the specific insurance requirements of the Security Documents,
maintain with Royal Indemnity Ins. Co., Lexington Insurance Company, Royal
Surplus Lines Company, or other financially sound and reputable insurance
companies reasonably acceptable to the Administrative Agent and the Required
Lenders not Affiliates of the Borrower, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and
in such amounts as are customarily carried under similar circumstances by such
other Persons and providing for not less than 30 days’ prior notice to the Administrative
Agent of termination, lapse or cancellation of such insurance and deliver to
the Administrative Agent upon its request a detailed list of the insurance then
in effect, stating the names of the insurance companies, the amounts and rates
of the insurance, the dates of the expiration thereof and the properties and
risks covered thereby.

 

Compliance with Laws.  Except where the failure to comply could
reasonably be expected to have a Material Adverse Effect, comply in all
material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except
in such instances in which such requirement of Law or order, writ, injunction
or decree is being contested in good faith by appropriate proceedings
diligently conducted, and maintain in full force and effect all Governmental
Approvals applicable to it or to its business or property.

 

Environmental Laws.  In addition to and without limiting the
generality of Section 7.08, (a) comply with, and ensure such
compliance by all tenants and subtenants with all applicable Environmental Laws
and obtain and comply with and maintain, and ensure that all tenants and
subtenants, if any, obtain and comply with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws, (b) conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required
under Environmental Laws, and promptly comply with all lawful orders and
directives of any Governmental Authority regarding Environmental Laws, and (c)
defend, indemnify and hold harmless the Administrative Agent and the Lenders,
and their respective parents, Subsidiaries, Affiliates, employees, agents,
officers and directors, from and against any 

 

61

 

claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the presence of Hazardous Materials,
or the violation of, noncompliance with or liability under any Environmental
Laws applicable to the operations of the Borrower or any such Subsidiary, or
any orders, requirements or demands of Governmental Authorities related
thereto, including, without limitation, reasonable attorney’s and consultant’s
fees, investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing directly
result from the gross negligence or willful misconduct of the party seeking
indemnification therefor.

 

Compliance with ERISA.  In addition to and without limiting the
generality of Section 7.08, (a) except where the failure to so
comply could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, (i) comply with all material applicable
provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans, (ii) not take any action
or fail to take action the result of which could be a liability to the PBGC or
to a Multiemployer Plan, (iii) not participate in any prohibited transaction
that could result in any civil penalty under ERISA or tax under the Code and
(iv) operate each Employee Benefit Plan in such a manner that will not incur
any tax liability under Section 4980B of the Code or any liability to any
qualified beneficiary as defined in Section 4980B of the Code and (b) furnish
to the Administrative Agent upon the Administrative Agent’s request such
additional information about any Employee Benefit Plan as may be reasonably
requested by the Administrative Agent.

 

Compliance With Agreements.  Comply in all respects with each term,
condition and provision of all leases, agreements and other instruments entered
into in the conduct of its business including, without limitation, any Material
Contract; provided, that the Borrower or any such Subsidiary may contest any
such lease, agreement or other instrument in good faith through applicable
proceedings so long as adequate reserves are maintained in accordance with
GAAP.

 

Books and Records.  (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Borrower or such Subsidiary, as the
case may be; and (b) maintain such books of record and account in material conformity
with all applicable requirements of any Governmental Authority having
regulatory jurisdiction over the Borrower or such Subsidiary, as the case may
be.

 

Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the reasonable expense of the Borrower and at such
reasonable times during normal business hours upon reasonable advance notice to
the Borrower; provided, that so long as no Default or Event of Default
has occurred and is continuing, the Borrower shall not be required to pay for
more than one (1) visit per calendar year; provided, further,
that when an Event of Default exists the Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may do any
of the foregoing at the expense of the Borrower at any time and as often as the
Administrative Agent or any such Lender may reasonably desire during normal
business hours and without advance notice.

 

Use of Proceeds.  Use the proceeds of the Committed Loans,
Swing Line Loans and Letters of Credit for the benefit of the Borrower or any
Guarantor, (i) for general corporate purposes of the 

 

62

 

Borrower
and the Guarantors, including, without limitation, working capital, capital
expenditures in the ordinary course of business, and other lawful corporate
purposes, (ii) to repay any existing Indebtedness under the Holdings Credit
Agreement, (iii) to pay fees and expenses related to the Loans, (iv) to finance
the construction costs of Restaurants owned by the Borrower or such Guarantor,
and (v) for the other purposes described herein, and not in contravention of
any Law or of any Loan Document.

 

Additional Subsidiaries.  Notify the Administrative Agent at the time that (a) any Person becomes
a direct or indirect wholly-owned Subsidiary of the Borrower, and (b) such
Person creates, acquires or engages in any business operations or owns assets
with a fair market value in excess of $50,000, and promptly thereafter (and in
any event within thirty (30) days) cause such Person to (a) become a Guarantor
by executing and delivering to the Administrative Agent a counterpart of the
Guaranty or such other document as the Administrative Agent shall deem appropriate
for such purpose, (b) deliver to the Administrative Agent a duly executed
supplement to each Security Document and comply with the terms of each Security
Document, (c) deliver to the Administrative Agent documents of the types
referred to in clauses (iii), (v) and (vi) of Section 4.01(a) and
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clauses (a) and (b)) and (d) deliver to the
Administrative Agent such other documents and closing certificates as may be
reasonably requested by the Administrative Agent, all in form, content and
scope reasonably satisfactory to the Administrative Agent.

 

Required
Joint Venture Distributions.  Make Required Joint Venture Distributions
within forty-five (45) days after the end of each calendar month.

 

Holdings Roll-Up.  On
or prior to December 31, 2005, the Borrower shall purchase, or shall cause
Holdings to purchase, for an amount not to exceed $35,000,000, from the
equityholders of Holdings, one hundred percent 100% of the Preferred Holdings
Shares (such redemption, the “Preferred Redemption”); provided,
that (a) upon completion of the Preferred Redemption, the Borrower shall
directly own one hundred percent 100% of the Equity Interest of Holdings (b)
one hundred percent (100%) of the aggregate amount paid in connection with the
Preferred Redemption shall be paid solely from the proceeds of the Borrower
IPO, and (c) upon completion of the Holdings Roll-Up, Texas Roadhouse Property
Holdings LLC, a Kentucky limited liability company, shall be merged into
Holdings, with Holdings being the surviving Person (collectively, the “Holdings
Roll-Up”).

 

Further Assurances.  Make, execute and deliver all such additional
and further acts, things, deeds and instruments as the Administrative Agent or
the Required Lenders (through the Administrative Agent) may reasonably require
to document and consummate the transactions contemplated hereby and to vest completely
in and insure the Administrative Agent and the Lenders their respective rights
under this Agreement, the Notes, the Letters of Credit and the other Loan
Documents.

 

NEGATIVE COVENANTS

 

So
long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall not, nor shall it permit
any Subsidiary to, directly or indirectly:

 

63

 

Liens.  Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than the following:

 

Liens pursuant to any Loan
Document;

 

Liens existing on the date
hereof and listed on Schedule 7.01 and any renewals or extensions
thereof, provided that the property covered thereby is not increased and
any renewal or extension of the obligations secured or benefited thereby is
permitted by Section 7.03(b);

 

Liens for taxes not yet due
or which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person in accordance with GAAP;

 

carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s or other like Liens arising in the
ordinary course of business which are not overdue for a period of more than 30
days or which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person;

 

pledges or deposits in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance and other social security legislation, other than any
Lien imposed by ERISA;

 

deposits to secure the performance of bids, trade
contracts and leases (other than Indebtedness), statutory obligations, surety
bonds (other than bonds related to judgments or litigation), performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;

 

easements, rights-of-way,
restrictions and other similar encumbrances affecting real property which do
not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of
the applicable Person;

 

Liens securing judgments for
the payment of money not constituting an Event of Default under Section 8.01(h)
or securing appeal or other surety bonds related to such judgments;

 

Liens securing Indebtedness
permitted under Section 7.03(e); provided that (i) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed
the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;

 

Liens securing Indebtedness
permitted under Section 7.03(h); provided that such Liens do
not at any time encumber any property other than the property owned by the
Joint Venture Subsidiary obligated with respect to such Indebtedness; and

 

Liens arising solely by
virtue of any contractual or statutory or common law provisions relating to
banker’s liens, rights to set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a creditor depository institution
provided that (i) such deposit account is not a dedicated cash collateral
account and is not subject to restrictions against access by the Loan Party or
any Subsidiary in excess of those set forth by regulations promulgated by the
Board of Governors of the Federal Reserve System, (ii) such deposit account is
not intended by 

 

64

 

the Loan Party or such Subsidiary to provide
collateral to the depositary institution and (iii) such deposit account is
subject to a control agreement pursuant to the terms of the Security Documents.

 

Investments.  Make any Investments, except:

 

Investments held by the
Borrower or such Subsidiary in the form of cash equivalents or short-term
marketable securities;

 

advances to officers, directors and employees of the
Borrower and Subsidiaries in an aggregate amount not to exceed $500,000 at any
time outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;

 

Investments of the Borrower
in any wholly-owned Subsidiary and Investments of any Subsidiary in the
Borrower;

 

Investments consisting of
extensions of credit in the nature of accounts receivable or notes receivable
arising from the grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in
order to prevent or limit loss;

 

Guarantees permitted by Section 7.03;

 

intercompany loans made by the Borrower to Guarantors,
among Guarantors or to the Borrower from its Subsidiaries;

 

Investments in the form of
acquisitions of (i) all or substantially all of the business or a line of
business (whether by the acquisition of capital stock, assets or any
combination thereof) of any other Person, or (ii) all or any portion of the
equity ownership interests of a Joint Venture Subsidiary not owned by the
Borrower or any Subsidiary thereof (any of the acquisition described in the
foregoing clauses (i) and (ii), a “Permitted Acquisition”); provided
that (1) the entity to be acquired (or with respect to which such acquisition
is made) is a going concern, (2) the entity to be acquired shall engage in a
business or the assets to be acquired shall be used in a business described in Section 7.08,
(3) the Borrower shall have delivered to the Administrative Agent prior to the
closing date of the acquisition a description of the acquisition, (4) the
Borrower shall have certified on or before the closing date of the acquisition,
in writing and in a form acceptable to the Administrative Agent and the
Lenders, that the acquisition has been approved (if applicable) by the board of
directors or equivalent governing body of the entity to be acquired, (5) no
Default or Event of Default shall have occurred and be continuing both before
and after giving effect to the acquisition, (6) the Borrower shall have
complied with Section 6.15, (7) the Borrower shall have delivered
to the Administrative Agent a Compliance Certificate dated as of the closing
date of the acquisition demonstrating, in form and substance reasonably
satisfactory thereto, the pro  forma compliance, immediately
before and after the closing date of the acquisition, with each covenant
contained in Section 7.15, (8) the entity to be acquired is (A) an
existing franchisee of Texas Roadhouse Development Corp. or the Borrower, or
(B) an existing Joint Venture Subsidiary (or with respect to which such
acquisition is made), (9) the Borrower shall have complied with the
requirements of Section 5.02, and (10) the Borrower shall have
obtained the prior written consent of the Administrative Agent and the

 

65

 

Required Lenders prior to
the consummation of such acquisition if the aggregate purchase price of all
acquisitions (including, without limitation, all cash payments and other
obligations assumed or earn out payments) consummated during the term of this Agreement
(including, without limitation, such acquisition) exceeds $25,000,000;

 

Investments in connection
with the financing of equipment permitted under Section 7.03;

 

Investments constituting
Capital Expenditures permitted under this Agreement;

 

Investments (i) existing on
the date hereof and listed on Schedule 7.02, or (ii) existing on
the date hereof in Subsidiaries existing on the date hereof; and

 

Investments of the Borrower
in any Joint Venture Subsidiary formed after the Closing Date; provided,
however, that the aggregate amount of all such Investments during the
term hereof shall not exceed $25,000,000 in the aggregate; provided, further,
that the Borrower may not form more than (i) three (3) Joint Venture
Subsidiaries in any Fiscal Year or (ii) eight (8) Joint Venture Subsidiaries
during the term hereof, in each case that are engaging in any business
operations or own assets with a fair market value in excess of $50,000.

 

Indebtedness.   Create, incur, assume or suffer to exist any
Indebtedness, except:

 

Indebtedness under the Loan
Documents;

 

Indebtedness outstanding on
the date hereof and listed on Schedule 7.03 and any refinancings,
refundings, renewals or extensions thereof; provided that the amount of
such Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such refinancing and by an amount equal to any existing
commitments unutilized thereunder;

 

Indebtedness of the Borrower
and its Subsidiaries in the form of intercompany loans permitted in Section 7.02(f);

 

obligations (contingent or
otherwise) of the Borrower or any Subsidiary existing or arising under any Swap
Contract, provided that (i) such obligations are (or were) entered into
by such Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets,
or property held or reasonably anticipated by such Person, or changes in the
value of securities issued by such Person, and not for purposes of speculation
or taking a “market view;” and (ii) such Swap Contract does not contain any
provision exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party;

 

Indebtedness in respect of
capital leases, and purchase money obligations for fixed or capital assets
within the limitations set forth in Section 7.01(i); provided,
however, that the aggregate amount of all such Indebtedness at any one
time outstanding shall not exceed $3,000,000;

 

unsecured Indebtedness in an aggregate principal
amount not to exceed $500,000 at any time outstanding; provided that the
Borrower shall have complied with the requirements of Section 2.05(c);

 

66

 

Indebtedness of the Borrower
and its Subsidiaries under performance bonds, surety bonds, statutory
obligations or appeal bonds or with respect to workers’ compensation claims or
other bonds permitted under Section 7.01(e) or Section 7.01(f);

 

Indebtedness of any Joint
Venture Subsidiary formed after the date hereof pursuant to Section 7.02(k);
provided, however, that (i) such Indebtedness shall not exceed
$20,000,000 in the aggregate during the term hereof, (ii) the terms of such
indebtedness comply with Section 7.11, (iii) such Indebtedness
shall not be secured by Liens on any assets of the Borrower or any other
Subsidiary thereof, and (iv) neither the Borrower nor any other Subsidiary
thereof shall be directly liable for or provide any other credit support for
any such Indebtedness except for Guarantees expressly permitted pursuant to Section 7.03(i);
and

 

Guarantees by (i) any Loan
Party in respect of Indebtedness otherwise permitted under Section 7.03(a)
through Section 7.03(g), and (ii) the Borrower or any other
Subsidiary of Indebtedness permitted pursuant to Section 7.03(h); provided
that the aggregate amount of all such guarantees permitted by clause (ii) of
this Section 7.03(i) shall not exceed $7,500,000 in the aggregate
during the term hereof.

 

Indebtedness of the Borrower
or any Subsidiary thereof arising in connection with cash management or similar
treasury or custodial arrangements entered into in the ordinary course of
business.

 

Fundamental Changes.  Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:

 

any Subsidiary may merge
with (i) the Borrower, provided that the Borrower shall be the
continuing or surviving Person or (ii) any one or more other Subsidiaries, provided
that (x) when any Guarantor is merging with another Subsidiary, such Guarantor
shall be the continuing or surviving Person and (y) when any wholly-owned
Subsidiary is merging with another Subsidiary, such wholly-owned Subsidiary
shall be the continuing or surviving Person;

 

any Subsidiary may Dispose
of all or substantially all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or to another Subsidiary; provided that if
the transferor in such a transaction is (x) a Guarantor, then the transferee
must either be the Borrower or a Guarantor which has satisfied all relevant
requirements of Section 6.15 and (y) a wholly-owned Subsidiary,
then the transferee must either be the Borrower or a wholly-owned Subsidiary
which has satisfied all relevant requirements of Section 6.15;

 

any Guarantor may merge with
any other Person in connection with any Permitted Acquisition, provided
that the Guarantor shall be the continuing or surviving Person or the survivor
complies with all relevant requirements of Section 6.15 and shall
remain a Guarantor; and

 

(d)                        in
connection with the Holdings Roll-Up.

 

Dispositions.  Make any Disposition or enter into any
agreement to make any Disposition, except:

 

67

 

Dispositions of obsolete or
worn out property, whether now owned or hereafter acquired, in the ordinary
course of business;

 

Dispositions of inventory in
the ordinary course of business;

 

Dispositions of equipment or
real property to the extent that (i) such property is exchanged for credit
against the purchase price of similar replacement property or (ii) the proceeds
of such Disposition are reasonably promptly applied to the purchase price of
such replacement property;

 

Dispositions of property by
the Borrower or any Subsidiary to the Borrower or to a wholly-owned Subsidiary
which has satisfied any relevant requirements of Section 6.15; provided
that if the transferor of such property is a Guarantor, the transferee thereof
must either be the Borrower or a Guarantor;

 

Dispositions permitted by Section 7.04;

 

non-exclusive licenses of IP Rights by IP Holdco in the
ordinary course of business and substantially consistent with past practice for
terms not exceeding five years;

 

the lease or license of real or personal
property by the Borrower and its Subsidiaries in the ordinary course of
business;

 

Dispositions by the Borrower
and its Subsidiaries consisting of leases and subleases of real property solely
to the extent that such real property is not necessary for the normal conduct
of operations of the Borrower and its Subsidiaries;

 

other Dispositions of
property by the Borrower and its Subsidiaries in the ordinary course of
business or as otherwise permitted by the Required Lenders; provided
that the Net Cash Proceeds from each such Disposition shall be applied to the
mandatory prepayment of the Loans in accordance with Section 2.05(c);

 

provided, however, that any Disposition
pursuant to clauses (a) through (i) shall be for fair market value.

 

Restricted Payments.  Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that as long as no Default or Event of Default is continuing or would
result therefrom:

 

the Borrower or any
Subsidiary may make Restricted Payments (including, without limitation,
Required Joint Venture Distributions) to the Borrower and to wholly-owned
Subsidiaries (and, in the case of a Restricted Payment by a non-wholly-owned
Subsidiary, to the Borrower and any Subsidiary and to each other owner of
capital stock or other equity interests of such Subsidiary on a pro rata basis
based on their relative ownership interests);

 

the Borrower and each Subsidiary may declare and
make dividend payments or other distributions payable solely in the common
stock or other common equity interests of such Person;

 

the Borrower and each Subsidiary may purchase,
redeem or otherwise acquire shares of its common stock or other common equity
interests or warrants or options to acquire any such 

 

68

 

shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other
common equity interests;

 

so long as Holdings remains
a limited liability company, Holdings may pay cash distributions (such
distributions, “Tax Distributions”) on a quarterly or annual basis, as
applicable, in any Fiscal Year to its members in an aggregate amount in any
Fiscal Year equal to the income tax payable by such members for the immediately
preceding Fiscal Year as reasonably determined by Holdings to be attributable
solely to the income of Holdings for the Fiscal Year to which the Tax
Distributions relate;

 

(e)           the Borrower may make the Preferred
Redemption in connection with the Holdings Roll-Up, to the extent expressly
permitted by Section 6.17 hereunder; and

 

(f)            the
Borrower may repurchase, redeem, or otherwise acquire or retire for value any
shares of its common stock; provided that:

 

(i)
any such repurchase shall be either (a) pursuant to, and in accordance with,
the terms of a common stock buyback program approved by the Board of Directors
of the Borrower (a copy of which shall be delivered to the Administrative
Agent), or (b) the repurchase, redemption or other acquisition or retirement
for value of any shares of common stock of the Borrower held by any current or
former employees of, or current of former members of, the management of the
Borrower pursuant to any management equity subscription agreement, employment
agreement or stock option agreement in effect as of the Closing Date; and

 

(ii)
prior to making any such repurchase, the Borrower
shall demonstrate, to the reasonable satisfaction of the Administrative Agent, pro
forma compliance (after giving effect to the proposed repurchase) with Section 7.15(b)
of this Agreement.

 

Limitations
on Exchange and Issuance of Capital Stock.  Issue, sell or otherwise dispose of any class or series of capital
stock that, by its terms or by the terms of any security into which it is
convertible or exchangeable, is, or upon the happening of an event or passage
of time would be, (a) convertible or exchangeable into Indebtedness or (b)
required to be redeemed or repurchased, including at the option of the holder,
in whole or in part, or has, or upon the happening of an event or passage of
time would have, a redemption or similar payment due.

 

Change
in Nature of Business.  Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business substantially related
or incidental thereto.

 

Accounting
Changes; Organizational Documents.  (a) Change its Fiscal Year end, or make any change in its accounting treatment
and reporting practices except as required by GAAP or (b) amend, modify or
change its Organizational Documents in any manner adverse in any respect to the
rights or interests of the Lenders.

 

Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of the
Borrower, whether or not in the ordinary course of business, other than on fair
and reasonable terms substantially as favorable to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the
time in a comparable arm’s length transaction with a Person other than an
Affiliate, provided that the foregoing restriction shall not apply to
transactions between or among the Borrower and any of its wholly-owned
Subsidiaries or between and among any wholly-owned Subsidiaries.

 

69

 

Burdensome Agreements.  Enter into any Contractual Obligation (other than this Agreement or any
other Loan Document) that (a) limits the ability (i) of any Subsidiary to make
Restricted Payments to the Borrower or any Guarantor or to otherwise transfer
property to the Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee
the Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary to
create, incur, assume or suffer to exist Liens on property of such Person; provided,
however, that this clause (iii) shall not prohibit any negative pledge
incurred or provided in favor of any holder of Indebtedness permitted under Section 7.03(e)
solely to the extent any such negative pledge relates to the property financed
by or the subject of such Indebtedness; (b) contains covenants more restrictive
than the provisions of Articles VI and VII; or (c) requires the grant of a Lien
to secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person.

 

Use
of Proceeds.  Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the FRB) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such
purpose.

 

Impairment
of Security Interests.  Take or omit to take any action, which might
or would have the result of materially impairing the security interests in
favor of the Administrative Agent with respect to the Collateral or grant to
any Person (other than the Administrative Agent for the benefit of itself and
the Lenders pursuant to the Security Documents) any interest whatsoever in the
Collateral, except for Liens permitted under Section 7.01 and
Dispositions permitted under Section 7.05.

 

Restrictions
on Conduct of IP Holdco.  IP Holdco shall not (a) be permitted to have
any Indebtedness, Liens, material liabilities or material assets (other than IP
Rights), including, without limitation, a restriction on (i) the conduct of IP
Holdco’s business to holding title of all the intellectual property used in the
business and operations of the Borrower and its Subsidiaries, which such
limitations and restrictions shall be reflected in the organizational documents
of IP Holdco if requested by the Administrative Agent, in its sole discretion,
and (ii) dispose of, assign, or transfer any of its intellectual property to a
third-party during the term of this Agreement (other than non-exclusive
licenses to third parties in the ordinary course of business), (b) amend,
modify or change its Organizational Documents in any manner adverse in any
respect to the rights or interests of the Lenders or (c) terminate the
License Agreement without the consent of all of the Lenders, as acknowledged by
the Administrative Agent, unless all obligations hereunder have been repaid in
full and all Commitments hereunder have been terminated.

 

Financial Covenants.

 

Consolidated
Tangible Net Worth. 
Permit Consolidated Tangible Net Worth at any time to be less than the
sum of (i) an amount equal to eighty five percent (85%) of the sum of (A)
Consolidated Tangible Net Worth as of June 29, 2004, plus (B) the
net equity proceeds received by the Borrower in connection with the Borrower
IPO, plus (C) fifty percent (50%)of the Consolidated Net Income earned
from June 30, 2004 to September 28, 2004, minus (D) the amount
to be paid by the Borrower and Holdings in connection with the Preferred
Redemption, minus (E) in connection with the Borrower IPO, any increase
in goodwill of the Borrower and its Subsidiaries determined in accordance with
GAAP, plus (ii) an amount equal to fifty percent (50%) of the
Consolidated Net Income earned in each full fiscal quarter ending after September 28,
2004 (with no deduction for a net loss in any such fiscal quarter) plus
(iii) an amount equal to one hundred percent (100%) of the aggregate increases
in Shareholders’ Equity of the Borrower 

 

70

 

and its Subsidiaries after September 28,
2004 by reason of the issuance and sale of capital stock or other equity
interests of the Borrower or any Subsidiary (other than issuances to the
Borrower or a wholly-owned Subsidiary), including upon any conversion of debt
securities of the Borrower into such capital stock or other equity interests; provided,
however, that Consolidated Tangible Net Worth shall be reduced for any
dividends or other distributions (excluding the Preferred Redemption).

 

Consolidated
Fixed Charge Coverage Ratio.  At any time, permit the Consolidated Fixed
Charge Coverage Ratio to be less than 1.50 to 1.00.

 

Consolidated
Leverage Ratio. As of any Fiscal Quarter end during any
period set forth below, permit the Consolidated Leverage Ratio for the four (4)
consecutive Fiscal Quarter period ending on such date
to be greater than 3.00 to 1.00.

 

Capital Expenditures.  Make or become legally obligated to make,
during any period set forth below, any Capital Expenditures in respect of the
purchase or other acquisition of any fixed or Capital Assets (excluding normal
replacements and maintenance which are properly charged to current operations),
except for Capital Expenditures in the ordinary course of business not
exceeding in the aggregate for the Borrower and it Subsidiaries the amounts set
forth below opposite such period:

 

	
  Fiscal Year Time Periods

  	
   

  	
  Maximum

  Amount of

  Capital

  Expenditures

  
	
  December 31, 2003 through December 28,
  2004

  	
   

  	
  $

  	
  55,000,000

  
	
  December 29, 2004 through December 27,
  2005

  	
   

  	
  $

  	
  70,000,000

  
	
  December 28, 2005 through December 26,
  2006

  	
   

  	
  $

  	
  75,000,000

  
	
  December 27, 2006 through December 25,
  2007

  	
   

  	
  $

  	
  85,000,000

  
	
  December 26, 2007 through December 30,
  2008

  	
   

  	
  $

  	
  95,000,000

  
	
  December 31, 2008 through December 29,
  2009

  	
   

  	
  $

  	
  105,000,000

  

 

Restaurant
Expenditure Limitations. Make any Investments, loans, advances,
purchases, distributions, contributions or any transfers related thereto of
more than $4,000,000 in the aggregate for any and all costs, expenses and fees
associated with the development, acquisition, construction, training,
organizing, opening and any other costs related thereto of any one (1)
particular Restaurant.

 

Consolidated New Unit
Pre-Opening Costs Limitations.  As of any Fiscal Quarter end,
permit the average amount of the Consolidated New Unit Pre-Opening Costs for
the four (4) consecutive Fiscal Quarters ending on such date to exceed $250,000
per New Unit.

 

71

 

EVENTS OF DEFAULT AND REMEDIES

 

Events of Default.  Any of the following shall constitute an
Event of Default:

 

Non-Payment.  The Borrower or any other Loan
Party fails to pay (i) when and as required to be paid herein, any amount of
principal of any Loan or any L/C Obligation, or (ii) within three (3) Business
Days after the same becomes due, any interest on any Loan or on any L/C
Obligation, or any Commitment Fee or other fee due hereunder, or (iii) within
five (5) days after the same becomes due, any other amount payable hereunder or
under any other Loan Document; or

 

Specific
Covenants.  Any
Loan Party fails to perform or observe any term, covenant or agreement
contained in any of Section 6.01, 6.02, 6.03, 6.05,
6.10, 6.11, 6.12, 6.13, 6.15 or 6.16
or Article VII; or

 

Other
Defaults.  Any
Loan Party fails to perform or observe any other covenant or agreement (not
specified in subsection (a) or (b) above) contained in any Loan Document
on its part to be performed or observed and such failure continues for thirty
(30) days; or

 

Representations
and Warranties.  Any
representation, warranty, certification or statement of fact made or deemed
made by or on behalf of any Loan Party herein, in any other Loan Document, or
in any document delivered in connection herewith or therewith shall be
incorrect or misleading in any material respect when made or deemed made; or

 

Cross-Default.

 

(i)            Any Loan Party (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts)
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than the Threshold Amount, or (B) fails
to observe or perform any other agreement or condition relating to any such
Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or
a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or

 

(ii)           there occurs under any Swap Contract
an Early Termination Date (as defined in such Swap Contract) resulting from (A)
any event of default under such Swap Contract as to which the Borrower or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrower or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap 

 

72

 

Termination
Value owed by the Borrower or such Subsidiary as a result thereof is greater
than the Threshold Amount; or

 

(iii)          The Borrower or any of its
Subsidiaries shall default in the payment when due, or in the performance or
observance, of any material obligation or condition of any Material Contract
unless, but only as long as, the existence of any such default is being
contested by the Borrower or any such Subsidiary in good faith by appropriate
proceedings and adequate reserves in respect thereof have been established on
the books of the Borrower or such Subsidiary to the extent required by GAAP; or

 

Insolvency Proceedings, Etc.  Any
Loan Party or any of its Subsidiaries institutes or consents to the institution
of any proceeding under any Debtor Relief Law, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer for it or for all or any material part of its property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for sixty (60) calendar days; or
any proceeding under any Debtor Relief Law relating to any such Person or to
all or any material part of its property is instituted without the consent of
such Person and continues undismissed or unstayed for sixty (60) calendar days,
or an order for relief is entered in any such proceeding; or

 

Inability
to Pay Debts; Attachment.  (i)
The Borrower or any Subsidiary becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due, or (ii) any
writ or warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within thirty (30) days after its
issue or levy; or

 

Judgments.  There is entered against the
Borrower or any Subsidiary (i) a final judgment or order for the payment of
money in an aggregate amount exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance as to which the insurer has not
disputed coverage), or (ii) any one or more non-monetary final judgments that
have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B)
there is a period of thirty (30) consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is
not in effect; or

 

Environmental.  The Borrower or any of its
Subsidiaries shall be subject to Environmental Liability and such liability
would be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect.

 

ERISA.  (i) An ERISA Event occurs with
respect to a Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of the Borrower under
Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in
an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or
any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of the Threshold Amount; or

 

73

 

Invalidity
of Loan Documents.  Any
Loan Document, at any time after its execution and delivery and for any reason
other than as expressly permitted hereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any Loan
Document; or any Loan Party denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or rescind
any Loan Document; or

 

Change
of Control.  There
occurs any Change of Control with respect to the Borrower.

 

Remedies Upon Event of Default.  If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

 

declare the commitment of each Lender to make Loans
and any obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;

 

declare the unpaid principal
amount of all outstanding Loans, all interest accrued and unpaid thereon, and
all other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower;

 

require that the Borrower Cash Collateralize the L/C
Obligations (in an amount equal to the then Outstanding Amount thereof); and

 

exercise on behalf of itself and the Lenders all
rights and remedies available to it and the Lenders under the Loan Documents or
applicable Law;

 

provided, however, that upon the occurrence of
an actual or deemed entry of an order for relief with respect to the Borrower
under the Bankruptcy Code of the United States, the obligation of each Lender
to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions shall automatically terminate, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of the Borrower to
Cash Collateralize the L/C Obligations as aforesaid shall automatically become
effective, in each case without further act of the Administrative Agent or any
Lender.

 

Application of Funds.  After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become
immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to Section 8.02),
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 reasonable fees, charges and disbursements of counsel to the
Administrative Agent and amounts payable under Article III) payable
to the Administrative Agent in its capacity as such;

 

74

 

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 L/C Issuer (including
fees, charges and disbursements of counsel to the respective Lenders and the
L/C Issuer and amounts payable under Article III), 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, L/C
Borrowings and other Obligations, ratably among the Lenders and the L/C Issuer
in proportion to the respective amounts described in this clause Third
payable to them;

 

Fourth, to payment of that portion of the
Obligations constituting (a) unpaid principal of the Loans and L/C Borrowings,
(b) all payments and other obligations owing by the Borrower under any Swap
Contracts, and (c) cash management or similar treasury or custodial
arrangements, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Fourth held by them;

 

Fifth, to the Administrative Agent for the account
of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised
of the aggregate undrawn amount of Letters of Credit; 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.

 

Subject
to Section 2.03(c), amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth
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.

 

ADMINISTRATIVE AGENT

 

Appointment and Authority.

 

Each
of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America
to act on its behalf as the Administrative Agent hereunder and under the other
Loan Documents and authorizes the Administrative Agent to take such actions on
its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such actions and powers as
are reasonably incidental thereto.  The
provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and the Borrower shall
not have rights as a third party
beneficiary of any of such provisions.

 

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

 

Exculpatory Provisions.  The Syndication Agent and the
Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents.  

 

75

 

Without
limiting the generality of the foregoing, the Syndication Agent and the
Administrative Agent:

 

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

 

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

 

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

 

The
Syndication Agent and the Administrative Agent shall not be liable for any
action taken or not taken by it (i) with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 11.01 and 9.02)
or (ii) in the absence of its own gross negligence or willful misconduct.  The Syndication Agent and the Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given to the Administrative Agent by the
Borrower, a Lender or the L/C Issuer.

 

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

 

Reliance by Administrative Agent.

 

The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed
by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person.  The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon.  In
determining compliance with any condition hereunder to the making of a Loan, or
the issuance of a Letter of Credit, that by its terms must be 

 

76

 

fulfilled
to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may
presume that such condition is satisfactory to such Lender or the L/C Issuer
unless the Administrative Agent shall have received notice to the contrary from
such Lender or the L/C Issuer prior to the making of such Loan or the issuance
of such Letter of Credit.  The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

 

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

 

Resignation
of Administrative Agent.  The Administrative Agent may at any time give
notice of its resignation to the Lenders, the L/C Issuer and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
the Borrower, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the
United States.  If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may on behalf of the Lenders and the L/C Issuer, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided
that if the Administrative Agent shall notify the Borrower and the Lenders that
no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any Collateral held by the Administrative Agent on behalf of the
Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such Collateral until such time as
a successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section).  The fees payable
by the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and
such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

 

77

 

Any
resignation by Bank of America as Administrative Agent pursuant to this Section shall
also constitute its resignation as L/C Issuer and Swing Line Lender.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of
the retiring L/C Issuer and Swing Line Lender, (b) the retiring L/C Issuer and
Swing Line Lender shall be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (c) the successor
L/C Issuer shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other
arrangement satisfactory to the retiring L/C Issuer to effectively assume the
obligations of the retiring L/C Issuer with respect to such Letters of Credit.

 

Non-Reliance
on Administrative Agent and Other Lenders.  Each
Lender and the L/C Issuer acknowledges that it has, independently and without
reliance upon the Syndication Agent and the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Syndication Agent and the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

No Other Duties, Etc. 
Anything herein to the contrary notwithstanding, none of the Co-Lead
Arrangers or “syndicated agent,” “documentation agent” or similar titles listed
on the cover page hereof shall have any powers, duties or responsibilities
under this Agreement or any of the other Loan Documents, except in its
capacity, as applicable, as the Administrative Agent, a Lender or the L/C
Issuer hereunder.

 

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 Loan
Party, the Administrative Agent (irrespective of whether the principal of any
Loan or L/C Obligation shall then be 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 Loans, L/C Obligations and all other 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, the L/C Issuer and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative
Agent and their respective agents and counsel and all other amounts due the
Lenders, the L/C Issuer and the Administrative Agent under Sections 2.03(i)
and (j), 2.09 and 11.04) 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 and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall

 

78

 

consent to the making of such payments directly to
the Lenders and the L/C Issuer, 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 Sections 2.09 and 11.04.

 

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 or the L/C
Issuer 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.

 

Collateral and Guaranty
Matters.  The Lenders and the L/C Issuer irrevocably
authorize the Administrative Agent, at its option and in its discretion,

 

(a)                           to
release any Lien on any property granted to or held by the Administrative Agent
under any Loan Document (i) upon termination of the Aggregate Commitments and
payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit, (ii)
that is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, or (iii) subject to Section 10.01,
if approved, authorized or ratified in writing by the Required Lenders; and

 

(b)                           to release any Guarantor from its obligations under the
Guaranty if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder.

 

Upon
request by the Administrative Agent at any time, the 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 9.10.

 

MISCELLANEOUS

 

Amendments, Etc. 
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Borrower or any other
Loan Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrower or the applicable Loan Party, as the case may
be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such
amendment, waiver or consent shall:

 

(a)           waive any
condition set forth in Section 4.01(a) without the written consent
of each Lender;

 

(b)           extend or
increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 8.02) without the written consent of such
Lender;

 

(c)           postpone any date fixed by this
Agreement or any other Loan Document for any payment (excluding mandatory
prepayments) of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;

 

(d)           reduce the principal of, or the rate
of interest specified herein on, any Loan or L/C Borrowing, or (subject to
clause (iv) of the second proviso to this Section 10.01) any fees
or other amounts payable hereunder or under any other Loan Document without the
written consent of each Lender directly affected thereby; provided, however,
that only the consent of the 

 

79

 

Required
Lenders shall be necessary (i) to amend the definition of “Default Rate” or to
waive any obligation of the Borrower to pay interest or Letter of Credit Fees
at the Default Rate or (ii) to amend 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 L/C Borrowing or to reduce any fee
payable hereunder;

 

(e)           change  Section 2.13
or Section 8.03 in a manner that would alter the pro rata sharing
of payments required thereby without the written consent of each Lender;

 

(f)            change any provision of this Section or
the definition of “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to amend, waive or otherwise
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; or

 

(g)           release any
Guarantor from the Guaranty or all or a material portion of the Collateral or
release any Security Document (other than as specifically permitted or
contemplated in this Agreement or the applicable Security Document) without the
written consent of each Lender;

 

and,
provided  further, that (i) no amendment, waiver or consent shall,
unless in writing and signed by the L/C Issuer in addition to the Lenders
required above, affect the rights or duties of the L/C Issuer under this
Agreement or any Issuer Document relating to any Letter of Credit issued or to
be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Lender in addition to the Lenders required above,
affect the rights or duties of the Swing Line Lender under this Agreement;
(iii) no amendment, waiver or consent shall, unless in writing and signed by
the Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender.

 

Notices; Effectiveness; Electronic Communication.

 

(a)           Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopier as follows, 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 L/C Issuer or the Swing Line
Lender, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 11.02; and

 

(ii)                           if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative
Questionnaire.

 

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

 

80

 

(b)           Electronic Communications.  Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender or the L/C Issuer
pursuant to Article II if such Lender or the L/C Issuer, as
applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.

 

Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient,
such notice or communication shall be deemed to have been sent at the opening
of business on the next business day for the recipient, and (ii) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

 

(c)           Change of Address, Etc.  Each of the Borrower, the Administrative
Agent, the L/C Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the Borrower, the Administrative Agent,
the L/C Issuer and the Swing Line Lender.

 

(d)           Reliance by Administrative Agent,
L/C Issuer and Lenders.  The Administrative Agent, the L/C
Issuer and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Committed Loan Notices and Swing Line Loan Notices)
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
the Administrative Agent, the L/C Issuer, each Lender and the Related Parties
of each of them 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 telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

 

No Waiver; Cumulative
Remedies.  No failure by any Lender, the L/C Issuer or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.

 

Expenses; Indemnity; Damage Waiver.

 

81

 

(a)           Costs and Expenses.  The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan 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
L/C Issuer 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
L/C Issuer (including the fees, charges and disbursements of any counsel for
the Administrative Agent, any Lender or the L/C Issuer), in connection with the
enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan 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 Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the L/C
Issuer, 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), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan 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 L/C
Issuer 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 currently or formerly owned or
operated by the Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to the Borrower 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
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding), whether brought by
a third party or by the Borrower or any other Loan 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) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower or any other Loan Party
against an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if the Borrower or such Loan Party
has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.

 

82

 

(c)           Reimbursement by Lenders.  To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under subsection (a)
or (b) of this Section to be paid by it to the Administrative Agent
(or any sub-agent thereof), the L/C Issuer 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 L/C Issuer or such Related Party, as the case may be,
such Lender’s Applicable 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
L/C Issuer 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 L/C
Issuer in connection with such capacity. 
The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 2.12(d).

 

(d)           Waiver of Consequential Damages,
Etc.  To the fullest extent permitted
by applicable law, the Borrower shall not assert, and 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 Agreement, any
other Loan 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 Agreement or the
other Loan 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.

 

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

 

Payments Set Aside.  To
the extent that any payment by or on behalf of the Borrower is made to the
Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent,
the L/C Issuer or any Lender exercises its right of setoff, and such payment or
the proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Administrative Agent, the L/C
Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief Law
or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to
the Administrative Agent upon demand its applicable share (without duplication)
of any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  The obligations of the Lenders
and the L/C Issuer under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.

 

83

 

Successors and Assigns.

 

(a)           Successors and Assigns Generally.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower
may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
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 Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and,
to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

(b)           Assignments by Lenders.  Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this subsection (b), participations in L/C
Obligations and in Swing Line 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, in any case, treating assignments to
two or more Approved Funds under common management as one assignment for
purposes of the minimum amounts;  unless each of the Administrative
Agent and, so long as no 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 Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not apply to rights in
respect of Swing Line Loans;

 

(iii)          any assignment of a Commitment must be
approved by the Administrative Agent, the L/C Issuer and the Swing Line 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),
such consent not to be unreasonably withheld or delayed; and

 

(iv)
(1) 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; provided, however, that such
processing and recordation fee shall be waived by 

 

84

 

the Administrative Agent in connection with any assignment to an Approved
Fund, and (2) the Eligible Assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative 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
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest assigned
by such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, and 11.04
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 Note to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

 

(c)           Register.  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 L/C 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 Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by each of the Borrower
and the L/C Issuer at any reasonable time and from time to time upon reasonable
prior notice.  In addition, at any time
that a request for a consent for a material or
substantive change to the Loan 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)           Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or
any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans
(including such Lender’s participations in L/C Obligations and/or Swing Line
Loans) owing to it); provided that (i) such Lender’s obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent, the Lenders
and the L/C Issuer shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under this Agreement.

 

Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the 

 

85

 

Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 10.01 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 3.01, 3.04 and 3.05 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 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13 as though it
were a Lender.

 

(e)           Limitations upon Participant
Rights.  A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 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 3.01 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 3.01(e)
as though it were a Lender.

 

(f)            Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its 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)           Electronic Execution of
Assignments.  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)           Resignation as L/C Issuer or Swing
Line Lender after Assignment. 
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 (30) days’ notice to the Borrower
and the Lenders, resign as L/C Issuer and/or (ii) upon thirty (30) days’ notice
to the Borrower, resign as Swing Line Lender. 
In the event of any such resignation as L/C Issuer or Swing Line Lender,
the Borrower shall be entitled to appoint from among the Lenders a successor
L/C Issuer or Swing Line Lender hereunder; provided, however,
that no failure by the Borrower to appoint any such successor shall affect the
resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case
may be.  If Bank of America resigns as
L/C Issuer, it shall retain all the rights and obligations of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Committed
Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  If Bank of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders 

 

86

 

to make Base Rate Committed Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

 

Treatment
of Certain Information; Confidentiality.  Each
of the Administrative Agent, the Lenders and the L/C Issuer 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
Affiliates’ 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 hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan 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 Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating
to the Borrower and its obligations, (g) with the consent of the Borrower or
(h) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower.

 

For
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, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by 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 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.

 

Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the L/C Issuer or any such Affiliate to or for the
credit or the account of the Borrower against any and all of the obligations of
the Borrower now or hereafter existing under this Agreement or any other Loan
Document to such Lender or the L/C Issuer, irrespective of whether or not such
Lender or the L/C Issuer shall have made any demand under this Agreement or any
other Loan Document and although such obligations of the Borrower may be
contingent or unmatured or are owed to a branch or office of such Lender or the
L/C Issuer different from the branch or office holding such deposit or
obligated on such indebtedness.  The
rights of each Lender, the L/C Issuer and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the L/C Issuer or their respective
Affiliates 

 

87

 

may have. 
Each Lender and the L/C Issuer agrees to notify the Borrower and the
Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

 

Interest Rate Limitation.  Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrower. 
In determining whether the interest contracted for, charged, or received
by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any payment
that is not principal as an expense, fee, or premium rather than interest, (b)
exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.

 

Counterparts;
Integration; Effectiveness.  This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. 
This Agreement and the other Loan Documents constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof.  Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
that, when taken together, bear the signatures of each of the other parties
hereto.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

Survival of Representations and Warranties.  All
representations and warranties made hereunder and in any other Loan 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 at the time of any Credit Extension, 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.

 

Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

Governing Law; Jurisdiction; Etc.

 

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

 

88

 

CAROLINA
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE;  PROVIDED THAT THE ADMINISTRATIVE
AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           SUBMISSION TO JURISDICTION.  THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY
AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NORTH CAROLINA AND OF THE UNITED
STATES FOR THE WESTERN DISTRICT OF SUCH STATE, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN 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
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE
AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(c)           WAIVER OF VENUE.  THE BORROWER AND EACH OTHER LOAN 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
AGREEMENT OR ANY OTHER LOAN 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 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

 

Waiver of Jury Trial.  EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR

 

89

 

ATTORNEY
OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

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.

 

Time of the Essence.  Time is of the essence of the Loan Documents.

 

[Signature Pages Follow]

 

90

 

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

 

 

	
   

  	
  TEXAS
  ROADHOUSE, INC.,

  
	
   

  	
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sheila C.
  Brown

  
	
   

  	
  Name:

  	
  Sheila C. Brown

  
	
   

  	
  Title:

  	
  Corporate
  Secretary and General Counsel

  
					

 

S-1

 

	
   

  	
  BANK
  OF AMERICA, N.A., as

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laura B.
  Schmuck

  
	
   

  	
  Name:

  	
  Laura B. Schmuck

  
	
   

  	
  Title:

  	
  Agency Officer

  
	
   

  	
   

  	
  Assistant Vice
  President

  
					

 

S-2

 

	
   

  	
  BANK
  OF AMERICA, N.A., as
  a Lender, L/C

  Issuer and Swing Line Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryan Hulker

  
	
   

  	
  Name:

  	
  Bryan Hulker

  
	
   

  	
  Title:

  	
  SVP

  
					

 

S-3

 

	
   

  	
  NATIONAL
  CITY BANK, as a
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas P.
  Crockett

  
	
   

  	
  Name:

  	
  Thomas P.
  Crockett

  
	
   

  	
  Title:

  	
  Senior Vice
  President

  
					

 

S-4

 

	
   

  	
  BANK
  ONE, N.A., as a
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Paul T. Costel

  
	
   

  	
  Name:

  	
  Paul T. Costel

  
	
   

  	
  Title:

  	
  First Vice
  President

  
					

 

S-5

 

	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION, as a

  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A. Wombwell

  
	
   

  	
  Name:

  	
  David A. Wombwell

  
	
   

  	
  Title:

  	
  Sr. Vice
  President

  
					

 

S-6

 

	
   

  	
  PNC
  BANK, N.A., as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julie S.
  Springer

  
	
   

  	
  Name:

  	
  Julie S.
  Springer

  
	
   

  	
  Title:

  	
  Assistant Vice
  President

  
					

 

S-7

 

	
   

  	
  FIFTH
  THIRD BANK, KENTUCKY, INC., as a

  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G.
  Whipple

  
	
   

  	
  Name:

  	
  Richard G.
  Whipple

  
	
   

  	
  Title:

  	
  Assistant Vice
  President

  
					

 

S-8

 

	
   

  	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION., as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark S.
  Supple

  
	
   

  	
  Name:

  	
  Mark S. Supple

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

S-9

 

	
   

  	
  OLD
  NATIONAL BANK, as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J.
  Otten

  
	
   

  	
  Name:

  	
  William J. Otten

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

S-10

 

	
   

  	
  ROYAL
  BANK OF CANADA, as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gordon
  MacArthur

  
	
   

  	
  Name:

  	
  Gordon MacArthur

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
					

 

S-11

 

EXHIBIT A

 

FORM OF COMMITTED LOAN NOTICE

 

Date:                    ,         

 

To:                              Bank of America, N.A., as Administrative
Agent

 

Ladies and Gentlemen:

 

Reference is made to that
certain Credit Agreement, dated as of
[             ],
2004 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein
being used herein as therein defined), among Texas Roadhouse, Inc., a Delaware
corporation (the “Borrower”), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and
Swing Line Lender.

 

The undersigned hereby
requests (select one):

 

o  A
Borrowing of Committed Loans

 

o  A
conversion or continuation of Committed Loans

 

1.                                                                                    On                                                                (a
Business Day).

 

2.                                                                                    In the amount of
$                                   .

 

3.                                                                                    Comprised
of                                   .

[Type of Committed Loan requested]

 

4.                                       For Eurodollar Rate Loans:  with an Interest Period of
              
months.

 

The
Borrowing requested herein complies with the proviso to the first sentence of Section 2.01
or Section 2.02 of the Agreement.

 

	
   

  	
  TEXAS ROADHOUSE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

A-1

 

EXHIBIT B

 

FORM OF SWING LINE LOAN NOTICE

 

Date:                    ,         

 

 

To:                              Bank of America, N.A., as Swing Line
Lender

Bank of America, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that
certain Credit Agreement, dated as of 
[             ],
2004 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein
being used herein as therein defined), among Texas Roadhouse, Inc., a Delaware
corporation (the “Borrower”), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and
Swing Line Lender.

 

The undersigned hereby
requests a Swing Line Loan:

 

1.                                                                                    On                          (a
Business Day).

 

2.                                                                                    In the amount of
$             .

 

The Swing Line Borrowing
requested herein complies with the requirements of the provisos to the first
sentence of Section 2.04 of the Agreement.

 

	
   

  	
  TEXAS ROADHOUSE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

B-1

 

EXHIBIT C

 

COMMITTED LOAN NOTE

 

	
  $                  

  	
                  ,
  2004

  

 

FOR VALUE RECEIVED, the
undersigned (the “Borrower”), hereby promises to pay to
                                       
or registered assigns (the “Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the principal amount of each Committed
Loan from time to time made by the Lender to the Borrower under that certain
Credit Agreement, dated as of
             ,
2004 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein
being used herein as therein defined), among the Borrower, the Lenders from
time to time party thereto, and Bank of America, N.A., as Administrative Agent,
L/C Issuer and Swing Line Lender.

 

The Borrower promises to
pay interest on the unpaid principal amount of each Committed Loan from the
date of such Committed Loan until such principal amount is paid in full, at
such interest rates and at such times as provided in the Agreement.  Except as otherwise provided in Section 2.04(f)
of the Agreement with respect to Swing Line Loans, all payments of principal
and interest shall be made to the Administrative Agent for the account of the
Lender in Dollars in immediately available funds at the Administrative Agent’s
Office.  If any amount is not paid in
full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

 

This Note is one of the
Notes referred to in the Agreement, is entitled to the benefits thereof and may
be prepaid in whole or in part subject to the terms and conditions provided
therein.  This Note is also entitled to
the benefits of the Guaranty agreements and is secured by the Collateral.  Upon the occurrence and continuation of one
or more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement.  Committed Loans made by the Lender shall be
evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this
Note and endorse thereon the date, amount and maturity of its Committed Loans
and payments with respect thereto.

 

The Borrower, for itself,
its successors and assigns, hereby waives diligence, presentment, protest and
demand and notice of protest, demand, dishonor and non-payment of this Note.

 

 

THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.

 

	
   

  	
  TEXAS ROADHOUSE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

COMMITTED LOANS AND PAYMENTS WITH
RESPECT THERETO

 

	
  Date

  	
   

  	
  Type of

  Loan Made

  	
   

  	
  Amount of

  Loan Made

  	
   

  	
  End of

  Interest

  Period

  	
   

  	
  Amount of

  Principal or

  Interest

  Paid This

  Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SWING LINE LOAN NOTE

 

	
  $10,000,000.00

  	
               ,
  2004

  

 

 

FOR VALUE RECEIVED, the
undersigned (the “Borrower”), hereby promises to pay to BANK OF AMERICA,
N.A. or registered assigns (the “Swing Line Lender”), in accordance with
the provisions of the Agreement (as hereinafter defined), the principal amount
of each Swing Line Loan from time to time made by the Swing Line Lender to the
Borrower under that certain Credit Agreement, dated as of
             ,
2004 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein
being used herein as therein defined), among the Borrower, the Lenders from
time to time party thereto, and Bank of America, N.A., as Administrative Agent,
L/C Issuer and Swing Line Lender.

 

The Borrower promises to
pay interest on the unpaid principal amount of each Swing Line Loan from the
date of such Swing Line Loan until such principal amount is paid in full, at
such interest rates and at such times as provided in the Agreement.  All payments of principal and interest shall
be made to the Swing Line Lender for the account of the Swing Line Lender in
Dollars in immediately available funds at the Swing Line Lender’s Office.  If any amount is not paid in full when due hereunder,
such unpaid amount shall bear interest, to be paid upon demand, from the due
date thereof until the date of actual payment (and before as well as after
judgment) computed at the per annum rate set forth in the Agreement.

 

This Note is one of the Notes
referred to in the Agreement, is entitled to the benefits thereof and may be
prepaid in whole or in part subject to the terms and conditions provided
therein.  This Note is also entitled to
the benefits of the Guaranty agreements and is secured by the Collateral.  Upon the occurrence and continuation of one
or more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement.  Swing Line Loans made by the Swing Line
Lender shall be evidenced by one or more loan accounts or records maintained by
the Swing Line Lender in the ordinary course of business. The Swing Line Lender
may also attach schedules to this Note and endorse thereon the date, amount and
maturity of its Swing Line Loans and payments with respect thereto.

 

The Borrower, for itself,
its successors and assigns, hereby waives diligence, presentment, protest and
demand and notice of protest, demand, dishonor and non-payment of this Note.

 

 

THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.

 

	
   

  	
  TEXAS ROADHOUSE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

SWING LINE LOANS AND PAYMENTS WITH
RESPECT THERETO

 

	
  Date

  	
   

  	
  Type of

  Loan Made

  	
   

  	
  Amount of

  Loan Made

  	
   

  	
  End of

  Interest

  Period

  	
   

  	
  Amount of

  Principal or

  Interest

  Paid This

  Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT D

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:
             ,

 

To:                              Bank of America, N.A., as Administrative
Agent

 

Ladies and Gentlemen:

 

Reference is made to that
certain Credit Agreement, dated as of October 8, 2004 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the “Credit Agreement;” the terms defined therein being used
herein as therein defined), among Texas Roadhouse, Inc., a Delaware corporation
(the “Borrower”), the Lenders from time to time party thereto, and Bank
of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

 

The undersigned
Responsible Officer hereby certifies as of the date hereof that he/she is the
                                                    of
the Borrower, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Administrative Agent on the behalf of the Borrower, and
that:

 

[Use following paragraph 1 for
fiscal year-end financial
statements]

 

1.                                       Attached hereto as Schedule 1
are the year-end audited financial statements required by Section 6.01(a)
of the Credit Agreement for the fiscal year of the Borrower ended as of the
above date, together with the report and opinion of an independent certified
public accountant required by such section.

 

[Use following paragraph 1 for
fiscal quarter-end financial
statements]

 

1.                                       Attached hereto as Schedule 1
are the unaudited financial statements required by Section 6.01(b)
of the Credit Agreement for the fiscal quarter of the Borrower ended as of the
above date.  Such financial statements
fairly present the financial condition, results of operations and cash flows of
the Borrower and its Subsidiaries in accordance with GAAP as at such date and
for such period, subject only to normal year-end audit adjustments and the
absence of footnotes.

 

2.                                       The undersigned has reviewed and is
familiar with the terms of the Credit Agreement and has made, or has caused to
be made under his/her supervision, a detailed review of the transactions and
condition (financial or otherwise) of the Borrower during the accounting period
covered by the attached financial statements.

 

3.                                       A review of the activities of the
Borrower during such fiscal period has been made under the supervision of the
undersigned with a view to determining whether during such fiscal period the
Borrower performed and observed all its Obligations under the Loan Documents,
and

 

[select one:]

 

[to
the best knowledge of the undersigned during such fiscal period, the Borrower
performed and observed each covenant and condition of the Loan Documents
applicable to it.]

 

—or—

 

[the following covenants or conditions have not been
performed or observed and the following is a list of each such Default and its
nature and status:]

 

4.                                       The representations and warranties of the
Borrower contained in Article V of the Credit Agreement, or which
are contained in any document furnished at any time under or in connection with
the Loan Documents, are true and correct on and as of the date hereof, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Compliance Certificate, the
representations and warranties contained in subsections (a) and (b) of Section 5.05

 

 

of the Credit Agreement
shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 6.01 of the Credit
Agreement, including the statements in connection with which this Compliance
Certificate is delivered.

 

5.                                       The financial covenant analyses and
information set forth on Schedule 2 attached hereto are true and
accurate on and as of the date of this Certificate.

 

IN
WITNESS WHEREOF,
the undersigned has executed this Certificate as
of                                       ,                          .

 

	
   

  	
  TEXAS ROADHOUSE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

For the Fiscal Quarter/Year ended
                                      
(“Statement Date”)

 

SCHEDULE 2

to the Compliance
Certificate

($ in 000’s)

 

	
  I.

  	
   

  	
  Section 7.15(a) – Consolidated
  Tangible Net Worth Covenant.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
   

  	
  Actual Consolidated Tangible Net Worth (excluding
  intercompany Debt to Affiliates) at Statement Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  1.

  	
   

  	
  Shareholders’ Equity of the Borrower and its
  Subsidiaries:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  Intangible Assets of the Borrower and its
  Subsidiaries:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  3.

  	
   

  	
  Consolidated Tangible Net Worth (Line I.A.1 less
  Line I.A.2):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
   

  	
  1.

  	
   

  	
  Consolidated Tangible Net Worth as of June 29,
  2004:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  Net equity proceeds received by the Borrower in
  connection with the Borrower IPO:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  3.

  	
   

  	
  50% of Consolidated Net Income earned from June 30,
  2004 to September 28, 2004:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  4.

  	
   

  	
  Amount to be paid by the Borrower and Holdings in
  connection with the Preferred Redemption:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  5.

  	
   

  	
  In connection with the Borrower IPO, any increase in
  goodwill of the Borrower and its Subsidiaries determined in accordance with
  GAAP:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  6.

  	
   

  	
  Lines (I.B.1 + 2 + 3 – 4 – 5):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  7.

  	
   

  	
  85% of Line I.B.6:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
   

  	
  50% of Consolidated Net Income for each full fiscal
  quarter ending after September 28, 2004 (with no deduction for a net
  loss in any such fiscal quarter):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
   

  	
  Any dividends or other distributions (excluding the
  Preferred Redemption):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E.

  	
   

  	
  100% of the aggregate increases in Shareholders’
  Equity of the Borrower and its Subsidiaries after September 28, 2004 by
  reason of the issuance and sale of capital stock or other equity interests of
  the Borrower or any Subsidiary (other than issuances to the Borrower or a
  wholly-owned Subsidiary), including upon any conversion of debt securities of
  the Borrower into such capital stock or other equity interests:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  F.

  	
   

  	
  Minimum required Consolidated Tangible Net Worth
  (Lines ((I.B.7 + I.C. + I.D. + I.E.):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  G.

  	
   

  	
  Excess (deficient) for covenant compliance (Line
  I.A.3 – I.F.):

  	
   

  	
  $

  	
   

  	
   

  

 

 

	
  II.

  	
   

  	
  Consolidated
  EBITDAR Calculation.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
   

  	
  Consolidated EBITDAR for four consecutive fiscal
  quarters ending on above date (“Subject Period”):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  1.

  	
   

  	
  Consolidated Net Income for Subject Period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  Consolidated Interest Charges for Subject Period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  3.

  	
   

  	
  Provision for income taxes for Subject Period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  4.

  	
   

  	
  Depreciation expenses for Subject Period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  5.

  	
   

  	
  Amortization expenses for Subject Period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  6.

  	
   

  	
  Consolidated EBITDA (Lines II.A .1 + 2 + 3 + 4 + 5):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  7.

  	
   

  	
  Consolidated Rental Expense for Subject Period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  8.

  	
   

  	
  Consolidated EBITDAR (Lines II.A.6 + II.A.7):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  Consolidated Adjusted Funded
  Indebtedness Calculation.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
   

  	
  Consolidated Adjusted Funded Indebtedness:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  1.

  	
   

  	
  Outstanding principle amount of all obligations at
  Statement Date:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  All purchase money Indebtedness:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  3.

  	
   

  	
  All direct obligations under letters of credit,
  bankers acceptances, bank guaranties, and similar instruments:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  4.

  	
   

  	
  All obligations in respect of deferred purchase
  price of property or services:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  5.

  	
   

  	
  Attributable Indebtedness in respect of capital
  leases:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  6.

  	
   

  	
  All obligations of any Person to purchase, redeem,
  retire, defease or otherwise make any payment in respect of any Equity
  Interest in such Person or any other Person, valued, in the case of a
  redeemable preferred interest, at the greater of its voluntary or involuntary
  liquidation preference plus accrued and unpaid dividends:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  7.

  	
   

  	
  All Guarantees with respect to outstanding
  Indebtedness of the types referred to in Lines III.A.1 through III.A.6 above:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  8.

  	
   

  	
  All Indebtedness of the types referred to in Lines
  III.A.1 through III.A.7 above of any partnership or joint venture involving
  the Borrower (other than a joint venture that is itself a corporation or
  limited liability company) which such partnership or joint venture is not a
  direct or indirect Subsidiary of the Borrower, in which the Borrower or a
  Subsidiary is a general partner or joint venturer, unless such Indebtedness
  is expressly made non-recourse to the Borrower or such Subsidiary:

  	
   

  	
  $

  	
   

  	
   

  

 

 

	
   

  	
   

  	
   

  	
   

  	
  9.

  	
   

  	
  An amount equal to the product of eight (8) times
  Consolidated Rental Expense for Subject Period (excluding up to $2,500,000 of
  Consolidated Rental Expense attributable to equipment leases):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  10.

  	
   

  	
  Consolidated Adjusted Funded Indebtedness (Lines
  III.A.1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 + 9):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  Section 7.15(c)
  – Consolidated Leverage Ratio Covenant.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
   

  	
  Consolidated Adjusted Funded Indebtedness at
  Statement Date (Line III.A.10 above):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
   

  	
  Until the consummation of the Preferred Redemption,
  Available Cash in excess of $5,000,000 as of such date:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
   

  	
  Consolidated EBITDAR for Subject Period (Line II.A.8
  above):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
   

  	
  Consolidated New United Pre-Opening Costs for
  Subject Period (up to the maximum amount permitted by Section 7.18
  of the Credit Agreement) deducted from Consolidated Net Income for Subject
  Period):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E.

  	
   

  	
  Consolidated Leverage Ratio ((Line IV.A. – Line
  IV.B.)  ̧ (Line IV.C. + Line IV.D.)):

  	
   

  	
               to
  1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  F.

  	
   

  	
  Permitted Maximum Consolidated Leverage Ratio of
  3.00 to 1.00

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  Section 7.15(b) - Consolidated
  Fixed Charge Coverage Ratio Covenant.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
   

  	
  Consolidated EBITDAR for Subject Period (Line II.A.8
  above):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
   

  	
  Consolidated Fixed Charges for Subject Period:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  1.

  	
   

  	
  Consolidated Interest Charges paid or payable in
  cash for such period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  Amount of scheduled principal payments with respect
  to Indebtedness for such period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  3.

  	
   

  	
  Consolidated Rental Expense for such period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  4.

  	
   

  	
  Dividends and other distributions paid in cash for
  such period (excluding any dividends and distributions to minority owners of
  Joint Venture Subsidiaries):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  5.

  	
   

  	
  Amount (a less b):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  a.

  	
   

  	
  Actual cash dividends and distributions to minority
  owners of Joint Venture Subsidiaries:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  b.

  	
   

  	
  Actual minority ownership expense attributable to
  such minority owners of the Joint Venture Subsidiaries:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  6.

  	
   

  	
  Assumed Capital Expenditures:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
   

  	
   

  	
   

  	
  7.

  	
   

  	
  Amounts paid to repurchase shares of the Borrower’s
  Capital Stock pursuant to Section 7.06(f) of the Credit Agreement:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  8.

  	
   

  	
  Consolidated Fixed Charges (Lines V.B. 1 + 2 + 3 + 4
  + 5 + 6 + 7):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
   

  	
  Consolidated Fixed Charge Coverage Ratio (Line V.A.  ̧ V.B.8):

  	
   

  	
             
  to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
   

  	
  Permitted Minimum Consolidated Fixed Charge Coverage
  Ratio of 1.50 to 1.00.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  Section 7.16 — Capital
  Expenditures.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
   

  	
  Capital Expenditures made during Fiscal Year to
  date:

  	
   

  	
  $

  	
   

  	
   

  

 

	
  Fiscal Year Time Periods

  	
   

  	
  Maximum

  Amount of Capital

  Expenditures

  	
   

  
	
  December 31, 2003
  through December 28, 2004

  	
   

  	
  $

  	
  55,000,000

  	
   

  
	
  December 29, 2004
  through December 27, 2005

  	
   

  	
  $

  	
  70,000,000

  	
   

  
	
  December 28, 2005
  through December 26, 2006

  	
   

  	
  $

  	
  75,000,000

  	
   

  
	
  December 27, 2006
  through December 25, 2006

  	
   

  	
  $

  	
  85,000,000

  	
   

  
	
  December 26, 2007
  through December 30, 2008

  	
   

  	
  $

  	
  95,000,000

  	
   

  
	
  December 31, 2008
  through December 29, 2009

  	
   

  	
  $

  	
  105,000,000

  	
   

  

 

 

EXHIBIT E

 

ASSIGNMENT AND ASSUMPTION

 

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

 

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

 

1.                                       Assignor:

 

2.                                       Assignee:                                                                     
[and is an

Affiliate/Approved Fund of [identify
Lender]]

 

3.                                       Borrower: 
Texas Roadhouse, Inc., a Delaware corporation

 

4.                                       Administrative Agent:  Bank of America, N.A.

 

5.                                       Credit Agreement:  The Credit Agreement, dated as of
[                 ],
2004, among  Texas Roadhouse, Inc., the
Lenders parties thereto, and Bank of America, N.A., as Administrative Agent

 

E-1

 

6.                                       Assigned Interest:

 

	
  Facility Assigned

  	
   

  	
  Aggregate

  Amount of

  Commitment/Loans

  for all Lenders

  	
   

  	
  Amount of

  Commitment/Loans

  Assigned

  	
   

  	
  Percentage

  Assigned of

  Commitment/Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  

 

[7.                                   Trade
Date:                                    ]

 

Effective Date:
                                      ,
20       [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

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

 

	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME OF
  ASSIGNOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME OF
  ASSIGNEE]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Consented to and
  Accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BANK OF AMERICA,
  N.A., as

  	
   

  	
   

  
	
  Administrative
  Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TEXAS ROADHOUSE, INC., as Borrower

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

E-2

 

ANNEX 1 TO
ASSIGNMENT AND ASSUMPTION

 

Credit Agreement, dated
[                     ],
2004, among Texas Roadhouse, Inc., a Delaware corporation, the lenders, and
Bank of America, N.A., as Administrative Agent]

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.                                                  Representations and Warranties.

 

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

 

1.2.                                          Assignee.  The Assignee
(a) represents and warrants that (i) it has full power and authority, and has
taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become
a Lender under the Credit Agreement, (ii) it meets all requirements of an
Eligible Assignee under the Credit Agreement (subject to receipt of such
consents as may be required under the Credit Agreement), (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement
as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 7.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by the Assignee; and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations
which by the terms of the Loan Documents are required to be performed by it as
a Lender.

 

2.                                                  Payments.  From and
after the Effective Date, the Administrative Agent shall make all payments in
respect of the Assigned interest (including payments of principal, interest,
fees and other amounts) to the Assignee whether such amounts have accrued prior
to or on or after the Effective Date. The Assignor and the Assignee shall make
all appropriate adjustments in payments by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.

 

E-3

 

3.                                                  General Provisions. 
This Assignment and Assumption shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed
counterpart of a signature page of this Assignment and Assumption by telecopy
shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of North Carolina.

 

E-4

 

EXHIBIT F

 

GUARANTY

 

THIS
GUARANTY, dated October 8, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”)
is executed by each of the undersigned Guarantors (whether one or more,
the “Guarantor”, and if more than one jointly and severally)  for value received, the sufficiency of
which is hereby acknowledged, and in consideration of any credit and/or
financial accommodation heretofore or hereafter from time to time made or
granted to TEXAS ROADHOUSE, INC., a Delaware corporation (the “Borrower”)
for the benefit of the Borrower and its Subsidiaries pursuant to that certain
Credit Agreement dated October 8, 2004 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between the Borrower, each lender
party thereto (collectively, the “Lenders”) and BANK OF AMERICA, N.A.,
as administrative agent for the Lenders thereunder (the “Administrative
Agent”), and each Guarantor hereby furnishes its guaranty of the Guaranteed
Obligations (as hereinafter defined) as follows:

 

1.                                      Guaranty.  The
Guarantor hereby absolutely and unconditionally guarantees, as a guarantee of
payment and not merely as a guarantee of collection, prompt payment when due,
whether at stated maturity, upon acceleration or otherwise, and at all times
thereafter, all “Obligations” as defined in the Credit Agreement, and any and
all existing and future indebtedness and liabilities of every kind, nature and
character, direct or indirect, absolute or contingent, liquidated or
unliquidated, voluntary or involuntary, of the Borrower to the Administrative
Agent and the Lenders arising under the Credit Agreement and all instruments,
agreements and other documents of every kind and nature now or hereafter
executed in connection with the Credit Agreement (including all renewals,
extensions and modifications thereof and all costs, attorneys’ fees and
expenses incurred by the Administrative Agent and the Lenders in connection
with the collection or enforcement thereof) (collectively, the “Guaranteed
Obligations”).  The Administrative
Agent’s and each of the Lender’s books and records showing the amount of the
Guaranteed Obligations shall be admissible in evidence in any action or
proceeding, and shall be binding upon the Guarantor and conclusive for the
purpose of establishing the amount of the Guaranteed Obligations.  This Guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Guaranteed
Obligations or any instrument or agreement evidencing any Guaranteed
Obligations, or by the existence, validity, enforceability, perfection, or
extent of any collateral therefor, or by any fact or circumstance relating to
the Guaranteed Obligations which might otherwise constitute a defense to the
obligations of the Guarantor under this Guaranty.  The obligations of the Guarantor hereunder
shall be limited to an aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance under
Section 548 of the Bankruptcy Code (Title 11, United States Code) or any
comparable provisions of any applicable state law.

 

2.                                      No Setoff or Deductions;
Taxes.  The Guarantor represents and warrants that it
is incorporated or formed and a resident in the United States of America.  All payments by the Guarantor hereunder shall
be paid in full, without setoff or counterclaim or any deduction or withholding
whatsoever, including, without limitation, for any and all present and future
taxes.  If the Guarantor must make a
payment under this Guaranty, the Guarantor represents and warrants that it will
make the payment from one of its U.S. resident offices to the Lender so that no
withholding tax is imposed on the payment. 
If notwithstanding the foregoing, the Guarantor makes a payment under this
Guaranty to which withholding tax applies, or any taxes (other than 

 

 

taxes
on net income (a) imposed by the country or any subdivision of the country in
which the Administrative Agent’s or any of the Lender’s principal office or
actual lending office is located and (b) measured by the United States taxable
income the Administrative Agent and the Lenders would have received if all
payments under or in respect of this Guaranty were exempt from taxes levied by
the Guarantor’s country) are at any time imposed on any payments under or in
respect of this Guaranty including, but not limited to, payments made pursuant
to this Paragraph 2, the Guarantor shall pay all such taxes to the relevant
authority in accordance with applicable law such that the Administrative Agent
and the Lenders receives the sum they would have received had no such deduction
or withholding been made and shall also pay to the Administrative Agent and the
Lenders, on demand, all additional amounts which the Administrative Agent and
the Lenders specify as necessary to preserve the after-tax yield the
Administrative Agent and the Lenders would have received if such taxes had not
been imposed.

 

The
Guarantor shall promptly provide the Administrative Agent with an original
receipt or certified copy issued by the relevant authority evidencing the
payment of any such amount required to be deducted or withheld.

 

3.                                      No Termination.  This
Guaranty is a continuing and irrevocable guaranty of all Guaranteed Obligations
now or hereafter existing and shall remain in full force and effect until all
Guaranteed Obligations and any other amounts payable under this Guaranty are
indefeasibly paid and performed in full and any commitments of the
Administrative Agent and the Lenders or facilities provided by the
Administrative Agent and the Lenders with respect to the Guaranteed Obligations
are terminated.  At the Administrative
Agent’s option, all payments under this Guaranty shall be made to an office of
the Administrative Agent located in the United States and in U.S. Dollars.

 

4.                                      Waiver of Notices.  The
Guarantor waives notice of the acceptance of this Guaranty and of the extension
or continuation of the Guaranteed Obligations or any part thereof.  The Guarantor further waives presentment,
protest, notice, dishonor or default, demand for payment and any other notices
to which the Guarantor might otherwise be entitled.

 

5.                                      Subrogation.  The
Guarantor shall exercise no right of subrogation, contribution or similar
rights with respect to any payments it makes under this Guaranty until all of
the Guaranteed Obligations and any amounts payable under this Guaranty are
indefeasibly paid and performed in full and any commitments of the
Administrative Agent and the Lenders or facilities provided by the
Administrative Agent and the Lenders with respect to the Guaranteed Obligations
are terminated.  If any amounts are paid
to the Guarantor in violation of the foregoing limitation, then such amounts
shall be held in trust for the benefit of the Administrative Agent and the
Lenders and shall forthwith be paid to the Administrative Agent and the Lenders
to reduce the amount of the Guaranteed Obligations, whether matured or
unmatured.

 

6.                                      Waiver of Suretyship
Defenses.  The Guarantor agrees that the Administrative
Agent and the Lenders may, at any time and from time to time, and without
notice to the Guarantor, make any agreement with the Borrower or with any other
person or entity liable on any of the Guaranteed Obligations or providing
collateral as security for the Guaranteed Obligations, for the extension,
renewal, payment, compromise, discharge or release of the Guaranteed
Obligations or any collateral (in whole or in part), or for any modification or
amendment of the terms thereof or of any instrument or agreement evidencing the
Guaranteed Obligations or the provision of collateral, all without in any way
impairing, releasing, discharging or otherwise affecting the obligations of the
Guarantor under this Guaranty.  The
Guarantor waives any 

 

2

 

defense
arising by reason of any disability or other defense of the Borrower or any
other guarantor, or the cessation from any cause whatsoever of the liability of
the Borrower, or any claim that the Guarantor’s obligations exceed or are more
burdensome than those of the Borrower and waives the benefit of any statute of
limitations affecting the liability of the Guarantor hereunder.  The Guarantor waives any right to enforce any
remedy which the Administrative Agent or the Lenders now have or may hereafter
have against the Borrower and waives any benefit of and any right to
participate in any security now or hereafter held by the Administrative Agent
or the Lenders.  Further, the Guarantor
consents to the taking of, or failure to take, any action which might in any
manner or to any extent vary the risks of the Guarantor under this Guaranty or
which, but for this provision, might operate as a discharge of the Guarantor.

 

7.                                      Exhaustion of Other Remedies
Not Required.  The obligations of the Guarantor hereunder
are those of primary obligor, and not merely as surety, and are independent of
the Guaranteed Obligations.  The
Guarantor waives diligence by the Administrative Agent or the Lenders and
action on delinquency in respect of the Guaranteed Obligations or any part
thereof, including, without limitation any provisions of law requiring the
Administrative Agent or the Lenders to exhaust any right or remedy or to take
any action against the Borrower, any other guarantor or any other person, entity
or property before enforcing this Guaranty against the Guarantor, including but
not limited to the benefits of N.C. General Statutes §§ 26-7 through 26-9
inclusive, as amended, or any similar statute.

 

8.                                      Reinstatement. 
Notwithstanding anything in this Guaranty to the contrary, this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any portion of the Guaranteed Obligations is revoked,
terminated, rescinded or reduced or must otherwise be restored or returned upon
the insolvency, bankruptcy or reorganization of the Borrower or any other
person or entity or otherwise, as if such payment had not been made and whether
or not the Administrative Agent or the Lenders are in possession of or has
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction.

 

9.                                      Subordination.  The Guarantor hereby subordinates the payment of all obligations and
indebtedness of the Borrower owing to the Guarantor, whether now existing or
hereafter arising, including but not limited to any obligation of the Borrower
to the Guarantor as subrogee of the Administrative Agent and the Lenders or
resulting from the Guarantor’s performance under this Guaranty, to the
indefeasible payment in full of all Guaranteed Obligations. If the
Administrative Agent so requests, any such obligation or indebtedness of the
Borrower to the Guarantor shall be enforced and performance received by the
Guarantor as trustee for the Administrative Agent and the Lenders and the
proceeds thereof shall be paid over to the Administrative Agent and the Lenders
on account of the Guaranteed Obligations, but without reducing or affecting in
any manner the liability of the Guarantor under this Guaranty.

 

10.                               Information.  The Guarantor agrees to furnish promptly to the Administrative Agent
any and all financial or other information regarding the Guarantor or its
property as the Administrative Agent may reasonably request in writing.

 

11.                               Stay of Acceleration.  In the event that acceleration of the time for payment of any of the
Guaranteed Obligations is stayed, upon the insolvency, bankruptcy or
reorganization of the Borrower or any other person or entity, or otherwise, all
such amounts shall nonetheless be payable by the Guarantor immediately upon
demand by the Administrative Agent.

 

3

 

12.                               Expenses.  The
Guarantor shall pay on demand all out-of-pocket expenses (including reasonable
attorneys’ fees and expenses and the allocated cost and disbursements of
internal legal counsel) in any way relating to the enforcement or protection of
the Administrative Agent’s and each of the Lender’s rights under this Guaranty,
including any incurred in the preservation, protection or enforcement of any
rights of the Lender in any case commenced by or against the Guarantor under
the Bankruptcy Code (Title 11, United States Code) or any similar or successor
statute.  The obligations of the
Guarantor under the preceding sentence shall survive termination of this
Guaranty.

 

13.                               Amendments.  No
provision of this Guaranty may be waived, amended, supplemented or modified,
except by a written instrument executed by the Administrative Agent and the
Guarantor.

 

14.                               No Waiver; Enforceability.  No
failure by the Administrative Agent or the Lenders to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy or power  hereunder preclude any other  or further exercise thereof or the
exercise of any other right.  The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or in equity.  The unenforceability
or invalidity of any provision of this Guaranty shall not affect the
enforceability or validity of any other provision herein.

 

15.                               Assignment; Governing Laws;
Jurisdiction.  This Guaranty shall (a) bind the Guarantor
and its successors and assigns, provided that the Guarantor may not
assign its rights or obligations under this Guaranty without the prior written
consent of the Administrative Agent (and any attempted assignment without such
consent shall be void), (b) inure to the benefit of the Administrative Agent or
the Lenders and their successors and assigns and the Administrative Agent or
the Lenders may, without notice to the Guarantor and without affecting the
Guarantor’s obligations hereunder, assign or sell their participations in the
Guaranteed Obligations and this Guaranty, in whole or in part, and (c) be governed
by the internal laws of the State of North Carolina.  The Guarantor hereby irrevocably (i) submits
to the non-exclusive jurisdiction of any United States Federal or State court
sitting in Charlotte, North Carolina in any action or proceeding arising out of
or relating to this Guaranty, and (ii) waives to the fullest extent permitted
by law any defense asserting an inconvenient forum in connection
therewith.  Service of process by the
Administrative Agent or the Lenders in connection with such action or proceeding
shall be binding on the Guarantor if given in accordance with Section 10.02
of the Credit Agreement.  The Guarantor
agrees that the Administrative Agent or the Lenders may disclose to any
prospective purchaser and any purchaser of all or part of the Guaranteed
Obligations any and all information in the Administrative Agent’s or the
Lender’s possession concerning the Guarantor, this Guaranty and any security
for this Guaranty.

 

16.                               Condition of the Borrower.  The
Guarantor acknowledges and agrees that it has the sole responsibility for, and
has adequate means of, obtaining from the Borrower such information concerning
the financial condition, business and operations of the Borrower as the
Guarantor requires, and that the Administrative Agent and the Lenders have no
duty, and the Guarantor is not relying on the Administrative Agent or the
Lenders at any time, to disclose to the Guarantor any information relating to
the business, operations or financial condition of the Borrower.

 

17.                               Setoff.  If
and to the extent any payment is not made when due hereunder, the
Administrative Agent or the Lenders may setoff and charge from time to time any
amount so due 

 

4

 

against
any or all of the Guarantor’s accounts or deposits with the Administrative
Agent or the Lenders.

 

18.                               Other Guarantees. 
Unless otherwise agreed by the Administrative Agent and the Guarantor in
writing, this Guaranty is not intended to supersede or otherwise affect any
other guaranty now or hereafter given by the Guarantor for the benefit of the
Administrative Agent and the Lenders or any term or provision thereof.

 

19.                               Representations and
Warranties.  The Guarantor represents and warrants that
(a) it is duly organized and in good standing under the laws of the
jurisdiction of its organization and has full capacity and right to make and
perform this Guaranty, and all necessary authority has been obtained; (b) this
Guaranty constitutes its legal, valid and binding obligation enforceable in
accordance with its terms; (c) the making and performance of this Guaranty does
not and will not violate the provisions of any applicable law, regulation or
order, and does not and will not result in the breach of, or constitute a
default or require any consent under, any material agreement, instrument, or
document to which it is a party or by which it or any of its property may be
bound or affected; (d) all consents, approvals, licenses and authorizations of,
and filings and registrations with, any governmental authority required under
applicable law and regulations for the making and performance of this Guaranty
have been obtained or made and are in full force and effect; (e) by virtue of
its relationship with the Borrower, the execution, delivery and performance of
this Guaranty is for the direct benefit of the Guarantor and it has received
adequate consideration for this Guaranty; and (f) the financial information,
that has been delivered to the Administrative Agent and the Lenders by or on
behalf of the Guarantor, is complete and correct in all respects and accurately
presents the financial condition and the operational results of the Guarantor
and since the date of the most recent financial statements delivered to the
Administrative Agent and the Lenders, there has been no material adverse change
in the financial condition or operational results of the Guarantor.

 

20.                               WAIVER OF JURY TRIAL; FINAL
AGREEMENT.  TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE
GUARANTOR AND THE ADMINISTRATIVE AGENT EACH WAIVE TRIAL BY JURY WITH RESPECT TO
ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT OF THIS GUARANTY.  THIS GUARANTY REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

 

21.                               Limitations.   Notwithstanding anything herein to the
contrary, under no circumstances shall the maximum aggregate liability of the
Guarantor hereunder exceed the amount of the Aggregate Commitments, plus
payment of interest accruing on the guaranteed indebtedness, and fees, charges
and costs of collecting the guaranteed indebtedness, including reasonable
attorneys’ fees.  Further this Guaranty
shall terminate on the Maturity Date; provided, however, the
termination of this Guaranty on said date shall not affect the liability of the
Guarantor with respect to obligations created or incurred prior to said date,
or extensions or renewals of, interest accruing on, or fees, costs or expenses
incurred with respect to obligations on or after said date.

 

(Signature Page Follows)

 

5

 

IN
WITNESS WHEREOF, each of the undersigned hereby causes this Guaranty to be
executed and delivered as of the date first above written.

 

	
   

  	
  Texas Roadhouse of Elkhart, LLC

  
	
   

  	
  Texas Roadhouse of Lancaster, LLC

  
	
   

  	
  Texas Roadhouse of Lynchburg, LLC

  
	
   

  	
  Texas Roadhouse of Richmond, LLC

  
	
   

  	
  Texas Roadhouse of Roseville, LLC

  
	
   

  	
  Texas Roadhouse of Boise, LLC

  
	
   

  	
  Texas Roadhouse of Cedar Falls, LLC

  
	
   

  	
  Texas Roadhouse of Cheyenne, LLC

  
	
   

  	
  Texas Roadhouse of Dixie Highway, LLC

  
	
   

  	
  Texas Roadhouse of East Peoria, LLC

  
	
   

  	
  Texas Roadhouse of Elyria, LLC

  
	
   

  	
  Texas Roadhouse of Fort Wayne, LLC

  
	
   

  	
  Texas Roadhouse of Grand Junction, LLC

  
	
   

  	
  Texas Roadhouse of Lansing, LLC

  
	
   

  	
  Texas Roadhouse of New Philadelphia, LLC

  
	
   

  	
  Texas Roadhouse of Decatur, LLC

  
	
   

  	
   

  	
  By: Texas Roadhouse Property Holdings

  LLC, its manager

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
							

 

 

	
   

  	
  Texas Roadhouse Louisville I LLC

  
	
   

  	
  Texas Roadhouse of Abilene, Ltd.

  
	
   

  	
  Texas Roadhouse of Amarillo, Ltd.

  
	
   

  	
  Texas Roadhouse of Conroe, Ltd.

  
	
   

  	
  Texas Roadhouse of Corpus Christi, Ltd.

  
	
   

  	
  Texas Roadhouse of Denton, Ltd.

  
	
   

  	
  Texas Roadhouse of Fort Worth, Ltd.

  
	
   

  	
  Texas Roadhouse of Friendswood, Ltd.

  
	
   

  	
  Texas Roadhouse of Houston, Ltd.

  
	
   

  	
  Texas Roadhouse of Killeen, Ltd.

  
	
   

  	
  Texas Roadhouse of Live Oak, Ltd.

  
	
   

  	
  Texas Roadhouse of McAllen, Ltd.

  
	
   

  	
  Texas Roadhouse of San Antonio, Ltd.

  
	
   

  	
  Texas Roadhouse of Texarkana, Ltd.

  
	
   

  	
  Texas Roadhouse of Tyler, Ltd.

  
	
   

  	
  Texas Roadhouse of Wichita Falls, Ltd.

  
	
   

  	
  Longview Roadhouse II, Ltd.

  
	
   

  	
  Texas Roadhouse of College Station, Ltd.

  
	
   

  	
  Texas Roadhouse of El Paso, Ltd.

  
	
   

  	
  Texas Roadhouse of Grand Prairie, Ltd.

  
	
   

  	
  Texas Roadhouse of Lubbock, Ltd.

  
	
   

  	
  Texas Roadhouse of Mesquite, Ltd.

  
	
   

  	
  Texas Roadhouse of Pasadena, Ltd.

  
	
   

  	
  Texas Roadhouse of Waco, Ltd.

  
	
   

  	
   

  	
  By: Texas Roadhouse Holdings LLC, its

  manager or general partner

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
							

 

 

	
   

  	
  Texas Roadhouse Holdings LLC

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse of Texas, LLC

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse Property Holdings LLC

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
  Aspen Steaks, Ltd.

  
	
   

  	
   

  	
  By: Aspen Steaks Exchange Subsidiary Inc.,

  its manager

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse of Gainesville, Inc., I

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
						

 

 

	
   

  	
  Texas Roadhouse Management Corp.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse Development Corp.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
  Aspen Steaks Exchange Subsidiary Inc.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
					

 

 

EXHIBIT
G

 

FORM OF
PLEDGE AGREEMENT

 

PLEDGE AGREEMENT (as amended, restated, supplemented or
otherwise modified, this “Agreement”), dated as of October 8, 2004,
by and among TEXAS ROADHOUSE, INC., a Delaware corporation (the “Borrower”)
and the Subsidiaries of
the Borrower party hereto and any
Additional Pledgor (as defined below) who may become party to this Agreement (such
Subsidiaries and Additional Pledgors, collectively, with the Borrower, the “Pledgors”,
and each individually, a “Pledgor”) and the Issuers (each as hereinafter
defined) party hereto in favor of Bank of America, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) for the ratable benefit of itself and the banks and other financial
institutions (the “Lenders”) from time to time parties to the Credit
Agreement, dated as of October 8, 2004 (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), by and
among the Borrower, the Lenders, and the Administrative Agent.

 

STATEMENT
OF PURPOSE

 

Pursuant to the Credit Agreement, the Lenders have
agreed to make Credit Extensions to the Borrower upon the terms and subject to
the conditions set forth therein.

 

It is a condition precedent to the obligation of the
Lenders to make their respective Credit Extensions to the Borrower under the
Credit Agreement that the Pledgors shall have executed and delivered this
Agreement to the Administrative Agent, for the ratable benefit of itself and
the Lenders.

 

NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
and to induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective Credit Extensions
to the Borrower thereunder, each Pledgor hereby agrees with the Administrative
Agent, for the ratable benefit of itself and the Lenders, as follows:

 

ARTICLE I

 

DEFINED TERMS

 

Definitions. 
The following terms when used in this Agreement shall have the meanings
assigned to them below:

 

“Additional Pledgor” means each Subsidiary of the Borrower which
hereafter becomes a Pledgor pursuant to Section 7.15 hereof and Section 6.15
of the Credit Agreement.

 

“Collateral” shall mean the collective
reference to the Pledged Investment Property and the Pledged Partnership/LLC
Interests.

 

“Guaranty” shall have the meaning assigned
thereto in the Credit Agreement.

 

 

“Investment Property” shall have the meaning now
or hereafter assigned thereto in the UCC.

 

“Issuers” means any issuer of any Pledged
Investment Property or Pledged Partnership/LLC Interests (including, without
limitation, any “issuer” as now or hereafter defined in the UCC.

 

“Obligations” shall have the meaning assigned
thereto in the Credit Agreement.

 

“Pledged Investment Property” means, with respect
to each Pledgor, the Investment Property of such Pledgor identified on Schedule 1
hereto.

 

“Pledged Partnership/LLC Interests” means, with
respect to each Pledgor, the entire partnership interest, membership interest
or limited liability company interest, as applicable, of such Pledgor in each
partnership, limited partnership or limited liability company owned thereby
listed on Schedule 1, including, without limitation, such Pledgor’s
capital account, its interest as a partner or member, as applicable, in the net
cash flow, net profit and net loss, and items of income, gain, loss, deduction
and credit of any such partnership, limited partnership or limited liability
company, as applicable, such Pledgor’s interest in all distributions made or to
be made by any such partnership, limited partnership or limited liability
company, as applicable, to such Pledgor and all of the other economic rights,
titles and interests of such Pledgor as a partner or member, as applicable, of
any such partnership, limited partnership or limited liability company, as
applicable, whether set forth in the partnership agreement or membership
agreement, as applicable, of such partnership, limited partnership or limited
liability company, as applicable, by separate agreement or otherwise.

 

“Proceeds” means all “proceeds” (as now or
hereafter defined in the UCC) of the Collateral, including, without limitation,
all dividends, distributions or payments with respect thereto or collections
thereon.

 

“Securities Act” means the Securities Act of
1933, including all amendments thereto and regulations promulgated thereunder.

 

“Security Interests” means the security interests
granted pursuant to this Agreement, as well as all other security interests
created or assigned as additional security for the Obligations pursuant to the
provisions of the Loan Documents.

 

“UCC” shall have the meaning assigned thereto in
the Credit Agreement.

 

Other Definitional Provisions.

 

(a)                                  Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.

 

(b)                                 The
words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section and
Schedule references are to this Agreement unless otherwise specified.  The meanings given to terms defined 

 

2

 

herein shall be equally
applicable to both the singular and plural forms of such terms.  Where the context requires, terms relating to
the Collateral or any part thereof, when used in relation to a Pledgor, shall
refer to such Pledgor’s Collateral or the relevant part thereof.  To the extent that a direct conflict between
the provisions of this Agreement and the provisions of the Credit Agreement
(other than with respect to any provision of this Agreement relating the grant,
pledge and assignment of the Security Interest in the Collateral or the
exercise of remedies with respect thereto), the Credit Agreement shall govern.

 

(c)                                  To the
extent any amendment, revision or other modification of the UCC after the date
hereof results in the renumbering of specific sections, revision of the order
of specific sections or other changes in the organization of the UCC in effect
as of the date hereof, all references herein to specific sections of the UCC in
effect as of the date hereof shall be deemed to refer to such new
section or sections which correspond to such original sections.

 

ARTICLE II

 

GRANT OF SECURITY INTEREST

 

Pledge and Grant of Security Interest.  Each Pledgor hereby grants, pledges and
collaterally assigns to the Administrative Agent, for the ratable benefit of
itself and the Lenders, a security interest in, all of such Pledgor’s right,
title and interest in the Collateral, including, without limitation, all books
and records pertaining to the Collateral and all Proceeds and products thereof,
whether now existing or hereafter acquired, as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

 

Control Agreement; Acknowledgement by Issuers.

 

(a)                                  The
Pledgors hereby authorize and instruct each Issuer to comply, and each Issuer
hereby agrees to so comply, with any instruction received thereby from the
Administrative Agent in accordance with the terms of this Agreement with
respect to the Collateral, without any consent or further instructions from the
Pledgors (or other registered owner), and the Pledgors agree that such Issuer
shall be fully protected in so complying. 
Each Issuer agrees that its agreement set forth in the preceding
sentence shall be sufficient to create in favor of the Administrative Agent,
for the benefit of the Lenders, “control” of the Collateral, if any, of such
Issuer within the meaning of such term under Section 8-106(c) of the UCC.

 

(b)                                 Each
Issuer acknowledges receipt of a copy of this Agreement and agrees to be bound
thereby and to comply with the terms thereof insofar as such terms are
applicable to it.  Each Issuer agrees to
notify the Administrative Agent promptly in writing of the occurrence of any of
the events described in Section 4.6.  Each Issuer further agrees that the terms of
this Agreement applicable thereto shall be binding on such Issuer with respect
to all actions that may be required of it in its capacity as Issuer under or
pursuant to or arising out of this Agreement.

 

3

 

Nature of Pledge.

 

(c)                                  Each
of the Pledgors agrees that its obligations under this Agreement shall be
primary, absolute and unconditional, irrespective of, and unaffected by:

 

(i)                                     the genuineness, validity, regularity,
enforceability or any future amendment of, or change in, the Credit Agreement
or any other Loan Document or any other agreement, document or instrument to
which the Borrower or any Subsidiary thereof is or may become a party;

 

(ii)                                  the absence of any action to enforce this
Agreement, the Credit Agreement or any other Loan Document or the waiver or
consent by the Administrative Agent or any Lender with respect to any of the
provisions of this Agreement, the Credit Agreement or any other Loan Document;

 

(iii)                               the existence, value or condition of, or
failure to perfect its Lien against, any security for or other pledge with
respect to the Obligations or any action, or the absence of any action, by the
Administrative Agent or any Lender in respect of such security or pledge
(including, without limitation, the release of any such security or pledge); or

 

(iv)                              any other action or circumstances which might
otherwise constitute a legal or equitable discharge or defense of a surety or
pledge;

 

(v)                                 it being agreed by each Pledgor that its
obligations under this Agreement shall not be discharged until the final
indefeasible payment and performance, in full, of the Obligations and the
termination of the Commitments.

 

(d)                                 Each
Pledgor represents, warrants and agrees that its obligations under this
Agreement are not and shall not be subject to any counterclaims, offsets or
defenses of any kind against the Administrative Agent, the Lenders or the
Borrower whether now existing or which may arise in the future.

 

(e)                                  Each
Pledgor hereby agrees and acknowledges that the Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Agreement, and all
dealings between the Borrower and each Pledgor, and the Administrative Agent
and the Lenders, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Agreement.

 

ARTICLE III

 

REPRESENTATIONS
AND WARRANTIES

 

To induce the Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective Credit Extensions to the Borrower thereunder, each Pledgor hereby
represents and warrants to the Administrative Agent and each Lender that:

 

4

 

Existence; Qualification and Power; Compliance with
Laws.  Each Pledgor (a)
is a corporation, partnership or limited liability company duly organized or
formed, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to (i) own its assets and carry on its business as now being
conducted and hereafter proposed to be conducted except where the absence of
any such license, authorization, consent or approval would not reasonably be
expected to have a Material Adverse Effect and (ii) execute, deliver and
perform its obligations under this Agreement, (c) is duly qualified and is
licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license except where the failure to so qualify,
be licensed or be in good standing, would not reasonably be expected to have a
Material Adverse Effect, and (d) is in compliance with all Laws except where
the failure to so comply would not reasonably be expected to have a Material
Adverse Effect.

 

Authorization of Agreement; No Conflict.  The execution, delivery and performance by
each Pledgor of each Loan Document to which such Person is party have been duly
authorized by all necessary corporate or other organizational action, and do
not and will not (a) contravene the terms of any of such Pledgor’s Organization
Documents; (b) conflict with or result in any breach or contravention of, or
the creation of any Lien under (other than the Security Interests), (i) any
Contractual Obligation to which such Pledgor is a party which such conflict,
breach or contravention would not reasonably be expected to have a Material
Adverse Effect or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Pledgor or its
property is subject which would reasonably be expected to have a Material
Adverse Effect; or (c) violate any Law which would reasonably be expected to
have a Material Adverse Effect.

 

Governmental Authorization;
Other Consents.  No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Pledgor of this Agreement, except (a) as may be required by Laws
affecting the offering and sale of securities generally, and (b) filings under
the UCC.  Each of the Pledgors (x) has
all Governmental Approvals required by any applicable Law for it to conduct its
business, each of which is in full force and effect, is final and not subject
to review on appeal and is not the subject of any pending or, to the best of
its knowledge, threatened attack by direct or collateral proceeding, except
where the absence of such Governmental Approval would not reasonably be
expected to have a Material Adverse Effect, (y) is in compliance with each
Governmental Approval applicable to it and in compliance with all other
applicable Laws relating to it or any of its respective properties, in each
case except where the failure to so comply would not reasonably be expected to
have a Material Adverse Effect and (z) has timely filed all material reports,
documents and other materials required to be filed by it under all applicable
Laws with any Governmental Authority and has retained all material records and
documents required to be retained by it under applicable Law.

 

Binding Effect.  This Agreement has been duly executed and
delivered by each Pledgor that is party thereto.  This Agreement constitutes a legal, valid and
binding obligation of each Pledgor, enforceable against each Pledgor in
accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium 

 

5

 

or
similar state or federal debtor relief laws which affect the enforcement of
creditor’s rights in general and the availability of equitable remedies.

 

Title,
No Other Liens.  Except for the Security
Interests, each Pledgor owns each item of the Collateral free and clear of any
and all Liens.  No financing statement
under the UCC of any state which names a Pledgor as debtor or other public
notice with respect to all or any part of the Collateral is on file or of
record in any public office, except for any such financing statement (a) which
will be terminated within forty-five (45) days after the date hereof (as such
time may be extended by Administrative Agent in its sole discretion) and with
respect to which the underlying obligation relating to such financing statement
has been paid in full and any further commitment has been terminated as of the
date hereof or (b) as have been filed in favor of the Administrative Agent, for
the ratable benefit of itself and the Lenders, pursuant to this Agreement.  No Collateral is in the possession or Control
of any Person asserting any claim thereto or security interest therein, except
that the Administrative Agent or its designee may have possession or Control of
Collateral as contemplated hereby.

 

Perfected First Priority Liens.  The Security Interests (a) constitute
valid perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of itself and the Lenders, as
collateral security for the Obligations, enforceable in accordance with the terms
hereof against all creditors of each Pledgor and any Persons purporting to
purchase any Collateral from such Pledgor and (b) are prior to all other
Liens on the Collateral in existence on the date hereof.

 

Collateral.

 

(a)                                  As of
the date hereof, all Collateral owned by the Pledgors is listed on Schedule 1.

 

(b)                                 All
Pledged Investment Property and all Pledged Partnership/LLC Interests have been
duly and validly issued and are fully paid and nonassessable.

 

(c)                                  Each
Pledgor is the legal, record and beneficial owner of, and has good and
marketable title to, the Collateral pledged by it hereunder, free of any and
all Liens or options in favor of, or claims of, any other Person, except the
security interest created by this Agreement.

 

Financing Statements.  The Financing Statements naming each Pledgor
as a debtor are in appropriate form and when filed in the jurisdiction of
organization of each Pledgor, the Security Interests will constitute valid and
perfected Security Interests in the Collateral of each Pledgor, prior to all
other Liens and rights of others therein (to the extent that a security
interest therein may be perfected by filing pursuant to the UCC) and all
filings and other actions necessary or desirable to perfect and protect such
Security Interests have been duly taken.

 

6

 

ARTICLE IV

 

COVENANTS

 

Until the Obligations shall have been paid in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 7.1, each Pledgor covenants and agrees
that:

 

Delivery of Collateral.

 

(a)                                  On the
Closing Date, the Pledgors shall deliver to the Administrative Agent (i) all
original stock certificates or other certificates evidencing the Collateral, if
applicable, together with (ii) an undated stock or other power for each such
certificate duly executed in blank by the Pledgor that is the registered owner
thereof.

 

(b)                                 Upon
receipt by any Pledgor after the Closing Date of any original stock
certificates or other certificates evidencing any Collateral such Pledgor shall
immediately pledge and deliver the corresponding certificates to the
Administrative Agent duly endorsed in a manner satisfactory to the
Administrative Agent and, as applicable, accompanied by duly executed undated stock
or other power, in blank.

 

Payment of Obligations.  Each Pledgor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all material taxes, assessments and governmental charges or
levies imposed upon the Collateral or in respect of income or profits there
from, as well as all claims of any kind (including, without limitation, claims
for labor, materials and supplies) against or with respect to the Collateral,
except that no such charge need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
are maintained with respect thereto in accordance with GAAP and such
proceedings could not reasonably be expected to result in the sale, forfeiture
or loss of any material portion of the Collateral or any interest therein.

 

Maintenance of Perfected Security Interest.

 

(c)                                  Each
Pledgor shall maintain the Security Interest created by this Agreement as a
perfected Security Interest having at least the priority described in Section 3.8
and shall defend such Security Interest against the claims and demands of all
Persons whomsoever.

 

(d)                                 The
Pledgors will furnish to the Administrative Agent and the Lenders from time to
time statements and schedules further identifying and describing the assets and
property of the Pledgors and such other reports in connection therewith as the
Administrative Agent may reasonably request, all in reasonable detail.

 

(e)                                  Upon
the request of the Administrative Agent, at the sole expense of the Pledgors,
jointly and severally, each Pledgor will promptly and duly execute and deliver,
and have recorded, such further instruments and documents and take such further
actions as the Administrative Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein 

 

7

 

granted, including, without
limitation, (i) filing any financing or continuation statements under the
UCC (or other similar laws) in effect in any jurisdiction with respect to the
Security Interests, and (ii) taking any actions necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the applicable
UCC) with respect to the Collateral.

 

(f)                                    Each
Pledgor shall not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the Credit
Agreement, or (ii) create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral to secure
indebtedness of any Person or entity.

 

(g)                                 Each
Pledgor will comply in all material respects with all Applicable Law with
respect to the Collateral or any part thereof or to the operation of such
Pledgor’s business.

 

Changes in Locations, Name,
etc.  Each Pledgor will not, except upon
thirty (30) days’ prior written notice to the Administrative Agent and delivery
to the Administrative Agent of all additional executed financing statements and
other documents reasonably requested by the Administrative Agent to maintain
the validity, perfection and priority of the Security Interests:

 

(h)                                 change
its jurisdiction of organization; or

 

(i)                                     change
its name, identity or corporate or organizational structure to such an extent
that any financing statement filed by the Administrative Agent in connection
with this Agreement would become misleading.

 

Notices
Each Pledgor will advise the Administrative Agent promptly, in reasonable
detail, of: (a) any Lien (other than the Security Interests) on any of the
Collateral which would adversely affect the ability of the Administrative Agent
to exercise any of its remedies hereunder; and (b) the occurrence of any other
event which could reasonably be expected to have a Material Adverse Effect on
the aggregate value of the Collateral or on the Security Interests.

 

Collateral.

 

(j)                                     Without
the prior written consent of the Administrative Agent, none of the Pledgors
will (i) vote to enable, or take any other action to permit, any Issuer to
issue any stock, partnership interests, limited liability company interests or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock,
partnership interests, limited liability company interests or other equity
securities of any nature of such Issuer, except for those additional interests
that will be subject to the Security Interest granted herein in favor of the
Administrative Agent, the certificates of which, if any, will be promptly
delivered to the Administrative Agent together with an undated stock or other
power for each such certificate duly executed in blank by such Pledgor as the
registered owner thereof or (ii) enter into any agreement or undertaking
restricting the right or ability of such Pledgor or the Administrative Agent to
sell, assign or transfer any of the Collateral. 
Each Pledgor 

 

8

 

will defend the right, title and
interest of the Administrative Agent in and to any Collateral against the
claims and demands of all Persons whomsoever.

 

(k)                                  If any
Pledgor shall become entitled to receive or shall receive any certificate
(including, without limitation, any certificate representing a stock dividend
or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the ownership interests of any
Issuer, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any of the Collateral, or otherwise in respect thereof, such
Pledgor shall accept the same as the agent of the Administrative Agent and the
Lenders, hold the same in trust for the Administrative Agent and the Lenders
and deliver the same forthwith to the Administrative Agent pursuant to Section 4.1.  Any sums paid upon or in respect of the
Collateral upon the liquidation or dissolution of any Issuer shall be paid over
to the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Collateral or any property shall be distributed
upon or with respect to the Collateral pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Administrative Agent, be delivered
to the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations.  If any
sums of money or property so paid or distributed in respect of the Collateral
shall be received by any Pledgor, such Pledgor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Lenders, segregated from other funds of such Pledgor,
as additional collateral security for the Obligations.

 

ARTICLE V

 

REMEDIAL PROVISIONS

 

Collateral.

 

(a)                                  Unless
an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the Pledgors of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 5.2(b),
the Pledgors shall be permitted to receive all cash dividends, payments or
other distributions made in respect of any Collateral, in each case paid in the
normal course of business of the Issuers and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
other corporate, company and partnership rights with respect to the Collateral;
provided that, no vote shall be cast or other corporate right exercised or
other action taken which, in the Administrative Agent’s reasonable judgment,
would impair the Collateral or which would result in a Default or Event of
Default under any provision of the Credit Agreement, this Agreement or any
other Loan Document.

 

(b)                                 If an
Event of Default shall occur and be continuing and the Administrative Agent
shall give notice of its intent to exercise such rights to the Pledgors, 

 

9

 

(i) the Administrative
Agent shall have the right to receive any and all cash dividends, payments or
distributions made in respect of the Collateral and make application thereof to
the Obligations in accordance with Section 8.03 of the Credit
Agreement, and (ii) any or all of the Collateral shall be registered in
the name of the Administrative Agent or its nominee, and the Administrative
Agent or its nominee may thereafter exercise (A) all voting, corporate and
other rights pertaining to such Collateral at any meeting of shareholders,
partners or members of the Issuers and (B) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Collateral as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate, partnership or
company structure of any Issuer or upon the exercise by any Pledgor or the
Administrative Agent of any right, privilege or option pertaining to such
Collateral, and in connection therewith, the right to deposit and deliver any
and all of the Collateral with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to account
for property actually received by it; but the Administrative Agent shall have
no duty to any Pledgor to exercise any such right, privilege or option and the
Administrative Agent and the Lenders shall not be responsible for failure to do
so or delay in so doing.

 

(c)                                  Each
Pledgor hereby authorizes and instructs each Issuer to (i) comply with any
instruction received by it from the Administrative Agent in writing that (A) states
that an Event of Default has occurred and is continuing and (B) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Pledgor, and each Pledgor agrees that each Issuer shall
be fully protected in so complying, and (ii) except as otherwise expressly
permitted hereby, pay any dividends, distributions or other payments with
respect to the Collateral directly to the Administrative Agent.

 

Proceeds to be Turned Over To Administrative Agent.  If an Event of Default shall occur and be
continuing, all Proceeds received by any Pledgor consisting of cash, checks and
other non-cash items shall be held by such Pledgor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Pledgor, and shall, forthwith upon receipt by such Pledgor, be turned over to
the Administrative Agent in the exact form received by such Pledgor (duly
indorsed by such Pledgor to the Administrative Agent, if required).  All Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent in a collateral
account maintained under its sole dominion and control.  All Proceeds while held by the Administrative
Agent in any such collateral account (or by any Pledgor in trust for the
Administrative Agent and the Lenders) shall continue to be held as collateral
security for the Obligations and shall not constitute payment thereof until
applied as provided in Section 5.4.

 

Application of Proceeds. At such
intervals as may be agreed upon by the Borrower and/or Pledgors and the
Administrative Agent, or, if an Event of Default shall have occurred and be
continuing, at any time at the Administrative Agent’s election, the
Administrative Agent may apply all or any part of Proceeds held in any
collateral account in payment of the Obligations in accordance with Section 8.03
of the Credit Agreement.  Any 

 

10

 

balance of such
Proceeds remaining after the Obligations shall have been paid in full and the
Commitments shall have terminated shall be paid over to the Pledgors, or to
whomsoever may be lawfully entitled to receive the same (if such Person is not
a Pledgor).

 

Code and Other Remedies.  If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of itself and the Lenders, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the UCC or any other applicable law. 
Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Pledgor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase, or otherwise dispose of and deliver the Collateral or
any part thereof (or contract to do any of the foregoing), in one or more parcels
at public or private sale or sales, at any exchange, broker’s board or office
of the Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit
risk.  The Administrative Agent or any
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Pledgor, which right or equity is hereby waived and
released.  The Administrative Agent shall
apply the net proceeds of any action taken by it pursuant to this Section 5.4,
after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys’ fees and disbursements, to the payment in whole or in
part of the Obligations, in accordance with Section 8.03 of the
Credit Agreement, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-610 and Section 9-615 of the
UCC, shall the Administrative Agent account for the surplus, if any, to the
Pledgors, or to whomever may be lawfully entitled to receive the same (if such
Person is not a Pledgor).  To the extent
permitted by applicable law, each Pledgor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Lender arising
out of the exercise by them of any rights hereunder except to the extent any
such claims, damages, or demands result solely from the gross negligence or
willful misconduct of the Administrative Agent or any Lender, in each case
against whom such claim is asserted.  The
Administrative Agent may disclaim all warranties in connection with any sale or
other disposition of the Collateral, including, without limitation, all
warranties of title, possession, quiet enjoyment and the like.  If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least ten (10) days before such sale or other
disposition.

 

11

 

Registration Rights.

 

(d)                                 If the
Administrative Agent shall determine to exercise its right to sell any or all
of the Collateral pursuant to Section 5.4, and if in the opinion of
the Administrative Agent it is necessary or advisable to have the Collateral,
or that portion thereof to be sold, registered under the provisions of the
Securities Act, each Pledgor will cause the Issuer thereof to (i) execute
and deliver, and cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all
such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Collateral, or that portion thereof to
be sold, under the provisions of the Securities Act, (ii) use its best
efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the date of the
first public offering of the Collateral, or that portion thereof to be sold,
and (iii) make all amendments thereto and/or to the related prospectus
which, in the opinion of the Administrative Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto.  Each Pledgor agrees to cause each Issuer to
comply with the provisions of the securities or “Blue Sky” laws of any and all
jurisdictions which the Administrative Agent shall designate and to make available
to its security holders, as soon as practicable, an earnings statement (which
need not be audited) which will satisfy the provisions of Section II
(a) of the Securities Act.

 

(e)                                  Each
Pledgor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Collateral, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof.  Each Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner.  The Administrative Agent
shall be under no obligation to delay a sale of any of the Collateral for the
period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.

 

(f)                                    If the
Administrative Agent shall determine to exercise its right to sell any or all
of the Collateral pursuant to Section 5.4, each Pledgor agrees to
use its best efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the Collateral
pursuant to this Section 5.5 valid and binding and in compliance
with any and all other Applicable Laws. 
Each Pledgor further agrees that a breach of any of the covenants
contained in this Section 5.5 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 5.5
shall be specifically enforceable against such Pledgor, and each Pledgor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the Credit Agreement.

 

12

 

Waiver,
Deficiency.  Each Pledgor waives, to the
extent permitted by Applicable Law, all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force under any
Applicable Law in order to prevent or delay the enforcement of this Agreement
or the absolute sale of the Collateral or any portion thereof.  Each Pledgor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Lender to collect such
deficiency.

 

ARTICLE VI

 

THE ADMINISTRATIVE AGENT

 

Administrative Agent’s Appointment as
Attorney-In-Fact, etc.

 

(a)                                  Each Pledgor hereby irrevocably constitutes and appoints
the Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Pledgor and in the name of
such Pledgor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Pledgor hereby gives the Administrative Agent the power and
right, on behalf of such Pledgor, without notice to or assent by such Pledgor,
to do any or all of the following:

 

(i)                                     pay or discharge taxes
and Liens levied or placed on or threatened against the Collateral, effect any
repairs or any insurance called for by the terms of this Agreement and pay all
or any part of the premiums therefor and the costs thereof,

 

(ii)                                  execute, in connection
with any sale provided for in Section 5.4 or Section 5.5,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and

 

(iii)                               (A) direct any party
liable for any payment under any of the Collateral to make payment of any and
all moneys due or to become due thereunder directly to the Administrative Agent
or as the Administrative Agent shall direct; (B) ask or demand for, collect,
and receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Collateral; (C) commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect of
any Collateral; (D) defend any suit, action or proceeding brought against
any Pledgor with respect to any Collateral; (E) settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Administrative Agent may deem appropriate;
and (F)  generally, sell, transfer, pledge and make any agreement with
respect to

 

13

 

or otherwise deal with any of the Collateral as
fully and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent’s option and the
Pledgors’ expense, jointly and severally, at any time, or from time to time,
all acts and things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Security Interests therein and
to effect the intent of this Agreement, all as fully and effectively as such
Pledgor might do.

 

Anything in this Section 6.1(a) to the
contrary notwithstanding, the Administrative Agent agrees that it will not
exercise any rights under the power of attorney provided for in this Section 6.1(a)
unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall give the Pledgors not less than ten (10) days notice
of such sale or disposition.

 

(b)                                 If any Pledgor fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement in accordance with Section 6.1(a).

 

(c)                                  The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 6.1,
together with interest thereon at a rate per annum equal to the highest rate
per annum at which interest would then be payable on any category of past due
Base Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the Pledgors, shall be payable
by the Pledgors, jointly and severally, to the Administrative Agent on demand.

 

(d)                                 Each Pledgor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof in accordance with Section 6.1(a).  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the Security Interests are released.

 

Duty of Administrative Agent.  The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the UCC or otherwise, shall be
to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. 
Neither the Administrative Agent, any Lender nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Pledgors or any other Person or to take any other
action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Administrative
Agent and the Lenders hereunder are solely to protect the Administrative
Agent’s and the Lenders’ interests in the Collateral and shall not impose any
duty upon the Administrative Agent or any Lender to exercise any such
powers.  The Administrative Agent and the
Lenders shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to the Pledgors
for any act or failure to act hereunder, except for their own gross negligence
or willful misconduct.

 

14

 

Financing Statements.  Pursuant to the UCC and any other applicable
law, each Pledgor authorizes the Administrative Agent to file or record
financing statements and other filing or recording documents or instruments
with respect to the Collateral without the signature of such Pledgor in such
form and in such offices as the Administrative Agent determines appropriate to
perfect the Security Interests of the Administrative Agent under this
Agreement.  A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction.  Each Pledgor hereby
authorizes, ratifies and confirms all financing statements and other filing or
recording documents or instruments filed by the Administrative Agent prior to
the date of this Agreement.

 

Authority of Administrative Agent.  Each Pledgor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect
to any action taken by the Administrative Agent or the exercise or non-exercise
by the Administrative Agent of any option, voting right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and such Pledgor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and such Pledgor shall not be under
any obligation, or entitlement to make any inquiry respecting such authority.

 

ARTICLE VII

 

MISCELLANEOUS

 

Amendments in Writing.  None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.01 of the Credit Agreement.

 

Notices.  All notices, requests and demands to or upon
the Administrative Agent or the Pledgors hereunder shall be effected in the
manner provided for in Section 10.02 of the Credit Agreement.

 

No Waiver by Course of Conduct,
Cumulative Remedies.  Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 7.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. 
No failure to exercise, nor any delay in exercising on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof.  No
single or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.  A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future
occasion.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

 

15

 

Enforcement Expenses,
Indemnification.

 

(a)                                  Each
Pledgor agrees, jointly and severally, to pay or reimburse each Lender and the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with enforcing or preserving any rights under this Agreement and the
other Loan Documents to which such Pledgor is a party, (including, without
limitation, in connection with any workout, restructuring, bankruptcy or other
similar proceeding), including, without limitation, the reasonable fees and
disbursements of counsel to each Lender and of counsel to the Administrative
Agent.

 

(b)                                 Each
Pledgor agrees, jointly and severally, to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all stamp, excise, sales or
other taxes (in each case, subject to Section 3.01 of the Credit
Agreement) which may be payable or determined to be payable with respect to any
of the Collateral or in connection with any of the transactions contemplated by
this Agreement.

 

(c)                                  Each
Pledgor agrees, jointly and severally, to pay, and to save the Administrative
Agent and the Lenders harmless from any and all liabilities, obligations,
losses, damages, penalties, costs and expenses in connection with actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance
and administration of this Agreement to the extent the Borrower would be
required to do so pursuant to Section 10.04 of the Credit
Agreement.

 

(d)                                 The
agreements in this Section 7.4 shall survive termination of the
Commitments and repayment of the Obligations and all other amounts payable
under the Credit Agreement and the other Loan Documents.

 

Waiver of Jury Trial.

 

EACH PLEDGOR HEREBY IRREVOCABLY
WAIVES ITS RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER
PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY
RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.

 

Successors and Assigns.  This Agreement shall be binding upon the
successors and assigns of the Pledgors and shall inure to the benefit of the
Pledgors (and shall bind all Persons who become bound as a Pledgor under this
Agreement), the Administrative Agent and the Lenders and their successors and
assigns; provided that no Pledgor may assign, transfer or delegate any
of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent (given in accordance with Section 7.1).

 

Set-Off.  Each Pledgor hereby irrevocably authorizes
the Administrative Agent and each Lender at any time and from time to time
pursuant to Section 10.08 of the Credit Agreement, without notice
to any Pledgor, any such notice being expressly waived by the Pledgors, to
set-off and appropriate and apply any and all deposits (general or special,
time or 

 

16

 

demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Administrative Agent or such Lender to or for the credit or the account of any
Pledgor, or any part thereof in such amounts as the Administrative Agent or
such Lender may elect, against and on account of the obligations and
liabilities of such Pledgor to the Administrative Agent or such Lender
hereunder and claims of every nature and description of the Administrative
Agent or such Lender against any Pledgor, in any currency, whether arising
hereunder, under the Credit Agreement, any other Loan Document or otherwise, as
the Administrative Agent or such Lender may elect, whether or not the
Administrative Agent or any Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured.  The Administrative Agent and each Lender
shall notify the Pledgors promptly of any such set-off and the application made
by the Administrative Agent or such Lender of the proceeds thereof; provided
that the failure to give such notice shall not affect the validity of such
set-off and application.  The rights of
the Administrative Agent and each Lender under this Section 7.7 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Administrative Agent or such Lender may have.

 

Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

 

Severability.  Any provision of this Agreement or any other
Loan Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective only to the extent of such prohibition
or unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

Section Heading. 
The Section headings used in this Agreement are for convenience of
reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.

 

Integration. 
This Agreement and the other Loan Documents represent the agreement of
each Pledgor, the Administrative Agent and the Lenders with respect to the
subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender
relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.

 

GOVERNING LAW. 
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NORTH CAROLINA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE;
PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW

 

CONSENT TO JURISDICTION.  EACH PLEDGOR IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NORTH 

 

17

 

CAROLINA AND OF
THE UNITED STATES FOR THE WESTERN DISTRICT OF SUCH STATE, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN 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
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST ANY PLEDGOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

Acknowledgements.  Each Pledgor hereby acknowledges that:

 

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

 

(f)                                    neither
the Administrative Agent nor any Lender has any fiduciary relationship with or
duty to any Pledgor arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between the Pledgors, on the
one hand, and the Administrative Agent and Lenders, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

 

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

 

Additional Pledgors.  Each Subsidiary of the Borrower that is required
to become a party to this Agreement pursuant to Section 6.15 of the
Credit Agreement shall become a Pledgor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of a joinder agreement in form and
substance satisfactory to the Administrative Agent.

 

Releases.

 

(h)                                 At such time as the Obligations shall have been paid in
full and the Commitments have been terminated, the Collateral shall be released
from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of the Administrative
Agent and the Pledgors hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Pledgors. 
At the request and sole expense of the Pledgors following any such
termination, the Administrative Agent shall 

 

18

 

deliver to
the Pledgors any Collateral held by the Administrative Agent hereunder, and
execute and deliver to the Pledgors such documents as such Pledgors shall
reasonably request to evidence such termination.

 

(i)                                     If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Pledgor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Pledgor, shall execute and deliver to such Pledgor all releases or other
documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral.  In
the event that all the capital stock of any Pledgor shall be sold, transferred
or otherwise disposed of in a transaction permitted by the Credit Agreement,
then, at the request the expense of such Pledgor, such Pledgor shall be
released from its obligations hereunder; provided that such Pledgor
shall have delivered to the Administrative Agent, at least ten (10) Business
Days prior to the date of the proposed release, a written request for release
identifying the Pledgor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by such Pledgor stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.

 

[Signature Pages to Follow]

 

19

 

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

 

	
   

  	
  Texas Roadhouse, Inc.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse Holdings LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse of Texas, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse Property Holdings LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Aspen Steaks Exchange Subsidiary Inc.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
						

 

 

	
   

  	
  Texas Roadhouse of Elkhart, LLC

  
	
   

  	
  Texas Roadhouse of Lancaster, LLC

  
	
   

  	
  Texas Roadhouse of Lynchburg, LLC

  
	
   

  	
  Texas Roadhouse of Richmond, LLC

  
	
   

  	
  Texas Roadhouse of Roseville, LLC

  
	
   

  	
  Texas Roadhouse of Boise, LLC

  
	
   

  	
  Texas Roadhouse of Cedar Falls, LLC

  
	
   

  	
  Texas Roadhouse of Cheyenne, LLC

  
	
   

  	
  Texas Roadhouse of Dixie Highway, LLC

  
	
   

  	
  Texas Roadhouse of East Peoria, LLC

  
	
   

  	
  Texas Roadhouse of Elyria, LLC

  
	
   

  	
  Texas Roadhouse of Fort Wayne, LLC

  
	
   

  	
  Texas Roadhouse of Grand Junction, LLC

  
	
   

  	
  Texas Roadhouse of Lansing, LLC

  
	
   

  	
  Texas Roadhouse of New Philadelphia, LLC

  
	
   

  	
  Texas Roadhouse of Decatur, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Texas Roadhouse Property Holdings

  LLC, its manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
							

 

 

	
   

  	
  Texas Roadhouse Louisville I LLC

  
	
   

  	
  Texas Roadhouse of Abilene, Ltd.

  
	
   

  	
  Texas Roadhouse of Amarillo, Ltd.

  
	
   

  	
  Texas Roadhouse of Conroe, Ltd.

  
	
   

  	
  Texas Roadhouse of Corpus Christi, Ltd.

  
	
   

  	
  Texas Roadhouse of Denton, Ltd.

  
	
   

  	
  Texas Roadhouse of Fort Worth, Ltd.

  
	
   

  	
  Texas Roadhouse of Friendswood, Ltd.

  
	
   

  	
  Texas Roadhouse of Houston, Ltd.

  
	
   

  	
  Texas Roadhouse of Killeen, Ltd.

  
	
   

  	
  Texas Roadhouse of Live Oak, Ltd.

  
	
   

  	
  Texas Roadhouse of McAllen, Ltd.

  
	
   

  	
  Texas Roadhouse of San Antonio, Ltd.

  
	
   

  	
  Texas Roadhouse of Texarkana, Ltd.

  
	
   

  	
  Texas Roadhouse of Tyler, Ltd.

  
	
   

  	
  Texas Roadhouse of Wichita Falls, Ltd.

  
	
   

  	
  Longview Roadhouse II, Ltd.

  
	
   

  	
  Texas Roadhouse of College Station, Ltd.

  
	
   

  	
  Texas Roadhouse of El Paso, Ltd.

  
	
   

  	
  Texas Roadhouse of Grand Prairie, Ltd.

  
	
   

  	
  Texas Roadhouse of Lubbock, Ltd.

  
	
   

  	
  Texas Roadhouse of Mesquite, Ltd.

  
	
   

  	
  Texas Roadhouse of Pasadena, Ltd.

  
	
   

  	
  Texas Roadhouse of Waco, Ltd.

  
	
   

  	
  Texas Roadhouse Delaware LLC

  
	
   

  	
  Texas Roadhouse of Parker, LLC

  
	
   

  	
  Texas Roadhouse of Jacksonville, NC, LLC

  
	
   

  	
  Texas Roadhouse of Austin, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Texas Roadhouse Holdings LLC, its

  manager or general partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Texas Roadhouse, Inc., its manager

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
							

 

 

	
   

  	
  Aspen Steaks, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Aspen Steaks Exchange Subsidiary Inc.,

  its manager

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse of Gainesville, Inc., I

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse Management Corp.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
  Texas Roadhouse Development Corp.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
						

 

[Signature Pages Continue]

 

 

	
   

  	
  BANK OF
  AMERICA, NA.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
					

 

 

SCHEDULE 1

 

to

Pledge Agreement

DESCRIPTION OF COLLATERAL

 

Pledged Investment Property/Pledged Partnership/LLC
Interests

 

	
  Pledgors:

  	
   

  	
  Issuers:

  
	
   

  	
   

  	
   

  
	
  Texas Roadhouse, Inc.

  	
   

  	
  100% of Texas Roadhouse
  Holdings LLC (common shares only)

  
	
   

  	
   

  	
  100% of Texas Roadhouse
  Development Corporation

  
	
   

  	
   

  	
  100% of Texas Roadhouse
  Management Corp.

  
	
   

  	
   

  	
  100% of Aspen Steaks
  Exchange Subsidiary Inc.

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Gainesville, Inc., I

  
	
   

  	
   

  	
  100% of Texas Roadhouse
  Property Holdings LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Texas, LLC

  
	
   

  	
   

  	
   

  
	
  Aspen Steaks Exchange
  Subsidiary Inc.

  	
   

  	
  100% of Aspen Steaks, Ltd.

  
	
   

  	
   

  	
   

  
	
  Texas Roadhouse Property
  Holdings LLC

  	
   

  	
   

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Boise, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Cedar Falls, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Cheyenne, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Decatur, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Dixie Highway, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  East Peoria, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Elkhart, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Elyria, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Fort Wayne, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Grand Junction, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Lancaster, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Lynchburg, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Lansing, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  New Philadelphia, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Richmond, LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse of
  Roseville, LLC

  
	
   

  	
   

  	
   

  
	
  Texas Roadhouse Holdings
  LLC

  	
   

  	
  100% of Texas Roadhouse
  Delaware LLC

  
	
   

  	
   

  	
  100% of Texas Roadhouse
  Louisville I LLC

  
	
   

  	
   

  	
  52.5% of Texas Roadhouse
  of Parker, LLC

  
	
   

  	
   

  	
  52.5% of Texas Roadhouse
  of Jacksonville, NC, LLC

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Austin, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Abilene, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Fort Worth, Ltd.

  

 

 

	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Killeen, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  McAllen, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  San Antonio, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Wichita Falls, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  El Paso, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Amarillo, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  College Station, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Conroe, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Corpus Christi, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Denton, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Friendswood, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Grand Prairie, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Houston, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Live Oak, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Longview Roadhouse
  II, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Lubbock, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Mesquite, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Pasadena, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Texarkana, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Tyler, Ltd.

  
	
   

  	
   

  	
   

  	
  1% of Texas Roadhouse of
  Waco, Ltd.

  
	
   

  	
   

  	
   

  	
   

  
	
  Texas Roadhouse of Texas,
  LLC

  	
   

  	
  64% of Texas Roadhouse of
  Austin, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Abilene, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Fort Worth, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Killeen, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  McAllen, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  San Antonio, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Wichita Falls, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  El Paso, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Amarillo, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  College Station, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Conroe, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Corpus Christi, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Denton, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Friendswood, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Grand Prairie, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Houston, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Live Oak, Ltd.

  
	
   

  	
   

  	
  99% of Longview Roadhouse
  II, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Lubbock, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Mesquite, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Pasadena, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Texarkana, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of
  Tyler, Ltd.

  
	
   

  	
   

  	
  99% of Texas Roadhouse of Waco, Ltd.

  

 

 

 

PLEDGE AGREEMENT

 

dated as of October 8, 2004

 

by and among

 

TEXAS ROADHOUSE, INC.

 

and

 

THE SUBSIDIARIES OF THE BORROWER PARTY HERETO

 

in favor of

 

BANK OF AMERICA, N.A.,

 

as Administrative Agent

 

 

 

Table of Contents

 

	
  ARTICLE I DEFINED TERMS

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Other Definitional
  Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II GRANT OF SECURITY
  INTEREST

  	
   

  
	
  Section 2.1

  	
  Pledge and Grant
  of Security Interest

  	
   

  
	
  Section 2.2

  	
  Control
  Agreement; Acknowledgement by Issuers

  	
   

  
	
  Section 2.3

  	
  Nature of Pledge

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  Section 3.1

  	
  Existence;
  Qualification and Power; Compliance with Laws

  	
   

  
	
  Section 3.2

  	
  Authorization
  of Agreement; No Conflict

  	
   

  
	
  Section 3.3

  	
  Governmental
  Authorization; Other Consents

  	
   

  
	
  Section 3.4

  	
  Binding Effect

  	
   

  
	
  Section 3.5

  	
  Title, No Other Liens

  	
   

  
	
  Section 3.6

  	
  Perfected First Priority
  Liens

  	
   

  
	
  Section 3.7

  	
  Collateral

  	
   

  
	
  Section 3.8

  	
  Financing
  Statements

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV COVENANTS

  	
   

  
	
  Section 4.1

  	
  Delivery
  of Collateral

  	
   

  
	
  Section 4.2

  	
  Payment
  of Obligations

  	
   

  
	
  Section 4.3

  	
  Maintenance
  of Perfected Security Interest

  	
   

  
	
  Section 4.4

  	
  Changes
  in Locations, Name, etc

  	
   

  
	
  Section 4.5

  	
  Notices

  	
   

  
	
  Section 4.6

  	
  Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REMEDIAL PROVISIONS

  	
   

  
	
  Section 5.1

  	
  Collateral

  	
   

  
	
  Section 5.2

  	
  Proceeds
  to be Turned Over To Administrative Agent

  	
   

  
	
  Section 5.3

  	
  Application
  of Proceeds

  	
   

  
	
  Section 5.4

  	
  Code
  and Other Remedies

  	
   

  
	
  Section 5.5

  	
  Registration
  Rights

  	
   

  
	
  Section 5.6

  	
  Waiver, Deficiency

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI THE
  ADMINISTRATIVE AGENT

  	
   

  
	
  Section 6.1

  	
  Administrative
  Agent’s Appointment as Attorney-In-Fact, etc

  	
   

  
	
  Section 6.2

  	
  Duty of Administrative
  Agent

  	
   

  
	
  Section 6.3

  	
  Financing
  Statements

  	
   

  
	
  Section 6.4

  	
  Authority of
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
   

  
	
  Section 7.1

  	
  Amendments
  in Writing

  	
   

  
	
  Section 7.2

  	
  Notices

  	
   

  
	
  Section 7.3

  	
  No Waiver by Course of
  Conduct, Cumulative Remedies

  	
   

  
	
  Section 7.4

  	
  Enforcement
  Expenses, Indemnification

  	
   

  

 

i

 

	
  Section 7.5

  	
  Waiver
  of Jury Trial

  	
   

  
	
  Section 7.6

  	
  Successors
  and Assigns

  	
   

  
	
  Section 7.7

  	
  Set-Off

  	
   

  
	
  Section 7.8

  	
  Counterparts

  	
   

  
	
  Section 7.9

  	
  Severability

  	
   

  
	
  Section 7.10

  	
  Section Heading

  	
   

  
	
  Section 7.11

  	
  Integration

  	
   

  
	
  Section 7.12

  	
  GOVERNING LAW

  	
   

  
	
  Section 7.13

  	
  CONSENT
  TO JURISDICTION

  	
   

  
	
  Section 7.14

  	
  Acknowledgements

  	
   

  
	
  Section 7.15

  	
  Additional
  Pledgors

  	
   

  
	
  Section 7.16

  	
  Releases

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  
	
  Schedule 1

  	
  Collateral

  	
   

  

 

iiExhibit 10.2

EMPLOYMENT
AGREEMENT

(Gerard J. Hart)

 

THIS EMPLOYMENT AGREEMENT
(this “Agreement”) is entered into as of May 5, 2004 by and between
TEXAS ROADHOUSE, INC., a Delaware corporation (the “Company”), and
GERARD J. HART, a resident of the Commonwealth of Kentucky (“Executive”).

 

RECITALS

 

A.            The Company is preparing for an initial public offering
(the “IPO”) of its shares of Class A Common Stock, $0.001 par value (“Class
A Common Stock”), and has filed a Registration Statement on Form S-1 (the “Registration
Statement”) with the Securities and Exchange Commission under the
Securities Act of 1933, as amended.

 

B.            Texas Roadhouse Management Corp., a Kentucky corporation
(“Management Corp.”), has entered into an agreement to merge with a
wholly-owned subsidiary of the Company effective immediately prior to the
closing of the IPO.

 

C.            Executive is currently employed by Management Corp. as
its President, pursuant to an Employment Agreement dated March 15, 2000,
between Management Corp. and Executive (the “Prior Employment Agreement”).

 

D.            Executive has been appointed as the Chief Executive
Officer of the Company.

 

E.             The Company desires that the employment of Executive,
and Executive wishes such employment, as Chief Executive Officer of the Company
following the IPO, to be governed by the terms and conditions set forth in this
Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the foregoing premises and the respective agreements of the
Company and Executive set forth below, the Company and Executive, intending to
be legally bound, agree as follows:

 

1.             Effective Date. The
terms and conditions of Executive’s employment hereunder shall become effective
upon completion and closing of the IPO (the “Effective Date”).
Notwithstanding the preceding sentence, the terms and conditions of Executive’s
employment hereunder shall not become effective and this Agreement shall
immediately terminate if, prior to the Effective Date, any of the following
shall occur: (a) Executive resigns from his employment with Management Corp.,
(b) the death or Disability (as defined in Section 10 hereof) of Executive, (c)
the withdrawal of the Registration Statement prior to its effectiveness, (d) if
the IPO does not close on or prior to December 31, 2004, or (e) Executive’s
employment is terminated by Management Corp. Neither Executive nor the Company
may revoke or cancel this Agreement prior to the Effective Date without written
agreement of the other party.

 

 

2.             Employment. Subject to
all the terms and conditions of this Agreement, Executive’s period of
employment under this Agreement shall be the period  commencing on the Effective Date and ending
on the last day of the twelfth full fiscal quarter following the Effective Date
(the “Third Anniversary Date”), which initial twelve fiscal quarter
term, unless otherwise agreed to by the parties, shall be extended on the Third
Anniversary Date and on each anniversary of that date thereafter, for a period
of four fiscal quarters thereafter (which initial twelve fiscal quarter term
together with any such extensions, if any, the “Term”), unless the
Executive’s employment terminates earlier in accordance with Section 9 hereof.
Thereafter, if Executive continues in the employ of the Company, the employ­ment
relationship shall continue to be at will, terminable by either Executive or
the Company at any time and for any reason, with or without cause, and subject
to such terms and conditions established by the Company from time to time.

 

3.             Position and Duties.

 

(a)           Employment with the Company.
While Executive is employed by the Company during the Term, Executive shall be
employed as the Chief Executive Officer of the Company, and such other titles
as the Company may designate, and shall perform such duties and
responsibilities as the Company shall assign to him from time to time,
including duties and responsibilities relating to the Company’s wholly-owned
and partially owned subsidiaries and other affiliates.

 

(b)           Performance of Duties and
Responsibilities. Executive shall serve the Company faithfully and
to the best of his ability and shall devote his full working time, attention
and efforts to the business of the Company during his employment with the
Company hereunder. While Executive is employed by the Company during the Term,
Executive shall report to the Chairman of the Company or to such other person
as designated by the Board of Directors of the Company (the “Board”).
Executive hereby represents and confirms that he is under no contractual or
legal commitments that would prevent him from fulfilling his duties and
responsibilities as set forth in this Agreement. During his employment with the
Company, Executive shall not accept other employment or engage in other
material business activity, except as approved in writing by the Board.
Executive may participate in charitable activities and personal investment
activities to a reasonable extent, and he may serve as a director of business
organizations as approved by the Board, so long as such activities and
directorships do not interfere with the performance of his duties and
responsibilities hereunder.

 

4.             Compensation.

 

(a)           Base Salary. While
Executive is employed by the Company during the Term, the Company shall pay to
Executive a base salary at the rate of Five Hundred Thousand and no/100 Dollars
($500,000.00) per fiscal year, less deductions and withholdings, which base
salary shall be paid in accordance with the Company’s normal payroll policies
and procedures.  The Executive’s base
salary may be reviewed by the Compensation Committee of the Board on or after
September 30, 2005, and annually thereafter, to determine whether it should be
increased.

 

- 2 - 

 

(b)           Incentive Bonus.
Commencing with the first full fiscal quarter following the Effective Date and
for each full fiscal quarter thereafter that Executive is employed by the
Company during the Term, Executive shall be eligible for a quarterly incentive
bonus in an amount up to Seventy Five Thousand and no/100 Dollars ($75,000.00),
based upon achievement of defined goals established by the Compensation
Committee of the Board and in accordance with the terms of any incentive plan
of the Company in effect from time to time (the “Incentive  Bonus”).
The level of achievement of the objectives each fiscal quarter and the amount
payable as Incentive Bonus shall be determined in good faith by the
Compensation Committee. Any Incentive Bonus earned for a fiscal quarter shall
be paid to Executive on or before the 90th day following the last
day of such fiscal quarter.  The amount
of the Executive’s quarterly incentive bonus may be reviewed by the
Compensation Committee of the Board on or after September 30, 2005, and
annually thereafter, to determine whether it should be increased.

 

(c)           Stock Options.

 

(i)            Pursuant to the 2004 Equity Incentive Plan of the
Company, as of the Effective Date, Executive shall be granted options (the “Options”)
to purchase 165,000 shares of Class A Common Stock at an exercise price equal
to the price per share at which shares of Class A Common Stock are offered to
the public in the IPO.

 

(ii)           The Options shall vest in accordance with the following
schedule:

 

	
  Date

  	
   

  	
  Amount Vesting

  	
   

  
	
  First Anniversary of the Effective Date

  	
   

  	
  24,000
  shares

  	
   

  
	
  Second Anniversary of Effective Date

  	
   

  	
  24,000
  shares

  	
   

  
	
  Third Anniversary of Effective Date

  	
   

  	
  117,000
  shares

  	
   

  

 

(iii)          If a share dividend, share split or share combination shall
occur with respect to the Common Shares of Texas Roadhouse Holdings LLC, a
Kentucky limited liability company, shall occur prior to the closing of the
IPO, or such Common Shares are exchanged for shares of Class A Common Stock in
connection with the IPO on a basis other than one-to-one, the amounts set forth
in this Section 4(c) shall be correspondingly adjusted.

 

(iv)          In the event of a termination of Executive’s Employment
other than for Cause (as defined below) or termination by Executive for Good
Reason (as defined below) within 12 months following a Change of Control (as
defined below), or prior to a Change of Control at the direction of a person
who has entered into an agreement with the Company, the consummation of which
will constitute a Change of Control, and contingent upon Executive’s execution
of a full release of claims in the manner set forth in Section 10(g), the Options
and all other options granted under any stock option and stock incentive plans
of

 

- 3 - 

 

 the Company that are outstanding as of the
date of termination shall become immediately exercisable in full and shall
remain exercisable until the earlier of (A) two years after termination of
Executive’s employment by the Company or (B) the option expiration date as set
forth in the applicable option agreement.

 

(v)            A “Change of Control” shall mean that one of the
following events has taken place at any time during the Term:

(A)          The stockholders of the Company approve one of the
following:

(I)            Any merger or statutory plan of exchange involving the
Company (“Merger”) in which the Company is not the continuing or surviving
corporation or pursuant to which the Common Stock, $0.001 par value (“Common
Stock”) would be converted into cash, securities or other property, other
than a Merger involving the Company in which the holders of Common Stock
immediately prior to the Merger have substantially the same proportionate
ownership of common stock of the surviving corporation after the Merger; or

               (II)           Any
sale, lease, exchange, or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company
or the adoption of any plan or proposal for the liquidation or dissolution;

B)            During any period of 12 months or less, individuals who
at the beginning of such period constituted a majority of the Board of
Directors cease for any reason to constitute a majority thereof unless the
nomination or election of such new directors was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period; or

C)            A tender or exchange offer, other than one made by:

(I)            the Company, or by

(II)           W. Kent Taylor or any corporation, limited liability
company, partnership, or other entity in which W. Kent Taylor (x) owns a direct
or indirect ownership of 50% or more or (y) controls 50% or more of the voting
power (collectively, the “Taylor Parties”)

is made for the Common Stock
(or securities convertible into Common Stock) and such offer results in a
portion of those securities being purchased and the offeror after the
consummation of the offer is the beneficial owner (as determined pursuant to
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)),

 

-
4 - 

 

directly or indirectly, of
securities representing in excess of the greater of (a) at least 20 percent of
the voting power of outstanding securities of the Company or (b) the percentage
of the voting power of the outstanding securities of the Company collectively
held by all of the Taylor Parties; or

 

(D)          Any person other than a Taylor Party
becomes the beneficial owner of securities representing in excess of the
greater of (i) 20 percent of the aggregate voting power of the outstanding
securities of the Company as disclosed in a report on Schedule 13D of the
Exchange Act or (ii) the percentage of the voting power of the outstanding
securities of the Company collectively held by all of the Taylor Parties.

 

Notwithstanding anything in
the foregoing to the contrary, no Change of Control shall be deemed to have
occurred for purposes of this Agreement by virtue of any transaction which
results in Executive, or a group of persons which includes Executive,
acquiring, directly or indirectly, securities representing 20 percent or more
of the voting power of outstanding securities of the Company.

vi)            A termination by Executive for “Good
Reason” shall mean a termination based on:

 

(A)          the assignment to Executive of a
different title or job responsibilities that result in a substantial decrease
in the level of responsibility from those in effect immediately prior to the
Change of Control;

 

(B)           a reduction by the Company or the
surviving company in Executive’s base pay as in effect immediately prior to the
Change of Control;

 

(C)           a significant reduction by the
Company or the surviving company in total benefits available to Executive under
cash incentive, stock incentive and other employee benefit plans after the
Change of Control compared to the total package of such benefits as in effect
prior to the Change of Control;

 

(D)          the requirement by the Company or the
surviving company that Executive be based more than 50 miles from where
Executive’s office is located immediately prior to the Change of Control,
except for required travel on company business to an extent substantially
consistent with the business travel obligations which Executive undertook on
behalf of the Company prior to the Change of Control; or

 

(E)           the failure by the Company to obtain
from any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company (“Successor”) the assent to this Agreement contemplated by
Section 13(g) hereof.

 

- 5 - 

 

(d)           Benefits. While Executive
is employed by the Company during the Term, Executive shall be entitled to
participate in all employee benefit plans and programs of the Company that are
available to executive officers generally to the extent that Executive meets
the eligibility requirements for each individual plan or program. The Company
provides no assurance as to the adoption or continuance of any particular
employee benefit plan or program, and Executive’s participation in any such
plan or program shall be subject to the provisions, rules and regulations
applicable thereto.

 

(e)           Expenses. While Executive
is employed by the Company during the Term, the Company shall reimburse
Executive for all reasonable and necessary out-of-pocket business, travel and
entertainment expenses incurred by him in the performance of his duties and
responsibilities hereunder, subject to the Company’s normal policies and
procedures for expense verification and documentation.

 

(f)            Vacations and Holidays.  Executive shall be entitled to be absent from
his duties for the Company by reason of vacation for a period of four weeks per
calendar year.  Executive shall
coordinate his vacation schedule with the Company so as not to impose an undue
burden on the Company.  In addition,
Executive shall be entitled to such national and religious holidays as the
Board shall approve for all of its employees from time to time.

 

5.             Affiliated Entities. As
used in Sections 6, 7 and 8 of this Agreement, “Company” shall include
the Company and each corporation, limited liability company, partnership, or
other entity that is controlled by the Company, or is under common control with
the Company (in each case “control” meaning the direct or indirect ownership of
50% or more of all outstanding equity interests).

 

6.             Confidential Information.
Except as required in the performance of Executive’s duties as an employee of
the Company or as authorized in writing by the Board, Executive shall not,
either during Executive’s employment with the Company or at any time
thereafter, use, disclose or make accessible to any person any confidential
information for any purpose. “Confidential Information” means
information proprietary to the Company or its suppliers or prospective
suppliers and not generally known (including trade secret information) about
the Company’s suppliers, products, services, personnel, customers, recipes,
pricing, sales strategies, technology, computer software code, methods,
processes, designs, research, development systems, techniques, finances,
accounting, purchasing, and plans. All information disclosed to Executive or to
which Executive obtains access, whether originated by Executive or by others,
during the period of Executive’s employment by the Company (whether before,
during, or after the Term), shall be presumed to be Confidential Information if
it is treated by the Company as being Confidential Information or if Executive
has a reasonable basis to believe it to be Confidential Information. Executive
acknowledges that the above-described knowledge and information constitutes a
unique and valuable asset of the Company and represents a substantial
investment of time and expense by the Company, and that any disclosure or other
use of such knowledge or information other than for the sole benefit of the
Company would be wrongful and would cause irreparable harm to the Company.
During 

 

- 6 - 

 

Executive’s employment with
the Company, Executive shall refrain from committing any acts that would
materially reduce the value of such knowledge or information to the Company.
The foregoing obligations of confidentiality shall not apply to any knowledge
or information that (i) is now or subsequently becomes generally publicly
known, or (ii) is required to be disclosed by law or legal process, other than
as a direct or indirect result of the breach of this Agreement by Executive.
Executive acknowledges that the obligations imposed by this Section 6 are in
addition to, and not in place of, any obligations imposed by applicable
statutory or common law.

 

7.             Noncompetition Covenant.

 

(a)           Agreement Not to Compete.
During Executive’s employment with the Company (whether before, during, or
after the Term) and during the Restricted Period (as defined below), Executive
shall not, directly or indirectly, on his own behalf or on behalf of any person
or entity other than the Company, including without limitation as a proprietor,
principal, agent, partner, officer, director, stockholder, employee, member of
any association, consultant or otherwise, engage in any business that is
directly competitive with the business of the Company, including without
limitation any business that operates one or more full-service, casual dining
steakhouse restaurants.  The provisions
of this Section 7(a) shall also apply to any business which is directly
competitive with any other business which the Company acquires or develops
during Executive’s employment with the Company.

 

(b)           Agreement Not to Hire.
Except as required in the performance of Executive’s duties as an employee of
the Company, during Executive’s employment with the Company (whether before,
during, or after the Term) and during the Restricted Period, Executive shall
not, directly or indirectly, hire, engage or solicit or induce or attempt to
induce to cease working for the Company, any person who is then an employee of
the Company or who was an employee of the Company during the six (6) month
period immediately preceding Executive’s termination of employment with the
Company.

 

(c)           Agreement Not to Solicit.
Except as required in the performance of Executive’s duties as an employee of
the Company, during Executive’s employment with the Company (whether before,
during, or after the Term) and during the Restricted Period, Executive shall
not, directly or indirectly, solicit, request, advise, induce or attempt to
induce any vendor, supplier or other business contact of the Company to cancel,
curtail, cease doing business with, or otherwise adversely change its
relationship with the Company.

 

(d)           Restricted Period. “Restricted
Period” hereunder means the period commencing on the last day of Executive’s
employment with the Company and ending on the date that is two years following
the last day of the Term.

 

(e)           Acknowledgment. Executive
hereby acknowledges that the provisions of this Section 7 are reasonable and
necessary to protect the legitimate interests of the Company and that any
violation of this Section 7 by Executive shall cause

 

- 7 - 

 

substantial and irreparable
harm to the Company to such an extent that monetary damages alone would be an
inadequate remedy therefor. Therefore, in the event that Executive violates any
provision of this Section 7, the Company shall be entitled to an injunction, in
addition to all the other remedies it may have, restraining Executive from
violating or continuing to violate such provision.

 

(f)            Blue Pencil Doctrine. If
the duration of, the scope of or any business activity covered by any provision
of this Section 7 is in excess of what is determined to be valid and
enforceable under applicable law, such provision shall be construed to cover
only that duration, scope or activity that is determined to be valid and
enforceable. Executive hereby acknowledges that this Section 7 shall be given
the construction that renders its provisions valid and enforceable to the
maximum extent, not exceeding its express terms, possible under applicable law.

 

(g)           Permitted Equity
Ownership. Ownership by Executive, as a passive investment, of less
than 2.5% of the outstanding shares of capital stock of any corporation listed
on a national securities exchange or publicly traded in the over-the-counter
market shall not constitute a breach of this Section 7.

 

8.             Intellectual Property.

 

(a)           Disclosure and Assignment.
As of the Effective Date, Executive hereby transfers and assigns to the Company
(or its designee) all right, title, and interest of Executive in and to every
idea, concept, invention, and improvement (whether patented, patentable or not)
conceived or reduced to practice by Executive whether solely or in
collaboration with others while he is employed by the Company, and all
copyrighted or copyrightable matter created by Executive whether solely or in
collaboration with others while he is employed by the Company that relates to
the Company’s business (collectively, “Creations”). Executive shall
communicate promptly and disclose to the Company, in such form as the Company
may request, all information, details, and data pertaining to each Creation.
Every copyrightable Creation, regardless of whether copyright protection is
sought or preserved by the Company, shall be a “work made for hire” as defined
in 17 U.S.C. § 101, and the Company shall own all rights in and to such matter
throughout the world, without the payment of any royalty or other consideration
to Executive or anyone claiming through Executive.

 

(b)           Trademarks. All right,
title, and interest in and to any and all trademarks, trade names, service
marks, and logos adopted, used, or considered for use by the Company during
Executive’s employment (whether or not developed by Executive) to identify the
Company’s business or other goods or services (collectively, the “Marks”),
together with the goodwill appurtenant thereto, and all other materials, ideas,
or other property conceived, created, developed, adopted, or improved by
Executive solely or jointly during Executive’s employment by the Company and
relating to its business shall be owned exclusively by the Company. Executive
shall not have, and will not claim to have, any right, title, or interest of
any kind in or to the Marks or such other property.

 

- 8 - 

 

(c)           Documentation. Executive
shall execute and deliver to the Company such formal transfers and assignments
and such other documents as the Company may request to permit the Company (or
its designee) to file and prosecute such registration applications and other
documents it deems useful to protect or enforce its rights hereunder. Any idea,
invention, copyrightable matter, or other property relating to the Company’s
business and disclosed by Executive prior to the first anniversary of the
effective date of Executive’s termination of employment shall be deemed to be
governed by the terms of this Section 8 unless proven by Executive to have been
first conceived and made after such termination date.

 

(d)           Non-Applicability.
Executive is hereby notified that this Section 8 does not apply to any
invention for which no equipment, supplies, facility, Confidential Information,
or other trade secret information of the Company was used and which was
developed entirely on Executive’s own time, unless (i) the invention relates
(A) directly to the business of the Company or (B) to the Company’s actual or
demonstrably anticipated research or development, or (ii) the invention results
from any work performed by Executive for the Company.

 

9.             Termination of Employment.

 

(a)           Executive’s employment with the Company shall terminate
immediately upon:

 

(i)                                   Executive’s
receipt of written notice from the Company of the termination of his
employment;

 

(ii)                                  the Company’s
receipt of Executive’s written or oral resignation from the Company;

 

(iii)                               Executive’s
Disability (as defined below); or

 

(iv)                              Executive’s
death.

 

(b)           The date upon which Executive’s termination of employment
with the Company occurs shall be the “Termination Date.”

 

10.           Payments upon Termination of
Employment.

 

(a)           If Executive’s employment with the Company is terminated
by reason of:

 

(i)                                     Executive’s
abandonment of his employment or Executive’s resignation for any reason
(whether or not such resignation is set forth in writing or otherwise
communicated to the Company);

 

- 9 - 

 

(ii)                                  termination of
Executive’s employment by the Company for Cause (as defined below); or

 

(iii)                               termination of
Executive’s employment by the Company without Cause following expiration of the
Term;

 

the Company shall pay to
Executive his then-current base salary through the Termination Date.

 

(b)           If Executive’s employment with the Company is terminated
by the Company pursuant to Section 9(a)(i) effective prior to the expiration of
the Term for any reason other than for Cause (as defined below), then the
Company shall pay to Executive, subject to Section 10(g) of this Agreement:

 

(i)                                     his
then-current base salary through the Termination Date;

 

(ii)                                  any earned and
unpaid annual Incentive Bonus for the fiscal quarter immediately preceding the
fiscal quarter in which the Termination Date occurs; and

 

(iii)                               a crisp $100
bill from W. Kent Taylor.

 

Any amount payable to
Executive pursuant to Section 10(b)(ii) shall be paid to Executive by the
Company in the same manner and at the same time that Incentive Bonus payments
are made to current employees of the Company, but no earlier than the first
normal payroll date of the Company following the expiration of all applicable
rescission periods provided by law.

 

(c)           If Executive’s employment with the Company is terminated
effective prior to the expiration of the Term by reason of Executive’s death or
Disability, the Company shall pay to Executive or his beneficiary or his
estate, as the case may be, his then-current base salary through the
Termination Date, any earned and unpaid quarterly Incentive Bonus for the
fiscal quarter preceding the fiscal quarter in which the Termination Date
occurs and a pro-rated portion of any quarterly Incentive Bonus for the fiscal
quarter in which the Termination Date occurs, based on the number of days
during such fiscal quarter that Executive was employed by the Company, payable
in the same manner and at the same time that Incentive Bonus payments are made
to current employees of the Company.

 

(d)           “Cause” hereunder shall mean:

 

(i)                                     an act or acts
of dishonesty undertaken by Executive and intended to result in substantial
gain or personal enrichment of Executive at the expense of the Company;

 

- 10 - 

 

(ii)                                  unlawful
conduct or gross misconduct that is willful and deliberate on Executive’s part
and that, in either event, is materially injurious to the Company;

 

(iii)                               the conviction
of Executive of a felony;

 

(iv)                              material and
deliberate failure of Executive to perform his duties and responsibilities
hereunder or to satisfy his obligations as an officer or employee of the
Company, which failure has not been cured by Executive within ten days after
written notice thereof to Executive from the Company; or

 

(v)                                 material breach
of any terms and conditions of this Agreement by Executive not caused by the
Company, which breach has not been cured by Executive within ten days after
written notice thereof to Executive from the Company.

 

(e)           “Disability” hereunder shall mean the inability of
Executive to perform on a full-time basis the duties and responsibilities of
his employment with the Company by reason of his illness or other physical or
mental impairment or condition, if such inability continues for an
uninterrupted period of 45 days or more during any 360-day period. A period of
inability shall be “uninterrupted” unless and until Executive returns to
full-time work for a continuous period of at least 30 days.

 

(f)            In the event of termination of Executive’s employment,
the sole obligation of the Company hereunder shall be its obligation to make
the payments called for by Sections 10(a), 10(b), or 10(c) hereof, as the case
may be, and the Company shall have no other obligation to Executive or to his
beneficiary or his estate, except as otherwise provided by law.

 

(g)           Notwithstanding any other provision hereof, the Company
shall not be obligated to make any payments under Section 10(b)(ii) or (iii) of
this Agreement unless Executive has signed a full release of claims against the
Company, in a form and scope to be prescribed by the Board, all applicable
consideration periods and rescission periods provided by law shall have
expired, and Executive is in strict compliance with the terms of this Agreement
as of the dates of the payments.

 

11.           Return of Property. Upon
termination of Executive’s employment with the Company, Executive shall deliver
promptly to the Company all records, files, manuals, books, forms, documents,
letters, memoranda, data, customer lists, tables, photographs, video tapes,
audio tapes, computer disks and other computer storage media, and copies
thereof, that are the property of the Company, or that relate in any way to the
business, products, services, personnel, customers, prospective customers,
suppliers, practices, or techniques of the Company, and all other property of
the Company (such as, for example,

 

- 11 - 

 

computers, cellular
telephones, pagers, credit cards, and keys), whether or not containing
Confidential Information, that are in Executive’s possession or under Executive’s
control.

 

12.           Remedies. Executive
acknowledges that it would be difficult to fully compensate the Company for
monetary damages resulting from any breach by him of the provisions of Sections
6, 7, 8 and 11 hereof. Accordingly, in the event of any actual or threatened
breach of any such provisions, the Company shall, in addition to any other
remedies it may have, be entitled to injunctive and other equitable relief to
enforce such provisions, and such relief may be granted without the necessity
of proving actual monetary damages.

 

13.          Miscellaneous.

 

(a)           Governing Law. This
Agreement shall be governed by, subject to, and construed in accordance with
the laws of the Commonwealth of Kentucky without regard to conflict of law
principles. Any action relating to this Agreement shall only be brought in a
court of competent jurisdiction in the Commonwealth of Kentucky, and the
parties consent to the jurisdiction, venue and convenience of such courts.

 

(b)           Jurisdiction and Law.
Executive and the Company consent to jurisdiction of the courts of the
Commonwealth of Kentucky and/or the federal district courts, Western District
of Kentucky, for the purpose of resolving all issues of law, equity, or fact,
arising out of or in connection with this Agreement. Any action involving
claims of a breach of this Agreement shall be brought in such courts. Each
party consents to personal jurisdiction over such party in the state and/or
federal courts of Kentucky and hereby waives any defense of lack of personal
jurisdiction or forum non conveniens. Venue, for
the purpose of all such suits, shall be in Jefferson County, Commonwealth of
Kentucky.

 

(c)           Entire Agreement. Except
for any written stock option agreement and related agreements between Executive
and the Company, this Agreement contains the entire agreement of the parties
relating to Executive’s employment with the Company and supersedes all prior
agreements and understandings with respect to such subject matter including
without limitation the Prior Employment Agreement, and the parties hereto have
made no agreements, representations or warranties relating to the subject
matter of this Agreement that are not set forth herein.  As of the Effective Date, the Prior
Employment Agreement shall terminate and be of no further force or effect;
provided, however, any obligations of Executive or the Company arising under
the Prior Employment Agreement prior to the Effective Date shall survive such
termination.

 

(d)           No Violation of Other Agreements.
Executive hereby represents and agrees that neither (i) Executive’s entering
into this Agreement, (ii) Executive’s employment with the Company, nor (iii)
Executive’s carrying out the provisions of this Agreement, will violate any
other agreement (oral, written or other) to which Executive is a party or by
which Executive is bound.

 

- 12 - 

 

(e)           Amendments. No amendment
or modification of this Agreement shall be deemed effective unless made in
writing and signed by the parties hereto.

 

(f)            No Waiver. No term or
condition of this Agreement shall be deemed to have been waived, except by a
statement in writing signed by the party against whom enforcement of the waiver
is sought. Any written waiver shall not be deemed a continuing waiver unless
specifically stated, shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.

 

(g)           Assignment. This Agreement
shall not be assignable, in whole or in part, by either party without the prior
written consent of the other party, except that the Company may, without the
consent of Executive, assign its rights and obligations under this Agreement
(i) to any entity with which the Company may merge or consolidate, or (ii) to
any corporation or other person or business entity to which the Company may
sell or transfer all or substantially all of its assets. Upon Executive’s
written request, the Company will seek to have any Successor by agreement
assent to the fulfillment by the Company of its obligations under this
Agreement.  After any assignment by the
Company pursuant to this Section 13(g), the Company shall be discharged from
all further liability hereunder and such assignee shall thereafter be deemed to
be the “Company” for purposes of all terms and conditions of this Agreement,
including this Section 13.

 

(h)           Counterparts. This
Agreement may be executed in any number of counterparts, and such counterparts
executed and delivered, each as an original, shall constitute but one and the
same instrument.

 

(i)            Severability. Subject to
Section 7(f) hereof, to the extent that any portion of any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this Agreement shall be
unaffected and shall continue in full force and effect.

 

(j)            Survival. The terms and
conditions set forth in Sections 5, 6, 7, 8, 9, 11, 12, and 13 of this
Agreement, and any other provision that continues by its terms, shall survive
expiration of the Term or termination of Executive’s employment for any reason.

 

(k)           Captions and Headings. The
captions and paragraph headings used in this Agreement are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement or any of the provisions hereof.

 

(l)            Notices.  Any
notice required or permitted to be given under this Agreement shall be
sufficient if in writing and either delivered in person or sent by first class
certified or registered mail, postage prepaid, if to the Company, at the
Company’s principal place of business, and if to Executive, at his home address
most recently filed with the Company, or to such other address or addresses as
either party shall have designated in writing to the other party hereto.

 

- 13 - 

 

IN WITNESS WHEREOF,
Executive and the Company have executed this Agreement as of the date set forth
in the first paragraph.

 

	
  TEXAS ROADHOUSE, INC.

  
	
   

  
	
  By:

  	
  /s/ W. Kent Taylor

  
	
   

  	
  W. Kent Taylor, Chairman

  
	
   

  	
   

  
	
   

  
	
  /s/ Gerard J. Hart

  
	
  GERARD J. HART

  
	
   

  

 

-
14 -

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