Document:

Exhibit 10.2

 

THIS PROMISSORY NOTE AND THE RIGHTS AND
OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT
SET FORTH IN SECTION 4 HEREOF TO THE INDEBTEDNESS (INCLUDING INTEREST AND
OTHER AMOUNTS) OWED BY MAKER PURSUANT TO THAT CERTAIN SENIOR SECURED CREDIT
AGREEMENT (AS AMENDED, RESTATED, EXTENDED OR OTHERWISE MODIFIED FROM TIME TO
TIME, THE “SENIOR CREDIT AGREEMENT”) DATED AS OF THE DATE HEREOF AMONG MAKER,
MAC-GRAY CORPORATION AND INTIRION CORPORATION (THE “SENIOR BORROWERS”), THE LENDERS
PARTY THERETO AND BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT AND COLLATERAL
AGENT, AND TO INDEBTEDNESS REFINANCING THE INDEBTEDNESS UNDER THE SENIOR CREDIT
AGREEMENT; AND EACH HOLDER OF THIS PROMISSORY NOTE, BY ITS ACCEPTANCE HEREOF,
IRREVOCABLY AGREES TO BE BOUND BY THE SUBORDINATION PROVISIONS IN SECTION 4
HEREOF.

 

PROMISSORY
NOTE

 

	
  $10,000,000.00

  	
  April 1, 2008

  

 

FOR VALUE RECEIVED, MAC-GRAY SERVICES, INC., a
Delaware corporation (“Maker”), promises to pay to the order of Paceco
Investors, L.P., a
Texas limited partnership (“Payee”), at 420 Throckmorton Street, Suite 710,
Fort Worth, Texas 76102, in lawful money of the United States of America, the
sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00),
together with interest on the unpaid principal balance from time to time
outstanding hereunder at a rate per annum of nine percent (9%) (the “Applicable Rate”), provided that in no event shall
the Applicable Rate exceed the maximum lawful rate (the “Maximum Rate”)
which may be contracted for, charged, taken, received or reserved by Payee in
accordance with applicable law, due credit being given for all payments,
charges and calculations made in connection with the loan evidenced hereby that
may be treated as interest under applicable law.

 

Section 1.                                          Interest.  Interest will be computed on a 360-day
year and will be accrued on the number of days funds are actually
outstanding.  Subject to Section 4,
accrued interest on the unpaid principal balance of this Note shall be due and
payable in the amount of $225,000.00 on the 1st day of January, April, July,
and October, of each year (the “Quarterly Periods”) commencing on July 1,
2008, until the second anniversary of the date hereof.

 

Section 2.                                          Payments
of Principal and Interest.

 

(a)                                  Subject
to Section 4, all unpaid principal and accrued interest hereunder shall be
due and payable on the earlier of a Change in Control (as such term is
hereinafter defined) and April 1, 2010 (the “Maturity Date”).  Subject to Section 4, principal and 

 

 

interest on this Note may
be prepaid by Maker, in whole or in part, at any time or from time to time,
without premium or penalty.  All payments
on this Note shall be applied first to the payment of unpaid accrued interest,
and any remainder shall be applied to reduction of the principal balance
hereof. For purposes of this Note, (i) a “Change in Control” shall mean (A) any
person who is not an Affiliate of Maker on the date hereof becoming the
beneficial owner, directly or indirectly, of fifty percent (50%) or more of the
combined voting power of the then outstanding securities of Maker, or (B) the
sale, transfer or other disposition of all or substantially all of the assets
of Maker, whether by sale of assets, merger or otherwise or (C) a “Change
in Control” as defined in the Senior Financing Agreement, and (ii) a “Control
Event” shall mean (A) the execution by Maker or any of its Affiliates of
any agreement or letter of intent with respect to a transaction which may
reasonably be expected to result in a Change of Control, or (B) the
execution of an agreement which, when performed by the parties thereto, will
result in a Change in Control.  Maker
shall promptly give Payee notice of any Control Event or Change in Control.

 

(b)                                 If
any payment of this Note shall not be made when due to Payee, then this Note
shall bear interest until paid at the Default Rate (as defined below).

 

(c)                                  Except
as hereinafter specifically provided, to the extent permitted by applicable
law, Maker and all sureties, endorsers, guarantors and other parties hereafter
assuming or otherwise becoming liable for the payment of any sum of money
payable under this Note (i) severally waive grace, presentment and demand
for payment, protest and notice of protest, notice of intent to accelerate
maturity, notice of acceleration of maturity, notice of nonpayment, and all
other notices of whatsoever nature, filing of suit, and diligence in collecting
this Note or enforcing any of the security herefor; (ii) severally agree
that Payee shall not be required first to institute suit or exhaust its
remedies herein against Maker or others liable or to become liable hereon in
order to enforce payment of this Note by them; and (iv) severally agree
that amounts due hereunder shall be paid without set-off, counter-claim,
abatement, suspension, or diminution, except to the limited extent provided in Section 8.07
of the Partnership Interest Purchase Agreement of even date herewith among
Automatic Laundry Company, Ltd., the Partners signatory thereto, Mac-Gray
Newco, LLC and Maker.  No extension of
time for the payment of this Note or any installment hereof shall affect the
liability of Maker under this Note.

 

(d)                                 Set-Off
Right.  Notwithstanding anything in
this Note to the contrary (including, without limitation, Section 4
hereof), in accordance with Section 8.07 of the Purchase Agreement, the
Maker shall have the right to set-off against any unsatisfied principal amount
of this Note (whether or not such principal amount is then due and payable) the
amount of any indemnifiable losses suffered or incurred by the Maker, in
accordance with the procedures, and subject to the limitations, set forth in Section 8.07
of the Purchase Agreement.  Upon any such
set-off, the principal amount of this Note will be reduced by the amount of
such set-off and, from and after the date of any such set-off, interest on this
Note shall accrue only on the remaining principal amount of this Note, but 

 

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no set-off of interest
shall be made or permitted, and interest shall continue to accrue and be paid
on the remaining principal of this Note in accordance with its terms.  If a court of competent jurisdiction
determines, or the parties agree, that interest has accrued and been paid on
principal of this Note that was subject to valid Set-Off Claim (as defined in
the Purchase Agreement) but was not set-off, the Payee shall return such amount
of interest to Maker, together with interest on such amount at the rate of nine
percent (9%) per annum from, and including, the date of payment to, but not
including, the date such interest is returned. 
If any unsatisfied Set-Off Claim has not been resolved in accordance
with the Purchase Agreement when the principal amount of this Note becomes due
and payable, then, in accordance with the Purchase Agreement, Maker will
deposit with an escrow agent an amount (the “Escrow Amount”) equal to the least
of (i) the aggregate amount of unsatisfied Set-Off Claims, (ii) the
remaining principal amount of the Note and (iii) the excess of $5,825,000
over the aggregate amount set off against the principal amount of this Note
prior to maturity, and Maker will pay the remaining principal amount of the
Note after reduction by the Escrow Amount, if any, to Payee.

 

Section 3.                                          Events
of Default.  If any one or more of
the following events (each such event is herein referred to as an “Event of
Default”) shall happen:

 

(a)                                  Maker
shall:

 

(i)                                     default in the
payment when due of all or part of the principal of this Note;

 

(ii)                                  default in the
payment when due of all or any part of the interest due on this Note or any
other amount payable by the Maker to the Payee under this Note, which default
remains unremedied for a period of 5 business days after the due date thereof;

 

(iii)                               fail to notify Payee of
a Control Event or Change in Control and such failure continues for five
business days after a responsible officer of Maker has knowledge of the
occurrence thereof;

 

(iv)                              fail to observe or
perform any of the other agreements or covenants hereunder and such failure
continues for 30 days after written notice thereof is given to the Maker by the
payee;

 

(v)                                 commence a voluntary
case under Title 11 of the United States Code as from time to time in effect
(the “Bankruptcy Code”);

 

(vi)                              seek relief as a debtor
under any applicable law, other than the Bankruptcy Code, of any jurisdiction
relating to the liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors, or consent to or acquiesce in such
relief;

 

(vii)                           have entered against it any
order by a court of competent jurisdiction (i) finding it to be bankrupt
or insolvent, (ii) assuming custody 

 

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of, or appointing a receiver or other custodian for, all or a
substantial part of its property;

 

(viii)                       make an assignment for the
benefit of, or enter into a composition with, its creditors, or appoint or
consent to the appointment of a receiver or other custodian for all or a
substantial part of its property; or

 

(ix)                               liquidate, terminate or
dissolve its business; or

 

(b)                                 If:

 

(i)                                    a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of Maker in an involuntary case under the Bankruptcy Code or
under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, which decree or order is
not stayed; or any other similar relief shall be granted under any applicable
federal or state law; or

 

(ii)                                 an involuntary case
shall be commenced against Maker under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over Maker, or over all or a substantial part of
its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Maker for all or a substantial part of its property; or a warrant of
attachment, execution or similar process shall have been issued against any
substantial part of the property of Maker, and any such event described in this
clause (b) shall continue for 60 days unless dismissed, bonded or
discharged;

 

then and in each and every such case the principal of and unpaid
accrued interest on this Note shall automatically become due and payable
without presentation, presentment, protest or further demand or notice of any
kind, all of which are hereby expressly waived, and such Payee or Payees may
proceed, subject to Section 4, to enforce payment of such amount or part
thereof in a commercially reasonable manner.

 

(c)                                  Upon
an Event of Default, at the option of Payee all amounts then due and payable
hereunder shall bear interest for the period beginning with the date of
occurrence of such default at a rate of interest per annum (the “Default Rate”)
equal to the lesser of (a) twelve percent (12%) per annum, or (b) the
Maximum Rate.

 

Section 4.                                          Subordination.

 

(a)                                  Agreement
to Subordinate.  The Maker agrees,
and the Payee by accepting the Note agrees, that the payment of all amounts
owing under or in respect of the Note are subordinated in right of payment, to
the extent and in the manner provided in this Section 4, to the prior
payment in full in cash of all existing and future Senior Financing 

 

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Obligations and that the
subordination and related terms hereunder are for the benefit of and enforceable
by the holders of the Senior Financing Obligations.

 

(b)                                 Liquidation,
Dissolution, Bankruptcy.  Upon any
payment or distribution of the assets of the Maker to creditors upon a total or
partial liquidation or a total or partial dissolution of the Maker or in a
reorganization, insolvency or bankruptcy of or similar proceeding relating to
the Company or its Property (a “Proceeding”):

 

(i)                                     the holders of
Senior Financing Obligations shall be entitled to receive Payment in Full of
the Senior Financing Obligations before the Payee shall be entitled to receive
any payment or distribution of any kind or character with respect to any
obligations on, or relating to, the Note; and

 

(ii)                                  until
the Senior Financing Obligations are Paid in Full, any payment or distribution
to which the Payee would be entitled but for the subordination provisions of this Section 4 shall be made to
holders of the Senior Financing Obligations as their interests may appear.

 

(c)                                  Permitted Payments.  All
Senior Financing Obligations shall be Paid-in-Full before the Maker may make
any payments on this Note, except for any payment with the proceeds of any
Seller Subordinated Note Refinancing Indebtedness as and to the extent
permitted under the Senior Financing Agreement; provided that subject to the
provisions contained in Sections 4(b) and 4(d), the Maker may pay (x) regularly
scheduled interest payments, and (y) principal payments upon a Change of
Control or the Maturity Date.

 

(d)                                 Default under Senior Financing Agreement. 
The Maker shall not pay principal of, premium, if any, or interest on
the Note or pay any other obligations relating to the Note, including fees,
costs, expenses, indemnities and rescission or damage claims and may not purchase,
redeem or otherwise retire or acquire
for cash or property the Note (collectively, “pay the Note”) if either of the
following occurs:

 

(i)                                     a default or event of default under any
document governing any Senior Financing Obligation that results from the
failure or inability to timely comply with any payment obligation (a “Payment
Default”), including, without limitation, for principal, interest, fees, or
expenses; or

 

(ii)                                  an
event of default under any document governing any Senior Financing Obligation
other than a Payment Default (a “Non-Payment Default”);

 

(A)                              in the case of a Payment Default, until (x) such
Payment Default has been cured or waived in writing by the party entitled to
waive such Payment Default or (y) the date on which the Senior Financing
Obligations are Paid-in-Full; and

 

(B)                                in the case of a Non-Payment Default, during
the period (the “Payment Blockage Period”) commencing on the date that
the Payee receives written notice of such Non-Payment 

 

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Default
from the Representative stating that a Payment Blockage Period will commence (a
“Non-Payment Default Notice”), which notice shall state that the
Non-Payment Default Notice is being delivered pursuant to this Section 4,
and ending on the earliest to occur of: (A) the date that is 179 consecutive
days after such date, (B) the date on which the Senior Financing
Obligations are Paid-in-Full, and (C) the date on which such Non-Payment
Default is cured or waived in writing by the Representative.

 

Subject
to the provisions contained in the first paragraph of this Section 4(d) and
Section 4(b) hereof, unless the holders of the Senior Financing
Obligations or the Representative shall have accelerated the maturity of the
Senior Financing Obligations or a Payment Default has occurred and is continuing,
the Maker shall be permitted to resume paying the Note after the end of such
Payment Blockage Period.  However, in no
event shall the total number of days during which any Payment Blockage Period
or Periods on the Note is in effect exceed 179 days in the aggregate during any
consecutive 360-day period, and there must be at least 181 days during any
consecutive 360-day period during which no Payment Blockage Period is in
effect.  Notwithstanding the foregoing,
however, no Non-Payment Default that existed or was continuing on the date of
commencement of any Payment Blockage Period with respect to the Senior
Financing Obligations and that was the basis for the initiation of such Payment
Blockage Period shall be, or be made, the basis for a subsequent Payment
Blockage Period by the Representative unless such default shall have been cured
or waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants during the period after the date of delivery of such initial
Non-Payment Default Notice, that, in either case, would give rise to a Non-Payment
Default pursuant to any provisions under which a Non-Payment Default previously
existed or was continuing shall constitute a new Non-Payment Default for this
purpose).

 

If a Payment Default or a
Non-Payment Default under the Senior Financing Agreement occurs, the Maker
shall promptly give a copy to the Payee of any notice of default under the
Senior Financing Agreement; provided that the failure to give such copy to the
Payee shall not affect the provisions
of this Section 4; provided further that the failure of the holder of any
Senior Financing Obligation to give the Payee notice of a default under the
Senior Financing Agreement shall not affect the provisions of this Section 4
(except as explicitly stated in this Note).

 

(e)                                  Subrogation.  After the Payment in Full of
the Senior Financing Obligations and until the Note is paid in full, the Payee
shall be subrogated to the rights of holders of the Senior Financing
Obligations to receive distributions applicable to the Senior Financing
Obligations.  A distribution made under
this Section 4 to holders of the Senior Financing Obligations which otherwise
would have been made to Payee is not, as between the Maker and Payee, a payment
by the Maker on the Senior Financing Obligations.

 

(f)                                    Turnover.  If, notwithstanding the
provisions of Section 4 of this Note, any payment or distribution of any
kind or character (whether in cash, securities or other property) or any
security shall be received by the holder of this Note in contravention of this Section 4
and before all the Senior Financing Obligations shall have been Paid-in-

 

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Full,
such payment, distribution or security shall be held in trust for the benefit
of, and shall be immediately paid over or delivered or transferred to, the
holders of the Senior Financing Obligations or their duly appointed agents for
application according to the priorities of the Senior Financing
Obligations.  In the event of the failure
of any holder of this Note to endorse or assign any such payment, distribution
or security, each holder of any Senior Financing Obligations is hereby irrevocably
authorized to endorse or assign the same. If any holder of the Senior Financing
Obligations is required in connection with any Proceeding or otherwise to
disgorge, turnover or otherwise pay any amount to the estate of the Maker or
any of its subsidiaries, because such amount was avoided or ordered to be paid
or disgorged for any reason, including without limitation because it was found
to be a fraudulent or preferential transfer (a “Recovery”), whether
received as proceeds of security, enforcement of any right of set-off or
otherwise, then the Senior Financing Obligations shall be reinstated to the
extent of such Recovery and deemed to be outstanding as if such payment had not
occurred and the Senior Financing Obligations, shall be deemed not to have been
paid.

 

(g)                                 Remedies.  No holder of this Note
(including the Payee) shall exercise any Remedies unless such holder shall have
given written notice to the Maker and the Representative (1) that it is
presently entitled to exercise Remedies and (2) that it intends to
exercise such Remedies, and a period of at least 150 days shall have elapsed
from the receipt of such notice (the “Remedies Notice”) by the
Representative; provided, that the period during which the holder shall be
prohibited from exercising Remedies shall terminate upon the earliest to occur
of such 150-day period (the “Standstill
Period”), or any of the following:  (A) the
acceleration of the Senior Financing Obligations, (B) the filing of any
voluntary Proceeding relating to the Maker, (C) the filing of any
involuntary Proceeding relating to the Maker which is not dismissed within 60 days, or (D) the
Payment-in-Full of the Senior Financing Obligations.  Upon the termination of any Standstill
Period, then the holder may, at its sole election, exercise any and all
Remedies (including acceleration of the maturity of this Note) available to it;
provided that the Payment Blockage Period or an indefinite blockage
period under a Payment Default, as the case may be, (if not also terminated)
shall continue for its applicable period notwithstanding the termination of the
Standstill Period.

 

(h)                                 Security.  Until Payment-in-Full of the
Senior Financing Obligations, the holder of this Note will not ask, demand,
accept, receive or retain (i) any guarantee of this Note from any Person
(except as and to the extent contemplated by any Seller Subordinated Note
Refinancing Indebtedness under the Senior Financing Agreement), or (ii) any
collateral security for the payment of this Note, or any other form of payment
assurance (other than any guarantee contemplated under clause (i) above)
as to this Note, from the Maker or any other Person.

 

(i)                                     Obligations.  The provisions of this Section 4
are solely for the purpose of defining the relative rights of the holders of
Senior Financing Obligations, on the one hand, and the holder of this Note on
the other, against the Maker and its assets, and nothing herein is intended to
or shall impair, as between the Maker and the holder of this Note, the
obligations of the Maker which are absolute and unconditional, to pay to the
holder the principal and interest on this Note as and when they become due and
payable 

 

7

 

in
accordance with their terms, or is intended to or will affect the relative
rights of the holder of this Note and creditors of the Maker other than the
holders of the Senior Financing Obligations, nor, except as provided in this Section 4,
will anything herein or therein prevent the holder of this Note from exercising
all remedies otherwise permitted by applicable law upon default under this
Note.

 

(j)                                     Third Party Beneficiary.  The
holders of Senior Financing Obligations have made loans and extended credit to
the Maker in reliance on this Section 4 and are entitled to the benefits
of the provisions hereof and are express third party beneficiaries of these
provisions.  Accordingly, any holder of
Senior Financing Obligations shall be entitled to enforce any provisions of
such Sections against the Payee or the Maker.  No present or future holder of Senior Financing
Obligations shall be prejudiced in its right to enforce the provisions of Section 4
of this Note by any act or failure to act on the part of the Maker.

 

(k)                                  Amendments.  Prior to Payment-in-Full of the Senior
Financing Obligations, this Note may not be amended, modified, replaced or
restated in whole or in part without the prior written consent of the
Representative (except as and to the extent contemplated by any Seller
Subordinated Note Refinancing Indebtedness under the Senior Financing
Agreement).  The holders of Senior
Financing Obligations may, at any time, in their discretion, renew, amend,
increase, extend or otherwise modify the terms and provisions of Senior
Financing Obligations so held or exercise any of their rights under the Senior
Financing Obligations including, without limitation, the waiver of defaults
thereunder and the amendment of any of the terms or provisions thereof (or any
notice evidencing or creating the same), all without notice to or assent from
the holder of this Note.  No compromise,
alteration, amendment, renewal or other change of; or waiver, consent or other
action in respect of any liability or obligation under or in respect of; any
terms, covenants or conditions of the Senior Financing Obligations (or any
instrument evidencing or creating the same), whether or not such release is in
accordance with the provisions of the Senior Financing Obligations (or any
instrument evidencing or creating the same), shall in any way alter or affect
any of the subordination provisions of this Note.

 

(l)                                     Communication
with Representative.  Maker
authorizes Payee to communicate with the Representative (i) at any time
and from time to time for the purpose of obtaining a copy of the Senior
Financing Agreement (and the Representative is authorized to deliver a copy,
when requested, to the Payee), and (ii) at any time after receiving a
Non-Payment Default Notice for the purpose of ascertaining the status of any
Default and a detailed description of the events giving rise to such Default
(and the Representative is authorized to disclose such matters to Payee).

 

Section 5.                                          Definitions.  For purposes of these definitions and their
use in this Note, the term “Maker” shall include the Maker and its parent
company, Mac-Gray Corporation.

 

(a)                                  “Affiliate” means, with respect to any
Person (the “Subject Person”), (i) any other Person (a “Controlling
Person”) that directly, or indirectly through one or more intermediaries,
Controls the Subject Person or (ii) any other Person which is 

 

8

 

Controlled
by or is under common Control with a Controlling Person; provided, however,
that the Holder and its Affiliates shall not be deemed Affiliates of the Maker.

 

(b)                                 “Control” (including, with correlative
meanings, the terms “Controlling,” “Controlled by” and “under
common Control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or interests, by contract or otherwise.

 

(c)                                  “Default” means any event or condition
which constitutes an Event of Default or which with the giving of notice or
lapse of time or both would, unless cured within the stated time period or
waived, become an Event of Default.

 

(d)                                 “Letter of Credit” means a letter of
credit issued by Bank of America, N.A. or any Affiliate of Bank of America,
N.A., for the account of the Maker.

 

(e)                                  “Paid-in-Full” or “Payment-in-Full”
shall mean with respect to the Senior Financing Obligations, (i) the
payment in full in cash of all outstanding Senior Financing Obligations (other
than contingent indemnity, cost or reimbursement obligations to the extent that
no claim giving rise thereto has been asserted), (ii) the termination of
all commitments to extend credit that would constitute Senior Financing
Obligations and (iii) the termination or cash collateralization of letters
of credit (in an amount not to exceed 101% of the face amount of such obligations);
provided that in no event shall a refinancing or restatement of the Senior
Financing Obligations constitute Payment-in-Full or Paid-in-Full of such Senior
Financing Obligations.

 

(f)                                    “Person” means an individual or a
corporation, company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, limited liability company,
government (or any agency or political subdivision thereof) or other entity of
any kind.

 

(g)                                 “Purchase Agreement” means that certain
Partnership Interest Purchase Agreement dated as of April 1, 2008 among
Automatic Laundry Company, Ltd., a Texas limited partnership, the partners of
the Company listed on the signature pages thereto Mac-Gray Newco, LLC, a
Delaware limited liability company, and the Maker.

 

(h)                                 “Remedies” shall mean, with respect to
a “default” or an “event of default” as defined in this Note, the acceleration
of any of this Note or the exercise of any remedies in respect of such default
or event of default (including, without limitation, the right to sue the Maker
or the right to file or participate in any involuntary bankruptcy proceeding
against the Maker but excluding the imposition of default interest rate).

 

(i)                                     “Representative” means the
administrative agent from time to time under the Senior Financing
Agreement.  The current Representative is
Bank of America, N.A., whose address is 231 S. LaSalle St., Chicago, IL
60604.  Maker shall notify Payee of any
change of the Representative or its address for notice.

 

9

 

(j)                                     “Senior Financing Agreement” means
that certain senior secured term loan and revolving credit facility, dated the
date hereof, among the Maker, Bank of America, N.A., as administrative agent,
and the financial institutions from time to time party as lenders thereto,
including any notes, mortgages, guarantees, collateral documents, instruments
and agreements executed in connection therewith, and any amendments,
supplements, modifications, extensions, replacements, renewals, restatements,
refundings or refinancings thereof and any one or more indentures or credit
facilities or commercial paper facilities with banks or other institutional
lenders or investors that extend, replace, refund, refinance, renew or defease
any part of the loans, notes, other credit facilities or commitments thereunder,
other than any such replacement, refunding or refinancing facility or indenture
that increases the amount borrowable thereunder and whether by the same or any
other agent, lender or group of lenders.

 

(k)                                  “Senior Financing Obligations” means (i) (A) all
indebtedness, obligations and liabilities, whether now existing or hereafter
arising, of the Maker, for or in connection with money borrowed or other credit
or financial accommodations extended (whether in the form of loans or
otherwise) from time to time under the Senior Financing Agreement, under
Letters of Credit, or otherwise, including (x) all principal of and
interest (including post-petition interest in a bankruptcy or similar
proceeding whether or not allowed) on all such borrowings and other credit or
financial accommodations extended under the Senior Financing Agreement, (y) all
fees, charges, premiums (if any) and costs of collection, attorneys’ fees and
other expenses payable by the Maker and all other amounts payable by the Maker
under, and all other claims (including without limitation claims arising out of
breaches of representations, warranties or covenants) payable by the Maker
arising out of, the Senior Financing Agreement and (z) any such
indebtedness, obligations and liabilities payable by the Maker as from time to
time arise in connection with any collateral for or guaranties of such
borrowings and other credit or financial accommodations, and (B) any
deferrals, renewals and extensions of any of the foregoing.

 

Section 6.                                          Additional
Provisions.

 

(a)                                  Maker
agrees to pay all costs of collection hereof when incurred, including
reasonable attorneys’ fees, whether or not any action shall be instituted to
enforce this Note.

 

(b)                                 It
is expressly stipulated and agreed to be the intent of Maker and Payee to
comply at all times with the applicable law now or hereafter governing both the
terms of this Note and the interest payable on this Note.  If the applicable law is ever revised,
repealed, or judicially interpreted so as to render any provision of this Note
invalid, or so as to render usurious any amount called for under this Note, or
contracted for, charged, taken, reserved or received with respect to the loan
evidenced by this Note, or if Payee’s exercise of the option herein contained
to accelerate the maturity of this Note or if any prepayment by Maker results
in Maker having paid any interest in excess of that permitted by law (after
taking into account all payments, charges, and calculations deemed to be
interest under applicable law), then it is Maker’s and Payee’s express intent
that all excess amounts theretofore collected by Payee be credited on the
principal 

 

10

 

balance of this Note (or,
if the Note has been paid in full, refunded to Maker), and that the invalid
provisions of this Note immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the then applicable
law, but so as to permit the recovery of the greatest amount otherwise called
for hereunder and thereunder.

 

(c)                                  All
sums paid or agreed to be paid to Payee for the use, forbearance or detention
of the indebtedness evidenced hereby shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness until payment in full so that the rate or amount
of interest on account of such indebtedness does not exceed the usury ceiling
from time to time in effect and applicable to the loan evidenced hereby for so
long as the debt is outstanding under the loan.

 

(d)                                 Any
notice required or permitted to be given hereunder by one party to the other
shall be in writing and the same shall be given and shall be deemed to have
been served and given if delivered in person to the address set forth
hereinafter for the party to whom the notice is given, or if placed in the
United States mail, return receipt requested, addressed to the party at the
address hereinafter specified.  The
addresses of Payee and Maker for all purposes under this Note and all notices
hereunder shall be as set forth below. 
From time to time either party may designate another address within the
United States of America for all purposes of this Note by giving the other
party not less than fifteen (15) days’ advance written notice of such change of
address in accordance with the provisions hereof.

 

	
  Payee:

  	
   

  	
  Maker:

  
	
   

  	
   

  	
   

  
	
  Paceco Investors, L.P.

  420 Throckmorton Street,

  Suite 710

  Fort Worth Texas 76102

  	
   

  	
  Mac-Gray
  Services, Inc.

  404 Wyman Street, Suite 400

  Waltham, Massachusetts

  02451-1212

  

 

(e)                                  THIS
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK.  ANY DISPUTE UNDER
THIS NOTE THAT IS NOT SETTLED BY MUTUAL CONSENT SHALL BE FINALLY ADJUDICATED BY
ANY FEDERAL OR STATE COURT SITTING IN THE STATE OF DELAWARE, AND THE MAKER
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS (OR ANY APPELLATE
COURT THEREFROM) OVER ANY SUCH DISPUTE. THE MAKER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND DELAWARE STATE COURTS LOCATED
IN THE STATE OF DELAWARE IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING 

 

11

 

RELATED TO THIS NOTE OR
ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK
OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT.  THE MAKER IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.

 

[Signature Page Follows Next]

 

12

 

THIS NOTE AND THE PURCHASE AGREEMENT REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AS TO THE OBLIGATIONS EVIDENCED HEREBY AND
THEREBY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

	
   

  	
  MAC-GRAY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J. Shea

  
	
   

  	
   

  	
  Michael J. Shea, Executive Vice President,

  
	
   

  	
   

  	
  CFO and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “MAKER”

  

 

 

EXECUTED BY PAYEE
FOR THE SOLE PURPOSE

OF ACKNOWLEDGING
THIS NOTE AND THE

 

PURCHASE AGREEMENT
AS THE FINAL

AGREEMENT OF THE
PARTIES

 

PACECO INVESTORS, L.P.

 

	
  By:

  	
  Paceco Investors
  Genpar, LLC,

  
	
   

  	
  its general
  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Joe K. Pace

  	
   

  
	
   

  	
   Joe K. Pace, President

  
	
   

  	
   

  
	
   

  	
  “PAYEE”

  
				

 

[Signature Page to Note]Exhibit 10.3

 

 

SENIOR SECURED CREDIT AGREEMENT

 

dated as of April 1, 2008

 

among

 

MAC-GRAY
CORPORATION,

MAC-GRAY
SERVICES, INC.

and

INTIRION
CORPORATION,

as Borrowers,

 

THE LENDERS PARTY HERETO

 

and

 

BANK OF AMERICA, N.A.,

as Administrative Agent and Collateral Agent

 

BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager

 

 

 

TABLE OF CONTENTS

 

	
  Article and Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
  1

  
	
  1.01

  	
   

  	
  Defined Terms

  	
   

  	
  1

  
	
  1.02

  	
   

  	
  Interpretive Provisions

  	
   

  	
  25

  
	
  1.03

  	
   

  	
  Accounting Terms and Provisions

  	
   

  	
  26

  
	
  1.04

  	
   

  	
  Rounding

  	
   

  	
  26

  
	
  1.05

  	
   

  	
  Times of Day

  	
   

  	
  26

  
	
  1.06

  	
   

  	
  Letter of Credit Amounts

  	
   

  	
  26

  
	
  ARTICLE II COMMITMENTS AND CREDIT EXTENSIONS 

  	
   

  	
  27

  
	
  2.01

  	
   

  	
  Commitments

  	
   

  	
  27

  
	
  2.02

  	
   

  	
  Borrowings, Conversions and Continuations

  	
   

  	
  29

  
	
  2.03

  	
   

  	
  Additional Provisions with respect to Letters of Credit

  	
   

  	
  31

  
	
  2.04

  	
   

  	
  Additional Provisions with respect to Swingline Loans

  	
   

  	
  36

  
	
  2.05

  	
   

  	
  Repayment of Loans

  	
   

  	
  38

  
	
  2.06

  	
   

  	
  Prepayments

  	
   

  	
  39

  
	
  2.07

  	
   

  	
  Termination or Reduction of Commitments

  	
   

  	
  41

  
	
  2.08

  	
   

  	
  Interest

  	
   

  	
  41

  
	
  2.09

  	
   

  	
  Fees

  	
   

  	
  42

  
	
  2.10

  	
   

  	
  Computation of Interest and Fees;
  Retroactive Adjustments of Applicable Rate

  	
   

  	
  43

  
	
  2.11

  	
   

  	
  Payments Generally; Administrative Agent’s
  Clawback

  	
   

  	
  44

  
	
  2.12

  	
   

  	
  Sharing of Payments By Lenders

  	
   

  	
  45

  
	
  2.13

  	
   

  	
  Evidence of Debt

  	
   

  	
  46

  
	
  2.14

  	
   

  	
  Joint and Several Liability

  	
   

  	
  46

  
	
  ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY 

  	
   

  	
  48

  
	
  3.01

  	
   

  	
  Taxes

  	
   

  	
  48

  
	
  3.02

  	
   

  	
  Illegality

  	
   

  	
  51

  
	
  3.03

  	
   

  	
  Inability to Determine Rates

  	
   

  	
  51

  
	
  3.04

  	
   

  	
  Increased Costs; Reserves on Eurodollar Rate Loans

  	
   

  	
  51

  
	
  3.05

  	
   

  	
  Compensation for Losses

  	
   

  	
  52

  
	
  3.06

  	
   

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  	
  53

  
	
  3.07

  	
   

  	
  Survival

  	
   

  	
  53

  
	
  ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS 

  	
   

  	
  54

  
	
  4.01

  	
   

  	
  Conditions to Initial Credit Extensions

  	
   

  	
  54

  
	
  4.02

  	
   

  	
  Conditions to all Credit Extensions

  	
   

  	
  56

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES 

  	
   

  	
  57

  
	
  5.01

  	
   

  	
  Organization; Powers

  	
   

  	
  57

  
	
  5.02

  	
   

  	
  Authorization; Enforceability

  	
   

  	
  57

  
	
  5.03

  	
   

  	
  Governmental Approvals; No Conflicts

  	
   

  	
  57

  
	
  5.04

  	
   

  	
  Financial Condition; No Material Adverse Change

  	
   

  	
  58

  
	
  5.05

  	
   

  	
  Properties

  	
   

  	
  58

  
	
  5.06

  	
   

  	
  Litigation and Environmental Matters

  	
   

  	
  58

  
	
  5.07

  	
   

  	
  Compliance with Laws and Agreements

  	
   

  	
  59

  
	
  5.08

  	
   

  	
  Use of Proceeds

  	
   

  	
  59

  
	
  5.09

  	
   

  	
  Taxes

  	
   

  	
  59

  
	
  5.10

  	
   

  	
  ERISA

  	
   

  	
  59

  
	
  5.11

  	
   

  	
  Disclosure

  	
   

  	
  59

  
	
  5.12

  	
   

  	
  Subsidiaries

  	
   

  	
  60

  
	
  5.13

  	
   

  	
  Insurance

  	
   

  	
  60

  

 

i

 

	
  5.14

  	
   

  	
  Labor Matters

  	
   

  	
  60

  
	
  5.15

  	
   

  	
  Solvency

  	
   

  	
  60

  
	
  5.16

  	
   

  	
  Margin Regulations; Investment Company Act

  	
   

  	
  60

  
	
  5.17

  	
   

  	
  Taxpayer Identification Number; Other Identifying Information

  	
   

  	
  61

  
	
  5.18

  	
   

  	
  Personal Property Collateral

  	
   

  	
  61

  
	
  5.19

  	
   

  	
  Pledged Collateral

  	
   

  	
  61

  
	
  5.20

  	
   

  	
  Mortgages

  	
   

  	
  61

  
	
  ARTICLE VI AFFIRMATIVE COVENANTS 

  	
   

  	
  62

  
	
  6.01

  	
   

  	
  Financial Statements and Other Information

  	
   

  	
  62

  
	
  6.02

  	
   

  	
  Notices of Material Events

  	
   

  	
  63

  
	
  6.03

  	
   

  	
  Information Regarding Collateral

  	
   

  	
  64

  
	
  6.04

  	
   

  	
  Existence; Conduct of Business

  	
   

  	
  64

  
	
  6.05

  	
   

  	
  Payment of Obligations

  	
   

  	
  64

  
	
  6.06

  	
   

  	
  Maintenance of Properties

  	
   

  	
  64

  
	
  6.07

  	
   

  	
  Insurance

  	
   

  	
  64

  
	
  6.08

  	
   

  	
  Casualty and Condemnation

  	
   

  	
  64

  
	
  6.09

  	
   

  	
  Books and Records; Inspection and Audit Rights

  	
   

  	
  65

  
	
  6.10

  	
   

  	
  Compliance with Laws

  	
   

  	
  65

  
	
  6.11

  	
   

  	
  Use of Proceeds and Letters of Credit

  	
   

  	
  65

  
	
  6.12

  	
   

  	
  Collateral and Guarantee Requirement

  	
   

  	
  65

  
	
  6.13

  	
   

  	
  Interest Rate Protection

  	
   

  	
  66

  
	
  ARTICLE VII NEGATIVE COVENANTS 

  	
   

  	
  66

  
	
  7.01

  	
   

  	
  Indebtedness; Certain Equity Securities

  	
   

  	
  66

  
	
  7.02

  	
   

  	
  Liens

  	
   

  	
  68

  
	
  7.03

  	
   

  	
  Fundamental Changes

  	
   

  	
  69

  
	
  7.04

  	
   

  	
  Investments, Loans, Advances, Guarantees and Acquisitions

  	
   

  	
  69

  
	
  7.05

  	
   

  	
  Asset Sales

  	
   

  	
  71

  
	
  7.06

  	
   

  	
  Sale and Leaseback Transactions

  	
   

  	
  72

  
	
  7.07

  	
   

  	
  Swap Agreements

  	
   

  	
  72

  
	
  7.08

  	
   

  	
  Restricted Payments; Certain Payments of Indebtedness

  	
   

  	
  72

  
	
  7.09

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  73

  
	
  7.10

  	
   

  	
  Restrictive Agreements

  	
   

  	
  73

  
	
  7.11

  	
   

  	
  Amendment of Material Documents

  	
   

  	
  74

  
	
  7.12

  	
   

  	
  Financial Covenants

  	
   

  	
  74

  
	
  ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES 

  	
   

  	
  74

  
	
  8.01

  	
   

  	
  Events of Default

  	
   

  	
  74

  
	
  8.02

  	
   

  	
  Application of Funds

  	
   

  	
  77

  
	
  ARTICLE IX ADMINISTRATIVE AGENT AND COLLATERAL AGENT 

  	
   

  	
  78

  
	
  9.01

  	
   

  	
  Appointment and Authorization of Administrative Agent and Collateral
  Agent

  	
   

  	
  78

  
	
  9.02

  	
   

  	
  Rights as a Lender

  	
   

  	
  78

  
	
  9.03

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  79

  
	
  9.04

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  80

  
	
  9.05

  	
   

  	
  Delegation of Duties

  	
   

  	
  80

  
	
  9.06

  	
   

  	
  Resignation of the Administrative Agent

  	
   

  	
  80

  
	
  9.07

  	
   

  	
  Non-Reliance on Administrative Agent and Other Lenders

  	
   

  	
  81

  
	
  9.08

  	
   

  	
  No Other Duties

  	
   

  	
  81

  
	
  9.09

  	
   

  	
  Administrative Agent May File Proofs of Claim

  	
   

  	
  81

  
	
  9.10

  	
   

  	
  Collateral and Guaranty Matters

  	
   

  	
  82

  
	
  ARTICLE X MISCELLANEOUS 

  	
   

  	
  83

  
	
  10.01

  	
   

  	
  Amendments, Etc.

  	
   

  	
  83

  
	
  10.02

  	
   

  	
  Notices; Effectiveness; Electronic Communication

  	
   

  	
  84

  

 

ii

 

	
  10.03

  	
   

  	
  No Waiver; Cumulative Remedies; Enforcement

  	
   

  	
  86

  
	
  10.04

  	
   

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  	
  87

  
	
  10.05

  	
   

  	
  Payments Set Aside

  	
   

  	
  89

  
	
  10.06

  	
   

  	
  Successors and Assigns

  	
   

  	
  89

  
	
  10.07

  	
   

  	
  Treatment of Certain Information; Confidentiality

  	
   

  	
  92

  
	
  10.08

  	
   

  	
  Right of Setoff

  	
   

  	
  93

  
	
  10.09

  	
   

  	
  Interest Rate Limitation

  	
   

  	
  93

  
	
  10.10

  	
   

  	
  Counterparts; Integration; Effectiveness

  	
   

  	
  94

  
	
  10.11

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  94

  
	
  10.12

  	
   

  	
  Severability

  	
   

  	
  94

  
	
  10.13

  	
   

  	
  Replacement of Lenders

  	
   

  	
  94

  
	
  10.14

  	
   

  	
  Governing Law; Jurisdiction; Etc.

  	
   

  	
  95

  
	
  10.15

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  96

  
	
  10.16

  	
   

  	
  No Advisory or Fiduciary Responsibility

  	
   

  	
  96

  
	
  10.17

  	
   

  	
  Electronic Execution of Assignments and Certain Other Documents

  	
   

  	
  97

  
	
  10.18

  	
   

  	
  USA PATRIOT Act

  	
   

  	
  97

  

 

iii

 

SCHEDULES

 

	
  Schedule
  1.01

  	
   

  	
  Acquired
  EBITDA

  
	
  Schedule
  2.01

  	
   

  	
  Lenders
  and Commitments

  
	
  Schedule
  5.05

  	
   

  	
  Real
  Property

  
	
  Schedule
  5.12

  	
   

  	
  Subsidiaries

  
	
  Schedule
  5.13

  	
   

  	
  Insurance

  
	
  Schedule
  5.17

  	
   

  	
  Taxpayer
  Identification Numbers

  
	
  Schedule
  7.01

  	
   

  	
  Existing
  Indebtedness

  
	
  Schedule
  7.02

  	
   

  	
  Existing
  Liens

  
	
  Schedule
  7.04

  	
   

  	
  Existing
  Investments

  
	
  Schedule
  7.10

  	
   

  	
  Restrictive
  Agreements

  
	
  Schedule
  10.02

  	
   

  	
  Notice
  Addresses

  

 

EXHIBITS

 

	
   

  	
   

  	
   

  
	
  Exhibit 2.01

  	
   

  	
  Form of
  Lender Joinder Agreement

  
	
  Exhibit 2.02

  	
   

  	
  Form of
  Loan Notice

  
	
  Exhibit 2.13-1

  	
   

  	
  Form of
  Revolving Note

  
	
  Exhibit 2.13-2

  	
   

  	
  Form of
  Swingline Note

  
	
  Exhibit 2.13-3

  	
   

  	
  Form of
  Term Loan Note

  
	
  Exhibit 6.01(c)

  	
   

  	
  Form of
  Compliance Certificate

  
	
  Exhibit 6.03

  	
   

  	
  Form of
  Collateral Questionnaire

  
	
  Exhibit 10.06

  	
   

  	
  Form of
  Assignment and Assumption

  

 

iv

 

SENIOR SECURED CREDIT AGREEMENT

 

This
SENIOR SECURED CREDIT AGREEMENT (this “Credit Agreement”) is entered
into as of April 1, 2008, among MAC-GRAY
CORPORATION, a Delaware corporation (the “Parent Borrower”),
MAC-GRAY SERVICES, INC., a Delaware corporation (“MGS”), and INTIRION
CORPORATION, a Delaware corporation (“Intirion”; together with the
Parent Borrower and MGS, each a “Borrower” and collectively the “Borrowers”),
the Lenders party hereto, and BANK OF AMERICA, N.A., as Administrative Agent
and Collateral Agent.

 

W  I  T  N  E  S  S
E  T  H

 

WHEREAS,
the Borrowers have requested that the Lenders provide revolving credit and term
loan facilities for the purposes set forth herein; and

 

WHEREAS,
the Lenders have agreed to make the requested facilities available on the terms
and conditions set forth herein;

 

NOW,
THEREFORE, in consideration of these premises and the mutual covenants and
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

1.01        Defined Terms.

 

As used in this Credit Agreement, the following
terms have the meanings provided below:

 

“Administrative
Agent” means Bank of America in its capacity as administrative agent for
the Lenders under any of the Loan Documents, or any successor administrative
agent pursuant to the terms hereof.

 

“Administrative
Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify the
Parent Borrower and the Lenders.

 

“Administrative
Questionnaire” means an administrative questionnaire for the Lenders in a
form supplied by the Administrative Agent.

 

“Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.

 

“Agent
Parties” has the meaning provided in Section 10.02(c).

 

“Aggregate
Commitments” means the Aggregate Revolving Commitments and the Term Loan
Commitments.

 

 

“Aggregate
Commitment Percentage” means, for each Lender, a fraction (expressed as a
percentage carried to the ninth decimal place), the numerator of which is the
amount of such Lender’s respective Revolving Commitment, Term Loan Commitment
or other commitment established under any Incremental Credit Facilities, as
appropriate, and the denominator of which is the Aggregate Commitments.

 

“Aggregate
Revolving Commitments” means the aggregate principal amount of the
Revolving Commitments of all the Lenders.

 

“Aggregate
Revolving Committed Amount” has the meaning provided in Section 2.01(a).

 

“Applicable
Percentage” means the following percentages per annum, based on the
Consolidated Leverage Senior Secured Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section 6.01(c):

 

	
   

  	
   

  	
   

  	
   

  	
  Revolving Loans and Letters of Credit

  	
   

  	
  Term Loan A

  	
   

  
	
  Pricing

  Level

  	
   

  	
  Consolidated

  Senior Secured

  Leverage Ratio

  	
   

  	
  Commitment

  Fee

  	
   

  	
  Eurodollar

  Rate Loans and

  Letter of Credit

  Fee

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Eurodollar

  Rate Loans

  	
   

  	
  Base Rate

  Loan

  	
   

  
	
  1

  	
   

  	
  >1.75:1.0

  	
   

  	
  0.500

  	
  %

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
  2

  	
   

  	
  >1.25:1.0
  but <1.75:1.0

  	
   

  	
  0.375

  	
  %

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  
	
  3

  	
   

  	
  <1.25:1.0

  	
   

  	
  0.300

  	
  %

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  

 

Any
increase or decrease in the Applicable Percentage resulting from a change in
the Consolidated Senior Secured Leverage Ratio shall become effective not later
than the first Business Day immediately following the date a Compliance
Certificate is delivered pursuant to Section 6.01(c); provided,
however, that if a Compliance Certificate is not delivered when due in
accordance therewith, then, upon the request of the Required Lenders, Pricing
Level 1 shall apply as of the first Business Day after the date on which such
Compliance Certificate was required to have been delivered and shall remain in
effect until the date on which such Compliance Certificate is delivered.  The Applicable Percentage in effect from the
Closing Date through the date for delivery of the Compliance Certificate for
the fiscal quarter ending June 30,
2008 shall be determined based upon Pricing Level 1.  Determinations
by the Administrative Agent of the appropriate Pricing Level shall be
conclusive absent manifest error.

 

For
any Incremental Credit Facilities established after the Closing Date, the “Applicable
Percentage” shall mean the percentages specified in the applicable joinder
agreement or other loan documentation whereby the Incremental Credit Facilities
are established.

 

Notwithstanding
anything to the contrary contained in this definition, the determination of the
Applicable Percentage for any period shall be subject to the provisions of Section 2.10(b).

 

“Approved
Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Arranger”
means BAS, in its capacity as sole lead arranger and sole book manager.

 

“Assignee
Group” means two (2) or more Eligible Assignees that are Affiliates of
one another or two (2) or more Approved Funds managed by the same
investment advisor.

 

2

 

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

 

“Attributed
Principal Amount” means (a) in the case of capital leases, the amount of
Capital Lease Obligations determined in accordance with GAAP, (b) in the
case of Synthetic Leases, an amount determined by capitalization of the
remaining lease payments thereunder as if it were a capital lease determined in
accordance with GAAP and (c) in the case of Securitization Transactions,
the outstanding principal amount of such financing, after taking into account
appropriate reserve amounts.

 

“Automatic
Laundry” means Automatic Laundry Companies, Ltd., a Texas limited
partnership.

 

“Automatic
Laundry Acquisition” means the acquisition of all or substantially all of
the Equity Interests of Automatic Laundry by the Parent Borrower or its
Affiliates pursuant to the terms and conditions of the Automatic Laundry
Acquisition Agreement.

 

“Automatic
Laundry Acquisition Agreement” means that certain Partnership Interest
Purchase Agreement, entered into as of April 1, 2008, by and among the
Parent Borrower, Automatic Laundry and the partners party thereto.

 

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

 

“BAS”
means Banc of America Securities LLC, together with its successors.

 

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

 

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

 

“Borrower”
and “Borrowers” have the meaning provided in the recitals hereto,
together with their successors and permitted assigns.

 

“Borrowing”
means (a) a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurodollar Rate Loans, having the same Interest Period, or (b) a
borrowing of Swingline Loans, as appropriate.

 

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

 

“Capital
Expenditures” means, for any period for the Consolidated Group, without
duplication, (a) the additions to property, plant and equipment and other
capital expenditures that are (or would be) set 

 

3

 

forth in a consolidated statement of cash
flows for such period prepared in accordance with GAAP and (b) Capital
Lease Obligations incurred by the Consolidated Group during such period; provided
that for purposes hereof, Capital Expenditures shall not include expenditures
to the extent they are (i) financed with the proceeds of any sale,
transfer or other disposition (including pursuant to a sale and leaseback
transaction) or any casualty or other insured damage to or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset or (ii) expenditures or investments that constitute
Permitted Acquisitions.  Except as
otherwise expressly provided, the applicable period shall be the period of four
consecutive fiscal quarters ending as of the date of determination.

 

“Capital
Lease Obligations” of any Person means 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 the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

 

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

 

“Cash
Equivalents” means (a) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (b) Dollar-denominated
time deposits and certificates of deposit of (i) any Lender, (ii) any
domestic commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 or (iii) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Moody’s
is at least P-1 or the equivalent thereof (each an “Approved Bank”), in
each case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes issued
by any Approved Bank (or by the parent company thereof) or any variable rate
notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody’s and maturing within six (6) months of the date of
acquisition, (d) repurchase agreements entered into by any Person with a
bank or trust company (including any of the Lenders) or recognized securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States in which such
Person shall have a perfected first priority security interest (subject to no
other Liens) and having, on the date of purchase thereof, a fair market value
of at least 100% of the amount of the repurchase obligations and (e) investments
(classified in accordance with GAAP as current assets) in money market
investment programs registered under the Investment Company Act of 1940, as amended,
that are administered by reputable financial institutions having capital of at
least $500,000,000 and the portfolios of which are limited to Investments of
the character described in the foregoing subclauses hereof.

 

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

 

“Change
in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the SEC thereunder as in
effect on the date hereof) other than Stewart G. MacDonald, Jr.,
Sandra MacDonald, Daniel MacDonald or Evelyn MacDonald or any of their
respective spouses or immediate family members or trusts or family limited
partnerships for their benefit, of Equity Interests representing more than 25%
of either the aggregate ordinary voting power or the aggregate equity value
represented by the issued and outstanding Equity Interests in the Parent
Borrower, (b) occupation of a majority of the 

 

4

 

seats (other than vacant seats) on the board
of directors of the Parent Borrower by Persons who were neither (i) nominated
by the board of directors of the Parent Borrower (or any committee thereof) nor
(ii) appointed by directors so nominated or (c) the occurrence of a “Change
of Control”, as defined in any Senior Notes Document.

 

“Closing
Date” means the date hereof.

 

“Code”
means the Internal Revenue Code of 1986.

 

“Collateral”
means the “Collateral” as such term is defined in the Collateral Agreement.

 

“Collateral
and Guarantee Requirement” means the requirement that:

 

(a)           the
Collateral Agent shall have received from the Parent Borrower and each of its
Domestic Subsidiaries either (i) a duly executed and delivered counterpart
of the Collateral Agreement, or (ii) in the case of any Person that
becomes a Loan Party after the Closing Date, a duly executed and delivered
supplement to the Collateral Agreement, in the form specified therein (or
otherwise acceptable to the Administrative Agent and the Collateral Agent in
their reasonable discretion);

 

(b)           all
outstanding Equity Interests of each Domestic Subsidiary, and 65% of the
outstanding Equity Interests of each First Tier Foreign Subsidiary, of the
Parent Borrower shall have been pledged pursuant to the Collateral Agreement,
and the Collateral Agent shall have received certificates or other instruments
representing all such Equity Interests, together with undated stock powers or
other instruments of transfer with respect thereto endorsed in blank;

 

(c)           all
Indebtedness of the Parent Borrower and each of its Subsidiaries that is owing
to any Loan Party shall be evidenced by a promissory note and shall have been
pledged pursuant to the Collateral Agreement and the Collateral Agent shall
have received all such promissory notes, together with undated instruments of
transfer with respect thereto endorsed in blank;

 

(d)           all
documents and instruments, including Uniform Commercial Code financing
statements and notice filings with the United States Copyright Office and
United States Patent and Trademark Office in respect of intellectual property,
required by law or reasonably requested by the Administrative Agent or the
Collateral Agent to be filed, registered or recorded to create the Liens
intended to be created by the Collateral Agreement and perfect such Liens to
the extent required by, and with the priority required by, the Collateral
Agreement, shall have been filed, registered or recorded or delivered to the
Collateral Agent for filing, registration or recording;

 

(e)           the
Collateral Agent shall have received (i) duly executed and delivered
counterparts of Mortgages for all real property owned by the Loan Parties
located in the United States by the record owner thereof; provided,
however, such Mortgages shall not be required for real property with an
aggregate fair market value of up to $500,000, (ii) a policy or policies
of title insurance issued by a nationally recognized title insurance company
insuring the Lien of such Mortgage as a valid first Lien on the Mortgaged
Property described therein, free of any other Liens except as expressly
permitted by Section 7.02, together with such endorsements,
coinsurance and reinsurance as the Collateral Agent or the Required Lenders may
reasonably request, and (iii) such surveys, abstracts, appraisals, legal
opinions and other documents as the Collateral Agent or the Required Lenders
may reasonably request with respect to any such Mortgage or Mortgaged Property;

 

5

 

(f)            the Collateral
Agent (i) shall have received, within ninety (90) days of the Closing
Date, duly executed and delivered counterparts of landlord consents, estoppel
letters or waivers in respect of Collateral held on leased premises for each of
the following real property locations : (A) 10 Walpole Park South,
Walpole, Massachusetts 02081, (B) 404 Wyman Street, Suite 400
Waltham, Massachusetts 02451, (C) 61 Holton Street, Woburn, Massachusetts
01801, (D) 2001 Sanyo Avenue, San Diego, California and (E) 351
Thornton Road, Suite 126, Lithia Springs, Georgia 30122, and (ii) shall
receive, with respect to leases entered into after the Closing Date, duly
executed and delivered counterparts of landlord consents, estoppel letters or
waivers in respect of such other material leased locations reasonably requested
by the Collateral Agent and the Required Lenders, in form and substance
reasonably acceptable to the Collateral Agent and the Required Lenders; and

 

(g)           each Loan Party
shall have obtained all consents and approvals required to be obtained by it in
connection with the execution and delivery of all Security Documents to which
it is a party, the performance of its obligations thereunder and the granting
by it of the Liens thereunder.

 

“Collateral
Agent” means Bank of America in its capacity as collateral agent for the
Lenders under any of the Security Documents, or any successor collateral agent.

 

“Collateral
Agreement” means that Guarantee and Collateral Agreement dated as of the
Closing Date among the Parent Borrower, the Subsidiaries identified therein and
Bank of America as collateral agent, may be amended, modified, extended,
supplemented and replaced from time to time.

 

“Collateral
Questionnaire” means a certificate substantially in the form of Exhibit 6.03.

 

“Commitment
Period” means the period from and including the Closing Date to the earlier
of (a)(i) in the case of Revolving Loans and Swingline Loans, the
Revolving Termination Date or (ii) in the case of the Letters of Credit,
the L/C Expiration Date, or (b) in each case, the date on which the
Revolving Commitments shall have been terminated as provided herein.

 

“Commitments”
means the Revolving Commitment and the Term Loan Commitments.

 

“Compliance
Certificate” means a certificate substantially in the form of Exhibit 6.01(c).

 

“Consolidated
Cash Flow” means, for any period for the Consolidated Group, the difference
of (a) Consolidated EBITDA minus (b) the sum of (i) Capital
Expenditures (other than Capital Lease Obligations of up to an aggregate amount
of $4,000,000 incurred in any such period), (ii) Prepaid Commission
Expenses, (iii) consolidated cash income taxes paid and (iv) Restricted
Payments paid, in each case on a consolidated basis in accordance with
GAAP.  Except as otherwise expressly
provided, the applicable period shall be the period of four consecutive fiscal
quarters ending as of the date of determination.

 

“Consolidated
Cash Flow Coverage Ratio” means, for any period for the Consolidated Group,
the ratio of (a) Consolidated Cash Flow to (b) the sum of (i)(A) the
aggregate amount of scheduled principal payments made on or in respect of
Long-Term Indebtedness (other than payment made by the Parent Borrower or any
Subsidiary to the Parent Borrower or a Subsidiary and excluding for purposes hereof,
the principal amount of the Seller Subordinated Note) and (B) the
aggregate amount of principal payments (other than scheduled principal
payments) made during such period in respect of Long-Term Indebtedness
(excluding for purposes hereof, the principal amount of the Seller Subordinated
Note) of the Parent Borrower and the Subsidiaries, to the extent that such
payments reduced any scheduled principal

 

6

 

payments that would have become due within
one year after the date of the applicable payment and (ii) Consolidated
Cash Interest Expense.  Except as
otherwise expressly provided, the applicable period shall be the period of four
consecutive fiscal quarters ending as of the date of determination.

 

“Consolidated
Cash Interest Expense” means, for any period the Consolidated Interest
Expense for such period, excluding any amount not payable in cash.

 

“Consolidated
EBITDA” means, for any period for the Consolidated Group, the sum of (a) Consolidated
Net Income plus (b) to the extent deducted in determining such
Consolidated Net Income, without duplication, the sum of (i) Consolidated
Interest Expense, (ii) consolidated income tax expense, (iii) depreciation
and amortization, (iv) any extraordinary non-cash charges reasonably
acceptable to the Administrative Agent and the Required Lenders, (v) non-cash
impairment charges for discontinued or divested operations, (vi) non-cash
compensation expenses (but excluding, for purposes hereof, any such non-cash
charges as for which there will be a subsequent cash payment) and (vii) non-cash
expenses resulting from the grant of stock options or other equity-related
compensation to any director, officer, consultant or employee, in each case on
a consolidated basis determined in accordance with GAAP; provided that (A) for
acquisitions made within the period of four consecutive fiscal quarters ending December 31,
2007, there shall be included in “Consolidated EBITDA” the amounts set forth on
Schedule 1.01 as adjustments to Consolidated EBITDA and (B) for
acquisitions made after the Closing Date adjustments may be made to
Consolidated EBITDA for expected cost-savings, synergies and one-time costs and
expenses relating to the acquisitions (including employee retention expenses
and severance expenses) reasonably acceptable to the Administrative Agent and
the Required Lenders.  Except as
otherwise expressly provided, the applicable period shall be the period of four
consecutive fiscal quarters ending as of the date of determination.

 

“Consolidated
Group” means the Parent Borrower and the Subsidiaries determined on a
consolidated basis in accordance with GAAP.

 

“Consolidated
Interest Expense” means, for any period for the Consolidated Group, all
interest expense on a consolidated basis determined in accordance with GAAP,
but including, in any event, the interest component under capital leases and
the implied interest component under Synthetic Leases and Securitization
Transactions.

 

“Consolidated
Net Income” means, for any period for the Consolidated Group, the net
income (or loss) determined on a consolidated basis in accordance with GAAP,
but excluding extraordinary gains and losses and related tax effects
thereon.  Except as otherwise expressly provided,
the applicable period shall be the period of four consecutive fiscal quarters
ending as of the date of determination.

 

“Consolidated
Senior Secured Funded Debt” means the portion of Consolidated Total Funded
Debt that (a) is secured by Liens on the property of the Consolidated
Group, and (b) is not subordinated to the Loans and Obligations under this
Credit Agreement in right and time of payment on terms reasonably acceptable to
the Administrative Agent.

 

“Consolidated
Senior Secured Leverage Ratio” means, on any date, the ratio of (a) Consolidated
Senior Secured Funded Debt as of such date to (b) Consolidated EBITDA for
the period of four consecutive fiscal quarters ended on such date (or, if such
date is not the last day of a fiscal quarter, ended on the last day of the
fiscal quarter most recently ended prior to such date).

 

“Consolidated
Total Funded Debt” means, as of any date, all Funded Debt of the Parent
Company and its subsidiaries determined on a consolidated basis in accordance
with GAAP.

 

7

 

“Consolidated
Total Leverage Ratio” means, as of the end of each fiscal quarter, the
ratio of (a) Consolidated Total Funded Debt as of such date to (b) Consolidated
EBITDA for the period of four consecutive fiscal quarters ended on such date (or,
if such date is not the last day of a fiscal quarter, ended on the last day of
the fiscal quarter most recently ended prior to such date).

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.

 

“Credit
Agreement” has the meaning provided in the recitals hereto, as the same may
be amended and modified from time to time.

 

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

 

“Debt
Transaction” means, with respect to any member of the Consolidated Group,
any sale, issuance, placement, assumption or guaranty of Funded Debt, whether
or not evidenced by a promissory note or other written evidence of
Indebtedness, except for Funded Debt permitted to be incurred pursuant to Section 7.01(a).

 

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

 

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

 

“Default
Rate” means an interest rate equal to (a) with respect to Obligations
other than (i) Eurodollar Rate Loans and (ii) Letter of Credit Fees,
the Base Rate plus the Applicable Percentage, if any, applicable to such
Loans plus 2% per annum; (b) with respect to Eurodollar Rate Loans,
the Eurodollar Rate plus the Applicable Percentage, if any, applicable
to such Loans plus 2% per annum; and (c) with respect to Letter of
Credit Fees, a rate equal to the Applicable Percentage plus 2% per
annum.

 

“Defaulting
Lender” means any Lender that (a) has failed to fund any portion of
the Loans, participations in L/C Obligations or participations in Swingline
Loans required to be funded by it hereunder within one (1) Business Day of
the date required to be funded by it hereunder and has not cured such failure
prior to the date of determination, (b) has otherwise failed to pay over
to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one (1) Business Day of the date when due,
unless the subject of a good faith dispute, and has not cured such failure
prior to the date of determination, or (c) has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding.

 

“Disposition”
or “Dispose” means the sale, transfer, license, lease or other
disposition (including any Sale and Leaseback Transaction) of any Property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith, but excluding, for purposes hereof, (a) Dispositions
of obsolete or worn out property, whether now owned or hereafter acquired, in
the ordinary course of business; (b) Dispositions of inventory in the
ordinary course of business; and (c) Dispositions of equipment or real
property to the extent that (i) such property is exchanged for credit
against the purchase price of similar replacement

 

8

 

property or (ii) the proceeds of such
Disposition are reasonably promptly applied to the purchase price of such
replacement property.

 

“Dollar”
or “$” means the lawful currency of the United States.

 

“Domestic
Loan Party” means any Loan Party that is organized under the laws of any
State of the United States or the District of Columbia.

 

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

 

“Eligible
Assignee” means any Person that meets the requirements to be an assignee
under Section 10.06(b)(iii), (v) and (vi) (subject
to such consents, if any, as may be required under Section 10.06(b)(iii)).

 

“Environmental
Laws” means any and all federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

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

 

“Equity
Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or
other equity ownership interests in a Person.

 

“Equity
Transaction” means, with respect to any member of the Consolidated Group,
any issuance or sale of shares of its Equity Interests, other than an issuance (a) to
a member of the Consolidated Group, (b) in connection with a conversion of
debt securities to equity, (c) in connection with the exercise by a
present or former employee, consultant, officer or director under a stock
incentive plan, stock option plan or other equity-based compensation plan or
arrangement, or (d) in connection with any Permitted Acquisition
hereunder.

 

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

 

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

 

“ERISA
Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Borrower or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by any Borrower or any ERISA
Affiliate from a Multiemployer Plan or

 

9

 

notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition that would
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any Borrower or any ERISA
Affiliate.

 

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

 

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

 

	
  Eurodollar Rate =

  	
   

  	
  Eurodollar Base Rate

  
	
   

  	
  1.00 – Eurodollar Reserve Percentage

  

 

Where,

 

“Eurodollar Base Rate” means, for such Interest Period, the rate
per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”),
as published by Reuters (or other commercially available source providing quotations
of BBA LIBOR as designated by the Administrative Agent from time to time) at
approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period.  If such rate is not available at
such time for any reason, then the “Eurodollar Base Rate” for such Interest
Period shall be the rate per annum determined by the Administrative Agent to be
the rate at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the commencement of such Interest Period.

 

“Eurodollar
Reserve Percentage” means, for any day during any Interest Period, the
reserve percentage (expressed as a decimal, carried out to five (5) decimal
places) in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred
to as “Eurocurrency liabilities”).  The
Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted
automatically as of the effective date of any change in the Eurodollar Reserve
Percentage.

 

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

 

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

 

“Excluded
Taxes” means, with respect to any Person, (a) taxes imposed on or
measured by such Person’s overall net income (however denominated), and
franchise taxes imposed in lieu of income taxes, by the jurisdiction (or any
political subdivision thereof) under the Laws of which such Person is organized
or in which its principal office is located or, in the case of any Lender, in
which its applicable Lending Office is located or in which it is otherwise
deemed to be engaged in a trade or business for

 

10

 

income tax purposes other than as a result of
its having entered into, performed its obligations under or enforced its rights
with respect to this Credit Agreement or any other Loan Document, (b) any
branch profits taxes imposed by the United States or any similar tax imposed by
any other jurisdiction in which any Borrower is located, (c) any backup
withholding tax that is required by the Code to be withheld from amounts
payable to a Lender that has failed to comply with clause (A) of Section 3.01(e)(ii),
(d) in the case of a Foreign Lender (other than an assignee pursuant to a
request by a Borrower under Section 10.13), any withholding tax
that (i) is required to be imposed on amounts payable to such Foreign
Lender pursuant to the Laws in force at the time such Foreign Lender becomes a
party hereto (or designates a new Lending Office) or (ii) is attributable
to such Foreign Lender’s failure or inability (other than as a result of a
Change in Law) to comply with clause (B) of Section 3.01(e)(ii),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment),
to receive additional amounts from such Borrower with respect to such
withholding tax pursuant to Section 3.01(a)(ii) or (iii) and
(e) interest, additions to tax or penalties applicable to taxes described
in clauses (a), (b), (c) or (d) of this definition.

 

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

 

“Fee
Letter” means the letter agreement, dated as of February 28, 2008,
among the Parent Borrower, Bank of America, and the Arranger.

 

“Financial
Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Parent Borrower.

 

“First
Tier Foreign Subsidiary” means any Foreign Subsidiary that is owned
directly by a Domestic Loan Party.

 

“Foreign
Lender” means any Lender that is not organized under the Laws of the United
States or any State thereof or the District of Columbia.

 

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

 

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

 

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

 

“Funded
Debt” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person upon
which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding trade
accounts payable

 

11

 

incurred in the ordinary course of business),
(f) all Indebtedness of the type described in clauses  (a), (b),
(c), (d), (e), (g), (h), (i) and
(j) of this definition of others secured by (or for which the
holder of such obligations has an existing right, contingent or otherwise, to
be secured by) any Lien on the property owned or acquired by such Person,
whether or not the obligations secured thereby have been assured, (g) all
Guarantees by such Person of obligations of others, (h) the Attributed
Principal Amount of all Capital Lease Obligations, Synthetic Leases and
Securitization Transactions of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’
acceptances.  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 provide that such Person is not liable therefor.  Notwithstanding the foregoing, in connection
with any Permitted Acquisition, the term “Indebtedness” shall not include
post-closing purchase price adjustments or earn-outs to which the seller may
become entitled.

 

“GAAP”
means generally accepted accounting principles in effect in the United States
applied on a consistent basis, subject to the provisions of Section 1.03.

 

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

 

“Guarantee”
of or by any Person (the “guarantor” means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay
(or advance of supply funds for the purchase or payment of) such Indebtedness
or other obligation or to purchase (or to advance or supply funds of the
purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

 

“Guarantors”
means, collectively, each Person that provides a Guarantee of the Obligations
pursuant to the terms of the Collateral Agreement or other agreement reasonably
acceptable to the Administrative Agent, in each case together with their
successors and permitted assigns.

 

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

 

“Honor
Date” has the meaning provided in Section 2.03(c)(i).

 

“Incremental
Credit Facilities” has the meaning provided in Section 2.01(e).

 

12

 

“Indebtedness”
of any Person means, without duplication, (a) all Funded Debt of such
Person, and (b) all obligations of such Person under Swap Agreements, or
obligations of others under Swap Agreements that are Guaranteed by such Person
or secured by (or for which the holder of such obligations has an existing
right, contingent or otherwise, to be secured by) any Lien on the property
owned or acquired by such Person, whether or not the obligations secured
thereby have been assured.

 

“Indemnified
Taxes” means Taxes other than Excluded Taxes.

 

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

 

“Information”
has the meaning specified in Section 10.07.

 

“Interest
Payment Date” means, (a) as to any Base Rate Loan (including Swingline
Loans), the last Business Day of each March, June, September and December,
the Revolving Termination Date and the date of the final principal amortization
payment on any Term Loan and, in the case of any Swingline Loan, any other
dates as may be mutually agreed upon by the applicable Borrower and the
Swingline Lender, and (b) as to any Eurodollar Rate Loan, the last
Business Day of each Interest Period for such Loan, the date of repayment of
principal of such Loan, the Revolving Termination Date and the date of the
final principal amortization payment on any Term Loan, and in addition, where
the applicable Interest Period exceeds three months, the date every three
months after the beginning of such Interest Period.  If an Interest Payment Date falls on a date
that is not a Business Day, such Interest Payment Date shall be deemed to be
the immediately succeeding Business Day.

 

“Interest
Period” means, as to each Eurodollar Rate Loan, the period commencing on
the date such Eurodollar Rate Loan is disbursed or converted to or continued as
a Eurodollar Rate Loan and ending on the date one (1), two (2), three (3) or
six (6) months thereafter, as selected by the applicable Borrower in its
Loan Notice; provided that:

 

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

 

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

 

(c)           no Interest Period with respect to any Revolving Loan
shall extend beyond the Revolving Termination Date; and

 

(d)           no Interest Period with respect to any Term Loan shall
extend beyond any principal amortization payment date, except to the extent
that the portion of such Loan comprised of Eurodollar Rate Loans that is
expiring prior to the applicable principal amortization payment date plus
the portion comprised of Base Rate Loans equals or exceeds the principal
amortization payment then due.

 

“Intirion”
has the meaning provided in the recitals hereto, together with its permitted
successors and assigns.

 

“IRS”
means the United States Internal Revenue Service.

 

13

 

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

 

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

 

“Laundry
Facility Agreements” means agreements and other documents pursuant to which
any of the Borrowers installs, operates and maintains certain pay per use
laundry equipment or rents such equipment to an owner, manager or any other
Person affiliated with the premises at which such equipment is located.

 

“Laws”
means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority.

 

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

 

“L/C
Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C
Issuer.

 

“L/C
Borrowing” means any extension of credit resulting from a drawing under any
Letter of Credit that has not been reimbursed or refinanced as a Borrowing of
Revolving Loans.

 

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

 

“L/C
Expiration Date” means the day that is seven (7) days prior to the
Revolving Termination Date then in effect (or, if such day is not a Business
Day, the immediately preceding Business Day).

 

“L/C
Issuer” means as to Letters of Credit issued hereunder, Bank of America in
its capacity as issuer of Letters of Credit hereunder, in each case together
with its successors in such capacity.

 

“L/C
Obligations” means, at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including L/C Borrowings.  For purposes of computing the amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  For all purposes of this Credit Agreement, if
on any date of determination a Letter of Credit has expired by its terms but
any amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.

 

“L/C
Sublimit” has the meaning provided in Section 2.01(b).

 

14

 

“Lender”
means each of the Persons identified as a “Lender” on the signature pages hereto
(and, as appropriate, includes the Swingline Lender) and each Person who joins
as a Lender pursuant to the terms hereof, together with their respective
successors and assigns.

 

“Lender
Joinder Agreement” means a joinder agreement, substantially in the form of Exhibit 2.01,
executed and delivered in accordance with the provisions of Section 2.01(f)(v).

 

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

 

“Letter
of Credit” means each standby  letter
of credit issued hereunder.

 

“Letter
of Credit Fee” has the meaning provided in Section 2.09(b)(i).

 

“Lien”
means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.

 

“Loan”
means any Revolving Loan, Swingline Loan and/or any Term Loan, and the Base
Rate Loans and Eurodollar Rate Loans comprising such Loans.

 

“Loan
Documents” means this Credit Agreement, the Notes, the Collateral
Questionnaire, the Security Documents, the Fee Letter, the Issuer Documents and
the Lender Joinder Agreements, if any.

 

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

 

“Loan
Obligations” means the Revolving Loan Obligations and the Term Loans.

 

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

 

“Loan
Party Materials” has the meaning specified in Section 6.02.

 

“Long-Term
Indebtedness” means any indebtedness that, in accordance with GAAP,
constitutes (or, when incurred constituted) a long-term liability.

 

“Material
Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, assets, properties, condition
(financial or otherwise) or prospects of the Consolidated Group taken as a
whole; or (b) a material impairment of the ability of any Loan Party to
perform its obligations under any Loan Document to which it is a party.

 

“Material
Acquisition” means (a) any acquisition by the Parent Borrower or a
wholly-owned Subsidiary that is a Loan Party of all the outstanding Equity
Interest in, all or substantially all the assets of, or all or substantially
all the assets constituting a division or line of business of, a Person if (i) the
cash consideration for such acquisition is at least $5,000,000 (ii) the
total consideration for such acquisition is at least $10,000,000 or (iii) the
acquired business contributes, together with all other Permitted 

 

15

 

Acquisitions that have occurred since the
beginning of the immediately preceding four consecutive fiscal quarter period
for which financial statements are available, in the aggregate at least
$1,000,000 to Consolidated EBITDA for such period (giving pro forma effect to
all such acquisitions as if they had occurred on the first day of such four
consecutive fiscal quarter period) and (b) the other preceding Permitted
Acquisitions described in clause (a)(iii) above.

 

“Material
Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one
or more of the Consolidated Group in an aggregate principal amount exceeding
$2,500,000.  For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of the Parent
Borrower or any Subsidiary in respect of any Swap Agreement at any time shall
be the maximum aggregate amount (giving effect to any netting agreements) that
the Parent Borrower or such Subsidiary would be required to pay if such Swap
Agreement were terminated at such time.

 

“MGS”
has the meaning provided in the recitals hereto, together with its successors
and permitted assigns.

 

“Moody’s”
means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgaged
Property” means all real property owned by the Loan Parties located in the
United States by the record owner thereof that shall be the subject of a
Mortgage pursuant to the Collateral and Guarantee Requirement, including (a) each
real property set forth on Schedule 5.05 that is identified as a
Mortgaged Property thereon and is the subject of a Mortgage and (b) each
other real property that is, or pursuant to the terms hereof, becomes, the
subject of a Mortgage; provided, however that such Mortgages shall not
be required for real property with an aggregate fair market value of up to
$500,000.

 

“Mortgages”
means those mortgages, deeds of trust, security deeds or like instruments given
by the Loan Parties, as grantors, to the Collateral Agent to secure the
Obligations, and any other such instruments that may be given by any Person
pursuant to the terms hereof, as such instruments may be amended and modified
from time to time.

 

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

 

“Net
Cash Proceeds” means the aggregate proceeds paid in cash or Cash
Equivalents received by any member of the Consolidated Group in connection with
any Disposition, Debt Transaction, Equity Transaction or Securitization
Transaction, net of (a) direct costs and expenses (including legal,
accounting and investment banking fees, sales commissions and underwriting and
brokerage discounts), (b) estimated taxes paid or payable as a result
thereof, (c) the principal amount of any Indebtedness that is secured by
an asset and that is required to be repaid in connection with such Disposition,
Debt Transaction, Equity Transaction or Securitization Transaction (other than
Indebtedness under the Loan Documents) and (d) any amounts which are
required to be placed in escrow (unless and until such amounts are released to
a member of the Consolidated Group).  For
purposes hereof, “Net Cash Proceeds” includes any cash or Cash Equivalents
received upon the disposition of any non-cash consideration received by a
member of the Consolidated Group in any Disposition, Debt Transaction, Equity
Transaction or Securitization Transaction.

 

“Notes”
means the Revolving Notes, the Swingline Note and the Term Loan Notes.

 

16

 

“Obligations”
means, without duplication, (a) all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against
any Loan Party or any Affiliate thereof of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding, (b) all
obligations under any Swap Agreement between any Loan Party and any Lender or
Affiliate of a Lender to the extent permitted hereunder and (c) all
obligations under any Treasury Management Agreement between any Loan Party and
any Lender or Affiliate of a Lender to the extent that such obligations do not
constitute “Indebtedness” under the Senior Note Documents.

 

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

 

“Original
Credit Agreement” means that certain Amended and Restated Credit Agreement
dated as of December 21, 2006, among the Borrowers, the lenders party
thereto, JPMorgan Chase Bank, N.A., as administrative agent, Keybank National
Association, as syndication agent, and HSBC Bank USA, N.A., Wachovia Bank,
National Association and Bank North, N.A., as co-documentation agents, as
amended through the date hereof.

 

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

 

“Outstanding
Amount” means (a) with respect to Revolving Loans and Swingline Loans
on any date, the aggregate outstanding principal amount thereof after giving
effect to any Borrowings and prepayments or repayments of Revolving Loans and
Swingline Loans, as the case may be, occurring on such date; (b) with
respect to any L/C Obligations on any date, the aggregate outstanding amount of
such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the amount of the L/C
Obligations as of such date, including as a result of any reimbursements by any
Borrower of Unreimbursed Amounts; and (c) with respect to the Term Loan A
on any date, the aggregate outstanding principal amount thereof after giving
effect to any prepayments or repayments of the Term Loan A on such date.

 

“Parent
Borrower” has the meaning provided in the recitals hereto, together with
its successors and permitted assigns.

 

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

 

“PBGC”
means the Pension Benefit Guaranty Corporation.

 

17

 

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

 

“Permitted
Acquisition” means any acquisition by the Parent Borrower or a wholly-owned
Subsidiary that is a Loan Party of all the outstanding Equity Interests in, all
or substantially all the assets of, or all or substantially all the assets
constituting a division or line of business of, a Person if (a) such
acquisition was not preceded by, or consummated pursuant to, a hostile offer
(including a proxy contest), (b) such Person is organized under the laws
of, and substantially all its assets are located in, the United States, any
State thereof or the District of Columbia, (c) no Default has occurred and
is continuing or would result therefrom, (d) all transactions related
thereto are consummated in accordance with the applicable Laws, (c) all
actions required to be taken with respect to such acquired or newly formed
Subsidiary or assets under Section 6.12 shall have been taken, (f) the
Consolidated Group is in compliance, on a Pro Forma Basis (including, without
duplication, giving pro forma effect to such acquisition and all other
Permitted Acquisitions that are not Material Acquisitions and that have
occurred since the beginning of the immediately preceding four consecutive
fiscal quarter period for which financial statements are available), with the
covenants contained in Section 7.12 recomputed as of the last day
of the most recently ended fiscal quarter of the Parent Borrower for which
financial statements are available, (g) after giving effect to such
acquisition, there shall be no less than $7,000,000 of aggregate unused and
available Revolving Commitments, (h) the business of such Person or such
assets, as the case may be, constitute a business permitted by Section 7.03(b),
and (i) for any acquisition that is a Material Acquisition, the Borrowers
have delivered to the Administrative Agent an officers’ certificate to the
effect set forth in clauses (a), (b), (c), (d), (e),
(f), (g) and (h) above, together with all
relevant financial information for the Person or assets to be acquired.

 

“Permitted Encumbrances” means:

 

(a)           Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 6.05;

 

(b)           carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 6.05;

 

(c)           pledges and deposits made in the ordinary course of
business in compliance with workers’ compensation, unemployment insurance and
other social security laws or regulations;

 

(d)           deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in ease case in the ordinary
course of business;

 

(e)           liens arising by operation of law to secure landlords or
lessors under leases made in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
compliance with Section 6.05;

 

(f)            judgment liens in respect of judgments that do not
constitute an Event of Default under clause (i) of Section 8.01;

 

18

 

(g)                                 easements, zoning
restrictions, rights-of-way and similar encumbrances on real property imposed
by law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the affected
property or interfere with the ordinary conduct of business of the Parent
Borrower or any Subsidiary;

 

(h)                                 (i) licenses,
sublicenses, leases or subleases granted by the Parent Borrower or any of its
Subsidiaries to other Persons not materially interfering with the conduct of
the business of the Parent Borrower or any of its Subsidiaries and (ii) any
interest or title of a lessor, sublessor or licensor under any lease or license
agreement not prohibited by this Credit Agreement to which the Parent Borrower
or any of its Subsidiaries is a party;

 

(i)                                     Liens arising from
precautionary UCC financing statement filings regarding operating leases
entered into in the ordinary course of business; and

 

(j)                                     Liens existing as of the
Closing Date set forth on Schedule 7.02.

 

“Permitted Investments” means:

 

(a)                                  direct obligations of or
obligations, the principal of and interest on which are unconditionally
guaranteed by, the United States (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States), in
each case maturing within one year from the date of acquisition thereof;

 

(b)                                 investments in commercial
paper maturing within 270 days from the date of acquisition thereof and having,
as of such date of acquisition, the highest credit rating obtainable from
S&P or from Moody’s;

 

(c)                                  investments in certificates
of deposit, banker’s acceptances and time deposits maturing within 180 days
from the date of acquisition thereof issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $500,000,000; and

 

(d)                                 fully collateralized
repurchase agreements with a term of not more than 30 days for securities
described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above.

 

“Permitted Liens” means any Liens in respect
of property of any Loan Party permitted to exist pursuant to the terms of Section 7.02.

 

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

 

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

 

“Platform”
has the meaning specified in Section 6.02.

 

“Public
Lender” has the meaning specified in Section 6.02.

 

19

 

“Prepaid
Commission Expenses” means the amount of any one-time up-front payment
required to be paid by the Parent Borrower or any Subsidiary to the landlord or
lessor under any Laundry Facility Agreement upon the commencement of such
Laundry Facility Agreement (but without duplication for any amount included as
a Capital Expenditure).

 

“Pro
Forma Basis” means, with respect to the calculation of the financial
covenants contained in Section 7.12 in connection with the
Automatic Laundry Acquisition or a Permitted Acquisition that such calculation
shall give pro forma effect to such Permitted Acquisition that is a Material
Acquisition, all other Permitted Acquisitions that are Material Acquisitions,
all issuances, incurrences or assumptions of Indebtedness (with any such
Indebtedness being deemed to be amortized over the applicable period in
accordance with its terms) and all dispositions that have occurred since the
beginning of the four consecutive fiscal quarter period for which such
calculation is being made as if it occurred on the first day of such four
consecutive fiscal quarter period (including (a) costs savings to the
extent such cost savings would be permitted to be reflected in pro forma
financial information complying with the requirements of GAAP and Article XI
of Regulation S-X under the Securities Act of 1933, as amended, as interpreted
by the Staff of the SEC, and as certified by a Financial Officer or (b) other
cost savings to the extent such cost savings would be acceptable to the
Administrative Agent in its sole discretion).

 

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

 

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

 

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

 

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

 

“Request
for Credit Extension” means (a) with respect to a Borrowing of Loans
(including Swingline Loans) or the conversion or continuation of Loans, a Loan
Notice and (b) with respect to an L/C Credit Extension, a L/C Application.

 

“Required
Lenders” means, as of any date of determination, Lenders having more than
50%  of the Aggregate Commitments
or, if the Commitments shall have expired or been terminated, Lenders holding
in the aggregate more than 50%  of
the Loan Obligations (including, in each case, the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swingline Loans); provided that the commitments of, and the portion of
the Loan Obligations held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

 

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

 

“Restricted
Payments” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Parent Borrower or any Subsidiary, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account
of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Equity

 

20

 

Interests in the Parent Borrower or any
Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in the Parent Borrower or any Subsidiary.

 

“Revolving
Commitment” means the commitment of each Lender to make Revolving Loans
(and to share in Revolving Loan Obligations) hereunder.

 

“Revolving
Commitment Percentage” means, for each Lender, a fraction (expressed as a
percentage carried to the ninth decimal place), the numerator of which is such
Lender’s Revolving Committed Amount and the denominator of which is Aggregate
Revolving Committed Amount.  The
Revolving Commitment Percentages as of the Closing Date are set forth on Schedule
2.01.

 

“Revolving
Committed Amount” means, for each Lender, the amount of such Lender’s Revolving
Commitment.  The Revolving Committed
Amounts as of the Closing Date are set out in Schedule 2.01.

 

“Revolving
Loan” has the meaning provided in Section 2.01(a).

 

“Revolving
Loan Obligations” means the Revolving Loans, the L/C Obligations and the Swingline
Loans.

 

“Revolving
Notes” means the promissory notes, if any, given to evidence the Revolving
Loans, as amended, restated, modified, supplemented, extended, renewed or
replaced.  A form of Revolving Note is
attached as Exhibit 2.13-1.

 

“Revolving
Termination Date” means April 1, 2013.

 

“S&P”
means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

 

“Sale
and Leaseback Transaction” means, with respect to the Parent Borrower or
any Subsidiary, any arrangement, directly or indirectly, with any Person (other
than a Loan Party) whereby the Parent Borrower or such Subsidiary shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property being sold or transferred.

 

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

 

“Securitization
Transaction” means any financing or factoring or similar transaction (or
series of such transactions) entered by the Parent Borrower or any of its
subsidiaries pursuant to which it may sell, convey or otherwise transfer, or
grant a security interest in, accounts, payments, receivables, rights to future
lease payments or residuals or similar rights to payment to a special purpose
subsidiary or affiliate or any other Person.

 

“Security Documents” means the Collateral
Agreement, any Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 6.12 to
secure any of the Obligations.

 

21

 

“Seller
Subordinated Note” means that certain Promissory Note dated as of as of the
date hereof given by MGS in favor of Paceco Investors, L.P., a Texas limited
partnership in an aggregate principal amount of $10,000,000.

 

“Seller
Subordinated Note Documents” means all or any of, as applicable, the Seller
Subordinated Note, all side letters, instruments, agreements and other
documents evidencing or governing the Seller Subordinated Note or any Seller
Subordinated Note Refinancing Indebtedness, providing for any Guarantee or
other right in respect thereof, affecting the terms of the foregoing and all
schedules, exhibits and annexes to each of the foregoing.  Notwithstanding the foregoing, the term
Seller Subordinated Note Documents shall not include the Automatic Laundry
Acquisition Agreement.

 

“Seller
Subordinated Note Refinancing Indebtedness” shall mean any Indebtedness
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund (collectively, to “Refinance”),
the Seller Subordinated Note being Refinanced (or previous refinancings thereof
constituting Seller Subordinated Note Refinancing Indebtedness), provided
that (a) the principal amount of such Seller Subordinated Note Refinancing
Indebtedness does not exceed the principal amount of the Indebtedness so
Refinanced (plus unpaid accrued interest and premium thereon and
underwriting discounts, fees, commissions and expenses), (b) the average
life to maturity of such Seller Subordinated Note Refinancing Indebtedness is
greater than or equal to that of the Indebtedness being Refinanced, (c) the
terms of such Seller Subordinated Note Refinancing Indebtedness are not less
favorable, in any material respect, to the Lenders and the Borrowers than the
terms of the Seller Subordinated Note and (d) no Seller Subordinated Note
Refinancing Indebtedness shall have obligors that are not Loan Parties
hereunder, or greater guarantees, than the Indebtedness being Refinanced.

 

“Senior
Notes” means (a) the 7.625% senior notes due 2015 issued by the Parent
Borrower on August 16, 2005 and (b) any substantially identical
senior notes that are registered under the Securities Act of 1933, as amended,
and issued in exchange for the senior notes described in clause (a) of
this definition.

 

“Senior
Notes Document” means all or any of, as applicable, the Senior Notes
Indenture, the indenture or indentures under which the Senior Notes Refinancing
Indebtedness is issued, all side letters, instruments, agreements and other
documents evidencing or governing the Senior Notes or any Senior Notes
Refinancing Indebtedness, providing for any Guarantee or other right in respect
thereof, affecting the terms of the foregoing or entered into in connection
therewith and all schedules, exhibits and annexes to each of the foregoing.

 

“Senior
Notes Indenture” means the Indenture dated as of August 16, 2005,
among the Parent Borrower, the Subsidiaries listed therein and Wachovia Bank,
National Association, as trustee, in respect of the Senior Notes.

 

“Senior
Notes Refinancing Indebtedness” shall mean any Indebtedness issued in
exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund (collectively, to “Refinance”), the
Senior Notes being Refinanced (or previous refinancings thereof constituting
Senior Notes Refinancing Indebtedness), provided that (a) the
principal amount of such Senior Notes Refinancing Indebtedness does not exceed
the principal amount of the Indebtedness so Refinanced (plus unpaid
accrued interest and premium thereon and underwriting discounts, fees,
commissions and expenses), (b) the average life to maturity of such Senior
Notes Refinancing Indebtedness is greater than or equal to that of the
Indebtedness being Refinanced, (c) the terms of such Senior Notes
Refinancing Indebtedness are not less favorable, in any material respect, to
the Lenders and the Borrowers than the terms of the Senior Notes and (d) no
Senior Notes Refinancing Indebtedness shall have obligors that are not Loan
Parties hereunder, or greater guarantees, than the Indebtedness being
Refinanced.

 

22

 

“Senior
Note Secured Debt Limit Amount” has the meaning provided in Section 2.01(a).

 

“Senior
Unsecured Credit Agreement” means that credit agreement dated as of the
Closing Date, as amended, modified, extended, renewed or replaced, among the
Parent Borrower and the Subsidiaries identified therein, as co-borrowers and
guarantors, the lenders identified therein and Bank of America, as administrative
agent, relating to establishment of a senior unsecured revolving credit
facility in an original principal amount of $15,000,000.

 

“Senior
Unsecured Loan Documents” means the Senior Unsecured Credit Agreement and
the other “Loan Documents” relating thereto, as referenced and defined therein.

 

“Shareholder
Rights Agreement” means the Shareholder Rights Agreement dated as of June 15,
1999, by and between the Parent Borrower and State Street Bank and Trust
Company.

 

 “Subordinated Debt” means any
Indebtedness of a member of the Consolidated Group that by its terms is
expressly subordinated in right of payment to the prior payment of the Loan  Obligations on terms and conditions, and
evidenced by documentation, satisfactory to the Administrative Agent and the
Required Lenders.

 

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

 

“Swap
Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no
phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Parent Borrower or the Subsidiaries shall be a Swap
Agreement.  All Swap Agreements, if any,
between the Borrowers (or any one of them) and one or more Lenders (or
Affiliates thereof) are independent agreements governed by the written
provisions of such Swap Agreements, which will remain in full force and effect,
unaffected by any repayment, prepayment, acceleration, reduction, increase or
change in the terms of the Loans or other Obligations.

 

“Swingline
Borrowing” means a borrowing of a Swingline Loan pursuant to Section 2.01(c).

 

“Swingline
Lender” means Bank of America in its capacity as such, together with any
successor in such capacity.

 

“Swingline
Loan” has the meaning provided in Section 2.01(c).

 

“Swingline
Note” means the promissory note given to evidence the Swingline Loans, as
amended, restated, modified, supplemented, extended, renewed or replaced.  A form of Swingline Note is attached as Exhibit 2.13-2.

 

“Swingline
Sublimit” has the meaning provided in Section 2.01(c).

 

23

 

“Synthetic
Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing arrangement that
is considered borrowed money indebtedness for tax purposes but is classified as
an operating lease under GAAP.

 

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

 

“Term
Loans” means, collectively or individually, as context requires, the Term
Loan A and any term loan established under an Incremental Credit Facility.

 

“Term
Loan A” shall have the meaning provided in Section 2.01(d).

 

“Term
Loan A Commitment” means, with respect to each Lender, the commitment of
such Lender to make the Term Loan A hereunder; provided that, at any
time after funding of the Term Loan A, determinations of “Required Lenders” shall
be based on the Outstanding Amount of the Term Loan A.

 

“Term
Loan A Commitment Percentage” means, for each Lender, a fraction (expressed
as a percentage carried to the ninth decimal place), the numerator of which is,
prior to funding of the Term Loan A, such Lender’s Term Loan A Committed
Amount, and after funding of the Term Loan A, the principal amount of such
Lender’s Term Loan A and the denominator of which is, prior to funding of the
Term Loan A, the aggregate principal amount of the Term Loan A Commitment, and
after funding of the Term Loan A, the Outstanding Amount of the Term Loan
A.  The initial Term Loan A Commitment
Percentages are set forth on Schedule 2.01.

 

“Term
Loan A Committed Amount” means, with respect to each Lender, the amount of such
Lender’s Term Loan A Commitment.  The
initial Term Loan A Committed Amounts are set forth on Schedule 2.01.

 

“Term
Loan A Maturity Date” means April 1, 2013.

 

“Term
Loan Commitments” means the aggregate principal amount of (i) the Term
Loan A Commitments, and (ii) any term loan commitments established under
the Incremental Credit Facilities, if any, provided that in any such
case, at any time after funding of the respective term loan, determinations of “Required
Lenders” and required lenders for the particular tranche of term loan thereby
established shall be based on the Outstanding Amount of such term loans.

 

“Term
Loan Note” means the promissory note or notes, if any, given to evidence
the Term Loan A or other term loan, as applicable, of such Lender, as amended,
restated, modified, supplemented, extended, renewed or replaced.  A form of Term Loan Note is attached as Exhibit 2.13-3.

 

“Transactions”
means the execution, delivery and performance by each Loan Party of the Loan
Documents to which it is to be a party, the borrowing of Loans, the use of
proceeds thereof and the issuance of Letters of Credit hereunder.

 

“Treasury
Management Agreement” means any agreement governing the provision of
treasury or cash management services, including deposit accounts, funds
transfer, automated clearinghouse, zero balance accounts, returned check
concentration, controlled disbursement, lockbox, account reconciliation and
reporting and trade finance services.

 

24

 

“Type”
means, with respect to any Revolving Loan or loans comprising any Term Loan,
its character as a Base Rate Loan or a Eurodollar Rate Loan.

 

“UCC”
means the Uniform Commercial Code in effect in any applicable jurisdiction from
time to time.

 

“United
States” or “U.S.” means the United States of America.

 

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

 

“Wholly
Owned Subsidiary” means, with respect to any direct or indirect Subsidiary
of any Person, that 100% of the Equity Interests with ordinary voting power
issued by such Subsidiary (other than directors’ qualifying shares and
investments by foreign nationals mandated by applicable Law) is beneficially
owned, directly or indirectly, by such Person.

 

1.02                        Interpretive Provisions.

 

With
reference to this Credit Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:

 

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

 

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

 

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

 

25

 

1.03                        Accounting Terms and Provisions.

 

(a)                                  All accounting terms not
specifically or completely defined herein shall be construed in conformity
with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Credit Agreement shall
be prepared in conformity with, GAAP applied on a consistent basis, as in
effect from time to time, applied in a manner consistent with that used in
preparing the audited financial statements referenced in Section 4.01(d),
except as otherwise specifically prescribed herein.

 

(b)                                 Notwithstanding any
provision herein to the contrary, determinations of (i) the applicable
pricing level under the definition of “Applicable Percentage” and (ii) compliance
with the financial covenants shall be made on a Pro Forma Basis.

 

(c)                                  The Parent Borrower will
provide a written summary of material changes in GAAP or in the consistent
application thereof with each annual and quarterly Compliance Certificate
delivered in accordance with Section 6.01(c).  If at any time any change in GAAP or in the
consistent application thereof would affect the computation of any financial
ratio or requirement set forth in any Loan Document, and either the Parent
Borrower or the Required Lenders shall object in writing to determining
compliance based on such change, then such computations shall continue to be
made on a basis consistent with the most recent financial statements delivered
pursuant to Section 6.01(a) or (b) as to which no
such objection has been made.

 

1.04                        Rounding.

 

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

 

1.05                        Times of Day.

 

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

 

1.06                        Letter of Credit Amounts.

 

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

 

26

 

ARTICLE II

 

COMMITMENTS AND CREDIT EXTENSIONS

 

2.01                        Commitments.

 

Subject to the terms and conditions set forth
herein:

 

(a)                                  Revolving Loans.  During the Commitment Period, each Lender
severally agrees to make revolving credit loans (the “Revolving Loans”)
to the Borrowers on any Business Day; provided that after giving effect
to any such Revolving Loan, (i) with regard to the Lenders collectively,
the Outstanding Amount of Revolving Loan Obligations shall not exceed ONE
HUNDRED THIRTY  MILLION DOLLARS
($130,000,000) (as such amount may be increased or decreased in accordance with
the provisions hereof, the “Aggregate Revolving Committed Amount”) and (ii) with
regard to each Lender individually, such Lender’s Revolving Commitment Percentage
of Revolving Loan Obligations shall not exceed its respective Revolving
Committed Amount; and provided, further, that notwithstanding
anything herein to the contrary, the aggregate amount of Revolving Loan
Obligations hereunder shall not at any time exceed an amount (the “Senior
Note Secured Debt Limit Amount”) equal to the difference of $167,500,000 minus
the aggregate outstanding principal amount of the Term Loans hereunder (or any
lesser amount as may be permitted as secured indebtedness under Sections
4.03 and 4.11 of the Senior Notes Indenture, or successor indenture
for any Senior Notes Refinancing Indebtedness, after allowing for at least
$5,000,000 in other secured indebtedness). 
Revolving Loans will be made in Dollars and may consist of Base Rate
Loans, Eurodollar Rate Loans or a combination thereof, as the applicable
Borrower may request, and may be repaid and reborrowed in accordance with the
provisions hereof.

 

(b)                                 Letters of Credit.  During the Commitment Period, (i) the
L/C Issuer, in reliance upon the commitments of the Lenders set forth herein,
agrees (A) to issue Letters of Credit for the account of any Borrower or
any member of the Consolidated Group on any Business Day, (B) to amend
Letters of Credit previously issued hereunder, and (C) to honor drawings
under Letters of Credit; and (ii) the Lenders severally agree to purchase
from the L/C Issuer a participation interest in the Letters of Credit issued
hereunder in an amount equal to such Lender’s Revolving Commitment Percentage
thereof; provided that (A) the Outstanding Amount of L/C
Obligations shall not exceed FIVE MILLION DOLLARS ($5,000,000) (as such amount
may be decreased in accordance with the provisions hereof, the “L/C Sublimit”),
(B) with regard to the Lenders collectively, the Outstanding Amount of
Revolving Loan Obligations shall not exceed the Aggregate Revolving Committed
Amount, and (C) with regard to each Lender individually, such Lender’s
Revolving Commitment Percentage of Revolving Loan Obligations shall not exceed
its respective Revolving Committed Amount; and provided, further,
that notwithstanding anything herein to the contrary, the aggregate amount of
Revolving Loan Obligations hereunder shall not at any time exceed the Senior
Note Secured Debt Limit Amount.  Letters of
Credit will be denominated in Dollars. 
Subject to the terms and conditions hereof, the Borrower’s ability to
obtain Letters of Credit shall be fully revolving, and accordingly the
Borrowers may obtain Letters of Credit to replace Letters of Credit that have
expired or that have been drawn upon and reimbursed.

 

(c)                                  Swingline Loans.  During the Commitment Period, the Swingline
Lender agrees, in reliance upon the commitments of the other Lenders set forth
herein, to make revolving credit loans (the “Swingline Loans”) to the
Borrowers on any Business Day; provided that (i) the Outstanding
Amount of Swingline Loans shall not exceed TEN MILLION DOLLARS ($10,000,000)
(as such amount may be decreased in accordance with the provisions hereof, the “Swingline
Sublimit”) and (ii) with respect to the Lenders collectively, the
Outstanding Amount of Revolving Loan Obligations shall not exceed the Aggregate
Revolving Committed Amount; and provided, further, that
notwithstanding anything herein to the contrary, the aggregate amount of
Revolving Loan Obligations hereunder shall not at any time exceed 

 

27

 

the Senior Note Secured Debt Limit
Amount.  Swingline Loans will be made in
Dollars and shall be comprised solely of Base Rate Loans, and may be repaid and
reborrowed in accordance with the provisions hereof.  Immediately upon the making of a Swingline
Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swingline Lender a participation
interest in such Swingline Loan in an amount equal to the product of such
Lender’s Revolving Commitment Percentage thereof.

 

(d)                                 Term Loan A.  On the Closing Date, each Lender severally
agrees to make its portion of a term loan (the “Term Loan A”) in a
single advance to the Borrowers in Dollars in the amount of its respective Term
Loan A Committed Amount; provided that after giving effect to such
advances, the Outstanding Amount of the Term Loan A shall not exceed FORTY
MILLION DOLLARS ($40,000,000) except as such amount may be increased pursuant
to Section 2.01(e) and (f). 
The Term Loan A may consist of Base Rate Loans, Eurodollar Rate Loans,
or a combination thereof, as the Borrowers may request.  Amounts repaid on the Term Loan A may not be
reborrowed.

 

(e)                                  Incremental Credit
Facilities.  At any time
on or after the Closing Date, the Borrowers may, on written notice to the
Administrative Agent, establish additional credit facilities (collectively, the
“Incremental Credit Facilities”) by increasing, at their election, the
Aggregate Revolving Committed Amount or the amount of the Term Loan A as
provided in Section 2.01(f), or establishing one or more new pro rata term loans, or some
combination thereof; provided that:

 

(i)                                     no Default shall have
occurred and be continuing or shall result after giving effect to the
Incremental Credit Facility;

 

(ii)                                  the conditions to all Credit
Extensions in Section 4.02 shall have been satisfied;

 

(iii)                               the Parent Borrower will
provide (A) a compliance certificate from a Financial Officer confirming
that no Default shall exist immediately before or immediately after giving
effect to the establishment of the Incremental Credit Facility and
demonstrating compliance with the financial covenants set forth in Section 7.12
after giving effect on a pro forma basis to the Incremental Credit Facility
(assuming, for purposes hereof, that the Incremental Credit Facility is fully
drawn and funded) as of the most recently ended fiscal quarter, and (b) supporting
resolutions, legal opinions, promissory notes and other items as may be
reasonably required by the Administrative Agent and the Lenders providing the
commitments for the Incremental Credit Facility;

 

(iv)                              upfront fees, if any, in
respect of the new commitments so established, shall be paid;

 

(v)                                 receipt of officer’s
certificates, legal opinions and other supporting certificates and documents
reasonably requested by the Administrative Agent confirming that loans,
commitments and indebtedness under the Incremental Credit Facilities, and the
liens and security interests relating thereto, are permitted under the Senior
Notes Indenture, or successor indenture for any Senior Notes Refinancing
Indebtedness; and

 

(vi)                              to the extent reasonably
requested by the Administrative Agent, amendments to each of the Security
Documents, if any, and related documents or agreements shall have been made, in
each case in a manner reasonably satisfactory to the Administrative Agent.

 

In
connection with establishment of any Incremental Credit Facility, (A) none
of the Lenders or their affiliates shall have any obligation to provide
commitments or loans for any Incremental Credit 

 

28

 

Facility without their prior written
approval, (B) neither the Administrative Agent nor the Arranger shall have
any responsibility for arranging any such additional commitments without their
prior written consent and subject to such conditions, including fee
arrangements, as they may provide in connection therewith and (C) Schedule
2.01 will be deemed to be revised to reflect the Lenders, Loans,
Commitments and pro rata shares after giving effect to the establishment of any
Incremental Credit Facility.

 

(f)                                    Additional
Conditions for Incremental Credit Facilities. Subject to Section 2.01(e),
the Borrowers may establish Incremental Credit Facilities; provided
that:

 

(i)                                     the sum of the Aggregate
Revolving Committed Amounts plus the aggregate amount of the Term Loan A
Commitments plus the aggregate principal amount of any other Incremental
Credit Facility will not exceed TWO HUNDRED TWENTY MILLION DOLLARS
($220,000,000);

 

(ii)                                  such increase shall be in a
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess
thereof, in the case of Revolving Commitments, and, in the case of Term Loan A
Commitments, $25,000,000 and integral multiples of $5,000,000 in excess
thereof;

 

(iii)                               any new lender providing
additional commitments pursuant to this subsection must be reasonably
acceptable to the Administrative Agent and, in the case of an increase in the
Revolving Commitments, also to the L/C Issuers and the Swingline Lender, as
appropriate;

 

(iv)                              lenders providing additional
commitments pursuant to this subsection will provide a Lender Joinder Agreement
and such other agreements reasonably acceptable to the Administrative Agent;

 

(v)                                 if any Revolving Loans or
Term Loans, as appropriate, are outstanding at the time of any such increase,
the Borrowers will make such payments and adjustments on the subject Loans
(including payment of any break-funding amounts owing under Section 3.05)
as may be necessary to give effect to the revised commitment amounts and
percentages; and

 

(vi)                              in the case of an increase
in the amount of the Term Loan A after the first principal amortization
payment date, adjustments will be made to the schedule of amortization payment
provided in Section 2.05(c), as appropriate, to give effect thereto
such that the interest in payments of principal, interest and other amounts
will be made on the same basis as for the underlying Term Loan A such
that the principal amortization payments made to the holders of the Term Loan A
will be not less than that which was payable prior to giving effect to such
Incremental Credit Facility.

 

2.02                        Borrowings, Conversions and Continuations.

 

(a)                                  Each Borrowing, each
conversion of Loans from one Type to the other, and each continuation of
Eurodollar Rate Loans shall be made upon a Borrower’s irrevocable notice to the
Administrative Agent, which may be given by telephone.  Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (i) with respect to
Eurodollar Rate Loans, three (3) Business Days prior to the requested date
of, or (ii) with respect to Base Rate Loans, on the requested date of, any
Borrowing, conversion or continuation. 
Each telephonic notice by any Borrower pursuant to this Section 2.02(a) must
be confirmed promptly by delivery to the Administrative Agent of a written Loan
Notice, appropriately completed and signed by a Responsible Officer of the
applicable Borrower.  Except as provided
in Sections 2.03(c) and 2.04(a), each Borrowing,
conversion or continuation shall be in a principal amount of (i) with
respect to Eurodollar Rate Loans, $5,000,000 or a whole multiple of 

 

29

 

$1,000,000 in excess thereof or (ii) with
respect to Base Rate Loans, $500,000 or a whole multiple of $100,000 in excess
thereof.  Each Loan Notice (whether
telephonic or written) shall specify (i) whether the applicable Borrower’s
request is with respect to Revolving Loans or the Term Loans, (ii) whether
such request is for a Borrowing, conversion, or continuation, (iii) the
requested date of such Borrowing, conversion or continuation (which shall be a
Business Day), (iv) the principal amount of Loans to be borrowed,
converted or continued, (v) the Type of Loans to be borrowed, converted or
continued, and (vi) if applicable, the duration of the Interest Period
with respect thereto.  If a Borrower
fails to specify a Type of Loan in a Loan Notice or if a Borrower fails to give
a timely notice requesting a conversion or continuation, then the applicable
Loans shall be made as, or converted to, Base Rate Loans.  Any 
automatic conversion to Base Rate Loans shall be effective as of the
last day of the Interest Period then in effect with respect to the applicable
Eurodollar Rate Loans.  If a Borrower
requests a Borrowing of, conversion to, or continuation of Eurodollar Rate
Loans in any Loan Notice, but fails to specify an Interest Period, the Interest
Period will be deemed to be one month.

 

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

 

(c)                                  Except as otherwise provided
herein, without the consent of the Required Lenders, (i) a Eurodollar Rate
Loan may be continued or converted only on the last day of an Interest Period
for such Eurodollar Rate Loan and (ii) any conversion into, or
continuation as, a Eurodollar Rate Loan may be made only if the conditions to
Credit Extensions in Section 4.02 have been satisfied.  During the existence of a Default or Event of
Default, (i) no Loan may be requested as, converted to or continued as a
Eurodollar Rate Loan and (ii) at the request of the Required Lenders, any
outstanding Eurodollar Rate Loan shall be converted to a Base Rate Loan on the
last day of the Interest Period with respect thereto.

 

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

 

(e)                                  After giving effect to all
Borrowings, conversions and continuations of Revolving Loans, there shall not
be more than eight Interest
Periods in effect with respect to Revolving Loans.

 

(f)                                    After giving effect to all
Borrowings, conversions and continuations of the Term Loan A, there shall not
be more than five Interest
Periods in effect with respect to the Term Loan A.

 

30

 

2.03        Additional Provisions with respect to
Letters of Credit.

 

(a)           Obligation to Issue or Amend.

 

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

 

(A)          the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of
issuance, unless the Required Lenders have approved such expiry date; or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

(b)           Procedures for Issuance and
Amendment of Letters of Credit.

 

(i)            Each Letter of Credit shall be
issued or amended, as the case may be, upon the request of a Borrower delivered
to the L/C Issuer (with a copy to the Administrative Agent) in the form of a
L/C Application, appropriately completed and signed by a Responsible Officer of
the applicable Borrower.  Such L/C
Application must be received by the L/C Issuer and the Administrative Agent not
later than 11:00 a.m. at least two (2) Business Days (or such later
date and time as the Administrative Agent and the L/C Issuer may agree in a
particular instance in their sole discretion) prior to the proposed issuance
date or date of amendment, as the case may be. 
In the case of a request for an initial issuance of a Letter of Credit,
such L/C Application shall specify in form and detail reasonably satisfactory
to the L/C Issuer: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount thereof; (C) the
expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) the purpose and
nature of the requested Letter of Credit; and (H) such other matters as
the L/C Issuer may reasonably require. 
In the case of a request for an amendment of any outstanding Letter of
Credit, such L/C Application shall specify in form and detail satisfactory to
the L/C Issuer (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as the L/C
Issuer may reasonably require. 
Additionally, the applicable Borrower shall furnish to the L/C Issuer
and the Administrative Agent such other documents and information
pertaining to such requested Letter of Credit issuance or amendment, including
any Issuer Documents, as the L/C Issuer or the Administrative Agent may
reasonably require.

 

(ii)           Promptly after receipt of any L/C
Application, the L/C Issuer will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy of
such L/C Application from a Borrower and, if not, the L/C Issuer will provide
the Administrative Agent with a copy thereof.  Unless the L/C Issuer has received written
notice from any Lender, the Administrative Agent or any Loan Party, at least
one (1) Business Day prior to the requested date of issuance or amendment
of the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject
to the terms and conditions hereof, the L/C Issuer shall, on the requested
date, issue a Letter of Credit for the account of the applicable Borrower (or
the applicable Subsidiary) or enter into the applicable amendment, as the case
may be, in each case in accordance with the L/C Issuer’s usual and customary
business practices.  Immediately upon the
issuance of each Letter of Credit, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the product of
such Lender’s Revolving Commitment Percentage times the amount of such
Letter of Credit.

 

(iii)          Promptly after its delivery of any
Letter of Credit or any amendment to a Letter of Credit to an advising bank
with respect thereto or to the beneficiary thereof, the L/C Issuer will

 

32

 

also
deliver to the applicable Borrower and the Administrative Agent a true and
complete copy of such Letter of Credit or amendment.

 

(c)           Drawings and Reimbursements;
Funding of Participations.

 

(i)            Upon receipt from the beneficiary of any Letter of Credit
of any notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify the Parent Borrower and the Administrative Agent thereof.  Not later than 11:00 a.m. on the date of
any payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor
Date”), the Borrowers shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing.  If the Borrowers fail to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly notify each Lender
of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed
Amount”), and the amount of such Lender’s Revolving Commitment Percentage
thereof.  In such event, the Borrowers
shall be deemed to have requested a Borrowing of Base Rate Loans to be disbursed
on the Honor Date in an amount equal to the Unreimbursed Amount, without regard
to the minimum and multiples specified in Section 2.02 for the
principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Revolving Committed Amount and the
conditions set forth in Section 4.02 (other than the delivery of a
Loan Notice).  Any notice given by the
L/C Issuer or the Administrative Agent pursuant to this

Section 2.03(c)(i) may be given by telephone if immediately confirmed
in writing; provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.

 

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

 

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

Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Lender in satisfaction of its participation obligation under this Section 2.03.

 

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

 

(v)           Each Lender’s obligation to make
Revolving Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn
under Letters of Credit, as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which

 

33

 

such
Lender may have against the L/C Issuer, any Borrower or any other Person for
any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender’s obligation to
make Loans pursuant to this Section 2.03(c) is subject to the
conditions set forth in Section 4.02 (other than delivery by a
Borrower of a Loan Notice).  No such
making of an L/C Advance shall relieve or otherwise impair the obligation of
the Borrowers to reimburse the L/C Issuer for the amount of any payment made by
the L/C Issuer under any Letter of Credit, together with interest as provided
herein.

 

(vi)          If any Lender fails to make available
to the Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the L/C Issuer in
accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the L/C
Issuer in connection with the foregoing. 
If such Lender pays such amount (with interest and fees as aforesaid),
the amount so paid shall constitute such Lender’s Loan included in the relevant
Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case
may be.  A certificate of the L/C Issuer
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent
manifest error.

 

(d)           Repayment of Participations.

 

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

 

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

 

(e)           Obligations
Absolute. 
The obligation of the Borrowers to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing
shall be absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Credit Agreement under all circumstances,
including the following:

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)            Role
of L/C Issuer.  Each Lender and the Borrowers
agree that, in paying any drawing under a Letter of Credit, the L/C Issuer
shall not have any responsibility to obtain any document (other than any sight
draft, certificates and documents expressly required by the Letter of Credit)
or to ascertain or inquire as to the validity or accuracy of any such document
or the authority of the Person executing or delivering any such document.  None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable; (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document.  The Borrowers hereby
assume all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. 
None of the L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of
the L/C Issuer shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section 2.03(e);
provided, however, that anything in such clauses to the contrary
notwithstanding, the Borrowers may have a claim against the L/C Issuer, and the
L/C Issuer may be liable to the Borrowers, to the extent, but only to the

 

35

 

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

 

(g)           Cash
Collateral.  Upon the request of the
Administrative Agent, (i) if the L/C Issuer has honored any full or
partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, or (ii) if, as of the L/C Expiration Date,
any L/C Obligation for any reason remains outstanding, the Borrowers shall, in
each case, immediately Cash Collateralize the then Outstanding Amount of all
L/C Obligations.  Sections 2.06
and Section 8.01 set forth certain additional requirements to
deliver Cash Collateral hereunder.  For
purposes of this Section 2.03, Section 2.06  and Section 8.01, “Cash
Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant
to documentation in form and substance satisfactory to the Administrative Agent
and the L/C Issuer (which documents are hereby consented to by the Lenders).  Derivatives of such term have corresponding
meanings.  The Borrowers hereby grant to
the Collateral Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing.  Cash
Collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Bank of America.

 

(h)           Applicability
of ISP and UCP.  Unless otherwise expressly agreed
by the L/C Issuer and the applicable Borrower when a Letter of Credit is issued,
the rules of the ISP shall apply to each Letter of Credit.

 

(i)            Letters
of Credit Issued for Subsidiaries. 
Notwithstanding that a Letter of Credit issued or outstanding hereunder
is in support of any obligations of, or is for the account of, any Subsidiary
of any Borrower, the Borrowers shall be obligated to reimburse the L/C Issuer
for any and all drawings under such Letter of Credit.  The Borrowers hereby acknowledge that the
issuance of Letters of Credit for the account of any Borrower’s Subsidiaries
inures to the benefit of the Borrowers, and that the Borrowers’ businesses
derive substantial benefits from the businesses of such Subsidiaries.

 

(j)            Letter
of Credit Fees.  The Borrowers shall
pay Letter of Credit fees as set forth in Section 2.09.

 

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

 

2.04        Additional Provisions with respect to
Swingline Loans.

 

(a)           Borrowing
Procedures.  Each Swingline Borrowing
shall be made upon the Borrower’s irrevocable notice to the Swingline Lender
and the Administrative Agent, which may be given by telephone. Each such notice
must be received by the Swingline Lender and the Administrative Agent not later
than 1:00 p.m. on the requested borrowing date, and shall specify (i) the
amount to be borrowed, which shall be a minimum of $100,000, and (ii) the
requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed
promptly by delivery to the Swingline Lender and

 

36

 

the Administrative Agent of a written Loan
Notice, appropriately completed and signed by a Responsible Officer of the
applicable Borrower.  Promptly after receipt
by the Swingline Lender of any telephonic Loan Notice, the Swingline Lender
will confirm with the Administrative Agent (by telephone or in writing) that
the Administrative Agent has also received such Loan Notice and, if not, the
Swingline Lender will notify the Administrative Agent (by telephone or in
writing) of the contents thereof.  Unless
the Swingline Lender has received notice (by telephone or in writing) from the
Administrative Agent (including at the request of any Lender) prior to 2:00 p.m.
on the date of the proposed Swingline Borrowing (A) directing the
Swingline Lender not to make such Swingline Loan as a result of the limitations
set forth in this Article II, or (B) that one or more of the
applicable conditions specified in Section 4.02 is not then
satisfied, then, subject to the terms and conditions hereof, the Swingline
Lender will, not later than 3:00 p.m. on the borrowing date specified in
such Loan Notice, make the amount of its Swingline Loan available to the
applicable Borrower.

 

(b)           Refinancing.

 

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

 

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

 

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

 

37

 

(iv)          Each Lender’s obligation to make Revolving Loans or to
purchase and fund risk participations in Swingline Loans pursuant to this Section 2.04(b) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right
that such Lender may have against the Swingline Lender, any Borrower or any
other Person for any reason whatsoever, (B) the occurrence or continuance
of a Default or Event of Default, (C) non-compliance with the conditions
set forth in Section 4.02, or (D) any other occurrence, event
or condition, whether or not similar to any of the foregoing; provided
that Swingline Lender has complied with the provisions of Section 2.04(a).  No such purchase or funding of risk
participations shall relieve or otherwise impair the obligation of the
Borrowers to repay Swingline Loans, together with interest as provided herein.

 

(c)           Repayment of Participations.

 

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

 

(ii)           If any payment received by the Swingline Lender in respect
of principal or interest on any Swingline Loan is required to be returned by
the Swingline Lender under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the Swingline Lender in
its discretion), each Lender shall pay to the Swingline Lender its Revolving
Commitment Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make such demand
upon the request of the Swingline Lender. 
The obligations of the Lenders under this clause shall survive the
payment in full of the Obligations and the termination of this Credit
Agreement.

 

(d)           Interest
for Account of Swingline Lender.  The
Swingline Lender shall be responsible for invoicing the Parent Borrower for
interest on the Swingline Loans.  Until
each Lender funds its Revolving Loan or risk participation pursuant to this Section 2.04
to refinance such Lender’s Revolving Commitment Percentage of any Swingline
Loan, interest in respect thereof shall be solely for the account of the
Swingline Lender.

 

(e)           Payments
Directly to Swingline Lender.  The
Borrowers shall make all payments of principal and interest in respect of the
Swingline Loans directly to the Swingline Lender.

 

2.05        Repayment of Loans.

 

(a)           Revolving
Loans.  The Borrowers shall repay to
the Lenders the Outstanding Amount of Revolving Loans on the Revolving
Termination Date.

 

(b)           Swingline
Loans.  The Borrowers shall repay to
the Swingline Lender the Outstanding Amount of the Swingline Loans on the
earlier  to occur of (i) the
date of demand by the Swingline Lender (which shall be no fewer than ten (10) Business
Days following the issuance date of such Swingline Loan) and (ii) the
Revolving Termination Date.

 

38

 

(c)           Term
Loan A.  The outstanding principal
amount of the Term Loan A shall be repayable in consecutive quarterly
installments on the dates set forth below, beginning on June 30, 2008 and ending on the Term Loan A Maturity Date, as
follows (expressed in terms of percentage of original principal amount), unless
accelerated sooner pursuant to Section 8.01:

 

	
  Payment Date

  	
   

  	
  Principal Amortization

  Payment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2008

  	
   

  	
  $1,000,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $1,000,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $1,000,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $1,000,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $1,000,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $1,000,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $1,000,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $1,000,000

  	
   

  
	
  June 30, 2010

  	
   

  	
  $1,000,000

  	
   

  
	
  September 30, 2010

  	
   

  	
  $1,000,000

  	
   

  
	
  December 31, 2010

  	
   

  	
  $1,000,000

  	
   

  
	
  March 31, 2011

  	
   

  	
  $1,000,000

  	
   

  
	
  June 30, 2011

  	
   

  	
  $1,000,000

  	
   

  
	
  September 30, 2011

  	
   

  	
  $1,000,000

  	
   

  
	
  December 31, 2011

  	
   

  	
  $1,000,000

  	
   

  
	
  March 31, 2012

  	
   

  	
  $1,000,000

  	
   

  
	
  June 30, 2012

  	
   

  	
  $1,000,000

  	
   

  
	
  September 30, 2012

  	
   

  	
  $1,000,000

  	
   

  
	
  December 31, 2012

  	
   

  	
  $1,000,000

  	
   

  
	
  Term Loan A Maturity Date

  	
   

  	
  $21,000,000
  (together with any remaining unpaid principal and unpaid accrued interest)

  	
   

  

 

2.06       Prepayments.

 

(a)          Voluntary Prepayments.  Except as otherwise expressly provided
herein, the Loans may be repaid in whole or in part without premium or penalty
(except, in the case of Loans other than Base Rate Loans, amounts payable
pursuant to Section 3.05); provided that:

 

(i)            in the case of Loans other than Swingline Loans, (A) notice
thereof must be received by 11:00 a.m. by the Administrative Agent at
least three (3) Business Days prior to the date of prepayment, in the case
of Eurodollar Rate Loans, and one (1) Business Day prior to the date of
prepayment, in the case of Base Rate Loans, (B) any such prepayment shall
be a minimum principal amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof, in the case of Eurodollar Rate Loans and $500,000
and integral multiples of $100,000 in excess thereof, in the case of Base Rate
Loans, or, in each case, the entire remaining principal amount thereof, if
less;

 

(ii)           in the case of Swingline Loans, (A) notice thereof
must be received by the Swingline Lender by 1:00 p.m. on the date of
prepayment (with a copy to the Administrative

 

39

 

Agent),
and (B) any such prepayment shall be in the same minimum principal amounts
as for advances thereof (or any lesser amount that may be acceptable to the
Swingline Lender);

 

(iii)          until the loans and obligations under the Senior Unsecured
Credit Agreement have been paid in full and the commitments thereunder shall
have expired or been terminated, voluntary prepayments may be made on or in
respect of Revolving Loan Obligations only to the extent of creating
$10,000,000 in availability under the Revolving Commitments (with any
prepayments thereafter being made to the loans and obligations owing under the
Senior Unsecured Credit Agreement and the Term Loans hereunder); and

 

(iv)          voluntary prepayments will not be made on the Term Loans
hereunder, unless and until the loans and obligations under the Senior
Unsecured Credit Agreement have been paid in full and the commitments
thereunder terminated.

 

Each
such notice of voluntary prepayment hereunder shall be irrevocable and shall
specify the date and amount of prepayment and the Loans and Types of Loans that
are being prepaid.  The Administrative
Agent will give prompt notice to the applicable Lenders of any prepayment on
the Loans and the Lender’s interest therein. 
Prepayments of Eurodollar Rate Loans hereunder shall be accompanied by
accrued interest on the amount prepaid and breakage or other amounts due, if
any, under Section 3.05.

 

(b)           Mandatory Prepayments.

 

(i)            Revolving Commitments.  If at any time (A) the Outstanding
Amount of Revolving Loan Obligations shall exceed the Aggregate Revolving
Committed Amount, (B) the Outstanding Amount of L/C Obligations shall
exceed the L/C Sublimit, or (C) the Outstanding Amount of Swingline Loans
shall exceed the Swingline Sublimit, immediate prepayment will be made on or in
respect of the Revolving Loan Obligations in an amount equal to such excess; provided,
however, that, except with respect to clause (B), L/C Obligations will
not be Cash Collateralized hereunder until the Revolving Loans and Swingline
Loans have been paid in full.

 

(ii)           Debt Transactions. 
Prepayment will be made on the Loan Obligations in an amount equal to
100% of the Net Cash Proceeds from any Debt Transactions on the fifth Business
Day following receipt thereof.

 

(iii)          Equity Transactions. 
Prepayment will be made on the Loan Obligations in an amount equal to
100%  of the Net Cash Proceeds from
any Equity Transactions on the fifth Business Day following receipt thereof.

 

(c)           Application.  Within each Loan, prepayments will be applied
first to Base Rate Loans, then to Eurodollar Rate Loans in direct order of
Interest Period maturities.  In addition:

 

(i)            Voluntary Prepayments.  Voluntary prepayments shall be applied as
specified by the Parent Borrower; provided that (A) voluntary
prepayments on the Loan Obligations are subject to the limitations in clauses
(iii) and (iv) of Section 2.06(a), and (B) partial
prepayment of the Term Loans will be applied pro rata to remaining scheduled
principal installments thereunder.

 

(ii)           Mandatory Prepayments.  Mandatory prepayments on the Loan Obligations
will be paid by the Administrative Agent to the Lenders ratably in accordance
with their respective interests therein; provided that:

 

40

 

(A)          Mandatory prepayments in respect of
the Revolving Commitments under subsection (b)(i) above shall
be applied to the respective Revolving Loan Obligations as appropriate.

 

(B)           Mandatory prepayments in respect of
Debt Transactions under subsection (b)(ii), and Equity Transactions
under subsection (b)(iii) shall be applied first, to the
Senior Unsecured Credit Agreement until paid in full, second, pro rata to the
Term Loans until paid in full, and then, third, to the Revolving Loan
Obligations.  Mandatory prepayments on
the Term Loans shall be applied to pro rata remaining principal amortization
installments thereunder.

 

2.07        Termination or Reduction of
Commitments.

 

(a)           Voluntary
Reductions.  The Commitments
hereunder may be permanently reduced in whole or in part by notice from the
Parent Borrower to the Administrative Agent; provided that (i) any
such notice thereof must be received by 1:00 p.m. at least three (3) Business
Days prior to the date of reduction or termination and any such prepayment
shall be in a minimum principal amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof; and (ii) the Commitments may not be reduced
to an amount less than the Loan Obligations then outstanding thereunder.  The Administrative Agent will give prompt
notice to the Lenders of any such reduction in Commitments.  Any reduction of Commitments shall be applied
ratably to the commitment of each Lender according to its commitment percentage
thereof.  All commitment or other fees
accrued with respect thereto through the Closing Date of any termination of
Commitments shall be paid on the Closing Date of such termination.

 

(b)           Mandatory
Reductions.  The Aggregate Revolving
Committed Amount shall not be permanently reduced in connection with any
prepayment on the Revolving Loan Obligations in respect of Debt Transactions
under Section 2.06(b)(ii) and Equity Transactions under Section 2.06(b)(iii).

 

2.08        Interest.

 

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

 

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

 

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

 

(iii)          Upon the request of the Required Lenders, while any Event
of Default exists, the Borrowers shall at the request of the Required Lenders,
pay interest on the principal amount of all

 

41

 

outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Law.

 

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

 

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

 

2.09        Fees.

 

(a)           Commitment
Fee.  The Borrowers shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Revolving Commitment Percentage, a commitment fee equal to the Applicable
Percentage of the actual daily amount by which the Aggregate Revolving
Committed Amount exceeds the sum of (i) the Outstanding Amount of
Revolving Loans plus (ii) the Outstanding Amount of L/C
Obligations.  The commitment fee shall
accrue at all times during the Commitment Period, including at any time during
which one or more of the conditions in Article IV is not met, and
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December, commencing with the first such date
to occur after the Closing Date, and on the Revolving Termination Date.  The commitment fee shall be calculated
quarterly in arrears, and if there is any change in the Applicable Percentage
during any quarter, the actual daily amount shall be computed and multiplied by
the Applicable Percentage separately for each period during such quarter that
such Applicable Percentage was in effect. 
For purposes hereof, Swingline Loans shall not be counted toward or be
considered as usage of the Aggregate Revolving Committed Amount.

 

(b)           Letter of Credit Fees.

 

(i)            Letter of Credit Fees.  The Borrowers shall pay to the Administrative
Agent for the account of each Lender in accordance with its Revolving
Commitment Percentage a Letter of Credit fee for each Letter of Credit equal to
the Applicable Percentage multiplied by the daily maximum amount
available to be drawn under such Letter of Credit (the “Letter of Credit
Fees”).  For purposes of computing
the daily amount available to be drawn under any Letter of Credit, the amount
of such Letter of Credit shall be determined in accordance with Section 1.06.  The Letter of Credit Fees shall be computed
on a quarterly basis in arrears, and shall be due and payable on the last
Business Day of each March, June, September and December, commencing with
the first such date to occur after the issuance of such Letter of Credit, on
the L/C Expiration Date and thereafter on demand.  If there is any change in the Applicable
Percentage during any quarter, the daily amount available to be drawn under
each Letter of Credit shall be computed and multiplied by the Applicable
Percentage separately for each period during such quarter that such Applicable
Percentage was in effect. 
Notwithstanding anything to the contrary contained herein, upon the
request of the Required Lenders, while any Event of Default exists, all Letter
of Credit Fees shall accrue at the Default Rate.

 

(ii)           Fronting Fee and Documentary and Processing Charges
Payable to L/C Issuer.  The Borrowers
shall pay directly to the L/C Issuer for its own account a fronting fee with
respect to each Letter of Credit, at the rate per annum specified in the Fee
Letter, computed on the daily amount available to be drawn under such Letter of
Credit on a quarterly basis in arrears. 
Such fronting fee shall be due and payable on the tenth Business Day
after the end of each March, June, September and December in respect
of the most recently-ended quarterly period (or portion

 

42

 

thereof,
in the case of the first payment), commencing with the first such date to occur
after the issuance of such Letter of Credit, on the L/C Expiration Date and
thereafter on demand.  For purposes of
computing the daily amount available to be drawn under any Letter of Credit,
the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  In addition, the Borrowers shall pay directly
to the L/C Issuer for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
the L/C Issuer relating to letters of credit as from time to time in
effect.  Such customary fees and standard
costs and charges are due and payable on demand and are nonrefundable.

 

(c)           Other Fees.

 

(i)            The Borrowers shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. 
Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.

 

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

 

2.10        Computation
of Interest and Fees; Retroactive Adjustments of Applicable Rate.

 

(a)           All computations of interest for Base
Rate Loans when the Base Rate is determined by Bank of America’s prime rate
shall be made on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a three hundred
sixty (360)-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a three
hundred sixty-five (365)-day year). 
Interest shall accrue on each Loan for the day on which the Loan is
made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to

Section 2.11(a), bear interest for one day.  Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.

 

(b)           If,
as a result of any restatement of or other adjustment to the financial
statements of the Parent Borrower or for any other reason, the Parent Borrower
or the Lenders determine that (i) the Consolidated Senior Secured Leverage
Ratio as calculated by the Parent Borrower as of any applicable date was
inaccurate and (ii) a proper calculation of the Consolidated Senior
Secured Leverage Ratio would have resulted in higher pricing for such period,
the Borrowers shall immediately and retroactively be obligated to pay to the
Administrative Agent for the account of the applicable Lenders and/or the L/C
Issuer, as the case may be, promptly on demand by the Administrative Agent (or,
after the occurrence of an actual or deemed entry of an order for relief with
respect to any Borrower under the Bankruptcy Code of the United States,
automatically and without further action by the Administrative Agent, any
Lender or the L/C Issuer), an amount equal to the excess of the amount of
interest and fees that should have been paid for such period over the amount of
interest and fees actually paid for such period.  This paragraph shall not limit the rights of
the Administrative Agent, any Lender or the any L/C Issuer, as the case may be,
under Section 2.03(c)(iii), 2.03(j), 2.08(b), 2.09
or under Section 8.01.  The
Borrower’s obligations under this paragraph shall survive the termination of
the Aggregate Commitments and the repayment of all other Obligations hereunder.

 

43

 

2.11        Payments
Generally; Administrative Agent’s Clawback.

 

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

 

(b)           (i)  Funding by Lenders; Presumption by Administrative
Agent.  Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of
any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of
Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such
Lender will not make available to the Administrative Agent such Lender’s share
of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with Section 2.02
(or, in the case of a Borrowing of Base Rate Loans, that such Lender has made
such share available in accordance with and at the time required by Section 2.02)
and may, in reliance upon such assumption, make available to the Borrowers a
corresponding amount.  In such event, if
a Lender has not in fact made its share of the applicable Borrowing available
to the Administrative Agent, then the applicable Lender and the Borrowers
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is made available to the
Borrowers to but excluding the date of payment to the Administrative Agent, at (A) in
the case of a payment to be made by such Lender, the greater of the Federal
Funds Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by the Administrative Agent in
connection with the foregoing, and (B) in the case of a payment to be made
by the Borrowers, the interest rate applicable to Base Rate Loans.  If the Borrowers and such Lender shall pay
such interest to the Administrative Agent for the same or an overlapping
period, the Administrative Agent shall promptly remit to the Borrowers the
amount of such interest paid by the Borrowers for such period.  If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrowers shall be without
prejudice to any claim the Borrowers may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

 

(ii)           Payments by Borrower; Presumptions by Administrative
Agent.  Unless the Administrative
Agent shall have received notice from the Borrowers prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders
or the L/C Issuer hereunder that the Borrowers will not make such payment, the
Administrative Agent may assume that the Borrowers have made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the L/C Issuer, as the case may be, the amount
due.  In such event, if the Borrowers
have not in fact made such payment, then each of the Lenders or the L/C Issuer,
as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or the L/C Issuer,
in

 

44

 

immediately
available funds with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.

 

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

 

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

 

(d)           Obligation
of the Lenders Several.  The
obligations of the Lenders hereunder to make Loans, to fund participations in
Letters of Credit and Swingline Loans and to make payments pursuant to Section 10.04(c) are
several and not joint.  The failure of
any Lender to make any Loan, to fund any such participation or to make any
payment under Section 10.04(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Loan, to purchase its participation or to make its
payment under Section 10.04(c).

 

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

 

(f)            Allocation
of Funds.  If at any time
insufficient funds are received by or are available to the Administrative Agent
to pay fully all amounts of principal, L/C Borrowings, interest and fees then
due hereunder, such funds shall be applied (i) first, toward costs
and expenses (including all reasonable fees, expenses and disbursements of any
law firm or other counsel, to the extent payable pursuant to Section 10.04,
and amounts payable under Article III) incurred by the
Administrative Agent and each Lender, (ii) second, toward repayment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (iii) third, toward repayment of principal and L/C
Borrowings then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and L/C Borrowings then due to such
parties.

 

2.12        Sharing
of Payments By Lenders.

 

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

 

45

 

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

 

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

 

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

 

2.13        Evidence
of Debt.

 

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

 

(b)           In
addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swingline Loans.  In the event of any conflict between the
accounts and records maintained by the Administrative Agent and the accounts
and records of any Lender in respect of such matters, the accounts and records
of the Administrative Agent shall control in the absence of manifest error.

 

2.14        Joint
and Several Liability.

 

(a)           Each
Borrower accepts joint and several liability hereunder in consideration of the
financial accommodation to be provided by the Administrative Agent and the
Lenders under this Credit Agreement and the other Loan Documents, for the
mutual benefit, directly and indirectly, of each Borrower and in consideration
of the undertakings of each Borrower to accept joint and several liability for
the obligations of each Borrower.

 

(b)           Each
Borrower shall be jointly and severally liable for all Obligations (whether or
not borrowed by a Borrower), regardless of which Borrower actually receives
Credit Extensions hereunder or the amount of such Credit Extensions received or
the manner in which the Administrative Agent or any

 

46

 

Lender
accounts for such Credit Extensions on its books and records.  Each Borrower’s obligations with respect to
Credit Extensions made to it, and each Borrower’s obligations arising as a
result of the joint and several liability of such Borrower hereunder, with
respect to Credit Extensions made to and other Obligations owing by the other
Borrowers hereunder, shall be separate and distinct obligations, but all such
obligations shall be primary obligations of each Borrower.

 

(c)           Each
Borrower’s obligations arising as a result of the joint and several liability
of such Borrower hereunder with respect to Credit Extensions made to and other
Obligations owing by the other Borrowers hereunder shall, to the fullest extent
permitted by law, be unconditional irrespective of (i) the validity or
enforceability, avoidance or subordination of the obligations of any other
Borrower or of any promissory note or other document evidencing all or any part
of the obligations of any other Borrower, (ii) the absence of any attempt
to collect the Obligations from any other Borrower, any other guarantor, or any
other security therefor, or the absence of any other action to enforce the
same, (iii) the waiver, consent, extension, forbearance or granting of any
indulgence by the Administrative Agent or any Lender with respect to any
provision of any instrument evidencing the obligations of any other Borrower,
or any part thereof, or any other agreement now or hereafter executed by any
other Borrower and delivered to the Administrative Agent or any Lender, (iv) the
failure by the Administrative Agent or any Lender to take any steps to perfect
and maintain its security interest in, or to preserve its rights to, any
security or collateral for the obligations of any other Borrower, (v) the
Administrative Agent’s or any Lender’s election, in any proceeding instituted
under the Bankruptcy Code, of the application of Section 1111(b)(2) of
the Bankruptcy Code, (vi) any borrowing or grant of a security interest by
any other Borrower, as Debtor In Possession under Section 364 of the
Bankruptcy Code, (vii) the disallowance of all or any portion of the
Administrative Agent’s or any Lender’s claim(s) for the repayment of the
obligations of any other Borrower under Section 502 of the Bankruptcy
Code, or (viii) any other circumstances which might constitute a legal or
equitable discharge or defense of a guarantor or of any other Borrower.  With respect to each Borrower’s obligations
arising as a result of the joint and several liability of such Borrower
hereunder with respect to Credit Extensions made to the other Borrowers
hereunder, such Borrower waives, until the Obligations shall have been paid in
full (excluding contingent indemnification obligations that shall survive the
termination of this Credit Agreement) and this Credit Agreement and the other
Loan Documents shall have been terminated, any right to enforce any right of
subrogation or any remedy which the Administrative Agent or any Lender now has
or may hereafter have against such Borrower, any endorser or any guarantor of
all or any part of the Obligations, and any benefit of, and any right to
participate in, any security or collateral given to the Administrative Agent or
any Lender to secure payment of the Obligations or any other liability of any
Borrower to the Administrative Agent or any Lender.

 

(d)           Upon
the occurrence and during the continuation of any Event of Default, the
Administrative Agent and the Lenders may proceed directly and at once, without
notice, against any Borrower to collect and recover the full amount, or any
portion of the Obligations, without first proceeding against any other Borrower
or any other Person, or against any security or collateral for the
Obligations.  Each Borrower consents and
agrees that the Administrative Agent and the Lenders shall be under no
obligation to marshal any assets in favor of any Borrower or against or in
payment of any or all of the Obligations.

 

47

 

ARTICLE III

 

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.

 

(a)           Payments
Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.  (i) Any and all payments by or on
account of any obligation of the Borrowers hereunder or under any other Loan
Document shall to the extent permitted by applicable Laws be made free and
clear of and without reduction or withholding for any Taxes.  If, however, applicable Laws require the
Borrowers or the Administrative Agent to withhold or deduct any Tax, such Tax
shall be withheld or deducted in accordance with such Laws as determined by the
Borrowers or the Administrative Agent, as the case may be, upon the basis of
the information and documentation to be delivered pursuant to subsection (e) below.

 

(ii)           If
the Borrowers or the Administrative Agent shall be required by the Code to
withhold or deduct any Taxes, including, but not limited to, both United States
Federal backup withholding and any withholding taxes, from any payment, then (A) the
Administrative Agent shall withhold or make such deductions as are determined
by the Administrative Agent to be required based upon the information and
documentation it has received pursuant to subsection (e) below, (B) the
Administrative Agent shall timely pay the full amount withheld or deducted to
the relevant Governmental Authority in accordance with the Code, and (C) to
the extent that the withholding or deduction is made on account of Indemnified
Taxes or Other Taxes, the sum payable by the Borrowers shall be increased as
necessary so that after any required withholding or the making of all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or L/C Issuer, as the case may
be, receives an amount equal to the sum it would have received had no such
Indemnified Taxes or Other Taxes been due.

 

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

 

(c)           Tax
Indemnifications.  (i) Without
limiting the provisions of subsection (a) or (b) above, the Borrowers
shall, and do hereby, indemnify the Administrative Agent, each Lender and the
L/C Issuer, and shall make payment in respect thereof within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) withheld or deducted by the
Borrowers or the Administrative Agent or paid by the Administrative Agent, such
Lender or the L/C Issuer, as the case may be, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  The Borrowers shall also, and do hereby,
indemnify the Administrative Agent, and shall make payment in respect thereof
within 10 days after demand therefor, for any amount which a Lender or the L/C
Issuer for any reason fails to pay indefeasibly to the Administrative Agent as
required by clause (ii) of this subsection.  A certificate as to the amount of any such
payment or liability delivered to the Borrowers by a Lender or the L/C Issuer
(with a copy to the Administrative Agent), or by the Administrative Agent on
its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive
absent manifest error.

 

(ii)           Without limiting the provisions of subsection (a) or (b) above,
each Lender and the L/C Issuer shall, and does hereby, indemnify the Borrowers
and the Administrative Agent, and shall make payment in respect thereof within
10 days after demand therefor, against any and all Taxes and any and all
related losses, claims, liabilities, penalties, interest and expenses

 

48

 

(including
the fees, charges and disbursements of any counsel for the Borrowers or the
Administrative Agent) incurred by or asserted against the Borrowers or the
Administrative Agent by any Governmental Authority as a result of the failure
by such Lender or the L/C Issuer, as the case may be, to deliver, or as a
result of the inaccuracy, inadequacy or deficiency of, any documentation
required to be delivered by such Lender or the L/C Issuer, as the case may be,
to the Borrowers or the Administrative Agent pursuant to subsection (e).  Each Lender and the L/C Issuer hereby
authorizes the Administrative Agent to set off and apply any and all amounts at
any time owing to such Lender or the L/C Issuer, as the case may be, under this
Credit Agreement or any other Loan Document against any amount due to the
Administrative Agent under this clause (ii). 
The agreements in this clause (ii) shall survive the resignation
and/or replacement of the Administrative Agent, any assignment of rights by, or
the replacement of, a Lender or the L/C Issuer, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all other
Obligations.

 

(d)           Evidence
of Payments.  Upon request by the
Borrowers or the Administrative Agent, as the case may be, after any payment of
Taxes by the Borrowers or the Administrative Agent to a Governmental Authority
as provided in this Section 3.01, the Borrowers shall deliver to
the Administrative Agent or the Administrative Agent shall deliver to the
Borrowers, as the case may be, the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of any
return required by Law to report such payment or other evidence of such payment
reasonably satisfactory to the Borrowers or the Administrative Agent, as the
case may be.

 

(e)           Status
of Lenders; Tax Documentation.  (i) Each
Lender shall deliver to the Borrowers and to the Administrative Agent, at the
time or times prescribed by applicable Laws or when reasonably requested by the
Borrowers or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable Laws or by the taxing authorities of any
jurisdiction and such other reasonably requested information as will permit the
Borrowers or the Administrative Agent, as the case may be, to determine (A) whether
or not payments made hereunder or under any other Loan Document are subject to
Taxes, (B) if applicable, the required rate of withholding or deduction,
and (C) such Lender’s entitlement to any available exemption from, or
reduction of, applicable Taxes in respect of all payments to be made to such
Lender by the Borrowers pursuant to this Credit Agreement or otherwise to
establish such Lender’s status for withholding tax purposes in the applicable
jurisdiction.

 

(ii)           Without limiting the generality of the foregoing, if any
Borrower is resident for tax purposes in the United States,

 

(A)          any Lender that is a “United States
person” within the meaning of Section 7701(a)(30) of the Code shall
deliver to such Borrower and the Administrative Agent executed originals of
Internal Revenue Service Form W-9 or such other documentation or
information prescribed by applicable Laws or reasonably requested by such
Borrower or the Administrative Agent as will enable such Borrower or the
Administrative Agent, as the case may be, to determine whether or not such
Lender is subject to backup withholding or information reporting requirements;
and

 

(B)           each Foreign Lender that is entitled
under the Code or any applicable treaty to an exemption from or reduction of
withholding tax with respect to payments hereunder or under any other Loan
Document shall deliver to such Borrower and the Administrative Agent (in such
number of copies as shall be requested by the recipient) on or prior to the
date on which such Foreign Lender becomes a Lender under this Credit Agreement
(and from time to time thereafter upon the request of such Borrower or the

 

49

 

Administrative
Agent, but only if such Foreign Lender is legally entitled to do so), whichever
of the following is applicable:

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

 

(II)           executed
originals of Internal Revenue Service Form W-8ECI,

 

(III)         executed
originals of Internal Revenue Service Form W-8IMY and all required
supporting documentation,

 

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

 

(V)           executed
originals of any other form prescribed by applicable Laws as a basis for
claiming exemption from or a reduction in United States Federal withholding tax
together with such supplementary documentation as may be prescribed by
applicable Laws to permit such Borrower or the Administrative Agent to
determine the withholding or deduction required to be made.

 

(iii)                             Each Lender
shall promptly (A) notify such Borrower and the Administrative Agent of
any change in circumstances which would modify or render invalid any claimed exemption
or reduction, and (B) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws of any jurisdiction that such Borrower
or the Administrative Agent make any withholding or deduction for taxes from
amounts payable to such Lender.

 

(f)            Treatment
of Certain Refunds.  Unless required
by applicable Laws, at no time shall the Administrative Agent have any
obligation to file for or otherwise pursue on behalf of a Lender or the L/C
Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any
refund of Taxes withheld or deducted from funds paid for the account of such
Lender or the L/C Issuer, as the case may be. 
If the Administrative Agent, any Lender or the L/C Issuer determines, in
its sole discretion, that it has received a refund of any Taxes or Other Taxes
as to which it has been indemnified by the Borrowers or with respect to which
the Borrowers have paid additional amounts pursuant to this Section, it shall
pay to the Borrowers an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrowers under
this Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses incurred by the Administrative
Agent, such Lender or the L/C Issuer, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund), provided that the Borrowers, upon the request
of the Administrative Agent, such Lender or the L/C Issuer, agree to repay the
amount paid over to the Borrowers (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative
Agent, such Lender or the L/C Issuer in the event the Administrative Agent,
such Lender or the L/C Issuer is required to repay such refund to such
Governmental Authority.  This subsection
shall not be construed to require the Administrative Agent, any Lender or the
L/C Issuer

 

50

 

to
make available its tax returns (or any other information relating to its taxes
that it deems confidential) to the Borrowers or any other Person.

 

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

 

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

 

3.04        Increased Costs; Reserves on
Eurodollar Rate Loans.

 

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

 

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

 

(ii)           subject any Lender or the L/C Issuer to any tax of any
kind whatsoever with respect to this Credit Agreement, any Letter of Credit,
any participation in a Letter of Credit or any Eurodollar Rate Loan made by it,
or change the basis of taxation of payments to such Lender or the L/C Issuer in
respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01
and the imposition of, or any change in the rate of, any Excluded Tax payable
by such Lender or the L/C Issuer); or

 

51

 

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

 

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

 

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

 

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

 

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

 

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

 

52

 

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

 

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

 

(c)           any
assignment of a Eurodollar Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrowers pursuant to Section 10.13;

 

including
any loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained.

 

For
purposes of calculating amounts payable by the Borrowers to the Lenders under
this Section 3.05, each Lender
shall be deemed to have funded each Eurodollar Rate Loan made by it at the
Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.

 

3.06          Mitigation Obligations; Replacement
of Lenders.

 

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

 

(b)             Replacement
of Lenders.  If any Lender requests
compensation under Section 3.04, or if any Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01, the Borrowers may
replace such Lender in accordance with Section 10.13.

 

3.07          Survival.  All of the Borrowers’ obligations under this Article III
shall survive termination of the Aggregate Commitments, repayment of all other
Obligations hereunder and resignation of the Administrative Agent.

 

53

 

ARTICLE IV

 

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01        Conditions to Initial Credit
Extensions.

 

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

 

(a)           Executed
Loan Documents.  The Administrative
Agent’s receipt of counterparts of this Credit Agreement, the Notes requested
by the Lenders, the Collateral Questionnaire, Collateral Agreement and the
Mortgages, in each case, dated as of the Closing Date, duly executed by a
Responsible Officer of each Loan Party party thereto and by each Lender party
thereto, and in form and substance reasonably satisfactory to the
Administrative Agent and the Lenders.

 

(b)           Organization
Documents, Etc.  The Administrative
Agent’s receipt of a duly executed certificate of a Responsible Officer of each
Loan Party, in form and substance satisfactory to the Administrative Agent and
the Lenders, attaching each of the following documents and certifying that each
is true, correct and complete and in full force and effect as of the Closing
Date:

 

(i)            Charter Documents. 
Copies of its articles or certificate of organization or formation,
certified to be true, correct and complete as of a recent date by the
appropriate Governmental Authority of the jurisdiction of its organization or
formation;

 

(ii)           Bylaws. 
Copies of its bylaws, operating agreement or partnership agreement;

 

(iii)          Resolutions. 
Copies of its resolutions approving and adopting the Loan Documents to
which it is party, the transactions contemplated therein, and authorizing the
execution and delivery thereof;

 

(iv)          Incumbency. 
Incumbency certificates identifying the Responsible Officers of such
Loan Party that are authorized to execute Loan Documents and to act on such
Loan Party’s behalf in connection with the Loan Documents; and

 

(v)           Good Standing Certificates.  Certificates of good standing or the
equivalent from its jurisdiction of organization or formation and from each
other jurisdiction where failure to be in good standing would reasonably be
expected to have a Material Adverse Effect, in each case certified as of a
recent date by the appropriate Governmental Authority.

 

(c)           Opinions
of Counsel.  The Administrative Agent’s
receipt of duly executed opinions of counsel to the Loan Parties, dated as of
the Closing Date, in form and substance satisfactory to the Administrative
Agent and the Lenders.

 

(d)           Financial Statements.  The Administrative Agent’s receipt of each of
the following:

 

(i)            The audited consolidated balance sheets of (A) the
Consolidated Group and (B) Automatic Laundry and its Subsidiaries, in each
case for the fiscal years ended December 31,
2005 and December 31, 2006, and the related consolidated statements
of income or operations, shareholders’ equity and cash flows for such fiscal
years (including the notes thereto), prepared in accordance with GAAP; and

 

54

 

(ii)           (A) The audited consolidated and consolidating
financial statements of the Consolidated Group and (B) the unaudited
consolidated financial statements of Automatic Laundry and its Subsidiaries, in
each case for the fiscal quarters ended December 31,
2007, and the related consolidated and consolidating statements of
income or operations, shareholders’ equity and cash flows for such fiscal
quarters, prepared in accordance with GAAP.

 

(e)           Officer
Certificates.  The Administrative
Agent’s receipt of a certificate or certificates of a Responsible Officer of
the Parent Borrower, dated as of the Closing Date, in form and substance
satisfactory to the Administrative Agent, certifying each of the following:

 

(i)            Consents. 
No material consents, material licenses or material approvals are
required in connection with the execution, delivery and performance by any Loan
Party of the Loan Documents to which it is a party, other than as are in full
force and effect and, to the extent requested by the Administrative Agent, are
attached thereto;

 

(ii)           Material Adverse Effect.  There has been no event or circumstance since
the date of the audited financial statements for the fiscal year ending December 31, 2007 that has had or
would reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect;

 

(iii)          Financial Statements.  The annual and quarterly financial statements
of the Consolidated Group delivered to the Administrative Agent pursuant to Section 4.01(d) hereof
(A) were prepared in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein, (B) fairly
present the financial condition of the Consolidated Group as of the date
thereof and the results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein (and with respect to such
quarterly statements, subject to the absence of footnotes and to normal
year-end audit adjustments) and (C) show all material indebtedness and
other liabilities, direct or contingent, of the Consolidated Group as of the
date thereof, including liabilities for taxes, material commitments and
Indebtedness; and

 

(iv)          Financial Covenant Calculations.  The calculations demonstrating that as of the
Closing Date (A) the Consolidated Total Leverage Ratio is not greater than
4.15:1.0 and (B) the Consolidated Senior Secured Leverage Ratio is not
greater than 2.15:1.0, in each case after giving effect on a Pro Forma Basis to
the Automatic Laundry Acquisition and the initial Credit Extensions hereunder.

 

(f)            Personal
Property Collateral.  The Collateral
Agent’s receipt of the following, each in form and substance satisfactory to
the Collateral Agent:

 

(i)            Lien Priority. 
Evidence that (A) the Collateral Agent, on behalf of the Lenders,
holds a perfected, first priority Lien on all Collateral and (B) none of
the Collateral is subject to any Liens (other than Permitted Liens);

 

(ii)           UCC Financing Statements.  Such UCC financing statements as are
necessary or appropriate, in the Collateral Agent’s discretion, to perfect the
security interests in the Collateral;

 

(iii)          Intellectual Property.  Such patent, trademark and copyright notices
and recordations as are necessary or appropriate, in the Collateral Agent’s
discretion, to perfect the security interests in the Loan Parties’ IP Rights;

 

55

 

(iv)          Equity Interests. 
Original certificates evidencing the Equity Interests pledged pursuant
to the Security Documents (to the extent any such Equity Interests are
certificated), together with undated stock transfer powers executed in blank;

 

(v)           Promissory Notes. 
Original promissory notes evidencing intercompany loans or advances
owing to any Loan Party by any Subsidiary of the Parent Borrower, together with
undated allonges executed in blank; and

 

(g)           Acquisition
of Automatic Laundry.  The
Administrative Agent’s receipt of (i) an officer’s certificate in form an
substance reasonably satisfactory to the Administrative Agent with a certified
copy of (A) the Automatic Laundry Acquisition Agreement and (B) the
Seller Subordinated Note, in each case with all amendments, modifications,
supplements and attachments, (ii) confirmation that there have been no material
modifications to the Automatic Laundry Acquisition Agreement, except as
approved by the Arranger, (iii) confirmation that the Automatic Laundry
Acquisition has been, or contemporaneously with the closing and initial funding
under this Credit Agreement, will be consummated in accordance with the terms
of the Automatic Laundry Acquisition Agreement and in compliance in all
material respects with applicable Laws and regulatory approvals, and (iv) confirmation
that the purchase price is not greater than $116,500,000 (without giving effect to any purchase price
adjustments).

 

(h)           Evidence
of Insurance.  The Collateral Agent’s
receipt of copies of insurance certificates 
with respect to all insurance required to be maintained pursuant to the
Loan Documents identifying the Collateral Agent as Lender’s loss payee, with
respect to flood hazard and casualty insurance, and as additional insured, with
respect to liability insurance.

 

(i)            Original
Credit Agreement.  The Administrative
Agent’s receipt of evidence, in form and substance reasonably satisfactory to
the Administrative Agent, that the Original Credit Agreement has been (or
concurrently with the Closing Date is being) terminated and all Liens securing
obligations under the Original Credit Agreement have been (or concurrently with
the Closing Date are being) released.

 

(j)            Senior
Unsecured Credit Agreement.  The
Administrative Agent’s receipt of a copy of
the Senior Unsecured Credit Agreement as
originally executed and delivered, together with all exhibits and schedules
thereto, in form and substance satisfactory to the Administrative Agent
and the Lenders and certified by a
Responsible Officer of the Parent Borrower as true and complete.

 

(k)           Fees
and Expenses.  All fees and expenses
(including, unless waived by the Administrative Agent, all reasonable fees,
expenses and disbursements of any law firm or other counsel to the extent
payable pursuant to the Loan Documents) required to be paid pursuant to the Fee
Letter and this Credit Agreement on or before the Closing Date shall have been
paid.

 

Without
limiting the generality of the provisions of the last paragraph of Section 9.04,
for purposes of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Credit Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

4.02        Conditions to all Credit Extensions.

 

The
obligation of each Lender to honor any Request for Credit Extension is subject
to the following conditions precedent:

 

56

 

(a)           The representations and warranties of the Borrowers
and each other Loan Party contained in Article VI, any other Loan
Document or any Loan Notice furnished at any time under or in connection
herewith or therewith, shall be true and correct (i) to the extent such
representation or warranty is modified or qualified based on the terms “materially”
or “material” or by reference to the term “Material Adverse Effect”, in any
respect and (ii) to the extent such representation or warranty is not so
modified or qualified, in any material respect on and as of the date of such
Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct (A) to the extent such representation or warranty is modified
or qualified based on the terms “materially” or “material” or by reference to
the term “Material Adverse Effect”, in any respect and (B) to the extent
such representation or warranty is not so modified or qualified, in any
material respect as of such earlier date.

 

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

 

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

 

Each
Request for Credit Extension submitted by any Borrower shall be deemed to be a
representation and warranty by all Borrowers that the conditions specified in Sections 4.02(a) and
(b) have been satisfied on and as of the date of the applicable
Credit Extension.

 

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

The Borrowers represent and warrant to the Lenders
that:

 

5.01        Organization; Powers.  Each of the Parent Borrower and the
Subsidiaries are duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, have all requisite corporate
power and authority to carry on its business as now conducted and as proposed
to be conducted and to execute, deliver and perform its obligations under each
Loan Document to which it is a party and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and are in good
standing in, every jurisdiction where such qualification is required for the
conduct of its business.

 

5.02        Authorization; Enforceability.  The Transactions to be entered into by each
Loan Party have been duly authorized by all necessary corporate or other action
and, if required, stockholder action. 
This Credit Agreement has been duly executed and delivered by each of
the Borrowers and constitutes, and each other Loan Document to which any Loan
Party is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of the Borrowers or such Loan
Party (as the case may be), enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

5.03        Governmental Approvals; No Conflicts.  The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by,
any Governmental Authority, except such as have been obtained or made and are
in full force and effect and except filings necessary to perfect Liens created
under the Loan Documents, (b) will not violate any requirement of Law
applicable to the Parent Borrower or any Subsidiary, (c) will not violate
or result in a default under any material 

 

57

 

indenture (including, without limitation, the
Senior Note Documents), material agreement or other material instrument binding
upon the Parent Borrower or any Subsidiary or their assets, or give rise to a
right thereunder to require any payment to be made by the Parent Borrower or
any Subsidiary or give rise to a right of, or result in, termination,
cancellation or acceleration of any obligation thereunder, and (d) will
not result in the creation or imposition of any Lien on any asset of the Parent
Borrower or any Subsidiary, except Liens created under the Loan Documents.

 

5.04        Financial Condition; No Material
Adverse Change.  (a) 
The Parent Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and consolidated statements of income, stockholders equity and
cash flows as of and for the fiscal years ended December 31, 2005, December 31,
2006 and December 31, 2007, reported on by PricewaterhouseCoopers LLP,
independent public accountants.  Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Consolidated Group as
of such dates and for such periods in accordance with GAAP consistently
applied.

 

(b)           Except as disclosed in the financial statements referred
to above or the notes thereto, none of the Parent Borrower or the Subsidiaries
has, as of the Closing Date, any material direct or contingent liabilities,
unusual long-term commitments or unrealized losses.

 

(c)           No event, change or condition has occurred that has had,
or could reasonably be expected to have, a materially adverse effect on the
business, operations, properties, assets, condition (financial or otherwise),
liabilities or prospects of the Parent Borrower and the Subsidiaries, taken as
a whole, whether or not covered by insurance, since December 31, 2007.

 

5.05        Properties.  (a)  Each of the Parent Borrower and the
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including the Mortgaged
Properties), except for (i) minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or as proposed
to be conducted or to utilize such properties for their intended purposes and (ii) leaseholds
subject to all superior title matters and all matters which encumber the
landlord’s or ground lessor’s interest.

 

(b)           Each of the Parent Borrower and the Subsidiaries owns, or
is licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Parent Borrower and the Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

(c)           Schedule 5.05 sets forth the address of each
real property that is owned or leased by the Parent Borrower or any Subsidiary
(other than addresses of the locations to which the Laundry Facility Agreements
relate and identifying each Mortgaged Property) as of the Closing Date.

 

5.06        Litigation and Environmental Matters.  (a)  There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Parent Borrower, threatened against the
Parent Borrower or any of its Subsidiaries (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect or (ii) that involve any of the Loan
Documents or the Transactions.

 

(b)           Except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, neither the Parent 

 

58

 

Borrower
nor any Subsidiary (i) has failed to comply with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.

 

5.07        Compliance with Laws and Agreements.

 

(a)           Each
of the Parent Borrower and the Subsidiaries is in compliance with all
requirements of Law applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

(b)           The
loans and other obligations under this Credit Agreement, and the Liens securing
such loans and other obligations, are permitted under the Senior Note Indenture
(and the other Senior Note Documents to the extent such documents are in
effect).

 

5.08        Use of Proceeds.  The proceeds of the Term Loan A and Revolving
Loans made on the Closing Date shall be used to finance the Automatic Laundry
Acquisition and to repay all Loans and other amounts outstanding under the
Original Credit Agreement, if any, on the Closing Date in accordance with Section 2.11
of the Original Credit Agreement. 
Thereafter, the proceeds of the Revolving Loans and Swingline Loans will
be used only for working capital and lawful corporate purposes (including
Permitted Acquisitions and capital expenditures).  No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the FRB, including Regulations T, U and
X.  Letters of Credit will be used only
for lawful corporate purposes.

 

5.09        Taxes.  Each of the Parent Borrower and the
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except (a) any Taxes that are being
contested in good faith by appropriate proceedings and for which the Parent
Borrower or such Subsidiary, as applicable, has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.

 

5.10        ERISA.  No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect.  The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such amounts, exceed by
more than $250,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $250,000 the
fair market value of the assets of all such underfunded Plans.

 

5.11        Disclosure.  The Borrowers have disclosed to the
Administrative Agent all agreements, instruments and corporate or other
restrictions to which the Parent Borrower or any Subsidiary is subject, and all
other matters known to any of them, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.  No reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party
by its agents to the Administrative Agent in connection with the negotiation of
this Credit Agreement or any other Loan Document or delivered 

 

59

 

hereunder
or thereunder (as modified or supplemented by other information so furnished)
contains, when taken as a whole, any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided
that, with respect to projected financial information, the Parent Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time delivered and, if such
projected financial information was delivered prior to the Closing Date, as of the
Closing Date.

 

5.12        Subsidiaries.  Schedule 5.12 sets forth the name
of, and the ownership interest of the Parent Borrower in, each Subsidiary of
the Parent Borrower and identifies each Subsidiary that is a Loan Party, in
each case as of the Closing Date.

 

5.13        Insurance.  Schedule 5.13 sets forth a
description of all insurance maintained by or on behalf of the Parent Borrower
and the Subsidiaries as of the Closing Date. 
As of the Closing Date, all premiums in respect of such insurance have
been paid.  The Borrowers believe that
the insurance maintained by or on behalf of the Parent Borrower and the
Subsidiaries is adequate.

 

5.14        Labor Matters.  As of the Closing Date, there are no strikes,
lockouts or slowdowns against the Parent Borrower or any Subsidiary pending or,
to the knowledge of the Parent Borrower, threatened.  The hours worked by and payments made to
employees of the Parent Borrower and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters.  All payments of a material amount due from
the Parent Borrower or any Subsidiary, or for which any reasonably foreseeable
claim may be made against the Parent Borrower or any Subsidiary, on account of
wages and employee health and welfare insurance and other benefits (other than
routine claims for benefits), have been paid or accrued as a liability on the
books of the Parent Borrower or such Subsidiary.  The consummation of the Transactions will not
give rise to any right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which the Parent
Borrower or any Subsidiary is bound.

 

5.15        Solvency.  Immediately after the
consummation of the Transactions to occur on the Closing Date, (a) the
fair value of the assets of the Loan Parties, taken as a whole, at a fair
valuation, will exceed their debts and liabilities, subordinated, contingent or
otherwise, (b) the present fair saleable value of the property of the Loan
Parties, taken as a whole, will be greater than the amount that will be
required to pay the probable liability of their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured, (c) the Loan Parties will be able to pay
their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured and (d) the Loan Parties
will not have unreasonably small capital with which to conduct the business in
which they are engaged as such business is now conducted and is proposed to be
conducted following the Closing Date.

 

5.16        Margin Regulations; Investment
Company Act.

 

(a)           The
Loan Parties are not engaged and will not engage, principally or as one of
their important activities, in the business of purchasing or carrying “margin
stock” (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock.

 

(b)           None
of the Loan Parties, any Person “controlling” (as such term is defined under
the Investment Company Act of 1940) a Loan Party, or any Subsidiary is or is
required to be registered as an “investment company” under the Investment
Company Act of 1940.

 

60

 

5.17        Taxpayer Identification Number; Other
Identifying Information.

 

The
true and correct U.S. taxpayer identification number, if any, of each Borrower
is set forth on Schedule 5.17.

 

5.18        Personal Property Collateral.

 

The
Collateral Agreement is effective to create in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties (as defined in the Collateral
Agreement), a legal, valid and enforceable security interest in the Collateral
identified therein, except to the extent the enforceability thereof may be
limited by applicable Debtor Relief Laws affecting creditors’ rights generally
and by equitable principles of law (regardless of whether enforcement is sought
in equity or at law) and, when UCC financing statements (or other appropriate
notices) in appropriate form are duly filed at the locations identified in the
Collateral Agreement or to the Collateral Agent in writing, the Collateral
Agreement shall create a fully perfected first priority Lien (subject only to
Permitted Liens) on, and security interest in, all right, title and interest of
the grantors thereunder in such Collateral, in each case prior and superior in
right to any other Lien (other than Permitted Liens).

 

5.19        Pledged Collateral.

 

The
Collateral Agreement is effective to create in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties (as defined in the Collateral
Agreement), a legal, valid and enforceable security interest in the Pledged
Collateral as defined and identified therein, except to the extent the
enforceability thereof may be limited by applicable Debtor Relief Laws
affecting creditors’ rights generally and by equitable principles of law
(regardless of whether enforcement is sought in equity or at law), and the
Collateral Agreement shall create a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the pledgors thereunder
in such collateral, in each case prior and superior in right to any other Lien (a) with
respect to any such collateral that is a “security” (as such term is defined in
the UCC) and is evidenced by a certificate, when such collateral is delivered
to the Collateral Agent with duly executed stock powers with respect thereto, (b) with
respect to any such collateral that is a “security” (as such term is defined in
the UCC) but is not evidenced by a certificate, when UCC financing statements
in appropriate form are filed in the appropriate filing offices in the
jurisdiction of organization of the pledgor or when “control” (as such term is
defined in the UCC) is established by the Collateral Agent over such interests
in accordance with the provision of Section 8-106 of the UCC, or any
successor provision, and (c) with respect to any such collateral that is
not a “security” (as such term is defined in the UCC), when UCC financing
statements in appropriate form are filed in the appropriate filing offices in
the jurisdiction of organization of the pledgor.

 

5.20        Mortgages.

 

Each
of the Mortgages, if any, is effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties (as defined in the
Collateral Agreement), a legal, valid and enforceable security interest in the
Mortgaged Properties identified therein in conformity with applicable Law,
except to the extent the enforceability thereof may be limited by applicable
Debtor Relief Laws affecting creditors’ rights generally and by equitable
principles of law (regardless of whether enforcement is sought in equity or at
law) and, when the Mortgages and UCC financing statements in appropriate form
are duly recorded at the locations identified in the Mortgages, and recording
or similar taxes, if any, are paid, the Mortgages shall constitute a fully
perfected first priority Lien (subject only to Permitted Liens) on, and
security interest in, all right, title and interest of the grantors thereunder
in such Mortgaged Properties, in each case prior and superior in right to any
other Lien (other than Permitted Liens).

 

61

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS

 

Until
the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document shall have been paid in full and all Letters of Credit shall
have expired or been terminated and all L/C Borrowings shall have been
reimbursed, the Borrowers covenant and agree with the Lenders that:

 

6.01        Financial Statements and Other
Information.  The
Borrowers will furnish to the Administrative Agent on behalf of each Lender:

 

(a)           within 90 days after the end of each fiscal year of
the Parent Borrower, its audited consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or
other independent public accountants of recognized national standing (without a
“going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Consolidated Group on
a consolidated basis in accordance with GAAP consistently applied;

 

(b)           within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Parent Borrower, its
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, all certified by
a Financial Officer as presenting fairly in all material respects the financial
condition and results of operations of the Consolidated Group on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;

 

(c)           concurrently with any delivery of financial statements
under clause (a) or (b) above, a Compliance Certificate of a
Financial Officer (i) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Section 7.12
and (iii) stating whether any change in GAAP or in the application thereof
has occurred since the date of the Parent Borrower’s audited financial
statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;

 

(d)           concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that reported
on such financial statements stating whether they obtained knowledge during the
course of their examination of such financial statements of any Default under Section 7.12
and, if such knowledge has been obtained, describing such Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);

 

(e)           within 45 days after the commencement of each fiscal
year of the Parent Borrower, a detailed consolidated budget for such fiscal
year (including a projected consolidated balance sheet and related statements
of projected operations and cash flow as of the end of and 

 

62

 

for
such fiscal year and setting forth the assumptions used for purposes of
preparing such budget) and, promptly when available, any significant revisions
of such budget;

 

(f)            promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed
by the Parent Borrower or any Subsidiary with the SEC or with any national
securities exchange, as the case may be; and

 

(g)           promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Parent Borrower or any Subsidiary, or compliance with the terms of any
Loan Document, as the Administrative Agent or any Lender may reasonably
request.

 

6.02        Notices of Material Events.  The Borrowers will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

 

(a)           the occurrence of
any Default;

 

(b)           the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or, to
the knowledge of an executive officer or the Parent Borrower or any Subsidiary
or a Financial Officer, affecting the Borrowers or any Affiliate thereof that,
if adversely determined, could reasonably be expected to result in a Material
Adverse Effect;

 

(c)           the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Parent Borrower and its Subsidiaries in an aggregate
amount exceeding $300,000; and

 

(d)           any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.

 

Each
notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Parent Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.

 

The
Loan Parties hereby acknowledge that the Administrative Agent will make
available to the Lenders and the L/C Issuer materials and/or information
provided by or on behalf of the Loan Parties hereunder (collectively, the “Loan
Party Materials”) by posting the Loan Party Materials on IntraLinks or
another similar electronic system (the “Platform”) and that certain of
the Lenders (each, a “Public Lender”) may have personnel who do not wish
to receive material non-public information with respect to any of the Loan
Parties or their respective Affiliates, or the respective securities of any of
the foregoing, and who may be engaged in investment and other market-related
activities with respect to such Persons’ securities.  The Loan Parties hereby agree that (1) all
Loan Party Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” (which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof); (2) by
marking the Loan Party Materials “PUBLIC,” the Loan Parties shall be deemed to
have authorized the Administrative Agent and the Lenders to treat such Loan
Party Materials as either publicly available information or not material
information (although it may be sensitive and proprietary) with respect to the
Loan Parties or their securities for purposes of United States federal and
state securities laws; (3) all Loan Party Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated as “Public
Side Information”; and (4) the Administrative Agent shall be entitled to
treat any Loan Party 

 

63

 

Materials
that are not designated “PUBLIC” as being suitable only for posting on a
portion of the Platform that is not marked as “Public Side Information”.

 

6.03        Information Regarding Collateral.  (a)  The Borrowers will furnish to the
Collateral Agent prompt written notice of any change (i) in any Loan Party’s
corporate name, (ii) in the jurisdiction of incorporation or organization
of any Loan Party or (iii) in any Loan Party’s organizational
identification number.  The Borrowers
agree not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the UCC or otherwise that are required
in order for the Collateral Agent to continue at all times following such
change to have a valid, legal and perfected security interest in all the
Collateral.  The Borrowers also agree
promptly to notify the Collateral Agent if any substantial portion of the
Collateral is damaged or destroyed.

 

(b)           Each year, at the time of delivery of financial statements
pursuant to Section 6.01, the Borrowers shall deliver to the
Collateral Agent a certificate of a Financial Officer or chief legal officer of
the Parent Borrower setting forth the information required pursuant to the
Collateral Questionnaire or confirming that there has been no change in such
information since the date of the Collateral Questionnaire delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section.

 

6.04        Existence; Conduct of Business.  The Parent Borrower will, and will cause each
Subsidiary to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade
names material to the conduct of its business; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.03 or any sale, transfer,
lease or other disposition permitted under Section 7.05.

 

6.05        Payment of Obligations.  The Parent Borrower will, and will cause each
Subsidiary to, pay its Material Indebtedness and other material obligations,
including tax liabilities, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) the Parent
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, (c) such contest effectively
suspends collection of the contested obligation and the enforcement of any Lien
securing such obligation and (d) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse
Effect.

 

6.06        Maintenance of Properties.  The Parent Borrower will, and will cause each
Subsidiary to, keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted.

 

6.07        Insurance.  The Parent Borrower will, and will cause each
Subsidiary to, maintain, with financially sound and reputable insurance
companies (a) insurance in such amounts (with no greater risk retention)
and against such risks as are customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations and (b) all insurance required to be maintained
pursuant to the Security Documents.  The
Borrowers will furnish to the Lenders, upon request of the Administrative
Agent, information in reasonable detail as to the insurance so maintained.

 

6.08        Casualty and Condemnation.  The Borrowers (a) will furnish to the
Administrative Agent prompt written notice of any casualty or other insured
damage to any material portion of the Collateral or the commencement of any
action or proceeding for the taking of any material portion of or any material
interest in the Collateral under power of eminent domain or by condemnation or
similar 

 

64

 

proceeding
and (b) will ensure that the Net Proceeds of any such event (whether in the
form of insurance proceeds, condemnation awards or otherwise) are collected and
applied in accordance with the applicable provisions of the Security Documents.

 

6.09        Books and Records; Inspection and
Audit Rights.  The
Parent Borrower will, and will cause each Subsidiary to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities.  The Parent Borrower will, and will cause each
Subsidiary to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice and during normal business
hours, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as
often as reasonably requested; provided, however, that unless an Event of
Default has occurred and is continuing, the Borrowers shall not be responsible
for the cost of more than one such visit by the Administrative Agent per
calendar year.

 

6.10        Compliance with Laws.  The Parent Borrower will, and will cause each
of its Subsidiaries to, comply with all requirements of Law (including
Environmental Law) applicable to it or its property, except where the failure
to do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

 

6.11        Use of Proceeds and Letters of Credit.  The proceeds of the Loans made on the Closing
Date shall be used to finance the Automatic Laundry Acquisition and to repay
all Loans and other amounts outstanding under the Original Credit Agreement, if
any, on the Closing Date.  Thereafter,
the proceeds of the Revolving Loans and Swingline Loans will be used only for
working capital and lawful corporate purposes (including Permitted Acquisitions
and capital expenditures).  No part of
the proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X. 
Letters of Credit will be used only for lawful corporate purposes.

 

6.12        Collateral
and Guarantee Requirement.

 

(a)           Additional
Domestic Subsidiaries.  The Parent
Borrower will give prompt notice to the Administrative Agent of the formation
or acquisition of any Subsidiary after the Closing Date, and cause each
Domestic Subsidiary to become a Guarantor hereunder, and otherwise meet the
Collateral and Guarantee Requirement hereunder, by execution and delivery of a
supplement or joinder agreement to the Collateral Agreement within thirty days
(30) of formation or acquisition, together with certified copies of
resolutions, organizational documents, incumbency and officer’s certificates
and legal opinions, in form and substance reasonably satisfactory to the
Administrative Agent in each case within thirty (30) days of formation or
acquisition (or such longer period agreed to by the Administrative Agent in its
reasonable discretion).

 

(b)           Foreign
Subsidiaries.  The Parent Borrower
will not form or acquire Foreign Subsidiaries without the prior written consent
of the Administrative Agent and the Required Lenders.

 

(c)           Further
Assurances (General).  The Parent
Borrower will, and will cause each Loan Party to, execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents), that may be
required under any applicable law, or that the Collateral Agent or the Required
Lenders may reasonably request, to cause the Collateral and Guarantee
Requirement to be and remain satisfied, all at the expense of the Loan Parties.  The Borrowers also agree to provide the
Collateral Agent, from time to time upon request, evidence reasonably
satisfactory to the 

 

65

 

Collateral Agent as to the perfection and priority of the Liens created
or intended to be created by the Security Documents.

 

(d)           Further
Assurances (Specific).  If any
material assets (including any real property or improvements thereto or any
interest therein) are acquired by any Loan Party after the Closing Date (other
than assets constituting Collateral under the Collateral Agreement that become
subject to the Lien of the Collateral Agreement upon acquisition thereof), the
Borrowers will notify the Collateral Agent and the Lenders thereof, and, if
requested by the Collateral Agent or the Required Lenders, the Borrowers will
cause the Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Collateral Agent to grant and perfect such Liens,
including actions described in paragraph (c) of this Section above,
all at the expense of the Loan Parties.

 

(e)           Post-Closing  Perfection of
Certain Collateral.  Within (i) ninety
(90) days after the Closing Date (or such extended period of time as reasonably
agreed to by the Collateral Agent), to the extent not delivered on or prior to
the Closing Date, the Borrowers shall deliver to the Collateral Agent (a) the
landlord consents, estoppel letters or waivers in respect of Collateral held on
leased premises as required under clause (f) of the definition of “Collateral
and Guarantee Requirement” and (b) Deposit Account Control Agreements (as
defined in the Collateral Agreement) required by the Collateral Agent to be
delivered pursuant to Section 4.04(b) of the Collateral Agreement, in
each case as may be obtained by the Loan Parties using commercially reasonable
efforts and (ii) two (2) days after
the Closing Date (or such extended period of time as reasonably agreed to by
the Collateral Agent), to the extent not delivered on or prior to the Closing
Date, the Borrowers shall deliver to the Collateral Agent all outstanding
Equity Interests, together with undated stock powers or other instruments of
transfer with respect thereto endorsed in blank required under clause (b) of
the definition of “Collateral and Guarantee Requirement”.

 

6.13        Interest Rate Protection.

 

Enter
into, within sixty (60) days of the Closing Date, and maintain one or more Swap
Agreements on such terms as shall be reasonably satisfactory to the
Administrative Agent, the effect of which shall be to fix or limit the interest
cost for a period of three (3) years from the Closing Date with a notional
amount equal to $40,000,000.

 

ARTICLE VII

 

NEGATIVE COVENANTS

 

Until
the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document have been paid in full and all Letters of Credit have expired
or been terminated and all L/C Borrowings shall have been reimbursed, the
Borrowers covenant and agree with the Lenders that:

 

7.01        Indebtedness;
Certain Equity Securities.  (a)  The Parent Borrower will not, and
will not permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:

 

(i)            Indebtedness created or existing
under this Credit Agreement and the other Loan Documents;

 

(ii)           Indebtedness created or existing
under the Senior Unsecured Loan Documents in an aggregate principal amount not to exceed $15,000,000;

 

66

 

(iii)          Indebtedness existing on the date
hereof and set forth in Schedule 7.01 and extensions, renewals and
replacements of any such Indebtedness; provided that such extending,
renewal or replacement Indebtedness (A) shall not be Indebtedness of an
obligor that was not an obligor with respect to the Indebtedness being
extended, renewed or replaced, (B) shall not be in a principal amount that
exceeds the principal amount of Indebtedness being extended, renewed or
replaced (plus accrued interest and premium thereon and fees and
expenses related to such extensions, renewals and replacements thereof), (C) shall
not have an earlier maturity date or decreased weighted average life than the
Indebtedness being extended, renewed or replaced and (D) shall be
subordinated to the Obligations on the same terms as the Indebtedness being
extended, renewed or replaced;

 

(iv)          intercompany Indebtedness between and
among members of the Consolidated Group to the extent permitted by Section 7.04;
provided that Indebtedness of any Borrower to any Subsidiary (other than
another Borrower) and Indebtedness of any Loan Party to any Subsidiary that is
not a Loan Party shall be subordinated to the Obligations on terms reasonably
satisfactory to the Administrative Agent;

 

(v)           Guarantees by members of the
Consolidated Group in respect of Indebtedness otherwise permitted hereunder; provided
that Guarantees by the Parent Borrower or any Loan Party of Indebtedness of any
Subsidiary that is not a Loan Party shall be subject to Section 7.04,
(C) Guarantees permitted under this clause (v) shall be
subordinated to the Obligations of the applicable Subsidiary on the same terms
as the Indebtedness so Guaranteed is subordinated to the Obligations and (D) neither
the Senior Notes nor any Senior Notes Refinancing Indebtedness shall be
Guaranteed by any Subsidiary, unless such Subsidiary is a Loan Party that has
Guaranteed the Obligations pursuant to the Collateral Agreement;

 

(vi)          Indebtedness of the Parent Borrower or
any Subsidiary incurred to finance the acquisition, construction or improvement
of any fixed or capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such assets or
secured by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof (plus accrued interest
and premium thereon); provided that (A) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement and (B) the aggregate
principal amount of Indebtedness permitted by this clause (vi) shall
not exceed $10,000,000 at any time outstanding;

 

(vii)         (A) Indebtedness of any Person
that becomes a Subsidiary after the date hereof; provided that (1) such
Indebtedness exists at the time such Person becomes a Subsidiary and is not
created in contemplation of or in connection with such Person becoming a
Subsidiary and (2) the aggregate principal amount of Indebtedness
permitted by this clause (vii) shall not exceed $3,000,000 at any
time outstanding (excluding Capital Lease Obligations under leases for
vehicles) and (B) any refinancings, renewals and replacements of any such
Indebtedness pursuant to the preceding clause (A) that do not
increase the outstanding principal amount (plus accrued interest and
premium and fees and expenses related to such refinancings, renewals and
replacements thereof) thereof;

 

67

 

(viii)        other unsecured Indebtedness in an
aggregate principal amount not exceeding $1,000,000 at any time outstanding; provided
that the aggregate principal amount of Indebtedness of the Subsidiaries that
are not Loan Parties permitted by this clause (viii) shall not exceed
$500,000 at any time outstanding;

 

(ix)           Indebtedness owed to any Person
(including obligations in respect of letters of credit for the benefit of such
Person) providing workers’ compensation, health, disability or other employee benefits
or property, casualty or liability insurance, pursuant to reimbursement or
indemnification obligations to such Person, in each case incurred in the
ordinary course of business;

 

(x)            Indebtedness of the Parent Borrower
or any Subsidiary in respect of performance bonds, bid bonds, appeal bonds,
surety bonds, performance and completion guarantees and similar obligations, in
each case provided in the ordinary course of business;

 

(xi)           Indebtedness in respect of Swap
Agreements permitted by Section 7.07;

 

(xii)          (A) the Senior Notes in an
aggregate principal amount not to exceed $225,000,000 and (B) Senior Notes
Refinancing Indebtedness; and

 

(xiii)         (A) the Seller Subordinated Note
in an initial aggregate principal amount not to exceed $10,000,000 and (B) Seller
Subordinated Note Refinancing Indebtedness; and

 

(b)           The Parent Borrower will not, and will not permit any
Subsidiary to, issue preferred Equity Interests, except for (i) any
preferred Equity Interest issued pursuant to the Shareholders Rights Plan and (ii) any
preferred Equity Interest, the proceeds of which are used to prepay any amounts
outstanding under this Credit Agreement, the other Loan Documents and the
Senior Unsecured Loan Documents.

 

7.02        Liens.  The Parent Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:

 

(a)           Liens created or existing under the Loan Documents;

 

(b)           Permitted Encumbrances;

 

(c)           any Lien on any property or asset of the Parent Borrower
or any Subsidiary existing on the date hereof and set forth in Schedule 7.02;
provided that (i) such Lien shall not apply to any other property
or asset of the Parent Borrower or any Subsidiary and (ii) such Lien shall
secure only those obligations that it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the outstanding
principal amount thereof (plus accrued interest and premium thereon and
fees and expenses related to such extension, renewal or replacement thereof);

 

(d)           any Lien existing on any property or asset prior to the
acquisition thereof by the Parent Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date hereof
prior to the time such Person becomes a Subsidiary; 

 

68

 

provided that (i) such
Lien is not created in contemplation of or in connection with such acquisition
or such Person becoming a Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Parent Borrower or any
Subsidiary and (iii) such Lien shall secure only those obligations that it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof (plus
accrued interest and premium thereon and fees and expenses related to such
extension, renewal or replacement thereof);

 

(e)           Liens on fixed or capital assets acquired, constructed or
improved by the Parent Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by clause (vi) or (vii) of
Section 7.01(a), (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90 days after
such acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed the lesser of the cost of
acquiring, constructing or improving such fixed or capital asset or its fair
market value at the time such security interest attaches, and in any event,
such Indebtedness does not exceed the amount of Indebtedness permitted under Section 7.01(a)(vi) or
(vii), and (iv) such security interests shall not apply to any
other property or assets of the Parent Borrower or any Subsidiary;

 

(f)            Liens of a collecting bank arising in the ordinary course
of business under Section 4-208 of the UCC in effect in the relevant
jurisdiction covering only the items being collected upon; and

 

(g)           Liens granted by a Subsidiary that is not a Loan Party in
favor of the Parent Borrower or another Loan Party in respect of Indebtedness
owed by such Subsidiary.

 

7.03        Fundamental Changes.

 

(a)           The Parent Borrower will not, and will not permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing (i) any Subsidiary may
merge into a Borrower in a transaction in which a Borrower is the surviving
corporation, (ii) any Subsidiary (other than a Borrower) may merge into
any Subsidiary (other than a Borrower) in a transaction in which the surviving
entity is a Subsidiary and (if any party to such merger is a Loan Party) is a
Loan Party and (iii) any Subsidiary (other than a Loan Party) may
liquidate or dissolve if the Parent Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Parent Borrower and
is not materially disadvantageous to the Lenders; provided that any such merger
involving a Person that is not a Wholly Owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 7.04.

 

(b)           The Parent Borrower will not, and will not permit any of
the Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Parent Borrower and the Subsidiaries on
the Closing Date and businesses reasonably related thereto.

 

7.04        Investments, Loans, Advances,
Guarantees and Acquisitions.  The Parent Borrower will not, and will not
permit any of the Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a Wholly Owned Subsidiary
prior to such merger) any Equity Interests in or evidences of indebtedness or
other securities (including any option, warrant or other right 

 

69

 

to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person,
or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
except:

 

(a)           Permitted Investments;

 

(b)           Permitted Acquisitions; provided that (i) all
of the obligations under the Senior Unsecured Credit Agreement have been paid
in full and the commitments thereunder have been terminated and (ii) the
aggregate cash consideration for such Permitted Acquisitions, which shall be
deemed to include (A) any amounts actually paid pursuant to any
post-closing payment adjustments, earn-outs or non-compete payments and (B) the
principal amount of Indebtedness that is assumed pursuant to Section 7.01(a)(vi) or
otherwise incurred in connection with such Permitted Acquisition, shall not
exceed $60,000,000 for any period of four consecutive fiscal quarters and
$120,000,000 in the aggregate since the Closing Date plus, in each case
(without duplication) an amount equal to any returns of capital or sale
proceeds actually received in cash in respect of any such Permitted Acquisition
(which amount shall not exceed the purchase price paid (including the principal
amount of Indebtedness assumed pursuant to Section 7.01(a)(vi) in
connection therewith) in respect of such Permitted Acquisition);

 

(c)           investments existing on the date hereof and set forth on Schedule 7.04;

 

(d)           investments by the Parent Borrower and its Subsidiaries in
Equity Interests in their respective Subsidiaries; provided that (i) any
such Equity Interests held by a Loan Party shall be pledged pursuant to the
Collateral Agreement (subject to the limitations applicable to common stock of
a Foreign Subsidiary referred to in the definition of “Collateral and Guarantee
Requirement”) and (ii) the aggregate amount of investments by Loan Parties
in Subsidiaries that are not Loan Parties (together with outstanding
intercompany loans permitted under clause (ii) to the proviso to
subsection (e) hereof and outstanding Guarantees permitted under the
proviso to subsection (g) hereof) shall not exceed $500,000 at any time
outstanding (in each case determined without regard to any write-down or
write-offs);

 

(e)           loans or advances made by the Parent Borrower to any
Subsidiary and made by any Subsidiary to the Parent Borrower or any other
Subsidiary; provided that (i) any such loans and advances made by a
Loan Party shall be evidenced by a promissory note pledged pursuant to the
Collateral Agreement and (ii) the amount of such loans and advances made
by Loan Parties to Subsidiaries that are not Loan Parties (together with
investments permitted under clause (ii) of subsection (d) hereof
and outstanding Guarantees permitted under the proviso to subsection (g) hereof
shall not exceed $500,000 at any time outstanding (in each case determined
without regard to any write-down or write-offs);

 

(f)            loans or advances to employees made in the ordinary
course of business of the Parent Borrower or a Subsidiary not exceeding
$250,000 in the aggregate outstanding at any time; provided that no such
advances to any single employee shall exceed $100,000 in the aggregate
outstanding (determined without regard to any write-downs or write-offs of such
loans or advances);

 

(g)           Guarantees constituting Indebtedness permitted by Section 7.01;
provided that the aggregate principal amount of Indebtedness of
Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party
(together with investments permitted under clause (ii) of Section 7.04(d) and
outstanding intercompany loans permitted under clause (ii) to the
proviso to 

 

70

 

Section 7.04(e)) shall not
exceed $500,000 at any time outstanding (in each case determined without regard
to any write-downs or write-offs);

 

(h)           investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;

 

(i)            investments in the form of Swap Agreements permitted by Section 7.07;

 

(j)            investments of any Person existing at the time such
Person becomes a Subsidiary of a Borrower or consolidates or merges with a
Borrower or any of the Subsidiaries (including in connection with a Permitted
Acquisition) so long as such investments were not made in contemplation of such
Person becoming a Subsidiary or of such consolidation or merger;

 

(k)           investments received in connection with the dispositions
of assets permitted by Section 7.05;

 

(l)            the Automatic Laundry Acquisition shall be permitted in
accordance with the terms of the Automatic Laundry Acquisition Agreement;

 

(m)          investments made to the extent permitted by Section 7.03;
and

 

(n)           other investments, loans and advances by the Parent
Borrower or any Subsidiary in an aggregate amount, as valued at cost at the
time each such investment is made and including all related commitments for
future advances, not exceeding $250,000 in the aggregate for all such
investments made from and after the Closing Date plus an amount equal to
any returns of capital actually received in cash in respect of any such
investments (which amount shall not exceed the amount of such investment valued
at cost at the time such investment was made).

 

7.05        Asset Sales.  The Parent Borrower will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose
of any asset, including any Equity Interest owned by it, nor will the Parent
Borrower permit any Subsidiary to issue any additional Equity Interest in such
Subsidiary, except:

 

(a)           sales, transfers and other dispositions of (i) inventory,
(ii) used or surplus equipment and (iii) Permitted Investments in the
ordinary course of business;

 

(b)           sales, transfers and other dispositions to the Parent
Borrower or a Subsidiary; provided that any such sales, transfers or
dispositions involving a Subsidiary that is not a Loan Party shall be made in
compliance with Sections 7.04 and 7.09;

 

(c)           sales, transfers and other dispositions of accounts
receivable in connection with the compromise, settlement or collection thereof
consistent with past practice;

 

(d)           sales, transfers and other dispositions of property to the
extent such property constitutes an investment permitted by clauses (a),
(h), (i) and (k) of Section 7.04;

 

(e)           sale and leaseback transactions permitted by Section 7.06;

 

71

 

(f)            dispositions resulting from any casualty or other insured
damage to, or any taking under power of eminent domain or by condemnation or
similar proceeding of, any property or asset of any Borrower or any Subsidiary;

 

(g)           sales, transfers and other dispositions of assets (other
than Equity Interests in a Subsidiary unless all Equity Interests in such
Subsidiary (other than a Borrower) are sold) that are not permitted by any
other clause of this Section; provided that the aggregate fair market
value of all assets sold, transferred or otherwise disposed of in reliance upon
this clause (g) shall not exceed $5,000,000; and

 

(h)           each of the Parent Borrower and its Subsidiaries may grant
licenses, sublicenses, leases or subleases to other Persons to the extent such
grant does not materially interfere with the conduct of business of the Parent
Borrower or any of its Subsidiaries;

 

provided that all
sales, transfers, leases and other dispositions permitted hereby (other than
those permitted by clause (b), (c) and (f) above) shall be made
for fair value and (other than those permitted by clause (b)) for at least
75% cash consideration.

 

7.06        Sale and Leaseback Transactions.  The Parent Borrower will not, and will not
permit any of the Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred, except for any such sale of any fixed or capital assets that is
made for cash consideration in an amount not less than the fair value of such
fixed or capital asset and is consummated within 90 days after the Parent
Borrower or such Subsidiary acquires or completes the construction of such
fixed or capital asset.

 

7.07        Swap Agreements.  The Parent Borrower will not, and will not
permit any of the Subsidiaries to, enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which the Parent Borrower
or any Subsidiary has actual exposure (other than those in respect of shares of
capital stock or other equity ownership interests of the Parent Borrower or any
of its Subsidiaries) and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from floating to fixed
rate, from fixed to floating rates, from one floating rate to another floating
rate or otherwise) with respect to any interest-bearing liability or investment
of the Parent Borrower or any Subsidiary.

 

7.08        Restricted Payments; Certain Payments
of Indebtedness.  (a)  The Parent Borrower will not, and
will not permit any Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except (i) the Subsidiaries may
declare and pay dividends ratably with respect to their Equity Interests, (ii) the
Parent Borrower may declare and pay dividends with respect to its common stock
payable solely in additional shares of its common stock and (iii) the
Parent Borrower may make Restricted Payments, not exceeding $6,000,000 during
any fiscal year, provided that the total of all Restricted Payments made
since December 31, 2007 may not exceed the sum of (A) $3,212,500 plus
(B) 50% of the Consolidated Net Income accrued during the period (treated
as one accounting period) from December 31, 2007 to the end of the most
recent fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment (or, in case such Consolidated Net Income shall be a
deficit, minus 100% of such deficit).

 

(b)           The Parent Borrower will not, and will not permit any
Subsidiary to, make or agree to pay or make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property)
of or in respect of principal of or interest on any Indebtedness, or any 

 

72

 

payment
or other distribution (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any
Indebtedness, except:

 

(i)            payment of Indebtedness created
under (A) the Senior Unsecured Credit Agreement and (B) this Credit
Agreement and the Loan Documents;

 

(ii)           scheduled payments of principal or
interest with respect to Indebtedness to the extent permitted by Section 7.01;

 

(iii)          payment of secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

 

(iv)          prepayments in respect of Capital
Lease Obligations in the ordinary course of business; and

 

(v)           prepayments of the Seller
Subordinated Note (by way of set-off or otherwise) or any Seller Subordinated
Note Refinancing Indebtedness; provided that no such prepayments shall
be permitted until all of the obligations under the Senior Unsecured Credit
Agreement have been paid in full and the commitments thereunder have been
terminated.

 

7.09        Transactions with Affiliates.  The Parent Borrower will not, and will not
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions in the ordinary course of business and at prices
and on terms and conditions not less favorable to the Parent Borrower or such
Subsidiary than could be obtained on an arm’s-length basis from unrelated third
parties, (b) transactions between or among the Parent Borrower and the
Loan Parties not involving any other Affiliate, (c) any investment
permitted by Section 7.04(d) and (e), (d) any
Indebtedness permitted under Section 7.01(a)(iv), (e) loans or
advances to employees permitted under Section 7.04, (f) the
payment of reasonable fees to directors of the Parent Borrower or any
Subsidiary who are not employees of the Parent Borrower or any Subsidiary, and
compensation and employee benefit arrangements paid to, and indemnities
provided for the benefit of, directors, officers or employees of the Parent
Borrower or its Subsidiaries in the ordinary course of business, (g) any
issuances of securities or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment agreements, stock
options and stock ownership plans approved by the Parent Borrower’s Board of
Directors, (h) employment and severance arrangements entered into in the
ordinary course of business and approved by the Parent Borrower’s Board of
Directors between the Parent Borrower or any Subsidiary and any employee
thereof and (i) any Restricted Payment permitted by Section 7.08.

 

7.10        Restrictive Agreements.  The Parent Borrower will not, and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Parent Borrower or any
Subsidiary to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any shares of its capital stock or to
make or repay loans or advances to the Parent Borrower or any other Subsidiary
or to Guarantee Indebtedness of the Parent Borrower or any other Subsidiary; provided
that (i) the foregoing shall not apply to restrictions and conditions
imposed by law, by the Senior Unsecured Credit Agreement or by any Loan
Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the Closing Date identified on Schedule 7.10
(but shall apply to any extension or renewal of, or any 

 

73

 

amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by (A) any
agreement relating to secured Indebtedness permitted by this Credit Agreement
if such restrictions or conditions apply only to the property or assets
securing such Indebtedness or (B) any Senior Notes Documents and (v) clause (a) of
the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

 

7.11        Amendment of Material Documents.  The Parent Borrower will not, and will not
permit any Subsidiary to, amend, modify or waive any of its rights under (a) its
certificate of incorporation, by-laws or other organizational documents to the
extent adverse to the Lenders, (b) any Senior Notes Documents, except to
the extent permitted by the definition of “Senior Notes Refinancing
Indebtedness” or (c) any Seller Subordinated Note Documents, except to the
extent permitted by the definition of “Seller Subordinated Note Refinancing
Indebtedness”.

 

7.12        Financial Covenants.

 

(a)           Consolidated
Total Leverage Ratio.  As of the end
of each fiscal quarter of the Parent Borrower, the Consolidated Total Leverage
Ratio will be not greater than:

 

	
  Period

  	
   

  	
  Maximum Consolidated

  Total Leverage Ratio

  	
   

  
	
  Closing Date through June 30, 2009

  	
   

  	
  4.5:1.0

  	
   

  
	
  July 1, 2009 and thereafter

  	
   

  	
  4.25:1.0

  	
   

  

 

(b)           Consolidated
Senior Secured Leverage Ratio.  As of
the end of each fiscal quarter of the Parent Borrower, the Consolidated Senior
Secured Leverage Ratio will be not greater than 2.5:1.0.

 

(c)           Consolidated Cash Flow Coverage
Ratio.  As of the end of each fiscal
quarter of the Parent Borrower, the Consolidated Cash Flow Coverage Ratio will
be not less than 1.2:1.0.

 

ARTICLE VIII

 

EVENTS OF DEFAULT AND REMEDIES

 

8.01        Events of Default.

 

If any of the following events (“Events of
Default”) shall occur:

 

(a)           the Borrowers shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;

 

(b)           the Borrowers shall fail to pay any interest on any Loan
or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable under this Credit Agreement or
any other Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three Business Days;

 

74

 

(c)           any representation or warranty made or deemed made by or
on behalf of the Parent Borrower or any Subsidiary in or in connection with any
Loan Document or any amendment or modification thereof or waiver thereunder, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been incorrect (i) to
the extent such representation or warranty is modified or qualified based on
the terms “materially” or “material” or by reference to the term “Material
Adverse Effect”, in any respect and (ii) to the extent such representation
or warranty is not so modified or qualified, in any material respect, in each
case when made or deemed made;

 

(d)           the Borrowers shall fail to observe or perform any
covenant, condition or agreement contained in Section 6.02, 6.03
or 6.04 (with respect to the existence of the Borrowers) or 6.11
or in Article VII;

 

(e)           any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Borrowers (which notice
will be given at the request of any Lender);

 

(f)            the Parent Borrower or any Subsidiary shall fail to
make any payment (whether of principal or interest and regardless of amount,
but in any case after any applicable grace period) in respect of any Material
Indebtedness, when and as the same shall become due and payable;

 

(g)           any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its
or their behalf to cause any Material Indebtedness to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity; provided that this clause (g) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness;

 

(h)           an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Parent Borrower or any
Subsidiary or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Parent
Borrower or any Subsidiary or for a substantial part of its assets, and, in any
such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing
shall be entered;

 

(i)            the Parent Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Parent Borrower or any Subsidiary or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a 

 

75

 

general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

 

(j)            the Parent Borrower or any Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;

 

(k)           one or more judgments for the payment of money in an
aggregate amount in excess of $2,500,000 shall be rendered against the Parent
Borrower, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Parent Borrower or
any Subsidiary to enforce any such judgment;

 

(l)            an ERISA Event shall have occurred that, in the opinion
of the Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of the
Parent Borrower and its Subsidiaries in an aggregate amount exceeding (i) $625,000
in any year or (ii) $1,250,000 for all periods;

 

(m)          any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on any Collateral, having a value in excess of
$625,000, with the priority required by the applicable Security Document,
except (i) as a result of the sale or other disposition of the applicable
Collateral in a transaction permitted under the Loan Documents or (ii) as
a result of the Administrative Agent’s failure to maintain possession of any
stock certificates, promissory notes and failure to file continuation
statements or other instruments delivered to it under the Collateral Agreement;

 

(n)           any Loan Document shall for any reason be asserted by any
Loan Party not to be a legal, valid and binding obligation of any party
thereto;

 

(o)           the Guarantees of the Obligations by Parent Borrower and
the Loan Parties pursuant to the Collateral Agreement shall cease to be in full
force and effect (other than in accordance with the terms of the Loan
Documents) or shall be asserted by Parent Borrower or any Loan Party not to be
in effect or not to be legal, valid and binding obligations;

 

(p)           a Change in Control shall occur; or

 

(q)           the occurrence of an “Event of Default” (or any comparable
term) under, and as defined in, the Senior Unsecured Loan Documents;

 

then,
and in every such event (other than an event with respect to the Borrowers
described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrowers,
take either or both of the following actions, at the same or different
times:  (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable) and require Cash Collateral to be provided in
an amount equal to the Outstanding Amount of L/C Obligations, and thereupon the
principal of the Loans so declared to be due and payable and Cash Collateral
for the L/C Obligations shall be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers; and in case of any event with 

 

76

 

respect
to the Borrowers described in clause (h) or (i) of this Article,
the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers.

 

8.02        Application of Funds.

 

After
the exercise of remedies provided for in Section 8.01 (or after the
Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized), any
amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:

 

First, pro rata to the payment of that portion of the Obligations
hereunder constituting fees, indemnities, expenses and other amounts (including
all reasonable fees, expenses and disbursements of any law firm or other
counsel to the extent payable under Section 10.04 and amounts
payable under Article III) payable to the Collateral Agent in its
capacity as such, including all amounts incurred in the execution of its duties
as collateral agent and the exercise of rights and remedies in respect of the
collateral to the extent payable under the Loan Documents;

 

Second, pro rata to payment of that portion of the
Obligations hereunder constituting fees, indemnities, expenses and other
amounts (including all reasonable fees, expenses and disbursements of any law
firm or other counsel to the extent payable under Section 10.04 and
amounts payable under Article III hereof) payable to the
Administrative Agent in its capacity as such to the extent payable under the
Loan Documents;

 

Third, pro rata to payment of that portion of the
Obligations hereunder constituting fees, indemnities and other amounts (other
than principal and interest) payable to the lenders (including all reasonable
fees, expenses and disbursements of any law firm or other counsel to the extent
payable under Section 10.04 and amounts payable under Article III),
ratably among them in proportion to the amounts described in this
clause payable to them to the extent payable under the Loan Documents;

 

Fourth, pro rata to payment of that portion of the
Obligations hereunder constituting accrued and unpaid interest on loans and L/C
Borrowings and fees, premiums and scheduled periodic payments, and any interest
accrued thereon, due under any Swap Agreement between any Loan Party and any
Lender, or any Affiliate of a Lender, to the extent such Swap Agreement is
permitted by Section 7.07, ratably among the Lenders (and, in the
case of such Swap Agreements, Affiliates of Lenders) in proportion to the
respective amounts described in this clause Fourth held by them;

 

Fifth, pro rata to payment of that portion of the
Obligations hereunder constituting unpaid principal of loans and L/C Borrowings
and breakage, termination or other payments, and any interest accrued thereon,
due under any Swap Agreement between any Loan Party and any Lender, or any
Affiliate of a Lender, to the extent such Swap Agreement is permitted by Section 7.07,
and to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit, ratably among the Lenders (and,
in the case of such Swap Agreements, Affiliates of Lenders) in proportion to
the respective amounts described in this clause Fifth held by them; and

 

77

 

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

 

Subject
to Section 2.03(c), amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fourth
above shall be applied to satisfy drawings under such Letters of Credit as they
occur.  If any amount remains on deposit
as Cash Collateral after all Letters of Credit have either been fully drawn or
expired, such remaining amount shall be applied to the other Obligations, if any,
in the order set forth above.

 

ARTICLE IX

 

ADMINISTRATIVE AGENT AND COLLATERAL AGENT

 

9.01        Appointment and Authorization of
Administrative Agent and Collateral Agent.

 

(a)          Each of the
Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act
on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto.  The
provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and none of the Borrowers nor any other Loan
Party shall have rights as a third party beneficiary of any of such
provisions.

 

(b)          Each Lender hereby irrevocably
appoints, designates and authorizes the Collateral Agent to take such action on
its behalf under the provisions of this Credit Agreement and each Collateral
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Credit Agreement or any Collateral
Document, together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary
contained elsewhere herein or in any Collateral Document, the Collateral Agent
shall not have any duties or responsibilities, except those expressly set forth
herein or therein, nor shall the Collateral Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Credit Agreement or any Collateral Document or
otherwise exist against the Collateral Agent. 
Without limiting the generality of the foregoing sentence, the use of
the term “agent” herein and in the Security Documents with reference to the
Collateral Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.  The Collateral Agent shall act on behalf of the
Lenders with respect to any Collateral and the Security Documents, and the
Collateral Agent shall have all of the benefits and immunities (i) provided
to the Administrative Agent under the Loan Documents with respect to any acts
taken or omissions suffered by the Collateral Agent in connection with any
Collateral or the Security Documents as fully as if the term “Administrative
Agent” as used in such Loan Documents included the Collateral Agent with
respect to such acts or omissions, and (ii) as additionally provided
herein or in the Security Documents with respect to the Collateral Agent.

 

9.02        Rights as a Lender.

 

The
Person serving as the Administrative Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Administrative Agent and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated or 

 

78

 

unless
the context otherwise requires, include the Person serving as the
Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with any of
the Borrowers or any of their Subsidiaries or other Affiliates as if such
Person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders.

 

9.03        Exculpatory Provisions.

 

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

 

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

 

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

 

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

 

The
Administrative Agent shall not be liable for any action taken or not taken by
it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and Article VIII)
or (ii) in the absence of its own gross negligence or willful
misconduct.  The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by a Borrower, a
Lender or the L/C Issuer.

 

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

 

79

 

9.04        Reliance by Administrative Agent.

 

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

 

9.05        Delegation of Duties.

 

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

 

9.06        Resignation of the Administrative
Agent.

 

The
Administrative Agent may at any time give notice of its resignation to the
Lenders, the L/C Issuer and the Parent Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
the Parent Borrower, to appoint a successor, which shall be a bank with an
office in the United States, or an Affiliate of any such bank with an office in
the United States.  If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may on behalf of the Lenders and the L/C Issuer, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided
that if the Administrative Agent shall notify the Parent Borrower and the Lenders
that no qualifying Person has accepted such appointment, then such resignation
shall nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed)  and (2) all payments, communications
and determinations provided to be made by, to or through the Administrative
Agent shall instead be made by or to each Lender and the L/C Issuer directly,
until such time as the Required Lenders appoint a successor Administrative
Agent as provided for above in this Section. 
Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under 

 

80

 

the
other Loan Documents (if not already discharged therefrom as provided above in
this Section).  The fees payable by the
Borrowers to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrowers and
such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

 

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

 

9.07        Non-Reliance on Administrative Agent
and Other Lenders.

 

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

 

9.08        No Other Duties.

 

Anything
herein to the contrary notwithstanding, neither the Sole Lead Arranger nor the
Sole Book Manager  listed on the
cover page hereof shall have any powers, duties or responsibilities under
this Credit Agreement or any of the other Loan Documents, except in its
capacity, as applicable, as the Administrative Agent, a Lender or the L/C
Issuer hereunder.

 

9.09        Administrative Agent May File
Proofs of Claim.

 

In
case of the pendency of any proceeding under any Debtor Relief Law or any other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and irrespective
of whether the Administrative Agent shall have made any demand on any Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

 

(a)           to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations
(other than obligations under Swap Agreements or Treasury Management Agreements
to which the Administrative Agent is not a party) that are owing and unpaid and
to file such other documents as may be necessary or advisable in order to have
the claims of the Lenders, the L/C Issuer and the Administrative Agent
(including any claim 

 

81

 

for
the reasonable compensation, expenses, disbursements and advances of the
Lenders, the L/C Issuer and the Administrative Agent and their respective
agents and counsel and all other amounts due the Lenders, the L/C Issuer and
the Administrative Agent under Sections 2.09 and 10.04) allowed
in such judicial proceeding; and

 

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

 

and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 10.04.

 

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

 

9.10        Collateral and Guaranty Matters.

 

The Lenders and the L/C Issuer irrevocably authorize
the Administrative Agent and the Collateral Agent:

 

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

 

(b)           to
subordinate any Lien on any property granted to or held by the Collateral Agent
under any Loan Document to the holder of any Lien on such property that is
permitted by Section 7.02; and

 

(c)           to release any
Guarantor from its obligations under the Collateral Agreement (or other
document pursuant to which a Person becomes a Guarantor), provided hereunder if
such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

 

In
each case as specified in this Section 9.10, the Administrative
Agent or the Collateral Agent, as appropriate, will, at the Parent Borrower’s
expense, execute and deliver to the applicable Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item
from the assignment and security interest granted under the Security Documents
or to subordinate its interest in such item, or to release such Guarantor from
its obligations under the Collateral Agreement, in each case in accordance with
the terms of the Loan Documents and this Section 9.10.

 

82

 

ARTICLE X

 

MISCELLANEOUS

 

10.01      Amendments, Etc.

 

No
amendment or waiver of any provision of this Credit Agreement or any other Loan
Document, and no consent to any departure by the Borrowers or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders (or by the Administrative Agent on behalf of the Required Lenders upon
receipt of a consent and direction letter to do so by the applicable Lenders)
and the applicable Borrower or the applicable Loan Party, as the case may be,
and acknowledged by the Administrative Agent, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that:

 

(a)           unless
also consented to in writing by each Lender directly affected thereby, no such
amendment, waiver or consent shall:

 

(i)            extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 8.01), it
being understood that the amendment or waiver of an Event of Default or a
mandatory reduction or a mandatory prepayment in Commitments shall not be
considered an increase in Commitments;

 

(ii)           waive non-payment or postpone any date fixed by this
Credit Agreement or any other Loan Document for any payment of principal,
interest, fees or other amounts due to any Lender hereunder or under any other
Loan Document (it being understood that an amendment or waiver of a mandatory
reduction or mandatory prepayment provision shall not be considered a
non-payment or postponement of a payment);

 

(iii)          reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or any fees or other amounts payable
hereunder or under any other Loan Document; provided, however, that only
the consent of the Required Lenders shall be necessary (A) to amend the
definition of “Default Rate” or to waive any obligation of the Borrowers to pay
interest or Letter of Credit Fees at the Default Rate or (B) to amend any
financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
L/C Borrowing or to reduce any fee payable hereunder;

 

(iv)          change any provision of this Credit Agreement regarding pro
rata sharing or pro rata funding with respect to (A) the making of
advances (including participations), (B) the manner of application of
payments or prepayments of principal, interest, or fees, (C) the manner of
application of reimbursement obligations from drawings under Letters of Credit,
or (D) the manner of reduction of commitments and committed amounts
(except for technical amendments with respect to additional extensions of
credit pursuant to this Credit Agreement which afford the protections to such
additional extensions of credit of the type provided to the Revolving Loans
and/or the Term Loans);

 

(v)           change any provision of this Section 10.01(a) or
the definition of “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to amend, waive or otherwise
modify any rights hereunder or make any determination or grant any consent
hereunder (other than as expressly provided in subsection (b) below);

 

83

 

(vi)          release all or substantially all of the Collateral (other
than as provided herein or as appropriate in connection with transactions
permitted hereunder); or

 

(vii)         release all or substantially all of the value of the
guarantee provided by the Loan Parties pursuant to the Collateral Agreement
without the written consent of each Lender;

 

(b)           Additional
Commitments or Tranches.  For the avoidance of doubt and
notwithstanding provisions to the contrary in this Section 10.01,
this Credit Agreement may be amended (or amended and restated) with the written
consent of the Loan Parties and the Administrative Agent for the purpose of
including one or more Incremental Credit Facilities contemplated in subsections
(e) and (f) of Section 2.01, by (i) increasing
the aggregate amount of commitments under any of the respective facilities and (ii) adding
one or more additional borrowing tranches hereunder and to provide for the
ratable sharing of the benefits of this Credit Agreement and the other Loan
Documents with the other commitments and Obligations contemplated herein and
therein;

 

(c)           unless
also consented to in writing by the L/C Issuer, no such amendment, waiver or
consent shall affect the rights or duties of the L/C Issuer under this Credit
Agreement or any Issuer Document relating to any Letter of Credit issued or to
be issued by it;

 

(d)           unless
also consented to in writing by the Swingline Lender, no such amendment, waiver
or consent shall affect the rights or duties of the Swingline Lender under this
Credit Agreement;

 

(e)           unless
also consented to in writing by the Administrative Agent, no such amendment,
waiver or consent shall affect the rights or duties of the Administrative Agent
under this Credit Agreement or any other Loan Document; and

 

(f)            unless
also consented to in writing by the Collateral Agent, no such amendment, waiver
or consent shall affect the rights or duties of the Collateral Agent under this
Credit Agreement or any other Loan Document;

 

provided however, that
notwithstanding anything to the contrary contained herein, (i) no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender, (ii) each
Lender is entitled to vote as such Lender sees fit on any bankruptcy or
insolvency reorganization plan that affects the Loans, (iii) each Lender
acknowledged that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein, (iv) the
Required Lenders may consent to allow a Loan Party to use cash collateral in
the context of a bankruptcy or insolvency proceeding; and (v) the Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto.

 

10.02     Notices;
Effectiveness; Electronic Communication.

 

(a)         Notices Generally. 
Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in subsection (b) below),
all notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier as follows, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:

 

84

 

(i)            if to any Borrower, the Administrative Agent, the L/C
Issuer or the Swingline Lender, to the address, telecopier number, electronic
mail address or telephone number specified for such Person on Schedule 10.02;
and

 

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

 

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

 

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

 

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

 

(c)           THE
PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT
WARRANT THE ACCURACY OR COMPLETENESS OF THE MATERIALS OR THE ADEQUACY OF THE
PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
LOAN PARTY MATERIALS.  NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN
CONNECTION WITH THE LOAN PARTY MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or
any of its Related Parties (collectively, the “Agent Parties”) have any
liability to any Loan Party, any Lender, the L/C Issuer or any other Person for
losses, claims, damages, liabilities or expenses of any kind (whether in tort,
contract or otherwise) arising out of any Loan Party’s or the Administrative
Agent’s transmission of Loan Party Materials through the Internet, except to the
extent that such losses, claims, damages, liabilities or expenses are
determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
any Agent Party; provided, however, that in no event shall any
Agent Party have any liability to any Loan Party, any Lender, the L/C 

 

85

 

Issuer
or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages).

 

(d)           Change
of Address, Etc.  Each of the
Borrowers, the Administrative Agent, the L/C Issuer and the Swingline Lender
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.  Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to the Parent Borrower, the Administrative Agent, the L/C Issuer and
the Swingline Lender.  In addition, each
Lender agrees to notify the Administrative Agent from time to time to ensure
that the Administrative Agent has on record (i) an effective address,
contact name, telephone number, telecopier number and electronic mail address
to which notices and other communications may be sent and (ii) accurate
wire instructions for such Lender. 
Furthermore, each Public Lender agrees to cause at least one individual
at or on behalf of such Public Lender to at all times have selected the “Private
Side Information” or similar designation on the content declaration screen of
the Platform in order to enable such Public Lender or its delegate, in
accordance with such Public Lender’s compliance procedures and applicable Law,
including United States Federal and state securities Laws, to make reference to
Loan Party Materials that are not made available through the “Public Side
Information” portion of the Platform and that may contain material non-public
information with respect to the Borrowers or their securities for purposes of
United States Federal or state securities laws.

 

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

 

10.03      No Waiver; Cumulative Remedies;
Enforcement.

 

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

 

Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
authority to enforce rights and remedies hereunder and under the other Loan
Documents against the Loan Parties or any of them shall be vested exclusively
in, and all actions and proceedings at law in connection with such enforcement
shall be instituted and maintained exclusively by, the Administrative Agent in
accordance with Section 8.02 for the benefit of all the Lenders and
the L/C Issuer; provided, however, that the foregoing shall not
prohibit (a) the Administrative Agent from exercising on its own behalf
the rights and remedies that inure to its benefit (solely in its capacity as
Administrative Agent) hereunder and under the other Loan Documents, (b) the
L/C Issuer or the Swingline Lender from exercising the rights and remedies that
inure to its benefit (solely in its capacity as L/C Issuer or Swingline Lender,
as the case may be) hereunder and under the other Loan Documents, (c) any
Lender from exercising setoff rights in 

 

86

 

accordance
with Section 10.08 (subject to the terms of Section 2.13),
or (d) any Lender from filing proofs of claim or appearing and filing
pleadings on its own behalf during the pendency of a proceeding relative to any
Loan Party under any Debtor Relief Law; and provided, further,
that if at any time there is no Person acting as Administrative Agent hereunder
and under the other Loan Documents, then (i) the Required Lenders shall
have the rights otherwise ascribed to the Administrative Agent pursuant to Article VIII
and (ii) in addition to the matters set forth in clauses (b), (c) and
(d) of the preceding proviso and subject to Section 2.13, any
Lender may, with the consent of the Required Lenders, enforce any rights and
remedies available to it and as authorized by the Required Lenders.

 

10.04      Expenses; Indemnity; Damage Waiver.

 

(a)           Costs
and Expenses.  The Borrowers shall
pay (i) all reasonable and documented out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of one outside counsel (in addition to any reasonably
necessary special counsel and up to one local counsel in each applicable
jurisdiction) for the Administrative Agent), in connection with the syndication
of the credit facilities provided for herein, the preparation, negotiation,
execution, delivery and administration of this Credit Agreement and the other
Loan Documents or any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the L/C Issuer in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and (iii) all
reasonable out-of-pocket expenses incurred by the Administrative Agent, any
Lender or the L/C Issuer (including the fees, charges and disbursements of any
one outside counsel (in addition to any reasonably necessary special counsel
and up to one local counsel in each applicable jurisdiction) for the
Administrative Agent, any Lender or the L/C Issuer), in connection with the enforcement or protection of its
rights (unless, in the reasonable opinion of such outside counsel, the
representation of all such parties by one outside counsel would be
inappropriate due to the existence of an actual or potential conflict of
interest) (A) in connection with this Credit Agreement and the other Loan
Documents, including its rights under this Section, or (B) in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

(b)           Indemnification
by the Borrowers.  The Borrowers
shall indemnify the Administrative Agent (and any sub-agent thereof), each
Lender and the L/C Issuer, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the reasonable and documented fees,
charges and disbursements of counsel for any Indemnitee, subject to the last
sentence of this clause (b)), incurred by any Indemnitee or asserted against
any Indemnitee by any third party or by any Borrower or any other Loan Party
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Credit Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties
hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, or, in the
case of the Administrative Agent (and any sub-agent thereof) and its Related
Parties only, the administration of this Credit Agreement and the other Loan
Documents (including in respect of any matters addressed in Section 3.01),
(ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrowers or any of
their Subsidiaries, or any Environmental Liability related in any way to the
Borrowers or any of their Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought
by a third party or by any Borrower 

 

87

 

or
any other Loan Party, and regardless of whether any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction
by final judgment to have resulted from the bad faith, gross negligence or
willful misconduct of such Indemnitee (or its Related Parties) or (y) result
from a claim brought by any Borrower or any other Loan Party against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder
or under any other Loan Document, if such Borrower or such other Loan Party has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.  Notwithstanding anything to the contrary in
this Credit Agreement or any other Loan Document, with respect to any
individual claim (or series of related claims), in no event shall the Loan
Parties be required to reimburse the legal fees and expenses of more than one
outside counsel (in addition to any reasonably necessary special counsel and up
to one local counsel in each applicable jurisdiction, but excluding any inhouse
counsel) for all Indemnitees collectively unless, in the reasonable opinion of
such outside counsel, the representation of all such Persons by one outside
counsel would be inappropriate due to the existence of an actual or potential
conflict of interest.

 

(c)           Reimbursement
by Lenders.  To the extent that any
Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any
sub-agent thereof), the L/C Issuer or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the L/C Issuer or such Related Party, as the case may be,
such Lender’s Aggregate Commitment Percentage or, in the case of L/C
Obligations, Revolving Commitment Percentage  (determined
in each case as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity
as such, or against any Related Party of any of the foregoing acting for the Administrative
Agent (or any such sub-agent) or L/C Issuer in connection with such
capacity.  The obligations of the Lenders
under this subsection (c) are subject to the provisions of Section 2.11(d).

 

(d)           Waiver
of Consequential Damages, Etc.  To
the fullest extent permitted by applicable law, the Borrowers shall not assert,
and hereby waive, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Credit Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed to such unintended recipients
by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Credit Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the bad faith, gross negligence or
willful misconduct of such Indemnitee or its Related Parties as determined by a
final and nonappeable judgment of a court of competent jurisdiction.

 

(e)           Payments.  All amounts due under this Section shall
be payable not later than ten (10) Business Days after demand therefor.

 

(f)            Survival.  The agreements in this Section 10.04
shall survive the resignation of the Administrative Agent, the L/C Issuer and
the Swingline Lender, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

88

 

10.05      Payments Set Aside.

 

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

 

10.06      Successors and Assigns.

 

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

 

(b)           Assignments
by Lenders.  Any Lender may at any
time assign to one or more assignees all or a portion of its rights and
obligations under this Credit Agreement (including all or a portion of its
Commitment and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations and in Swingline Loans) at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

 

(i)            Minimum Amounts.

 

(A)          in the case of an assignment of the
entire remaining amount of the assigning Lender’s Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender, an Affiliate
of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)           in any case not
described in subsection (b)(i)(A) of this Section, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding
thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment, determined as of

 

89

 

the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment
and Assumption, as of the Trade Date, shall not be less than $5,000,000  with
respect to any Revolving Commitment and $1,000,000 with respect to any Term
Commitment  unless each of
the Administrative Agent and, so long as no Event of Default has occurred and
is continuing, the Parent Borrower otherwise consents (each such consent not to
be unreasonably withheld or delayed); provided, however, that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met.

 

(ii)           Proportionate Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Credit Agreement with respect to the Revolving Loans and
the Term Loan A, and the commitments relating thereto, being assigned,  and shall be pro rata with respect to such loans and
commitments; provided that, that this clause (ii) shall not apply
to rights and obligations in respect of Swingline Loans;

 

(iii)          Required Consents.  No consent shall be required for any
assignment except to the extent required by subsection (b)(i)(B) of this Section and,
in addition:

 

(A)          the consent of the Parent Borrower
(such consent not to be unreasonably withheld or delayed) shall be required
unless (1) an Event of Default has occurred and is continuing at the time
of such assignment or (2) such assignment is to a Lender, an Affiliate of
a Lender or an Approved Fund;

 

(B)           the consent of the Administrative
Agent (such consent not to be unreasonably withheld or delayed) shall be
required for assignments in respect of (1) any Term Loan Commitment or
Revolving Commitment if such assignment is to a Person that is not a Lender, an
Affiliate of such Lender or an Approved Fund with respect to such Lender or (2) the
Term Loan to a Person that is not a Lender, an Affiliate of a Lender or an
Approved Fund;

 

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

 

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

 

(iv)          Assignment and Assumption.  The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment.  The assignee, if it is not a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire.

 

90

 

(v)           No Assignment to Borrower.  No such assignment shall be made to any
Borrower or any Borrower’s Affiliates or Subsidiaries.

 

(vi)          No Assignment to Natural Persons.  No such assignment shall be made to a natural
person.

 

Subject
to acceptance and recording thereof by the Administrative Agent pursuant to subsection
(c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to
this Credit Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Credit Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Credit Agreement (and, in the case of an Assignment
and Assumption covering all of the assigning Lender’s rights and obligations
under this Credit Agreement, such Lender shall cease to be a party hereto) but
shall continue to be entitled to the benefits of Sections 3.01, 3.04,
3.05, and 10.04 with respect to facts and circumstances occurring
prior to the effective date of such assignment. 
Upon request, the Borrowers (at their expense) shall execute and deliver
a Note to the assignee Lender.  Any
assignment or transfer by a Lender of rights or obligations under this Credit
Agreement that does not comply with this subsection shall be treated for
purposes of this Credit Agreement as a sale by such Lender of a participation
in such rights and obligations in accordance with subsection (d) of
this Section.

 

(c)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, absent manifest error, and the Borrowers, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Credit Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrowers and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.

 

(d)           Participations.  Any Lender may at any time, without the
consent of, or notice to, any Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrowers or
any of the Borrowers’ respective Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Credit Agreement (including all or a portion of its Commitment and/or the Loans
(including such Lender’s participations in L/C Obligations and/or Swingline
Loans) owing to it); provided that (i) such Lender’s obligations
under this Credit Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Administrative Agent, the
Lenders and the L/C Issuer shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Credit Agreement.

 

Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 10.01 that affects such Participant.  Subject to subsection (e) of this
Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05  to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to subsection (b) of
this Section.  To the extent permitted by

 

91

 

law,
each Participant also shall be entitled to the benefits of Section 10.08  as though it were a Lender, provided
such Participant agrees to be subject to Section 2.12 as though it
were a Lender.

 

(e)           Limitations
upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Section 3.01
or 3.04  than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant. 
A Participant shall not be entitled to the benefits of Section 3.01
unless the Parent Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrowers, to
comply with Section 3.01(e) as though it were a Lender.

 

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

 

(g)           Resignation
as L/C Issuer or Swingline Lender after Assignment.  Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Revolving
Commitment and Revolving Loans pursuant to subsection (b) above, Bank of
America may, (i) upon thirty (30) days’ notice to the Borrowers and the
Lenders, resign as L/C Issuer and/or (ii) upon thirty (30) days’ notice to the Parent Borrower,
resign as Swingline Lender.  In the event
of any such resignation as L/C Issuer or Swingline Lender, the Parent Borrower
shall be entitled to appoint from among the Lenders a successor L/C Issuer or
Swingline Lender hereunder; provided, however, that no failure by
the Borrowers to appoint any such successor shall affect the resignation of
Bank of America as L/C Issuer or Swingline Lender, as the case may be.  If Bank of America resigns as L/C Issuer, it
shall retain all the rights, powers, privileges and duties of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the Closing
Date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  If Bank of America resigns as Swingline
Lender, it shall retain all the rights of the Swingline Lender provided for
hereunder with respect to Swingline Loans made by it and outstanding as of the
Closing Date of such resignation, including the right to require the Lenders to
make Base Rate Loans or fund risk participations in outstanding Swingline Loans
pursuant to Section 2.04(b). 
Upon the appointment of a successor L/C Issuer and/or Swingline Lender, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swingline Lender, as the
case may be, and (b) the successor L/C Issuer shall issue letters of
credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or make other arrangements satisfactory to Bank of
America to effectively assume the obligations of Bank of America with respect
to such Letters of Credit.

 

10.07      Treatment of Certain Information;
Confidentiality.

 

Each
of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
trustees, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Credit Agreement or any other Loan 

 

92

 

Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Credit Agreement or any Eligible
Assignee invited to be a Lender pursuant to Section 2.01(e) or
(ii) any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to the Borrowers and their obligations, (g) with
the consent of the Parent Borrower or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or (y) becomes
available to the Administrative Agent, any Lender, the L/C Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other than
a Borrower.

 

For
purposes of this Section, “Information” means all information received
from the Borrowers or any Subsidiary relating to the Borrowers or any
Subsidiary or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the
L/C Issuer on a nonconfidential basis prior to disclosure by the Borrowers or
any Subsidiary.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

Each
of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the
Information may include material non-public information concerning a Borrower
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will
handle such material non-public information in accordance with applicable Law,
including United States federal and state securities Laws.

 

10.08      Right of Setoff.

 

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

 

10.09      Interest Rate Limitation.

 

Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrowers. 
In determining whether the interest contracted for, charged, or received
by the Administrative Agent or a Lender exceeds 

 

93

 

the
Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize
any payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.

 

10.10      Counterparts; Integration;
Effectiveness.

 

This
Credit Agreement may be executed in counterparts (and by different parties
hereto in different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.  This Credit Agreement and the other Loan
Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 5.01,
this Credit Agreement shall become effective when it shall have been executed
by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto. 
Delivery of an executed counterpart of a signature page of this
Credit Agreement by telecopy or other electronic imaging means shall be
effective as delivery of a manually executed counterpart of this Credit
Agreement.

 

10.11      Survival of Representations and
Warranties.

 

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

 

10.12      Severability.

 

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

 

10.13      Replacement of Lenders.

 

If
(a) any Lender requests compensation under Section 3.04, (b) any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01,
(c) a Lender (a “Non-Consenting Lender”) does not consent to a
proposed amendment, consent, change, waiver, discharge or termination with
respect to any Loan Document that has been approved by the Required Lenders
(including, without limitation, by a failure to respond in writing to a
proposed amendment by the date and time specified by the Administrative Agent)
as provided in Section 10.01 but requires unanimous consent of all
Lenders or all Lenders of a particular class of loans, or (d) any Lender
is a Defaulting Lender, then the Parent Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents 

 

94

 

required
by, Section 10.06; provided that the consent of the Administrative
Agent shall not be unreasonably withheld), all of its interests, rights and
obligations under this Credit Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:

 

(i)            the respective Borrower shall have paid to the
Administrative Agent the assignment fee specified in Section 10.06(b)(iv);

 

(ii)           such Lender shall have received payment of an amount equal
to the outstanding principal of its Loans and, with respect to Revolving
Lenders, L/C Advances, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Loan Documents (including any
amounts under Section 3.05) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts);

 

(iii)          in the case of any such assignment resulting from a claim
for compensation under Section 3.04 or payments required to be made
pursuant to Section 3.01, such assignment will result in a
reduction in such compensation or payments thereafter;

 

(iv)          such assignment does not conflict with applicable Laws; and

 

(v)            in the case of any such assignment
resulting from a Non-Consenting Lender’s failure to consent to a proposed
amendment, consent change, waiver, discharge or termination with respect to any
Loan Document, the applicable replacement bank or financial institution
consents to the proposed change, waiver, discharge or termination;

 

provided that the
failure by such Non-Consenting Lender to execute and deliver an Assignment and
Assumption shall not impair the validity of the removal of such Non-Consenting
Lender and the mandatory assignment of such Non-Consenting Lender’s Commitments
and outstanding Loans and, with respect to the Revolving Lenders,
participations in L/C Obligations pursuant to this Section 10.13
shall nevertheless be effective without the execution by such Non-Consenting
Lender of an Assignment and Assumption.

 

A
Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the respective Borrower to require such assignment and
delegation cease to apply.

 

10.14     Governing
Law; Jurisdiction; Etc.

 

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

 

(b)         SUBMISSION TO JURISDICTION.  EACH OF THE BORROWERS AND THE OTHER LOAN
PARTIES IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING
IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF SUCH STATE AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN 

 

95

 

RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT.  EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS CREDIT AGREEMENT OR IN ANY
OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY
LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST
THE BORROWERS OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(c)           WAIVER
OF VENUE.  EACH OF THE BORROWERS AND
THE OTHER LOAN PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT
REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

 

(d)           SERVICE
OF PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN SECTION 10.02.  NOTHING IN
THIS CREDIT AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

10.15      Waiver of Jury Trial.

 

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

 

10.16      No Advisory or Fiduciary Responsibility.

 

In
connection with all aspects of each transaction contemplated hereby (including
in connection with any amendment, waiver or other modification hereof or of any
other Loan Document), each of the Borrowers and the other Loan Parties
acknowledges and agrees that: (a) (i) the arranging and other
services regarding this Credit Agreement provided by the Administrative Agent
and the Arranger, are arm’s-length commercial transactions between the
Borrowers, the other Loan Parties and their respective Affiliates, on the one
hand, and the Administrative Agent and the Arranger, on the other hand, (ii) each
of the Borrowers and the other Loan Parties has consulted its own legal,
accounting, regulatory and tax 

 

96

 

advisors to the extent it has deemed
appropriate, and (iii) each of the Borrowers and the other Loan Parties is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (b) (i) the Administrative Agent and the Arranger, each is
and has been acting solely as a principal and, except as expressly agreed in
writing by the relevant parties, has not been, is not, and will not be acting
as an advisor, agent or fiduciary for the Borrowers, any other Loan Party or
any of their respective Affiliates, or any other Person and (ii) neither
the Administrative Agent nor the Arranger has any obligation to the Borrowers,
any other Loan Party or any of their respective Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (c) the Administrative Agent
and the Arranger and their respective Affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Borrowers, the other Loan Parties and their respective Affiliates, and neither
the Administrative Agent nor the Arranger has any obligation to disclose any of
such interests to the Borrowers, any other Loan Party or any of their
respective Affiliates.  To the fullest
extent permitted by law, each of the Borrowers and the other Loan Parties
hereby waives and releases any claims that it may have against the
Administrative Agent and the Arranger with respect to any breach or alleged
breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

 

10.17        Electronic Execution of Assignments
and Certain Other Documents.  The words “execution,” “signed,” “signature”
and words of like import in any Assignment and Assumption or in any amendment
or other modification hereof (including waivers and consents) shall be deemed
to include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as
a manually executed signature or the use of a paper-based recordkeeping system,
as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.

 

10.18      USA PATRIOT Act.

 

Each
Lender that is subject to the PATRIOT Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrowers that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L.

107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it
is required to obtain, verify and record information that identifies the
Borrowers, which information includes the name and address of each Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify such Borrower in accordance with the Act.  Each Borrower shall, promptly following a
request by the Administrative Agent or any Lender, provide all documentation
and other information that the Administrative Agent or such Lender requests in
order to comply with its ongoing obligations under applicable “know your
customer” and anti-money laundering rules and regulations, including the
Act.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

97

 

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

 

	
  BORROWERS:

  	
  MAC-GRAY CORPORATION,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
   Michael J. Shea

  
	
   

  	
  Name:
  

  	
    Michael J. Shea

  
	
   

  	
  Title:
  

  	
    Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  MAC-GRAY SERVICES, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael J. Shea

  
	
   

  	
  Name:
  

  	
    Michael J. Shea

  
	
   

  	
  Title:
  

  	
    Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  INTIRION CORPORATION,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
   Michael J. Shea

  
	
   

  	
  Name:
  

  	
    Michael J. Shea

  
	
   

  	
  Title:
  

  	
    Chief
  Financial Officer

  
						

 

 

	
  ADMINISTRATIVE AGENT:

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Administrative Agent and Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    William Faidell, Jr.

  
	
   

  	
  Name:
  

  	
  William
  Faidell, Jr.

  
	
   

  	
  Title:
  

  	
  Assistant
  Vice President

  
				

 

 

	
  LENDERS:

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as L/C Issuer, Swingline Lender and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    Christopher S. Allen

  
	
   

  	
  Name:
  

  	
  Christopher
  S. Allen

  
	
   

  	
  Title:
  

  	
  Senior
  Vice President

  
				

 

 

	
  LENDERS:

  	
  FIFTH THIRD BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Henry
  Petrillo

  
	
   

  	
  Name:
  

  	
   Henry Petrillo

  
	
   

  	
  Title:

  	
   Managing Director

  
				

 

 

	
   

  	
  KEYBANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Mitchell B. Feldman

  
	
   

  	
  Name:
  

  	
  Mitchell
  B. Feldman

  
	
   

  	
  Title:

  	
  Director

  
				

 

 

	
   

  	
  WELLS FARGO BANK N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Michael Sweeney

  
	
   

  	
  Name:
  

  	
  Michael
  Sweeney

  
	
   

  	
  Title:

  	
  Vice
  President

  
				

 

 

	
   

  	
  TD BANKNORTH NA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Jeffrey
  R. Westling

  
	
   

  	
  Name:
  

  	
  Jeffrey
  R. Westling

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
				

 

 

	
   

  	
  EASTERN BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Robert J. Moodie

  
	
   

  	
  Name:
  

  	
  Robert
  J. Moodie

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
				

 

 

	
   

  	
  SOVEREIGN BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Penny Garver

  
	
   

  	
  Name:
  

  	
  Penny
  Garver

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
				

 

 

	
   

  	
  ALLIED IRISH BANKS, P.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Joanne Gibson

  	
  Des
  Brennan

  
	
   

  	
  Name:
  

  	
  Joanne
  Gibson

  	
  Des
  Brennan

  
	
   

  	
  Title:

  	
  Assistant
  V.P.

  	
  Assistant
  V.P.

  
					

 

 

	
   

  	
  RBS CITIZENS, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Christopher J. Wickles

  
	
   

  	
  Name:
  

  	
  Christopher
  J. Wickles

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
				

 

 

	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ J. Matthew Rowand

  
	
   

  	
  Name:
  

  	
  J.
  Matthew Rowand

  
	
   

  	
  Title:

  	
  Vice
  President

  
				

 

 

	
   

  	
  BANK OF THE WEST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Sylvia Ponce

  
	
   

  	
  Name:
  

  	
  Slyvia
  Ponce

  
	
   

  	
  Title:

  	
  AVP

  
				

 

 

	
   

  	
  BROWN BROTHERS HARRIMAN & CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Suzanne Dwyer

  
	
   

  	
  Name:
  

  	
  Suzanne
  Dwyer

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
				

 

 

	
   

  	
  SALEM FIVE CENTS SAVINGS BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Joseph V. Leary

  
	
   

  	
  Name:
  

  	
  Joseph
  V. Leary

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
				

 

 

	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Elise M. Russo

  
	
   

  	
  Name:
  

  	
  Elise
  M. Russo

  
	
   

  	
  Title:

  	
  First
  Vice President

  
				

 

 

	
   

  	
  FIRSTRUST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Ellen Frank

  
	
   

  	
  Name:
  

  	
  Ellen
  Frank

  
	
   

  	
  Title:

  	
  Vice
  President

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