Document:

Exhibit 10.1

 

EXECUTION COPY

 

 

$95,000,000

 

FIRST LIEN
CREDIT AGREEMENT

 

among

 

NEW WORLD
RESTAURANT GROUP, INC.,

as Borrower,

 

The Several
Lenders

from Time to Time Parties Hereto,

 

and

 

WELLS FARGO
FOOTHILL, INC.,

as Administrative Agent

 

Dated as of January 26,
2006

 

 

 

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

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1.

  	
   

  	
  Defined Terms

  	
   

  	
  1

  
	
  1.2.

  	
   

  	
  Other Definitional Provisions

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
   

  	
  AMOUNT AND TERMS OF TERM COMMITMENTS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1.

  	
   

  	
  Term Commitments

  	
   

  	
  25

  
	
  2.2.

  	
   

  	
  Procedure for Term Loan Borrowing

  	
   

  	
  25

  
	
  2.3.

  	
   

  	
  Repayment of Term Loans

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
   

  	
  AMOUNT AND TERMS OF REVOLVING COMMITMENTS

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1.

  	
   

  	
  Revolving Commitments

  	
   

  	
  27

  
	
  3.2.

  	
   

  	
  Procedure for Revolving Loan Borrowing

  	
   

  	
  27

  
	
  3.3.

  	
   

  	
  Swingline Commitment

  	
   

  	
  28

  
	
  3.4.

  	
   

  	
  Procedure for Swingline Borrowing; Refunding of Swingline Loans

  	
   

  	
  29

  
	
  3.5.

  	
   

  	
  Commitment Fees, etc

  	
   

  	
  30

  
	
  3.6.

  	
   

  	
  Termination or Reduction of Revolving Commitments

  	
   

  	
  30

  
	
  3.7.

  	
   

  	
  L/C Commitment

  	
   

  	
  31

  
	
  3.8.

  	
   

  	
  Procedure for Issuance of Letter of Credit

  	
   

  	
  31

  
	
  3.9.

  	
   

  	
  Fees and Other Charges

  	
   

  	
  32

  
	
  3.10.

  	
   

  	
  L/C Participations

  	
   

  	
  32

  
	
  3.11.

  	
   

  	
  Reimbursement Obligation of the Borrower

  	
   

  	
  33

  
	
  3.12.

  	
   

  	
  Obligations Absolute

  	
   

  	
  33

  
	
  3.13.

  	
   

  	
  Letter of Credit Payments

  	
   

  	
  34

  
	
  3.14.

  	
   

  	
  Applications

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
   

  	
  GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.

  	
   

  	
  Optional Prepayments

  	
   

  	
  34

  
	
  4.2.

  	
   

  	
  Mandatory Prepayments and Commitment Reductions

  	
   

  	
  35

  
	
  4.3.

  	
   

  	
  Conversion and Continuation Options

  	
   

  	
  36

  
	
  4.4.

  	
   

  	
  Limitations on Eurodollar Tranches

  	
   

  	
  37

  
	
  4.5.

  	
   

  	
  Interest Rates and Payment Dates

  	
   

  	
  37

  
	
  4.6.

  	
   

  	
  Computation of Interest and Fees

  	
   

  	
  38

  
	
  4.7.

  	
   

  	
  Inability to Determine Interest Rate

  	
   

  	
  38

  
	
  4.8.

  	
   

  	
  Pro Rata Treatment and Payments

  	
   

  	
  39

  
	
  4.9.

  	
   

  	
  Requirements of Law

  	
   

  	
  40

  
	
  4.10.

  	
   

  	
  Taxes

  	
   

  	
  41

  
	
  4.11.

  	
   

  	
  Indemnity

  	
   

  	
  43

  
	
  4.12.

  	
   

  	
  Change of Lending Office

  	
   

  	
  43

  
	
  4.13.

  	
   

  	
  Replacement of Lenders

  	
   

  	
  44

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.14.

  	
   

  	
  Evidence of Debt

  	
   

  	
  44

  
	
  4.15.

  	
   

  	
  Illegality

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.

  	
   

  	
  Financial Condition

  	
   

  	
  45

  
	
  5.2.

  	
   

  	
  No Change

  	
   

  	
  46

  
	
  5.3.

  	
   

  	
  Corporate Existence; Compliance with Law

  	
   

  	
  46

  
	
  5.4.

  	
   

  	
  Power; Authorization; Enforceable Obligations

  	
   

  	
  46

  
	
  5.5.

  	
   

  	
  No Legal Bar

  	
   

  	
  47

  
	
  5.6.

  	
   

  	
  Litigation

  	
   

  	
  47

  
	
  5.7.

  	
   

  	
  No Default

  	
   

  	
  47

  
	
  5.8.

  	
   

  	
  Ownership of Property; Liens

  	
   

  	
  47

  
	
  5.9.

  	
   

  	
  Intellectual Property

  	
   

  	
  47

  
	
  5.10.

  	
   

  	
  Taxes

  	
   

  	
  47

  
	
  5.11.

  	
   

  	
  Federal Regulations

  	
   

  	
  48

  
	
  5.12.

  	
   

  	
  Labor Matters

  	
   

  	
  48

  
	
  5.13.

  	
   

  	
  ERISA

  	
   

  	
  48

  
	
  5.14.

  	
   

  	
  Investment Company Act; Other Regulations

  	
   

  	
  48

  
	
  5.15.

  	
   

  	
  Subsidiaries

  	
   

  	
  48

  
	
  5.16.

  	
   

  	
  Use of Proceeds

  	
   

  	
  48

  
	
  5.17.

  	
   

  	
  Environmental Matters

  	
   

  	
  49

  
	
  5.18.

  	
   

  	
  Accuracy of Information, etc.

  	
   

  	
  50

  
	
  5.19.

  	
   

  	
  Security Documents

  	
   

  	
  50

  
	
  5.20.

  	
   

  	
  Solvency

  	
   

  	
  50

  
	
  5.21.

  	
   

  	
  First Lien Obligations; Senior Indebtedness.

  	
   

  	
  50

  
	
  5.22.

  	
   

  	
  Inactive Subsidiaries

  	
   

  	
  51

  
	
  5.23.

  	
   

  	
  Material Contracts

  	
   

  	
  51

  
	
  5.24.

  	
   

  	
  Bank Accounts

  	
   

  	
  51

  
	
  5.25.

  	
   

  	
  Insurance

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
   

  	
  CONDITIONS PRECEDENT

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1.

  	
   

  	
  Conditions to the Closing Date

  	
   

  	
  51

  
	
  6.2.

  	
   

  	
  Conditions to the Initial Borrowing Date

  	
   

  	
  53

  
	
  6.3.

  	
   

  	
  Conditions to Each Extension of Credit

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
   

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1.

  	
   

  	
  Financial Statements

  	
   

  	
  56

  
	
  7.2.

  	
   

  	
  Certificates; Other Information

  	
   

  	
  57

  
	
  7.3.

  	
   

  	
  Payment of Obligations

  	
   

  	
  58

  
	
  7.4.

  	
   

  	
  Maintenance of Existence; Compliance

  	
   

  	
  58

  
	
  7.5.

  	
   

  	
  Maintenance of Property; Insurance

  	
   

  	
  58

  
	
  7.6.

  	
   

  	
  Inspection of Property; Books and Records; Discussions

  	
   

  	
  58

  
	
  7.7.

  	
   

  	
  Notices

  	
   

  	
  59

  
	
  7.8.

  	
   

  	
  Environmental Laws

  	
   

  	
  59

  

 

ii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.9.

  	
   

  	
  Interest Rate Protection

  	
   

  	
  59

  
	
  7.10.

  	
   

  	
  Additional Collateral, etc.

  	
   

  	
  60

  
	
  7.11.

  	
   

  	
  Further Assurances

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
   

  	
  NEGATIVE COVENANTS

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1.

  	
   

  	
  Financial Condition Covenants

  	
   

  	
  62

  
	
  8.2.

  	
   

  	
  Indebtedness

  	
   

  	
  64

  
	
  8.3.

  	
   

  	
  Liens

  	
   

  	
  65

  
	
  8.4.

  	
   

  	
  Fundamental Changes

  	
   

  	
  67

  
	
  8.5.

  	
   

  	
  Disposition of Property

  	
   

  	
  67

  
	
  8.6.

  	
   

  	
  Restricted Payments

  	
   

  	
  68

  
	
  8.7.

  	
   

  	
  Capital Expenditures

  	
   

  	
  68

  
	
  8.8.

  	
   

  	
  Investments

  	
   

  	
  69

  
	
  8.9.

  	
   

  	
  Certain Payments and Modifications of Certain Debt Instruments

  	
   

  	
  70

  
	
  8.10.

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  71

  
	
  8.11.

  	
   

  	
  Sales and Leasebacks

  	
   

  	
  71

  
	
  8.12.

  	
   

  	
  Hedge Agreements

  	
   

  	
  71

  
	
  8.13.

  	
   

  	
  Changes in Fiscal Periods

  	
   

  	
  71

  
	
  8.14.

  	
   

  	
  Negative Pledge Clauses

  	
   

  	
  71

  
	
  8.15.

  	
   

  	
  Clauses Restricting Subsidiary Distributions

  	
   

  	
  72

  
	
  8.16.

  	
   

  	
  Lines of Business

  	
   

  	
  72

  
	
  8.17.

  	
   

  	
  Inactive Subsidiaries

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
   

  	
  EVENTS OF DEFAULT

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
   

  	
  THE AGENTS

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1.

  	
   

  	
  Appointment and Authorization of Administrative Agent

  	
   

  	
  76

  
	
  10.2.

  	
   

  	
  Delegation of Duties

  	
   

  	
  77

  
	
  10.3.

  	
   

  	
  Liability of the Administrative Agent

  	
   

  	
  77

  
	
  10.4.

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  78

  
	
  10.5.

  	
   

  	
  Notice of Default or Event of Default

  	
   

  	
  78

  
	
  10.6.

  	
   

  	
  Credit Decision

  	
   

  	
  78

  
	
  10.7.

  	
   

  	
  Costs and Expenses; Indemnification

  	
   

  	
  79

  
	
  10.8.

  	
   

  	
  Agent in Its Individual Capacity

  	
   

  	
  79

  
	
  10.9.

  	
   

  	
  Successor Administrative Agent

  	
   

  	
  80

  
	
  10.10.

  	
   

  	
  Lenders in Individual Capacity

  	
   

  	
  80

  
	
  10.11.

  	
   

  	
  Agents Generally

  	
   

  	
  80

  
	
  10.12.

  	
   

  	
  The Lead Arranger

  	
   

  	
  80

  
	
  10.13.

  	
   

  	
  The Issuing Lender; the L/C Arranger; Other Agents

  	
   

  	
  80

  
	
  10.14.

  	
   

  	
  Agency for Perfection.

  	
   

  	
  81

  
	
  10.15.

  	
   

  	
  Payments by Agent to the Lenders.

  	
   

  	
  81

  
	
  10.16.

  	
   

  	
  Concerning the Collateral and Related Loan Documents.

  	
   

  	
  81

  
	
  10.17.

  	
   

  	
  Several Obligations; No Liability

  	
   

  	
  81

  

 

iii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1.

  	
   

  	
  Amendments and Waivers

  	
   

  	
  82

  
	
  11.2.

  	
   

  	
  Notices

  	
   

  	
  84

  
	
  11.3.

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  85

  
	
  11.4.

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  85

  
	
  11.5.

  	
   

  	
  Payment of Expenses and Taxes

  	
   

  	
  85

  
	
  11.6.

  	
   

  	
  Successors and Assigns; Participations and Assignments

  	
   

  	
  86

  
	
  11.7.

  	
   

  	
  Adjustments; Set-off

  	
   

  	
  90

  
	
  11.8.

  	
   

  	
  Counterparts; Electronic Execution

  	
   

  	
  91

  
	
  11.9.

  	
   

  	
  Severability

  	
   

  	
  91

  
	
  11.10.

  	
   

  	
  Integration; Intercreditor and Subordination Agreements

  	
   

  	
  91

  
	
  11.11.

  	
   

  	
  GOVERNING LAW

  	
   

  	
  91

  
	
  11.12.

  	
   

  	
  Submission To Jurisdiction; Waivers

  	
   

  	
  91

  
	
  11.13.

  	
   

  	
  Acknowledgments

  	
   

  	
  92

  
	
  11.14.

  	
   

  	
  Releases of Guarantees and Liens

  	
   

  	
  92

  
	
  11.15.

  	
   

  	
  Confidentiality

  	
   

  	
  93

  
	
  11.16.

  	
   

  	
  Revival and Reinstatement of Obligations

  	
   

  	
  94

  
	
  11.17.

  	
   

  	
  WAIVERS OF JURY TRIAL

  	
   

  	
  94

  
	
  11.18.

  	
   

  	
  Delivery of Addenda

  	
   

  	
  94

  

 

iv

 

	
  Annex A:
  Pricing Grid

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  
	
   

  	
   

  	
   

  
	
  5.4

  	
   

  	
  Consents,
  Authorizations, Filings and Notices

  
	
  5.15

  	
   

  	
  Subsidiaries

  
	
  5.19(a)

  	
   

  	
  UCC Filing
  Jurisdictions

  
	
  5.22

  	
   

  	
  Inactive
  Subsidiaries

  
	
  5.24

  	
   

  	
  Bank
  Accounts

  
	
  5.25

  	
   

  	
  Insurance

  
	
  8.2(f)

  	
   

  	
  Existing
  Indebtedness

  
	
  8.3(g)

  	
   

  	
  Existing
  Liens

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  
	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Form of
  Addendum

  
	
  B

  	
   

  	
  Form of
  Assignment and Assumption

  
	
  C

  	
   

  	
  Form of
  Compliance Certificate

  
	
  D

  	
   

  	
  Form of
  Guarantee and Collateral Agreement

  
	
  E

  	
   

  	
  [Reserved]

  
	
  F

  	
   

  	
  Form of
  Exemption Certificate

  
	
  G-1

  	
   

  	
  Form of
  Term Note

  
	
  G-2

  	
   

  	
  Form of
  Revolving Note

  
	
  G-3

  	
   

  	
  Form of
  Swingline Note

  
	
  H

  	
   

  	
  Form of
  Closing Certificate

  
	
  I-1

  	
   

  	
  Form of
  Legal Opinion of Holme Roberts & Owen LLP

  
	
  I-2

  	
   

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

  
	
  J

  	
   

  	
  Form of
  Intercreditor Agreement

  
	
  K

  	
   

  	
  Form of
  Subordinated Loan Agreement

  
	
  L

  	
   

  	
  Form of
  Subordination Agreement

  
	
  M

  	
   

  	
  Form of
  Solvency Certificate

  

 

v

 

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

 

W
I  T  N  E  S  S  E  T  H:

 

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

 

WHEREAS, the
Borrower has requested that the Lenders make available the credit facilities
described in this Agreement in order to finance the Refinancing and to pay fees
and expenses related to the Refinancing, and to provide for the ongoing working
capital and general corporate needs of the Borrower and its Subsidiaries; and

 

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

 

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

 

SECTION 1.   DEFINITIONS

 

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

 

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

 

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

 

“Adjustment
Date”:  as defined in the Pricing
Grid.

 

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

 

 

“Affiliate”:  as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.  For purposes
of this definition, “control” of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors (or persons performing
similar functions) of such Person or (b) direct or cause the direction of
the management and policies of such Person, whether by contract or otherwise.

 

“Agents”:  the collective reference to the Lead Arranger
and the Administrative Agent, which term shall include, for the purposes of Section 10
and Section 11.5 only, the L/C Arranger, the Issuing Lender and the
Swingline Lender.

 

“Aggregate
Exposure”:  with respect to any
Lender at any time, an amount equal to (a) until the Initial Borrowing
Date, the aggregate amount of such Lender’s Commitments at such time and (b) thereafter,
the sum of (i) the aggregate then unpaid principal amount of such Lender’s
Term Loans and (ii) the amount of such Lender’s Revolving Commitment then
in effect or, if the Revolving Commitments have been terminated, the amount of
such Lender’s Revolving Extensions of Credit then outstanding.

 

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

 

“Agreement”:  this First Lien Credit Agreement.

 

“Applicable
Margin”:  for each Type of Loan, the
rate per annum set forth under the relevant column heading below:

 

	
   

  	
   

  	
  Eurodollar Loans

  	
   

  	
  Base Rate Loans

  	
   

  
	
  Revolving Loans

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  
	
  Swingline Loans

  	
   

  	
  N/A

  	
   

  	
  2.00

  	
  %

  
	
  Term Loans

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  

 

; provided,
that, on and after the first Adjustment Date (as defined in the Pricing Grid)
occurring after the date which is twelve months after the Initial Borrowing
Date, the Applicable Margin will be determined pursuant to the Pricing Grid.

 

“Application”:  an application, in such form as the L/C
Arranger or the Issuing Lender may specify from time to time, requesting the
L/C Arranger to cause a Letter of Credit to be issued (which application shall
be subject to Section 3.14).

 

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

 

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

 

2

 

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

 

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

 

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

 

“Available
Revolving Commitment”:  as to any
Revolving Lender at any time, an amount equal to the excess, if any, of (a) such
Lender’s Revolving Commitment then in effect over (b) such Lender’s
Revolving Extensions of Credit then outstanding, provided that, in
calculating any Lender’s (other than the Swingline Lender) Revolving Extensions
of Credit for purposes of determining such Lender’s Available Revolving
Commitment pursuant to Section 3.5, the aggregate principal amount of
Swingline Loans then outstanding shall be zero.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Capital
Expenditures”:  for any period, with
respect to any Person, without duplication, (i) the aggregate of all
expenditures by such Person and its Subsidiaries for the

 

3

 

acquisition of
fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements) during such period, in each case, that
should be capitalized under GAAP on a consolidated balance sheet of such Person
and its Subsidiaries, and (ii) Capital Lease Obligations incurred by such
Person and its Subsidiaries during such period, provided that (a) the
cost of any Investment permitted under Sections 8.8(k) or 8.8(l) shall not
constitute a Capital Expenditure by the Borrower or any of its Subsidiaries and
(b) Capital Expenditures funded with Reinvestment Deferred Amounts shall
not be deemed to be Capital Expenditures.

 

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

 

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

 

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

 

“Cash
Equivalents”:  (a) marketable
direct obligations issued by, or unconditionally guaranteed by, the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within one calendar year
from the date of acquisition; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities of six
months or less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States or any state
thereof having combined capital and surplus of not less than $500,000,000; (c) commercial
paper of an issuer rated at least A-1 by Standard & Poor’s Ratings
Services (“S&P”) or P-1 by Moody’s Investors Service, Inc. (“Moody’s”),
or carrying an equivalent rating by a nationally recognized rating agency, if
both of the two named rating agencies cease publishing ratings of commercial
paper issuers generally, and maturing within six months from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition,
having a term of not more than 30 days, with respect to securities issued
or fully guaranteed or insured by the United States government; (e) securities
with maturities of one year or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least
A by S&P or A by Moody’s; (f) securities with maturities of six months
or less from the date of acquisition backed by standby letters of credit issued
by any Lender or any commercial

 

4

 

bank
satisfying the requirements of clause (b) of this definition; or (g) shares
of money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this
definition or money market funds that (i) comply with the criteria set
forth in Securities and Exchange Commission Rule 2a-7 under the Investment
Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by
Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

 

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

 

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

 

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

 

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

 

“Commitment”:  as to any Lender, the sum of the Term
Commitment and the Revolving Commitment of such Lender.

 

“Commitment
Fee Rate”:  0.50% per annum.

 

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

 

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

 

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

 

“Consolidated
Current Assets”:  at any date, all
amounts (other than cash and Cash Equivalents but including any “restricted
cash” under GAAP) that would, in conformity

 

5

 

with GAAP, be
set forth opposite the caption “total current assets” (or any like caption) on
a consolidated balance sheet of the Borrower and its Subsidiaries at such date.

 

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

 

“Consolidated
EBITDA”:  for any period,
Consolidated Net Income for such period plus, without duplication and to
the extent deducted in determining Consolidated Net Income for such period, the
sum of (a) income tax expense, (b) interest expense, amortization or
writeoff of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with Indebtedness (including the Loans,
the Second Lien Term Loans and the Subordinated Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but
not limited to, goodwill) and organization costs, (e) any extraordinary
charges or extraordinary losses determined in accordance with GAAP, (f) non-cash
compensation expenses arising from the issuance of stock, options to purchase
stock and stock appreciation rights to the employees of the Borrower, (g) reasonable
legal, accounting, financing, consulting, advisory and out-of-pocket fees and
expenses incurred in connection with the initial consummation of permitted
incurrences of Indebtedness by the Borrower or any of its Subsidiaries after
the date hereof under Section 8.2(a), 8.2(b), 8.2(c), 8.2(g), 8.2(l) or
8.2(m), issuances of Capital Stock of the Borrower, permitted Dispositions
under Sections 8.5(f), 8.5(g) or 8.5(i) and permitted Investments
under Sections 8.8(k) or 8.8(l), (h) fees and expenses related to store
closures incurred during the first three fiscal years ending after the Initial
Borrowing Date and not exceeding $1,000,000 per fiscal year, (i) non-cash
charges related to changes in the exposure of the Borrower and its Subsidiaries
under Hedge Agreements, (j) reorganization costs, expenses or charges recorded
during the fiscal year ended December 31, 2005 not exceeding $1,600,000 in
the aggregate (with such amounts to be added back in the quarter (and any four
quarter period which includes such quarter) during which the cost, expense or
charge was recorded and only the amount recorded during such quarter), (k)cash
expenses related to the “Ruskin Moscou Faltischek, P.C. v. New World Restaurant
Group, Inc.” litigation in an aggregate amount not to exceed $500,000
(with such expenses to be added back in the quarter (and any four quarter
period which includes such quarter) during which such expense is recorded and
only the amount recorded during such quarter)and (l) any other non-cash
charges, non-cash expenses or non-cash losses of the Borrower or any of its
Subsidiaries for such period (excluding any such charge, expense or loss
incurred in the ordinary course of business that constitutes an accrual of or a
reserve for cash charges for any future period), provided, however,
that cash payments made in such period or in any future period in respect of
such non-cash charges, expenses or losses (excluding any such charge, expense
or loss incurred in the ordinary course of business that constitutes an accrual
of or a reserve for cash charges for any future period) shall be subtracted
from Consolidated Net Income in calculating Consolidated EBITDA in the period
when such payments are made, and minus, to the extent included in
determining such Consolidated Net Income for such period, the sum of (a) interest
income, (b) any extraordinary income or gains determined in accordance
with GAAP and (c) any other non-cash income (excluding any items that
represent the reversal of any accrual of, or cash reserve for, anticipated cash
charges in any

 

6

 

prior period
that are described in the parenthetical to clause (l) above), all as
determined on a consolidated basis.  For
the purposes of calculating Consolidated EBITDA for any period of four
consecutive fiscal quarters (each, a “Reference Period”) pursuant to any
determination of the Consolidated Leverage Ratio, (i) if at any time
during such Reference Period the Borrower or any Subsidiary shall have made any
Material Disposition, the Consolidated EBITDA for such Reference Period shall
be reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the property that is the subject of such Material Disposition
for such Reference Period or increased by an amount equal to the Consolidated
EBITDA (if negative) attributable thereto for such Reference Period and (ii) if
during such Reference Period the Borrower or any Subsidiary shall have made a
Material Acquisition, Consolidated EBITDA for such Reference Period shall be
calculated after giving pro  forma effect thereto as if such
Material Acquisition occurred on the first day of such Reference Period.  As used in this definition, “Material Acquisition”
means any Acquisition that involves the payment of consideration by the
Borrower and its Subsidiaries in excess of $2,500,000; and “Material
Disposition” means any Disposition of property or series of related
Dispositions of property that yields gross proceeds to the Borrower or any of
its Subsidiaries in excess of $2,500,000.

 

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

 

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

 

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

 

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

 

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

 

7

 

period in
respect of “restricted cash” under GAAP shall be deducted in calculating
Consolidated Interest Expense for such period.

 

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

 

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

 

“Consolidated
Net Income”:  for any period, the
consolidated net income (or loss) of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded (a) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (b) the undistributed earnings of
any Subsidiary of the Borrower (other than a Subsidiary Guarantor) to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law
applicable to such Subsidiary, provided, that this clause (b) shall
not apply to customary surplus requirements under applicable law related to the
payment of dividends.

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

“Defaulting
Lender”:  as defined in Section 4.13.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Eurocurrency
Reserve Requirements”:  for any day
as applied to a Eurodollar Loan, the aggregate (without duplication) of the
maximum rates (expressed as a decimal fraction) of reserve requirements in
effect on such day (including basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for

 

9

 

eurocurrency
funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board) maintained by a member bank of the Federal
Reserve System.

 

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

 

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

 

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

 

	
  Eurodollar
  Base Rate

  
	
  1.00 -
  Eurocurrency Reserve Requirements

  

 

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

 

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

 

“Excess
Cash Flow”:  for any fiscal year of
the Borrower, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated
Net Income for such fiscal year (other than Consolidated Net Income arising out
of any Asset Sale during such fiscal year), (ii) the amount of all
non-cash charges (including depreciation and amortization) deducted in arriving
at such Consolidated Net Income, (iii) decreases in Consolidated Working
Capital for such fiscal year, (iv) the aggregate net amount of non-cash
loss on the Disposition of Property by the Borrower and its Subsidiaries during
such fiscal year (other than sales of inventory in the ordinary course of
business), to the extent deducted in arriving at such Consolidated Net Income,
and (v) cash payments in respect of the net decrease (if any) during such
period of outstanding Investments under Sections 8.8 (d), (f) and (g), over
(b) the sum, without duplication, of (i) the amount of all non-cash
gains or credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount of Capital Expenditures of the Borrower and its Subsidiaries
during such fiscal year

 

10

 

(excluding the
principal amount of Indebtedness incurred to finance such expenditures (but
including repayments of any such Indebtedness incurring during such period or
any prior period)), (iii) the aggregate amount of all prepayments of
Revolving Loans and Swingline Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Commitments and all
optional prepayments of the Term Loans and the Second Lien Term Loans during
such fiscal year together with any prepayment premium paid in connection
therewith, (iv) the aggregate amount of all regularly scheduled principal
payments of Long-Term Debt (including the Term Loans, the Second Lien Term
Loans and the Subordinated Loans) of the Borrower and its Subsidiaries made
during such fiscal year (other than in respect of any revolving credit facility
to the extent there is not an equivalent permanent reduction in commitments
thereunder), (v) increases in Consolidated Working Capital for such fiscal
year, (vi) the aggregate net amount of non-cash gain on the Disposition of
Property by the Borrower and its Subsidiaries during such fiscal year (other
than sales of inventory in the ordinary course of business), to the extent
included in arriving at such Consolidated Net Income, (vii) cash payments
in respect of the net increase (if any) during such period of outstanding
Investments under Sections 8.8(d), (f) and (g) and (viii) cash
contributions required by law to be made to, and made to, any Plan during such
period.

 

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

 

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

 

“Excluded
Items”: collectively, (i) the Series Z Preferred, (ii) the
NJEDA Debt, (iii) the Indebtedness under the Coke Beverage Marketing
Agreement and (iv) Cash Collateralized Surety Bonds, provided, that
(x) the NJEDA Debt shall constitute an Excluded Item only to the extent cash
reserves are maintained exclusively for the purpose of repaying the NJEDA Debt
at its maturity and (y) the Coke Beverage Marketing Agreement shall only
constitute an Excluded Item to the extent a default shall not have occurred and
be continuing thereunder which permits The Coca-Cola Company to terminate such
agreement (after giving effect to any applicable cure periods) and to cause the
“Advance” or similar advances thereunder to become due and payable unless the
parties to the Coke Beverage Marketing Agreement are negotiating in good faith
to resolve such default in accordance with the dispute resolution provisions in
such agreement (in which case the Coke Beverage Marketing Agreement shall
remain an Excluded Item until the parties are no longer engaged in such negotiations
in accordance with such provisions).

 

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

 

“Facility”:  each of (a) the Term Commitments and the
Term Loans made thereunder (the “Term Facility”) and (b) the
Revolving Commitments and the extensions of credit made thereunder (the “Revolving
Facility”).

 

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

 

11

 

average of the
quotations for the day of such transactions received by the Reference Bank from
three federal funds brokers of recognized standing selected by it.

 

“First Lien
Loans”: collectively, the Term Loans and the Revolving Loans.

 

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

 

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

 

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

 

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

 

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

 

“Governmental
Authority”:  any nation or
government, any state or other political subdivision thereof, any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities
exchange and any self-regulatory organization (including the National
Association of Insurance Commissioners).

 

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

 

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

 

“Guarantee
Obligation”:  as to any Person (the “guaranteeing
person”), any obligation of (a) the guaranteeing person or (b) another
Person (including any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity
or similar obligation, in either case guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the “primary obligor”) in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee

 

12

 

Obligation of
any guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.

 

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

 

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

 

“Indebtedness”:  of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of such
Person’s business that are not outstanding after the later of (i) 60 days
after the invoice date or (ii) 30 days after payment is due), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations of such
Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) for the purpose of Section 8.2
and the definition of Replacement Equity only, the liquidation value of all mandatorily
redeemable preferred Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the
kind referred to in clauses (a) through (h) above secured by (or
for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation, (j) for the purposes of Section 8.2
and Section 9(e) only, all obligations of such Person in respect of
Hedge Agreements and (k) other than with respect to Section 9(e), all
obligations under the Coke Beverage Marketing Agreement or other similar
agreements to the extent such obligations constitute “take-or-pay”
arrangements, provided, that for the purposes of this definition, the “principal
amount” of the obligations of such Person in respect of any Hedge Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedge Agreement
were terminated at such time.  The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor.

 

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

 

13

 

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

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

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

 

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

 

“Interest
Payment Date”:  (a) as to any
Base Rate Loan (other than any Swingline Loans), the last day of each March,
June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan
having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day that is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of such
Interest Period, (d) as to any Loan (other than any Revolving Loan that is
a Base Rate Loan and any Swingline Loan), the date of any repayment or
prepayment made in respect thereof and (e) with respect to any Swingline
Loan, the date of any repayment thereof.

 

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

 

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

 

(ii)                                  the Borrower may not
select an Interest Period under a particular Facility that would extend beyond
the Revolving Termination Date or beyond the date final payment is due on the
Term Loans, as the case may be; and

 

14

 

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

 

“Investments”:  as defined in Section 8.8.

 

“Issuing
Lender”:  any financial institution
designated by the L/C Arranger as an Issuing Lender hereunder.  To the extent that there is more than one
Issuing Lender, each reference to “Issuing Lender” herein shall be deemed,
where appropriate, to be a reference to the relevant Issuing Lender with
respect to the relevant Letter of Credit.

 

“L/C
Arranger”: Wells Fargo Foothill, Inc., in its capacity as the party
responsible for causing the issuance of Letters of Credit hereunder.

 

“L/C
Commitment”:  $15,000,000.

 

“L/C Fee
Payment Date”:  the last day of each
March, June, September and December and the last day of the Revolving
Commitment Period.

 

“L/C
Obligations”:  at any time, an amount
equal to the sum, without duplication, of (a) the aggregate then undrawn
and unexpired amount of the then outstanding Letters of Credit, (b) except
to the extent the Letter of Credit will, immediately upon issuance thereof,
replace another outstanding Letter of Credit, the Stated Amount of any Letter
of Credit for which an Application has been submitted and is pending and has
not been withdrawn or revoked, but that has not yet been issued, and (c) the
aggregate amount of drawings under Letters of Credit that have not then been
reimbursed pursuant to Section 3.11.

 

“L/C
Participants”:  the collective
reference to all the Revolving Lenders other than the Issuing Lender.

 

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

 

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

 

“Letters of
Credit”:  as defined in Section 3.7(a).

 

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

 

“Loan”:  any loan made by any Lender pursuant to this
Agreement.

 

15

 

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

 

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

 

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

 

“Majority
Facility Lenders”:  with respect to
any Facility, the holders of more than 50% of the aggregate unpaid principal
amount of the Term Loans or the Total Revolving Extensions of Credit, as the
case may be, outstanding under such Facility (or, in the case of the Revolving
Facility, prior to any termination of the Revolving Commitments, the holders of
more than 50% of the Total Revolving Commitments).

 

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

 

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

 

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

 

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

 

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

 

“Net Cash
Proceeds”:  (a) in connection
with any Asset Sale or any Recovery Event, the proceeds thereof received by any
Group Member in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or by the
Disposition of any non-cash consideration received in connection therewith or
otherwise, but only as and when received) of such Asset Sale or Recovery Event,
net of attorneys’ fees, accountants’ fees, other consultants’ fees, investment
banking or brokerage fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted

 

16

 

hereunder on
any asset that is the subject of such Asset Sale or Recovery Event (other than
any Lien pursuant to a Security Document) and other customary fees and expenses
actually incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and net
of reserve amounts established by the Borrower or any Subsidiary for
liabilities reasonably anticipated in connection with such Asset Sale or
Recovery Event so long as such reserve amounts are comprised of segregated cash
or Cash Equivalents and will constitute Net Cash Proceeds to the extent such
reserve amounts are no longer required to be maintained and (b) in
connection with any issuance or sale of Capital Stock, any capital contribution
or any incurrence of Indebtedness, the cash proceeds received by any Group
Member from such issuance, contribution or incurrence, net of attorneys’ fees,
other consultants’ fees, investment banking or brokerage fees, accountants’
fees, underwriting discounts and commissions and other customary fees and
expenses actually incurred in connection therewith.

 

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

 

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

 

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

 

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

 

“Obligations”:  as defined in the Intercreditor Agreement.

 

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

 

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

 

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

 

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

 

“Permitted
Refinancing Indebtedness”:  
Indebtedness of any Group Member which satisfies each of the following
conditions:  (i) (A) to the
extent that the Net Cash Proceeds of such Indebtedness are used to prepay the
Second Lien Term Loans (or any other Indebtedness which is secured by a Lien
pursuant to this clause (i)(A)) and such Indebtedness is to be secured by a
Lien on any assets (to the extent such Indebtedness is not secured by a Lien,
this clause (i)(A) shall not apply), the terms of such Indebtedness
(including the Liens which secure such Indebtedness) shall be similar to the
terms and conditions as those applicable to the Second Lien Term Loans (other
than changes which extend the maturity thereof, decrease the interest rate
applicable thereto, release a portion of the assets subject to such Liens or
otherwise amend the terms in a manner not materially adverse to the Group
Members) and (B) to the extent that the

 

17

 

Net Cash
Proceeds of such Indebtedness are used to prepay the Subordinated Loans (or any
other subordinated Indebtedness incurred pursuant to this clause (i)(B)), such
Indebtedness shall be subordinated to the Obligations under the Loan Documents
on substantially the same terms and conditions as are applicable to the
Subordinated Loans or on such other terms as may be approved by the
Administrative Agent and the Required Lenders; (ii) the Consolidated
Leverage Ratio at such time and after giving effect thereto is equal to or less
than (A) 2.50 to 1.00 with respect to any prepayment of Second Lien Term
Loans or any Permitted Refinancing Indebtedness incurred pursuant to Section 8.2(b) or
(B) 3.25 to 1.00 with respect to any prepayment of Subordinated Loans or
any Permitted Refinancing Indebtedness incurred to refinance Subordinated Loans
or any other Indebtedness incurred pursuant to Section 8.2(c); (iii) no
Default or Event of Default shall have occurred and be continuing or would
result from the incurrence of such Indebtedness; (iv) the Administrative
Agent shall have received a copy of all the documents relating to such
Indebtedness at least five days prior to the funding of any such Indebtedness; (v) the
terms and conditions of any such Indebtedness shall not be materially more
restrictive taken as a whole to the Borrower and its Subsidiaries than the
terms of the Indebtedness being refinanced as determined in good faith by the
Borrower; (vi) such Indebtedness shall not have a stated final maturity
before the maturity date of the Indebtedness being refinanced thereby and shall
not be subject to any amortization or required repurchase or redemption
obligations (other than as contemplated by clause (i) above) on or prior
to such date; (vii) the Net Cash Proceeds of such Indebtedness are
concurrently applied to the prepayment of the Indebtedness to be refinanced
with such Net Cash Proceeds; and (viii) the Administrative Agent shall
have received a certificate of a Responsible Officer certifying compliance with
the conditions set forth in this definition (and attaching reasonable detailed
supporting calculations and other information reasonably required by the Administrative
Agent).

 

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

 

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

 

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

 

“Pricing
Grid”: the pricing grid attached hereto as Annex A.

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

“Reference
Bank”:  Wells Fargo Bank.

 

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

 

“Refunded
Swingline Loan”: as defined in Section 3.4.

 

“Refunding
Date”: as defined in Section 3.4.

 

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

 

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

 

“Reimbursement
Obligation”:  the obligation of the
Borrower to reimburse the Issuing Lender pursuant to Section 3.11 for
amounts drawn under Letters of Credit.

 

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

 

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

 

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

 

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

 

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

 

19

 

in clause (a) shall
be extended for an additional period of six months (or, if earlier, the
expiration or termination of such binding agreement).

 

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

 

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

 

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

 

“Required
Lenders”:  at any time, the holders
of more than 50% of (a) until the Initial Borrowing Date, the Commitments
then in effect and (b) thereafter, the sum of (i) the aggregate
unpaid principal amount of the Term Loans then outstanding and (ii) the
Total Revolving Commitments then in effect or, if the Revolving Commitments
have been terminated, the Total Revolving Extensions of Credit then
outstanding.

 

“Requirement
of Law”:  as to any Person, the
Certificate of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

 

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

 

“Restricted
Payments”:  as defined in Section 8.6.

 

“Revolving
Commitment”:  as to any Lender, the
obligation of such Lender, if any, to make Revolving Loans and Swingline Loans
and participate in Letters of Credit in an aggregate principal and/or face
amount not to exceed the amount set forth under the heading “Revolving
Commitment” under such Lender’s name on such Lender’s Addendum or in the
Assignment and Assumption pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof.  The original amount of the Total Revolving
Commitments is $15,000,000.

 

“Revolving
Commitment Period”:  the period from
and including the Initial Borrowing Date to the Revolving Termination Date.

 

20

 

“Revolving Extensions of Credit”:  as to any Revolving Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding, (b) such Lender’s
Revolving Percentage of the L/C Obligations then outstanding and (c) such
Lender’s Revolving Percentage of the aggregate principal amount of the
Swingline then outstanding.

 

“Revolving Facility”:  as defined in the definition of “Facility.”

 

“Revolving Lender”:  each Lender that has a Revolving Commitment
or that holds Revolving Extensions of Credit.

 

“Revolving Loans”:  as defined in Section 3.1(a).

 

“Revolving Percentage”:  as to any Revolving Lender at any time, the
percentage which such Lender’s Revolving Commitment then constitutes of the
Total Revolving Commitments (or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender’s Revolving Extensions of Credit then outstanding
constitutes of the aggregate principal amount of the Total Revolving Extensions
of Credit then outstanding).

 

“Revolving Termination Date”:  the earlier of (a) the date on which the
Revolving Commitments are terminated pursuant to Section 9 and (b) March 31,
2011, provided that, if the Borrower has not, on or prior to December 30,
2008, either (i) extended the mandatory redemption date of the Series Z
Preferred to a date that is on or after the date that is six years and six
months after the Initial Borrowing Date or (ii) redeemed all the
outstanding Series Z Preferred with the proceeds of an issuance of
Replacement Equity, the Revolving Termination Date shall be December 30,
2008, provided, that in the event that the mandatory redemption date of
the Series Z Preferred is extended after the date hereof, then the
reference to December 30, 2008 shall be deemed to be a reference to the
date which is two fiscal quarters prior to the then effective mandatory
redemption date of the Series Z Preferred (it being understood, for the
avoidance of doubt, that, for purposes of this proviso, any extension of the
scheduled redemption date of the Series Z Preferred must be effective and
not subject to any conditions (which have not been satisfied) or acceleration
provisions).

 

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

 

“Second Lien Administrative Agent”:  Bear Stearns Corporate Lending Inc., together
with any of its successors.

 

“Second Lien Credit Agreement”:  the Second Lien Credit Agreement, dated as of
January 26, 2006, among the Borrower, the several banks and other
financial institutions from time to time parties thereto and Bear Stearns
Corporate Lending, Inc., as administrative agent.

 

“Second Lien Documents”:  as defined in the Second Lien Credit
Agreement.

 

“Second Lien Secured Parties”:  as defined in the Second Lien Credit
Agreement.

 

21

 

“Second Lien Term Loans”:  the term loans made under the Second Lien
Credit Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

“Stated Amount”:  as to any Letter of Credit, at any time, the
maximum amount that then is or may become available to be drawn thereunder,
determined without regard to whether any conditions to drawing could then be
met.

 

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

 

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

 

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

 

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

 

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

“Swingline Commitment”: the
obligations of the Swingline Lender to make Swingline Loans pursuant to Section 3.3
in an aggregate amount at any one time outstanding not to exceed $3,000,000.

 

“Swingline Lender”: WFF, in its
capacity as the lender of the Swingline Loans.

 

“Swingline Loans”: as defined in Section 3.3.

 

“Swingline Participation Amount”: as
defined in Section 3.4.

 

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

 

“Term Loan”:  as defined in Section 2.1.

 

“Term Loan Commitment”: as to any
Lender, the obligation of such Lender, if any, to make a Term Loan to the
Borrower hereunder in a principal amount not to exceed the

 

23

 

amount set forth under the heading “Term Commitment” under such Lender’s
name on such Lender’s Addendum.  The
original aggregate amount of the Term Loan Commitments is $80,000,000.

 

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

 

“Total Revolving Commitments”:  at any time, the aggregate amount of the
Revolving Commitments then in effect.

 

“Total Revolving Extensions of Credit”:  at any time, the aggregate amount of the
Revolving Extensions of Credit of the Revolving Lenders outstanding at such
time.

 

“Transferee”:  any Assignee or Participant.

 

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

 

“United States”:  the United States of America.

 

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

 

“Voidable Transfer”: as defined in Section 11.16.

 

“Wells Fargo Bank”: Wells Fargo Bank,
National Association, a national banking association.

 

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

 

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

 

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

 

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

 

(b)           As
used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP, (ii) the
words “include,” “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”, (iii) the word “incur” shall be construed
to mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words “incurred” and “incurrence”

 

24

 

shall have correlative
meanings), (iv) the words “asset” and “property” (when used in the lower
case) shall be construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties, including cash,
Capital Stock, securities, revenues, accounts, leasehold interests and contract
rights, and (v) references to agreements or other Contractual Obligations
shall, unless otherwise specified, be deemed to refer to such agreements or
Contractual Obligations as amended, supplemented, restated or otherwise
modified from time to time (subject to any applicable restrictions hereunder).

 

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

 

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

 

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

 

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

 

SECTION 2.   AMOUNT AND TERMS OF TERM COMMITMENTS

 

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

 

2.2.                          Procedure
for Term Loan Borrowing.  The Borrower
has informed the Administrative Agent, the Lead Arranger and the Lenders that,
in the connection with the consummation of the Refinancing, it will require
that the Term Loans be made available to it prior to 10 A.M., New York
City time, on the Initial Borrowing Date. 
In that connection, the Borrower has requested that each Lender make
available to the Lead Arranger on the Business

 

25

 

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

 

2.3.          Repayment
of Term Loans.  The Term Loan of each
Term Lender shall mature in 20 consecutive quarterly installments on the
dates set forth below, commencing on March 31, 2006, each of which shall
be in an amount equal to such Lender’s Term Percentage multiplied by the amount set forth below opposite such installment
due date:

 

	
  Installment Due Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  475,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  475,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  475,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  475,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  950,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  950,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  950,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  950,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  2,500,000

  	
   

  

 

26

 

	
  Installment Due Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  3,125,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  3,125,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  3,125,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  3,125,000

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  12,950,000

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  12,950,000

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  12,950,000

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  12,950,000

  	
   

  

 

, provided
that, if the Borrower has not, on or prior to December 30, 2008, either (i) extended
the mandatory redemption date of the Series Z Preferred to a date that is
on or after the date that is six years and six months after the Closing Date or
(ii) redeemed all the outstanding Series Z Preferred with the
proceeds of an issuance of Replacement Equity, the Borrower shall repay the
remaining outstanding balance of the Term Loans on December 30, 2008, provided,
that in the event that the mandatory redemption date of the Series Z
Preferred is extended after the date hereof, then the reference to December 30,
2008 shall be deemed to be a reference to the date which is two fiscal quarters
prior to the then effective mandatory redemption date of the Series Z
Preferred (it being understood, for the avoidance of doubt, that, for purposes
of this proviso, any extension of the scheduled redemption date of the Series Z
Preferred must be effective and not subject to any conditions (which have not
been satisfied) or acceleration provisions).

 

SECTION 3.   AMOUNT AND TERMS OF REVOLVING
COMMITMENTS

 

3.1.          Revolving
Commitments.  (a)  Subject
to the terms and conditions hereof, each Revolving Lender severally agrees to
make revolving credit loans (“Revolving Loans”) to the Borrower from
time to time during the Revolving Commitment Period in an aggregate principal
amount at any time outstanding which, when added to such Lender’s Revolving
Percentage of the L/C Obligations then outstanding, does not exceed the amount
of such Lender’s Revolving Commitment. 
During the Revolving Commitment Period the Borrower may use the
Revolving Commitments by borrowing, prepaying and reborrowing the Revolving
Loans in whole or in part, all in accordance with the terms and conditions
hereof.  The Revolving Loans may from
time to time be Eurodollar Loans or Base Rate Loans, as determined by the
Borrower and notified to the Administrative Agent in accordance with
Sections 3.2 and 4.3.

 

(b)           The
Borrower shall repay all outstanding Revolving Loans on the Revolving
Termination Date.

 

3.2.          Procedure
for Revolving Loan Borrowing.  The
Borrower may borrow under the Revolving Commitments during the Revolving
Commitment Period on any Business Day, provided that the Borrower shall
give the Administrative Agent irrevocable written notice (it being understood
that the Administrative Agent may accept a telephonic notice given by an
Authorized Person and to be followed by a written confirmation by the next day,
provided, that failure to deliver such written notice shall not affect
the validity of any such request) (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time,

 

27

 

(a) three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day
prior to the requested Borrowing Date, in the case of Base Rate Loans) (provided
that any such notice of a borrowing of Base Rate Loans to finance payments
required to be made pursuant to Section 3.5 may be given not later than
10:00 A.M., New York City time, on the date of the proposed
borrowing), specifying (i) the amount and Type of Revolving Loans to be
borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Period therefor; provided, that, at the
Administrative Agent’s option, any such borrowing request relating to Base Rate
Loans can, subject to Section 3.3, be funded as Swingline Loans by notice
to the Borrower.  Each borrowing under
the Revolving Commitments shall be in an amount equal to (x) in the case
of Base Rate Loans, $1,000,000 or a whole multiple of $250,000 in excess
thereof (or, if the then aggregate Available Revolving Commitments are less
than $1,000,000, such lesser amount) and (y) in the case of Eurodollar
Loans, $1,000,000 or a whole multiple of $250,000 in excess thereof; provided,
that (x) the Swingline Lender may request, on behalf of the Borrower,
borrowings under the Revolving Commitments that are Base Rate Loans in other
amounts pursuant to Section 3.6 and (y) borrowings of Base Rate Loans
pursuant to Section 3.11 shall not be subject to the foregoing minimum
amounts.  Upon receipt of any such notice
from the Borrower, the Administrative Agent shall promptly notify each
Revolving Lender thereof.  Each Revolving
Lender will make the amount of its pro rata
share of each borrowing available to the Administrative Agent for the account
of the Borrower at the Funding Office prior to 12:00 Noon, New York City
time (provided, that in the case of a borrowing of a Base Rate Loan
under Section 3.11 each Revolving Lender will make the amount of its pro
rata share available to the Administrative Agent for the account of the
Borrower at the Funding Office by 11:00 A.M, New York City time), on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent.  Such borrowing
will then be made available to the Borrower by the Administrative Agent
crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Lenders and in like funds as received by the Administrative Agent.

 

3.3.          Swingline
Commitment.  (a)  Subject
to the terms and conditions hereof, the Swingline Lender agrees to make a
portion of the credit otherwise available to the Borrower under the Revolving
Commitments from time to time during the Revolving Commitment Period by making
swing line loans (“Swingline Loans”) to the Borrower; provided
that (i) the aggregate principal amount of Swingline Loans outstanding at
any time shall not exceed the Swingline Commitment then in effect
(notwithstanding that the Swingline Loans outstanding at any time, when
aggregated with the Swingline Lender’s other outstanding Revolving Loans
hereunder, may exceed the Swingline Commitment then in effect) and (ii) the
Borrower shall not request, and the Swingline Lender shall not make, any
Swingline Loan if, after giving effect to the making of such Swingline Loan,
the aggregate amount of the Available Revolving Commitments would be less than
zero.  During the Revolving Commitment
Period, the Borrower may use the Swingline Commitment by borrowing, repaying and
reborrowing, all in accordance with the terms and conditions hereof.  Swingline Loans shall be Base Rate Loans
only.

 

(b)           The
Borrower shall repay all outstanding Swingline Loans on the Revolving
Termination Date.

 

28

 

3.4.          Procedure
for Swingline Borrowing; Refunding of Swingline Loans.  (a)  Whenever the Borrower desires
that the Swingline Lender make Swingline Loans it shall give the Swingline
Lender irrevocable telephonic notice confirmed promptly in writing (which
telephonic notice must be received by the Swingline Lender not later than 1:00 P.M.,
New York City time, on the proposed Borrowing Date), specifying (i) the
amount to be borrowed and (ii) the requested Borrowing Date (which shall
be a Business Day during the Revolving Commitment Period).  Each borrowing under the Swingline Commitment
shall be in an amount equal to $500,000 or a whole multiple of $100,000 in
excess thereof.  Not later than 3:00 P.M.,
New York City time, on the Borrowing Date specified in a notice in
respect of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender.  The Administrative Agent shall
make the proceeds of such Swingline Loan available to the Borrower on such
Borrowing Date by depositing such proceeds in the account of the Borrower with
the Administrative Agent on such Borrowing Date in immediately available funds.

 

(b)           The
Swingline Lender, at any time and from time to time in its sole and absolute
discretion may (and shall at least once during each week in which the
Administrative Agent shall have exercised its option to cause requested
Revolving Loans to be funded as Swingline Loans), on behalf of the Borrower
(which hereby irrevocably directs the Swingline Lender to act on its behalf),
on one Business Day’s notice given by the Swingline Lender no later than
12:00 Noon, New York City time, request each Revolving Lender to
make, and each Revolving Lender hereby agrees to make, a Revolving Loan, in an
amount equal to such Revolving Lender’s Revolving Percentage of the aggregate
amount of the Swingline Loans (the “Refunded Swingline Loans”)
outstanding on the date of such notice, to repay the Swingline Lender.  Each Revolving Lender shall make the amount
of such Revolving Loan available to the Administrative Agent at the Funding
Office in immediately available funds, not later than 10:00 A.M.,
New York City time, one Business Day after the date of such
notice.  The proceeds of such Revolving
Loans shall be immediately made available by the Administrative Agent to the
Swingline Lender for application by the Swingline Lender to the repayment of
the Refunded Swingline Loans.

 

(c)           The
Administrative Agent shall give the Revolving Lenders notice one Business Day’s
notice, to make, and each Revolving Lender hereby agrees to make, a Revolving
Loan, in an amount equal to such Revolving Lender’s Revolving Percentage of the
aggregate amount of the borrowing request made as Swingline Loans pursuant to Section 3.2.  Each Revolving Lender shall make the amount
of such Revolving Loan available to the Administrative Agent at the Funding
Office in immediately available funds, not later than 10:00 A.M.,
New York City time, one Business Day after the date of such
notice.  The proceeds of such Revolving
Loans shall be immediately made available by the Administrative Agent to the
Borrower for application by the Borrower to the repayment of the Swingline
Loans made pursuant to Section 3.2.

 

(d)           If
prior to the time a Revolving Loan would have otherwise been made pursuant to Section 3.4(b),
one of the events described in Section 9(f) shall have occurred and
be continuing with respect to the Borrower or if for any other reason, as
determined by the Swingline Lender in its sole discretion, Revolving Loans may
not be made as contemplated by

 

29

 

Section 3.4(b), each
Revolving Lender shall, on the date such Revolving Loan was to have been made
pursuant to the notice referred to in Section 3.4(b) (the “Refunding
Date”), purchase for cash an undivided participating interest in the then
outstanding Swingline Loans by paying to the Swingline Lender an amount (the “Swingline
Participation Amount”) equal to (i) such Revolving Lender’s Revolving
Percentage times (ii) the sum of the aggregate principal amount of
Swingline Loans then outstanding that were to have been repaid with such
Revolving Loans.

 

(e)           Whenever,
at any time after the Swingline Lender has received from any Revolving Lender
such Lender’s Swingline Participation Amount, the Swingline Lender receives any
payment on account of the Swingline Loans, the Swingline Lender will distribute
to such Lender its Swingline Participation Amount (appropriately adjusted, in
the case of interest payments, to reflect the period of time during which such
Lender’s participating interest was outstanding and funded and, in the case of
principal and interest payments, to reflect such Lender’s pro  rata
portion of such payment if such payment is not sufficient to pay the principal
of and interest on all Swingline Loans then due); provided, however,
that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline
Lender.

 

(f)            Each
Revolving Lender’s obligation to make the Loans referred to in Section 3.4(b) and
to purchase participating interests pursuant to Sections 3.4(c) and (d) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right
that such Revolving Lender or the Borrower may have against the Swingline
Lender or the Administrative Agent, as the case may be, the Borrower or any
other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 6; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower; (iv) any breach of
this Agreement or any other Loan Document by the Borrower, any other Loan Party
or any other Revolving Lender; or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.

 

3.5.          Commitment
Fees, etc.  (a)  The
Borrower agrees to pay to the Administrative Agent for the account of each
Revolving Lender a commitment fee for the period from and including the Closing
Date to the last day of the Revolving Commitment Period, computed at the
Commitment Fee Rate on the average daily amount of the Available Revolving
Commitment of such Lender during the period for which payment is made, payable
quarterly in arrears on the last day of each March, June, September and December and
on the Revolving Termination Date, commencing on March 31, 2006.

 

(b)           The
Borrower agrees to pay to the Administrative Agent the fees in the amounts and
on the dates previously agreed to in writing by the Borrower and the
Administrative Agent.

 

3.6.          Termination
or Reduction of Revolving Commitments. 
The Borrower shall have the right, upon not less than three Business
Days’ notice to the Administrative Agent, to terminate the Revolving
Commitments or, from time to time, to reduce the amount of the Revolving
Commitments; provided that no such termination or reduction of Revolving

 

30

 

Commitments shall be permitted if, after giving effect
thereto and to any prepayments of the Revolving Loans and Swingline Loans made
on the effective date thereof, the Total Revolving Extensions of Credit would
exceed the Total Revolving Commitments. 
Any such reduction shall be in an amount equal to $1,000,000, or a whole
multiple thereof, and shall reduce permanently the Revolving Commitments then
in effect.

 

3.7.          L/C
Commitment.  (a)  Subject
to the terms and conditions hereof, the L/C Arranger agrees to cause the
Issuing Lender designated by it, in reliance on the agreements of the other
Revolving Lenders set forth in Section 3.10(a), to issue letters of credit
(“Letters of Credit”) for the account of the Borrower on any Business
Day during the Revolving Commitment Period in such form as may be approved from
time to time by the L/C Arranger and the Issuing Lender; provided that,
the L/C Arranger shall have no obligation to cause any Letter of Credit to be
issued if, after giving effect to such issuance, (i) the L/C Obligations
would exceed the L/C Commitment or (ii) the aggregate amount of the
Available Revolving Commitments would be less than zero.  Each Letter of Credit shall (i) be
denominated in Dollars, (ii) have a face amount of at least $250,000
(unless otherwise agreed by the L/C Arranger and the Issuing Lender) and (iii) expire
no later than the earlier of (x) the first anniversary of its date of
issuance and (y) the date that is five Business Days prior to the
Revolving Termination Date, provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in
clause (y) above).

 

(b)           The
L/C Arranger shall not at any time be obligated to cause any Letter of Credit
to be issued hereunder if such issuance would conflict with, or cause the L/C
Arranger, the Issuing Lender or any L/C Participant to exceed any limits
imposed by, any applicable Requirement of Law.

 

3.8.          Procedure
for Issuance of Letter of Credit. 
The Borrower may from time to time request that the L/C Arranger cause a
Letter of Credit to be issued by an Issuing Lender by delivering to the L/C
Arranger, with a copy to the Administrative Agent, at their addresses for
notices specified herein, an Application therefor, completed to the
satisfaction of the L/C Arranger, and such other certificates, documents and
other papers and information as the L/C Arranger may request.  Upon receipt of any Application, the L/C
Arranger will, and will cause such Issuing Lender to, process such Application
and the certificates, documents and other papers and information delivered to
it in connection therewith in accordance with their respective customary
procedures, and the L/C Arranger will promptly cause such Issuing Lender to
issue the Letter of Credit requested thereby by causing the original of such
Letter of Credit to be issued to the beneficiary thereof or as otherwise may be
agreed to by the L/C Arranger, such Issuing Lender and the Borrower (but in no
event shall any Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after the L/C Arranger’s receipt of the
Application therefor and all such other certificates, documents and other
papers and information relating thereto). 
Promptly after issuance by an Issuing Lender of a Letter of Credit, the
L/C Arranger shall furnish a copy of such Letter of Credit to the Borrower and
the Administrative Agent.  The L/C
Arranger shall promptly give notice to the Administrative Agent of the issuance
of each Letter of Credit issued by such Issuing Lender (including the amount
thereof).

 

31

 

3.9.          Fees
and Other Charges.  (a)  The
Borrower will pay a fee on the daily aggregate Stated Amount of all outstanding
Letters of Credit at a per annum rate equal to the Applicable Margin then in
effect with respect to Eurodollar Loans under the Revolving Facility, shared
ratably among the Revolving Lenders and payable quarterly in arrears on each
L/C Fee Payment Date after the issuance date. 
In addition, the Borrower shall pay to the L/C Arranger for the account
of the L/C Arranger a fronting fee on the aggregated Stated Amount of all
Letters of Credit issued by such Issuing Lender calculated at a rate per annum
equal to 0.50%, payable quarterly in arrears on each L/C Fee Payment Date after
the issuance.

 

(b)           In
addition to the foregoing fees, the Borrower shall pay or reimburse the L/C
Arranger and each Issuing Lender, without duplication, for such normal and
customary commissions, costs, fees and expenses as are incurred or charged by
the Issuing Lender in issuing, negotiating, effecting payment under, amending,
extending or otherwise administering any Letter of Credit.

 

3.10.        L/C
Participations.  (a)  The
L/C Arranger, for itself and the Issuing Lender designated by it, irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
L/C Arranger to cause the Issuing Lender to issue Letters of Credit hereunder,
each L/C Participant irrevocably agrees to accept and purchase and hereby
accepts and purchases from the L/C Arranger, on the terms and conditions set
forth below, for such L/C Participant’s own account and risk an undivided
interest equal to such L/C Participant’s Revolving Percentage in the L/C
Arranger’s obligations and rights under and in respect of each Letter of Credit
issued by the L/C Arranger’s designated Issuing Lender and the amount of each
draft paid by the Issuing Lender thereunder (which shall include the L/C
Arranger’s obligations to reimburse its designated Issuing Lender for the
amount of such drawing).  Each L/C
Participant unconditionally and irrevocably agrees with the L/C Arranger that,
if a draft is paid under any Letter of Credit for which the L/C Arranger is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative Agent (for the
account of the L/C Arranger), regardless of the occurrence or continuance of a
Default or Event of Default or the failure to satisfy any of the other
conditions specified in Section 6, upon demand of the L/C Arranger, an
amount equal to such L/C Participant’s Revolving Percentage of the amount of
such draft, or any part thereof, that is not so reimbursed; provided
that if the L/C Arranger makes any such demand after 1:00 PM New York City
time, payment will be due on the immediately succeeding business day.  The Administrative Agent shall promptly
forward such amounts to the L/C Arranger.

 

(b)           If
any amount required to be paid by any L/C Participant to the L/C Arranger
pursuant to Section 3.10(a) is paid to the Administrative Agent (and
the Administrative Agent shall promptly distribute such amount to the L/C
Arranger) within three Business Days after the date such payment is due, such
L/C Participant shall pay to the Administrative Agent for the account of the
L/C Arranger on demand (and thereafter the Administrative Agent shall promptly
pay to the L/C Arranger) an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate during
the period from and including the date such payment is required to the date on
which such payment is immediately available to the L/C Arranger times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. 
If any such amount required to be paid by any L/C Participant pursuant
to Section 3.10(a) is not made available to the Administrative Agent
for

 

32

 

the account of the L/C Arranger
by such L/C Participant within three Business Days after the date such payment
is due, the L/C Arranger shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to Base Rate Loans under the
Revolving Facility.  A certificate of the
L/C Arranger submitted to any L/C Participant with respect to any amounts owing
under this Section shall be conclusive in the absence of manifest error.

 

(c)           Whenever,
at any time after the L/C Arranger or the Issuing Lender designated by it has
made payment under any Letter of Credit and has received from any L/C
Participant its pro  rata share of such payment in accordance with
Section 3.10(a), the L/C Arranger receives any payment related to such
Letter of Credit (whether directly from the Borrower or otherwise, including
proceeds of collateral applied thereto by the Issuing Lender), or any payment
of interest on account thereof, the L/C Arranger will distribute to the
Administrative Agent for the account of such L/C Participant its pro  rata
share thereof; provided, however, that in the event that any such
payment received by the L/C Arranger shall be required to be returned by the
L/C Arranger, such L/C Participant shall return to the Administrative Agent for
the account of the L/C Arranger the portion thereof previously distributed by
the Administrative Agent to it.

 

3.11.        Reimbursement
Obligation of the Borrower.  The
Borrower agrees to reimburse the L/C Arranger on the date on which the L/C
Arranger notifies the Borrower of the date and amount of a draft presented and
paid under any Letter of Credit for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by
the L/C Arranger or the Issuing Lender (without duplication) in connection with
such payment, other than taxes based upon net income and other than taxes
payable pursuant to Section 4.10. 
Each such payment to be made by the Borrower shall be made to the
Administrative Agent at its address for notices referred to herein in Dollars
and in immediately available funds and the Administrative Agent shall promptly
distribute such payment to the L/C Arranger. 
Interest shall be payable on any and all such amounts remaining unpaid
by the Borrower from the date on which the relevant draft is paid until payment
in full or conversion as set forth below, at the rate set forth in (i) until
the Business Day next succeeding the date of the relevant notice, Section 4.5(b) and
(ii) thereafter, Section 4.5(c). 
Each drawing under any Letter of Credit shall (unless an event of the
type described in clause (i) or (ii) of Section 9(f) shall
have occurred and be continuing with respect to the Borrower, in which case the
procedures specified in Section 3.10 for funding by L/C Participants shall
apply) constitute a request by the Borrower to the Administrative Agent for a
borrowing pursuant to Section 3.2 of Base Rate Loans (or, at the option of
the Administrative Agent, a borrowing of Swingline Loans pursuant to Section 3.4)
in the amount of such drawing.  The
Borrowing Date with respect to such borrowing shall be the first date on which
a borrowing of Revolving Loans (or, if applicable, Swingline Loans) could be
made, pursuant to Section 3.2 (or, if applicable, Section 3.4), if
the Administrative Agent had received a notice of such borrowing at the time
the Administrative Agent receives notice from the Issuing Lender of such
drawing under such Letter of Credit.

 

3.12.        Obligations
Absolute.  The Borrower’s obligations
under Section 3.11 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment that the Borrower may have or have had against the L/C Arranger, the
Issuing Lender, any beneficiary of a Letter of Credit or any other Person.  The

 

33

 

Borrower also agrees with the L/C Arranger and each
Issuing Lender that the L/C Arranger and the Issuing Lenders shall not be
responsible for, and the Borrower’s Reimbursement Obligations under Section 3.11
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or any dispute between or among
the Borrower and any beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred or any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee.  Neither the L/C Arranger nor
any Issuing Lender shall be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advise, however
transmitted, in connection with any Letter of Credit, except that the L/C
Arranger shall be liable to the extent provided by law for errors and omissions
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its gross negligence or willful
misconduct.  The Borrower agrees that any
action taken or omitted by the L/C Arranger or an Issuing Lender under or in
connection with any Letter of Credit or the related drafts or documents, if
done in the absence of gross negligence or willful misconduct and in accordance
with the standards of care specified in the Uniform Commercial Code of the
State of New York, shall be binding on the Borrower and shall not result
in any liability of the L/C Arranger or any Issuing Lender to the Borrower. The
Issuing Lender shall not have any liability to the Borrower, the Administrative
Agent or the Lenders in respect of any Letters of Credit issued by it or any
Letters of Credit requested to be issued by it, nor shall the Issuing Lender
owe any duty to any Person, or be deemed to have agreed, to issue any Letters
of Credit (it being understood that the Issuing Lender shall issue Letters of
Credit, if at all, pursuant to separate contractual arrangements with, and
solely for the benefit of, the L/C Arranger and any duties, obligations or
liabilities of the Issuing Lender shall be only those set forth in such
separate contractual arrangements).

 

3.13.        Letter
of Credit Payments.  If any draft
shall be presented for payment under any Letter of Credit, the L/C Arranger
shall promptly notify the Administrative Agent and Borrower of the date and
amount thereof.  The responsibility of
the L/C Arranger and any Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to
any payment obligation expressly provided for in such Letter of Credit, be
limited to determining that the documents (including each draft) delivered
under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.

 

3.14.        Applications.  To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, or Sections 5, 6, 7, 8 or 9, as applicable, the
provisions of this Section 3 shall apply.

 

SECTION 4.   GENERAL PROVISIONS APPLICABLE TO LOANS
AND LETTERS OF CREDIT

 

4.1.          Optional
Prepayments.  The Borrower may at any
time and from time to time prepay the Loans, in whole or in part, without
premium or penalty, upon irrevocable notice delivered to the Administrative
Agent no later than 11:00 A.M., New York City time, three
Business Days prior thereto, in the case of Eurodollar Loans, and no later than
11:00 A.M., New York City time, one Business Day prior thereto,
in the case of Base Rate Loans, which

 

34

 

notice shall specify the date and amount of prepayment
and whether the prepayment is of Eurodollar Loans or Base Rate Loans; provided
that, if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 4.11. 
Upon receipt of any such notice the Administrative Agent shall promptly
notify each relevant Lender thereof.  If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Loans that are Base Rate Loans or Swingline Loans) accrued interest
to such date on the amount prepaid. 
Partial prepayments of Term Loans, Revolving Loans and Swingline Loans
shall be in an aggregate principal amount of $1,000,000 or a whole multiple
thereof.

 

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

 

(b)           If
any Indebtedness shall be incurred by any Group Member (other than Excluded
Indebtedness), an amount equal to 100% of the Net Cash Proceeds thereof shall
be applied on the date of such incurrence toward the prepayment of the Term
Loans and the reduction of the Revolving Commitments as set forth in Section 4.2(e).

 

(c)           If
on any date any Group Member shall receive Net Cash Proceeds from any Asset
Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in
respect thereof, such Net Cash Proceeds shall be applied on such date toward
the prepayment of the Term Loans and the reduction of the Revolving Commitments
as set forth in Section 4.2(e); provided, that, notwithstanding the
foregoing, on each Reinvestment Prepayment Date, an

 

35

 

amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans and the reduction of
the Revolving Commitments as set forth in Section 4.2(e).

 

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

 

(e)           Amounts
to be applied in connection with prepayments and Commitment reductions made
pursuant to Section 4.2 shall be applied, first, to the prepayment
of the Term Loans, and second, unless the Majority Facility Lenders with
respect to the Revolving Facility shall agree otherwise, to reduce permanently
the Revolving Commitments.  Any such
reduction of the Revolving Commitments shall be accompanied by prepayment of
the Revolving Loans and Swingline Loans to the extent, if any, that the Total
Revolving Extensions of Credit exceed the amount of the Total Revolving
Commitments as so reduced, provided that if the aggregate principal
amount of Revolving Loans and Swingline Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion thereof),
the Borrower shall, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount equal to 105% of the
Stated Amount of the Letters of Credit in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Lenders on
terms and conditions satisfactory to the Administrative Agent.  The application of any prepayment pursuant to
Section 4.2 shall be made, first, to Base Rate Loans and, second,
to Eurodollar Loans.  Each prepayment of
the Loans under Section 4.2 (except in the case of Revolving Loans that
are Base Rate Loans and Swingline Loans) shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.

 

4.3.          Conversion
and Continuation Options.  (a)  The
Borrower may elect from time to time to convert Eurodollar Loans to Base Rate
Loans by giving the Administrative Agent prior irrevocable notice of such
election no later than 11:00 A.M., New York City time, on the
Business Day preceding the proposed conversion date, provided that any
such conversion of Eurodollar Loans may only be made on the last day of an
Interest Period with respect thereto. 
The Borrower may elect from time to time to convert Base Rate Loans to
Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of
such election no later than 11:00 A.M., New York City time, on
the third Business Day preceding the proposed conversion date (which notice
shall specify the length of the initial Interest Period therefor), provided
that no

 

36

 

Base Rate Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions.  Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.

 

(b)           Any
Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving irrevocable
notice to the Administrative Agent, in accordance with the applicable
provisions of the term “Interest Period” set forth in Section 1.1, of the
length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations,
and provided, further, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans
shall be automatically converted to Base Rate Loans on the last day of such
then expiring Interest Period.  Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.

 

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

 

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

 

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

 

(c)           (i)  If
all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus
2% or (y) in the case of Reimbursement Obligations, the rate applicable to
Base Rate Loans under the Revolving Facility plus 2%, and (ii) if
all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to Base Rate Loans under the relevant Facility plus 2%
(or, in the case of any such other amounts that do not relate to a particular
Facility, the rate then applicable to Base Rate Loans under the Revolving
Facility plus 2%), in each case, with respect

 

37

 

to clauses (i) and (ii) above,
from the date of such non-payment until such amount is paid in full (as well
after as before judgment).

 

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

 

(e)           Reimbursement
Obligations shall bear interest pursuant to Section 3.11.

 

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

 

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

 

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

 

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

 

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

 

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

 

38

 

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

 

(b)           Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Term Loans shall be made pro  rata according
to the respective outstanding principal amounts of the Term Loans then held by
the Term Lenders.  The amount of each
principal prepayment of the Term Loans shall be applied to reduce the then
remaining installments of the Term Loans, pro  rata based upon the
then remaining principal amount thereof; provided, that if no Event of
Default has occurred and is continuing, any prepayments made to the Term Loans
pursuant to Section 4.1 may be applied, at the Borrower’s option, to the
next succeeding installment or installments of the Term Loans due within twelve
months after such prepayment is made. 
Amounts prepaid on account of the Term Loans may not be reborrowed.

 

(c)           Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Revolving Loans shall be made pro  rata
according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.

 

(d)           All
payments (including prepayments) to be made by the Borrower hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without
setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds.  The
Administrative Agent shall distribute such payments to the Lenders promptly
upon receipt in like funds as received. 
If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day.  If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business
Day.  In the case of any extension of any
payment of principal pursuant to the preceding two sentences, interest thereon shall
be payable at the then applicable rate during such extension.

 

(e)           Unless
the Administrative Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  If such amount is not made
available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the greater of (i) the
Federal Funds Effective Rate and (ii) a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation for the period until such Lender makes such amount
immediately available to the Administrative Agent.  A certificate of

 

39

 

the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error.  If such Lender’s share of such borrowing is
not made available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to Base Rate Loans under the relevant Facility, on demand, from the
Borrower.

 

(f)            If
at any time the Borrower shall be required to make any payment under any Loan
Document to or for the account of a Defaulting Lender, then the Borrower, so
long as it is then permitted to borrow Revolving Loans hereunder, may set off
and otherwise apply its obligation to make such payment against the obligation
of such Defaulting Lender to make such defaulted Revolving Loan.  In such event, the amount so set off and
otherwise applied shall be deemed to constitute a Revolving Loan or Term Loan
by such Defaulting Lender made on the date of such set-off and included within
any borrowing of Revolving Loans or Term Loans, as applicable, as the Administrative
Agent may reasonably determine.

 

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

 

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

 

(i)            shall
subject any Lender to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any Application or any Eurodollar Loan made by
it, or change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by Section 4.10 and except
for any tax on the overall net income of such Lender);

 

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

 

40

 

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

 

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

 

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

 

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

 

4.10.        Taxes.  (a)  All payments made by the
Borrower under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on any Agent or any Lender as a
result of a present or former connection between such Agent or such Lender and
the jurisdiction of the Governmental Authority imposing

 

41

 

such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely
from such Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document).  If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be
withheld from any amounts payable to any Agent or any Lender hereunder, the
amounts so payable to such Agent or such Lender shall be increased to the
extent necessary to yield to such Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrower shall not be required to increase any such
amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that
are attributable to such Lender’s failure to comply with the requirements of
paragraph (d) or (e) of this Section or (ii) that are
United States withholding taxes imposed on amounts payable to such Lender
at the time such Lender becomes a party to this Agreement, except to the extent
that such Lender’s assignor (if any) was entitled, at the time of assignment,
to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph.

 

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

 

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

 

(d)           Each
Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30)
of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) two copies of either
U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the
case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest”, a statement substantially in the form of Exhibit F
and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan
Documents.  Such forms shall be delivered
by each Non-U.S. Lender on or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation).  In addition, each Non-U.S. Lender shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. 
Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing

 

42

 

authorities for such purpose).  Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.

 

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

 

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

 

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

 

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

 

43

 

postpone any of the obligations of the Borrower or the
rights of any Lender pursuant to Section 4.9 or 4.10(a).

 

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

 

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

 

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

 

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

 

(d)           The
Borrower agrees that, upon the request to the Administrative Agent by any
Lender, the Borrower will execute and deliver to such Lender a promissory note
of the

 

44

 

Borrower evidencing any Term
Loans, Revolving Loans or Swingline Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit G-1, G-2 or G-3, respectively, with
appropriate insertions as to date and principal amount.

 

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

 

SECTION 5.   REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to each Agent
and each Lender that:

 

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

 

(b)           The
audited consolidated balance sheets of the Borrower and its consolidated
Subsidiaries as at December 31, 2003 and December 31, 2004, and the
related consolidated statements of operations, changes in stockholders’ equity
and of cash flows for each of the three years in the period ended December 31,
2004, reported on by and accompanied by the report from Grant Thornton LLP,
present fairly the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended.  The unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at its
fiscal quarter ending September 30, 2005, and the related unaudited
consolidated (i) statements of operations and cash flows for the
three-month and year-to-date periods ended on such date and (ii) the
statement of stockholders’ equity for the year-to-date period ended on such
date, present

 

45

 

fairly the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the three-month period then ended (subject to normal year-end
audit adjustments and the absence of footnotes).  All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein).  No Group Member has any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph.  During
the period from December 31, 2004 to and including the date hereof there
has been no Disposition by the Borrower and its Subsidiaries of any material
part of its business or property.

 

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

 

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

 

5.4.          Power;
Authorization; Enforceable Obligations. 
Each Loan Party has the power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to obtain extensions of credit hereunder.  Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement.  No consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the Refinancing
and the extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan
Documents, except (i) consents, authorizations, filings and notices
described in Schedule 5.4, which consents, authorizations, filings
and notices have been obtained or made and are in full force and effect and (ii) the
filings referred to in Section 5.19. 
Each Loan Document has been (or on the Initial Borrowing Date will be)
duly executed and delivered on behalf of each Loan Party party thereto.  This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’

 

46

 

rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

 

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

 

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

 

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

 

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

 

5.9.          Intellectual
Property.  Each Group Member owns, is
licensed to use or is otherwise lawfully permitted to use, all material
Intellectual Property necessary for the conduct of its business as currently
conducted; no material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does the Borrower know of
any valid basis for any such claim; and to the knowledge of the Borrower, the
use of such Intellectual Property by each Group Member does not infringe on the
rights of any Person in any material respect.

 

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

 

47

 

 

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

 

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

 

5.13.        ERISA.  Neither a Reportable Event nor an “accumulated
funding deficiency” (within the meaning of Section 412 of the Code or Section 302
of ERISA) has occurred during the five-year period prior to the date on which
this representation is made or deemed made with respect to any Plan, and each
Plan has complied in all material respects with the applicable provisions of
ERISA and the Code.  No termination of a
Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has arisen, during such five-year period. 
The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. 
Neither the Borrower nor any Commonly Controlled Entity has incurred any
withdrawal liability under Title IV of ERISA which remains unsatisfied that
would reasonably be expected to have a Material Adverse Effect and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
withdrawal liability under ERISA that would reasonably be expected to have a
Material Adverse Effect if the Borrower or any such Commonly Controlled Entity
were to engage in a complete withdrawal (as defined in Section 4203 of
ERISA) or partial withdrawal (as defined in Section 4205 of ERISA) from
any Multiemployer Plan as of the valuation date most closely preceding the date
on which this representation is made or deemed made.  No such Multiemployer Plan is in
Reorganization or Insolvent.

 

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

 

5.15.        Subsidiaries.  Except as disclosed to the Administrative
Agent by the Borrower in writing from time to time after the Closing Date, (a) Schedule 5.15
sets forth the name and jurisdiction of incorporation of each Subsidiary and,
as to each such Subsidiary, the

 

48

 

percentage of each class of Capital Stock owned by any
Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors’ qualifying shares) of
any nature relating to any Capital Stock of any Subsidiary, except as created
by the Loan Documents.

 

5.16.        Use
of Proceeds.  The proceeds of the
Term Loans shall be used to finance the Refinancing and to pay related fees and
expenses.  The proceeds of the Revolving
Loans and Swingline Loans shall be used, together with the Letters of Credit,
for general corporate purposes.

 

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

 

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

 

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

 

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

 

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

 

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

 

49

 

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

 

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

 

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

 

5.19.        Security
Documents.  Commencing on the Initial
Borrowing Date and at all times thereafter, (a) the Guarantee and
Collateral Agreement is effective to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral described therein and proceeds
thereof.  In the case of the Pledged
Stock and Pledged Notes as described in the Guarantee and Collateral Agreement,
when stock certificates and promissory notes representing such Pledged Stock
and Pledged Notes, respectively, are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings specified on Schedule 5.19(a) in
appropriate form are filed in the offices specified on Schedule 5.19(a),
the Guarantee and Collateral Agreement shall constitute a fully perfected first
priority Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the First Lien Obligations, in each case prior and superior in right to any
other Person (except, in the case of Collateral other than Pledged Stock and
Pledged Notes, Liens permitted by Section 8.3 (other than Section 8.3(b)).

 

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

 

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

 

5.21.        First
Lien Obligations; Senior Indebtedness. 
The Obligations of the Loan Parties under the Loan Documents constitute
First Lien Obligations (as defined in the

 

50

 

Intercreditor Agreement)
and “Designated Senior Indebtedness” of the Borrower under and as defined in
the Subordination Agreement.  The
obligations of each Subsidiary Guarantor under the Guarantee and Collateral
Agreement constitute “Designated Senior Indebtedness” of such Subsidiary
Guarantor under and as defined in the Subordination Agreement.

 

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

 

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

 

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

 

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

 

SECTION 6.   CONDITIONS
PRECEDENT

 

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

 

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

 

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

 

(c)           The
Senior Notes.  The Administrative
Agent and the Lead Arranger shall have received satisfactory evidence that the
Borrower shall have issued on or prior to the Closing Date an irrevocable
instruction to the trustee for the Senior Notes directing the

 

51

 

trustee to issue an irrevocable notice to the holders of the Senior
Notes redeeming the outstanding principal amount of such Senior Notes.

 

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

 

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

 

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

 

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

 

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

 

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

 

(j)            PATRIOT
Act.  The Lenders shall have
received, sufficiently in advance of the Closing Date, all documentation and
other information required by bank regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including
without limitation the United States PATRIOT Act (Title III of

 

52

 

Pub. L. 107-56 (signed into law October 26, 2001)), in each
case if requested by such Lender (such satisfaction to be evidenced by each
Lender’s execution of this Agreement).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           Second
Lien Term Loans.  The Borrower shall
have received $65,000,000 in gross cash proceeds from borrowings of the Second
Lien Term Loans under the Second Lien Credit Agreement.

 

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

 

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

 

53

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

54

 

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

 

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

 

6.3.          Conditions
to Each Extension of Credit.  The
agreement of each Lender to make any extension of credit requested to be made
by it on any date (including its initial extension of credit) is subject to the
satisfaction of the following conditions precedent:

 

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

 

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

 

Each borrowing
by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall
constitute a representation and warranty by the Borrower as of the date of such
extension of credit that the conditions contained in this Section 6.3 have
been satisfied.

 

SECTION 7.   AFFIRMATIVE COVENANTS

 

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

 

55

 

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

 

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

 

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

 

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

 

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

 

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

 

56

 

communication
pursuant to procedures approved by the Administrative Agent pursuant to Section 11.2.

 

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

 

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

 

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

 

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

 

57

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

58

 

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

 

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

 

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

 

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

 

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

 

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

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

 

7.8.          Environmental
Laws.  (a)  Comply in all
material respects with, and take all commercially reasonable efforts to ensure
compliance in all material respects by all tenants and subtenants, if any,
with, all applicable Environmental Laws, and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.

 

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

 

7.9.          Interest
Rate Protection.  In the case of the
Borrower, within 90 days after the Initial Borrowing Date, enter into, and
thereafter maintain, Hedge Agreements to the extent necessary to provide that
at least 50% of the aggregate principal amount of the Term Loans and

 

59

 

the Subordinated Loans is subject to either a fixed
interest rate or interest rate protection for a period of not less than two
years, which Hedge Agreements shall have terms and conditions reasonably
satisfactory to the Administrative Agent.

 

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

 

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

 

(c)           With
respect to any new Subsidiary (other than a Foreign Subsidiary) created or
acquired after the Initial Borrowing Date by any Group Member (which, for the
purposes of this paragraph (c), shall include any existing Subsidiary that
ceases to be a Foreign Subsidiary), promptly (i) execute and deliver to
the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in the Capital Stock of such new Subsidiary, (ii) deliver
to the Administrative Agent the certificates representing such Capital Stock,
if any, together with undated stock powers, in blank, executed and delivered by
a duly authorized officer of the relevant Group Member, (iii) cause

 

60

 

such new Subsidiary (A) to
become a party to the Guarantee and Collateral Agreement, (B) to take such
actions necessary to grant to the Administrative Agent for the benefit of the
Lenders a perfected first priority security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, in the case of the Secured Parties, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law or as may be requested by
the Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the form of Exhibit H,
with appropriate insertions and attachments, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

 

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

 

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

 

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

 

61

 

Administrative Agent or such Secured Parties may be
required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.

 

SECTION 8.   NEGATIVE COVENANTS

 

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

 

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

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  
	
  March 31, 2006

  	
   

  	
  5.25 to 1:00

  	
   

  
	
  June 30, 2006

  	
   

  	
  5.25 to 1:00

  	
   

  
	
  September 30, 2006

  	
   

  	
  5.25 to 1:00

  	
   

  
	
  December 31, 2006

  	
   

  	
  5.00 to 1:00

  	
   

  
	
  March 31, 2007

  	
   

  	
  4.75 to 1:00

  	
   

  
	
  June 30, 2007

  	
   

  	
  4.75 to 1:00

  	
   

  
	
  September 30, 2007

  	
   

  	
  4.50 to 1:00

  	
   

  
	
  December 31, 2007

  	
   

  	
  4.25 to 1:00

  	
   

  
	
  March 31, 2008

  	
   

  	
  4.00 to 1:00

  	
   

  
	
  June 30, 2008

  	
   

  	
  4.00 to 1:00

  	
   

  
	
  September 30, 2008

  	
   

  	
  3.75 to 1:00

  	
   

  
	
  December 31, 2008

  	
   

  	
  3.75 to 1:00

  	
   

  
	
  March 31, 2009

  	
   

  	
  3.50 to 1:00

  	
   

  
	
  June 30, 2009

  	
   

  	
  3.50 to 1:00

  	
   

  
	
  September 30, 2009

  	
   

  	
  3.25 to 1:00

  	
   

  
	
  December 31, 2009

  	
   

  	
  3.25 to 1:00

  	
   

  
	
  March 31, 2010

  	
   

  	
  3.25 to 1:00

  	
   

  
	
  June 30, 2010

  	
   

  	
  3.00 to 1:00

  	
   

  
	
  September 30, 2010

  	
   

  	
  3.00 to 1:00

  	
   

  
	
  December 31, 2010

  	
   

  	
  3.00 to 1:00

  	
   

  
	
  March 30, 2011

  	
   

  	
  3.00 to 1:00

  	
   

  

 

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

 

62

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated First Lien

  Leverage Ratio

  	
   

  
	
  March 31, 2006

  	
   

  	
  2.50 to 1:00

  	
   

  
	
  June 30, 2006

  	
   

  	
  2.50 to 1:00

  	
   

  
	
  September 30, 2006

  	
   

  	
  2.50 to 1:00

  	
   

  
	
  December 31, 2006

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  March 31, 2007

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  June 30, 2007

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  September 30, 2007

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  December 31, 2007

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  March 31, 2008

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  June 30, 2008

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  September 30, 2008

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  December 31, 2008

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  March 31, 2009

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  June 30, 2009

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  September 30, 2009

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  December 31, 2009

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  March 31, 2010

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  June 30, 2010

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  September 30, 2010

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  December 31, 2010

  	
   

  	
  2.00 to 1:00

  	
   

  
	
  March 30, 2011

  	
   

  	
  2.00 to 1:00

  	
   

  

 

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

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated Fixed Charge

  Coverage Ratio

  	
   

  
	
  March 31, 2006

  	
   

  	
  1.35 to 1:00

  	
   

  
	
  June 30, 2006

  	
   

  	
  1.35 to 1:00

  	
   

  
	
  September 30, 2006

  	
   

  	
  1.40 to 1:00

  	
   

  
	
  December 31, 2006

  	
   

  	
  1.40 to 1:00

  	
   

  
	
  March 31, 2007

  	
   

  	
  1.45 to 1:00

  	
   

  
	
  June 30, 2007

  	
   

  	
  1.45 to 1:00

  	
   

  
	
  September 30, 2007

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  December 31, 2007

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  March 31, 2008

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  June 30, 2008

  	
   

  	
  1.60 to 1:00

  	
   

  
	
  September 30, 2008

  	
   

  	
  1.60 to 1:00

  	
   

  
	
  December 31, 2008

  	
   

  	
  1.60 to 1:00

  	
   

  
	
  March 31, 2009

  	
   

  	
  1.60 to 1:00

  	
   

  
	
  June 30, 2009

  	
   

  	
  1.75 to 1:00

  	
   

  
	
  September 30, 2009

  	
   

  	
  1.75 to 1:00

  	
   

  
	
  December 31, 2009

  	
   

  	
  1.75 to 1:00

  	
   

  

 

63

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated Fixed Charge

  Coverage Ratio

  	
   

  
	
  March 31, 2010

  	
   

  	
  1.75 to 1:00

  	
   

  
	
  June 30, 2010

  	
   

  	
  1.75 to 1:00

  	
   

  
	
  September 30, 2010

  	
   

  	
  1.75 to 1:00

  	
   

  
	
  December 31, 2010

  	
   

  	
  1.75 to 1:00

  	
   

  
	
  March 30, 2011

  	
   

  	
  1.75 to 1:00

  	
   

  

 

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

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

 

(b)           Indebtedness
of any Loan Party under the Second Lien Credit Agreement or any Permitted
Refinancing Indebtedness, provided that the aggregate principal amount
of such Indebtedness may not exceed $65,000,000 at any time outstanding and may
not be reborrowed after repayment thereof;

 

(c)           Indebtedness
of the Borrower and the Subsidiary Guarantors under the Subordinated Loan
Agreement or any Permitted Refinancing Indebtedness; provided that the
aggregate principal amount of such Indebtedness may not exceed $25,000,000
(plus the amount of any accrued or capitalized payment in kind interest) at any
time outstanding and may not be reborrowed after repayment thereof;

 

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

 

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

 

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

 

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

 

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

 

(i)            Hedge
Agreements permitted under Section 8.12;

 

64

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           Liens
on the Collateral securing Indebtedness of Borrower and its Subsidiaries
permitted by Section 8.2(b) as long as such Liens are subordinate to
the Liens securing the First Lien Obligations pursuant to the provisions of the
Intercreditor Agreement (other than as a result of any amendment or waiver
pursuant to Section 8.3 of the Intercreditor Agreement with respect to
which the Borrower has not consented or approved);

 

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

 

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

 

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

 

(f)            zoning
restrictions, easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and minor
irregularities of title

 

65

 

that, in the aggregate, are not substantial in amount and that do not
in any case materially detract from the value of the property subject thereto
or materially interfere with the ordinary conduct of the business utilizing the
property subject to such encumbrances and restrictions;

 

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

 

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

 

(i)            judgment
Liens in respect of judgments not constituting Events of Default under Section 9(h) so
long as (A) such judgment Liens are released within 90 days after the
entry thereof or (B) the aggregate amount covered by all such judgments
Liens does not exceed $2,500,000 at any time;

 

(j)            Liens
created pursuant to the Security Documents;

 

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

 

(l)            Liens
not otherwise permitted by this Section so long as (i) the aggregate
outstanding principal amount of the obligations secured thereby does not exceed
$1,000,000 at any time and (ii) the aggregate fair market value (determined
as of the date such Lien is incurred) of the assets encumbered thereby does not
exceed (as to the Borrower and all Subsidiaries) $1,500,000 at any one time;

 

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

 

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

 

66

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

67

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  Fiscal Year

  	
   

  	
  Capital Expenditures

  	
   

  
	
  2006

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  2011

  	
   

  	
  $

  	
  20,000,000

  	
   

  

 

68

 

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

 

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

 

(b)           Investments
in cash and Cash Equivalents;

 

(c)           Guarantee
Obligations permitted by Section 8.2;

 

(d)           loans
and advances to officers, directors, consultants, employees of any Group Member
of the Borrower in the ordinary course of business (including for
indemnification, travel, entertainment and relocation expenses) in an aggregate
amount for all Group Members not to exceed $500,000 at any one time
outstanding;

 

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

 

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

 

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

 

(h)           Investments
resulting from non-cash consideration received in connection with Asset Sales
so long as the aggregate outstanding amount of such Investments does not exceed
$7,500,000 at any time;

 

(i)            Capital
Expenditures permitted under Section 8.7;

 

(j)            (i) loans
to franchisees and area developers in an amount not to exceed $250,000 in any
fiscal year and (ii) existing loans to franchisees not to exceed $250,000
in the aggregate;

 

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

 

(l)            Acquisitions,
provided that (i) no Default or Event of Default shall have then
occurred and be continuing or would result therefrom, (ii) such
Acquisition is initiated and completed on a “friendly” basis, (iii) if
such Acquisition is a Material Acquisition, after giving effect thereto on a pro
forma basis as if such Acquisition were completed on the first day of
the most recent period of four consecutive fiscal quarters for

 

69

 

which financial statements have been delivered, the Borrower would have
been in compliance with Sections 8.1(a) and 8.1(b) (assuming the
required ratio was 0.25 to 1.00 lower than the then applicable ratio), (iv) the
consideration for any such Acquisition shall consist exclusively of a
combination of (x) common stock of the Borrower and (y) other consideration in
connection with such Acquisition in an aggregate amount outstanding (valued at
cost) not to exceed at any one time the sum of (I) $1,000,000 plus (II) the
product of (A) $1,000,000 and (B) the number of calendar years ended
after the Closing Date minus (III) the outstanding amount of any Investments
made in reliance on Section 8.8(k) and (v) the Borrower shall have
delivered a certificate of a Responsible Officer certifying compliance with the
foregoing conditions (and attaching reasonably detailed calculations) at least
five Business Days prior to the consummation thereof; and

 

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

 

8.9.          Certain
Payments and Modifications of Certain Debt Instruments.  (a)  Make or offer to make any optional
or voluntary payment, optional or voluntary prepayment, optional or voluntary
repurchase or optional or voluntary redemption of or otherwise optionally or
voluntarily defease or segregate funds with respect to (i) the Series Z
Preferred or any Replacement Equity (other than with the Net Cash Proceeds of
any Replacement Equity), (ii) the Subordinated Loans, any Permitted
Refinancing Indebtedness incurred pursuant to Section 8.2(c), the Second
Lien Term Loans or any Permitted Refinancing Indebtedness incurred pursuant to Section 8.2(b) (in
each case, other than with the Net Cash Proceeds of (x) any Capital Stock
issued to any Group Member or the Permitted Investors, (y) so long as (A) the
Consolidated Leverage Ratio at such time and after giving effect thereto is
equal to or less than 3.25 to 1.00 and (B) no Default or Event of Default
shall have occurred and be continuing or would result therefrom, any issuance
of common stock of the Borrower, or (z) so long as no Default or Event of
Default shall have occurred and be continuing or would result therefrom, Permitted
Refinancing Indebtedness), (b) amend, modify, waive or otherwise change,
or consent or agree to any amendment, modification, waiver or other change to,
any of the terms of (i) the Series Z Preferred or any Replacement
Equity consisting of preferred stock (other than any such amendment,
modification, waiver or other change that (A) would extend or eliminate
the scheduled redemption date or reduce the amount of any scheduled redemption
payment or reduce the rate or extend any date for payment of dividends thereon
and (B) does not involve the payment of a consent fee other than any
consent fees paid in connection with the extension of the scheduled redemption
date in an aggregate amount not exceeding $250,000), (ii) the Subordinated
Loan Agreement (other than any such amendment, modification, waiver or other
change that (A) would extend or eliminate the maturity or reduce the
amount of any payment of principal thereof or reduce the rate or extend any
date for payment of interest thereon and (B) does not involve the payment
of a consent fee) or (iii) the Second Lien Credit Agreement (other than
any such amendment, modification, waiver or other change that is permitted
under the Intercreditor Agreement), (c) designate any Indebtedness (other
than obligations of the Loan Parties pursuant to the Loan Documents or the
Second Lien Loan Documents (as defined in the Intercreditor Agreement) or any
Permitted Refinancing Indebtedness in respect thereof) as “Designated Senior
Indebtedness” (or any other defined term having a similar purpose) for the
purposes of the Subordination Agreement or (d) make any payment in respect
of any Indebtedness under the Coke Beverage Marketing Agreement or any other
Indebtedness of the

 

70

 

type described in clause (k) of the definition
thereof, to the extent that, after giving effect thereto, the Available
Revolving Commitment would be less than $2,000,000.

 

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

 

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

 

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

 

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

 

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

 

71

 

restricting the Group Members from assigning or
pledging their rights under such lease agreements.

 

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

 

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

 

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

 

SECTION 9.   EVENTS OF DEFAULT

 

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

 

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

 

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

 

(c)           (i)  any
Loan Party shall default in the observance or performance of any agreement
contained in clause (i) or (ii) of Section 7.4(a) (with
respect to the Borrower

 

72

 

only), Section 7.5(b), Section 7.7(a) or Section 8
of this Agreement or Sections 5.5(a) and 5.7(b) of either
Guarantee and Collateral Agreement or (ii) an “Event of Default” under and
as defined in any Mortgage shall have occurred and be continuing; or

 

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

 

(e)           any
Group Member (other than an Inactive Subsidiary) (i) defaults in making
any payment of any principal of any Indebtedness (including the Second Lien
Term Loans, the Subordinated Loans and any Guarantee Obligation, but excluding
the Loans) on the scheduled or original due date with respect thereto; or (ii) defaults
in making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created; or (iii) defaults in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement (including the Second
Lien Credit Agreement and the Subordinated Loan Agreement) evidencing, securing
or relating thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to permit
the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf
of such holder or beneficiary) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or to become
subject to a mandatory offer to purchase by the obligor thereunder or (in the
case of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall
not at any time constitute an Event of Default unless, at such time, one or
more defaults, events or conditions of the type described in clauses (i), (ii) and
(iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $2,500,000; or

 

(f)            (i) any
Group Member (other than an Inactive Subsidiary) shall commence any case, proceeding
or other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or any Group
Member shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against any Group Member (other than an Inactive Subsidiary)
any case, proceeding or other action of a nature referred to in clause (i) above
that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against any Group Member (other than an Inactive Subsidiary) any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution,

 

73

 

distraint or similar process against all or any substantial part of its
assets that results in the entry of an order for any such relief that shall not
have been vacated, discharged, or stayed or bonded pending appeal within
60 days from the entry thereof; or (iv) any Group Member (other than
an Inactive Subsidiary) shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) any Group Member (other
than an Inactive Subsidiary) shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or

 

(g)           (i)  any
Person shall engage in any “prohibited transaction” (as defined in Section 406
of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of the PBGC
or a Plan shall arise on the assets of any Group Member or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any
Group Member or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or conditions, if
any, could, in the sole judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or

 

(h)           one
or more judgments or decrees shall be entered against any Group Member
involving in the aggregate a liability (not paid or fully covered by insurance
as to which the relevant insurance company has acknowledged coverage) of
$2,500,000 or more, which such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from
the entry thereof; or

 

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

 

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

 

(k)           (i) (A) the
Permitted Investors shall cease to own of record and beneficially at least a
majority of the outstanding common stock of the Borrower and (B) any “person”
or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)),
excluding the

 

74

 

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

 

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

 

(m)          the
Second Lien Loans or the guarantees thereof shall cease, for any reason (other
than as a result of any amendment or waiver pursuant to Section 11.1 of
this Agreement or any amendment or waiver pursuant to Section 8.3 of the
Intercreditor Agreement with respect to which the Borrower has not consented or
approved), to be validly subordinated to the obligations under the Loan
Documents as provided in the Intercreditor Agreement or any Loan Party, any
Affiliate of any Loan Party or any holder of such Second Lien Loans shall so
assert;

 

then, and in
any such event, (A) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f) above with respect
to the Borrower, automatically the Commitments shall immediately terminate and
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder) shall
immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken:  (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Revolving Commitments to be terminated forthwith, whereupon the Revolving
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.  With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to this paragraph,
the Borrower shall at such time deposit in a cash collateral account opened by
the Administrative Agent an amount equal to 105% of the Stated Amount of such
Letters of Credit.  Amounts held in such
cash collateral account shall be applied by the Administrative Agent to the
payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have

 

75

 

expired or
been fully drawn upon, if any, shall be applied in accordance with the Intercreditor
Agreement.  Subject to the Intercreditor
Agreement, after all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the Borrower hereunder and under the other Loan Documents
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Borrower (or such other Person as may be
lawfully entitled thereto).  Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived by the Borrower.

 

SECTION 10.   THE AGENTS

 

10.1.        Appointment and
Authorization of Administrative Agent. 
Each Lender hereby designates and appoints the Administrative Agent as
its representative under this Agreement and the other Loan Documents and each
Lender hereby irrevocably authorizes the Administrative Agent to execute and
deliver each of the other Loan Documents on its behalf and to take such other
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.  The Administrative Agent agrees to act as
such on the express conditions contained in this Section 10.  The provisions of this Section 10 are
solely for the benefit of the Administrative Agent, and the Lenders, and the
Borrower and its Subsidiaries shall have no rights as a third party beneficiary
of any of the provisions contained herein. 
Any provision to the contrary contained elsewhere in this Agreement or
in any other Loan Document notwithstanding, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent; it being
expressly understood and agreed that the use of the word “Administrative Agent”
is for convenience only, that Wells Fargo Foothill, Inc. is merely the
representative of the Lenders, and only has the contractual duties set forth
herein.  Except as expressly otherwise
provided in this Agreement, the Administrative Agent shall have and may use its
sole discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that the
Administrative Agent expressly is entitled to take or assert under or pursuant
to this Agreement and the other Loan Documents. 
Without limiting the generality of the foregoing, or of any other
provision of the Loan Documents that provides rights or powers to the
Administrative Agent, Lenders agree that the Administrative Agent shall have
the right to exercise the following powers as long as this Agreement remains in
effect:  (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the
status of the Obligations under the Loan Documents, the Collateral, and related
matters, (b) execute or file any and all financing or similar statements
or notices, amendments, renewals, supplements, documents, instruments, proofs
of claim, notices and other written agreements with respect to the Loan
Documents, (c) make Loans, for itself or on behalf of Lenders as provided
in the Loan Documents, (d) open and maintain such bank accounts and cash
management arrangements as the Administrative Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral, (f) perform, exercise, and enforce any and
all other rights and remedies of the Lenders with respect to the Borrower, the
Obligations under the Loan Documents, the Collateral,

 

76

 

or otherwise
related to any of same as provided in the Loan Documents, and (g) incur
and pay such expenses as the Administrative Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers
pursuant to the Loan Documents.

 

10.2.        Delegation
of Duties.  The Administrative Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney in fact that it selects as long as such selection was
made without gross negligence or willful misconduct.

 

10.3.        Liability
of the Administrative Agent.  Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall (a) be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the
Lenders for any recital, statement, representation or warranty made by the
Borrower or any Subsidiary or Affiliate of the Borrower, or any officer or
director thereof, contained in this Agreement or in any other Loan Document, or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder.  Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the books and
records or properties of the Borrower or the books or records or properties of
any of the Borrower’s Subsidiaries or Affiliates.

 

10.4.        Reliance
by Administrative Agent.  The
Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, telefacsimile or
other electronic method of transmission, telex or telephone message, statement
or other document or conversation believed by it to be genuine and correct and
to have been signed, sent, or made by the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel to the Borrower or
counsel to any Lender), independent accountants and other experts selected by
the Administrative Agent.  The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless the Administrative Agent
shall first receive such advice or concurrence of the Lenders as it deems
appropriate and until such instructions are received, the Administrative
Agent shall act, or refrain from
acting, as it deems advisable.  If the Administrative
Agent so requests, it shall first be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.  The Administrative
Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the requisite

 

77

 

Lenders and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
of the Lenders.

 

10.5.        Notice
of Default or Event of Default.  The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in the payment of
principal, interest, fees, and expenses required to be paid to the
Administrative Agent for the account of the Lenders and, except with respect to
Events of Default of which the Administrative Agent has actual knowledge,
unless the Administrative Agent shall have received written notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a “notice of default.”  The Administrative Agent promptly will notify
the Lenders of its receipt of any such notice or of any Event of Default of
which the Administrative Agent has actual knowledge.  If any Lender obtains actual knowledge of any
Event of Default, such Lender promptly shall notify the other Lenders and the
Administrative Agent of such Event of Default. 
Each Lender shall be solely responsible for giving any notices to its
Participants, if any.  Subject to Section 10.4,
the Administrative Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, however, that unless and until the Administrative
Agent has received any such request, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable.

 

10.6.        Credit
Decision.  Each Lender acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
have made any representation or warranty to it, and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower and its Subsidiaries or Affiliates, shall be deemed to constitute
any representation or warranty by the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates to any
Lender.  Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon
either the Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and any other Person party
to a Loan Document, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower. 
Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and any other Person party to a Loan Document.  Except for notices, reports, and other
documents expressly herein required to be furnished to the Lenders by the Administrative
Agent, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrower and any other Person party to a

 

78

 

Loan Document that may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.

 

10.7.        Costs
and Expenses; Indemnification.  The
Administrative Agent may incur and pay
expenses to the extent the Administrative Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, attorneys
fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection
agencies, auctioneer fees and expenses, and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not the Borrower
is obligated to reimburse the Administrative Agent or the Lenders for such
expenses pursuant to this Agreement or otherwise.  Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Administrative Agent’s officers, directors, employees, agents,
attorneys-in-fact or affiliates (to the extent not reimbursed by or on behalf
of the Borrower and without limiting the obligation of the Borrower to do so),
according to their pro rata shares, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable
for the payment to any officers, directors, employees, agents,
attorneys-in-fact or affiliates of the Administrative Agent of any portion of
such Indemnified Liabilities resulting solely from such Person’s gross
negligence or willful misconduct nor shall any Lender be liable for the
obligations of any Lender in failing to make a Loan or other extension of
credit hereunder.  Without limitation of
the foregoing, each Lender shall reimburse the Administrative Agent upon demand
for such Lender’s pro rata share of any costs or out of pocket expenses
(including attorneys, accountants, advisors, and consultants fees and expenses)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment, or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein, to
the extent that the Administrative Agent is not reimbursed for such expenses by
or on behalf of the Borrower.  The
undertaking in this Section shall survive the payment of all Obligations
under the Loan Documents and the resignation or replacement of the
Administrative Agent.

 

10.8.        Agent
in Its Individual Capacity.  Each Agent
and its affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire
equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with the Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though Wells Fargo Foothill, Inc. were not the Administrative Agent
hereunder, and, in each case, without notice to or consent of the Lenders.  The other Lenders acknowledge that, pursuant
to such activities, the Administrative Agent or its Affiliates may receive
information regarding the Borrower or its Affiliates and any other Person party
to any Loan Documents that is subject to confidentiality obligations in favor of
the Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver the Administrative Agent will use its reasonable best
efforts to obtain), the Administrative Agent shall not be under any obligation
to provide such information to them.  The
terms “Lender” and “Lenders” include WFF in its individual capacity.

 

79

 

10.9.        Successor
Administrative Agent.  The
Administrative Agent may resign as
Administrative Agent upon 10 days notice to the Lenders.  If the Administrative Agent resigns under
this Agreement, the Required Lenders shall appoint a successor Administrative
Agent for the Lenders.  If no successor
Administrative Agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Lenders, a successor Administrative Agent.  If the Administrative Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
the Administrative Agent with a successor Administrative Agent from among the
Lenders.  In any such event, upon the
acceptance of its appointment as successor Administrative Agent hereunder, such
successor Administrative Agent shall succeed to all the rights, powers, and
duties of the retiring Agent and the term “Administrative Agent” shall mean
such successor Administrative Agent and the retiring Administrative Agent’s
appointment, powers, and duties as Administrative Agent shall be
terminated.  After any retiring Agent’s
resignation hereunder as Agent, the provisions of this Section 10.9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement.  If no successor Administrative Agent has
accepted appointment as Administrative Agent by the date which is 45 days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Lenders appoint a successor
Administrative Agent as provided for above.

 

10.10.      Lenders
in Individual Capacity.  Any Lender and its respective Affiliates may
make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting, or other business with the Borrower
and its Subsidiaries and Affiliates and any other Person party to any Loan
Documents as though such Lender were not a Lender hereunder without notice to
or consent of the other Lenders.  The
other Lenders acknowledge that, pursuant to such activities, such Lender and
its respective Affiliates may receive information regarding the Borrower or its
Affiliates and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of the Borrower or such other Person and
that prohibit the disclosure of such information to the Lenders, and the
Lenders acknowledge that, in such circumstances (and in the absence of a waiver
of such confidentiality obligations, which waiver such Lender will use its
reasonable best efforts to obtain), such Lender shall not be under any obligation
to provide such information to them.

 

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

 

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

 

10.13.      The Issuing
Lender; the L/C Arranger; Other Agents.  Without limiting any rights otherwise granted
herein to the L/C Arranger, any Issuing Lender or any other Agent, it is
understood and agreed that the L/C Arranger, any Issuing Lender and the other
Agents (i) shall have all of the benefits and immunities (x) provided
to the Administrative Agent in this

 

80

 

Section 10, with
respect to their rights and obligations under this Agreement and with respect
to acts taken or omissions suffered by the L/C Arranger or any Issuing Lender
in connection with Letters of Credit issued or made under this Agreement and
the documents associated therewith as fully as if the term “Administrative
Agent”, as used in this Section 10, included the L/C Arranger or such
Agent as the case may be, with respect to such acts or omissions and
(y) as additionally provided in this Agreement and (ii) shall have
all of the benefits of the provisions of Section 10.7 as fully as if the
term “Administrative Agent”, as used in Section 10.7 included the L/C
Arranger, any Issuing Lender or such other Agent; provided that, any
resignation by the L/C Arranger shall apply to its agreement to cause the
issuance of Letters of Credit and, provided  further that, if the
L/C Arranger shall resign (which may occur at any time for any reason) and no
successor L/C Arranger shall be appointed, no additional Letters of Credit
shall be issued under this Agreement.

 

10.14.      Agency for Perfection.  The Administrative Agent hereby appoints
each other Lender as its agent (and each Lender hereby accepts such
appointment) for the purpose of perfecting the Administrative Agent’s Liens in assets which, in accordance with
Article 8 or Article 9, as applicable, of the Code can be perfected
only by possession or control.  Should
any Lender obtain possession or control of any such Collateral, such Lender
shall notify the Administrative Agent
thereof, and, promptly upon the Administrative
Agent’s request therefor shall deliver possession or control of such
Collateral to the Administrative Agent
or in accordance with the Administrative
Agent’s instructions.

 

10.15.      Payments by Agent to the Lenders.  All
payments to be made by the Administrative Agent to the Lenders shall be made by
bank wire transfer of immediately available funds pursuant to such wire
transfer instructions as each party may designate for itself by written notice
to Agent.  Concurrently with each such
payment, the Administrative Agent
shall identify whether such payment (or any portion thereof) represents
principal, premium, fees, or interest of the Obligations under the Loan
Documents.

 

10.16.      Concerning the Collateral and Related Loan
Documents.  Each Lender authorizes and directs the
Administrative Agent to enter into this Agreement and the other Loan Documents
(including, without limitation, the Intercreditor Agreement).  Each Lender agrees that any action taken by
the Administrative Agent in accordance with the terms of this Agreement or the
other Loan Documents relating to the Collateral and the exercise by the
Administrative Agent of its powers set forth therein or herein, together with
such other powers that are reasonably incidental thereto, shall be binding upon
all of the Lenders.

 

10.17.      Several Obligations; No Liability.  Notwithstanding
that certain of the Loan Documents now or hereafter may have been or will be
executed only by or in favor of the Administrative Agent in its capacity as
such, and not by or in favor of the Lenders, the Administrative Agent shall not
have any obligation to make any credit available hereunder.  Nothing contained herein shall confer upon
any Lender any interest in, or subject any Lender to any liability for, or in
respect of, the business, assets, profits, losses, or liabilities of any other
Lender.  Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other
Lender.  Except as provided in Section 10.7,
no Lender shall have any liability for the acts of any Lender.  No

 

81

 

Lender shall be
responsible to the Borrower or any other Person for any failure by any other
Lender to fulfill its obligations to make credit available hereunder, nor to
advance for it or on its behalf in connection with its Commitment, nor to take
any other action on its behalf hereunder or in connection with the financing
contemplated herein.

 

SECTION 11.  MISCELLANEOUS

 

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

 

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

 

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

 

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

 

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

 

82

 

(v)           amend,
modify or waive any condition precedent to any extension of credit under the
Revolving Facility set forth in Section 6.3 (including in connection with
any waiver of an existing Default or Event of Default) without the written
consent of the Majority Facility Lenders with respect to the Revolving
Facility;

 

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

 

(vii)         reduce
the amount of Net Cash Proceeds or Excess Cash Flow required to be applied to
prepay Loans under this Agreement without the written consent of the Majority
Facility Lenders with respect to each Facility;

 

(viii)        reduce
the percentage specified in the definition of Majority Facility Lenders with
respect to any Facility without the written consent of all Lenders under such
Facility;

 

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

 

(x)            amend,
modify or waive any provision of Section 3.3 or 3.4 without the written
consent of the Swingline Lender;

 

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

 

(xii)          amend,
modify or waive any provision of Sections 3.7 to 3.14 without the written
consent of the L/C Arranger.

 

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

 

Notwithstanding
the foregoing, this Agreement may be amended (or amended and restated) with the
written consent of the Required Lenders, the Administrative Agent and the

 

83

 

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

 

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

 

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

 

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

 

	
  The Borrower:

  	
   

  	
  New World Restaurant Group, Inc.

  1687 Cole Boulevard

  Golden, CO 80401

  Attention: Richard P. Dutkiewicz, Chief

  

 

84

 

	
   

  	
   

  	
   Financial
  Officer

  
	
   

  	
   

  	
  Telecopy: (303) 568-8402

  Telephone: (303) 568-8004

  
	
   

  	
   

  	
   

  
	
  The Administrative Agent:

  	
   

  	
  Wells Fargo Foothill, Inc.

  2450 Colorado Avenue

  Suite 3000 West

  Santa Monica, CA  90404

  Attention: Specialty Finance Manager

  Telecopy: (310) 453-7300

  Telephone: (310) 453-7442

  

 

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

 

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

 

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

 

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

 

11.5.        Payment
of Expenses and Taxes.  The Borrower
agrees (a) to pay or reimburse each Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to each Agent and filing and recording fees and
expenses, with statements with respect to the foregoing initially expected
(assuming the Closing Date occurs) to be submitted to the Borrower prior to the
Initial Borrowing Date (in the case of amounts to be paid on the Initial Borrowing
Date) and from time to time thereafter on a quarterly basis or such other
periodic basis as such Agent shall deem appropriate, (b) to pay or
reimburse each Lender and each Agent

 

85

 

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

 

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

 

86

 

assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section.

 

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

 

(A)          the
Borrower, provided that no consent of the Borrower shall be required for
an (x) assignment to a Lender, an affiliate of a Lender, an Approved Fund
(as defined below) or, if an Event of Default under Section 9(a) or (f) has
occurred and is continuing, any other Person, (y) any assignment by the
Administrative Agent or the Lead Arranger (or their affiliates), provided
that any such assignment of a Term Loan Commitment pursuant to this clause (y)
shall require the consent of the Borrower (such consent not to be unreasonably
withheld) unless such assignment is made in connection with the primary
syndication of the Facilities to a Person disclosed to the Borrower prior to
the Closing Date or (z) any assignment of Term Loans; and

 

(B)           the
Administrative Agent, provided that no consent of the Administrative
Agent shall be required for (x) an assignment to an Assignee that is a
Lender immediately prior to giving effect to such assignment, except in the
case of an assignment of a Revolving Commitment to an Assignee that does not
already have a Revolving Commitment, (y) any assignment by the
Administrative Agent (or its affiliates) or (z) any assignment of Term
Loans; and

 

(C)           in
the case of any assignment of a Revolving Commitment, the L/C Arranger.

 

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

 

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

 

87

 

has occurred and is continuing and (2) such amounts shall be
aggregated in respect of each Lender and its affiliates or Approved Funds, if
any;

 

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

 

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

 

(D)          in
the case of an assignment by a Lender to a CLO related to such Lender (as
defined below), the assigning Lender shall retain the sole right to approve any
amendment, modification or waiver of any provision of this Agreement and the
other Loan Documents, provided that the Assignment and Assumption
between such Lender and such CLO may provide that such Lender will not, without
the consent of such CLO, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 11.1 and (2) directly affects such
CLO.

 

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

 

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

 

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

 

(iii)          Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) below,
from and after the effective date specified in each Assignment and Assumption
the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 4.9, 4.10, 4.11

 

88

 

and 10.5).  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this Section 11.6 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.

 

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

 

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

 

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

 

89

 

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

 

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

 

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

 

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

 

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

 

90

 

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

 

11.8.        Counterparts;
Electronic Execution.  This Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the same Agreement.  Delivery of an executed counterpart of this
Agreement by telefacsimile or other electronic method of transmission shall be
equally as effective as delivery of an original executed counterpart of this
Agreement.  Any party delivering an
executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this
Agreement.  The foregoing shall apply to
each other Loan Document mutatis mutandis.

 

11.9.        Severability.  Each
provision of this Agreement shall be severable from every other provision of
this Agreement for the purpose of determining the legal enforceability of any
specific provision.

 

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

 

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

 

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

 

91

 

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

 

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

 

(c)           agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the Borrower at its address set
forth in Section 11.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;

 

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

 

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

 

11.13.      Acknowledgments.  The Borrower hereby acknowledges that:

 

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

 

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

 

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

 

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

 

92

 

that has been consented to in accordance with Section 11.1
or (ii) under the circumstances described in paragraph (b) below.

 

(b)           At
such time as the Loans, the Reimbursement Obligations and the other First Lien
Obligations under the Loan Documents (other than First Lien Obligations under
or in respect of Specified Hedge Agreements or Specified Cash Management
Agreements and unasserted contingent indemnification obligations) shall have
been paid in full, the Commitments have been terminated and no Letters of
Credit shall be outstanding, the Collateral shall be released from the Liens
created by the Security Documents, and the Security Documents and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Loan Party under the Security Documents shall
terminate, all without delivery of any instrument or performance of any act by
any Person, provided that, the Administrative Agent agrees upon such
termination to promptly deliver to the Borrower UCC-3 termination statements, discharges
of existing Mortgages, and other release and termination documents as are
reasonably requested by the Borrower to discharge the Liens as a matter of
public record.

 

11.15.      Confidentiality.  The Administrative Agent and Lenders each individually (and not jointly or jointly and
severally) agree that all material non-public information regarding Borrower
and its Subsidiaries, their operations, assets, and existing and contemplated
business plans shall be treated by the Administrative Agent and the Lenders in
a confidential manner, and shall not be disclosed by the Administrative Agent
and the Lenders to Persons who are not parties to this Agreement, except:  (a) to attorneys for and other advisors,
accountants, auditors, and consultants to any Lender (it being understood that
the persons to whom such disclosure is made will be informed of the
confidential nature of such information and the Administrative Agent or such
Lender, as the case may be, shall be responsible for the compliance of such
person with this Section), (b) to Subsidiaries and Affiliates of any
Lenders, provided that any such Subsidiary or Affiliate shall have agreed to
receive such information hereunder subject to the terms of this Section 11.15,
(c) as may be required by statute, decision, or judicial or administrative
order, rule, or regulation, (d) as may be agreed to in writing in advance
by Borrower or its Subsidiaries or as requested or required by any Governmental
Authority pursuant to any subpoena or other legal process, (e) as to any
such information that is or becomes generally available to the public (other
than as a result of prohibited disclosure by the Administrative Agent or the
Lenders), (f) in connection with any assignment, prospective assignment,
sale, prospective sale, participation or prospective participations, or pledge
or prospective pledge of any Lender’s interest under this Agreement, provided
that any such assignee, prospective assignee, purchaser, prospective purchaser,
participant, prospective participant, pledgee, or prospective pledgee shall
have agreed in writing to receive such information hereunder subject to the
terms of this Section, and (g) in connection with any litigation or other
adversary proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties
under this Agreement or the other Loan Documents.  The Administrative Agent and each Lender
agrees that in the event the Administrative Agent or such Lender, as the case
may be, is requested or required to disclose such information pursuant to
clause (c) or (d) above, the Administrative Agent or such Lender, as
the case may be, shall, to the extent practicable, provide the Borrower with
notice of any such request or requirement. 
The provisions of this Section 11.15 shall survive for two calendar
years after the payment in full of the
Obligations under the Loan Documents.

 

93

 

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

 

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

 

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

 

94

 

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

 

	
   

  	
  NEW WORLD
  RESTAURANT GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul J.B. Murphy, III

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Paul J.B. Murphy, III

  
	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

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

  Arranger and Sole Bookrunner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Bram Smith

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Bram Smith

  
	
   

  	
   

  	
  Title:

  	
  Senior Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO
  FOOTHILL, INC., as

  Administrative Agent and as L/C Arranger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kevin S. Fong

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin S. Fong

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					

 

 

[Signature Page to First
Lien Credit Agreement]

 

95

 

Annex A

 

PRICING GRID 

 

	
  Pricing Level

  	
   

  	
  Applicable Margin

  for Eurodollar

  Loans

  	
   

  	
  Applicable Margin for

  Base Rate Loans

  	
   

  
	
  I

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  
	
  II

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  
	
  III

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  

 

The Applicable
Margin shall be adjusted, on and after the first Adjustment Date (as defined
below) occurring after the date which is twelve months after the Initial
Borrowing Date, based on changes in the Consolidated Leverage Ratio, with such
adjustments to become effective on the date (the “Adjustment Date”) that
is three Business Days after the date on which the relevant financial
statements are delivered to the Lenders pursuant to Section 7.1 and to
remain in effect until the next adjustment to be effected pursuant to this
paragraph.  If any financial statements
referred to above are not delivered within the time periods specified in Section 7.1,
then, until the date that is three Business Days after the date on which such
financial statements are delivered, the highest rate set forth in each column
of the Pricing Grid shall apply.  On each
Adjustment Date occurring after the date that is twelve months after the
Initial Borrowing Date, the Applicable Margin shall be adjusted to be equal to
the Applicable Margins opposite the Pricing Level determined to exist on such
Adjustment Date from the financial statements relating to such Adjustment Date.

 

As used
herein, the following rules shall govern the determination of Pricing
Levels on each Adjustment Date:

 

“Pricing
Level I”  shall exist on an
Adjustment Date if the Consolidated Leverage Ratio for the relevant period is
greater than or equal to 4.50 to 1.00.

 

“Pricing
Level II”  shall exist on an
Adjustment Date if the Consolidated Leverage Ratio for the relevant period is
less than 4.50 to 1.00 but greater than or equal to 3.5 to 1.00.

 

“Pricing
Level III”  shall exist on an
Adjustment Date if the Consolidated Leverage Ratio for the relevant period is
less than 3.50 to 1.00.

 

Annex AExhibit 10.2

 

EXECUTION COPY

 

 

$65,000,000

 

SECOND LIEN
CREDIT AGREEMENT

 

among

 

NEW WORLD
RESTAURANT GROUP, INC.,

as Borrower,

 

The Several
Lenders

from Time to Time Parties Hereto,

 

and

 

BEAR STEARNS
CORPORATE LENDING INC.,

as Administrative Agent

 

Dated as of January 26,
2006

 

 

 

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

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.

  	
  Defined Terms

  	
  1

  
	
   

  	
  1.2.

  	
  Other Definitional Provisions

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
  AMOUNT AND TERMS OF TERM LOAN COMMITMENTS

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Term Loan Commitments

  	
  22

  
	
   

  	
  2.2.

  	
  Procedure for Term Loan Borrowing

  	
  22

  
	
   

  	
  2.3.

  	
  Repayment of Term Loans

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
  [Reserved]

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
  GENERAL PROVISIONS APPLICABLE TO TERM LOANS

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  Optional Prepayments

  	
  23

  
	
   

  	
  4.2.

  	
  Mandatory Prepayments and Term Loan Commitment Reductions

  	
  24

  
	
   

  	
  4.3.

  	
  Conversion and Continuation Options

  	
  25

  
	
   

  	
  4.4.

  	
  Limitations on Eurodollar Tranches

  	
  26

  
	
   

  	
  4.5.

  	
  Interest Rates and Payment Dates

  	
  26

  
	
   

  	
  4.6.

  	
  Computation of Interest and Fees

  	
  26

  
	
   

  	
  4.7.

  	
  Inability to Determine Interest Rate

  	
  27

  
	
   

  	
  4.8.

  	
  Pro Rata Treatment and Payments

  	
  27

  
	
   

  	
  4.9.

  	
  Requirements of Law

  	
  28

  
	
   

  	
  4.10.

  	
  Taxes

  	
  30

  
	
   

  	
  4.11.

  	
  Indemnity

  	
  31

  
	
   

  	
  4.12.

  	
  Change of Lending Office

  	
  32

  
	
   

  	
  4.13.

  	
  Replacement of Lenders

  	
  32

  
	
   

  	
  4.14.

  	
  Evidence of Debt

  	
  32

  
	
   

  	
  4.15.

  	
  Illegality

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1.

  	
  Financial Condition

  	
  33

  
	
   

  	
  5.2.

  	
  No Change

  	
  34

  
	
   

  	
  5.3.

  	
  Corporate Existence; Compliance with Law

  	
  34

  
	
   

  	
  5.4.

  	
  Power; Authorization; Enforceable Obligations

  	
  34

  
	
   

  	
  5.5.

  	
  No Legal Bar

  	
  35

  
	
   

  	
  5.6.

  	
  Litigation

  	
  35

  
	
   

  	
  5.7.

  	
  No Default

  	
  35

  
	
   

  	
  5.8.

  	
  Ownership of Property; Liens

  	
  35

  
	
   

  	
  5.9.

  	
  Intellectual Property

  	
  35

  
	
   

  	
  5.10.

  	
  Taxes

  	
  36

  
	
   

  	
  5.11.

  	
  Federal Regulations

  	
  36

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  5.12.

  	
  Labor Matters

  	
  36

  
	
   

  	
  5.13.

  	
  ERISA

  	
  36

  
	
   

  	
  5.14.

  	
  Investment Company Act; Other Regulations

  	
  37

  
	
   

  	
  5.15.

  	
  Subsidiaries

  	
  37

  
	
   

  	
  5.16.

  	
  Use of Proceeds

  	
  37

  
	
   

  	
  5.17.

  	
  Environmental Matters

  	
  37

  
	
   

  	
  5.18.

  	
  Accuracy of Information, etc.

  	
  38

  
	
   

  	
  5.19.

  	
  Security Documents

  	
  38

  
	
   

  	
  5.20.

  	
  Solvency

  	
  39

  
	
   

  	
  5.21.

  	
  Second Lien Obligations

  	
  39

  
	
   

  	
  5.22.

  	
  Inactive Subsidiaries

  	
  39

  
	
   

  	
  5.23.

  	
  Material Contracts

  	
  39

  
	
   

  	
  5.24.

  	
  Bank Accounts.

  	
  39

  
	
   

  	
  5.25.

  	
  Insurance.

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
  CONDITIONS PRECEDENT

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1.

  	
  Conditions to the Closing Date

  	
  39

  
	
   

  	
  6.2.

  	
  Conditions to the Initial Borrowing Date

  	
  41

  
	
   

  	
  6.3.

  	
  Additional Conditions to Term Loans

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
  AFFIRMATIVE COVENANTS

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1.

  	
  Financial Statements

  	
  44

  
	
   

  	
  7.2.

  	
  Certificates; Other Information

  	
  45

  
	
   

  	
  7.3.

  	
  Payment of Obligations

  	
  46

  
	
   

  	
  7.4.

  	
  Maintenance of Existence; Compliance

  	
  46

  
	
   

  	
  7.5.

  	
  Maintenance of Property; Insurance

  	
  46

  
	
   

  	
  7.6.

  	
  Inspection of Property; Books and Records; Discussions

  	
  47

  
	
   

  	
  7.7.

  	
  Notices

  	
  47

  
	
   

  	
  7.8.

  	
  Environmental Laws

  	
  47

  
	
   

  	
  7.9.

  	
  Interest Rate Protection

  	
  48

  
	
   

  	
  7.10.

  	
  Additional Collateral, etc.

  	
  48

  
	
   

  	
  7.11.

  	
  Further Assurances

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
  NEGATIVE COVENANTS

  	
  50

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1.

  	
  Financial Condition Covenants

  	
  50

  
	
   

  	
  8.2.

  	
  Indebtedness

  	
  52

  
	
   

  	
  8.3.

  	
  Liens

  	
  54

  
	
   

  	
  8.4.

  	
  Fundamental Changes

  	
  55

  
	
   

  	
  8.5.

  	
  Disposition of Property

  	
  56

  
	
   

  	
  8.6.

  	
  Restricted Payments

  	
  56

  
	
   

  	
  8.7.

  	
  Capital Expenditures

  	
  57

  
	
   

  	
  8.8.

  	
  Investments

  	
  57

  
	
   

  	
  8.9.

  	
  Certain Payments and Modifications of Certain Debt Instruments

  	
  58

  
	
   

  	
  8.10.

  	
  Transactions with Affiliates

  	
  59

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  8.11.

  	
  Sales and Leasebacks

  	
  59

  
	
   

  	
  8.12.

  	
  Hedge Agreements

  	
  59

  
	
   

  	
  8.13.

  	
  Changes in Fiscal Periods

  	
  60

  
	
   

  	
  8.14.

  	
  Negative Pledge Clauses

  	
  60

  
	
   

  	
  8.15.

  	
  Clauses Restricting Subsidiary Distributions

  	
  60

  
	
   

  	
  8.16.

  	
  Lines of Business

  	
  60

  
	
   

  	
  8.17.

  	
  Inactive Subsidiaries

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
  EVENTS OF DEFAULT

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
  THE AGENTS

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1.

  	
  Appointment

  	
  64

  
	
   

  	
  10.2.

  	
  Delegation of Duties

  	
  64

  
	
   

  	
  10.3.

  	
  Exculpatory Provisions

  	
  64

  
	
   

  	
  10.4.

  	
  Reliance by Agents

  	
  64

  
	
   

  	
  10.5.

  	
  Notice of Default

  	
  65

  
	
   

  	
  10.6.

  	
  Non-Reliance on Agents and Other Lenders

  	
  65

  
	
   

  	
  10.7.

  	
  Indemnification

  	
  66

  
	
   

  	
  10.8.

  	
  Agent in Its Individual Capacity

  	
  66

  
	
   

  	
  10.9.

  	
  Successor Administrative Agent

  	
  66

  
	
   

  	
  10.10.

  	
  Agents Generally

  	
  67

  
	
   

  	
  10.11.

  	
  The Lead Arranger

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
  MISCELLANEOUS

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1.

  	
  Amendments and Waivers

  	
  67

  
	
   

  	
  11.2.

  	
  Notices

  	
  69

  
	
   

  	
  11.3.

  	
  No Waiver; Cumulative Remedies

  	
  70

  
	
   

  	
  11.4.

  	
  Survival of Representations and Warranties

  	
  70

  
	
   

  	
  11.5.

  	
  Payment of Expenses and Taxes

  	
  70

  
	
   

  	
  11.6.

  	
  Successors and Assigns; Participations and Assignments

  	
  71

  
	
   

  	
  11.7.

  	
  Adjustments; Set-off

  	
  75

  
	
   

  	
  11.8.

  	
  Counterparts

  	
  76

  
	
   

  	
  11.9.

  	
  Severability

  	
  76

  
	
   

  	
  11.10.

  	
  Integration; Intercreditor and Subordination Agreements

  	
  76

  
	
   

  	
  11.11.

  	
  GOVERNING LAW

  	
  76

  
	
   

  	
  11.12.

  	
  Submission To Jurisdiction; Waivers

  	
  76

  
	
   

  	
  11.13.

  	
  Acknowledgments

  	
  77

  
	
   

  	
  11.14.

  	
  Releases of Guarantees and Liens

  	
  77

  
	
   

  	
  11.15.

  	
  Confidentiality

  	
  78

  
	
   

  	
  11.16.

  	
  Revival and Reinstatement of Obligations

  	
  78

  
	
   

  	
  11.17.

  	
  WAIVERS OF JURY TRIAL

  	
  78

  
	
   

  	
  11.18.

  	
  Delivery of Addenda

  	
  78

  

 

iii

 

	
  SCHEDULES:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.4

  	
   

  	
  Consents,
  Authorizations, Filings and Notices

  	
   

  
	
  5.15

  	
   

  	
  Subsidiaries

  	
   

  
	
  5.19(a)

  	
   

  	
  UCC Filing
  Jurisdictions

  	
   

  
	
  5.22

  	
   

  	
  Inactive
  Subsidiaries

  	
   

  
	
  5.24

  	
   

  	
  Bank
  Accounts

  	
   

  
	
  5.25

  	
   

  	
  Insurance

  	
   

  
	
  8.2(f)

  	
   

  	
  Existing
  Indebtedness

  	
   

  
	
  8.3(g)

  	
   

  	
  Existing
  Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Form of
  Addendum

  	
   

  
	
  B

  	
   

  	
  Form of
  Assignment and Assumption

  	
   

  
	
  C

  	
   

  	
  Form of
  Compliance Certificate

  	
   

  
	
  D

  	
   

  	
  Form of
  Guarantee and Collateral Agreement

  	
   

  
	
  E

  	
   

  	
  [Reserved]

  	
   

  
	
  F

  	
   

  	
  Form of
  Exemption Certificate

  	
   

  
	
  G

  	
   

  	
  Form of
  Term Note

  	
   

  
	
  H

  	
   

  	
  Form of
  Closing Certificate

  	
   

  
	
  I-1

  	
   

  	
  Form of
  Legal Opinion of Holme Roberts & Owen LLP

  	
   

  
	
  I-2

  	
   

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

  	
   

  
	
  J

  	
   

  	
  Form of
  Intercreditor Agreement

  	
   

  
	
  K

  	
   

  	
  Form of
  Subordinated Loan Agreement

  	
   

  
	
  L

  	
   

  	
  Form of
  Subordination Agreement

  	
   

  
	
  M

  	
   

  	
  Form of
  Solvency Certificate

  	
   

  

 

iv

 

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

 

W
I  T  N  E  S  S  E  T  H:

 

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

 

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

 

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

 

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

 

SECTION 1.   DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

“Agreement”:  this Second Lien Credit Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Defaulting
Lender”:  as defined in Section 4.13.

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
   

  	
  Eurodollar Base Rate

  	
   

  
	
  1.00 - Eurocurrency Reserve Requirements

  

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

“Investments”:  as defined in Section 8.8.

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

“Obligations”:  as defined in the Intercreditor Agreement.

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Reference
Bank”:  Bank of New York.

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

“Restricted
Payments”:  as defined in Section 8.6.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Term Loan”:  as defined in Section 2.1.

 

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

 

20

 

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

 

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

 

“Transferee”:  any Assignee or Participant.

 

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

 

“United
States”:  the United States of
America.

 

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

 

“Voidable
Transfer”: as defined in Section 11.16.

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

SECTION 2.   AMOUNT AND TERMS OF TERM LOAN
COMMITMENTS

 

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

 

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

 

22

 

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

 

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

 

SECTION 3.   [RESERVED]

 

SECTION 4.   GENERAL PROVISIONS APPLICABLE TO TERM
LOANS

 

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

 

23

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c) [Reserved]

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

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

 

SECTION 5.   REPRESENTATIONS
AND WARRANTIES

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

37

 

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

 

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

 

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

 

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

 

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

 

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

 

38

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 6.   CONDITIONS
PRECEDENT

 

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

 

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

 

39

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

40

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

43

 

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

 

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

 

SECTION 7.   AFFIRMATIVE COVENANTS

 

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

 

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

 

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

 

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

 

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

 

44

 

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

 

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

 

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

 

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

 

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

 

45

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

46

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

47

 

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

 

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

 

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

 

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

 

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

 

48

 

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

 

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

 

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

 

49

 

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

 

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

 

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

 

SECTION 8.   NEGATIVE
COVENANTS

 

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

 

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

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  
	
  March 31, 2006

  	
   

  	
  5.50 to 1:00

  	
   

  
	
  June 30, 2006

  	
   

  	
  5.50 to 1:00

  	
   

  
	
  September 30, 2006

  	
   

  	
  5.50 to 1:00

  	
   

  
	
  December 31, 2006

  	
   

  	
  5.25 to 1:00

  	
   

  

 

50

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  
	
  March 31, 2007

  	
   

  	
  5.00 to 1:00

  	
   

  
	
  June 30, 2007

  	
   

  	
  5.00 to 1:00

  	
   

  
	
  September 30, 2007

  	
   

  	
  4.75 to 1:00

  	
   

  
	
  December 31, 2007

  	
   

  	
  4.50 to 1:00

  	
   

  
	
  March 31, 2008

  	
   

  	
  4.25 to 1:00

  	
   

  
	
  June 30, 2008

  	
   

  	
  4.25 to 1:00

  	
   

  
	
  September 30, 2008

  	
   

  	
  4.00 to 1:00

  	
   

  
	
  December 31, 2008

  	
   

  	
  4.00 to 1:00

  	
   

  
	
  March 31, 2009

  	
   

  	
  3.75 to 1:00

  	
   

  
	
  June 30, 2009

  	
   

  	
  3.75 to 1:00

  	
   

  
	
  September 30, 2009

  	
   

  	
  3.50 to 1:00

  	
   

  
	
  December 31, 2009

  	
   

  	
  3.50 to 1:00

  	
   

  
	
  March 31, 2010

  	
   

  	
  3.50 to 1:00

  	
   

  
	
  June 30, 2010

  	
   

  	
  3.25 to 1:00

  	
   

  
	
  September 30, 2010

  	
   

  	
  3.25 to 1:00

  	
   

  
	
  December 31, 2010

  	
   

  	
  3.25 to 1:00

  	
   

  
	
  March 30, 2011

  	
   

  	
  3.25 to 1:00

  	
   

  

 

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

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated First Lien

  Leverage Ratio

  	
   

  
	
  March 31, 2006

  	
   

  	
  2.75 to 1:00

  	
   

  
	
  June 30, 2006

  	
   

  	
  2.75 to 1:00

  	
   

  
	
  September 30, 2006

  	
   

  	
  2.75 to 1:00

  	
   

  
	
  December 31, 2006

  	
   

  	
  2.50 to 1:00

  	
   

  
	
  March 31, 2007

  	
   

  	
  2.50 to 1:00

  	
   

  
	
  June 30, 2007

  	
   

  	
  2.50 to 1:00

  	
   

  
	
  September 30, 2007

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  December 31, 2007

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  March 31, 2008

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  June 30, 2008

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  September 30, 2008

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  December 31, 2008

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  March 31, 2009

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  June 30, 2009

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  September 30, 2009

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  December 31, 2009

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  March 31, 2010

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  June 30, 2010

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  September 30, 2010

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  December 31, 2010

  	
   

  	
  2.25 to 1:00

  	
   

  
	
  March 30, 2011

  	
   

  	
  2.25 to 1:00

  	
   

  

 

51

 

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

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated Fixed Charge

  Coverage Ratio

  	
   

  
	
  March 31, 2006

  	
   

  	
  1.25 to 1:00

  	
   

  
	
  June 30, 2006

  	
   

  	
  1.25 to 1:00

  	
   

  
	
  September 30, 2006

  	
   

  	
  1.30 to 1:00

  	
   

  
	
  December 31, 2006

  	
   

  	
  1.30 to 1:00

  	
   

  
	
  March 31, 2007

  	
   

  	
  1.35 to 1:00

  	
   

  
	
  June 30, 2007

  	
   

  	
  1.35 to 1:00

  	
   

  
	
  September 30, 2007

  	
   

  	
  1.40 to 1:00

  	
   

  
	
  December 31, 2007

  	
   

  	
  1.40 to 1:00

  	
   

  
	
  March 31, 2008

  	
   

  	
  1.40 to 1:00

  	
   

  
	
  June 30, 2008

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  September 30, 2008

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  December 31, 2008

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  March 31, 2009

  	
   

  	
  1.50 to 1:00

  	
   

  
	
  June 30, 2009

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  September 30, 2009

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  December 31, 2009

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  March 31, 2010

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  June 30, 2010

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  September 30, 2010

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  December 31, 2010

  	
   

  	
  1.65 to 1:00

  	
   

  
	
  March 30, 2011

  	
   

  	
  1.65 to 1:00

  	
   

  

 

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

 

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

 

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

 

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

 

52

 

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

 

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

 

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

 

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

 

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

 

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

 

(i) Hedge Agreements permitted under Section 8.12;

 

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

 

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

 

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

 

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

 

53

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

54

 

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

 

(j) Liens created pursuant to the Security
Documents;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

56

 

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

 

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

 

8.7.          Capital
Expenditures.  Make or commit to make
any Capital Expenditures, other than Capital Expenditures indicated in any
fiscal year below, in an aggregate amount not to exceed the corresponding
amount indicated below:

 

	
  Fiscal Year

  	
   

  	
  Capital Expenditures

  	
   

  
	
  2006

  	
   

  	
  $

  	
  22,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  22,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  27,500,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  22,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  22,000,000

  	
   

  
	
  2011

  	
   

  	
  $

  	
  22,000,000

  	
   

  

 

8.8.          Investments.  Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
other Person (all of the foregoing, “Investments”), except:

 

(a) extensions of trade credit in the
ordinary course of business;

 

(b) Investments in cash and Cash Equivalents;

 

(c) Guarantee Obligations permitted by Section 8.2;

 

(d) loans and advances to officers,
directors, consultants, employees of any Group Member of the Borrower in the
ordinary course of business (including for indemnification, travel,
entertainment and relocation expenses) in an aggregate amount for all Group
Members not to exceed $550,000 at any one time outstanding;

 

(e) Investments in notes receivable and other
instruments and securities obtained in connection with transactions permitted
by Section 8.5(e);

 

(f) intercompany Investments by (i) any
Group Member in the Borrower or any Person that, prior to such Investment, is a
Subsidiary Guarantor or (ii) any Foreign Subsidiary in any Foreign
Subsidiary;

 

57

 

(g) Investments resulting from payments
required under Hedge Agreements permitted under Section 8.12;

 

(h) Investments resulting from non-cash
consideration received in connection with Asset Sales so long as the aggregate
outstanding amount of such Investments does not exceed $8,250,000 at any time;

 

(i) Capital Expenditures permitted under Section 8.7;

 

(j) (i) loans to franchisees and area
developers in an amount not to exceed $275,000 in any fiscal year and (ii) existing
loans to franchisees not to exceed $275,000 in the aggregate;

 

(k) in addition to Investments otherwise
expressly permitted by this Section, Investments (including Acquisitions) by
the Borrower or any of its Subsidiaries in an aggregate amount outstanding
(valued at cost) not to exceed at any one time the sum of (i) $1,100,000
plus (ii) the product of (x) $1,100,000 and (y) the number of calendar
years ended after the Closing Date minus (iii) the outstanding amount of
any Investments made in reliance on Section 8.8(l)(iv)(y);

 

(l) Acquisitions, provided that (i) no
Default or Event of Default shall have then occurred and be continuing or would
result therefrom, (ii) such Acquisition is initiated and completed on a “friendly”
basis, (iii) if such Acquisition is a Material Acquisition, after giving
effect thereto on a pro  forma basis as if such Acquisition were
completed on the first day of the most recent period of four consecutive fiscal
quarters for which financial statements have been delivered, the Borrower would
have been in compliance with Sections 8.1(a) and 8.1(b) (assuming the
required ratio was 0.25 to 1.00 lower than the then applicable ratio), (iv) the
consideration for any such Acquisition shall consist exclusively of a
combination of (x) common stock of the Borrower and (y) other consideration in
connection with such Acquisition in an aggregate amount outstanding (valued at
cost) not to exceed at any one time the sum of (I) $1,100,000 plus (II) the
product of (A) $1,100,000 and (B) the number of calendar years ended
after the Closing Date minus (III) the outstanding amount of any Investments
made in reliance on Section 8.8(k) and (v) the Borrower shall have
delivered a certificate of a Responsible Officer certifying compliance with the
foregoing conditions (and attaching reasonably detailed calculations) at least
five Business Days prior to the consummation thereof; and

 

(m) deposits permitted by Section 8.3(e).

 

8.9.          Certain
Payments and Modifications of Certain Debt Instruments.  

(a)  Make or offer to make any optional or voluntary payment, optional or
voluntary prepayment, optional or voluntary repurchase or optional or voluntary
redemption of or otherwise optionally or voluntarily defease or segregate funds
with respect to (i) the Series Z Preferred or any Replacement Equity
(other than with the Net Cash Proceeds of any Replacement Equity), (ii) the
Subordinated Loans or any Permitted Refinancing Indebtedness incurred pursuant
to Section 8.2(c) (in each case, other than with the Net Cash
Proceeds of (x) any Capital Stock issued to any Group Member or the Permitted
Investors, (y) so long as (A) the Consolidated Leverage Ratio at

 

58

 

such time and after giving effect thereto is equal to
or less than 3.25 to 1.00 and (B) no Default or Event of Default shall
have occurred and be continuing or would result therefrom, any issuance of
common stock of the Borrower, or (z) so long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom, Permitted Refinancing
Indebtedness), (b) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the
terms of (i) the Series Z Preferred or any Replacement Equity
consisting of preferred stock (other than any such amendment, modification,
waiver or other change that (A) would extend or eliminate the scheduled
redemption date or reduce the amount of any scheduled redemption payment or
reduce the rate or extend any date for payment of dividends thereon and (B) does
not involve the payment of a consent fee other than any consent fees paid in
connection with the extension of the scheduled redemption date in an aggregate
amount not exceeding $250,000) or (ii) the Subordinated Loan Agreement
(other than any such amendment, modification, waiver or other change that (A) would
extend or eliminate the maturity or reduce the amount of any payment of
principal thereof or reduce the rate or extend any date for payment of interest
thereon and (B) does not involve the payment of a consent fee), (c) designate
any Indebtedness (other than obligations of the Loan Parties pursuant to the
Loan Documents or the First Lien Loan Documents (as defined in the
Intercreditor Agreement) or any Permitted Refinancing Indebtedness in respect
thereof) as “Designated Senior Indebtedness” (or any other defined term having
a similar purpose) for the purposes of the Subordination Agreement or (d) make
any payment in respect of any Indebtedness under the Coke Beverage Marketing
Agreement or any other Indebtedness of the type described in clause (k) of the
definition thereof, to the extent that, after giving effect thereto, the
Available Revolving Commitment (as defined in the First Lien Credit Agreement)
would be less than $2,200,000.

 

8.10.        Transactions
with Affiliates.  Enter into any
transaction, including any purchase, sale, lease or exchange of property, the
rendering of any service or the payment of any management, advisory or similar
fees, with any Affiliate (other than the Borrower or any Wholly Owned
Subsidiary Guarantor) unless such transaction is (a) otherwise not
prohibited under this Agreement and (b)  upon fair and reasonable terms no
less favorable to the relevant Group Member, than it would obtain in a
comparable arm’s length transaction with a Person that is not an Affiliate; it
being understood that the Subordinated Loan Agreement and the Subordination
Agreement shall be permitted and the Subordinated Loans may be repaid in
accordance with the terms thereof to the extent permitted hereunder.

 

8.11.        Sales
and Leasebacks.  Enter into any
arrangement with any Person providing for the leasing by any Group Member of
real or personal property that has been or is to be sold or transferred by such
Group Member to such Person or to any other Person to whom funds have been or
are to be advanced by such Person on the security of such property or rental
obligations of such Group Member.

 

8.12.        Hedge
Agreements.  Enter into any Hedge
Agreement, except Hedge Agreements entered into in order to effectively cap,
collar or exchange interest rates from floating to fixed rates with respect to
any interest-bearing liability or investment of the Borrower or any Subsidiary.

 

59

 

8.13.        Changes
in Fiscal Periods.  Permit the fiscal
year of the Borrower to end on a day other than December 31 (subject to Section 1.2(f))
or change the Borrower’s method of determining fiscal quarters; provided,
that, with the prior written consent of the Administrative Agent and the Lead
Arranger (such consent not to be unreasonably withheld), the Borrower may
change its fiscal year, provided, that, in connection with such change,
no fiscal year may include more than five fiscal quarters without the prior
written consent of the Administrative Agent and the Lead Arranger and the
amounts permitted under Section 8.7 shall be pro  rata with
respect to any fiscal year which does not consist of four fiscal quarters.

 

8.14.        Negative
Pledge Clauses.  Enter into or suffer
to exist or become effective any agreement that prohibits, limits or imposes
any condition upon the ability of any Group Member to create, incur, assume or
suffer to exist any Lien upon any of its property or revenues, whether now
owned or hereafter acquired, to secure its obligations under the Loan Documents
or any refinancing thereof other than (a) this Agreement and the other
Loan Documents, (b) the First Lien Credit Agreement and the Subordinated
Loan Agreement and any provisions in any Permitted Refinancing Indebtedness so
long as such provisions are no more restrictive than the provisions in the
First Lien Credit Agreement or the Subordinated Loan Agreement, as applicable, (c) any
agreements governing any utility bonds, industrial revenue or development
bonds, purchase money Liens or Capital Lease Obligations otherwise permitted
hereby (in which case, any prohibition or limitation shall only be effective
against the assets financed thereby), (d) until the Initial Borrowing
Date, the Existing Credit Facility and the Senior Notes, (e) restrictions
on assets subject to agreements for permitted Dispositions under Section 8.5
(such restrictions to be limited to the assets subject to such Dispositions)
and (f) restrictions in lease agreements restricting the Group Members
from assigning or pledging their rights under such lease agreements.

 

8.15.        Clauses
Restricting Subsidiary Distributions. 
Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary of the Borrower to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
Borrower, (b) make loans or advances to, or other Investments in, the
Borrower or any other Subsidiary of the Borrower or (c) transfer any of
its assets to the Borrower or any other Subsidiary of the Borrower, except for
such encumbrances or restrictions existing under or by reason of (i) any
restrictions existing under the Loan Documents, (ii) the First Lien Credit
Agreement and the Subordinated Loan Agreement and any provisions in any
Permitted Refinancing Indebtedness so long as such provisions are no more
restrictive than the provisions in the First Lien Credit Agreement or the
Subordinated Loan Agreement, as applicable, (iii) any restrictions with
respect to a Subsidiary imposed pursuant to an agreement that has been entered
into in connection with the Disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary and (iv) until the Initial
Borrowing Date, the Existing Credit Facility and the Senior Notes.

 

8.16.        Lines
of Business.  Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement or that are reasonably related thereto.

 

60

 

8.17.        Inactive
Subsidiaries.  With respect to
Inactive Subsidiaries, (a) engage in an active business or (b) except
as disclosed on Part B of Schedule 5.22, own any property or assets
or incur, directly or indirectly, liabilities or obligations in excess of
$100,000 in the aggregate.

 

SECTION 9.   EVENTS OF
DEFAULT

 

If any of the
following events shall occur and be continuing:

 

(a) the Borrower shall fail to pay any
principal of any Term Loan when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Term Loan, or any other amount
payable hereunder or under any other Loan Document, within five days after any
such interest or other amount becomes due in accordance with the terms hereof;
or

 

(b) any representation or warranty made or
deemed made by any Loan Party herein or in any other Loan Document or that is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been inaccurate in any material
respect (except that such materiality qualifier shall not be applicable to any
representations and warranties that are already qualified or modified by
materiality in the text thereof) on or as of the date made or deemed made; or

 

(c) (i)  any Loan Party shall
default in the observance or performance of any agreement contained in
clause (i) or (ii) of Section 7.4(a) (with respect to
the Borrower only), Section 7.5(b), Section 7.7(a) or Section 8
of this Agreement or Sections 5.5(a) and 5.7(b) of either
Guarantee and Collateral Agreement or (ii) an “Event of Default” under and
as defined in any Mortgage shall have occurred and be continuing; or

 

(d) any Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days after notice to the Borrower from the Administrative
Agent or the Required Lenders; or

 

(e) any Group Member (other than an Inactive
Subsidiary) (i) defaults in making any payment of any principal of any
Indebtedness (including the First Lien Loans, the Subordinated Loans and any
Guarantee Obligation, but excluding the Term Loans) on the scheduled or
original due date with respect thereto; or (ii) defaults in making any
payment of any interest on any such Indebtedness beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created; or (iii) defaults in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement (including the First Lien Credit Agreement and the
Subordinated Loan Agreement) evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or beneficiary of
such Indebtedness (or a trustee or agent on behalf of such holder or

 

61

 

beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or to become subject to
a mandatory offer to purchase by the obligor thereunder or (in the case of any
such Indebtedness constituting a Guarantee Obligation) to become payable; provided,
that a default, event or condition described in clause (i), (ii) or (iii) of
this paragraph (e) shall not at any time constitute an Event of
Default unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the aggregate
$2,750,000; or

 

(f) (i) any Group Member (other than an
Inactive Subsidiary) shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Group Member shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Group Member (other than an Inactive Subsidiary) any
case, proceeding or other action of a nature referred to in clause (i) above
that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against any Group Member (other than an Inactive Subsidiary) any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within
60 days from the entry thereof; or (iv) any Group Member (other than
an Inactive Subsidiary) shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) any Group Member (other
than an Inactive Subsidiary) shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or

 

(g) (i)  any Person shall engage in
any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan, (ii) any “accumulated funding deficiency”
(as defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise
on the assets of any Group Member or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) any Group Member or any
Commonly Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a withdrawal from,
or the

 

62

 

Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist with respect to a Plan; and in
each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could, in
the sole judgment of the Required Lenders, reasonably be expected to have a
Material Adverse Effect; or

 

(h) one or more judgments or decrees shall be
entered against any Group Member involving in the aggregate a liability (not
paid or fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $2,750,000 or more, which such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or

 

(i) any of the Security Documents shall
cease, for any reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or

 

(j) the guarantee contained in Section 2
of the Guarantee and Collateral Agreement shall cease, for any reason, to be in
full force and effect or any Loan Party or any Affiliate of any Loan Party
shall so assert; or

 

(k) (i) (A) the Permitted Investors
shall cease to own of record and beneficially at least a majority of the
outstanding common stock of the Borrower and (B) any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), excluding the
Permitted Investors, shall become, or obtain right (whether by means of
warrants, options or otherwise) to become, the “beneficial owner” (as defined
in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 25% of the outstanding common stock of the Borrower; (ii) the
Permitted Investors shall cease to own of record and beneficially at least 40%
of the outstanding amount of common stock of the Borrower; (iii) Continuing
Directors shall cease to constitute a majority of the board of directors of the
Borrower shall cease to consist of a majority of Continuing Directors; or (iv) a
Specified Change of Control shall occur; or

 

(l) the Subordinated Loans or the guarantees
thereof shall cease, for any reason (other than as a result of any amendment or
waiver pursuant to Section 11.1 or any amendment or waiver pursuant to Section 20
of the Subordination Agreement), to be validly subordinated to the Obligations
under the Loan Documents as provided in the Subordination Agreement, or any
Loan Party, any Affiliate of any Loan Party or any holder of Subordinated Loans
shall so assert;

 

then, and in
any such event, (A) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f) above with respect
to the Borrower, automatically the Term Loan Commitments shall immediately
terminate and the Term Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the other Loan Documents shall
immediately become due and payable, and (B) if such event is any other
Event of Default, the following action may be taken:  with the consent of the Required Lenders, the
Administrative Agent may,

 

63

 

or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Term Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Loan Documents
to be due and payable forthwith, whereupon the same shall immediately become
due and payable.  Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived by the Borrower.

 

SECTION 10.   THE AGENTS

 

10.1.        Appointment.  Each Lender hereby irrevocably designates and
appoints each Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes such Agent,
in such capacity, to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto.  
Notwithstanding any provision to the contrary elsewhere in this Agreement,
no Agent shall have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against any Agent.

 

10.2.        Delegation
of Duties.  Each Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.

 

10.3.        Exculpatory
Provisions.  Neither any Agent nor
any of their respective officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (i) liable for any action lawfully taken or omitted
to be taken by it or such Person under or in connection with this Agreement or
any other Loan Document (except to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such Person’s own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by any
Loan Party or any officer thereof contained in this Agreement or any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agents under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder.  The
Agents shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party.

 

10.4.        Reliance
by Agents.  Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or

 

64

 

conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by such Agent.  The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed
with the Administrative Agent.  Each Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such
action.  The Agents shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.

 

10.5.        Notice
of Default.  No Agent shall be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless such Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders (or, if so specified by
this Agreement, all Lenders or any other instructing group of Lenders specified
by this Agreement); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.

 

10.6.        Non-Reliance
on Agents and Other Lenders.  Each
Lender expressly acknowledges that neither the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender.  Each Lender represents to the Agents that it
has, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and enter
into this Agreement.  Each Lender also
represents that it will, independently and without reliance upon any Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Loan Parties and their affiliates.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or

 

65

 

responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or
any affiliate of a Loan Party that may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.

 

10.7.        Indemnification.  The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever that may at any
time (whether before or after the payment of the Loans) be imposed on, incurred
by or asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court
of competent jurisdiction to have resulted from such Agent’s gross negligence
or willful misconduct.  The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.

 

10.8.        Agent
in Its Individual Capacity.  Each
Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Loan Party as though such Agent were
not an Agent.  With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.

 

10.9.        Successor
Administrative Agent.  The
Administrative Agent may resign as Administrative Agent upon 10 days’
notice to the Lenders and the Borrower. 
If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 9(a) or
Section 9(f) with respect to the Borrower shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term “Administrative
Agent” shall mean such successor agent effective upon such appointment and
approval, and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. 
If no successor agent has accepted appointment as Administrative

 

66

 

Agent by the date that is 10 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall
assume and perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.  After any retiring
Administrative Agent’s resignation as Administrative Agent, the provisions of
this Section 10 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.

 

10.10.      Agents
Generally.  Except as expressly set
forth herein, no Agent shall have any duties or responsibilities hereunder in
its capacity as such.

 

10.11.      The
Lead Arranger.  The Lead Arranger, in
its capacity as such, shall have no duties or responsibilities, and shall incur
no liability, under this Agreement and other Loan Documents..

 

SECTION 11.   MISCELLANEOUS

 

11.1.        Amendments
and Waivers.  Neither this Agreement,
any other Loan Document, nor any terms hereof or thereof may be amended, supplemented
or modified except in accordance with the provisions of this Section 11.1.  The Required Lenders and each Loan Party
party to the relevant Loan Document may, or, with the written consent of the
Required Lenders, the Administrative Agent and each Loan Party party to the
relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or
modification shall:

 

(i)            forgive
the principal amount or extend the final scheduled date of maturity of any Term
Loan, extend the scheduled date of any amortization payment in respect of any
Term Loan, reduce the stated rate of any interest or fee payable hereunder
(except (x) in connection with the waiver of applicability of any
post-default increase in interest rates, which waiver shall be effective with
the consent of the Required Lenders) and (y) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or fees for purposes
of this clause (i)) or extend the scheduled date of any payment thereof
without the written consent of each Lender affected thereby;

 

(ii)           release
all or substantially all of the Collateral under the Security Documents or
release all or substantially all of the Subsidiary Guarantors from their
obligations, in each case without the written consent of all the Lenders;

 

67

 

(iii)          eliminate
or reduce the voting rights of any Lender under this Section 11.1 without
the written consent of such Lender;

 

(iv)          reduce
any percentage specified in the definition of Required Lenders or consent to
the assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, in each case without the
written consent of all Lenders;

 

(v)           subject
to the following two paragraphs of this Section 11.1, amend, modify or
waive any provision of Section 4.8 without the written consent of the
Required Lenders, provided, that any amendment, modification or waiver
of Section 4.8 which changes the pro  rata provision therein
shall require the written consent of each Lender adversely affected thereby;

 

(vi)          reduce
the amount of Net Cash Proceeds or Excess Cash Flow required to be applied to
prepay Term Loans under this Agreement without the written consent of the
Required Lenders;

 

(vii)         amend,
modify or waive any provision of Section 10 without the written consent of
each Agent adversely affected thereby; and

 

(viii)        amend,
modify or waive Section 6.5 of the Guarantee and Collateral Agreement so
as to alter the ratable treatment of the Second Lien Obligations with respect
to the Loan Documents, the Specified Hedge Agreements and the Specified Cash
Management Agreements, in a manner adverse to any Second Lien Qualified
Counterparty with Second Lien Obligations then outstanding without the written
consent of any such Second Lien Qualified Counterparty.

 

Any such
waiver and any such amendment, supplement or modification shall apply equally
to each of the Lenders and shall be binding upon the Loan Parties, the Lenders,
the Agents and all future holders of the Term Loans.  In the case of any waiver, the Loan Parties,
the Lenders and the Agents shall be restored to their former position and
rights hereunder and under the other Loan Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

 

Notwithstanding
the foregoing, this Agreement may be amended (or amended and restated) with the
written consent of the Required Lenders, the Administrative Agent and the
Borrower (a) to add one or more additional credit facilities to this
Agreement and to permit the extensions of credit from time to time outstanding
thereunder and the accrued interest and fees in respect thereof (collectively,
the “Additional Extensions of Credit”) to share ratably in the benefits
of this Agreement and the other Loan Documents with the Term Loans and the
accrued interest and fees in respect thereof and (b) to include
appropriately the Lenders holding such credit facilities in any determination
of the Required Lenders.

 

In
addition, notwithstanding the foregoing, this Agreement may be amended with the
written consent of the Administrative Agent, the Borrower and the Lenders
providing the

 

68

 

relevant Replacement Term Loans (as defined below) to
permit the refinancing of all outstanding Term Loans (“Refinanced Term Loans”)
with a replacement term loan tranche hereunder (“Replacement Term Loans”),
provided that (a) the aggregate principal amount of such Replacement
Term Loans shall not exceed the aggregate principal amount of such Refinanced
Term Loans, (b) the Applicable Margin for such Replacement Term Loans
shall not be higher than the Applicable Margin for such Refinanced Term Loans, (c) the
weighted average life to maturity of such Replacement Term Loans shall not be
shorter than the weighted average life to maturity of such Refinanced Term
Loans at the time of such refinancing and (d) all other terms applicable
to such Replacement Term Loans shall be substantially identical to, or less
favorable to the Lenders providing such Replacement Term Loans than, those
applicable to such Refinanced Term Loans, except to the extent necessary to
provide for covenants and other terms applicable to any period after the latest
final maturity of the Term Loans in effect immediately prior to such
refinancing.

 

Notwithstanding
the foregoing, any provision of this Agreement may be amended by an agreement
in writing entered into by the Borrower, the Required Lenders and the Administrative
Agent if (i) by the terms of such agreement the Term Loan Commitment of
each Lender not consenting to the amendment provided for therein shall
terminate upon the effectiveness of such amendment and (ii) at the time
such amendment becomes effective, each Lender not consenting thereto receives
payment in full of the principal of and interest accrued on each Term Loan made
by it and all other amounts owing to it or accrued for its account under this
Agreement.

 

11.2.        Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of the Borrower and the Agents,
and as set forth in an administrative questionnaire delivered to the
Administrative Agent in the case of the Lenders, or to such other address as
may be hereafter notified by the respective parties hereto:

 

	
  The Borrower:

  	
   

  	
  New World
  Restaurant Group, Inc.

  1687 Cole Boulevard

  Golden, CO 80401

  
	
   

  	
   

  	
  Attention:

  	
  Richard P.
  Dutkiewicz, Chief 

  Financial Officer

  
	
   

  	
   

  	
  Telecopy:

  	
  (303)
  568-8402

  
	
   

  	
   

  	
  Telephone:
  (303) 568-8004

  
	
   

  	
   

  	
   

  
	
  The
  Administrative Agent:

  	
   

  	
  Bear Stearns
  Corporate Lending Inc.

  383 Madison Avenue

  New York, New York 10179

  
	
   

  	
   

  	
  Attention:

  	
  Bram Smith

  
	
   

  	
   

  	
  Telecopy:

  	
  (917)
  849-1542

  
	
   

  	
   

  	
  Telephone:
  (212) 272-3669

  
					

 

69

 

provided
that any notice, request or demand to or upon any Agent, the Issuing Lender or
the Lenders shall not be effective until received.

 

Notices and
other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative
Agent; provided that the foregoing shall not apply to notices pursuant
to Section 2 unless otherwise agreed by the Administrative Agent and the applicable
Lender.  The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.

 

11.3.        No
Waiver; Cumulative Remedies.  No
failure to exercise and no delay in exercising, on the part of any Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege.  The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

11.4.        Survival
of Representations and Warranties. 
All representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Term Loans and other extensions of credit
hereunder.

 

11.5.        Payment
of Expenses and Taxes.  The Borrower
agrees (a) to pay or reimburse each Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to each Agent and filing and recording fees and
expenses, with statements with respect to the foregoing initially expected
(assuming the Closing Date occurs) to be submitted to the Borrower prior to the
Initial Borrowing Date (in the case of amounts to be paid on the Initial
Borrowing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as such Agent shall deem appropriate, (b) to pay or
reimburse each Lender and each Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to such Agent, (c) to pay,
indemnify, and hold each Lender and each Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, that
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender
and each Agent and their respective officers, directors,

 

70

 

employees, affiliates, agents and controlling persons
(each, an “Indemnitee”) harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the other Loan Documents (regardless of whether any Loan
Party is or is not a party to any such actions or suits) and any such other
documents, including any of the foregoing relating to the use of proceeds of
the Term Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Group Member or any of
the Properties and the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against any
Loan Party under any Loan Document (all the foregoing in this clause (d),
collectively, the “Indemnified Liabilities”), provided, that the
Borrower shall have no obligation hereunder to any Indemnitee with respect to
Indemnified Liabilities to the extent such Indemnified Liabilities are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such
Indemnitee.  Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives
and agrees to cause its Subsidiaries to waive, all rights for contribution or
any other rights of recovery with respect to all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind
or nature, under or related to Environmental Laws, that any of them might have
by statute or otherwise against any Indemnitee. 
All amounts due under this Section 11.5 shall be payable not later
than ten days after written demand therefor. 
Statements payable by the Borrower pursuant to this Section 11.5
shall be submitted to Chief Financial Officer (Telephone No. (303) 568-8004)
(Telecopy No. (303) 568-8402), at the address of the Borrower set forth in
Section 11.2, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative
Agent.  The agreements in this Section 11.5
shall survive repayment of the Term Loans and all other amounts payable
hereunder.

 

11.6.        Successors
and Assigns; Participations and Assignments.  (a)  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that (i) the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section.

 

(b)           (i)  Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender
may assign to one or more assignees (each, an “Assignee”) all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Term Loan Commitments and the Term Loans at the time owing to
it) with the prior written consent (any such consent not to be unreasonably
withheld) of:

 

(A) the Borrower, provided that no
consent of the Borrower shall be required for an (x) assignment to a
Lender, an affiliate of a Lender, an Approved Fund (as defined below) or, if an
Event of Default under Section 9(a) or (f) has occurred and is
continuing, any other Person, (y) any assignment by the Administrative
Agent or the Lead Arranger (or

 

71

 

their affiliates), provided that any such assignment of a Term
Loan Commitment pursuant to this clause (y) shall require the consent of the
Borrower (such consent not to be unreasonably withheld) unless such assignment
is made in connection with the primary syndication of the Facilities to a
Person disclosed to the Borrower prior to the Closing Date or (z) any
assignment of Term Loans; and

 

(B) the Administrative Agent, provided
that no consent of the Administrative Agent shall be required for (x) an
assignment to an Assignee that is a Lender immediately prior to giving effect
to such assignment, (y) any assignment by the Administrative Agent (or its
affiliates) or (z) any assignment of Term Loans.

 

(ii)           Assignments
shall be subject to the following additional conditions:

 

(A) except in the case of an assignment to a
Lender, an affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Term Loan Commitments or Term
Loans under any Facility, the amount of the Term Loan Commitments or Term Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $1,000,000 and, after
giving effect thereto, the assigning Lender (if it shall retain any Terms
Loans) shall have Term Loan Commitments and Term Loans aggregating at least
$1,000,000, unless each of the Borrower and the Administrative Agent otherwise
consent, provided that (1) no such consent of the Borrower shall be
required if an Event of Default under Section 9(a) or (f) has
occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Lender and its affiliates or Approved Funds, if any;

 

(B) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
and, subject to Section 4.13, the assigning Lender or the assignee Lender
shall pay a processing and recordation fee of $3,500 (except for the
Administrative Agent, the Lead Arranger and any of their Affiliates and the
Borrower and except for assignments by a Lender to any of its Affiliates or
Approved Funds);

 

(C) the Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an administrative
questionnaire; and

 

(D) in the case of an assignment by a Lender
to a CLO related to such Lender (as defined below), the assigning Lender shall
retain the sole right to approve any amendment, modification or waiver of any
provision of this Agreement and the other Loan Documents, provided that
the

 

72

 

Assignment and Assumption between such Lender and such CLO may provide
that such Lender will not, without the consent of such CLO, agree to any
amendment, modification or waiver that (1) requires the consent of each
Lender directly affected thereby pursuant to the proviso to the second sentence
of Section 11.1 and (2) directly affects such CLO.

 

For the
purposes of this Section 11.6, the terms “Approved Fund” and “CLO”
have the following meanings:

 

“Approved
Fund” means (a) a CLO and (b) with respect to any Lender that is
a fund which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans and similar extensions of credit and is managed
by the same investment advisor as such Lender or by an affiliate of such
investment advisor.

 

“CLO”
means any entity (whether a corporation, partnership, trust or otherwise) that
is engaged in making, purchasing, holding or otherwise investing in bank loans
and similar extensions of credit in the ordinary course of its business and is
administered or managed by a Lender or an affiliate of such Lender.

 

(iii)          Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) below,
from and after the effective date specified in each Assignment and Assumption
the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 4.9, 4.10, 4.11 and 10.5). 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 11.6 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

 

(iv)          The
Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Term Loan Commitments of, and principal amount of the
Term Loans owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”).  The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

 

73

 

(v)           Upon
its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an Assignee, the Assignee’s completed administrative
questionnaire (unless the Assignee shall already be a Lender hereunder) and any
written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register.  No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.

 

(c)           (i)  Any
Lender may, without the consent of the Borrower or the Administrative Agent,
sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Term Loan Commitments and the Term
Loans owing to it); provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (C) the Borrower, the Administrative Agent, and the other
Lenders shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement.  Any agreement pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that (1) requires the
consent of each Lender directly affected thereby pursuant to the proviso to the
second sentence of Section 11.1 and (2) directly affects such
Participant.  Subject to paragraph (c)(ii) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 4.9, 4.10 and 4.11 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. 
To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 10.14(b) as though it were a Lender, provided
such Participant shall be subject to Section 10.14(b) as though it
were a Lender.

 

(ii)           A
Participant shall not be entitled to receive any greater payment under Section 4.9
or 4.10 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  Any Participant that is a
Non-U.S. Lender shall not be entitled to the benefits of Section 4.10
unless such Participant complies with Sections 4.10(d) and 4.10(e).

 

(d) Any Lender
may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.

 

74

 

(e) The
Borrower, upon receipt of written notice from the relevant Lender, agrees to
issue Notes to any Lender requiring Notes to facilitate transactions of the
type described in paragraph (d) above.

 

(f) Notwithstanding
the foregoing, any Conduit Lender may assign any or all of the Term Loans it
may have funded hereunder to its designating Lender without the consent of the
Borrower or the Administrative Agent and without regard to the limitations set
forth in Section 11.6(b).  Each of
the Borrower, each Lender and the Administrative Agent hereby confirms that it
will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify,
save and hold harmless each other party hereto for any loss, cost, damage or
expense arising out of its inability to institute such a proceeding against
such Conduit Lender during such period of forbearance.

 

11.7.        Adjustments;
Set-off.  (a)  Except to
the extent that this Agreement expressly provides for payments to be allocated
to a particular Lender or to the Lenders under a particular Facility, if any
Lender (a “Benefitted Lender”) shall receive any payment of all or part
of the Obligations owing to it under the Loan Documents, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 9(f),
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations under the
Loan Documents owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations under the Loan Documents owing to each such other
Lender, or shall provide such other Lenders with the benefits of any such
collateral, as shall be necessary to cause such Benefitted Lender to share the
excess payment or benefits of such collateral ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.

 

(b) In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by applicable
law, upon the occurrence and during the continuance of an Event of Default
under Section 9(a) hereof, to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the Borrower,
as the case may be.  Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such setoff and application.

 

75

 

11.8.        Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.  Delivery of an
executed signature page of this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.  A set of copies of this Agreement signed by
all the parties shall be lodged with the Borrower and the Administrative Agent.

 

11.9.        Severability.  Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

11.10.      Integration;
Intercreditor and Subordination Agreements. 
This Agreement, together with
the other Loan Documents, reflects the entire understanding of the parties with
respect to the transactions contemplated hereby and shall not be contradicted
or qualified by any other agreement, oral or written, before the date
hereof.  Each Lender hereby authorizes
and directs the Administrative Agent to enter into the Intercreditor Agreement
and Subordination Agreement on its behalf and hereby approves and agrees to be
bound by the terms of the Intercreditor Agreement and the Subordination
Agreement.  Notwithstanding anything to
the contrary herein, in the case of any inconsistency between this Agreement
and the Intercreditor Agreement, the Intercreditor Agreement shall govern.

 

11.11.      GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

11.12.      Submission
To Jurisdiction; Waivers.  The
Borrower hereby irrevocably and unconditionally:

 

(a) submits for itself and its property in
any legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York located in the City or County of New York,
the courts of the United States for the Southern District of
New York, and appellate courts from any thereof;

 

(b) consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;

 

(c) agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the Borrower at its address set forth in

 

76

 

Section 11.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;

 

(d) agrees that nothing herein shall affect
the right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and

 

(e) waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.

 

11.13.      Acknowledgments.  The Borrower hereby acknowledges that:

 

(a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;

 

(b) no Agent or Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Agents and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

 

(c) no joint venture is created hereby or by
the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the Lenders.

 

11.14.      Releases
of Guarantees and Liens.  (a)  Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 11.1) to take any action requested by the Borrower having the
effect of releasing any Collateral or guarantee obligations (i) to the
extent necessary to permit consummation of any transaction not prohibited by
any Loan Document or that has been consented to in accordance with Section 11.1
or (ii) under the circumstances described in paragraph (b) below.

 

(b) At such
time as the Term Loans and the other Second Lien Obligations under the Loan
Documents (other than Second Lien Obligations under or in respect of Specified
Hedge Agreements or Specified Cash Management Agreements and unasserted
contingent indemnification obligations) shall have been paid in full and the
Term Loan Commitments have been terminated, the Collateral shall be released
from the Liens created by the Security Documents, and the Security Documents
and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Loan Party under the Security
Documents shall terminate, all without delivery of any instrument or
performance of any act by any Person, provided that, the Administrative
Agent agrees upon such termination to promptly deliver to the Borrower UCC-3
termination statements, discharges of existing Mortgages, and other release and
termination documents as are reasonably requested by the Borrower to discharge
the Liens as a matter of public record.

 

77

 

11.15.      Confidentiality.  Each Agent and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement; provided that nothing herein shall prevent any
Agent or any Lender from disclosing any such information (a) to any Agent,
any other Lender or any Lender Affiliate, (b) subject to an agreement to
comply with the provisions of this Section, to any actual or prospective
Transferee or any direct or indirect counterparty to any Hedge Agreement (or
any professional advisor to such counterparty), (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors or
those of any of its affiliates (it being understood that the persons to whom
such disclosure is made will be informed of the confidential nature of such
information and such Agent or such Lender, as the case may be, shall be
responsible for the compliance of such person with this Section), (d) upon
the request or demand of any Governmental Authority, (e) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required
to do so in connection with any litigation or similar proceeding, (g) that
has been publicly disclosed (other than
as a result of prohibited disclosure by the Agents or the Lenders), (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with
respect to such Lender, or (i) in connection with the exercise of any
remedy hereunder or under any other Loan Document.  Each Agent and each Lender agrees that in the
event such Agent or such Lender is requested or required to disclose such
information pursuant to clauses (d), (e) or (f) above, such Agent or
such Lender, as the case may be, shall, to the extent practicable, provide the
Borrower with notice of any such request or requirement.

 

11.16.      Revival
and Reinstatement of Obligations.  If
the incurrence or payment of the Obligations by the Borrower under the Loan
Documents or the transfer to the Lenders of any property should for any reason
subsequently be declared to be void or voidable under any sate or federal law
relating to creditors’ rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, or other voidable or recoverable
payments of money or transfers of property (collectively, a “Voidable
Transfer”), and if the Lenders are required to repay or restore, in whole
or in part, any such Voidable Transfer, or elects to do so upon the reasonable
advice of their respective counsel, then, as to any Voidable Transfer, or the
amount thereof that the Lenders are required or elect to repay or restore, and
as to all reasonable costs, expenses and attorneys fees of the lenders related
thereto, the liability of the Borrower automatically shall be revived,
reinstated, and restored and shall exist as though such Voidable Transfer had
never been made.

 

11.17.      WAIVERS OF JURY TRIAL.  THE BORROWER, THE AGENTS AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

11.18.      Delivery
of Addenda.  Each initial Lender
shall become a party to this Agreement by delivering to the Administrative
Agent an Addendum duly executed by such Lender.

 

78

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written.

 

	
   

  	
  NEW WORLD
  RESTAURANT GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul J.B. Murphy, III

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paul J.B. Murphy, III

  
	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  BEAR, STEARNS &
  CO. INC., as Sole Lead

  Arranger and Sole Bookrunner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bram Smith

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Bram Smith

  
	
   

  	
   

  	
  Title:

  	
  Senior Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAR STEARNS
  CORPORATE LENDING INC.,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bram Smith

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Bram Smith

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
						

 

 

[Signature Page to Second
Lien Credit Agreement]

 

79

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