Document:

exv10w28

Exhibit 10.28

Execution Version

 

GWR OPERATING PARTNERSHIP, L.L.L.P.

AND

GREAT WOLF FINANCE CORP.

AND

EACH OF THE GUARANTORS PARTY HERETO

10.875% FIRST MORTGAGE NOTES DUE 2017

 

INDENTURE

Dated as of April 7, 2010

 

U.S. BANK NATIONAL ASSOCIATION

AS TRUSTEE

AND

COLLATERAL AGENT

 

 

 

CROSS-REFERENCE TABLE*

	 	 	 	 	 	 	 
	Trust Indenture	 	 
	Act Section	 	Indenture Section
	310

	 	(a)(1)
	 	 	7.10	 
	 

	 	(a)(2)
	 	 	7.10	 
	 

	 	(a)(3)
	 	 	N.A.	 
	 

	 	(a)(4)
	 	 	N.A.	 
	 

	 	(a)(5)
	 	 	7.10	 
	 

	 	(b)
	 	 	7.10	 
	 

	 	(c)
	 	 	N.A.	 
	311

	 	(a)
	 	 	7.11	 
	 

	 	(b)
	 	 	7.11	 
	 

	 	(c)
	 	 	N.A.	 
	312

	 	(a)
	 	 	2.05	 
	 

	 	(b)
	 	 	13.03	 
	 

	 	(c)
	 	 	13.03	 
	313

	 	(a)
	 	 	7.06	 
	 

	 	(b)(1)
	 	 	10.03	 
	 

	 	(b)(2)
	 	7.06; 7.07 

	 

	 	(c)
	 	7.06; 10.03; 13.02

	 

	 	(d)
	 	 	7.06	 
	314

	 	(a)
	 	4.03; 13.02; 13.05 

	 

	 	(b)
	 	 	10.02	 
	 

	 	(c)(1)
	 	 	13.04	 
	 

	 	(c)(2)
	 	 	13.04	 
	 

	 	(c)(3)
	 	 	N.A.	 
	 

	 	(d)
	 	10.03; 10.04; 10.05

	 

	 	(e)
	 	 	13.05	 
	 

	 	(f)
	 	 	N.A.	 
	315

	 	(a)
	 	 	7.01	 
	 

	 	(b)
	 	7.05; 13.02 

	 

	 	(c)
	 	 	7.01	 
	 

	 	(d)
	 	 	7.01	 
	 

	 	(e)
	 	 	6.11	 
	316

	 	(a) (last sentence)
	 	 	2.09	 
	 

	 	(a)(1)(A)
	 	 	6.05	 
	 

	 	(a)(1)(B)
	 	 	6.04	 
	 

	 	(a)(2)
	 	 	N.A.	 
	 

	 	(b)
	 	 	6.07	 
	 

	 	(c)
	 	 	2.12	 
	317

	 	(a)(1)
	 	 	6.08	 
	 

	 	(a)(2)
	 	 	6.09	 
	 

	 	(b)
	 	 	2.04	 
	318

	 	(a)
	 	 	13.01	 
	 

	 	(b)
	 	 	N.A.	 
	 

	 	(c)
	 	 	13.01	 

 

N.A. means not applicable.

			
	*	 	This Cross Reference Table is not part of the Indenture.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	
ARTICLE 1
	DEFINITIONS AND INCORPORATION
	BY REFERENCE
	 
	 	 	 	 
	Section 1.01 Definitions
	 	 	1	 
	Section 1.02 Other Definitions
	 	 	33	 
	Section 1.03 Incorporation by Reference of Trust Indenture Act
	 	 	34	 
	Section 1.04 Rules of Construction
	 	 	34	 
	 
	 	 	 	 
	
ARTICLE 2
	THE NOTES
	 
	 	 	 	 
	Section 2.01 Form and Dating
	 	 	35	 
	Section 2.02 Execution and Authentication
	 	 	36	 
	Section 2.03 Registrar and Paying Agent
	 	 	36	 
	Section 2.04 Paying Agent to Hold Money in Trust
	 	 	37	 
	Section 2.05 Holder Lists
	 	 	37	 
	Section 2.06 Transfer and Exchange
	 	 	37	 
	Section 2.07 Replacement Notes
	 	 	49	 
	Section 2.08 Outstanding Notes
	 	 	50	 
	Section 2.09 Treasury Notes
	 	 	50	 
	Section 2.10 Temporary Notes
	 	 	50	 
	Section 2.11 Cancellation
	 	 	50	 
	Section 2.12 Defaulted Interest
	 	 	51	 
	Section 2.13 CUSIP Numbers
	 	 	51	 
	 
	 	 	 	 
	
ARTICLE 3
	REDEMPTION AND PREPAYMENT
	 
	 	 	 	 
	Section 3.01 Notices to Trustee
	 	 	51	 
	Section 3.02 Selection of Notes to Be Redeemed or Purchased
	 	 	52	 
	Section 3.03 Notice of Redemption
	 	 	52	 
	Section 3.04 Effect of Notice of Redemption
	 	 	53	 
	Section 3.05 Deposit of Redemption or Purchase Price
	 	 	53	 
	Section 3.06 Notes Redeemed or Purchased in Part
	 	 	53	 
	Section 3.07 Optional Redemption
	 	 	53	 
	Section 3.08 Mandatory Redemption
	 	 	54	 
	Section 3.09 Offer to Purchase by Application of Excess Proceeds
	 	 	54	 
	 
	 	 	 	 
	
ARTICLE 4
	COVENANTS
	 
	 	 	 	 
	Section 4.01 Payment of Notes
	 	 	57	 
	Section 4.02 Maintenance of Office or Agency
	 	 	57	 
	Section 4.03 Reports
	 	 	57	 
	Section 4.04 Compliance Certificate
	 	 	58	 
	Section 4.05 Taxes
	 	 	59	 
	Section 4.06 Stay, Extension and Usury Laws
	 	 	59	 
	Section 4.07 Restricted Payments
	 	 	59	 
	Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
	 	 	64	 
	Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock
	 	 	65	 

 

 

	 	 	 	 	 
	 	 	Page	 
	Section 4.10 Collateral Asset Sales
	 	 	69	 
	Section 4.11 Non-Collateral Asset Sales
	 	 	71	 
	Section 4.12 Events of Loss
	 	 	73	 
	Section 4.13 Transactions with Affiliates
	 	 	74	 
	Section 4.14 Liens
	 	 	76	 
	Section 4.15 Business Activities
	 	 	76	 
	Section 4.16 Corporate Existence
	 	 	76	 
	Section 4.17 Offer to Repurchase Upon Change of Control
	 	 	76	 
	Section 4.18 No Layering of Debt
	 	 	78	 
	Section 4.19 Payments for Consent
	 	 	78	 
	Section 4.20 Additional Note Guarantees
	 	 	78	 
	Section 4.21 Designation of Restricted and Unrestricted Subsidiaries
	 	 	79	 
	Section 4.22 Restrictions on Activities of Great Wolf Finance
	 	 	79	 
	 
	 	 	 	 
	
ARTICLE 5
	SUCCESSORS
	 
	 	 	 	 
	Section 5.01 Merger, Consolidation or Sale of Assets
	 	 	80	 
	Section 5.02 Successor Corporation Substituted
	 	 	81	 
	 
	 	 	 	 
	
ARTICLE 6
	DEFAULTS AND REMEDIES
	 
	 	 	 	 
	Section 6.01 Events of Default
	 	 	82	 
	Section 6.02 Acceleration
	 	 	84	 
	Section 6.03 Other Remedies
	 	 	85	 
	Section 6.04 Waiver of Past Defaults
	 	 	85	 
	Section 6.05 Control by Majority
	 	 	85	 
	Section 6.06 Limitation on Suits
	 	 	86	 
	Section 6.07 Rights of Holders of Notes to Receive Payment
	 	 	86	 
	Section 6.08 Collection Suit by Trustee
	 	 	86	 
	Section 6.09 Trustee May File Proofs of Claim
	 	 	86	 
	Section 6.10 Priorities
	 	 	87	 
	Section 6.11 Undertaking for Costs
	 	 	87	 
	Section 6.12 Exercise of Remedies by Collateral Agent
	 	 	87	 
	 
	 	 	 	 
	
ARTICLE 7
	TRUSTEE
	 
	 	 	 	 
	Section 7.01 Duties of Trustee
	 	 	88	 
	Section 7.02 Rights of Trustee
	 	 	89	 
	Section 7.03 Individual Rights of Trustee
	 	 	90	 
	Section 7.04 Trustee’s Disclaimer
	 	 	90	 
	Section 7.05 Notice of Defaults
	 	 	90	 
	Section 7.06 Reports by Trustee to Holders of the Notes
	 	 	90	 
	Section 7.07 Compensation and Indemnity
	 	 	91	 
	Section 7.08 Replacement of Trustee
	 	 	92	 
	Section 7.09 Successor Trustee by Merger, etc
	 	 	93	 
	Section 7.10 Eligibility; Disqualification
	 	 	93	 
	Section 7.11 Preferential Collection of Claims Against Issuers
	 	 	93	 
	 
	 	 	 	 
	
ARTICLE 8
	LEGAL DEFEASANCE AND COVENANT DEFEASANCE
	 
	 	 	 	 
	Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance
	 	 	93	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	Section 8.02 Legal Defeasance and Discharge
	 	 	93	 
	Section 8.03 Covenant Defeasance
	 	 	94	 
	Section 8.04 Conditions to Legal or Covenant Defeasance
	 	 	94	 
	Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions
	 	 	95	 
	Section 8.06 Repayment to Company
	 	 	96	 
	Section 8.07 Reinstatement
	 	 	96	 
	 
	 	 	 	 
	
ARTICLE 9
	AMENDMENT, SUPPLEMENT AND WAIVER
	 
	 	 	 	 
	Section 9.01 Without Consent of Holders of Notes
	 	 	97	 
	Section 9.02 With Consent of Holders of Notes
	 	 	98	 
	Section 9.03 Compliance with Trust Indenture Act
	 	 	100	 
	Section 9.04 Revocation and Effect of Consents
	 	 	100	 
	Section 9.05 Notation on or Exchange of Notes
	 	 	100	 
	Section 9.06 Trustee to Sign Amendments, etc
	 	 	100	 
	 
	 	 	 	 
	
ARTICLE 10
	COLLATERAL AND SECURITY
	 
	 	 	 	 
	Section 10.01 Collateral Documents
	 	 	100	 
	Section 10.02 Recording and Opinions
	 	 	101	 
	Section 10.03 Release of Collateral
	 	 	101	 
	Section 10.04 Certificates of the Issuers
	 	 	103	 
	Section 10.05 Certificates of the Trustee
	 	 	103	 
	Section 10.06 Authorization of Actions to Be Taken by the Trustee Under the Collateral Documents
	 	 	104	 
	Section 10.07 Authorization of Receipt of Funds by the Trustee Under the Collateral Documents
	 	 	104	 
	Section 10.08 Termination of Security Interest
	 	 	104	 
	Section 10.09 Collateral Agent
	 	 	104	 
	Section 10.10 Replacement of Collateral Agent
	 	 	105	 
	Section 10.11 Transfers of Collateral
	 	 	105	 
	 
	 	 	 	 
	
 ARTICLE 11
	NOTE GUARANTEES
	 
	 	 	 	 
	Section 11.01 Guarantee
	 	 	106	 
	Section 11.02 Limitation on Guarantor Liability
	 	 	107	 
	Section 11.03 Execution and Delivery of Note Guarantee
	 	 	107	 
	Section 11.04 Guarantors May Consolidate, etc., on Certain Terms
	 	 	107	 
	Section 11.05 Releases
	 	 	108	 
	Section 11.06 Contribution by Guarantors
	 	 	109	 
	 
	 	 	 	 
	
ARTICLE 12
	SATISFACTION AND DISCHARGE
	 
	 	 	 	 
	Section 12.01 Satisfaction and Discharge
	 	 	110	 
	Section 12.02 Application of Trust Money
	 	 	111	 
	 
	 	 	 	 
	
ARTICLE 13
	MISCELLANEOUS
	 
	 	 	 	 
	Section 13.01 Trust Indenture Act Controls
	 	 	111	 
	Section 13.02 Notices
	 	 	111	 

iii

 

	 	 	 	 	 
	 	 	Page	 
	Section 13.03 Communication by Holders of Notes with Other Holders of Notes
	 	 	112	 
	Section 13.04 Certificate and Opinion as to Conditions Precedent
	 	 	112	 
	Section 13.05 Statements Required in Certificate or Opinion
	 	 	113	 
	Section 13.06 Rules by Trustee and Agents
	 	 	113	 
	Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders
	 	 	113	 
	Section 13.08 Governing Law
	 	 	113	 
	Section 13.09 No Adverse Interpretation of Other Agreements
	 	 	113	 
	Section 13.10 Successors
	 	 	114	 
	Section 13.11 Severability
	 	 	114	 
	Section 13.12 Counterpart Originals
	 	 	114	 
	Section 13.13 Table of Contents, Headings, etc
	 	 	114	 
	Section 13.14 Conflict with Other Documents
	 	 	114	 
	Section 13.15 Waiver of Jury Trial
	 	 	114	 
	 
	 	 	 	 
	
 EXHIBITS
	 
	 	 	 	 
	Exhibit A1 FORM OF NOTE
	 	 	 	 
	Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
	 	 	 	 
	Exhibit B FORM OF CERTIFICATE OF TRANSFER
	 	 	 	 
	Exhibit C FORM OF CERTIFICATE OF EXCHANGE
	 	 	 	 
	Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
	 	 	 	 
	Exhibit E FORM OF NOTATION OF GUARANTEE
	 	 	 	 
	Exhibit F FORM OF SUPPLEMENTAL INDENTURE
	 	 	 	 

iv

 

     INDENTURE dated as of April 7, 2010 among GWR Operating Partnership, L.L.L.P., a Delaware
limited liability limited partnership, Great Wolf Finance Corp., a Delaware corporation, the
Guarantors (as defined) and U.S. Bank National Association, as trustee.

     The Issuers (as defined), the Guarantors and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders (as defined) of the 10.875% First
Mortgage Notes due 2017 (the “Notes”):

ARTICLE 1

DEFINITIONS AND INCORPORATION

BY REFERENCE

Section 1.01 Definitions.

     “144A Global Note” means a Global Note substantially in the form of Exhibit A1 hereto bearing
the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and
registered in the name of, the Depositary or its nominee that will be issued in a denomination
equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

     “Acquired Debt” means, with respect to any specified Person:

     (1) Indebtedness of any other Person (other than the Issuers or any Subsidiary of the
Company) existing at the time such other Person is merged with or into or became a
Subsidiary of such specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with or into, or becoming
a Restricted Subsidiary of, such specified Person; and

     (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified
Person from a Person other than an Issuer or a Subsidiary of the Company.

     “Additional Collateral Assets” means assets acquired in accordance with the provisions of
Section 4.10 and pledged as Collateral to secure the Notes or the Note Guarantees.

     “Additional Notes” means additional Notes (other than the Initial Notes) issued under this
Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.

     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For
purposes of this definition, “control,” 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 or policies
of such Person, whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to
be control. For purposes of this definition, the terms “controlling,” “controlled by” and “under
common control with” have correlative meanings.

     “Agent” means any Registrar, co-registrar, Paying Agent, additional paying agent or Collateral
Agent.

     “Applicable Premium” means, with respect to any Note on any Make-Whole Redemption Date, the
greater of:

     (1) 1.0% of the principal amount of the Note; or

1

 

     (2) the excess of: (a) the present value at such Make-Whole Redemption Date of (i) the
redemption price of the Note at April 1, 2014 (such redemption price being set forth in the
table appearing in Section 3.07 hereof), plus (ii) all required interest payments due on the
Note through April 1, 2014, (excluding accrued but unpaid interest to, but not including,
the Make-Whole Redemption Date), computed using a discount rate equal to the Treasury Rate
as of such redemption date plus 50 basis points; over (b) the principal amount of the Note.

     “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial
interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream
that apply to such transfer or exchange.

     “Asset Sale” means:

     (1) the sale, lease, conveyance or other disposition or transfer of any assets or
rights of the Issuers or any Restricted Subsidiary (each referred to in this definition as a
“disposition"); and

     (2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than
directors’ qualifying shares), whether in a single transaction or a series of related
transactions.

     Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

     (a) a disposition or transfer of cash, Cash Equivalents or Investment Grade
Securities or obsolete, scrap or worn out equipment, vehicles or other similar
assets in the ordinary course of business or any disposition or transfer of
inventory, supplies, permanent fixtures and equipment, byproducts or goods held for
sale in the ordinary course of business or any disposition or transfer of assets no
longer used or useful or necessary in the conduct of the business of the Issuers and
their Restricted Subsidiaries;

     (b) the disposition of all or substantially all of the assets of the Issuers or
a Restricted Subsidiary other than a Principal Property Subsidiary in a manner
permitted by Section 5.01 hereof or any disposition that constitutes a Change of
Control pursuant to this Indenture;

     (c) the making of any Permitted Investment or the making of any Restricted
Payment that is not prohibited by Section 4.07 hereof;

     (d) any disposition of assets or issuance or sale of Equity Interests of any
Restricted Subsidiary in any transaction or series of transactions with an aggregate
Fair Market Value of less than $5.0 million;

     (e) any disposition of property or assets (other than Collateral) or issuance
or transfer of securities (other than Collateral) by a Restricted Subsidiary to any
of the Issuers or by any of the Issuers or a Restricted Subsidiary to a Restricted
Subsidiary;

     (f) any disposition of Collateral, including the issuance or transfer of
securities, by a Principal Property Subsidiary to another Principal Property
Subsidiary;

     (g) to the extent allowable under Section 1031 of the Internal Revenue Code of
1986, any exchange of assets other than Collateral for like property (excluding any

2

 

boot thereon) for use in a business similar to the business of the Issuers and
their Restricted Subsidiaries;

     (h) the lease or sub-lease of any real or personal property in the ordinary
course of business;

     (i) any issuance or dispositions of Equity Interests in, or Indebtedness or
other securities of, an Unrestricted Subsidiary, to the extent not included in the
Collateral;

     (j) foreclosures on (or deeds or other transfers in lieu of foreclosures)
assets other than Collateral;

     (k) the unwinding of any Hedging Obligations;

     (l) the sale or grant of licenses or sub-licenses of software or intellectual
property entered into in the ordinary course of business;

     (m) creation or realization of Liens that are permitted to be incurred by this
Indenture;

     (n) any transfer of property or assets that represents a surrender or waiver of
a contract right or a settlement, surrender or release of a contract or tort claim;
and

     (o) dispositions of Investments in joint ventures to the extent required by, or
made pursuant to customary buy/sell arrangements between, the joint venture parties
set forth in joint venture agreements and similar binding agreements.

     “Attributable Debt” in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be extended. Such
present value shall be calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with GAAP; provided, however, that if such sale and
leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented
thereby will be determined in accordance with the definition of “Capital Lease Obligation.”

     “Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief
of debtors.

     “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any particular “person”
(as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to
have beneficial ownership of all securities that such “person” has the right to acquire by
conversion or exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned”
have a corresponding meaning.

     “Board of Directors” means:

     (1) with respect to a corporation, the board of directors of the corporation or any
committee thereof duly authorized to act on behalf of such board;

3

 

     (2) with respect to a partnership, the Board of Directors of the general partner of the
partnership;

     (3) with respect to a limited liability company, the managing member or members or any
controlling committee of managing members thereof; and

     (4) with respect to any other Person, the board or committee of such Person serving a
similar function.

     “Broker-Dealer” has the meaning set forth in the Registration Rights Agreement.

     “Business Day” means any day other than a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York. If a payment date is a day that
is not a Business Day at such place, payment may be made at such place on the next succeeding day
that is a Business Day, and no interest shall accrue for the intervening period.

     “Capital Lease Obligation” means, at the time any determination is to be made, the amount of
the liability in respect of a capital lease that would at that time be required to be capitalized
on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be prepaid by the lessee without payment of a penalty.

     “Capital Stock” means:

     (1) in the case of a corporation, corporate stock;

     (2) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;

     (3) in the case of a partnership or limited liability company, partnership interests
(whether general or limited) or membership interests; and

     (4) any other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing Person, but
excluding from all of the foregoing any debt securities convertible into Capital Stock,
whether or not such debt securities include any right of participation with Capital Stock.

     “Cash Equivalents” means:

     (1) United States dollars, Canadian dollars, Japanese yen, pounds sterling, Australian
dollars, euro or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary,
such local currencies held by it from time to time in the ordinary course of business;

     (2) securities issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government having
maturities of not more than 24 months from the date of acquisition;

     (3) certificates of deposit, time deposits and eurodollar time deposits with maturities
of one year or less from the date of acquisition, bankers’ acceptances with maturities not
exceeding one year and overnight bank deposits, in each case, with any commercial bank
having capital and surplus in excess of $500.0 million;

4

 

     (4) repurchase obligations for underlying securities of the types described in clauses
(2) and (3) above entered into with any financial institution meeting the qualifications
specified in clause (3) above;

     (5) commercial paper having one of the two highest ratings obtainable from Moody’s or
S&P and, in each case, maturing within 12 months after the date of acquisition;

     (6) investment funds investing at least 95% of their assets in securities which
constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this
definition;

     (7) readily marketable direct obligations issued by any state of the United States of
America or any political subdivision thereof having one of the two highest rating categories
obtainable from either Moody’s or S&P with maturities of 24 months or less from the date of
acquisition; and

     (8) Indebtedness or preferred stock issued by Persons with a rating of “A” or higher
from S&P or “A2” or higher from Moody’s with maturities of 12 months or less from the date
of acquisition.

     “Cash Management Obligations” means any obligations of the Issuers, Parent Guarantors or any
of the Company’s Restricted Subsidiaries in respect of any arrangement for treasury, depositary or
cash management services provided to the Issuers, Parent Guarantors or any of the Company’s
Restricted Subsidiaries, as applicable, in connection with any transfer or disbursement of funds
through an automated clearinghouse or on a same day or immediate or accelerated availability basis.

     “Change of Control” means the occurrence of any of the following:

     (1) the direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of Great Wolf Resorts or the Company
and its Subsidiaries taken as a whole to any Person (including any “person” (as that term is
used in Section 13(d)(3) of the Exchange Act));

     (2) the adoption of a plan relating to the liquidation or dissolution of Great Wolf
Resorts or the Company;

     (3) the consummation of any transaction (including, without limitation, any merger or
consolidation), the result of which is that any Person (including any “person” (as defined
above) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting
Stock of Great Wolf Resorts, measured by voting power rather than number of shares;

     (4) the first date upon which Great Wolf Resorts ceases to own directly or indirectly
100% of the Equity Interests in the Company;

     (5) Great Wolf Resorts or the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, Great Wolf Resorts or the
Company, in any such event pursuant to a transaction in which any of the outstanding Voting
Stock of Great Wolf Resorts or the Company or such other Person is converted into or
exchanged for cash, securities or other property, other than any such transaction where the
Voting Stock of Great Wolf Resorts or the Company outstanding immediately prior to such
transaction constitutes

5

 

or is converted into or exchanged for a majority of the outstanding shares of the
Voting Stock of such surviving or transferee Person (immediately after giving effect to such
transaction); or

     (6) the first day on which a majority of the members of the Board of Directors of Great
Wolf Resorts are not Continuing Directors.

     Notwithstanding the foregoing: (A) any holding company whose only significant asset is Equity
Interests of Great Wolf Resorts, the Company or any of their direct or indirect parent companies
shall not itself be considered a “Person” or “group” for purposes of clause (2) above; (B) the
transfer of assets between or among the Parent Guarantors, the Issuers or the Company’s
Subsidiaries shall not itself constitute a Change of Control; (C) the term “Change of Control”
shall not include a merger or consolidation of Great Wolf Resorts or the Company with or the sale,
assignment, conveyance, transfer, lease or other disposition of all or substantially all of Great
Wolf Resorts’ or the Company’s assets to, an Affiliate incorporated or organized solely for the
purpose of reincorporating or reorganizing Great Wolf Resorts or the Company in another
jurisdiction and/or for the sole purpose of forming or collapsing a holding company structure; and
(D) a “Person” or “group” shall not be deemed to have beneficial ownership of securities subject to
a stock purchase agreement, merger agreement or similar agreement (or voting or option agreement
related thereto) until the consummation of the transactions contemplated by such agreement.

     “Clearstream” means Clearstream Banking, S.A.

     “Collateral” means (i) “Collateral” as defined in the Security Agreement, (ii) the “Mortgaged
Property” under each of the Mortgages and (iii) any real or personal property on which a lien or
security interest is granted under any other Collateral Documents entered into by any of the
Company, any Guarantor and any Restricted Subsidiary after the date of the Indenture; provided that
“Collateral” shall not include any “Excluded Assets.”

     “Collateral Agent” means U.S. National Bank Association in its capacity as collateral agent,
until a successor replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.

     “Collateral Asset Sale” means an Asset Sale or other transfer or disposition of any Non-Core
Collateral Asset by the Company or any of the Company’s Restricted Subsidiaries.

     “Collateral Documents” means the security agreements, mortgages, pledge agreements, agency
agreements and other instruments and documents executed and delivered pursuant to this Indenture or
any of the foregoing, as the same may be amended, supplemented or otherwise modified from time to
time and pursuant to which Collateral is pledged, assigned or granted to or on behalf of the
Collateral Agent for the ratable benefit of the Holders of the Notes and the Trustee or notice of
such pledge, assignment or grant is given.

     “Company” means GWR Operating Partnership, L.L.L.P., a Delaware limited liability limited
partnership, and any and all successors thereto.

     “Consolidated EBITDA” means, with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period plus,

     (1) provision for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income; plus

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     (2) the Fixed Charges of such Person and its Restricted Subsidiaries for such period,
to the extent that such Fixed Charges were deducted in computing such Consolidated Net
Income; plus

     (3) depreciation, amortization (including amortization of intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and other non-cash
charges and expenses (excluding any such non-cash charge or expense to the extent that it
represents an accrual of or reserve for cash charges or expenses in any future period or
amortization of a prepaid cash charge or expense that was paid in a prior period) of such
Person and its Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges or expenses were deducted in computing such
Consolidated Net Income; plus

     (4) any expenses or charges related to any completed or uncompleted debt or equity
offering, permitted acquisition or other Investment, permitted disposition, recapitalization
or the incurrence of Indebtedness permitted to be incurred under this Indenture including a
refinancing thereof (in each case, whether or not successful) and any amendment or
modification to the terms of any such transactions, including such fees, expenses or charges
related to the offering of the Notes offered hereby deducted in computing Consolidated Net
Income for such period; plus

     (5) the amount of any restructuring charge, redemption premium, prepayment penalty,
premium and other related fee or reserve deducted in such period in computing Consolidated
Net Income, including any one-time costs incurred in connection with (A) acquisitions after
the date of this Indenture or (B) the closing or consolidation of operating facilities; plus

     (6) any write offs, write downs or other noncash charges reducing Consolidated Net
Income for such period, excluding any such charge that represents an accrual or reserve for
a cash expenditure for a future period; plus

     (7) the amount of any non-controlling interest expense deducted in calculating
Consolidated Net Income for such period; plus

     (8) the amount of management, monitoring, consulting and advisory fees and related
expenses paid (or any accruals related to such fees or related expenses) (including by means
of a dividend) during such period to any direct or indirect parents of the Company to the
extent permitted under Section 4.13 hereof; plus

     (9) any costs or expenses incurred by the Parent Guarantors, the Company or a
Restricted Subsidiary of the Company pursuant to any management equity plan, stock option
plan, phantom equity plan or any other management or employee benefit plan or agreement or
any stock subscription or stockholders agreement, to the extent that such costs or expenses
are funded with cash proceeds contributed to the capital of the Company or net cash proceeds
of issuance of Equity Interests of the Company (other than Disqualified Stock that is
preferred stock); plus

     (10) Expenses related to resorts under development, construction or expansion; plus

     (11) Environmental liability costs; minus

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     (12) non-cash items increasing such Consolidated Net Income for such period, other than
the accrual of revenue in the ordinary course of business; and minus

     (13) the amount of any non-controlling interest income added in calculating
Consolidated Net Income for such period.

in each case, without duplication and on a consolidated basis and determined in accordance with
GAAP.

     “Consolidated Net Income” means, with respect to any specified Person for any period, the
aggregate of the net income (loss) of such Person and its Restricted Subsidiaries for such period,
on a consolidated basis (excluding the net income (loss) of any Unrestricted Subsidiary of such
Person), determined in accordance with GAAP and without any reduction in respect of preferred stock
dividends; provided that:

     (1) any net after-tax extraordinary, non-recurring or unusual gains or losses (less all
fees and expenses relating thereto) and any restructuring expenses, including any severance
or separation expenses, fees, expenses or charges relating to facilities closing costs,
acquisition integration costs, facilities opening costs and costs related to the termination
or abandonment of a proposed development shall be excluded;

     (2) the net income (but not loss) of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting will be included only to the extent
of the amount of dividends or similar distributions paid in cash to the specified Person or
a Restricted Subsidiary of the Person;

     (3) solely for the purpose of determining the amount available for Restricted Payments
under clause (c)(1) of the first paragraph of Section 4.07 hereof, the net income (but not
loss) of any Restricted Subsidiary will be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted Subsidiary of that net
income is not at the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, unless such
restriction with respect to the payment of dividends or similar distributions has been
legally waived or is not being enforced; provided that Consolidated Net Income of the Person
will be increased by the amount of dividends or other distributions or other payments
actually paid in cash (or to the extent converted into cash) to the Person or a Restricted
Subsidiary thereof in respect of such period, to the extent not already included therein;

     (4) the cumulative effect of a change in accounting principles will be excluded;

     (5) any net after-tax income (loss) from disposed or discontinued operations and any
net after-tax gains or losses on disposal of disposed or discontinued operations shall be
excluded;

     (6) any net after-tax gains or losses (less all fees and expenses relating thereto)
attributable to asset dispositions or the sale or other disposition of any Capital Stock of
any Person, in each case, other than in the ordinary course of business, as determined in
good faith by the Company, shall be excluded;

     (7) any net after-tax income (loss) from Hedging Obligations or Cash Management
Obligations and the application of Accounting Standards Codification Topic 815 “Derivatives

8

 

and Hedging” or other derivative instruments or from the extinguishment of Indebtedness
shall be excluded;

     (8) any net after-tax impairment charge or asset write-off, in each case pursuant to
GAAP;

     (9) any net after-tax non-cash compensation expense recorded from grants of stock
appreciation or similar rights, stock options, restricted stock or other rights to officers,
directors, employees, managers or consultants shall be excluded;

     (10) any net after-tax gain or loss resulting in such period from (i) currency
translation gains or losses or (ii) currency remeasurements of Indebtedness shall be
excluded;

     (11) the recognition of non-cash interest expense resulting from the application of
Accounting Standards Codification Topic 470-20 “Debt—Debt with Conversion
Options—Recognition”; and

     (12) any charges resulting from the application of Accounting Standards Codification
Topic 805 “Business Combinations,” Accounting Standards Codification Topic 350
“Intangibles-Goodwill and Other,” Accounting Standards Codification Topic 360-10-35-15
“Impairment or Disposal of Long-Lived Assets,” Accounting Standards Codification Topic
480-10-25-4 “Distinguishing Liabilities from Equity—Overall—Recognition” or Accounting
Standards Codification Topic 820 “Fair Value Measurements and Disclosures” shall be
excluded;

in each case, without duplication.

     “continuing” means, with respect to any Default or Event of Default, that such Default or
Event of Default has not been cured or waived.

     “Continuing Directors” means, as of any date of determination, any member of the Board of
Directors of the Company who:

     (1) was a member of such Board of Directors on the date of this Indenture; or

     (2) was nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board of Directors at the
time of such nomination or election.

     “consolidated” shall have the meaning given to such term under GAAP. Notwithstanding the
foregoing, for the avoidance of doubt, under no circumstances shall the joint venture owning Grand
Mound (Chehalis) be consolidated with Great Wolf Resorts or the Company, unless such joint venture
is a Restricted Subsidiary of the Company.

     “Creative Kingdoms” means Creative Kingdoms, LLC, a Delaware limited liability company.

     “Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in
Section 13.02 hereof or such other address as to which the Trustee may give notice to the Issuers.

     “Credit Facilities” means one or more debt facilities or commercial paper facilities, in each
case, with banks or other institutional or other lenders providing for revolving credit loans, term
loans, debt securities (including Additional Notes), receivables financing (including through the
sale of receivables to

9

 

such lenders or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as such Credit Facility, in whole or in part, in
one or more instances, may be amended, renewed, extended, substituted, refinanced, restructured,
replaced, supplemented or otherwise modified from time to time (including any successive renewals,
extensions, substitutions, refinancings, restructurings, replacements, supplementations or other
modifications of the foregoing and including any amendment increasing the amount of Indebtedness
incurred or available to be borrowed thereunder, extending the maturity of any Indebtedness
incurred thereunder or contemplated thereby or deleting, adding or substituting one or more parties
thereto (whether or not such added or substituted parties are banks or other institutional
lenders)), including into one or more debt facilities, commercial paper facilities or other debt
instruments, indentures or agreements (including by means of sales of debt securities (including
Additional Notes) to institutional investors), providing for revolving credit loans, term loans,
letters of credit or other debt obligations, whether any such extension, replacement or refinancing
(1) occurs simultaneously or not with the termination or repayment of a prior Credit Facility or
(2) occurs on one or more separate occasions.

     “Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any
successor entity thereto.

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

     “Definitive Note” means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A1 hereto
except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of
Exchanges of Interests in the Global Note” attached thereto.

     “Depositary” means, with respect to the Notes issuable or issued in whole or in part in global
form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and
any and all successors thereto appointed as depositary hereunder and having become such pursuant to
the applicable provision of this Indenture.

     “Designated Noncash Consideration” means the Fair Market Value of noncash consideration
received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so
designated as Designated Noncash Consideration pursuant to an officers’ certificate, setting forth
the basis of such valuation, less the amount of cash or Cash Equivalents received in connection
with a subsequent sale of such Designated Noncash Consideration.

     “Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible, or for which it is exchangeable, in each case, at the option
of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that
would constitute Disqualified Stock solely because the holders of the Capital Stock have the right
to require the Issuers to repurchase such Capital Stock upon the occurrence of a Change of Control
or an Asset Sale will not constitute Disqualified Stock if the terms of such Capital Stock provide
that the Issuers may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07 hereof. The amount of Disqualified
Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum
amount that the Issuers and its Restricted Subsidiaries may become obligated to pay upon the
maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock,
exclusive of accrued dividends.

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     “Domestic Subsidiary” means any Restricted Subsidiary of the Company that was formed under the
laws of the United States or any state of the United States or the District of Columbia or that
guarantees or otherwise provides direct credit support for any Indebtedness of the Company.

     “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).

     “Equity Offering” means a public or private sale of Equity Interests of Great Wolf Resorts (or
the direct or indirect parent of the Company) by Great Wolf Resorts or such parent company (other
than Disqualified Stock and other than to a Subsidiary of Great Wolf Resorts).

     “Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.

     “Event of Loss” means, with respect to any Principal Property, whether in respect of a single
event or a series of related events, any of the following:

     (1) any loss or damage of such Principal Property as a result of fire or casualty or
destruction of such Principal Property;

     (2) any actual condemnation, seizure or taking by exercise of the power of eminent
domain or otherwise of such Principal Property, or confiscation of such Principal Property
or the requisition of the use of such Principal Property; or

     (3) any settlement in lieu of clause (2) above.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Exchange Notes” means the Notes issued in the Exchange Offer pursuant to Section 2.06(f)
hereof.

     “Exchange Offer” has the meaning set forth in the Registration Rights Agreement.

     “Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights
Agreement.

     “Excluded Assets” means the collective reference to (i) any interest in real property (other
than Principal Properties and certain real property owned by Issuers or the Guarantors and set
forth on a schedule to this Indenture) if the greater of the cost, Fair Market Value and the book
value of such interest is less than $300,000; (ii) any asset to the extent that the grant of a
security interest in such asset is prohibited by any applicable law or requires a consent not
obtained of any governmental authority pursuant to applicable law; (iii) any right, title or
interest in any permit, lease, license, contract or agreement held by any grantor or to which any
grantor is a party or any of its right, title or interest thereunder that would otherwise
constitute Collateral to the extent, but only to the extent, that (a) such a grant would, under the
terms of such permit, lease, license, contract or agreement, require the consent of any Person
other than the Company or any of its Subsidiaries or controlled Affiliates as a condition to the
assignment thereof or to the creation by such grantor of a Lien thereon or (b) such a grant is
prohibited by or in violation of (1) any law, rule or regulation applicable to such grantor or (2)
a term, provision or condition of any such permit, lease, license, contract or agreement, in the
case of the foregoing clauses (1) and (2), when such law, rule, regulation, term, provision or
condition would be rendered ineffective with respect to the creation of the security interest
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor
provisions) of any relevant jurisdiction or principles of

11

 

equity); provided, that immediately upon the ineffectiveness, lapse or termination of any such
provision, such right, title or interest in such permit, lease, license, contract or agreement
shall cease to be an “Excluded Asset”; (iv) the Capital Stock of the Issuers, Parent Guarantors or
any Subsidiary of the Company; (v) any asset of any Principal Property Subsidiary that is subject
to a Permitted Lien referred to in clauses (2), (3) or (5) of the definition thereof and any
replacement of such Liens pursuant to clause (11) of the definition thereof to the extent the
documents relating to such Permitted Lien would not permit such asset to be subject to the Liens
created under the Collateral Documents; provided, that immediately upon the ineffectiveness, lapse
or termination of any such restriction, such asset shall cease to be an “Excluded Asset”; (vi) any
motor vehicles, vessels and aircraft or other property subject to a certificate of title statute of
any jurisdiction; (vii) assets located outside of the United States to the extent a Lien on such
assets cannot be created and perfected under United States federal or state law; (viii)
applications for any trademarks that have been filed with the U.S. Patent and Trademark Office on
the basis of an “intent to use” with respect to such trademarks; and (ix) any intercompany debt
obligations.

     “Existing Indebtedness” means all Indebtedness of the Parent Guarantors, the Issuers and the
Company’s Subsidiaries in existence on the date of this Indenture, until such amounts are repaid.

     “Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated
willing seller in a transaction not involving distress or necessity of either party, determined in
good faith by the Board of Directors of the Company (unless otherwise provided in this Indenture).

     “Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the
ratio of the Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person
for such period. In the event that the specified Person or any of its Restricted Subsidiaries
incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any
Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems
preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for which the calculation
of the Fixed Charge Coverage Ratio is made (the “Calculation Date"), then the Fixed Charge Coverage
Ratio will be calculated giving pro forma effect (in accordance with Regulation S-X under the
Securities Act) to such incurrence, assumption, Guarantee, repayment, repurchase, redemption,
defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of
preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the
beginning of the applicable period.

     In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

     (1) acquisitions, dispositions, mergers, consolidations and disposed operations (as
determined in accordance with GAAP) that have been made by the Company or any Restricted
Subsidiary during the relevant period or subsequent to such period and on or prior to or
simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming
that all such acquisitions, dispositions, mergers, consolidations and disposed operations
(and the change in any associated Fixed Charges and the change in Consolidated EBITDA
resulting therefrom) had occurred on the first day of such period. If since the beginning
of such period any Person (that subsequently became a Restricted Subsidiary or was merged
with or into the Company or any Restricted Subsidiary since the beginning of such period)
shall have made any acquisition, disposition, merger, consolidation or disposed operation
that would have required adjustment pursuant to this definition, then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if
such Investment, acquisition, disposition, merger, consolidation or disposed operation had
occurred at the beginning of such period (it being understood that whenever pro forma effect
is to be given to a transaction, the pro forma calculations shall be made in good faith by
the Chief Financial Officer of the Company);

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     (2) any Person that is a Restricted Subsidiary on the Calculation Date will be
deemed to have been a Restricted Subsidiary at all times during such period;

     (3) any Person that is not a Restricted Subsidiary on the Calculation Date will be
deemed not to have been a Restricted Subsidiary at any time during such period;

     (4) if any Indebtedness bears a floating rate of interest, the interest expense on such
Indebtedness will be calculated as if the rate in effect on the Calculation Date had been
the applicable rate for the entire period (taking into account any Hedging Obligation
applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the
Calculation Date in excess of 12 months);

     (5) interest on a Capital Lease Obligation shall be deemed to accrue at an interest
rate reasonably determined by the Chief Financial Officer of the Company to be the rate of
interest implicit in such Capital Lease Obligation in accordance with GAAP;

     (6) interest on any Indebtedness under a revolving credit facility computed on a pro
forma basis shall be computed based upon the average daily balance of such Indebtedness
during the applicable period; and

     (7) interest on Indebtedness that may optionally be determined at an interest rate
based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or
other rate, shall be deemed to have been based upon the rate actually chosen, or, if none,
then based upon such optional rate chosen as the Company may designate.

     “Fixed Charges” means, with respect to any specified Person for any period, the sum, without
duplication, of:

     (1) the consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued, including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of letter of
credit or bankers’ acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations in respect of interest rates; plus

     (2) the consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus

     (3) any interest on Indebtedness of another Person that is guaranteed by such Person or
one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

     (4) the product of (a) all dividends, whether paid or accrued and whether or not in
cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries,
other than dividends on Equity Interests payable solely in Equity Interests of the Company
(other than Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company,
times (b) a fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, determined on a consolidated basis in accordance with
GAAP.

13

 

     “Foreign Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such
Person that is not organized or existing under the laws of the United States of America, any state
thereof, the District of Columbia, or any territory thereof.

     “Foxwoods Joint Venture” means a proposed joint venture between Great Wolf Resorts (or its
Affiliates) to develop and operate a new Great Wolf Lodge resort with the Mashantucket Pequot
Tribal Nation (Western) (or its Affiliates) to be located on tribal-owned land near the tribe’s
southeast Connecticut reservation and the Foxwoods Resort Casino.

     “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are in effect on the date of this Indenture, except that if the
Company notifies the Trustee in writing and the Company or Great Wolf Resorts is reporting its
financial results based on IFRS in the reports it files with the SEC, GAAP shall mean IFRS (except
where the context requires otherwise); provided that the Company shall not be entitled to make the
foregoing election on more than one occasion. In the event the Company makes such election, (i)
Great Wolf Resorts shall present comparative financial statements also in accordance with IFRS for
the fiscal year ending immediately prior to the first fiscal year for which financial statements
have been prepared in accordance with IFRS; (ii) all accounting terms and references in this
Indenture to accounting standards shall be deemed to be references to the most comparable terms or
standards under IFRS; (iii) the reports filed under Section 4.03 hereof may contain financial
statements prepared in accordance with IFRS, as in effect from time to time, to the extent
permitted by the rules and regulations of the SEC; and (iv) any calculation or determination in
this Indenture that requires the application of GAAP for periods that include fiscal quarters ended
prior to the Company’s election to apply IFRS shall remain as previously calculated or determined
in accordance with GAAP.

     “Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof, which is
required to be placed on all Global Notes issued under this Indenture.

     “Global Notes” means, individually and collectively, each of the Restricted Global Notes and
the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the
Depository or its nominee, substantially in the form of Exhibit A1 hereto and that bears the Global
Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached
thereto, issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f)
hereof.

     “Government Securities” means direct obligations of, or obligations guaranteed by, the United
States of America, and the payment for which the United States pledges its full faith and credit.

     “Grand Mound (Chehalis)” means the Great Wolf Lodge resort in Grand Mound, Washington that is
owned by CTGW LLC, a joint venture with The Confederated Tribes of the Chehalis Reservation.

     “Grand Mound (Chehalis) Joint Venture” means CTGW LLC, a Delaware limited liability company,
or any successor entity that owns Grand Mound (Chehalis).

     “Grand Mound (Chehalis) Mortgage Loan” means that certain construction loan, dated as of July
27, 2007, in the original maximum principal amount of $102,000,000 by Marshall Financial Group LLC
to CTGW LLC, and secured by Grand Mound (Chehalis).

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     “Grapevine Property” means the Company’s Great Wolf Lodge resort in Grapevine, Texas,
including without limitation the real property, improvements, fixtures and other material assets,
owned by Great Wolf Lodge of Grapevine, LLC or its Subsidiaries, related to such resort or used or
useful in connection therewith.

     “Great Wolf Finance” means Great Wolf Finance Corp., a Delaware corporation, and any and all
successors thereto.

     “Great Wolf Resorts” means Great Wolf Resorts, Inc., a Delaware corporation, and any and all
successors thereto.

     “Guarantee” means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any manner including, without
limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements
in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or otherwise).

     “Guarantor Payments” means with respect to an LTM Period, the amount of cash paid during such
LTM Period by the Company or the Subsidiary Guarantors on behalf of Non- Guarantor Restricted
Subsidiaries in respect of operating expenses, interest payments and capital expenditures of the
Non-Guarantor Restricted Subsidiaries plus an amount equal to the amount of corporate overhead
recorded during the LTM Period that is allocable to the Non-Guarantor Subsidiaries, based on the
percentage of consolidated revenue during the LTM Period that was contributed by the Non-Guarantor
Restricted Subsidiaries.

     “Guarantors” means the Parent Guarantors and the Subsidiary Guarantors.

     “Hedging Obligations” means, with respect to any specified Person, the obligations of such
Person under:

     (1) interest rate swap agreements (whether from fixed to floating or from floating to
fixed), interest rate cap agreements and interest rate collar agreements;

     (2) other agreements or arrangements designed to manage interest rates or interest rate
risk; and

     (3) other agreements or arrangements designed to protect such Person against
fluctuations in currency exchange rates or commodity prices.

     “Holder” means a Person in whose name a Note is registered on the Registrar’s books.

     “IAI Global Note” means a Global Note substantially in the form of Exhibit A1 hereto bearing
the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee that will be issued in a denomination equal
to the outstanding principal amount of the Notes sold to Institutional Accredited Investors.

     “IFRS” means the International Financial Reporting Standards, as promulgated by the
International Accounting Standards Board (or any successor board or agency), as in the effect at
the time of the Company’s election to use IFRS.

15

 

     “Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary that (i) does not
possess any of the Collateral, (ii) whose total assets, as of that date, are less than $100,000 and
(iii) whose total revenues for the most recent 12-month period do not exceed $100,000; provided
that a Restricted Subsidiary will not be considered to be an Immaterial Subsidiary if it, directly
or indirectly, guarantees or otherwise provides direct credit support for any Indebtedness of the
Parent Guarantors or the Company.

     “Incidental Liens” means Permitted Liens under clauses (1), (2), (3), (5), (6), (10), (11),
(14), (24), (25) and (27) of the definition thereof.

     “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person
(excluding accrued expenses and trade payables), whether or not contingent:

     (1) in respect of borrowed money;

     (2) evidenced by bonds, Notes, debentures or similar instruments or letters of credit
(or reimbursement agreements in respect thereof);

     (3) in respect of banker’s acceptances;

     (4) representing Capital Lease Obligations or Attributable Debt in respect of sale and
leaseback transactions;

     (5) representing the balance deferred and unpaid of the purchase price of any property
or services due more than six months after such property is acquired or such services are
completed; or

     (6) representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit, Attributable Debt
and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness
of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness
is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without
giving effect to the effects of Accounting Standards Codification Topic 825-10-25 “Fair Value
Option” and related interpretations to the extent such effects would otherwise increase or decrease
an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any
embedded derivatives created by the terms of such Indebtedness.

     “Indenture” means this Indenture, as amended or supplemented from time to time.

     “Indirect Participant” means a Person who holds a beneficial interest in a Global Note through
a Participant.

     “Initial Notes” means the first $230,000,000 aggregate principal amount of Notes issued under
this Indenture on the date hereof.

     “Initial Purchasers” means Deutsche Bank Securities Inc., Banc of America Securities LLC,
Wells Fargo Securities, LLC and Credit Agricole Securities (USA) Inc.

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     “Institutional Accredited Investor” means an institution that is an “accredited investor”
under Rule 501(a)(1), (2), (3) or (7) under the Securities Act, that is not also a QIB.

     “Investment Grade Securities” means:

     (1) securities issued or directly and fully guaranteed or insured by the government of
the United States of America or any agency or instrumentality thereof (other than Cash
Equivalents);

     (2) debt securities or debt instruments with a rating of BBB- or higher by S&P or Baa3
or higher by Moody’s or the equivalent of such rating by such rating organization, or, if no
rating of S&P or Moody’s then exists, the equivalent of such rating by any other nationally
recognized securities rating agency, but excluding any debt securities or instruments
constituting loans or advances among the Company and its Subsidiaries;

     (3) investments in any fund that invests exclusively in investments of the type
described in clauses (1) and (2), which fund may also hold immaterial amounts of cash
pending investment or distribution; and

     (4) corresponding instruments in countries other than the United States of America
customarily utilized for high quality investments.

     “Investments” means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the forms of joint ventures, loans (including
Guarantees or other obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of business), purchases
or other acquisitions for consideration of Indebtedness, Equity Interests or other securities,
together with all items that are or would be classified as investments on a balance sheet prepared
in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary of the Company, the Company will be deemed to have made an Investment on the
date of any such sale or disposition equal to the Fair Market Value of the Company’s Investments in
such Subsidiary that were not sold or disposed of in an amount determined as provided in Section
4.07(d) hereof less the portion (proportionate to the Company’s equity interest in such Subsidiary)
of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation.
The acquisition by the Company or any Restricted Subsidiary of the Company of a Person that holds
an Investment in a third Person will be deemed to be an Investment by the Company or such
Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the
Investments held by the acquired Person in such third Person in an amount determined as provided in
Section 4.07(d) hereof. Except as otherwise provided in this Indenture, the amount of an
Investment will be determined at the time the Investment is made and without giving effect to
subsequent changes in value.

     “Issuers” means the Company and Great Wolf Finance.

     “Letter of Transmittal” means the letter of transmittal to be prepared by the Issuers and sent
to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.

     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, deed of trust,
security interest or encumbrance of any kind in respect of such asset, whether or not filed,
recorded or otherwise perfected under applicable law, including any conditional sale or other title
retention

17

 

agreement, any lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

     “LTM Period” means:

     (1) with respect to an Investment occurring on or after the first anniversary of the
date of this Indenture, the twelve completed calendar months preceding the date of such
Investment for which internal financial statements are available; and

     (2) with respect to an Investment occurring before the first anniversary of the date of
this Indenture, the calendar months completed during the period beginning January 1, 2010
and ending on the date of such Investment for which internal financial statements are
available.

     "Mason Property” means the Company’s Great Wolf Lodge resort in Mason, Ohio, including without
limitation the real property, improvements, fixtures and other material assets, owned by Mason
Family Resorts, LLC or its Subsidiaries, related to such resort or used or useful in connection
therewith.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Mortgage Loan Borrower” means a Person who is an obligor on debt secured by a mortgage on the
real property held by such Person and/or security interests in the other assets held by such
Person, which debt is without recourse (other than customary non-recourse and environmental
guarantees or indemnities) to the assets of the Issuers or the Subsidiary Guarantors.

     “Mortgages” means each of the mortgages and deeds of trust dated as of the date hereof
pursuant to which a Lien is granted in favor of the Collateral Agent in real property owned by any
Principal Property Subsidiary, as each may be amended, restated, supplemented or otherwise modified
from time to time.

     “Net Loss Proceeds” means the aggregate cash and Cash Equivalents received by the Issuers or
any of their Subsidiary Guarantors in respect of any Event of Loss (including, without limitation,
insurance proceeds from condemnation awards or damages awarded by any judgment), net of:

     (1) the reasonable out-of-pocket direct costs relating to such Event of Loss
(including, without limitation, legal, accounting, appraisal and insurance adjuster fees);

     (2) taxes paid or payable after taking into account any reduction in tax liability due
to available tax credits or deductions and any tax sharing arrangements;

     (3) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as
the case may be, as a reserve, in accordance with GAAP, against any liabilities associated
with such Event of Loss and retained by the Company or any Restricted Subsidiary, as the
case may be, after such Event of Loss, including, without limitation, liabilities related to
environmental matters and liabilities under any indemnification obligations associated with
such Event of Loss.

     “Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation,
any cash or Cash Equivalents received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of:

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     (1) the direct costs relating to such Asset Sale, including, without limitation, legal,
accounting and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale;

     (2) taxes paid or payable as a result of the Asset Sale, in each case, after taking
into account any available tax credits or deductions and any tax sharing arrangements;

     (3) amounts required to be applied to the repayment of Indebtedness secured by, or
directly related to, the asset or assets that were the subject of such Asset Sale;

     (4) payments of unassumed liabilities (not constituting Indebtedness) relating to the
assets sold at the time of, or within 30 days after the date of, such Asset Sale;

     (5) amounts required to be paid to any Person (other than the Company or any Restricted
Subsidiary) owning a beneficial interest in the assets subject to the Asset Sale or having a
Lien thereon; and

     (6) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as
the case may be, as a reserve, in accordance with GAAP, against any liabilities associated
with such Asset Sale and retained by the Company or any Restricted Subsidiary, as the case
may be, after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset Sale, all as
reflected in an officers’ certificate delivered to the Trustee.

     “Non-Collateral Asset Sale” means an Asset Sale other than an Asset Sale of Collateral.

     “Non-Core Collateral Asset” means (i) the Undeveloped Land and (ii) those other assets of the
Principal Property Subsidiaries that are not real property or buildings thereon.

     “Non-Guarantor Restricted Subsidiaries” means Restricted Subsidiaries that are not Subsidiary
Guarantors.

     “Non-Recourse Debt” means Indebtedness:

     (1) as to which neither the Issuers nor any of the Company’s Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness) or (b) is directly or indirectly liable as a guarantor
or otherwise; or

     (2) as to which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of the Issuers or any of the Company’s Restricted
Subsidiaries (other than the Equity Interests of an Unrestricted Subsidiary).

     “Non-U.S. Person” means a Person who is not a U.S. Person.

     “Note Guarantee” means the Guarantee by each Guarantor of the Company’s obligations under this
Indenture and the Notes, executed pursuant to the provisions of this Indenture.

     “Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes,
the Exchange Notes and the Additional Notes shall be treated as a single class for all purposes
under this

19

 

Indenture, and unless the context otherwise requires, all references to the Notes shall
include the Initial Notes, the Exchange Notes and any Additional Notes.

     “Obligations” means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation governing any
Indebtedness.

     “Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the General
Counsel, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Executive
Vice-President or other Vice-President of such Person.

     “Officers’ Certificate” means a certificate signed on behalf of the Issuers by two Officers of
the Issuers, one of whom must be the principal executive officer, the principal financial officer,
the treasurer or the principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.

     “Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the
Trustee, that meets the requirements of Section 13.05 hereof. The counsel may be an employee of or
counsel to the Issuers, any Subsidiary of the Issuers or the Trustee.

     “Parent Guarantors” means Great Wolf Resorts and GWR OP General Partner, LLC, a Delaware
limited liability company, until the Note Guarantee of such Person has been released in accordance
with the provisions of this Indenture.

     “Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who
has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to
the Depositary, shall include Euroclear and Clearstream).

     “Permitted Business” means any business that is the same as, or reasonably related, ancillary
or complementary to, any of the businesses in which the Company and its Restricted Subsidiaries are
engaged on the date of this Indenture.

     “Permitted Collateral Liens” means:

     (1) Liens on property (including Capital Stock) existing at the time of acquisition of
the property by the Company or any Subsidiary of the Company (plus improvements and
accessions to such property, or proceeds or distributions thereof); provided that such Liens
were in existence prior to such acquisition and not incurred in contemplation of, such
acquisition;

     (2) Liens on accounts holding Net Loss Proceeds or Net Proceeds from a Collateral Asset
Sale to secure the performance of bids, tenders, contracts or similar obligations in respect
of construction, replacement, rebuilding or repair of assets that will become Collateral;

     (3) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
Section 4.09(b)(4) hereof covering only the assets acquired with or financed by such
Indebtedness (plus improvements and accessions to such property, or proceeds or
distributions thereof);

     (4) Liens existing on the date of this Indenture;

     (5) Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or subject to penalties for nonpayment or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded; provided that any
reserve

20

 

     or other appropriate provision as is required in conformity with GAAP, as in effect
from time to time, has been made therefor;

     (6) Liens imposed by law, such as carriers’, warehousemen’s and landlord’s Liens, in
each case, incurred in the ordinary course of business;

     (7) survey exceptions, easements or reservations of, or rights of others for, licenses,
rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar
purposes or other non-monetary encumbrances, or zoning or other restrictions as to the use
of real property that were not incurred in connection with Indebtedness and that do not in
the aggregate materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person;

     (8) Liens created for the benefit of (or to secure) the Initial Notes (or the Note
Guarantees in respect thereof) and any Exchange Notes issued under the Registration Rights
Agreement in respect thereof (and any Note Guarantees in respect of such Exchange Notes) and
not to secure any Additional Notes or Note Guarantees issued to guarantee any Additional
Notes;

     (9) Liens to secure Permitted Refinancing Indebtedness permitted to be incurred under
this Indenture that is issued in exchange for, or the net proceeds of which are used to
renew, refund, refinance, replace, defease or discharge other Indebtedness of the Issuers,
Parent Guarantors or any of the Company’s Restricted Subsidiaries that was permitted to be
incurred by Sections 4.09(b)(4) and 4.09(b)(12) hereof; provided, however, that:

     (a) the new Lien is limited to all or part of the same property and assets that
secured or, under the written agreements pursuant to which the original Lien arose,
could secure the original Lien (plus improvements and accessions to, such property
or proceeds or distributions thereof); and

     (b) the Indebtedness secured by the new Lien is not increased to any amount
greater than the sum of (x) the outstanding principal amount plus accrued and unpaid
interest, or, if greater, the committed amount, of the Indebtedness renewed,
refunded, refinanced, replaced, defeased or discharged with such Permitted
Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses,
including premiums, related to such renewal, refunding, refinancing, replacement,
defeasance or discharge;

     (10) Liens arising from filing of Uniform Commercial Code or similar state law
financing statements in connection with operating leases in the ordinary course of business;

     (11) Liens arising out of judgments or awards not constituting an Event of Default and
notices of lis pendens and associated rights related to litigation being contested in good
faith by appropriate proceedings and for which adequate reserves have been made;

     (12) Liens on specific items of inventory or other goods (and the proceeds thereof) of
any Person securing such Person’s obligations in respect of bankers’ acceptances issued or
created in the ordinary course of business for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods;

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     (13) Leases, licenses, subleases and sublicenses granted to others in the ordinary
course of business of the Issuers, the Parent Guarantors or any of the Company’s Restricted
Subsidiaries;

     (14) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of business;

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

     (16) Customary rights of setoff in respect of unpaid fees and expenses of deposit banks
encumbering accounts holding Net Loss Proceeds or Net Proceeds from a Collateral Asset Sale;

     (17) other Liens incidental to the conduct of the business of the Company and its
Restricted Subsidiaries or the ownership of any of their assets incurred in the ordinary
course of business and not incurred in connection with Indebtedness, which Liens do not in
any case materially detract from the value of the property subject thereto or interfere with
the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

     (18) mechanics’, materialmens’ or other similar Liens arising in the ordinary course of
business which are not delinquent for more than 60 days and remain payable without penalty,
or which are being contested in good faith and by appropriate proceedings diligently
prosecuted, which proceedings have the effect of preventing the forfeiture or sale of the
property subject thereto and for which adequate reserves in accordance with GAAP are being
maintained; and

     (19) other Liens securing obligations that do not exceed $250,000, in the aggregate, at
any one time outstanding.

     “Permitted Investments” means:

     (1) any Investment in the Company or in a Restricted Subsidiary of the Company that is
a Subsidiary Guarantor;

     (2) any Investment in Cash Equivalents or Investment Grade Securities;

     (3) any Investment by the Company or any Restricted Subsidiary of the Company in a
Person, if as a result of such Investment:

     (a) such Person becomes a Restricted Subsidiary of the Company and a Subsidiary
Guarantor; or

     (b) such Person, in one transaction or a series of related transactions, is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company that is a Subsidiary Guarantor;

     (4) any Investment made as a result of the receipt of non-cash consideration from a
Asset Sale that was made pursuant to and in compliance with Sections 4.10 or 4.11 hereof, or
any disposition of assets not constituting an Asset Sale;

22

 

     (5) any acquisition of assets or Capital Stock solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of Great Wolf Resorts;

     (6) (a) any Investments received in compromise or resolution of (i) obligations of
trade creditors or customers that were incurred in the ordinary course of business of the
Company or any of its Restricted Subsidiaries, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of any trade
creditor or customer; or (ii) litigation, arbitration or other disputes; or (b) as a result
of a foreclosure with respect to any secured Investment or other transfer of title with
respect to any secured Investment in default.

     (7) Investments represented by Hedging Obligations;

     (8) loans or advances to directors employees made in the ordinary course of business of
the Company or any Restricted Subsidiary of the Company in an aggregate principal amount not
to exceed $250,000 at any one time outstanding;

     (9) repurchases of the Notes and related Note Guarantees;

     (10) any guarantee of Indebtedness permitted to be incurred under Section 4.09 hereof
and performance guarantees in the ordinary course of business;

     (11) any Investment existing on, or made pursuant to binding commitments existing on,
the date of this Indenture and any Investment consisting of an extension, modification or
renewal of any Investment existing on, or made pursuant to a binding commitment existing on,
the date of this Indenture; provided that the amount of any such Investment may be increased
(a) as required by the terms of such Investment as in existence on the date of this
Indenture or (b) as otherwise permitted under this Indenture;

     (12) Investments acquired after the date of this Indenture as a result of the
acquisition by the Company or any Restricted Subsidiary of the Company of another Person,
including by way of a merger, amalgamation or consolidation with or into the Company or any
of its Restricted Subsidiaries in one transaction or a series of related transactions not
prohibited under Section 5.01 hereof after the date of this Indenture to the extent that
such Investments were not made in contemplation of such acquisition, merger, amalgamation or
consolidation and were in existence on the date of such acquisition, merger, amalgamation or
consolidation;

     (13) so long as no Event of Default has occurred and is continuing, other Investments
in any Person having an aggregate Fair Market Value (measured on the date each such
Investment was made and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (13) that are at the time
outstanding not to exceed $2.5 million, net of any return of or on such Investments;

     (14) Investments consisting of purchases and acquisitions of inventory, supplies,
material or equipment or the licensing or contribution of intellectual property pursuant to
joint marketing, joint development or similar arrangements with other Persons;

     (15) any Investments in receivables owing to the Company or a Restricted Subsidiary, if
created or acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade terms may include
such concessionary trade terms as the Company or such Restricted Subsidiary deems reasonable
under the circumstances;

23

 

     (16) advances, loans, rebates and extensions of credit to suppliers, customers and
vendors in the ordinary course of business; and

     (17) Investments in prepaid expenses, negotiable instruments held for collection and
lease and utility and worker’s compensation deposits provided to third parties in the
ordinary course of business.

     For the avoidance of doubt, Permitted Investments in joint ventures may be direct or indirect,
through an Unrestricted Subsidiary or a holding company.

     “Permitted Liens” means:

     (1) Liens in favor of the Issuers or the Subsidiary Guarantors;

     (2) Liens on property of a Person existing at the time such Person becomes a Restricted
Subsidiary of the Company or is merged with or into or consolidated with the Company or any
Restricted Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such Person becoming a Restricted Subsidiary of the Company or such
merger or consolidation and do not extend to any assets other than those of the Person that
becomes a Restricted Subsidiary of the Company or is merged with or into or consolidated
with the Company or any Restricted Subsidiary of the Company;

     (3) Liens on property (including Capital Stock) existing at the time of acquisition of
the property by the Company or any Subsidiary of the Company (plus improvements and
accessions to such property, or proceeds or distributions thereof); provided that such Liens
were in existence prior to such acquisition and not incurred in contemplation of, such
acquisition;

     (4) Liens to secure the performance of statutory obligations, insurance, surety or
appeal bonds, workers compensation obligations, performance bonds, surety bonds, bid bonds
or good faith deposits to secure bids, tenders, contracts (other than for the payment of
Indebtedness) or leases, or deposits to secure public or statutory obligations or deposits
of cash or U.S. government bonds to secure surety or appeal bonds, or deposits as security
for contested taxes or import duties or for the payment of rent, or other obligations of a
like nature incurred in the ordinary course of business (including Liens to secure letters
of credit issued to assure payment of such obligations);

     (5) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
Section 4.09(b)(4) hereof covering only the assets acquired with or financed by such
Indebtedness (plus improvements and accessions to such property, or proceeds or
distributions thereof);

     (6) Liens existing on the date of this Indenture;

     (7) Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or subject to penalties for nonpayment or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded; provided that any
reserve or other appropriate provision as is required in conformity with GAAP, as in effect
from time to time, has been made therefor;

     (8) Liens imposed by law, such as carriers’, warehousemen’s and landlord’s Liens, in
each case, incurred in the ordinary course of business;

24

 

     (9) survey exceptions, easements or reservations of, or rights of others for, licenses,
rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar
purposes or other non-monetary encumbrances, or zoning or other restrictions as to the use
of real property that were not incurred in connection with Indebtedness and that do not in
the aggregate materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person;

     (10) Liens created for the benefit of (or to secure) the Notes (or the Note
Guarantees);

     (11) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred
under this Indenture; provided, however, that:

     (a) the new Lien is limited to all or part of the same property and assets that
secured or, under the written agreements pursuant to which the original Lien arose,
could secure the original Lien (plus improvements and accessions to, such property
or proceeds or distributions thereof); and

     (b) the Indebtedness secured by the new Lien is not increased to any amount
greater than the sum of (x) the outstanding principal amount plus accrued and unpaid
interest, or, if greater, the committed amount, of the Indebtedness renewed,
refunded, refinanced, replaced, defeased or discharged with such Permitted
Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses,
including premiums, related to such renewal, refunding, refinancing, replacement,
defeasance or discharge;

     (12) Liens on insurance policies and proceeds thereof, or other deposits, to secure
insurance premium financings;

     (13) Liens arising from filing of Uniform Commercial Code or similar state law
financing statements in connection with operating leases in the ordinary course of business;

     (14) bankers’ Liens, rights of setoff, Liens arising out of judgments or awards not
constituting an Event of Default and notices of lis pendens and associated rights related to
litigation being contested in good faith by appropriate proceedings and for which adequate
reserves have been made;

     (15) Liens on cash, Cash Equivalents or other property arising in connection with the
defeasance, discharge or redemption of Indebtedness;

     (16) Liens on specific items of inventory or other goods (and the proceeds thereof) of
any Person securing such Person’s obligations in respect of bankers’ acceptances issued or
created in the ordinary course of business for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods;

     (17) Leases, licenses, subleases and sublicenses granted to others in the ordinary
course of business of the Issuers, the Parent Guarantors or any of the Company’s Restricted
Subsidiaries;

     (18) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of business;

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     (19) Liens to secure Indebtedness permitted by Sections 4.09(b)(1), 4.09(b)(11) or
4.09(b)(13) hereof;

     (20) other Liens of the Company or any Restricted Subsidiary of the Company with
respect to obligations that do not exceed $5.0 million at any one time outstanding;

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

     (22) Liens (i) of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection, (ii) attaching to commodity trading
accounts or other commodity brokerage accounts incurred in the ordinary course of business
and (iii) in favor of banking institutions arising as a matter of law encumbering deposits
(including the right of set-off) and which are within the general parameters customary in
the banking industry;

     (23) Liens that are contractual rights of set-off (i) relating to the establishment of
depository relations with banks not given in connection with the issuance of Indebtedness,
(ii) relating to pooled deposit or sweep accounts of the Company or any of its Restricted
Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the
ordinary course of business of the Company and its Restricted Subsidiaries or (iii) relating
to purchase orders and other agreements entered into with customers of the Company or any of
its Restricted Subsidiaries in the ordinary course of business;

     (24) Liens encumbering reasonable customary initial deposits and margin deposits and
similar Liens attaching to commodity trading accounts or other brokerage accounts incurred
in the ordinary course of business and not for speculative purposes;

     (25) Liens deemed to exist in connection with Investments in repurchase agreements
permitted under Section 4.09 hereof; provided that such Liens do not extend to any assets
other than those assets that are the subject of such repurchase agreement;

     (26) other Liens incidental to the conduct of the business of the Company and its
Restricted Subsidiaries or the ownership of any of their assets not incurred in connection
with Indebtedness, which Liens do not in any case materially detract from the value of the
property subject thereto or interfere with the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries;

     (27) Liens securing (w) secured Cash Management Obligations, (x) Hedging Obligations
secured by assets securing Credit Facilities, (y) any Hedging Obligations, so long as the
related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on
the same property securing such Hedging Obligations; and (z) any Hedging Obligations meant
to manage the fluctuations of commodity prices; and

     (28) mechanics’, materialmens’ or other similar Liens arising in the ordinary course of
business which are not delinquent for more than 60 days and remain payable without penalty,
or which are being contested in good faith and by appropriate proceedings diligently
prosecuted, which proceedings have the effect of preventing the forfeiture or sale of the
property subject thereto and for which adequate reserves in accordance with GAAP are being
maintained.

26

 

“Permitted Payments to Great Wolf Resorts” means, without duplication as to amounts:

     (1) payments to Great Wolf Resorts to permit Great Wolf Resorts to pay reasonable,
accounting, legal, and other professional and administrative expenses (including franchise
taxes and fees) of Great Wolf Resorts when incurred in the ordinary course and due;

     (2) payments to Great Wolf Resorts to permit Great Wolf Resorts to pay reasonable
director fees and other reasonable public company expenses that are customary for public
companies similar to Great Wolf Resorts;

     (3) payments to Great Wolf Resorts to permit Great Wolf Resorts to make lease payments
for its corporate offices;

     (4) payments to Great Wolf Resorts of amounts due and payable under a Tax Sharing
Agreement, if any; and

     (5) any “deemed dividend” for accounting purposes resulting from, or in connection
with, the filing of a consolidated or combined federal income tax return by Great Wolf
Resorts or any direct or indirect parent of the Company (and not involving any cash
distribution from the Company except as permitted by the Tax Sharing Agreement).

     “Permitted Refinancing Indebtedness” means any Indebtedness, Disqualified Stock or preferred
stock of the Issuers, Parent Guarantors or any of the Company’s Restricted Subsidiaries issued in
exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease
or discharge other Indebtedness of the Issuers, Parent Guarantors or any of the Company’s
Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

     (1) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or
discharged (plus all accrued interest on the Indebtedness and the amount of all fees and
expenses, including premiums, incurred in connection therewith);

     (2) such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity that is (a) equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock
or preferred stock being renewed, refunded, refinanced, replaced, defeased or discharged or
(b) more than 90 days after the final maturity date of the Notes;
(3) if Disqualified Stock or preferred stock is being renewed, refunded, refinanced,
replaced, defeased or discharged, than such Permitted Refinancing Indebtedness must be
Disqualified Stock or preferred stock, respectively;

     (4) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable
to the Holders of Notes as those contained in the documentation governing the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or discharged; and

27

 

     (5) any Permitted Refinancing Indebtedness may not be incurred by an Issuer or a
Guarantor to renew, refund, refinance, replace, defease or discharge the Indebtedness of a
Person who is not an Issuer or a Guarantor.

     “Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability company or government or
other entity.

     “Pittsburgh Joint Venture” means the proposed joint venture between Great Wolf Resorts (or its
Affiliates) and Zamias Corporation (or its Affiliates) to develop and operate a new Great Wolf
Lodge resort located adjacent to The Galleria at Pittsburgh Mills in Tarentum, Pennsylvania.

     “Principal Property” means the Williamsburg Property, Grapevine Property or Mason Property.

     “Principal Property Subsidiary” means Mason Family Resorts, LLC, a Delaware limited liability
company, Great Wolf Lodge of Grapevine, LLC, a Delaware limited liability company or Great Wolf
Williamsburg SPE, LLC, a Delaware limited liability company, together with all Subsidiaries of each
of them, and any direct or indirect Subsidiary of the Company that owns any portion of the
Principal Properties.

     “Private Placement Legend” means the legend set forth in Section 2.06(g)(1) hereof to be
placed on all Notes issued under this Indenture except where otherwise permitted by the provisions
of this Indenture.

     “QIB” means a “qualified institutional buyer” as defined in Rule 144A.

     “Qualifying Equity Interests” means Equity Interests of the Company other than Disqualified
Stock.

     “Registration Rights Agreement” means the Registration Rights Agreement, dated as of April 7,
2010, among the Issuers, the Guarantors and the other parties named on the signature pages thereof,
as such agreement may be amended, modified or supplemented from time to time and, with respect to
any Additional Notes, one or more registration rights agreements among the Issuers, the Guarantors
and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from
time to time, relating to rights given by the Issuers to the purchasers of Additional Notes to
register such Additional Notes under the Securities Act.

     “Regulation S” means Regulation S promulgated under the Securities Act.

     “Regulation S Global Note” means a Regulation S Temporary Global Note or Regulation S
Permanent Global Note, as appropriate.

     “Regulation S Permanent Global Note” means a permanent Global Note in the form of Exhibit A1
hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in a denomination
equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration
of the Restricted Period.

     “Regulation S Temporary Global Note” means a temporary Global Note in the form of Exhibit A2
hereto deposited with or on behalf of and registered in the name of the Depositary or its nominee,
issued in a denomination equal to the outstanding principal amount of the Notes initially sold in
reliance on Rule 903 of Regulation S.

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     “Responsible Officer” of any Person means the chief executive officer, the president, any vice
president, the chief operating officer or any financial officer of such Person and any other
officer or similar official thereof responsible for the administration of the obligations of such
Person in respect of the Notes.

     “Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

     “Restricted Global Note” means a Global Note bearing the Private Placement Legend.

     “Restricted Investment” means an Investment other than a Permitted Investment.

     “Restricted Period” means the 40-day distribution compliance period as defined in Regulation
S.

     “Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an
Unrestricted Subsidiary. For the avoidance of doubt, for purposes of the calculation of the Fixed
Charge Coverage Ratio and the Senior Secured Leverage Ratio, the Issuers shall be deemed to be
Restricted Subsidiaries of Great Wolf Resorts.

     “Rule 144” means Rule 144 promulgated under the Securities Act.

     “Rule 144A” means Rule 144A promulgated under the Securities Act.

     “Rule 903” means Rule 903 promulgated under the Securities Act.

     “Rule 904” means Rule 904 promulgated under the Securities Act.

     “S&P” means Standard & Poor’s Ratings Group.

     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Security Agreement” means the Security Agreement dated as of the date of this Indenture (as
it may be amended, restated, supplemented or otherwise modified from time to time), entered into by
and among the Principal Property Subsidiaries, each additional guarantor party thereto from time to
time and the Collateral Agent.

     “Senior Secured Indebtedness” means with respect to any Person, as of any date, the total
consolidated Indebtedness of such Person and its Restricted Subsidiaries that is secured by a Lien
(other than a Permitted Lien pursuant to clauses (4), (7), (8), (9), (12), (13), (14), (15), (16),
(17), (18), (21), (22), (23), (24), (25) and (26) of the definition of Permitted Liens, net (in the
case of the calculation of the Senior Secured Indebtedness of Great Wolf Resorts) of any
unrestricted cash shown on the last available quarterly consolidated balance sheet of Great Wolf
Resorts and its Restricted Subsidiaries.

     “Senior Secured Leverage Ratio” means, on any date, the ratio of total Senior Secured
Indebtedness on such date to Consolidated EBITDA for the period of four consecutive fiscal quarters
most recently ended on or prior to such date. The Senior Secured Leverage Ratio shall be subject
to the same adjustments as those specified in the second paragraph of the definition of “Fixed
Charge Coverage Ratio,” to the extent applicable.

     “Shelf Registration Statement” means the Shelf Registration Statement as defined in the
Registration Rights Agreement.

29

 

     “Significant Subsidiary” means any Restricted Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such Regulation is in effect on the date of this Indenture.

     “Special Interest” has the meaning assigned to that term pursuant to the Registration Rights
Agreement.

     “Stated Maturity” means, with respect to any installment of interest or principal on any
series of Indebtedness, the date on which the payment of interest or principal was scheduled to be
paid in the documentation governing such Indebtedness as of the date of this Indenture, and will
not include any contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.

     “Subordinated Indebtedness” means (a) with respect to the Company, any Indebtedness of the
Company that is by its terms subordinated in right of payment to the Notes pursuant to a written
agreement, and (b) with respect to any Subsidiary Guarantor, any Indebtedness of such Subsidiary
Guarantor that is by its terms subordinated in right of payment to the Note Guarantee of such
Subsidiary Guarantor pursuant to a written agreement. For the purposes of the foregoing, for the
avoidance of doubt, no Indebtedness shall be deemed to be subordinated in right of payment to any
other Indebtedness solely by virtue of being unsecured or secured by a lower priority Lien or by
virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements
or other arrangements giving one or more of such holders priority over the other holders in the
Collateral held by them.

     “Subordinated Notes” means those certain junior subordinated notes of the Company issued to
Trust I in March 2005 and Trust III in June 2007 under the Subordinated Notes Indentures on the
terms as in effect on the date of this Indenture.

     “Subordinated Notes Indentures” means, collectively, the Trust I Indenture and the Trust III
Indenture.

     “Subsidiary” means, with respect to any specified Person:

     (1) any corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency and after giving effect to any voting agreement or stockholders’ agreement
that effectively transfers voting power) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and

     (2) any partnership or limited liability company of which (a) more than 50% of the
capital accounts, distribution rights, total equity and voting interests or general and
limited partnership interests, as applicable, are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that Person or a
combination thereof, whether in the form of membership, general, special or limited
partnership interests or otherwise, and (b) such Person or any Subsidiary of such Person is
a controlling general partner or otherwise controls such entity.

     “Subsidiary Guarantors” means any Subsidiary of the Company that executes a Note Guarantee in
accordance with the provisions of this Indenture, and their respective successors and assigns, in
each

30

 

case, until the Note Guarantee of such Person has been released in accordance with the
provisions of this Indenture.

     “Tax Sharing Agreement” means any tax allocation agreement between the Company or any of its
Subsidiaries with any of the Parent Guarantors, or any other direct or indirect shareholder of the
Company, in each such case with respect to tax returns reflecting the income or assets of the
Company or any of its Subsidiaries, but only to the extent that amounts payable from time to time
by the Company or any such Subsidiary under any such agreement do not exceed the lesser of (1) the
corresponding tax payments that the Company or such Subsidiary would have been required to make to
any relevant taxing authority had the Company or such Subsidiary filed returns including only the
Company or its Subsidiaries, and (2) the net amount of relevant tax that Great Wolf Resorts
actually owes to the appropriate taxing authority.

     “TIA” means the Trust Indenture Act of 1939, as amended, or any successor statute.

     “Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption
date of United States Treasury securities with a constant maturity (as compiled and published in
the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available
at least two Business Days prior to the Make-Whole Redemption Date or, in the case of defeasance or
discharge, the date of deposit (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the period from the
redemption date to April 1, 2014; provided, however, that if the period from the redemption date to
April 1, 2014, is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.

     “Trust I” means Great Wolf Capital Trust I.

     “Trust I Indenture” means the junior subordinated notes indenture between Great Wolf Resorts
and JPMorgan Chase Bank, National Association, dated March 15, 2005, which provides for the
issuance of its unsecured junior subordinate Notes issued to evidence loans made to Great Wolf
Resorts of the proceeds from the issuance by Trust I of certain Trust I securities.

     “Trust III” means Great Wolf Capital Trust III.

     “Trust III Indenture” means the junior subordinated notes indenture between the Company and
Wells Fargo Bank, N.A., dated June 15, 2007, which provides for the issuance of its unsecured
junior subordinate Notes issued to evidence a loan made to Great Wolf Resorts of the proceeds from
the issuance by Trust III of certain Trust III securities.

     “Trustee” means U.S. National Bank Association, until a successor replaces it in accordance
with the applicable provisions of this Indenture and thereafter means the successor serving
hereunder.

     “Undeveloped Land” means (i) those portions of the Grapevine Property known as Lot 2-R, Lot
3-R and Lot 4-R, Block 1R, (ii) the portion of the Williamsburg Property known as “Parcel D,” and
(iii) any undeveloped part of the portion of the Williamsburg Property known as “Parcel A” to the
extent that (a) such undeveloped part consists, on or after the date of this Indenture, of a
separate real estate tax parcel and has been legally subdivided from the remainder of such “Parcel
A,” and (b) such undeveloped part is not necessary for Great Wolf Williamsburg SPE LLC’s physical
operation or use of the Williamsburg Property for its then current use or Great Wolf Williamsburg
SPE, LLC has entered or will enter into a reciprocal easement agreement or other agreement with
respect to any necessary use of such undeveloped part.

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     “Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required
to bear the Private Placement Legend.

     “Unrestricted Global Note” means a Global Note that does not bear and is not required to bear
the Private Placement Legend.

     “Unrestricted Subsidiary” means any Subsidiary of the Company (other than the Principal
Property Subsidiaries or any successor to any of them) that is designated by the Board of Directors
of the Company as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors,
but only to the extent that such Subsidiary:

     (1) has no Indebtedness other than Non-Recourse Debt;

     (2) except as permitted by Section 4.13 hereof, is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement or understanding are
no less favorable to the Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company;

     (3) is a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such Person’s financial condition or to cause such
Person to achieve any specified levels of operating results; and

     (4) has not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries.

     “U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities
Act.

     “Voting Stock” of any specified Person as of any date means the Capital Stock of such Person
that is at the time entitled to vote in the election of the Board of Directors of such Person.

     “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing:

     (1) the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment; by

     (2) the then outstanding principal amount of such Indebtedness.

     “Wholly Owned Restricted Subsidiary” of any specified Person means a Restricted Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares) will at the time be owned by such Person or by one or more Wholly
Owned Restricted Subsidiaries of such Person.

     “Williamsburg Property” means the Company’s Great Wolf Lodge resort in Williamsburg, Virginia,
including without limitation the real property, improvements, fixtures and other material assets,

32

 

owned by Great Wolf Williamsburg SPE, LLC or its Subsidiaries, related to such resort or used
or useful in connection therewith.

     “Without Recourse” means, with respect to an item of Indebtedness and assets, that such
Indebtedness is without recourse to such assets, except for customary non-recourse carve-out or
environmental guarantees or indemnities that have not been called; provided that, at the time any
such guarantees or indemnities are called, such Indebtedness shall no longer be Without Recourse to
such assets.

Section 1.02 Other Definitions.

	 	 	 	 	 
	 	 	Defined in	 
	Term	 	Section	 
	“Acceptable Event of Loss Commitment”
	 	 	4.12	 
	“Affiliate Transaction”
	 	 	4.13	 
	“Aggregate Payments”
	 	 	11.02	 
	“Authentication Order”
	 	 	2.02	 
	“Change of Control Offer”
	 	 	4.17	 
	“Change of Control Payment”
	 	 	4.17	 
	“Change of Control Payment Date”
	 	 	4.17	 
	“Collateral Asset Sale Offer”
	 	 	4.10	 
	“Collateral Excess Proceeds”
	 	 	4.10	 
	“Contributing Guarantors”
	 	 	11.06	 
	“Covenant Defeasance”
	 	 	8.03	 
	“DTC”
	 	 	2.03	 
	“Event of Default”
	 	 	6.01	 
	“Event of Loss Offer”
	 	 	4.12	 
	“Excess Loss Proceeds”
	 	 	4.12	 
	“Excess Proceeds Offer”
	 	 	3.09	 
	“Fair Share”
	 	 	11.06	 
	“Fair Share Contribution Amount”
	 	 	11.06	 
	“Funding Guarantor”
	 	 	11.06	 
	“Funds in Trust”
	 	 	8.04	 
	“incur”
	 	 	4.09	 
	“Legal Defeasance”
	 	 	8.02	 
	“Make-Whole Redemption Date”
	 	 	3.07	 
	“Non-Collateral Asset Sale Offer”
	 	 	4.11	 
	“Non-Collateral Excess Proceeds”
	 	 	4.11	 
	“Offer Amount”
	 	 	3.09	 
	“Offer Period”
	 	 	3.09	 
	“OID Legend”
	 	 	2.06	 
	“Paying Agent”
	 	 	2.03	 
	“Payment Default”
	 	 	6.01	 
	“Permitted Debt”
	 	 	4.09	 
	“Purchase Date”
	 	 	3.09	 
	“Registrar”
	 	 	2.03	 
	“Restricted Payments”
	 	 	4.07	 

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Section 1.03 Incorporation by Reference of Trust Indenture Act.

     Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture.

     The following TIA terms used in this Indenture have the following meanings:

     “indenture securities” means the Notes;

     “indenture security Holder” means a Holder of a Note;

     “indenture to be qualified” means this Indenture;

     “indenture trustee” or “institutional trustee” means the Trustee; and

     “obligor” on the Notes and the Note Guarantees means the Issuers and the Guarantors,
respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.

     All other terms used in this Indenture that are defined by the TIA, defined by TIA reference
to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

Section 1.04 Rules of Construction.

     Unless the context otherwise requires:

     (1) a term has the meaning assigned to it;

     (2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

     (3) “or” is not exclusive;

     (4) words in the singular include the plural, and in the plural include the singular;

     (5) “will” shall be interpreted to express a command;

     (6) provisions apply to successive events and transactions;

     (7) references to “interest” shall, without duplication, also be deemed to be
references to Special Interest, unless the context otherwise requires;

     (8) references to laws and statutes shall be deemed to refer to successor laws and
statutes thereto; and

     (9) references to sections of or forms or rules under the Exchange Act, the Securities
Act or the TIA will be deemed to include substitute, replacement of successor sections or
forms or rules adopted by the SEC from time to time.

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ARTICLE 2

THE NOTES

Section 2.01 Form and Dating.

     (a) General. The Notes and the Trustee’s certificate of authentication will be substantially
in the form of Exhibits A1 and A2 hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Note will be dated the date of its
authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in
excess thereof.

     The terms and provisions contained in the Notes will constitute, and are hereby expressly
made, a part of this Indenture and the Issuers, the Guarantors and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be controlling.

     (b) Global Notes. Notes issued in global form will be substantially in the form of Exhibits
A1 or A2 hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of
Interests in the Global Note” attached thereto). Notes issued in definitive form will be
substantially in the form of Exhibit A1 hereto (but without the Global Note Legend thereon and
without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global
Note will represent such of the outstanding Notes as will be specified therein and each shall
provide that it represents the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in
the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee
or the Custodian, at the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.06 hereof.

     (c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S will be issued
initially in the form of the Regulation S Temporary Global Note, which will be deposited on behalf
of the purchasers of the Notes represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the
accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the
Issuers and authenticated by the Trustee as hereinafter provided. The Restricted Period will be
terminated upon the receipt by the Trustee of:

     (1) a written certificate from the Depositary, together with copies of certificates
from Euroclear and Clearstream certifying that they have received certification of
non-United States beneficial ownership of 100% of the aggregate principal amount of the
Regulation S Temporary Global Note (except to the extent of any Beneficial Owners thereof
who acquired an interest therein during the Restricted Period pursuant to another exemption
from registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Note or an IAI Global Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(b) hereof); and

     (2) an Officers’ Certificate from the Issuers.

     Following the termination of the Restricted Period, beneficial interests in the Regulation S
Temporary Global Note will be exchanged for beneficial interests in the Regulation S Permanent
Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the
Regulation S

35

 

Permanent Global Note, the Trustee will cancel the Regulation S Temporary Global Note. The
aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent
Global Note may from time to time be increased or decreased by adjustments made on the records of
the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.

     (3) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating
Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear”
and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of
Clearstream will be applicable to transfers of beneficial interests in the Regulation S
Temporary Global Note and the Regulation S Permanent Global Note that are held by
Participants through Euroclear or Clearstream.

Section 2.02 Execution and Authentication.

     At least one Officer must sign the Notes for the Issuers by manual or facsimile signature.

     If an Officer whose signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note will nevertheless be valid.

     A Note will not be valid until authenticated by the manual signature of the Trustee. The
signature will be conclusive evidence that the Note has been authenticated under this Indenture.

     The Trustee will, upon receipt of a written order of the Issuers signed by at least one
Officer (an “Authentication Order”), authenticate Notes for original issue that may be validly
issued under this Indenture, including any Additional Notes. The aggregate principal amount of
Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for
issuance by the Issuers pursuant to one or more Authentication Orders, except as provided in
Section 2.07 hereof.

     The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by such agent.
An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of
the Issuers.

Section 2.03 Registrar and Paying Agent.

     The Issuers will maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for
payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer
and exchange. The Issuers may appoint one or more co-registrars and one or more additional paying
agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any
additional paying agent. The Issuers may change any Paying Agent or Registrar without notice to
any Holder. The Issuers will notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuers or any of their Subsidiaries
may act as Paying Agent or Registrar.

     The Issuers initially appoint The Depository Trust Company (“DTC”) to act as Depositary with
respect to the Global Notes.

     The Issuers initially appoint the Trustee to act as the Registrar and Paying Agent and to act
as Custodian with respect to the Global Notes.

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Section 2.04 Paying Agent to Hold Money in Trust.

     The Issuers will require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the
Paying Agent for the payment of principal of, premium on, if any, interest or Special Interest, if
any, on, the Notes, and will notify the Trustee of any default by the Issuers in making any such
payment. While any such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Issuers at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Issuers or a Subsidiary) will have no further liability for the money. If either of the Issuers or
a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Issuers, the Trustee will serve as Paying Agent for the Notes.

Section 2.05 Holder Lists.

     The Trustee will preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of all Holders and shall otherwise comply with TIA
§312(a). If the Trustee is not the Registrar, the Issuers will furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may reasonably require
of the names and addresses of the Holders of Notes and the Issuers shall otherwise comply with TIA
§312(a).

Section 2.06 Transfer and Exchange.

     (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a
whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes will be
exchangeable for Definitive Notes if:

     (1) the Issuers deliver to the Trustee notice from the Depositary that it is unwilling
or unable to continue to act as Depositary or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is not
appointed by the Issuers within 120 days after the date of such notice from the Depositary;

     (2) the Issuers in their sole discretion determine that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and deliver a written notice to such
effect to the Trustee; provided that in no event shall the Regulation S Temporary Global
Note be exchanged by the Issuers for Definitive Notes prior to (A) the expiration of the
Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant
to Rule 903(b)(3)(ii)(B) under the Securities Act; or

     (3) there has occurred and is continuing a Default or Event of Default with respect to
the Notes.

     Upon the occurrence of either of the preceding events in (1) or (2) above, Definitive Notes
shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every
Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a

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Global Note. A Global Note may not be exchanged for another Note other than as provided in
this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and
exchanged as provided in Section 2.06(b), (c) or (f) hereof.

     (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and
exchange of beneficial interests in the Global Notes will be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial
interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Transfers of beneficial
interests in the Global Notes also will require compliance with either subparagraph (1) or (2)
below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

     (1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in
any Restricted Global Note may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend; provided, however, that
prior to the expiration of the Restricted Period, transfers of beneficial interests in the
Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note. No written orders or instructions
shall be required to be delivered to the Registrar to effect the transfers described in this
Section 2.06(b)(1).

     (2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In
connection with all transfers and exchanges of beneficial interests that are not subject to
Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the
Registrar either:

     (A) both:

     (i) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged; and

     (ii) instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited with
such increase; or

     (B) both:

     (i) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged; and

     (ii) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above;

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provided that in no event shall Definitive Notes be issued upon the transfer
or exchange of beneficial interests in the Regulation S Temporary Global
Note prior to (A) the expiration of the Restricted Period and (B) the
receipt by the Registrar of any certificates required pursuant to Rule 903
under the Securities Act.

Upon consummation of an Exchange Offer by the Issuers in accordance with Section 2.06(f) hereof,
the requirements of this Section 2.06(b)(2) shall be deemed to have been satisfied upon receipt by
the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of
such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes contained in this
Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust
the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

     (3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial
interest in any Restricted Global Note may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar
receives the following:

     (A) if the transferee will take delivery in the form of a beneficial interest
in the 144A Global Note, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof;

     (B) if the transferee will take delivery in the form of a beneficial interest
in the Regulation S Temporary Global Note or the Regulation S Permanent Global Note,
then the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and

     (C) if the transferee will take delivery in the form of a beneficial interest
in the IAI Global Note, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.

     (4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for
Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer
complies with the requirements of Section 2.06(b)(2) above and:

     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the holder of the beneficial
interest to be transferred, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal that it is not
(i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange
Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Issuers;

     (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;

     (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or

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     (D) the Registrar receives the following:

     (i) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a beneficial interest
in an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

     (ii) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.

     If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an
Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.

     Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to
Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.

     (c) Transfer or Exchange of Beneficial Interests for Definitive Notes.

     (1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If
any holder of a beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:

     (A) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;

     (B) if such beneficial interest is being transferred to a QIB in accordance
with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof;

     (C) if such beneficial interest is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item (2)
thereof;

40

 

     (D) if such beneficial interest is being transferred pursuant to an exemption
from the registration requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;

     (E) if such beneficial interest is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration requirements
of the Securities Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3) thereof, if
applicable;

     (F) if such beneficial interest is being transferred to the Issuers or any of
its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or

     (G) if such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Issuers shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of such beneficial interest
shall instruct the Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained therein.

     (2) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes.
Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a beneficial interest in the
Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred
to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the
expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates
required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case of a
transfer pursuant to an exemption from the registration requirements of the Securities Act
other than Rule 903 or Rule 904.

     (3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes.
A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial
interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:

     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the holder of such beneficial
interest, in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes
or (iii) a Person who is an affiliate (as defined in Rule 144) of the Issuers;

41

 

     (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;

     (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or

     (D) the Registrar receives the following:

     (i) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for an Unrestricted
Definitive Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or

     (ii) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of an Unrestricted Definitive Note, a
certificate from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.

     (4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.
If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange
such beneficial interest for a Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction
of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the
aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Issuers will execute and the Trustee will authenticate
and deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(4) will be registered in such name or names and in
such authorized denomination or denominations as the holder of such beneficial interest
requests through instructions to the Registrar from or through the Depositary and the
Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear the Private
Placement Legend.

     (d) Transfer and Exchange of Definitive Notes for Beneficial Interests.

     (1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If
any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following documentation:

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     (A) if the Holder of such Restricted Definitive Note proposes to exchange such
Note for a beneficial interest in a Restricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item (2)(b)
thereof;

     (B) if such Restricted Definitive Note is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;

     (C) if such Restricted Definitive Note is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;

     (D) if such Restricted Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance
with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(a) thereof;

     (E) if such Restricted Definitive Note is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration requirements
of the Securities Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3) thereof, if
applicable;

     (F) if such Restricted Definitive Note is being transferred to the Issuers or
any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or

     (G) if such Restricted Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item (3)(c)
thereof,

the Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above, the
appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global
Note, in the case of clause (C) above, the Regulation S Global Note, and in all
other cases, the IAI Global Note.

     (2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.
A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in
an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:

     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;

     (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;

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     (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or

     (D) the Registrar receives the following:

     (i) if the Holder of such Definitive Notes proposes to exchange such
Notes for a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or

     (ii) if the Holder of such Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.

     Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be
increased the aggregate principal amount of the Unrestricted Global Note.

     (3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.
A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial
interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note
at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will
cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.

     If any such exchange or transfer from a Definitive Note to a beneficial interest is
effected pursuant to subparagraphs (2)(B), (2)(D) or (3) above at a time when an
Unrestricted Global Note has not yet been issued, the Issuers will issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will
authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.

     (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder
of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the
Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration
of transfer or exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in
writing. In addition, the requesting Holder must provide any additional certifications, documents
and information, as applicable, required pursuant to the following provisions of this Section
2.06(e).

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     (1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted
Definitive Note may be transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the
following:

     (A) if the transfer will be made pursuant to Rule 144A, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;

     (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the
transferor must deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and

     (C) if the transfer will be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if applicable.

     (2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted
Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note
or transferred to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:

     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;

     (B) any such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement;

     (C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the Registration Rights Agreement;
or

     (D) the Registrar receives the following:

     (i) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto, including the certifications in
item (1)(d) thereof; or

     (ii) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the form
of an Unrestricted Definitive Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on

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transfer contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act.

     (3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of
Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such
a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.

     (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Issuers will issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee will authenticate:

     (1) one or more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes accepted for
exchange in the Exchange Offer by Persons that certify in the applicable Letters of
Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a
distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144)
of the Issuers; and

     (2) Unrestricted Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange
Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not
Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and
(C) they are not affiliates (as defined in Rule 144) of the Issuers.

     Concurrently with the issuance of such Notes, the Trustee will cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuers will
execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of
Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount.

     (g) Legends. The following legends will appear on the face of all Global Notes and Definitive
Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions
of this Indenture.

     (1) Private Placement Legend.

     (A) Except as permitted by subparagraph (B) below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:

“THE OFFER AND SALE OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) AND, ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”) OR (B) IT IS NOT A U.S. PERSON,
IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED

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TO UNDER RULE 144A(d)(1) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB OR AN ACCREDITED INVESTOR PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB OR AN ACCREDITED INVESTOR, RESPECTIVELY, IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED STATES TO INSTITUTIONAL
“ACCREDITED INVESTORS” (UNDER RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144A UNDER THE SECURITIES
ACT (IF AVAILABLE AND PROVIDED THAT PRIOR TO SUCH TRANSFER, THE TRUSTEE IS FURNISHED WITH AN
OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE (2) (E) OR (2) (F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN
THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM
BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.”

     (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued
pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or
(f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution
thereof) will not bear the Private Placement Legend.

     (2) Global Note Legend. Each Global Note will bear a legend in substantially the
following form:

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR
ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
ISSUERS.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE

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DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER
STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

     (3) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note
will bear a Legend in substantially the following form:

“THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE
SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.”

     (4) Original Issue Discount Legend. To the extent required by Section 1275(c)(1)(A) of
the Internal Revenue Code of 1986, as amended, and Treasury Regulation Section
1.1275-3(b)(1), each Note issued at a discount to its stated redemption price at maturity
shall bear a legend (the “OID Legend”) in substantially the following form (with any
necessary amendments thereto to reflect any amendments occurring after the Issue Date to the
applicable sections):

“FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT. YOU MAY CONTACT THE ISSUER AT 122 WEST
WASHINGTON AVENUE, MADISON, WISCONSIN, 53703, ATTENTION: TREASURER, AND THE ISSUER WILL PROVIDE YOU
WITH THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO
MATURITY OF THIS NOTE.”

     (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests
in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note
has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be
returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any
time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes represented by such
Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note, such other Global Note will be
increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

     (i) General Provisions Relating to Transfers and Exchanges.

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     (1) To permit registrations of transfers and exchanges, the Issuers will execute and
the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an
Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

     (2) No service charge will be made to a Holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but
the Issuers may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10,
3.06, 3.09, 4.10, 4.11, 4.12, 4.17 and 9.05 hereof).

     (3) The Registrar will not be required to register the transfer of or exchange of any
Note selected for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.

     (4) All Global Notes and Definitive Notes issued upon any registration of transfer or
exchange of Global Notes or Definitive Notes will be the valid obligations of the Issuers,
evidencing the same debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

     (5) Neither the Registrar nor the Issuers will be required:

     (A) to issue, to register the transfer of or to exchange any Notes during a
period beginning at the opening of business 15 days before the day of any selection
of Notes for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection;

     (B) to register the transfer of or to exchange any Note selected for redemption
in whole or in part, except the unredeemed portion of any Note being redeemed in
part; or

     (C) to register the transfer of or to exchange a Note between a record date and
the next succeeding interest payment date.

     (6) Prior to due presentment for the registration of a transfer of any Note, the
Trustee, any Agent and the Issuers may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and none of the Trustee,
any Agent or the Issuers shall be affected by notice to the contrary.

     (7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with
the provisions of Section 2.02 hereof.

     (8) All certifications, certificates and Opinions of Counsel required to be submitted
to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.

Section 2.07 Replacement Notes.

     If any mutilated Note is surrendered to the Trustee or the Issuers and the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuers will issue
and the

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Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the
Trustee’s requirements are met. If required by the Trustee or the Issuers, an indemnity bond must
be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuers to
protect the Issuers, the Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Issuers may charge for their expenses in replacing a
Note.

     Every replacement Note is an additional obligation of the Issuers and will be entitled to all
of the benefits of this Indenture equally and proportionately with all other Notes duly issued
hereunder.

Section 2.08 Outstanding Notes.

     The Notes outstanding at any time are all the Notes authenticated by the Trustee except for
those canceled by it, those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof, and those described
in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does
not cease to be outstanding because the Issuers or an Affiliate of the Issuers holds the Note.

     If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

     If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to
be outstanding and interest on it ceases to accrue.

     If the Paying Agent (other than the Issuers, a Subsidiary or an Affiliate of any thereof)
holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date,
then on and after that date such Notes will be deemed to be no longer outstanding and will cease to
accrue interest.

Section 2.09 Treasury Notes.

     In determining whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver or consent, Notes owned by the Issuers or any Guarantor, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect common control with
the Issuers or any Guarantor, will be considered as though not outstanding, except that for the
purposes of determining whether the Trustee will be protected in relying on any such direction,
waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.

Section 2.10 Temporary Notes.

     Until certificates representing Notes are ready for delivery, the Issuers may prepare and the
Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary
Notes will be substantially in the form of certificated Notes but may have variations that the
Issuers considers appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Issuers will prepare and the Trustee will authenticate
definitive Notes in exchange for temporary Notes.

     Holders of temporary Notes will be entitled to all of the benefits of this Indenture.

Section 2.11 Cancellation.

     The Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and
Paying Agent will forward to the Trustee any Notes surrendered to them for registration of
transfer,

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exchange or payment. The Trustee and no one else will cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled
Notes (subject to the record retention requirement of the Exchange Act). Certification of the
destruction of all canceled Notes will be delivered to the Issuers. The Issuers may not issue new
Notes to replace Notes that they have paid or that have been delivered to the Trustee for
cancellation.

Section 2.12 Defaulted Interest.

     If the Issuers default in a payment of interest on the Notes, they will pay the defaulted
interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Notes and in Section 4.01 hereof. The Issuers will notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and the date of the
proposed payment. The Issuers will fix or cause to be fixed each such special record date and
payment date; provided that no such special record date may be less than 10 days prior to the
related payment date for such defaulted interest. At least 15 days before the special record date,
the Issuers (or, upon the written request of the Issuers, the Trustee in the name and at the
expense of the Issuers) will mail or cause to be mailed to Holders a notice that states the special
record date, the related payment date and the amount of such interest to be paid.

Section 2.13 CUSIP Numbers.

     The Issuers in issuing the Notes may use CUSIP numbers, ISIN or Common Code numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no representation is made as
to the correctness of such numbers either as printed on the Notes or as contained in any notice of
a redemption and that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or omission of such
numbers. The Issuers shall promptly notify the Trustee in writing of any change in the CUSIP
numbers, ISIN or Common Code numbers.

ARTICLE 3

REDEMPTION AND PREPAYMENT

Section 3.01 Notices to Trustee.

     If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Section
3.07 hereof, they must furnish to the Trustee, at least 30 days but not more than 60 days before a
redemption date, an Officers’ Certificate (except that such Officer’s Certificate may be furnished
more than 60 days prior to a redemption date if it is issued in connection with a defeasance of the
Notes or a satisfaction and discharge of this Indenture pursuant to Article 8 or 12) setting forth:

	 	(1)	 	the clause of this Indenture pursuant to which the redemption shall occur;
	 
	 	(2)	 	the redemption date;
	 
	 	(3)	 	the principal amount of Notes to be redeemed; and
	 
	 	(4)	 	the redemption price.

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Section 3.02 Selection of Notes to Be Redeemed or Purchased.

     If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee will select Notes for redemption or purchase on a pro rata basis (or, in the case
of Notes issued in global form pursuant to Article 2 hereof, based on a method that most nearly
approximates a pro rata selection as the Trustee deems fair and appropriate) unless otherwise
required by law or applicable stock exchange or depositary requirements.

     In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or
purchased will be selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption or purchase date by the Trustee from the outstanding Notes not
previously called for redemption or purchase.

     The Trustee will promptly notify the Issuers in writing of the Notes selected for redemption
or purchase and, in the case of any Note selected for partial redemption or purchase, the principal
amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in
amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes
of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such
Holder shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of
this Indenture that apply to Notes called for redemption or purchase also apply to portions of
Notes called for redemption or purchase.

Section 3.03 Notice of Redemption.

     Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days
before a redemption date, the Issuers will provide a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption notices may be mailed
more than 60 days prior to a redemption date if the notice is issued in connection with a
defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8 or
12 hereof.

     The notice will identify the Notes to be redeemed and will state:

     (1) the redemption date;

     (2) the redemption price;

     (3) if any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the redemption date upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;

     (4) the name and address of the Paying Agent;

     (5) that Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;

     (6) that, unless the Issuers default in making such redemption payment, interest or
Special Interest, if any, on Notes called for redemption ceases to accrue on and after the
redemption date;

     (7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the
Notes called for redemption are being redeemed;

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     (8) the CUSIP number, ISIN or Common Code number, if any, listed on such notice or
printed on such Notes; and

     (9) that no representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Notes.

     At the Issuers’ request, the Trustee will give the notice of redemption in the Issuers’ names
and at their expense; provided, however, that the Issuers have delivered to the Trustee, at least
45 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as provided in the
preceding paragraph.

Section 3.04 Effect of Notice of Redemption.

     Once notice of redemption is provided in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the redemption price. A
notice of redemption may not be conditional.

Section 3.05 Deposit of Redemption or Purchase Price.

     One Business Day prior to the redemption or purchase date, the Issuers will deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of,
accrued interest and Special Interest, if any, on all Notes to be redeemed or purchased on that
date. The Trustee or the Paying Agent will promptly return to the Issuers any money deposited with
the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption or purchase price of, accrued interest and Special Interest, if any, on all Notes to be
redeemed or purchased.

     If the Issuers comply with the provisions of the preceding paragraph, on and after the
redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes
called for redemption or purchase. If a Note is redeemed or purchased on or after an interest
record date but on or prior to the related interest payment date, then any accrued and unpaid
interest or Special Interest, if any, to, but not including the redemption or purchase date shall
be paid to the Person in whose name such Note was registered at the close of business on such
record date. If any Note called for redemption or purchase is not so paid upon surrender for
redemption or purchase because of the failure of the Issuers to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date
until such principal is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06 Notes Redeemed or Purchased in Part.

     Upon surrender of a Note that is redeemed or purchased in part, the Issuers will issue and,
upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the
expense of the Issuers a new Note equal in principal amount to the unredeemed or unpurchased
portion of the Note surrendered.

Section 3.07 Optional Redemption.

     (a) At any time prior to April 1, 2013, the Issuers may on any one or more occasions redeem up
to 35% of the aggregate principal amount of Notes issued under this Indenture (including any
Additional Notes but not including any Exchange Notes), upon not less than 30 nor more than 60
days’ notice, at a redemption price equal to 110.875% of the principal amount of the Notes
redeemed, plus accrued and unpaid interest and Special Interest, if any, to, but not including, the
date of redemption

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(subject to the rights of Holders of Notes on the relevant record date to receive interest on
the relevant interest payment date), with the net cash proceeds of an Equity Offering by Great Wolf
Resorts that are contributed to the Company; provided that:

     (1) at least 50% of the aggregate principal amount of Notes originally issued under
this Indenture (including any Additional Notes, but excluding any Exchange Notes) remains
outstanding immediately after the occurrence of such redemption; and

     (2) the redemption occurs within 60 days of the date of the closing of such Equity
Offering.

     (b) At any time prior to April 1, 2014, the Issuers may on any one or more occasions redeem
all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at a redemption
price equal to 100% of the principal amount of the Notes redeemed, plus the Applicable Premium as
of, and accrued and unpaid interest and Special Interest, if any, to, but not including, the date
of redemption (the “Make-Whole Redemption Date”), subject to the rights of Holders on the relevant
record date to receive interest due on the relevant interest payment date.

     (c) Except pursuant to the preceding paragraphs, the Notes will not be redeemable at the
Issuers’ option prior to April 1, 2014.

     (d) On or after April 1, 2014, the Issuers may on any one or more occasions redeem all or a
part of the Notes, upon not less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest
and Special Interest, if any, on the Notes redeemed, to, but not including, the applicable
redemption date, if redeemed during the twelve-month period beginning on April 1 of the years
indicated below, subject to the rights of Holders on the relevant record date to receive interest
on the relevant interest payment date:

	 	 	 	 	 
	Year	 	Percentage	 
	2014
	 	 	105.438	%
	2015
	 	 	102.719	%
	2016 and thereafter
	 	 	100.000	%

     Unless the Issuers default in the payment of the redemption price, interest will cease to
accrue on the Notes or portions thereof called for redemption on the applicable redemption date.

     (e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

Section 3.08 Mandatory Redemption.

     The Issuers are not required to make mandatory redemption or sinking fund payments with
respect to the Notes.

Section 3.09 Offer to Purchase by Application of Excess Proceeds.

     In the event that, pursuant to Section 4.10, 4.11 or 4.12 hereof, the Issuers are required to
commence a Collateral Asset Sale Offer, Non-Collateral Asset Sale Offer or Event of Loss Offer,
respectively (each Collateral Asset Sale Offer, Non-Collateral Asset Sale Offer or Event of Loss
Offer is referred to in this Section 3.09 as an “Excess Proceeds Offer”), they will follow the
procedures specified below.

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     The Excess Proceeds Offer shall be made (i) to all Holders and (ii) if made pursuant to
Section 4.11 hereof, all holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers to purchase, prepay
or redeem with the proceeds of sales of assets. The Excess Proceeds Offer will remain open for a
period of at least 20 Business Days following its commencement and not more than 30 Business Days,
except to the extent that a longer period is required by applicable law (the “Offer Period”). No
later than five Business Days after the termination of the Offer Period (the “Purchase Date”), the
Issuers will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and, if
applicable, such other pari passu Indebtedness (on a pro rata basis, if applicable, based on the
principal amount of Notes and, if applicable, such other pari passu Indebtedness surrendered) or,
if less than the Offer Amount has been tendered, all Notes and, if applicable, other Indebtedness
tendered in response to the Excess Proceeds Offer. Payment for any Notes so purchased will be made
in the same manner as interest payments are made.

     If the Purchase Date is on or after an interest record date and on or before the related
interest payment date, any accrued and unpaid interest and Special Interest, if any, to, but not
including the Purchase Date, will be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest will be payable to Holders who
tender Notes pursuant to the Excess Proceeds Offer.

     Upon the commencement of an Excess Proceeds Offer, the Issuers will send a notice to the
Trustee and each of the Holders. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Excess Proceeds Offer. The notice, which
will govern the terms of the Excess Proceeds Offer, will state:

     (1) that the Excess Proceeds Offer is being made pursuant to this Section 3.09 and
Section 4.10, 4.11 or 4.12, as applicable, hereof and the length of time the Excess Proceeds
Offer will remain open;

     (2) the Offer Amount, the purchase price and the Purchase Date;

     (3) that any Note not tendered or accepted for payment will continue to accrue interest
or Special Interest, if any;

     (4) that, unless the Issuers default in making such payment, any Note accepted for
payment pursuant to the Excess Proceeds Offer will cease to accrue interest or Special
Interest, if any, after the Purchase Date;

     (5) that Holders electing to have a Note purchased pursuant to an Excess Proceeds Offer
may elect to have Notes purchased in denominations of $2,000 or an integral multiple of
$1,000 in excess thereof;

     (6) that Holders electing to have Notes purchased pursuant to any Excess Proceeds Offer
will be required to surrender the Note, with the form entitled “Option of Holder to Elect
Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the
Issuers, a Depositary, if appointed by the Issuers, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;

     (7) that Holders will be entitled to withdraw their election if the Issuers, the
Depositary or the Paying Agent, as the case may be, receives, not later than the expiration
of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the
name of the

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Holder, the principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note purchased;

     (8) the “CUSIP” number, “ISIN” or “Common code” number, if any, listed on such notice
or printed on such Notes;

     (9) that, if the aggregate principal amount of Notes and, if applicable, other pari
passu Indebtedness surrendered by holders thereof exceeds the Offer Amount, the Issuers will
select the Notes and other pari passu Indebtedness to be purchased on a pro rata basis based
on the principal amount of Notes and, if applicable, such other pari passu Indebtedness
surrendered (with such adjustments as may be deemed appropriate by the Issuers so that only
Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will
be purchased); and

     (10) that Holders whose Notes were purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer), which unpurchased portion must be equal to $2,000 in
principal amount or an integral multiple of $1,000 in excess thereof.

     On or before the Purchase Date, the Issuers will, to the extent lawful, accept for payment, on
a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered
pursuant to the Excess Proceeds Offer, or if less than the Offer Amount has been tendered, all
Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly
accepted together with an Officers’ Certificate stating that such Notes or portions thereof were
accepted for payment by the Issuers in accordance with the terms of this Section 3.09. The
Issuers, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not
later than five Business Days after the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Issuers
for purchase, and the Issuers will promptly issue a new Note, and the Trustee, upon written request
from the Issuers, will authenticate and mail or deliver (or cause to be transferred by book entry)
such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered; provided that each new Note will be in a principal amount of $2,000 or an integral
multiple of $1,000 in excess thereof. Any Note not so accepted shall be promptly mailed or
delivered by the Issuers to the Holder thereof. The Issuers will publicly announce the results of
the Excess Proceeds Offer on the Purchase Date.

     Other than as specifically provided in this Section 3.09, any purchase pursuant to this
Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

     The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes pursuant to Sections 3.09, 4.10, 4.11,
4.12 or 4.17 hereof. To the extent that the provisions of any securities laws or regulations
conflict with the provisions of Sections 3.09, 4.10, 4.11, 4.12 or 4.17 hereof, the Issuers will
comply with the applicable securities laws and regulations and will not be deemed to have breached
their obligations under any of Sections 3.09, 4.10, 4.11, 4.12 or 4.17 hereof by virtue of such
compliance.

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ARTICLE 4

COVENANTS

Section 4.01 Payment of Notes.

     The Issuers will pay or cause to be paid the principal of, premium, if any, interest and
Special Interest, if any, on, the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, interest and Special Interest, if any, will be considered paid on the
date due if the Paying Agent, if other than the Issuers or a Subsidiary thereof, holds as of 10:00
a.m. Eastern Time on the due date money deposited by the Issuers in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and interest, if any, then
due. The Issuers will pay all Special Interest, if any, in the same manner on the dates and in the
amounts set forth in the Registration Rights Agreement.

     The Issuers will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at a rate that is equal to the then applicable interest rate
on the Notes to the extent lawful; they will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and Special Interest, if
any (without regard to any applicable grace period), at the same rate to the extent lawful.

Section 4.02 Maintenance of Office or Agency.

     The Issuers will maintain in the Borough of Manhattan, the City of New York, an office or
agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be
served. The Issuers will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Issuers fail to maintain any such
required office or agency or fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office
of the Trustee.

     The Issuers may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or rescission will in any
manner relieve the Issuers of their obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Issuers will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the location of any such
other office or agency.

     The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or
agency of the Issuers in accordance with Section 2.03 hereof.

Section 4.03 Reports.

     (a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are
outstanding, Great Wolf Resorts will furnish to the Holders of Notes and the Trustee (or file with
the SEC for public availability), within the time periods specified in the SEC’s rules and
regulations:

     (1) all quarterly and annual reports that would be required to be filed with the SEC on
Forms 10-Q and 10-K if Great Wolf Resorts were required to file such reports, including a
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and,
with respect to the annual information only, a report thereon by the Company’s certified
independent accountants; and

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     (2) all current reports that would be required to be filed with the SEC on Form 8-K if
Great Wolf Resorts were required to file such reports.

     All such reports will be prepared in all material respects in accordance with all of the rules
and regulations applicable to such reports. Each annual report on Form 10-K will include a report
on Great Wolf Resorts’ consolidated financial statements by Great Wolf Resorts’ certified public
accountants. In addition, Great Wolf Resorts will file a copy of each of the reports referred to
in clauses (1) and (2) above with the SEC for public availability within the time periods specified
in the rules and regulations applicable to such reports (unless the SEC will not accept such a
filing) and will furnish such reports to the Trustee.

     If, at any time after consummation of the Exchange Offer contemplated by the Registration
Rights Agreement, Great Wolf Resorts is no longer subject to the periodic reporting requirements of
the Exchange Act for any reason, Great Wolf Resorts will nevertheless continue filing the reports
specified in the preceding paragraphs of this Section 4.03 with the SEC within the time periods
specified above unless the SEC will not accept such a filing. If, notwithstanding the foregoing,
the SEC will not accept Great Wolf Resorts’ filings for any reason, Great Wolf Resorts will furnish
the reports referred to in the preceding paragraphs to the Trustee within the time periods that
would apply if Great Wolf Resorts were required to file those reports with the SEC. Great Wolf
Resorts will not take any action for the purpose of causing the SEC not to accept any such filings.

     (b) Any information filed with, or furnished to, the SEC shall be deemed to have been
furnished to the Trustee and the registered Holders of the Notes. For the avoidance of doubt, the
subsequent filing or making available of any report required by this covenant shall be deemed
automatically to cure any Default or Event of Default resulting from the failure to file or make
available such report within the required timeframe.

     (c) For so long as any Notes remain outstanding, if at any time Great Wolf Resorts is not
required to file with the SEC the reports required by paragraph (a) of this Section 4.03, it will
furnish to the Holders and to securities analysts and prospective investors, upon their request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Section 4.04 Compliance Certificate.

     (a) Each of the Issuers and each Guarantor (to the extent that such Guarantor is so required
under the TIA) shall deliver to the Trustee, within 90 days after the end of each fiscal year, an
Officers’ Certificate stating that a review of the activities of the Issuers and the Company’s
Subsidiaries during the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Issuers and the Guarantors have kept, observed,
performed and fulfilled their obligations under this Indenture and the Collateral Documents, and
further stating, as to each such Officer signing such certificate, that to the best of his or her
knowledge the Issuers and the Guarantors have kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and the Collateral Documents and are not in default in
the performance or observance of any of the terms, provisions and conditions of this Indenture or
the Collateral Documents (or, if a Default or Event of Default has occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what action the Issuers and
the Guarantors are taking or propose to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which payments on account
of the principal of, premium, if any, interest or Special Interest, if any, on, the Notes is
prohibited or if such event has occurred, a description of the event and what action the Issuers
and the Guarantors are taking or propose to take with respect thereto.

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     (b) So long as any of the Notes are outstanding, the Issuers and the Guarantors will deliver
to the Trustee, within 10 Business Days after any Officer becoming aware of any Default or Event of
Default, an Officers’ Certificate specifying such Default or Event of Default and what action the
Issuers and the Guarantors are taking or propose to take with respect thereto.

Section 4.05 Taxes.

     The Issuers will pay, and the Company will cause each of its Subsidiaries to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except (1) such as are
contested in good faith and by appropriate proceedings (provided that any reserve or other
appropriate provision as is required in conformity with GAAP, as in effect from time to time, has
been made therefor) or (2) where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.

Section 4.06 Stay, Extension and Usury Laws.

     Each of the Issuers and each of the Guarantors covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this Indenture; and each of
the Issuers and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.07 Restricted Payments.

     (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly:

     (i) declare or pay any dividend or make any other payment or distribution on account of
the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving the Company
or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’s
or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other
than dividends or distributions payable in Equity Interests (other than Disqualified Stock)
of the Company and other than dividends or distributions payable by a Restricted Subsidiary
so long as, in the case of any dividend or distribution payable on or in respect of any
class or series of securities issued by a Restricted Subsidiary other than a Wholly-Owned
Restricted Subsidiary, the Issuers or a Restricted Subsidiary receives at least its pro rata
share of such dividend or distribution in accordance with its Equity Interests in such class
or series of securities);

     (ii) purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving the Company or the
Parent Guarantors) any Equity Interests of the Company or the Parent Guarantors;

     (iii) make any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire, in each case prior to any scheduled repayment, sinking fund payment or
the Stated Maturity thereof, for value any Subordinated Indebtedness other than (x)
Indebtedness permitted under Section 4.09(b)(6) hereof or (y) the purchase, repurchase or
other acquisition of Subordinated Indebtedness of the Company or any Restricted Subsidiary
purchased

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in anticipation of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of purchase, repurchase or
acquisition; or

     (iv) make any Restricted Investment (all such payments and other actions set forth in
these clauses (i) through (iv) above being collectively referred to as “Restricted
Payments”),

     unless, at the time of and after giving effect to such Restricted Payment:

     (1) no Default or Event of Default has occurred and is continuing after giving effect
to such Restricted Payment;

     (2) the Company would, at the time of such Restricted Payment and after giving pro
forma effect thereto as if such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a)
hereof, and

     (3) such Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Company and its Restricted Subsidiaries since the date of this
Indenture (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7),
(8), (10), (12), (15), (16), (17), (18) or (19) of Section 4.07(b) hereof), is less than the
sum, without duplication, of:

     (A) 50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period) from the beginning of the first fiscal quarter commencing
after the date of this Indenture to the end of the Company’s most recently ended
fiscal quarter for which internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit); plus

     (B) 100% of the aggregate net cash proceeds and the Fair Market Value of
marketable securities or other property received by the Company since the date of
this Indenture as a contribution to its common equity capital or from the issue or
sale of Qualifying Equity Interests of the Company or from the issue or sale of
convertible or exchangeable Disqualified Stock of the Company or convertible or
exchangeable debt securities of the Company, in each case that have been converted
into or exchanged for Qualifying Equity Interests of the Company (other than
Qualifying Equity Interests and convertible or exchangeable Disqualified Stock or
debt securities sold to a Subsidiary of the Company); plus

     (C) without duplication from amounts that offset or increase the amounts able
to be paid under clauses (11), (13), (15) and (19) of Section 4.07(b), 100% of the
aggregate amount received in cash and the Fair Market Value of marketable securities
or other property received after the date of this Indenture by means of (A) the sale
or other disposition (other than to the Company or a Restricted Subsidiary) of
Restricted Investments made by the Company or any Restricted Subsidiary and
repurchases and redemptions of such Restricted Investments from the Company or any
Restricted Subsidiary and repayments of loans or advances that constitute Restricted
Investments by the Company or any Restricted Subsidiary or (B) the sale (other than
to the Company or a Restricted Subsidiary) of the Capital Stock of an Unrestricted
Subsidiary; plus

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     (D) to the extent that any Unrestricted Subsidiary of the Company designated as
such after the date of this Indenture is redesignated as a Restricted Subsidiary
after the date of this Indenture, the Fair Market Value of the Company’s Restricted
Investment in such Subsidiary as of the date of such redesignation; plus

     (E) 100% of the aggregate amount received in cash by the Company or a
Restricted Subsidiary after the date of this Indenture from an Unrestricted
Subsidiary of the Company by means of a dividend or other distribution, to the
extent that such dividends or distributions were not otherwise included in the
Consolidated Net Income of the Company for such period.

     (b) The preceding provisions will not prohibit:

     (1) the payment of any dividend or the consummation of any irrevocable redemption
within 60 days after the date of declaration of the dividend or giving of the redemption
notice, as the case may be, if at the date of declaration or notice, the dividend or
redemption payment would have complied with the provisions of this Indenture;

     (2) the making of any Restricted Payment in exchange for, or out of or with the net
cash proceeds of the sale (other than to a Subsidiary of the Company) of, Equity Interests
of the Company (other than Disqualified Stock) or from the contribution of common equity
capital to the Company, which sale or contribution occurs within 60 days of such Restricted
Payment, and the Fair Market Value of marketable securities or other property received;
provided that the amount of any such net cash proceeds that are utilized for any such
Restricted Payment will not be considered to be net proceeds of Qualifying Equity Interests
for purposes of Section 4.07(a)(3)(B) hereof and will not be considered to be net cash
proceeds from an Equity Offering for purposes of Section 3.07 hereof;

     (3) the payment of any dividend (or, in the case of any partnership or limited
liability company, any similar distribution) by a Restricted Subsidiary of the Company to
the holders of its Equity Interests on a pro rata basis;

     (4) the repurchase, redemption, defeasance or other acquisition or retirement for value
of Subordinated Indebtedness of the Company or any Subsidiary Guarantor with the proceeds
from an incurrence of Permitted Refinancing Indebtedness, which incurrence occurs within 60
days of such repurchase, redemption, defeasance or other acquisition or retirement for
value;

     (5) the repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Restricted Subsidiary of the Company held by, or any
Restricted Payments made to, any future, current or former officer, director, consultant,
manager or employee of the Company or any of its Subsidiaries, their respective estates,
spouses or former spouses pursuant to any equity subscription agreement, compensation plan,
stock option plan, shareholders’ agreement, any other management or employee benefit plan or
similar agreement; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests may not exceed $50,000 in any calendar year
(with unused amounts in any calendar year being carried over to succeeding calendar years
subject to a maximum of $50,000 in any calendar year);

     (6) the repurchase of Equity Interests deemed to occur upon (i) the exercise of stock
options to the extent such Equity Interests represent a portion of the exercise price of
those stock

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options or (ii) the netting of shares of restricted Equity Interests of Great Wolf
Resorts (or a direct or indirect parent of the Company) delivered to employees for tax
purposes;

     (7) the declaration and payment of regularly scheduled or accrued dividends to holders
of any class or series of Disqualified Stock of the Company or any preferred stock of any
Restricted Subsidiary of the Company issued on or after the date of this Indenture in
accordance with the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof;

     (8) payments of cash, dividends, distributions, advances or other Restricted Payments
by the Company or any of its Restricted Subsidiaries to allow the payment of cash in lieu of
the issuance of fractional shares upon (i) the exercise of options or warrants or (ii) the
conversion or exchange of Capital Stock of any such Person;

     (9) so long as no default in the payment when due of interest and Special Interest, if
any, on the Notes and no Event of Default has occurred and is continuing after giving effect
to such payments, dividends or distributions to Great Wolf Resorts for the payment of
regularly scheduled interest on the outstanding Subordinated Notes as such amounts come due
under the Subordinated Notes Indentures;

     (10) Permitted Payments to Great Wolf Resorts;

     (11) so long as no Event of Default has occurred and is continuing, Investments in the
Foxwoods Joint Venture or in related development or construction entities in an amount up to
$25.0 million;

     (12) so long as no Event of Default has occurred and is continuing after giving effect
thereto, non-cash contributions of services as equity contributions to joint ventures,
including, without limitation, the Pittsburgh Joint Venture;

     (13) so long as no Event of Default has occurred and is continuing after giving effect
thereto, Investments in an amount up to $4.0 million per calendar year in joint ventures
that enter into customary license agreements or management agreements with the Company or
any Subsidiary Guarantor pursuant to which the Company or such Subsidiary Guarantor is
entitled to payment of fees; provided that the unused portion of the amount payable in any
calendar year may be carried over and paid in each of the two subsequent calendar years (in
addition to the amounts permitted for such calendar years);

     (14) so long as no Event of Default has occurred and is continuing after giving effect
thereto, Investments in the form of loans to Creative Kingdoms in an aggregate amount of up
to $1.0 million at any time outstanding;

     (15) so long as no Event of Default has occurred and is continuing after giving effect
thereto, Investments in the Grand Mound (Chehalis) Joint Venture in an amount not to exceed
$5.0 million plus the amount received after the date of this Indenture in respect of any
return on or of any existing investment in the Grand Mound (Chehalis) Joint Venture, in
connection with a refinancing of the Grand Mound (Chehalis) Mortgage Loan;

     (16) Investments in Non-Guarantor Restricted Subsidiaries (including Guarantor
Payments) that, taken together with all other Investments (including Guarantor Payments)
made pursuant to this clause (16) since the beginning of the LTM Period, do not exceed the
aggregate

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amount of cash provided to the Company or the Subsidiary Guarantors by the
Non-Guarantor Restricted Subsidiaries during the LTM Period;

     (17) the repurchase, redemption or other acquisition or retirement for value of any
Subordinated Indebtedness pursuant to provisions in documentation governing such
Subordinated Indebtedness similar to those described in Sections 4.10, 4.11, 4.12 and 4.17
hereof; provided that, prior to such repurchase, redemption or other acquisition, the
Company (or a third party to the extent permitted by this Indenture) shall have made any
required Change of Control Offer, Collateral Asset Sale Offer, Non-Collateral Asset Sale
Offer or Event of Loss Offer, as the case may be, with respect to the Notes and shall have
repurchased all Notes validly tendered and not withdrawn in connection with such Change of
Control Offer, Collateral Asset Sale Offer, Non-Collateral Asset Sale Offer or Event of Loss
Offer;

     (18) so long as no Event of Default has occurred and is continuing after giving effect
thereto, the distribution, as a dividend or otherwise (and the declaration of such
dividend), of shares of Capital Stock of, or Indebtedness owed to the Company or a
Restricted Subsidiary by, any Unrestricted Subsidiary; and

     (19) so long as no Default or Event of Default has occurred and is continuing after
giving effect thereto, other Restricted Payments in an aggregate amount not to exceed $5.0
million since the date of this Indenture.

provided, that in the case of clauses (11), (13) and (19) of this Section 4.07(b), to the extent
that a Restricted Payment made under such clause is sold for cash or Cash Equivalents or otherwise
liquidated for or repaid in the form of cash or Cash Equivalents, or principal repayments, returns
of capital or subrogation recoveries are received by the Person that originally made such
Restricted Payment or by the Company or any Subsidiary Guarantor in respect of such Restricted
Payment, valued, in each such case at the cash or Fair Market Value of Cash Equivalents received
with respect to such Restricted Payment (less the cost of disposition, if any), then the amount for
such clause shall be increased without duplication by the amount so received.

     (c) For purposes of determining compliance with this Section 4.07, in the event that a
proposed Restricted Payment (or portion thereof) meets the criteria of more than one of the
categories of Restricted Payments described in clauses (1) through (19) of Section 4.07(b), or is
entitled to be incurred pursuant to Section 4.07(a), the Company will be entitled to classify or
re-classify (based on circumstances existing at the time of such reclassification) such Restricted
Payment or portion thereof in any manner that complies with this Section 4.07 and such Restricted
Payment will be treated as having been made pursuant to only such clause or clauses of paragraph
(b) or to paragraph (a) of this Section 4.07.

     (d) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on
the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or
issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The Fair Market Value of any assets or securities that are required to be valued by this
covenant will be determined by the Board of Directors of the Company whose resolution with respect
thereto will be delivered to the Trustee.

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Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

     (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, create or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to:

     (1) pay dividends or make any other distributions on its Capital Stock to the Company
or any of its Restricted Subsidiaries, or with respect to any other interest or
participation in, or measured by, its profits, or pay any indebtedness owed to the Company
or any of its Restricted Subsidiaries (it being understood that the priority of any
preferred stock in receiving dividends or liquidating distributions prior to dividends or
liquidating distributions being paid on common stock shall not be deemed a restriction on
the ability to make distributions on Capital Stock);

     (2) make loans or advances to the Company or any of its Restricted Subsidiaries; or

     (3) sell, lease or transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries.

     (b) The restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions
existing under or by reason of:

     (1) agreements as in effect on the date of this Indenture and any amendments,
restatements, modifications, renewals, supplements, refundings, replacements or refinancings
of those agreements; provided that the amendments, restatements, modifications, renewals,
supplements, refundings, replacements or refinancings are not, in the good faith judgment of
the Company, materially more restrictive, taken as a whole, with respect to such dividend
and other payment restrictions than those contained in those agreements on the date of this
Indenture;

     (2) this Indenture, the Notes, the Note Guarantees and the Collateral Documents;

     (3) agreements governing other Indebtedness permitted to be incurred under Section 4.09
hereof and any amendments, restatements, modifications, renewals, supplements, refundings,
replacements or refinancings of those agreements; provided that the restrictions therein
are:

     (A) in respect of lock-box arrangements, customary and not materially more
restrictive, taken as a whole, than the most restrictive lock-box arrangement in
effect on the date of this Indenture; and

     (B) in respect of other restrictions not, in the good faith judgment of the
Company, materially more restrictive, taken as a whole, than those contained in this
Indenture, the Notes and the Note Guarantees;

     (4) applicable law, rule, regulation or order;

     (5) any instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness or Capital Stock was incurred in connection with or
in contemplation of such acquisition), which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other than the Person, or the
property or assets

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of the Person, so acquired (plus improvements and accessions to such property or assets
or proceeds or distributions thereof); provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred;

     (6) customary provisions in contracts, leases and licenses entered into in the ordinary
course of business;

     (7) purchase money obligations for property acquired in the ordinary course of business
and Capital Lease Obligations that impose restrictions on the property purchased or leased
(plus improvements and accessions to such property, or assets or proceeds or distributions
thereof) of the nature described in Section 4.08(a)(3) hereof;

     (8) any agreement for the sale or other disposition of assets, including customary
restrictions with respect to a Subsidiary pursuant to an agreement for the sale or
disposition of that Subsidiary and that restricts distributions by that Subsidiary pending
its sale or other disposition;

     (9) Permitted Refinancing Indebtedness; provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are:

     (A) in respect of lock-box arrangements, customary for such Indebtedness; and

     (B) in respect of other restrictions, not, in the good faith judgment of the
Company, materially more restrictive, taken as a whole, than those contained in the
agreements governing the Indebtedness being refinanced;

     (10) Liens permitted to be incurred under Section 4.14 hereof that limit the right of
the debtor to dispose of the assets subject to such Liens (plus improvements and accessions
to such assets, or proceeds or distributions thereof);

     (11) provisions limiting the disposition or distribution of assets, property or
interests in joint venture agreements, asset sale agreements, sale-leaseback agreements,
stock sale agreements and other similar agreements (including agreements entered into in
connection with a Restricted Investment), which limitation is applicable only to the assets
that are the subject of such agreements;

     (12) restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business; and

     (13) customary due-on-sale arrangements.

Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock

     (a) The Company and the Parent Guarantors will not, and the Company will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue
any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares
of preferred stock; provided, however, that the Issuers and the Guarantors may incur Indebtedness
(including Acquired Debt) or issue Disqualified Stock if the Fixed Charge Coverage Ratio for Great
Wolf Resorts’ most recently ended four

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full fiscal quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is
issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at
the beginning of such four-quarter period.

     (b) Section 4.09(a) will not prohibit the incurrence of any of the following items of
Indebtedness (collectively, “Permitted Debt”):

     (1) the incurrence by the Issuers or any of the Company’s Restricted Subsidiaries
(other than a Principal Property Subsidiary) of Indebtedness in an aggregate principal
amount at any one time outstanding under this clause (1) (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability of the borrower)
not to exceed the greater of (i) $20.0 million and (ii) the amount that would cause,
immediately preceding the date on which such additional Indebtedness is incurred, the Senior
Secured Leverage Ratio of Great Wolf Resorts to exceed 4.75 to 1.0, determined on a pro
forma basis (including a pro forma application of the net proceeds therefrom) as if the
additional Indebtedness had been incurred at the beginning of such four-quarter period;

     (2) the incurrence by the Issuers, the Parent Guarantors and the Company’s Restricted
Subsidiaries of the Existing Indebtedness;

     (3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the
Notes and the related Note Guarantees to be issued on the date of this Indenture and the
Exchange Notes and the related Note Guarantees to be issued pursuant to the Registration
Rights Agreement;

     (4) the incurrence by the Issuers, the Parent Guarantors and the Company’s Restricted
Subsidiaries of Indebtedness, including by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case, incurred for the purpose of financing or
reimbursing all or any part of the purchase price or cost of design, acquisition,
development, purchase, lease, repair, addition, construction, installation or improvement of
property (real or personal), plant, equipment, or other fixed or capital assets used or
useful in the business of the Company or any of its Restricted Subsidiaries, whether through
the direct purchase of assets or the Capital Stock of any Person owning such assets
(incurred within 270 days of such acquisition, development, construction, purchase, lease,
repair, addition or improvement), in an aggregate principal amount, including all Permitted
Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge
any Indebtedness incurred pursuant to this clause (4), not to exceed $5.0 million at any
time outstanding;

     (5) the incurrence by the Issuers, the Parent Guarantors and the Company’s Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness
that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2),
(3), (4), (5), (11), (12), (13) and (15) of this Section 4.09(b);

     (6) the incurrence by the Issuers, the Parent Guarantors or any of the Company’s
Restricted Subsidiaries of intercompany Indebtedness between or among the Issuers, the
Parent Guarantors and any of the Company’s Restricted Subsidiaries; provided, however, that:

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     (A) if the Company or any Subsidiary Guarantor is the obligor on such
Indebtedness and the payee is not the Company or a Subsidiary Guarantor, such
Indebtedness must be subordinated to the prior payment in full in cash of all
Obligations then due with respect to the Notes, in the case of the Company, or the
Note Guarantee, in the case of a Subsidiary Guarantor; and

     (B) (i) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than an Issuer or a Restricted
Subsidiary of the Company and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either an Issuer or a Subsidiary of the
Company,

will be deemed, in each case, to constitute an incurrence of such Indebtedness by the
relevant Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by
this clause (6);

     (7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to
any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:

     (A) any subsequent issuance or transfer of Equity Interests that results in any
such preferred stock being held by a Person other than the Company or a Restricted
Subsidiary of the Company; and

     (B) any sale or other transfer of any such preferred stock to a Person that is
not either the Company or a Restricted Subsidiary of the Company, will be deemed, in
each case, to constitute an issuance of such preferred stock by such Restricted
Subsidiary that was not permitted by this clause (7);

     (8) the incurrence by the Issuers, the Parent Guarantors and the Company’s Restricted
Subsidiaries of Hedging Obligations in the ordinary course of business;

     (9) the Guarantee by the Issuers or any of the Subsidiary Guarantors of Indebtedness of
an Issuer or a Restricted Subsidiary of the Company to the extent that the guaranteed
Indebtedness was permitted to be incurred by such Issuer or Subsidiary Guarantor under
another provision of this covenant; provided that if the Indebtedness being guaranteed is
subordinated to or pari passu with the Notes in right of payment, then the Guarantee must be
subordinated or pari passu, as applicable, to the same extent as the Indebtedness
guaranteed;

     (10) the incurrence by the Issuers, the Parent Guarantors and the Company’s Restricted
Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including letters of credit in respect
of workers’ compensation claims, or other Indebtedness in respect of workers’ compensation
claims, self-insurance obligations, bankers’ acceptances, performance and surety bonds in
the ordinary course of business;

     (11) the incurrence by the Company’s Subsidiary that owns the Pocono Mountains resort
of Indebtedness in the form of a loan with mortgaged property as collateral in an aggregate
principal amount at any one time outstanding, including all Permitted Refinancing
Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any
Indebtedness incurred pursuant to this clause (11), not to exceed the amount that would
cause, immediately preceding the date on which such additional Indebtedness is incurred, the
Senior Secured Leverage Ratio of such Subsidiary to exceed 5.5 to 1.0, determined on a pro
forma basis (including a pro forma

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application of the net proceeds therefrom) as if the additional Indebtedness had been
incurred at the beginning of such four-quarter period;

     (12) the incurrence by the Issuers, the Parent Guarantors or any of the Company’s
Restricted Subsidiaries of Acquired Debt (except to the extent such Acquired Debt was
incurred in connection with or in contemplation of such acquisition);

     (13) the incurrence by direct and indirect Foreign Subsidiaries of the Company in an
aggregate principal amount at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any
Indebtedness incurred pursuant to this clause (13), not to exceed $10.0 million;

     (14) the incurrence by the Issuers, the Parent Guarantors or any of the Company’s
Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds, so long as such Indebtedness is covered within five Business Days;

     (15) the incurrence by the Issuers, the Parent Guarantors or any of the Company’s
Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any
Indebtedness incurred pursuant to this clause (15), not to exceed $5.0 million;

     (16) incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
arising from agreements of the Company or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each case, incurred
or assumed in connection with the acquisition or disposition of any business, assets or a
Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or
any portion of such business, assets or Subsidiary for the purpose of financing such
acquisition; provided that (i) such Indebtedness is not reflected on the balance sheet of
the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote
to financial statements and not otherwise reflected on the balance sheet shall not be deemed
to be reflected on such balance sheet for purposes of (i)), and (ii) the maximum assumable
liability in respect of all such Indebtedness (other than liability for those
indemnification obligations that are not customarily subject to a cap) shall at no time
exceed the gross proceeds including noncash proceeds (the Fair Market Value of such noncash
proceeds being measured at the time received and without giving effect to any subsequent
changes in value) actually received by the Company and the Restricted Subsidiaries in
connection with such disposition; and

     (17) incurrence by the Issuers or any of the Company’s Restricted Subsidiaries of
Indebtedness supported by a letter of credit, in a principal amount not in excess of the
stated amount of such letter of credit.

     (c) Notwithstanding anything to the contrary, the following shall not be deemed to be
Indebtedness for purposes of Section 4.09(a): (i) each Guarantee by Great Wolf Resorts of
Indebtedness (unless Great Wolf Resorts is required to perform under such Guarantee, either in
whole or in part, in which case the principal amount guaranteed shall be deemed to be Indebtedness
of Great Wolf Resorts for purposes of a subsequent incurrence of Indebtedness, although the
incurrence thereof shall not be deemed to be an “incurrence” for purposes of this covenant), (ii)
each customary non-recourse carve-out guarantee or indemnity by Great Wolf Resorts, (iii) each
completion guarantee by Great Wolf Resorts and (iv) each environmental guarantee or indemnity by
Great Wolf Resorts.

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     (d) For purposes of determining compliance with this Section 4.09, in the event that an
item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt
described in clauses (1) through (17) of Section 4.09(b) hereof, or is entitled to be incurred
pursuant to Section 4.09(a), the Company will be permitted to classify such item of Indebtedness on
the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in
any manner that complies with this covenant (based on circumstances existing at the time of such
reclassification). The accrual of interest or preferred stock dividends, the accretion or
amortization of original issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, the reclassification of preferred stock as
Indebtedness due to a change in accounting principles, and the payment of dividends on preferred
stock or Disqualified Stock in the form of additional shares of the same class of preferred stock
or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of
preferred stock or Disqualified Stock for purposes of this Section 4.09; provided, in each such
case, that the amount thereof is included in Fixed Charges of Great Wolf Resorts as accrued. For
purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence
of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a
foreign currency shall be utilized, calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this
covenant, the maximum amount of Indebtedness that the Issuers, Parent Guarantors or any Restricted
Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a
result of fluctuations in exchange rates or currency values.

     (e) The amount of any Indebtedness outstanding as of any date will be:

     (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount;

     (2) the principal amount of the Indebtedness, in the case of any other Indebtedness;
and

     (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the
specified Person, the lesser of:

	 	(A)	 	the Fair Market Value of such assets at the date of determination; and
	 
	 	(B)	 	the amount of the Indebtedness of the other Person.

Section 4.10 Collateral Asset Sales.

     (a) The Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate a sale of a Principal Property other than a Collateral Asset Sale.

     (b) The Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale of any Collateral, unless:

     (1) the asset or property sold, leased, conveyed or otherwise disposed of is a Non-Core
Collateral Asset;

     (2) the Company or the applicable Principal Property Subsidiary, as the case may be,
receives consideration at the time of the Collateral Asset Sale at least equal to the Fair
Market Value (measured as of the date of the definitive agreement with respect to such
Collateral Asset Sale) of the assets sold or otherwise disposed of; and

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     (3) at least 75% of the consideration received in the Collateral Asset Sale by the
Company or such Principal Property Subsidiary is in the form of cash or Cash Equivalents.

     (c) Within 365 days after the receipt of any Net Proceeds from a Collateral Asset Sale, the
Company (or the applicable Principal Property Subsidiary, as the case may be) may apply such Net
Proceeds:

     (1) to purchase Additional Collateral Assets;

     (2) to make capital expenditures at any of the Principal Properties that will become
Additional Collateral Assets; or

     (3) to repurchase a portion of the Notes otherwise in accordance with the provisions of
this Indenture.

     (d) Pending their application, all Net Proceeds from a Collateral Asset Sale will be invested
in Cash Equivalents. Such Cash Equivalents will be held in an account in which the Trustee will be
granted a perfected first priority security interest for the benefit of the Holders of the Notes;
provided that unless the aggregate of Net Proceeds from Collateral Asset Sales and Net Loss
Proceeds equals or exceeds $2.5 million outstanding at any one time, such proceeds shall not be
required to be held in such an account. Such Net Proceeds may be used by the Company (or the
applicable Principal Property Subsidiary, as the case may be) to pay for or reimburse the Company
(or the applicable Principal Property Subsidiary, as the case may be) for either (i) the actual
cost of a permitted use of Net Proceeds as provided Section 4.10(c) hereof, or (ii) the Collateral
Asset Sale Offer, in accordance with the terms of the Collateral Documents. The Company (or the
applicable Principal Property Subsidiary, as the case may be) will grant to the Trustee, on behalf
of the Holders of the Notes, a perfected first priority security interest on any property or assets
(subject to Permitted Collateral Liens) purchased with such Net Proceeds on the terms set forth in
this Indenture and the Collateral Documents.

     (e) Any Net Proceeds from Collateral Asset Sales that are not applied or invested as provided
in Section 4.10(c) hereof will constitute “Collateral Excess Proceeds.” When the aggregate amount
of Collateral Excess Proceeds exceeds $10.0 million, within ten Business Days thereof, the Company
will make an offer (a “Collateral Asset Sale Offer”) in accordance with Section 3.09 hereof to all
Holders of Notes to purchase, prepay or redeem the maximum principal amount of Notes, together with
any accrued and unpaid interest thereon and Special Interest, if any, that may be purchased with
such Collateral Excess Proceeds. If the Company makes a Collateral Asset Sale Offer prior to the
365-day deadline specified in Section 4.10(c) hereof with respect to any Net Proceeds from a
Collateral Asset Sale, the Company’s obligations with respect to such Net Proceeds under this
covenant shall be deemed satisfied after completion of such Collateral Asset Sale Offer. The offer
price in any Collateral Asset Sale Offer will be equal to 100% of the principal amount, plus
accrued and unpaid interest and Special Interest, if any, to, but not including, the date of
repurchase, subject to the rights of Holders of Notes on the relevant record date to receive
interest due on the relevant interest payment date, and will be payable in cash. If any Collateral
Excess Proceeds remain after consummation of a Collateral Asset Sale Offer, the Company may use
those Collateral Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If
the aggregate principal amount of Notes tendered in such Collateral Asset Sale Offer exceeds the
amount of Collateral Excess Proceeds, the Trustee will select the Notes to be purchased on a pro
rata basis, based on the amounts tendered (with such adjustments as may be deemed appropriate by
the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in
excess thereof, will be purchased). Upon completion of each Collateral Asset Sale Offer, the
amount of Collateral Excess Proceeds will be reset at zero.

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     (f) For the avoidance of doubt, as used in paragraphs (b) through (e) of this Section 4.10,
the term “Collateral Asset Sale” shall only mean an Asset Sale of any Non-Core Collateral Asset by
the Company or any of the Company’s Restricted Subsidiaries and shall not include any other
transfer or disposition of any Non-Core Collateral Asset.

Section 4.11 Non-Collateral Asset Sales.

     (a) The Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate a Non-Collateral Asset Sale unless:

     (1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Non-Collateral Asset Sale at least equal to the Fair Market
Value (measured as of the date of the definitive agreement with respect to such Asset Sale)
of the assets or Equity Interests issued or sold or otherwise disposed of; and

     (2) at least 75% of the consideration received in the Non-Collateral Asset Sale by the
Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For
purposes of this provision, each of the following will be deemed to be cash:

     (A) any liabilities, as shown on the Company’s most recent consolidated balance
sheet, of the Company or any of its Restricted Subsidiaries, including those that
are transferred with a Subsidiary (in the case of a Subsidiary that is disposed of
in an Asset Sale) (other than contingent liabilities and liabilities that are by
their terms subordinated to the Notes or any Note Guarantee) that are (i) assumed by
the transferee of any such assets pursuant to a customary novation or indemnity
agreement that releases the Company or such Restricted Subsidiary from or
indemnifies against further liability or (ii) transferred with a Subsidiary in such
Asset Sale and with respect to which neither the Company nor any of its Restricted
Subsidiaries are liable following such transfer;

     (B) any securities, Notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are converted by the Company or
such Restricted Subsidiary into cash or Cash Equivalents, to the extent of the cash
or Cash Equivalents received in that conversion within 180 days following the
closing of such Non-Collateral Asset Sale;

     (C) any Designated Noncash Consideration received by the Company or such
Restricted Subsidiary in such Non-Collateral Asset Sale having an aggregate Fair
Market Value, taken together with all other Designated Noncash Consideration
received pursuant to this clause (C) that is at that time outstanding, not to exceed
the greater of (i) $20.0 million and (ii) 5.0% of Total Assets at the time of the
receipt of such Designated Noncash Consideration (with the Fair Market Value of each
item of Designated Noncash Consideration received pursuant to this clause (C) being
measured at the time received and without giving effect to subsequent changes in
value); and

     (D) any stock or assets of the kind referred to in clauses (2) or (4) of
Section 4.11(b) hereof.

Notwithstanding the foregoing, the Parent Guarantors and the Company will not, and the Company will
not permit its Subsidiaries to, issue, sell, convey or otherwise transfer any of the Equity
Interests in any of the Principal Property Subsidiaries.

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     (b) Within 365 days after the receipt of any Net Proceeds from a Non-Collateral Asset Sale,
the Company (or the applicable Restricted Subsidiary, as the case may be) may apply such Net
Proceeds:

     (1) to prepay permanently, repay permanently or repurchase and retire or cancel any
senior Indebtedness (including the Notes, other Indebtedness that is pari passu in right of
payment with the Notes and the Note Guarantees or Indebtedness under any Credit Facility)
and permanently reduce commitments with respect thereof;

     (2) to acquire all or substantially all of the assets of, or any Capital Stock of,
another Permitted Business, if, after giving effect to any such acquisition of Capital
Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Company;

     (3) to make a capital expenditure;

     (4) to acquire other assets, including Permitted Investments, that are not classified
as current assets under GAAP and that are used or useful in a Permitted Business; or

     (5) to repurchase a portion of the Notes otherwise in accordance with the provisions of
this Indenture.

Pending the final application of any Net Proceeds, the Company (or the applicable Restricted
Subsidiary) may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds
in any manner that is not prohibited by this Indenture.

     (c) Any Net Proceeds from Non-Collateral Asset Sales that are not applied or invested as
provided in Section 4.11(b) will constitute “Non-Collateral Excess Proceeds”; provided that if
during such 365-day period the Company or a Restricted Subsidiary enters into a definitive binding
agreement committing it to apply such Net Proceeds in accordance with the requirements of clause
(2) of the immediately preceding paragraph after such 365th day, such 365-day period will be
extended with respect to the amount of Net Proceeds so committed until such Net Proceeds are
required to be applied in accordance with such agreement (but such extension will in no event be
for a period longer than 180 days) (or, if earlier, the date of termination of such agreement).
When the aggregate amount of Non- Collateral Excess Proceeds exceeds $10.0 million, within 30 days
thereof, the Company will make an offer (a “Non-Collateral Asset Sale Offer”) to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase, prepay or redeem
with the proceeds of sales of assets to purchase, prepay or redeem the maximum principal amount of
Notes and such other pari passu Indebtedness (plus all accrued interest on the Indebtedness and the
amount of all fees and expenses, including premiums, incurred in connection therewith) that may be
purchased, prepaid or redeemed out of the Non-Collateral Excess Proceeds. If the Company makes a
Non-Collateral Asset Sale Offer prior to the 365-day deadline specified in Section 4.11(b) with
respect to any Net Proceeds from a Non-Collateral Asset Sale, the Company’s obligations with
respect to such Net Proceeds under this covenant shall be deemed satisfied after completion of such
Non-Collateral Asset Sale Offer. The offer price in any Non-Collateral Asset Sale Offer will be
equal to 100% of the principal amount, plus accrued and unpaid interest and Special Interest, if
any, to, but not including, the date of purchase, prepayment or redemption, subject to the rights
of Holders of Notes on the relevant record date to receive interest due on the relevant interest
payment date, and will be payable in cash. If any Non-Collateral Excess Proceeds remain after
consummation of a Non-Collateral Asset Sale Offer, the Company may use those Non-Collateral Excess
Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal
amount of Notes and other pari passu Indebtedness tendered in (or required to be prepaid or
redeemed in connection with) such Non-Collateral Asset Sale Offer exceeds the amount of
Non-Collateral Excess Proceeds, the Trustee will select

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the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis, based on
the amounts tendered or required to be prepaid or redeemed (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple
of $1,000 in excess thereof, will be purchased). Upon completion of each Non-Collateral Asset Sale
Offer, the amount of Non-Collateral Excess Proceeds will be reset at zero.

Section 4.12 Events of Loss.

     (a) In the case of an Event of Loss with respect to any Principal Property, the Company or the
affected Principal Property Subsidiary, as the case may be, shall, within 365 days following the
receipt of any Net Loss Proceeds received from such Event of Loss apply such Net Loss Proceeds to:

     (1) rebuild, repair, replace or construct improvements to (or enter into a binding
agreement to do so within 365 days after the execution of such agreement) the affected
Principal Property (an “Acceptable Event of Loss Commitment”); provided that the Company or
the affected Principal Property Subsidiary, as the case may be, shall be allowed, in the
course of rebuilding, replacement or construction of improvements to make alterations not
prohibited under the terms of this Indenture and the Collateral Documents;

     (2) purchase Additional Collateral Assets;

     (3) make capital expenditures at any of the Principal Properties that will become
Additional Collateral Assets; or

     (4) repurchase a portion of the Notes as set forth below,

provided that in the event any Acceptable Event of Loss Commitment is later cancelled or terminated
for any reason before the Net Loss Proceeds are applied in connection therewith and the Company has
not replaced such Acceptable Event of Loss Commitment with a substantially similar commitment
within ten Business Days, or such Net Loss Proceeds are not actually so applied as specified in
clause (1) under this Section 4.12(a) by the end of such one-year period, then such Net Loss
Proceeds shall be applied to repurchase the Notes. If a repair, rebuilding, replacement or
construction of improvements is made to the affected Principal Property before the Net Loss
Proceeds are received, an amount of Net Loss Proceeds equal to the amount expended to make such
repair, rebuilding, replacement or construction of improvements shall be deemed applied in
accordance with clause (1) under this Section 4.12(a). The Company or the affected Principal
Property Subsidiary shall notify the Trustee and Collateral Agent in writing within ten Business
Days after the receipt of Net Loss Proceeds equal to or greater than $2.5 million.

     (b) Any Net Loss Proceeds that are not reinvested as provided Section 4.12(a) hereof will be
deemed “Excess Loss Proceeds.” Within 30 days following the earlier of the date on which the
aggregate amount of Excess Loss Proceeds exceeds $10.0 million the Company will make an offer (an
“Event of Loss Offer”) to all Holders of Notes to purchase the maximum principal amount of Notes
that may be purchased out of the Excess Loss Proceeds. If the Company makes an Event of Loss Offer
prior to the 365-day deadline specified in Section 4.12(a) hereof with respect to any Net Loss
Proceeds from an Event of Loss, the Company’s obligations with respect to such Net Loss Proceeds
under this Section 4.12 shall be deemed satisfied after completion of such Event of Loss Offer.
The offer price in any Event of Loss Offer will be 100% of the principal amount of the Notes to be
purchased, plus accrued and unpaid interest and Special Interest, if any, to, but not including,
the date of purchase and will be payable in cash. If any Excess Loss Proceeds remain after
consummation of an Event of Loss Offer, the applicable entity may use those Excess Loss Proceeds
for any general corporate purpose not prohibited by this Indenture and the

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Collateral Documents. If the aggregate principal amount of Notes tendered in such Event of
Loss Offer exceeds the Excess Loss Proceeds, the Trustee will select the Notes to be purchased as
described in Section 3.02 hereof. Upon completion of each Event of Loss Offer, the amount of
Excess Loss Proceeds will be reset at zero.

     (c) Pending their application, all Net Loss Proceeds will be invested in Cash Equivalents.
Such Cash Equivalents will be held in an account in which the Trustee will be granted a perfected
first priority security interest for the benefit of the Holders of the Notes; provided that unless
the aggregate of Net Proceeds from Collateral Asset Sales and Net Loss Proceeds equals or exceeds
$2.5 million outstanding at any one time, such proceeds shall not be required to be held in such an
account. These funds and securities will be released to the Company (or the applicable Restricted
Subsidiary, as the case may be) to pay for or reimburse the Company (or the applicable Restricted
Subsidiary, as the case may be) for either (i) the actual cost of a permitted use of Net Loss
Proceeds as provided above, or (ii) the Event of Loss Offer, in accordance with the terms of the
Collateral Documents. The Company (or the applicable Principal Property Subsidiary, as the case
may be) will grant to the Trustee, on behalf of the Holders of the Notes, a perfected first
priority security interest (subject to Permitted Collateral Liens) on any property or assets
rebuilt, repaired, replaced, constructed or purchased with such Net Loss Proceeds on the terms set
forth in this Indenture and the Collateral Documents.

Section 4.13 Transactions with Affiliates.

     (a) The Parent Guarantors and the Company will not, and the Company will not permit any of its
Restricted Subsidiaries to, make any payment to or sell, lease, transfer or otherwise dispose of
any of its properties or assets to, or purchase any property or assets from, or enter into or make
or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or
for the benefit of, any Affiliate of the Company or the Parent Guarantors (each, an “Affiliate
Transaction”) involving aggregate payments or consideration in excess of $5.0 million, unless:

     (1) the Affiliate Transaction is on terms that are not materially less favorable to the
Parent Guarantors, the Company or the relevant Restricted Subsidiary, taken as a whole, than
those that would have been obtained in a comparable transaction by the Parent Guarantors,
the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the
Parent Guarantors, the Company or such Restricted Subsidiary, as applicable; and

     (2) the Company delivers to the Trustee with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in excess of
$15.0 million, a resolution of the Board of Directors of Great Wolf Resorts set forth in an
officers’ certificate certifying that such Affiliate Transaction complies with this Section
4.13 and that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors of Great Wolf Resorts.

     (b) The following items will not be deemed to be Affiliate Transactions and, therefore, will
not be subject to the provisions of Section 4.13(a) hereof:

     (1) any reasonable and customary compensatory agreement, benefit plan, indemnification
agreement or any similar arrangement entered into by the Parent Guarantors, the Company or
any of its Restricted Subsidiaries with any director, manager, officer, employee or
consultant of such entity and payments pursuant thereto;

     (2) transactions between or among the Parent Guarantors, the Issuers and/or the
Company’s Restricted Subsidiaries;

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     (3) transactions with a Person (other than an Unrestricted Subsidiary of the Company)
that is an Affiliate of the Parent Guarantors or the Company solely because the Parent
Guarantors or the Company owns, directly or through a Restricted Subsidiary, an Equity
Interest in, or controls, such Person;

     (4) payment of reasonable and customary fees and reimbursements of expenses of, and
payment of indemnities to, (pursuant to indemnity arrangements or otherwise) officers,
directors, employees, managers or consultants of the Parent Guarantors, the Company or any
of its Restricted Subsidiaries;

     (5) Restricted Payments and Permitted Investments that do not violate Section 4.07
hereof;

     (6) the issuance or transfer of Equity Interests (other than Disqualified Stock) of the
Company or the Parent Guarantors to any director, manager, officer, employee or consultant
of the Parent Guarantors, the Company or the Company’s Subsidiaries (or their estates,
spouses or former spouses);

     (7) transactions in which the Parent Guarantors, the Company or any Restricted
Subsidiary, as the case may be, delivers to the Trustee a letter from an accounting,
appraisal or investment banking firm of national standing stating that such transaction is
fair to the Parent Guarantors, the Company or such Restricted Subsidiary, as applicable,
from a financial point of view or meets the requirements of Section 4.13(a)(1) hereof;

     (8) transactions with suppliers or purchasers or sellers of goods or services, in each
case in the ordinary course of business and otherwise in compliance with the terms of this
Indenture that are fair to the Parent Guarantors, the Company and the Restricted
Subsidiaries, in the good faith determination of the Board of Directors or the senior
management of Great Wolf Resorts, or are on terms at least as favorable as might reasonably
have been obtained at such time from an unaffiliated party;

     (9) any agreement, instrument or arrangement as in effect as of the date of this
Indenture, or any amendment thereto (so long as any such amendment is not more
disadvantageous to the Holders when taken as a whole in any material respect than the
applicable agreement as in effect on the date of this Indenture, as determined in good faith
by the Company);

     (10) any transaction with an Affiliate in which the consideration paid by the Parent
Guarantors, the Company or any Restricted Subsidiary consists only of Equity Interests
(other than Disqualified Stock) of the Parent Guarantors or the Company, as applicable;

     (11) any merger, consolidation or reorganization of the Parent Guarantors or the
Company with an Affiliate of the Parent Guarantors or the Company, as applicable, solely for
the purpose of (i) forming or collapsing a holding company structure or (ii) reincorporating
the Parent Guarantors or the Company in a new jurisdiction;

     (12) payments to or from, and transactions with, any joint venture in the ordinary
course of business;

     (13) any transaction pursuant to which Great Wolf Resorts or an Affiliate thereof
provides the Issuers or their Restricted Subsidiaries, at their request and at the cost to
Great Wolf Resorts or such Affiliate, with services, including services to be purchased from
third-party

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providers, such as legal and accounting, tax, consulting, financial advisory, corporate
governance, insurance coverage and other services; and

     (14) transactions with Great Wolf Finance that are incidental to its role as a
co-issuer of the Notes or obligor under any other Indebtedness permitted to be incurred
pursuant to Section 4.22 hereof.

Section 4.14 Liens.

     The Parent Guarantors and the Company will not, and the Company will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any
Lien of any kind securing Indebtedness, Attributable Debt or trade payables (i) on any Collateral
now owned or hereafter acquired, except Permitted Collateral Liens, and (ii) on any asset other
than Collateral, except Permitted Liens. Notwithstanding the foregoing, except to secure the Notes
and the Notes Guarantees, (i) the Parent Guarantors shall not create or permit to exist any Lien to
secure Indebtedness for borrowed money on, or pledge, their Equity Interests in the Company and
(ii) the Company and each Subsidiary shall not create or permit to exist any Lien to secure
Indebtedness for borrowed money on, or pledge, its Equity Interests in any Principal Property
Subsidiary or in Great Wolf Finance. Great Lakes Services, LLC shall not create or permit to exist
any Lien on its assets or pledge its assets, in each case, to secure Indebtedness for money
borrowed other than (i) Liens to secure Obligations under Indebtedness permitted by Section
4.09(b)(1) or (ii) Incidental Liens.

Section 4.15 Business Activities.

     The Parent Guarantors and the Company will not, and the Company will not permit any of its
Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole.

Section 4.16 Corporate Existence.

     Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect:

	 	(1)	 	its partnership existence, and the corporate, partnership, limited
liability company or other existence of each of its Subsidiaries, in accordance
with the respective organizational documents (as the same may be amended from time
to time) of the Company or any such Subsidiary; and
	 
	 	(2)	 	the rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries (other than Great Wolf
Finance), if the Board of Directors shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.

Section 4.17 Offer to Repurchase Upon Change of Control.

     (a) If a Change of Control occurs, each Holder of Notes will have the right to require the
Issuers to make an offer (a “Change of Control Offer”), in accordance with this Section 4.17, to
each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in
excess thereof)

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of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal
amount of Notes repurchased, plus accrued and unpaid interest and Special Interest, if any, on the
Notes repurchased to, but not including, the date of purchase, subject to the rights of Holders of
Notes on the relevant record date to receive interest due on the relevant interest payment date
(the “Change of Control Payment”). Within 30 days following any Change of Control, the Issuers
will provide a notice to each Holder describing the transaction or transactions that constitute the
Change of Control and stating:

     (1) that the Change of Control Offer is being made pursuant to this Section 4.17 and
that all Notes tendered will be accepted for payment;

     (2) the purchase price and the purchase date, which shall be no earlier than 30 days
and no later than 60 days from the date such notice is provided (the “Change of Control
Payment Date”);

     (3) that any Note not tendered will continue to accrue interest and Special Interest,
if any;

     (4) that, unless the Issuers default in the payment of the Change of Control Payment,
all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue
interest and Special Interest, if any, after the Change of Control Payment Date;

     (5) that Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to surrender the Notes, with the form entitled “Option of Holder to
Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the
Paying Agent at the address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date;

     (6) that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day preceding the
Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes purchased; and

     (7) that Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of
$1,000 in excess thereof.

     On the Change of Control Payment Date, all Notes repurchased by the Issuers shall be delivered
to the Trustee for cancellation, and the Issuers shall pay the repurchase price plus accrued and
unpaid interest and Special Interest, if any, to the Holders entitled thereto.

     (b) On the Change of Control Payment Date, the Issuers will, to the extent lawful:

     (1) accept for payment all Notes or portions of Notes properly tendered pursuant to the
Change of Control Offer;

     (2) deposit with the paying agent an amount equal to the Change of Control Payment in
respect of all Notes or portions of Notes properly tendered; and

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     (3) deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officers’ Certificate stating the aggregate principal amount of Notes or
portions of Notes being purchased by the Issuers.

     The Paying Agent will promptly provide (but in any case not later than five days after the
Change of Control Payment Date) to each Holder of Notes properly tendered the Change of Control
Payment for such Notes, and the Trustee will promptly authenticate and provide (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any.

     (c) Notwithstanding anything to the contrary in this Section 4.17, the Issuers will not be
required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the
Change of Control Offer in the manner, at or prior to the times and otherwise in compliance with
the requirements set forth in this Section 4.17 and purchases all Notes properly tendered and not
withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to
Section 3.07 hereof, unless and until there is a default in payment of the applicable redemption
price.

     (d) Notwithstanding anything to the contrary contained herein, a Change of Control Offer may
be made in advance of a Change of Control, conditioned upon the consummation of such Change of
Control.

Section 4.18 No Layering of Debt.

     The Company will not incur, and will not permit any Subsidiary Guarantor to incur, any
Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to
any other Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also
contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on
substantially identical terms; provided, however, that no Indebtedness will be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the Company solely by
virtue of being unsecured or by virtue of being secured on a junior priority basis.

Section 4.19 Payments for Consent.

     The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes
for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of
this Indenture or the Notes unless such consideration is offered to be paid and is paid to all
Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement or is paid to all Holders of
the Notes.

Section 4.20 Additional Note Guarantees.

     If the Company or any of its Restricted Subsidiaries acquires or creates another Domestic
Subsidiary (other than a Mortgage Loan Borrower) after the date of this Indenture, then the Company
will cause such newly acquired or created Domestic Subsidiary to provide a Note Guarantee pursuant
to a supplemental indenture in form and substance satisfactory to the Trustee and deliver an
Opinion of Counsel to the Trustee within 10 Business Days after the date on which it was acquired
or created to the effect that such supplemental indenture has been duly authorized, executed and
delivered by that Domestic Subsidiary and constitutes a valid and binding agreement of that
Domestic Subsidiary, enforceable in accordance with its terms (subject to customary exceptions);
provided that any Domestic Subsidiary that constitutes an Immaterial Subsidiary need not become a
Guarantor until such time as it

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ceases to be an Immaterial Subsidiary. The form of such supplemental indenture is attached as
Exhibit F hereto. Notwithstanding the foregoing, each of the following Subsidiaries of the Company
(and each of their Subsidiaries) shall not be required to become a Guarantor, unless otherwise
required to become a Guarantor pursuant to Section 10.11 hereof: (i) Great Wolf Lodge of the
Carolinas LLC, a Delaware limited liability company, (ii) Great Wolf Kansas SPE LLC, a Delaware
limited liability company, (iii) Great Wolf Traverse SPE LLC, a Delaware limited liability company,
(iv) Great Wolf Lodge of the Poconos LLC, a Delaware limited liability company, (v) Blue Harbor
Resort Sheboygan LLC, a Wisconsin limited liability company, and (vi) Great Wolf Lodge of Chehalis
LLC, a Delaware limited liability company.

Section 4.21 Designation of Restricted and Unrestricted Subsidiaries.

     The Board of Directors of Great Wolf Resorts may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default; provided that in no event
will (i) the business or Principal Properties currently operated by the Principal Property
Subsidiaries be transferred to or held by an Unrestricted Subsidiary or (ii) any Principal Property
Subsidiary be designated as an Unrestricted Subsidiary. If a Restricted Subsidiary is designated
as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be
deemed to be an Investment made as of the time of the designation and will reduce the amount
available for Restricted Payments under Section 4.07 hereof or under one or more clauses of the
definition of Permitted Investments, as determined by the Company. That designation will only be
permitted if the Investment would be permitted at that time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors of Great Wolf
Resorts may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that
redesignation would not cause a Default.

     Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary after the date of
this Indenture will be evidenced to the Trustee by filing with the Trustee a certified copy of a
resolution of the Board of Directors of Great Wolf Resorts giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the preceding conditions and
was permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to
meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will
be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, the Issuers
will be in default of such covenant. The Board of Directors of Great Wolf Resorts may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Company; provided that
such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of
the Company of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation
will only be permitted if (1) such Indebtedness is permitted under Section 4.09 hereof, calculated
on a pro forma basis as if such designation had occurred at the beginning of the applicable
reference period; and (2) no Default or Event of Default would be in existence following such
designation.

     Great Wolf Development Connecticut LLC and GWF Connecticut LLC, each a Delaware limited
liability company, shall be Unrestricted Subsidiaries as of the date of this Indenture.

Section 4.22 Restrictions on Activities of Great Wolf Finance.

     Great Wolf Finance will not hold any material assets, hold any Equity Interests, incur any
Indebtedness, become liable for any obligations, engage in any business activities or have any
Subsidiaries. However, Great Wolf Finance may incur Indebtedness to the extent that it is a
co-obligor

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with respect to Indebtedness that the Company is permitted to incur under this Indenture, but
only if the Net Proceeds of such Indebtedness are received by the Company or one or more of the
Company’s Wholly Owned Restricted Subsidiaries other than Great Wolf Finance.

ARTICLE 5

SUCCESSORS

Section 5.01 Merger, Consolidation or Sale of Assets.

     (a) Each Issuer will not, directly or indirectly: (1) consolidate or merge with or into
another Person (whether or not each Issuer is the surviving corporation), or (2) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Issuers and the Company’s Restricted Subsidiaries, as applicable, in each case taken as a
whole, in one or more related transactions, to another Person, unless:

     (1) either:

     (A) such Issuer is the surviving corporation; or

     (B) the Person formed by or surviving any such consolidation or merger (if
other than such Issuer) or to which such sale, assignment, transfer, conveyance or
other disposition has been made is an entity organized or existing under the laws of
the United States, any state of the United States or the District of Columbia; and,
if such entity is not a corporation, a co-obligor of the Notes is a corporation
organized or existing under any such laws;

     (2) the Person formed by or surviving any such consolidation or merger (if other than
such Issuer) or the Person to which such sale, assignment, transfer, conveyance or other
disposition has been made assumes all the obligations of such Issuer under the Notes, this
Indenture, the registration rights agreement and the Collateral Documents (to the extent
that such Issuer was a party thereto immediately prior to such transaction) pursuant to
agreements reasonably satisfactory to the Trustee;

     (3) immediately after such transaction, no Default or Event of Default exists; and

     (4) Great Wolf Resorts or the Person formed by or surviving any such consolidation or
merger (if other than Great Wolf Resorts or the Issuers), or to which such sale, assignment,
transfer, conveyance or other disposition has been made would, on the date of such
transaction after giving pro forma effect thereto and any related financing transactions as
if the same had occurred at the beginning of the applicable four-quarter period (i) be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09(a) hereof or (ii) have had a Fixed Charge
Coverage Ratio greater than or equal to the actual Fixed Charge Coverage Ratio for Great
Wolf Resorts for such four quarter period prior to giving pro forma effect to such
transactions.

     (b) Each Parent Guarantor will not, directly or indirectly: (1) consolidate or merge with or
into another Person (whether or not each Issuer is the surviving corporation), or (2) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Parent Guarantors and their Subsidiaries, as applicable, in each case taken as a whole, in one
or more related transactions, to another Person, unless:

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     (1) either:

     (A) such Parent Guarantor is the surviving Person; or

     (B) the Person formed by or surviving any such consolidation or merger (if
other than such Issuer) or to which such sale, assignment, transfer, conveyance or
other disposition has been made is an entity organized or existing under the laws of
the United States, any state of the United States or the District of Columbia;

     (2) the Person acquiring the property in any such sale or disposition or the Person
formed by or surviving any such consolidation or merger unconditionally assumes all the
obligations of that Parent Guarantor under its Note Guarantee, this Indenture, the
registration rights agreement and the Collateral Documents (to the extent the relevant
Parent Guarantor was a party thereto immediately prior to such transaction) pursuant to
agreements reasonably satisfactory to the Trustee;

     (3) immediately after giving effect to such transaction, no Default or Event of Default
exists; and

     (4) Great Wolf Resorts or the Person formed by or surviving any such consolidation or
merger (if other than Great Wolf Resorts or the Issuers), or to which such sale, assignment,
transfer, conveyance or other disposition has been made would, on the date of such
transaction after giving pro forma effect thereto and any related financing transactions as
if the same had occurred at the beginning of the applicable four-quarter period (i) be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09(a) hereof or (ii) have had a Fixed Charge
Coverage Ratio greater than or equal to the actual Fixed Charge Coverage Ratio for Great
Wolf Resorts for such four quarter period prior to giving pro forma effect to such
transactions.

     In addition, neither Parent Guarantor nor the Company will, directly or indirectly, lease all
or substantially all of the properties and assets of it and its Restricted Subsidiaries taken as a
whole, in one or more related transactions, to any other Person.

     (c) This Section 5.01 will not apply to any sale, assignment, transfer, conveyance, lease or
other disposition of assets between or among the Company, the Parent Guarantors and the Company’s
Restricted Subsidiaries. Clauses (3) and (4) of each of paragraphs (a) and (b) of this Section
5.01 will not apply to any merger or consolidation of Great Wolf Resorts or the Company with or
into (i) one of its Restricted Subsidiaries for any purpose or (ii) an Affiliate solely for the
purpose of reincorporating Great Wolf Resorts or the Company, as applicable, in another
jurisdiction.

Section 5.02 Successor Corporation Substituted.

     (a) Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the properties or assets of either Issuer in a
transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the
successor Person formed by such consolidation or into or with which such Issuer is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed
to, and be substituted for (so that from and after the date of such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture
referring to the “Company” or “Great Wolf Finance” shall refer instead to the successor Person and
not to such Issuer), and may exercise every right and power of such Issuer under this Indenture
with the same effect as if such successor Person had been named as

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such Issuer herein; provided, however, that the predecessor Issuer shall not be relieved from
the obligation to pay the principal of, premium on, if any, interest and Special Interest, if any,
on, the Notes except in the case of a sale of all of such Issuer’s assets in a transaction that is
subject to, and that complies with the provisions of, Section 5.01 hereof.

     (b) Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the properties or assets of either Parent
Guarantor in a transaction that is subject to, and that complies with the provisions of, Section
5.01 hereof, and upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee
endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions
of this Indenture to be performed by such Parent Guarantor, such successor Person will succeed to
and be substituted for such Parent Guarantor with the same effect as if it had been named herein as
such Parent Guarantor. Such successor Person thereupon may cause to be signed any or all of the
Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Issuers and delivered to the Trustee.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01 Events of Default.

     Each of the following is an “Event of Default”:

     (1) default for 30 days in the payment when due and payable of interest and Special
Interest, if any, on the Notes;

     (2) default in the payment when due and payable (at maturity, upon redemption or
otherwise) of the principal of, or premium, if any, on, the Notes;

     (3) failure by any of the Parent Guarantors, the Company or any of its Restricted
Subsidiaries to comply with its obligations under Section 4.17 or Section 5.01 hereof;

     (4) failure by any of the Parent Guarantors, the Company or any of its Restricted
Subsidiaries for 60 days after notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding voting as a single
class to comply with its obligations under any of the other agreements in this Indenture or
the Collateral Documents;

     (5) default under any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any Indebtedness for money borrowed by the
Parent Guarantors, the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Parent Guarantors, the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the
date of this Indenture, if that default:

     (A) is caused by a failure to pay principal of, premium on, if any, or
interest, if any, on, such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a “Payment Default”); or

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     (B) results in the acceleration of such Indebtedness prior to its express
maturity,

(other than Indebtedness of a Restricted Subsidiary of the Company that upon such
default or acceleration is Without Recourse to the assets of the Parent Guarantors,
the Company or any of its other Restricted Subsidiaries except for a
bankruptcy-remote special-purpose entity that is a direct obligor under such
Indebtedness) and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which there
has been a Payment Default for failure to pay principal at the stated final maturity
(after giving effect to any applicable grace periods) or the maturity of which has
been so accelerated, aggregates $10.0 million or more at any one time outstanding;

     (6) failure by the Parent Guarantors, the Company or any of its Restricted Subsidiaries
to pay final judgments entered by a court or courts of competent jurisdiction aggregating in
excess of $10.0 million (net of amounts covered by insurance), which final judgments are not
paid, discharged or stayed for a period of more than 60 days;

     (7) (i) breach by the Company or any of its Restricted Subsidiaries of any material
representation, warranty or agreement in the Collateral Documents for 60 days after notice
to the Company by the Trustee or Collateral Agent or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding voting as a single class (unless
otherwise provided in the Collateral Documents); (ii) any security interest created by the
Collateral Documents with regard to the Collateral ceases to be in full force and effect
(except as permitted by the terms of this Indenture or the Collateral Documents) with
respect to Collateral having a Fair Market Value in excess of $5.0 million, or an assertion
by the Company or any of its Restricted Subsidiaries that any Collateral having a Fair
Market Value in excess of $5.0 million is not subject to a valid, perfected first priority
security interest (except as permitted by the terms of this Indenture or the Collateral
Documents and except to the extent that any such loss of perfection or priority results from
the failure of the Trustee to make any filings, renewals or continuations (or other
equivalent filings) which the Company has indicated in the perfection certificate or other
written communications to the Trustee are required to be made or the failure of the Trustee
to maintain possession of certificates, instruments or other documents actually delivered to
it representing securities or other possessory Collateral pledged under the Collateral
Documents); or (iii) the repudiation by the Company or any of its Restricted Subsidiaries of
any of their material obligations under the Collateral Documents;

     (8) except as permitted by this Indenture (including, without limitation, in connection
with the release of such Note Guarantee as permitted under this Indenture or the discharge
or defeasance of this Indenture), any Note Guarantee is held in any judicial proceeding to
be unenforceable or invalid or ceases for any reason to be in full force and effect, or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, denies or
disaffirms its obligations under its Note Guarantee; and

     (9)

     (A) the Company, the Parent Guarantors or any Restricted Subsidiary of the
Company that is a Significant Subsidiary or any group of Restricted Subsidiaries of
the Company that, taken together, would constitute a Significant Subsidiary pursuant
to or within the meaning of Bankruptcy Law:

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     (i) commences a voluntary case,

     (ii) consents to the entry of an order for relief against it in an
involuntary case,

     (iii) consents to the appointment of a Custodian of it or for any
substantial part of its property,

     (iv) makes a general assignment for the benefit of its creditors,

     (v) takes any comparable action under any foreign laws relating to
insolvency, or

     (vi) is generally unable to pay its debts as they become due; or

     (B) a court of competent jurisdiction enters an order or decree (which order or
decree remains unstayed and in effect for 60 consecutive days) under any Bankruptcy
Law that:

     (i) is for relief against the Company, the Parent Guarantors or any
Restricted Subsidiary of the Company that is a Significant Subsidiary or any
group of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary in an involuntary case,

     (ii) appoints a custodian of the Company, the Parent Guarantors or any
Restricted Subsidiary of the Company that is a Significant Subsidiary or any
group of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary or for all or substantially all of the
property of the Company, the Parent Guarantors or any Restricted Subsidiary
of the Company that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary,

     (iii) orders the winding up or liquidation of the Company, the Parent
Guarantors or any Restricted Subsidiary of the Company that is a Significant
Subsidiary or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary, or

     (iv) any similar relief is granted under any foreign laws and the
provisions of this clause (9).

Section 6.02 Acceleration.

     In the case of an Event of Default specified in clause (9) of Section 6.01 hereof, with
respect to the Parent Guarantors, the Company, any Restricted Subsidiary of the Company that is a
Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately by notice in writing
to the Company.

     Upon any such declaration, the Notes shall become due and payable immediately.

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     The Holders of a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an
acceleration and its consequences hereunder, if the rescission would not conflict with any judgment
or decree and if all existing Events of Default (except nonpayment of principal of, premium on, if
any, interest or Special Interest, if any, on the Notes that has become due solely because of the
acceleration) have been cured or waived.

Section 6.03 Other Remedies.

     Subject to the provisions of this Indenture relating to the duties of the Trustee, in case an
Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any
of the rights or powers under this Indenture at the request or direction of any Holders of Notes
unless such Holders have offered to the Trustee reasonable indemnity or security satisfactory to it
against any loss, liability or expense. Except to enforce the right to receive payment of
principal, premium, if any, interest or Special Interest, if any, when due, no Holder of a Note may
pursue any remedy with respect to this Indenture or the Notes unless:

     (1) such Holder has previously given the Trustee written notice that an Event of
Default is continuing;

     (2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes
make a written request to the Trustee to pursue the remedy;

     (3) such Holder or Holders offer and, if requested, provide to the Trustee security or
indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;

     (4) the Trustee does not comply with such request within 60 days after receipt of the
request and the offer of security or indemnity; and

     (5) during such 60-day period, Holders of a majority in aggregate principal amount of
the then outstanding Notes do not give the Trustee a direction inconsistent with such
request.

Section 6.04 Waiver of Past Defaults.

     The Holders of a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may, on behalf of the Holders of all of the Notes waive, subject to
Section 9.02(b) and 9.02(c), any existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of principal of, premium,
if any, interest or Special Interest, if any, on, the Notes (including in connection with an offer
to purchase); provided, however, that the Holders of a majority in aggregate principal amount of
the then outstanding Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.

Section 6.05 Control by Majority.

     Holders of a majority in aggregate principal amount of the then outstanding Notes may direct
the time, method and place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to
follow any direction

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that conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal
liability.

Section 6.06 Limitation on Suits.

     No Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

     (1) such Holder has previously given to the Trustee written notice that an Event of
Default is continuing;

     (2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes
make a written request to the Trustee to pursue the remedy;

     (3) such Holder or Holders offer and, if requested, provide to the Trustee security or
indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;

     (4) the Trustee does not comply with such request within 60 days after receipt of the
request and the offer of security or indemnity; and

     (5) during such 60-day period, Holders of a majority in aggregate principal amount of
the then outstanding Notes do not give the Trustee a direction inconsistent with such
request.

     A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a
Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07 Rights of Holders of Notes to Receive Payment.

     Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal of, premium, if any, interest or Special Interest, if any, on, the
Note, on or after the respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such Holder; provided
that a Holder shall not have the right to institute any such suit for the enforcement of payment if
and to the extent that the institution or prosecution thereof or the entry of judgment therein
would, under applicable law, result in the surrender, impairment, waiver or loss of the Lien of
this Indenture upon any property subject to such Lien.

Section 6.08 Collection Suit by Trustee.

     If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing,
the Trustee is authorized to recover judgment in its own name and as trustee of an express trust
against the Issuers for the whole amount of principal of, premium, if any, interest and Special
Interest, if any, remaining unpaid on, the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel.

Section 6.09 Trustee May File Proofs of Claim.

     The Trustee is authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon

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the Notes), its creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any such claims and
any custodian in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any
such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of
any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

Section 6.10 Priorities.

     If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in
the following order:

     First: to the Trustee and the Collateral Agent, their agents and attorneys for amounts
due under Section 7.07 hereof and the applicable Collateral Documents, including payment of
all compensation, expenses and liabilities incurred, and all advances made, by the Trustee
and the Collateral Agent and the costs and expenses of collection;

     Second: to Holders of Notes for amounts due and unpaid on the Notes for principal,
premium, if any, interest and Special Interest, if any, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for principal,
premium, if any, interest and Special Interest, if any, respectively; and

     Third: to the Issuers or to such party as a court of competent jurisdiction shall
direct.

     The Trustee may fix a record date and payment date for any payment to Holders of Notes
pursuant to this Section 6.10.

Section 6.11 Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in aggregate principal amount of the then outstanding Notes.

Section 6.12 Exercise of Remedies by Collateral Agent

     The Collateral Agent may exercise any and all other remedies available to it under the
Collateral Documents.

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ARTICLE 7

TRUSTEE

Section 7.01 Duties of Trustee.

     (a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.

     (b) Except during the continuance of an Event of Default:

     (1) the duties of the Trustee will be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and

     (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee will examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture (but need not verify any
mathematical calculations or other facts stated therein).

     (c) The Trustee may not be relieved from liabilities for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

     (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

     (2) the Trustee will not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and

     (3) the Trustee will not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

     (d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.

     (e) No provision of this Indenture will require the Trustee to expend or risk its own funds or
incur any liability. The Trustee will be under no obligation to exercise any of its rights or
powers under this Indenture at the request of any Holders, unless such Holder has offered to the
Trustee reasonable indemnity and security satisfactory to it against any loss, liability or
expense.

     (f) The Trustee will not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Issuers. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.

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Section 7.02 Rights of Trustee.

     (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.

     (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits
to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee
may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.

     (c) The Trustee may act through its attorneys and agents and will not be responsible for the
misconduct or negligence of any agent appointed with due care.

     (d) The Trustee will not be liable for any action it takes or omits to take in good faith that
it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

     (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Issuers will be sufficient if signed by an Officer of the Company.

     (f) The Trustee will be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders unless such Holders have
offered to the Trustee reasonable indemnity or security satisfactory to it against the losses,
liabilities and expenses that might be incurred by it in compliance with such request or direction.

     (g) Except with respect to Section 4.01 hereof, the Trustee shall have no duty to inquire as
to the performance of the Company with respect to the covenants contained in Article 4 hereof. In
addition, the Trustee shall not be deemed to have knowledge of an Event of Default except (i) any
Default or Event of Default occurring pursuant to Sections 4.01, 6.01(1) or 6.02(2) hereof or (ii)
any Default or Event of Default of which the Trustee shall have received written notification or
obtained actual knowledge.

     (h) Delivery of such reports, information and documents to the Trustee described in Section
4.03 of this Indenture is for informational purposes only, and the Trustee’s receipt of such shall
not constitute constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely conclusively on Officers’ Certificates).

     (i) In no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.

     (j) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.

     (k) In no event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond

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its control, including, without limitation, strikes, work stoppages, accidents, acts of war or
terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer (software and
hardware) services; it being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.

Section 7.03 Individual Rights of Trustee.

     The Trustee in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuers or any Affiliate of the Issuers with the same rights it
would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee (if this Indenture has been qualified under the TIA) or resign. Any Agent may
do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.

Section 7.04 Trustee’s Disclaimer.

     The Trustee will not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the
proceeds from the Notes or any money paid to the Issuers or upon the Issuers’ direction under any
provision of this Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be responsible for any
statement or recital herein or any statement in the Notes or any other document in connection with
the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05 Notice of Defaults.

     If a Default or Event of Default occurs and is continuing and if it is known to the Trustee,
the Trustee will provide to Holders of Notes a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of Default in payment of principal
of, premium on, if any, interest or Special Interest, if any, on, any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the Notes.

Section 7.06 Reports by Trustee to Holders of the Notes.

     (a) Within 60 days after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee will provide to the Holders of
the Notes a brief report dated as of such reporting date that complies with TIA §313(a) (but if no
event described in TIA §313(a) has occurred within the twelve months preceding the reporting date,
no report need be transmitted). The Trustee also will comply with TIA §313(b)(2). The Trustee
will also provide all reports as required by TIA §313(c).

     (b) A copy of each report at the time of its mailing to the Holders of Notes will be provided
by the Trustee to the Issuers and filed by the Trustee with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA §313(d). The Issuers will promptly notify the
Trustee when the Notes are listed on any stock exchange.

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Section 7.07 Compensation and Indemnity.

     (a) The Issuers will pay to the Trustee from time to time reasonable compensation for its
acceptance of this Indenture and services hereunder. The Trustee’s compensation will not be
limited by any law on compensation of a trustee of an express trust. The Issuers will reimburse
the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred
or made by it in addition to the compensation for its services. Such expenses will include the
reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

     (b) The Issuers and the Guarantors will indemnify the Trustee and its officers, directors,
employees and agents against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Issuers and the Guarantors
(including this Section 7.07) and defending itself against any claim (whether asserted by the
Issuers, the Guarantors, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the extent any such
loss, liability or expense may be attributable to its negligence, willful misconduct or bad faith.
The Trustee will notify the Issuers promptly of any claim for which it may seek indemnity. Failure
by the Trustee to so notify the Issuers will not relieve the Issuers or any of the Guarantors of
their obligations hereunder. The Issuers or such Guarantor will defend the claim and the Trustee
will cooperate in the defense. The Trustee may have separate counsel and the Issuers will pay the
reasonable fees and expenses of such counsel. Neither the Issuers nor any Guarantor need pay for
any settlement made without its consent, which consent will not be unreasonably withheld.

     (c) The Issuers will pay to the Collateral Agent from time to time reasonable compensation for
its acceptance of this Indenture and services hereunder. The Collateral Agent’s compensation will
not be limited by any law on compensation of a trustee of an express trust. The Issuers will
reimburse the Collateral Agent promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its services. Such expenses
will include the reasonable compensation, disbursements and expenses of the Collateral Agent’s
agents and counsel.

     (d) The Issuers and the Guarantors will indemnify the Collateral Agent and its officers,
directors, employees and agents against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against the Issuers and the
Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted
by the Issuers, the Guarantors, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the extent any such
loss, liability or expense may be attributable to its negligence, willful misconduct or bad faith.
The Collateral Agent will notify the Issuers promptly of any claim for which it may seek indemnity.
Failure by the Collateral Agent to so notify the Issuers will not relieve the Issuers or any of
the Guarantors of their obligations hereunder. The Issuers or such Guarantor will defend the claim
and the Collateral Agent will cooperate in the defense. The Collateral Agent may have separate
counsel and the Issuers will pay the reasonable fees and expenses of such counsel. Neither the
Issuers nor any Guarantor need pay for any settlement made without its consent, which consent will
not be unreasonably withheld.

     (e) The obligations of the Issuers and the Guarantors under this Section 7.07 will survive the
satisfaction and discharge of this Indenture and the resignation or removal of the Trustee or
Collateral Agent.

     (f) To secure the Issuers’ and the Guarantors’ payment obligations in this Section 7.07, the
Trustee and Collateral Agent will have a Lien prior to the Notes on all money or property held or

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collected by the Trustee or Collateral Agent, in its capacity as Trustee or Collateral Agent,
as applicable, except that held in trust to pay principal of, premium on, if any, interest or
Special Interest, if any, on, particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.

     (g) When the Trustee or Collateral Agent, as applicable, incurs expenses or renders services
after an Event of Default specified in Section 6.01(9) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any Bankruptcy Law.

     (h) The Trustee will comply with the provisions of TIA §313(b)(2) to the extent applicable.

Section 7.08 Replacement of Trustee.

     (a) A resignation or removal of the Trustee and appointment of a successor Trustee will become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section
7.08.

     (b) The Trustee may resign in writing at any time and be discharged from the trust hereby
created by so notifying the Issuers. The Holders of a majority in aggregate principal amount of
the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuers in
writing. The Issuers may remove the Trustee if:

     (1) the Trustee fails to comply with Section 7.10 hereof;

     (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

     (3) a custodian or public officer takes charge of the Trustee or its property; or

     (4) the Trustee becomes incapable of acting.

     (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for
any reason, the Issuers will promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the
Issuers.

     (d) If a successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Issuers, or the Holders of at least 10% in
aggregate principal amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

     (e) If the Trustee, after written request by any Holder who has been a Holder for at least six
months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

     (f) A successor Trustee will deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuers. Thereupon, the resignation or removal of the retiring Trustee will
become effective, and the successor Trustee will have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee will provide a notice of its succession to
Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the
successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07 hereof.

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Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuers’
obligations under Section 7.07 hereof will continue for the benefit of the retiring Trustee.

Section 7.09 Successor Trustee by Merger, etc.

     If the Trustee consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation without any further
act will be the successor Trustee.

Section 7.10 Eligibility; Disqualification.

     There will at all times be a Trustee hereunder that is a corporation organized and doing
business under the laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.

     This Indenture will always have a Trustee who satisfies the requirements of TIA §310(a)(1),
(2) and (5). The Trustee is subject to TIA §310(b).

Section 7.11 Preferential Collection of Claims Against Issuers.

     The Trustee is subject to TIA §311(a), excluding any creditor relationship listed in TIA
§311(b). A Trustee who has resigned or been removed shall be subject to TIA §311(a) to the extent
indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.

     The Company may at any time, at its option, by a resolution of the Board of Directors of Great
Wolf Resorts set forth in an Officers’ Certificate, elect to have either Section 8.02 or 8.03
hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in
this Article 8.

Section 8.02 Legal Defeasance and Discharge.

     Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section
8.02, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with
respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set
forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance
means that the Issuers and the Guarantors will be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will
thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all
their other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee,
on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise terminated or
discharged hereunder:

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     (1) the rights of Holders of outstanding Notes to receive payments in respect of the
principal of, premium on, if any, interest or Special Interest, if any, on, such Notes when
such payments are due from the Funds in Trust referred to in Section 8.04 hereof;

     (2) the Issuers’ obligations with respect to such Notes under Sections 2.03, 2.06,
2.07, 2.10 and 4.02 hereof;

     (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Issuers’ and the Guarantors’ obligations in connection therewith; and

     (4) this Article 8.

     Subject to compliance with this Article 8, the Issuers may exercise their option under this
Section 8.02 notwithstanding the prior exercise of their option under Section 8.03 hereof.

Section 8.03 Covenant Defeasance.

     Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section
8.03, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from each of their obligations under the covenants
contained in Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 4.18,
4.19, 4.20, 4.21 and 4.22 hereof, clauses (3) and (4) of Sections 5.01(a) and (b) hereof, and
Articles 10 and 11 hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and
the Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any thereof) in connection with
such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it
being understood that such Notes will not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees,
the Issuers and the Guarantors may omit to comply with and will have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and such omission to comply
will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as
specified above, the remainder of this Indenture and such Notes and Note Guarantees will be
unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(3), (4), (5), (6), (7) and (8) hereof will not constitute Events
of Default.

Section 8.04 Conditions to Legal or Covenant Defeasance.

     In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02
or 8.03 hereof:

     (1) the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized
investment bank, appraisal firm, or firm of independent public accountants, to pay the
principal of, premium on, if any, interest and Special Interest, if any, on, the outstanding
Notes (“Funds in Trust”) on the stated date for payment thereof or on the applicable
redemption date, as the case may be, and the Issuers must specify whether the Notes are
being defeased to such stated date for payment or to a particular redemption date;

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     (2) in the case of an election under Section 8.02 hereof, the Issuers must deliver to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:

     (A) the Issuers have received from, or there has been published by, the
Internal Revenue Service a ruling; or

     (B) since the date of this Indenture, there has been a change in the applicable
federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Legal Defeasance had not
occurred;

     (3) in the case of an election under Section 8.03 hereof, the Issuers must deliver to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;

     (4) no Default or Event of Default shall have occurred and is continuing on the date of
such deposit (other than a Default or Event of Default resulting from the borrowing of funds
to be applied to the Funds in Trust (and any similar concurrent deposit relating to other
Indebtedness), and the granting of Liens to secure such borrowings);

     (5) such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under, any material agreement or instrument (other
than this Indenture and the agreements governing any other Indebtedness being defeased,
discharged or replaced) to which the Issuers or any of the Guarantors is a party or by which
the Issuers or any of the Guarantors is bound;

     (6) the Issuers must deliver to the Trustee an Officers’ Certificate stating that the
deposit was not made by the Issuers with the intent of preferring the Holders of Notes being
defeased over the other creditors of the Issuers with the intent of defeating, hindering,
delaying or defrauding any creditors of the Issuers or others; and

     (7) the Issuers must deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.

Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.

     Subject to Section 8.06 hereof, all money and non-callable Government Securities (including
the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the
outstanding Notes will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Issuers acting as Paying Agent) as the Trustee may determine, to the Holders
of such Notes of all sums due and to become

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due thereon in respect of principal, premium, if any, interest and Special Interest, if any,
but such money need not be segregated from other funds except to the extent required by law.

     The Issuers will pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the cash or non-callable Government Securities deposited pursuant to Section
8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the outstanding Notes.

     Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to
the Issuers from time to time upon the request of the Issuers any money or non-callable Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in
excess of the amount thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.

Section 8.06 Repayment to Company.

     Any money deposited with the Trustee or any Paying Agent, or then held by the Issuers, in
trust for the payment of the principal of, premium, if any, interest or Special Interest, if any,
on, any Note and remaining unclaimed for two years after such principal, premium, if any, interest
or Special Interest, if any, has become due and payable shall be paid to the Issuers on their
request or (if then held by the Issuers) will be discharged from such trust; and the Holder of such
Note will thereafter be permitted to look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money, and all liability
of the Issuers as trustee thereof, will thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the expense of the
Issuers cause to be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date specified therein, which
will not be less than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will be repaid to the Issuers.

Section 8.07 Reinstatement.

     If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government
Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any
order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Issuers’ and the Guarantors’ obligations under this
Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit
had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case
may be; provided, however, that, if the Issuers make any payment of principal of, premium, if any,
interest or Special Interest, if any, on, any Note following the reinstatement of its obligations,
the Issuers will be subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

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ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01 Without Consent of Holders of Notes.

     Notwithstanding Section 9.02 of this Indenture, without the consent of any Holder of Notes,
the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture, the Collateral
Documents, the Notes or the Note Guarantees:

     (1) to cure any ambiguity, defect or inconsistency;

     (2) to provide for uncertificated Notes in addition to or in place of certificated
Notes;

     (3) to provide for the assumption of the Issuers’ or a Guarantor’s obligations to
holders of Notes and Note Guarantees in the case of a merger or consolidation or sale of all
or substantially all of the Company’s or such Guarantor’s assets, as applicable;

     (4) to make any change that would provide any additional rights or benefits to the
Holders of Notes or that does not adversely affect the legal rights under this Indenture of
any Holder in any material respect;

     (5) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;

     (6) to conform the text of this Indenture, the Notes, the Note Guarantees or the
Collateral Documents to any provision of the “Description of Notes” section of the Issuers’
Offering Memorandum dated March 30, 2010, relating to the initial offering of the Notes, to
the extent that such provision in that “Description of Notes” was intended to be a verbatim
recitation of a provision of this Indenture, the Notes, the Note Guarantees or the
Collateral Documents, which intent may be evidenced by an Officers’ Certificate to that
effect;

     (7) to enter into additional or supplemental Collateral Documents;

     (8) to release Collateral in accordance with the terms of this Indenture and the
Collateral Documents;

     (9) to provide for the issuance of Additional Notes in accordance with the limitations
set forth in this Indenture as of the date of this Indenture;

     (10) to allow any Guarantor or additional obligor to execute a supplemental indenture
and/or a Note Guarantee with respect to the Notes;

     (11) to add covenants or rights for the benefit of the Holders or to surrender any
right or power conferred upon the Issuers or a Guarantor;

     (12) to release a Guarantor as provided in this Indenture;

     (13) to make any amendment to the provisions of this Indenture relating to the transfer
and legending of Notes; provided, however, that (a) compliance with this Indenture as so
amended would not result in Notes being transferred in violation of the Securities Act or
any

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applicable securities law and (b) such amendment does not materially and adversely
affect the rights of Holders to transfer Notes;

     (14) to evidence and provide the acceptance of the appointment of a successor trustee
under this Indenture;

     (15) to comply with the rules of any applicable securities depositary; or

     (16) to add additional assets as Collateral or to release Collateral from the Lien or
any Guarantor from its Note Guarantee, in each case pursuant to this Indenture, the
Collateral Documents when permitted or required by this Indenture or the Collateral
Documents.

Section 9.02 With Consent of Holders of Notes.

     (a) Except as provided in Section 9.01 hereof and in paragraphs (b), (c) and (d) of this
Section 9.02, the Issuers and the Trustee may amend or supplement this Indenture (including,
without limitation, Sections 3.09, 4.11, 4.12 and 4.17 hereof) and the Notes, the Note Guarantees
and the Collateral Documents with the consent of the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if
any) voting as a single class (including, without limitation, consents obtained in connection with
a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and
6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in
the payment of the principal of, premium on, if any, interest or Special Interest, if any, on, the
Notes, except a payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture or the Notes or the Note Guarantees may be waived
with the consent of the Holders of a majority in aggregate principal amount of the then outstanding
Notes (including, without limitation, Additional Notes, if any) voting as a single class
(including, without limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes).

     (b) Notwithstanding Section 9.02(a) and Section 9.01 hereof, without the consent of Holders
holding an aggregate principal amount equal to at least 662⁄3% of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer for, or purchase
of, such Notes), no amendment, supplement or waiver to this Indenture may make any change in the
provisions of Section 4.10 hereof that adversely affects the Holders of the Notes in any material
respect.

     (c) Notwithstanding Section 9.02(a) and Section 9.01 hereof, without the consent of Holders
holding an aggregate principal amount equal to at least 95% of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer for, or purchase
of, such Notes), no amendment, supplement or waiver to this Indenture may (with respect to any
Notes held by a non-consenting Holder) release all or substantially all of the Collateral from the
Liens securing the Note Guarantees except as contemplated in the Collateral Documents.

     (d) Notwithstanding paragraphs (a), (b) and (c) of Section 9.02, without the consent of each
Holder of Notes affected, an amendment, supplement or waiver may not (with respect to any Notes
held by a non-consenting Holder):

     (1) reduce the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;

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     (2) reduce the principal of or change the fixed maturity of any Note or alter or waive
any of the provisions with respect to the redemption of the Notes (except those provisions
described in Sections 4.10, 4.11, 4.12 and 4.17 hereof);

     (3) reduce the rate of or extend the time for payment of interest, including default
interest, on any Note;

     (4) waive a Default or Event of Default in the payment of principal of, premium on, if
any, interest or Special Interest, if any, on, the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate principal
amount of the then outstanding Notes and a waiver of the Payment Default that resulted from
such acceleration);

     (5) make any Note payable in currency other than that stated in the Notes;

     (6) make any change in the provisions of this Indenture relating to waivers of past
Defaults or the rights of Holders of Notes to receive payments of principal of, premium on,
if any, interest or Special Interest, if any, on, the Notes;

     (7) waive a redemption payment with respect to any Note (other than a payment required
by Sections 4.10, 4.11, 4.12 and 4.17 hereof);

     (8) release any Guarantor from any of its obligations under its Note Guarantee or this
Indenture, except in accordance with the terms of this Indenture; or

     (9) make any change in the preceding amendment and waiver provisions.

     Upon the request of the Company accompanied by a resolution of the Board of Directors of Great
Wolf Resorts authorizing the execution of any such amended or supplemental indenture, and upon the
filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of
Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee will join with the Issuers and the Guarantors in the execution of such amended
or supplemental indenture unless such amended or supplemental indenture directly affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but will not be obligated to, enter into such amended or
supplemental Indenture.

     It is not necessary for the consent of the Holders of Notes under this Section 9.02 to approve
the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such
consent approves the substance thereof.

     After an amendment, supplement or waiver under this Section 9.02 becomes effective, the
Company will provide to the Holders of Notes affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect
therein, will not, however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver. Subject to paragraphs (b), (c) and (d) of this Section 9.02 and
Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes
then outstanding voting as a single class may waive compliance in a particular instance by the
Issuers with any provision of this Indenture, the Notes or the Note Guarantees.

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Section 9.03 Compliance with Trust Indenture Act.

     Every amendment or supplement to this Indenture, the Notes or the Note Guarantees will be set
forth in an amended or supplemental indenture that complies with the TIA as then in effect.

Section 9.04 Revocation and Effect of Consents.

     Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a
Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of
the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written notice of revocation
before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds every Holder.

Section 9.05 Notation on or Exchange of Notes.

     The Trustee may place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Issuers in exchange for all Notes may issue and the Trustee
shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

     Failure to make the appropriate notation or issue a new Note will not affect the validity and
effect of such amendment, supplement or waiver.

Section 9.06 Trustee to Sign Amendments, etc.

     The Trustee (and the Collateral Agent, if applicable) will sign any amended or supplemental
indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Issuers may not sign an
amended or supplemental indenture until the Board of Directors of Great Wolf Resorts approves it.
In executing any amended or supplemental indenture or any amendment, supplement or modification of
any Collateral Document, the Trustee and the Collateral Agent will be entitled to receive and
(subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the
documents required by Section 13.04 hereof, an Officers’ Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture or amendment is authorized or
permitted by this Indenture.

ARTICLE 10

COLLATERAL AND SECURITY

Section 10.01 Collateral Documents.

     The performance of all obligations of the Principal Property Subsidiaries, to the Holders of
Notes or the Trustee under this Indenture and the Note Guarantees, according to the terms hereunder
and thereunder, respectively, are secured by the Collateral as provided in the Collateral
Documents, which the Principal Property Subsidiaries have entered into simultaneously with the
execution of this Indenture. Each Holder of Notes, by its acceptance thereof, consents and agrees
to the terms of the Collateral Documents (including, without limitation, the provisions providing
for foreclosure and release of Collateral) as the same may be in effect or may be amended from time
to time in accordance with its terms and the terms of this Indenture and authorizes and directs the
Collateral Agent to enter into the Collateral Documents and to perform its obligations and exercise
its rights thereunder in accordance

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therewith. The Issuers will deliver to the Trustee copies of all documents delivered to the
Collateral Agent pursuant to the Collateral Documents, and will do or cause to be done all such
acts and things as may be deemed reasonably necessary, or as may be required by the provisions of
the Collateral Documents, in order to effect, reflect, perfect or preserve any security interest or
Lien granted to the Collateral Agent under the Collateral Documents. The Issuers will take, and
the Company will cause the Principal Property Subsidiaries to take, upon request of the Trustee or
the Collateral Agent, any and all actions reasonably required to cause the Collateral Documents to
create and maintain, as security for the Obligations of the Principal Property Subsidiaries, under
the Note Guarantees, a valid and enforceable perfected first priority Lien in and on all the
Collateral (provided, that with respect to the perfection of security interests in any personal
property, only to the extent such perfection can be achieved by the filing of financing
statements), in favor of the Collateral Agent for the benefit of the Holders of Notes, superior to
and prior to the rights of all third Persons other than holders of Permitted Collateral Liens and
subject to no other Liens other than Permitted Collateral Liens. Notwithstanding any of the
foregoing to the contrary, the security interest granted to the Collateral Agent in the Collateral
which does not constitute real estate or fixtures will only be perfected to the extent that such
security interest is able to be perfected by the filing of financing statements.

Section 10.02 Recording and Opinions.

     (a) The Issuers will furnish to the Trustee simultaneously with the execution and delivery of
this Indenture one or more Opinions of Counsel either:

     (1) stating that, in the opinion of such counsel, all action has been taken with
respect to the recording, registering and filing of this Indenture, financing statements or
other instruments necessary to make effective the Lien intended to be created by the
Collateral Documents, and reciting with respect to the security interests in the Collateral,
the details of such action; or

     (2) stating that, in the opinion of such counsel, no such action is necessary to make
such Lien effective.

     (b) The Company shall furnish to the Trustee and the Collateral Agent (i) promptly following
the Issue Date and (ii) on August 1 of each year, beginning August 1, 2010, an Opinion or Opinions
of Counsel, dated as of such date, either stating that, in the opinion of such counsel, all UCC
financing statements and other recordings necessary to maintain the effectiveness of the Liens and
security interests created by this Indenture and the Collateral Documents, and the perfection of
such Liens and security interests, have been filed, or stating that, in the opinion of such
counsel, no action is necessary to maintain the effectiveness and perfection of such Liens and
security interests.

     (c) The Issuers will otherwise comply with the provisions of TIA §314.

Section 10.03 Release of Collateral.

     (a) Subject to subsections (b), (c) and (d) of this Section 10.03, Collateral may be released
from the Liens and security interests created by the Collateral Documents at any time or from time
to time in accordance with the provisions of the Collateral Documents or as provided in this
Indenture. In addition, upon the request of the Issuers pursuant to an Officers’ Certificate
certifying that all conditions precedent hereunder have been met and stating whether or not such
release is in connection with an Asset Sale, the Collateral Agent will release (at the sole cost
and expense of the Issuers) Collateral that is sold, conveyed or disposed of in compliance with the
provisions of this Indenture; provided that if such sale, conveyance or disposition constitutes an
Asset Sale, the Issuers will apply the Net Proceeds in accordance with Section 4.10 hereof. Upon
receipt of such Officers’ Certificate, the Collateral Agent shall execute,

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deliver or acknowledge any necessary or proper instruments of termination, satisfaction or
release to evidence the release of any Collateral permitted to be released pursuant to this
Indenture or the Collateral Documents.

     (b) Except as otherwise provided in this Indenture, no Collateral may be released from the
Liens and security interests created by the Collateral Documents pursuant to the provisions of the
Collateral Documents unless the Officers’ Certificate required by this Section 10.03 has been
delivered to the Collateral Agent.

     (c) At any time when a Default or Event of Default has occurred and is continuing and the
maturity of the Notes has been accelerated (whether by declaration or otherwise) and the Trustee
has delivered a notice of acceleration to the Collateral Agent, no release of Collateral pursuant
to the provisions of the Collateral Documents will be effective as against the Holders of Notes.

     (d) The release of any Collateral from the terms of this Indenture and the Collateral
Documents will not be deemed to impair the security under this Indenture in contravention of the
provisions hereof if and to the extent the Collateral is released pursuant to the terms of the
Collateral Documents. Except as otherwise provided in this Indenture, to the extent applicable,
the Issuers will comply, or will cause to be complied, with TIA §313(b), relating to reports, and
TIA §314(d), relating to the release of property or securities from the Liens and security
interests created by the Collateral Documents and relating to the substitution therefor of any
property or securities to be subjected to the Liens and security interests created by the
Collateral Documents. Any certificate or opinion required by TIA §314(d) may be made by an Officer
of the Issuers except in cases where TIA §314(d) requires that such certificate or opinion be made
by an independent Person, in which case such certificate or opinion shall be made by an independent
engineer, appraiser or other expert selected or approved by the Trustee and the Collateral Agent in
the exercise of reasonable care. Subject to compliance with this Section 10.03(d), Liens on the
Collateral may be released:

     (1) in part, as to assets and properties to be disposed of or transferred or as
otherwise permitted, under Section 4.10 or 4.12 hereof;

     (2) in whole or in part, to the extent permitted by a modification of the Indenture,
the Collateral Documents or the Guarantees under Section 9.01 or 9.02 hereof;

     (3) in part, as to any asset that becomes an Excluded Asset;

     (4) as provided in the Collateral Documents; and

     (5) in whole, as to all Collateral, upon (i) payment in full of the principal of,
together with accrued and unpaid interest (including Special Interest, if any) on, the Notes
and all other obligations under this Indenture, the Subsidiary Guarantees and the Collateral
Documents that are due and payable at or prior to the time such principal, together with
accrued and unpaid interest (including Special Interest, if any), is paid or (ii) a Legal
Defeasance or Covenant Defeasance under Article 8 hereof or a satisfaction and discharge of
the Indenture under Article 12 hereof.

     (e) Notwithstanding anything to the contrary in this Section 10.03, the Issuers will not be
required to comply with all or any portion of TIA §314(d) if they determine, in good faith based on
advice of counsel, that under the terms of TIA §314(d) and/or any interpretation or guidance as to
the meaning thereof made by the SEC and its staff, including “no action” letters or exemptive
orders, all or any portion of TIA §314(d) is inapplicable to one or a series of released
Collateral. In addition, and without limiting the generality of the foregoing, the Principal
Property Subsidiaries may, among other things, without any

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release or consent by the Trustee (and without the delivery of any Officers’ Certificate or
any other documents under this Indenture, except as specified in this Section 10.03(e)), but
otherwise in compliance with the covenants of this Indenture and the Collateral Documents, conduct
ordinary course activities with respect to the Collateral including, without limitation (i) selling
or otherwise disposing of, in any transaction or series of related transactions, any property
subject to the Liens and security interests created by this Indenture or any of the Collateral
Documents which has become worn out, defective or obsolete or not used or useful in the business;
(ii) abandoning, terminating, canceling, releasing or making alterations in or substitutions of any
leases or contracts subject to the Liens and security interests created by the Collateral
Documents; (iii) surrendering or modifying any franchise, license (other than a license for the
relevant Principal Property Subsidiary to use the Great Wolf trade name or trademark) or permit
subject to the Liens and security interests created by the Collateral Documents which it may own or
under which it may be operating; (iv) altering, repairing, replacing or changing the location or
position of and adding to its structures, machinery, systems, equipment, fixtures and
appurtenances; (v) granting a license of any intellectual property; (vi) selling, transferring or
otherwise disposing of inventory in the ordinary course of business; (vii) collecting accounts
receivable in the ordinary course of business or selling, liquidating, factoring or otherwise
disposing of accounts receivable in the ordinary course of business; (viii) making cash payments
(including for the repayment of Indebtedness or interest and in connection with the Company’s cash
management activities) from cash that is at any time part of the Collateral in the ordinary course
of business that are not otherwise prohibited by this Indenture or the Collateral Documents; and
(ix) abandoning any intellectual property which is no longer used or useful in the Company’s
business. The Company must deliver to the Trustee within 30 calendar days following the end of
each fiscal year (or such later date as the Trustee shall agree), an Officers’ Certificate to the
effect that all releases and withdrawals during the preceding fiscal year (or since the date of
this Indenture, in the case of the first such certificate) in which no release or consent of the
Trustee was obtained in the ordinary course of the Issuers’ and Principal Property Subsidiaries’
business were not prohibited by this Indenture. Notwithstanding any of the foregoing to the
contrary, the Trustee shall execute and deliver to the Issuers all documents reasonably requested
to evidence any such releases of Collateral. In addition, in lieu of releasing the Liens created
by any of the Mortgages, the Trustee or Collateral Agent will, at the request of the Issuers, to
the extent necessary to facilitate future savings of mortgage recording tax in states that impose
such taxes, assign such Liens to the applicable Principal Property Subsidiaries’ new lender or
collateral agent.

Section 10.04 Certificates of the Issuers.

     The Issuers will furnish to the Trustee and the Collateral Agent, prior to each proposed
release of Collateral pursuant to the Collateral Documents:

     (1) all documents required by TIA §314(d); and

     (2) an Opinion of Counsel, which may be rendered by internal counsel to the Issuers, to
the effect that such accompanying documents constitute all documents required by TIA
§314(d).

     The Trustee may, to the extent permitted by Sections 7.01 and 7.02 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate statements
contained in such documents and such Opinion of Counsel.

Section 10.05 Certificates of the Trustee.

     In the event that the Issuers or Principal Property Subsidiaries wish to release Collateral in
accordance with the Collateral Documents and have delivered the certificates and documents required
by

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the Collateral Documents and Sections 10.03 and 10.04 hereof, the Trustee will determine
whether it has received all documentation required by TIA §314(d) in connection with such release
and, based on such determination and the Opinion of Counsel delivered pursuant to Section 10.04(2)
hereof, will deliver a certificate to the Collateral Agent setting forth such determination.

Section 10.06 Authorization of Actions to Be Taken by the Trustee Under the Collateral Documents.

     Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee may, in its sole
discretion and without the consent of the Holders of Notes, direct, on behalf of the Holders of
Notes, the Collateral Agent to take all actions it deems necessary or appropriate in order to:

     (1) enforce any of the terms of the Collateral Documents; and

     (2) collect and receive any and all amounts payable in respect of the Obligations of
the Issuers or the Guarantors hereunder or under the Note Guarantees.

     The Trustee, or the Collateral Agent at the Trustee’s direction, will have power to institute
and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of any Collateral Document or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders of Notes in the Collateral (including power to
institute and maintain suits or proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the Holders of Notes
or of the Trustee).

Section 10.07 Authorization of Receipt of Funds by the Trustee Under the Collateral Documents.

     The Trustee is authorized to receive any funds for the benefit of the Holders of Notes
distributed under the Collateral Documents, and to make further distributions of such funds to the
Holders of Notes according to the provisions of this Indenture.

Section 10.08 Termination of Security Interest.

     Upon the full and final payment and performance of all Obligations of the Issuers under this
Indenture and the Notes or upon Legal Defeasance, Covenant Defeasance or satisfaction and discharge
of this Indenture in accordance with Article 12 hereof, the Trustee will, at the request of the
Issuers, deliver a certificate to the Collateral Agent stating that such Obligations have been paid
in full, and instruct the Collateral Agent to release the Liens created by the Collateral
Documents.

Section 10.09 Collateral Agent.

     U.S. Bank National Association is appointed as of the date of this Indenture as Collateral
Agent for the benefit of the Holders of the Notes and shall initially act as Collateral Agent under
this Indenture and the Collateral Documents.

     The Collateral Agent will hold (directly or through co-trustees or agents), and will be
entitled to enforce on behalf of the Holders of Notes, all Liens on the Collateral.

     Except as provided in this Indenture or the Collateral Documents, the Collateral Agent will
not be obligated:

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     (1) to act upon directions purported to be delivered to it by any Person;

     (2) to foreclose upon or otherwise enforce any Lien; or

     (3) to take any other action whatsoever with regard to any or all of the Collateral
Documents, the Liens created thereby or the Collateral.

     For the avoidance of doubt, all of the rights, protections and immunities granted to the
Trustee hereunder shall inure to the benefit of the Collateral Agent acting hereunder and under the
Collateral Documents.

Section 10.10 Replacement of Collateral Agent.

     The Collateral Agent may resign by so notifying the Issuers in writing. The Holder or Holders
of a majority in aggregate principal amount of the outstanding Notes may remove the Collateral
Agent by so notifying the Issuers and the Collateral Agent in writing and may appoint a successor
Collateral Agent with the Issuers’ consent. The Issuers may remove the Collateral Agent if:

     (1) the Collateral Agent is adjudged bankrupt or insolvent;

     (2) a receiver, Custodian or other public officer takes charge of the Collateral Agent
or its property; or

     (3) the Collateral Agent becomes incapable of acting.

     If the Collateral Agent resigns or is removed or if a vacancy exists in the office of
Collateral Agent for any reason, the Issuers shall promptly appoint a successor Collateral Agent.

     A successor Collateral Agent shall deliver a written acceptance of its appointment to the
retiring Collateral Agent and to the Issuers. Immediately after that and provided that all sums
owing to the retiring Collateral Agent provided for in Section 7.7 have been paid, the retiring
Collateral Agent shall transfer all property held by it as Collateral Agent to the successor
Collateral Agent, subject to the lien, if any, provided in Section 7.7, the resignation or removal
of the retiring Collateral Agent shall become effective, and the successor Collateral Agent shall
have all the rights, powers and duties of the Collateral Agent under this Indenture. A successor
Collateral Agent shall mail notice of its succession to each Holder.

     If a successor Collateral Agent does not take office within 60 days after the retiring
Collateral Agent resigns or is removed, the retiring Collateral Agent (at the Issuers’ cost and
expense), the Issuers or the Holder or Holders of at least 10% in aggregate principal amount of the
outstanding Notes may petition any court of competent jurisdiction for the appointment of a
successor Collateral Agent.

     Notwithstanding replacement of the Collateral Agent pursuant to this Section 10.10, the
Issuers’ and the Guarantors’ obligations under Section 7.7 shall continue for the benefit of the
retiring Collateral Agent.

Section 10.11 Transfers of Collateral.

     (a) Except as permitted by Sections 4.10 and 9.02(b) hereof, each Principal Property must be
held by a Principal Property Subsidiary that is a Subsidiary Guarantor for so long as any Notes are
outstanding.

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     (b) In the event that the ownership of any Collateral is transferred to a Restricted
Subsidiary, such Restricted Subsidiary shall, within ten Business Days after such transfer, grant a
security interest in such Collateral equal in all material respects to the grant of the security
interest that the former owner of such Collateral granted in favor of the Collateral Agent for the
benefit of the Holders. Notwithstanding the foregoing, if such Collateral is transferred or
disposed of pursuant to subclauses (a), (c), (h) or (l) of the exceptions from the definition of
“Asset Sale” and such transfer or other disposition is otherwise permitted under this Indenture,
then the Restricted Subsidiary receiving such Collateral will be under no obligation pursuant to
this Section 10.11(b) to grant a security interest in such Collateral to the Collateral Agent or to
become a Subsidiary Guarantor pursuant to Section 10.11(a).

ARTICLE 11

NOTE GUARANTEES

Section 11.01 Guarantee.

     (a) Subject to this Article 11, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of the validity and enforceability of
this Indenture, the Notes or the obligations of the Issuers hereunder or thereunder, that:

     (1) the principal of, premium on, if any, interest and Special Interest, if any, on,
the Notes will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of, premium on, if any,
interest and Special Interest, if any, on, the Notes, if lawful, and all other obligations
of the Issuers to the Holders or the Trustee hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the terms hereof and thereof; and

     (2) in case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.

     Failing payment when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.

     (b) The Guarantors hereby agree that their obligations hereunder are unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with
respect to any provisions hereof or thereof, the recovery of any judgment against the Issuers, any
action to enforce the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuers, any right to require a proceeding first against the Issuers, protest,
notice and all demands whatsoever and covenants that its Note Guarantee will not be discharged
except by complete performance of the obligations contained in the Notes and this Indenture.

     (c) If any Holder or the Trustee is required by any court or otherwise to return to the
Issuers, the Guarantors or any custodian, trustee, liquidator or other similar official acting in
relation to either the Issuers or the Guarantors, any amount paid by either to the Trustee or such
Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force
and effect.

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     (d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation
to the Holders in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes
of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any
declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations
(whether or not due and payable) will forthwith become due and payable by the Guarantors for the
purpose of their Note Guarantees.

Section 11.02 Limitation on Guarantor Liability.

     Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee by such Guarantor not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors
hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum
amount that will, after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in
the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer
or conveyance.

Section 11.03 Execution and Delivery of Note Guarantee.

     To evidence its Note Guarantee set forth in Section 11.01 hereof, each Guarantor hereby agrees
that a notation of such Note Guarantee substantially in the form attached as Exhibit E hereto will
be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee
and that this Indenture will be executed on behalf of such Guarantor by one of its Officers.

     Each Guarantor hereby agrees that its Note Guarantee set forth in Section 11.01 hereof will
remain in full force and effect notwithstanding any failure to endorse on each Note a notation of
such Note Guarantee.

     If an Officer whose signature is on this Indenture or on a Note Guarantee no longer holds that
office at the time the Trustee authenticates the Note on which such Note Guarantee is endorsed, the
Note Guarantee will be valid nevertheless.

     The delivery of any Note by the Trustee, after the authentication thereof hereunder, will
constitute due delivery of the Note Guarantees set forth in this Indenture on behalf of the
Guarantors.

Section 11.04 Guarantors May Consolidate, etc., on Certain Terms.

     (a) Except as otherwise provided in Section 11.05 hereof, no Subsidiary Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with
or into (whether or not such Subsidiary Guarantor is the surviving Person) another Person, other
than the Company or another Subsidiary Guarantor, unless:

     (1) immediately after giving effect to such transaction, no Default or Event of Default
exists; and

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     (2) either:

     (A) subject to Section 11.05 hereof, the Person acquiring the property in any
such sale or disposition or the Person formed by or surviving any such consolidation
or merger unconditionally assumes all the obligations of that Subsidiary Guarantor
under its Note Guarantee, this Indenture, the Registration Rights Agreement and the
Collateral Documents on the terms set forth herein or therein, pursuant to a
supplemental indenture and appropriate Collateral Documents in form and substance
reasonably satisfactory to the Trustee; or

     (B) such sale or other disposition is otherwise permitted by the applicable
provisions of this Indenture, including without limitation, Sections 4.10 and 4.11
hereof.

     (b) In case of any such consolidation, merger, sale or conveyance and upon the assumption by
the successor Person, by supplemental indenture, executed and delivered to the Trustee and
reasonably satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and
the due and punctual performance of all of the covenants and conditions of this Indenture to be
performed by the Subsidiary Guarantor, such successor Person will succeed to and be substituted for
the Subsidiary Guarantor with the same effect as if it had been named herein as such Subsidiary
Guarantor. Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have
been signed by the Issuers and delivered to the Trustee.

     Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses 2(A) and (B) of
Section 11.04(a) hereof, nothing contained in this Indenture or in any of the Notes will prevent
any consolidation or merger of a Subsidiary Guarantor with or into the Issuers or another
Subsidiary Guarantor, or will prevent any sale or conveyance of the property of a Subsidiary
Guarantor as an entirety or substantially as an entirety to the Issuers or another Subsidiary
Guarantor.

Section 11.05 Releases.

     (a) The Note Guarantee of a Subsidiary Guarantor will be released:

     (1) in connection with any sale or other disposition of all or substantially all of the
assets of that Subsidiary Guarantor, by way of merger, consolidation or otherwise, to a
Person that is not (either before or after giving effect to such transaction) an Issuer or a
Restricted Subsidiary of the Company, if the sale or other disposition does not violate
Section 4.10 or 4.11 hereof;

     (2) in connection with any sale or other disposition of Capital Stock of that
Subsidiary Guarantor to a Person that is not (either before or after giving effect to such
transaction) an Issuer or a Restricted Subsidiary of the Company, if the sale or other
disposition does not violate Section 4.10 or 4.11 hereof and the Subsidiary Guarantor ceases
to be a Restricted Subsidiary of the Company as a result of the sale or other disposition;

     (3) if the Company designates any Restricted Subsidiary that is a Subsidiary Guarantor
to be an Unrestricted Subsidiary in accordance with the provisions of this Indenture; or

     (4) upon Legal Defeasance, Covenant Defeasance or satisfaction and discharge of the
indenture as provided in Article 8 or 12 hereof.

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     (b) To the extent a Subsidiary Guarantor is released from its Note Guarantee pursuant to this
Section 11.05, the Trustee shall execute any documents reasonably required in order to evidence the
release of any such Subsidiary Guarantor from its Note Guarantee.

     (c) Any Guarantor not released from its obligations under its Note Guarantee as provided in
this Section 11.05 will remain liable for the full amount of principal of, premium on, if any,
interest and Special Interest, if any, on, the Notes and for the other obligations of any Guarantor
under this Indenture as provided in this Article 11.

Section 11.06 Contribution by Guarantors.

     All Guarantors desire to allocate among themselves (collectively, the “Contributing
Guarantors”), in a fair and equitable manner, their obligations arising under this Guarantee.
Accordingly, in the event any payment or distribution is made on any date by a Guarantor (a
“Funding Guarantor”) under its Guarantee of the Notes such that its Aggregate Payments exceeds its
Fair Share as of such date, such Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in an amount sufficient to cause each Contributing Guarantor’s
Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the
Fair Share Contribution Amount with respect to such Contributing Guarantor, to (ii) the aggregate
of the Fair Share Contribution Amounts with respect to all Contributing Guarantors, multiplied by
(b) the aggregate amount paid or distributed on or before such date by all Funding Guarantors under
its Guarantee of the Notes in respect of the obligations guaranteed. “Fair Share Contribution
Amount” means, with respect to a Contributing Guarantor as of any date of determination, the
maximum aggregate amount of the obligations of such Contributing Guarantor under its Guarantee of
the Notes that would not render its obligations hereunder or thereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code or any comparable
applicable provisions of state law; provided, that solely for purposes of calculating the Fair
Share Contribution Amount with respect to any Contributing Guarantor for purposes of this Section
11.06, any assets or liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of contribution
hereunder shall not be considered as assets or liabilities of such Contributing Guarantor.
“Aggregate Payments” means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (1) the aggregate amount of all payments and distributions made
on or before such date by such Contributing Guarantor in respect of its Guarantee of the Notes
(including in respect of this Section 11.06), minus (2) the aggregate amount of all payments
received on or before such date by such Contributing Guarantor from the other Contributing
Guarantors as contributions under this Section 11.06. The amounts payable as contributions
hereunder shall be determined as of the date on which the related payment or distribution is made
by the applicable Funding Guarantor. Each Guarantor is a third party beneficiary to the
contribution agreement set forth in this Section 11.06.

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ARTICLE 12

SATISFACTION AND DISCHARGE

Section 12.01 Satisfaction and Discharge.

     This Indenture will be discharged and will cease to be of further effect as to all Notes and
Note Guarantees issued hereunder, when:

          (1) either:

               (a) all Notes that have been authenticated, except lost, stolen or destroyed Notes that
have been replaced or paid and Notes for whose payment money has been deposited in trust and
thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or

               (b) all Notes that have not been delivered to the Trustee for cancellation have become
due and payable by reason of the mailing of a notice of redemption or otherwise or will
become due and payable within one year and the Issuers or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, without consideration of any
reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not
delivered to the Trustee for cancellation for principal of, premium, if any, interest and
Special Interest, if any, on the Notes to the date of maturity or redemption (for the
avoidance of doubt, in the case of a discharge that occurs in connection with a redemption
that is to occur on a Make-Whole Redemption Date, the amount to be deposited shall be the
amount that, as of the date of such deposit, is deemed reasonably sufficient to make such
payment and discharge on the Make-Whole Redemption Date, in the good-faith determination of
the Board of Directors of Great Wolf Resorts pursuant to a Board Resolution and as evidenced
by an Officers’ Certificate);

     (2) in respect of subclause (b) of clause (1) of this Section 12.01, no Default or
Event of Default has occurred and is continuing on the date of the deposit (other than a
Default or Event of Default resulting from the borrowing of funds to be applied to such
deposit and any similar deposit relating to other Indebtedness and, in each case, the
granting of Liens to secure such borrowings) and the deposit will not result in a breach or
violation of, or constitute a default under, any other instrument to which either Issuer or
any Guarantor is a party or by which either Issuer or any Guarantor is bound (other than
with respect to the borrowing of funds to be applied concurrently to make the deposit
required to effect such satisfaction and discharge and any similar concurrent deposit
relating to other Indebtedness, and in each case the granting of Liens to secure such
borrowings);

     (3) either Issuer or any Guarantor has paid or caused to be paid all sums payable by it
under this Indenture; and

     (4) the Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at maturity or on the
redemption date, as the case may be.

In addition, the Company must deliver an Officers’ Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

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     Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited
with the Trustee pursuant to subclause (b) of clause (1) of this Section 12.01, the provisions of
Sections 12.02 and 8.06 hereof will survive. In addition, nothing in this Section 12.01 will be
deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.

Section 12.02 Application of Trust Money.

     Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee
pursuant to Section 12.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Issuers acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal, premium, if any, interest and Special Interest, if any,
on the Notes for whose payment such money has been deposited with the Trustee; but such money need
not be segregated from other funds except to the extent required by law.

     If the Trustee or Paying Agent is unable to apply any money or non-callable Government
Securities in accordance with Section 12.01 hereof by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuers’ and any Guarantor’s obligations under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section
12.01 hereof; provided that if the Issuers have made any payment of principal of, premium on, if
any, interest or Special Interest, if any, on, any Notes because of the reinstatement of its
obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive
such payment from the money or non-callable Government Securities held by the Trustee or Paying
Agent.

ARTICLE 13

MISCELLANEOUS

Section 13.01 Trust Indenture Act Controls.

     If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by
TIA §318(c), the imposed duties will control.

Section 13.02 Notices.

     Any notice or communication by the Issuers, any Guarantor or the Trustee to the others is duly
given if in writing and delivered in Person or by first class mail (registered or certified, return
receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery,
to the others’ address:

If to the Issuers and/or any Guarantor:

GWR Operating Partnership, L.L.L.P.

Great Wolf Finance Corp.

c/o Great Wolf Resorts, Inc.

122 West Washington Avenue

Madison, Wisconsin 53703

Facsimile No.: (608) 661-4701

Attention: General Counsel

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With a copy to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019-6064

Facsimile No.: (212) 492-0052

Attention: Lawrence G. Wee

If to the Trustee:

U.S. Bank National Association

40 Pearl Street NW, Suite 838

Grand Rapids, Michigan 49503

Facsimile No.: (616) 459-3561

Attention: R. Jason Fry

     The Issuers, any Guarantor or the Trustee, by notice to the others, may designate additional
or different addresses for subsequent notices or communications.

     All notices and communications (other than those sent to Holders) will be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by
facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

     Any notice or communication to a Holder will be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or communication will also be
so mailed to any Person described in TIA §313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with
respect to other Holders.

     If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.

     If the Issuers mail a notice or communication to Holders, it will mail a copy to the Trustee
and each Agent at the same time.

Section 13.03 Communication by Holders of Notes with Other Holders of Notes.

     Holders may communicate pursuant to TIA §312(b) with other Holders with respect to their
rights under this Indenture or the Notes. The Issuers, the Trustee, the Registrar and anyone else
shall have the protection of TIA §312(c).

Section 13.04 Certificate and Opinion as to Conditions Precedent.

     Upon any request or application by the Issuers to the Trustee to take any action under this
Indenture, the Issuers shall furnish to the Trustee:

     (1) an Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which must include the statements set forth in Section 13.05 hereof) stating that,
in the opinion of the signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied; and

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     (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which must include the statements set forth in Section 13.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 13.05 Statements Required in Certificate or Opinion.

     Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate provided pursuant to TIA §314(a)(4)) must comply
with the provisions of TIA §314(e) and must include:

     (1) a statement that the Person making such certificate or opinion has read such
covenant or condition;

     (2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;

     (3) a statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has been satisfied; and

     (4) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been satisfied.

Section 13.06 Rules by Trustee and Agents.

     The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders.

     No director, officer, employee, incorporator or stockholder of the Issuers or any Guarantor,
as such, will have any liability for any Obligations of the Issuers or the Guarantors under the
Notes, this Indenture, the Note Guarantees, the Collateral Documents or for any claim based on, in
respect of, or by reason of, such Obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to waive liabilities
under the federal securities laws.

Section 13.08 Governing Law.

     THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE,
THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

Section 13.09 No Adverse Interpretation of Other Agreements.

     This Indenture may not be used to interpret any other indenture, loan or debt agreement of the
Issuers or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.

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Section 13.10 Successors.

     All agreements of the Issuers in this Indenture and the Notes will bind its successors. All
agreements of the Trustee in this Indenture will bind its successors, except as otherwise provided
in Section 5.01 hereof. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Sections 5.01 and 11.05 hereof.

Section 13.11 Severability.

     In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions will not in any way be
affected or impaired thereby.

Section 13.12 Counterpart Originals.

     The parties may sign any number of copies of this Indenture. Each signed copy will be an
original, but all of them together represent the same agreement.

Section 13.13 Table of Contents, Headings, etc.

     The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part of
this Indenture and will in no way modify or restrict any of the terms or provisions hereof.

Section 13.14 Conflict with Other Documents.

     In the event of a conflict between (a) this Indenture and (b) the Notes or the Note
Guarantees, the terms and provisions of this Indenture shall control. In the event of a
conflict between (x) this Indenture and (y) any Collateral Document, the terms and provisions of
this Indenture shall control.

Section 13.15 Waiver of Jury Trial.

     EACH OF THE ISSUERS, THE GAURANTORS AND THE TRUSTEE HEREBY IRREOVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED
HEREBY.

[Signatures on following page]

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SIGNATURES

Dated as of April 7, 2010

	 	 	 	 	 
	 	GWR OPERATING PARTNERSHIP, L.L.L.P.

 	 
	 	By:  	GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member  	 

	 	 	 	 	 
	 	 	 
	 	By:  	

 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	GREAT WOLF FINANCE CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	GREAT WOLF RESORTS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	GWR OP GENERAL PARTNER, LLC

 	 
	 	By:  	Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 
	 	

BHMH, LLC

 	 
	 	By:  	GWR Operating Partnership, L.L.L.P.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	GRAPEVINE BEVERAGE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 	 	 
	 	GREAT LAKES SERVICES, LLC

 	 
	 	By:  	GWR Operating Partnership, L.L.L.P.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	

 

 

	 	 	 	 	 
	 	GREAT WOLF LODGE OF GRAPEVINE, LLC

 	 
	 	By:  	GWR Operating Partnership, L.L.L.P.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	GREAT WOLF LODGE OF KANSAS CITY, LLC

 	 
	 	By:  	GWR Operating Partnership, L.L.L.P.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	GREAT WOLF LODGE OF PKI, LLC

 	 
	 	By:  	GWR Operating Partnership, L.L.L.P.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 
	 	GREAT WOLF LODGE OF TRAVERSE CITY, LLC

 	 
	 	By:  	GWR Operating Partnership, L.L.L.P.
 	 
	 	 	its Managing Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                  GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	GREAT WOLF LODGE OF WILLIAMSBURG, LLC

 	 
	 	By:  	GWR Operating Partnership, L.L.L.P.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	

GREAT WOLF WILLIAMSBURG SPE, LLC

 	 
	 	By:  	Great Wolf Lodge of Williamsburg, LLC
 	 
	 	 	its Sole Member 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	               GWR Operating Partnership, L.L.L.P.
 	 
	 	 	its Sole Member 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	MASON FAMILY RESORTS, LLC

 	 
	 	By:  	Great Wolf Lodge of PKI, LLC
 	 
	 	 	its Sole Member 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	               GWR Operating Partnership, L.L.L.P.
 	 
	 	 	its Sole Member 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	U.S.BANK NATIONAL ASSOCIATION,

as Trustee and Collateral Agent

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 

 

 

	 	 	 	 	 

[Face of Note]

 

[Insert OID legend, if applicable]

CUSIP/CINS                     

10.875% First Mortgage Notes due 2017

	 	 	 

	No. ___

	 	$                     

GWR OPERATING PARTNERSHIP, L.L.L.P.

and

Great Wolf Finance Corp.

promise to pay to                      or registered assigns,

the principal sum of                                                                     
                                 DOLLARS on April 1,
2017.

Interest Payment Dates: April 1 and October 1

Record Dates: March 15 and September 15

Dated:                     , 2010

	 	 	 	 	 

	 	 	GWR OPERATING PARTNERSHIP, L.L.L.P.
	 
	 	 	 	 
	 

	 	By:
	 	GWR OP General Partner, LLC
	 

	 	 	 	its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	Great Wolf Resorts, Inc.
	 

	 	 	 	its Sole Member
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	GREAT WOLF FINANCE CORP.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

A1-1

 

This is one of the Notes referred to

in the within-mentioned Indenture:

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

	 	 	 	 	 
	 	 
	By:  	 	 
	 	Authorized Signatory 	 
	 	 	 
	 

Dated:                     , 2010

A1-2

 

[Back of Note]

10.875% First Mortgage Notes due 2017

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

     Capitalized terms used herein have the meanings assigned to them in the Indenture referred to
below unless otherwise indicated.

     (1) Interest. GWR Operating Partnership, L.L.L.P., a Delaware limited
liability limited partnership (the “Company"), and Great Wolf Finance Corp., a Delaware
corporation (together with the Company, the “Issuers"), promise to pay or cause to be paid
interest on the principal amount of this Note at 10.875% per annum from                     ,
___ until maturity and shall pay the Special Interest, if any, payable pursuant to the
Registration Rights Agreement referred to below. The Issuers will pay interest and Special
Interest, if any, semi-annually in arrears on April 1 and October 1 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each, an “Interest
Payment Date”). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of issuance; provided
that, if this Note is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next succeeding
Interest Payment Date; provided further that the first Interest Payment Date shall be
                    , ___. The Issuers will pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at a rate that is equal to the
then applicable interest rate on the Notes to the extent lawful; they will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Special Interest, if any (without regard to any applicable
grace period), at the same rate to the extent lawful.

     Interest will be computed on the basis of a 360-day year comprised of twelve 30-day
months.

     (2) Method of Payment. The Issuers will pay interest on the Notes (except
defaulted interest) and Special Interest, if any, to the Persons who are registered Holders
of Notes at the close of business on the March 15 or September 15 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes will be payable as to principal, premium, if any,
interest and Special Interest, if any, at the office or agency of the Paying Agent and
Registrar within the City and State of New York, or, at the option of the Issuers, payment
of interest and Special Interest, if any, may be made by check mailed to the Holders at
their addresses set forth in the register of Holders; provided that payment by wire transfer
of immediately available funds will be required with respect to principal of, premium on, if
any, interest and Special Interest, if any, on, all Global Notes and all other Notes the
Holders of which will have provided wire transfer instructions to the Issuers or the Paying
Agent. Such payment will be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.

     (3) Paying Agent and Registrar. Initially, U.S. Bank National Association,
the Trustee under the Indenture, will act as initial Paying Agent and Registrar. The
Issuers may

A1-3

 

change the Paying Agent or Registrar without prior notice to the Holders of the Notes.
The Issuers or any of their Subsidiaries may act as Paying Agent or Registrar.

     (4) Indenture and Collateral Documents. The Issuers issued the Notes under an
Indenture dated as of April 7, 2010 (the “Indenture”) among the Issuers, the Guarantors, the
Trustee and the Collateral Agent. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the TIA. The Notes are
subject to all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts with the
express provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are unsecured Obligations of the Issuers. The Note Guarantees by
the Principal Property Subsidiaries are secured by a pledge of the Collateral pursuant to
the Collateral Documents referred to in the Indenture. The Indenture does not limit the
aggregate principal amount of Notes that may be issued thereunder.

     (5) Optional Redemption.

          (a) At any time prior to April 1, 2013, the Issuers may on any one or more occasions
redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture
(including any Additional Notes but not including any Exchange Notes), upon not less than 30
nor more than 60 days’ notice, at a redemption price equal to 110.875% of the principal
amount of the Notes redeemed, plus accrued and unpaid interest and Special Interest, if any,
to, but not including, the date of redemption (subject to the rights of Holders of Notes on
the relevant record date to receive interest on the relevant interest payment date), with
the net cash proceeds of an Equity Offering by Great Wolf Resorts that are contributed to
the Company; provided that:

     (A) at least 50% of the aggregate principal amount of Notes originally issued
under the Indenture (including any Additional Notes, but excluding any Exchange
Notes) remains outstanding immediately after the occurrence of such redemption; and

     (B) the redemption occurs within 60 days of the date of the closing of such
Equity Offering.

          (b) At any time prior to April 1, 2014, the Issuers may on any one or more occasions
redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at a
redemption price equal to 100% of the principal amount of the Notes redeemed, plus the
Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to,
but not including, the date of redemption (the “Make-Whole Redemption Date"), subject to the
rights of Holders on the relevant record date to receive interest due on the relevant
interest payment date.

          (c) Except pursuant to the preceding paragraphs, the Notes will not be redeemable at
the Issuers’ option prior to April 1, 2014.

          (d) On or after April 1, 2014, the Issuers may on any one or more occasions redeem all
or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at the
redemption prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest and Special Interest, if any, on the Notes redeemed, to, but not
including, the applicable redemption date, if redeemed during the twelve-month period
beginning on April 1 of the years indicated below, subject to the rights of Holders on the
relevant record date to receive interest on the relevant interest payment date:

A1-4

 

	 	 	 	 	 
	Year	 	Percentage	 
	2014
	 	 	105.438	%
	2015
	 	 	102.719	%
	2016 and thereafter
	 	 	100.000	%

Unless the Issuers default in the payment of the redemption price, interest will cease to
accrue on the Notes or portions thereof called for redemption on the applicable redemption
date.

     (6) Mandatory Redemption. The Issuers are not required to make mandatory
redemption or sinking fund payments with respect to the Notes.

     (7) Repurchase at the Option of Holder.

          (a) If there is a Change of Control, each Holder of Notes will have the right to
require the Issuers to make an offer (a “Change of Control Offer”), in accordance with
Section 4.17 of the Indenture, to each Holder to repurchase all or any part (equal to $2,000
or an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a purchase
price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus
accrued and unpaid interest and Special Interest, if any, thereon to, but not including, the
date of purchase, subject to the rights of Holders of Notes on the relevant record date to
receive interest due on the relevant interest payment date (the “Change of Control
Payment”). Within 30 days following any Change of Control, the Issuers will provide a
notice to each Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.

          (b) As provided in Section 4.10 of the Indenture, after the Issuers or a Restricted
Subsidiary of the Company consummate a Collateral Asset Sale, the Issuers or such Restricted
Subsidiary may be required to redeem the Notes with Collateral Excess Proceeds in excess of
$10.0 million. Holders of Notes that are the subject of an offer to purchase will receive a
Collateral Asset Sale Offer from the Issuers prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled “Option of Holder to
Elect Purchase” attached to the Notes.

          (c) As provided in Section 4.11 of the Indenture, after the Issuers or a Restricted
Subsidiary of the Company consummate a Non-Collateral Asset Sale, the Issuers or such
Restricted Subsidiary may be required to redeem the Notes with Non-Collateral Excess
Proceeds in excess of $10.0 million. Holders of Notes that are the subject of an offer to
purchase will receive a Non-Collateral Asset Sale Offer from the Issuers prior to any
related purchase date and may elect to have such Notes purchased by completing the form
entitled “Option of Holder to Elect Purchase” attached to the Notes.

          (d) As provided in Section 4.12 of the Indenture, after the Issuers or a Restricted
Subsidiary of the Company experience certain Events of Loss, the Issuers or such Restricted
Subsidiary may be required to redeem the Notes with Excess Loss Proceeds in excess of $10.0
million. Holders of Notes that are the subject of an offer to purchase will receive an
Excess Loss Offer from the Issuers prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase”
attached to the Notes.

     (8) Notice of Redemption. At least 30 days but not more than 60 days before a
redemption date, the Issuers will mail or cause to be mailed, by first class mail, a notice
of redemption to each Holder whose Notes are to be redeemed at its registered address,
except that

A1-5

 

redemption notices may be mailed more than 60 days prior to a redemption date if the
notice is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of the Indenture pursuant to Articles 8 or 12 thereof. Notes and portions of
Notes selected will be in amounts of $2,000 or whole multiples of $1,000 in excess thereof;
except that if all of the Notes of a Holder are to be redeemed or purchased, the entire
outstanding amount of Notes held by such Holder shall be redeemed or purchased.

     (9) Denominations, Transfer, Exchange. The Notes are in registered form in
denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of
Notes may be registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Issuers may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Issuers need not exchange or
register the transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuers need not
exchange or register the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed.

     (10) Persons Deemed Owners. The registered Holder of a Note may be treated as
the owner of it for all purposes. Only registered Holders have rights under the Indenture.

     (11) Amendment, Supplement and Waiver. The Indenture, the Notes, the Note
Guarantee and the Collateral Documents may be amended or supplemented only as provided in
the Indenture.

     (12) Defaults and Remedies. Events of Default include: (i) default for 30
days in the payment when due of interest and Special Interest, if any, on, the Notes; (ii)
default in the payment when due and payable (at maturity, upon redemption or otherwise) of
the principal of, or premium, if any, on the Notes; (iii) failure by any of the Parent
Guarantors, the Company or any of its Restricted Subsidiaries to comply with its obligations
under the provisions described under Section 4.17 or Section 5.01 of the Indenture; (iv)
failure by any of the Parent Guarantors, the Company or any of its Restricted Subsidiaries
for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding voting as a single class to comply
with its obligations under any of the other agreements in the Indenture or the Collateral
Documents; (v) default under certain other agreements relating to Indebtedness of the Parent
Guarantors, the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Parent Guarantors, the Company or any of its Restricted Subsidiaries),
which default is a Payment Default or results in the acceleration of such Indebtedness prior
to its express maturity; (vi) failure by the Parent Guarantors, the Company or any of its
Restricted Subsidiaries to pay certain final judgments, which judgments are not paid,
discharged or stayed, for a period of 60 days; (vii) the breach by the Company or any of its
Restricted Subsidiaries of any material representation, warranty or agreement in the
Collateral Documents for 60 days after notice to the Company by the Trustee or Collateral
Agent or the holders of at least 25% in aggregate principal amount of the Notes then
outstanding voting as a single class, certain security interest created by the Collateral
Documents with regard to the Collateral ceases to be in full force and effect, or the
repudiation by the Company or any of its Restricted Subsidiaries of any of their material
obligations under the Collateral Documents; (viii) except as permitted by the Indenture, any
Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases
for any reason to be in full force and effect, or any Subsidiary Guarantor, or any Person
acting on behalf of any Subsidiary Guarantor, denies or disaffirms its obligations under its
Note Guarantee; and (ix) certain events of bankruptcy or insolvency, as described in the
Indenture, with respect to the Parent Guarantors, the

A1-6

 

Company or any of its Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary. In the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Parent Guarantors, the Company, any Restricted
Subsidiary of the Company that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary,
all outstanding Notes will become due and payable immediately without further action or
notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately by notice in writing to the Company. Holders
may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal of, premium on,
if any, interest or Special Interest, if any, on, any Note) if it determines that
withholding notice is in their interest. Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may, on behalf of all
the Holders, rescind an acceleration or waive an existing Default or Event of Default and
its respective consequences under the Indenture except a continuing Default or Event of
Default in the payment of principal of, premium, if any, on, interest or Special Interest,
if any, on the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required, upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.

     (13) Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services for the
Issuers or its Affiliates, and may otherwise deal with the Issuers or its Affiliates, as if
it were not the Trustee.

     (14) No Recourse Against Others. No director, officer, employee, incorporator
or stockholder of the Issuers or any Guarantor, as such, will have any liability for any
obligations of the Issuers or the Guarantors under the Notes, the Indenture, the Note
Guarantees, the Collateral Documents or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and
releases all such liability. The waiver and release are part of the consideration for
issuance of the Notes. The waiver may not be effective to waive liabilities under the
federal securities laws.

     (15) Authentication. This Note will not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.

     (16) Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

     (17) Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes will have all
the rights set forth in the Registration Rights Agreement dated as of April 7, 2010, among
the Issuers, the Guarantors and the other parties named on the signature pages thereof or,
in the case of Additional Notes, Holders of Restricted Global Notes and Restricted
Definitive Notes will have the rights set forth in one or more registration rights
agreements, if any, among the Issuers, the Guarantors and the other parties thereto,
relating to rights given by the Issuers and the Guarantors to the purchasers of any
Additional Notes (collectively, the “Registration Rights Agreement”).

A1-7

 

     (18) CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such numbers either
as printed on the Notes or as contained in any notice of redemption, and reliance may be
placed only on the other identification numbers placed thereon.

     (19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND
BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     The Issuers will furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement. Requests may be made to:

GWR Operating Partnership, L.L.L.P.

Great Wolf Finance Corp.

c/o Great Wolf Resorts, Inc.

122 West Washington Avenue

Madison, Wisconsin 53703

Attention: General Counsel

A1-8

 

Assignment Form

     To assign this Note, fill in the form below:

	 	 	 

	(I) or (we) assign and transfer this Note to:
	 	 
	 

	 	 
	 

	 	(Insert assignee’s legal name)

      

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                
                                     
to transfer this Note on the books of the Issuers. The agent may
substitute another to act for him.

Date:                     

	 	 	 	 	 	 	 

	 	 	Your Signature:	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:                                         

 

			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

A1-9

 

Option of Holder to Elect Purchase

     If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.10,
4.11, 4.12 or 4.17 of the Indenture, check the appropriate box below:

	 	 	 

	o Section 4.10

	 	o Section 4.11
	 
	 	 
	o Section 4.12

	 	o Section 4.17

     If you want to elect to have only part of the Note purchased by the Issuers pursuant to
Section 4.10, 4.11, 4.12 or 4.17 of the Indenture, state the amount you elect to have purchased:

$                                         

Date:                                         

	 	 	 	 	 	 	 

	 	 	Your Signature:	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the face of this Note)
	 
	 	 	Tax Identification No.:                                                             

Signature Guarantee*:                                                             

 

			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).

A1-10

 

Schedule of Exchanges of Interests in the Global Note *

     The following exchanges of a part of this Global Note for an interest in another Global
Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for
an interest in this Global Note, have been made:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Principal Amount	 	 
	 	 	 	 	Amount of decrease	 	Amount of increase	 	of this Global Note	 	Signature of
	 	 	 	 	in Principal Amount	 	in Principal Amount	 	following such	 	authorized officer
	 	 	 	 	of	 	of	 	decrease	 	of Trustee or
	Date of Exchange	 	this Global Note	 	this Global Note	 	(or increase)	 	Custodian

 

			
	*	 	This schedule should be included only if the Note is issued in global form.

A1-11

 

[Face of Regulation S Temporary Global Note]

 

[Insert OID legend, if applicable]

CUSIP/CINS                     

10.875% First Mortgage Notes due 2017

			
	No. ___
	 	$                     

GWR OPERATING PARTNERSHIP, L.L.L.P.

and

Great Wolf Finance Corp.

promises to pay to CEDE & CO. or registered assigns,

the principal sum of                                                                     
                                                     DOLLARS on                         
                , 2017.

Interest Payment Dates: April 1 and October 1

Record Dates: March 15 and September 15

Dated:                                         , 2010

	 	 	 	 	 
	 	GWR OPERATING PARTNERSHIP, L.L.L.P.

 	 
	 	By:  	GWR OP General Partner, LLC
 	 
	 	 	its General Partner 	 
	 	 	 	 
	 	 	 
	 	By:  	Great Wolf Resorts, Inc.
 	 
	 	 	its Sole Member 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	GREAT WOLF FINANCE CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

A2-1

 

This is one of the Notes referred to

in the within-mentioned Indenture:

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

	 	 	 	 	 
	 	 
	By:  	 	 
	 	Authorized Signatory 	 
	 	 	 
	Dated:                                          , 2010 	 
	 

A2-2

 

[Back of Regulation S Temporary Global Note]

10.875% First Mortgage Notes due 2017

THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE
SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE
BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE OFFER AND SALE OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) AND, ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”) OR (B) IT IS NOT A U.S. PERSON,
IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144A(d)(1) UNDER THE SECURITIES ACT
AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY
BELIEVES IS A QIB OR AN ACCREDITED INVESTOR PURCHASING FOR ITS

A2-3

 

OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB OR AN ACCREDITED INVESTOR, RESPECTIVELY, IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED STATES TO INSTITUTIONAL “ACCREDITED
INVESTORS” (UNDER RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT), (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT (IF
AVAILABLE AND PROVIDED THAT PRIOR TO SUCH TRANSFER, THE TRUSTEE IS FURNISHED WITH AN OPINION OF
COUNSEL ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT) OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE (2) (E) OR (2) (F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO
ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN THE TERMS
“OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.

     Capitalized terms used herein have the meanings assigned to them in the Indenture referred to
below unless otherwise indicated.

     (1) Interest. GWR Operating Partnership, L.L.L.P., a Delaware limited
liability limited partnership (the “Company"), and Great Wolf Finance Corp., a Delaware
corporation (together with the Company, the “Issuers"), promise to pay or cause to be paid
interest on the principal amount of this Note at 10.875% per annum from ___,
___, until maturity and shall pay the Special Interest, if any, payable pursuant to the
Registration Rights Agreement referred to below. The Issuers will pay interest and Special
Interest, if any, semi-annually in arrears on April 1 and October 1 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each, an “Interest
Payment Date"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of issuance; provided
that, if this Note is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next succeeding
Interest Payment Date; provided further that the first Interest Payment Date shall be
___, ___. The Issuers will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at a rate that is equal to the
then applicable interest rate on the Notes to the extent lawful; it will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Special Interest, if any (without regard to any applicable
grace periods), at the same rate to the extent lawful.

          Interest will be computed on the basis of a 360-day year of twelve 30-day months.

A2-4

 

     Until this Regulation S Temporary Global Note is exchanged for one or more Regulation S
Permanent Global Notes, the Holder hereof shall not be entitled to receive payments of interest
hereon; until so exchanged in full, this Regulation S Temporary Global Note shall in all other
respects be entitled to the same benefits as other Notes under the Indenture.

     (2) Method of Payment. The Issuers will pay interest on the Notes (except
defaulted interest) and Special Interest, if any, to the Persons who are registered Holders
of Notes at the close of business on the March 15 or September 15 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes will be payable as to principal, premium, if any,
interest and Special Interest, if any, at the office or agency of the Paying Agent and
Registrar within the City and State of New York, or, at the option of the Issuers, payment
of interest and Special Interest, if any, may be made by check mailed to the Holders at
their addresses set forth in the register of Holders; provided that payment by wire transfer
of immediately available funds will be required with respect to principal of, premium on, if
any, interest and Special Interest, if any, on, all Global Notes and all other Notes the
Holders of which will have provided wire transfer instructions to the Issuers or the Paying
Agent. Such payment will be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.

     (3) Paying Agent and Registrar. Initially, U.S. Bank National
Association, the Trustee under the Indenture, will act as initial Paying Agent and
Registrar. The Issuers may change the Paying Agent or Registrar without notice to the
Holders of the Notes. The Issuers or any of its Subsidiaries may act as Paying Agent or
Registrar.

     (4) Indenture and Collateral Documents. The Issuers issued the Notes
under an Indenture dated as of April 7, 2010 (the “Indenture”) among the Issuers, the
Guarantors, the Trustee and the Collateral Agent. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the TIA. The
Notes are subject to all such terms, and Holders are referred to the Indenture and such Act
for a statement of such terms. To the extent any provision of this Note conflicts with the
express provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are unsecured obligations of the Issuers. The Note Guarantees by
the Principal Property Subsidiaries are secured by a pledge of the Collateral pursuant to
the Collateral Documents referred to in the Indenture. The Indenture does not limit the
aggregate principal amount of Notes that may be issued thereunder.

     (5) Optional Redemption.

          (a) At any time prior to April 1, 2013, the Issuers may on any one or more occasions
redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture
(including any Additional Notes but not including Exchange Notes), upon not less than 30 nor
more than 60 days’ notice, at a redemption price equal to 110.875% of the principal amount
of the Notes redeemed, plus accrued and unpaid interest and Special Interest, if any, to,
but not including, the date of redemption (subject to the rights of Holders of Notes on the
relevant record date to receive interest on the relevant interest payment date), with the
net cash proceeds of an Equity Offering by Great Wolf Resorts that are contributed to the
Company; provided that:

          (A) at least 50% of the aggregate principal amount of Notes originally issued
under the Indenture (including any Additional Notes, but excluding any Exchange
Notes) remains outstanding immediately after the occurrence of such redemption; and

A2-5

 

     (B) the redemption occurs within 60 days of the date of the closing of such
Equity Offering.

          (b) At any time prior to April 1, 2014, the Issuers may on any one or more occasions
redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at a
redemption price equal to 100% of the principal amount of the Notes redeemed, plus the
Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to,
but not including, the date of redemption (the “Make-Whole Redemption Date"), subject to the
rights of Holders on the relevant record date to receive interest due on the relevant
interest payment date.

          (c) Except pursuant to the preceding paragraphs, the Notes will not be redeemable at
the Issuers’ option prior to April 1, 2014.

          (d) On or after April 1, 2014, the Issuers may on any one or more occasions redeem all
or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at the
redemption prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest and Special Interest, if any, on the Notes redeemed, to, but not
including, the applicable redemption date, if redeemed during the twelve-month period
beginning on April 1 of the years indicated below, subject to the rights of Holders on the
relevant record date to receive interest on the relevant interest payment date:

	 	 	 	 	 
	Year	 	Percentage	 
	2014
	 	 	105.438	%
	2015
	 	 	102.719	%
	2016 and thereafter
	 	 	100.000	%

Unless the Issuers default in the payment of the redemption price, interest will
cease to accrue on the Notes or portions thereof called for redemption on the
applicable redemption date.

     (6) Mandatory Redemption. The Issuers are not required to make
mandatory redemption or sinking fund payments with respect to the Notes.

     (7) REPURCHASE AT OPTION OF HOLDER.

          (a) If there is a Change of Control, each Holder of Notes will have the right to
require the Issuers to make an offer (a “Change of Control Offer”), in accordance with
Section 4.17 of the Indenture, to each Holder to repurchase all or any part (equal to $2,000
or an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a purchase
price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus
accrued and unpaid interest and Special Interest, if any, thereon to, but not including, the
date of purchase, subject to the rights of Holders of Notes on the relevant record date to
receive interest due on the relevant interest payment date (the “Change of Control
Payment”). Within 30 days following any Change of Control, the Issuers will provide a
notice to each Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.

          (b) As provided in Section 4.10 of the Indenture, after the Issuers or a Restricted
Subsidiary of the Company consummate a Collateral Asset Sale, the Issuers or such Restricted
Subsidiary may be required to redeem the Notes with Collateral Excess Proceeds in excess of

A2-6

 

$10.0 million. Holders of Notes that are the subject of an offer to purchase will
receive a Collateral Asset Sale Offer from the Issuers prior to any related purchase date
and may elect to have such Notes purchased by completing the form entitled “Option of Holder
to Elect Purchase” attached to the Notes.

          (c) As provided in Section 4.11 of the Indenture, after the Issuers or a Restricted
Subsidiary of the Company consummate a Non-Collateral Asset Sale, the Issuers or such
Restricted Subsidiary may be required to redeem the Notes with Non-Collateral Excess
Proceeds in excess of $10.0 million. Holders of Notes that are the subject of an offer to
purchase will receive a Non-Collateral Asset Sale Offer from the Issuers prior to any
related purchase date and may elect to have such Notes purchased by completing the form
entitled “Option of Holder to Elect Purchase” attached to the Notes.

          (d) As provided in Section 4.12 of the Indenture, after the Issuers or a Restricted
Subsidiary of the Company experience certain Events of Loss, the Issuers or such Restricted
Subsidiary may be required to redeem the Notes with Excess Loss Proceeds in excess of $10.0
million. Holders of Notes that are the subject of an offer to purchase will receive an
Excess Loss Offer from the Issuers prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase”
attached to the Notes.

     (8) Notice of Redemption. At least 30 days but not more than 60 days
before a redemption date, the Issuers will mail or cause to be mailed, by first class mail,
a notice of redemption to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of the Notes or a
satisfaction and discharge of the Indenture pursuant to Articles 8 or 12 thereof. Notes and
portions of Notes selected will be in amounts of $2,000 or whole multiples of $1,000 in
excess thereof; except that if all of the Notes of a Holder are to be redeemed or purchased,
the entire outstanding amount of Notes held by such Holder shall be redeemed or purchased.

     (9) Denominations, Transfer, Exchange. The Notes are in registered
form in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The
transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Issuers may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Issuers need not
exchange or register the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also, the Issuers
need not exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and the next
succeeding Interest Payment Date.

     This Regulation S Temporary Global Note is exchangeable in whole or in part for one or
more Global Notes only (i) on or after the termination of the 40-day distribution compliance
period (as defined in Regulation S) and (ii) upon presentation of certificates (accompanied
by an Opinion of Counsel, if applicable) required by Article 2 of the Indenture. Upon
exchange of this Regulation S Temporary Global Note for one or more Global Notes, the
Trustee shall cancel this Regulation S Temporary Global Note.

     (10) Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.

A2-7

 

     (11) Amendment, Supplement and Waiver. The Indenture, the Notes, the
Note Guarantee and the Collateral Documents may be amended or supplemented only as provided
in the Indenture.

     (12) Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest and Special Interest, if any, on, the Notes;
(ii) default in the payment when due and payable (at maturity, upon redemption or otherwise)
of the principal of, or premium, if any, on the Notes; (iii) failure by any of the Parent
Guarantors, the Company or any of its Restricted Subsidiaries to comply with its obligations
under the provisions described under Section 4.17 or Section 5.01 of the Indenture; (iv)
failure by any of the Parent Guarantors, the Company or any of its Restricted Subsidiaries
for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding voting as a single class to comply
with its obligations under any of the other agreements in the Indenture or the Collateral
Documents; (v) default under certain other agreements relating to Indebtedness of the Parent
Guarantors, the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Parent Guarantors, the Company or any of its Restricted Subsidiaries),
which default is a Payment Default or results in the acceleration of such Indebtedness prior
to its express maturity; (vi) failure by the Parent Guarantors, the Company or any of its
Restricted Subsidiaries to pay certain final judgments, which judgments are not paid,
discharged or stayed, for a period of 60 days; (vii) the breach by the Company or any of its
Restricted Subsidiaries of any material representation, warranty or agreement in the
Collateral Documents for 60 days after notice to the Company by the Trustee or Collateral
Agent or the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding voting as a single class, certain security interest created by the Collateral
Documents with regard to the Collateral ceases to be in full force and effect, or the
repudiation by the Company or any of its Restricted Subsidiaries of any of their material
obligations under the Collateral Documents; (viii) except as permitted by the Indenture, any
Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases
for any reason to be in full force and effect, or any Subsidiary Guarantor, or any Person
acting on behalf of any Subsidiary Guarantor, denies or disaffirms its obligations under its
Note Guarantee; and (ix) certain events of bankruptcy or insolvency, as described in the
Indenture, with respect to the Parent Guarantors, the Company or any of its Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary. In the case
of an Event of Default arising from certain events of bankruptcy or insolvency with respect
to the Parent Guarantors, the Company, any Restricted Subsidiary of the Company that is a
Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will become due
and payable immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may declare all the Notes to be due and payable
immediately by notice in writing to the Company. Holders may not enforce the Indenture or
the Notes except as provided in the Indenture. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal of, premium on, if any, interest or Special
Interest, if any, on, any Note) if it determines that withholding notice is in their
interest. Holders of a majority in aggregate principal amount of the then outstanding Notes
by written notice to the Trustee may, on behalf of all the Holders, rescind an acceleration
or waive an existing Default or Event of Default and its respective consequences under the
Indenture except a continuing Default or Event of Default in the payment of principal of,
premium, if any, on, interest or Special Interest, if any, on the Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required, upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

A2-8

 

     (13) Trustee Dealings with Company. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform services for the
Issuers or its Affiliates, and may otherwise deal with the Issuers or its Affiliates, as if
it were not the Trustee.

     (14) No Recourse Against Others. No director, officer, employee,
incorporator or stockholder of the Issuers or any Guarantor, as such, will have any
liability for any obligations of the Issuers or the Guarantors under the Notes, the
Indenture, the Note Guarantees, the Collateral Documents or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes. The waiver may not be effective to waive
liabilities under the federal securities laws.

     (15) Authentication. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.

     (16) Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

     (17) Additional Rights of Holders. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of this Regulation S Temporary
Global Note will have all the rights set forth in the Registration Rights Agreement dated as
of April 7, 2010, among the Issuers, the Guarantors and the other parties named on the
signature pages thereof or, in the case of Additional Notes, Holders thereof will have the
rights set forth in one or more registration rights agreements, if any, among the Issuers,
the Guarantors and the other parties thereto, relating to rights given by the Issuers and
the Guarantors to the purchasers of any Additional Notes (collectively, the “Registration
Rights Agreement").

     (18) CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the accuracy of
such numbers either as printed on the Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed thereon.

     (19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     The Issuers will furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement. Requests may be made to:

GWR Operating Partnership, L.L.L.P.

Great Wolf Finance Corp.

c/o Great Wolf Resorts, Inc.

122 West Washington Avenue

Madison, Wisconsin 53703

Attention: General Counsel

A2-9

 

Assignment Form

     To assign this Note, fill in the form below:

	 	 	 

	(I) or (we) assign and transfer this Note to:
	 	 
	 

	 	 
	 

	 	(Insert assignee’s legal name)

      

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                 
                                    
to transfer this Note on the books of the Issuers. The agent may
substitute another to act for him.

Date:                     

	 	 	 	 	 	 	 

	 	 	Your Signature:	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:                                         

 

			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

A2-10

 

Option of Holder to Elect Purchase

     If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.10,
4.11, 4.12 or 4.17 of the Indenture, check the appropriate box below:

	 	 	 

	o Section 4.10

	 	o Section 4.11
	 
	 	 
	o Section 4.12

	 	o Section 4.17

     If you want to elect to have only part of the Note purchased by the Issuers pursuant to
Section 4.10, 4.11, 4.12 or 4.17 of the Indenture, state the amount you elect to have purchased:

$                                         

Date:                                         

	 	 	 	 	 	 	 

	 	 	Your Signature:	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the face of this Note)
	 	 	Tax Identification No.:                                                             

Signature Guarantee*:                                                             

 

			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).

A2-11

 

Schedule of Exchanges of Interests in the Global Note 

     The following exchanges of a part of this Regulation S Temporary Global Note for an
interest in another Global Note, or exchanges of a part of another other Restricted Global Note for
an interest in this Regulation S Temporary Global Note, have been made:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Principal Amount	 	 
	 	 	 	 	Amount of decrease	 	Amount of increase	 	of this Global Note	 	Signature of
	 	 	 	 	in Principal Amount	 	in Principal Amount	 	following such	 	authorized officer
	 	 	 	 	of	 	of	 	decrease	 	of Trustee or
	Date of Exchange	 	this Global Note	 	this Global Note	 	(or increase)	 	Custodian

A2-12

 

EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

GWR Operating Partnership, L.L.L.P.

Great Wolf Finance Corp.

122 West Washington Avenue

Madison, Wisconsin 53703

[Registrar address block]

     Re: 10.875% First Mortgage Notes due 2017

     Reference is hereby made to the Indenture, dated as of April 7, 2010 (the “Indenture”), among
GWR Operating Partnership, L.L.L.P., a Delaware limited liability limited partnership, and Great
Wolf Finance Corp., a Delaware corporation, as co-issuers (together, the “Company”), the Guarantors
party thereto and U.S. Bank National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

     ___, (the “Transferor”) owns and proposes to transfer the Note[s] or interest
in such Note[s] specified in Annex A hereto, in the principal amount of $___in such
Note[s] or interests (the “Transfer”), to
___ (the “Transferee”), as
further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby
certifies that:

[CHECK ALL THAT APPLY]

     1. o Check if Transferee will take delivery of a beneficial interest in the 144A
Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer is being
effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believes is purchasing the beneficial interest or Definitive Note for its own account,
or for one or more accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a “qualified institutional buyer” within the meaning of
Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted
Definitive Note and in the Indenture and the Securities Act.

     2. o Check if Transferee will take delivery of a beneficial interest in the
Regulation S Temporary Global Note, the Regulation S Permanent Global Note or a Restricted
Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in the United States
and (x) at the time the buy order was originated, the Transferee was outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in the United States,
(ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b)
or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a
plan or scheme to evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is
not being

B-1

 

made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S
Permanent Global Note, the Regulation S Temporary Global Note and/or the Restricted Definitive Note
and in the Indenture and the Securities Act.

     3. o Check and complete if Transferee will take delivery of a beneficial interest
in the IAI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities
Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with
the transfer restrictions applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any
applicable blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):

     (a) o such Transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;

or

     (b) o such Transfer is being effected to the Issuers or a subsidiary thereof;

or

     (c) o such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus delivery
requirements of the Securities Act;

or

     (d) o such Transfer is being effected to an Institutional Accredited Investor
and pursuant to an exemption from the registration requirements of the Securities Act
other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the
time of transfer of less than $250,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this certification), to
the effect that such Transfer is in compliance with the Securities Act. Upon consummation
of the proposed transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the IAI Global Note and/or the
Restricted Definitive Notes and in the Indenture and the Securities Act.

     4. o Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.

     (a) o Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected
pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement

B-2

 

Legend are not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.

     (b) o Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in
compliance with the transfer restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to maintain compliance
with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

     (c) o Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being
effected pursuant to and in compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities laws of any State of
the United States and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.

     This certificate and the statements contained herein are made for your benefit and the benefit
of the Issuers.

	 	 	 	 	 
	 	
 	 
	 	
[Insert Name of Transferor]

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

     Dated:                                                             

B-3

 

ANNEX A TO CERTIFICATE OF TRANSFER

	1.	 	The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

	 	(a)	 	o a beneficial interest in the:

	 	(i)	 	o 144A Global Note (CUSIP                     ), or
	 
	 	(ii)	 	o Regulation S Global Note (CUSIP                     ), or
	 
	 	(iii)	 	o IAI Global Note (CUSIP                     ); or

	 	(b)	 	o a Restricted Definitive Note.

	2.	 	After the Transfer the Transferee will hold:

[CHECK ONE]

	 	(a)	 	o a beneficial interest in the:

	 	(i)	 	o 144A Global Note (CUSIP                     ), or
	 
	 	(ii)	 	o Regulation S Global Note (CUSIP                     ), or
	 
	 	(iii)	 	o IAI Global Note (CUSIP                     ); or
	 
	 	(iv)	 	o Unrestricted Global Note (CUSIP                     ); or

	 	(b)	 	o a Restricted Definitive Note; or
	 
	 	(c)	 	o an Unrestricted Definitive Note,

     in accordance with the terms of the Indenture.

B-4

 

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

GWR Operating Partnership, L.L.L.P.

Great Wolf Finance Corp.

122 West Washington Avenue

Madison, Wisconsin 53703

[Registrar address block]

     Re: 10.875% First Mortgage Notes due 2017

(CUSIP [       ])

     Reference is hereby made to the Indenture, dated as of April 7, 2010 (the “Indenture”), among
GWR Operating Partnership, L.L.L.P., a Delaware limited liability limited partnership, and Great
Wolf Finance Corp., a Delaware corporation, as co-issuers (together, the “Company”), the Guarantors
party thereto and U.S. Bank National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

                                             , (the “Owner”) owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of $___in such Note[s]
or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

     1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global
Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note

     (a) o Check if Exchange is from beneficial interest in a Restricted Global Note to
beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global
Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in
accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the beneficial interest
in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

     (b) o Check if Exchange is from beneficial interest in a Restricted Global Note to
Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest
in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the
Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

     (c) o Check if Exchange is from Restricted Definitive Note to beneficial interest in an
Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note
for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in

C-1

 

compliance with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

     (d) o Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive
Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

     2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global
Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes

     (a) o Check if Exchange is from beneficial interest in a Restricted Global Note to
Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in
a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account
without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and
in the Indenture and the Securities Act.

     (b) o Check if Exchange is from Restricted Definitive Note to beneficial interest in a
Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note
for a beneficial interest in the [CHECK ONE] o 144A Global Note, o Regulation S Global
Note, o IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

     This certificate and the statements contained herein are made for your benefit and the benefit
of the Issuers.

	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 
	 

	 	 	 	[Insert Name of Transferor]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

Dated:         
                   
                     
                      
          

C-2

 

EXHIBIT D

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

GWR Operating Partnership, L.L.L.P.

Great Wolf Finance Corp.

122 West Washington Avenue

Madison, Wisconsin 53703

[Registrar address block]

     Re: 10.875% First Mortgage Notes due 2017

     Reference is hereby made to the Indenture, dated as of April 7, 2010 (the “Indenture”), among
GWR Operating Partnership, L.L.L.P., a Delaware limited liability limited partnership, and Great
Wolf Finance Corp., a Delaware corporation, as co-issuers (together, the “Company”), the Guarantors
party thereto and U.S. Bank National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

     In connection with our proposed purchase of $                     aggregate principal amount of:

     (a) o a beneficial interest in a Global Note, or

     (b) o a Definitive Note,

     we confirm that:

     1. We understand that any subsequent transfer of the Notes or any interest therein is subject
to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be
bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except
in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended
(the “Securities Act”).

     2. We understand that the offer and sale of the Notes have not been registered under the
Securities Act, and that the Notes and any interest therein may not be offered or sold except as
permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for
which we are acting as hereinafter stated, that if we should sell the Notes or any interest
therein, we will do so only (A) to the Issuers or any subsidiary thereof, (B) in accordance with
Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C)
to an institutional “accredited investor” (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. Broker-Dealer) to you and to the Issuers a
signed letter substantially in the form of this letter and, if such transfer is in respect of a
principal amount of Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in
form reasonably acceptable to the Issuers to the effect that such transfer is in compliance with
the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under
the Securities Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we further agree to
provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from
us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.

     3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we
will be required to furnish to you and the Issuers such certifications, legal opinions and other
information as you and the Issuers may reasonably require to confirm that the proposed sale
complies with the

D-1

 

foregoing restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.

     4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act) and have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to bear the economic risk of
our or its investment.

     5. We are acquiring the Notes or beneficial interest therein purchased by us for our own
account or for one or more accounts (each of which is an institutional “accredited investor”) as to
each of which we exercise sole investment discretion.

     You and the Issuers are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.

	 	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	 	 	[Insert Name of Accredited Investor]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

Dated:  
                 
                   
                     
                     

D-2

 

EXHIBIT E

[FORM OF NOTATION OF GUARANTEE]

     For value received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture dated as of April 7, 2010 (the
"Indenture”), among GWR Operating Partnership, L.L.L.P., a Delaware limited liability limited
partnership, and Great Wolf Finance Corp., a Delaware corporation, as co-issuers (together, the
"Company”), the Guarantors party thereto and U.S. Bank National Association, as trustee (the
"Trustee”), (a) the due and punctual payment of the principal of, premium on, if any, interest and
Special Interest, if any, on, the Notes, whether at maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue principal of, premium on, if any,
interest and Special Interest, if any, on, the Notes, if any, if lawful, and the due and punctual
performance of all other obligations of the Issuers to the Holders or the Trustee all in accordance
with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the
Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 11 of
the Indenture and reference is hereby made to the Indenture for the precise terms of the Note
Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound by such
provisions (b) authorizes and directs the Trustee, on behalf of such Holder, to take such action as
may be necessary or appropriate to effectuate the subordination as provided in the Indenture and
(c) appoints the Trustee attorney-in-fact of such Holder for such purpose; provided, however, that
the Indebtedness evidenced by this Note Guarantee shall cease to be so subordinated and subject in
right of payment upon any defeasance of this Note in accordance with the provisions of the
Indenture.

     Capitalized terms used but not defined herein have the meanings given to them in the
Indenture.

	 	 	 	 	 
	 	[Name of Guarantor(s)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-1

 

	 	 	 	 	 

EXHIBIT G

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

     Supplemental Indenture (this “Supplemental Indenture”), dated as of                                         ,
among                                          (the “Guaranteeing Subsidiary”), a subsidiary of [            ] (or its
permitted successor), a [Delaware] [limited liability company] (the “Company”), the Issuers, the
other Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National
Association, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

     WHEREAS, the Issuers have heretofore executed and delivered to the Trustee an indenture (the
"Indenture”), dated as of April 7, 2010 providing for the issuance of 10.875% First Mortgage Notes
due 2017 (the “Notes”);

     WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary
shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers’ Obligations under the
Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and

     WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and
deliver this Supplemental Indenture.

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the
Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes
as follows:

     1. Capitalized Terms. Capitalized terms used herein without definition shall have
the meanings assigned to them in the Indenture.

     2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to provide an
unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee
and in the Indenture including but not limited to Article 11 thereof.

     4. No Recourse Against Others. No director, officer, employee, incorporator or
stockholder of the Issuers or any Guarantor, as such, will have any liability for any obligations
of the Issuers or the Guarantors under the Notes, this Indenture, the Note Guarantees [,the
Collateral Documents] or for any claim based on, in respect of, or by reason of, such obligations
or their creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of the Notes. The
waiver may not be effective to waive liabilities under the federal securities laws.

     5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

     6. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.

G-1

 

EXHIBIT E

     7. Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.

     8. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of
the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary
and the Issuers.

H-2

 

EXHIBIT E

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first above written.

     Dated:                                         ,

	 	 	 	 	 
	 	[Guaranteeing Subsidiary]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	GWR OPERATING PARTNERSHIP, L.L.L.P.

 	 
	 	By:  	GWR OP General Partner, LLC its General Partner
 	 

	 	 	 	 	 
	 	 	 
	 	By: 	 Great Wolf Resorts, Inc. its Sole Member
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 	 	 
	 	GREAT WOLF FINANCE CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[Existing Guarantors]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[Trustee],

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

H-3exv10w48

Exhibit 10.48

EXECUTION COPY

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

LOAN AND SECURITY AGREEMENT

          THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of the Effective Date
between (i) SILICON VALLEY BANK, a California corporation with a loan production office located at
One Newton Executive Park, 2221 Washington Street, Suite 200, Newton, Massachusetts 02462 (“Bank”),
and (ii) NXSTAGE MEDICAL, INC., a Delaware corporation (“NxStage”), EIR MEDICAL, INC., a
Massachusetts corporation (“EIR”), MEDISYSTEMS CORPORATION, a Washington corporation
(“Medisystems”), each with offices located at 439 South Union Street, 5th Floor,
Lawrence, Massachusetts 01843, and MEDISYSTEMS SERVICES CORPORATION, a Nevada corporation,
(“Services”), with offices located at 101 Convention Center Drive, Suite 850, Las Vegas, Nevada
89101 (NxStage, EIR, Medisystems and Services are individually and collectively, jointly and
severally, the “Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower
shall repay Bank. The parties agree as follows:

     1 ACCOUNTING AND OTHER TERMS

          Accounting terms not defined in this Agreement shall be construed following GAAP.
Calculations and determinations must be made following GAAP. Capitalized terms not otherwise
defined in this Agreement shall have the meanings set forth in Section 13. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the
Code to the extent such terms are defined therein.

     2 LOAN AND TERMS OF PAYMENT

     2.1 Promise to Pay. Borrower hereby unconditionally, jointly and severally, promises to pay
Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest
thereon as and when due in accordance with this Agreement.

     2.1.1 Revolving Advances.

          (a) Availability. Subject to the terms and conditions of this Agreement and to
deduction of Reserves, Bank shall make Advances not exceeding the Availability Amount. Amounts
borrowed under the Revolving Line may be repaid, and prior to the Revolving Line Maturity Date,
reborrowed, subject to the applicable terms and conditions precedent herein.

          (b) Termination; Repayment. The Revolving Line terminates on the Revolving Line
Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all
other Obligations relating to the Revolving Line shall be immediately due and payable.

     2.1.2 Letters of Credit Sublimit.

          As part of the Revolving Line and subject to deduction of Reserves, Bank shall issue or have
issued Letters of Credit denominated in Dollars or a Foreign Currency for Borrower’s account. The
aggregate Dollar Equivalent amount utilized for the issuance of Letters of Credit shall at all
times reduce the amount otherwise available for Advances under the Revolving Line. The aggregate
Dollar Equivalent of the face amount of outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed the lesser of (A)
Seven Million Five Hundred Thousand Dollars ($7,500,000), minus (i) the sum of all amounts
used (and not re-paid) for Cash Management Services, and minus (ii) the FX Reduction
Amount, or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the sum of all
outstanding principal amounts of any Advances (including any amounts used and not re-paid for Cash
Management Services), and minus (ii) the FX Reduction Amount.

          (a) If, on the Revolving Line Maturity Date (or the effective date of any termination of this
Agreement), there are any outstanding Letters of Credit, then on such date Borrower shall provide
to Bank cash collateral in an amount equal to 105% of the Dollar Equivalent of the face amount of
all such Letters of Credit plus all interest, fees, and costs due or to become due in connection
therewith (as estimated by Bank in its good faith business judgment), to secure all of the
Obligations relating to such Letters of Credit. All Letters of Credit shall be in form and
substance acceptable to Bank in its sole discretion and shall be subject to the terms and
conditions of Bank’s standard Application and Letter of Credit Agreement (the “Letter of Credit
Application”). Borrower agrees to execute any further documentation in connection with the Letters
of Credit as Bank may reasonably

 

 

request. Borrower further agrees to be bound by the regulations and interpretations of the
issuer of any Letters of Credit guarantied by Bank and opened for Borrower’s account or by Bank’s
interpretations of any Letter of Credit issued by Bank for Borrower’s account, and Borrower
understands and agrees that Bank shall not be liable for any error, negligence, or mistake, whether
of omission or commission, in following Borrower’s instructions or those contained in the Letters
of Credit or any modifications, amendments, or supplements thereto, absent Bank’s gross negligence
or wilfull misconduct.

          (b) The obligation of Borrower to immediately reimburse Bank for drawings made under Letters
of Credit shall be absolute, unconditional, and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, such Letters of Credit, and the Letter of Credit
Application.

          (c) Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency. If
a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an
Advance to Borrower of the Dollar Equivalent of the amount thereof (plus fees and charges in
connection therewith such as wire, cable, SWIFT or similar charges).

          (d) To guard against fluctuations in currency exchange rates, upon the issuance of any Letter
of Credit payable in a Foreign Currency, Bank shall create a reserve (the “Letter of Credit
Reserve”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of
such Letter of Credit upon the issuance thereof. The amount of the Letter of Credit Reserve may be
adjusted by Bank from time to time to account for fluctuations in the exchange rate. The
availability of funds under the Revolving Line shall be reduced by the amount of such Letter of
Credit Reserve for as long as such Letter of Credit remains outstanding and such reduction shall
cease when such Letter of Credit is no longer outstanding.

     2.1.3 Foreign Exchange Sublimit. As part of the Revolving Line and subject to the deduction
of Reserves, Borrower may enter into foreign exchange contracts with Bank under which Borrower
commits to purchase from or sell to Bank a specific amount of Foreign Currency (each, a “FX Forward
Contract”) on a specified date (the “Settlement Date”). The aggregate amount of FX Forward
Contracts at any one time may not exceed ten (10) times the lesser of (A) Seven Million Five
Hundred Thousand Dollars ($7,500,000), minus (i) the sum of all amounts used (and not
re-paid) for Cash Management Services, and minus (ii) the Dollar Equivalent of the face
amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and
any Letter of Credit Reserve), or (B) the lesser of Revolving Line or the Borrowing Base,
minus (i) the sum of all outstanding principal amounts of any Advances (including any
amounts used (and not repaid) for Cash Management Services), and minus (ii) the Dollar
Equivalent of the face amount of any outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of Credit Reserve). The amount otherwise available
for Credit Extensions under the Revolving Line shall be reduced by an amount equal to ten percent
(10%) of each outstanding FX Forward Contract (the “FX Reduction Amount”). Any amounts needed to
fully reimburse Bank for any amounts not paid by Borrower in connection with FX Forward Contracts
will be treated as Advances under the Revolving Line and will accrue interest at the interest rate
applicable to Advances.

     2.1.4 Cash Management Services Sublimit. Borrower may use the Revolving Line for Bank’s cash
management services, which may include merchant services, direct deposit of payroll, business
credit card, and check cashing services identified in Bank’s various cash management services
agreements (collectively, the “Cash Management Services”), in an aggregate amount not to exceed the
lesser of (A) Seven Million Five Hundred Thousand Dollars ($7,500,000), minus (i) the
Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of Credit Reserve), and minus (ii) the FX
Reduction Amount, or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the
sum of all outstanding principal amounts of any Advances, minus the Dollar Equivalent of the face
amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and
any Letter of Credit Reserve), and minus (iii) the FX Reduction Amount. Any amounts Bank
pays on behalf of Borrower for any Cash Management Services will be treated as Advances under the
Revolving Line and will accrue interest at the interest rate applicable to Advances.

     2.2 Overadvances. If, at any time, the sum of (a) the outstanding principal amount of any
Advances (including any amounts used (and not re-paid) for Cash Management Services); plus
(b) the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters
of Credit and any Letter of Credit Reserve); plus (c) the FX Reduction Amount exceeds the
lesser of either the Revolving Line or the Borrowing Base (such excess amount being an
“Overadvance”), Borrower shall immediately pay to Bank in cash such Overadvance. Without limiting
Borrower’s obligation to repay Bank any amount of the Overadvance, Borrower agrees to pay Bank
interest on the outstanding amount of any Overadvance if not paid when due on demand, at the
Default Rate.

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     2.3 Payment of Interest on the Credit Extensions.

          (a) Interest Rate.

               (i) Advances. Subject to Section 2.3(b), the principal amount outstanding under the
Revolving Line shall accrue interest at floating per annum rate equal to two percentage points
(2.00%) above the Prime Rate, which interest shall be payable monthly, in arrears, in accordance
with Section 2.3(f) below.

          (b) Default Rate. Immediately upon the occurrence and during the continuance of an
Event of Default, Obligations shall bear interest at a rate per annum which is four percentage
points (4.00%) above the rate that is otherwise applicable thereto (the “Default Rate”) unless Bank
otherwise elects from time to time in its sole discretion to impose a smaller increase. Fees and
expenses which are required to be paid by Borrower pursuant to the Loan Documents (including,
without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a
rate equal to the highest rate applicable to the Obligations. Payment or acceptance of the
increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of Bank.

          (c) Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension
based on changes to the Prime Rate shall be effective on the effective date of any change to the
Prime Rate and to the extent of any such change.

          (d) Computation; 360-Day Year. In computing interest, the date of the making of any
Credit Extension shall be included and the date of payment shall be excluded; provided, however,
that if any Credit Extension is repaid on the same day on which it is made, such day shall be
included in computing interest on such Credit Extension. Interest shall be computed on the basis
of a 360-day year for the actual number of days elapsed.

          (e) Debit of Accounts. Bank may debit any of Borrower’s deposit accounts, including
the Designated Deposit Account, for principal and interest payments or any other amounts Borrower
owes Bank when due. These debits shall not constitute a set-off.

          (f) Interest Payment Date. Unless otherwise provided, interest is payable monthly on
the last calendar day of each month.

          (g) Payment; Interest Computation. Interest is payable monthly on the last calendar
day of each month. In computing interest on the Obligations, all Payments received after 12:00
noon Eastern time on any day shall be deemed received on the next Business Day. Bank shall not,
however, be required to credit Borrower’s account for the amount of any item of payment which is
unsatisfactory to Bank in its good faith business judgment, and Bank may charge Borrower’s
Designated Deposit Account for the amount of any item of payment which is returned to Bank unpaid.

     2.4 Fees. Borrower shall pay to Bank:

          (a) Anniversary Fee. A fully earned, non refundable annual fee equal to (i) Seventy
Five Thousand Dollars ($75,000), payable on the earlier to occur of (X) the occurrence of an Event
of Default and (Y) 365 days after the Effective Date (the “First Anniversary”); and (ii) Thirty
Seven Thousand Five Hundred Dollars ($37,500), on a pro-rated basis through the Revolving Line
Maturity Date, payable on the earlier to occur of (X) after the First Anniversary, the occurrence
of an Event of Default, and (Y) 365 days after the First Anniversary.

          (b) Letter of Credit Fee. Bank’s customary fees and expenses for the issuance or
renewal of Letters of Credit, upon the issuance of such Letter of Credit, each anniversary of the
issuance during the term of such Letter of Credit, and upon the renewal of such Letter of Credit by
Bank;

          (c) Termination Fee. Upon the conditions set forth in and subject to the terms of
Section 12.1, a termination fee;

          (d) Unused Revolving Line Facility Fee. A fee (the “Unused Revolving Line Facility
Fee”), payable monthly, in arrears, on a calendar year basis, in an amount equal to one-half of one
percent (0.50%) per annum of the average unused portion of the Revolving Line, as determined by
Bank. The unused portion of the

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Revolving Line, for the purposes of this calculation, shall not include amounts reserved for
products provided in connection with Cash Management Services, FX Forward Contracts or Letters of
Credit. Borrower shall not be entitled to any credit, rebate or repayment of any Unused Revolving
Line Facility Fee previously earned by Bank pursuant to this Section notwithstanding any
termination of the Agreement or the suspension or termination of Bank’s obligation to make loans
and advances hereunder, including during any Streamline Period; and

          (e) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and
expenses for documentation and negotiation of this Agreement incurred through and after the
Effective Date, when due.

     2.5 Payments; Application of Payments.

          (a) All payments (including prepayments) to be made by Borrower under any Loan Document shall
be made in immediately available funds in U.S. Dollars, without setoff or counterclaim, before
12:00 noon Eastern time on the date when due. Payments of principal and/or interest received after
12:00 noon Eastern time are considered received at the opening of business on the next Business
Day. When a payment is due on a day that is not a Business Day, the payment shall be due the next
Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid.

          (b) Except as provided in the proviso in Section 6.3(c) hereof, Bank shall apply the whole or
any part of collected funds against the Revolving Line or credit such collected funds to a
depository account of Borrower with Bank (or an account maintained by an Affiliate of Bank), the
order and method of such application to be in the sole discretion of Bank. Borrower shall have no
right to specify the order or the accounts to which Bank shall allocate or apply any payments
required to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any
such allocation or application is not specified elsewhere in this Agreement.

     3 CONDITIONS OF LOANS

     3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial
Credit Extension is subject to the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate, including, without limitation:

          (a) duly executed original signatures to the Loan Documents;

          (b) duly executed original signatures to the Control Agreements, if any;

          (c) Borrower’s Operating Documents and a good standing certificate of Borrower certified by
the Secretary of State of the applicable jurisdiction of Borrower as of a date no earlier than
thirty (30) days prior to the Effective Date;

          (d) duly executed original signatures to the Secretary’s Certificate with completed Borrowing
Resolutions for Borrower;

          (e) the Asahi Intercreditor Agreement by and between Asahi and Bank, together with the duly
executed original signatures thereto;

          (f) certified copies, dated as of a recent date, of financing statement searches, as Bank
shall request, accompanied by written evidence (including any UCC termination statements) that the
Liens indicated in any such financing statements either constitute Permitted Liens or have been or,
in connection with the initial Credit Extension, will be terminated or released;

          (g) the Perfection Certificates of Borrower, together with the duly executed original
signatures thereto;

          (h) the IP Agreement of Borrower, together with the duly executed original signatures thereto
and any required schedules thereto;

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          (i) (1) within forty-five (45) days of the Effective Date, obtain a landlord’s consent in
favor of Bank for the Borrower’s leased location located at 439 South Union Street, 5th
Floor, Lawrence, MA 01843, together with the duly executed signatures thereto; and (2) for each
other leased location of the Borrower existing on the Effective Date with assets greater than
$250,000, Borrower shall, within forty-five (45) days of the Effective Date, use commercially
reasonable efforts to obtain a landlord’s consent for each such location, from each respective
landlord thereof, together with the duly executed original signatures thereto;

          (j) (1) within forty-five (45) days of the Effective Date, obtain a bailee’s/warehouseman’s
waiver executed by Kuehne & Nagle, Inc., for the Borrower’s leased warehouse space located at 1800
Waters Ridge Drive, Suite 100, Lewisville, Texas 75057; and (2) for each other leased warehouse
space of the Borrower in existence on the Effective Date with assets greater than $250,000,
Borrower shall, within forty-five (45) days of the Effective Date, use commercially reasonable
efforts to obtain a bailee’s/warehouseman’s waiver for each such location, from each respective
bailee/warehouseman, together with the duly executed original signatures thereto;

          (k) the duly executed original signatures to each Guaranty, together with a Secretary’s
Certificate/duly executed original signatures to the completed Borrowing Resolutions for each
Guarantor;

          (l) a legal opinion of Borrower’s counsel as to authority of the Borrowers and enforceability
of the Loan Documents, in form and substance acceptable to Bank, in its reasonable discretion,
dated as of the Effective Date together with the duly executed original signature thereto;

          (m) evidence satisfactory to Bank that the insurance policies required by Section 6.7 hereof
are in full force and effect, together with appropriate evidence showing lender loss payable and/or
additional insured clauses or endorsements in favor of Bank; and

          (n) payment of the fees and Bank Expenses then due as specified in Section 2.4 hereof.

     3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit
Extension, including the initial Credit Extension, is subject to the following conditions
precedent:

          (a) except as otherwise provided in Section 3.4(a), timely receipt of an executed Transaction
Report;

          (b) the representations and warranties in this Agreement shall be true, accurate, and complete
in all material respects on the date of the Transaction Report and on the Funding Date of each
Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as of such date, and no
Default or Event of Default shall have occurred and be continuing or result from the Credit
Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the
representations and warranties in this Agreement remain true, accurate, and complete in all
material respects; provided, however, that such materiality qualifier shall not be applicable to
any representations and warranties that already are qualified or modified by materiality in the
text thereof; and provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects as of such date;
and

          (c) in Bank’s reasonable discretion, there has not been a Material Adverse Change.

     3.3 Covenant to Deliver. Borrower agrees to deliver to Bank each item required to be
delivered to Bank under this Agreement as a condition precedent to any Credit Extension. Borrower
expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall
not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of
any Credit Extension in the absence of a required item shall be in Bank’s sole discretion.

     3.4 Procedures for Borrowing. Advances. Subject to the prior satisfaction of all
other applicable conditions to the making of an Advance set forth in this Agreement, to obtain an
Advance other than Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Bank (which
notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time
on the Funding Date of the Advance. Together with any such electronic or facsimile notification,
Borrower shall deliver to Bank by electronic mail or facsimile a completed

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Transaction Report executed by a Responsible Officer or his or her designee. Bank may rely on
any telephone notice given by a person whom Bank reasonably believes is a Responsible Officer or
designee. Bank shall credit Advances to the Designated Deposit Account. Bank may make Advances
under this Agreement based on instructions from a Responsible Officer or his or her designee or
without instructions if the Advances are necessary to meet Obligations which have become due.

     4 CREATION OF SECURITY INTEREST

     4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the payment and
performance in full of all of the Obligations, a continuing security interest in, and pledges to
Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof.

     4.2 Priority of Security Interest. Borrower represents, warrants, and covenants that the
security interest granted herein is and shall at all times continue to be a first priority
perfected security interest in the Collateral (subject only to Permitted Liens that may have
superior priority to Bank’s Lien under this Agreement and the Asahi Intercreditor Agreement). If
Borrower shall acquire a commercial tort claim in excess of Two Hundred Fifty Thousand Dollars
($250,000), Borrower shall promptly notify Bank in a writing signed by Borrower of the general
details thereof and grant to Bank in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Bank.

          If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the
Obligations (other than inchoate indemnity obligations and any other obligations which, by their
terms, are to survive the termination of this Agreement) are repaid in full in cash. Upon payment
in full in cash of the Obligations (other than inchoate indemnity obligations and any other
obligations which, by their terms, are to survive the termination of this Agreement) and at such
time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at Borrower’s sole
cost and expense, release its Liens in the Collateral and all rights therein shall revert to
Borrower.

     4.3 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file
financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or
protect Bank’s interest or rights hereunder, including a notice that any disposition of the
Collateral, by either Borrower or any other Person other than in accordance with this Agreement,
shall be deemed to violate the rights of Bank under the Code. Such financing statements may
indicate the Collateral as “all assets of the Debtor” or words of similar effect, or as being of an
equal or lesser scope, or with greater detail, all in Bank’s discretion.

     5 REPRESENTATIONS AND WARRANTIES

          Borrower represents and warrants as follows:

     5.1 Due Organization; Authorization; Power and Authority. Borrower and each of its
Subsidiaries are duly existing and in good standing as a Registered Organization in its
jurisdiction of formation and each is qualified and licensed to do business and each is in good
standing in any jurisdiction in which the conduct of each of its business or its ownership of
property requires that it be qualified except where the failure to do so would not reasonably be
expected to have a material adverse effect on Borrower’s business taken as a whole. In connection
with this Agreement, Borrower has delivered to Bank completed certificates each signed by Borrower,
each entitled “Perfection Certificate”. Borrower represents and warrants to Bank that (a)
Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature
page hereof; (b) Borrower is an organization of the type and is organized in the jurisdictions set
forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth
Borrower’s organizational identification number or accurately states that Borrower has none; (d)
the Perfection Certificate accurately sets forth each Borrower’s place of business, or, if more
than one, its chief executive office as well as Borrower’s mailing address (if different than its
chief executive office); (e) except as set forth in the Perfection Certificate, Borrower (and each
of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation,
organizational structure or type, or any organizational number assigned by its jurisdiction; and
(f) all other information set forth on the Perfection Certificate pertaining to Borrower and each
of its Subsidiaries is accurate and complete in all material respects (it being understood and
agreed that Borrower may from time to time update certain information in the Perfection Certificate
after the Effective Date, and such information is deemed automatically updated, to the extent
changes are permitted by one or more specific provisions in this Agreement). If Borrower is not
now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such
occurrence and provide Bank with Borrower’s organizational identification number.

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          The execution, delivery and performance by Borrower of the Loan Documents to which it is a
party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational
documents (except where Borrower has obtained any necessary consents), (ii) contravene, conflict
with, constitute a default under or violate any material Requirement of Law, (iii) contravene,
conflict or violate any applicable order, writ, judgment, injunction, decree, determination or
award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their
property or assets may be bound or affected, (iv) require any action by, filing, registration, or
qualification with, or Governmental Approval from, any Governmental Authority (except such
Governmental Approvals which have already been obtained and are in full force and effect) or (v)
constitute an event of default under any material agreement by which Borrower is bound (after
giving effect to any consents or amendments obtained concurrently herewith). Borrower is not in
default under any agreement to which it is a party or by which it is bound in which the default
would reasonably be expected to have a material adverse effect on Borrower’s business taken as a
whole.

     5.2 Collateral. Borrower has good title to, has rights in, and the power to transfer each
item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and
all Liens except Permitted Liens. Other than as permitted pursuant to Section 6.8 hereof, Borrower
has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any
described in the Perfection Certificate delivered to Bank in connection herewith, or of which
Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected
security interest therein. The Accounts are bona fide, existing obligations of the Account
Debtors.

          As of the date hereof, no portion of the Collateral (other than (i) Field Equipment maintained
with Borrower’s customers and/or end users of such Field Equipment, and (ii) other assets with a
value of no more than $250,000 at any location) is in the possession of any third party bailee
(such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the
components of the Collateral (other than (i) Field Equipment maintained with Borrower’s customers
and/or end users of such Field Equipment, and (ii) other assets with a value of no more than
$250,000 at any location) shall be maintained at locations other than as provided in the Perfection
Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date
hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee (other than
(i) Field Equipment maintained with Borrower’s customers and/or end users of such Field Equipment,
and (ii) other assets with a value of no more than $250,000 at any location), then Borrower will
use commercially reasonable efforts to deliver to the Bank an executed bailee agreement in form and
substance satisfactory to Bank in its reasonable discretion.

          All Inventory is in all material respects of good and marketable quality, free from material
defects.

          Borrower is the sole owner of the Intellectual Property which it owns or purports to own
except for (a) non-exclusive licenses granted to its customers in the ordinary course of business,
(b) over-the-counter software that is commercially available to the public, and (c) material
Intellectual Property licensed to Borrower and, as of the date hereof noted on the Perfection
Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s
business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or
purports to own and which is material to Borrower’s business has been judged invalid or
unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made
that any part of the Intellectual Property violates the rights of any third party except to the
extent such claim would not have a material adverse effect on Borrower’s business taken as a whole.

          Except as noted on the Perfection Certificate, and as Borrower may notify Bank pursuant to
Section 6.10(c) hereof, Borrower is not a party to, nor is it bound by, any Restricted License
(other than any open source or over the counter software that is commercially available to the
public).

     5.3 Accounts Receivable; Inventory. For any Eligible Account in any Borrowing Base
Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and
other documents evidencing such Eligible Accounts are and shall be true and correct and all such
invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all
respects what they purport to be. Whether or not an Event of Default has occurred and is
continuing, Bank may notify any Account Debtor owing Borrower money of Bank’s security interest in
such funds and verify the amount of such Eligible Account; provided that, prior to the occurrence
of an Event of Default, acceptable forms of notification and verification may include such form and
manner as will be reasonably determined by Bank and Borrower. All sales and other transactions
underlying or giving rise to each Eligible Account shall comply in all material respects with all
applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or
imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any
Borrowing Base Certificate. To the best of Borrower’s knowledge, all

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signatures and endorsements on all documents, instruments, and agreements relating to all
Eligible Accounts are genuine, and all such documents, instruments and agreements are legally
enforceable in accordance with their terms.

          For any item of Inventory consisting of “Eligible Inventory” in any Borrowing Base
Certificate, such Inventory (a) consists of finished goods, in good, new, and salable condition,
which is not perishable, returned, consigned, obsolete, not sellable, damaged, or defective, and is
not comprised of demonstrative or custom inventory, works in progress, packaging or shipping
materials, or supplies; (b) meets in all material respects all applicable governmental standards;
(c) has been manufactured in compliance with the Fair Labor Standards Act, to the extent
applicable; (d) is not subject to any Liens, except the first priority Liens granted or in favor of
Bank under this Agreement or any of the other Loan Documents and Permitted Liens; and (e) is
located at the locations identified by Borrower in the Perfection Certificate where it maintains
Inventory (or at any location permitted under Section 5.2).

     5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of the
Responsible Officers, threatened in writing against Borrower or any of its Subsidiaries that would
reasonably be expected to result in damages or costs to Borrower of more than, individually, Five
Hundred Thousand Dollars ($500,000), or in the aggregate One Million Dollars ($1,000,000).

     5.5 Financial Condition. All consolidated financial statements for Borrower and any of its
Subsidiaries delivered to Bank fairly present in all material respects Borrower’s consolidated
financial condition and Borrower’s consolidated results of operations (for the periods presented,
subject to the absence of footnotes and year-end adjustments for the interim financial statements).
There has not been any material deterioration in Borrower’s consolidated financial condition since
the date of the most recent financial statements submitted to Bank.

     5.6 Solvency. The fair salable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; Borrower is not left with
unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay
its debts (including trade debts) as they mature.

     5.7 Regulatory Compliance. Borrower is not an “investment company” or except as disclosed in
the Perfection Certificate, a company “controlled” by an “investment company” under the Investment
Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in
extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of
Governors). Borrower has complied in all material respects with the Federal Fair Labor Standards
Act, the rules and regulations promulgated by the U.S. Food and Drug Administration and the U.S.
Food, Drug and Cosmetic Act. Neither Borrower nor any of its Subsidiaries is a “holding company”
or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each
term is defined and used in the Public Utility Holding Company Act of 2005. Borrower has not
violated any laws, ordinances or rules, the violation of which would reasonably be expected to have
a material adverse effect on its business. None of Borrower’s or any of its Subsidiaries’
properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s
knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any
hazardous substance other than legally, except where it would not reasonably be expected to have a
material adverse effect on Borrower’s business taken as a whole. Borrower and each of its
Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all Government Authorities that are necessary to continue
their respective businesses as currently conducted, except where the failure to do so would not
reasonably be expected to have a material adverse effect on the Borrower’s business, taken as a
whole.

     5.8 Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other
equity securities except for Permitted Investments.

     5.9 Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required
tax returns and reports (except such returns or reports related to taxes as may be due or owing in
an amount less than One Hundred Thousand Dollars ($100,000) in the aggregate), and Borrower has
timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions
owed by Borrower (except such returns or reports related to taxes as may be due or owing in an
amount less than One Hundred Thousand Dollars ($100,000) in the aggregate). Borrower may defer
payment of any contested taxes, provided that with respect to any such taxes in excess of One
Hundred Thousand Dollars ($100,000), Borrower (a) in good faith contests its obligation to pay the
taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies
Bank in writing of the commencement of, and any material development in, the proceedings, (c) posts
bonds or takes any other steps required to prevent the governmental authority levying such
contested taxes from obtaining a Lien upon any of the

-8-

 

Collateral that is other than a “Permitted Lien”. Borrower is unaware of any claims or
adjustments proposed for any of Borrower’s prior tax years which would reasonably be expected to
result in additional taxes in excess of One Hundred Thousand Dollars ($100,000) becoming due and
payable by Borrower. Borrower has paid all amounts necessary to fund all present pension, profit
sharing and deferred compensation plans in accordance with their terms, and Borrower has not
withdrawn from participation in, and has not permitted partial or complete termination of, or
permitted the occurrence of any other event with respect to, any such plan which would reasonably
be expected to result in any liability of Borrower, including any liability to the Pension Benefit
Guaranty Corporation or its successors or any other governmental agency.

     5.10 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as
working capital and to fund its general business requirements and not for personal, family,
household or agricultural purposes.

     5.11 Full Disclosure. No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Bank in connection with this Agreement, as of the
date such representation, warranty, or other statement was made, taken together with all such
written certificates and written statements given to Bank, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements contained in the
certificates or statements not misleading (it being recognized by Bank that the projections and
forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed
as facts and that actual results during the period or periods covered by such projections and
forecasts may differ from the projected or forecasted results).

     5.12 Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation
or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or
with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable
investigation, of the Responsible Officers.

     6 AFFIRMATIVE COVENANTS

          Borrower shall do all of the following:

     6.1 Government Compliance. Maintain its and all its Subsidiaries’ legal existence and good
standing in their respective jurisdictions of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to have a material
adverse effect on Borrower’s business or operations taken as a whole. Borrower shall comply, and
have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject,
including, without limitation, regulations of the U.S. Food and Drug Administration and regulations
promulgated pursuant to the U.S. Food, Drug and Cosmetic Act, the noncompliance with which would
reasonably be expected to have a material adverse effect on Borrower’s business taken as a whole.

     6.2 Financial Statements, Reports, Certificates.

          (a) Borrower shall provide Bank with the following:

                    (i) (A) bi-weekly, and (B) upon each request for a Credit Extension, a Transaction Report;

                    (ii) within thirty (30) days after the end of each month, (A) monthly accounts receivable
agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and
outstanding or held check registers, if any, (C) (x) monthly reconciliations of accounts receivable
agings (aged by invoice date), Transaction Reports, and such portion of the general ledger as Bank
may reasonably request, and (y) to the extent requested by Bank in its good faith business
judgment, monthly Deferred Revenue reports, detailed backlog reports and bookings reports, in each
case prepared by Borrower in a manner consistent with past practices, and (D) monthly perpetual
inventory reports prepared in accordance with GAAP or such other inventory reports as are requested
by Bank in its good faith business judgment;

                    (iii) as soon as available, and in any event within thirty (30) days after the end of each
month, monthly unaudited consolidated and consolidating financial statements;

-9-

 

                    (iv) within thirty (30) days after the end of each month a monthly Compliance Certificate
signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in
compliance with all of the terms of this Agreement, and setting forth calculations showing
compliance with the financial covenants set forth in this Agreement and such other information as
Bank shall reasonably request, including, without limitation, a statement that at the end of such
month there were no held checks;

                    (v) as soon as available, and in any event within forty-five (45) days after the end of each
fiscal quarter of Borrower, quarterly consolidated unaudited financial statements;

                    (vi) within sixty (60) days after the end of each fiscal year of Borrower, annual operating
budgets (including income statements, balance sheets and cash flow statements, by month) for the
upcoming fiscal year of Borrower, as approved by Borrower’s board of directors, and such additional
financial projections as may be requested by Bank in its good faith business judgment;

                    (vii) as soon as available, and in any event within one hundred twenty (120) days following
the end of Borrower’s fiscal year, annual consolidated financial statements certified by, and with
an unqualified opinion with respect to the consolidated financial statements, of independent
certified public accountants reasonably acceptable to Bank;

                    (viii) within five (5) days of delivery, copies of all material statements, reports and
notices made available to Borrower’s security holders or to any holders of Subordinated Debt, in
their respective capacity as such;

                    (ix) a prompt report of any legal actions pending or threatened in writing against Borrower or
any of its Subsidiaries that would reasonably be expected to result in damages or costs to Borrower
or any of its Subsidiaries of, individually, Five Hundred Thousand Dollars ($500,000) or in the
aggregate One Million Dollars ($1,000,000) or more;

          The items specified in clauses (v), (vii) and (viii) shall be deemed delivered by sending a
copy to the Bank or by timely filing such items with the SEC, or a link thereto or a copy thereof
on borrower’s or another website on the Internet.

          Notwithstanding the foregoing, during a Streamline Period, provided no Event of Default has
occurred and is continuing, Borrower shall be required to provide Bank with the Transaction Reports
required pursuant to clause (a)(i)(A) above monthly, within thirty (30) days after the end of each
month. In any event, Borrower may provide Bank with an updated Transaction Report at any time in
its sole discretion;

          (b) In the event that Borrower is or becomes subject to the reporting requirements under the
Securities Exchange Act of 1934, as amended, within five (5) days after filing, all reports on Form
10-K, 10-Q and 8-K filed with the SEC or a link thereto or copy thereof on Borrower’s or another
website on the Internet.

          (c) (i) quarterly written notice of any material change in the composition of the Intellectual
Property, (ii) quarterly written notice of the registration of any Copyright (including any
subsequent ownership right of Borrower in or to any Copyright), Patent or Trademark not previously
disclosed to Bank, or (iii) notice of Borrower’s knowledge of an event that would reasonably be
expected to have a material adverse effect on the value of the Intellectual Property.

     6.3 Accounts Receivable.

          (a) Schedules and Documents Relating to Accounts. Borrower shall deliver to Bank
Transaction Reports and schedules of collections, as provided in Section 6.2, on Bank’s standard
forms; provided, however, that Borrower’s failure to execute and deliver the same
shall not affect or limit Bank’s Lien and other rights in all of Borrower’s Accounts, nor shall
Bank’s failure to advance or lend against a specific Account affect or limit Bank’s Lien and other
rights therein. If requested by Bank, Borrower shall furnish Bank with copies (or, at Bank’s
request, originals) of all contracts, orders, invoices, and other similar documents, and all
shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any
goods the sale or disposition of which gave rise to such Accounts. In addition, Borrower shall
deliver to Bank, on its request, the originals of all instruments, chattel paper, security
agreements, guarantees and other documents and property evidencing or

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securing any Accounts, in the same form as received, with all necessary endorsements, and
copies of all credit memos.

          (b) Disputes. Borrower shall promptly notify Bank of all disputes or claims relating
to Accounts owed to Borrower in an aggregate amount in excess of One Hundred Thousand Dollars
($100,000) for all such accounts. Borrower may forgive (completely or partially), compromise, or
settle any Account for less than payment in full, or agree to do any of the foregoing so long as
(i) Borrower does so in good faith, in a commercially reasonable manner, in the ordinary course of
business, in arm’s-length transactions, and reports the same to Bank in the regular reports
provided to Bank; (ii) no Default or Event of Default has occurred and is continuing; and
(iii) after taking into account all such discounts, settlements and forgiveness, the total
outstanding Advances will not exceed the Availability Amount.

          (c) Collection of Accounts. Borrower shall have the right to collect all Accounts,
unless and until a Default or an Event of Default has occurred and is continuing. All payments on,
and proceeds of, Accounts shall be deposited directly by the applicable Account Debtor into a
lockbox account, or such other “blocked account” as Bank may specify, pursuant to a blocked account
agreement in form and substance satisfactory to Bank in its reasonable discretion;
provided, however, that with respect to Accounts owed to Medisystems, Medisystems
may, subject to Section 6.8 hereof, for a period of up to one hundred eighty (180) days, continue
to collect Accounts in the normal course of business through its existing collection accounts at
Key Bank. Whether or not an Event of Default has occurred and is continuing, Borrower shall hold
all payments on, and proceeds of, any Accounts in trust for Bank, and Borrower shall, with the
exception of Medisystems noted above, promptly deliver all such payments and proceeds to Bank in
their original form, duly endorsed, to be applied to the Obligations pursuant to the terms of
Section 9.4 hereof; provided, further, that during a Streamline Period, provided no
Event of Default has occurred and is continuing, such payments and proceeds shall be transferred on
a daily basis by Bank to an account of Borrower maintained at Bank.

          (d) Returns. Provided no Event of Default has occurred and is continuing, if any
Account Debtor returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason
for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate amount,
and (iii) upon request from Bank, provide a copy of such credit memorandum to Bank, to the extent
such credit memorandum is in an amount in excess of Fifty Thousand Dollars ($50,000) per credit
memorandum or One Hundred Thousand Dollars ($100,000) in the aggregate for all such credit
memoranda. In the event any attempted return occurs after the occurrence and during the
continuance of any Event of Default, Borrower shall hold the returned Inventory in trust for Bank,
and immediately notify Bank of the return of the Inventory.

          (e) Verification. Whether or not an Event of Default has occurred and is continuing,
Bank may notify any Account Debtor owing Borrower money of Bank’s security interest in such funds
and verify the amount of such Eligible Account; provided that, prior to the occurrence of an Event
of Default, acceptable forms of notification and verification shall be in such form and manner as
will be reasonably determined by Bank and Borrower.

          (f) No Liability. Bank shall not be responsible or liable for any shortage or
discrepancy in, damage to, or loss or destruction of, any goods, the sale or other disposition of
which gives rise to an Account, or for any error, act, omission, or delay of any kind occurring in
the settlement, failure to settle, collection or failure to collect any Account, or for settling
any Account in good faith for less than the full amount thereof, nor shall Bank be deemed to be
responsible for any of Borrower’s obligations under any contract or agreement giving rise to an
Account. Nothing herein shall, however, relieve Bank from liability for its own gross negligence
or willful misconduct.

     6.4 Remittance of Proceeds. Subject to the Asahi Intercreditor Agreement, except as otherwise
provided in Section 6.3(c), deliver, in kind, all proceeds arising from the disposition of any
Collateral with respect to which Bank has a senior lien, to Bank in the original form in which
received by Borrower not later than the following Business Day after receipt by Borrower, to be
applied to the Obligations pursuant to the terms of Section 9.4 hereof; provided that, if no
Default or Event of Default has occurred and is continuing, Borrower shall not be obligated to
remit to Bank the proceeds of the sale of worn out, excess or obsolete Equipment disposed of by
Borrower in good faith in an arm’s length transaction for an aggregate purchase price of One
Hundred Thousand Dollars ($100,000) or less (for all such transactions in any fiscal year) or the
proceeds of Transfers permitted under Section 7.1 hereof. Borrower agrees that it will not
commingle proceeds of Collateral with any of Borrower’s other funds or property, but will hold such
proceeds separate and apart from such other funds and property and in an

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express trust for Bank, subject to the Asahi Intercreditor Agreement. Nothing in this Section
limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement.

     6.5 Taxes; Pensions; Withholding. Timely file, and require each of its Subsidiaries to timely
file, all required tax returns and reports (or extensions thereof) and timely pay, and require each
of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments,
deposits and contributions owed by Borrower and each of its Subsidiaries, except as otherwise
provided in Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates
attesting to such payments, and pay all amounts necessary to fund all present pension, profit
sharing and deferred compensation plans in accordance with their terms.

     6.6 Access to Collateral; Books and Records. At reasonable times, on three (3) Business Days’
notice (provided no notice is required if an Event of Default has occurred and is continuing),
Bank, or its agents, shall have the right, on a semi-annual basis (or more frequently as conditions
warrant, in Bank’s reasonable discretion), to inspect the Collateral and the right to audit and
copy Borrower’s Books. The foregoing inspections and audits shall be at Borrower’s expense, and
the charge therefor shall be $850 per person per day (or such higher amount as shall represent
Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. In the
event Borrower and Bank schedule an audit more than ten (10) days in advance, and Borrower cancels
or seeks to reschedules the audit with less than ten (10) days written notice to Bank, then
(without limiting any of Bank’s rights or remedies), Borrower shall pay Bank a fee of $1,000 plus
any reasonable out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs
and expenses of the cancellation or rescheduling.

     6.7 Insurance. Keep its business and the Collateral insured for risks and in amounts standard
for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance
policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to
Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as an
additional lender loss payee and waive subrogation against Bank and shall provide that the insurer
must give Bank at least twenty (20) days notice before canceling, amending, or declining to renew
its policy. All liability policies shall show, or have endorsements showing, Bank as an additional
insured, and all such policies (or the loss payable and additional insured endorsements) shall
provide that the insurer shall give Bank at least twenty (20) days notice before canceling,
amending, or declining to renew its policy. At Bank’s request, Borrower shall deliver certified
copies of policies and evidence of all premium payments. Proceeds payable under any policy with
respect to any Collateral as to which the Bank’s Lien is senior to that of Asahi pursuant to the
Asahi Intercreditor Agreement shall, at Bank’s option, be payable to Bank on account of the
Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is
continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to
Two Hundred Fifty Thousand Dollars ($250,000) with respect to any loss, toward the replacement or
repair of destroyed or damaged property; provided that any such replaced or repaired property (i)
shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed
Collateral in which Bank has been granted a security interest, and (b) after the occurrence and
during the continuance of an Event of Default, all proceeds payable under such casualty policy
shall, at the option of Bank, be payable to Bank on account of the Obligations. If Borrower fails
to obtain insurance as required under this Section 6.7 or to pay any amount or furnish any required
proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain
such insurance policies required in this Section 6.7, and take any action under the policies Bank
deems prudent.

     6.8 Operating Accounts.

          (a) (i) Maintain its and its Subsidiaries’, if any, primary operating, depository accounts and
securities accounts with Bank and Bank’s Affiliates; provided that Medisystems shall, for a
period of up to one hundred eighty (180) days after the Effective Date, be permitted to maintain
its existing operating accounts at Key Bank (the “Key Bank Accounts”); provided
further, that at any time in which the Key Bank Accounts have a balance equal to or greater
than Two Hundred Fifty Thousand Dollars ($250,000), such amounts shall immediately be transferred
to an account of Borrower maintained at Bank (Bank acknowledges and agrees that notwithstanding the
provisions of clause (b) below, no Control Agreement shall be required with respect to the Key Bank
Accounts during the 180 day transition period); and

          (ii) Within ninety (90) days after the Effective Date, maintain or invest at least 80% of the
Borrowers’ and its Subsidiaries funds, on a world-wide, aggregate basis, through Bank or an
Affiliate of Bank.

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          (b) Provide Bank five (5) days prior-written notice before establishing any Collateral Account
at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each
Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or
financial institution (other than Bank) at or with which any Collateral Account is maintained to
execute and deliver a Control Agreement or other appropriate instrument with respect to such
Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms
hereunder which Control Agreement may not be terminated without the prior written consent of Bank.
The provisions of the previous sentence shall not apply to (i) deposit accounts exclusively used
for payroll, payroll taxes and/or other employee wage and benefit payments to or for the benefit of
Borrower’s employees and identified to Bank by Borrower as such, and (ii) any account or accounts
at which the Borrower maintains an aggregate amount of up to One Hundred Thousand Dollars
($100,000) for all such accounts at any time.

     6.9 Financial Covenants.

          Maintain at all times, to be tested as of the last day of each month, unless otherwise noted,
on a consolidated basis with respect to Borrower and its Subsidiaries:

          (a) Adjusted EBITDA. Achieve a minimum Adjusted EBITDA (maximum loss), measured on a
quarterly basis for each quarterly period ending date listed below, in an amount not less than (max
loss not greater than) the corresponding amount listed below for such quarterly period:

	 	 	 
	Quarterly Period Ending	 	Minimum Adjusted EBITDA (maximum loss)
	March 31, 2010
	 	[**]
	June 30, 2010
	 	[**]
	September 30, 2010
	 	[**]
	December 31, 2010
	 	[**]
	March 31, 2011, and each quarterly
period ending thereafter
	 	[**]

          (b) Liquidity. Liquidity of Borrower of at least Seven Million Five Hundred Thousand
Dollars ($7,500,000); provided, however, that if Borrower fails to maintain
Liquidity of at least Seven Million Five Hundred Thousand Dollars, in Bank’s sole discretion and
with the prior consent of Bank, Borrower shall have three (3) Business Days to achieve Liquidity of
at least Seven Million Five Hundred Thousand Dollars ($7,500,000). During such three (3) Business
Day cure period, no Event of Default will be deemed to have occurred under this Section 6.9(b) (but
no Credit Extension will be made during the cure period). Such three (3) Business Day cure period
under this Section 6.9(b) may be exercised no more than once prior to the Revolving Line
Maturity Date.

     6.10 Protection and Registration of Intellectual Property Rights.

          (a) (i) Protect, defend and maintain the validity and enforceability of its Intellectual
Property consistent with reasonable business judgment; (ii) promptly advise Bank in writing of
material infringements of its material Intellectual Property; and (iii) not allow any Intellectual
Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public
without Bank’s written consent.

          (b) If Borrower (i) obtains any Patent, registered Trademark, registered Copyright, registered
mask work, or any pending application for any of the foregoing, or (ii) applies for any Patent or
the registration of any Trademark, then Borrower shall, on a quarterly basis, provide written
notice thereof to Bank and shall execute such intellectual property security agreements and other
documents and take such other actions as Bank shall reasonably request in its good faith business
judgment to perfect and maintain a perfected security interest in favor of Bank in such property,
subject to the Asahi Intercreditor Agreement. If Borrower decides to register any Copyrights or
mask works in the United States Copyright Office, Borrower shall: (x) provide Bank with at least
fifteen (15) days prior written notice of Borrower’s intent to register such Copyrights or mask
works together with a copy of the application it intends to file with the United States Copyright
Office (excluding exhibits thereto); (y)

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execute an intellectual property security agreement and such other documents and take such
other actions as Bank may reasonably request to perfect and maintain a perfected security interest
in favor of Bank in the Copyrights or mask works intended to be registered with the United States
Copyright Office, subject to the Asahi Intercreditor Agreement; and (z) record any such
intellectual property security agreement with the United States Copyright Office contemporaneously
with filing the Copyright or mask work application(s) with the United States Copyright Office.
Upon request, Borrower shall provide to Bank copies of all applications that it files for Patents
or for the registration of Trademarks, Copyrights or mask works, and will promptly provide Bank
with evidence of the recording of the intellectual property security agreement necessary for Bank
to perfect and maintain a security interest in such property.

          (c) Provide written notice to Bank within ten (10) Business Days of entering or becoming bound
by any Restricted License (other than open source or over-the-counter software that is commercially
available to the public and other than the Utterberg License). Borrower shall make commercially
reasonable efforts upon request of Bank to obtain the consent of, or waiver by, any person whose
consent or waiver is necessary for (i) any Restricted License (other than open source or
over-the-counter software that is commercially available to the public and the Utterberg License)
to be deemed “Collateral” and for Bank to have a security interest in it that would be reasonably
expected to otherwise be restricted or prohibited by law or by the terms of any such Restricted
License, whether now existing or entered into in the future, and (ii) subject to the Asahi
Intercreditor Agreement, Bank to have the ability in the event of a liquidation of any Collateral
to dispose of such Restricted License (other than open source or over-the-counter software that is
commercially available to the public and other than the Utterberg License) in accordance with
Bank’s rights and remedies under this Agreement and the other Loan Documents.

     6.11 Litigation Cooperation. From the date hereof and continuing through the termination of
this Agreement, make available to Bank, upon reasonable notice and at reasonable intervals, without
expense to Bank, Borrower and its officers, employees and agents and Borrower’s Books, to the
extent that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or
proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower.

     6.12 Creation/Acquisition of Subsidiaries. Notwithstanding and without limiting the negative
covenant contained in Section 7.3 hereof, in the event Borrower or any Subsidiary creates or
acquires any Subsidiary, Borrower and such Subsidiary shall promptly notify Bank of the creation or
acquisition of such new Subsidiary and, at Bank’s request, in its sole discretion, take all such
action as may be reasonably required by Bank to cause each such Subsidiary to, in Bank’s sole
discretion, become a co-Borrower or Guarantor under the Loan Documents and grant a continuing
pledge and security interest in and to the assets of such Subsidiary (substantially as described on
Exhibit A hereto); and Borrower shall grant and pledge to Bank a perfected security interest in the
stock, units or other evidence of ownership of each Subsidiary.

     Borrower may designate a newly created Subsidiary to be a Filter Plant Subsidiary hereunder.
Upon such designation, (a) such Subsidiary shall not be deemed to be a “Subsidiary” for the
purposes of this Agreement and the other Loan Documents, (b) the Borrower shall not be required to
comply with the first paragraph of this Section 6.12 with respect to such Subsidiary, and (c) upon
request of Borrower, Bank shall not unreasonably withhold its consent to release the Guaranty of
such Subsidiary, if any.

     6.13 Further Assurances. Execute any further instruments and take further action as Bank
reasonably requests to perfect or continue Bank’s Lien in the Collateral as contemplated by this
Agreement. On a monthly basis, Borrower agrees to make management available to provide any update
with respect to Government Approvals and will provide Bank with such additional documents as Bank
reasonably requests in connection therewith.

     6.14 Changes in Senior Management. Upon the departure of any Key Person from NxStage, (i)
give the Bank prompt notice of such departure, (ii) provide the Bank with prompt notice as to the
officer or employee who will be acting in the capacity of such office for purposes of taking
actions under the Loan Documents, and (iii) keep the bank reasonably informed, and in any event no
less than monthly, as to the Borrower’s efforts to fill such position or its determination as to
the officers or employees who will fulfill the duties otherwise associated with such office.

     7 NEGATIVE COVENANTS

          Borrower shall not do any of the following without Bank’s prior written consent:

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     7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of
(collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its
business or property, except for Transfers (a) of Inventory and Field Equipment in the ordinary
course of business; (b) of worn out or obsolete Equipment; (c) in connection with Permitted Liens
and Permitted Investments; and (d) in connection with the Filter Plant Transactions.

     7.2 Changes in Business, Ownership, or Business Locations. (a) Engage in or permit any of its
Subsidiaries, if any, to engage in any business other than the businesses currently engaged in by
Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or
dissolve; or (c) enter into any transaction or series of related transactions in which the
stockholders of Borrower who were not stockholders immediately prior to the first such transaction
own more than forty-nine percent (49%) of the voting stock of Borrower immediately after giving
effect to such transaction or related series of such transactions (other than by the sale of
Borrower’s equity securities in a public offering or to venture capital investors so long as
Borrower identifies to Bank the venture capital investors prior to the closing of the transaction
and provides to Bank a description of the material terms of the transaction).

     Borrower shall not, without at least thirty (30) days prior written notice to Bank: (1) add
any new offices or business locations, including warehouses (unless such new offices or business
locations contain less than $250,000 in Borrower’s assets or property) or, deliver any portion of
the Collateral (other than (i) Field Equipment maintained with Borrower’s customers and/or end
users of such Field Equipment, and (ii) other assets with a value of no more than $250,000 at any
location) to a bailee at a location other than to a bailee and at a location already disclosed in
the Perfection Certificate, (2) change its jurisdiction of organization, (3) change its
organizational structure or type, (4) change its legal name, or (5) change any organizational
number (if any) assigned by its jurisdiction of organization. If Borrower intends to deliver any
portion of the Collateral, valued, individually or in the aggregate, (other than (i) Field
Equipment maintained with Borrower’s customers and/or end users of such Field Equipment, and (ii)
other assets with a value of no more than $250,000 at any location) and Bank and such bailee are
not already parties to a bailee agreement governing both the Collateral and the location to which
Borrower intends to deliver the Collateral, then Borrower will use commercially reasonable efforts
upon Bank’s request to deliver to the Bank a signed bailee agreement in form and substance
satisfactory to Bank in its reasonable discretion.

     7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge
or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire,
all or substantially all of the capital stock or property of another Person, other than Permitted
Investments. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.

     7.4 Indebtedness. (a) create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness; or (b) make any payment or prepayment of
principal under the Asahi Term Loan prior to the stated maturity date therein of May 31, 2013,
except if there are no longer any Credit Extensions outstanding under this Agreement and this
Agreement is terminated (and provided that nothing shall restrict the ability of the Borrower to
convert the Indebtedness owed to Asahi to equity securities of a Borrower), or otherwise amend or
modify the Asahi Term Loan in a manner which is adverse to Bank, without the prior written consent
of Bank.

     7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of the Collateral, or assign
or convey any right to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the
first priority security interest granted herein (other than as stated in the Asahi Intercreditor
Agreement and other Permitted Liens which are entitled to priority) or enter into any agreement,
document, instrument or other arrangement (except with or in favor of Bank or Asahi) with any
Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any
Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or
encumbering any of Borrower’s or any Subsidiary’s Intellectual Property, except as is otherwise
permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.

     7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to
the terms of Section 6.8(b) hereof.

     7.7 Distributions; Investments. (a) pay any dividends or make any distribution or payment on
account of or redeem, retire or purchase any capital stock, provided that (i) Borrower may convert
or exchange any of its equity securities into or for other securities pursuant to the terms of such
convertible securities or otherwise in

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exchange thereof, (ii) Borrower may pay dividends solely in common stock, (iii) Borrower may
repurchase the stock of former employees, directors or consultants pursuant to stock repurchase
agreements so long as an Event of Default does not exist at the time of such repurchase and would
not exist after giving effect to such repurchase, provided such repurchases do not exceed Two
Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate per fiscal year, (iv) Borrower may
pay dividends or make distributions or payments to any other Borrower; or (b) directly or
indirectly make any Investment (including, without limitation, any additional Investment in any
Subsidiary) other than Permitted Investments, or permit any of its Subsidiaries to do so.

     7.8 Transactions with Affiliates. Other than the Utterberg License and any other transaction
disclosed on the Perfection Certificate, directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower, except for (a) transactions that are in the
ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable
to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person, (b)
transactions among Borrowers, (c) transactions permitted pursuant to the terms of Section 7.2, 7.3,
7.4, 7.7, and 7.9 hereof, and (d) transactions with the Filter Plant Subsidiary which shall in all
events be upon fair and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm’s length transaction with a non-affiliated Person.

     7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under
the terms of the subordination, intercreditor, or other similar agreement to which such
Subordinated Debt is subject, or (b) amend any provision in any document relating to the
Subordinated Debt which would increase the amount thereof or adversely affect the subordination
thereof to Obligations owed to Bank.

     7.10 Compliance. Become an “investment company” or a company controlled by an “investment
company”, under the Investment Company Act of 1940, as amended, or undertake as one of its
important activities extending credit to purchase or carry margin stock (as defined in Regulation U
of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit
Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or non-exempt Prohibited Transaction, as defined in ERISA, to occur; fail to
comply with the Federal Fair Labor Standards Act; fail to comply in any material respect with any
law or regulation promulgated by the U.S. Food and Drug Administration or promulgated under the
U.S. Food, Drug and Cosmetic Act; or violate any other law or regulation, if the violation would
reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of
its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in,
permit partial or complete termination of, or permit the occurrence of any other event with respect
to, any present pension, profit sharing and deferred compensation plan which would reasonably be
expected to result in any liability of Borrower, including any liability to the Pension Benefit
Guaranty Corporation or its successors or any other governmental agency.

     8 EVENTS OF DEFAULT

          Any one of the following shall constitute an event of default (an “Event of Default”) under
this Agreement:

     8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any
Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days
after such Obligations are due and payable (which three (3) Business Day cure period shall not
apply to payments due on the Revolving Line Maturity Date). During the cure period, the failure to
make or pay any payment specified under clause (a) or (b) hereunder is not an Event of Default (but
no Credit Extension will be made during the cure period);

     8.2 Covenant Default.

          (a) Borrower fails or neglects to perform any obligation in Sections 6.2 (provided, however,
(i) Borrower shall have two (2) Business Days from the scheduled due date to cure any default under
clauses 6.2(a) (i)-(iv) and Bank shall endeavor to notify Borrower of any failure to comply with
any such clause; (ii) Borrower shall have three (3) Business Days from the scheduled due date to
cure any default under clause 6.2(a)(viii); and (iii) Borrower shall have three (3) Business Days
from the scheduled due date to cure any default under clause 6.2(c)(i) and (ii)), 6.4 (provided,
however, Borrower shall have three (3) Business Days from the scheduled due date to cure any
default thereunder), 6.5, 6.7, 6.8 (provided, however, Borrower shall have three (3) Business Days
from the scheduled due date to cure any default under clause 6.8(b)) or 6.9, or violates any
covenant in Section 7 (provided, however, Borrower shall have three (3) Business Days from the
scheduled due date to cure any default under clauses 7.5 and 7.6); or

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          (b) Borrower fails or neglects to perform, keep, or observe any other term, provision,
condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any
default (other than those specified in this Section 8) under such other term, provision, condition,
covenant or agreement that can be cured, has failed to cure the default within ten (10) days after
the occurrence thereof; provided, however, that if the default cannot by its nature be cured within
the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10)
day period, and such default is likely to be cured within a reasonable time, then Borrower shall
have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure
such default, and within such reasonable time period the failure to cure the default shall not be
deemed an Event of Default (but no Credit Extensions shall be made during such cure period). Cure
periods provided under this section shall not apply, among other things, to financial covenants or
any other covenants set forth in clause (a) above;

     8.3 Material Adverse Change. A Material Adverse Change occurs;

     8.4 Attachment; Levy; Restraint on Business.

          (a) (i) The service of process seeking to attach, by trustee or similar process, any funds of
Borrower or of any entity under the control of Borrower on deposit or otherwise maintained with
Bank or any Bank Affiliate, or (ii) a notice of lien or levy is filed against any of Borrower’s
assets with a fair market value in excess of One Hundred Thousand Dollars ($100,000), individually
or in the aggregate, by any government agency, and the same under subclauses (i) and (ii) hereof
are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through
the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during
any ten (10) day cure period; or

          (b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents
Borrower from conducting any material part of its business;

     8.5 Insolvency. (a) Borrower is unable to pay its debts (including trade debts) as they
become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an
Insolvency Proceeding is begun against Borrower and not dismissed or stayed within forty-five (45)
days (but no Credit Extensions shall be made while of any of the conditions described in clause (a)
exist and/or until any Insolvency Proceeding is dismissed);

     8.6 Other Agreements. There is, under any agreement to which Borrower or any Guarantor is a
party with a third party or parties, (a) any default resulting in a right by such third party or
parties (other than the Asahi Term Loan), whether or not exercised, to accelerate the maturity of
any Indebtedness in an amount individually or in the aggregate in excess of Five Hundred Thousand
Dollars ($500,000); (b) a default occurs by Borrower under the Asahi Term Loan and any applicable
grace and cure periods have expired; or (c) any default by Borrower, the result of which would
reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole;

     8.7 Judgments. One or more final judgments, orders, or decrees for the payment of money in an
amount, individually or in the aggregate, of at least Five Hundred Thousand Dollars ($500,000) (not
covered by independent third-party insurance as to which liability has been accepted by such
insurance carrier), shall be rendered against Borrower and the same are not, within ten (10) days
after the entry thereof, discharged or execution thereof stayed or bonded pending appeal, or such
judgments are not discharged prior to the expiration of any such stay (provided that no Credit
Extensions will be made prior to the discharge, stay, or bonding of such judgment, order, or
decree);

     8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation,
warranty, or other statement now or later in this Agreement, any Loan Document or in any writing
delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such
representation, warranty, or other statement is incorrect in any material respect when made;

     8.9 Subordinated Debt/Asahi Intercreditor Agreement. Any document, instrument, or any
intercreditor or subordination agreement relating to Subordinated Debt (including the Asahi
Intercreditor Agreement), shall for any reason be revoked or invalidated or otherwise cease to be
in full force and effect except in accordance with its terms or as a result of Bank’s bad faith or
willful misconduct, any Person other than Bank shall be in material breach thereof or contest in
any manner the validity or enforceability thereof or deny that it has any

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further liability or obligation thereunder except in accordance with its terms, or the
Obligations shall for any reason be subordinated or shall not have the priority contemplated by
this Agreement or the Asahi Intercreditor Agreement;

     8.10 Guaranty. (a) Any guaranty of any Obligations terminates or ceases for any reason to be
in full force and effect except to the extent any guaranty is terminated in accordance with the
terms hereof; (b) any Guarantor does not perform any obligation or covenant under any guaranty of
the Obligations; (c) any circumstance described in Sections 8.3 or 8.8. occurs with respect to any
Guarantor, or (d) the liquidation, winding up, or termination of existence of any Guarantor; or

     8.11 Governmental Approvals. Any material Governmental Approval shall have been revoked,
rescinded, suspended, modified in an materially adverse manner or not renewed in the ordinary
course for a full term and such revocation, rescission, suspension, modification or non-renewal
results in a Material Adverse Change.

     8.12 Notice of Exclusive Control. The delivery by Asahi to Bank, Bank’s Affiliates or any
other bank or financial institution of a “Notice of Exclusive Control” or an “entitlement order”
(as such term is defined in Article 8 of the Code), pursuant to any Collateral Account of the
Borrower.

     9 BANK’S RIGHTS AND REMEDIES

     9.1 Rights and Remedies. While an Event of Default occurs and continues Bank may, without
notice or demand, do any or all of the following, and in each case subject to the Asahi
Intercreditor Agreement:

          (a) declare all Obligations immediately due and payable (but if an Event of Default described
in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);

          (b) stop advancing money or extending credit for Borrower’s benefit under this Agreement or
under any other agreement between Borrower and Bank;

          (c) demand that Borrower (i) deposit cash with Bank in an amount equal to 105% of the Dollar
Equivalent of the aggregate face amount of all Letters of Credit remaining undrawn plus all
interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its
good faith business judgment), to secure all of the Obligations relating to such Letters of Credit,
as collateral security for the repayment of any future drawings under such Letters of Credit, and
Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit
fees scheduled to be paid or payable over the remaining term of any Letters of Credit;
provided, however, if an Event of Default described in Section 8.5 occurs, the
obligation of Borrower to cash collateralize all Letters of Credit remaining undrawn shall
automatically become effective without any action by Bank;

          (d) terminate any FX Forward Contracts;

          (e) settle or adjust disputes and claims directly with Account Debtors for amounts on terms
and in any order that Bank considers advisable, notify any Person owing Borrower money of Bank’s
security interest in such funds, and verify the amount of such account;

          (f) make any payments and do any acts it considers necessary or reasonable to protect the
Collateral and/or its security interest in the Collateral. Borrower shall use commercially
reasonable efforts to assemble the Collateral if Bank requests and make it reasonably available as
Bank designates which is reasonably convenient to both Borrower and Bank. Bank may enter premises
where the Collateral is located, take and maintain possession of any part of the Collateral, and
pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its
security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy
any of its premises, without charge, to exercise any of Bank’s rights or remedies;

          (g) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any
amount held by Bank owing to or for the credit or the account of Borrower;

          (h) subject to the rights of third parties including those in the Utterberg License, ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell
the Collateral. Bank is hereby granted a non-exclusive, royalty-free license or other right to
use, without charge, Borrower’s labels, Patents,

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Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and
advertising matter, or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in connection with Bank’s
exercise of its rights under this Section, Borrower’s rights under all licenses and all franchise
agreements inure to Bank’s benefit;

          (i) deliver a notice of exclusive control, any entitlement order, or other directions or
instructions pursuant to any Control Agreement or similar agreements providing control of any
Collateral;

          (j) demand and receive possession of Borrower’s Books; and

          (k) exercise all rights and remedies available to Bank under the Loan Documents or at law or
equity, including all remedies provided under the Code (including disposal of the Collateral
pursuant to the terms thereof).

     9.2 Power of Attorney. Borrower hereby irrevocably appoints Bank as its lawful
attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of
Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b)
sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account
Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle, and adjust all
claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge,
encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the
Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints
Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect
or continue the perfection of Bank’s security interest in the Collateral regardless of whether an
Event of Default has occurred until all Obligations (other than inchoate indemnity obligations and
any other obligations which, by their terms, are to survive the termination of this Agreement) have
been satisfied in full and Bank is under no further obligation to make Credit Extensions hereunder.
Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers,
coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity
obligations and any other obligations which, by their terms, are to survive the termination of this
Agreement) have been fully repaid and performed and Bank’s obligation to provide Credit Extensions
terminates.

     9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.7
or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to
pay under this Agreement or any other Loan Document, Bank may obtain such insurance or make such
payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing
interest at the then highest rate applicable to the Obligations, and secured by the Collateral.
Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance
at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed
an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.

     9.4 Application of Payments and Proceeds. Unless an Event of Default has occurred and is
continuing, and subject to Section 2.5 hereof and the Asahi Intercreditor Agreement, Bank may apply
any funds in its possession, whether from Borrower account balances, payments, or proceeds realized
as the result of any collection of Accounts or other disposition of the Collateral, first, to Bank
Expenses, including without limitation, the reasonable costs, expenses, liabilities, obligations
and attorneys’ fees incurred by Bank in the exercise of its rights under this Agreement; second, to
the interest due upon any of the Obligations; and third, to the principal of the Obligations and
any applicable fees and other charges, in such order as Bank shall determine in its sole
discretion. Any surplus shall be paid to Borrower or other Persons legally entitled thereto;
Borrower shall remain liable to Bank for any deficiency. If an Event of Default has occurred and
is continuing, and subject to Section 2.5 hereof and the Asahi Intercreditor Agreement, Bank may
apply any funds in its possession, whether from Borrower account balances, payments, proceeds
realized as the result of any collection of Accounts or other disposition of the Collateral, or
otherwise, to the Obligations in such order as Bank shall determine in its sole discretion. Any
surplus shall be paid to Borrower or to other Persons legally entitled thereto; Borrower shall
remain liable to Bank for any deficiency. If Bank, in its good faith business judgment, directly
or indirectly enters into a deferred payment or other credit transaction with any purchaser at any
sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the
Obligations by the principal amount of the purchase price or deferring the reduction of the
Obligations until the actual receipt by Bank of cash therefor.

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     9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking
practices regarding the safekeeping of the Collateral in the possession or under the control of
Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act
or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss,
damage or destruction of the Collateral.

     9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict
performance by Borrower of any provision of this Agreement or any other Loan Document shall not
waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance
herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting
the waiver and then is only effective for the specific instance and purpose for which it is given.
Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative. Bank
has all rights and remedies provided under the Code, by law, or in equity. Bank’s exercise of one
right or remedy is not an election and shall not preclude Bank from exercising any other remedy
under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event
of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver,
election, or acquiescence.

     9.7 Demand Waiver. Except as expressly provided herein or provided under applicable law,
Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of
any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of
accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is
liable.

     10 NOTICES

          All notices, consents, requests, approvals, demands, or other communication (collectively,
“Communication”), other than Advance requests made pursuant to Section 3.4, by any party to this
Agreement or any other Loan Document must be in writing and be delivered or sent by facsimile at
the addresses or facsimile numbers listed below. Bank or Borrower may change its notice address by
giving the other party written notice thereof. Each such Communication shall be deemed to have
been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the U.S. mail, registered or certified mail, return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission
(with such facsimile promptly confirmed by delivery of a copy by personal delivery or United States
mail as otherwise provided in this Section 10); (c) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent to the address or
facsimile number indicated below. Advance requests made pursuant to Section 3.4 must be in writing
and may be in the form of electronic mail, delivered to Bank by Borrower at the e-mail address of
Bank provided below and shall be deemed to have been validly served, given, or delivered when sent
(with such electronic mail promptly confirmed by delivery of a copy by personal delivery or United
States mail as otherwise provided in this Section 10). Bank or Borrower may change its address,
facsimile number, or electronic mail address by giving the other party written notice thereof in
accordance with the terms of this Section 10.

	 	 	 

	If to Borrower:

	 	NxStage Medical, Inc.
	 

	 	EIR Medical, Inc.
	 

	 	Medisystems Services Corporation
	 

	 	Medisystems Corporation
	 

	 	c/o NxStage Medical, Inc.
	 

	 	439 South Union Street, 5th Floor
	 

	 	Lawrence, Massachusetts 01843
	 

	 	Attn: General Counsel
	 

	 	Fax: (978) 687-4825
	 

	 	Email: wswan@nxstage.com
	 
	 	 
	with a copy (which shall not constitute notice) to:
	 
	 

	 	Wilmer Cutler Pickering Hale and Dorr LLP
	 

	 	60 State Street
	 

	 	Boston, MA 02109

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	 	Attn: George Shuster, Esquire
	 

	 	Fax: (617) 526-5000
	 

	 	Email: george.shuster@wilmerhale.com
	 
	 	 
	If to Bank:

	 	Silicon Valley Bank
	 

	 	One Newton Executive Park Suite 200
	 

	 	2221 Washington Street
	 

	 	Newton, Massachusetts 02462
	 

	 	Attn: Mr. Ryan Ravenscroft
	 

	 	Fax: (617) 527- 0177
	 

	 	Email: rravenscroft@svb.com
	 
	 	 
	with a copy to:

	 	Riemer & Braunstein LLP
	 

	 	Three Center Plaza
	 

	 	Boston, Massachusetts 02108
	 

	 	Attn: Charles W. Stavros, Esquire
	 

	 	Fax: (617) 880-3456
	 

	 	Email: cstavros@riemerlaw.com

     11 CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE

          Massachusetts law governs the Loan Documents without regard to principles of conflicts of law.
Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in
Massachusetts; provided, however, that nothing in this Agreement shall be deemed to
operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction
to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or
other court order in favor of Bank. Borrower expressly submits and consents in advance to such
jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any
objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non
conveniens and hereby consents to the granting of such legal or equitable relief as is deemed
appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and
other process issued in such action or suit and agrees that service of such summons, complaints,
and other process may be made by registered or certified mail addressed to Borrower at the address
set forth in Section 10 of this Agreement and that service so made shall be deemed completed upon
the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the
U.S. mails, proper postage prepaid. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREINABOVE,
BANK SHALL SPECIFICALLY HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER
TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE BANK’S RIGHTS AGAINST BORROWER OR ITS
PROPERTY.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN
DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH
PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

     12 GENERAL PROVISIONS

     12.1 Termination Prior to Maturity Date. This Agreement may be terminated prior to the
Revolving Line Maturity Date by Borrower, effective three (3) Business Days after written notice of
termination is given to Bank or if Bank’s obligation to fund Credit Extensions terminates pursuant
to the terms of Section 2.1.1(b). Notwithstanding any such termination, Bank’s lien and security
interest in the Collateral shall continue until Borrower fully satisfies its Obligations (other
than inchoate indemnity obligations and any other obligations which, by their terms, are to survive
the termination of this Agreement). If such termination is at Borrower’s election, Borrower shall
pay to Bank, in addition to the payment of any other expenses or fees then-owing, a termination fee
equal to (i) if terminated at any time prior to the first anniversary of the Effective Date, an
amount equal to one percent (1.00%) of the Revolving Line (i.e. One Hundred Fifty Thousand Dollars
($150,000)); (ii) if terminated on

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or at any time after the first anniversary of the Effective Date but prior to the second
anniversary of the Effective Date, an amount equal to one-half of one percent (0.50%) of the
Revolving Line (i.e. Seventy Five Thousand Dollars ($75,000)); and from the second anniversary of
the Effective Date and thereafter, Zero Dollars ($0.00); provided that no termination fee
shall be charged if the credit facility hereunder is replaced with a new or amended and restated
facility from Silicon Valley Bank. Upon payment in full of the Obligations (other than inchoate
indemnity obligations and any other obligations which, by their terms, are to survive the
termination of this Agreement) and at such time as Bank’s obligation to make Credit Extensions has
terminated, Bank shall release its liens and security interests in the Collateral and all rights
therein shall revert to Borrower.

     12.2 Successors and Assigns. This Agreement binds and is for the benefit of the successors
and permitted assigns of each party. Borrower may not assign this Agreement or any rights or
obligations under it without Bank’s prior written consent (which may be granted or withheld in
Bank’s discretion). Bank has the right, without the consent of or notice to Borrower, to sell,
transfer, assign, negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents.

     12.3 Indemnification. Borrower agrees to indemnify, defend and hold Bank and its directors,
officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank
(each, an “Indemnified Person”) harmless against: (a) all obligations, demands, claims, and
liabilities (collectively, “Claims”) claimed or asserted by any other party in connection with the
transactions contemplated by the Loan Documents; and (b) all losses or expenses (including Bank
Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a result of,
following from, consequential to, or arising from transactions between Bank and Borrower (including
reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such
Indemnified Person’s gross negligence or willful misconduct.

     12.4 Time of Essence. Time is of the essence for the performance of all Obligations in this
Agreement.

     12.5 [Reserved].

     12.6 Severability of Provisions. Each provision of this Agreement is severable from every
other provision in determining the enforceability of any provision.

     12.7 Amendments in Writing; Waiver; Integration. No purported amendment or modification of
any Loan Document, or waiver, discharge or termination of any obligation under any Loan Document,
shall be enforceable or admissible unless, and only to the extent, expressly set forth in a writing
signed by the party against which enforcement or admission is sought. Without limiting the
generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure
to require performance or course of conduct shall operate as, or evidence, an amendment, supplement
or waiver or have any other effect on any Loan Document. Any waiver granted shall be limited to
the specific circumstance expressly described in it, and shall not apply to any subsequent or other
circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or
commitment to grant any further waiver. The Loan Documents represent the entire agreement about
this subject matter and supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the parties about the subject
matter of the Loan Documents merge into the Loan Documents.

     12.8 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and delivered, is an
original, and all taken together, constitute one Agreement.

     12.9 Survival. All covenants, representations and warranties made in this Agreement continue
in full force until this Agreement has terminated pursuant to its terms and all Obligations (other
than inchoate indemnity obligations and any other obligations which, by their terms, are to survive
the termination of this Agreement) have been paid in full and satisfied. The obligation of
Borrower in Section 12.3 to indemnify Bank shall survive until the statute of limitations with
respect to such claim or cause of action shall have run.

     12.10 Confidentiality. In handling any confidential information, Bank shall exercise the same
degree of care that it exercises for its own proprietary information, but disclosure of information
may be made: (a) to Bank’s Subsidiaries or Affiliates (provided, however, that such Subsidiaries
and Affiliates shall agree to the terms of this provision); (b) to prospective transferees or
purchasers of any interest in the Credit Extensions (provided, however,

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Bank shall use commercially reasonable efforts to obtain any prospective transferee’s or
purchaser’s agreement to the terms of this provision); (c) as required by law, regulation,
subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection with
Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the
Loan Documents; and (f) to third-party service providers of Bank so long as such service providers
have executed a confidentiality agreement with Bank with terms no less restrictive than those
contained herein. Confidential information does not include information that is either: (i) is in
the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public
domain after disclosure to Bank; or (ii) is disclosed to Bank by a third party, if Bank does not
know that the third party is prohibited from disclosing the information.

          Bank may use confidential information for the development of databases, reporting purposes,
and market analysis so long as such confidential information is aggregated and anonymized prior to
distribution unless otherwise expressly permitted by Borrower. The provisions of the immediately
preceding sentence shall survive the termination of this Agreement.

     12.11 Attorneys’ Fees, Costs and Expenses. In any action or proceeding between Borrower and
Bank arising out of or relating to the Loan Documents, Bank shall be entitled to recover its
reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief
to which it may be entitled.

     12.12 Right of Set Off. Borrower hereby grants to Bank, a lien, security interest and right
of set off as security for all Obligations to Bank, whether now existing or hereafter arising upon
and against all deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of Bank or any entity under the control of Bank (including a Bank
subsidiary) or in transit to any of them. At any time after the occurrence and during the
continuance of an Event of Default, without demand or notice, Bank may set off the same or any part
thereof and apply the same to any liability or obligation of Borrower even though unmatured and
regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO
REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES
THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR
OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

     12.13 Borrower Liability. Any Borrower may, acting singly, request Credit Extensions
hereunder. Each Borrower hereby appoints the other as agent for the other for all purposes
hereunder, including with respect to requesting Credit Extensions hereunder. Each Borrower
hereunder shall be jointly and severally obligated to repay all Credit Extensions made hereunder,
regardless of which Borrower actually receives said Credit Extension, as if each Borrower hereunder
directly received all Credit Extensions. Each Borrower waives (a) any suretyship defenses
available to it under the Code or any other applicable law, and (b) any right to require Bank to:
(i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security;
or (iii) pursue any other remedy. Bank may exercise or not exercise any right or remedy it has
against any Borrower or any security it holds (including the right to foreclose by judicial or
non-judicial sale) without affecting any Borrower’s liability. Notwithstanding any other provision
of this Agreement or other related document, so long as the Obligations (other than inchoate
indemnity obligations and other obligations that by their terms survive the termination of this
Agreement) are outstanding or the Bank has any commitment to lend to Borrower hereunder, each
Borrower waives all rights that it may have at law or in equity (including, without limitation, any
law subrogating Borrower to the rights of Bank under this Agreement) to seek contribution,
indemnification or any other form of reimbursement from any other Borrower, or any other Person now
or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by
Borrower with respect to the Obligations in connection with this Agreement or otherwise and all
rights that it might have to benefit from, or to participate in, any security for the Obligations
as a result of any payment made by Borrower with respect to the Obligations in connection with this
Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other
arrangement prohibited under this Section shall be null and void to the extent that it conflicts
with the preceding sentence. If any payment is made to a Borrower in contravention of this
Section, such Borrower shall hold such payment in trust for Bank and such payment shall be promptly
delivered to Bank for application to the Obligations, whether matured or unmatured.

     12.14 Electronic Execution of Documents. The words “execution,” “signed,” “signature” and
words of like import in any Loan Document 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
and enforceability as a manually executed signature or the use of a paper-based recordkeeping
systems, as the case may be, to the extent and as provided for in any applicable law, including,
without limitation, any state law based on the Uniform Electronic Transactions Act.

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     12.15 Captions. The headings used in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement.

     12.16 Construction of Agreement. The parties mutually acknowledge that they and their
attorneys have participated in the preparation and negotiation of this Agreement. In cases of
uncertainty this Agreement shall be construed without regard to which of the parties caused the
uncertainty to exist.

     12.17 Relationship. The relationship of the parties to this Agreement is determined solely by
the provisions of this Agreement. The parties do not intend to create any agency, partnership,
joint venture, trust, fiduciary or other relationship with duties or incidents different from those
of parties to an arm’s-length contract.

     12.18 Third Parties. Nothing in this Agreement, whether express or implied, is intended to:
(a) confer any benefits, rights or remedies under or by reason of this Agreement on any persons
other than the express parties to it and their respective permitted successors and assigns; (b)
relieve or discharge the obligation or liability of any person not an express party to this
Agreement; or (c) give any person not an express party to this Agreement any right of subrogation
or action against any party to this Agreement.

     13 DEFINITIONS

     13.1 Definitions. As used in the Loan Documents, the word “shall” is mandatory, the word
“may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not
limiting, the singular includes the plural, and numbers denoting amounts that are set off in
brackets are negative. As used in this Agreement, the following capitalized terms have the
following meanings:

          “Account” is any “account” as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to Borrower.

          “Account Debtor” is any “account debtor” as defined in the Code with such additions to such
term as may hereafter be made.

          “Adjusted EBITDA” is, for any period of measurement, Borrower’s EBITDA for such period
minus Capital Expenditures made during such period.

          “Advance” or “Advances” means an advance (or advances) under the Revolving Line.

          “Affiliate” is, with respect to any Person, each other Person that owns or controls directly
or indirectly the Person, any Person that controls or is controlled by or is under common control
with the Person, and each of that Person’s senior executive officers, directors, partners and, for
any Person that is a limited liability company, that Person’s managers and members.

          “Agreement” is defined in the preamble hereof.

          “Asahi” is Asahi Kasei Kuraray Medical Co., Ltd., a company organized under the laws of Japan,
and its permitted successors and assigns.

          “Asahi Intercreditor Agreement” is that certain Intercreditor Agreement, by and between Bank
and Asahi, dated as of the date hereof, as may be amended from time to time.

          “Asahi Term Loan” is that certain Term Loan and Security Agreement by and among Borrower,
Guarantors and Asahi, dated as of June 5, 2009, as may be amended, modified or restated from time
to time.

          “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available
under the Borrowing Base minus (b) the Dollar Equivalent amount of all outstanding Letters
of Credit (including drawn but unreimbursed Letters of Credit plus an amount equal to the Letter of
Credit Reserve), minus (c) the FX Reduction Amount, minus (d) any amounts used for
Cash Management Services, and minus (e) the outstanding principal balance of any Advances.

          “Bank” is defined in the preamble hereof.

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          “Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable
attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and
enforcing the Loan Documents (including, without limitation, those incurred in connection with
appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower or any Guarantor.

          “Borrower” is defined in the preamble hereof.

          “Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state
tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any equipment containing
such information.

          “Borrowing Base” is (a) eighty percent (80%) of Eligible Accounts plus (b) the
lesser of (i) thirty percent (30%) of the value of Borrower’s Eligible Inventory (valued at
the lower of cost or wholesale fair market value) or (ii) Two Million Five Hundred Thousand Dollars
($2,500,000); plus (c) the lesser of (i) twenty percent (20%) of Eligible Field
Equipment or (ii) One Million Dollars ($1,000,000), in each case as determined by Bank from
Borrower’s most recent Borrowing Base Certificate; provided, however, that Bank may
decrease the foregoing percentages and/or amounts in its good faith business judgment based on
events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect the
Collateral.

          “Borrowing Base Certificate” is that certain certificate included within each Transaction
Report.

          “Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such
Person’s Board of Directors or other appropriate body and delivered by such Person to Bank
approving the Loan Documents to which such Person is a party and the transactions contemplated
thereby, together with a certificate executed by its secretary on behalf of such Person certifying
that (a) such Person has the authority to execute, deliver, and perform its obligations under each
of the Loan Documents to which it is a party, (b) that attached as Exhibit A to such certificate is
a true, correct, and complete copy of the resolutions then in full force and effect authorizing and
ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it
is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents on behalf of
such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank
may conclusively rely on such certificate unless and until such Person shall have delivered to Bank
a further certificate canceling or amending such prior certificate.

          “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.

          “Capital Expenditures” means, with respect to any Person for any period, the aggregate of all
expenditures by such Person and its Subsidiaries during such period that are capital expenditures
as determined in accordance with GAAP, whether such expenditures are paid in cash or financed;
provided, that any Capital Expenditures made in connection with the Filter Plant
Transactions funded by a third party (a party other than Borrower or any Guarantor) shall not be
included in the calculation of Capital Expenditures.

          “Cash Equivalents” means (a) marketable direct obligations issued or unconditionally
guaranteed by the United States or any agency or any State thereof having maturities of not more
than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1)
year after its creation and having the highest rating from either Standard & Poor’s Ratings Group
or Moody’s Investors Service, Inc., (c) Bank’s certificates of deposit issued maturing no more than
one (1) year after issue; and (d) money market funds at least ninety-five percent (95%) of the
assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of
this definition.

          “Cash Management Services” is defined in Section 2.1.4.

          “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in
effect in the Commonwealth of Massachusetts; provided, that, to the extent that the Code is used to
define any term herein or in any Loan Document and such term is defined differently in different
Articles or Divisions of the Code, the definition of such term contained in Article or Division 9
shall govern; provided further, that in the event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien
on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than
the Commonwealth of Massachusetts, the term “Code” shall mean the Uniform Commercial Code as

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enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority, or remedies and for purposes of definitions
relating to such provisions.

          “Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.

          “Collateral Account” is any Deposit Account, Securities Account, or Commodity Account of
Borrower.

          “Commodity Account” is any “commodity account” as defined in the Code with such additions to
such term as may hereafter be made.

          “Communication” is defined in Section 10.

          “Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit B.

          “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or
not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation
of another such as an obligation, in each case directly or indirectly guaranteed, endorsed, co
made, discounted or sold with recourse by that Person, or for which that Person is directly or
indirectly liable; (b) any obligations for undrawn letters of credit for the account of that
Person; and (c) all obligations from any interest rate, currency or commodity swap agreement,
interest rate cap or collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or commodity prices; but
“Contingent Obligation” does not include endorsements in the ordinary course of business. The
amount of a Contingent Obligation is the stated or determined amount of the primary obligation for
which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated
liability for it determined by the Person in good faith; but the amount may not exceed the maximum
of the obligations under any guarantee or other support arrangement.

          “Control Agreement” is any control agreement entered into among the depository institution at
which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary
at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank
pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account,
Securities Account, or Commodity Account.

          “Copyrights” are any and all copyright rights, copyright applications, copyright registrations
and like protections in each work or authorship and derivative work thereof, whether published or
unpublished and whether or not the same also constitutes a trade secret.

          “Credit Extension” is any Advance, Letter of Credit, FX Forward Contract, amount utilized for
Cash Management Services, or any other extension of credit by Bank for Borrower’s benefit.

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

          “Default Rate” is defined in Section 2.3(b).

          “Deferred Revenue” is all amounts received or invoiced in advance of performance under
contracts and not yet recognized as revenue.

          “Deposit Account” is any “deposit account” as defined in the Code with such additions to such
term as may hereafter be made.

          “Designated Deposit Account” is Borrower’s deposit account, account number [**], maintained
with Bank.

          “Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and
not any other currency, regardless of whether that currency uses the “$” sign to denote its
currency or may be readily converted into lawful money of the United States.

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          “Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars,
such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent
amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing
rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to
the country issuing such Foreign Currency.

          “EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to the
extent deducted in the calculation of Net Income, depreciation expense and amortization expense,
plus (d) income tax expense, plus (e) non-cash stock compensation expenses.

          “Effective Date” is the date Bank executes this Agreement and as indicated on the signature
page hereof.

          “Eligible Accounts” are Accounts which arise in the ordinary course of Borrower’s business
that meet all Borrower’s representations and warranties in Section 5.3. Bank reserves the right at
any time and from time to time after the Effective Date upon notice to Borrower, to adjust any of
the criteria set forth below and to establish new criteria in its good faith business judgment.
Without limiting the fact that the determination of which Accounts are eligible for borrowing is a
matter of Bank’s good faith judgment, the following (“Minimum Eligibility Requirements”) are the
minimum requirements for an Account to be an Eligible Account. Unless Bank agrees otherwise in
writing, Eligible Accounts shall not include:

          (a) Accounts for which the Account Debtor has not been invoiced or where goods or services
have not yet been rendered to the Account Debtor (sometimes called memo billings or pre-billings);

          (b) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date,
regardless of invoice payment period terms;

          (c) Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have
not been paid within ninety (90) days of invoice date;

          (d) Accounts billed and/or payable outside the United States;

          (e) Accounts with credit balances over ninety (90) days from invoice date (but only to the
extent of such credit balance);

          (f) Accounts owing from an Account Debtor, including such Account Debtor’s Affiliates, whose
total obligations to Borrower exceed twenty-five percent (25%) of all Accounts (35% with respect to
any two of (i) Da Vita, Inc., a Delaware corporation, (ii) Henry Schein, Inc., a Delaware
corporation and (iii) Gambro Renal Products, Inc., a Delaware corporation and each of their
respective Affiliates), in each case for the amounts that exceed that percentage, unless Bank
approves in writing;

          (g) Accounts subject to contractual arrangements between Borrower and an Account Debtor where
payments shall be scheduled or due according to completion or fulfillment requirements where the
Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to
perform in accordance with the contract (sometimes called contracts accounts receivable, progress
billings, milestone billings, or fulfillment contracts);

          (h) Accounts owing from an Account Debtor the amount of which may be subject to withholding
based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the
extent of the amount withheld; sometimes called retainage billings);

          (i) Accounts owing from an Account Debtor which does not have its principal place of business
in the United States except for Eligible Foreign Accounts;

          (j) Accounts owing from the United States or any department, agency, or instrumentality
thereof except for Accounts or portions thereof of the United States if Borrower has assigned its
payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of
Claims Act of 1940, as amended;

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          (k) Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated
in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise — sometimes called
“contra” accounts, accounts payable, customer deposits or credit accounts), but only to the extent
that Borrower is indebted or obligated, with the exception of (i) customary credits, adjustments
and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business and
(ii) amounts due on account of clinical trials in amounts not to exceed $10,000 at any time
outstanding per Account Debtor;

          (l) Accounts for demonstration or promotional equipment, or in which goods are consigned, or
sold on a “sale guaranteed”, “sale or return”, “sale on approval”, “bill and hold”, or other terms
if Account Debtor’s payment may be conditional;

          (m) Accounts that represent non-trade receivables or that are derived by means other than in
the ordinary course of Borrower’s business;

          (n) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;

          (o) Accounts in which the Account Debtor disputes liability or makes any claim (but only up to
the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding,
or becomes insolvent, or goes out of business;

          (p) Accounts owing from an Account Debtor with respect to which Borrower has received Deferred
Revenue (but only to the extent of such Deferred Revenue and excluding Deferred Revenue generated
in connection with (i) the sale of Equipment, (ii) warranty contracts in an amount up to Five
Hundred Thousand Dollars ($500,000) in the aggregate per year), and (iii) [the sale of equity to Da
Vita, Inc. and/or its Affiliates on or about February 7, 2007];

          (q) Accounts subject to chargebacks or other payment deductions taken by an Account Debtor,
but only up to the amount of such chargeback or payment deduction;

          (r) Accounts for which Bank in its good faith business judgment determines collection to be
doubtful; and

          (s) other Accounts Bank deems ineligible in the exercise of its good faith business judgment.

          “Eligible Field Equipment” is Equipment located in the United States which consists of (a)
equipment rented to dialysis treatment centers and hospitals which may then transferred to
patient’s homes; (b) “service pool” cyclers owned and maintained by the Borrower that are swapped
for cyclers that require repairs or services by the Borrower while being rented or owned by a
patient (c) equipment that otherwise complies with all of Borrower’s representations and warranties
to Bank and which is acceptable to Bank in all respects; and (d) equipment in which Bank has a
first priority Lien.

          “Eligible Foreign Accounts” are Accounts for which the Account Debtor does not have its
principal place of business in the United States but are otherwise Eligible Accounts that Bank
approves in writing, on a case-by-case basis.

          “Eligible Inventory” means, at any time, the aggregate of Borrower’s Inventory that (a)
consists of finished goods, in good, new, and salable condition, which is not perishable, returned,
consigned, obsolete, not sellable, damaged, or defective, and is not comprised of demonstrative or
custom inventory, works in progress, packaging or shipping materials, or supplies; (b) meets all
applicable governmental standards; (c) has been manufactured in compliance with the Fair Labor
Standards Act, to the extent applicable; (d) is not subject to any Liens, except the first priority
Liens granted or in favor of Bank under this Agreement or any of the other Loan Documents and other
Permitted Liens; (e) is located at Borrower’s principal place of business (or any location
permitted under Section 5.2 in the United States and subject to a landlord’s consent or bailee
waiver, as applicable, in form and substance acceptable to Bank, in its sole discretion); (f) is
not Eligible Field Equipment; and (g) is otherwise acceptable to Bank in its good faith business
judgment.

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          “Equipment” is all “equipment” as defined in the Code with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles
(including motor vehicles and trailers), and any interest in any of the foregoing.

          “ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.

          “Event of Default” is defined in Section 8.

          “Field Equipment” is any existing or hereafter acquired (by the Borrower), System One cyclers,
Pure Flow systems and all components thereof, and similar products that are updates thereto or
developments thereon, which are leased to end users.

          “Filter Plant Subsidiary” means any subsidiary designated by NxStage by written notice to Bank
as the “Filter Plant Subsidiary” in order to perform the obligations of NxStage in connection with
the Filter Plant Transactions. Such Filter Plant Subsidiary may be formed by a Borrower or a
Guarantor or, with the prior written consent of Bank, such consent not to be unreasonably withheld,
be an existing Subsidiary.

          “Filter Plant Transactions” means the transactions contemplated in connection with the
construction of a new facility during Phase II pursuant to the Dialyzer Production Agreement, dated
as of June 5, 2009, as amended, by and among NxStage and Asahi Kasei Kuraray Medical, Co., Ltd.

          “Foreign Currency” means lawful money of a country other than the United States.

          “Funding Date” is any date on which a Credit Extension is made to or for the account of
Borrower which shall be a Business Day.

          “FX Business Day” is any day when (a) Bank’s Foreign Exchange Department is conducting its
normal business and (b) the Foreign Currency being purchased or sold by Borrower is available to
Bank from the entity from which Bank shall buy or sell such Foreign Currency.

          “FX Forward Contract” is defined in Section 2.1.3.

          “FX Reduction Amount” is defined in Section 2.1.3.

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

          “General Intangibles” is all “general intangibles” as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and includes without
limitation, all Intellectual Property, claims, income and other tax refunds, security and other
deposits, payment intangibles, contract rights, options to purchase or sell real or personal
property, rights in all litigation presently or hereafter pending (whether in contract, tort or
otherwise), insurance policies (including without limitation key man, property damage, and business
interruption insurance), payments of insurance and rights to payment of any kind.

          “Governmental Approval” is any consent, authorization, approval, order, license, franchise,
permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or
other act by or in respect of, any Governmental Authority.

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

          “Guarantor” is any present or future guarantor of the Obligations, including, without
limitation, Medimexico s. de R.L. de C.V., a company organized and existing under the laws of
Mexico, NxStage Verwaltungs

-29-

 

GmbH, a company organized and existing under the laws of Germany, NxStage GmbH & Co. KG, a
company organized and operating under the laws of Germany, and Medisystems Europe S.p.A., a company
organized under the laws of Italy.

          “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations, and (d) Contingent Obligations.

          “Indemnified Person” is defined in Section 12.3.

          “Insolvency Proceeding” is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

          “Intellectual Property” means all of Borrower’s right, title, and interest in and to the
following:

          (a) its Copyrights, Trademarks and Patents;

          (b) any and all trade secrets and trade secret rights, including, without limitation, any
rights to unpatented inventions, know-how, operating manuals;

          (c) any and all source code;

          (d) any and all design rights which may be available to a Borrower;

          (e) any and all claims for damages by way of past, present and future infringement of any of
the foregoing, with the right, but not the obligation, to sue for and collect such damages for said
use or infringement of the Intellectual Property rights identified above; and

          (f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

          “Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash)
determined in accordance with GAAP for the relevant period ending on such date, including, in any
event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower and
its Subsidiaries, if any, including, without limitation or duplication, all commissions, discounts,
or related amortization and other fees and charges with respect to letters of credit and bankers’
acceptance financing and the net costs associated with interest rate swap, cap, and similar
arrangements, and the interest portion of any deferred payment obligation (including leases of all
types).

          “Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation all merchandise,
raw materials, parts, supplies, packing and shipping materials, work in process and finished
products, including without limitation such inventory as is temporarily out of Borrower’s custody
or possession or in transit and including any returned goods and any documents of title
representing any of the above.

          “Investment” is any beneficial ownership interest in any Person (including stock, partnership
interest or other securities), and any loan, advance or capital contribution to any Person.

          “IP Agreement” is each Intellectual Property Security Agreement executed and delivered by each
Borrower to Bank, dated as of the date hereof.

          “Key Person” and “Key Persons” are any of the Chief Financial Officer and the Chief Executive
Officer, who are, as of the Effective Date, Robert Brown and Jeffrey H. Burbank, respectively.

-30-

 

          “Letter of Credit” means a standby letter of credit issued by Bank or another institution
based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set
forth in Section 2.1.2.

          “Letter of Credit Application” is defined in Section 2.1.2(a).

          “Letter of Credit Reserve” has the meaning set forth in Section 2.1.2(d).

          “Lien” is a mortgage, deed of trust, levy, charge, pledge, security interest or other
encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise
against any property.

          “Liquidity” is, as of any date of measurement, Borrower’s unrestricted cash at Bank and Bank
Affiliates plus the Availability Amount, as determined by Bank, in its reasonable discretion.

          “Loan Documents” are, collectively, this Agreement, the IP Agreement, the Asahi Intercreditor
Agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other
present or future agreement between Borrower or any Guarantor and/or for the benefit of Bank in
connection with this Agreement, all as amended, restated, or otherwise modified.

          “Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s
Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the
business, operations, or condition (financial or otherwise) of Borrower, taken as a whole; (c) a
material impairment of the prospect of repayment of any portion of the Obligations or (d) Bank
determines, based upon information available to it and in its reasonable judgment, that there is a
reasonable likelihood that Borrower shall fail to comply with one or more of the financial
covenants in Section 6 during the next succeeding financial reporting period.

          “Minimum Eligibility Requirements” is defined in the defined term “Eligible Accounts”.

          “Net Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries,
if any, for any period as at any date of determination, the net profit (or loss), after provision
for taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.

          “Obligations” are Borrower’s obligation to pay when due any debts, principal, interest, Bank
Expenses and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan
Documents, or otherwise, including, without limitation, all obligations relating to letters of
credit (including reimbursement obligations for drawn and undrawn letters of credit), cash
management services, and foreign exchange contracts, if any, and including interest accruing after
Insolvency Proceedings begin, and to perform Borrower’s duties under the Loan Documents.

          “Operating Documents” are, for any Person, such Person’s formation documents, as certified
with the Secretary of State of such Person’s state of formation on a date that is no earlier than
30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in
current form, (b) if such Person is a limited liability company, its limited liability company
agreement (or similar agreement), and (c) if such Person is a partnership, its partnership
agreement (or similar agreement), each of the foregoing with all current amendments or
modifications thereto.

          “Patents” means all patents, patent applications and like protections including without
limitation improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.

          “Payment” means all checks, wire transfers and other items of payment received by Bank
(including proceeds of Accounts and payment of all the Obligations in full) for credit to
Borrower’s outstanding Credit Extensions or, if the balance of the Credit Extensions has been
reduced to zero, for credit to its Deposit Accounts.

          “Perfection Certificate” is defined in Section 5.1.

          “Permitted Indebtedness” is:

          (a) Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;

-31-

 

          (b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate;

          (c) Subordinated Debt, if any;

          (d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;

          (e) Indebtedness between and among one Borrower and any other Borrower;

          (f) (i) inclusive of and without duplication of Investments permitted pursuant to clause (d)
of the definition of “Permitted Investments”, Indebtedness of Subsidiaries (other than a Borrower)
owed to a Borrower, provided no Event of Default has occurred and is continuing, or would result
from the incurrence of such Indebtedness, not to exceed Three Million Dollars ($3,000,000) in the
aggregate in any fiscal year, incurred in the ordinary course of business for reasonable operating
expenses and capital expenditures of such Subsidiaries, consistent with past practices, inclusive
of any guarantees by a Borrower of any Indebtedness of any Subsidiary (other than a Borrower), and
(ii) Indebtedness of Subsidiaries to other Subsidiaries or in Borrower

          (g) Indebtedness of a Borrower to Subsidiaries, in an aggregate amount for all such
Subsidiaries not to exceed Two Hundred Fifty Thousand Dollars ($250,000) at any time;

          (h) Capital leases/equipment financing arrangements up to the principal amount of Five Million
Dollars ($5,000,000) outstanding at any time;

          (i) Indebtedness to Asahi under the Asahi Term Loan;

          (j) Indebtedness incurred in connection with the Filter Plant Transactions;

          (k) Indebtedness with respect to bonds or security deposits provided to utilities with respect
to utility services provided to Borrowers and their Subsidiaries in the ordinary course of
business, not to exceed $500,000 in the aggregate at any time outstanding;

          (l) Debt under swap arrangements or other derivative instruments entered into in connection
with any other Permitted Indebtedness hereunder to mitigate risk and not for speculative purposes;

          (m) Indebtedness secured by Permitted Liens;

          (n) Indebtedness incurred as a result of endorsements for collections or deposits in the
ordinary course of business;

          (o) other unsecured Indebtedness not otherwise permitted hereunder in an amount not to exceed
Five Hundred Thousand Dollars ($500,000) in the aggregate at any time;

          (p) Indebtedness in connection with the financing of insurance premiums in the ordinary course
of business; and

          (q) extensions, refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness (a) through (p) above, provided that the principal amount thereof is not
increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or
its Subsidiary, as the case may be.

          “Permitted Investments” are:

          (a) Investments shown on the Perfection Certificate and existing on the Effective Date;

          (b) Cash and Cash Equivalents;

          (c) Investments consisting of the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of Borrower’s business;

-32-

 

          (d) (i) inclusive of and without duplication of Indebtedness permitted pursuant to clause (f)
of the definition of “Permitted Indebtedness”, Investments, by Borrower in Subsidiaries (other than
a Borrower), provided no Event of Default has occurred and is continuing, or would result from the
making of such Investment, not to exceed Three Million Dollars ($3,000,000) in the aggregate in any
fiscal year, incurred in the ordinary course of business for reasonable operating expenses and
capital expenditures of such Subsidiaries, consistent with past practices, inclusive of any
guarantees by a Borrower of the Indebtedness of any Subsidiary (other than a Borrower), and (ii) by
Subsidiaries in other Subsidiaries or in Borrower;

          (e) Investments in the Filter Plant Subsidiary or otherwise in connection with the Filter
Plant Transactions, provided that (I) any cash Investment shall not exceed (i) One Million
Dollars ($1,000,000) during the term of this Agreement plus (ii) the amount of cash or other assets
received by NxStage or its Subsidiaries from or on behalf of Asahi for the sole purpose of
investment in the Filter Plant Subsidiary in connection with the Filter Plant Transactions, (II)
Borrower shall provide Bank prior written notice of its intention to make any such Investment and
(III) no Event of Default exists or would result from the making of any such Investment;

          (f) Investments by a Borrower or Guarantor in any other Borrower;

          (g) Investments consisting of (i) travel advances and employee relocation loans and other
employee loans and advances in the ordinary course of business, and (ii) loans to employees,
officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries
pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors;

          (h) Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers arising in the ordinary course of business; and

          (i) Investments consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business;
provided that this paragraph (i) shall not apply to Investments of Borrower in any Subsidiary;

          (j) Investments of (i) cash or Cash Equivalent consideration of up to Two Million Dollars
($2,000,000) in the aggregate (inclusive of deferred payment obligations) and (ii) equity of the
Borrower of up to Twenty Million Dollars ($20,000,000) (any Investments made with equity of the
Borrower in excess of Twenty Million Dollars ($20,000,000) may only be made with the prior written
consent of Bank, which consent shall not be unreasonably withheld), in each case for the purpose of
acquiring all or substantially all of the assets, capital stock or other equity interest of another
Person in the same or similar line of business of Borrower; provided that after giving
effect thereto, (i) no Event of Default shall have occurred and be continuing, (ii) Bank shall have
received satisfactory evidence of compliance on a pro forma basis with the financial covenants
contained in Section 6.9 hereof; and (ii) Borrower complies with Section 6.12 hereof, as necessary;
provided, further, no Indebtedness (other than Permitted Indebtedness) will be
incurred by Borrower or its Subsidiaries as a result of such Investment and no lien will be
incurred or assumed, other than (i) liens granted in favor of Bank or (ii) Permitted Liens;

          (k) Other Investments not otherwise permitted herein in an aggregate amount of up to Five
Hundred Thousand Dollars ($500,000) per year and One Million Dollars ($1,000,000) over the term of
this Agreement, provided that prior to and after giving effect thereto, no Event of Default is
continuing; and

          (l) Security deposits paid to landlords in the ordinary course of business and without
duplication of clause (k) of the definition of Permitted Indebtedness, Investments with respect to
bonds or security deposits provided to utilities with respect to utility services provided to
Borrowers and their Subsidiaries in the ordinary course of business, not to exceed $500,000 in the
aggregate at any time outstanding.

          “Permitted Liens” are:

          (a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising
under this Agreement and the other Loan Documents;

          (b) Liens for taxes, fees, assessments or other government charges or levies, either (i) not
due and payable or (ii) being contested in good faith and for which Borrower maintains adequate
reserves on its Books,

-33-

 

that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of
1986, as amended, and the Treasury Regulations adopted thereunder;

          (c) purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing
the acquisition of the Equipment, including, without limitation, financed Equipment existing on the
Effective Date, securing no more than Five Million Dollars ($5,000,000) in the aggregate principal
amount outstanding at any time, or (ii) existing on Equipment when acquired, if the Lien is
confined to the property and improvements and the proceeds of the Equipment;

          (d) leases or subleases of real property granted in the ordinary course of business, and
leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or
Intellectual Property) granted in the ordinary course of Borrower’s business, if the leases,
subleases, licenses and sublicenses do not prohibit granting Bank a security interest;

          (e) non-exclusive licenses of Intellectual Property granted to third parties in the ordinary
course of business, and licenses of Intellectual Property that would not reasonably be expected to
result in a legal transfer of title of the licensed property, that may be exclusive in respects
other than territory and that may be exclusive as to territory only as to discreet geographical
areas outside of the United States;

          (f) Liens arising from judgments, decrees or attachments in circumstances not constituting an
Event of Default under Section 8.4 or 8.7;

          (g) Liens to secure obligations under worker’s compensation, social security or similar laws
or under unemployment insurance;

          (h) Deposits or liens to secure bids, tenders, contracts, leases, statutory obligations,
surety and appeal bonds and other obligations in the ordinary course of business;

          (i) Carrier’s, warehousemen’s, mechanic’s, workmen’s, materialmen’s or other similar liens
arising in the ordinary course of business;

          (j) Liens to secure the payment of nominal account fees to financial institutions in
connection with accounts permitted under Section 6.8 hereof; and

          (k) Liens in favor of Ashai pursuant to the Asahi Term Loan;

          (l) Liens against Filter Plant Subsidiary in connection with the Filter Plant Transactions;
and

          (m) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) through (l), but any extension, renewal or replacement Lien must be limited
to the property encumbered by the existing Lien and the principal amount of the indebtedness may
not increase.

          “Person” is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or government agency.

          “Prime Rate” is the greater of (i) four percent (4.00%) per annum and (ii) Bank’s most
recently announced “prime rate,” even if it is not Bank’s lowest rate.

          “Registered Organization” is any “registered organization” as defined in the Code with such
additions to such term as may hereafter be made.

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

-34-

 

          “Reserves” means, as of any date of determination, such amounts as Bank may, from time to
time, reasonably establish and revise in good faith, after consultation with Borrower and on one
(1) Business Day’s notice reducing the amount of Advances, Letters of Credit and other financial
accommodations which would otherwise be available to Borrower under the lending formulas: (a) to
reflect events, conditions, contingencies or risks which, as determined by Bank in good faith, do
or may affect (i) the Collateral or any other property which is security for the Obligations or its
value (including without limitation any increase in delinquencies of Accounts), (ii) the assets or
business of Borrower or any guarantor, or (iii) the security interests and other rights of Bank in
the Collateral (including the enforceability, perfection and priority thereof); or (b) to reflect
Bank’s good faith belief that any collateral report or financial information furnished by or on
behalf of Borrower or any guarantor to Bank is or may have been incomplete, inaccurate or
misleading in any material respect; or (c) in respect of any state of facts which Bank determines
in good faith constitutes an Event of Default or may, with notice or passage of time or both,
constitute an Event of Default.

          “Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial
Officer and Controller of Borrower.

          “Restricted License” is any material license or other agreement with respect to which Borrower
is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security
interest in Borrower’s interest in such license or agreement or any other property, or (b) for
which a default under or termination of would reasonably be expected to interfere with the Bank’s
right to sell any Collateral.

          “Revolving Line” is an Advance or Advances in an amount up to Fifteen Million Dollars
($15,000,000).

          “Revolving Line Maturity Date” is April 1, 2012.

          “SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any
analogous Governmental Authority

          “Securities Account” is any “securities account” as defined in the Code with such additions to
such term as may hereafter be made.

          “Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now
or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar
agreement in form and substance satisfactory to Bank entered into between Bank and the other
creditor), on terms acceptable to Bank.

          “Streamline Period” is, as of any date of measurement in which Borrower’s Liquidity is equal
to or greater than Twelve Million Five Hundred Thousand Dollars ($12,500,000).

          “Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or
other entity of which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such
Person. Unless the context otherwise requires, each reference to a Subsidiary herein shall be a
reference to a Subsidiary of Borrower or any Guarantor. Upon the written designation by Borrower to
Bank that any Subsidiary is a Filter Plant Subsidiary, the term “Subsidiary” as used in this
Agreement shall not include such Filter Plant Subsidiary.

          “Trademarks” means any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and the entire
goodwill of the business of Borrower connected with and symbolized by such trademarks.

          “Transaction Report” is the Bank’s standard reporting package provided by Bank to Borrower.

          “Transfer” is defined in Section 7.1.

          “Unused Revolving Line Facility Fee” is defined in Section 2.4(d).

-35-

 

          “Utterberg License” is that certain License Agreement by and between Medisystems and DSU
Medical corporation, a Nevada corporation, dated as of June 1, 2007, as may be amended from time to
time.

[Signature page follows.]

-36-

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as a sealed
instrument under the laws of the Commonwealth of Massachusetts as of the Effective Date.

BORROWER:

	 	 	 	 	 	 	 

	NXSTAGE MEDICAL, INC.	 	EIR MEDICAL, INC.
	 
	 	 	 	 	 	 
	By

	 	/s/ Robert S. Brown
	 	By
	 	/s/ Robert S. Brown
	 

	 	 
	 	 	 	 
	Name: Robert S. Brown	 	Name: Robert S. Brown
	Title: Treasurer, Senior Vice President and
Chief Financial
Officer	 	Title: Treasurer
	 
	 	 	 	 	 	 
	MEDISYSTEMS CORPORATION	 	MEDISYSTEMS SERVICES CORPORATION
	 
	 	 	 	 	 	 
	By

	 	/s/ Robert S. Brown
	 	By
	 	/s/ Robert S. Brown
	 

	 	 
	 	 	 	 
	Name:  Robert S. Brown	 	Name: Robert S. Brown
	Title: Treasurer	 	Title: Treasurer
	 
	 	 	 	 	 	 
	BANK:	 	 	 	 
	 
	 	 	 	 	 	 
	SILICON VALLEY BANK	 	 	 	 
	 
	 	 	 	 	 	 
	By

	 	/s/ Ryan Reyerscroft	 	 	 	 
	 

	 	 	 	 	 	 
	Name: Ryan Reyerscroft	 	 	 	 
	Title: VP	 	 	 	 
	 
	 	 	 	 	 	 
	Effective Date: March 10, 2010	 	 	 	 

[Signature page to Loan and Security Agreement]

 

 

EXHIBIT A — COLLATERAL DESCRIPTION

     The Collateral consists of all of Borrower’s right, title and interest in and to the following
personal property:

     All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles, commercial tort claims, documents, instruments (including any promissory notes),
chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and

     all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.

1

 

EXHIBIT B

COMPLIANCE CERTIFICATE

	 	 	 	 	 

	TO:

	 	SILICON VALLEY BANK
	 	Date:                                         
	FROM:

	 	NXSTAGE MEDICAL, INC.	 	 
	 

	 	EIR MEDICAL, INC.	 	 
	 

	 	MEDISYSTEMS CORPORATION	 	 
	 

	 	MEDISYSTEMS SERVICES CORPORATION	 	 

          The undersigned authorized officer of NXSTAGE MEDICAL, INC., EIR MEDICAL, INC., MEDISYSTEMS
CORPORATION and MEDISYSTEMS SERVICES CORPORATION (individually and collectively, jointly and
severally, the “Borrower”) certifies that under the terms and conditions of the Loan and Security
Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in compliance for the period
ending ___with all required covenants except as noted below, (2) there are no Events
of Default, (3) all representations and warranties in the Agreement are true and correct in all
material respects on this date except as noted below; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that already are qualified
or modified by materiality in the text thereof; and provided, further that those representations
and warranties expressly referring to a specific date shall be true, accurate and complete in all
material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all
required tax returns and reports, and Borrower has timely paid all foreign, federal, state and
local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted
pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens (other than Permitted
Liens) have been levied or claims made against Borrower or any of its Subsidiaries, if any,
relating to unpaid employee payroll or benefits of which Borrower has not previously provided
written notification to Bank. Attached are the required documents supporting the certification.
The undersigned certifies that the monthly and quarterly financial statements are prepared in
accordance with GAAP consistently applied from one period to the next except as explained in an
accompanying letter or footnotes and subject to year end adjustments and the absence of footnotes.
The undersigned acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the Agreement, and that
compliance is determined not just at the date this certificate is delivered. Capitalized terms
used but not otherwise defined herein shall have the meanings given them in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	Monthly consolidated and consolidating
financial statements with Compliance Certificate

	 	Monthly within 30 days
	 	Yes  No
	 
	 	 	 	 
	Quarterly consolidated financial 

certificates

	 	Quarterly within 45 days
	 	Yes  No
	 
	 	 	 	 
	Annual financial statement (CPA Audited) + CC

	 	FYE within 120 days
	 	Yes  No
	 
	 	 	 	 
	10-Q, 10-K and 8-K

	 	Within 5 days after filing with SEC
	 	Yes  No
	 
	 	 	 	 
	A/R & A/P Agings, Deferred Revenue report, bookings 

report, inventory report

	 	Monthly within 30 days, or as
otherwise required
	 	Yes  No
	 
	 	 	 	 
	Transaction Reports

	 	Bi-weekly (Monthly within 30 days
during a Streamline Period)
	 	Yes  No
	 
	 	 	 	 
	Projections

	 	FYE with 60 days
	 	Yes  No

The following Intellectual Property was registered after the Effective Date (report on a quarterly basis)
(if no registrations, state “None”)

1

 

	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	Actual	 	Complies
	Maintain as indicated:
	 	 	 	 	 	 
	Adjusted EBITDA (tested quarterly)
	 	See Section 6.9(a)	 	$—	 	Yes  No
	Liquidity (at all times)
	 	$7,500,000	 	$—	 	Yes  No

          The following financial covenant analyses and information set forth in Schedule 1 attached
hereto are true and accurate as of the date of this Certificate.

     The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”)

 

 

 

	 	 	 	 	 	 	 

	NXSTAGE MEDICAL, INC.	 	BANK USE ONLY
	EIR MEDICAL, INC.	 	 	 	 
	MEDISYSTEMS CORPORATION	 	Received by:	 	 
	MEDISYSTEMS SERVICES CORPORATION	 	 	 	authorized signer
	 

	 	 	 	Date:	 	 
	 

	 	 	 	 	 	 
	By:

	 	 	 	Verified:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	 	 	authorized signer
	 

	 	 	 	 	 	 
	Title:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 	Compliance Status: Yes   No

2

 

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

Dated: _________

I. Adjusted EBITDA (Section 6.9(a))

          Required: Adjusted EBITDA. Achieve a minimum Adjusted EBITDA (maximum loss), measured
on a quarterly basis for each quarterly period ending date listed below, in an amount not less than
(max loss not greater than) the corresponding amount listed below for such quarterly period:

	 	 	 
	Quarterly Period Ending	 	Minimum Adjusted EBITDA (maximum loss)
	March 31, 2010
	 	[**]
	June 30, 2010
	 	[**]
	September 30, 2010
	 	[**]
	December 31, 2010
	 	[**]
	March 31, 2011, and each quarterly
period ending thereafter
	 	[**]

Actual:

	 	 	 	 	 

	A. Net Income
	 	 	$                    	 
	B. Interest Expense
	 	 	$                    	 
	C. To the extent deducted in the calculation of Net Income, depreciation expense and
amortization expense
	 	 	$                    	 
	D. Income tax expense
	 	 	$                    	 
	E. Non-cash stock compensation expenses
	 		$                    	 
	F. Capital Expenditures
	 	 	$                    	 
	G. Adjusted EBITDA (line A plus line B plus line C plus line D plus line E minus line F)
	 	 	$                    	 

Is line G equal to or greater than $[          ]?

	 	 	 

	                     No, not in compliance

	 	                     Yes, in compliance

3

 

II. Liquidity (Section 6.9(b))

Required: Maintain at all times Liquidity of at least Seven Million Five Hundred Thousand Dollars
($7,500,000).

Actual:

	 	 	 	 	 

	A. Borrower’s unrestricted cash at Bank and Bank’s Affiliates
	 	$	                    	 
	B. Availability Amount
	 	$	                    	 
	C. LIQUIDITY (line A plus line B)
	 	$	                    	 

Is line C equal to or greater than $7,500,000?

	 	 	 

	                     No, not in compliance

	 	                     Yes, in compliance

Is line C equal to or greater than $12,500,000 for Streamline Period?

	 	 	 

	                     No, not in compliance
	 	                     Yes, in compliance

1171567.11

1

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